U.S.  Department  of  Health and Human Services 
Office of Inspector  General
Data Snapshot
September 2020,  OEI-03-19-00200 
Some  Manufacturers  Reported  Inaccurate  Drug  Product  Data  to  CMS 
What OIG Did 
The Office of  Inspector  General  (OIG) conducted  a review of  the accuracy  of average 
sales price (ASP) product  data  and  average manufacturer  price (AMP) product  data  
Key Takeaway
for  1,345  National  Drug  Codes (NDCs) associated with drugs  covered  by Medicare 
Some manufacturers  
Part  B for 2018.  (Drugs covered  by  Part B  are generally those that are injected  or  
reported inaccurate 
infused in physicians offices  or hospital outpatient  settings.)  We identified these out  
product data  that  could 
of a total  of 3,527  NDCs  associated with  Part  B-covered drugs  for  which 
result  in inaccurate  
manufacturers  submitted both ASP data and AMP  data for  that year.  For Part          
Medicare 
B-covered drugs,  the Centers for  Medicare & Medicaid Services  (CMS) uses  
reimbursement and  
manufacturer-reported  ASP pricing  and product  data to  determine reimbursement  
amounts.  For Medicaid-covered  drugs,  CMS uses  manufacturer-reported AMP   Medicaid rebates  
pricing and product data to  calculate  the statutorily required Medicaid rebates that  amounts. 
reduce the net  cost of  those drugs.
To assess  the accuracy  of  ASP  and AMP  product  data, we compared  (1)  the package 
size and  package quantity  that manufacturers reported as  part of  the ASP  product  
data against the drugs labels,  drug  package inserts, and drug  manufacturers 
websites (hereinafter  referred  to as  publicly available sources); (2)  the unit  type and  
units per package size that manufacturers  reported  as  part  of the AMP  product  data  
against the information listed in publicly available sources; and (3) the package size 
that manufacturers  reported  as  part  of the ASP  product  data against the unit type 
reported with the  AMP  product data. 
Results 
Manufacturers reported  inaccurate drug  Exhibit  1:  Manufacturers  reported  inaccurate product 
data found for 192 NDCs 
product data  for 14 percent of NDCs associated 
with Part B-covered drugs 
1,153 
No errors 
  Manufacturers product  data contained  an error  in 
at least 1  quarter of  2018  for 14  percent  of  the 
NDCs  we reviewed  (192  of 1,345).  192  Inaccurate  product data 
  Across the four quarters of 2018, manufacturers 
inaccurately reported product  data 581  times  for   AMP  151  41 ASP 
these 192 NDCs. 
  Most of  these errors (151 of  192) were associated   Source:  OIG analysis  of ASP and  AMP  product data,  2019.   
with only  AMP product  data, e.g., the unit type 
Twenty-four percent of  all manufacturers reported 
and/or units per package size reported  with AMP  
inaccurate drug product data 
data  did not correspond to the  package size  
and/or package quantity from  publicly available    Twenty-four  percent  of all manufacturers43 of  182 
sources.   were associated with inaccurate drug product data.  
  There were 411 NDCs with errors in  the  ASP    These errors could result  in inaccurate payment  
amounts and fewer  price substitutions in Medicare 
product  data reported  by manufacturers.   
Part  B,  as well as  inaccurate rebates in Medicaid.  
  In 2018, manufacturers  corrected  product 
  Eight manufacturers  accounted  for 60  percent  of  the 
information in a subsequent quarter for  only        
reported errors. 
35  NDCs  or 18  percent  of those associated with an 
  These eight manufacturers reported between 10  and 
error. 
23 errors each. 
Data Snapshot:  Some  Manufacturers  Reported Inaccurate  Drug Product  Data to CMS  1  Why this Matters
CMS  uses ASP  and AMP  product  data to determine overall reimbursement in both Medicare and Medicaid.  
Medicare Part  B and Medicaid expenditures  for  prescription drugs  total nearly $100  billion each year.  In 
Medicare Part  B,  CMS  uses  ASP  to  directly  calculate drug  reimbursement amounts paid to  providers.  When 
these data are not accurate,  Medicare and its beneficiaries may make inaccurate payments for  drugs.  In 
Medicaid, CMS  uses  AMP  product  data to determine the rebate amounts owed  by manufacturer  for  covered  
drugs.  The Medicaid rebate program  is an important  cost-containment tool  that offsets State and Federal  
expenditures for most  prescription drugs.  If this product  data is  incorrect,  Medicaid may collect  inaccurate 
rebates from  manufacturers  and not  reap the programs  full benefits. 
In addition,  when Congress established ASP  as the basis for  Part B drug  reimbursement,  it  provided  a 
mechanism for  monitoring  market  prices and limiting potentially excessive  ASP-based  payment amounts.  This  
mechanism requires OIG to conduct  a comparison of  quarterly ASP  and  AMP  product  datathe results of this  
comparative analysis  can trigger  reductions  in Part B  reimbursement for  certain drugs.  If the ASP and AMP  
datawhich include the prices  and product  data such as package size and package quantityare incorrect,  
this can lead to  inaccurate comparisons  or the exclusion of certain drugs from  the comparative analysis,  which 
can, in turn,  potentially lead to fewer  price substitutions and higher costs.  For  2018  data, OIG was not able to  
complete mandated analysis  for price substitution for 44  Part  B  drug procedure codes2 because of  
questionable product  data reported  for  1  or more of the NDCs  associated with the procedure code. 
What  OIG Recommends 
To  ensure the accuracy of  manufacturer-reported  data, Part B reimbursement amounts, and 
Medicaid rebate amounts, CMS  should: 
Work  with the manufacturers associated with errors to correct and  resubmit 
accurate  product data.
We will provide CMS  the list  of NDCs  and  manufacturers associated  with inaccurate product  
data.   After reviewing  this  information, CMS  should  work with these manufacturers to update 
and  revise their  product  datafixing  actual errors and  discrepanciesand take steps  to  ensure 
that future submissions  are correct.  Given the various ways that ASP and AMP  product  data  
potentially impact  Medicare reimbursement  and Medicaid rebate amounts, it is vitally  
important that manufacturers provide CMS  with accurate ASP  and  AMP  product data.   
Agency Comments  and  OIG Response 
CMS  did  not explicitly concur  or  nonconcur with OIGs  recommendation for it  to work with manufacturers  
associated with errors to  correct  and resubmit accurate product  data.  Although CMS  did not explicitly concur  
with the recommendation,  it outlined actions  that it has taken and actions that  it plans to take to achieve the 
recommendations  goal of  ensuring that manufacturers  submit  accurate product  data.  CMS  emphasized  that  
the potential  inconsistencies between the manufacturer-reported  data  and the publicly  available sources that  
OIG used do not  necessarily  indicate that the ASP  or AMP  data, or  the associated payment or rebate amounts,  
are incorrect.  CMS  said  that  for example, it has  reviewed  the OIG-identified  inconsistencies associated with the 
ASP  product  data  identified in this  report and found  that only  7  out  of  41,  or just  17  percent, of OIG-identified  
NDCs  impacted  pricing  and  that the overall impact  on pricing  appeared  to be minimal.  CMS  reported  that  
each of the errors  has  been addressed and updates are reflected  in the July 2020  ASP drug pricing  file.  CMS  
also  stated that  it will review  OIG-identified  inconsistencies in AMP  product  data  and address  any errors that  
affect  rebate amounts. 
OIG appreciates  the efforts  that CMS  has  taken to work  with manufacturers  to ensure that pricing  and  rebate 
data are accurate.  We agree with CMS  that inaccurate ASP  and AMP  product  data may not always result in 
incorrect  Part B  payment amounts or  rebate amounts.  However, the results of CMSs  review  indicate that  in 
some instances these product  data inaccuracies  did result in incorrect  payment amounts  being established  by  
CMS.  OIG encourages  CMS  to continue its efforts  to ensure that all manufacturer-reported product data  are  
accurate.  We ask  that  CMS  specify in its Final  Management Decision whether  it concurs  with our  
recommendation and how  it plans to continue its efforts to  address  inconsistencies in the AMP  data.  For  the 
full text of CMSs  comments,  see the Appendix.   
Data Snapshot:  Some  Manufacturers  Reported Inaccurate  Drug Product  Data to CMS  2  Methodology 
Data Collection.  We obtained 3,527  NDCs  associated with  Part B-covered drugs for which 182  manufacturers  
submitted both  ASP  data  and AMP  data  to CMS  in at least 1  quarter  of 2018.  These  data were  obtained from 
CMS  and  had been used for OIGs  mandated ASP and AMP  price comparison.  In addition to including  prices,  
these data include product  data  such as  the drugs package size,  package quantity, unit type, the units per  
package size,  and  the manufacturer  name. From  publicly  available sourcesincluding  the drugs labels,  drug  
package inserts,  and  drug manufacturers websiteswe obtained additional  product  information to evaluate 
the accuracy  of product data that  manufacturers reported  to  CMS. 
Data Analysis. For this in-depth review, we targeted  a more limited number of  NDCs  that may be associated  
with errors.  First, we reviewed  all  3,527  NDCs  for  which manufacturers  submitted both ASP  and AMP  product  
data to  CMS  in at least 1  quarter in 2018.  To identify ASP and AMP  data  that had potential  errors, we  used our  
previous  experience with ASP  and  AMP  data comparisons  to develop four review criteria for  identifying NDCs  
with potential  errors.   
We reviewed  the following: 
(1)  all NDCs  that were newly  reported  to CMS  during 2018; 
(2)  all  NDCs  for which product data  changed or  was adjusted in  at least 1  quarter of  2018;3 
(3)  outlier  NDCs,  i.e.,  those for which the ASP  exceeded  the AMP  by 100  percent  or more in at least  
one quarter,  or NDCs  for  which the ASP  was at least 90  percent  lower  than the AMP  in at least one 
quarter;4 and 
(4)  all NDCs  associated with a potential price substitution in any quarter,  i.e.,  NDCs  associated with 
procedure codes for  which the ASP  exceeded the AMP  by at least 5  percent  and procedure codes that  
had complete  AMP data.5 
As a result of this analysis,  we identified 1,345  NDCs  to target  for  an in-depth review. 
For  each of  these 1,345  NDCs,  we compared the following: 
(1)  the package size and  package quantity  that manufacturers reported as  part of  the ASP  product  data  
against the package size and  package quantity  from publicly  available sources; 
(2)  the unit  type and units per package size that manufacturers  reported  as  part  of the AMP  product  data  
against the package size and  package quantity  from publicly  available sources; and  
(3)  the package size that manufacturers  reported  as  part  of the ASP  product  data against the unit type that  
manufacturers  reported  as part  of the AMP  product  data. 
We determined  the number  of NDCs  for which the package size and/or package quantity that  manufacturers  
reported  as part of the ASP  product  data did not  match the package size and/or package quantity  reported  in 
publicly  available sources, and we considered  these to be errors.  We determined  the number  of NDCs  for  
which the units  per package size and unit  type that  manufacturers  reported as  part of  the AMP  product  data  
did not  correspond  to  the package size and/or package quantity reported  in publicly  available sources, and we 
considered  these to be errors.  We then determined  the number  of NDCs  for  which the package size that  
manufacturers  reported  as part  of the ASP  data  did not correspond  to the unit type reported  with the AMP  
data and required  an adjustment to  ensure an equivalent comparison.6  For  example,  if the manufacturer  of a  
drug  reported  an ASP  package size of 1  vial  and  an AMP  unit  type of milliliter, the ASP  package size would  be 
adjusted to the number of  milliliters  in the vial.  We did not determine the accuracy  of  the prices in the ASP  or  
AMP  data provided by manufacturers. 
Finally,  we grouped all NDCs  associated with an error  by the manufacturer  name7 to  determine which 
manufacturers were associated with errors in their  product  data as  well  as  the number  of NDCs  associated with 
each manufacturer.   We then determined how many  NDCs  were associated  with corrected  product data over  
the course of 2018. 
Data Snapshot:  Some  Manufacturers  Reported Inaccurate  Drug Product  Data to CMS  3  Standards 
We conducted  this  study in accordance with the Quality  Standards for  Inspection and Evaluation issued  by the 
Council of the Inspectors General on Integrity  and Efficiency. 
Acknowledgments 
Conswelia  McCourt served as  team  leader for this study. Office of Evaluation and Inspections  staff who  
provided support  include Althea Hosein,  Christine Moritz, and Michael  Novello.  This  report  was prepared  
under  the direction of Linda Ragone, Regional  Inspector  General  for  Evaluation and  Inspections in the 
Philadelphia  regional office,  and Edward  Burley,  Deputy Regional Inspector  General. 
To obtain additional  information concerning  this report  or to  obtain copies, contact  the Office of Public Affairs   
at Public.Affairs@oig.hhs.gov.  
Endnotes 
1Two  of these 41  NDCs  had both ASP  and AMP  errors  identified. 
2A  procedure code is a standardized billing  code that  is  used primarily to  identify products,  supplies,  and other  
services.  A  procedure code specifies the name and  the amount of  the drug  and may represent one or  more 
NDCs. 
3During OIGs  quarterly  comparisons of ASP and AMP  pricing  data, OIG may adjust the reported  ASP  package 
size and/or reported  package quantity to  ensure equivalent comparisons,  when applicable. 
4This includes only outlier NDCs  associated  with HCPCS  codes  that had complete AMP  data  in a quarter. 
5This includes only NDCs  associated with HCPCS  codes that  had complete AMP  data in a quarter. 
6To ensure that  the AMP  would  be comparable to the ASP,  it was necessary to convert  the AMP  for  each NDC  
so that it represented  the total amount  of the drug designated by the NDC. 
7We conducted  a manual review of  the manufacturer  names  to  determine the unique number of  manufacturer  
names reported  with the NDCs  under  review.  In several  cases in which the name was similarbut not an exact  
matchwe also reviewed the first five digits of  the NDC,  i.e.,  the labeler code.  In these specific  cases,  if the 
labeler  codes  matched, we considered these to be the same manufacturer  for the purposes of  this  analysis.   
Data Snapshot:  Some  Manufacturers  Reported Inaccurate  Drug Product  Data to CMS  4  Appendix:  Agency Comments 
Data Snapshot:  Some  Manufacturers  Reported Inaccurate  Drug Product  Data to CMS  5  Data Snapshot:  Some  Manufacturers  Reported Inaccurate  Drug Product  Data to CMS  6