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What is the PDMA?
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Section ____ of the PDMA dictates that a wholesale distributor of prescription drugs must be licensed by the state where it does business.
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CNPR Certification
Chapter 5
| Question | Answer |
|---|---|
| What is the PDMA? | Prescription Drug Marketing Act |
| Section ____ of the PDMA dictates that a wholesale distributor of prescription drugs must be licensed by the state where it does business. | 503 |
| What are the 2 classifications of wholesale distributors? | 1)Primary - Buy most of their drugs directly from manufacturers 2)Secondary - Buy from primary and other secondary wholesalers and are not considered "authorized distributors." |
| Who are the 3 major wholesale distributors? | 1)Cardinal Health 2)McKesson HBOC 3)AmerisourceBergen |
| Vocab: Authorized Distributor | Any distributor of a prescriptions drug that has a written agreement with the manufacturers and also conducts at least 2 transactions with in 24 months. |
| Vocab: Average Wholesale Price (AWP) | Published wholesale price or "list price" suggested by the manufacturer of the drug. |
| Vocab: Brokerage | Combination of drop-ship and dock-to-dock delivery services by wholesalers. Wholesalers do not bring the product into their warehouse. |
| Vocab: 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. |
| Vocab: Chain Drug Store | A company that owns and operates 4 or more pharmacies. Walgreens, CVS etc do count. |
| Vocab: Dock-to-Dock Delivery | a wholesaler obtains the drugs from the manufacturer and delivers them to a dispensers own warehouse without taking the drugs into its own inventory. Also called non-stock sales. |
| Vocab: Drop Shipment | When a drug manufacturer directly delivers the drugs to a dispenser, but the order and payments are made through a wholesaler. |
| Vocab: Float | The time differential between when a wholesaler receives payment from its customer (pharmacy) and when the payment is due to its suppler (manufacturer or wholesaler). |
| Vocab: Group Purchasing Organization (GPO) | Group of 2 or more entities that is formed to offer its members access to purchasing contracts for health supplies. |
| Vocab: In-State Wholesaler | Wholesaler that distributes drug products in a state in which it is physically located. |
| Vocab: Independent Drug Store | A company that owns and operates three or fewer pharmacies. |
| Vocab: Integrated delivery network (IDN) | A financial and management structure that unites hospitals, physicians, ambulatory care sits, and managed care plans through ownership or exclusive agreements to provide a system to deliver a continuum of healthcare services. |
| Other names for Integrated delivery network (IDN) | aka Healthcare delivery network (IHDN), integrated delivery system (IDS), or Integrated healthcare system (IHS). |
| Vocab: Mail-Order Pharmacy | A Pharmacy that dispenses prescriptions to patients who submit their prescriptions by mail or fax. Average prescription size is 3 times larger than normal retail pharmacies. |
| Vocab: Manufacturer-direct sale | The type of sale that bypassed the need for any intermediary distributor. The product is sold and shipped directly by the manufacturer to the dispenser. |
| Vocab: Mass Merchandiser | Department store that is primarily engaged in retailing a wide range of merchandise including a pharmacy. Walmart, Target, Costco etc |
| Vocab: Non-stock sales | Brokerage services, dock to dock sales, drop shipments, and any other form of sales not placed in inventory by a wholesale distributor. |
| Vocab: Out-of-state Wholesaler | A wholesaler that distributes drug products in a state in which it is not physically located. |
| Vocab: Pharmacy benefit management company (PBM) | Entity that administers the prescription drug part of health insurance plans on behalf of plan sponsors, such as self insured employers, insurance companies, and HMO's. |
| Vocab: Rebate | The amount that the manufacturer of the drug pays to an insurer or health plan for each unit of drug dispensed. aka "aftermarket arrangements." |
| Vocab: Self-warehousing | Distribution system where the retailer of the dispenser takes on the task of distribution itself. (Walgreens has its own warehouses) |
| Vocab: Sell-Side Margin | Wholesaler revenues that are generated from fees and other charges obtained from dispensers. |
| Vocab: Upcharge | The percentage fee that is paid by the dispenser to the wholesaler for the cost of distribution. |
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