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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Elimination of the Weighted Average Manufacturer Price Provisions of the Medicaid Outpatient Prescription Drug Rebate Program," (A-06-93-00070)

December 28, 1993


Complete Text of Report is available in PDF format (793 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.

EXECUTIVE SUMMARY:

This final report presents the results of our review of the weighted average manufacturer price (WAMP) provisions of the Omnibus Budget Reconciliation Act (OBRA) of 1990 and its impact on the Medicaid outpatient prescription drug rebate program. The WAMP provisions of OBRA 1990, scheduled to become effective on January 1, 1994, were recently repealed by OBRA 1993. Our analysis showed that: (1) utilization data needed to make WAMP calculations would not be available on a timely basis and (2) WAMP calculations would be unpredictable and could have had a negative impact on Medicaid drug rebate collections. The Health Care Financing Administration (HCFA) agreed with our findings and pointed out that the WAMP provisions were recently repealed by OBRA 1993, which was signed by the President on August 10, 1993. As a result of the repeal of the WAMP provision no further action by HCFA is necessary.