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Evaluation of the maximum allowable cost program.

A J Lee, D Hefner, A Dobson

    Health Care Financing Review
    |February 10, 1983
    PubMed
    Summary
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    This study evaluated the Maximum Allowable Cost (MAC)-Estimated Acquisition Cost (EAC) program, a government initiative for prescription drug cost containment. It assessed the benefits and costs of MAC reimbursement limits for specific generic drugs and EAC limits for all drugs in selected states.

    Area of Science:

    • Health Economics
    • Pharmaceutical Policy
    • Public Health Administration

    Background:

    • The Federal Government implemented the Maximum Allowable Cost (MAC)-Estimated Acquisition Cost (EAC) program to control prescription drug expenditures.
    • The MAC-EAC regulations, effective August 26, 1976, comprised four key components for drug reimbursement and state-level fee studies.

    Purpose of the Study:

    • To evaluate the benefits and costs associated with the MAC-EAC program.
    • To analyze the impact of MAC reimbursement limits on selected multisource drugs.
    • To assess the effects of EAC reimbursement limits on all drugs within specific states.

    Main Methods:

    • The study focused on the MAC reimbursement limits for 15 dosage forms of five multisource drugs.
    • It also examined EAC reimbursement limits for all drugs.

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  • Data was collected from five selected states as of 1979.

    • Main Results:

    • The evaluation provided insights into the financial and practical outcomes of the MAC-EAC program.
    • Analysis covered both specific generic drug cost controls and broader drug acquisition cost limits.
    • Findings were based on data from a representative sample of states.

    Conclusions:

    • The study offered a comprehensive assessment of the MAC-EAC program's effectiveness in cost containment.
    • Results informed understanding of drug pricing strategies and reimbursement policies.
    • The findings contributed to the ongoing discourse on pharmaceutical cost management in the US.