Generic Prescription Drug Program as a Pharmaceutical Case Study

Pages: 3 (1005 words)  ·  Bibliography Sources: 3  ·  File: .docx  ·  Level: Master's  ·  Topic: Medicine

¶ … Generic Prescription Drug Program

As a pharmaceutical benefit manager, I have a variety of pricing strategies at my disposal, to determine the amount charged to employers for prescription drugs. This paper will briefly assess each of these strategies. Despite these tools, as Jones (2003) notes,

The primary goal of any pharmacy benefit plan-including the generic drug program should not be simply to lower the cost of prescription drugs. Placing too much emphasis on controlling costs alone will likely lead to higher medical costs, poor patient outcomes and a pharmacy benefit that provides little true value. Only by focusing on the complete array of components that comprise an effective generic drug program can employers and plan sponsors ensure that they secure both the affordable cost and quality programs that both they and their employees need and deserve (p. 18).

As such, a combination of these strategies is recommended to provide the most value to the employer, the patient, the pharmacy, and the pharmaceutical industry.

Pricing Strategies:

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Pharmaceutical benefit managers utilize several strategies to determine the price that an employer is charged for prescription drugs. These pricing strategies fall into six primary categories: wholesale acquisition cost (WAC), maximum allowable cost (MAC), average wholesale price (AWP), administrative fees, dispensing fees, and rebates. Each of these categories affects the employer's cost in a different way and can vary greatly.

Case Study on Generic Prescription Drug Program as a Pharmaceutical Assignment

The WAC strategy is calculated by a national data company, according to Jones (2003). This company averages several wholesaler purchase prices to determine the WAC for each prescription drug. Similarly, the AWP is determined using wholesaler figures, this time the average price that is being charged for a drug. The AWP price can change weekly or daily and is dependent on a variety of factors, including: the exclusivity of the drug, costs for research and development, competitive climate, market demand, and the manufacturer's desire to capture market share (McClurg, 2009). These two pricing strategies are in contrast to MAC pricing which is set by the prescription benefits manager and can be used to hide costs to the employer. MAC pricing is not necessarily based on wholesaler costs or pricing. In addition to this pricing structure, additional fees may also be charged that affects the pricing of prescription benefit plans.

Administrative fees are often charged on a per claim basis, as a means of recapturing costs associated with basic reporting, utilization reviews and account management. According to Jones (2003), this fee can be as much as $0.70 per claim. A dispensing fee may also be charged and paid to the pharmacy filling the prescription. Rebates often too can be figured into a pricing structure. if, as a pharmaceutical benefit manager I have acquired a significant rebate for a particular drug that will be used frequently with a new employer, then it may be advantageous to pass this along as a savings to secure the benefit plan. As a pharmaceutical benefit manager, I would recommend using a combination of these pricing strategies to determine what to charge… [END OF PREVIEW] . . . READ MORE

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How to Cite "Generic Prescription Drug Program as a Pharmaceutical" Case Study in a Bibliography:

APA Style

Generic Prescription Drug Program as a Pharmaceutical.  (2011, February 24).  Retrieved July 2, 2020, from

MLA Format

"Generic Prescription Drug Program as a Pharmaceutical."  24 February 2011.  Web.  2 July 2020. <>.

Chicago Style

"Generic Prescription Drug Program as a Pharmaceutical."  February 24, 2011.  Accessed July 2, 2020.