Actual Acquisition Cost (AAC)
What is the actual acquisition cost (AAC)?
When a medication is sold by a drug manufacturer or wholesaler to a pharmacy, the AAC is the net cost paid by the pharmacy. It includes rebates, discounts, chargebacks, and other pricing adjustments, but it does not include the pharmacy’s dispensing fees.
The AAC is what a state’s Medicaid agency determines to be the actual prices a pharmacy provider pays to acquire drugs marketed or sold by a specific manufacturer. The AAC is the current benchmark used by Medicaid to set payments for drug ingredients. However, reimbursements are capped at the federal upper limit (FUL) or state maximum allowable cost (MAC), which may lead to a lower price per ingredient than AAC. In general, states pay the lowest of these three benchmarks for a given drug.
How is AAC determined?
To determine AAC, the states may use national survey data, survey pharmacies, or the average manufacturer price (AMP) that manufacturers are required to report.
The national average drug acquisition cost (NADAC) is also a reference file to determine AAC. It contains voluntarily reported data from retail pharmacies to determine what price they pay wholesalers and manufacturers, but it does not include rebates or discounts.