Generic Drug Cost Containment in Medicaid: Lessons from Five State MAC Programs

In Medicaid, generic drug cost containment revolves around two programs: the Federal upper limit (FUL) program and State maximum allowable cost (MAC) programs. This article analyzes MAC programs in five States and finds considerable variation between these programs and the FUL program in both size and pricing aggressiveness. We conclude that expansion of existing MAC programs and creation of new ones could contribute to cost containment efforts nationwide. Options for States seeking to optimize their efforts include focusing on pricing for drugs with high sales volumes, ensuring that MAC lists include prices for all forms and dosages of listed drug entities, and collaborating with other States or the Federal Government on MAC list operations.