Best practices for WAC decreases

Many manufacturers approach communications about WAC decreases the same way they handle increases. However, a WAC decrease requires a different mindset.  

Manufacturers will often delay announcements about WAC increases to prevent customers from buying excess inventory at the lower price. However, upcoming decreases should be communicated as early as possible. This is so customers have time to exhaust their inventory at the current price as well as, when possible, avoid unnecessary purchases at the current price. The less inventory your customers hold at the higher WAC price, the less they'll be impacted financially when it goes down.

In addition, early notice affords your customers more time to make returns if it’s possible or needed, while avoiding times of year that are challenging for returns, such as around holidays or at times when they have limited staffing.

Manufacturers may offer programs to make whole any customers who are still carrying inventory at the higher WAC. However, the type of program makes a difference.

The structure of certain programs, create a hardship on the customer to have to move a product as a result of pricing changes, such as by returning it or swapping inventory. It can be difficult, time-consuming, and expensive — adding to the significant administrative burden dispensing sites are already managing.

Focus on a rebate-based program where customers can avoid the financial loss of a WAC decrease without having to physically return the product.

A rebate-based program supports a positive customer experience for dispensing sites by keeping the product in the channel, while also supporting continuity of care for patients.

Some manufacturers will only target strategic customers with notifications about upcoming WAC decreases or applicable rebate programs.

However, pricing changes can have a significant impact on all dispensing sites, regardless of size. In fact, WAC decreases can have a disproportionately negative impact on smaller independent pharmacies that are operating on very thin margins. 

Treat all your customers the same. Have one standard communication that goes to all customers at the same time and use the same rebate program across all customers.

The program could be either managed internally, or externally by your distribution partner, or a combination of both. For example, some manufacturers prefer to directly manage programs with large retail chains. Regardless of how it's managed, the program and associated communications should be the same. 

It is important to engage with a distribution partner before you announce the WAC decrease to your customers. This allows your distribution partner to help you pursue the best plan for your shared customers.

Early engagement also provides sufficient time to address any changes needed to the distribution contract and your partner may be able to help you identify the best time to execute the WAC change in relation to your distribution contract. For example, it may be easier on all stakeholders to wait until the current contract expires.

Rethinking your approach to WAC decreases doesn't just benefit dispensing sites and patients; it also ultimately benefits your success as well. When dispensing partners remain financially stable, they're better equipped to keep products available, maintain patient access, and continue serving as a vital access point for your products. By minimizing disruption and showing a commitment to shared success, manufacturers can strengthen their long-term relationships with dispensing sites, help patients have better access to care, and create an even stronger reputation in their channels. 

Cencora is committed to supporting both its manufacturer partners and sites of care who dispense their products. If you have questions about how to manage your WAC pricing changes, contact your Cencora Sourcing Manager or click here today.