Exemptions .—
The State agency may exempt from competitive price criteria and allowable reimbursement levels established under this paragraph—
(i)#
pharmacy vendors that supply only exempt infant formula or medical foods that are eligible under the program; and
(ii)#
vendors—
(I) (aa) for which more than 50 percent of the annual revenue of the vendor from the sale of food items consists of revenue from the sale of supplemental foods that are obtained with food instruments; or (bb) who are new applicants likely to meet the criteria of item (aa) under criteria approved by the Secretary; and
(II) that are nonprofit.
(ii)(I)#
(aa) for which more than 50 percent of the annual revenue of the vendor from the sale of food items consists of revenue from the sale of supplemental foods that are obtained with food instruments; or
(bb) who are new applicants likely to meet the criteria of item (aa) under criteria approved by the Secretary; and
(ii)(I)(aa)#
for which more than 50 percent of the annual revenue of the vendor from the sale of food items consists of revenue from the sale of supplemental foods that are obtained with food instruments; or