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Report (OEI-03-10-00280)

01-09-2012
Comparison of Average Sales Prices to Widely Available Market Prices for Selected Drugs

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Summary

Federal law requires OIG to conduct studies that compare average sales prices (ASP) to widely available market prices (WAMP) and average manufacturer prices (AMP). If OIG finds that the ASP of a drug exceeds either the WAMP or AMP by a certain threshold (currently 5 percent), the Secretary of Health and Human Services may disregard the ASP for the drug when setting reimbursement amounts. Since the implementation of the ASP reimbursement methodology, OIG has issued 27 reports comparing ASPs to WAMPs and AMPs (2 comparing ASPs to WAMPs, 25 comparing ASPs to AMPs). The purpose of this review was to compare ASPs to WAMPs for 14 drugs that have been identified in previous OIG reports as repeatedly exceeding the 5-percent ASP-AMP threshold.

We requested sales data (including discounts and rebates) from each manufacturer and distributor of the 14 drugs under review for third-quarter 2009, fourth-quarter 2009, and first-quarter 2010. We calculated the volume-weighted WAMP for each of the 14 drugs in each of the three quarters and compared these figures to the volume-weighted ASPs obtained from CMS.

Limitations and irregularities in the sales data provided by the distributors and manufacturers called into question the data's accuracy and reliability, and prevented us from measuring WAMPs against the threshold. Because of limitations in the distributor-reported data, most of the sales data we received did not reflect discounts and rebates that were passed on to providers. Furthermore, the total number of units sold reported to us differed substantially from the number reported to CMS through quarterly ASP submissions, potentially resulting in our data reflecting an inaccurate number of sales. Most likely because of these issues, the WAMPs we calculated varied widely from other pricing points, and therefore we could not accurately determine whether any of the drugs exceeded the ASP-WAMP threshold. We plan to continue to fulfill our statutory mandate to conduct WAMP studies, and these issues will need to be addressed before any future efforts can be made to compare ASPs to WAMPs. We will consider alternative methodologies that will allow us to conduct pricing comparisons, including directly surveying providers to obtain accurate and complete sales data.

This report does not contain recommendations.

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