Fair Medicaid Drug Payment Act of 2007

Fair Medicaid Drug Payment Act of 2007 - Amends title XIX (Medicaid) of the Social Security Act to direct the Secretary of Health and Human Services to calculate the federal upper reimbursement limit as no less than 300% of the weighted average (based on utilization) of the most recent average manufacturer prices (AMPs) for pharmaceutically and therapeutically equivalent multiple source drug products available for purchase by retail community pharmacies on a nationwide basis. Directs the Secretary to implement a smoothing process for AMPs to ensure that federal upper reimbursement limits do not vary significantly from month to month as a result of rebates, discounts, and other pricing practices.

Requires a state plan to subject to prior authorization all covered outpatient drug products that are innovator multiple source drugs, if such drug products are more expensive than other biologically and therapeutically equivalent drug products available for purchase in that state by retail community pharmacies.

Revises requirements for monthly reports to the Secretary of price information by manufacturers subject to rebate agreements.