The HHS inspector general has released new reports showing the CMS continues to overpay for prescription drugs and could save more than $700 million annually on just three pharmaceutical products by establishing uniform lowest price reimbursement policies.
One inspection report predicts that if the remaining 10 of 57 Medicare carriers not already employing a "least costly alternative policy" for the prostate cancer drug Lupron would establish such a program, they could save Medicare and its beneficiaries $40 million annually.
Forty-seven other carriers already follow such a policy on Lupron, paying $446.49 for a 7.5 mg dose of the drug Zolodex, considered by many doctors as a clinically equivalent drug, compared to the average $611.56 of those carriers without the policy.
Medicare and its beneficiaries paid $677 million for Lupron in fiscal year 2002. Lake Forest, Ill.-based TAP Pharmaceutical Products, the manufacturer of Lupron, paid a record $884 million civil and criminal settlement in 2001 to resolve kickback and other violations.
In two other reports, the inspector general estimated that the CMS could have saved a total of $659 million in fiscal 2002 if it had adopted the same reimbursement policy that state Medicaid agencies use to reimburse for two popular inhalation drugs used in nebulizers to treat asthma and emphysema: Albuterol and ipratropium bromide. The Medicaid Federal Upper Limit amount would have saved $263 million on Albuterol and $386 million on ipratropium bromide.
Sidney Wolfe, director of the health research group of Washington-based Public Citizen, said the inspector general reports point to the benefits of imposing price controls on the few prescription drugs for which Medicare pays.
"One reason why (the Department of) Veterans Affairs and Medicaid are able to afford drugs better than Medicare is because they have price controls. Price controls are the way to save money. Medicare has them for a lot of other services, but medical devices and drugs have escaped that all these many years."
Officials with the Pharmaceutical Research and Manufacturers of America could not be reached for comment at deadline.