42 C.F.R. § 447.512 : Public Health — CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF HEALTH AND HUMAN SERVICES — MEDICAL ASSISTANCE PROGRAMS — PAYMENTS FOR SERVICES — PAYMENT FOR DRUGS — Drugs: Aggregate upper limits of payment

(a) Multiple source drugs. Except for brand name drugs that are certified in accordance with paragraph (c) of this section, the agency payment for multiple source drugs must not exceed, in the aggregate, the amount that would result from the application of the specific limits established in accordance with §447.514. If a specific limit has not been established under §447.514, then the rule for "other drugs" set forth in paragraph (b) of this section applies.
(b) Other drugs. The agency payments for brand name drugs certified in accordance with paragraph (c) of this section and drugs other than multiple source drugs for which a specific limit has been established under §447.514 must not exceed, in the aggregate, payment levels that the agency has determined by applying the lower of the following:
(1) AAC plus a professional dispensing fee established by the agency; or
(2) Providers' usual and customary charges to the general public.
(c) Certification of brand name drugs.
(1) The upper limit for payment for multiple source drugs for which a specific limit has been established under §447.514 does not apply if a physician certifies in his or her own handwriting (or by an electronic alternative means approved by the Secretary) that a specific brand is medically necessary for a particular beneficiary.
(2) The agency must decide what certification form and procedure are used.
(3) A check off box on a form is not acceptable but a notation like "brand necessary" is allowable.
(4) The agency may allow providers to keep the certification forms if the forms will be available for inspection by the agency or HHS.

42 C.F.R. §447.512

72 FR 39239, 7/17/2007, as amended at 75 FR 69597, 11/15/2010; 81 FR 5347, 2/1/2016