The Pharmacy Glossary
Daily pharmacy operations and clinical reference tools, consolidated into a single professional toolkit.
A
ACE Inhibitor
Angiotensin-Converting Enzyme inhibitor; a class of medication used primarily for the treatment of high blood pressure and heart failure.
Adherence
The extent to which patients take their medications exactly as prescribed by their healthcare provider.
Adverse Drug Reaction
Any unexpected or dangerous reaction to a drug.
Anticoagulant
Commonly known as blood thinners, these are chemical substances that prevent or reduce coagulation of blood, prolonging the clotting time.
AWP (Average Wholesale Price)
A benchmark price for prescription drugs used in reimbursement calculations, generally representing the average price wholesalers charge pharmacies.
B
Bioavailability
The proportion of a drug or other substance which enters the circulation when introduced into the body and so is able to have an active effect.
Bioequivalent
Refers to pharmaceutical equivalents or pharmaceutical alternatives whose rate and extent of absorption do not show a significant difference.
Black Box Warning
The strictest warning put in the labeling of prescription drugs by the FDA when there is reasonable evidence of an association of a serious or life-threatening hazard with the drug.
Brand-name Drug
A drug sold by a pharmaceutical company under a specific name or trademark and is protected by a patent.
C
Clinical Pharmacy
The branch of pharmacy in which pharmacists provide patient care that optimizes the use of medication and promotes health, wellness, and disease prevention.
Compound
The creation of a particular pharmaceutical product to fit the unique need of a patient.
Controlled Substance
A drug or other substance that is tightly controlled by the government because it may be abused or cause addiction.
Copayment
A fixed amount for a covered service, paid by a patient to the provider of service before receiving the service.
D
DEA Number
A registration number assigned to a health care provider by the U.S. Drug Enforcement Administration allowing them to write prescriptions for controlled substances.
DIR Fees
Direct and Indirect Remuneration fees charged by PBMs to pharmacies, often months after the point of sale.
Dispensing Fee
The fee paid to the pharmacy for the professional services of the pharmacist and the costs associated with filling a prescription.
Drug-Drug Interaction
A change in a drug's effect on the body when the drug is taken together with a second drug.
E
E-prescribing
The electronic transmission of a prescription directly to a pharmacy through a computer or similar device.
Electronic Health Record (EHR)
A digital version of a patient's paper chart. EHRs are real-time, patient-centered records that make information available instantly and securely to authorized users.
F
FDA (Food and Drug Administration)
The federal agency responsible for protecting the public health by ensuring the safety, efficacy, and security of human and veterinary drugs.
Formulary
A constantly updated list of prescription drugs covered by a specific health insurance plan.
G
Generic Drug
A medication created to be the same as an already marketed brand-name drug in dosage form, safety, strength, route of administration, quality, and performance characteristics.
Generic Substitution
The process of dispensing an equivalent, lower-cost generic drug in place of a brand-name medication.
GPO (Group Purchasing Organization)
An entity that is created to leverage the purchasing power of a group of businesses to obtain discounts from vendors based on the collective buying power of the GPO members.
H
HIPAA
Health Insurance Portability and Accountability Act; US law designed to provide privacy standards to protect patients' medical records and other health information.
I
In-network Pharmacy
A pharmacy that has a contract with your health insurance plan to provide services at a pre-negotiated rate.
Indication
A valid reason to use a certain test, medication, procedure, or surgery.
L
Legend Drug
A drug that, by law, can only be dispensed with a physician's prescription.
M
MAC (Maximum Allowable Cost)
A PBM-generated list of maximum prices they will pay for generic drugs.
MTM (Medication Therapy Management)
Healthcare services provided by pharmacists to help patients get the best benefits from their medications.
N
NDC (National Drug Code)
A unique 10 or 11-digit, 3-segment number which serves as a universal product identifier for human drugs in the U.S.
NPI (National Provider Identifier)
A unique 10-digit identification number issued to covered health care providers in the United States by the Centers for Medicare and Medicaid Services (CMS).
O
Orphan Drug
A biological product or drug intended to treat a rare disease or condition.
OTC (Over-the-Counter)
Drugs that are safe and effective for use by the general public without a prescription.
P
PBM (Pharmacy Benefit Manager)
Third-party administrators of prescription drug programs for health insurance plans.
Pharmacokinetics
The branch of pharmacology concerned with the movement of drugs within the body.
Prior Authorization
A requirement that your doctor obtain approval from your health insurance plan before a specific drug is covered.
PSAO (Pharmacy Services Administration Organization)
Entities that help independent pharmacies negotiate with PBMs and wholesalers.
Q
Quality Assurance
A way of preventing mistakes and defects in manufactured products and avoiding problems when delivering products or services.
R
REMS (Risk Evaluation and Mitigation Strategy)
A drug safety program that the FDA can require for certain medications with serious safety concerns to help ensure the benefits of the drug outweigh its risks.
S
Specialty Pharmacy
A pharmacy that specializes in providing high-cost, high-touch medications for patients with complex or rare diseases.
T
Therapeutic Equivalency
Drug products that are pharmaceutical equivalents and can be expected to have the same clinical effect and safety profile when administered to patients under the conditions specified in the labeling.
Tiered Formulary
A type of formulary that divides drugs into different 'tiers' based on cost, with different levels of patient cost-sharing for each tier.
U
USP (United States Pharmacopeia)
A non-profit organization that sets standards for the identity, strength, quality, and purity of medicines, food ingredients, and dietary supplements manufactured, distributed and consumed worldwide.
Utilization Review
The process of reviewing healthcare services to ensure they are necessary, appropriate, and delivered in the most cost-effective manner.
W
WAC (Wholesale Acquisition Cost)
The manufacturer's list price for a drug when sold to wholesalers, not including discounts or rebates.
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