The HHS Office of Inspector General (OIG) has issued two recent reports on the Medicaid drug rebate program. In “Nationwide Rollup Report for Medicaid Drug Rebate Collections," a follow-up to a 2005 report, the OIG examined the extent to which states strengthened controls over the collection of rebates on single-source drugs administered by physicians, as required by the Deficit Reduction Act of 2005. While most states established such controls, six states and the District of Columbia did not establish recommended controls and therefore lacked adequate assurance that all drug rebates due the states were properly recorded and/or collected. The OIG also found that CMS did not have reliable drug rebate billing and collection information to properly monitor the program. The OIG recommended that CMS emphasize to the states that they must (1) submit accurate and reliable information on the Medicaid Drug Rebate Schedule; (2) place a priority on their billing and collecting of drug rebates, and (3) collect rebates for single-source drugs administered by physicians. CMS agreed with the recommendations.   In a separate report, "Medicaid Brand-Name Drugs: Rising Prices Are Offset by Manufacturer Rebates," the OIG found that while prices and payment amounts for Medicaid brand-name drugs increased by between 34% and 40% from 2005 to 2010 (compared to a 13% inflation rate over the 5-year period), these increases were offset by savings generated by the Medicaid drug rebate program. In fact, the OIG reports that Medicaid’s rebate-adjusted payment amounts for brand-name drugs actually declined at the median in 3 of 4 years, lagging behind the inflation rate (rebate data were not available for 2010). The OIG concludes that the rebate program has been effective in helping to offset increasing Medicaid drug costs.