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In 1987, regulations limited the amount which Medicaid could reimburse for drugs with available generic drugs under the Federal Upper Limit (FUL) Program. These limits are intended to assure that the Federal government acts as a prudent buyer of drugs. The concept of the upper limits program is to achieve savings by taking advantage of the current market prices. Until the passage of the Omnibus Budget Reconciliation Action of 1990 (OBRA '90), FUL could be established only if all versions of a drug product had been classified as therapeutically equivalent (A-rated) by the Food and Drug Administration (FDA) in its publication "Approved Drug Products with Therapeutic Equivalence Evaluations" and at least three suppliers were listed in the current editions of published national compendia. OBRA '90 expanded that criteria and permitted the establishment of a FUL for a drug product if there are three (or more) versions of the product rated therapeutically equivalent (A-rated) regardless of the rating of other versions (B-rated) and at least three suppliers are listed in the current editions of published national compendia. Update: On July 15, 2008, the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), Public Law 110-275, was enacted. As a result of this legislation, we are prohibited from taking any action, prior to October 1, 2009, to impose FULs for multiple source drugs established under 42 CFR 447.514(b) as published in the final rule on July 17, 2007. In accordance with the law, the specific upper limit under 42 CFR 447.332 (as in effect on December 31, 2006) applicable to payments for multiple source drugs shall continue to apply through September 30, 2009, for purposes of Federal financial participation. Accordingly, the Centers for Medicare & Medicaid Services (CMS) resumed publishing the FULs for multiple source drugs, using the methodology in 42 CFR 447.332 as in effect on December 31, 2006.
Page Last Modified: 12/12/2008 11:53:17 AM
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