Glossary

Plain-English definitions for the pharmaceutical pricing terms used across the platform. Most of them appear as inline links on the drug, drug-market, and manufacturer pages so you can jump straight to the relevant entry.

On this page

ANDA (Abbreviated New Drug Application)

An Abbreviated New Drug Application is the FDA pathway used to approve a generic drug. Generic sponsors do not have to repeat the original clinical trials — instead, they must show the generic is bioequivalent to a reference brand product. Drugs approved under this pathway show up in NADAC with the classification B–ANDA. See also generic vs brand pricing.

AWP (Average Wholesale Price)

AWP is a published list price for prescription drugs, set by manufacturers and tracked by pricing compendia. It is widely understood to be inflated relative to actual acquisition cost and is mostly used as a benchmark for contractual discounts. NADAC, by contrast, is survey-based and reflects what pharmacies actually pay. See the deep dive at NADAC vs AWP.

Classification (FDA, on NADAC files)

CMS publishes a one- or two-character classification for rate setting on every NADAC row. The four values used today are G (Generic), B (Brand), B–ANDA (Brand approved via Abbreviated New Drug Application), and B–BIO (Biologic). Throughout this site we render those labels using the same mapping the rest of the platform uses, so the badge you see on a drug market page matches the value in the underlying CMS file.

DEA Schedule

The U.S. Drug Enforcement Administration places controlled substances into five schedules (CI through CV) based on accepted medical use and abuse potential. Schedule II drugs (opioids, stimulants like methylphenidate, etc.) have the tightest dispensing controls of the prescription products on NADAC.

Drug market

On NADAC Intelligence a drug market is the set of all NDCs that share the same nonproprietary name — for example, all metformin HCl 500 mg tablets across every manufacturer and pack size. Grouping this way lets you compare supply breadth, manufacturer concentration, and pricing dispersion within a single therapeutic substitute pool. Browse the full list at /drug-market.

Generic vs Brand

A brand drug is the original product, sold under its proprietary name by the manufacturer that developed it. A generic is a copy approved via ANDA once exclusivity expires; FDA requires the generic to be bioequivalent to the brand. Generic entry is the single biggest driver of price decline in most drug markets. See generic drug prices.

MAC (Maximum Allowable Cost)

A Maximum Allowable Cost schedule is a payer’s reimbursement ceiling for multi-source generics. State Medicaid programs commonly base MAC values on NADAC, which is one reason changes in NADAC ripple through pharmacy reimbursement so quickly. PBMs also publish their own MAC schedules, which are typically opaque.

NADAC (National Average Drug Acquisition Cost)

NADAC is the National Average Drug Acquisition Cost, a benchmark commissioned by the Centers for Medicare & Medicaid Services (CMS) and updated weekly. It is built from a voluntary survey of retail community pharmacy invoices, conducted by Myers and Stauffer LC. State Medicaid agencies use NADAC as a reference for pharmacy reimbursement, and analysts use it as the most transparent public proxy for actual acquisition cost. Read the long-form explainer at Understanding NADAC pricing and the data-source attribution at /data-sources.

NDC (National Drug Code)

The National Drug Code is the FDA’s identifier for a specific drug product at a specific strength, dosage form, and package size. NADAC publishes one price per NDC per week. NDCs are typically written as 5-4-2 or 4-4-2 segments — for example, 00378-0017-01 identifies one specific manufacturer’s metformin tablet in a specific bottle size.

Nonproprietary name

The nonproprietary name is the official generic name of the active ingredient(s) — for example, “atorvastatin calcium” rather than Lipitor. We group NDCs into drug markets by upper-cased nonproprietary name so that brand and generic versions of the same molecule live in one place.

OTC (Over the Counter)

OTC products do not require a prescription, but many still appear in NADAC because they can be reimbursed by state Medicaid programs when dispensed under a prescription order (e.g., omeprazole, loratadine, prenatal vitamins).

Outlier (low / high)

We flag a manufacturer’s price as a low or high outlier inside a drug market when its average NADAC sits below Q1−1.5·IQR or above Q3+1.5·IQR. The rule is only applied when at least four manufacturers compete in the market, so single-source markets never trip the flag. Methodology details live on the methodology page.

Pharmacy reimbursement

Pharmacy reimbursement is the payment a pharmacy receives for filling a prescription. It typically combines an ingredient cost (often anchored to NADAC, MAC, or WAC) plus a professional dispensing fee. Most state Medicaid agencies now use NADAC plus a fixed dispensing fee for the ingredient component on multi-source generics.

Pricing unit

NADAC publishes prices in one of three pricing units: EA (each — tablets, capsules, patches, vials), ML (milliliter — oral solutions, injectables), or GM (gram — topicals, powders). On every product page we show price per pricing unit; total package cost depends on the package size for that NDC.

Proprietary name

The proprietary name is the trademarked brand name on the label — Lipitor, Crestor, Glucophage. Generic NDCs also carry a proprietary name (often just the generic ingredient name plus the manufacturer’s house style), so this field is not a reliable signal of whether a product is brand or generic; use classification for that.

Therapeutic class

A therapeutic class on this site is an FDA Established Pharmacologic Class (EPC) — for example, “HMG-CoA Reductase Inhibitor” or “Proton Pump Inhibitor.” We surface these so you can zoom out from a single product or manufacturer and see what is happening across substitutes. Browse the directory at /therapeutic-class.

WAC (Wholesale Acquisition Cost)

WAC is the manufacturer’s list price to wholesalers, before any rebates, chargebacks, or discounts. It is a useful manufacturer-side anchor but does not reflect what pharmacies pay. See NADAC vs WAC for how the two benchmarks differ in practice.

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