Department of Health and Human Services
Office of Inspector General -- AUDIT
"Review of Generic Drug Price Increases," (A-06-07-00042)
October 24, 2007
Complete Text of Report is available in PDF format (276 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.
Generic drug price increases exceeded the specified
statutory inflation factor applicable to brand-name drugs for 35 percent of the
quarterly average manufacturer prices reviewed. If the provision for brand-name
drugs were extended to generic drugs, the Medicaid program would receive
additional rebates. By applying the method in the Social Security Act for
calculating additional rebates on brand-name drugs to generic drugs,
we calculated that the Medicaid program would have received a total of $966
million in additional rebates for the top 200 generic drugs, ranked by Medicaid
reimbursement, from 1991 through 2004.
We recommended that the Centers for Medicare & Medicaid Services (CMS) consider seeking legislative authority to extend the additional rebate provisions to generic drugs. CMS agreed to consider the recommendation when it considers future legislative proposals.