Dealing with the pharmacy can seem overwhelming at times. Between managing prescriptions, working with insurance, and trying to understand all the different pharmacy terms – things can get confusing real quick.
But don’t worry – we made this guide of 9 pharmacy terms everyone should know to help you out.
Let’s dive in.
What is a deductible?
A deductible is the amount of money you must pay for covered medical services before insurance will offer any assistance.
The deductible amount will vary from one insurance plan to another and some plans may not have a deductible at all. However, this depends on your monthly premium or the amount you pay each month for health insurance.
Generally, a high premium means a low deductible while a low premium means a high deductible.
Review your specific health care needs with a qualified professional to figure our which option will reduce your total costs.
What is a copay?
A copay is an out-of-pocket amount you owe on a healthcare service or prescription.
Copay amounts can vary depending on health insurance plans. For some medical services, you won’t have a copay at all. For others, you’ll owe a copay only after you meet your insurance deductible. In another situation, you could owe a smaller copay (usually in the $20—$30 range) for covered services or after meeting a deductible.
Your healthcare plan will outline all of these scenarios. So, pay close attention to the details of your individual plan to understand when you’ll owe a copay and how much. Also, remember that your copay details or covered services might change every year. Your insurance organization should let you know what details of the plan will change in advance.
If you have any questions regarding your copay, call your insurer.
What is coinsurance?
Coinsurance is the percentage of covered medical expenses you will pay after you have met your deductible.
While a copay is a set amount, coinsurance rates will vary based on the total cost of the service being rendered. Typically, this percentage is around 15-25%.
Here’s a simple example to show you how much someone might pay for coinsurance. Let’s say the total bill for a covered service comes to $11,000, your coinsurance is 20%, and your deductible is $1,000.
You would owe $1,000 (the deductible) and 20% of the remainder of the bill. That would be 20% of $10,000, or $2,000. Your insurance provider would pay the rest.
What is a formulary?
A formulary is the list of medications that a consumer’s health insurance has agreed to pay for.
It’s helpful to familiarize yourself with the formulary to understand what prescriptions are covered by your insurance plan and how much they will cost. This can help inform your doctor what treatment options are available and how they can help you keep prescription costs down.
You should be able to access your healthcare plan’s formulary relatively easily, but remember to check it often as they update it frequently.
What does over the counter mean in pharmacy?
Over-the-counter medication refers to items in the pharmacy available without a prescription. Items like aspirin, most types of cough medicine, and antihistamines are common over-the-counter drugs.
You’ll need a prescription from a healthcare professional in order to purchase these drugs.
What is a controlled substance?
A controlled substance refers to a drug regulated or controlled by a government entity to avoid abuse.
Controlled substances typically have a higher risk of abuse and can include some of the more dangerous drugs in the world. Strong opioids, stimulants, and hallucinogens are some examples of controlled substances.
In the United States, controlled substances get broken up into categories called “schedules.” These schedules range from Schedule I (drugs like heroin) to Schedule V (cough syrup containing traces of codeine).
What is a generic medication?
A generic medication is a medication that contains the same active ingredients, in the same strength and dosage as a brand-name drug.
Generic medications are usually much cheaper than branded drugs and only become available once the patents on the original brand-name drugs expire.
Additionally, generic medications undergo the same rigorous inspection as brand-name drugs for quality and effectiveness standards.
What is a compound medication?
Compound medications are medications that combine, mix, or alter ingredients to meet the specific needs of an individual patient.
There are several different ways a compound medication can be modified. For example, they can have their form or shape changed, they can have ingredients removed in order to accommodate allergies, or they can be in higher or lower doses than normal. They can even have different flavors if someone prefers one taste to another.
However, compound medications are not FDA approved and will need to be prepared by a specialized compounding pharmacy. If you’re interested in utilizing a compound medication, contact your healthcare professional or pharmacist for assistance.
What are biosimilars?
Biosimilars are similar to generic drugs, with one big difference: biosimilars come from biologic drugs made from living proteins.
Just as generic drugs replicate their brand-name predecessors, biosimilars replicate original, starting-point biologic drugs. Again, just like generic drugs, biosimilars have to meet the same high standards before they go to market. However, because they come from organic matter, there may be very slight variations in different biosimilars.
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