Drug Spending
Updated: 02-09-2022
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.
Recommendations
OIG makes recommendations to HHS that promote efficiency and effectiveness in the administration of HHS programs and operations. These recommendations generally stem from OIG's audits and evaluations. For a list of unimplemented recommendations across HHS programs, see the Top Unimplemented Recommendations.
Below is a list of the unimplemented recommendations in the drug spending area that would most positively affect HHS programs in terms of saving money and/or improving quality and should therefore be prioritized for implementation.
| Unimplemented Recommendation | Report | Work Area |
|---|---|---|
| CMS should provide States with acquisition cost data for a wider range of specialty drugs. | States Could Do More to Oversee Spending and Contain Medicaid Costs for Specialty Drugs (OEI-03-17-00430) (Issue Date: 12-23-2020) | Program Compliance |
| CMS should work with the manufacturers associated with errors to correct and resubmit accurate product data. | Some Manufacturers Reported Inaccurate Drug Product Data to CMS (OEI-03-19-00200) (Issue Date: 09-11-2020) | Program Compliance |
| CMS should develop and execute a strategy to ensure Part D does not pay for drugs that should be covered by the Part A hospice benefit. | Medicare Part D Is Still Paying Millions for Drugs Already Paid for Under the Part A Hospice Benefit (A-06-17-08004) (Issue Date: 08-01-2019) | Program Compliance |
| CMS should require the use of claim-level methods to identify 340B drugs. | State Efforts to Exclude 340B Drugs from Medicaid Managed Care Rebates (OEI-05-14-00430) (Issue Date: 06-06-2016) | Program Compliance |
| CMS should amend current regulations to decrease the Part B payment rates for dispensing and supplying fees to rates similar to those of other payers, such as Part D and Medicaid. | Medicare Part B Prescription Drug Dispensing and Supplying Fee Payment Rates Are Considerably Higher Than the Rates Paid by Other Government Programs (A-06-12-00038) (Issue Date: 09-15-2014) | Reimbursement |
| CMS should examine the potential impacts of establishing a prescription drug rebate program under Medicare Part B and, if appropriate, seek legislative change. | Medicare Could Collect Billions If Manufacturers Were Required To Pay Rebates for Part B Drugs (OEI-12-12-00260) (Issue Date: 09-09-2013) | Reimbursement |
| CMS should consider seeking legislative authority to implement least costly alternative policies for Part B drugs under appropriate circumstances. | Least Costly Alternative Policies: Impact on Prostate Cancer Drugs Covered Under Part B (OEI-12-12-00210) (Issue Date: 11-21-2012) | Reimbursement |
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OIG's portfolio on drug spending focuses on the following areas:
Reimbursement
OIG work examining the financial impact of drug reimbursement and rebate policies on Federal spending.
Program Compliance
OIG work examining whether drug manufacturers, State Medicaid agencies, and other entities are complying with statutory and program requirements.
Incentive Alignment
OIG work exploring situations in which entities involved with HHS programs may have incentives not aligned with HHS program goals, adversely affecting those programs and their beneficiaries.