HHS IG Will Calculate “Widely Available Market Price” Using 10 Sources
This article was originally published in The Pink Sheet Daily
Executive Summary
The Inspector General will seek pricing information from wholesalers, group purchasing organizations, physicians and manufacturers to compare WAMP to the average sales price calculated by CMS using manufacturer-submitted data. The Medicare Rx law allows for a rate cut if ASP exceeds WAMP by a certain amount.
|
The HHS Office of Inspector General will collect market price data from 10 different sources to determine the "widely available market price" of drugs. IG will "collect information on these 'widely available market prices' from 10 different sources, ranging from manufacturers to wholesalers, physicians, and group purchasing arrangements," HHS IG Chief Counsel Lewis Morris said at the Pharmaceutical Compliance Congress Nov. 15 in Washington, D.C. WAMP is "a price defined by statute as 'the price a prudent physician or supplier would pay for the drug,'" Morris noted. Under the Medicare Modernization Act, IG is directed to conduct market surveys comparing WAMP with the "average sales price" calculated by the Centers for Medicare & Medicaid Services using manufacturer-submitted data, and WAMP. Medicare Part B reimbursement will shift to an ASP plus 6% model in January, but CMS can justify a rate cut if WAMP is lower than ASP by a certain amount. The Medicare Rx proposed implementing regulations set the threshold at 5% below ASP for 2005. CMS released the 2005 Physician Fee Schedule rule Nov. 3, including preliminary ASPs based on second quarter data (1 (Also see "CMS Expects No Significant Change In Average Sales Prices Before 2005" - Pink Sheet, 3 Nov, 2004.)). "We're going to compare [WAMP] to ASP, and we're then going to establish a system that will allow us to trend price data information in a timely fashion," Morris said. "It's going to be a lot of work, but we now have access to a tremendous amount of data, and we've got the folks with the technical background and skills to be able to put it into databases that allow us to do some very effective and exciting price trending." "While we strongly believe in cooperation and the carrot aspect of this, Congress has also provided a stick," Morris noted. "Under MMA, [civil monetary penalties] up to $100,000 are available if a wholesaler, manufacturer or direct seller of covered drug refuses a request for information on charges or prices in connection with the survey or knowingly provides false information." - Elizabeth Walker |