Acquisition Price Metric Proposed for Medi-Cal Rx Reimbursement


Plan Would Impose California Price Reporting Obligations on Drug and Biologics Manufacturers

California Governor Jerry Brown has released a draft set of amendments to the state’s Medi-Cal code that would add “average acquisition price” (AAP) to the set of data from which Medi-Cal pharmacy reimbursement is determined. The proposed amendments also open the door to unspecified price reporting obligations to California along the lines of those in Texas, New Mexico, Vermont and Maine.

The proposal would peg California ingredient reimbursement at a state calculated pharmacy acquisition cost plus some markup. If enacted, it is likely to generate budget savings by the state and could therefore be a precedent for other state activity in this area. Currently Alabama, Oregon and (arguably) Texas utilize cost-plus Medicaid reimbursement schemes. All other Medicaid programs base reimbursement on AWP or WAC. A recent letter from HHS Secretary Sebelius advocated that states reexamine their reimbursement methodologies to find Medicaid drug savings, specifically mentioning Alabama and the forthcoming national survey on actual acquisition costs.

Please see full Alert below for further information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© King & Spalding | Attorney Advertising

Written by:


King & Spalding on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.