DEPARTMENT OF HEALTH & HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, Maryland 21244-1850 
 
Center for Medicaid and State Operations 
SMDL #08-008 
November 3, 2008 
Dear State Medicaid Director: 
The Centers for Medicare & Medicaid Services (CMS) is issuing this State Medicaid Director Letter 
to notify you of the latest update to the Federal Upper Limit (FUL) listing.  This letter will also 
provide you with information on certain provisions in the Medicare Improvements for Patients and 
Providers Act of 2008 (MIPPA), Public Law 110-275, regarding pharmacy reimbursement for 
multiple source drugs under the Medicaid program and publication of average manufacturer prices 
(AMPs). 
Prior to the passage of the Deficit Reduction Act of 2005 (DRA), CMS updated the FUL list on a 
quarterly basis.  The last update was issued in December 2006, in accordance with procedures that 
pre-dated the effective date of these DRA amendments. 
Section 203 in MIPPA prohibits CMS from taking any action, prior to October 1, 2009, to impose the 
specific upper limits for multiple source drugs established under 42 CFR 447.514(b) as published 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.  Therefore, CMS will 
update the FULs for multiple source drugs using the methodology in 42 CFR 447.332 as in effect on 
December 31, 2006. 
These FULs will continue to be disseminated through transmittals consistent with the MIPPA 
provisions.  The first transmittals include updates with respect to multiple source drug listings and will 
be followed by transmittals which will update published prices.  We have published our first 
transmittal on the Medicaid Federal Upper Limit Web site, at: 
http://www.cms.hhs.gov/Reimbursement/.  We will continue to give States a 30-day period to 
implement the FUL prices with each publication. 
Additionally, MIPPA prohibits CMS from making AMPs publicly available prior to October 1, 2009.  
In accordance with that provision, we will not include that information on our Web site.  Page 2  State Medicaid Director 
If you have any questions regarding these provisions, you may contact Ms. Gale Arden, Director, 
Disabled & Elderly Health Programs Group, at (410) 786-6810, or Ms. Deirdre Duzor, Director, 
Division of Pharmacy, at (410) 786-4626. 
Sincerely, 
/s/ 
Herb B. Kuhn 
Deputy Administrator 
Acting Director, Center for Medicaid and State Operations 
cc:  
CMS Regional Administrators 
CMS Associate Regional Administrators 
Division of Medicaid and Childrens Health 
Ann C. Kohler 
NASMD Executive Director 
American Public Human Services Association 
Joy Wilson 
Director, Health Committee 
National Conference of State Legislatures 
Matt Salo 
Director of Health Legislation 
National Governors Association 
Debra Miller 
Director for Health Policy 
Council of State Governments 
Christie Raniszewski Herrera 
Director, Health and Human Services Task Force 
American Legislative Exchange Council 
Barbara W. Levine 
Chief, Government Relations and Legal Affairs 
Association of State and Territorial Health Officials