Three Reasons Why You Need to Rethink Your Rebate Management Process

During my career, I’ve been able to work in a lot of different industries to help organizations better understand their data, from automotive to pharmaceutical and government. So often I’m asked to describe these highly regulated industries in one word, and the word that always comes to mind is ‘time’.  The reason for this comes down to the fact that these industries, particularly pharmaceutical manufactures, have a business model that revolves around the concept of time – speed to market, time to failure. No company likes to put good money into projects that aren’t going to succeed and the faster you can get products onto the market, the more successful you are.

Over the last 18 months, my team and I at EncompaaS have been fortunate enough to work with one of the largest pharmaceutical manufacturers in the world to revolutionize its rebate management process using artificial intelligence, saving them thousands of hours in the process.

From my experience working alongside the rebate contract managers and legal teams in their business, and the broader pharma industry, I wanted to share three observations on why pharmaceutical companies need to rethink their legacy rebate management processes and automate those processes using advanced AI.  

Reason 1: Manual, time consuming processing

My first observation from working alongside these contract managers to learn more about their jobs, their requirements and how they literally manage thousands of rebate contracts and amendments is that their normal workday is extremely manual and tedious.

At least part of, if not most of their day, is consumed by leafing through thousands of pages of contracts and amendments, finding specific information, typing this into an Excel spreadsheet, and then feeding this data into some sort of business visualization tool like Power BI.  

Imagine being able to automate the extraction of those data points from these contracts, so you can do your job faster, better and more accurately. With AI technology solutions like EncompaaS, that’s possible.

Reason 2: Inaccurate insights

When I first started working in AI, I would explain to prospects and interested parties that AI can deliver a superior result. To that point, I was frequently told, “if it can’t produce 100 percent accuracy, I’m not interested in it”.

The reality is that AI, as good as it is today, is only going to get better. It’s never going to achieve 100 percent accuracy, but if it gets to 95 percent accuracy, that’s a pretty great metric.

By comparison, if you put 20 people in a room, trained them in how to read business contracts, and asked them to leaf through these page by page – whether you outsource this offshore or not – it can’t be done at scale and with any level of accuracy that is delivered by AI-based solutions such as EncompaaS.

My experience on projects with content levels of this scale is that using legacy manual techniques, on its best days, delivers around 70 percent accuracy over a significantly extended period.

What’s more, if someone quits or goes on vacation, you’re left with a resource gap you then need to fill or re-train. Simply put, manual methods are not a scalable solution.

By leveraging AI, you can extract more information out of your contracts in a precise and repeatable way in literally minutes.

Reason 3: Missed opportunities

My third key observation is that because the pharmaceutical business is based so heavily on the metric of time, it’s important that rebate contract managers can respond to changing business conditions as fast as possible. Frankly, AI makes this possible for you by extracting information that’s hidden in a contract and creating new business value from it.

For example, AI-driven datapoint extraction can roll up information across thousands of contracts and give you a view into a specific element like shipping terms. If you perform a data rollup and find that 85 percent of your customers are requiring you to pay for shipping formularies, then you can let your management know accurately and quickly and organize efforts to address that as a cost center.

The ability to correlate that information at scale demonstrates an incredible amount of business value. With EncompaaS, you can unlock that value in real time and act on it with confidence.

The AI Advantage

In the dynamic landscape of the pharmaceutical industry, where rebate contracts are one of the key contributing factors to gaining commercial advantage, it’s essential to rethink legacy manual processes and prioritize continuous improvement and innovation.

Leveraging AI to transform how you analyze and visualize contracted agreements can dramatically streamline this process – saving you time and money.

We trust AI to change lanes in our cars and fly planes on auto pilot, so why not trust it to automate rebate management and the extraction of insights that can be used to further your competitive advantage?

At EncompaaS, we help organizations discover, understand, govern and use their information to power better business decision making and outcomes. We do that by using advanced AI technologies, and we provide this same technology platform to one of the world’s largest pharmaceutical companies, helping them better understand the 50,000 contracts they manage (and amendments within those contracts) to make better decisions with their customers, payers and distributors.