Glossary of terms

Cost of day therapy

The cost of day therapy includes all costs incurred for the treatment of a given person, a given disease per day of therapy, based on the resources used, i.e. including resources such as: hospitalization days, diagnostic tests, medications, and staff work.

Excess amount

Within the meaning of the Reimbursement Act is a part of the total exceeded budget for reimbursement in the part concerning the financing of benefits referred to in Art. 15 sec. 2 point 14 of the Act on Benefits, converted into a limit group according to the appropriate algorithm. The amount of overrun in a given limit group is calculated according to the formula:

KP = Wr ′ – Wr , where individual symbols mean: KP – the amount of the overrun, Wr ’- the amount of the refund in the accounting year in the given limit group, Wr – the planned amount of the refund in the given limit group, calculated as the product of the planned amount of the refund in this group in the preceding year and the growth coefficient which is the quotient of the total budget for the refund in the accounting year less the reserve referred to in article 2. 3 sec. 3, and the total budget for the reimbursement in the preceding year [ [1] ].

Reimbursement

reimbursement by the payer of part or all of the costs related to the purchase of drugs [ [2] ].

Automatic reimbursement

Reimbursement of all drugs containing a given active substance, e.g. in the health care system in Germany, in the first year after approval, all drugs are reimbursed from public funds, and at that time the reimbursement documentation, price determination and final reimbursement conditions are assessed .

Reimbursement decision

An administrative decision issued by the Minister of Health and ends the reimbursement procedure. It can be both positive and negative.

It should contain the following elements:

1) designation (company) of the applicant, address of the registered office or place of business;

2) the name of the drug, foodstuff for particular nutritional uses or the name and use of the medical device, and its identification data;

3) category of reimbursement availability or description of the drug program constituting an appendix to the decision;

4) level of payment;

5) official selling price;

6) the date of entry into force of the decision and the period of its validity;

7) risk sharing instruments, if established;

8) determination of the limit group [ [3] ].

Reimbursement application

Application for reimbursement and determination of the official selling price of a drug, foodstuff for particular nutritional uses, medical device, constituting Annex 1 to the Regulation,

1. b) increasing the official selling price of a drug, foodstuff for particular nutritional uses, and a medical device subject to reimbursement, constituting Annex 2 to the Regulation,
2. c) reduction of the official selling price of a drug, foodstuff for particular nutritional uses, medical device subject to reimbursement, constituting Annex 3 to the Regulation,
3. d) establishing or changing the official selling price of a medicine, food intended for particular nutritional uses, referred to in Art. 6 sec. 1 point 4 of the Act of 12 May 2011 on the reimbursement of drugs, foodstuffs for particular nutritional uses and medical devices, constituting Annex 4 to the regulation,
4. e) shortening the period of validity of the decision referred to in Art. 11 sec. 1 or paragraph 6 of the Act of 12 May 2011 on the reimbursement of drugs, foodstuffs for particular nutritional uses and medical devices, constituting Annex 5 to the Regulation [ [4] ].

Basic list

A list of reimbursed drugs considered to be life-saving drugs or drugs necessary for therapy; payment for them is a lump sum and amounts to PLN 3.20 up to the limit. The list contains information: Name, form and dose of the drug; Packaging in accordance with the Register of Medicinal Products Admitted to Trade in the territory of the Republic of Poland; Single flat-rate packaging; Availability category; EAN13 code of the packaging

Positive letters

Lists of drugs established by the regulator, the task of which is to counteract excessive burden on patients resulting from drug prices . Positive lists include drugs, the costs of which are fully or partially covered by the payer.

Reimbursed drugs

Drugs whose cost is partially or fully covered by the payer

Complementary list

A list that contains drugs that supplement the action of basic drugs. Payment for complementary drugs is 30% or 50% of the drug price up to the limit.

Negative letters

A list of non-reimbursable drugs Exists in some countries, for example over-the-counter drugs or drugs of low or controversial effectiveness.

Negative reimbursement list

Lists including non-reimbursable drugs (as above) – proposes to remove – repeats.

Pharmacy margin

The official retail margin used in the retail trade in medicinal products subject to reimbursement or the retail margin used in the trade of pharmaceutical products, not subject to reimbursement in generally available pharmacies [ [5] ].

Retail margin, mark-up, profit,

This is the difference between the wholesale price (selling price offered by wholesalers) and the retail price (selling price in retail trade).

Margin

In accounting it is defined as the difference between the selling price and the purchase price of goods. This concept can be defined as the profit obtained on sale, i.e. the value obtained on the sale of a given product minus the costs of obtaining it. In the case of manufacturing enterprises, the cost of acquisition will be the cost of production, while in commercial activities, the cost of acquisition will be the cost of purchase. The margin can be expressed as an amount or as a percentage. The amount margin is expressed as: Margin = CS – KP, where: CS – selling price, KP – acquisition cost. The margin expressed as a percentage is the ratio of the amount margin to the selling price or cost of a good or product [ [6] , [7] , [8] ].

Retailers markup – degressive

A retail margin that decreases as the purchase price of a good or service increases [ [9] ].

Retailers markup Linear

A retail margin determined at a constant percentage level, regardless of the purchase price of a good or service.

Retail constant margin plus an element of degressive

The primary source of pharmacy revenue in most European countries, which is realized when dispensing drugs. These countries include, among others : Austria, Bulgaria, Czech Republic, Estonia, Finland, Spain, Lithuania, Portugal, Romania, Switzerland, Hungary, Italy. Most often it is a degressive margin, which outside Poland is always calculated on the basis of the wholesale price of the drug. In some countries – the Czech Republic, Estonia, Finland, France, Portugal and Switzerland – a small fixed fee is added to the degressive margin, which may depend on the wholesale price of the drug, or it is, for example, a fixed fee for dispensing a specific preparation in the case of a prescription containing a drug rewritten as an international name. In the case of pharmacies with a high turnover of reimbursed drugs, a small part of the realized margin is returned to the health care fund, thanks to which it is possible, for example, to co-finance pharmacies in rural areas or in small towns, which have a much smaller turnover and cannot resign from many costs. The pharmacy degressive margin system is sometimes replaced by a fixed fee system for the dispensed reimbursed drugs. The pharmacy receives a fixed fee for each package of the drug dispensed and its value is usually between EUR 3-6. The value of this fee in specific countries depends to a large extent on the average size of drug packages dispensed. However, in some countries – in the Netherlands and England – the pharmacy receives a fixed fee, not for each package of reimbursed medicine issued, but for each filled item on the prescription. This means that regardless of the number of prescribed packages of a given drug, the pharmacy receives the equivalent of one fixed fee for its dispensing. Moreover, the fixed fee system (eg in England) consists of many components, also dependent on the number of professional staff employed [ [10] ].

Margin

the difference between the selling price of a good and its purchase price, determining the surplus (profit) obtained from the sale of the good over the direct costs of obtaining it. It can be expressed as an amount or as a percentage. The margin expressed in amount is the difference between the selling price and the cost of the good sold. The percentage margin is the ratio of the amount margin to the selling price or cost of the good. There are two ways to determine the percentage margin, whether it is calculated in relation to the selling price or the cost of the good sold – it is suitably referred to as the „one hundred” or „per hundred” margin . Margin percentage is a very popular metric as it shows the profitability of sales. It allows you to easily compare the profitability of selling goods with different prices. There are two types of margins: net and gross [ [11] , [12] ].

Wholesale margin

The difference between the selling price and the wholesale price. it is the trade margin charged by wholesalers. It is the difference between the price of the goods obtained by the wholesaler and the selling price. The wholesale margin and the retail margin are collectively referred to as the trading margin [ [13] ].

Manufacturer’s margin

The difference between the total cost of producing a product and the selling price.

Official retail margin

Entities authorized to retail, within the meaning of the Pharmaceutical Law of 6 September 2001, are required to use the official retail margin. The official retail margin is calculated on the wholesale price of a drug, food intended for particular nutritional uses or a medical device constituting the basis for the limit in a given limit group, depending on the wholesale price. The official retail margin is a fixed margin [ [14] , [15 ].

Official wholesale margin

Pursuant to the Pharmaceutical Law Act of 6 September 2011, all entrepreneurs engaged in wholesale trade in medicinal products are required to apply the official wholesale margin, determined at 5% of the official selling price. This margin may be shared between entrepreneurs engaged in wholesale trade. The official wholesale margin is a fixed margin [ [16] ].

Degressive margins

Specifies the margin amount depending on the price of the drug. The higher the price, the lower the margin will be. It means an increase in the prices of the cheapest drugs and a decrease in the prices of the most expensive drugs. The degressive margin for reimbursed drugs is set by law [ [17] ].

Degresive percentage quota margins

They define the surplus obtained from the sale of a drug, over the direct costs of obtaining it. It can be expressed as an amount or as a percentage. The amount degressive margin is the difference between the selling price and the cost of the dispensed drug, while the percentage degressive margin is the ratio of the amount margin to the selling price or cost of a drug or product [ [18] , [19] ].

Maximum margins

The difference between the purchase price and the selling price (official price) is the maximum margin. An entrepreneur running a pharmacy, purchasing a drug from a warehouse (for which the official price applies), may, when selling this drug in a pharmacy, set a trade margin in such an amount that it does not exceed the official price as the maximum selling price of the drug. If the entrepreneur buys the drug cheaper, he can obtain a higher margin on its sale [ [20] ].

Fixed margins

Official margins that cannot be changed (increased or decreased).

Drug prescription monitoring

A set of activities aimed at evaluating prescription of pharmacotherapy or prescription of drugs by doctors. They can be used to control drug reimbursement expenses by introducing limited physicians’ drug budgets or by controlling hospital expenses. Influencing prescription among physicians may also be used to optimize the therapeutic effect.

Drug prescription monitoring

Control activities carried out by the public payer (National Health Fund) aimed at assessing the correctness of prescription of drugs by doctors; are in part the result of abuses in medical prescription and, consequently, the unlawful gaining of benefits related to unjustified reimbursement of drugs. They are also used to control and limit public spending on drug reimbursement.

Guidelines of good prescribing practice

A set of rules that apply to the so-called the proper canon of good prescribing practice. The guidelines can be used as a mechanism for controlling the amount and type of prescribed reimbursed drugs and, going further, the related reimbursement expenses; they can also be used to optimize the therapeutic effect.

Price negotiation

A method of setting prices for drugs involving the interaction of the entity responsible for the drug with the representatives of the regulator on the drug market or the insurer (public payer). Their goal is to achieve levels of drug prices on a given pharmaceutical market that are satisfactory for both sides; as a rule, it concerns pharmacotherapy financed from public funds . In Poland, price negotiations are conducted by the Economic Commission in the following areas: setting the official selling price; the level of payment; indications for which the drug, foodstuff for particular nutritional uses or medical device is to be reimbursed; risk sharing instruments. On the basis of a negotiated document signed by the parties to the negotiations, the Commission adopts its position by resolution and presents it immediately to the minister competent for health [21 ].

Limited budget for drugs

One of the mechanisms for controlling drug reimbursement expenditure; Its aim is to change the practice of prescribing drugs by applying financial incentives to encourage rational pharmacotherapy by physicians. It consists in establishing specific amounts of reimbursement, which doctors should not exceed in a given period, and prescribe drugs to their patients. Exceeding such a budget may result in a system of rewards or penalties, most often financial. It may concern individual doctors as well as collective medical practices or entire institutions ( e.g. hospitals or hospital networks). In Poland, a limited budget for drugs is not used, but doctors sign an agreement with the National Health Fund allowing them to prescribe reimbursed drugs. When signing a prescription contract, the doctor cannot negotiate the contract, also with regard to the amount and nature of contractual penalties. According to the model agreement for prescribing reimbursed products, the doctor is obliged to prescribe reimbursed drugs in accordance with the current state of medical knowledge and the applicable legal regulations, including lists [ [22] ].

Drug pricing

Determining the price of a drug based on the clinical value of this drug, defined by the relationship of clinical effectiveness (positive effects of drug use determined by the effect on life expectancy and quality or other clinical effects) to its safety profile (risk of side effects). A drug that has a higher clinical efficacy and a better safety profile compared to the reference product may be priced higher in proportion to the difference to the pharmacotherapy with which it is compared.

Grattini’s tax

A tax imposed on pharmaceutical companies in a certain amount (e.g. 5% in Italy) of their marketing expenses. The expenditures are intended for conducting clinical trials independent of the pharmaceutical industry related to the therapy of selected drugs. The tax applied in Italy is aimed at reducing the expenditure of pharmaceutical companies for marketing purposes. It was also proposed in Poland in the course of legislative works on the new reimbursement act in 2009 and was finally not adopted.

Drug pricing policy

The area of drug policy (see drug policy) concerning the principles of pricing reimbursed drugs. The official selling price of the drug is set by the minister competent for health matters by way of an administrative decision for a period of 5 years. Under Art. 11, sec. 4 and art. 11, sec. 10 of the Reimbursement Act, the minister competent for health may change the decision on the official selling price of the drug [ [23] ].

Drug policy

The area of health care management, which includes the concepts of production, drug registration ( admission to trading on the pharmaceutical market), setting official prices and drug reimbursement conditions. The drug policy is to provide patients with access to rational pharmacotherapy, taking into account the existing socio-economic situation in a given country.

Reimbursement Policy

The area of health care management, which includes the concepts of establishing official prices and reimbursement conditions for drugs financed from public funds. It is to provide patients with access to clinically and economically optimal pharmacotherapy, taking into account the existing socio-economic situation in a given country.

Drug program
A health program within the meaning of the Act of 27 August 2004 on health care services financed from public funds, including drug technology, in which the active substance is not a cost component of other guaranteed benefits or a food for special nutritional purposes, which does not it is a cost component of other guaranteed benefits within the meaning of this Act [ [24] ].

Therapeutic program

A set of planned and intended activities in the field of health care assessed as effective, safe and justified, enabling the achievement of the set goals within a specified period, consisting in detecting and meeting specific health needs and improving the health condition of a specific group of recipients, developed, implemented, implemented and financed by the National Health Fund. [ [25] ].

Prescribed daily dose

PDD – the average dose of a drug actually prescribed to patients and determined on the basis of a representative sample of orders for a given drug based on available data from hospital or open pharmacies. It is possible to establish different PDDs for several therapeutic indications in which the same drug is used [ [26] , [27] ].

Tender

A method of purchasing goods or services, or selecting a contractor, consisting in collecting many offers and selecting the most advantageous one according to previously adopted criteria. There are limited (closed) and unlimited (open) tenders.

Open tender – a form of tender characterized by inviting an unlimited group of people to submit bids, usually through a public announcement.

Restricted tender – a form of tender characterized by sending an invitation to submit offers to a limited group of entities. This limitation may be made, for example, by indicating in a public announcement the conditions, the fulfillment of which allows for submitting an offer, or by sending individual invitations to specific entities [ [28] , [29] ].

Central purchase

Central Tender – consists in the direct or indirect purchase by or on behalf of the payer of a specific category of products or services that would allow to meet the health needs of a specific population, while providing the selected bidder with a reward for proposing the best offer in the form of a privileged or monopolistic position in a given area and / or during the specified term of the contract.

Such a purchase is usually carried out in accordance with the tendering procedure applicable in a given country, often by the so-called central coordinating institutions acting on behalf of the payer.

In the Public Procurement Law, Art. 15a has been defined Central procuring entity – it is one of the government administration bodies, or a unit subordinated or supervised by a government administration body, which may prepare and conduct procurement procedures, award contracts or conclude framework agreements for the needs of contracting authorities from government administration, if the contract is related to the activity of more than one awarding entity [ [30] , [31] ].

Reimbursement for an episode of the disease

Episode -of- Care _ Payments or Bundled payment – a single payment (price) for the service provider covering the entire scope of care that the patient receives during the treatment of a specific disease, condition or medical event. The payment covers the work of medical personnel, hospital or outpatient care, medications, etc., necessary for the performance of a medical procedure, such as hip arthroplasty, treatment of acute coronary syndrome, etc. The payment is fixed and independent of the occurrence of possible complications and the need for their treatment [ [32] , [33] ].

Drug price regulation

Pharmaceutical Price Regulation – is a form of market regulation aimed at rationalizing expenditure and controlling costs in health care, implemented by imposing restrictions on responsible entities when setting the prices of their drugs. Usually, it is used by introducing fixed or maximum prices or margins for a given drug or drugs from a given therapeutic group, but other methods can also be used, such as lowering or freezing prices, a reference price system, obligatory rebates. Price regulation may apply to all preparations available on the market, both reimbursed and non-reimbursed, those used in open and closed treatment, original drugs – protected by a patent and those for which the patent protection has already expired [ [34] , [35] , [36] ].

Criteria for price setting

Criteria used by drug market regulators when determining drug prices: therapeutic value of a drug, degree of innovation, presence of alternative methods, prices of other drugs available in a given indication, international price comparison, clinical and economic guidelines, treatment costs, cost-benefit analysis, size planned sales, results of comparative pharmacoeconomic analyzes [ [37] , [38] , [39 ].

Outcome-based schemes

Risk-sharing instruments relying on the dependence of the reimbursement of drug costs on the achievement or non-achievement of a specific health effect assessed for each individual patient in the population covered by the agreement. The basis of the agreement is the effectiveness declared by the drug manufacturer, based on data from clinical trials. The payer bears the costs of the reimbursement only if the declared results are achieved in accordance with the ” no cure , no pay ” principle. In practice, two types of contracts are concluded: one, when the payer pays for the drug in advance, and the manufacturer reimburses the cost of the drug in the event of failure to achieve the declared health effect, or treatment is commenced at the manufacturer’s expense and the payer reimburses only after demonstrating the achievement of the declared health effect [[ [ 40] , [41] ].

Agreements based on the results of further research

Coverage with evidence development , CED – risk-sharing instruments consisting in making reimbursement (conditional reimbursement) of a drug dependent on the initiation of the process of collecting clinical data on its use. Conditional reimbursement is granted for a specified period, during which additional information is collected on the effectiveness and safety of the drug in the conditions of a clinical trial or registry. After the end of the contract, the drug is re-assessed, taking into account the new information, and a decision on whether or not to be reimbursed is made [ [42] , [43] ].

Reference price

Defined as the lowest price of a drug or pharmacological substance in a given therapeutic class or on individual markets (countries). It is used in the process of pricing drugs based on drug price comparisons in groups within one market ( internal reference pricing ) or drug prices in various markets ( external / international reference pricing ). In the internal system reference pricing sets the upper limit of financing by the payer for all drugs in the group and is the basis for calculating the patient’s co-payment. In the external ( international ) reference pricing it is a reference price for establishing or negotiating the price of the same product in a given country [ [44] , [45] ].

Drug price freeze

An administrative ban on increasing the prices of drugs, aimed at keeping prices at the current level and maintaining short-term budget discipline. Where prices for all or certain groups of medicinal products have been frozen by the competent authorities of an EU Member State, the Member State in which the prices have been frozen shall, at least once a year, conduct a review to see if the macroeconomic conditions justify keeping the frozen prices unchanged. The competent authorities shall announce, within 90 days of the commencement of such review, whether and what price reductions or increases will be made [46] , [47 ].

Defined daily dose

DDD – is defined as the average daily dose of the drug used to treat the main indication defined by the ATC code in adults. The DDD is determined by the World Health Organization, based on a review of available information on doses used in different countries. DDD is a conventional dose and does not have to correspond to the recommended or actually prescribed dose [48] , [49 ].

Promoting the prescription of generics

A doctor in Poland has the right to issue a prescription with both the trade name of the drug and the name of the active substance, the so-called INN (International Nonproprietary Name – International Non-proprietary Name). The patient carries out such prescriptions at the pharmacy. In the case of a prescription from INN, the patient has the right to choose a specific drug brand in the pharmacy [ [50] ].

Promoting generic substitution

In the pharmacy, regardless of the method of issuing the prescription, the pharmacist in the pharmacy is obliged to inform the patient about the cheapest equivalent available within a given therapeutic group. Substitution of drugs with their generic counterparts is allowed in Poland, unless the doctor puts the code „NZ” on the prescription (do not replace) or the patient does not consent to the replacement of the prescribed drug [ [51] ].

Generic substitution

Original and generic drugs have the same active substance (and the same amount ), which is responsible for the key therapeutic effect of the preparation. This does not mean that they are identical because e.g. can contain other auxiliary and stabilizing compounds or have a different method of purification and synthesis, provided that they do not change the properties of the drug and do not affect its effectiveness, the same form, the same bioavailability (bioavailability). Before a generic drug is placed on the market, it is tested for pharmaceutical availability, bioavailability and bioequivalence . However , due to the fact that generic preparations do not undergo full clinical trials, the costs of which constitute up to 70% of the costs related to introducing the drug to the market, their price may be lower than the price of innovative drugs ( generics , you can rely on the efficacy and safety studies performed for the originator drug). For this reason, introducing generic drugs to the market (after expiry of the patent protection of the original drug) allows for a significant reduction in the costs of pharmacotherapy, both in the scale of the country and the individual patient [ [52] , [53] ].

Generic substitution for the entire market in Poland is currently performed at the level of approx. 2 percent. This means that one drug pack is replaced with 50 that could potentially be changed [ [54] ].

Risk sharing schemes, abbreviation

RSS – is an agreement between the parties to carry out a transaction for which there are doubts as to its final value. In such an agreement, one of the parties must have confidence in the effectiveness / efficiency of the proposed transaction to accept awards or penalties depending on the results recorded. We talk about a risk sharing agreement when a certain type of risk exists on both sides, i.e. the payer and the producer. Risk-sharing agreements concluded in the pharmaceutical market are used in many countries. The main reason for concluding such agreements is the pricing policy pursued by pharmaceutical companies, the result of which are the increasing costs of pharmacotherapy and the needs of patients. There are two basic types of risk-sharing agreement: • based on the use of financial resources, called a financial agreement, This type of agreement specifies the consumption of drugs at the level of one patient or the entire population, sets the maximum consumption of drugs, above which the costs are borne by the manufacturer or payer. These agreements may also provide for free treatment cycles, e.g. in the form of drug packages. A financial agreement is therefore an agreement which specifies the conditions for granting a financial rebate (e.g. a price reduction) or a natural rebate (e.g. free therapy cycles) by the manufacturer; • based on health outcomes, these are contracts that define financial risk depending on the achieved health outcomes [ [55] , [56] , [57 ].

Price agreements, price collusion

Occurs when a distributor imposes a reserve price on sellers for the products they distribute, thereby reducing natural price formation. The entrepreneur reserves the minimum price of goods and services in agreement with the sellers. The functioning of the market economy is based on the cooperation of entrepreneurs. Cooperation requires the conclusion of various agreements which usually have pro-competitive effects or are at least neutral from the point of view of competition on the market. Therefore, it is crucial to correctly identify and distinguish between anti- competitive , and therefore prohibited, agreements from non-infringing agreements.

The pricing agreement has the purpose or effect of eliminating, limiting or otherwise distorting competition on the relevant market. Price agreements are among the most serious violations of competition and consumer law, and therefore are almost always illegal. Such agreements are particularly harmful because they directly deprive consumers of the possibility of purchasing a good or service at a price lower than the unlawful price. Entrepreneurs who are parties to such an agreement do not have to seek contractors, e.g. by higher quality products or by lowering prices. In addition, the conclusion of an agreement usually leads to the fixing of prices at a level above the market level. In the pharmaceutical market, a price agreement is understood as the acceptance of a specific type of agreement between the responsible entity and the payer, eg a public payer, the purpose of which is to establish the rules for accepting prices for specific medicinal products, especially products subject to reimbursement from the public fund [ [58] ].

Price and volume agreements

abbreviated as PCA, is a mechanism used under use-based risk sharing agreements. It is a tool used to control expenses incurred and drug reimbursement. Agreements are agreements at the population level. The essence of this type of agreement is the producer’s compensation to the payer depending on the sales volume, which may depend on the number of patients, packages, number of treatments, months of treatment, and DOT ( days of treatment ). The compensation proposed by the manufacturer may be realized by a refund (full or partial, percentage) which may be progressive or regressive. It is also possible to make returns in the form of a material discount for service providers. Agreements of this type are used in the case of new innovative drugs used in diseases characterized by a high prevalence, and thus a potentially large population of patients who can use a given drug. The advantage of price-volume agreements is their relative simplicity both from the point of view of the producer and the public payer. Additional manufacturer benefits may result from the reduction of expenses related to the promotion of the drug. A further advantage of PVA arises in the case of a multi-indication drug, as one such contract may cover all the uses. The most important advantage from the point of view of the public payer is the guarantee of maintaining a rigid limit of expenses for a given drug, and thus budget security. The disadvantages of price-volume agreements include uncertainty as to the treated populations, unprofitability in the case of very effective technologies, difficult to prepare in the case of technologies with a large market share, the potential threat of using the drug off-label, the requirement to carefully monitor the level of drug sales, difficult to enforce with several indications [ [59] ].

Reimbursement of part of profits, Amount of reimbursement

Payback – is understood as a proportional reimbursement of amounts exceeding the reimbursement limit set for a given limit group – determining the excess amount for the limit group and reimbursement of the reimbursement costs is proportional to the share of a specific drug. The aim of such an action is to guarantee the party financing the costs of pharmacotherapy with a given drug that the expenses on reimbursement will not exceed the level previously established under the agreement. The financial risk of making a reimbursement decision is shared between the financing of pharmacotherapy costs, e.g. a public payer, and the responsible entity.

Revenue control

The control of obtained or due inflows of value or material benefits as part of the conducted business activity. Most often it is the total value of net sales of goods, merchandise and services (excluding VAT) in the settlement period (day, month or accounting year).

Control the volume of sales

The control of obtained or due value or material benefits in the course of business activity. Most often it is the total value of net sales of goods, merchandise and services (excluding VAT) in the settlement period (day, month or accounting year) [ [60] ].

Expenses control

The control of cash outflows in connection with the payment for specific goods or services. An expense is any cash outflow from an enterprise’s cash register or bank account in connection with the payment for certain goods or services in connection with the settlement of the entity’s various liabilities. Not every expense is a cost, but every cost is an expense [ [61] ].

Drug usage control

Consists in the systematic collection of data on the amount of drugs used and the analysis of the structure and dynamics of their use. Drug consumption is controlled by therapeutic groups or therapeutic substances, taking into account the changing demographic factors in the analyzed period [ [62] ].

Profit control

The control over the difference between the total revenues of the enterprise (obtained or due inflows of value or material benefits) and total costs. Profit maximization may be the goal of an enterprise’s activity both in a perfectly competitive and imperfectly competitive market. This mechanism consists in making the company’s profits from the sale of a given drug or group of drugs dependent on investment in research and development or capital investments in a given country or market [ [63] , [64] ].

Profit limit

These are the predetermined maximum amounts that can be earned or lost on a given transaction. The most common is the maximum profit limit, max profit. This limit determines the maximum profit that a given transaction will generate before it is closed. Thanks to the limits, you can not only gain time and the opportunity to invest in subsequent transactions, but also minimize the possible loss. The appropriate profit limit is related to the company’s remuneration in relation to a certain level of innovation, and on the other hand, to the company’s achievement of a certain profitability (return on investment) [ [65] ].

Stop loss

The moment when the quotation of a transaction, after a decline in the market, reaches a level below the previously declared level, then the transaction is automatically closed [ [66] ].

Discounts

Bonus, Rebate , Compensation , Allowance – a discount is a price reduction, granted after the transaction, usually as an incentive to increase purchases or a form of compensation due to inferior quality of the goods. It is granted in the event of circumstances that the parties could not foreseen when signing the contract [ [67] , [68] ].

Rebates, Discount Rebate, Abatement

A discount is a specific amount or percentage discount on the agreed price of a given product, most often given to buyers who pay in cash, buy large quantities of goods, once or at a specified time, it can also be granted due to defects in the goods. The discount can be linked to transactions made at a given time and invoices issued.

We can distinguish the following types of discounts:

– quantity discounts ( Quantity rebates ) – which is a price reduction in return for the purchase of large quantities of the product;

– seasonal discounts ( Seasonal rebates ) – applied at a strictly defined time;

– Trade rebates – granted in return for taking over additional functions, e.g. advertising;

– Cash rebates – an additional bonus for a cash payment or a shorter payment term;

– Natural rebates – a discount in the form of an additional quantity of full value goods of the same or another, written on the invoice in the form of freebies, reduces the unit price [ [69] , [70] , [71] , [72 ] ].

Flexibility of price

One of the methods of establishing prices of goods and services. It is based on the freedom to set prices by the producer or distributor. In the demand (market) orientation, the basic factor of price regulation is demand. The application of this method requires examining the size of demand and directions of its changes as the basis for setting and changing the price level. The response of the demand to price changes is reflected in the price elasticity of demand. In supply orientation, supply is the primary factor that regulates the price. The degree of response of the volume of supply to a change in price is determined by the price elasticity index of supply, which is the relation of the percentage change in the volume of the supply of a commodity to the percentage change in its price. The analysis of the elasticity of demand and supply is important in the process of making price decisions [ [73] , [74] ].

Gross retail price

GRP – this is the official selling price of a drug, foodstuff for special purposes, medical device increased by the official wholesale margin and the official retail margin as well as the due tax on goods and services [ [75] ].

Gross wholesale price

GWP – it is the official selling price of a drug, foodstuff for special purposes, medical device increased by a row wholesale margin and due tax on goods and services [ [76] ].

Maximum price

This is the official price above which transactions for a given good cannot be concluded. It is introduced only in a few cases, when, according to decision-makers, it is required by an important social interest (availability of drugs). Thus, it is one of the mechanisms of official drug price control. The maximum price is to protect the interest of the patient – consumer. The effect of introducing a maximum price on the pharmaceutical market below the price that is profitable for the manufacturer may be a shortage of the drug (production unprofitability). Fixing the maximum price above the level of the equilibrium price will have no effect on the market as under such conditions the equilibrium price will be achievable [ [77] , [78] ].

Manufacturer’s net price – selling

Price of a drug, food for special purposes, or a medical device to authorized entities, excluding the tax on goods and services [ [79] ].

Administrative price

 it is the sale price of a drug, foodstuff for particular nutritional uses, or a medical device determined as a result of negotiations, determined in the administrative decision on reimbursement, taking into account the due tax on goods and services. The official selling price may not be higher than the maximum gross retail price of a drug, foodstuff for particular nutritional uses, medical device specified in the list of reimbursed drugs, less the wholesale and retail margins. it is a fixed price [ [80] ].

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