Capital Rx and 3 Axis Advisors Study Finds Potential for Billions in Prescription Drug Savings With Transparent Pricing Practices

• Mandatory NADAC responses by pharmacies for 1,600 unique oral solid products could create additional savings of $1.5 billion over 10 years
• Comparing generic drug costs with NADAC and Alabama actual acquisition cost, study finds $937 million in potential annual savings across Medicaid
• Implementing and improving transparency in pricing practices can restore public trust in U.S. drug pricing system, results suggest

NEW YORK--(BUSINESS WIRE)--Capital Rx, the fastest-growing pharmacy benefit manager in the U.S., announced today the results of a study that it commissioned with 3 Axis Advisors, which found that implementing transparent pricing practices via the National Average Drug Acquisition Cost (NADAC) benchmark has the potential to create billions of dollars in savings, and restore public trust in the U.S. drug pricing system. The full study results are available here.

Potential legislative changes could expand pharmacies’ retail survey reporting of NADAC. To determine the potential economic impact of compulsory retail pharmacy NADAC reporting, Capital Rx and 3 Axis Advisors conducted a study to estimate the benefits to Medicaid plans.

The study examined available retail pharmacy acquisition cost data, which more accurately represents how greater NADAC survey data would impact payer costs. Since Alabama mandates that all pharmacies respond to its actual acquisition cost survey, this study utilized the state’s survey as the representative full NADAC survey reporting benchmark and found potential annual savings for Medicaid plans of approximately:

• $937 million if all retail pharmacies reported their acquisition prices in the NADAC survey
• $155 million if more robust NADAC survey reporting requirements created NADAC prices for over 1,600 products that do not currently have them

Over a 10-year period, potential savings could exceed $10 billion.

The study only reflects potential “savings” to Medicaid plans and does not address likely additional savings for commercial payers, Medicare Prescription Drug Plans and Medicare Advantage.

Developed by the Centers for Medicare & Medicaid Services (CMS), NADAC estimates the average price paid by independent and chain pharmacies for prescription drugs, creating a benchmark for supply and demand. Traditional drug pricing benchmarks, such as Wholesale Acquisition Cost (WAC) and Average Wholesale Price (AWP) are reported by drug manufacturers to third parties who publish these reference prices on a subscription basis. Utilizing NADAC is free on a public website, increasing transparency and visibility into actual average retail drug acquisition price.

Matthew Gibbs, Pharm. D., President of Commercial Markets at Capital Rx, said, “This study clearly shows that greater transparency with prescription drug pricing practices could create billions of dollars in savings for patients and payers. Capital Rx has been utilizing NADAC pricing as a foundation for our Clearinghouse Model for over three years. We have seen clients lower their drug trend by 10% to 20% through leveraging this NADAC-based model.”

For more information on how Capital Rx brings transparency to drug pricing, visit the website at www.Cap-Rx.com.

About Capital Rx
Capital Rx is a health technology company that is leading the transformation of the pharmacy benefits industry. Capital Rx’s enterprise pharmacy platform, JUDI™, digitally links providers, patients, pharmacies, and plans to achieve the highest standard of clinical care. By establishing a competitive marketplace through its Clearinghouse Model™, Capital Rx unlocks the pharmacy supply chain to ensure patients receive seamless access to medication at the lowest price.