Transcript Federal Upper Limit - Pro Pharma Pharmaceutical

Federal Upper Limit
Dimitry Gotlinsky
Western University
Rx Pricing
• It is extremely difficult to understand U.S.
pharmaceutical pricing
• Not everyone pays the same price
• Prices for different payers are often a
secret
• The only official price released by
pharmaceutical company is called WAC
• WAC(whole sale acquisition cost)- The price
paid by a wholesaler for drugs purchased from
the wholesaler's supplier
• AWP(avg, wholesale price) –an average of list
prices quoted by wholesalers to pharmacies
• -AMP(avg. manufacturer price)-an average
price paid to manufacturer by wholesalers for
drugs distributed to retail pharmacies
• -AMP is used in calculating Medicaid Rebates
What is FUL?
• In 1987 CMS (centers for Medicare & Medicaid
Services) established a Federal Upper Limit
• FUL was established to limit the amount that
Medicaid could reimburse for multiple-source
drugs
• Multiple source drugs-is the same as generic,
but multiple manufacturers make the same
medication
How does a drug get picked to be on FUL?
• 2 criteria's must be met
1)there must be 3 or more versions of the
drug rated therapeutically equivalent by
the FDA (A rated)
2) and the drug has at least three
suppliers listed in current editions of
national compendia
Problem with FUL
• FUL is updated only twice a year
• Not all categories of drugs are
covered under FUL
Reasons why generics may not have FUL
• 1. Very old generic
• 2. Recently marketed generics for
single source drugs whose patents
just expired
• 3. generic may have a 6 months period of
exclusivity granted by the FDA
What does it mean?
• Drug price competition benefits Medicaid
reimbursements
• Example
• In August 2001, a generic form of Prozac called Fluoxetine became
available
• Before the 1st generic was available Medicaid was reimbursing
$2.86 per capsule
• Once the 1st generic became available (it had 6 months exclusivity
period) Medicaid was reimbursing $2.46/capsule
• After the 6 months exclusivity period, reimbursement was $.70/cap
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This sets an incentive for pharmacies to purchase generics at lower than
FUL price.
Drug classes covered under FUL
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Narcotic analgesics (tylenol w/codeine)
Anti-virals (acyclovir)
Anti-gout (allopurinol)
Benzodiazepines (alprazolam)
B-blokers (atenolol)
Bronchodialators (albuterol)
Diuretics (bumetanide)
ACE inhibitors (captopril)
Anti-histamines (chlorpheniramine)
Cephalosporins (Keflex)
Antifungals (ketokonazole)
Continued
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H-2-antagonists (cimetidine)
TCA (clomipramine)
NSAIDs (diclofenac)
Topical steroids (desonide)
Ca channel blockeers (diltiazem)
SSRI (fluoxetine)
Muscle relaxants (carisoprodol)
Alpha adrenergic blockers (doxazosin)
Statin (lovastatin)
Sufonylureal (glyburide)
Typical antipsychotic (haldol)
Drugs not included in FUL
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These drugs meet the FUL criteria but are not included in the FUL
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Clozapine (anti-psychotic)
Morphine Sulfate (opioid)
Phentermine HCl (anorectic)
Sotalol HCl (anti-arrhythmic)
Bupropion (anti-depressant)
Clotrimazole cream (anti-fungal)
Dipyridamole (platelet aggregation inhibitor)
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●Since FUL does not cover all the drugs,
MAC (maximum alloawble cost) was
established
●PBM and TPA use MAC lists to cover all
generic medications
●Unlike FUL, MAC is updated monthly
Recommendation
• FULs were created to help Medicaid save
money by taking advantage of lower prices for
multiple-source drugs available
• There are more drugs that fit the criteria to be
added to FUL
• By including more drugs to FULs that meet the
requirement, can save millions of dollars to State
Medicaid
• Also, updating FUL at least once a month would
encourage greater use of cost-effective generic
drugs
THE END