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Audit (A-07-10-03143)

03-02-2011
Review of Erectile Dysfunction Drugs in the Medicare Part D Program

Executive Summary

Of approximately $133 billion in gross drug costs included in private prescription drug plans' and Medicare Advantage plans' (collectively known as sponsors) prescription drug event (PDE) data for calendar years (CY) 2007 and 2008, CMS accepted PDE data totaling $3.1 million in gross Medicare Part D drug costs for erectile dysfunction (ED) drugs approved only for the treatment of sexual or erectile dysfunction. Pursuant to Federal requirements, Part D should not have covered these drugs.

According to CMS officials, the software edit in place in CMS's Medicare Drug Data Processing System during our audit period did not prevent CMS from accepting PDE data for some ED drugs in CY 2007 and most of CY 2008 because the Part D program used an incomplete list of excluded drugs as the basis for the edit. Although the officials indicated that CMS had updated its list of ED drugs in CY 2008, CMS accepted PDE data for some ED drugs during our entire audit period.

We recommended that CMS (1) determine whether it can impose financial adjustments on sponsors that were paid for furnishing ED drugs used for the treatment of sexual or erectile dysfunction and (2) strengthen internal controls to help ensure that drugs covered by Medicare Part D comply with Federal requirements by collaborating with the Food and Drug Administration (FDA) to create and maintain a comprehensive list of ED drugs that have been approved by FDA for the treatment of sexual or erectile dysfunction, regularly disseminating this list to all sponsors, and periodically updating the edit used to reject PDE data for ED drugs used for the treatment of sexual or erectile dysfunction. CMS partly agreed and partly disagreed with our recommendations. Nothing in CMS's comments caused us to change our findings or recommendations.

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