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What We're Reading: Taxpayers Spending Millions on Expensive Generic Drugs

AJMC Staff
What we're reading, December 18, 2015: HHS report finds generic drug prices rising faster than inflation; UnitedHealthcare's real-time drug approval tool; and government overcharged by private Medicare Advantage plans.
A report released by HHS, based on their investigation of rising generic drug prices, has found that taxpayers paid $1.4 billion resulting from increasingly expensive generic drugs. The HHS enquiry was at the behest of Sen. Bernie Sanders (I-VT) and Rep. Elijah Cummings (D-MD). Rising faster than inflation, the drug costs could have saved Medicare over $700 million during 2013 and 2014 if rebates were applied to the generic costs.

UnitedHealthcare is collaborating with providers to offer them a fast-track drug approval process that is almost real-time. AIS Health reports that the approval process will follow the recommendations of the National Comprehensive Cancer Network Clinical Practice Guidelines. The pilot was initiated in May 2014 for providers in Florida, and the current program went live in June for Medicaid as well as commercial members of the company in the states of Florida and Arizona.

Records from CMS reveal that private Medicare Advantage plans continued to overcharge the government millions of dollars, despite officials within CMS drawing attention to this fraud as early as 2008. According to a report by NPR, short staffing resulted in very few financial audits by CMS—just 30 audits per year, which account for only 5% of the total number of Medicare Advantage contracts. The first batch of audits are expected to be completed in 2016, per CMS.

 
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