Health coverage in which an employer, union, or other plan sponsor (rather than an insurance company) bears the financial risk for covered expenses incurred under the plan. Self-insured plans usually contract with a third-party administrator, PBM, or insurance company to administer the health plan (e.g., negotiate provider networks, reduce costs for goods like prescription drugs, pay claims, determine eligibility). Self-insured plans typically operate under ERISA, and, subject to certain exceptions, enjoy broad preemption protection from state insurance laws.

The choice for the physical location of provider-infused or -injected drug administration. Sites of care include hospital inpatient, hospital outpatient, physician office, ambulatory infusion suite, or home-based setting.

 

These are compounds with low molecular weight. In contrast to biosimilars, most traditional brand drugs are small molecule.

Social determinants of health (SDOH) are the nonmedical factors that influence health outcomes. They are the conditions in which people are born, grow, work, live, and age, and the wider set of forces and systems shaping the conditions of daily life. These forces and systems include economic policies and systems, development agendas, social norms, social policies, racism, climate change, and political systems. (also see Health Disparities)

 

A “specialty drug” is a prescription drug that typically is high in cost and that:

1 .   is prescribed for a person with a (a) chronic, complex, or life-threatening condition, and/or (b) rare medical condition;

2 .   has limited or exclusive distribution; or

3 .   requires (a) specialized product handling and/or administration by the dispensing pharmacy, or (b) specialized clinical care, including frequent dosing adjustments, intensive clinical monitoring, or expanded services for patients, including intensive patient counseling, education, or ongoing clinical support beyond traditional dispensing activities, such as individualized disease and therapy management to support improved health outcomes.

 

A recognized channel for delivery of specialty medications that provides services such as (1) specialized storage, handling, delivery, and administration of drugs, and offers (2) specialized clinical care and expanded patient support services such as individualized patient counseling and education, proactive safety monitoring and coordination with health plans and physicians to support improved outcomes. Pharmacists and clinicians at specialty pharmacies offer support to patients with complex and long-term medical conditions including blood disorders, cancer, Crohn’s, HIV/AIDS, infertility, multiple sclerosis, and rheumatoid arthritis. Specialty pharmacies must meet rigorous requirements for network participation, are usually accredited through independent, national bodies that set higher standards for safety, patient care, dispensing, and distribution practices, and are licensed by the Boards of Pharmacy.

 

The process by which an independent third party (non-plan/ PBM) organization reviews the practices of specialty pharmacies against established national quality standards for service and uniformity of care. During the accreditation process, specialty pharmacies are required to demonstrate that they have the infrastructure to provide a full range of personalized clinical and operational services beyond the capabilities of a traditional retail pharmacy, such as handling specialty drugs appropriately and providing the coordinated services required by patients with complex conditions. Pharmacy accreditation is an indicator of a pharmacy’s commitment to quality and safety, and goes beyond Board of Pharmacy requirements. The best-known accrediting entities in the specialty pharmacy arena are the Utilization Review Accreditation Commission (URAC) and Accreditation Commission for Health Care (ACHC).

A risk mitigation (sometimes referred to as spread) pricing model provides employers and other health plan sponsors with cost predictability by giving them a price-certain for prescription drug benefits used by their enrollees, regardless of the how much the pharmacy charges for the prescriptions. Under this model, the PBM has discretion to pay network pharmacies a different rate than the plan sponsor has paid the PBM to arrange the service, often creating a spread. Spread-pricing contracts are offered as an alternative to passthrough contracts.

 A practice that plan sponsors use to encourage enrollees to use network pharmacies that offer drugs at a lower price, or with higher quality, within the pharmacy benefit.

 

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.