CNPR Certification Exam Study Guide Chapter 5-7

Wholesale Distributor - must be licensed by state where business is conducted must meet min. federally prescribed standards (storage, handling and record keeping) Wholesaler Perspective - buys in very large quantities from drug manufacturers or other wholesalers, resells in smaller quantities to retail pharmacies, hospitals, long term care pharmacies, clinics, medical offices, and other wholesalers Primary Wholesalers - o Buy drugs directly from manufacturers o Have ongoing relationships with manufacturers o Legally considered authorized distributors Secondary Wholesalers - o Buy from primary and other secondary wholesalers as well as manufacturers o Not considered "authorized distributors" Wholesalers - • Sell to pharmacies by the bottle or vials and deliver daily o Pharmacies can order daily w/out maintaining large stocks • Pharmacies buying from them lowers cost since only paying one supplier for all drug purchases o Large chain pharmacies buy in large quantities directly from manufacturer and maintain own warehouse from which they ship to their pharmacy • Buy enough quantities to act as their own distributor • Most large wholesalers have dozens of distribution centers o Near large markers or population centers for quick overnight or same-day deliveries o Distributors are responsibility of NAMs but some visits by local rep may be necessary Authorized Distributor - Any distributor of a prescription drug that has written agreement w/ manufacturers of drug and conducts at least 2 transactions w/ manufacturer of drug w/in any 24 month period Average Wholesale Price (AWP) - o Published wholesale price or "list price" suggested by manufacturer of drug o Doesn't capture actual transaction prices, serves as reference for pricing, negotiations, and reimbursements Brokerage - o Combo of drop-ship and dock-to-dock delivery services provided by wholesalers o Wholesalers do not bring product into their warehouses Buy-Side Margin - o Early payment discounts and other earner or negotiated rebates and discounts received by wholesalers from drug manufacturers o Further increases in value of wholesalers' inventories as manufacturers' prices rise Chain Drug Store - o Company that owns and operates 4 or more pharmacies