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Since the lawsuits and controversy over AWP, and its subsequent removal from FDB, stakeholders throughout pharmacy and related industries have been considering alternatives for a new standard drug price type. The commonly agreed criteria for a new benchmark are that it should be: transparent, accessible, comprehensive, timely, and immune to manipulation.

Although there have long been an array of drug price types available in addition to AWP (AAC, AMP, ASP, EAC, FUL, MAC, MLP, and WAC), none of these meets all of the desired criteria. Consequently, two new drug price types have been proposed as potential alternatives. They are the National Average Drug Acquisition Cost (NADAC) and the Predictive Acquisition Cost (PAC). What follows are brief summaries and pertinent facts about each of the two options:

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The Average Wholesale Price (AWP) has long been the drug price benchmark for establishing reimbursement payment terms between payers, PBM’s, and pharmacies. Created in 1969 by George Pennebaker to address the need for a reference price to adjudicate California Medicaid drug claims, AWP became the standard nationwide as the shift from paper to real-time drug reimbursement claims required the use of common pricing fields. However, as early as the 1980’s, industry pundits referred to AWP as “ain’t what’s paid” because of the common and significant gap between AWP and the actual acquisition cost of a drug.
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