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Potential Savings from Inflation-Based Rebates in Medicare Part B

Each year, statutorily mandated rebates enable Medicaid to recoup a substantial portion of the billions spent by the program on prescription drugs. In contrast, Medicare Part B also spends billions annually on prescription drugs; however, no similar rebate authority exists for Part B to reduce the costs of drugs to the program. OIG will examine the amount the Federal Government could potentially collect from pharmaceutical manufacturers if inflation-indexed rebates were required under Medicare Part B, which builds upon earlier OIG work examining existing inflation-based rebates in Medicaid and potential rebates in Medicare Part B. The study will select a sample of 50100 Part B drugs. We will calculate the amount covering the difference between the existing rebate policy in 2015 and a scenario where an inflation-based rebate methodology similar to Medicaid had been in place for drugs covered under Medicare Part B and in absence of industry adjustments to such rebate agreement.

Announced or Revised Agency Title Component Report Number(s) Expected Issue Date (FY)
Nov-16 Centers for Medicare & Medicaid Services Potential Savings from Inflation-Based Rebates in Medicare Part B Office of Evaluation and Inspections OEI-12-17-00180 2017

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