Glossary of Drug Pricing Terms

(See NADAC)7 www.pcmanet.org PCMA Glossary of Drug Pricing Terms Average Manufacturer Price (AMP) – The average price paid to the manufacturer by wholesalers and pharmacies that purchase directly from a manufacturer. [...] Central Fill – An intermediary pharmacy that is permitted by the state to prepare orders for dispensing by a registered retail pharmacy. [...] 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. [...] Gold Carding – A program used by some health plan sponsors that waives, on a limited basis, prior authorization (PA) rules for certain services provided by clinicians who are deemed “high performing.” The clinician’s “gold card” exemption from PA is effective for a limited service or set of services, for a defined period, and is reviewed regularly by the plan sponsor to ensure the clinician con [...] 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. [...] Step Therapy – Step therapy is a process that encourages the use of clinically-appropriate, lower- cost generic or brand medications before the use of non-preferred brand medications. This process is used by plan sponsors to control unnecessary costs and lower out-of-pocket costs for patients who are new to therapy. [...] The drugs involved are not FDA-rated generic equivalents .30 www.pcmanet.org PCMA Glossary of Drug Pricing Terms U Utilization Management (UM) – Utilization management is a set of programs adopted by a health plan sponsor to help ensure appropriate use of health care services and medications. In the pharmacy benefit, a PBM administers the plan’s UM program.