Common term within Pharm Vernacular

tvo16's version from 2015-09-04 03:34


Question Answer
Average Wholesale Price - AWPThe published average "cost" of a drug product paid by the pharmacy to the wholesaler.This price is specific to drug strength or concentrating dosage form, package size and manufracturer or labeler. AWP of each drug is maintained on the National Drug Code (NAC) master file. This price is used to calculate the upper limit of payment available under a plan
Maximum Allowable Cost (MAC)a cost management program that sets upper limits on the payment for equivalent drugs available from multiple manufacturers. It is the highest unit price that will be paid for a drug and is designed to increase generic dispensing, to ensure the pharmacy dispenses economically and to control future cost increases.
Usual and Customary (U&C) Pricingthe amount that a pharmacist would charge a cash-paying customer for a prescription
Prior Authorization (PA)The process of obtaining certification or authorization from the health plan or pharmacy benefit manager for specified medications or specified quantities of medications, involving appropriateness review against preestablished criteria. Failure to obtain PA often results in a financial penalty to the subscriber
Dispense as Writtem (DAW)a notation used by physician, pharmacy or cardholder that will determine whether or not generic substitution occurs
Pharmacy Benefit Management Companies (PBM)Firms used by plan sponsors to design and administer pharmaceutical benefit plans
Dispensing feeContracted rate of compensation paid to a pharmacy for the processing/filling of a prescription claim. The dispensing fee is added to the negotiated formula for reimbursing ingredient cost
Drug Utilization Evaluation (DUE)An evaluation of prescribing patterns of physicians to specifically determine the appropriateness of drug therapy
Drug Utilization Review (DUR)A system of drug use review that can detect potential adverse drug interactions, drug-pregnancy conflicts, therapeutic duplication, drug-age conflicts, and so on. There are three forms of DUR: prospective (before dispensing), concurrent (at the time of prescription dispensing), and retrospective (after the therapy has been completed). Appropriate use of an integrated DUR program can curb drug misuse and abuse and monitor quality of care. DUR can reduce hospitalization and other costs related to inappropriate drug use.