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 starting point for drug pricing in the United States. It represents the price a manufacturer charges wholesalers before any rebates, discounts, or negotiation. WAC is often significantly higher than what insurers actually pay because pharmacy benefit managers (PBMs) negotiate rebates that reduce the effective price. However, patients without insurance or in the deductible phase of their coverage may pay prices closer to WAC. Drug manufacturers set WAC unilaterally — there is no government price control in the U.S. for most medications.
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.
- Rebate — A discount paid by a drug manufacturer to an insurer or PBM after a sale, reducing the effective price below the list price.
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About This Definition
This definition is part of the DrugPrice Drug Pricing Glossary — 34 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.