SPECIALTY RX FACTS

17Jan/120

New HHS Report Indicates Shocking Gaps between ASP and WAMP

The HHS Office of the Inspector General (OIG) released a report comparing average sales prices (ASP) to widely available market prices (WAMP) for selected drugs. The report compares ASPs to WAMPs for 14 drugs that have been identified in previous OIG reports for repeatedly exceeding the 5 percent ASP to average manufacturer price (AMP) threshold.

As part of the ASP price substitution policy, OIG is required to conduct studies that compare ASP to WAMP and AMP for Medicare Part B drugs to identify if the ASP of a drug exceeds either the WAMP or the AMP by a certain threshold.

The study revealed significant gaps in what is being reported between the manufacturers and the distributors in come cases gaps of over 300%!

D2 readers can find this document at http://oig.hhs.gov/oei/reports/oei-03-10-00280.pdf

Below is a summary statement taken from the above document.

Federal law requires OIG to conduct studies that compare ASPs to W AMPs and average manufacturer prices (AMP).  I f  OIG finds that the ASP of  a drug exceeds either the WAMP or AMP by a certain threshold (currently 5 percent), the Secretary of  Health and Human Services (the Secretary) may disregard the ASP for the drug when setting reimbursement amounts.  Since the implementation of the ASP reimbursement methodology, OIG has issued 27 reports comparing ASPs to W AMPs and AMPs

(2 comparing ASPs to WAMPs, 25 comparing ASPs to AMPs). The purpose of this review was to compare ASPs to W AMPs for 14 drugs that have been identified in previous OIG reports as repeatedly exceeding the 5-percent ASP-AMP threshold.  However, limitations and irregularities in the sales data provided by the distributors and manufacturers of the 14 drugs called into question the data's accuracy and reliability, and prevented us from measuring W AMPs against the threshold.

All of the manufacturers that reported direct sales to providers included data on their discounts and rebates for those sales.  However, two distributors (which sold over half of all the units reported to us) were not able to determine the discounts and rebates they provided, meaning that the W AMPs we calculated most likely did not reflect the actual prices paid in the marketplace.  In the past, OIG has had difficulty obtaining data on discounts and rebates from distributors, but in those instances, the missing data did not have the same impact on our results.

Furthermore, the total number of units sold reported to us by distributors and manufacturers differed substantially from the number reported to the Centers for Medicare & Medicaid Services (CMS) through quarterly ASP submissions, potentially resulting in our data reflecting an inaccurate number of sales.  Most likely because of these issues, the WAMPs we calculated varied widely from other pricing points; several drugs had WAMPs that were substantially higher than the associated ASPs and AMPs.  We plan to continue to fulfill our statutory mandate to conduct WAMP studies, and these issues will need to be addressed before any future efforts can be made to compare ASPs to WAMPs.  We will consider alternative methodologies that will allow us to conduct pricing comparisons, including directly surveying providers to obtain accurate and complete sales data.

 

 

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