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HCFA WILL DESIGNATE ONE CLAIMS PROCESSOR AS "PRIME DRUG DATA CENTER": PDDC WILL BE HCFA's DATA SOURCE FOR REPORTS, SURVEYS, AND MONITORING DRUG PRICING

Executive Summary

The Health Care Financing Administration will designate one Medicare drug claims processor as its "Prime Drug Data Center" with responsibility for information on all prescription drugs covered by Medicare as well as for generating reports and pricing surveys, according to a May 15 HCFA proposal. HCFA said that the PDDC functions will include: (1) "gathering and consolidating program wide statistical data and DUR [drug utilization review] management reporting requirements; (2) generating reports -- periodic and ad hoc; (3) obtaining, maintaining and distributing to the three drug bill processors the Covered Drug/Drug Pricing File; (4) conducting semi-annual drug pricing surveys; [and] (5) obtaining, maintaining, and distributing the Drug Interaction File to the three drug bill processors." The drug data center will "ease the administrative burden for HCFA," the agency said. "This will result in a constant flow of information and make it easier to obtain from one source rather than from several sources each time a study or survey is requested." HCFA will direct the PDDC to obtain "from a single commercial source" the covered prescription drug data "necessary to develop and maintain the Covered Drug/Drug Pricing File and distribute this file to the three" processors, the agency said. The drug file will identify whether listed products are FDA approved, pre-1962 drugs, DESI drugs or biologicals. The PDDC would also identify drugs "for which pre-authorization is required," and distinguish between single and multi-source drugs. The data center would further identify generic drugs according to their therapeutic rating from FDA. With regard to pricing, the PDDC would establish a process "for collection of covered drug pricing information (survey and published average wholesale price data), calculation of unit average price for multiple and single source drugs, and developing [drug bill processor] payment algorithm for reimbursement purposes." The PDDC is required to provide the pricing data on a biannual basis for four years, beginning on July 1, 1990, for the payment calculation period from Jan. 1, 1991 to Jan. 1, 1994. The "routine" reports expected from the PDDC will include "frequency and total charge ranking of drugs by brand name and therapeutic class for: total and average charge, total average reimbursement, average prescription size, average price, percent generic, percent new and refill, and percent of total." The PDDC will also prepare: monthly reports on the "edit alerts" for drug interactions and the outcomes of the alerts; quarterly reports on "utilization and charges of new drugs approved by FDA in the prior six months"; monthly reports on the "utilization of the top 100 single source drugs by frequency of use and by charges"; and monthly reports on the "100 most frequent multiple source drugs with restrictive prescriptions outlining charges, generic area and percent of total for generic equivalent." Copies of the draft proposal may be obtained by contacting HCFA's Leonard Monfred, procurement coordinator, Room 334 Meadows East Building, 6300 Security Boulevard, Baltimore, MD 21207; (301) 966-7424.
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