October 17th, 2018
Wolters Kluwer provides unit and package pricing for multiple drug price types: Average Wholesale Price (AWP), Wholesale Acquisition Cost (WAC), Direct Price (DP), Manufacturer's Suggested Wholesale Price (SWP), Centers for Medicare & Medicaid Services, Federal Upper Limit (CMS FUL), Average Average Wholesale Price (AAWP), Generic Equivalent Average Price (GEAP).
Average Wholesale Price (AWP)
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. The AWP may be determined by several different methods.
- The drug manufacturer may report the AWP to the individual publisher of drug pricing data
- The AWP may also be calculated by the publisher based upon a
mark-upspecified by the manufacturer that is applied to the wholesale acquisition cost (WAC) or direct price (DP).
- The wholesale acquisition cost (WAC) is the manufacturer’s list price of the drug when sold to the wholesaler. Pharmacies typically buy their drugs from wholesalers. WAC is the most common benchmark used today by pharmacies to buy drugs from wholesalers.
- Typically a 20%
mark-upis applied to the manufacturer-supplied WAC or DP, which results in the AWP.
Wholesale Acquisition Cost (WAC)
The wholesale acquisition cost (WAC) is an estimate of the manufacturer's list price for a drug to wholesalers or direct purchasers. WAC does not always represent the sales price in a single transaction accurately, as the manufacturer can choose to offer discounts or rebates that lower the price of which the product is sold to the wholesaler.
Direct Price (DP)
Direct Price is the price at which non-wholesalers and providers can purchase drug products from a manufacturer. These prices can vary by transaction, as the manufacturer may offer discounts or rebates.
Manufacturer's Suggested Wholesale Price (SWP)
SWP is the reported price from the manufacturer for its drugs to be sold by wholesalers to customers. This does not reflect the pricing from the manufacturer to the customers. Wholesalers will determine the actual price of the product based on competitive and market factors.
Federal Upper Limit (CMS FUL)
The list of covered drug products comes directly from CMS and is updated periodically. They establish ceiling prices for each set of therapeutically equivalent drug products according to the formula in the Medicaid final regulation published July 31, 1987, by CMS' parent organization, the Department of Health and Human Services (HHS). The rule's reimbursement ceiling is set at 150% of the lowest published price for therapeutically equivalent drug products.
Average Wholesale Price (AAWP) & Generic Equivalent Average Price (GEAP)
The AAWP is a Wolters Kluwer Clinical Drug Information drug pricing concept. Generally, the AAWP represents the average of all AWPs for each multi-source drug product. The AAWP is not calculated when the number of manufacturers supplying a generic is insufficient.
The Generic Equivalent Average Price (GEAP) is a Wolters Kluwer Clinical Drug Information drug pricing concept. The GEAP is not calculated when the number of manufacturers supplying a generic is insufficient. The GEAP is a generic price applied to all drug products sharing the same GPPC; however, all drug products with the same GPPC have not been used in the determination of the GEAP.
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