Q&A: Advantages of NADAC for Stakeholders in the Drug Supply Chain

The National Average Drug Acquisition Cost (NADAC) is a benchmark that provides drug prices to the pharmaceutical supply chain. The prices, which are determined by averaging prices from retail community pharmacies across the United States, are gathered from the monthly Retail Price Survey conducted by the Centers for Medicare and Medicaid Services (CMS). NADAC aims to provide more accurate drug prices for states who use it as a reference price when setting their reimbursement methodology.

Q&A: Advantages of NADAC for Stakeholders in the Drug Supply Chain / Dedmityay - stock.adobe.com

At the National Community Pharmacists Association (NCPA) 2024 Annual Convention and Expo, held October 26 to 29 in Columbus, Ohio, Drug Topics sat down with AJ Loiacono, co-founder and CEO of Capital RX, to discuss how the NADAC survey is conducted, how it captures drug pricing data across various pharmacies, what makes it a reliable source of pricing information, and what advantages it offers in terms of accuracy and transparency for stakeholders across the drug supply chain.

Click here to watch the full video interview with AJ Loiacono.

Drug Topics: Can you explain how the NADAC survey is conducted and how it captures drug pricing data across various pharmacies? What makes it a reliable source of pricing information?

AJ Loiacono: NADAC represents a survey of pharmacies reporting pricing surveys on a weekly basis. There's also a monthly update. NADAC is a very important pricing benchmark because it's used by 45 states, including the District of Columbia, for Medicaid reimbursement. It's also a benchmark that continues to be used by states for other reimbursement.

We talk about ways of protecting pharmacies on reimbursement so that someone isn't under reimbursed. NADAC plays a very vital role. It's also extraordinarily accurate, because it represents actual acquisition cost, what people are actually purchasing the drug for. And this may sound like kind of a silly concept, but if you think about it, there really hasn't been, until NADAC emerged, a way for people to understand what is the appropriate or real cost of a drug. This kind of sets the stage for the entire supply chain on what I call the distribution and payer side. Distribution being the pharmacies, and payers being the insurance and self-insured plan sponsors. Without a reasonable benchmark of pricing, unfortunately, people tend to take advantage of people when they don't know a price.

Click here to view all of our coverage from NCPA 2024.

Coverage of the National Community Pharmacists Association 2024 Annual Convention and Expo was supported by Red Sail, with independent editorial content creation on-site by the Drug Topics team.