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LEGAL NOTICE COMMONWEALTH OF VIRGINIA DEPARTMENT OF MEDICAL ASSISTANCE SERVICES Notice of Intent to Modify Pharmacy Services Reimbursement for Generic Drug Products Notice is hereby given that the Department of Medical Assistance Services (DMAS) intends to modify its reimbursement plan for pharmacy services pursuant to the Department’s authority under Title XIX of the Social Security Act. This notice is intended to satisfy the requirements of 42 C.F.R. § 447.205 and of § 1902(a)(13) of the Social Security Act, 42 U.S.C. § 1396a(a)(13). The changes contained in this public notice are occurring in response to Chapter 4 of the 2004 Acts of the Assembly, Item 326 WW directing DMAS to modify the reimbursement methodology used for generic drug products. This new methodology will reimburse for the product cost based on a Maximum Allowable Cost (MAC) for generic, multiple source drug products. The MAC program will replace the current maximum allowable cost as a payment methodology for multiple source drugs. The MAC will expand the variety of drugs priced through the current methodology. In addition, the MAC program will ensure that pricing is reflective of current market conditions and that these prices are made available to providers on a regular basis. This action sets the criteria for the Department to develop MAC pricing methodology, publish prices, and maintain a pricing dispute resolution procedure. The methodology used to reimburse for generic drug products shall be the higher of either: (i) the lowest Wholesale Acquisition Cost (WAC) plus 10 percent, OR (ii) the second lowest WAC plus six percent. The remainder of the agency’s pharmacy reimbursement, as set forth in 12 VAC 30-80-40, will not change. The MAC program is expected to offer savings of $10 million in total funds in fiscal year 2004. Savings will be achieved by more accurately pricing generic, multiple source drugs based on market pricing and the availability of drugs. A copy of this notice is available for public review from H. Bryan Tomlinson, Director, Health Care Services Division, DMAS, 600 Broad Street, Suite 1300, Richmond, VA 23219, and this notice is available for public review at www.townhall.state.va.us . Comments or inquiries may be submitted, in writing, within 30 days of this notice publication to Mr. Tomlinson and such comments are available for review at the same address.