Is the AWP or average wholesale price determined by WAC or direct price?

The average wholesale price (AWP) is a benchmark used in the pharmaceutical industry to set medication prices and reimbursements. It is a pricing reference point that is not directly tied to the actual price at which a pharmacist purchases drugs. Instead, AWP is generally determined based on data aggregated from various sources about wholesale pricing trends across the market.

In this context, it’s important to recognize that AWP is influenced by factors such as the wholesale acquisition cost (WAC) of drugs, which refers to the manufacturer's list price for wholesale distributors, as well as other elements that could include negotiated discounts, rebates, and market conditions. While AWP is not directly calculated from WAC, it often reflects the cost structures associated with wholesale pricing.

Thus, stating that AWP is determined by WAC acknowledges that WAC serves as an essential component in the pricing framework that informs AWP, even if it is not a direct calculation. Other options can imply limitations or conditions that do not encompass the broader relationship between AWP and WAC across all scenarios. Hence, the affirmation is appropriate, recognizing the interconnectedness of these pricing indices in the pharmaceutical distribution landscape.