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Drug Spending

Updated: 12-16-2024

For over 25 years, the HHS Office of Inspector General has conducted work to assess drug spending in HHS programs. This work covers three domains: reimbursement, program compliance, and incentive alignment. This page is a compilation of completed reports, unimplemented recommendations, enforcement actions, and industry guidance.

Industry Guidance

The Federal anti-kickback statute¹ makes it a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce or reward referrals of items or services reimbursable by a Federal health care program. Where remuneration is paid purposefully to induce or reward referrals of items or services payable by a Federal health care program, the anti-kickback statute is violated. In addition, the civil monetary penalty provision prohibiting inducements to beneficiaries (the CMP)² against any person who gives something of value to a beneficiary of Medicare or a State health care program (including Medicaid) that the benefactor knows or should know is likely to influence the beneficiary's selection of a particular provider, practitioner, or supplier of any item or service for which payment may be made, in whole or in part, by Medicare or a State health care program (including Medicaid).

The resources below provide guidance on OIG's interpretation and enforcement of these statutes in the context of drug pricing and reimbursement.

• OIG Policy Statement Regarding Hospitals That Discount or Waive Amounts Owed by Medicare Beneficiaries for Self-Administered Drugs Dispensed in Outpatient Settings (October 29, 2015) This document assures hospitals that they will not be subject to OIG administrative sanctions for discounting or waiving amounts that Medicare beneficiaries may owe for self-administered drugs they receive in outpatient settings when those drugs are not covered by Medicare Part B, subject to certain specified conditions.
• Special Advisory Bulletin: Pharmaceutical Manufacturer Copayment Coupons (September 16, 2014) This special advisory bulletin was issued concurrently with a report that analyzed the measures pharmaceutical manufacturers use to prevent their coupon programs from inducing the purchase of drugs paid for by Medicare Part D.
• Special Advisory Bulletin: Patient Assistance Programs for Medicare Part D Enrollees (November 7, 2005) and Supplemental Special Advisory Bulletin: Independent Charity Patient Assistance Programs (May 21, 2014) These related special advisory bulletins provide guidance regarding patient assistance programs operated by independent charities that provide cost-sharing assistance for prescription drugs. (News Release)
• Compliance Program Guidance for Pharmaceutical Manufacturers (68 Fed. Reg. 23731; May 5, 2003) This guidance sets forth specific elements that pharmaceutical manufacturers should consider when developing and implementing an effective compliance program and includes a discussion of key areas of potential risk under the anti-kickback statute.

Footnotes

¹ See section 1128B(b) of the Social Security Act.

² See section 1128A(a)(5) of the Social Security Act.