Medicare Part B Drug Payments: Impact of Price Substitutions Based on 2023 Average Sales Prices

When Congress established average sales price (ASP) as the basis for Medicare Part B drug reimbursement, it also provided a mechanism for monitoring market prices and limiting potentially excessive Medicare payment amounts. Section 1847A(d)(1)-(3) of the Social Security Act mandates that OIG compare ASPs with average manufacturer prices (AMPs) and the widely available market price, if any. If OIG finds that the ASP for a drug exceeded the AMP by 5 percent in the two previous quarters or in three of the previous four quarters, the Secretary of Health and Human Services may substitute the reimbursement amount with a lower calculated rate. Over the past decade, OIG has produced annual reports aggregating the results of our mandated quarterly ASP-to-AMP comparisons. This annual report will quantify the savings to Medicare and its beneficiaries that are a direct result of CMS's price substitution policy based on 2023 ASPs, and it may offer recommendations for Medicare to achieve additional savings.

Announced or Revised	Agency	Title	Component	Report Number(s)	Expected Issue Date (FY)
November 2024	Centers for Medicare and Medicaid Services	Medicare Part B Drug Payments: Impact of Price Substitutions Based on 2023 Average Sales Prices	Office of Evaluation and Inspections	OEI-03-25-00050	2025