What is the maximum price per tablet an insurer or PBM will pay for a medication called?

The maximum price per tablet that an insurer or Pharmacy Benefit Manager (PBM) will pay for a medication is referred to as the Maximum Allowable Cost (MAC). This pricing structure is crucial as it determines the maximum reimbursement amount for generic medications, providing a benchmark that helps in controlling overall drug costs within the healthcare system.

The concept of MAC allows the insurer or PBM to establish a limit on the price they will reimburse pharmacies for specific medications, ensuring that costs remain manageable. This means that pharmacies cannot charge more than the MAC pricing for those drugs when processing insurance claims.

By utilizing MAC pricing, insurers and PBMs can maintain cost-effectiveness while still providing access to necessary medications for patients. This approach significantly affects how pharmacies price their inventory and how patients ultimately pay for their prescriptions.