SECTION 354.1921. Addition of Drugs to the Texas Drug Code Index

(a) A drug company that has a valid rebate agreement under 42 U.S.C. §1396r-8 may apply to the Health and Human Services Commission (Commission) to add a drug to the Texas Drug Code Index (TDCI). The term "drug company" includes any manufacturer, repackager, or private labeler.

(b) To apply for the addition of a drug to the TDCI, a drug company must complete each section of the Certification of Information for the Addition of a Drug Product to the TDCI provided by the Commission.

(c) A drug company must also:

(1) update the Commission with changes to formulation, product status, or availability; and

(2) submit changes to the prices requested in the Price Certification section of the Certification of Information, if requested by the Commission, within 10 calendar days of receiving the request.

(d) Sources other than drug companies may request the addition of a drug not currently listed in the TDCI. If the request is not from a drug company, the Commission may request that the manufacturer submit a Certification of Information as described in subsection (b) of this section.

(e) The drug company and other sources, if applicable, are entitled to receive notification of approved or denied Certifications of Information. If a Certification of Information is denied, the Commission will state the reasons for the denial.

(f) Notwithstanding any other state law, pricing information reported by a drug company under this subchapter is confidential and must not be disclosed by the Commission, its agents, contractors, or any other State agency in a format that discloses the identity of a specific manufacturer or labeler, or the prices charged by a specific manufacturer or labeler for a specific drug, except as necessary to permit the Attorney General to enforce state and federal law.

(g) Definitions. The following words and terms, when used in this chapter and in Chapter 355 of this title (relating to Reimbursement Rates), have the following meanings unless the context clearly indicates otherwise.

(1) Acquisition Cost (AC)--HHSC's determination of the price pharmacy providers pay to acquire drug products marketed or sold by specific manufacturers. AC is based on NADAC, wholesale acquisition cost (WAC), or pharmacy invoice, in accordance with the Medicaid state plan.

(2) Average Manufacturer Price (AMP)--The average manufacturer price as defined in 42 USC §1396r-8(k)(1).

(3) Average Wholesale Price (AWP)--The average wholesale price for a drug as published in a price reporting compendium such as First DataBank or Medispan.

(4) Customary Prompt Pay Discount--Any discount off the purchase price of a drug routinely offered by the drug company to a wholesaler or distributor for prompt payment of purchased drugs within a specified time frame and consistent with customary business practices for payment.

(5) Direct Price to Long Term Care Pharmacy--The amount paid by a pharmacy servicing a long term care facility, including a nursing facility, assisted living facility, and skilled nursing facility. The price should be net of price concessions. In reporting this price point to the Commission, if the price is reported as a range, the weighted average of these prices, based on unit sales, must be included. The following prices should be excluded from this price point:

(A) prices excluded from the determination of Medicaid Best Price at 42 C.F.R. §447.505; and

(B) prices to entities participating in the Health Resources and Services Administration (HRSA) 340b discount program.

(6) Direct Price to Pharmacy--The amount paid for a product by a pharmacy when purchased directly from a drug company. This price should be net of Price Concessions. In reporting this price point to the Commission, if the price is reported as a range, the weighted average of these prices, based on unit sales, must be included. The following prices should be excluded from this price point:

(A) prices excluded from the determination of Medicaid Best Price at 42 C.F.R. §447.505;

(B) prices to entities participating in the Health Resources and Services Administration (HRSA) 340b discount program; and

(C) Direct Prices to Long Term Care Pharmacy.

(7) Gross Amount Due--Has the meaning as defined by the National Council for Prescription Drug Programs.

(8) Long term care facility--Facility that provides long term care services, such as a nursing home, skilled nursing facility, assisted living facility, group home, hospice facility, or intermediate care facility for individuals with an intellectual disability or related condition (ICF/IID).

(9) Long term care pharmacy--A pharmacy for which the total Medicaid claims for prescription drugs to residents of long term care facilities exceeds 50 percent of the pharmacy's total Medicaid claims per year. Long term care pharmacies are not open to the public for walk-in business.

(10) Long term care pharmacy acquisition cost (LTCPAC)--The acquisition cost determined by the Commission for a drug product purchased by a long term care pharmacy.

(11) "May apply to the Commission"--The act of applying to have a drug included on the TDCI. This includes completing the Certification of Information for the Addition of a New Drug Product to the Texas Drug Code Index, submitting National Drug Code (NDC) changes, submitting price updates, and submitting additional package sizes for a drug that is already included on the TDCI.

(12) NADAC--National Average Drug Acquisition Cost.

(13) National Drug Code (NDC)--The 11-digit numerical code established by the U.S. Food and Drug Administration that indicates the labeler, product, and package size.

(14) Pharmacy--An entity with an approved community pharmacy license or an institutional pharmacy license.

(15) Price concession--An action by a manufacturer (other than a customary prompt-pay discount as defined in this section) that has the effect of reducing the net cost of a product to a purchaser. The term includes discounts, rebates, billbacks, chargebacks, or other adjustments to pricing or payment terms. Lagged price concessions must be accounted for in the Reported Manufacturer Pricing by operation of a 12-month average estimation methodology as described in 42 C.F.R. §414.804. For new, at launch products, if a manufacturer has forecasted price concessions, the initial Reported Manufacturer Pricing should reflect this internal business information.

(16) Price to Wholesaler/Distributor--The amount paid by a wholesaler or a distributor. The price should be net of price concessions. In reporting this price point to the Commission, if the price is reported as a range, the weighted average of these prices, based on unit sales, must be included. The following prices should be excluded from this price point:

(A) prices excluded from the determination of Medicaid Best Price at 42 C.F.R. §447.505; and

(B) prices to entities participating in the Health Resources and Services Administration (HRSA) 340b discount program.

(17) Reliable Sources--Sources including other state or federal agencies and pricing services, as well as verifiable reports by contracted providers and Vendor Drug Program formulary and field staff.

(18) Reported Manufacturer Pricing--Pricing information submitted to the Commission by a drug company on a Certification of Information, or in subsequent price updates as described in subsections (b) and (c) of this section. This includes: Average Wholesale Price, Average Manufacturer Price, Price to Wholesaler/Distributor, Direct Price to Pharmacy, and Direct Price to Long Term Care Pharmacy. If a drug company does not have a single price for a price point, it must report a range of prices. If a drug company reports a range of prices, it must also provide the weighted average of these prices based on unit sales.

(19) Retail Pharmacy Acquisition Cost (RetailPAC)--HHSC's determination of the price a retail pharmacy pays to acquire drug products marketed or sold by specific manufacturers.

(20) Specialty pharmacy--A pharmacy that meets all of the following criteria:

(A) total Medicaid claims for specialty drugs, as described in §354.1853 of this subchapter (relating to Specialty Drugs), exceeds 10 percent of the pharmacy's total Medicaid claims per year;

(B) obtains volume-based discounts or rebates on specialty drugs from manufacturers or wholesalers; and

(C) delivers at least 80 percent of dispensed prescriptions by shipment through the U.S. Postal Service or other common carrier to customers or healthcare professionals (including physicians and home health providers).

(21) Specialty pharmacy acquisition cost (SPAC)--HHSC's determination of the price a retail pharmacy pays to acquire drug products marketed or sold by specific manufacturers.

(22) Weighted AMP (Average Manufacturer Price)--The Weighted AMP (Average Manufacturer Price) as contemplated in 42 U.S.C. §1396r-8(b)(3) and (e), and as reported by the Centers for Medicare & Medicaid Services.

(23) Wholesaler Cost--The net cost of a product to a wholesaler; equivalent to Price to Wholesaler/Distributor and cost to wholesaler.

Source Note: The provisions of this §354.1921 adopted to be effective November 16, 1987, 12 TexReg 3553; amended to be effective January 1, 1991, 16 TexReg 4630; transferred effective September 1, 1993, as published in the Texas Register September 7, 1993, 18 TexReg 5978; transferred effective September 1, 2001, as published in the Texas Register May 24, 2002, 27 TexReg 4562; amended to be effective June 19, 2003, 28 TexReg 4541; amended to be effective November 16, 2003, 28 TexReg 9802; amended to be effective January 14, 2013, 37 TexReg 8462; amended to be effective May15,2016, 41 TexReg 3291; amended to be effective April 15, 2019, 44 TexReg 1836