Average Wholesale Price of HIV Drugs

The wholesale price of HIV drugs is determined by a number of factors. Firstly, an independent Wholesale Acquisition Cost (WAC) is released by the manufacturer, which is essentially the asking price of a drug before any discounts or rebates are added for volume purchases and/or prompt payment.

From this, a Suggested Wholesale Price (SWP) is set. This is the price recommended by the manufacturer to wholesalers when determining prices for their customers (i.e. retailers, hospitals, institutions). The SWP is not the actual transaction cost but rather a baseline from which wholesalers can make competitive pricing decisions.

By contrast, the Average Wholesale Price (AWP) is the average price that retailers and others are reportedly paying for a particular drug. The AWP is reported by the manufacturers and compiled by independent publishers, the data of which is used by governments, insurance companies, and others to determine the reimbursement and retail prices of prescription drugs. Because AWP relies on third-party reporting—and is, therefore, vulnerable to price manipulation—some institutions have begun to abandon its use in favor of the SWP.

Finally, the Direct Price (DIRP or DP) is the price a non-wholesale buyer (e.g. you) would expect to pay at the cash register. Generally speaking, there's a 20-30% markup between the WAC and DIRP.