U.S. flag

An official website of the United States government

Dot gov

The .gov means it's official.
Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you're on a federal government site.

Https

The site is secure.
The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Generic Drug Price Increases," (A-06-07-00042)

October 24, 2007

PDF File 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.

EXECUTIVE SUMMARY:

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.