RULES AND REGULATIONS
DEPARTMENT OF PUBLIC WELFARE
[55 PA. CODE CH. 1121]
[Correction]
Pharmaceutical Services; Revisions to the State Maximum Allowable Cost for Pharmaceutical Services
[35 Pa.B. 4823] Errors occurred in the document amending §§ 1121.2 and 1121.56 (relating to definitions; and drug cost determination), which appeared at 35 Pa.B. 4727, 4732 and 4733 (August 20, 2005). Amendments to those sections which appeared at 35 Pa.B. 4309 (August 6, 2005) were not incorporated. The correct version of those sections is as follows:
Annex A
TITLE 55. PUBLIC WELFARE
PART III. MEDICAL ASSISTANCE
CHAPTER 1121. PHARMACEUTICAL SERVICES
GENERAL PROVISIONS § 1121.2. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the content clearly indicates otherwise:
AWP--The average wholesale price listed for a drug in one or more available Nationally recognized pricing services.
Brand name--A registered trade name commonly used to identify a drug.
CMS--The Centers for Medicare and Medicaid Services.
CMS multisource drug--A multisource drug identified by CMS for which FFP is limited under 42 CFR 447.331--447.333 (relating to drugs: aggregate upper limits of payment; upper limits for multiple source drugs; state plan requirements, findings and assurances).
Compounded prescription--A prescription that is prepared in the pharmacy by combining two or more ingredients and involves the weighing of at least one solid ingredient which shall be a compensable item or a legend drug in a therapeutic amount.
DESI drug--A drug product for which Federal Financial Participation FFP is not available under 42 CFR 441.25 (relating to less than effective drugs).
EAC--Estimated Acquisition Cost--As defined in 42 CFR 447.301 (relating to definitions).
Experimental drug--A drug or product currently being investigated under licensure by the FDA to determine its safety and effectiveness.
FDA--Food and Drug Administration.
FFP--Federal financial participation.
Federal upper limit--The per unit amount set for a multisource drug which is established by CMS under 42 CFR 447.332.
Generic drug--A drug that is ''A-rated'' by the FDA as therapeutically equivalent to the counterpart brand name drug.
Legend drug--A drug or product that under Federal law or State law can be dispensed only upon the order of a physician.
Licensed prescriber--A person currently licensed under the law of a state to order medication.
Multisource drug--A drug marketed or sold by two or more manufacturers or labelers or a drug marketed or sold by the same manufacturer or labeler under two or more different proprietary names or both under a proprietary name and without such a name.
Nonlegend drug--A drug or product that can be purchased without a prescription.
OBRA '90--The Omnibus Budget Reconciliation Act of 1990 (Pub. L. No. 101-508, 104 Stat. 1388).
Pricing service--A third-party source that compiles and provides drug-specific information needed to maintain the drug reference file under this chapter.
State MAC--The maximum allowable cost established for a multisource drug.
Usual and customary charge--The pharmacy's lowest net charge an MA recipient would pay for a prescription as a non-Medicaid patient at the time of dispensing for the same quantity and strength of a particular drug or product, including applicable discounts, such as special rates to nursing home residents, senior citizens, or other discounts extended to a particular group of patients. This lowest net price does not apply to special in-store rates or discounts extended to charitable organizations, religious groups, store employees and their families, nonprofit organizations, members of the medical profession or other similar non-Medicaid groups.
WAC--Wholesale Acquisition Cost--The manufacturer's list price for a drug to wholesalers or direct purchasers in the United States as listed in one or more available Nationally recognized pricing services.
PAYMENT FOR PHARMACEUTICAL SERVICES § 1121.56. Drug cost determination.
(a) The Department will base its drug cost for compensable legend and nonlegend drugs on the lower of:
(1) The EAC established by the Department.
(i) For brand name drugs, the EAC is established by the Department as one of the following:
(A) The lowest WAC listed for the drug in available Nationally recognized pricing services, plus 7%.
(B) If WAC data are not available from a Nationally recognized pricing service, the lowest AWP listed for the drug in available Nationally recognized pricing services, minus 14%.
(C) If both WAC and AWP cost data are available for the drug from a Nationally recognized pricing service, the lower of the two amounts.
(ii) For generic drugs, the EAC is established by the Department as one of the following:
(A) The lowest WAC listed for the drug in available Nationally recognized pricing services, plus 66%.
(B) If WAC data are not available from a Nationally recognized pricing service, the lowest AWP listed for the drug in available Nationally recognized pricing services, minus 25%.
(C) If both WAC and AWP cost data are available for the drug from a Nationally recognized pricing service, the lower of the two amounts.
(2) The State MAC established by the Department.
(b) The Department will update the EAC for individual drugs on a monthly basis as it appears in available Nationally recognized pricing services.
(c) CMS establishes lists that identify and set Federal upper limits for CMS multisource drugs and provides the listing of these drugs and revisions to the list to the Department through Medicaid manual transmittals on a periodic basis.
(d) The Department will determine the State MAC by one of the following methods:
(1) For multisource drugs, the Department will set the State MAC at the lower of the following:
(i) The upper payment limit established by the CMS.
(ii) Provided that the generic product is available at the price established by the Department from at least two wholesalers:
(A) If the generic product is available from more than one manufacturer, the base price of 150% of the lowest acquisition cost for the generic product, unless 150% of the lowest acquisition cost is not at least 120% of the second lowest acquisition cost, in which case the base price will be set at 120% of the second lowest acquisition cost.
(B) If the generic product is available from only one manufacturer, the base price is 120% of the acquisition cost for the generic product.
(2) For disposable insulin syringes, the Department will set the State MAC at the amount listed in the MA Program Fee Schedule.
(e) The Department will update the State MAC:
(1) If the State MAC for a multisource drug is set at the Federal upper payment limit established by CMS, the Department will apply the Federal upper limits for CMS multisource drugs to be effective on the date established by CMS and will describe the update to each pharmacy enrolled in the MA Program when it is available.
(2) The Department will apply the price for all other State MAC multisource drugs every 3 months, and will distribute the update to each pharmacy enrolled in the MA Program.
(f) With the exception of the HCFA multisource drugs, the Department will make further additions to the list of State MAC drugs after consultation with the Medical Assistance Advisory Committee as to whether the application of a State MAC is cost effective to the Department for a particular multisource drug. The Department will add the HCFA multisource drugs to the State MAC list effective as of the effective date established by HCFA.
(g) With the exception of disposable insulin syringes, the State MAC does not apply if the conditions are met as described in § 1121.53(b)(1) and (2) (relating to limitations on payment).
(h) The most common package size for the purposes of determining the product cost is one of the following:
(1) For capsules, tablets and liquids available in breakable package sizes:
(i) The listed package size if only one package size is listed.
(ii) The 100 or pint package size if more than one package size is listed.
(iii) The next smaller package size from the 100 or pint size, excluding a drug company's unit-dose package size, if more than one package size is listed other than the 100 or pint package size.
(iv) The package size closest to the 100 or pint package size, excluding a drug company's unit-dose package size, if the next smaller package is the unit-dose package size.
(2) The listed package size for all dosage forms available for all nonlegend drug products.
(3) The smallest package size for all dosage forms available in nonbreakable packages.
[Pa.B. Doc. No. 05-1561. Filed for public inspection August 19, 2005, 9:00 a.m.]
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