Chapter 5: Drug Distribution & Supply Chain Flashcards
A wholesale distributor of prescription drugs must be licensed by the state where it does business. True or false?
True
What is PDMA?
Prescription drug marketing act
Wholesalers buy in large quantities from drug manufacturers and resell in smaller quantities to pharmacies, hospitals, etc. True or false?
True
What are primary wholesale distributors?
Buy most of their drugs directly from manufacturers. Legally considered authorized distributors. Usually have ongoing relationships with manufacturers.
What are secondary wholesale distributors?
Buy from primary and other secondary wholesalers, as well as manufacturers, but are not considered “authorized distributors”
What three companies account for nearly 90% of all drug wholesale sales?
Cardinal Health
McKesson HBOC
AmerisourceBergen
What is an authorized distributor?
Any distributor of a prescription drug that has a written agreement with the manufacturers of the drug and conducts at least two transactions with the manufacturer of the drug within any 24 month period.
What is average wholesale price (AWP)?
The AWP is a published wholesale price or “list price” suggested by the manufacturer of the drug. Serves as a reference for pricing, negotiations and reimbursement.
What is brokerage?
The combination of drop-ship, and dock-to-dock delivery services provided by the wholesalers. In brokerage services, wholesalers do not bring the products into their warehouses.
What is buy-side margin?
The term refers to the early payment discounts and other earned or negotiated rebates and discounts, received by wholesalers from drug manufacturers.
What is a chain drugstore?
A company that owns and operates four or more pharmacies
What is dock-to-dock delivery?
A wholesaler obtains the drugs from the manufacturer, and delivers them to a dispenser’s own warehouse without taking the drugs into its own inventory. Also referred to as non-stock sales.
What is a drop shipment?
A drug manufacturer directly delivers the drugs to a dispenser, but the order and payments are made through a wholesaler.
What is float?
The time differential between when a wholesaler receives payment from a customer, and when the payment is due to its supplier.
What is a group purchasing organization (GPO)?
An 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.
What is an in-state wholesaler?
Wholesaler that distributes drug products in a state in which it is physically located.
What is an independent drug store?
A company that owns and operates three or fewer pharmacies.
What is an integrated delivery network (IDN)?
Also known as integrated healthcare delivery network (IHDN), integrated delivery system (IDS), or integrated health/healthcare system (IHS).
This is a financial and management structure that unites hospitals, physicians, ambulatory care sites, and managed care plans through ownership or exclusive formal agreements to provide a system to deliver a continuum of healthcare services.
What is a mail order pharmacy?
Pharmacy that dispenses prescriptions to patients who submit their prescriptions by mail or fax.
What is a manufacturer direct sale?
The type of sale that bypasses the need for any intermediary distributor.
What is a mass merchandiser?
An establishment, like a department store, that sells many items. A pharmacy is included within the building. Examples are Walmart, Target, and Costco.
What are non-stocks sales?
Brokerage sales, dock-to-dock delivery sales, drop shipments, and any other form of sales not placed in inventory.
What is an out-of-state wholesaler?
A wholesaler that distributes drug products in a state in which it is not physically located.
What is a pharmacy benefit management company?
An entity that administers the prescription drug parts of health insurance plans on behalf of plan sponsors, such as self insured, employers, insurance companies, and health maintenance organizations (HMOs). These provide pharmacy claims processing and mail order pharmacy services in addition to other services.
What is a rebate?
The amount that the manufacturer of the drug pays to an insurer or health plan for each unit of drug dispensed.
What is self warehousing?
A type of distribution system, where the retailer of the institutional dispenser takes on the task of distribution itself.
What is sell side margin?
Wholesaler revenues that are generated from fees, and other charges obtained from dispensers.
What is upcharge?
The percentage fee that is paid by the dispenser to the wholesaler for the cost of distribution.
