MAC Pricing

Maximum Allowable Cost, or MAC, is a pricing mechanism PBMs use to set reimbursement limits for generic and multi-source brand drugs. MAC lists are among the most opaque elements of pharmacy benefit economics and a frequent source of disputes between PBMs and pharmacies.

How MAC Lists Work

Each PBM maintains its own proprietary MAC list that sets the maximum price it will reimburse a pharmacy for dispensing a particular generic drug. When a prescription is adjudicated, the PBM's system checks whether the drug appears on its MAC list. If it does, reimbursement is capped at the MAC price plus a dispensing fee, regardless of what the pharmacy paid to acquire the drug.

MAC prices are set by the PBM's internal pricing team and can be updated daily, weekly, or at other intervals. The methodology for setting MAC prices is typically proprietary and not disclosed to plan sponsors or pharmacies. This opacity is the core issue with MAC pricing: neither pharmacies nor plan sponsors can independently verify whether MAC prices reflect fair market conditions.

MAC and Plan Sponsors

For plan sponsors, MAC pricing affects cost in two ways. Lower MAC prices reduce the ingredient cost component of claims, which directly reduces plan spending. However, if MAC prices are set so low that pharmacies lose money on certain drugs, those pharmacies may stop stocking them, creating access issues for plan members. The balance between cost control and network stability is a persistent tension in MAC management.

State MAC Regulations

Over 40 states have enacted some form of MAC regulation, typically requiring PBMs to update MAC lists within a specified timeframe when acquisition costs change, to provide pharmacies with an appeals process when MAC reimbursement falls below acquisition cost, and to disclose MAC list sources and update frequency to state regulators.