AWP – Like Finding Sasquatch


AWP - Like Finding Sasquatch

Einstein may have split the atom and discovered the theory of relativity, but I wonder if he could define Average Wholesale Price (AWP)?

In theory the concept of AWP sounds simple. As it relates to prescription drugs, it’s the average price for drugs purchased on the wholesale market (i.e. average wholesale price). Unfortunately, a consistent interpretation of AWP is as elusive as Sasquatch. According to some industry material, AWP can be one of the following:

  • A benchmark

  • A fluid moving average

  • A sticker price

  • Cost plus

  • The list price

  • Rebate loaded cost

It is many different calculations, but what it is not, is the actual cost paid for the drug. So how do you know what to buy and what to pay? My advice:

  • Find a good PBM with fair, transparent pricing and value added customer services

  • Take steps to limit your claimants/patients to the approved pharmacies in your PBM network

  • Don’t rely solely on your PBM to address the drug utilization issues of:

    1. Extent

    2. Duration

    3. Relatedness

    4. Appropriateness

At OMCA, we don’t try to find Sasquatch or recalculate AWP. But, we do successfully perform enhanced drug utilization review to determine if your claimant/patient is on the right drugs, the right dosage, for the right length of time AND from the right PBM.

Call Us. We can do better.
William Faris, JD

Posted in OMCA