Section 130511 Of Chapter 2. Prescription Drug Discounts From California Health And Safety Code >> Division 112. >> Chapter 2.
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. (a) Each drug discount agreement shall do all of the
following:
(1) Specify which of the manufacturer's drugs are included in the
agreement.
(2) Permit the department to remove a drug from the agreement if
there is a dispute over the drug's utilization.
(3) Permit a manufacturer to audit claims for the drugs the
manufacturer provides under the program. Claims information provided
to manufacturers shall comply with all federal and state privacy laws
that protect a program participant's health information.
(b) In addition to the requirements of subdivision (a), each drug
discount agreement with a single-source manufacturer shall do all of
the following:
(1) Require the manufacturer to make a rebate payment to the
department for each drug described in paragraph (1) of subdivision
(a) dispensed to a program participant.
(2) Require the manufacturer to make the rebate payments to the
department on at least a quarterly basis.
(3) Require the manufacturer to provide, upon request,
documentation to validate the rebate.
(c) The department may collect prospective rebates from
single-source manufacturers for payment to pharmacies. The amount of
the prospective discount shall be specified in the drug rebate
agreements.
(d) (1) Manufacturers shall calculate and pay interest on late or
unpaid rebates. The interest shall not apply to any prior period
adjustments of unit rebate amounts or department utilization
adjustments.
(2) For rebate payments to the program, manufacturers shall
calculate and pay interest on late or unpaid rebates for quarters
that begin on or after January 1, 2007.
(e) Interest required by subdivision (d) shall begin accruing 38
calendar days from the date of mailing of the invoice, including
supporting utilization data sent to the manufacturer. Interest shall
continue to accrue until the date of mailing of the manufacturer's
payment. Interest rates and calculations for purposes of this section
shall be at 10 percent.
(f) A participating manufacturer shall clearly identify all
rebates, interest, and other payments, and payment transmittal forms
for the program, in a manner designated by the department.