OBJECTIVES: 1) To examine the percent difference between average wholesale price (AWP) and wholesale acquisition cost (WAC) for pharmaceuticals in the United States, accounting for patent status and manufacturer type, and 2) to evaluate the relationship between brand manufacturers and relabelers. METHODS: Data for this study came from the Master Drug Data Base (MDDB), which is a proprietary drug file containing pricing information for all prescription and non-prescription products available in the US. The percent difference between AWP and WAC for prescription pharmaceuticals was compared on a variety of facets, including single source, type of manufacturer (original or repackager). The difference was expressed as a percentage of AWP (a commonly used method for reimbursing pharmacies in the US). We also compared the AWP among brand name manufacturers and relabelers (who repackage brand name pharmaceuticals produced by the original manufacturer). RESULTS: A total of 23,607 unique drug products were included in the analysis examining AWP and WAC. The mean percent difference for brand name pharmaceuticals was 0.23+0.11, as compared to 0.44+0.26, p<0001. Brand name drugs that were available from multiple companies had a mean difference of 0.25+0.14, compared to 0.20+0.05 for single source products (p<0.001). The median AWP for brand name manufacturers was $3.04 per unit, compared to $3.11 per unit for relablers. CONCLUSION: This study documents the magnitude of well-known differences between AWP and WAC for brand name and generic products. Further, branded products produced by more than one manufacturer will have larger differences between AWP and WAC than single source products. The findings suggest the need for analysts to critically evaluate the use of AWP for determining product costs in the US and substantial differences exist between single source and multiple source products. A more transparent and accurate pricing system is needed for economic analyses in the US.