§ 49-4-152-1 — Medicaid Prescription Drug Bidding and Rebate Program

(a) The General Assembly finds that the department frequently must pay more for prescription drugs furnished to recipients of medical assistance under this article than certain health care providers pay for the same products. In order to control more effectively the costs of such drugs, the department may establish a Medicaid Prescription Drug Bidding and Rebate Program as provided in this Code section. (b) The department may request sealed bids from prescription drug manufacturers for both brand name and generic equivalent prescription drugs specified by the department. The bids shall be proposed agreements by these manufacturers to adjust prices of drugs specified by the department to a price designated as the bid price when those drugs are supplied to recipients of medical assistance under this article. If the department has accepted a bid for a drug under this Code section, the department may not reimburse a provider of such drug for any equivalent drug not so successfully bid during the term of the contract awarded with regard to the drug so bid. The department may elect not to reimburse for any multisource drugs of a drug manufacturer which does not participate in the bid process or which bids prices considered excessive by the department. (c) All prescription drugs for which bids are submitted must meet applicable standards of the U.S. Pharmacopoeia, the State Board of Pharmacy, and be guaranteed as meeting all requirements, regulations, and comparison data under the Federal Food, Drug, and Cosmetic Act and the regulations thereunder. The manufacturer of a drug which is bid must have an FDA approved New Drug Application or an abbreviated New Drug Application and must have a product liability insurance policy extending to pharmacy providers under this article, but the policy may condition coverage thereunder upon the provider's complying with all applicable federal and state laws and regulations promulgated thereunder. (d) Nothing in this Code section shall be construed to change the practice of pharmacies having provider agreements under this article with respect to their purchases and sales of and reimbursements for drugs furnished to recipients of medical assistance under this article. Adjustment rebates shall be made by the successfully bidding drug manufacturer to the department and be paid quarterly to the department. (e) In the event no acceptable bids are received for a drug for which a request for bid was made, the department may select a single drug supplier for the drug or establish one price for such drug which the department will reimburse therefor, but this shall not restrict the department from establishing one price for any drug upon which the department does not request bids. (f) Except when in conflict with this Code section, Article 3 of Chapter 5 of Title 50, relating to state purchases by the Department of Administrative Services, shall apply to bidding and purchasing of prescription drugs by the department pursuant to this Code section. The prohibitions against financial interest in Code Section 50-5-78 shall be applicable to the commissioner and other employees of the department and any violation thereof punishable as provided in subsection (d) of that Code section. Contracts for the purchase of prescription drugs made in violation of this Code section shall be void and of no effect and liability therefor shall be the same as that provided in Code Section 50-5-79 . (g) The department is authorized to accept rebates from any drug manufacturer for providing information to that manufacturer regarding utilization by Medicaid recipients of that manufacturer's drugs as long as the anonymity of the recipients is maintained. The department is further authorized to verify and audit claims for reimbursement for drugs successfully bid, provide the manufacturers thereof with the information so obtained, and to adjust the department's claim for rebates based upon that information. (h) The provisions of this Code section shall be construed in conformity with Code Section 49-4-157 .