What NADAC measures, and what it leaves out

In November 2013, retail pharmacies paid an average of 18.3 cents for a single 20 mg atorvastatin tablet, according to the federal government's survey of pharmacy invoices. In October 2026 the same survey put the figure at 2.8 cents. GxRadar tracks that number for 47 common generics on our price pages, drawing on CMS files published through data.medicaid.gov¹.

The number is the National Average Drug Acquisition Cost, or NADAC. The Centers for Medicare & Medicaid Services publishes it as a per-unit dollar figure: one tablet or capsule for most solid drugs, one milliliter for liquids, one gram for creams. It is free to download and national in scope, and it is built from what pharmacies actually paid on their invoices.

That makes it the yardstick reporters, researchers and state Medicaid programs reach for when they want to know whether a price is reasonable. It also has blind spots that are easy to miss.

A survey built from invoices

CMS runs NADAC through its Survey of Retail Prices⁵, a Medicaid program. Each month a contractor draws a random sample of independent and chain pharmacies and asks them for invoices from the month before. In a 2017 overview of operations⁴, CMS described the scale: 2,500 pharmacies selected a month, 450 to 600 responding, and 200,000 to 300,000 usable cost observations.

Participation is voluntary. A pharmacy picked one month is withheld from the draw for the next three, and responding "should take no more than 30 minutes of non-pharmacist staff time," CMS says in its current methodology³. Invoice prices are averaged into one national rate for each drug, strength and dosage form, with separate rates for brand and generic versions. Each NDC on the file is mapped to one of those rates.

There is a lag. CMS posts rates about two months after it collects the most recent invoices, so a monthly rate reflects what pharmacies paid a couple of months earlier. Our explainer on how NADAC is calculated walks through the arithmetic step by step.

When the files come out

CMS posts on a fixed rhythm. Its monthly file "is produced on the first Monday on or after the 15th of each month," according to CMS's NADAC page², and every other file in the month is a weekly posting. Weekly files pick up price changes between surveys, such as a brand list price increase or a pharmacy reporting that a generic cost has moved. A weekly comparison file lists only the drugs whose rate changed, with the old rate, the new rate and the reason, CMS's 2017 overview explains⁴.

Which pharmacies count, and which don't

Only retail community pharmacies are surveyed, meaning the stores that fill prescriptions for the public. "Closed door pharmacies, including specialty pharmacies," are excluded, and pharmacies are asked to leave out invoices for drugs bought under the federal 340B discount program, the methodology states³.

The final rate is one national average. It is not adjusted for region, and CMS says rates "are not weighted based upon independent or chain pharmacy status." A rural independent and a high-volume chain store carry equal weight in the math. The differences between them are the subject of our piece on independent and chain pharmacies.

Why Medicaid needed it

NADAC exists mainly to help state Medicaid programs pay pharmacies. A CMS final rule on covered outpatient drugs, published in the Federal Register on Feb. 1, 2016⁶ and effective April 1, 2016, requires states to pay for most outpatient drugs based on the pharmacy's actual acquisition cost plus a professional dispensing fee. States had until April 1, 2017, to submit plan changes, CMS told state officials in a 2016 letter⁷. NADAC is one benchmark a state can adopt to set that acquisition cost; others run their own surveys or rely on maximum allowable cost lists, as our guide to Medicaid and generic drug prices describes.

NADAC also acts as a floor under the Federal Upper Limits⁸, the aggregate caps on what Medicaid pays for many generics. Federal rules set a FUL at 175 percent of the weighted average manufacturer price for drugs that FDA has rated at least three products as equivalent. If that formula would land below what retail pharmacies actually pay, as measured by "the most current national survey of such costs," CMS raises the limit to match, under 42 CFR 447.514⁹.

What the number leaves out

NADAC is useful because it is public and built from real invoices. It is also narrower than it looks.

Rebates are missing. Discounts "that are not reflected on the invoice at the drug line item level" are not factored in, CMS says³. A pharmacy that earns a year-end rebate from its wholesaler may have a lower true cost than its invoices show.

It is not a patient price. NADAC covers the drug only, with no dispensing fee, overhead or margin. A cash price at the counter will be higher, and an insured patient's copay is set by the plan. Our explainer on WAC, AWP, NADAC and MAC lays out where each benchmark sits in the chain.

Who answers shapes the average. Because the survey is voluntary, the mix of pharmacies that respond can move rates. In its December 2024 methodology, CMS acknowledged stakeholder concerns about "generic NADAC rate volatility occurring as a result of fluctuations in survey participation."

The 2024 change to generic rates

To damp those swings, CMS began calculating monthly generic rates as a three-month moving average with the December 2024 updates, after the 2024 swings. The agency called it "a temporary, short-term measure" that "will continue until further notice," according to the methodology document³. Brand rates are unaffected.

For the cheapest generics, year-to-year movement is now measured in fractions of a cent. GxRadar's monthly series for five common drugs:

Figures are GxRadar's monthly values from CMS NADAC files¹, generic rows only. Read a NADAC of $0.0181 for lisinopril as an approximate national average invoice cost of under two cents per tablet, before rebates. A 30-tablet fill carries about 54 cents in drug cost; everything else a pharmacy charges or is paid covers dispensing, staff, rent and margin. That gap is why the same generic can cost different amounts at different counters.

CMS has set no end date for the moving average. The methodology says only that it will continue "until further notice."