U.S. Department of Health and Human Services 
 
Office of Inspector General 
 
 
 
 
CMS Should Pursue Strategies 
To Increase the Number of 
At-Risk Beneficiaries Acquiring 
Naloxone Through Medicaid 
 
 
Suzanne Murrin  
Deputy Inspector General for Evaluation and Inspections 
September 2020, OEI-BL-18-00360  U.S. Department of Health and Human Services 
O  ffice of Inspector General 
 
Report in Brief 
 
Se ptember 2020, OEI-BL-18-00360 
 
CMS Should Pursue Strategies To Increase the Number of At-Risk 
Why OIG Did This Review 
Beneficiaries Acquiring Naloxone Through Medicaid  
On average, 130 people in the 
United States die every day 
What OIG Found 
from an opioid overdose.  The  Key Takeaway  Access to naloxone for Medicaid beneficiaries has expanded 
drug naloxone plays a critical 
significantly,  with the program paying  for 21  times more doses 
role in saving  the lives of those  Despite a significant 
in 2018 than in 2014.  Despite this growth, Medicaid paid for 
who abuse or misuse opioids increase in  naloxone  
only 5 percent of  all naloxone distributed in the United States 
one review of emergency data  utilization under 
in 2018.  This figure is especially concerning given that 
found that when given  Medicaid, the 
(1) Medicaid covers almost 40 percent of nonelderly adults with 
naloxone, 94  percent of people  program accounted 
opioid use disorder (OUD) and (2) some States with extremely 
survived their overdose.  In April  for only a small  
high overdose mortality rates paid for relatively little naloxone 
2018, the U.S. Surgeon General  proportion of  all 
under Medicaid. 
issued an advisory stating that  naloxone distributed 
increasing the  availability and  in the United States  Because of statutory rebates that manufacturers pay to 
targeted distribution of  in 2018.  Especially  Medicaid, the program has been able to recoup a large 
naloxone is a critical  component  concerning, some  percentage of its spending on  naloxone.  For example, in 2018, 
of efforts to reduce deaths from  States severely  Medicaid achieved a significant discount off the list price for 
opioid-related overdoses.   affected by the  Narcan (the only version of  naloxone currently covered under 
Similarly, Federal and State  opioid crisis are  Medicaid that can be appropriately administered in emergency 
agencies have undertaken  paying for relatively  situations by those with minimal to no training).  Narcan  
numerous efforts to increase  little naloxone  under  accounted for 9 out of 10 naloxone doses paid for under the 
access to  naloxone for those in   Medicaid.   program that  year.  In  fact,  Medicaids net cost for Narcan in 
need.  However, it is widely  2018 was less than the substantially discounted price that 
acknowledged that more needs  Narcans manufacturer offered to public health organizations for this community use 
to be done.  Medicaid covers  version of naloxone. 
almost  40 percent of  nonelderly 
What OIG Recommends and How the Agency Responded 
adults with opioid use disorder, 
underscoring the key role that  The Centers for Medicare & Medicaid Services (CMS) and State Medicaid agencies can 
the program can play in  be encouraged by their progress to date in increasing access to naloxone while also 
providing access to naloxone.  continuing to look for ways to further expand naloxone availability  under Medicaid.   Such 
efforts have recently become even more crucial as States struggle with surges in drug 
How OIG Did This  Review  overdose deaths during the coronavirus pandemic.  Because the high  cost of naloxone is 
We used State-reported  often cited as a primary barrier to increased access, Medicaids ability to achieve 
Medicaid data to determine  significant discounts for the drug increases the importance of  helping more beneficiaries 
how total utilization for   obtain the drug through the program.   
naloxone changed in the 
We recommend that CMS pursue strategies to increase the number of at-risk 
program between 2014 and 
beneficiaries acquiring community-use versions of  naloxone through Medicaid.  Potential  
2018.  Using manufacturer-
strategies include the following: (1) educating Medicaid  beneficiaries and Medicaid-
reported sales data, we 
eligible patients about the availability of  naloxone under Medicaid; (2) encouraging and 
determined the proportion of all 
supporting State efforts to allow family members and friends of Medicaid beneficiaries to 
naloxone distributed in the 
obtain  community-use versions of naloxone on their behalf through Medicaid;  and 
United States that was paid for 
(3) encouraging and supporting State efforts that require providers to co-prescribe 
under Medicaid each year 
naloxone to Medicaid beneficiaries when they prescibe high doses of prescription 
between 2014 and 2018.  We 
opioids.  CMS did not explicitly concur with our recommendation but stated that it is 
used data on Medicaid drug 
already pursuing multiple strategies to increase the number of  at-risk beneficiaries 
spending to examine how 
acquiring naloxone through Medicaid and will continue to do so.  
statutory rebatespaid by 
manufacturers to States 
affec ted Medicaid payments for 
naloxone during this period.      
TABLE OF CONTENTS 
 
 
 
 
BACKGROUND  1 
Methodology  3 
FINDINGS  6 
Despite paying for rapidly increasing amounts of  naloxone each year, Medicaid still accounted  6 
for only 5 percent of the doses distributed in the United States in 2018 
Some States experiencing high overdose mortality rates paid for a comparatively small  7 
amount of naloxone through Medicaid 
Because of statutory rebates, Medicaid was able to obtain significant discounts for naloxone   9 
RECOMMENDATION  10 
Pursue strategies to increase the number of at-risk beneficiaries acquiring community-use  10 
versions of naloxone through Medicaid 
AGENCY COMMENTS AND OIG RESPONSE  12 
DETAILED METHODOLOGY  13 
APPENDICES  18 
A.  Medicaid Drug Rebate Calculation  18 
B.  Total Doses Paid for Under Medicaid, by Formulation   20 
C.  Drug Overdose Deaths and Distribution of Naloxone Paid for Under Medicaid in 2018, by  21 
State  
D.  Agency Comments    23 
ACKNOWLEDGMENTS AND CONTACT  25 
ABOUT THE OFFICE OF INSPECTOR GENERAL  26 
ENDNOTES  27 
   
BACKGROUND 
 
 
Objectives  
1.   Determine how total utilization of naloxone under Medicaid changed 
between 2014 and 2018.  
2.   Determine the proportion of all naloxone distributed in the United States 
that was paid for under Medicaid each year between 2014 and 2018.  
3.   Examine how statutory rebates affected Medicaid payments for naloxone. 
 
On average, 130 people in the United States die every day from an opioid overdose.1   
The drug naloxone plays a critical role in saving the lives of those who abuse or 
misuse opioids, with one review of emergency data finding that, when given 
naloxone, 94 percent of people survived their overdose.2  In April 2018, the U.S. 
Surgeon General issued an advisory stating that increasing the availability and 
targeted distribution of naloxone is a critical component of efforts to reduce opioid-
related overdose deaths.3  Similarly, Federal and State agencies have undertaken 
numerous efforts to increase access to naloxone  for those in need.  In this report, we 
examine utilization and cost of naloxone in Medicaid, a program that covers nearly 
40 percent of nonelderly adults with opioid use disorder (OUD).4    
Naloxone  
Naloxone was first approved by the Food and Drug Administration (FDA) in 1971 to 
reverse opioid overdoses.  The drug does this by blocking the effects of opioids on 
the brain and restoring normal breathing within minutes of administration.   
For decades, naloxone was available only in formulations that required intravenous or 
intramuscular injection, and thus was primarily intended for use by health care 
professionals and trained first responders. (Hereinafter, we refer to these formulations 
as professional use versions.)  In 2014, the first community-use version of 
naloxone, Evzio, reached the market.  Evzio is an autoinjector that provides spoken 
instructions and visual guidance during administration.  The following year, FDA 
fast-tracked approval of a nasal spray formulation of naloxone under the brand name 
Narcan.  Evzio and Narcan can be appropriately administered in emergency situations 
by those with minimal to no training, such as bystanders with no medical skills.  
However, both community-use products are more expensive than professional-use 
versions of naloxone, raising concerns about the financial impact of purchasing 
community-use versions.5    
 
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid 
OEI-BL-18-00360  Background | 1   Federal and State Efforts To Increase Access to Naloxone 
In  response to the opioid crisis, Federal and State agencies have implemented 
numerous policies to improve the distribution of naloxone to those in need.  For 
example, 47 States are making it easier to distribute naloxone directly to residents
including to Medicaid beneficiariesby allowing pharmacists to dispense naloxone 
prescribed independently or by collaborative practice agreements, standing orders,6  
or other predetermined protocols.7  A number of States are also requiring providers 
to co-prescribe naloxone when they prescribe certain opioids.8  The Centers for 
Medicare & Medicaid Services (CMS) and State Medicaid agencies have also taken 
specific steps to make naloxone more accessible to Medicaid beneficiaries
a population that is (as previously stated) particularly vulnerable to OUD.  For 
example, all State Medicaid agencies have removed prior-authorization requirements 
for naloxone prescriptions,9 and a few have allowed friends and family of Medicaid 
enrollees with addiction issues to obtain prescriptions for naloxone on the enrollees 
behalf.10  In January 2016, CMS encouraged States to place naloxone on preferred 
drug lists to increase access,11, 12 and as of 2018, 43 State Medicaid programs had 
done so for at least one formulation.13  CMS has also proposed requiring States to 
implement safety edits that would identify Medicaid beneficiaries who could be at 
high risk for an opioid overdose and for whom the co-prescribing or co-dispensing of 
naloxone should therefore be considered.14  
First responders and community health programs also play a critical role in providing 
naloxone to those in need.  In many areas, law enforcement professionals, firefighters, 
emergency medical technicians, and paramedics carry naloxone, as they are often the 
first emergency personnel to respond to overdoses.  In addition, community health 
programs throughout the country dispense naloxone to individuals at risk for an 
opioid overdose, as well as to the family and friends of such individuals.  Although 
several manufacturers have established programs to offer naloxone at discounted 
prices for first responders and certain public health programs, numerous reports 
indicate that local governments are stretching their budgets to purchase this 
lifesaving drug.15  In response, the Department of Health and Human Services (HHS) 
has issued grants to States, local law enforcement, and first responders to assist in the 
purchase of naloxone and reduce the financial impact on communities.16     
Medicaid 
Medicaid is a joint Federal-State program providing health insurance for nearly 
65 million low-income individuals across the United States.17  All State Medicaid 
agencies offer coverage for outpatient prescription drugs, including naloxone.  
Medicaid Reimbursement for Prescription Drugs 
Medicaid prescription drug benefits are offered under both fee-for-service (FFS) and 
managed care models.18  Under the FFS model, Medicaid State agencies reimburse 
pharmacies for covered outpatient drugs dispensed to beneficiaries, based on the 
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid 
OEI-BL-18-00360  Background | 2   drugs actual acquisition cost (AAC) plus a professional dispensing fee.19, 20  States 
typically determine AAC using data obtained through pharmacy surveys (e.g., the 
National Average Drug Acquisition Cost files), although compendia-published 
benchmarks such as wholesale acquisition cost (WAC)also  referred to as the drugs 
list pricemay be used as well.21    
Under the Medicaid managed care model, States do not use a general payment 
formula to calculate reimbursement amounts.  Rather, managed care organizations 
(MCOs)or pharmacy benefit managers acting on their behalfnegotiate terms for 
prescription drug payment with individual pharmacies.22  
Medicaid Drug Rebate Program 
The Omnibus Budget Reconciliation Act of 1990 created the Medicaid Drug Rebate 
Program (MDRP) to reduce State and Federal Medicaid expenditures for prescription 
drugs.  For Federal financial participation to be available for covered outpatient drugs 
under Medicaid, manufacturers must enter into rebate agreements with the Secretary 
of HHS and pay quarterly rebates to State Medicaid agencies.23  Statutorily mandated 
rebates enable Medicaid to recoup a substantial percentage of the billions that the 
program spends annually on prescription drugs.  The formula to calculate the basic 
rebate depends primarily on whether the drug is brand-name or generic and is based 
on manufacturer-reported sales prices.24  To protect Medicaid from significant price 
increases, drug manufacturers must pay additional rebates on drugs when certain 
reported prices have risen faster than inflation.25  
See Appendix A for a detailed description of the Medicaid drug rebate calculation.  
Methodology 
Scope 
We examined spending and utilization data both for professional-use and 
community-use versions of naloxone.  When examining the cost of naloxone, we 
limited our analysis to Narcan and Evziothe two available community use versions 
of naloxonebecause, as noted by the Surgeon General, community use versions of 
naloxone play a key role in reducing overdose deaths, and stakeholders have raised 
concerns about the cost of these two products.  When analyzing the amount of 
naloxone paid for through Medicaid, we did not assess whether individual State 
policies may have led to variations in utilization among States.   
Data Analysis  
Surveying Naloxone Manufacturers.  We surveyed the eight manufacturers who 
produced naloxone between 2014 and 2018.  From each manufacturer, we requested 
data related to the total number of units of naloxone distributed (including all sales 
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid 
OEI-BL-18-00360  Background | 3   and donations) in each quarter from 2014 through 2018.  We also asked 
manufacturers whether they sold naloxone under a discount program to qualified 
purchasers such as public health organizations, and if so, to provide the quarterly 
discounted price per unit.  
Calculating Medicaid Pre-Rebate Expenditures.  To calculate Medicaids annual pre-
rebate expenditures from 2014-2018, we summed total reimbursement amounts for 
naloxone products among all States using 2014-2018 Medicaid Drug Rebate System 
(MDR) data.   
Calculating Medicaid Post-Rebate Expenditures.  We subtracted total rebates 
claimed by States as reported in MDR from pre-rebate expenditures.   
Summarizing Number of Naloxone Doses Paid for Under Medicaid.   To ensure 
consistency when comparing utilization and cost across versions, we converted the 
number of units reimbursed to their equivalent number of doses (i.e., the quantity of 
naloxone the manufacturer recommends for overdose reversal) and then summed 
across all States to determine the national total.  We also calculated how many doses 
of naloxone were paid nationally and by each State under Medicaid per 100,000 
beneficiaries in 2018.  
Identifying States with Potentially High Need for Naloxone.   To identify States with a 
potentially high need for naloxone, we used 2018 CDC State-level drug overdose 
mortality data.  We ranked the age-adjusted drug overdose mortality rates by State.  
We then identified the 10 States with the highest drug overdose mortality rates as 
having a particularly high need for naloxone availability.    
Examining Cost per Dose.  We calculated how much each dose of naloxone cost 
Medicaid on average after rebates in 2016 through 2018.  As noted in the scope, we 
limited this portion of the analysis to Evzio and Narcan.  
Determining Proportion of Naloxone Paid for Under Medicaid.  Using data collected 
from our survey of manufacturers,  we determined the total number of doses of 
naloxone distributed in the United States (through all channels and to all payers) 
during each year from 2014 through 2018.  We divided the total number of doses 
paid for under Medicaid each year by the total number of doses distributed in the 
United States to determine the proportion of naloxone paid under Medicaid.  
See the Detailed Methodology section for more information. 
Limitations 
We did not review drug compendia, drug manufacturer survey data, and 
manufacturer survey responses for accuracy.  The naloxone utilization data from MDR 
reflects only units paid for by Medicaid.  Therefore, we could not determine 
(1) whether all of these paid units were actually dispensed (i.e., whether beneficiaries 
picked up their naloxone prescriptions at the pharmacy) or (2) if Medicaid 
beneficiaries obtained naloxone through sources other than Medicaid, e.g., if the 
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid 
OEI-BL-18-00360  Background | 4   naloxone was paid for out-of-pocket or distributed through public health programs 
funded by Federal grants, States, and local communities.  Some State Medicaid 
agencies may not reimburse emergency medical services for naloxone separately; 
rather, they may provide a single bundled payment for all services and medications 
administered at the time of an overdose.  MDR data does not include utilization, 
spending, and rebate information about naloxone that was part of a bundled service.    
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.   
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid 
OEI-BL-18-00360  Background | 5    
FINDINGS 
 
Despite paying for rapidly increasing amounts of naloxone each 
year, Medicaid still accounted for only 5 percent of the doses 
distributed in the United States in 2018 
Medicaid paid for 21 times more doses of naloxone in 2018 than 
in 2014 
In 2014, Medicaid paid for roughly 23,000 doses of naloxone nationwide.  By 2018 
that figure had climbed to more than  477,000 dosesa 21-fold increase in just 
5 years (Exhibit 1).  Prior to the introduction of Narcan in February 2016, professional-
use versions accounted for nearly all of the naloxone doses reimbursed under 
Medicaid.26  However, once Narcan became available, Medicaid saw a pronounced 
shift to this community-use formulation that requires minimal or no training at all for 
appropriate use.  By 2018, Narcan represented nearly 90 percent of naloxone doses 
reimbursed under Medicaid.  Although Evzio was introduced in 2014 and is also 
intended for community use, it never comprised more than 12 percent of Medicaid 
utilization each year.  Further, Evzios manufacturer terminated its rebate agreement in 
March 2017, meaning that in practice, Evzio is no longer covered by Medicaid.27, 28    
Exhibit 1:  Medicaid utilization for naloxone grew by nearly half a million doses in just 
5 years, driven primarily by increased use of Narcan. 
 
 
Source:  OIG analysis  of 20142018 MDR data.   See Appendix B for detailed information.  
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid 
OEI-BL-18-00360  Findings | 6   Relatively little of the naloxone distributed in 2018 was paid for 
by Medicaid, despite the programs serving a substantial 
percentage of individuals with opioid use disorder  
Although Medicaid paid for substantially more naloxone each year, the overall 
proportion was still relatively small given that the program serves nearly 40 percent of 
all non-elderly adults in the United States who suffer from OUD.  In total,  
manufacturers distributed 10.4 million doses of naloxone in 2018.29  As previously 
noted, Medicaid paid for 477,000 doses of naloxone that same year, or just 
4.6 percent of the total doses distributed (up from 0.5 percent in 2014).  For Narcan 
specifically (i.e., by far the most common formulation paid under Medicaid in 2018), 
nearly 10 percent of all U.S. doses were paid for under Medicaid in 2018.  It is 
important to note that this data does not necessarily mean that Medicaid 
beneficiaries in need of naloxone never acquired the drug.  As previously stated, 
beneficiaries may have obtained naloxone through sources other than Medicaid, such 
as public health programs funded by Federal grants, States, and local communities.   
Some States experiencing high overdose mortality rates paid for 
a comparatively small amount of naloxone through Medicaid 
Nationally, Medicaid paid for 639 doses of naloxone per 100,000 beneficiaries in 2018.  
Among individual States this rate varied widely, ranging from a low of 68 doses per 
100,000 beneficiaries to a high of 2,861 doses per 100,000 in that year.  Especially 
concerning is that several States severely affected by the opioid crisis paid for 
comparatively few naloxone doses under Medicaid, sometimes by a substantial 
amount (Exhibit 2).30     
For example, both Delaware and New Hampshire experienced high drug overdose 
death rates but paid for relatively little naloxone under Medicaid.  Delaware had the 
second highest drug overdose death rate in 2018, at 43.8 deaths per 100,000 
residents (more than double the national rate).  That same year, Delawares Medicaid 
program paid for only 441 naloxone doses per 100,000 beneficiaries31 percent less 
than the national Medicaid average.  Similarly, New Hampshires drug overdose 
mortality rate (35.8 per 100,000 residents) was also among the 10 highest in the 
nation in 2018; however, the State paid for just 306 doses of naloxone per 
100,000 beneficiariesless than half the national average. 
In contrast, West Virginia and Maryland also experienced high drug overdose death 
rates in 2018.  However, unlike Delaware and New Hampshire, both States distributed 
relatively large amounts of naloxone under Medicaid that year.  West Virginia had the 
highest drug overdose mortality rate in the United States in 201851.5 deaths per 
100,000 residents (double the national average).  The State also paid for more than 
double the national average amount of naloxone through Medicaid (1,453 doses per 
100,000 beneficiaries) the same year.  Similarly, Maryland ranked third highest in drug 
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid 
OEI-BL-18-00360  Findings | 7   overdose mortality rates in 2018, and its Medicaid program paid for more than 
4 times (2,861 doses per 100,000 beneficiaries) the national average number of doses.   
As previously stated, beneficiaries may have obtained naloxone through sources other 
than Medicaid, such as public health programs funded by Federal grants, States, and 
local communities.   
Exhibit 2:  States varied widely in their distribution of naloxone under 
Medicaid in 2018.  
 
Source:  OIG analysis of 2018 CDC and MDR data.   See Appendix C for detailed information.  
Note:  Drug overdose mortality rates are age-adjusted.  We did not examine whether Medicaid beneficiaries  are  
acquiring naloxone through channels outside of  Medicaid, such as through public health organizations. 
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid 
OEI-BL-18-00360  Findings | 8   Because of statutory rebates, Medicaid was able to obtain 
significant discounts for naloxone 
Given the rapid rise in naloxone utilization in Medicaid, the programs overall 
spending for the drug increased dramatically from 2014 to 2018.  However, this 
spending growth was tempered by statutorily mandated rebatesparticularly for 
brand-name versions of naloxone (i.e., Narcan and Evzio).  Between 2014 and 2018, 
Medicaid recouped between 6 percent and 84 percent of naloxone expenditures each 
year, with the sharp increase in 2016 stemming from increased use of the brand-name 
versions of naloxone (i.e., Narcan and Evzio) that are subject to higher rebates.     
Rebates allowed Medicaid to pay substantially less than the list 
priceand slightly less than the heavily discounted price 
available to qualified public health organizationsfor Narcan  
As stated previously, Narcan accounted for nearly 9 out of every 10 doses of naloxone 
paid for under Medicaid in 2018.  On average, rebates allowed  Medicaid to pay 
significantly less than the list price for each dose of the nasal spray that year.31  In fact, 
Medicaids net cost for the drug in 2018 was also less than the substantially 
discounted price offered to public health organizations by Narcans manufacturer.  
According to more recent data, Narcans pricing and net Medicaid cost remained 
relatively unchanged in 2019.  
The substantial effect of Medicaid rebates on net costs was not solely limited to 
Narcan.  During the period covered by our review, Evzios list price was as much as 
30 times greater than Narcans.  However, prior to Evzios manufacturers withdrawal 
from the Medicaid drug rebate program in early 2017, the programs net cost for 
Evzio was actually below that of Narcan.32  In part, Medicaid was able to achieve such 
massive rebates for Evzio because of the additional amounts owed under statute 
when a drugs price increases faster than inflation.  Between 2015 and 2016, Evzios 
manufacturer raised its average list price six-fold, triggering a substantial inflation-
based rebate penalty. 
 
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid 
OEI-BL-18-00360  Findings | 9    
RECOMMENDATION 
 
 
Expanding affordable access to naloxone is crucial in fighting the opioid crisis and 
reducing overdose-related deaths.  Medicaida program that serves almost 
40 percent of American adults with OUDcontinues to play a key role in achieving 
this goal.  With the encouragement of CMS, States have implemented policies that 
make naloxone more readily accessible to Medicaid beneficiaries who struggle with 
OUD.  For example, all States have removed prior-authorization requirements for 
naloxone, and most have placed naloxone on preferred drug lists.   
Our findings show that although Medicaid has greatly increased the availability of 
naloxone to  its beneficiaries, the program still paid for only 5 percent of all naloxone 
distributed in the United States in 2018.  Especially concerning is that some States 
severely affected by the opioid crisis are reimbursing for relatively little naloxone 
under Medicaid.   
In addition, because of statutory rebates, Medicaid obtains significant discounts for 
Narcana version of naloxone that can be appropriately administered by those with 
minimal to no training in emergency situations.  These rebates help bring Medicaids 
net cost for Narcan to an amount below even the highly discounted price offered by 
the manufacturer to public health organizations. 
CMS and States can be encouraged by their progress towards increasing naloxone 
access to patients while also continuing to look for ways to further expand naloxone 
availability under Medicaid.  Such efforts have recently become even more crucial as 
many States struggle with surges in drug overdose deaths during the coronavirus 
pandemic.33   Given that the high cost of naloxone is often cited as a primary barrier to 
increased access, Medicaids ability to achieve significant discounts for the drug only 
increases the importance of helping more beneficiaries obtain naloxone through the 
program.   
Therefore, we recommend that CMS: 
Pursue strategies to increase the number of at-risk beneficiaries 
acquiring community-use versions of naloxone through 
Medicaid  
Because Medicaid covers a large share of individuals with OUD, undertaking efforts to 
increase beneficiaries access to community-use naloxone such as Narcan could 
significantly reduce opioid overdose deaths.  In its efforts to expand access to this 
critical drug, CMS should work with its Federal partners, such as the Substance Abuse 
and Mental Health Services Administration and the Office of National Drug Control 
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid  
OEI-BL-18-00360  Recommendation | 10   Policy, to collect and disseminate information from States about effective strategies 
for dispensing naloxone.  This could be accomplished through several avenues, such 
through a Notice of Request for Information or Medicaid State Plan amendments.   As 
part of this process, CMS and its Federal partners may wish to consider whether the 
following specific methods could increase naloxone dispensing through State 
Medicaid programs to beneficiaries in need: 
  In conjunction with community public health organizations, educate Medicaid 
beneficiaries and Medicaid-eligible patients about the availability of naloxone 
under Medicaid; 
  Encourage and support State efforts to allow family members and friends of 
Medicaid beneficiaries to obtain community-use versions of naloxone on their 
behalf through Medicaid;  
  Encourage and support State efforts that require providers to co-prescribe 
naloxone to Medicaid beneficiaries when they prescribe high doses of 
prescription opioids.    
 
   
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid  
OEI-BL-18-00360  Recommendation | 11    
AGENCY COMMENTS AND OIG RESPONSE 
 
 
CMS did not explicitly concur with our recommendation but stated that the agency is 
already pursuing multiple strategies to increase the number of at-risk beneficiaries 
acquiring community-use versions of naloxone through Medicaid and will continue to 
do so.  CMS anticipates that increased access will result from its recent proposal 
requiring States to implement safety edits that would identify at-risk Medicaid 
beneficiaries for whom the co-prescribing or co-dispensing of naloxone should be 
considered.  Further, the agency explained that it will continue to work with its Federal 
and State partners where appropriate. 
OIG appreciates the efforts CMS has taken to ensure that at-risk beneficiaries acquire 
community-use versions of naloxone through Medicaid.  OIG continues to 
recommend that CMS build upon these efforts and further expand its strategies to 
increase beneficiaries access to this lifesaving drug through Medicaid, particularly 
given our findings that some States severely affected by the opioid crisis are 
reimbursing for relatively little naloxone under Medicaid.  We ask that CMS specify in 
its Final Management Decision how it is enhancing, or plans to enhance, these efforts. 
For the full text of CMSs comments, see Appendix D. 
 
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid  
OEI-BL-18-00360  Agency Comments and OIG Response | 12    
DETAILED METHODOLOGY 
 
 
Data Sources  
Drug Products in the Medicaid Drug Rebate Program File.  To identify national drug 
codes (NDCs) representing naloxone, we obtained all NDCs, associated product 
information (e.g., product names, package sizes, etc.), and Medicaid unit type data for 
2014 through 2018 from CMSs Drug Products in the Medicaid Drug Rebate Program 
File.  These files contain drugs that have been reported by drug manufacturers 
participating in the Medicaid Drug Rebate Program.  
FDA NDC Directory.  The FDA NDC Directory provides a current list of all drug 
products distributed in the United States.  We obtained all NDCs and associated 
product information from the FDA NDC Directory on March 27, 2019 to identify NDCs 
representing naloxone.   
Drug Compendia.  The IBM Micromedex Red Book database and First Databank 
(collectively referred to as the drug compendia) provide list prices and drug 
information for drugs approved by FDA.  To identify NDCs representing naloxone, we 
obtained NDCs and associated pricing and product information for 2014 through 
2018.   
CDC Injury Center Data.  We obtained NDCs and associated product data from CDCs 
2018 Injury Center Data.  CDCs data file contains information for opioids with 
morphine milligram equivalent conversion factors. 
Medicaid MDR Data.  States report to CMS the drug utilization and payments by NDC 
for covered outpatient drugs paid for by the State Medicaid agency.  We obtained 
quarterly 20142018 data on Medicaid expenditures, rebates, and utilization for each 
naloxone NDC from CMSs nonpublic MDR system for all 50 States and the District of 
Columbia.34   
Medicaid Rebate Amounts.  We obtained from CMS the Medicaid unit rebate 
amounts (URAs) for all NDCs associated with Narcan and Evzio in each quarter from 
2014 through 2018.  
Medicaid Budget and Expenditure  System (MBES).  We obtained monthly 2014 
through 2018 counts of Medicaid enrollees for each State from CMSs  MBES to 
calculate how many doses of naloxone were paid for under Medicaid per 
100,000 beneficiaries (i.e., Medicaid per-capita doses). 
CDC Drug Overdose Data.   CDCs National Vital Statistics System collects information 
on births, deaths, and fetal deaths from U.S. States and jurisdictions.  Age-adjusted 
drug overdose mortality rates are calculated based on the underlying cause-of-death 
codes from the International Classification of Diseases, Tenth Revision (ICD-10), that 
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid 
OEI-BL-18-00360  Detailed Methodology | 13   detail drug poisoning.35  In this report, we used mortality rates for all drug overdoses.  
Drug-specific overdose death information (e.g., death information that  includes the 
type of drug that caused the overdose) is not routinely reported across all U.S. 
jurisdictions; therefore, using only the mortality rates specific to opioid overdoses 
would have underestimated the number of actual opioid overdose deaths.  We 
obtained 2018 State-level age-adjusted mortality rates from CDC.  We used these 
data as a measure to identify States with high indicators of opioid misuse and abuse.  
Drug Manufacturer Contact Information.  CMSs Drug Contact file contains contact 
information for each manufacturer participating in the Medicaid drug rebate program. 
We sent a survey to the legal contact listed in this file for every manufacturer 
associated with each naloxone NDC.   
Drug Manufacturer Survey and Sales Data.  We surveyed the eight manufacturers 
who produce naloxone products and received responses from each.  We did not 
include repackagers (companies that repackage drugs into smaller quantities for sale 
to providers).  We asked manufacturers whether they sell naloxone under  a discount 
program to qualified purchasers, what types of entities are eligible for the discount 
price (i.e., public health price), and the quarterly discount price per unit for each NDC.    
We also requested sales data from manufacturers.  For each naloxone NDC, we asked 
how many units the manufacturer donated at no charge, sold to qualified purchasers 
at the discount program price, and sold outside of the discount program annually 
from 2014 to 2018.     
Data Analysis   
Selecting Naloxone NDCs.  We obtained all NDCs representing products containing 
naloxone that were active at any point between 2014 and 2018 from CMSs Drug 
Products in the Medicaid Drug Rebate  Program File, FDA NDC Directory, drug 
compendia files, and CDC Injury data.  We then removed NDCs that represented 
combination medications containing naloxone (e.g., buprenorphine/naloxone) 
because these products are not used to treat opioid-related  overdoses.  In addition, 
we removed powder formulations of naloxone, as these versions would need to be 
reconstituted and therefore would not be widely used in settings relevant to our 
scope.     
We identified 57 NDCs that represent naloxone products (excluding powder 
formulations) on the market at any point between 2014 and 2018.   
Surveying Naloxone Manufacturers.  We removed NDCs representing repackaged 
naloxone products and surveyed manufacturers regarding the remaining 31 NDCs.  
We asked manufacturers about what  discount programs, if any, they offered to 
qualified purchasers for naloxone.  We also requested discount program prices (i.e., 
public health prices) and sales data for our study period. 
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid 
OEI-BL-18-00360  Detailed Methodology | 14   Categorizing NDCs by Formulation.  Using quarterly Medicaid expenditure data from 
MDR, we determined that Medicaid paid for 28 of the 57 naloxone NDCs during the 
5-year period.  All 28 were produced by original manufacturers (i.e., none of the 26 
repackaged NDCs had associated Medicaid utilization).  We determined whether each 
of the NDCs with Medicaid expenditures represents Narcan, Evzio, or a professional-
use version of naloxone.  We referred to product labeling information to  identify each  
drugs formulation.  
Calculation of Medicaid Expenditures and Rebates Claimed.   We calculated 
Medicaid expenditures and rebates for the 28 naloxone NDCs paid under Medicaid 
using the quarterly 2014 to 2018 MDR data.36  To calculate how much Medicaid spent 
for naloxone before receiving rebates (i.e., pre-rebate spending), we summed total 
reimbursement amounts.  To calculate total rebates owed by manufacturers for 
naloxone, we summed total rebates claimed by States.  Finally, to calculate how much 
Medicaid spent for naloxone after receiving rebates (i.e., post-rebate spending), we 
subtracted total rebates from pre-rebate expenditures.  We conducted these 
calculations for each year under review.  
Correcting Utilization Data Anomalies.   We identified anomalies in the MDR in which 
the data sometimes appeared to misrepresent the actual number of units reimbursed 
by certain States.  This occurred primarily when States seemed to report data using an 
incorrect unit type (e.g., reporting the number of milliliters of Evzio reimbursed 
instead of the number of individual autoinjectors).  In these instances, we manually 
corrected the data only for NDCs representing Narcan and Evzio because (1) these 
versions accounted for the most expenditures under Medicaid and (2) the relatively 
standard pricing for these versions made potentially incorrect data easier to identify.  
Converting Units to Doses.  In MDR, the number of units of a drug listed is generally 
based on the lowest dispensable amount of the drug (e.g., milliliter, tablet, etc.).  
Therefore, for naloxone, the number of units billed for a single dose (i.e., a single 
injection or nasal spray) varies depending on the specific formulation (e.g., a nasal 
spray of 0.1 mL versus an autoinjector of 0.4 mL).  To ensure consistency when 
comparing utilization and cost across versions, we converted the number of units 
reimbursed for each NDC as reported in MDR to their equivalent number of doses.  
For example, if providers bill and Medicaid reimburses for a version of naloxone on a 
per mL basis, but a single dose of this version is 2 mL, we multiplied units by 0.5 to 
calculate doses.  We converted units to doses for all naloxone NDCs.  
Using data collected from the eight naloxone manufacturers, we converted units 
distributed to doses distributed for each naloxone NDC by  identifying how many units 
are within a single dose of naloxone (i.e., the quantity of naloxone the manufacturer 
recommends that an individual administer for overdose reversal).   
We also used manufacturer-reported data to convert quarterly public health prices for 
each Narcan and Evzio NDC to public health prices per dose.  Similarly, the number of 
units on which WACsi.e., manufacturer list pricesare based often differs from the 
number of units for which providers bill Medicaid for the same drug.  To ensure 
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid 
OEI-BL-18-00360  Detailed Methodology | 15   consistency when comparing the cost of naloxone under Medicaid to WACs, we used 
drug compendia data to convert quarterly WACs for each Narcan and Evzio NDC to 
WACs per dose by identifying how many units are within a single dose of naloxone.   
Total Medicaid Utilization.  To determine trends in naloxone utilization under 
Medicaid, for each year under review we  summed the total doses reimbursed overall, 
by formulation, and by State.37   
Calculation of Medicaid Per Capita Utilization.  To better compare State naloxone 
utilization rates, we calculated Medicaid doses per capita by State.  We first summed 
the number of doses reimbursed under Medicaid in each State.  We divided the result 
by the average number of Medicaid enrollees that year (i.e., calculated as an average 
of monthly Medicaid enrollments).  Finally, we multiplied the result by 100,000 to 
calculate how many doses of naloxone were paid for under Medicaid in each State 
per 100,000 beneficiaries.   
We then divided States Medicaid doses per 100,000 beneficiaries into quintiles to 
better compare States distribution of naloxone doses paid for under Medicaid in 
2018.  To determine how many doses beneficiaries received on average over the 
years, we calculated the average number of naloxone doses paid for under Medicaid 
per 100,000 beneficiaries in the entire United States (i.e., nationwide rate) every year 
between 2014 and 2018. 
Identifying States with High Indicators of Opioid Misuse and Abuse.  To identify 
States with a potentially high need for naloxone, we used CDC State-level drug 
overdose mortality data.  We ranked the age-adjusted drug overdose mortality rates 
by State.  We then identified States with rates that were in the top 20 percent of the 
distribution (i.e., the 10 States with the highest drug overdose mortality rates) as 
having a particularly high need for increased naloxone availability.  
Calculating Medicaid Cost Per Dose.  To calculate Medicaids nationwide post-rebate 
cost per dose, we divided total post-rebate spending by the number of doses paid for 
by the program that same year.  We conducted this calculation for each year between 
2016 and 2018.  We limited this part of our analysis to only Narcan and Evzio because 
community-use formulations of naloxone are currently the most widely utilized 
versions of the drug.  
Calculating WAC Per Dose.   To calculate an annual WAC per dose for Narcan and 
Evzio, we first averaged the quarterly WACs per dose.  Because there were multiple 
NDCs associated with Narcan and Evzio, we then calculated a volume-weighted WAC 
per dose for these products using manufacturer-reported sales data.  We conducted 
this calculation for Narcan and Evzio each year between 2016 and 2018.  
Calculating Public Health Price Per Dose.   Because manufacturers offered discount 
prices for only one NDC associated with each product, we simply averaged the 
quarterly public health prices per dose to calculate a single annual public health price 
per dose for Narcan and Evzio each year between 2016 and 2018.    
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid 
OEI-BL-18-00360  Detailed Methodology | 16   Determining the Proportion of Naloxone Paid for under Medicaid.  Using data 
collected from the eight naloxone manufacturers, we calculated the total number of 
doses of naloxone distributed in the United States each  year.  We summed the 
number of doses for each NDC that were donated at no charge, sold at discount 
prices to public health organizations (if applicable), and sold outside of the 
manufacturers public health program (to all payers, such as Federal and private 
payers).  We divided the total doses reimbursed under Medicaid by the total doses 
distributed to calculate the percentage of naloxone doses paid for under Medicaid 
each year overall and by formulation.  
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid 
OEI-BL-18-00360  Detailed Methodology | 17    
APPENDIX A 
 
Medicaid Drug Rebate Calculation 
Under section 1927 of the Act, manufacturers are responsible for accurately 
calculating and paying rebates to the States.  To assist States, CMS uses the pricing 
and drug category data reported by manufacturers to calculate by NDC a  unit rebate 
amount (URA) every quarter for each covered outpatient drug included in the 
Medicaid drug rebate program.  In general, the URA equals the sum of the basic 
rebate and the inflation-indexed rebate (if any).  
Basic Rebate 
Pursuant to section 1927(c) of the Act, the formula used to calculate the URA depends 
on the drug category reported by the manufacturer.  The basic URA for a 
noninnovator multiple-source drug is 13 percent of the AMP.  The basic URA for a 
single-source or innovator multiple-source drug is the greater of 23.1 percent of the 
AMP or the difference between the AMP and best price.  In addition, for drugs 
approved exclusively for pediatric indications and certain blood-clotting factors, the 
basic rebate is the greater of 17.1 percent of AMP or the difference between the AMP 
and the best price.  
Inflation-Indexed Rebate  
If the AMP for a drug has risen faster than the Consumer Price Index-Urban (CPI-U), 
the drugs manufacturer must pay an additional rebate over and above the basic 
URA.38  To determine whether a drug is subject to the increased rebate amount, CMS 
compares the reported AMP for a given quarter to its inflation-adjusted baseline 
AMP.   
To adjust the baseline AMP for inflation, CMS first divides the baseline AMP by the 
baseline CPI-U (see Exhibit 3 for details).  The result of that calculation is then 
multiplied by the quarterly CPI-U, which is the CPI-U for the month before the quarter 
being calculated.  If the reported AMP is greater than this inflation-adjusted baseline 
AMP, the difference is added to the basic rebate when determining the URA.  If the 
result (i.e., total rebate amount) is greater than the reported AMP, it is reduced to 
equal AMP.  
 
 
 
 
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid 
OEI-BL-18-00360  Appendix A | 18   Exhibit 3:  Key variables used to calculate inflation-indexed rebates 
Drug Category  Market Date  Baseline AMP  Baseline CPI-U 
On or before  CPI-U for 
3rd-quarter 1990 AMP  
October 1, 1990  September 1990  
Single-Source or 
CPI-U for the first 
Innovator  AMP for the first 
month before the first  
Multiple-Source   quarter after the 
After October 1, 1990   quarter after the 
drugs initial market 
drugs initial market 
date 
date 
On or before  CPI-U for 
3rd-quarter 2014 AMP 
April 1, 2013   September 2014 
Noninnovator  
Multiple-Source   AMP for the 5th full  CPI-U for the last 
After April 1, 2013   calendar quarter after  month of the Baseline 
the market  date   AMP quarter  
Source:  Sections 1927(c)(2) and 1927(c)(3) of the Act.  
Total Rebate   
CMS provides the URA for each NDC to State Medicaid agencies each quarter.  To 
determine the total rebate due from manufacturers for each NDC, the URA is 
multiplied by the total number of units of the NDC reimbursed by the State during 
the quarter.  This utilization figure should include all units for which Medicaid paid a 
portion of the claim, including Part B claims for beneficiaries who also have coverage 
under Medicare (i.e., dual eligibles) for which Medicaid covered any Part B 
coinsurance or deductible.  To prevent subjecting drug manufacturers to duplicate 
discounts when claiming Medicaid rebates, States need to exclude claims for drugs 
purchased under the 340B Program when calculating the total rebates owed.39  
  
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid 
OEI-BL-18-00360  Appendix A | 19    
APPENDIX B 
 
Total Doses Paid for Under Medicaid, by Formulation 
Formulation 
2014  2015  2016  2017  2018 
Autoinjector (Evzio)  110  5,050   10,159  1,455   0 
Community-Use  Nasal Spray (Narcan)   0   0   36,876   194,835   424,381  
Versions  Community-Use 
110   5,050   47,036   196,289   424,381  
Versions Total  
Professional-Use  Professional-Use 
22,638  38,557  72,799  68,839  53,026 
Versions   Versions Total  
                                 Grand Total   22,748   43,606   119,834   265,128   477,407  
Source:  OIG analysis  of 20142018 MDR data. 
Note:  Sum of rows may not equal totals due to rounding.  
 
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid  
OEI-BL-18-00360  Appendix B | 20    
APPENDIX C 
 
Drug Overdose Deaths and Distribution of Naloxone Paid for 
Under Medicaid in 2018, by State 
Drug Overdose Age-
Adjusted Mortality  
Rate Per 100,000 
State  People  Doses Per 100,000 Medicaid Beneficiaries 
West Virginia  51.5                       1 ,453.5 
Delaware  43.8                          4 41.3 
Maryland  37.2                       2 ,861.1 
Pennsylvania  36.1                       2 ,143.8 
Ohio  35.9                       1 ,064.3 
New Hampshire  35.8                          3 05.6 
District of  Columbia  35.4                          3 51.4 
New Jersey  33.1                          4 66.2 
Massachusetts  32.8                       1 ,611.4 
Kentucky  30.9                          8 09.3 
Connecticut  30.7                       2 ,250.1 
Rhode Island  30.1                       2 ,573.2 
Maine  27.9                          6 05.0 
Missouri  27.5                          7 45.4 
Tennessee  27.5                          1 87.6 
New Mexico  26.7                       1 ,523.0 
Michigan  26.6                          4 33.4 
Vermont  26.6                          8 23.5 
Indiana  25.6                          9 77.4 
Louisiana  25.4                          4 41.6 
Arizona  23.8                       1 ,249.8 
Florida  22.8                          4 92.5 
South Carolina  22.6                          1 86.5 
North Carolina  22.4                          5 18.0 
Illinois  21.3                          3 55.1 
Nevada  21.2                          7 83.0 
Utah  21.2                          7 26.8 
Wisconsin  19.2                          5 39.8 
New York  18.4                          3 17.9   
 
 
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid 
OEI-BL-18-00360  Appendix C | 21   Drug Overdose Age-
Adjusted Mortality  
Rate Per 100,000 
State  People  Doses Per 100,000 Medicaid Beneficiaries 
Oklahoma  18.4                          5 61.0 
Virginia  17.1                       1 ,561.9 
Colorado  16.8                          7 05.7 
Alabama  16.6                          1 09.8 
Arkansas  15.7                            9 7.5 
Washington  14.8                          8 55.5 
Alaska  14.6                          6 38.9 
Idaho  14.6                          4 47.0 
Hawaii  14.3                          3 07.3 
Georgia  13.2                          1 12.0 
California  12.8                          2 28.6 
Oregon  12.6                       1 ,004.6 
Kansas  12.4                          4 55.7 
Montana  12.2                          7 58.1 
Minnesota  11.5                          6 06.0 
Wyoming  11.1                          5 00.7 
Mississippi  10.8                            6 8.2 
Texas  10.4                          1 19.3 
North Dakota  10.2                          1 66.3 
Iowa  9.6                          1 33.4 
Nebraska  7.4                          1 08.9 
South Dakota  6.9                           231.1   
Source:  OIG analysis of 2018 CDC drug overdose mortality data and 2018 MDR data.  
 
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid  
OEI-BL-18-00360  Appendix C | 22      
APPENDIX D 
 
Agency Comments 
  
 
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid 
OEI-BL-18-00360  Appendix D | 23    
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid 
OEI-BL-18-00360  Appendix D | 24    
ACKNOWLEDGMENTS AND CONTACT 
 
Acknowledgments 
Bahar Adili served as the team leader for this study, and Kara Robinson served as the 
lead analyst.  Office of Evaluation and Inspections staff who provided support include 
Adam Freeman, Althea Hosein, Kevin Manley, and Christine Moritz.  
We would also like to acknowledge the contributions of other Office of Inspector 
General staff, including Lauren McNulty and Jessica Swanstrom.   
This report was prepared under the direction of Dave Tawes, Regional Inspector 
General for Evaluation and Inspections in the Baltimore regional office; Heather 
Barton, Deputy Regional Inspector General; and Louise Schoggen, Assistant Regional 
Inspector General. 
Contact 
To obtain additional information concerning this report, contact the Office of Public 
Affairs at Public.Affairs@oig.hhs.gov.  OIG reports and other information can be found 
on the OIG website at oig.hhs.gov.  
Office of Inspector General 
U.S. Department of Health and Human Services 
330 Independence Avenue, SW 
Washington, DC 20201  
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid  
OEI-BL-18-00360  Acknowledgments and Contact | 25    
ABOUT THE OFFICE OF INSPECTOR GENERAL 
 
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-
452, as amended, is to protect the integrity of the Department of Health and Human 
Services (HHS) programs, as well as the health and welfare of beneficiaries served by 
those programs.  This statutory mission is carried out through a nationwide network 
of audits, investigations, and inspections conducted by the following operating 
components: 
The Office of Audit Services (OAS) provides auditing services for HHS, 
either by conducting audits with its own audit resources or by overseeing audit work 
done by others.  Audits examine the performance of HHS programs and/or its 
grantees and contractors in carrying out their respective responsibilities and are 
intended to provide independent assessments of HHS programs and operations.  
These audits help reduce waste, abuse, and mismanagement and promote economy 
and efficiency throughout HHS. 
The Office of Evaluation and Inspections (OEI)  conducts national 
evaluations to provide HHS, Congress, and the public with timely, useful, and reliable  
information on significant issues.  These evaluations focus on preventing fraud, waste, 
or abuse and promoting economy, efficiency, and effectiveness of departmental 
programs.  To promote impact, OEI reports also present practical recommendations 
for improving program operations. 
The Office of Investigations (OI)  conducts criminal, civil, and administrative 
investigations of fraud and misconduct related to HHS programs, operations, and 
beneficiaries.  With investigators working in all 50 States and the District of Columbia, 
OI utilizes its resources by actively coordinating with the Department of Justice and 
other Federal, State, and local law enforcement authorities.  The investigative efforts 
of OI often lead to criminal convictions, administrative sanctions, and/or civil 
monetary penalties. 
The Office of Counsel to the Inspector General (OCIG)  provides 
general legal services to OIG, rendering advice and opinions on HHS programs and 
operations and providing all legal support for OIGs internal operations.  OCIG 
represents OIG in all civil and administrative fraud and abuse cases involving HHS 
programs, including False Claims Act, program exclusion, and civil monetary penalty 
cases.  In connection with these cases, OCIG also negotiates and monitors corporate 
integrity agreements.  OCIG renders advisory opinions, issues compliance program 
guidance, publishes fraud alerts, and provides other guidance to the health care 
industry concerning the anti-kickback statute and other OIG enforcement authorities. 
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid 
OEI-BL-18-00360  About OIG | 26   ENDNOTES 
 
 
1 CDC, Americas Drug Overdose Epidemic:  Data to Action.  Accessed at https://www.cdc.gov/injury/features/prescription-drug-
overdose/index.html June 18, 2020.  
2 Weiner SG, Baker O, Bernson D, Schuur JD/Brigham and Womens Hospital, Boston, MA, One-Year Mortality of Opioid 
Overdose Victims Who Received Naloxone by Emergency Medical Services. Annals of Emergency Medicine Volume 70, Issue 4, 
Supplement, October 2017. 
3 Office of the Surgeon General. U.S. Surgeon Generals Advisory on Naloxone and Opioid Overdose. Accessed at 
https://www.hhs.gov/surgeongeneral/priorities/opioids-and-addiction/naloxone-advisory/index.html on March 24, 2020.  
4 Kaiser Family Foundation, The Opioid Epidemic and Medicaids Role in Facilitating Access to Treatment. Accessed at 
https://www.kff.org/medicaid/issue-brief/the-opioid-epidemic-and-medicaids-role-in-facilitating-access-to-treatment/ on  
February 25, 2020.  
5 United States  Senate,  Combatting the Opioid Crisis:  The Price Increase of an Opioid Overdose Reversal Drug and the Cost to 
the U.S. Health Care System. 
6 Standing orders take the place of an individual prescription. 
7 CMS, National Medicaid Fee-For-Service (FFS) 2018 Drug Utilization Review (DUR).  Accessed at 
https://www.medicaid.gov/medicaid/prescription-drugs/downloads/drug-utilization-review/2018-dur-ffs-summary-report.pdf  
on July 10, 2020.  
8 Association of State and Territorial Health Officials, Increasing Number of States Require Naloxone to be Co-Prescribed with 
Opioids.  Accessed at https://www.astho.org/StatePublicHealth/Increasing-Number-of-States-Require-Naloxone-Co-
Prescribed-with-Opioids/08-15-19/ on May 21, 2020.  
9 CMS, National Medicaid Fee-For-Service (FFS) 2018 Drug Utilization Review (DUR).  Accessed at 
https://www.medicaid.gov/medicaid/prescription-drugs/downloads/drug-utilization-review/2018-dur-ffs-summary-report.pdf  
on July 10, 2020.  
10 For example, in Florida, a family member or friend obtaining a prescription for a Medicaid enrollee must present the 
enrollees Medicaid identification number for the pharmacy to bill Medicaid.  In this case, the Federal Governments share 
(Federal Medical Assistance Percentage) of payments would be available for this prescription as well.  Kaiser Family Foundation, 
Medicaid Behavioral Health Services: Naloxone Coverage Provided for Family Members or Friends Obtaining a Naloxone 
Prescription on Enrollees Behalf.  Accessed at https://www.kff.org/other/state-indicator/medicaid-behavioral-health-services-
naloxone-coverage-provided-for-family-members-or-friends-obtaining-naloxone-prescription-on-enrollees-behalf/ on 
May 21, 2020.  
11 Medications are often designated as preferred or nonpreferred drugs by the State Medicaid agency or contracted managed 
care organization.  In most cases, providers are permitted to prescribe preferred drugs without seeking prior authorization. 
12 CMS, Best Practices for Addressing Prescription  Opioid Overdoses, Misuse and Addiction.  Accessed at 
https://www.medicaid.gov/sites/default/files/Federal-Policy-Guidance/Downloads/cib-02-02-16.pdf on March 19, 2020. 
13 SAMHSA, Medicaid Coverage of Medication-Assisted Treatment for Alcohol and Opioid Use Disorders and of Medication for the 
Reversal of Opioid Overdose.  Accessed at 
https://store.samhsa.gov/sites/default/files/d7/priv/medicaidfinancingmatreport_0.pdf on February 27, 2020.   
 
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid  
OEI-BL-18-00360  Endnotes | 27  
   
14 85 Fed. Reg. 37286-37322 (June 19, 2020). 
15 For example, see Alison Kodjak, First Responders Spending More On Overdose Reversal Drug, NPR, August 8, 2017.  See 
also Matt Stout, State funds for overdose-reversing Narcan run dry, raising prices for municipalities,  Boston Globe, April 4,  
2018. 
16 The Comprehensive Addiction and Recovery Act (CARA) established a grant program to assist local governments in 
providing naloxone for first responders to administer during opioid overdose emergencies.  Comprehensive Addiction and 
Recovery Act of 2016, P.L. No. 114-198.  The Substance Use Disorder Prevention that Promotes Opioid Recovery and Treatment 
(SUPPORT) for Patients and Communities Act recently expanded the grant program.  SUPPORT for Patients and Communities 
Act, P.L. No. 115-271. 
17 Medicaid enrollment for 2018.  Kaiser Family  Foundation, Health Insurance Coverage of the Total Population.  Accessed at 
https://www.kff.org/other/state-indicator/total-population/  on April 7, 2020. 
18 MACPAC (the Medicaid and CHIP [Children's Health Insurance Program] Payment and Access Commission), Provider 
Payment and Delivery Systems.  Accessed at https://www.macpac.gov/medicaid-101/provider-payment-and-delivery-systems/  
on February 27, 2020.  
19 CMS, Implementation of the Covered Outpatient Drug Final Regulation Provisions Regarding Reimbursement for Covered  
Outpatient Drugs in the Medicaid Program.  Accessed at https://www.medicaid.gov/federal-policy-
guidance/downloads/smd16001.pdf on March 31, 2020. 
20 Actual acquisition cost (AAC) is the purchase price paid by a pharmacy net of all discounts and rebates to the price of the 
drug, not including the professional dispensing fee.  
21 WAC is an estimate of the manufacturers list price for a drug to wholesalers or other direct purchasers, not including 
discounts or rebates. 
22 Kaiser Family Foundation. Pricing and Payment for Medicaid Prescription Drugs.  Accessed at 
https://www.kff.org/medicaid/issue-brief/understanding-the-medicaid-prescription-drug-rebate-program/ on February 28, 
2020.  
23 Sections 1927(a)(1) and (b)(1) of the Social Security Act (the Act). 
24 The basic rebate amount for a brand-name drug is set at either the difference between the quarterly average manufacturer 
price (AMP) and the best price or 23.1 percent of the AMP, whichever is higher.  For generic drugs, the basic rebate amount is 
equivalent to the 13 percent of the AMP.  Section 1927(c) of the Act. 
25 Sections 1927(c)(2) and 1927(c)(3) of the Act.  
26 Evzio entered the market in 2014, and its manufacturer, Kaleo, left the Medicaid drug rebate program in 2017.   
27 According to a U.S. Senate staff report, Kaleos explanation for leaving the Medicaid drug rebate program was: [M]any state 
Medicaid plans restrict patients to only one preferred product on their formularies. To help meet the needs of the community 
and ensure patients at risk for an opioid emergency have access to EVZIO, we are no longer participating in Medicaid.  See 
U.S. Senate, Combatting the Opioid Crisis:  The Price Increase of an Opioid Overdose Reversal Drug and the Cost to the U.S. 
Health Care System, pp. 79-80. 
28 In the second quarter of 2017, Medicaid reimbursed providers in three States for Evzio even though Kaleo had exited the 
Medicaid drug rebate program in the first quarter of 2017. 
29 In 2018, 3 percent of doses were donated by manufacturers and one-third were sold at discounted prices to qualified public 
health entities, such as emergency personnel, community health programs, and colleges.  The remainder were sold at 
nondiscount prices and paid for by other entitiessuch as private insurance, Medicare, and Medicaidor directly by 
 
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid  
OEI-BL-18-00360  Endnotes | 28  
   
consumers.  One manufacturer reported to OIG only total units distributed for each of its naloxone products and did not report 
specifically how many of those doses were donated, sold at discount prices, and sold at nondiscount prices.  Therefore, we may 
have underestimated these calculations. 
30 Medicaid beneficiaries may acquire naloxone through channels outside of Medicaid, such as through public health 
organizations. 
31 OIG is unable to disclose prices for Narcan because drug pricing information is confidential.  
32 OIG is unable to disclose prices for Evzio because drug pricing information is confidential.  
33 For example, see Brianna Ehley, Pandemic unleashes a spike in overdose deaths,  Politico, June 29, 2020.  
34 We obtained data directly from CMSs nonpublic MDR system.  MDR contains fields that have been removed (e.g., data fields 
related to Medicaid drug rebates) and data that have been suppressed from the public to protect beneficiary privacy. 
35 CDC.  Drug Overdose Deaths in the United States, 1999-2018.  To identify drug overdose deaths, the National Center for 
Health Statistics uses ICD-10 underlying-cause-of-death codes X40X44, X60X64, X85, and Y10Y14.   
36 MDR contains data summarizing Medicaid payments by State and payment arrangement (i.e., FFS or MCO).  However, there  
are instances in which capitated payment arrangements between States and MCOs result in reimbursement amounts of $0.  
Capitation payments are premiums paid by the State to the MCO to cover the cost of providing services.  A payment is made 
regardless of whether a given beneficiary receives services for that month.  Because we could not identify a reimbursement 
amount for the drug specifically in these instances, we removed these records.  These accounted for 3 percent of records over 
the 5-year study period.    
37 Capitated payment arrangements are sometimes used by States to reimburse MCOs.  In these cases, Medicaid provides  
a payment for a number of services, and reports paying $0.  Because we could not determine how much the State reimbursed 
for the naloxone NDC specifically, we removed the associated utilization from our analysis.  
38 Sections 1927(c)(2) and 1927(c)(3) of the Act.  
39 The 340B Drug Discount Program (340B Program) requires drug manufacturers to provide discounted outpatient drugs to 
certain eligible health care entitiesknown as covered entitiesthat serve the underinsured or uninsured.  Covered entities 
include disproportionate share hospitals, which are hospitals that serve a disproportionately large number of low-income 
patients.  Duplicate discounts under Medicaid are prohibited by law.  42 U.S.C.  256b(a)(5)(A). 
CMS Should Pursue Strategies To Increase the Number of Beneficiaries Acquiring Naloxone Through Medicaid  
OEI-BL-18-00360  Endnotes | 29