OIG: CMS Too Hesitant to Cut Part B Drug Prices

Monday, March 9, 2015

Source: FDA News

The HHS Inspector General is urging the Centers for Medicare & Medicaid Services to expand price substitutions for Medicare Part B drugs, saying the move could save millions of dollars a year.

HHS is allowed to cut the price it pays a drugmaker to 103 percent of the average price the company receives from all wholesalers if the price the company charges CMS exceeds the average sales price of the drug to all customers by five percent.

CMS has so far used the authority on a limited group of 15 drugs in 2013. However, 20 others exceeded the 5 percent threshold in one quarter, OIG says, but CMS did not impose price substitution.

These results aren’t a fluke based on temporary market fluctuations, OIG says. Nearly all 20 drugs had exceeded the 5 percent threshold at some point before or after that one quarter and 11 exceeded it once in the previous five quarters.

Reducing the prices of these 20 drugs could have saved Medicare and its beneficiaries $3.6 million between the fourth quarter of 2013 and the third quarter of 2014, the report says. OIG didn’t specify the 20 drugs and didn’t return a request for comment by press time.

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