CHAPTER 5. Administration [130540. - 130544.]

Cal. Health and Safety Code - HSC 5.
in effect

Cal. Health and Safety Code - HSC § 130540. Section 130540.

(a) Contracts, contract amendments, change orders, change requests, and any project or systems development notices, entered into for purposes of this division, shall be subject to the same exemptions provided for in the Medi-Cal drug program and those provided to the department in paragraph (4) of subdivision (c) of Section 124977. In addition, contracts, contract amendments, change orders, change requests, and any project or systems development notices, entered into for purposes of this division, are specifically exempt from: (1) Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code. (2) The competitive bidding requirements of State Administrative Manual Management Memo 03-10. (3) The project authority requirements of State Administrative Manual, Section 4800 et seq. (4) Section 11.00 and Provision 6 of Item 4260-001-0001 of Section 2 of the Budget Act of 2006 and related Budget letters. (b) Contracts with pharmacies and drug manufacturers may be entered into on a bid or nonbid basis. (c) Change orders entered into pursuant to this division shall not require a contract amendment. (d) To the extent that any exemption set forth in this section conflicts with exemptions set forth in paragraph (4) of subdivision (c) of Section 124977, the exemption in this section shall govern over the conflicting provision in Section 124977.

Cal. Health and Safety Code - HSC § 130541. Section 130541.

To implement the program, the department may contract with a third-party vendor or utilize existing health care service provider enrollment and payment mechanisms, including the Medi-Cal program’s fiscal intermediary. Drug discount agreements negotiated by a third party shall be subject to review by the department. The department may cancel a contract that it finds not in the best interests of the state or program participants. Participating pharmacy contracts entered into pursuant to Section 130505 shall be considered contracts between the participating pharmacy and the department and shall not be associated with, or leveraged against, other third-party agreements.

Cal. Health and Safety Code - HSC § 130542. Section 130542.

(a) The department shall deposit all payments the department receives pursuant to this division into the California Discount Prescription Drug Program Fund, which is hereby established in the State Treasury. (b) Notwithstanding Section 13340 of the Government Code, the fund is hereby continuously appropriated to the department without regard to fiscal year for the purpose of providing payment to participating pharmacies pursuant to this division and for defraying the costs of administering this division. (c) Notwithstanding any other provision of law, no money in the fund is available for expenditure for any other purpose or for loaning or transferring to any other fund, including the General Fund, except as provided in Section 130542.1. The fund shall also contain any interest accrued on moneys in the fund.

Cal. Health and Safety Code - HSC § 130542.1. Section 130542.1.

(a) It is the intent of the Legislature that the program shall be self-financing and that General Fund moneys provided to the fund shall be repaid within five years after implementation of the program begins. The department shall provide the Legislature with a five-year projection of program revenues and expenditures as part of its annual budget request. The projection shall include a projected General Fund repayment schedule. (b) The department may use up to 25 percent of manufacturer rebate revenues to administer the program, including the funding of a float account to finance payments to participating pharmacies in advance of the receipt of manufacturer rebates.

Cal. Health and Safety Code - HSC § 130543. Section 130543.

(a) The director may adopt regulations as are necessary to implement and administer this division. (b) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the director may implement this division, in whole or in part, by means of a provider bulletin or other similar instructions, without taking regulatory action, provided that no bulletin or other similar instructions shall remain in effect after August 1, 2015. It is the intent that regulations adopted pursuant to this section shall be adopted on or before August 1, 2015.

Cal. Health and Safety Code - HSC § 130544. Section 130544.

If any provision of this division, or the application thereof, is for any reason, held invalid, ineffective, or unconstitutional by a court of competent jurisdiction, the remainder of this division, or the application of this provision, shall not be affected thereby, and to this end the provisions of this division are severable.
Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026