Definitions for "Average Wholesale Price"
Under the Medicare catastrophic coverage act, payment for prescription drugs is limited to the lowest of the pharmacy's actual charge, the sum of the AWP for the drug plus an administrative allowance, or effective 1992, the 90th percentile of pharmacy charges.
The standardized cost of a prescription medication that is calculated by averaging the cost of an undiscounted pharmaceutical charged to a pharmacy provider by a large group of pharmaceutical wholesale suppliers.
AWP is a reference calculation used in some states to formulate reimbursement to pharmacies for Medicaid. AWP is published quarterly in the Red Book.