Completed Work on Data Integrity

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The Medicaid drug rebate program is a cost containment program that provides Medicaid with lower net drug costs. Recent OIG report found that Potential Misclassifications Reported by Drug Manufacturers May Have Led to $1 Billion in Lost Medicaid Rebates (OEI-03-17-00100). Brand-name drugs are generally subject to higher Medicaid rebates than generic drugs. For covered drugs, manufacturers are required to provide CMS with specified pricing data and with classification information that essentially indicates whether the drugs are brand or generic. OIG found that nearly all of the approximately 30,000 drugs in the Medicaid rebate program were classified appropriately. However, OIG also found that manufacturers may have misclassified 885 of these drugs (3 percent) in 2016. Further, OIG found that from 2012 to 2016, Medicaid may have lost $1.3 billion in base and inflation adjusted rebates for 10 potentially misclassified drugs with the highest total reimbursement in 2016.