Why GAO Did This Study
In 2010, the Medicare program and its beneficiaries spent about $19.5 billion on Part B drugs--drugs that are commonly administered by a physician or under a physician's close supervision in physicians' offices and hospital outpatient departments. Some of these drugs are particularly expensive for Medicare, either because they are used by a large number of beneficiaries or because their prices are high. These drugs generally differ from drugs beneficiaries obtain through Medicare Part D, which are usually self-administered and for which Medicare, its beneficiaries, and the states spent $61.7 billion in 2010.
Medicare bases its payments for most Part B drugs on the average sales price (ASP), which is calculated from data that manufacturers report quarterly to the Centers for Medicare & Medicaid Services (CMS), the agency within the Department of Health and Human
Services that administers Medicare. ASP is the average price, after rebates and discounts, of all sales of a specified drug in the United States; consequently, Medicare's payment rates for Part B drugs are based on prices set by the private market.
Congress asked us to analyze trends in utilization and expenditures for high-expenditure Part B drugs and to estimate Medicare's proportion of total U.S. expenditures for these high-expenditure drugs. This report examines (1) the Part B drugs for which Medicare expenditures were highest in 2010 and the utilization and spending trends for these high-expenditure Part B drugs from 2008 to 2010, and (2) nationwide spending levels for the total U.S. population for these high-expenditure Part B drugs in 2010 and Medicare's percentage of total U.S. spending.
For information, contact James C. Cosgrove at (202) 512-7114 or firstname.lastname@example.org .