maximum allowable cost


Also found in: Acronyms.

maximum allowable cost

The maximum amount that a pharmacy contractor may charge for drugs.
References in periodicals archive ?
Independent pharmacies complain those maximum allowable costs are often less than the wholesale price they pay to manufacturers to obtain the drug.
One of the highlights of that legislation was an appeal procedure allowing pharmacies to challenge the maximum allowable cost in certain situations.
In the face of rising drug prices, many lawmakers have instituted policies that only worsen the situation, such as banning efficient pharmacy networks, restricting mail-order pharmacies and restricting maximum allowable costs, claims Herrick.
Slow and low MAC (Maximum Allowable Cost) reimbursements associated with generic prescription reimbursement continue to be a major challenge for community pharmacies.
* Maximum allowable cost (MAC) legislation to address the delay in generic drug payment rate updates.
244 address this time lag by requiring MAC (maximum allowable cost) benchmarks to be updated every seven days, NCPA notes.
"On average, total generic reimbursement under the new guideline is -4% lower than the current maximum allowable cost (MAC) benchmark.
"NCPA favors the use of a wholesale acquisition cost [WAC]-based reimbursement benchmark for brands and an appropriately determined state maximum allowable cost [MAC] approach for multiple-source drugs with three or more sources of supply," states the letter, signed by NCPA senior vice president of government affairs John Coster.
(7,8) The lower reimbursements from Part D plans/ PBMs are due to the maximum allowable costs (MACs)--the upper limit for drug reimbursements set by plans/ PBMs--being low relative to the actual cost of drug purchases.(2,9,11) In addition to low MACs, pharmacies are frequently charged direct and indirect remuneration (DIR) fees.
1106 because the agency lacks data on maximum allowable costs for each MCO," the memo states.
Meanwhile, state lawmakers nationwide are discussing such steps as reduction in Medicaid pharmacy payments, cuts in dispensing fees, brand-drug limits, prescription limits, preferred drug lists (PDLs)*, state maximum allowable costs, generic substitution, prior authorization and assisted-living-related medication management, among others.
Senate bill 867 would begin to address abusive pharmacy audits and PBMs that often reimburse pharmacies below cost for generic drugs by manipulating maximum allowable costs (MACs).

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