What NADAC is, and what it is not

What NADAC actually measures

NADAC stands for National Average Drug Acquisition Cost. It comes from the Centers for Medicare & Medicaid Services, which surveys retail pharmacies each month about what they paid to buy drugs from wholesalers and distributors.

CMS takes those invoice-based survey responses, averages them by drug and package size, and publishes the result. The file updates weekly, but the underlying survey data is monthly. So NADAC is a rolling picture of pharmacy acquisition cost, not a live price feed.

This number answers one question: what does a pharmacy pay to get the drug onto its shelf? It does not answer what a patient pays, what an insurer pays, or what the pharmacy charges at the register.

How CMS builds the file

Every month, a sample of retail pharmacies reports actual invoice prices to CMS's contractor. Those invoices reflect real purchases, not list prices or suggested prices. The contractor cleans the data, calculates averages, and CMS releases updated NADAC values weekly.

Because it is survey-based, NADAC can lag real-time market shifts. A wholesaler price change this week may not show up in NADAC until next month's survey cycle catches it. That lag is a known limitation, not a flaw in the concept.

What NADAC is not

NADAC is not a retail price. Pharmacies do not sell drugs to patients at NADAC. They mark up from it to cover overhead, staff time, and margin, then add a dispensing fee.

NADAC is not what insurers or pharmacy benefit managers pay pharmacies. Reimbursement contracts use their own formulas, often based on NADAC plus a professional dispensing fee, but the final reimbursement number is negotiated separately and can differ pharmacy to pharmacy.

NADAC excludes rebates. Manufacturer rebates flow to PBMs and plan sponsors after the sale, often based on confidential contracts. None of that shows up in the acquisition cost data. A drug can have a high NADAC and still generate a large rebate downstream, and NADAC will never reflect that.

NADAC excludes dispensing fees. The pharmacist's time, the counseling, the paperwork, none of that is priced into NADAC. States and payers set dispensing fees separately, and they vary widely.

Why the counter price looks different, and why that's legitimate

If you compare a NADAC figure to what you were charged at the pharmacy, the numbers will not match. That gap is normal and expected, not a sign of overcharging.

The retail price you see includes:

• The pharmacy's acquisition cost (roughly tracked by NADAC)
• A markup or margin
• A dispensing fee
• Sometimes insurance-negotiated adjustments that have nothing to do with acquisition cost

None of these additional layers are visible in the NADAC file. CMS built NADAC to give a consistent, survey-based benchmark for acquisition cost, mainly so states and researchers can set fair reimbursement floors. It was never designed to predict your out-of-pocket price.

How to use this site's numbers

When you look up a drug on RxTrueCost, you're seeing what pharmacies paid to acquire it, based on the most recent CMS NADAC file. Use it to understand the wholesale side of the supply chain. Do not use it to estimate your copay, your insurance payment, or any specific savings. Those depend on your plan, your pharmacy, and your location, none of which NADAC tracks.