Independent reference · source-cited · 51 jurisdictions
What your state's PBM law actually requires.
A plain-language, statute-cited reference to pharmacy reimbursement law across the United States — the floor, the dispensing fee, and the appeal route in every state we cover, traced to the law behind it.
The rules are on the books. Finding them isn't.
Independent pharmacies are often reimbursed by pharmacy benefit managers (PBMs) at rates below the cost of the medicine they dispense. In response, a growing number of states have set a reimbursement floor — typically the national average acquisition cost (NADAC) plus a professional dispensing fee — and a right to appeal underpayments.
But those rules are scattered across dozens of statutes, take effect on different dates, and change every legislative session — so a pharmacy owner can't easily learn what their own state requires today.
This site puts that answer in one place, state by state, with the primary source cited for every entry.
Start with the basics
What is a pharmacy benefit manager (PBM)?
A pharmacy benefit manager (PBM) is a company that administers prescription-drug benefits for health plans, employers, unions, and government programs such as Medicare Part D and Medicaid. PBMs decide which drugs a plan covers (the formulary), build the pharmacy networks patients can use, negotiate rebates with drug manufacturers, process pharmacy claims, and set how much pharmacies are paid. The market is highly concentrated and vertically integrated: the three largest PBMs — CVS Caremark, Express Scripts, and OptumRx — manage roughly 80% of US prescription claims, and each is owned by a major insurer and also owns its own pharmacies. Read →What is a pharmacy reimbursement floor?
A pharmacy reimbursement floor is a legal minimum a pharmacy benefit manager (PBM) or health plan must pay a pharmacy for a covered drug, set so the pharmacy is not paid below what the medicine cost to buy and dispense. In practice a floor has two parts: a drug-cost benchmark — most often NADAC, the national average drug acquisition cost, or the pharmacy's own acquisition cost — plus a professional dispensing fee for the pharmacist's time and overhead. Floors are enacted state by state and vary in scope: some reach only Medicaid managed care, others commercial or state-employee plans, and some only independent or rural pharmacies. This minimum is the central figure the per-state tracker records. Read →What is NADAC, and how does it affect pharmacy reimbursement?
NADAC — the National Average Drug Acquisition Cost — is a benchmark, published by the Centers for Medicare & Medicaid Services (CMS), of what retail community pharmacies actually pay to buy a drug, based on a voluntary monthly survey of pharmacies. A growing number of states use NADAC plus a professional dispensing fee as the reimbursement floor a PBM must meet, because it is tied to real acquisition cost rather than to a price the PBM itself sets. Read →NADAC, WAC, AWP: what's the difference between drug-pricing benchmarks?
These three benchmarks measure different things. NADAC (National Average Drug Acquisition Cost) is CMS's estimate of what retail pharmacies actually pay for a drug, built from a voluntary monthly survey of pharmacy invoices. WAC (Wholesale Acquisition Cost) is the manufacturer's published list price to wholesalers — a statutory term, and explicitly not net of rebates or discounts. AWP (Average Wholesale Price) is a published 'sticker' benchmark from commercial compendia that, by the government's own account, is neither an average nor a price wholesalers actually charge. Only NADAC is built to reflect real acquisition cost, which is why state reimbursement floors increasingly anchor on it. Read →Published by Pharmacists for Fair Reimbursement, an independent reference. Every entry cites its primary source. General information — not legal advice.
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