Glossary

Acquisition Cost: The final cost of a drug after all discounts are subtracted.

Acquisition Cost-Based Mail Service (ACMS): Pharmaceutical product pricing at actual net cost, plus a dispensing and shipping fee. The product is delivered through mail service.

Average Wholesale Price (AWP): The suggested list price assigned to a drug and is listed in pricing publications such as Redbook, Medispan or First Data Bank.

Clinical Advisory Committee (CAC): Ventegra’s Clinical Advisory Committee is a group of clinical decision makers comprised mostly of physicians and pharmacists. The CAC is responsible for the development of Ventegra’s formularies and clinical programs. The CAC promotes quality, safe, and cost-effective drug therapy that reflects the community and national standards of practice.

Consumer Driven Health Plans (CDHP): Health plans that allow consumers to have more choices in healthcare and more engagement in spending healthcare dollars.

Contracting Service Organization (CSO): A fully transparent organization with a robust portfolio of pharmaceutical contracts plus other healthcare services and allows its clients the flexibility of accessing those products or services that meet the clients’ business needs.

Downside Financial Risk: The entity bearing financial risk for a given expense category (e.g., pharmaceuticals, medical care, etc.). The entity bearing downside financial risk is, in most cases, entitled to manage and receive discounts on the products and/or services defined by the division of financial responsibility (DOFR). DOFR tables usually exist between health plans and providers. These are usually organized medicine entities such as medical groups and hospitals.

Formulary: A list of pharmaceutical products and other information that reflects the current clinical view and approved for use by a client.

Healthcare Common Procedural Coding System (HCPCS): Uniform national definitions of services, codes to represent the services and payment modifiers for the services.

Health Savings Accounts (HSA): An account that allows individuals to pay for current health expenses and save for future qualified medical and retiree health expenses on a tax free basis, with some state exceptions.

Injectable: A drug or medication that can be injected.

J-Codes: Subset of HCPCS codes with a high order value level “j” to identify certain drugs and other supplies. The “J” series contains many of the injectable pharmaceuticals, but others may be found in the “C,” “G,” and “U” HCPCS codes.

Maximum Allowable Cost (MAC): The maximum cost per unit reimbursed to a network pharmacy regardless of the acquisition cost, typically established by a health plan.

National Drug Code (NDC): A code set that identifies prescription drugs and some over-the-counter medications.

Over-The-Counter (OTC): Medications available without a prescription.

Payor: The responsible party who must make payment.

Pharmacy Benefit Administration (PBA): The management of pharmacy benefits, generally with no financial risk on drug costs.

Provider: A medical-related individual or entity. Usually a physician, medical group, pharmacy and/or hospital, but could include home infusion, skilled nursing and long-term care facilities.

Rebate: A refund or discount of part of an amount paid.

Robo-Rebate System: Ventegra’s web-based pharmaceutical rebate management application that allows for full transparency.

Specialty Pharmacy: A pharmacy that provides medications, including injectables, which require special handling and storage.

Transparency: The property of an entity that allows another entity to pass through it without filtering or altering information or incentives between the provider of the information/incentive and intended recipient of the information/incentive.

Ventegra: Derived from the Latin words veritas meaning truth and integritas meaning integrity.

Ventegra Injectable Program (VIP): A comprehensive injectable utilization management solution that encompasses claims management, distribution at net cost (inclusive of all discounts and rebates) and contracts/rebates.

Wholesale Acquisition Cost (WAC): Cost at which Wholesalers purchase drug products from Manufacturers.