42 CFR §409.13

1. (a)Except as specified in paragraph (b) of this section, Medicare pays for drugs and biologicals as inpatient hospital or inpatient CAH services only if—
   1. (1)They represent a cost to the hospital or CAH;
   2. (2)They are ordinarily furnished by the hospital or CAH for the care and treatment of inpatients; and
   3. (3)They are furnished to an inpatient for use in the hospital or CAH.
2. (b)Exception. Medicare pays for a limited supply of drugs for use outside the hospital or CAH if it is medically necessary to facilitate the beneficiary's departure from the hospital and required until he or she can obtain a continuing supply.