Which term is used to describe the average percent discount off the AWP for all generic drugs?

The term that describes the average percent discount off the Average Wholesale Price (AWP) for all generic drugs is known as the Generic Effective Rate (GER). This metric is significant in evaluating the pricing of generic drugs as it provides insights into how much less pharmacies pay for these medications compared to the AWP. By calculating the average discount, the GER helps to understand the overall cost savings that can be achieved through the acquisition of generic medications, which are typically less expensive than their brand-name counterparts.

In this context, WAC stands for Wholesale Acquisition Cost, which reflects the manufacturer's list price for a drug to wholesalers or direct purchasers. AMP, or Average Manufacturer Price, is the average price paid to manufacturers for drugs by wholesalers, which can inform Medicaid reimbursement but does not specifically capture discounts for generics. MAC, or Maximum Allowable Cost, refers to the maximum price that a pharmacy benefit manager (PBM) is willing to reimburse for a generic drug, but it’s not reflective of the average discount percentage. Therefore, GER is the most appropriate term to describe the average percent discount off the AWP specifically for generic drugs.