February 15, 2022 
TO:   Chiquita Brooks-LaSure 
Administrator 
Centers for Medicare & Medicaid Services  
ERIN BLISS Digitally signed by ERIN BLISS 
FROM:   Suzanne Murrin  Date: 2022.02.15 11:17:38 
-05'00' 
Deputy Inspector General 
On behalf of Suzanne Murrin 
   for Evaluation and Inspections 
SUBJECT:  Comparison of Average Sales Prices and Average Manufacturer Prices: Results 
for the Third Quarter of 2021, OEI-03-22-00190 
This memorandum summarizes the results of the Office of Inspector Generals (OIGs) 
comparison of average sales prices (ASPs) and average manufacturer prices (AMPs) for the third 
quarter of 2021.  By law, OIG must notify the Secretary of Health and Human Services if the 
ASP for a particular drug exceeds the drugs AMP by 5 percent or more.  If that threshold is met, 
the Secretary may disregard the drugs ASP when setting the reimbursement amount and 
substitute the lesser of either the widely available market price or 103 percent of the AMP.   
In April 2013, the Centers for Medicare & Medicaid Services (CMS) began making price 
substitutions in accordance with the November 2012 final rule specifying the circumstances 
under which AMP-based price substitutions occur.  Pursuant to the rule, CMS substitutes 
103 percent of the AMP for the ASP-based reimbursement amount when OIG identifies a drug 
code that exceeds the 5-percent threshold for 2 consecutive quarters or 3 of the previous 4 
quarters.  CMS lowers reimbursement amounts only when ASP and AMP comparisons are based 
on the same set of drug products (i.e., based on complete AMP data).  To prevent CMS from 
inadvertently raising the Medicare reimbursement amount, a price substitution is not 
implemented if the substituted amount would exceed the ASP-based payment amount for the 
quarter in which the price substitution would take effect.  In addition, price substitutions are not 
implemented for drugs that the Food and Drug Administration (FDA) identifies as being in short 
supply.  
OIG found that in the third quarter of 2021, 8  drug codes met CMSs price-substitution criteria 
by exceeding the 5-percent threshold for 2 consecutive quarters or 3 of the previous 4 quarters, 
on the basis of complete AMP data.  OIG found 6 additional drug codes that, on the basis of 
complete AMP data, exceeded the 5-percent threshold.  However, at the time of our analysis, 
FDA identified these drugs as being in short supply.  Another 14  drug codes had ASPs that  Page 2Chiquita Brooks-LaSure 
exceeded the AMPs by at least 5 percent in the third quarter of 2021, on the basis of complete 
AMP data, but these drug codes did not meet other CMS price-substitution criteria.  
 
In addition, on February 11, 2022, OIG sent an early alert to CMS informing you that the ASPs 
used to set the Part B payment amount for Aduhelm in the first quarter of 2022 exceeded the 
widely available market price by more than 5 percent.  In future quarters, OIG will continue to 
provide early alerts to CMS when we identify similar instances involving Part B drugs.   
 
We will provide you with the results of our pricing comparison for the third quarter of 2021, the 
results for the three previous quarters, and pricing information for Aduhelm from the February 
2022 early alert.  This information will be transmitted via our secure file transfer system.