Prescription drug purchasing pool
Prescription drug purchasing pool
A Prescription drug purchasing pool (pronunciation: /prɪˈskrɪpʃən drʌɡ ˈpɜːʧɪsɪŋ puːl/) is a collective buying strategy employed by multiple healthcare providers or organizations to negotiate lower prices for prescription drugs.
Etymology
The term "Prescription drug purchasing pool" is derived from the combination of three words. "Prescription" (from the Latin praescriptio), "drug" (from Old French drogue), and "purchasing pool" (from Old French pourchacier and Middle English pol).
Function
The primary function of a prescription drug purchasing pool is to leverage the combined purchasing power of its members to negotiate lower prices for prescription drugs. This is typically achieved through volume-based discounts or rebates from pharmaceutical companies.
Related Terms
- Pharmacy Benefit Manager (PBM): An organization that manages prescription drug benefits on behalf of health insurers, Medicare Part D drug plans, large employers, and other payers.
- Group Purchasing Organization (GPO): An entity that helps healthcare providers — such as hospitals, nursing homes and home health agencies — realize savings and efficiencies by aggregating purchasing volume and using that leverage to negotiate discounts with manufacturers, distributors and other vendors.
- Drug formulary: A list of prescription drugs, both generic and brand name, that are preferred by your health plan.
- Rebate (marketing): A type of sales promotion marketers use to increase product sales, where a refund or reduction is given on a product.
External links
- Medical encyclopedia article on Prescription drug purchasing pool
- Wikipedia's article - Prescription drug purchasing pool
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