National Average Drug Acquisition Cost (NADAC)

Key facts

Maintained by

Centers for Medicare & Medicaid Services (CMS)

Based on

Monthly survey of retail community pharmacy purchase invoices

Updated

Weekly, with survey results incorporated monthly

Unit

Price per pricing unit (each, milliliter or gram) for each NDC

Excludes

Manufacturer rebates, off-invoice discounts and dispensing costs

What is NADAC?

CMS created NADAC to give state Medicaid programs a transparent, survey-based estimate of what pharmacies actually pay for drugs, as an alternative to list-price benchmarks such as Average Wholesale Price (AWP) and Wholesale Acquisition Cost (WAC). A contractor surveys chain and independent retail community pharmacies, collects their purchase invoices and converts them into national average costs.

CMS publishes the results as a downloadable file that lists each National Drug Code (NDC) with its NADAC per unit, pricing unit, effective date and flags such as whether the drug is classified as brand or generic for rate setting. CMS began publishing final NADAC files in 2013.

How NADAC is calculated

NADAC combines monthly survey data with weekly price updates:

• Survey: pharmacies submit invoices showing what they paid wholesalers and manufacturers, and the results are averaged by drug.
• Generic grouping: for multiple source generics, a single rate is generally calculated across equivalent products with the same ingredient, strength and dosage form, then applied to each NDC in the group.
• Weekly changes: between surveys, rates are adjusted when published list prices change or when pharmacies report significant cost changes.
• Explanation codes: each row carries codes describing how the rate was set or why it changed.

Why NADAC matters

NADAC is the closest public proxy for pharmacy acquisition cost in the United States.

• Many state Medicaid programs use NADAC as the ingredient cost component when paying pharmacy claims, alongside a professional dispensing fee.
• Pricing analysts compare NADAC with WAC and AWP to estimate discounts off list price, especially for generics.
• Weekly history shows when a generic price spikes or falls, which can signal shortages, new market entrants or manufacturer exits.
• Because it is keyed by NDC, NADAC joins directly to FDA product listings, Medicaid drug rebate data and state drug utilization files.

Limitations of NADAC data

NADAC reflects invoice prices only. It excludes manufacturer rebates and off-invoice discounts, and it covers retail community pharmacies, so mail order, long-term care and hospital pharmacies are outside the survey. Drugs rarely dispensed at retail, including many specialty products, may have no NADAC at all.

Rates are national averages, so an individual pharmacy may pay more or less. Pharmacy participation in the survey has historically been voluntary, which limits response coverage for low-volume products.