The Department of Health and Human Services (HHS) Office of Inspector General (OIG) has released its Work Plan for fiscal year 2016. The items identified in the Work Plan provide the drug industry with insight into OIG’s objectives for the coming year. This year’s Work Plan covers numerous new and ongoing initiatives that relate to pharmaceutical manufacturers, including rising drug costs, data integrity and a variety of beneficiary protection issues.
We highlight some of these key objectives for 2016 by issue, program or agency.
- “High Cost” Branded Drugs in Medicare Part D: Noting that prices for the most commonly prescribed branded drugs increased by almost 13 percent in 2013, OIG will compare price increases for brand name drugs under Medicare Part D against the inflation rate.
- Payments for Specialty Drugs: Reflecting concerns about the prices of specialty drugs, OIG will study how state Medicaid agencies calculate payment methodologies for these drugs and the variation in their reimbursement rates.
- Generic Price Increases: Given the focus on increases in generic product pricing, which recently led to the extension of the inflation penalty to generic products, OIG will compare generic price changes with changes in the inflation rate.
- Treatment of Authorized Generics (AGs) in Average Manufacturer Price (AMP): Noting that manufacturers that include AG sales “to a secondary manufacturer could lower AMP” and lower Medicaid rebates, OIG states that it will examine the treatment of AGs in AMP.
- AMP Reporting Requirements: OIG will conduct another review of AMP reporting, contending that prior work showed that “more than half” of manufacturers reviewed previously “failed to comply with reporting requirements.”
- Review of State Drug Utilization Review (DUR) Efforts: OIG plans to review education and enforcement actions taken by states based on their DUR efforts, with a particular focus on inappropriate dispensing of opioids.
Medicare Part D
- Appropriate Combinations of Prescription Drugs: OIG plans to review whether Medicare Part D beneficiaries are being prescribed combinations of drugs that are clinically inappropriate, specifically drugs that when used in combination cause severe side effects.
- Part D Pharmacy Enrollment Oversight: OIG will review pharmacy enrollment and the Centers for Medicare & Medicaid Services’ (CMS) oversight of that enrollment, focusing on pharmacies “identified as high risk.”
- E1 Transaction Accuracy: OIG plans to conduct a review of the validity of data from E1 transactions that pharmacies submit to determine Part D eligibility and calculate out-of-pocket costs.
Medicare Part B
- Average Sales Price (ASP)/AMP Comparison: OIG will review ASP as compared to the AMP for a number of products.
- Nebulizers and Related Drugs: OIG will review Part B payments for these items to determine if claims were medically necessary.
- Duplicate Discounts for 340B Drugs: OIG will assess the risk of duplicate discounts in drug purchases by Medicaid managed care organizations (MCOs). The review will also examine the systems state Medicaid agencies have put in place to prevent duplicate discounts.
- Part B Payments Compared With 340B Prices: Reflecting concerns regarding Part B reimbursements to covered entities, OIG will examine the difference between those reimbursements and 340B prices.
Data, Quality and Beneficiary Protection
- Analysis of Open Payments Data: OIG had previously started a review of the financial interests reported by manufacturers under the Open Payments program to determine whether the reported data were fully and accurately displayed on the CMS website. Now OIG intends to analyze the validity of the data submitted.
- Validation of Quality Reporting Data: OIG plans to conduct a study to determine the extent to which CMS has validated quality reporting data used in the inpatient hospital value-based purchasing program and the impact of that validation work.
- Protection of Electronic Protected Health Information (ePHI): OIG states that the Office of Civil Rights (OCR) has not implemented adequate controls in the past to ensure the protection of ePHI and plans to analyze the adequacy of OCR’s current oversight over the security of ePHI.
- Human Research Subjects Protection: OIG plans to review the process that the Office for Human Research Protections (OHRP) uses to exercise oversight over compliance with, and potential violations of, federal regulations protecting human research subjects.
- Examination of Opioid Abuse: OIG states that it will undertake a “holistic examination” of HHS’ efforts to reduce opioid abuse.
- Preparedness for High-Risk Infectious Diseases: Reflecting growing concerns about bioterrorism and antibiotic-resistant bacteria risks, OIG will review hospital preparedness.
Food and Drug Administration (FDA) Issues
- FDA Oversight of Postmarketing Studies: OIG will review how FDA monitors these studies and the extent to which the agency takes “enforcement action” against New Drug Application applicants who do not comply with their obligations.
- Information Exchange in the Drug Supply Chain: OIG will study supply chain trading partners (including manufacturers, wholesalers and pharmacies) in exchanging transaction and history information under the Drug Supply Chain Security Act.
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For your reference, the Work Plan is available here.