Glossary of terms in drug coverage debate
Brand-name drugs
A drug sold by a drug company under a specific name or trademark and that is or has been protected by a U.S. patent. Brand-name drugs may be available by prescription or over the counter. They invariably are more expensive than generic drugs, although generics aren’t allowed while the drug remains under patent.
Co-pay accumulator
Sometimes called an accumulator adjustment program, this is a strategy used by health-insurance companies and pharmacy benefit managers (PBMS) that stop manufacturer co-pay assistance from counting toward two things: 1) the deductible; and 2) the maximum out-of-pocket spending
Deductible
The amount you pay for covered health-care services before your insurance plan starts to pay. With a $2,000 deductible, for example, you pay the first $2,000 of covered services yourself. After you pay your deductible, you usually pay only a co-payment or coinsurance for covered services. Your insurance company pays the rest.
Formulary
A list of prescription drugs covered by a prescription-drug plan or another insurance plan offering prescription-drug benefits. Also called a drug list.
Out-of-pocket costs
Your expenses for medical care that aren’t reimbursed by insurance. Out-of-pocket costs include deductibles, coinsurance, and co-payments for covered services plus all costs for services that aren’t covered. Health-insurance policies typically have a maximum for these expenses you must pay in a year.
Pharmacy Benefit Managers
Middlemen in the drug-supply chain that function as intermediaries between health insurance providers and pharmaceutical manufacturers. PBMS create formularies, negotiate rebates (discounts paid by a drug manufacturer to a PBM) with manufacturers, process claims, create pharmacy networks, review drug utilization and occasionally manage mail-order specialty pharmacies.