DAW (Dispense as Written)

DAW (Dispense as Written) codes are National Council for Prescription Drug Programs (NCPDP) codes pharmacies submit on claims to indicate whether the dispensed drug was a brand, a generic, or a substitution exception. DAW codes range from 0 through 9. DAW 1 indicates physician request that no substitution be made. DAW 2 indicates patient request for the brand. DAW 0 indicates no product selection indicated. PBM audits commonly review DAW 1 and DAW 2 claims because the brand reimbursement is higher than the equivalent generic.

How DAW audits work

The auditor samples claims with DAW 1 or DAW 2 submissions and requests the supporting documentation. For DAW 1, the auditor expects to see the prescriber's specific notation that no substitution may be made (in compliance with the issuing state's substitution law, which varies by state). For DAW 2, the auditor expects to see contemporaneous documentation of the patient's request for the brand and the patient's acceptance of any additional cost. Missing or non-conforming documentation can support recoupment of the difference between the brand reimbursement and the generic reimbursement.

The defense framework focuses on the prescriber's actual intent, state substitution law application, contemporaneous documentation reconstruction (including ePrescribing records that capture brand-medically-necessary indicators), and the appeal challenge where the audit methodology mischaracterizes the underlying clinical decision.

When DAW audits apply

DAW audits apply to every PBM contract that reimburses brand and generic claims at different rates, which is essentially every PBM contract. State substitution laws govern the prescriber's procedural obligations for brand-medically-necessary designations; the PBM audit applies the state law standard to the audited claims. DAW audits are especially common in matters involving narrow-therapeutic-index drugs (warfarin, levothyroxine), psychiatric medications, and seizure medications, where brand-versus-generic clinical justifications are stronger.

The pharmacy's exposure under DAW audit findings

Per-claim recoupment runs as the difference between brand reimbursement and the generic equivalent, multiplied across the flagged claims. Statistical extrapolation can scale the dollar exposure significantly. Repeated DAW deficiencies can support network discipline or termination for cause. The defense framework focuses on documentation reconstruction (ePrescribing records, prescriber chart notes, patient documentation), state substitution law application, and the methodology challenge to the audit sample and extrapolation where applicable.

Related terms

• PBM audit The audit framework where DAW review is concentrated.
• Signature log The parallel audit category whose findings often appear alongside DAW findings.
• Prior authorization The PBM approval process that often precedes brand-dispense claims.
• Recoupment The dollar demand that follows when DAW findings become final.

See also

• Practice area
  PBM Audit Defense

  Defense framework for PBM audit DAW findings and the documentation reconstruction process.

• Practice area
  Recoupment Defense

  Defense framework for DAW-driven recoupment demands, including statistical methodology challenge.