Average Wholesale Price – A benchmark used for pricing and reimbursement of prescription drugs for both government and private payers. AWP is not a true representation of actual market prices for either generic or brand drug products. AWP has often been compared to the “list price” or “sticker price”, meaning it is an elevated drug price that is rarely what is actually paid. It is provided by pricing services.
Further reading –
http://www.ncsl.org/research/health/medicaid-pharmaceutical-laws-and-policies.aspx