PAClow and PAChigh
In addition to publishing the PAC, the PAClow and PAChigh are provided to subscribers. The PAC is an estimation of acquisition cost, but there can be a degree of uncertainty. PAClow and PAChigh establish a range within which there is a high degree of confidence that the true acquisition cost lies.
For a given pharmacy per-script profit target, this PAC range can translate into a range within which the MAC should lie:
In order to spot prime opportunities to create a more balanced MAC pricing, we can identify drug groups for which the current MAC is outside the range, i.e. MAClow to MAChigh.
Scenario: Assuming a pharmacy profit-per-script target of at least $3/script and 10% margin (not including professional services/dispensing fee), the PAC range was used to identify drug groups where an increase or decrease of the SMAC may be appropriate.
We know specific business parameters exist when generating SMAC values and those parameters will vary from state to state. For example, the assumptions made regarding targeted pharmacy profitability can be adjusted and the incorporation of a pharmacy’s utilization can focus on the most relevant drug groups. Glass Box Analytics is available to provide a pharmacy with additional analytics that are tailored to that pharmacy’s areas of interests.