DEPARTMENT OF HEALTH & HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, Maryland 21244-1850 
 
 
 
Center for Medicaid and CHIP Services 
 
CMCS Informational Bulletin 
 
 
DATE:  May 31, 2012 
 
FROM:  Cindy Mann, Director 
    Center for Medicaid and CHIP Services (CMCS) 
 
SUBJECT:  Medicaid Pharmacy  Survey of Retail Prices 
 
 
The Centers for Medicare & Medicaid Services (CMS) is pleased to announce the launch of the 
second part of its Medicaid drug survey of retail prices, which will provide information to help States 
ensure that their outpatient drug purchasing is efficient.  CMS, through its contractor, Myers and 
Stauffer, LC will conduct a monthly survey of retail community pharmacy prescription drug 
prices and generate a National Average Drug Acquisition Cost (NADAC) pricing file that we 
expect will be available to States.  
 
The first part of the survey (Part I) focuses on the retail community pharmacy consumer prices 
and provides for the calculation of the monthly national retail community pharmacy prices of 
covered outpatient drugs.   
 
The second part of this survey (Part II), which will begin in June, will focus on the retail 
community pharmacy ingredient costs.  This will provide for a survey of the acquisition costs of 
covered outpatient drugs purchased by retail community pharmacies, which will include 
purchase prices derived from independent community pharmacies and chain pharmacies.  CMS 
intends to start surveying pharmacies beginning on June 1, 2012.  We will survey approximately 
2000- 2,500 pharmacies each month.  Pharmacies will be randomly selected from all fifty States 
and Washington, DC.  The NADAC prices will be updated on at least a monthly basis or as 
pricing changes occur throughout the month. Please note that we are not including specialty 
pharmacies in the survey at this time.  We will continue to evaluate the inclusion of specialty 
pharmacies and make a subsequent determination whether specialty pharmacies will be included 
in the survey.   
 
We will also collect State payment and utilization rates, and compare State drug payment rates 
for the 50 most widely prescribed drugs with the national retail sales price data.   
  CMS anticipates that the NADAC files will give State Medicaid agencies covered outpatient 
drug information regarding retail prices for prescription drugs.  State Medicaid agencies will be 
able to use this information to evaluate their own pricing methodologies and compare payments 
to those derived from this survey. 
 
CMS has included external stakeholders in the development stages of the NADAC to ensure that 
the process has been implemented appropriately and transparently.  The first Stakeholders 
Meeting occurred on August 4, 2011 in which representatives from pharmacy associations, 
wholesalers, and States attended to learn about the survey and NADAC collection process.  
 
A methodology document titled Part II: Draft Methodology for Calculating the National Average 
Drug Acquisition Cost (NADAC) has been developed to outline the processes used to derive the 
NADAC and can be found at http://medicaid.gov/Medicaid-CHIP-Program-Information/By-
Topics/Benefits/Prescription-Drugs/Downloads/NADACDraftMethodology.pdf.  Comments are 
welcome; please send comments no later than June 21, 2012 to RPS@cms.hhs.gov.  CMS will 
host a follow-up webinar with interested stakeholders to review the methodology developed for 
the consumer price and NADAC calculations, and hopes to host a subsequent webinar to review 
the initial survey results.  We are committed to a process that ensures accuracy through 
transparency, stakeholder engagement and continuing improvement. 
 
Please see our Survey of Retail Prices webpage at http://medicaid.gov/Medicaid-CHIP-Program-
Information/By-Topics/Benefits/Prescription-Drugs/Survey-of-Retail-Prices.html or further 
information.  Should you have any questions, please contact Joseph Fine at (410) 786-2128 or 
RPS@cms.hhs.gov.