Average Wholesale Price (AWP)
A published list price representing the average cost wholesalers charge pharmacies for a drug, historically used as a benchmark for pharmacy reimbursement and payer contracts. AWP is often criticized as inflated relative to actual transaction prices.
What is Average Wholesale Price (AWP)?
Average Wholesale Price (AWP) is a published list price meant to represent the average amount wholesalers charge pharmacies for a drug. Historically it has functioned as a reference benchmark in pharmacy reimbursement formulas and in contracts between payers and providers.
Despite its name, AWP is essentially a posted figure rather than a measure of actual negotiated transactions. This distinction is at the heart of much of the debate surrounding it.
Why is AWP significant and frequently criticized?
Because so many payment arrangements were tied to AWP, the number has had outsized influence on how much pharmacies and payers exchange for medications. Its convenience as a single reference point is part of why it became so entrenched.
At the same time, AWP is widely criticized for sitting well above the prices actually paid in the market, which can distort reimbursement. That gap between the list figure and real transaction costs has driven efforts to rely on more accurate benchmarks.
- awp
- what is average wholesale price
- average wholesale price definition
- awp drug pricing
- awp pharmacy reimbursement
- average wholesale price meaning
- awp vs amp