The National Association of State Medicaid Directors (NASMD) released a report examining possibly replacements for the Average Wholesale Price (AWP) used to determine drug reimbursements.  The AWP will no longer be published for use after September 2011.  The report examines the findings of a working group that NASMD convened on the topic, and their cursory suggestions for developing a new model to determine reimbursements.

From the report: For nearly forty years, a standard pricing benchmark employed for the reimbursement of drugs, for both public and private payers, has been the “Average Wholesale Price” or “AWP,” a value based on manufacturer-reported information and compiled by commercial drug pricing compendia. The recent determination of major drug pricing compendia to cease publication of AWP no later than September, 2011 creates a challenge and an opportunity for state Medicaid programs: states must find a new drug pricing standard and do so immediately, so that necessary adaptations, in law, regulation and system design, can be accomplished in time.

Full report: Post AWP Pharmacy Pricing and Reimbursement (PDF | 201KB)

National Association of State Medicaid Directors.  (2010).  Post AWP pharmacy pricing and reimbursement.