(a) Drugs will be considered for the Medicaid preferred drug list based on clinical efficacy, side effect profiles, appropriate usage, and cost effectiveness.

(b) The Medicaid Pharmacy and Therapeutics Committee shall perform a thorough review of relevant clinical and medical considerations, including, but not limited to: Medicaid Drug Utilization Review (DUR) data; Surveillance Utilization Review (SUR) data; potential abuse, misuse, or inappropriate use in prescribing and/or dispensing patterns; inconsistency with FDA approved labeling, inconsistency with uses recognized in the American Hospital Formulary Service Drug Information, and the American Medical Association Drug Evaluations, or the U.S. Pharmacopoeia Dispensing Information.

(c) The Medicaid Pharmacy and Therapeutics Committee shall recommend and the Medicaid Agency shall adopt an initial Medicaid preferred drug list not later than three months after June 18, 2003. Until Medicaid adopts the preferred drug list required by this article, Medicaid shall continue to use its existing voluntary preferred drug list and prior authorization program. Drugs that currently require Medicaid prior authorization shall not be subject to review for inclusion on the preferred drug list and shall continue to require prior authorization unless the Medicaid Pharmacy and Therapeutics Committee recommends and the Medicaid Commissioner approves changing the requirement.

(d) Medicaid recipients may appeal prior authorization decisions using the Medicaid fair hearing process administered by the Alabama Medicaid Agency. Physicians may appeal prior authorization decisions to Medicaid's Medical Directors.