Glossary of Drug Pricing Terms

Retractive reconciliations, which may include both increased and decreased payments, are performed to ensure payments align with contract terms. Coinsurance – Determined by the plan benefit design, coinsurance is a type of OOP patient cost sharing calculated as a predetermined percentage of the billed or allowed costs for a medical service or products, including drugs covered under the plan, wh [...] D Deductible – The amount determined by benefit design that a patient pays for health care services or products before their insurance plan begins to pay. [...] The fee is paid in addition to reimbursement for the cost of the drug.11 www.pcmanet.org PCMA Glossary of Drug Pricing Terms Direct and Indirect Remuneration (DIR) – Under Medicare Part D, DIR includes any price concession received by or paid by a PBM that impacts final prescription drug costs for the Medicare program. [...] Drug Coupon – A marketing tool used by drug manufacturers to reduce patient cost sharing at the pharmacy for certain brand medications. Coupons are often processed after a patient’s insurance claim. [...] Drug Patent – Patents, including those for drugs, are a proprietary right granted by the United States Patent and Trademark Office to protect the holder of a unique product, process, or technology against market competition. [...] The detection and elimination of FWA is a high priority for stakeholders in the prescription drug supply chain, including PBMs . Fully Insured – A fully insured policy may be offered directly for purchase to an individual or via an employer or other plan sponsor as a group health plan. [...] Premiums – The fees paid each month by or on behalf of an enrollee to maintain health insurance coverage from a plan sponsor . [...] This approach is used to extend a drug’s duration of time without competition from generics or biosimilars . Purple Book – A publication by the FDA that contains licensed biological products regulated by FDA’s Center for Drug Evaluation and Research (CDER) and Center for Biologics Evaluation and Research (CBER). [...] Quality Improvement (QI) – QI is the degree to which health services for individuals increase the likelihood of desired health outcomes and are consistent with current professional knowledge. [...] The drugs involved are not FDA-rated generic equivalents. U Usual and customary (U&C) price – The retail price charged by a pharmacy for a drug without the use of insurance.