Cal. Welfare and Institutions Code § 14105.451

(a) (1) The Legislature finds and declares all of the following: (A) The United States Department of Health and Human Services has identified the critical need for state Medicaid agencies to establish pharmacy reimbursement rates based on a pricing benchmark that reflects actual acquisition costs. (B) The Medi-Cal program currently uses a methodology based on average wholesale price (AWP). (C) Investigations by the federal Office of Inspector General have found that average wholesale price is inflated relative to average acquisition cost. (2) Therefore, it is the intent of the Legislature to enact legislation by August 1, 2011, that provides for development of a new reimbursement methodology that will enable the department to achieve savings while continuing to reimburse pharmacy providers in compliance with federal law. (b) Subject to Section 14105.45, the department may require providers, manufacturers, and wholesalers to submit any data the director determines necessary or useful in preparing for the transition from a methodology based on average wholesale price to a methodology based on actual acquisition cost. (c) If the AWP ceases to be listed by the department’s primary price reference source vendor, the department may direct the fiscal intermediary to establish a process with the primary price reference source vendor to temporarily report the AWP consistent with the definition of AWP in Section 14105.45. If this process is established, it shall be limited in scope and duration, and shall cease when the department has fully implemented the average acquisition cost methodology pursuant to Section 14105.45.