You're correct that there is, if I can use the phrase, a bit of a term of art within the insurance policy business. “First dollar” means that as soon as an insurable event occurs—in this case, having a prescription filled—the insurance would apply: That is, the coverage would apply before any other payments.
In other words, the person coming to the pharmacy is not paying a copay or something first. It's the insurance coverage that would pay that full charge.