In pharmaceuticals and medical devices, list price is a number everyone agrees on and nobody pays. The cash that arrives has passed through a wholesaler's chargeback, a group purchasing organization's tier, a rebate agreement and, for imported product, a customs entry. Each step is governed by a contract with a date on it. Each is applied by someone else's system, on someone else's reading of that contract.
The gap between list and net has a name on the CFO's page, gross-to-net, and it is estimated far more often than it is checked.
Gross-to-net is assembled by people who are not you
The wholesaler buys at list, sells to a hospital or a pharmacy at the price in that customer's contract, and claims the difference back from you as a chargeback. Thousands of these arrive every week, and each one asserts three things: that the buyer was a member of that contract on that date, that the contract price it cites was the price in force, and that the quantity sold is the quantity claimed. Membership rosters change monthly. Tiers move. Contracts expire and get extended by amendment. The claims keep coming at the old price, for the departed member, twice for the same sale.
Rebates run the same play at a slower cadence: paid quarterly against volumes and market-share conditions that are reported by the party receiving the rebate. The accrual on your books is a forecast. The payment is whatever the claim said.
Contract pricing: the tier that was never reviewed
GPO and IDN contracts carry tiers on committed volume or compliance, and price protection that caps increases. The tier a customer earns depends on purchases across the group over a period; the tier they are billed at depends on what someone entered when the contract was loaded. When the two drift, it is almost always in one direction.
Medical device adds a mechanism that has no parallel elsewhere. Consignment and bill-only inventory sits in the hospital until it is used, and the invoice is triggered by a usage report. Implants are used and not reported, kits are opened and half-recorded, and the revenue never exists because no document ever said it should. This is leakage by omission, and it is invisible to any check that starts from an invoice, because there is no invoice.
Duty on a classification nobody revisits
High-value imports, active ingredients and finished devices, clear customs on a tariff classification chosen when the product was first shipped. Nobody revisits it when the product changes, when a trade agreement makes it eligible for a lower rate, or when re-exports would qualify for a refund. Brokers bill on schedules that are rarely compared to the agreement. Cold-chain freight carries accessorials that were quoted as part of the lane rate. The duty line is small on any one entry and large across a year, and it is treated as a tax rather than as a term.
What the check reads
None of this is in the ERP. The ERP knows what was invoiced and what was paid. The contract with its tiers and dates, the membership roster, the wholesaler's sales data, the usage report, the customs entry and the broker's schedule know what should have been, and they sit in portals, spreadsheets and PDFs.
Our agents read both sides. Every chargeback is checked against the contract in force on the date of sale and the roster on that date; every tier billed against the tier earned; every usage report against the consignment ledger; every entry against the classification and the agreement. Where a claim does not agree, the dispute is assembled with the contract page and the roster line attached, and it is held before the credit is issued. Where a usage went unreported, the invoice is staged. Your team approves and sends; nothing leaves without that.
Test one contract, one quarter
Take one GPO contract. Pull its membership roster for one quarter. Pull every chargeback that cited it in the same quarter. For each, check that the buyer was on the roster on the sale date and that the price claimed was the tier in force. Count the ones that fail either test.
Then take one hospital on consignment and compare a quarter of usage reports to the implant log. If the two agree, you are in better shape than most manufacturers. Most find the difference in the first account.
Net price is not negotiated. It is assembled, claim by claim, by people who are not you.