MAC regulations: their predicted economic impact on pharmaceutical reimbursement

The Maximum Allowable Cost (MAC) regulations, Part 19 of Subtitle A of Title 45 of the Code of Federal Regulations, were promulgated as a method of cost containment applicable to a component of the escalating health care expenditures. This study predicted the economic impact of the MAC regulations on the Medicaid program of Georgia. Reimbursements for Medicaid prescription drug products by the Georgia Department of Medical Assistance for 1976-1977 were compared with the reimbursements for drug products that would have been paid under the MAC regulation limitations had the MAC regulations been in force during the time period studied. The cost per unit of a purposive sample of 386 drug entities sorted into eight code groups was compared with the MAC-regulated cost per unit reimbursements. Significant differences in cost were noted for three of the eight code groups. For these groups, reimbursements of before MAC-regulated drug product cost per unit were greater than reimbursements for predicted MAC-regulated drug product cost per unit. Further analysis of the data predicted a reduction of reimbursements for the eight classes of prescription drug products studied to be 24.42%. This reduction compares favorably with the projected savings of 22-36% reported by the Task Force on Prescription Drugs.