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June 7, 2012

CMS Releases Draft Methodology for Calculating National Average Drug Acquisition Cost

Arnold & Porter Advisory

The Centers for Medicare and Medicaid Services (CMS) has been working to develop a new drug pricing metric that State Medicaid programs could use to set reimbursement rates.  Last August, CMS outlined plans to have a contractor (Myers & Stauffer, LC) calculate a “National Average Drug Acquisition Cost” (NADAC), which would be a measure of pharmacies’ average drug acquisition costs, based on a monthly national survey of pharmacies.  In proposed regulations published in February 2012, CMS did not mention NADAC specifically, but proposed that State Medicaid programs use “actual acquisition cost” which could be based on a “national survey” to set drug reimbursement rates.  On June 1st, CMS released its draft methodology for calculating NADAC.

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