Understanding Gross-to-Net: Analyzing Claims – Comparing Earned v. Paid Periods 

July 31, 2023

Completing the gross-to-net process requires a vast amount of data from various sources. One crucial dataset used for analysis is the claims data source from the adjudication system. This data provides information regarding the end customer and when the activity occurred. When claims are processed, the earned and final paid periods are stored and made available for analytics with our Gross-to-Net Application.  

The paid period reflects when the claim has cleared the adjudication system and has been sent to the ERP period to be released from the reserve. This is usually the current fiscal period of activity and most directly ties to the close for the current month.  

The earned period reflects when the final customer purchased the drug and when the revenue deduction needs accounting. This earned period may be the same as the current period or may be from a prior month, year, or more.  

By capturing both Paid and Earned Periods, Breakaway GTN allows analysts to evaluate the lag time for individual customers or products.   One crucial benefit of this approach is ensuring that the latest actuals are used in Forecasts and Month End Close. Additionally, it allows actual partial periods to be projected by the Forecast/Close Users. Users can analyze the payments going out for the current period and see which periods they are connected to, allowing them to identify closed periods. Comparing earned versus paid periods can help pharmaceutical companies make informed decisions regarding revenue forecasting, pricing strategies, and rebate negotiations. By understanding the difference between the two perspectives, companies can better align their business goals and strategies with their financial outcomes.  

Comparing earned versus paid periods is vital in the pharmaceutical industry and is a key part of developing an end-to-end understanding of the Gross-to-Net process. It allows for better insights into customer experiences and financial outcomes, leading to more informed decision-making. Breakaway GTN offers a comprehensive solution that enables businesses to analyze the data from both perspectives, driving better business outcomes. 

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