--- title: Demystifying Specialty Drug Pricing Acronyms, and Why They All Fail Employers description: Uncover the complexities of drug pricing acronyms like AWP, ASP, and WAC, and learn how Leap Health's transparent approach saves employers on infusion therapy costs. image: https://go.leaphealth.com/hubfs/AI-Generated%20Media/Images/The%20image%20depicts%20a%20modern%20sleek%20office%20environment%20with%20a%20large%20conference%20table%20at%20the%20center%20surrounded%20by%20comfortable%20chairs%20A%20projector%20screen%20displays%20a%20colorful%20infographic%20titled%20Demystifying%20Specialty%20Drug%20Pricing%20featuring%20bold%20acronyms%20ASP-1.jpeg --- [Skip to content](https://go.leaphealth.com/blog/demystifying-specialty-drug-pricing-acronyms-and-why-they-all-fail-employers#main-content) [![LeapHealth_Standard_1000px](https://go.leaphealth.com/hubfs/LeapHealth_Standard_1000px.png "LeapHealth_Standard_1000px")](http://) May 21 2025 # Demystifying Specialty Drug Pricing Acronyms, and Why They All Fail Employers [Robert LaHayne](https://go.leaphealth.com/blog/author/robert-lahayne) ![Blog Details](https://go.leaphealth.com/hubfs/AI-Generated%20Media/Images/The%20image%20depicts%20a%20modern%20sleek%20office%20environment%20with%20a%20large%20conference%20table%20at%20the%20center%20surrounded%20by%20comfortable%20chairs%20A%20projector%20screen%20displays%20a%20colorful%20infographic%20titled%20Demystifying%20Specialty%20Drug%20Pricing%20featuring%20bold%20acronyms%20ASP-1.jpeg) [costsavings](https://go.leaphealth.com/blog/tag/costsavings) Behind the exorbitant costs of infusion therapies, you’ll find layers of complexity—and three acronyms that confuse more than they clarify: ASP, AWP, and WAC. Here’s what they mean, who uses them, and why they’re all part of a broken system that drives up costs. **What’s the Difference?** Let’s break them down one at a time: - **Average Wholesale Price (AWP):** Despite its name, AWP isn’t what anyone actually pays. It’s a benchmark price set by drug manufacturers that often reflects a 20–25% markup over what providers pay. AWP is still commonly used by insurers and pharmacy benefit managers as a reference point, but its inflated nature makes it a poor proxy for actual costs. - **Wholesale Acquisition Cost (WAC):** WAC is the price a wholesaler pays to the manufacturer for a drug, not including discounts or rebates. It’s closer to a "list price" and is used for cataloging and forecasting. Like AWP, it often bears little resemblance to the true transactional price after all the deals are done. - **Average Sales Price (ASP):** ASP attempts to reflect the real-world average price, including discounts and rebates. It’s calculated by the Centers for Medicare & Medicaid Services for Part B drugs and is often used in public reimbursement models. But ASP lags in time and doesn’t account for commercial market dynamics or the full impact of administrative markups. **Why Should Employers Care?** Because none of these models reflect what they actually pay. When a provider purchases a drug under the traditional buy-and-bill model, they buy the drug (often at or below WAC), administer it, then bill the plan based on AWP or ASP plus a markup. In a hospital outpatient department, that markup can reach 500%. Even in an ambulatory infusion center, you’re still looking at 50% markups or more. The result? Employers end up paying dramatically different prices for the same drug depending on where and how it’s administered, not what it’s worth. **Why the System Is Failing Employers** - **No consistency**: Pricing is opaque and varies wildly across settings. - **No control**: Employers are locked into contracts they can’t negotiate. - **No value**: Inflated markups aren’t tied to outcomes, they’re just added costs. - **No transparency**: Employers don’t know what portion of the cost is the drug vs. the markup. **How Leap Health Does It Better** Leap Health replaces the outdated pricing models with a pass-through pricing approach. That means employers pay only the actual cost of the drug—no markups, no hidden fees, no surprises. Here’s how it works: 1. **True drug cost only:** No inflated charges based on AWP or ASP 2. **Home-based administration:** Avoids high-cost hospital settings altogether 3. **Transparent pricing and coordination:** Reduces infusion costs by up to 50% 4. **Improved adherence**: Easier access means fewer missed treatments and better outcomes **The Bottom Line** AWP, ASP, and WAC were never designed to serve employers - the ones who ultimately pay the bills. It’s time to move beyond legacy pricing systems that obscure costs and reward inefficiency. 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