Glossary

Inflation Reduction Act (IRA): A U.S. law aimed at reducing spending on medicines by limiting the growth of prescription drug prices for Medicare beneficiaries and allowing Medicare to set prices for certain drugs.

Pharmacy Benefit Managers (PBM): Intermediaries between insurers, pharmacies, and drug manufacturers that manage and dispense prescription drug benefits while negotiating prices and determining formulary lists.

Biopharmaceutical companies: Companies that develop and manufacture medicines using biological and chemical sources, including proteins and genetic material, to treat diseases.

Medicare Part D: A part of Medicare that provides prescription drug coverage to eligible seniors and people with disabilities.

Medicare beneficiaries: Individuals who are eligible for Medicare, a federal health insurance program for people aged 65 and older, and some younger people with disabilities.

Out-of-pocket cost: The amount of money a patient must pay for healthcare services or prescriptions, which may include deductibles, co-pays, and co-insurance.

Co-payment: A fixed amount a patient pays for a prescription or medical service, typically at the time of the service or purchase.

Co-insurance: A percentage of the cost of a healthcare service or prescription that the patient is required to pay after meeting any deductible.

Premium: The monthly amount a person must pay for health insurance coverage, regardless of whether they use the insurance.

Center for Medicare and Medicaid Services (CMS): A U.S. government agency that oversees Medicare, Medicaid, and other health-related programs, ensuring they provide adequate coverage and services.

Inflation Penalty: A penalty that requires companies to pay a fee if they increase drug prices above the rate of inflation, as mandated by the Inflation Reduction Act.

Small molecule medicines: Traditional drugs made from chemically synthesized compounds, often used to treat a wide range of conditions.

Large molecule medicines: Also known as biologics, these are complex drugs made from living organisms used to treat diseases like cancer and autoimmune disorders.

Wholesale Acquisition Cost (WAC): The manufacturer’s suggested list price for a drug before any discounts or rebates.

Drug formulary tier: A classification system used by health plans to categorize drugs based on factors like cost, effectiveness, and how often they are prescribed.

Administrative burden: The administrative tasks and paperwork that healthcare providers, patients, and insurers must manage, often making the healthcare process more complicated and time-consuming.

Prior authorization: A process where a healthcare provider must obtain approval from an insurer before prescribing a medication or treatment to ensure it will be covered.

Step therapy: A policy that requires patients to try cheaper or preferred treatments before moving on to more expensive or specialized options.

Congressional Budget Office (CBO): A nonpartisan federal agency that provides budget and economic analysis to Congress, often assessing the financial impact of proposed legislation.

Insurers: Companies or entities that provide health insurance coverage, helping to pay for healthcare costs, typically in exchange for premiums.

IQVIA: A global provider of data analytics and technology solutions for the healthcare industry, often used by pharmaceutical companies to gather insights into market trends and drug usage.