Chapter 5 - Drug Distribution & Supply Chain Flashcards
What are the two legal classifications of drug wholesalers?
Primary Wholesale Distributors (buy most of their drugs directly from the manufacturers), and Secondary Wholesale Distributors who buy from primary and secondary wholesalers and manufacturers. (Not considered “authorized distributors” of the manufacturer’s).
What is PDMA?
The Prescription Drug Marketing Act.
How many companies account for nearly 90% or all drug wholesale sales?
Three (Cardinal Health, McKesson HBOC, and AmerisourceBergen).
Published wholesale price or “list price” suggested by the manufacturer of a drug.
Average Wholesale Price (AWP)
Entity consisting of two or more hospitals or other healthcare entities that is formed to offer its members access to purchasing contracts for health supplies.
Group Purchasing Organization (GPO)
A company that owns and operates three or fewer pharmacies (Community or neighborhood pharmacies).
Independent Drug Store
What does IDN stand for?
Integrated Delivery Network
What is the average size of prescriptions dispensed by mail-order pharmacies compared to those dispensed by retail pharmacies?
3 times larger.
Brokerage sales, dock-to-dock delivery sales, drop shipments, and any other form of sales not placed in inventory.
Non-Stock Sales
What is another name for a rebate?
After-market arrangement (They do not affect the prices paid at the time of service).
As a pharmacy, what is the benefit of buying from Wholesalers?
They can buy by-the-bottle and receive a delivery daily, so there’s no need to keep a large stock. This situation also lowers costs, and requires paying only ONE supplier instead of dozens of manufacturers.
Who’s responsibility is it to visit distributors and distribution centers?
NAMs
What type of sale bypasses the need for intermediary distributors?
Manufacturer-Direct Sales
The average size of prescriptions dispensed by mail-order pharmacies is usually ____ times larger than those dispensed by retail pharmacies.
Three
Name 3 examples of Non-Stock Sales.
Brokerage Sales, Dock-to-Dock Sales, and Drop Shipments
By FDA law, large chain pharmacies are not allowed to buy directly from manufacturers. True or False?
False. Some large pharmacy companies DO buy directly from the drug manufacturers, but they are exceptions.
Any distributor of prescription drug that has a written agreement with the manufacturer of the prescription drug and conducts at least two transactions with the manufacturer of the prescription drug within any 24-month period.
Authorized Distributor
The percentage fee that is paid by the dispenser to the wholesaler for the cost of distribution.
Upcharge
The combination of drop-ship and dock-to-dock delivery services provided by wholesalers. Wholesalers do not bring the product into their warehouses.
Brokerage
Wholesaler revenues that are generated from fees and other charges obtained from dispensers.
Sell-Side Margin
A wholesaler obtains the drugs from the manufacturer and delivers them to a dispenser’s own warehouse without taking the drug into its own inventory. (a type of “non-stock sales”)
Dock-to-Dock Delivery
The type of sale that bypasses the need for any intermediary distributor. The product is sold and shipped directly by the manufacturer to the dispenser.
Manufacturer Direct Sale
Refers to the early payment discounts and other earned/negotiated rebated and discounts received by wholesalers from drug manufacturers. Increases in the value of the wholesaler’s inventories as manufacturers prices rise, are also considered this…
Buy-Side Margin
