HealthMarch 14, 2016

The FUL story: What you need to know about new ACA FUL pricing

The federal government is publishing a new drug pricing benchmark. Are you ready?

What is ACA FUL?

The Affordable Care Act Federal Upper Limit — or ACA FUL — is a drug pricing benchmark based on a new formula detailed in the Affordable Care Act. Once the federal government publishes this data, it will render long-standing pricing benchmark CMS FUL (Centers for Medicare and Medicaid Services Federal Upper Limit) obsolete.

The Centers for Medicare and Medicaid Services (CMS) anticipates the ACA FUL changes to take effect on April 1, 2016.

CMS is basing the new FUL pricing on Average Manufacturer’s Price (AMP). See below for more detail.

What does that mean for my business?

Healthcare businesses are anticipated to use ACA FUL information to establish reimbursement for drugs covered under Medicaid. Businesses that currently reference CMS FUL will need to transition to using ACA FUL instead.

Understanding the benchmarks

ACA FUL will be included among a variety of commonly consulted drug pricing benchmarks. They are derived from various methods and represent nuanced different assessments for comparison, analysis, and decisions related to reimbursement and product positioning.

  • AWP — Average Wholesale Price is a drug price data point that has evolved over the past 40 years. Originally, it was intended to represent an average of prices for which certain large wholesalers reported they would sell a medication to providers or pharmacies. Now, AWP is more like a manufacturer-reported “list price.” It is not based on actual wholesaler sales information, and it is usually higher than the price at which wholesalers will sell a drug to a provider or pharmacy.
  • WAC — Wholesale Acquisition Cost is a drug price data point that represents a manufacturer-reported “list price” at which that manufacturer will sell a medication to a wholesaler. Like AWP, WAC is not based on actual sales information, and it is usually higher than the price at which a manufacturer will sell a drug to a wholesaler.
  • AMP — Average Manufacturer Price is a drug price data point indicating the average price paid to manufacturers by wholesalers for drugs that are ultimately distributed to retailers. AMP is based on actual drug sales information reported to CMS by drug manufacturers. Manufacturers must report AMP data for all Medicaid-covered drugs to CMS each quarter to meet Medicaid drug rebate program requirements. AMP data is proprietary to CMS.
  • NADAC — National Average Drug Acquisition Cost is a drug price data point that based on CMS surveys of chain and independent pharmacies to determine prices retail pharmacies pay to purchase drug products. It is intended primarily for use by state Medicaid. NADAC data is proprietary to CMS.

How we help

Wolters Kluwer will provide ACA FUL pricing data through its Medi-Span Federal Government Pricing File and within the Medi-Span Price Rx drug pricing analysis tool.

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