Glossary for Consumers

  • 30-day prescription supply – The most commonly prescribed amount of prescription drugs that are packaged for patients when picking up their supply at a retail pharmacy,
  • 90-day supply – This amount of prescription drugs packaged for patients is mostly available only through mail order pharmacies and is usually for chronic health conditions
  • Brand Name Drugs – Are costly new drugs developed by drug manufacturers that are patented for specific amount of time, which means there is an exclusive window when they can sold before generic alternatives can enter the marketplace
  • Co-pay - Is a payment or form of coinsurance as defined by a health plan that must be paid each time a medical services is used by an insured person
  • Drug Formulary – This is list of prescription drugs, brand and generic, that are "preferred" by your health plan that will pay for them as part of the coverage, and the list is largely determined by the PBMs
  • Generic Drugs – Are inexpensive replications of brand name prescription drugs that have come off patent for competition in the marketplace
  • Health Plan Sponsor - Entity (corporation, labor union, government agency or non-profit organization) that establishes and maintains insurance plan that must follow government guidelines for participants coverage of clearly defines benefits
  • Mail Order Pharmacy – Are traditionally owned by PBMs, these usually out-of-state entities offer prescription drugs and supplies through mail delivery services,
  • Maximum Allowable Costs (MAC) – caps reimbursement for commonly dispensed drugs when there are generic products
  • Medicare Part D prescription drug plan – Is the federal insurance benefit added for Medicare recipients in 2006 to help seniors pay for their prescription drugs
  • Pharmacy Benefit Manager (PBM) – Third party administrators hired by health plan sponsors to manage prescription drug benefits for a pool of employees, members or beneficiaries that operate in both the private and public sector
  • Pharmacy Reimbursement – Are the payment provided through health plan sponsors to pharmacies to compensate them for the purchase and services provided in the distribution of prescription drugs and supplies
  • Prescription Refill – Physicians will recommend, especially in the case of chronic conditions, that when a patient finishes a certain amount of prescribed drugs that they continue with another supply
  • Spread Pricing – Is the differential that PBMs pockets after telling health plan sponsors they will pay for prescription drugs to pharmacies, when in fact they pay the pharmacies a lower amount