What mandated NADAC pricing means for your group
Is your group ready for NADAC pricing?
New Arkansas PBM legislation requires pharmacy benefit managers (PBMs), health insurers and self-funded employers to reimburse pharmacies based on National Average Drug Acquisition Cost (NADAC) pricing. This was a change from more common pricing methodologies, enacted by the legislature to pursue fairer drug pricing and increased transparency.
What it is
NADAC pricing answers the question, “So what did this drug actually cost for pharmacies to acquire?” Originally created to be a pricing benchmark for the Centers for Medicare and Medicaid Services (CMS), NADAC is based on monthly surveys of the drug invoice prices that retail community pharmacies—both independent and chain pharmacies—pay to acquire prescription drugs. While some of the pharmacies that respond to this voluntary survey are in Arkansas, the benchmark represents a national average of acquisition cost of thousands of individual drugs.
“Increasingly in the healthcare industry, there’s a push towards greater transparency in pharmaceutical pricing and finding ways to contain costs,” explained Chase Cain, who manages large accounts for BlueAdvantage Administrators of Arkansas and has an extensive background as a pharmacist. “The NADAC mandate from Arkansas and other state regulators across the country is part of that movement. It gets to the bottom line: What did most pharmacies actually pay, all things considered?”
Why it’s better
Cain said other pricing methodologies that are set by the manufacturer may result in less transparency for the pharmacy and members. Since NADAC is a measurement of the average acquisition cost of the pharmacies, when a drug’s cost goes down, so does the amount paid for by members and plan sponsors.
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SPECIAL NOTE: The above notice is intended solely for informational purposes and should not be relied upon as guidance or advice with regard to any drug, therapy or treatment, nor with regard to its safety, efficacy, applicability or appropriateness for any person or Plan participant. BlueAdvantage does not offer medical or legal advice or services to its health plan customers or their individual Plan participants or beneficiaries. Any estimate stated with regard to potential impact for your health plan, including but not limited to any estimated number of Plan participants/beneficiaries potentially affected, is purely an estimate and should not be relied upon for business, financial or Plan administration purposes. Additionally, Plan benefit design and ultimate authority in regard to Plan coverage or benefits decisions, including but not limited to Plan coverage or non-coverage of any drug, therapy or treatment, remains the exclusive province of the Plan Administrator and/or Plan Sponsor, not BlueAdvantage.