Dictionary
The Dictionary provides concise definitions of health economics terms, arranged alphabetically for quick reference. Use it to understand unfamiliar terminology or confirm the meaning of a specific term.
A
- Average Manufacturer PriceAMP, Manufacturer Average Price
- A US Medicaid pricing benchmark, the average price wholesalers pay a manufacturer for a drug, used to calculate manufacturer rebates owed.
- Average Sales PriceMedicare Net Price, ASP Benchmark
- A US Medicare pricing benchmark determining reimbursement for physician-administered drugs, based on actual sales prices net of discounts and rebates.
B
- Best PriceLowest Acquisition Price, Manufacturer Lowest Price
- A US Medicaid pricing benchmark, the lowest price a manufacturer sells a drug to any purchaser, used to calculate required rebates.
C
- Confidential DiscountPrivate Discount, Undisclosed Rebate
- A price reduction negotiated privately between a manufacturer and payer, keeping a higher public list price while offering a lower net price.
G
- Gross PricePublished Price, Pre-Rebate Price
- The publicly listed price of a drug before any rebates or discounts are applied, unlike the net price actually realised by the manufacturer.
- Gross-to-NetGross-Net Reduction, List-to-Net Reduction
- The overall reduction from a drug's publicly listed gross price to the actual net price realised after rebates and discounts.
L
- List PriceSticker Price, Catalogue Price
- The publicly stated price a manufacturer offers a drug for sale, before accounting for negotiated discounts or rebates that reduce the price actually paid.
M
- Market Share RebateShare-Based Rebate, Volume Share Rebate
- A rebate arrangement in which the discount a manufacturer provides depends on the treatment's achieved market share relative to competing products.
N
- Net PricePost-Rebate Price, Discounted Transaction Price
- The actual price a manufacturer realises for a treatment after all rebates and discounts, distinct from its publicly listed gross price.
O
- Outcome-Based RebateOutcomes-Based Rebate, Results-Linked Rebate
- A manufacturer rebate paid or withheld depending on whether a treatment achieves a predefined clinical outcome for the patients who received it.
P
- Performance-Based RebatePerformance Rebate, Outcome-Linked Rebate
- A rebate arrangement in which a manufacturer discount to a payer is contingent on the treatment achieving a specified level of clinical performance.
- Pharmacy Benefit ManagerPBM, Drug Benefit Administrator
- A company administering prescription drug benefits for health plans and employers, negotiating rebates, managing pharmacy networks, and processing claims.
R
- RebateManufacturer Discount, Volume Concession
- A retrospective payment from a manufacturer to a payer, typically a percentage of price or based on utilisation volume, reducing true net cost.
- Rebate AgreementDiscount Agreement, Refund Contract
- A formal contract establishing the terms under which a rebate will be paid, including the percentage and any formulary or utilisation conditions.
- Risk-Sharing RebatePerformance-Linked Rebate, Value-Based Rebate
- A rebate mechanism in which the amount a manufacturer repays a payer depends on how a treatment actually performs in real-world use.
T
- Tax CreditTax Rebate, Fiscal Credit
- A reduction in tax owed, provided by government to encourage a behaviour or offset a cost, such as buying health insurance.
V
- Volume RebateQuantity Rebate, Volume-Based Rebate
- A rebate payment that increases in proportion to the total quantity of a treatment utilised, tied directly to overall uptake.