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Drug Spending

Updated: 11-28-2023

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.

Featured Reports

Report Title	Issue Date	Program	Area(s) of Work
Early Alert: Part B Payment Amount for Tezspire Included a Noncovered Self-Administered Version in 2023 (OEI-BL-24-00030)	2023/11	Medicare Part B	Reimbursement
Congressional Mandate: Part B Payment Amounts for Two Drugs Included Noncovered Self Administered Versions in 2022 (OEI-BL-22-00380)	2023/11	Medicare Part B	Reimbursement
Biosimilars Have Lowered Costs for Medicare Part B and Enrollees, but Opportunities for Substantial Spending Reductions Still Exist (OEI-05-22-00140)	2023/10	Medicare Part B	Reimbursement
North Carolina Did Not Always Invoice Rebates to Manufacturers for Physician-Administered Drugs (A-07-21-07002)	2023/02	Medicaid	Reimbursement
Technical Assistance Brief: Implementation of Inflation-Indexed Rebates for Part B Drugs (OEI-BL-23-00170)	2023/02	Medicare Part B	Reimbursement
Manufacturers May Need Additional Guidance To Ensure Consistent Average Sales Price Calculations (OEI-BL-21-00330)	2023/01	Medicare Part B	Program Compliance
CMS Should Bolster Its Oversight of Manufacturer-Submitted Average Sales Price Data To Ensure Accurate Part B Drug Payments (OEI-03-21-00390)	2023/01	Medicare Part B	Program Compliance
Comparison of Average Sales Prices and Average Manufacturer Prices: Results for the Second Quarter of 2022 (OEI-03-23-00070) *Note: This Report is the Most Recent in a Series of Quarterly Reports*	2022/11	Medicare Part B	Reimbursement
CMS Generally Ensured That Medicare Part C and Part D Sponsors Did Not Pay Ineligible Providers for Services to Medicare Beneficiaries (A-02-20-01027)	2022/10	Medicare Parts C, D	Program Compliance
Mississippi Did Not Always Invoice Rebates to Manufacturers for Physician-Administered Drugs (A-07-21-06101)	2022/10	Medicaid	Reimbursement
Delays in Confirmatory Trials for Drug Applications Granted FDA's Accelerated Approval Raise Concerns (OEI-01-21-00401)	2022/09	Medicare Parts B, C, D; Medicaid; FDA	Incentive Alignment
Medicare Part B Drug Payments: Impact of Price Substitutions Based on 2020 Average Sales Prices (OEI-03-22-00170) *Note: This Report is the Most Recent in a Series of Annual Reports*	2022/09	Medicare Part B	Reimbursement
Tennessee Did Not Always Invoice Rebates to Manufacturers for Physician-Administered Drugs Dispensed to Enrollees of Medicaid Managed-Care Organizations (A-07-21-06096)	2022/09	Medicaid	Reimbursement
Comparison of Average Sales Prices and Average Manufacturer Prices: Results for the First Quarter of 2022 (OEI-03-22-00210) *Note: This Report is the Most Recent in a Series of Quarterly Reports*	2022/08	Medicare Part B	Reimbursement
Part D Plan Preference for Higher-Cost Hepatitis C Drugs Led to Higher Medicare and Beneficiary Spending (OEI-BL-21-00200)	2022/08	Medicare Part D	Incentive Alignment
South Carolina Did Not Always Invoice Rebates to Manufacturers for Physician-Administered Drugs (A-07-21-07003)	2022/08	Medicaid	Reimbursement
Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles: 2022 (OEI-05-22-00230)	2022/06	Medicare Part D	Program Compliance
Comparison of Average Sales Prices and Average Manufacturer Prices: Results for the Fourth Quarter of 2021 (OEI-03-22-00200) *Note: This Report is the Most Recent in a Series of Quarterly Reports*	2023/05	Medicare Part B	Reimbursement
California Improperly Claimed at Least $23 Million of $260 Million in Total Medicaid Reimbursement for Opioid Treatment Program Services (A-09-20-02009)	2022/04	Medicaid	Reimbursement
Medicare Part D and Beneficiaries Could Realize Significant Spending Reductions With Increased Biosimilar Use (OEI-05-20-00480)	2022/03	Medicare Part D	Incentive Alignment
Comparison of Average Sales Prices and Average Manufacturer Prices: Results for the Third Quarter of 2021 (OEI-03-22-00190) *Note: This Report is the Most Recent in a Series of Quarterly Reports*	2022/02	Medicare Part B	Reimbursement
CMS Should Bolster Its Oversight of Manufacturer-Submitted Average Sales Price Data To Ensure Accurate Part B Drug Payments OEI-03-21-00390	2022/12	Medicare Part B	Program Compliance
Manufacturers May Need Additional Guidance To Ensure Consistent Average Sales Price Calculations OEI-BL-21-00330	2022/12	Medicare Part B	Program Compliance
Tennessee Did Not Always Invoice Rebates to Manufacturers for Physician-Administered Drugs Dispensed to Enrollees of Medicaid Managed-Care Organizations (A-07-21-06096)	2022/09	Medicaid	Program Compliance
Part D Plan Preference for Higher-Cost Hepatitis C Drugs Led to Higher Medicare and Beneficiary Spending (OEI-BL-21-00200)	2022/08	Medicare Part D	Incentive Alignment; Reimbursement
Medicare Part D and Beneficiaries Could Realize Significant Spending Reductions With Increased Biosimilar Use (OEI-05-20-00480)	2022/03	Medicare Part D	Reimbursement
Audit of Medicare Part D Pharmacy Fees: Group Health Cooperative, Inc. (A-03-19-00002)	2021/07	Medicare Part D	Program Compliance
Some Manufacturers Reported Inaccurate Drug Product Data to CMS (OEI-03-19-00200)	2020/09	Medicare Part B	Program Compliance
Audit of Medicare Part D Pharmacy Fees: Horizon Blue Cross Blue Shield, Inc. (A-03-18-00007)	2020/09	Medicare Part D	Program Compliance
Loophole in Drug Payment Rule Continues to Cost Medicare and Beneficiaries Hundreds of Millions of Dollars (OEI-BL-20-00100)	2020/07	Medicare Part B	Reimbursement
Key Medicare Tools to Safeguard Against Pharmacy Fraud and Inappropriate Billing Do Not Apply to Part D (OEI-02-15-00440)	2020/03	Medicare Part D	Incentive Alignment
The Majority of Providers Reviewed Used Medicare Part D Eligibility Verification Transactions for Potentially Inappropriate Purposes (A-05-17-00020)	2020/02	Medicare Part D	Program Compliance
Audit of Medicare Part D Pharmacy Fees: Geisinger Health Systems, Inc. (A-03-18-00006)	2019/10	Medicare Part D	Program Compliance
Some Medicare Part D Beneficiaries Face Avoidable Extra Steps that Can Delay or Prevent Access to Prescribed Drugs (OEI-09-16-00411)	2019/09	Medicare Part D	Incentive Alignment
Rebates for Brand Name Drugs in Part D Substantially Reduced the Growth in Spending from 2011 to 2015 (OEI-03-19-00010)	2019/09	Medicare Part D	Reimbursement
Medicare Part D Is Still Paying Millions for Drugs Already Paid for Under the Part A Hospice Benefit (A-06-17-08004)	2019/08	Medicare Part D	Program Compliance
CMS's Enhanced Controls Did Not Always Prevent Terminated Drug Utilization in Medicare Part D (A-07-16-06068)	2018/11	Medicare Part D	Program Compliance
High-expenditure Medicare drugs often qualified for Orphan Drug Act incentives designed to encourage the development of treatments for rare diseases (OEI-BL-20-00080)	2021/09	Medicare Part D	Incentive Alignment
CMS Should Strengthen Its Prescription Drug Event Guidance To Clarify Reporting of Sponsor Margin for Medicare Part D Bids (A-03-17-00001)	2021/11	Medicare Part D	Program Compliance
Medicaid Rebates for Physician-Administered Drugs (OEI-03-02-00660)	2004/04	Medicaid	Program Compliance
Review of Additional Rebates for Brand-Name Drugs with Multiple Versions	2010/03	Medicaid	Reimbursement
Drug Manufacturers' Noncompliance with Average Manufacturer Price Reporting Requirements (OEI-03-09-00060)	2010/09	Medicaid	Program Compliance
Medicare Payments for Newly Available Generic Drugs (OEI-03-09-00510)	2011/01	Medicare Part B	Reimbursement
States' Collection of Medicaid Rebates for Physician-Administered Drugs (OEI-03-09-00410)	2011/06	Medicaid	Program Compliance
Replacing Average Wholesale Price: Medicaid Drug Payment Policy (OEI-03-11-00060)	2011/07	Medicaid	Reimbursement
Medicaid Brand-Name Drugs: Rising Prices Are Offset by Manufacturer Rebates (OEI-03-10-00260)	2011/08	Medicaid	Reimbursement
Medicare Payments for Drugs Used to Treat Wet Age-Related Macular Degeneration (OEI-03-10-00360)	2012/04	Medicare Part B	Reimbursement
Least Costly Alternative Policies: Impact on Prostate Cancer Drugs Covered Under Medicare Part B (OEI-12-12-00210)	2012/11	Medicare Part B	Reimbursement
Gaps in Oversight of Conflicts of Interest in Medicare Prescription Drug Decisions (OEI-05-10-00450)	2013/03	Medicare Part D	Incentive Alignment
Medicaid Drug Pricing in State Maximum Allowable Cost Programs (OEI-03-11-00640)	2013/08	Medicaid	Reimbursement
Medicare Could Collect Billions If Pharmaceutical Manufacturers Were Required To Pay Rebates for Part B Drugs (OEI-12-12-00260)	2013/09	Medicare Part B	Reimbursement
Contract Pharmacy Arrangements in the 340B Program (OEI-05-13-00431)	2014/02	340 B	Program Compliance
Update: Medicare Payments for End Stage Renal Disease Drugs (OEI-03-12-00550)	2014/03	Medicare Part B	Reimbursement
Average Manufacturer Price Determinations by Selected Drug Manufacturers Generally Were Consistent With Federal Requirements (A-06-13-00014)	2014/06	Medicaid	Program Compliance
Limitations in Manufacturer Reporting of Average Sales Price Data for Part B Drugs (OEI-12-13-00040)	2014/07	Medicare Part B	Program Compliance
Medicaid Drug Rebate Dispute Resolution Could Be Improved (OEI-05-11-00580)	2014/08	Medicaid	Program Compliance
Manufacturer Safeguards May Not Prevent Copayment Coupon Use for Part D Drugs (OEI-05-12-00540)	2014/09	Medicare Part D	Program Compliance
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)	2014/09	Medicare Part B	Reimbursement
States' Collection of Offset and Supplemental Medicaid Rebates (OEI-03-12-00520)	2014/12	Medicaid	Program Compliance
Medicaid Rebates for Brand-Name Drugs Exceeded Part D Rebates by a Substantial Margin (OEI-03-13-00650)	2015/04	Medicaid	Reimbursement
Medicare Part B Overpaid Millions for Selected Outpatient Drugs (A-09-14-02024)	2015/07	Medicare Part B	Program Compliance
States' Collection of Rebates for Drugs Paid Through Medicaid Managed Care Organizations Has Improved (OEI-05-14-00431)	2015/09	Medicaid	Program Compliance
Part B Payments for 340B-Purchased Drugs (OEI-12-14-00030)	2015/11	Medicare Part B	Reimbursement
Average Manufacturer Prices Increased Faster Than Inflation for Many Generic Drugs (A-06-15-00030)	2015/12	Medicaid	Reimbursement
High Part D Spending on Opioids and Substantial Growth in Compounded Drugs Raise Concerns (OEI-02-16-00290)	2016/06	Medicare Part D	Program Compliance
State Efforts to Exclude 340B Drugs from Medicaid Managed Care Rebates (OEI-05-14-00430)	2016/06	Medicaid	Program Compliance
High-Price Drugs Are Increasing Federal Payments for Medicare Part D Catastrophic Coverage (OEI-02-16-00270)	2017/01	Medicare Part D	Reimbursement
Calculation of Potential Inflation-Indexed Rebates For Medicare Part B Drugs 2017 (OEI-12-17-00180)	2017/08	Medicare Part B	Reimbursement
Excluding Noncovered Versions When Setting Payment for Two Part B Drugs Would Have Resulted in Lower Drug Costs for Medicare and its Beneficiaries (OEI-12-17-00260)	2017/11	Medicare Part B	Reimbursement
Potential Misclassifications Reported by Drug Manufacturers May Have Led to $1 Billion in Lost Medicaid Rebates (OEI-03-17-00100)	2017/12	Medicaid	Reimbursement
CMS Did Not Always Provide Accurate Medicaid Unit Rebate Offset Amounts to State Medicaid Agencies (A-07-17-06074)	2018/05	Medicaid	Program Compliance
Increases in Reimbursement for Brand-Name Drugs in Part D (OEI-03-15-00080)	2018/06	Medicare Part D	Reimbursement
Medicaid Could Save Hundreds of Millions by Excluding Authorized Generic Drug Transactions to Secondary Manufacturers from Brand Name Drugs’ Average Manufacturer Price Calculations (A-06-18-04002)	2019/04	Medicaid	Reimbursement
One Percent of Drugs With Medicaid Reimbursement Were Not FDA-Approved (OEI-03-17-00120)	2019/05	Medicaid	Reimbursement
Medicare Part D Rebates for Prescriptions Filled At 340B Contract Pharmacies (A-03-16-00002)	2019/07	Medicare Part D	Reimbursement
Reasonable Assumptions in Manufacturer Reporting of AMPs and Best Prices (OEI-12-17-00130)	2019/09	Medicaid	Reimbursement
CMS's Implementation of a 2014 Policy Change Resulted in Improvements in the Reporting of Coverage Gap Discounts Under Medicare Part D (A-07-16-06067)	2020/01	Medicare Part D	Reimbursement; Program Compliance
States Could Do More to Oversee Spending and Contain Medicaid Costs for Specialty Drugs (OEI-03-17-00430)	2020/12	Medicaid	Program Compliance
Medicare Part B Drug Payments: Impact of Price Substitutions Based on 2019 Average Sales Prices (OEI-03-21-00130) *Note: This Report is the Most Recent in a Series of Annual Reports*	2021/06	Medicare Part B	Program Compliance
Comparison of Average Sales Prices and Average Manufacturer Prices: Results for the First Quarter of 2021 (OEI-03-21-00080) *Note: This Report is the Most Recent in a Series of Quarterly Reports*	2021/08	Medicare Part B	Program Compliance
States' Collection of Medicaid Rebates from Drug Manufacturers	Various	Medicaid	Program Compliance

• Legend: Areas of Work

  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.