Limitations in Manufacturer Reporting of Average Sales Price Data for Part B Drugs

WHY WE DID THIS STUDY

Manufacturer-reported average sales prices (ASPs) serve as the basis for most Part B drug payment amounts. Complete ASP data ensure that payment amounts are accurate and are reflective of all manufacturer sales prices. Previous OIG work has shown that CMS lacks complete ASP data for certain drugs because (1) not all manufacturers that are required to report ASPs are doing so and (2) not all manufacturers of Part B drugs are required to report ASPs. OIG has previously recommended that CMS consider seeking a legislative change to require all manufacturers of Part B drugs to submit ASPs. In response, CMS stated that it would be helpful if OIG provided a full analysis of the policy's implications.

HOW WE DID THIS STUDY

We compared data in CMS's background and crosswalk files-the agency's two ASP related files-with two national drug compendia to determine the number of manufacturers that did not report required ASPs in the third quarter of 2012. We then determined the number of additional manufacturers that would be required to submit ASPs if reporting requirements were extended to all manufacturers of Part B drugs. We also identified national drug codes (NDCs) with incorrect product and pricing information in CMS's ASP files. Finally, we surveyed CMS officials and reviewed CMS policies to determine whether the agency has improved ASP collection and verification processes since the publication of OIG's prior work.

WHAT WE FOUND

At least one-third of the more than 200 manufacturers of Part B drugs did not submit ASPs for some of their products in the third quarter of 2012, despite being required to do so. An additional 45 manufacturers of Part B drugs were not required to report ASPs that quarter. Furthermore, for a small number of drugs, inaccuracies in CMS's ASP files may have affected Medicare payments. Finally, CMS has improved its ASP-related processes and procedures; however, challenges remain.

WHAT WE RECOMMEND

We recommend that CMS (1) continue to assist OIG in identifying and penalizing manufacturers that do not meet ASP reporting requirements; (2) seek a legislative change to directly require all manufacturers of Part B drugs to submit ASPs; (3) ensure the accuracy of product information for NDCs listed in the background and crosswalk files; and (4) finalize the implementation of automated ASP-related procedures by using processes related to average manufacturer price as a model, and subsequently require all manufacturers to submit ASPs through the automated system. CMS concurred with our first, third, and fourth recommendations, but did not concur with our recommendation to seek a legislative change.