May 30, 2019

OIG Releases Q4 Results of Average Sales Price and Average Manufacturer Price: Ten Drug Codes Subject to Price Substitution

OIG released its May 10, 2019, memorandum summarizing its findings regarding the average sales prices (ASPs) and average manufacturer prices (AMPs) for drugs in the fourth quarter of 2018. After conducting a comparison study between the ASPs and AMPs during that quarter, OIG found that the ASPs of 16 drug codes exceeded their AMPs by either five% for two consecutive quarters or three of the previous four quarters. However, six of the drug codes will not be subject to price-substitution despite exceeding the five% threshold because one was identified by the FDA as being in short supply and the other five “did not meet other CMS price-substitution criteria.”  The remaining ten drug codes met the price substitution criteria allowing the Secretary of HHS to disregard these ten drugs’ ASPs when setting the reimbursement amount and instead permit payment at “the lesser of either the widely available market price or 103 percent of the AMP.”