Case Study

Unifying the process for drug rebate and chargeback programs

Custom Chargeback software for DLSS

Dohmen Life Science Services (DLSS) helps drug manufacturers manage their drug chargeback and Medicaid rebate administration programs through its contract management services. As part of this service, DLSS looked to Red Arrow Labs to help create a modular drug chargeback and rebate application to simplify their service for drug manufacturers.


The chargeback and rebate administration software DLSS was using was expensive to maintain and the off-the-shelf solution from their vendor lacked the features they needed. This meant they were sacrificing efficiency and functionality, making an already data-rich process even more complex to manage.                                    

DLSS needed a custom solution to better track drug chargeback and Medicaid rebate information. This relies on collecting volume-intensive data along a supply chain that involves the drug manufacturer, the wholesale distributor and the entity purchasing the drug, such as a pharmacy or hospital. The price a drug is sold is used to calculate drug chargebacks and state Medicaid reimbursements. Inaccuracies in the data from the wholesaler back to the drug manufacturer can mean the difference between selling a drug for less than what it costs to manufacture.

To ensure accuracy, the system needed to track a variety of data records, including state Medicaid reimbursement rates, unique to each state, and weed out duplicate and unauthorized submissions.

The development of our new chargeback and Medicaid processing system has been transformational to our team. We are working much more efficiently and able to focus on value added activities for our clients. The end product has been a true differentiator in the marketplace and the feedback from our clients and potential clients has been very positive.

Jeff Faich, Director of Operations Project Management for DLSS

Our collaboration with DLSS not only replaced their off-the-shelf solution with an efficient and intuitive custom application, it enabled them to shift their client-services focus from claims processor to claims consultant.


Our internal teams worked with DLSS to define a new application to process chargeback and Medicaid rebate information accurately and efficiently, and then built the new tool from the ground up. 

With the sheer amount of data points to track and volume of data records, including data from pricing contracts between the drug manufacturer, wholesaler and buyer, we identified all the pertinent data points to ensure reimbursement calculations were correct.

Chargeback processing involves the data reconciliation of debit memos and chargeback request lines, as well as maintaining contract and product data. Chargebacks are the transactions that are submitted between the wholesaler and the manufacturer. We built in a validation engine to analyze these chargeback requests and assist the DLSS team in reconciling the large volumes of data, correct errors, manage contract data, etc. 

Medicaid processing involves the reconciliation of state Medicaid invoices, submitted from the states to the manufacturers. Medicaid-related features offer tools to assist users in the reconciliation process, making sure that that the state submitted rebate amounts and/or quantities are accurate.

The application also interfaces with other DLSS reporting services, which optimizes their data crunching needs. And because it’s modular, as DLSS’s clients’ needs evolves, the software can adapt with it.

chargeback concept diagram

Return on investment

The application keeps track of all the pertinent data to ensure accuracy in hundreds of thousands of drug data records. It’s also modular, so it can be configured to pull data from an existing external system. This flexibility means DLSS can optimize all information useful to a client’s chargeback and rebate administration activities. The application streamlines DLSS’s chargeback and rebate programs and protects client revenue, making it an invaluable client service offering.

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