Pharmaceutical Terms Defined: Part 2

PBIRx®

Intelligent Solutions in Pharmacy Benefits

612 Wheelers Farms Road, Milford, CT 06461

(888) 797-2479

In a recent blog, we defined five terms commonly used by members of our team in order to help you better understand our industry. Although those five terms will make reading pharmaceutical literature and understanding hot topics easier on your part, alone, they simply aren't enough. That is why today, we would like to introduce you to an additional five terms and their definitions! See below:

Prior Authorization (PA): The approval process/clinical criteria required in order to obtain particular drugs or certain amounts of others. Criteria is typically based on FDA manufacturer approved guidelines. As more expensive drugs are launched, this clinical criteria is expanding significantly, especially with Hepatitis C drugs.

Quantity Limit (QL): The quantity of medication that is recommended by the pharmaceutical manufacturer to be dispensed to a patient over a certain period of time at a particular copayment, coinsurance or deductible.

Rx: Symbol or acronym meaning "medical prescription."

Usual and Customary Price (U&C): The price that a pharmacy charges when there is no health insurance or other coverage for the purchase of prescriptions. This price varies from pharmacy to pharmacy on any given day.

Wholesale Acquisition Cost (WAC): The list price of a drug paid by a wholesaler, distributor or other direct account, before any rebates, discounts, allowances or other price concessions are offered by the supplier of such drugs.

Have you come across industry terms that you are still unsure about? Visit us on our Facebook or Twitter page and let us know! We would be pleased to provide you with the definition so you can better understand additional information on the topic you are seeking.

Since 1993, we have exclusively provided intelligent solutions to our clients in order to help them effectively manage their pharmacy benefit costs. Due to the combined effort of our actuaries, financial analysts, clinical pharmacists, attorneys, HIPAA Compliance Officers and other industry experts, we have found great success in finding our clients the rebates and discounts they deserve through their pharmacy benefit plans. For more information on how we can help, please visit us on our website or contact us at (888) 797-2479 today!

Pharmaceutical Terms Defined

PBIRx®

Intelligent Solutions in Pharmacy Benefits

612 Wheelers Farms Road, Milford, CT 06461

(888) 797-2479

 

In order to understand topics covered in the pharmaceutical industry, it is first important to understand the terms and acronyms that are used to detail them. Since the terms used by industry experts can be quite complex and highly specific, it is often difficult to decipher their meaning at first glance. However, not understanding such terms makes it much more difficult to fully grasp industry news as well as information pertaining to your healthcare and pharmacy benefit plans.

To help you better understand our industry, we've put together a list of five terms commonly used by our team along with their definitions; check them out below!

Average Wholesale Price (AWP): Average wholesale price for a drug that is determined by the manufacturer and applied to each NDC code. The AWP does not necessarily reflect what pharmacies pay for a drug, but it is generally accepted as a pricing measure.

Generic Effective Rate (GER): The rate calculated by looking at the AWP of a generic drug as well as all generic drug claims submitted for a specific plan.

Maximum Allowable Cost Price (MAC): When brand drugs have more than one generic equivalent, prices will differ among each depending on manufacturer and package size. The MAC for such drugs is determined and implemented by your Pharmacy Benefit Manager. Some brands also have a MAC applied i.e brand with two distributors.

National Drug Code (NDC): The code every FDA approved drug is assigned, which could be 10 to 11 digits. The first 4-5 digits represent the Labeler Code (manufacturer, repacker or distributor), the next 3-4 digits represent the Product Code (strength, dosage form and formulation), and the last 1-2 indicate the Package Code (package forms and sizes).

Patient Protection and Affordable Care Act (PPACA): Also known as Obamacare and the Affordable Care Act, PPACA is a federal regulation that was signed into law by President Obama on March 23, 2010, with several amendments to date.

Though these are just a few of the most popular pharmaceutical terms, they are a great place to start to increase your knowledge and understanding of this industry. Stay tuned for our next blog which will contain an additional five!

At PBIRx, it is our goal to make sure our clients are fully educated on their pharmacy benefit plans, which is why we take the time to explain what it all means, every step of the way. With us, there is no confusion or uncertainty when it comes to your healthcare costs. To learn more about how we can help, please visit us on our website or contact us at (888) 797-2479.