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| Academic Detailing of Prescribers |
Fact-based information about prescription drugs provided by
credentialed clinicians to physicians and other prescribers.
Traditional “detailing” refers to the process pharmaceutical
manufacturer sales representatives use to promote their
brand-name drugs. |
| Actual Rebate Amount Per Mail Script |
Actual dollar amount of rebate for each mail-service
prescription. |
| Actual Rebate Amount Per Retail Script |
Actual dollar amount of rebate for each retail prescription. |
| Annual Deductible |
Amount a plan member pays before reimbursement begins. |
| Annual Out-of-Pocket (OOP) Limit |
The cap on the total amount a plan member pays. |
| Average Wholesale Price (AWP) |
The published or suggested cost of pharmaceuticals charged
to a pharmacy by a large group of pharmaceutical wholesalers.
The AWP is the basis for most third-party prescription
reimbursement. It is analogous to a sticker price on a new
automobile. Pharmacies do not pay for their drugs using the
AWP. A markup of wholesale acquisition cost (WAC) is the
current method. |
| AWP Discount % – (AWP Minus X%) |
The negotiated amount a drug plan pays to pharmacies for the
ingredient cost of a prescription and commonly expressed as
a percentage off of Average Wholesale Price. |
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| Biotech Drugs (Specialty Drugs) |
Drugs manufactured through biologic processes to treat
chronic, complex or life-threatening conditions. Also called
specialty drugs. |
| Brand Drug |
Prescription drug covered by patent exclusivity. |
| Claritin® |
OTC nonsedating antihistamine used to treat allergies. Claritin®
was only available as a prescription drug before its OTC
conversion in 2002. |
| Copayment Relief or Waivers |
Reduced or zero-dollar copayments commonly used as
incentives for plan members to use generic drugs and
adhere to medication regimens. |
| Diabetic Supplies |
Medical materials used for treatment of diabetes, specifically
glucose meter strips, syringes, and needles. |
| Disease Management |
A systematic approach to providing care to a population of
patients with a specific disease. Patient and provider education,
pharmaceutical care, continuous quality improvement, practice
guidelines, patient monitoring, outcomes assessment, and
case management all play key roles in disease management. |
| Dispensing Fee |
Contracted amount in a traditional third-party prescription
plan, usually in the $2.00 to $3.00 range, that is paid to the
pharmacy in addition to the negotiated ingredient cost of the
prescription. |
| Dollar Limit on Coverage |
Price cap for amount of money plan will pay for prescription
benefit. |
| Dose Optimization |
Pharmacist-driven program to ensure patients are taking the
best dosages and strengths of a given medication to manage
costs of drug therapy. |
| Drug Utilization Review (DUR) |
The process of evaluating physicians’ prescribing patterns
and/or patient drug utilization to determine the appropriateness
of therapy. Three types are: prospective (before prescription
dispensing), concurrent (at point of dispensing), and retrospective
(after drug therapy is complete). |
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| Experimental/Investigational Drugs |
Prescription drugs being tested in clinical trials that may or
may not be approved for sale by the U.S. Food and Drug
Administration. |
| Generic Drug |
Chemically equivalent copy designed from a brand-name
drug where the patent has expired. Generics are typically
less expensive and sold under the chemical name of the
drug, not the brand name. |
| Generic Sampling |
Providing samples of generic drugs to medical offices and
clinics to encourage the prescribing of generic drugs when
medically appropriate. |
| Gross Cost of Script |
Total cost of a prescription = AWP – AWP Discount +
Dispensing Fee + Member Cost-Share Payment. |
| Growth Hormones |
Prescription hormone supplements used to treat patients
with growth deficiencies. |
| Guarantee Rebate Per Mail Script |
Pharmacy benefit manager guarantees a flat-dollar amount
of rebate for each mail-service prescription. |
| Guarantee Rebate Per Retail Script |
Pharmacy benefit manager guarantees a flat-dollar amount
of rebate for each retail prescription. |
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| Injectables |
Prescription drugs that are injected by patient or provider.
Often used as a synonym for high cost specialty or biotech
drugs because most are administered via injection. |
| Lifestyle Drugs |
Drugs that are not medically necessary but used to improve
the quality of life. |
| Mail Cost Share (90-day Supply) |
Cost share amount for 90 days of a prescription therapy typically
dispensed at a mail-order pharmacy. Some plan designs may
allow for this at a retail pharmacy. |
| Maintenance Prescriptions |
Drugs used to treat chronic diseases or conditions. |
| Managed Care Organization (MCO) |
An organization that finances and delivers a wide variety of
health care services through a network of preferred providers. |
| Maximum Allowable Cost (MAC) |
The unit price that has been established for a generic drug.
The same MAC price applies to all versions of identical generic
drugs. MAC prices were created because the cost of identical
generic drugs may differ from distributor to distributor. |
| MAC Pricing Applied |
MAC list used to price generic prescriptions. |
| Maximum Annual Benefit (MAB) |
Total amount of expenses a plan will pay in a 12-month period. |
| Multi-source Brand |
A drug product manufactured by more than one company or
source. Multi-source is commonly used to describe a brand
drug where generic equivalents are available. |
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| Net Cost (after copayments) of Script |
Total amount paid for prescription less the cost sharing
amounts. |
| Nexium® |
Prescription proton pump inhibitor to treat gastro esophageal
reflux disease (GERD) and related stomach disorders. |
| Nonformulary Drugs |
Drugs not included on plan’s drug list or formulary. |
| Nonpreferred Brands |
Brand-name drugs not included on plan’s preferred drug list. |
| Oral Contraceptives |
Prescription drugs used to avoid pregnancy. |
| Other Coverage Limitation(s) |
Plan design limits on prescription coverage such as number
of days supply allowed. |
| Other Nonsedating Antihistamines |
Prescription allergy drugs that typically do not cause
drowsiness. |
| Outbound Telephone Calls |
Calls made to plan members as part of disease or care management
programs to encourage compliance with treatment. |
| Over-the-counter (OTC) Drug |
U.S. Food and Drug Administration-approved drugs that do
not require a prescription to be purchased. |
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| Pharmacy Benefit Manager (PBM) |
Organization dedicated to providing prescription benefit
management services to employers, health plans, third-party
administrators, union groups, and other plan sponsors.
A full-service PBM maintains eligibility, adjudicates prescription
claims, provides clinical services, contracts and manages
pharmacy network, and provides management reports. |
| Pill Splitting |
Cutting prescription medications in half to double the number
of days supply from one prescription. This practice, which
decreases total cost of the drug therapy, is commonly used
to manage the cost of cholesterol-reducing medications. |
| Preferred Brands |
Brand-name drugs included on plan’s preferred drug list. |
| Preferred Drug List |
List of drugs available to plan members with a lower
copayment than drugs not on list. |
| Prescriber Profiling |
Assessment of prescribing patterns to identify areas to manage
utilization and cost of prescription drugs. Drug claim data is
cut by prescriber (physician, physician assistant or nurse
practitioner) to identify outliers in prescribing patterns. |
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Prescription Drug Plan (PDP) |
U.S. Centers for Medicare & Medicaid Services-certified drug
benefit program for the Medicare-eligible population. |
| Prilosec® |
OTC proton pump inhibitor to treat gastro esophageal reflux
disease (GERD) and related stomach disorders. |
| Prior Authorization |
A process where the prescription claim is initially denied, but
provides a mechanism for the claim to be covered via criteria
established by the managed care organization (MCO) or the
pharmacy benefit manager (PBM). This requires action from
the physician, pharmacist, or patient to obtain coverage. |
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| Quantity Limits |
Limit on the number of pills or dosages allowable per claim. |
| Refill Too Soon Supply Limit |
A system edit that rejects a drug claim if a refill is requested
before a predefined number of days have passed since the
initial fill date of prescription. |
| Retail Cost Share (30-day Supply) |
Cost share amount for 30 days of a prescription therapy
dispensed at a retail pharmacy.
%: Cost sharing amount is a percentage of total
prescription cost.
$ Min: Minimum cost sharing amount.
$ Max: Maximum cost sharing amount. |
| Retin A® |
Brand-name dermatology drug commonly prescribed for
cosmetic purposes. |
| Retiree Drug Subsidy |
Amount of money the U.S. Centers for Medicare & Medicaid
Services pays employers to subsidize employers’ funding of
drug benefits for Medicare-eligible employees and retirees. |
| Retrospective DUR |
Drug utilization review conducted after a prescription is
adjudicated. |
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| Single-source Brand |
A drug product manufactured by one company or source. |
| Specialty Drugs (Biotech Drugs) |
Drugs manufactured through biologic processes to treat
chronic, complex or life-threatening conditions. |
| Specialty Pharmacy Benefit |
Coverage of drugs manufactured through biologic processes
to treat chronic, complex or life-threatening conditions. |
| Step Therapy |
Treatment guidelines used to recommend drug therapy
beginning with the least expensive therapy. More expensive
therapies are only used when the patient fails to respond to
the first-line drug. |
| Therapeutic Substitution |
A pharmacist-initiated change in a dispensed drug when a
medically equivalent drug is available for the prescription
presented. State prescribing laws address the required
physician permission for substitutions. |
| Wholesale Acquisition Cost (WAC) |
The price used by a pharmaceutical manufacturer to sell
prescription products to a wholesaler; also known as
Wholesale List Price. |
| Wrap Around Coverage |
Drug benefit coverage provided by employers to Medicareeligible
employees and retirees to supplement Medicare
Part D coverage. |
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