Understanding the basics when it comes to pharmacy benefits management (PBM) can provide insight for procurement managers trying to find cost savings in unfamiliar territory.
To help, we've created a guide with key questions to ask and terms to know when you are starting conversations with your HR team.
12 Terms to Know
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1. ADHERENCE. The patient's conformance with the healthcare provider's recommendations for timing, dosage and frequency of medication. |
7. PMPM. Per Member Per Month; measure used to assess population-based metrics such as cost or utilization, computed by dividing the total cost/utilization/other measure by the total number in the population. |
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2. AWP. Average Wholesale Price; a list-price benchmark for many pharmaceutical transactions that was created in the 1960s. Does not represent actual marketplace transactions or measure average prices; Typically computed by multiplying WAC by 1.2. |
8. PA. Prior Authorization; Process when a prescription claim is initially denied so that the health plan can evaluate the therapy before treatment starts. |
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3. BRAND DRUG. A prescription pharmaceutical product that the FDA has granted exclusive marketing rights to the manufacturers of the product. |
9. QL. Quantity Limits; A limit on the number of pills or dosages of a prescription drug that will be covered, either per claim or per unit of time. |
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4. COST SHARING. Amount beneficiaries contribute to the cost of each prescription covered by their drug benefit plan. Amount is established in plan design for major categories (brand, generic, etc.). |
10. SPECIALTY DRUGS. Drugs that treat chronic, complex, or life-threatening conditions, usually manufactured through biologic processes and/or targeting a specific gene. |
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5. FORMULARY. List of drugs used to treat patients in a drug benefit plan. Products listed on a formulary are covered for reimbursement. |
11. STEP THERAPY. Treatment guidelines used to recommend drug therapy beginning with a drug that is less expensive and/or where there is more post-marketing safety experience. More expensive therapies are used if patient doesn't respond to first-line drug. |
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6. GENERIC DRUG. Product that is comparable to a brand-name drug in dosage form, strength, administration, quality, performance characteristics and intended use. Typically less expensive and sold under the chemical name. |
12. WAC. Wholesale Acquisition Cost; Defined by statute as the pharmaceutical manufacturer's list price to wholesalers or direct purchasers in the US. |
We Can Help You With the Next Step
The Pharmacy Benefits Management program through OMNIA Partners is powered by Valued Pharmacy Services (VPS). VPS provides strategic pharmacy oversight through experiences Account Management, Clinical Services, Artificial Intelligence and Plan Oversight. This program includes negotiating competitive contracts with two of the largest PBMs in the industry, Express Scripts and CVS Caremark.
Now is the time to rethink your prescription drug benefits management! Learn how the OMNIA Partners VPS program can help your organizations take control of your plan, find savings, and provide resources.
