Average Wholesale Price (AWP) (Health Care) Law and Legal Definition

Average wholesale price (AWP) is a term which is generally used with prescription drugs. AWP refers to the average value at which wholesalers sell drugs to physicians, pharmacies, and other customers. AWP is the generally accepted standard measure for calculating the cost of a particular medication. It has become an important prescription drug pricing benchmark for prescription drug pricing and reimbursement throughout the health care industry. AWP is generally 20% greater than the value for which a manufacturer sells their products to distributors and large customers.