The amount determined by benefit design that a patient pays for health care services or products before their insurance plan begins to pay. Once this amount has been reached, patients usually pay a copayment or coinsurance for services or products while the insurance company is responsible for the rest.

Manufacturers, pharmacies, wholesalers, physicians, PBMs, and other participants in the drug supply chain are often compensated based on the list price of a drug. Delinking is a term used to describe proposals that would prohibit some or all of the participants in the drug supply chain from being compensated based on the list price of a drug or other drug pricing benchmark (e.g., AWP).

 

Digital therapeutics (DTx) are evidence-based therapeutic interventions that are driven by high-quality software programs to prevent, manage, or treat a medical disorder or disease. They are used independently or in concert with medications, devices, or other therapies to optimize patient care and health outcomes. Digital therapeutics products incorporate advanced technology best practices relating to design, clinical validation, usability, and data security. They are reviewed and cleared or approved by regulatory bodies as required to support product claims regarding risk, efficacy, and intended use.

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. In the context of pharmacies, DIR arises when pharmacies participating in the Part D preferred network are assessed against performance standards related to quality of care. When network pharmacies meet or exceed the standards, they are eligible for additional payments, and when they fall short, they are required to reimburse the plan sponsor. The amount owed back to the plan sponsor may be referred to as a “clawback” by the pharmacy. As of 2024, the Centers for Medicare & Medicaid Services (CMS) has eliminated the retroactive application of DIR fees. Such fees must now be reflected in the negotiated price the patient pays when they receive their medication.

A fee paid to a pharmacist for dispensing a medication. The fee is paid in addition to reimbursement for the cost of the drug.

A marketing tool used by drug manufacturers to drive demand for certain brand medications, usually when there is more than one therapeutic option for insured patients. Coupons insulate the patient from the true costs of the medication at the pharmacy. Removing the cost considerations encourages the use of more expensive drug products instead of lower-cost generics or therapeutically equivalent alternatives. Coupons, in addition to other programs like debit cards, also do not clearly indicate the source of payment.

 

Manufacturer means an entity that owns or operates an establishment that manufactures a drug. This term includes, but is not limited to, control laboratories, contract laboratories, contract manufacturers, contract packers, contract labelers, and other entities that manufacture a drug.

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. A patent prevents the invention from being produced, sold, or used by competitors for a limited time. Drug patents typically last for 20 years due to the range of extension schemes utilized by manufacturers.

Protecting a product with as many patents as a drug company can attain. Drug patent thickets are made up of duplicate patents linked through terminal disclaimers, secondary patents, and/or patents on each component or feature of a drug or device.

The Federal Food, Drug, and Cosmetic Act defines a drug shortage as a period of time when the demand or projected demand for the drug within the United States exceeds the supply of the drug. FDA tracks shortages at the national level and receives information from manufacturers about their ability to supply the market.

A patient safety check typically required by states and performed by a pharmacist. Pharmacists evaluate prescriptions based on health conditions, allergies, drug interactions, patient demographics, laboratory values, and other values to ensure the medication is safe for the patient. Reviews are completed systematically by pharmacists dispensing at any pharmacy, and at the PBM or plan sponsor. There are three forms of DUR: prospective (before dispensing), concurrent (at the time of prescription dispensing), and retrospective (after the therapy dispensing).