Estimated Acquisition Cost (EAC)
Definition
Estimated Acquisition Cost (EAC) is a Medicaid pharmacy reimbursement benchmark that estimates the price typically paid by pharmacies for a specific drug, based on the most commonly purchased package size. Some state Medicaid programs use EAC (plus a dispensing fee) as the basis for pharmacy reimbursement.
The exact method for calculating EAC varies by state. Historically, EAC was often calculated as a discount from AWP (such as AWP minus 15%). As AWP has become a less reliable benchmark, many states have moved to AAC-based methodologies.
In the 340B context, EAC is relevant for covered entities billing Medicaid in states that still use EAC-based reimbursement. The relationship between EAC and the 340B price affects the economics of billing Medicaid for 340B-acquired drugs.
Frequently Asked Questions
Why Estimated Acquisition Cost (EAC) Matters
State Medicaid reimbursement methodologies directly affect the economics of 340B drug purchasing. Covered entities billing Medicaid should understand whether their state uses EAC, AAC, or another reimbursement methodology.
How Virtue 340B Uses It
Virtue 340B helps covered entities understand state-specific Medicaid reimbursement methodologies and their implications for program economics.