Description
Background: Survey-based approaches for estimating pharmacy acquisition costs have become increasingly prevalent. While originally developed for Medicaid, these models have expanded and, in some states, have been adopted legislatively as a reimbursement price floor for all payers. The National Average Drug Acquisition Cost (NADAC) is the predominant national benchmark, but several states conduct independent surveys to establish their own Actual Acquisition Cost (AAC) benchmarks. The extent to which these approaches accurately measure pharmacy acquisition cost remains unclear. Objectives: To evaluate differences between survey-based pharmacy acquisition cost benchmarks, focusing on differences between brand and generic drugs. Methods: Medicaid drug utilization for the four most recent available quarters (Q4 2024 Q3 2025) was obtained from the CMS Medicaid Drug Utilization database. NADAC and state AAC files were obtained from publicly available sources. Utilization was linked to NADAC and AAC benchmarks for five states, using prevailing prices as of April 1, 2026. Nearly 345 million claims were included in the analysis. The primary analysis constructed utilization-weighted price indices to compare AAC and NADAC. Secondary analyses used spend-weighted t-tests of the log difference between AAC and NADAC. Results*: Overall AAC-based estimates aligned with NADAC on a total spending basis, with indices ranging from 0.983 to 0.993. Brand drug estimates were consistent and near parity with NADAC (indices: 0.996, 1.00). In contrast, generic drugs exhibited substantial variation but were consistently below NADAC, ranging from 0.797 to 0.890. Spend-weighted analyses showed minimal overall differences between AAC and NADAC (index 0.986). Brand estimates were indistinguishable from NADAC, while generic estimates remained below NADAC (indices 0.774‚ 0.863; p < 0.001). Conclusions: State AAC benchmarks are materially lower than NADAC for generic drugs while remaining aligned for brands. These findings suggest that NADAC may accurately estimate acquisition costs for brand drugs but overestimate them for lower-cost, high-volume generics. Differences in data collection methods, including voluntary NADAC reporting, may contribute to these discrepancies. Policymakers should consider how methodological differences affect benchmarks for estimating pharmacy acquisition costs. *Results are preliminary at the time of submission.
Publication Info
2026.