DAW Codes 0 Through 9: What Each Code Tells the PBM

A pharmacy claim's dispense as written (DAW) code tells the PBM who decided between a brand and a generic product, and why. PBM audits built around DAW 1 and DAW 2 claims recur because the code by itself proves nothing: it is a single digit, submitted at the point of sale, standing in for a decision the pharmacy has to be able to document on demand. The codes run from 0 through 9 under the NCPDP Telecommunication Standard, the data format pharmacies and PBMs use to transmit claims, and each one puts a different burden on the pharmacy's hard copy. Knowing what each code is meant to represent, and what an auditor expects to find backing it up, is the starting point for responding to a PBM audit documentation request.

What a DAW Code Tells the PBM

The National Council for Prescription Drug Programs (NCPDP) maintains the code set pharmacies submit on every claim to show whether the dispensed product was the brand or the generic, and if the brand, who made that call. The definitions themselves sit inside NCPDP's licensed Telecommunication Standard rather than in a public statute, so pharmacies learn the applicable code list and documentation expectations through their state Medicaid program, their state board of pharmacy, or the PBM's own provider manual. California's Medicaid pharmacy program, Medi-Cal Rx, publishes its own DAW code reference for providers for that reason. What counts as adequate support for a given code depends on the pharmacy's state substitution law and the specific plan's audit criteria, not on one fixed national standard, so a hard copy that satisfies one payer can still fail another.

DAW 0, 1, and 2: The Codes Auditors Compare First

DAW 1 and DAW 2 draw close PBM audit attention because each one asserts that someone other than the pharmacy made the brand-over-generic decision, and that assertion needs a record behind it. DAW 0 is the baseline against which the other two are compared: it indicates that no product selection question arose on that claim at all.

DAW 1 indicates the prescriber did not allow substitution. Auditors expect to find a prescription, written or recorded in the pharmacy's own system, that actually states the brand is required, not a pharmacist's inference about what the prescriber probably wanted. DAW 2 indicates the patient requested the brand when a generic was available. Auditors expect the hard copy to document that the request came from the patient, not from the pharmacy. A pattern of DAW 1 or DAW 2 claims that cannot be tied to this kind of record is what can turn a routine documentation request into a

recoupment demand, and in a repeated pattern, a network termination notice.

The Remaining Codes and What They Signal

The codes 3 through 9 cover other circumstances: a choice the pharmacy itself made, a supply problem, a law that bars substitution, or the plan's own rule, rather than the prescriber's order or the patient's request. Some describe a pharmacist's own substitution choice. Others describe a temporary supply problem, a generic that was not in stock or not available in the marketplace when the prescription was filled. Others describe the brand product being required by law rather than by anyone's preference, and the plan's own claims processing rules determine which of these codes its system recognizes at all. Exact definitions for this part of the code set sit inside NCPDP's licensed standard, and PBMs vary in which of these codes they accept. A pharmacy should rely on its PBM's provider manual and its state board of pharmacy guidance, not an assumption carried from a different payer.

A DAW code states a conclusion. The hard copy is what has to prove it was true on the date the claim was submitted.

Why Early Legal Counsel Is Critical

It is critical that pharmacies promptly retain experienced healthcare defense counsel upon receiving a PBM audit notice or documentation request built around DAW code findings. Early legal intervention can protect the pharmacy's rights, shape the documentation response before a sample of DAW 1 or DAW 2 claims hardens into a demand that is harder to unwind at the audit appeal stage, avoid inadvertent admissions during the records exchange, and allow counsel to communicate with the PBM's audit team on the pharmacy's behalf. Delaying representation can narrow the pharmacy's options once the PBM has already drawn its conclusions from the claims sample.

How Health Law Alliance Can Help

Health Law Alliance has represented 2,500+ clients nationwide. If your pharmacy has received a documentation request tied to DAW 1, DAW 2, or any other product selection code, contact Health Law Alliance's PBM audit defense attorneys for a free, confidential consultation before the response deadline passes.