Average Wholesale Price (AWP)November 17th, 2017 - David Berky
Find-A-Code's WK Drug Database product is becoming more and more popular and we often get asked how the AWP or average wholesale price is derived. The following information is directly out of a Wolters Kluwer (WK) PDF file about the drug pricing:
Clinical Drug Information, LLC Average Wholesale Price (AWP) is intended only to be used by Clinical Drug Information, LLC customers. While many use this information as a price index, the Clinical Drug Information, LLC AWP does not represent an average of wholesale prices from any group of transactions in the marketplace. A wholesaler may agree to sell its products to one or more of its customers at a lower price through the use of any number of methods (i.e. discounts or rebates).
For a complete explanation of Clinical Drug Information, LLC’s AWP Policy, go to http://www.medispan.com/common/pdf/wkh_AWP_policy.pdf
Reviewing the AWP Policy carefully in its entirety is strongly encouraged, both before using the pricing contained in Wolters Kluwer Clinical Drug Information products and when making ongoing decisions about reasonable and appropriate uses of that information.
As a condition to Clinical Drug Information, LLC publishing the AWP of a product, the manufacturer must supply at least one of the following price types:
- Suggested Wholesale Price (SWP)
- Wholesaler Acquisition Cost (WAC)
- Direct Price (DP)
In all cases where the manufacturer supplies an SWP, even if accompanied by either or both a WAC or DP, the AWP value will reflect the manufacturer’s SWP as reported to Clinical Drug Information, LLC. In all cases where the manufacturer does not supply an SWP, the AWP results from applying a markup to the manufacturer’s reported WAC or DP. DP is only used to determine AWP when the manufacturer does not supply a WAC. The markup applied to the WAC or DP for active products is based either on a standard markup of 20% or from certain historical, wholesaler-reported data where the historical markup is less than 20%.
This AWP pricing policy governs pricing information published in documentation manuals of other Clinical Drug Information, LLC products.
If you have questions or comments about this article please contact us. Comments that provide additional related information may be added here by our Editors.
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