(1) The state maximum allowable cost (SMAC) is the state average acquisition cost per drug determined by direct pharmacy survey, wholesale survey, and other relevant cost information.

(a) The department will review SMAC rates on an ongoing basis and adjust the rates as necessary to reflect prevailing market conditions and ensure reasonable access by providers to drugs at or below the applicable SMAC rate.

(b) Pharmacies and providers that are enrolled in Montana Medicaid are required, as a condition of participation, to submit, upon request, to the department, or its designee, acquisition cost information, product availability information, and other information deemed relevant by the department for the efficient operation of the pharmacy benefit. Information will be provided in the format requested by the department or its designee. Providers will not be reimbursed for this information and will submit information to the department or its designee within 30 days following a request for such information unless the department or its designee grants an extension upon written request of the pharmacy or provider.

(2) The estimated acquisition cost (EAC) for a drug is:

(a) the direct price charged by manufacturers to retailers;

(b) 85% of the average wholesale price (AWP) if there is no direct price available to providers in the state; or

(c) a department set SMAC for specified drugs or drug categories when the department determines that acquisition cost is lower than (2 )(a) or (b) based on national pricing data.

(3) The usual and customary charge is the price the provider charges a typical customer in the provider's typical course of business.