Glossary - PHRX 4050 Glossary of Terms for 2011 actual...

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PHRX 4050 Glossary of Terms for 2011 1 actual acquisition cost (AAC) Final cost of the pharmaceutical to the pharmacy or other health care provider after all discounts, rebates, and other price concessions are taken into account. administrative services only (ASO) An arrangement in which a plan hires a third-party to deliver administrative services to the plan, such as claims processing and billing, but the plan bears the financial risk for claims. This is common in self-funded (also known as self-insured) health care plans. adverse selection The problem of attracting members who are sicker than the general population, specifically, members who are sicker than was anticipated when developing the budget for medical costs. A tendency for utilization of health services in a population group to be higher than the average or the tendency for a person who is in poor health to be enrolled in a health plan where he or she is below the average risk of the group. From an insurance perspective, adverse selection occurs when persons with poorer-than-average health status apply for, or continue, insurance coverage to a greater extent than do persons with average or better health expectations. authorized generic Drug approved by the FDA that the brand manufacturer subsequently chooses to market (or have marketed under sale or license) by generic name. The brand-name drug and the authorized generic are chemically identical. average manufacturer price (AMP) Average price paid to a pharmaceutical manufacturer by wholesalers for drugs distributed to retail pharmacies, net of prompt- pay (“cash”) discounts. AMP was a benchmark created by Congress in 1990 in calculating rebates owed by Medicaid by pharmaceutical manufacturers. The Federal Supply Schedule (FSS) and 340B prices, as well as prices associated with direct sales to health maintenance organizations (HMOs) and hospitals, are excluded from AMP under the Medicaid rebate program. In June 2005, the OIG estimated the median AMP at approximately 77% of the average wholesale prices (AWP) for single-source brand drugs, 72% of AWP for multiple-source brand drugs, and 30% of AWP for generic drugs. Before the enactment of the Deficit Reduction Act of 2005 (DRA), AMP data were used by the Centers for Medicare & Medicaid Services (CMS) primarily for purposes of the Medicaid drug rebate program, and disclosure of AMP data was forbidden except in certain narrow circumstances. The DRA stipulated that AMPs were to be made available to state Medicaid programs, that they were to be used to calculate federal upper limit (FUL) amounts for certain multiple-source drugs, and that states could use them to help set other reimbursement rates. In July 2007, CMS issued final regulations addressing the AMP provisions of the DRA. average wholesale price (AWP)
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This note was uploaded on 10/08/2011 for the course PHAR 4030 taught by Professor Dr.miller during the Spring '11 term at UConn.

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Glossary - PHRX 4050 Glossary of Terms for 2011 actual...

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