“The members of the Myers and Stauffer team are professional, competent, experienced and have always completed deliverables timely. They have demonstrated a thorough and comprehensive understanding of the Medicaid pharmacy benefit. They are genuinely pleasant to work with and have a desire to achieve excellence in their deliverables.”
— Former [State] Director of Pharmacy

Average Acquisition Cost (AAC) and State Maximum Allowable Cost (SMAC)

Myers and Stauffer has implemented and maintained AAC-based pharmacy reimbursement programs since 2001. We currently contract with seven state Medicaid programs to perform these services. Most recently, the use of AAC-based rates for both brand and generic drug reimbursement has been implemented in four states. Myers and Stauffer helped make strategic decisions to gain maximum cost savings while preserving the best possible relationship with the pharmacy industry. We provided critical assistance in reimbursement policy design and subsequent rule making. After significant review and analysis of acquisition cost data, drug utilization and statistical analysis. We have continuously set ingredient reimbursement rates specific to each state.

Utilizing average acquisition costs in determining MAC rates provides many benefits:

  • AAC-based pricing is based on what pharmacies actually pay, rather than on published prices such as average wholesale price (AWP) that have been shown to overstate actual costs.
  • Use of AAC establishes stronger pricing control, allowing state Medicaid agencies to establish rates that are based on true costs and simultaneously ensuring appropriate access to services.
  • The approach is easy to understand (thus promoting stakeholder buy-in) and has the flexibility to be tailored to each state’s program objectives and the unique characteristics of its pharmacy providers.
  • An acquisition cost-based pricing approach enables the state to better analyze comments and concerns from pharmacies and the public regarding reimbursement rates, and essentially eliminates the state’s vulnerability in defending rate challenges or in issuing rates that are substantially overstated.
  • It is much easier to predict program expenditures and to maximize savings within the context of the Medicaid program’s overall objectives.

Myers and Stauffer performs a rigorous and timely review of MAC rates that includes examination of and comparison with current acquisition cost data, published pricing information, prescription drug patent expirations, and other state-specific market indicators. Our work with multiple Medicaid fiscal agents allows us to quickly and effectively transmit rate files to the state’s contractors for implementation in claims processing.


Myers and Stauffer has assisted 26 states and CMS with pharmacy-related projects over the past 35 years.