![]() The publishers then in turn sell these published AWPs to government, private insurance, and other buyers of prescription drugs, who use these data tables to determine reimbursement and retail prices. Typically a 20% mark-up is applied to the manufacturer-supplied WAC or DIRP, which results in the AWP figure.WAC is the most common benchmark used today by pharmacies to buy drugs from wholesalers. The wholesale acquisition cost (WAC) is the manufacturer’s list price of the drug when sold to the wholesaler, while the DIRP is the manufacturer’s list price when sold to non-wholesalers. Pharmacies typically buy their drugs from wholesalers (such as AmeriSource Bergen, Cardinal Health, or McKesson).The AWP may also be calculated by the publisher based upon a mark-up specified by the manufacturer that is applied to the wholesale acquisition cost (WAC) or direct price (DIRP).The drug manufacturer may report the AWP to the individual publisher of drug pricing data, such as MediSpan or First Data Bank.The AWP may be determined by several different methods. As such, the AWP, while used throughout the industry, is a controversial pricing benchmark. AWP has often been compared to the “list price” or “sticker price”, meaning it is an elevated drug price that is rarely what is actually paid.ĪWP is not a government-regulated figure, does not include buyer volume discounts or rebates often involved in prescription drug sales, and is subject to manipulation by manufacturers or even wholesalers. However, the AWP is not a true representation of actual market prices for either generic or brand drug products, and is usually inflated about 20 percent. The AWP benchmark has been used for over four decades to determine pricing and reimbursement of prescription drugs to third parties such as the government and private payers. In the United States, the average wholesale price (AWP) is a pharmaceutical term that describes the average price paid by a retailer to buy a drug from the wholesaler. What is the average wholesale price (AWP)? Medically reviewed by Leigh Ann Anderson, PharmD. Average Wholesale Price (AWP) as a Pricing Benchmark
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