Managing prescription drug benefits requires a sophisticated toolkit of strategies designed to balance three critical goals: controlling costs, ensuring quality of care, and providing patient access to medications. For PharmD students, understanding these strategies—from formulary design and utilization management to clinical programs and network management—is essential. This knowledge is not only vital for careers in managed care but also for every pharmacist who helps patients navigate the complexities of their insurance coverage.
1. A core strategy for managing drug benefits, which involves creating a list of covered medications, is known as:
- A pharmacy network
- A prior authorization program
- Formulary management
- A copayment system
Answer: Formulary management
2. In a tiered formulary design, what is the primary purpose of placing a drug on a higher tier (e.g., Tier 3 or 4)?
- To indicate it is the most preferred drug in its class
- To assign a higher cost-share to the patient for that medication
- To exempt it from prior authorization requirements
- To ensure it is dispensed by all pharmacies in the network
Answer: To assign a higher cost-share to the patient for that medication
3. A management strategy that requires a prescriber to obtain approval from the health plan before a specific medication will be covered is known as what?
- Retrospective DUR
- Tiered Copayment
- Prior Authorization
- Formulary Exclusion
Answer: Prior Authorization
4. The utilization management strategy that requires a patient to first try a preferred, often more cost-effective drug, before a non-preferred drug in the same class will be covered is called:
- Quantity Limit
- Step Therapy
- Coinsurance
- A Therapeutic Interchange Program
Answer: Step Therapy
5. A prospective Drug Utilization Review (DUR) is a management strategy that occurs when?
- A year after the drug has been dispensed
- During the drug’s clinical trial phase
- Before the prescription is dispensed to the patient
- After the patient has completed the full course of therapy
Answer: Before the prescription is dispensed to the patient
6. Health plans and PBMs often use a mail-order pharmacy as a strategy to:
- Manage acute, first-time prescriptions
- Dispense 90-day supplies of maintenance medications, often at a lower cost
- Provide compounded sterile preparations
- Eliminate the need for prior authorizations
Answer: Dispense 90-day supplies of maintenance medications, often at a lower cost
7. A key financial strategy used by PBMs is negotiating ________ with pharmaceutical manufacturers in exchange for favorable formulary placement.
- clinical trial data
- rebates
- marketing campaigns
- patient education materials
Answer: rebates
8. Medication Therapy Management (MTM) is a clinical program strategy, especially in Medicare Part D, designed to:
- Increase overall drug spending
- Optimize therapeutic outcomes for patients with multiple chronic conditions
- Limit access to all high-cost medications
- Replace the role of the primary care physician
Answer: Optimize therapeutic outcomes for patients with multiple chronic conditions
9. Limiting the number of tablets a patient can receive per month for a specific medication is an example of which management strategy?
- Formulary Exclusion
- Step Therapy
- Quantity Limit
- Retrospective DUR
Answer: Quantity Limit
10. A “closed formulary” is a management strategy where the health plan:
- Covers all FDA-approved drugs without restriction
- Does not cover any prescription drugs
- Covers only the drugs that are specifically listed on its formulary
- Requires all members to use a single pharmacy
Answer: Covers only the drugs that are specifically listed on its formulary
11. The primary entities that purchase and implement prescription drug benefit management strategies for their employees or members are known as:
- Pharmaceutical manufacturers
- Plan sponsors
- Wholesalers
- Community pharmacies
Answer: Plan sponsors
12. Restricting the dispensing of high-cost specialty drugs to a small number of pharmacies is a management strategy known as a(n):
- Open pharmacy network
- Limited or preferred specialty pharmacy network
- Mail-order exclusion
- Adherence program
Answer: Limited or preferred specialty pharmacy network
13. A retrospective DUR is a strategy that involves analyzing prescription data:
- At the point of sale
- Before the prescription is written
- After medications have been dispensed to identify patterns of use
- During the drug development process
Answer: After medications have been dispensed to identify patterns of use
14. A value-based contract is an innovative strategy where payment for a drug is linked to:
- The number of units sold
- The manufacturer’s stock price
- Its performance and patient outcomes
- Its marketing budget
Answer: Its performance and patient outcomes
15. A plan sponsor’s decision about whether to cover a class of drugs, such as those for obesity, is a fundamental part of what strategy?
- Pharmacy network design
- Health plan coverage design
- Drug Utilization Review
- Medication Therapy Management
Answer: Health plan coverage design
16. The use of cost-effectiveness data from pharmacoeconomic studies is a key strategy for informing what?
- Patient counseling techniques
- Drug formulary and coverage decisions
- Pharmacy staffing levels
- Wholesaler purchasing patterns
Answer: Drug formulary and coverage decisions
17. What is the primary purpose of patient cost-sharing strategies like copayments and coinsurance?
- To make all drugs free for the patient
- To have patients contribute to the cost of their medications and be more aware of the price
- To increase the net cost of drugs for the health plan
- To eliminate the need for a pharmacy formulary
Answer: To have patients contribute to the cost of their medications and be more aware of the price
18. From a managed care perspective, promoting the use of generic drugs is a primary strategy to:
- Increase overall drug spending
- Reduce healthcare costs for both the plan and the patient
- Limit therapeutic options for prescribers
- Ensure all new drugs are approved quickly
Answer: Reduce healthcare costs for both the plan and the patient
19. A managed care pharmacist might develop a clinical program as a strategy to improve medication adherence for which of the following diseases?
- Acute sinusitis
- The common cold
- Diabetes and hypertension
- A minor sprain
Answer: Diabetes and hypertension
20. A “carve-out” is a management strategy where a specific benefit, such as the pharmacy benefit, is:
- Managed by a specialized vendor (like a PBM) instead of the primary health insurer
- Eliminated entirely from the health plan
- Combined with the medical benefit
- Offered only to a select group of members
Answer: Managed by a specialized vendor (like a PBM) instead of the primary health insurer
21. A health plan might use a therapeutic interchange program as a strategy to:
- Authorize automatic substitution of a non-preferred drug with a preferred drug in the same class
- Prevent any generic substitution at the pharmacy
- Ensure only brand-name drugs are dispensed
- Increase the number of prior authorizations required
Answer: Authorize automatic substitution of a non-preferred drug with a preferred drug in the same class
22. An online tool that allows a physician to see a patient’s formulary information at the time of prescribing is a strategy to:
- Increase the prescribing of non-formulary drugs
- Guide physicians to prescribe covered, cost-effective options
- Delay the prescribing process unnecessarily
- Eliminate the need for a pharmacist review
Answer: Guide physicians to prescribe covered, cost-effective options
23. The pharmacy supply chain is a critical consideration in benefit management. Who sits between the manufacturer and the pharmacy in this chain?
- The PBM
- The plan sponsor
- The wholesaler
- The patient
Answer: The wholesaler
24. Which of the following is a management strategy focused on patient safety?
- A retrospective DUR that identifies patients receiving dangerously high doses of opioids
- A marketing campaign for a new drug
- A rebate contract with a manufacturer
- A pharmacy network with only one pharmacy
Answer: A retrospective DUR that identifies patients receiving dangerously high doses of opioids
25. A key consideration for a plan sponsor when designing a drug benefit is balancing the “richness” of the benefit with its:
- Popularity
- Affordability (premiums and costs)
- Color scheme
- Marketing slogan
Answer: Affordability (premiums and costs)
26. ESI’s Drug Exclusions list is an example of what kind of management strategy?
- An open formulary
- A formulary where certain drugs are not covered, often when cost-effective alternatives are available
- A program to increase utilization of excluded drugs
- A government-mandated coverage list
Answer: A formulary where certain drugs are not covered, often when cost-effective alternatives are available
27. The use of a preferred pharmacy network is a strategy that can help a health plan:
- Increase dispensing fees paid to pharmacies
- Negotiate lower reimbursement rates with in-network pharmacies
- Ensure every pharmacy in the country is in their network
- Eliminate the need for pharmacists
Answer: Negotiate lower reimbursement rates with in-network pharmacies
28. A key role for a pharmacist in managed care is to apply clinical knowledge to:
- Help design population-based management strategies
- Compound sterile preparations for the entire health plan
- Only focus on the financial aspects of drug pricing
- Market drugs directly to physicians
Answer: Help design population-based management strategies
29. The strategy of using different copayment amounts for generic, preferred brand, and non-preferred brand drugs is known as:
- A quantity limit
- A flat copayment system
- A tiered copayment system
- A prospective DUR
Answer: A tiered copayment system
30. The main purpose of a concurrent DUR alert at the pharmacy is to:
- Slow down the dispensing process
- Notify the pharmacist of a potential safety issue before the drug is dispensed
- Increase the price of the medication
- Provide the patient with marketing materials
Answer: Notify the pharmacist of a potential safety issue before the drug is dispensed
31. Which drug characteristic is most likely to trigger a prior authorization requirement as a management strategy?
- Low cost and long history of safe use
- Generic availability
- High cost and potential for off-label use
- Over-the-counter status
Answer: High cost and potential for off-label use
32. A successful drug benefit management strategy ultimately aims to:
- Shift all costs to the patient
- Limit access to all new medications
- Achieve a balance between cost containment and providing quality care
- Maximize profits for pharmaceutical manufacturers
Answer: Achieve a balance between cost containment and providing quality care
33. In the context of the pharmacy supply chain, “reimbursement” refers to how:
- The patient pays the pharmacy
- The pharmacy is paid by the PBM/health plan for a dispensed drug
- The manufacturer pays the wholesaler
- The wholesaler pays the PBM
Answer: The pharmacy is paid by the PBM/health plan for a dispensed drug
34. A managed care strategy to control specialty drug costs may involve requiring patients to:
- Obtain their medication from a designated specialty pharmacy
- Pay for the entire cost of the drug out-of-pocket
- See a specialist physician for a diagnosis
- A and C
Answer: A and C
35. A “doughnut hole” or coverage gap is a feature of which government program’s drug benefit?
- Medicaid
- Medicare Part D
- TRICARE
- State Health Exchanges
Answer: Medicare Part D
36. A managed care organization’s decision to remove a drug from the formulary mid-year is a strategy that is:
- Common and encouraged
- Highly regulated and often restricted to protect patients
- The primary method for controlling costs
- Only done for generic medications
Answer: Highly regulated and often restricted to protect patients
37. The overall goal of utilization management strategies (PA, ST, QL) is to ensure medications are used:
- As little as possible
- Appropriately, safely, and cost-effectively
- Only for off-label indications
- By every member of the health plan
Answer: Appropriately, safely, and cost-effectively
38. A health plan’s decision to cover preventive services like vaccines is a management strategy focused on:
- Long-term health and cost avoidance
- Increasing short-term pharmacy costs
- Treating acute illnesses
- Managing specialty drugs
Answer: Long-term health and cost avoidance
39. When a brand-name drug loses its patent, a key management strategy is to:
- Immediately remove the brand-name drug from the formulary
- Encourage the rapid adoption of its less expensive generic equivalent
- Require prior authorization for the new generic
- Place the generic drug on the highest formulary tier
Answer: Encourage the rapid adoption of its less expensive generic equivalent
40. A pharmacist working for a PBM might analyze claims data as a strategy to:
- Identify prescribers with unusual patterns of opioid prescribing
- Select a new CEO for the company
- Determine the pharmacy’s daily workflow
- Set the price of a new brand-name drug
Answer: Identify prescribers with unusual patterns of opioid prescribing
41. The strategy of creating a “preferred brand” tier on a formulary is used to:
- Discourage the use of all brand-name drugs
- Encourage the use of specific brand-name drugs for which the plan receives higher rebates
- Make all brand-name drugs have the same copayment
- Eliminate the need for generic drugs
Answer: Encourage the use of specific brand-name drugs for which the plan receives higher rebates
42. Which of the following is NOT a typical drug benefit management strategy?
- Implementing a prior authorization program
- Creating a tiered formulary
- Negotiating manufacturer rebates
- Requiring all pharmacies to charge the same cash price to all patients
Answer: Requiring all pharmacies to charge the same cash price to all patients
43. A P&T committee’s primary management strategy is to make decisions based on:
- The color of the medication
- The drug’s marketing budget
- Scientific and clinical evidence
- The manufacturer’s location
Answer: Scientific and clinical evidence
44. Patient assistance programs, often offered by manufacturers, can be a strategy to help patients overcome which barrier?
- Prior authorization requirements
- High out-of-pocket costs
- Step therapy protocols
- Therapeutic duplication
Answer: High out-of-pocket costs
45. A key consideration for a plan sponsor in choosing a PBM is the PBM’s ability to:
- Effectively manage drug trend and control costs
- Increase drug trend year over year
- Own the most community pharmacies
- Run the most television commercials
Answer: Effectively manage drug trend and control costs
46. A managed care pharmacist reviewing a new drug for the formulary would be most interested in its:
- Comparative efficacy and safety against current formulary agents
- Packaging aesthetics
- Name recognition among the general public
- The manufacturer’s quarterly earnings report
Answer: Comparative efficacy and safety against current formulary agents
47. The strategy of using a formulary is designed to influence the behavior of:
- Prescribers and patients
- Pharmaceutical manufacturers
- Pharmacies
- All of the above
Answer: All of the above
48. An “open formulary” strategy means that the health plan:
- Generally covers most drugs, but may have higher cost-sharing for non-preferred agents
- Covers no prescription drugs
- Only covers drugs from a single manufacturer
- Has no cost-sharing for any medication
Answer: Generally covers most drugs, but may have higher cost-sharing for non-preferred agents
49. The overall effectiveness of a prescription drug benefit management strategy is measured by its impact on:
- Drug cost, patient health outcomes, and member satisfaction
- The PBM’s stock price only
- The number of prescriptions denied
- The number of pharmacies in the network
Answer: Drug cost, patient health outcomes, and member satisfaction
50. For a pharmacist, understanding these management strategies is critical because they directly affect:
- A patient’s access to medications and their out-of-pocket costs
- The physical location of the pharmacy
- The color of the pharmacist’s lab coat
- The time the pharmacy opens each day
Answer: A patient’s access to medications and their out-of-pocket costs
I am a Registered Pharmacist under the Pharmacy Act, 1948, and the founder of PharmacyFreak.com. I hold a Bachelor of Pharmacy degree from Rungta College of Pharmaceutical Science and Research. With a strong academic foundation and practical knowledge, I am committed to providing accurate, easy-to-understand content to support pharmacy students and professionals. My aim is to make complex pharmaceutical concepts accessible and useful for real-world application.
Mail- Sachin@pharmacyfreak.com