Wholesale acquisition cost

Wholesale Acquisition Cost (WAC) is a term used in the pharmaceutical industry to refer to the cost that a wholesaler pays to acquire a drug from the manufacturer. This cost is typically used as a benchmark in pricing prescription drugs and is often used in drug pricing calculations.

Overview

The Wholesale Acquisition Cost is the list price for a drug that a manufacturer suggests a wholesaler or distributor pay for their products. It does not include discounts or rebates offered by the manufacturer. The WAC is often used as a starting point for negotiations between wholesalers and manufacturers, and is also used as a reference point in pricing decisions by pharmacies and insurance companies.

Calculation

The calculation of the Wholesale Acquisition Cost is a complex process that involves several factors. These include the cost of raw materials, manufacturing costs, marketing and distribution costs, and a profit margin for the manufacturer. The WAC is typically updated on a monthly basis to reflect changes in these costs.

Role in Drug Pricing

The Wholesale Acquisition Cost plays a significant role in the pricing of prescription drugs. It is often used as a benchmark in pricing decisions by pharmacies and insurance companies. However, it is important to note that the WAC is not the actual price that pharmacies pay for a drug. The actual price is often lower due to discounts and rebates offered by the manufacturer.

Criticism

The use of the Wholesale Acquisition Cost in drug pricing has been criticized for its lack of transparency. Critics argue that the WAC does not accurately reflect the actual cost of a drug, as it does not take into account discounts and rebates offered by the manufacturer. This has led to calls for more transparency in drug pricing, including the disclosure of the actual prices paid by pharmacies and insurance companies.

See also

• Pharmaceutical industry
• Drug pricing
• Pharmacy Benefit Management