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The Pennsylvania Code website reflects the Pennsylvania Code changes effective through 54 Pa.B. 1806 (March 30, 2024).

55 Pa. Code § 1121.2. Definitions.

§ 1121.2. Definitions.

 The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:

   AWP—The average wholesale price for a drug as found in the Department’s pricing service publication.

   Brand name—A registered trade name commonly used to identify a drug.

   CMS—The Centers for Medicare and Medicaid Services.

   CMS multisource drug—A multisource drug identified by CMS for which FFP is limited under 42 CFR 447.331—447.333 (relating to drugs: aggregate upper limits of payment; upper limits for multiple source drugs; state plan requirements, findings and assurances).

   Compounded prescription—A prescription that is prepared in the pharmacy by combining two or more ingredients and involves the weighing of at least one solid ingredient which shall be a compensable item or a legend drug in a therapeutic amount.

   DESI drug—A drug product for which Federal Financial Participation FFP is not available under 42 CFR 441.25 (relating to less than effective drugs).

   EAC—Estimated Acquisition Cost—As defined in 42 CFR 447.301 (relating to definitions).

   Experimental drug—A drug or product currently being investigated under licensure by the FDA to determine its safety and effectiveness.

   FDA—Food and Drug Administration.

   FFP—Federal financial participation.

   Federal upper limit—The per unit amount set for a multisource drug which is established by CMS under 42 CFR 447.332.

   Generic drug—A drug that is ‘‘A-rated’’ by the FDA as therapeutically equivalent to the counterpart brand name drug.

   Legend drug—A drug or product that under Federal law or State law can be dispensed only upon the order of a physician.

   Licensed prescriber—A person currently licensed under the law of a state to order medication.

   Multisource drug—A drug marketed or sold by two or more manufacturers or labelers or a drug marketed or sold by the same manufacturer or labeler under two or more different proprietary names or both under a proprietary name and without such a name.

   Nonlegend drug—A drug or product that can be purchased without a prescription.

   OBRA ’90—The Omnibus Budget Reconciliation Act of 1990 (Pub. L. No. 101-508, 104 Stat. 1388).

   Pricing service—A third-party source that compiles and provides drug-specific information needed to maintain the drug refernece file under this chapter.

   State MAC—The maximum allowable cost established for a multisource drug.

   Usual and customary charge—The pharmacy’s lowest net charge an MA recipient would pay for a prescription as a non-Medicaid patient at the time of dispensing for the same quantity and strength of a particular drug or product, including applicable discounts, such as special rates to nursing home residents, senior citizens, or other discounts extended to a particular group of patients, including generic drug discount and savings programs. This lowest net price does not apply to special in-store rates or discounts extended to charitable organizations, religious groups, store employees and their families, nonprofit organizations, members of the medical profession or other similar non-Medicaid groups.

   WAC—Wholesale Acquisition Cost—The manufacturer’s list price for a drug to wholesalers or direct purchasers in the United States as listed in one or more available Nationally recognized pricing services.


   The provisions of this §  1121.2 amended under sections 201(2), 403(b), 403.1, 443.4 and 454 of the Public Welfare Code (62 P. S. § §  201(2), 403(b), 403.1, 443.4 and 454).


   The provisions of this §  1121.2 amended December 14, 1990, effective January 11, 1991, 20 Pa.B. 6167; amended January 24, 1992, effective upon publication and apply retroactively to April 1, 1991 for the Manufacturers’ Rebate Program and September 1, 1991 for the pharmacy dispensing fee increase, 22 Pa.B. 361; amended September 22, 1995, effective September 23, 1995, 25 Pa.B. 3978; amended August 5, 2005, effective August 10, 2005, Pa.B. 4309; amended August 19, 2005, effective August 22, 2005, 35 Pa.B. 4727; corrected August 26, 2005, effective August 22, 2005, 35 Pa.B. 4823; amended April 13, 2012, effective April 14, 2012, 42 Pa.B. 2015. Immediately preceding text appears at serial pages (351422) and (312941) to (312942).

   (Editor’s Note: This regulation was promulgated under section 6(b) of the Regulatory Review Act (71 P. S. §  745.6(b)).)

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