Model N proposes revenue management as a platform for ‘digital reinvention’

Reconciling contracts between pharma companies and their trading partners is a nontrivial task, made exponentially more difficult by the contracting and reporting requirements for payers, such as public health funds and insurers. Model N has created a market for software to manage these processes over the past decade, currently in the form of the Revenue Cloud for Pharma, a cloud-based solution that matches contract terms with sales accruals, the reporting for federally funded reimbursements (Medicare, etc.), and the marketing investments that pharma makes in discounts, rebates and related price adjustments. Now, the company wants to take this process to a next level, capturing the “digital reinvention” process (a term popularized by McKinsey consultants), for situations where a product can become a service (or vice versa). Neeraj Gokhale, chief product officer at Model N, notes that the trend toward value- or outcomes-based contracts for pharma products is going to require a broader, more comprehensive method to collect and analyze patient data, as an example of how pharma's business models are changing.

The new offering is called Model N CPQ (Configure, Price and Quote), said to enable companies to merge product-related revenue with service revenue, accelerate the construction of a pricing model, and providing business intelligence to manage the execution. Another new offering is the Channel Cloud, intended to capture the interplay of trading partners and suppliers in complex “ecosystems” of markets, distribution channels, and aligning rebates or other incentives with market goals.

The existing Revenue Cloud for Pharma includes upgraded capabilities for managing global tenders (the tendering process is said to involve 25% of pharma’s global sales), contract life-cycle management, and business intelligence tools for forecasting and managing accruals.

All these products are available now, and are being introduced at the company’s annual Rainmaker conference in California. Nooraj adds that the company continues to support the software solutions it acquired with the purchase of Revitas, one of Model N’s competitors, completed a year ago.