Chapter 5 - Drug Distribution & Supply Chain

Question 1

What are the two legal classifications of drug wholesalers?

Answer 1

Primary wholesale distributors (buy most of their drugs directly from the manufacturers), and secondary wholesale distributors (not considered “authorized distributors”).

Question 2

What is PDMA?

Answer 2

The Prescription Drug Marketing Act.

Question 3

How many companies account for nearly 90% or all drug wholesale sales?

Answer 3

Three (Cardinal Health, McKesson HBOC, and AmerisourceBergen).

Question 4

Average Wholesale Price (AWP)

Answer 4

Published wholesale price or “list price” suggested by the manufacturer of a drug.

Question 5

Group purchasing organization (GPO)

Answer 5

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.

Question 6

Independent drug store

Answer 6

A company that owns and operates three or fewer pharmacies (Community or neighborhood pharmacies).

Question 7

IDN

Answer 7

Integrated Delivery Network

Question 8

What is the average size of prescriptions dispensed by mail-order pharmacies compared to those dispensed by retail pharmacies?

Answer 8

3 times larger.

Question 9

Non-stock sales

Answer 9

Brokerage sales, dock-to-dock delivery sales, drop shipments, and any other form of sales not placed in inventory.

Question 10

What is another name for a rebate?

Answer 10

After-market arrangement (They do not affect the prices paid at the time of service).