Pharmacy Terms

  • Co-Payment – The customer is required to pay a particular flat dollar amount for each prescription.
  • Dispense As Written (DAW) – Information that a physician can observe on a prescription, which instructs the pharmacist to distribute the exact brand prescribed. DAW is designed to prevent substitutions.
  • Brand Name Drugs – A drug that has a trade name and is protected by the patent.
  • Generic Name Drugs – When a patent for a brand-name drug expires, generic versions of the drug can be offered for sale if the FDA agrees; generic drugs are usually cheaper than brand name drugs.
  • Preferred Drugs – are non-preferred brand name drugs for which generic equivalents may or may not be available.
  • Non-Preferred Drugs – A drug that your insurance discourages you from getting, usually by requiring a higher co-payment.
  • Formulary Drugs – Drugs covered by benefits; prescription drugs that appear on a list covered by healthcare benefits.
  • Non-Formulary – Drugs not on a plan-approved list. Tier 3 drugs have the highest co-payment.
  • Preferred Drug List (PDL) – The term is habitually used interchangeably with “formulary”. A list of brand and generic name drugs, which the carrier encourages members to use. The PDL classifies prescription drugs into 3 categories or tiers.
  • Tier 1 This level consists of generic drugs. Generic drugs that are purchased for a lower co-payment.
  • Tier 2 This level  includes preferred brand name drugs form which generic equivalent is not available. Tier 2 drugs, can be purchased for moderate co-payments.
  • Prior Authorization – A cost containment procedure that requires a prescriber to obtain permission to prescribe a medication prior to prescribing it. It is also called prior approval.
  • Controlled Drugs – Strong opiates for pain management and some amphetamines, like stimulants, used for attention deficit disorder.
  • Non-Controlled Drug – Medications prescribed to treat medical conditions such as high blood pressure, diabetes, bacterial infections.
  • Deductible – The amount you have to pay out-of-pocket for expenses before the insurance companies will cover the remaining costs.
  • Donut Hole (Medicare Patients) – This happens when your insurance temporarily stops paying for your prescriptions. If you are in the donut hole, you have to the pay the entire cost of your medication.

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