(a) The department shall enter into demonstration contracts with manufacturers of medical supplies for four items of its own selection of medical supplies existing on the pharmacy claims processing system, for the purpose of establishing rebates or other cost-saving mechanisms and demonstrating cost savings in the purchase of these medical supplies. The department shall maintain a list of the supplies for which contracts have been executed.

(b) Nothing in this section shall prevent a small retail business from continuing to supply medical supplies for use by Medi-Cal beneficiaries.

(c) In establishing these demonstration contracts, the department shall preserve reasonable access to these supplies by beneficiaries. To ensure that the health needs of Medi-Cal beneficiaries are met, the department shall evaluate products and execute contracts pursuant to subdivision (c) of Section 14105.47.

(d) The department shall report the outcomes of these demonstration contracts to the Legislature no later than January 1, 2009.

(Amended by Stats. 2007, Ch. 188, Sec. 61. Effective August 24, 2007.)