South Carolina Code of Laws
Chapter 71 - Accident And Health Insurance
Section 38-71-2240. Placement of drug on Maximum Allowable Cost List.

(A) Before a pharmacy benefits manager places or continues to place a particular drug on a Maximum Allowable Cost List, the drug must:
(1) be listed as "A" or "B" rated in the most recent version of the Food and Drug Administration's Approved Drug Products with Therapeutic Equivalence Evaluations, also known as the Orange Book, or has an "NR" or "NA" rating, or a similar rating, by a nationally recognized reference;
(2) be available for purchase in the State from national or regional wholesalers operating in this State; and
(3) not be obsolete.
(B) A pharmacy benefits manager shall:
(1) provide a process for network pharmacy providers to readily access the maximum allowable cost specific to that provider;
(2) update its Maximum Allowable Cost List at least once every seven calendar days;
(3) provide a process for each pharmacy subject to the Maximum Allowable Cost List to access any updates to the Maximum Allowable Cost List;
(4) ensure that dispensing fees are not included in the calculation of maximum allowable cost; and
(5) establish a reasonable administrative appeal procedure by which a contracted pharmacy can appeal the provider's reimbursement for a drug subject to maximum allowable cost pricing if the reimbursement for the drug is less than the net amount that the network provider paid to the suppliers of the drug. The reasonable administrative appeal procedure must include:
(a) a dedicated telephone number and email address or website for the purpose of submitting administrative appeals; and
(b) the ability to submit an administrative appeal directly to the pharmacy benefits manager regarding the pharmacy benefits plan or program or through a pharmacy service administrative organization if the pharmacy service administrative organization has a contract with the pharmacy benefits manager that allows for the submission of such appeals.
(C) A pharmacy must be allowed no less than ten calendar days after the applicable fill date to file an administrative appeal.
(D) If an appeal is initiated, the pharmacy benefits manager shall within ten calendar days after receipt of notice of the appeal either:
(1) if the appeal is upheld:
(a) notify the pharmacy or pharmacist or his designee of the decision;
(b) make the change in the maximum allowable cost effective as of the date the appeal is resolved;
(c) permit the appealing pharmacy or pharmacist to reverse and rebill the claim in question; and
(d) make the change effective for each similarly situated pharmacy as defined by the payor subject to the Maximum Allowable Cost List effective as of the date the appeal is resolved; or
(2) if the appeal is denied, provide the appealing pharmacy or pharmacist the reason for the denial, the National Drug Code number, and the name of the national or regional pharmaceutical wholesalers operating in this State.
(E) The provisions of this section:
(1) do not apply to the Maximum Allowable Cost List maintained by the State Medicaid Program, the Medicaid managed care organizations under contract with the South Carolina Department of Health and Human Services or the South Carolina Public Employee Benefit Authority; and
(2) apply to the pharmacy benefits manager employed by the South Carolina Public Employee Benefit Authority if, at any time, the South Carolina Public Employee Benefit Authority engages the services of a pharmacy benefits manager to maintain the Maximum Allowable Cost List.
HISTORY: 2019 Act No. 48 (S.359), Section 1, eff January 1, 2021.

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