410-121-0000 Foreword and Definition of Terms (1) The Health Systems Division (Division) Oregon Administrative Rules (OAR) are designed to assist providers in preparing claims for services provided to the Division’s fee-for-service clients. Providers must use Pharmaceutical OARs in conjunction with the General Rules OARs (chapter 410, division 120) for Oregon Medical Assistance Programs. (2) Pharmaceutical services delivered through a managed care plan or a Coordinated Care Organization (CCO) contracted with the Division under the Oregon Health Plan (OHP) are subject to the policies and procedures established in the OHP administrative rules (chapter 410, division 141) and by the specific managed care plan or CCO. (3) Definition of Terms: (a) “Actively Practicing” means the active practice of medicine as described in ORS chapter 689 or the active practice of pharmacy as described in ORS chapter 677. (b) “Authority” means the Oregon Health Authority. See the Oregon Health Authority definition in General Rules (chapter 410, division 120); (c) “Average Manufacturer’s Price (AMP)” means the average price that manufacturers sell medication to wholesalers and retail pharmacies, as further clarified in 42 CFR 447; (d) “Bulk Dispensing” means multiple doses of medication packaged in one container labeled as required by pertinent federal and state laws and rules; (e) “Centers for Medicare and Medicaid Services (CMS) Basic Rebate” means the quarterly payment by the manufacturer of a drug pursuant to the manufacturer’s CMS Medicaid Drug Rebate Agreement made in accordance with Section 1927(c) of the Social Security Act (42 U.S.C. 1396r-8(c)). See 410-121-0157; (f) “CMS Consumer Price Index (CPI) Rebate” means the quarterly payment by the manufacturer pursuant to the manufacturer’s CMS Medicaid Drug Rebate Agreement made in accordance with Section 1927(c)(2) of the Social Security Act (42 U.S.C. 1396r-8(c)); (g) “Compendia” means those resources widely accepted by the medical profession in the efficacious use of drugs, including the following sources: (A) The American Hospital Formulary Service Drug information; (B) The United States Pharmacopeia Drug Information (or its successor publications); (C) The American Medical Association drug evaluations; (D) Peer-reviewed medical literature; (E) Drug therapy information provided by manufacturers of drug products consistent with the federal Food and Drug Administration requirements. (h) “Community Based Care Living Facility” means for the purposes of the Division’s Pharmacy Program, a home, facility, or supervised living environment licensed or certified by the State of Oregon that provides 24-hour care, supervision, and assistance with medication administration. These include but are not limited to: (A) Supportive living facilities; (B) Twenty-four hour residential services; (C) Adult foster care; (D) Semi-independent living programs; (E) Assisted living and residential care facilities; (F) Group homes and other residential services for people with developmental disabilities or needing mental health treatment; and (G) Inpatient hospice. (i) “Compounded Prescription” means the following: (A) A prescription that is prepared at the time of dispensing and involves the weighting of at least one solid ingredient that must be a reimbursable item or a legend drug in a therapeutic amount; (B) Compounded prescription further defined to include the Oregon Board of Pharmacy definition of compounding (see OAR 855-006-0005). (j) “Dispensing” means issuance of a prescribed quantity of an individual drug entity by a licensed pharmacist; (k) “Director” means the director of the Authority; (L) “Drug Order/Prescription” means the following: (A) A medical practitioner's written or verbal instructions for a patient's medications; or (B) A medical practitioner's written order on a medical chart for a client in a nursing facility. (m) “Durable Medical Equipment and Supplies (DME)” means equipment and supplies as defined in OAR 410-122-0010, Durable Medical Equipment, Prosthetics, Orthotics, and Supplies; (n) “Intermediate Care Facility” means a facility providing regular health-related care and services to individuals at a level above room and board, but less than hospital or skilled nursing levels as defined in ORS 442.015; (o) “Legend Drug” means a drug limited by Section 503(b)(1) of the Federal Food, Drug, and Cosmetic Act to being dispensed by or upon a medical practitioner’s prescription because the drug is: (A) Habit-forming; (B) Toxic or having potential for harm; or (C) Limited in its use to being used under a practitioner’s supervision by the new drug application for the drug: (i) The product label of a legend drug is required to contain the statement: “CAUTION: FEDERAL LAW PROHIBITS DISPENSING WITHOUT A PRESCRIPTION;” (ii) A legend drug includes prescription drugs subject to the requirement of Section 503(b)(1) of the federal Food, Drug, and Cosmetic Act that shall be exempt from Section 502(F)(1) if certain specified conditions are met. (p) “Long Term Care Facility” means skilled nursing facilities and intermediate care facilities with the exclusions found in ORS 443.400 to 443.455; (q) “Maintenance Medication” means drugs that have a common indication for treatment of a chronic disease, and the therapeutic duration is expected to exceed one year. This is determined by a First DataBank drug code maintenance indicator of “Y” or “1;” (r) “Mental Health Drug” means a type of legend drug defined by the Oregon Health Authority (Authority) by rule that includes but is not limited to those drugs classified by First DataBank in the following Standard Therapeutic Classes: (A) Therapeutic Class 7 ataractics-tranquilizers and Therapeutic Class 11 psychostimulants-antidepressants; (B) Depakote, Lamictal, and their generic equivalents and other drugs that the Division specifically carved out from capitation from CCOs as specified in OAR 410-141-3855. (s) “Narrow Therapeutic Index (NTI) Drug” means a drug that has a narrow range in blood concentrations between efficacy and toxicity and requires therapeutic drug concentration or pharmacodynamic monitoring; (t) “National Average Drug Acquisition Cost (NADAC)” means the rate that is established by CMS or its contractor by rolling surveys of pharmacies nationwide to verify the actual invoice amount paid by the pharmacy or corporate entity to wholesalers, manufacturers, or distribution centers for the product. The NADAC is the average of invoice amounts for individual drug products based on the Generic Sequence Number (GSN); (u) “Net Price” means the amount a drug costs the Division and is calculated using the following formula: OR-AAAC, minus CMS Basic Rebate, minus CMS CPI Rebate, minus State Supplemental Rebate; (v) “Nominal Price” means sales at less than 10 percent of the Average Manufacturer’s Price (AMP); (w) “Non-Preferred Products” means any medication in a class that has been evaluated and that is not listed on the Practitioner-Managed Prescription Drug Plan Preferred Drug List in OAR 410-121-0030; (x) “Nursing Facility” means an establishment that is licensed and certified by the Department’s Aging and People with Disabilities Division (APD) as a Nursing Facility; (y) “Oregon Average Actual Acquisition Cost (OR-AAAC)” means the rate that is established by the Division or its contractor by rolling surveys of enrolled pharmacies to verify the actual invoice amount paid by the pharmacy or corporate entity to wholesalers, manufacturers, or distribution centers for the product. The AAAC is the average of invoice amounts for individual drug products based on the Generic Sequence Number (GSN); (z) “Pharmacist” means an individual who is licensed as a pharmacist under ORS chapter 689; (aa) “Physical Health Drug” means all other drugs not included in the definition of a “mental health drug” according to this rule; (bb) “Point-of-Sale (POS)” means a computerized, claims submission process for retail pharmacies that provides on-line, real-time claims adjudication; (cc) “Preferred Drug List (PDL)” means the list of prescription drugs in selected classes that the Authority in consultation with the Pharmacy & Therapeutics Committee (P & T) has determined represent the most effective drugs available at the best possible price. (See details for the Division’s PMPDP PDL in OAR 410-121-0030.) The following are two types of preferred drug lists: (A) “Enforceable Physical Health Preferred Drug List” means the list of “preferred” drug products used to treat physical health conditions. The “preferred” drugs may nevertheless require prior authorization (PA) for clinical reasons. Drugs prescribed that do not appear on the PDL (non-preferred products) shall be subject to PA; (B) “Voluntary Mental Health Preferred Drug List” means the list of “preferred” drug products used to treat mental health conditions. Any drug prescribed for the treatment of mental health diagnosis shall be exempt from non-clinical PA requirements by the Division. (dd) “Preferred Products” means products in classes that have been evaluated and placed on the Practitioner Managed Prescription Drug Plan (PMPDP) PDL in OAR 410-121-0030; (ee) “Prescriber” means any person authorized by law to prescribe drugs; (ff) “Prescription Splitting” means any one or a combination of the following actions: (A) Reducing the quantity of a drug prescribed by a licensed practitioner for prescriptions not greater than 34 days, except as needed for Prescription Synchronization (see OAR 410-121-0146); (B) Billing the agency for more than one dispensing fee when the prescription calls for one dispensing fee for the quantity billed, except as needed for Prescription Synchronization (see OAR 410-121-0146); (C) Separating the ingredients of a prescribed drug and billing the agency for separate individual ingredients, with the exception of compounded medications (see OAR 410-121-0146); or (D) Using multiple 30-day cards to dispense a prescription when a lesser number of cards will suffice. (gg) “Prescription Synchronization” means the process of, at the client’s direction, aligning the refill dates of a client’s prescription drugs so drugs that are refilled at the same frequency may be refilled concurrently; (hh) “Prior Authorization Program (PA)” means the prior authorization program is a system of determining, through a series of therapeutic and clinical protocols, which drugs require authorizations prior to dispensing: (A) OAR 410-121-0040 lists the drugs or categories of drugs requiring PA; (B) The practitioner or practitioner's licensed medical personnel listed in OAR 410-121-0060 may request a PA. (ii) “State Supplemental Rebates” means the Division and CMS approved discounts paid by manufacturers per unit of drug. These rebates are authorized by the Social Security Act section 42 USC 1396r-8(a)(1) and are in addition to federal rebates mandated by the Omnibus Budget Rehabilitation Act (OBRA 90) and the federal rebate program; (jj) “Unit Dose” means a sealed, single unit container of medication so designed that the contents are administered to the patient as a single dose, direct from the container, and dispensed following the rules for the unit dose dispensing system established by the Oregon Board of Pharmacy; (kk) “Urgent Medical Condition” means a medical condition that arises suddenly, is not life-threatening, and requires prompt treatment to avoid the development of more serious medical problems; (LL) “Usual and Customary Price” means a pharmacy's charge to the general public that reflects all advertised savings, discounts, special promotions, or other programs including membership based discounts initiated to reduce prices for product costs available to the general public, a special population, or an inclusive category of customers; (mm) “Wholesale Acquisition Cost (WAC)” means the price paid by a wholesaler for drugs purchased from the wholesaler's supplier, typically the manufacturer of the drug. WAC is the price of a covered product by the National Drug Code (NDC) as published by First DataBank, MediSpan, or Red Book; (nn) “340B Pharmacy” means a federally designated community health center or other federally qualified covered entity that is listed on the Health Resources and Services Administration (HRSA) website. NOTE: Publications referenced are available from the agency. Statutory/Other Authority: ORS 413.042, 414.065 & 414.325 Statutes/Other Implemented: ORS 414.065 History: DMAP 71-2025, amend filed 09/25/2025, effective 10/01/2025 DMAP 11-2018, amend filed 03/02/2018, effective 03/02/2018 DMAP 76-2015, f. 12-22-15, cert. ef. 1-1-16 DMAP 44-2011, f. 12-21-11, cert. ef. 1-1-12 DMAP 27-2011(Temp), f. & cert. ef. 9-30-11 thru 3-15-12 DMAP 23-2011, f. 8-24-11, cert. ef. 9-1-11 DMAP 40-2010, f. 12-28-10, cert. ef. 1-1-11 DMAP 17-2010, f. 6-15-10, cert. ef. 7-1-10 DMAP 39-2009, f. 12-15-09, cert. ef. 1-1-10 DMAP 14-2009, f. 6-12-09, cert. ef. 7-1-09 DMAP 36-2008, f. 12-11-08, cert. ef. 1-1-09 OMAP 18-2004, f. 3-15-04, cert. ef. 4-1-04 OMAP 1-2003, f. 1-31-03, cert. ef. 2-1-03 OMAP 31-2001, f. 9-24-01, cert. ef. 10-1-01 OMAP 1-1999, f. & cert. ef. 2-1-99 HR 29-1990, f. 8-31-90, cert. ef. 9-1-90