The HHS Office of Inspector General (OIG) has issued a report entitled "Replacing Average Wholesale Price: Medicaid Drug Payment Policy," in which the OIG discusses the results of a survey it sent to states asking how they intend to set average wholesale price (AWP) for Medicaid drug reimbursement after First DataBank stops publishing AWPs in September 2011. According to the OIG, First DataBank’s plan to cease publication of AWPs offers presents states “an opportunity to implement new reimbursement methodologies that more closely approximate pharmacy acquisition costs.” Of the 45 states with AWP-based reimbursement methodologies, three had developed plans to replace AWP with average acquisition cost, 12 to replace AWP with wholesale acquisition cost, and 10 to use AWP from a source other than First DataBank, while 20 states did not have definitive plans for prescription drug reimbursement. Most states would prefer that CMS develop a single national benchmark to set Medicaid reimbursement rates, with 24 of these states wanting a benchmark based on pharmacy acquisition costs. The OIG also concluded that CMS has not yet provided uniform guidance about options for Medicaid reimbursement after AWPs are no longer available from First DataBank. CMS notes that it is taking steps to address this issue through a nationwide survey to collect retail community pharmacy prices for drugs, and the agency plans to provide guidance to states in the future (for information on CMS’s ongoing survey of drug retail prices, see our earlier report). The OIG recommends that CMS develop a national benchmark that accurately estimates acquisition cost and encourage states to consider it when determining Medicaid reimbursement for prescription drugs; CMS concurred.