OIG Publishes Medicare Drug Pricing Information
The OIG has published a series of reports examining the Medicare drug costs. Take a look:
A. “Medicaid Drug Price Comparison: Average Sales Price to Average Wholesale Price,” (US Department of Health and Human Service, Office of Inspector General, OEI-03-05-00200, June 2005, .pdf format, 15p.).
Summary:
“[This report] examined prices for Medicare-covered drugs (2,077 national drug codes). Medicare-covered drugs may also be covered by the Medicaid program. This report found that ASP is 49 percent lower than AWP. The difference between ASP and AWP was also greatest for generic drugs, similar to the companion report. For single source brand codes, ASP is 26 percent below AWP at the median, and for multisource brand codes, ASP is 30 percent below AWP at the median. For generic national drug codes, ASP is 68 percent less than AWP at the median. OIG also found that the differences between AWP and other prices analyzed are similar for both reports. OIG found that the difference between AMP and AWP for generic drugs is 72 percent for Medicare-covered drugs. For single source and multisource brand drugs, this report found that the differences between AMP and AWP for Medicare-covered drugs are 22 and 25 percent, respectively.”
http://www.oig.hhs.gov/oei/reports/oei-03-05-00200.pdf
B. “Medicaid Drug Price Comparisons: Average Manufacturer Price to Published Prices,” (US Department of Health and Human Service, Office of Inspector General, OEI-05-05-00240, June 2005, .pdf format, 27p.) .
Summary:
“[This report] examined prices for Medicaid-reimbursed drugs (24,101 national drug codes). This report found that at the median, AMP is 59 percent lower than AWP. In comparison, the median AWP-based State estimated acquisition cost formula is AWP minus 12 percent. The difference between AMP and published prices was greatest for generic drugs. For generic drugs, AMP is 70 percent lower than AWP at the median. In comparison, AMP is 23 percent lower than AWP at the median for single source brands and 28 percent lower for multisource brands.”
http://www.oig.hhs.gov/oei/reports/oei-05-05-00240.pdf
C. “Comparison of Medicaid Federal Upper Limit Amounts to Average Manufacturer Prices,” (US Department of Health and Human Service, Office of Inspector General, OEI-03-05-00110, June 2005, .pdf format, 19p.).
Summary:
“In this inspection, the OIG found that, overall, Federal upper limit amounts were five times higher than the average manufacturer prices (AMP) for generic drug products in the third quarter of 2004. During the same period, the Federal upper limit amount was, on average, 22 times higher than the lowest reported AMP. If Medicaid based Federal upper limit amounts on reported AMPs, the program could save hundreds of millions of dollars per year. OIG recommended that CMS work with Congress to set Federal upper limit amounts that more closely approximate acquisition costs. CMS concurred with OIG’s recommendation.”