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Drug Average Wholesale Price? What Does That Mean?

Drug AWP or Average wholesale price is provided for comparison only. This figure is not what your United States pharmacy actually pays. ...

This figure is what the drug maker recommends as a starting point for further discounts. Discounts can range from 15 percent for most brand name drugs to over 90 percent for some generics.

The discount off average wholesale price varies depending on several factors. These factors include

  • which drug company makes the product,
  • whether the drug is a brand or generic product,
  • which wholesaler the pharmacy buys from,
  • what volume the wholesaler purchases from the drug maker,
  • what volume the pharmacy purchases from the wholesaler or drug maker,
  • lastly and most infuratingly, what "class of trade" the drug maker classifies the pharmacy into, e.g. institutional, mail order, or retail.

Brand name drug companies (sometimes referred to as "Big Pharma" referring to their lobbying clout) raise Average Wholesale Price at least once a year.

Generic or Brand Name Drugs?

Generic companies raise their prices less often unless there are special market considerations, such as a supply problem. Of course, when costs rise, prices have to rise also.

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We provide Average Wholesale Price for comparison purposes only. We provide this figure to illustrate a point. The point: that the difference between Canadian prescription prices and United States prescription prices are not because you local pharmacist is greedy. That distinction belongs further up the drug supply chain. Who sets drug AWP? The drug makers.

Also, who do they lobby to keep their drug AWP prices artificially high? The United States Congress. One study shows $96 million was spent by drug companies in 2003 lobbying (or buying influence with) United States lawmakers.

Soap Box Statement: United States prescription customers pay more than Canadian prescription customers. The United States government allows and even encourages the brand name drug makers to charge whatever the market will bear.

How much more can you bear?

Your first step should be to save where you can. Your next step should be to write your Congressman to complain. And to demand change. Your local retail pharmacists, and by extension you the consumer, should have access to the same lower prices as any other entity or "class of trade." Providing, of course, they are willing to purchase the same volume.

There is no good, valid or even legal reason for this price discrepancy.

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