OIG's 2017 work plan takes aim at drug prices


While a federal watchdog agency may not be able to directly control steadily rising prescription drug costs, it is making it a primary focal point of investigations in the coming year.

Drug rebates appear to be a specific point of emphasis for the Department of Health and Human Services Office of Inspector General, according to its 2017 Work Plan (PDF). In addition to already scheduled reviews of specialty drug pricing, rebates for physician administered drugs and utilization reviews, the agency is including a new investigation into Medicaid drug claims through managed care organizations (MCOs)—specifically whether Medicaid MCOs paid for outpatient drugs that did not have a rebate agreement and were therefore excluded from coverage.

Additionally, the agency plans to investigate Medicare Part D rebates for prescription drugs filled at 340B pharmacies, as well as the potential savings associated with implementing inflation-based rebates within Medicare Part B. An OIG spokesperson told STAT that “prescription drug oversight is a top priority.”

Drug rebates have emerged as a central focus within the last several months in the aftermath of Mylan’s controversial $465 million settlement to resolve allegations that it misclassified EpiPens in the Medicaid Drug Rebate Program, leading to millions in overpayments.

Beyond drug rebates, the OIG has also penciled in a review of drug waste for single-use vials that are manufactured in larger sizes. A previous report indicated that hospitals waste as much as $3 billion each year in oncology medications alone because single-dose files are too large. On the heels of an explosion of claims for compound medications, which triggered coordinated fraud busts, the agency is planning a review of compound medications, which saw a 3,400 percent increase in Part D spending between 2006 and 2015.

The OIG has also scheduled new reviews of post-acute care providers, including several focusing on skilled nursing facility payments, hospice and home health claims and personal care services, all of which carry their own fraud, waste and abuse concerns.