Section 3761-706 - Excessive pharmaceutical price inflation discount(a) General rule.--A discount shall be provided to the department for all covered prescription drugs except those excluded under subsection (d) . The discount shall be calculated as follows:(1) For each quarter for which a rebate under section 705(a) and (b) is to be paid after December 31, 1991, and before January 1, 1997, the average manufacturer price for each dosage form and strength of a covered prescription drug shall be compared to the average manufacturer price for the same form and strength in the previous calendar year, and a percentage increase shall be calculated.(2) For each quarter under paragraph (1), the average percentage increase in the Producer Price Index for Pharmaceuticals over the same quarter in the previous calendar year shall be calculated.(3) If the calculation under paragraph (1) is greater than the calculation under paragraph (2), the discount amount for each quarter shall be equal to the product of: (i) the difference between the calculations under paragraphs (1) and (2); and(ii) the total number of units of each dosage form and strength reimbursed by PACE and General Assistance and the average manufacturer price reported by the manufacturer under section 704(c)(1) . (b) Revised general rule.--A discount shall be provided to the department for all covered prescription drugs except those excluded under subsection (d). The discount shall be calculated as follows: (1) For each quarter for which a rebate under section 705(a) and (c) is to be paid after December 31, 1996, the average manufacturer price for each dosage form and strength of a covered prescription drug shall be compared to the average manufacturer price for the same form and strength in the previous calendar year and a percentage increase shall be calculated.(2) For each quarter under paragraph (1), the average percentage increase in the Consumer Price Index-Urban over the same quarter in the previous calendar year shall be calculated.(3) If the calculation under paragraph (1) is greater than the calculation under paragraph (2), the discount amount for each quarter shall be equal to the product of: (i) the difference between the calculations under paragraphs (1) and (2); and(ii) the total number of units of each dosage form and strength reimbursed by PACE, PACENET and designated pharmaceutical programs and the average manufacturer price reported by the manufacturer under section 704(c)(1).(c) New bimarketed drugs.--For covered prescription drugs that have not been marketed for a full calendar year, subsection (a) shall apply after the covered prescription drug has been on the market for four consecutive quarters. The drug's initial average manufacturer price shall be based on the first day of the first quarter that the drug was marketed.(d) Applicability.--This section shall not apply to a noninnovator multiple-source prescription drug or generic prescription drug.1971, Aug. 26, P.L. 351, No. 91, § 706, added 1996, Nov. 21, P.L. 741, No. 134, § 2, imd. effective. Amended 2006, July 7, P.L. 1061, No. 111, § 12, effective 1/1/2007.