What is the formula for calculating the WAC?

The formula for calculating the Wholesale Acquisition Cost (WAC) is appropriately derived from the relationship between the retail cost, markup, and dispensing fee. In this context, WAC is often used to represent the cost of acquiring a medication before any additional charges, such as markup or dispensing fees, are applied.

To arrive at the correct formula, one would need to deduct both the markup and the dispensing fee from the retail cost. The reasoning here is that retail costs typically include both a markup (that accounts for the profit margin of the pharmacy) and a dispensing fee (which covers the cost of providing the prescription). Therefore, by subtracting both components from the retail cost, you arrive at the basic acquisition cost, which is what the WAC aims to represent.

Thus, the equation illustrated correctly represents this relationship and leads to an understanding of how to assess the fundamental cost of the drug without the additional financial considerations that come with retail pricing.