Van De Kamp, 021684 CAAGO, AGO 83-909

Docket Nº:AGO 83-909
Case Date:February 16, 1984
Court:California
 
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JOHN K. VAN DE KAMP Attorney General
RODNEY O. LILYQUIST Deputy Attorney General
AGO 83-909
No. 83-909
California Attorney General Opinion
Office of the Attorney General State of California
February 16, 1984
         THE HONORABLE PETER RANK, DIRECTOR, DEPARTMENT OF HEALTH SERVICES, has requested an opinion on the following question:          Must the adjustment of drug product prices pursuant to Welfare and Institutions Code section 14105.7 be accomplished by adopting and amending formal regulations under the provisions of the Administrative Procedure Act?          CONCLUSION          The adjustment of drug product prices pursuant to Welfare and Institutions Code section 14105.7 may be accomplished by means other than adopting and amending formal regulations under the provisions of the Administrative Procedure Act.          ANALYSIS          Welfare and Institutions Code section 14105.7, subdivision (a),1 provides:
"In order to fairly reimburse pharmacies for the furnishing of prescription drugs to Medi-Cal beneficiaries, the director shall update allowable drug product prices no less often than every 60 days. The update shall include any prior change received notice. Notice to the director shall include, but not be limited to, publication of the price change in the supplier's catalog or supplement or in nationally distributed drug price reference guides."
         The question presented for analysis is whether the director of the Department of Health Services ("Department") may perform his statutory duties of adjusting drug product prices without adopting and amending formal regulations under the provisions of the Administrative Procedure Act (Gov. Code, §§ 11340-11528; hereafter "APA"). We conclude that he may.          The Department administers the Medi-Cal Act (§§ 14000-14199), enacted by the Legislature to provide "health care and related remedial or preventive services to recipients of public assistance and to medically indigent aged and other persons." (§ 14000; see Roberts v. Brian (1971) 6 Cal.3d 1, 4; Morris v. Williams (1967) 67 Cal.2d 733, 738-744; California Medical Assn. v. Brian (1973) 30 Cal.App.3d 637, 642.)          Services provided as benefits under the program include the purchase of prescription drugs "subject to the Medi-Cal Drug Formulary and Utilization Control." (§ 14132, subd. (d); see § 14053.)          The Department has previously issued detailed regulations which specify by name a select few prescription drugs (Cal. Admin. Code, tit. 22, §§ 51513-51513.6) and which are amended from time to time to reflect the price changes made under section 14105.7. The Department believes that such formal administrative action is burdensome, unnecessary, and in conflict with the language and intent of section 14105.7.          The Office of...

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