Pharmacy glossary

Manufacturer suggested price charged by a seller when selling to retail pharmacies.
AWP is particular to drug strength, dosage, package size, and manufacturer.

Benefit Plan Design:
The combination of temporary options selected by the client. Some of the elements of the advantage plan design for pharmacy coverage include:

Formulary
Generic options
Pharmacy network

Clinical Programs:
Programs a health plan provides to help progress the overall quality and cost of care, and are designed to compliment the health benefits program.

Closed Formulary:
Only the drugs listed on the formulary are protected by the plan and thus adequate for reimbursement as outlined in the plan provisions. In the occasion the client receives a drug which is not on the formulary, the client is dependable for paying the full cost of that prescription.

Coinsurance:
The customer is required to pay a particular percentage of the cost of the prescription.

Compliance and Persistency Programs:
A positive approach to support customers to be compliant with the medications prescribed by their physician(s). A PBM or carrier may send helpful letters or email messages regarding appropriate medication use or refill reminders. Habitually these programs relate to therapeutic drugs.

Concurrent Drug Utilization Review (DUR):
Implicates a series of revises (such as: drug-drug or drug-disease interaction, drug-age, drug-gender, dosage), or criteria used to a prescription drug claim which compare information about the customer with the drug to be distributed, as well as information about the customer’s other medications (if any). Computer links between the pharmacy and PBM assist in quickly identifying any DUR concerns before the medication is distributed.

Copay:
The customer is required to pay a particular flat dollar amount for each prescription.

Cost Share:
The benefit plan design will identify the portion of the medication costs for which the client is responsible for paying. Thus, the carrier and the client “share” in the cost of prescriptions.

Discounts:
Price reductions acquired as the result of negotiation with pharmacies, wholesalers, and/or pharmaceutical manufacturers.

Dispense As Written (DAW):
DAW is a information that a physician can observe on a prescription which instructs the pharmacist to distribute the exact brand prescribed. In other words, DAW is planned to prevent substitution.

Dispensing Fees:
The fee paid for prescriptions filled. Although the fee could potentially be the equal for all prescriptions, habitually the dispensing fee paid to the pharmacy is elevated for generics and thus incents the pharmacy to help generic substitutions.

Drug Groups:
A method of classifying drugs based upon the type of bodily response drugs that group create.

Examples:

statins
ACE inhibitors
diuretics
bronchodilators

Drug Quantity Management (quantity limit groups):
Controls over-utilization based upon manufacturer and FDA recommendations. The limits are predefined for a typical list of targeted drugs based upon quantity prescribed and length of treatment.

Drug Utilization Review (DUR):
The purpose of DUR is to guarantee appropriate use of prescriptions and compliance with the benefit plan design.

Fiduciary:
A relationship of trust, confidence and responsibility. To make decisions in the best importance of another.

Formulary:

A list of prescription drugs accepted for coverage under a pharmacy benefit plan.
A main consideration in the development of a formulary is clinical appropriateness.
An effort is completed to offer a complete range of drugs and carefully evaluate cost effective alternatives.

Full-Disclosure:
Sharing all relevant financial and operating information. This could also be referred to as “transparency”.

Generic:
Drugs where the patent has expired and bioequivalent versions are created by numerous manufacturers. A generic includes the same active ingredient(s) and is chemically identical in strength, concentration, dosage form, and route of administration to a name brand drug, but the cost is considerably cheaper.

Generic Substitution:
Dispensing a generic equivalent rather than a exact brand name drug.

Hybrid Prescription Plans:
Feature a combination of coinsurance and copayments. As an example, a plan can charge a flat copayment amount for generics, but charge a coinsurance percentage for brand name drugs.

Mail Order:
Usually utilized for processing prescriptions for maintenance medications. Most plan designs allow 90 day provide of medication which contrasts with the 30 day supply normally dispensed by a retail pharmacy. Additional cost savings may be appreciated due to reduced copay being assessed for mail order prescriptions. For example the client may pay an amount identical to one or two copays, rather than the three copays associated with having three prescription refills from a retail pharmacy.

Maintenance Medications:
Prescriptions that are applied on a continuous basis for long term medical conditions or diseases. For example: high blood pressure.

Maximum Allowable Cost (MAC):
Managed to determine the payment schedules for generic drugs. Symbolizes the maximum amount the PBM or carrier will compensate a pharmacy for dispensing the generic version of precise drugs on the list.

Non-Preferred:
Drugs excluded from the Preferred Drug List or formulary. Depending upon the profit plan design, non-preferred drugs may not be enclosed at all, or may have higher copays or coinsurance amounts.

Open Formulary:
The benefit plan includes drugs which are listed on the formulary and those that are not listed. However, the plan is regularly ordered to incent the member to use formulary medications as non-formulary drugs will be subject to higher coinsurance or copayments. The primary reason of the formulary is to support use of listed medications.

Over-the-Counter (OTC):
As the name involves, these medications are sold over the counter. No prescription is required in order to buy these products. (Examples: ibuprofen or Claritin). In most cases, OTC drugs are not enclosed under pharmacy benefit designs.

Patient Profiling:
A review of prescription claims on a customer basis to recognize any patterns or trends, as well as potential concerns or occasions for customer education.

Pharmacy and Therapeutics Committee:
A group of specialists consisting of physicians, pharmacists and clinical experts who help PBM’s in developing formularies and preferred drug lists which are clinically suitable.

Pharmacy Benefit Manager (PBM):
A salesperson who offers a set of core services to a customer (such as an insurance carrier or employer) to control drug expenditures.

Physician “Detailing”:
Direct physician contacts by pharmaceutical manufacturers to instruct providers about their products in plans of influencing the physician’s prescribing patterns.

Physician Profiling:
A re-evaluate of prescriptions written by physicians in a community or region to recognize any providers whose prescribing practices are outside of the usual range. For example, are there physicians who appear to contain a tendency to prescribe brand name drugs constantly when a generic equivalent exists?

Preferred Drug List:
This term is habitually used interchangeably with formulary. A list of brand name and generic drugs which the carrier encourages members to use.

Prior Authorization:
A requirement to get approval prior to a drug distributed by a pharmacy. The intention of this rule is to guarantee the appropriateness and suitability of the medication for the client, and as a cost containment measure.

Rebates:
Discounts on brand name drugs acquired through arrangements with wholesalers and manufacturer purchase and rebate agreements.

Retail Pharmacy Networks:
Pharmacies with whom a Pharmacy Benefit Manager or insurance carrier has employed and contracted with, and with whom discounts are negotiated for drug ingredients and dispensing fees.

Retrospective Drug Utilization Review (DUR) Program:
Assists in detecting patterns of unacceptable dispensing and/or utilization. Can also support in physician education in regard to an exacting drug when new clinical findings are available.

Specialty Drugs:
Utilized by a small percentage of the population with rather complex and/or chronic conditions (like MS, hepatitis C, rheumatoid arthritis, organ transplants) requiring costly and/or difficult drug regimens (like injectible and infusion therapies). Moreover, specialty drugs may need particular handling such as refrigeration.

Step Therapy:
When numerous medications with altering costs exist as possible treatment options for a condition, step therapy recommends that a therapeutically equivalent lower cost generic substitute be prescribed first.

Therapeutic Interchange:
Interchange of therapeutically equivalent, but chemically exclusive drugs in accordance with established policies and procedures relevant to the formulary. Although the drugs contain dissimilar compositions, they are accepted to produce the same clinical outcome in the patient.

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