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edited by AIFA’s Office of Osmed and HTA


The active total care offered to a person and that person’s family when it is recognised that the illness is no longer curable, in order to concentrate on the person’s quality of life and the alleviation of distressing symptoms. The focus of palliative care is neither to hasten nor postpone death. It provides relief from pain and other distressing symptoms and integrates the psychological and spiritual aspects of care. It offers a support system to help relatives and friends cope during an individual’s illness and with their bereavement. [Source: WHO. A Glossary of Terms for Community Health Care and Services for Older Persons]
Parallel trade in medicines within the EU is a form of arbitrage in which medicinal products are purchased in one Member State, typically where income levels are relatively low, and sold into other Member States, where income levels and hence prices are higher (although there are exceptions to this, when high prices are being charged in lower income Member States). About 100 parallel trade enterprises are involved, between them employing about 12,000 people (5,000 in the UK), some on a part-time or casual basis. The major companies are represented at EU level by the trade association European Association of Euro-Pharmaceutical Companies (EAEPC), but there are a relatively large number of others holding licences about whom less is known. [Source: Europe Economics. Safe Medicines Through Parallel Trade Contribution to an Impact Assessment]
Paramedicines are substances or compounds which do not correspond to the legal definition of a medicine. They are in any event products which, by virtue of their composition, utilisation or presentation, are compatible with the dignity of the profession of pharmacist. [Source: PPRI Glossary]
Patient access schemes are special ways Pharmaceutical companies can propose to enable patients to gain access to high costs drugs medicines. They are proposed by a pharmaceutical company and agreed between the Department of Health and the pharmaceutical company. [Source: Patient Access Scheme Liaison Unit at NICE, adapted] See also: managed entry agreements
Schemes where the reimbursement level is tied to the impact on clinical decision making or practice patterns. [Source: Carlson JJ , Sullivan SD, Garrison LP, Neumann PJ, Veenstra DL. Linking payment to health outcomes: A taxonomy and examination of performance-based reimbursement schemes between healthcare payers and manufacturers. Health Policy. 2010 Aug. 96(3):179-90.] See also: managed entry agreements
A cost-containment measure; a financial mechanism that requires manufacturers to refund a part of their revenue to a payer (i.e. third party payer) if sales exceed a previously determined or agreed target-budget. [Source: PPRI Glossary]
Cost-sharing in the form of a set proportion of the cost of a service or product. The patient pays a certain fixed proportion of the cost of a service or product, with the third party payer paying the remaining proportion. [Source: PPRI Glossary]
Agreement between a payer and a pharmaceutical, device or diagnostic manufacturer where the price level and/or revenue received is related to the future performance of the product in either a research or a real world environment. [Source: Towse A, Garrison L. Can't get no satisfaction? Will pay for performance help? Toward an economic framework for understanding performance-based risk sharing agreements for innovative medical products. Pharmacoeconomics 2010, 28:93-102.] See also: managed entry agreements
Schemes between healthcare payers and medical product manufacturers in which the price, level, or nature of reimbursement are tied to future measures of clinical or intermediate endpoints ultimately related to patient quality or quantity of life, appear to have arisen out of a desire to provide patients with access to novel and potentially beneficial healthcare technologies under conditions of significant uncertainty and cost pressures. [Source: Carlson JJ , Sullivan SD, Garrison LP, Neumann PJ, Veenstra DL. Linking payment to health outcomes: A taxonomy and examination of performance-based reimbursement schemes between healthcare payers and manufacturers. Health Policy. 2010 Aug. 96(3):179-90.] See also: managed entry agreements
Schemes where the reimbursement level for covered products is tied to the measure of clinical outcomes in the real world. [Source: Carlson JJ , Sullivan SD, Garrison LP, Neumann PJ, Veenstra DL. Linking payment to health outcomes: A taxonomy and examination of performance-based reimbursement schemes between healthcare payers and manufacturers. Health Policy. 2010 Aug. 96(3):179-90.] See also: managed entry agreements
Medicinal products are pharmaceutical alternatives if they contain the same active moiety but differ in chemical form (salt, ester, etc) of that moiety or in the dosage form or strength. [Source: EMEA. Note for guidance on the investigation on bioavailability and bioequivalence.]
A pharmaceutical and therapeutic committee is assigned to develop a list of medicines (hospital pharmaceutical formulary) that is authorised for hospital use. This committee can either be established within a hospital (e.g. AT, BE) or by government (e.g. CY). Members of a PTC may be the head of the hospital pharmacy, the chief physician, the chief nurse, the administrative director, and specialist physicians.
Pharmaceutical budgets are a cost-containment measure of third party payers. The maximum amount of money to be spent on medicines in a specific region or period of time is fixed ex-ante. [Source: PPRI Glossary]
Pharmaceutical care is the responsible provision of drug therapy for the purpose of achieving definite outcomes that improve a patient's quality of life. These outcomes are: * cure of a disease; * elimination or reduction of a patients’ symptomatology; * arresting or slowing of a disease process; or * preventing a disease or symptomatology. Pharmaceutical care involves the process that a pharmacist co-operates with the patient and healthcare professionals in designing, implementing, and monitoring a therapeutic plan that will produce specific therapeutic outcomes for the patient. This in turn involves three major functions: * identifying potential and actual drug-related problems; * resolving actual drug-related problems; and * preventing drug-related problems. Pharmaceutical care is a necessary element of health care, and should be integrated with other elements. Pharmaceutical care is, however, provided for the direct benefit to the patient, and the pharmacist is responsible directly to the patient for the quality of that care. The fundamental relationship in pharmaceutical care is a mutually beneficial exchange in which the patient grants authority to the provider and the provider gives competence and commitment (accept responsibility) to the patient. These fundamental goals, processes, and relationships of pharmaceutical care exist regardless of practice setting and of professional background.
A unit within a hospital for the internal supply of the hospital with medicines. It usually has fewer tasks, competences and responsibilities than a hospital pharmacy, and it might be run by a hospital pharmacy of another hospital.
Medicinal products are pharmaceutically equivalent if they contain the same amount of the same active substance(s) in the same dosage forms that meet the same or comparable standards. Pharmaceutical equivalence does not necessarily imply bioequivalence as differences in the excipients and/or the manufacturing process can lead to faster or slower dissolution and absorption. [Source: EMEA. Note for guidance on the investigation on bioavailability and bioequivalence]
It is defined as total expenditure on pharmaceutical and other medical nondurables. This comprises medicinal preparations, branded and generic medicines, drugs, patent medicines, serums and vaccines, vitamins and minerals and oral contraceptives. Other medical nondurables comprise wide range of medical nondurables such as bandages, elastic stockings, incontinence articles, condoms and other mechanical contraceptive devices
Form in which a pharmaceutical product is presented. No definition of pharmaceutical form is given in the rules governing medicinal products for human use in the European Union. [Source: UNI ENV 12610 Medical informatics. Medicinal product identification]
Pharmaceutical promotion includes all kind of information and promotion activities to consumers, doctors or pharmacists that provide incentives with the aim of influence prescription, dispensing, sales or consumption of pharmaceuticals. Pharmaceutical promotion may be regulated.
Service of supplying the population with medicines.
Pharmaceutical samples are medicines which are given out for free to physicians mostly by pharmaceutical representatives. The purpose of a pharmaceutical sample is to promote new products among doctors. The provision of pharmaceutical samples is often regulated and limited by law (e.g. in Austria).
All services rendered by pharmaceutical staff to support the provision of pharmaceutical care. Beyond the supply of pharmaceutical products, pharmaceutical services include information, education, and communication to promote public health, the provision of pharamceutical information and counselling, regulatory services, education and training of staff. [Source: Global Conference on the Future of Hospital Pharmacy]
A pharmaceutical system comprises the following elements: regulatory (marketing authorisation, market surveillance, vigilance), pricing, funding and reimbursement, supply chain / distribution and consumption of medicines.
Persons who have completed studies in pharmacy at university level (granted by adequate diploma) and who are licensed to practise pharmacy. They may be either salaried or self-employed pharmacists delivering services irrespectively of the place of service provision. Services provided by pharmacists include: preparing and directing the preparation of medicines according to prescriptions of medical and dental practitioners, or establish formulae; checking prescriptions to ensure that recommended dosages are not exceeded, and that instructions are understood by patients – or persons administering the medicines – and advising on possible medicine incompatibility; dispensing medicines in hospitals or selling them in pharmacies. [Source: adapted from EUROSTAT. Definitions and data collection specifications on health care statistics (non-expenditure data)] Hospital pharmacists: They provide services to patients and health care professionals in hospitals. [Source: European Association of Hospital Pharmacists] Hospital pharmacy specialist: A pharmacist who has completed an additional training program after completing the pharmacist degree in order to gain more specific and in-depth knowledge about hospital pharmacy. This definition does not describe pharmacists that work in hospitals who have not completed additional training. [Source: Global Conference on the Future of Hospital Pharmacy]
The comparative analysis of alternative courses of action in terms of both their costs and consequences. [Source: PPRI Glossary]
Group of ingredients according to their effects in human beings or animals. [Source: UNI ENV 12610 Medical informatics. Medicinal product identification]
Pharmacopoeia (literally, the art of the drug compounder), in its modern technical sense, is a book containing directions for the identification of samples and the preparation of combination products, and published by the authority of a government or a medical or pharmaceutical society. [Source: PPRI Glossary]
A group of different pharmacies belonging to the same owner which may or may not be a pharmacy. Often, pharmacy chain are run by wholesale or manufacturing companies.
A pharmaceutical retail facility, often in place in rural and/or scarcely populated areas to guarantee pharmaceutical provision, e.g. Postos Farmacêuticos Móveis, PFM in Portugal. They are usually run and under the supervision of a community pharmacy and often only have a limited range of products.
The price charged by wholesalers to the retailers (usually pharmacies). It includes any wholesale mark-up. [Source: OECD. A System of Health Accounts]
The price charged by retail pharmacist to the general public. It includes any pharmacy mark-up or dispensing fee. It can be a Gross PRP (including VAT) or a Net PRP (excluding VAT). [Source: adapted from PPRI Glossary]
A tax - other than VAT - levied by a state or city on the pharmacy retail price of an item, collected by the retailer. [Source: PPRI Glossary]
A person who has completed studies in medicine at the university level (granted by adequate diploma) and who are licensed to practise. To be legally licensed for the independent practice of medicine, (s)he must, in most cases, undergo additional postgraduate training in a hospital. They may be either salaried or self-employed physicians delivering services irrespectively of the place of service provision. Services provided by physicians include: conducting medical examination and making diagnosis, prescribing medication and giving treatment for diagnosed illnesses, disorders or injuries, giving specialised medical or surgical treatment for particular types of illnesses, disorders or injuries, giving advice on and applying preventive medicine methods and treatments. [Source: EUROSTAT. Definitions and data collection specifications on health care statistics (non-expenditure data)]
A person that is involved in policy development and formulation
The administration of many medicines at the same time or the administration of an excessive number of medicines. [Source: WHO. A Glossary of Terms for Community Health Care and Services for Older Persons]
Specific population groups (e.g. children, old-age pensioners) are eligible for medicines, while others are not. [Source: PPRI Glossary]
List of medicines that may be prescribed at the expense of the third party payer. [Source: PPRI Glossary]
Is an order mostly in written form (~ receipt) by a qualified health care professional to a pharmacist or other therapist for a medicine or treatment to be provided to their patients. One prescription may contain several items. The maximum number of items on a receipt is in many countries regulated. Given the different definitions of prescriptions, the PHIS indicator on prescription refers to the items prescribed in order to guarantee comparability. [Source: adapted from PPRI Glossary]
The patient has to pay a fixed fee for each prescription item dispensed on the expense of a third party payer, i.e. a form of fixed co-payment. [Source: PPRI Glossary]
Prescription guidelines ensure that the right medicine in the right dose is given to the right patient at the right time, all the time. These guidelines help improving the rational use of medicines.
The act of assessing/observing prescribing practices of physicians. It is sometimes accompanied by feedback to prescribers and in a few cases also sanctions in order to improve rational use of medicines are possible.
Products that can be dispensed only on a health professional prescription. Products are subject to medical prescription where they: — are likely to present a danger either directly or indirectly, even when used correctly, if utilised without medical supervision, or — are frequently and to a very wide extent used incorrectly, and as a result are likely to present a direct or indirect danger to human health, or contain substances or preparations thereof, the activity and/or adverse reactions of which require further investigation, or — are normally prescribed by a doctor to be administered parenterally. — the medicinal product is intended for out-patients but its use may produce very serious adverse reactions requiring a prescription drawn up as required by a specialist and special supervision throughout the treatment. [Source: Directive 2001/83/EC of the European Parliament and of the Council of 6 November 2001 on the Community code relating to medicinal products for human use]
Umbrella term for facilities that are allowed to sell POM to out-patients, e.g. pharmacies, dispensing doctors, hospital pharmacies. [Source: PPRI Glossary]
How common a disease is. Specifically, it is the number of existing cases of the disease in a defined population at a given point in time or over a defined time period divided by the number of people in that population [Source: Strom, Kimmel. Textbook of pharmacoepidemiology]
A cost-containment measure which fixes ex-ante the maximum price of medicine, e.g. taking into consideration inflation rates and production cost. Companies are allowed to choose any price below this threshold and in exchange authorities refrain from further control of company data (profit margins, sales etc.). [Source: PPRI Glossary]
Pricing policies where government authorities set the price of a medicine and/or indirectly influence it (e.g. statutory pricing, price negotiations, public procurement). Contrary to free pricing. The bases on which regulated prices are set vary. These may be on costs, return on investment, mark-ups, etc. [Source: PPRI Glossary and OECD. Glossary of statistical terms]
A cost-containment measure where the set price of a medicine is reduced by the authorities.
A common cost-containment method. The price of a medicine is fixed at a given level, mostly for a predetermined period of time. Price freezes are sometimes based on agreements between pharmaceutical industry and authorities but in most cases it is done by law. [Source: PPRI Glossary]
A form of pricing procedure, where medicine prices are discussed/negotiated (e.g. between manufacturer and third party payer). [Source: PPRI Glossary]
A form of pricing procedure where pharmaceutical companies officially inform the authorities about the price of the medicine
The level at which the price of a medicine is set. The following price types exist:  ex-factory pricepharmacy purchasing price  pharmacy retail price
Agreements which focus on controlling financial expenditure with pharmaceutical companies refunding over budget situations. [Source: Adamski J. Risk sharing arrangements for pharmaceuticals: potential considerations and recommendations for European payers. BMC Health Services Research 2010, 10:153.] See also: managed entry agreements
Like a framework agreement, a volume control tool. The price of a medicine is agreed between public authorities and a manufacturer on the basis of a forecast volume of sales. If the actual sales volume exceeds the forecast, the price of the medicine is usually reviewed downwards. [Source: PPRI Glossary]
The act of setting a price for a medicine. [Source: PPRI Glossary]
A body responsible for recommending, setting or controlling/monitoring the price of a medicine. The PC may be composed of representatives of different government authorities (e.g. Ministry of Health, Ministry of Finance) in many countries also further stakeholders (e.g. doctors, patient interest groups) are involved.
Regulations or procedures used by government authorities to set or limit the amount paid by purchasers or the amount received by sellers (e.g. free pricing, statutory pricing, price negotiation and price control). [Source: PPRI Glossary]
There are several methods of determining the price of a medicine: internal price referencing, external price referencing, cost-plus pricing and profit control. [Source: PPRI Glossary]
Basic or general health care focused on the point at which a patient ideally first seeks assistance from the medical care system. Primary care is considered comprehensive when the primary provider takes responsibility for the overall coordination of the care of the patient's health problems, be they biological, behavioural, or social. Such care is generally provided by physicians (general practitioners, family practitioners, internists, obstetricians and paediatricians) but in some countries is increasingly provided by other personnel such as nurse practitioners or physician assistants.
This term includes all forms of - out-of pocket payments (OPP): * percentage co-payment, * fixed co-payment, * deductibles as well as - direct payments. [Source: PPRI Glossary]
The act of purchasing a pharmaceutical by a public authority. [Source: OECD. A System of Health Accounts] Pharmaceutical procurement is a complex process that involves many steps and many stakeholders. It is also conducted within national and institutional policies, rules, regulations, and structures that may hinder or support the overall efficiency of the procurement process. An effective procurement process at any level must ensure that four strategic objectives are achieved:  the procurement of the most cost effective medicines in the right qualities,  the selection of reliable suppliers of high-quality products,  procurement and distribution systems that ensure timely and undisturbed deliveries,  processes that ensure the lowest possible total costs. [Source: WHO. Operational principles for good pharmaceutical procurement]
Any organisation purchasing or otherwise acquiring any pharmaceutical product, vaccine or nutraceutical for human use. [Source: WHO. A model quality assurance system for procurement agencies]
The following procurement methods are being used in actual practice: Open tender An open tender is a formal procedure whereby quotations are invited from a potential manufacturer or supplier. Restricted tender A restricted tender, open only to prequalified suppliers, seems to work best in small countries. Although initial evaluation of suppliers is time consuming, when a core of prequalified suppliers has already been established, the recurring work for the procurement agency and the overall workload is significantly lower than that in an open tender. Product quality may be more easily assured through a restricted tender. Competitive negotiations Competitive negotiations means approaching a few selected companies and requesting price quotations. Usually, this method results in higher prices. Direct procurement This is the simplest but perhaps the most expensive procurement method of all as it involves direct purchase from a single supplier either at quoted prices or negotiated prices. This method is well suited for emergency situations, but is not the preferred choice for routine orders. [Source: WHO. Practical Guidelines on Pharmaceutical Procurement for Countries with Small Procurement Agencies]
Eligibility for reimbursement depends on the medicine in question (either a medicine is considered as reimbursable or as non-reimbursable). [Source: PPRI Glossary]
It is a profit framework, which is in United Kingdom negotiated periodically between the Department of Health and the pharmaceutical industry. This framework is fixed for each individual manufacturer. Within this framework manufacturers are free to set their medicine prices. [Source: PPRI Glossary]
The amount paid by the purchaser in order to take delivery of a unit of a good or service at the time and place required by the purchaser. It excludes any VAT (or similar deductible tax on products) which the purchaser can deduct from his own VAT liability in respect of VAT invoiced to his customers. It includes supplier’s retail and wholesale margins, separately invoiced transport and insurance charges and any VAT (or similar deductible tax on products) which the purchaser cannot deduct from his own VAT liability. In the case of equipment goods it will also include installation costs if applicable. Purchasers’ prices are the prices most relevant for decision-making by buyers. [Source: EUROSTAT-OECD. Methodological manual on purchasing power parities (PPPs)] See also: list price
A committee of experts who meets on a regular basis to evaluate and approve the purchase of consumables and equipment not already present in the hospital.
Procuring presentations and formulations of medicines approved for use in local medicine formularies. In this process, medicine products are reviewed by purchasing and pharmacy groups, and products that are designed in such a way as to promote safer practice are selected. This process does not involve therapeutic substitution. [Source: National Patient Safety Agency. Patient Safety Alert No. 20]
Spatial deflators and currency converters, which eliminate the effects of the differences in price levels between countries, thus allowing volume comparisons of Gross Domestic Product (GDP) components and comparisons of price levels. PPPs are calculated in three stages: first for individual products, then for groups of products or basic headings and, finally, for groups of basic headings or aggregates. The PPPs for basic headings are unweighted averages of the PPPs for individual products. The PPPs for aggregates are weighted averages of the PPPs for basic headings. The weights used are the expenditure on the basic headings. PPPs at all stages are price relatives. They show how many units of currency A need to be spent in country A to obtain the same volume of a product or a basic heading or an aggregate that X units of currency B purchases in country B. In the case of a single product, the “same volume” means “identical volume”. But in the case of the complex assortment of goods and services that make up an aggregate such as GDP, the “same volume” does not mean an “identical basket of goods and services”. The composition of the basket will vary between countries according to their economic, social and cultural differences, but each basket will provide equivalent satisfaction or utility. Also referred to as “parity” or “parities”. [Source: EUROSTAT-OECD. Methodological manual on purchasing power parities (PPPs)]
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