OIG keeps the heat on AWP

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Thursday, February 28, 2002

WASHINGTON - The OIG continued its efforts last month to prove that average wholesale pricing should not be used when determining Medicare and Medicaid reimbursement.

The OIG recently completed a report for the West Virginia Medicaid program, estimating that pharmacies purchase brand-name drugs at 21.7% below AWP and generic drugs at 68.9% below AWP. The OIG's national estimates are 21.84 and 65.93, respectively.

The OIG has selected eight states for which it will study pharmacy acquisition prices. The department released its finding for Washington, Texas, Colorado, and Indiana last month (HME News 1/15/02). The remaining states are Florida, Montana and Wisconsin.

As with the other reports, the OIG ended it's West Virginia report by stating: "We recommended that the West Virginia Department of Health and Human Resources (State Agency) consider the results of our review as a factor in determining any future changes to pharmacy reimbursement for Medicaid drugs."

West Virginia Medicaid has stated that it was considering adjusting the discount of AWP to more correctly reflect the prices pharmacies are actually paying for prescription drugs. HME

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