The 2024 NADAC swings, and the three-month average that followed

In November 2024, GxRadar's price index for a fixed basket of 43 common generic drugs fell 13.3 percent in a single month. In December it fell another 7.3 percent, to 45.7, the lowest reading since the series began in January 2014. Both figures come from our analysis of the federal government's weekly drug cost files, the 2024 NADAC dataset² published by the Centers for Medicare & Medicaid Services.

Neither was a one-off. The six largest one-month moves in nearly 13 years of the index all came between May and December 2024, four of them down and two of them sharply up. By April 2025 the index had climbed back to 53.9.

CMS said the cause was in its own survey. Rates had been swinging, the agency wrote on its NADAC page⁵, because of "fluctuations in survey participation," and starting with rates effective Dec. 18, 2024, it began calculating monthly generic rates as a three-month moving average. The series has been far calmer since.

The basket, month by month

The GxRadar index follows 43 generics that had a generic NADAC rate in January 2014, which is set to 100. Each drug's monthly figure is our median of the weekly NADAC per-unit rates for its generic-classified products. The index is the geometric mean of each drug's price relative to January 2014, a method explained in our piece on the GxRadar generic price index. The last two columns count how many of the 43 drugs moved more than 5 percent from the month before. Data come from the 2023¹, 2024 and 2025³ NADAC datasets.

Source: GxRadar analysis of CMS NADAC weekly files. 43 drugs, generic-classified rows only.

Through 2023 the index barely moved, and in most months only a handful of drugs shifted by more than 5 percent. In April 2024 that changed. Thirty-two of the 43 drugs fell by more than 5 percent that month, and 37 did in May. In August, 41 rose by more than 5 percent. In November, 42 of 43 fell.

When nearly every drug in a basket moves the same way in the same month, by similar amounts, the likeliest explanation is something common to all of them. That points at the measuring instrument more than at 43 separate markets.

How the survey works

NADAC is built from invoices. Each month, CMS's contractor mails survey requests (GxRadar explains the sampling in how the NADAC survey picks its pharmacies) to a random sample of independent and chain retail community pharmacies and asks them to send in their drug purchase invoices, according to the December 2024 methodology⁶. Participation is voluntary, as CMS notes in its NADAC questions and responses⁹.

Three details of the method matter for volatility. A generic rate is the average of the per-unit costs submitted, after costs more than two standard deviations from the mean are removed as outliers. The methodology states that "NADAC rates are not weighted based upon independent or chain pharmacy status." And for a generic rate, CMS needs at least five cost observations from the most recent six months.

CMS had also just changed the method. An updated methodology took effect with rate files effective April 17, 2024, according to a CMS executive summary of the changes⁸. Under it, generic rate groups with enough invoices in the most recent month are calculated from that month's invoices alone, while groups with too few draw on additional invoices from the most recent six survey months.

Put those together and the rate for a generic depends heavily on which pharmacies answered the latest survey. If the mix of responding pharmacies shifts from one month to the next, the simple average can shift with it, even if no pharmacy's own costs changed. CMS has not published monthly response counts, and GxRadar's data cannot separate the effect of the April 2024 method update from changes in who responded. What the data do show is that the first large basket-wide drop came in April 2024.

The fix CMS chose

CMS described the change as "a temporary, short-term measure" in its December 2024 methodology⁶. Monthly generic NADAC rates are now calculated as a three-month moving average of the individual monthly average acquisition costs. The agency said it chose that approach "in order to moderate monthly rate volatility while also ensuring that rates remain responsive to change in market conditions." Brand-name drug rates were left out because they use a separate time frame. The moving average, CMS said, will continue "until further notice," and the agency plans to solicit stakeholder input on the methodology "to address the volatility on a more permanent basis."

Our data show how much calmer the series became. The table compares the median month-to-month change for the 43 drugs in each year, and counts the drug-months with a move larger than 20 percent.

Source: GxRadar analysis of CMS NADAC weekly files. Changes compare each month's figure with the month before.

In 2024 the typical drug moved about three times as much per month as in 2023. In 2026 it moved less than in any year we track. Some of 2025's index movement came early in the year, when the basket rebounded 17.9 percent between December 2024 and April 2025. From May 2025 through October 2026, no monthly change in the index was larger than about 1.6 percent in either direction, and 17 of those 18 months were declines. The index stood at 47.4 in October 2026, according to the 2026 files⁴, about 53 percent below January 2014 and the lowest reading of 2026 so far.

Individual drugs show the same shift. Sildenafil 20 mg, the most volatile of the 47 generics we track in 2024, moved by a quarter or more in five separate months that year. Its monthly series shows how the line flattened after the change. Among the six antidepressants we track, sertraline, escitalopram, citalopram and duloxetine all hit their lowest month on record in December 2024.

Why the swings mattered beyond the data

NADAC is a payment benchmark as well as a statistic. A 2016 federal rule, CMS's covered outpatient drugs final rule¹¹, required state Medicaid programs to pay pharmacies for drug ingredients based on actual acquisition cost, and the methodology notes that the NADAC or a state-run actual acquisition cost program satisfies that requirement. Our explainers on how Medicaid pays for generic drugs and the federal upper limit cover how states and CMS use it. When the generic rates in our basket fell 13 percent in a single month, any payment formula tied to those rates moved with them.

Anyone reading NADAC as a price history needs to account for the swings too. A drop in May 2024 or a jump in September 2024 in a single drug's line is more likely to reflect the survey than a change in that drug's market. Our explainers on how NADAC is calculated and what NADAC measures describe its other limits, and the monthly series for all 47 drugs are on the GxRadar price pages.

What to watch

As of early November 2026, the methodology document CMS links from its Survey of Retail Prices page¹⁰ was still the December 2024 version⁷, with the three-month moving average described as temporary and in effect until further notice. CMS has said it will seek stakeholder input on a permanent approach. Any change to how generic rates are averaged, or to how pharmacies are surveyed, would show up across every generic in the federal data at once, and in our index the month it takes effect.