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PUBLIC LAW 103-66—AUG. 10, 1993 107 STAT. 615 which payment was made under the State plan for the rebate period; and **(ii) the amount (if any) by which— "(I) the average manufacturer price for the dosage form and strength of the drug for the period, exceeds ''(II) the average manufacturer price for such dosage form and strength for the calendar quarter beginning July 1, 1990 (without regard to whether or not the drug has been sold or transferred to an entity, including a division or subsidiary of the manufactiirer, after the first day of such quar- ter), increased by the percentage by which the consumer price index for all urban consumers (United States city average) for the month before the month in which the rebate period begins exceeds such index for September 1990. "(B) TREATMENT OF SUBSEQUENTLY APPROVED DRUGS.— In the case of a covered outpatient drug approved by the Food and Drug Administration after October 1,1990, clause (iiXII) of subparagraph (A) shall be applied by substituting 'the first full calendar quarter after the day on which the drug was first marketed' for 'the calendar quarter beginning July 1, 1990' and the month prior to the first month of the first full calendar quarter after the day on which the drug was first marketed' for 'September 1990'. "(3) REBATE FOR OTHER DRUGS.— "(A) IN GENERAL.—^The amount of the rebate paid to a State for a rebate period with respect to each dosage form and strength of covered outpatient drugs (other than single source drugs and innovator multiple source drugs) sh£dl be equal to the product of— "(i) the applicable percentage (as described in subparagraph (B)) of the average manufacturer price for the dosage form and strength for the rebate period, and "(ii) the total number of units of such dosage form and strength dispensed after December 31, 1990, for which pajrment was made luider the State plan for the rebate period. "(B) APPUCABLE PERCENTAGE DEFINED.—For purposes of subparagraph (AXi), the 'applicable percentage' for rebate periods beginning— "(i) before January 1, 1994, is 10 percent, and "(ii) after December 31,1993, is 11 percent. "(d) LIMITATIONS ON COVERAGE OF DRUGS.— "(1) PERMISSIBLE RESTRICTIONS.—(A) A State mav subject to prior authorization any covered outpatient drug. Any such prior authorization program shall comply with the requirements of paragraph (5). "(B) A State may exclude or otherwise restrict coverage of a covered outpatient drug if— "(i) the prescribed use is not for a medically accepted indication (as defined in subsection (kX6)); "(ii) the drug is contained in the list referred to in paragraph (2); -194 O - 94 - 21 : QL. 3 Part 1