What does AWP stand for in the context of pharmacy pricing?

AWP stands for Average Wholesale Price, which is a term commonly used in pharmacy pricing to indicate the average price that wholesalers charge pharmacies for drugs. This pricing benchmark is important in the pharmacy industry as it helps pharmacies, insurers, and other stakeholders set the reimbursement levels for prescription medications. AWP serves as a reference point for determining how much pharmacies should be paid for the drugs they dispense.

The significance of AWP lies in its role in price negotiations and the calculations surrounding insurance reimbursements. Since AWP is often considered when determining copayments or overall drug costs, understanding this pricing metric is essential for pharmacy technicians. By being familiar with AWP, pharmacy technicians can better understand pricing structures and assist pharmacists in managing costs effectively.