Pharmacy Price Index

How much do pharmacies pay for the prescription medications they buy? Until recently, that had been somewhat of a mystery. Pharmacy costs weren’t listed anywhere so, if you wanted to know how much a drug actually cost a pharmacy, the only to find out was to ask a pharmacist and hope he was willing to tell you.

That all changed in 2012 when the Centers for Medicare and Medicaid Services (CMS) began to survey retail pharmacies in all 50 states (and Washington DC) each and every month to see exactly how much retail pharmacies are paying for their medications.

Here’s how it works: Each month since October 2012, CMS compiles a list of 600-800 retails pharmacies throughout the United States. This list is randomly selected from a list of all retail pharmacies in the US and must contain at least one pharmacy from each of the 50 states and Washington DC.

CMS then asks each of the pharmacies on that list to submit invoice copies for every medication (prescription and over the counter) they bought in the previous month. Those invoices are then used to compile a master list of the average price retail pharmacies in the US pay for every medication they purchase.

During the month (after the first list is published) pharmacies can update CMS about any sudden change in the price of a medication. A new list is published each week to reflect these changes. The list is called the National Average Drug Acquisition cost (NADAC) and is an extremely accurate source for the average price all retail pharmacies in the US pay for all the medications they buy.

The NADAC itself can be a bit overwhelming though. Here is a recent NADAC list. As you can see, it has more than 23,400 listings with the same dose and preparation of a medication often being listed multiple times. It also list all over the counter as well as prescription medications.

What I’ve done here is to upload simplified versions of the NADAC lists for each Quarter starting October 4, 2012 (the date of the first list). This simplified version eliminates over the counter listings and only lists each dose and preparation of a medication once at each given price. It also only lists the medication, dose, price and unit type (pill, capsule, ml or gram). The simplified version is still a lot to take in but it has only about 5,000 total listings so it’s much more user friendly.

Simplified NADAC Lists: