Which of the following is an upper payment limit on the ingredient costs for a multiple-source drug?

The correct answer is the maximum allowable cost (MAC) because it specifically refers to the upper payment limit set by a pharmacy benefit manager (PBM) or health plan for the ingredient costs associated with a multiple-source drug. This term pertains to generic medications that have multiple manufacturers, and the MAC helps control the costs by establishing a ceiling on the reimbursement for these drugs.

MAC pricing is beneficial for managing the overall costs of pharmacy benefits and ensures that the costs remain competitive while promoting the use of cost-effective generic drugs. This mechanism encourages pharmacies to dispense generics and, ultimately, helps to reduce the overall burden on health care systems.

In contrast, average manufacturer's price (AMP), wholesale acquisition cost (WAC), and average wholesale price (AWP) play different roles in the pharmaceutical pricing landscape. AMP is typically used for calculating rebates under Medicaid, WAC represents the manufacturer's list price to wholesalers, and AWP is often used for pricing drugs in the market but does not function as a limit on reimbursement. Hence, MAC is the most appropriate choice for setting an upper payment limit specifically for the ingredient costs of multiple-source drugs.