Evaluation of the Maximum Allowable Cost Program

This article summarizes an evaluation of the Maximum Allowable Cost (MAC)-Estimated Acquisition Cost (EAC) program, the Federal Government's cost-containment program for prescription drugs. The MAC-EAC regulations which became effective on August 26, 1976, have four major components: (1) Maximum Allowable Cost reimbursement limits for selected multisource or generically available drugs; (2) Estimated Acquisition Cost reimbursement limits for all drugs; (3) "usual and customary" reimbursement limits for all drugs; and (4) a directive that professional fee studies be performed by each State. The study examines the benefits and costs of the MAC reimbursement limits for 15 dosage forms of five multisource drugs and EAC reimbursement limits for all drugs for five selected States as of 1979.