Wednesday, June 04, 2014

FULs Delayed (Again); AMP Final Rule Scheduled for June (LOL)

The Center for Medicare & Medicaid Services (CMS) just announced plans to finalize the Federal Upper Limits (FUL) for multiple source drugs sometime before the universe collapses into a dimensionless singularity.

In the meantime, CMS postponed its previously announced July 2014 deadline for finalizing the FULs. For CMS aficionados, the email notice is pasted below. (CMS apparently can’t be bothered to update its FUL website.)

In related non-news, the Office of Information and Regulatory Affairs website now taunts us with a June 2014 arrival for the oft-delayed Final Rule on Covered Outpatient Drugs, a.k.a., the Average Manufacturer Price (AMP) Final Rule. (Read my November note on the last three delays.) Long-time readers may vaguely recall my January 2012 write-up of the proposed rule: New AMP Rule Targets Bona Fide Service Fees.

As my teenage daughter would say: What-ever. See the AMP notice below. I expect the AMP rule to be released after the mid-term elections.

Here’s the CMS email postponing the FUL finalization.
“We are sharing the following notification which was provided to states and stakeholders on Monday, June 2, 2014.
This is to notify stakeholders that we will not be finalizing the Affordable Care Act Federal Upper Limits (FULs) in July 2014, as we previously announced in the Center for Medicaid and CHIP Services (CMCS) Informational Bulletin issued on November 27, 2013. In the November 2013 Informational Bulletin, we stated that further detailed guidance would be provided for states to implement the Affordable Care Act FULs, and we remain committed to ensuring that this guidance is provided to states with sufficient time to implement the FULs. We expect to provide a new finalization date for the FULs when we release this subsequent guidance to states. We will continue to analyze the draft monthly Affordable Care Act FUL data, including the relationship of these FULs to the National Average Drug Acquisition Cost pricing, as we continue to work to implement the FUL provisions of section 1927(e)(4) of the Social Security Act. We will also continue to post the draft monthly Affordable Care Act FUL files on
For more information on the Affordable Care Act FULs, please visit
The infinite delay is good news for the pharmacy industry.

When (if?) the new AMP-based FULs get implemented, pharmacies in many states will face reimbursement cuts of 30% or more. See Obamacare Will Squeeze Pharmacy Profits. Hence the title of this NACDS press release: NACDS Expresses Appreciation for CMS’ Announcement on AMP-based FULs.

Fans of Congressional irony will appreciate that Section 2503 of the Affordable Care Act, which created the AMP-based FULs, is named "Providing Adequate Pharmacy Reimbursement."

The AMP Final Rule notice below appears on the Office of Information and Regulatory Affairs website (Click to enlarge.) Note the date for Final Action is "06/00/2014." So, we can expect the rule to be released on the 0th of June, right?

[Click to Enlarge]

At this rate, CMS will finish the Affordable Care Act’s implementation just in time for President Chelsea Clinton's inauguration. Stay tuned (or not).


  1. 'Adequate' could be a very carefully chosen word!

  2. Some where along the line someone forgot that rebates count. They really count. In fact toward millions of dollars in savings to taxpayers.

    What everyone missed is that Federal Upper Limits do not allow a state to pay for a brand name drug when it is less expensive than the generic, unless the doctor writes or signifies electronically that the brand name product is medically necessary.

    Oppps, how did this happen? Rebates happened! Rebates were federally mandated to be paid by drug manufacturers. Some rebates are so big that they end up making Brand name drug products fee to Medicaid. What didn't happen was the needed update to the old Federal Upper Limit (FUL) language under the Social Security Act. If FUL's were put in place today state Medicaid agencies would not have a choice to prefer the free or less expansive brand name drugs.