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Wholesale Acquisition Cost (WAC)

The manufacturer's list price for a drug sold to wholesalers, often called the "sticker price" before any rebates or discounts.

How It Works

WAC is the anchor price in U.S. pharmaceutical distribution, set unilaterally by the manufacturer and reported to pricing compendia like Red Book and Medi-Span. It is the price wholesalers (Cardinal Health, McKesson, AmerisourceBergen, which handle roughly 90% of U.S. drug distribution) pay before prompt-pay discounts, and it anchors downstream pharmacy contracts and PBM rebate calculations. WAC is typically 20-25% below Average Wholesale Price (AWP) and 10-40% above the net price insurers actually pay after rebates. Humira's WAC peaked at around $6,600 per month (roughly $80,000/year) before biosimilar entry in 2023; Keytruda's WAC runs about $16,000 per 200mg vial, yielding roughly $200,000 per year of treatment; Ozempic lists around $998/month. Cash-paying patients, uninsured patients, and insured patients still in their deductible phase often pay prices very close to WAC, which is why a drug with a $500 WAC but 55% PBM rebate costs the plan $225 yet still hits the patient with a $500 deductible bill. The Inflation Reduction Act inflation-rebate penalty is benchmarked to WAC: if a manufacturer raises WAC faster than CPI-U, it owes the Part B or Part D program the excess. There is no federal ceiling on launch WAC, which is why gene therapies like Casgevy ($2.2M) and Hemgenix ($3.5M) can enter the market at record prices.

Related Terms

  • Average Cost per Claim, The average amount Medicare pays per 30-day supply claim for a prescription drug, including both the plan's payment and the beneficiary's out-of-pocket cost.
  • Pharmacy Benefit Manager (PBM), A company that acts as a middleman between drug manufacturers, insurers, and pharmacies, negotiating drug prices, managing formularies, and processing claims.
  • Manufacturer Rebate, A post-sale discount paid by a drug manufacturer to a PBM or insurer in exchange for favorable formulary placement, reducing the effective net price below the list price.
  • Inflation Rebate Penalty, An IRA provision requiring drug manufacturers to pay Medicare rebates when a drug's price increases exceed general inflation (CPI-U) on a year-over-year basis.

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About This Definition

This definition is part of the DrugPrice Drug Pricing Glossary, 49 terms explaining how prescription drug pricing works in the United States. All definitions are written in plain language for patients, caregivers, journalists, and healthcare professionals.

this entity is one of the U.S. Medicare prescription-drug pricing concepts that recurs across this site. The definition above is the technical answer; the paragraphs below add the practical context for how the concept connects to the CMS Medicare Part D Drug Spending data data behind every per-entity page on the site.

In the CMS Medicare Part D Drug Spending data data, this concept shapes one or more of the fields that drive the per-entity grades and rankings on this site. The methodology page describes which fields feed into which output; this glossary entry documents the underlying term.

Source: CMS Medicare Part D Spending, 2026.