(a) A Medicaid managed care organization or pharmacy benefit manager, as applicable, under the organization’s pharmacy benefit plan required by § 540.0273 in a contract to which this subchapter applies, must:
(1) ensure that, to place a drug on a maximum allowable cost list:
(A) the drug is listed as “A” or “B” rated in the most recent version of the United States Food and Drug Administration’s Approved Drug Products with Therapeutic Equivalence Evaluations, also known as the Orange Book, has an “NR” or “NA” rating or a similar rating by a nationally recognized reference; and
(B) the drug is generally available for purchase by pharmacies in this state from national or regional wholesalers and is not obsolete;
(2) review and update maximum allowable cost price information at least once every seven days to reflect any maximum allowable cost pricing modification;
(3) in formulating a drug’s maximum allowable cost price, use only the price of the drug and drugs listed as therapeutically equivalent in the most recent version of the United States Food and Drug Administration’s Approved Drug Products with Therapeutic Equivalence Evaluations, also known as the Orange Book;
(4) establish a process for eliminating products from the maximum allowable cost list or modifying maximum allowable cost prices in a timely manner to remain consistent with pricing changes and product availability in the marketplace; and
(5) notify the commission not later than the 21st day after implementing a practice of using a maximum allowable cost list for drugs dispensed at retail but not by mail.
(b) A Medicaid managed care organization or pharmacy benefit manager, as applicable, under the organization’s pharmacy benefit plan required by § 540.0273 in a contract to which this subchapter applies, must:
(1) provide a procedure for a network pharmacy provider to challenge a drug’s listed maximum allowable cost price;
(2) respond to a challenge not later than the 15th day after the date the provider makes the challenge;
(3) if the challenge is successful, adjust the drug price effective on the date the challenge is resolved and make the adjustment applicable to all similarly situated network pharmacy providers, as the Medicaid managed care organization or pharmacy benefit manager, as appropriate, determines;
(4) if the challenge is denied, provide the reason for the denial; and
(5) report to the commission every 90 days the total number of challenges that were made and denied in the preceding 90-day period for each maximum allowable cost list drug for which a challenge was denied during the period.

(c) A Medicaid managed care organization or pharmacy benefit manager, as applicable, under the organization’s pharmacy benefit plan required by § 540.0273 in a contract to which this subchapter applies, must provide:
(1) to a network pharmacy provider, at the time the organization or pharmacy benefit manager enters into or renews a contract with the provider, the sources used to determine the maximum allowable cost pricing for the maximum allowable cost list specific to that provider; and
(2) a process for each network pharmacy provider to readily access the maximum allowable cost list specific to that provider.
(d) Except as provided by Subsection (c)(2), a maximum allowable cost list specific to a provider that a Medicaid managed care organization or pharmacy benefit manager maintains is confidential.

Text of section effective on April 01, 2025