National Average Drug Acquisition Cost (NADAC)
A CMS-published benchmark reflecting the actual average price pharmacies pay to acquire drugs from wholesalers.
How It Works
NADAC was created by the Centers for Medicare & Medicaid Services in 2013 to provide a more accurate benchmark than AWP. CMS surveys retail pharmacies monthly to determine their actual acquisition costs. NADAC is widely used in Medicaid reimbursement and is considered a more transparent and accurate measure of drug costs than WAP or AWP. The gap between NADAC and a drug's list price reveals how much margin exists in the supply chain.
Related Terms
- Average Wholesale Price (AWP) — A benchmark price for drugs that historically served as the basis for pharmacy reimbursement — often called the "sticker price that nobody pays."
- Wholesale Acquisition Cost (WAC) — The manufacturer's list price for a drug sold to wholesalers — often called the "sticker price" before any rebates or discounts.
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About This Definition
This definition is part of the DrugPrice Drug Pricing Glossary — 34 terms explaining how prescription drug pricing works in the United States. All definitions are written in plain language for patients, caregivers, journalists, and healthcare professionals.