Completed Work on Incentive Alignment

In Concerns with Rebates in the Medicare Part D Program (OEI-02-08-00050),OIG reviewed rebates received by Medicare Part D sponsors. Prior to this review, little information was publicly available about the extent to which sponsors receive rebates for Medicare Part D drugs and pass them on to the Government and beneficiaries. This review found that sponsors commonly underestimated rebates in their bids, which meant that the Government and beneficiaries overpaid for the benefit. Further, some sponsors had complex contractual relationships that lacked transparency with pharmacy benefit managers (PBMs), the third-party entities that often negotiate rebates on behalf of sponsors. This lack of transparency raises concerns that sponsors may not always have enough information to oversee the services and information provided by PBMs.