Department of Health and Human Services


OFFICE OF 

INSPECTOR GENERAL 

INTRAVENOUS IMMUNE 


GLOBULIN: MEDICARE 


PAYMENT AND AVAILABILITY


Daniel R. Levinson


Inspector General 


April 2007


OEI-03-05-00404

Office of Inspector General 
 http://oig.hhs.gov 

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: 

Office of Audit Services 

The Office of Audit Services (OAS) provides all 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 assessments help reduce waste, 

abuse, and mismanagement and promote economy and efficiency throughout HHS. 

Office of Evaluation and Inspections 

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. Specifically, these evaluations focus on preventing fraud, waste, or 

abuse and promoting economy, efficiency, and effectiveness in departmental programs. 

To promote impact, the reports also present practical recommendations for improving 

program operations. 

Office of Investigations 

The Office of Investigations (OI) conducts criminal, civil, and administrative 

investigations of allegations of wrongdoing in HHS programs or to HHS beneficiaries 

and of unjust enrichment by providers. The investigative efforts of OI lead to criminal 

convictions, administrative sanctions, or civil monetary penalties. 

Office of Counsel to the Inspector General 

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 in OIG's internal operations. OCIG imposes program exclusions and civil 

monetary penalties on health care providers and litigates those actions within HHS. 

OCIG also represents OIG in the global settlement of cases arising under the Civil False 

Claims Act, develops and monitors corporate integrity agreements, develops compliance 

program guidances, renders advisory opinions on OIG sanctions to the health care 

community, and issues fraud alerts and other industry guidance. 
Δ EXECUTIVE SUMMAR Y 

OBJECTIVE 

1. To determine whether hospitals and physicians could purchase 

intravenous immune globulin (IVIG) at prices below the Medicare 

payment amounts in 2005 and 2006. 

2. To determine whether IVIG was readily available to physicians and 

distributors in 2005 and 2006. 

BACKGROUND 

Members of the congressional subcommittees on Health within the 

Energy and Commerce and Ways and Means Committees requested 

that the Office of Inspector General (OIG) examine the current state of 

pricing and supply of IVIG. IVIG is a collection of antibodies derived 

from blood plasma fractionation and administered by infusion to 

patients with poorly functioning immune systems. Preliminary claims 

data indicate that Medicare and its beneficiaries paid approximately 

$74 million for IVIG administered in physicians’ offices and home 

settings in 2006. Medicare paid an additional $130 million for IVIG 

administered in hospital outpatient settings based on claims processed 

from January through October 2006. 

The Medicare Prescription Drug, Improvement, and Modernization Act 

of 2003 changed the payment basis for most Part B prescription drugs, 

including IVIG, from the average wholesale price (AWP) to the average 

sales price (ASP) for physicians in 2005 and for hospitals in 2006. As a 

result, physician payment amounts fell 14 percent for powder and liquid 

IVIG between the fourth quarter of 2004 (the last quarter of AWP-based 

physician payments) and first quarter of 2005 (the first quarter of 

ASP-based physician payments). The Medicare payment amounts to 

hospitals fell 45 percent for powder IVIG and 30 percent for liquid IVIG 

between the fourth quarter of 2005 (the last quarter of AWP-based 

hospital payments) and first quarter of 2006. 

The Centers for Medicare & Medicaid Services (CMS) established a 

temporary preadministration-related service payment (for both 

hospitals and physicians’ offices) of approximately $70 per day of 

infusion during 2006 in response to concerns about beneficiary access 

and Medicare payment for IVIG. CMS recently stated that it would 

continue the add-on payment throughout 2007. In addition to the 

temporary add-on payment, the ASP-based Medicare payment during 

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the fourth quarter of 2006 was 17 percent higher for powder IVIG and 

8 percent higher for liquid IVIG than it was at the close of 2005. 

We conducted a review to examine IVIG availability and Medicare 

payment from the perspectives of: (1) manufacturers of IVIG, 

(2) distributors and group purchasing organizations (GPO) identified by 

the manufacturers as involved in the sale and distribution of IVIG, and 

(3) randomly selected physicians who billed Medicare for IVIG. 

It is important to note that IVIG is a unique pharmaceutical product 

that presents payment and cost-related issues that may not be typical of 

other Part B-covered drugs (such as oral anticancer drugs and 

immunosuppressive drugs, drugs used in conjunction with durable 

medical equipment, and some vaccines). IVIG is a blood plasma 

derivative; the amount produced is dependent upon plasma collection 

and there is a finite amount of raw material. Therefore, the results of 

this review are applicable only to IVIG. 

FINDINGS 

In the third quarter of 2006, just over half of IVIG sales to hospitals 

and physicians were at prices below Medicare payment amounts, 

which represents a substantial increase over the previous three 

quarters. During the third quarter of 2006, 56 percent of IVIG sales to 

hospitals and 59 percent of IVIG sales to physicians by the three largest 

distributors occurred at prices below the Medicare payment amounts. 

This represents a dramatic shift from the previous three quarters, when 

the percentage of IVIG sold at prices below the Medicare payment 

amounts was as low as 23 percent for hospitals and 4 percent for 

physicians. 

The substantial increase in sales below the Medicare payment amounts 

appears to be the result of manufacturer price increases in January 

2006 that were not reflected in increased Medicare payments until the 

third quarter of 2006. 

Most physicians and distributors reported problems with IVIG 

availability in 2005 and the first quarter of 2006. The majority 

(57 percent) of responding physicians reported that they were unable to 

provide patients with adequate amounts of IVIG during the first 

quarter of 2006. In addition, distributors responding to our survey also 

reported problems with IVIG availability in 2005. According to their 

responses, none of the distributors were able to fulfill all customer 

requests for IVIG, and all responding distributors have asked 

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manufacturers for additional product. These respondents stated that 

problems with availability are typically related to Medicare payment. 

CONCLUSION 

Based on the data presented in this report, just over half of IVIG sales 

to hospitals and physicians were at prices below the Medicare payment 

amounts in the third quarter of 2006, a substantial increase over 

previous quarters. Distributors and physicians also reported problems 

with IVIG availability. 

The interaction of manufacturer pricing decisions and certain 

ASP-related issues could partially explain our findings regarding IVIG 

pricing and availability. Because manufacturer price increases for IVIG 

in early 2006 were not reflected in Medicare reimbursement until the 

middle of that year, hospitals and physicians were initially charged 

more for IVIG without a corresponding increase in payment. If 

manufacturers were to implement another across-the-board price 

increase, hospitals and physicians might face issues similar to those 

that they faced in the first two quarters of 2006. 

It is important to note that additional factors, including off-label use, 

coding, and plasma industry economics, may drive the difficulties with 

IVIG pricing and availability. Reported recent increases in the use of 

IVIG for off-label indications may strain the tight supply of this product. 

Each IVIG product is a unique brand drug, yet Medicare payment is 

based on a weighted average price of all products. The production of 

IVIG requires substantial resources not typically associated with other 

pharmaceutical products. However, this review did not include an 

in-depth examination of these factors. 

AGENCY COMMENTS 

CMS commented that this report provides initial information on the 

availability and pricing for IVIG and sets the stage for further review of 

certain issues (e.g., off-label use, payment lags, and distributor 

markups) that can bring greater understanding of how the marketplace 

operates for this unique product. CMS also noted that the time lag is a 

feature of the ASP system and applies to all Part B drugs and 

biologicals. CMS stated that the substantial increase in the percentage 

of IVIG sold to hospitals and physicians at prices below the Medicare 

payment amounts is an important development and noted that these 

findings indicate that Medicare payment has adjusted to increases in 

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IVIG market prices over time. CMS stated, “We will carefully consider 

this report as we continue our dialogue with manufacturers, patient 

groups, and stakeholders to better understand marketplace 

developments and issues impacting beneficiary access to quality care. 

We strongly encourage the OIG to further study some of the issues 

raised [in CMS’s comments to the draft report].” 

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Δ T ABLE OF CONTENTS 

EXECUTIVE SUMMARY ..................................... i

INTR O D U C T I ON ........................................... 1

FINDI NGS ................................................. 9 

Increase in IVIG sales at prices below Medicare payment ....... 9 

Physicians and distributors report problems with availability. . . 12 

CON C L U SION ............................................ 15

 Agency Comments...................................... 16

APPENDIXES ............................................. 17

A: Detailed Scope and Methodology ....................... 17

B: Agency Comments ................................... 21

ACKN O W LEDGMENTS .................................... 24
Δ INTRODU C TION 

OBJECTIVE 

1. To determine whether hospitals and physicians could purchase 

intravenous immune globulin (IVIG) at prices below the Medicare 

payment amounts in 2005 and 2006. 

2. To determine whether IVIG was readily available to physicians and 

distributors in 2005 and 2006. 

BACKGROUND 

Sections 1847A (d) (1) and (2) of the Social Security Act (the Act), as 

added by the Medicare Prescription Drug, Improvement, and 

Modernization Act of 2003 (MMA) (Public Law 108-173), directs the 

Office of Inspector General (OIG) to undertake pricing studies and 

compare average sales prices (ASPs) with widely available market 

prices. Related to these provisions, members of the congressional 

subcommittees on Health within the Energy and Commerce and Ways 

and Means committees requested that OIG determine the current 

market prices for IVIG and investigate the current state of IVIG pricing 

and supply. We previously provided the congressional requestors with 

the results of our work. 

Intravenous Immune Globulin 

Patients with poorly functioning immune systems receive IVIG 

infusions to temporarily replace missing antibodies, thus helping to 

protect them against infectious agents that cause various diseases. 

IVIG is produced in both powder and liquid form through fractionation 

of human blood plasma. Fractionation is the process whereby plasma 

proteins are separated in a purified and concentrated form. Each IVIG 

product has a distinct brand name. 

The Food and Drug Administration (FDA) has approved IVIG to treat 

several conditions. One condition is primary immune deficiency 

disease, a group of disorders in which the immune system fails to 

produce enough antibodies, thereby predisposing individuals to 

increased risk of infection. Additional FDA-approved indications for 

IVIG use are acute and chronic idiopathic thrombocytopenia purpura, 

B-cell chronic lymphocytic leukemia, Kawasaki syndrome, pediatric 

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human immunodeficiency virus, and bone marrow transplantation.1 

Some providers have reported that the majority of their IVIG use is for 

off-label (non-FDA-approved) indications (e.g., multiple sclerosis, 

rheumatoid arthritis, infections in low-birth-weight newborns). 

Off-label use may have increased, contributing to rising demand.2 

IVIG is a unique pharmaceutical product; as a blood plasma derivative, 

the amount produced is dependent upon plasma collection. Production 

increases require substantial time and resources not generally 

associated with other drug products. 

Sources of IVIG 

Physicians, hospitals, and other providers purchase IVIG through 

distributors, group purchasing organizations (GPO), and directly from 

manufacturers. 

Manufacturers establish relationships with distributors to sell IVIG to 

providers. Distributors purchase IVIG from manufacturers and then 

independently resell IVIG to providers or work in conjunction with 

GPOs to provide IVIG to GPO members. 

GPOs generally provide their members with access to lower-cost 

products by negotiating prices for specific drugs from manufacturers. 

GPOs do not purchase drugs themselves; rather, they enter into group 

purchasing contracts with manufacturers on behalf of their members. 

The contracts prescribe the prices, conditions, and terms under which 

GPO members can purchase drug products. GPO members then 

purchase drugs from distributors or manufacturers at the price specified 

in the GPO contracts. Distributors do not determine GPO contract 

prices; they only provide drugs to GPO members at the contract prices. 

Medicare Payment for IVIG 

According to Medicare claims data, Part B and its beneficiaries paid 

approximately $74 million for IVIG administered in physicians’ offices 

and patients’ homes in 2006.3 Medicare paid an additional $130 million 

OE I-03-05-00 404 

1 Department of Health and Human Services Advisory Committee on Blood Safety and 

Availability, “Status of Immune Globulin Intravenous (IVIG) Products.” Available online at 

http://www.hhs.gov/bloodsafety/igiv.html. Accessed April 24, 2006. 

2 Ibid. 

3 Medicare Part B Extract and Summary System, updated through December 2006 

(90 percent of claims reported), accessed March 26, 2007. 

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for IVIG administered in hospital outpatient settings from January 

through October 2006.4 

The MMA changed the basis of physician payment for most Medicare 

Part B prescription drugs, including IVIG, to ASP, effective 

January 1, 2005. 5 There is a two-quarter lag between the time 

manufacturers report ASPs to CMS and the time those prices become 

the basis for Medicare payment. For example, first-quarter 2006 ASP 

submissions from manufacturers served as the basis for third-quarter 

2006 Medicare payment for most covered drugs. Prior to 2005, 

Medicare generally used the average wholesale price (AWP) as the basis 

for Part B payment for prescription drugs. Numerous reports by OIG 

and the Government Accountability Office found that the AWP is often 

significantly higher for Part B drugs than the prices that drug 

manufacturers, wholesalers, and similar entities actually charge the 

physicians who purchase these drugs. 

Medicare continued to use AWPs to pay hospitals for outpatient drugs 

in 2005. However, since January 1, 2006, Medicare payment for most 

drugs and biologicals, including IVIG, administered in hospital 

outpatient departments has been based on 106 percent of the 

manufacturer’s ASP, an amount identical to the physician payment 

amount.6 

A previous OIG review examined the adequacy of Medicare’s new 

payment methodology among certain specialties (hematology, 

hematology/oncology, and medical oncology). This review determined 

that physician practices in these specialties could generally purchase 

drugs, including IVIG, at less than the MMA-established payment 

4 This figure is based on hospital claims processed from January through October 27, 

2006. This figure includes Medicare and beneficiary payments. 

5 Pursuant to section 1847A (c) of the Act, the ASP is defined as a manufacturer’s sales of 

a drug to all purchasers in the United States (with certain exceptions) in a calendar quarter 

divided by the total number of units of the drug sold by the manufacturer in that same 

quarter. The ASP is net of any price concessions, such as volume, prompt pay, and cash 

discounts; free goods contingent on purchase requirements; chargebacks; and rebates other 

than those obtained through the Medicaid drug rebate program. 

6 “Medicare Announces Payment Rates and Policy Changes for Hospital Outpatient 

Services in 2006.” Available online at 

http://www.cms.hhs.gov/apps/media/press/release.asp?Counter=1711. Accessed 

April 24, 2006. 

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rates.7 An additional review conducted by the Medicare Payment 

Advisory Commission similarly found that oncologists could purchase 

most drugs at prices below Medicare’s payment amount.8 

Concerns Over Medicare Payment and Product Availability 

Medicare payment for IVIG. After the MMA changed the basis of 

physician drug payment from AWPs to ASPs, patient advocacy groups 

and physicians expressed concerns over Medicare’s reduced payment 

amount for IVIG.9 Their concerns centered on the claim that, under the 

new payment methodology, the cost for physicians to acquire IVIG 

would exceed Medicare’s payment amount. As a result of changes to 

Medicare’s payment methodology, the physician payment amounts fell 

14 percent for powder and liquid IVIG between the fourth quarter of 

2004 (the last quarter of AWP-based physician payments) and the first 

quarter of 2005 (the first quarter of ASP-based physician payments).10 

In addition, manufacturers expressed concern over the fact that the 

codes used for Medicare payment are based on a weighted average of all 

liquid or all powder IVIG products. 

Similarly, hospital payments also decreased as a result of the shift to 

ASPs in January 2006. The Medicare payment amounts to hospitals fell 

45 percent for powder IVIG and 30 percent for liquid IVIG between the 

fourth quarter of 2005 (the last quarter of AWP-based hospital 

payments) and the first quarter of 2006. 

IVIG availability. In addition to issues with pricing, it has been reported 

in the media that there is an inadequate supply of IVIG.11 FDA’s 

Center for Biologics Evaluation and Research, which has procedures for 

determining and reporting a shortage, indicates on its Web site that 

“along with other HHS [Department of Health and Human Services] 

agencies, the FDA has received reports from stakeholders, patients, and 

health care providers regarding difficulty in obtaining [IVIG] products. 

7 “Adequacy of Medicare Part B Drug Reimbursement to Physician Practices for the 

Treatment of Cancer Patients.” Department of Health and Human Services, OIG 

(A-06-05-00024). September 2005. 

8 “Effects of Medicare Payment Changes on Oncology Services.” Medicare Payment 

Advisory Commission. January 2006. 

9 “Law Impedes Flow of Immunity in a Vial.” New York Times. July 19, 2005. 

10 The Medicare physician payment amounts were identical for powder and liquid IVIG 

in the fourth quarter of 2004 as well as in the first quarter of 2005. 

11 “Law Impedes Flow of Immunity in a Vial.” New York Times. July 19, 2005. “IVIG 

Shortage Driving Patients to Hospitals.” Drug Topics. August 22, 2005. 

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From discussions with manufacturers, distributors, providers, and 

consumers, it is clear that availability and treatment patterns have 

shifted; but we did not find clear evidence that there is currently a 

shortage. This is a multi-faceted and fluid situation.”12 Further, HHS 

officials have told Congress that, among other factors, because IVIG is 

derived from human plasma, it takes significant startup time to 

increase supply, and supply has historically been cyclical.13 

This is not the first time patient advocacy groups and physicians have 

expressed concern over IVIG availability. According to a media report, 

as well as an OIG interview with a manufacturer, there was a shortage 

of IVIG in the late 1990s after two companies halted production in their 

factories to make changes in order to meet new quality standards.14 

When the factories came back online, production increased, leading to 

excess product and reduced prices. At that time, three manufacturers 

left the business. Other issues with IVIG availability surfaced in 2003 

when one manufacturer, while staying in business, reportedly closed 

dozens of plasma collection centers.15 

Recent Increases in Medicare Payment for IVIG 

In response to concerns about beneficiary access to IVIG and Medicare 

payment, CMS established a temporary preadministration-related 

service payment (for both hospitals and physician offices) of 

approximately $70 per day of infusion during calendar year 2006. This 

additional payment covers the preadministration-related services 

required to locate and acquire adequate IVIG product and prepare for 

an infusion of IVIG. 

In a press release dated November 2, 2005, CMS stated “that the 

pricing for IVIG is accurate, and that there is no overall product 

shortage. However, in the face of such factors as increasing IVIG 

demand . . . physician office staff has to expend extra resources on 

locating and obtaining appropriate IVIG products and scheduling 

patient infusions.” CMS went on to state that “for calendar year 2006 

12 “Biological Product Shortages.” Available online at 

http://www.fda.gov/cber/shortage/shortage.htm. Accessed February 6, 2007. 

13 Testimony of Herb B. Kuhn, CMS, before the Subcommittee on Health of the House 

Committee on Ways and Means, July 13, 2006. Available online at 

http://waysandmeans.house.gov/hearings.asp?formmode=view&id=5108. Accessed 

November 28, 2006. 

14 “Law Impedes Flow of Immunity in a Vial.” New York Times. July 19, 2005. 

15 Ibid. 

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only, physicians and hospitals will be permitted to bill this add-on code 

to compensate for the administrative burdens associated with IVIG 

administration during this time of some volatility in IVIG product 

availability.” 16 CMS recently stated that it will maintain the add-on 

payment for IVIG in 2007 to help ensure appropriate patient access to 

IVIG.17 

In addition to the temporary add-on payment, the Medicare payment 

amounts for IVIG rose in 2006. The ASP-based payment during the 

fourth quarter of 2006 was 17 percent higher for powder IVIG and 

8 percent higher for liquid IVIG than it was at the close of 2005.18 

SCOPE AND METHODOLOGY 

Scope 

We conducted this review to examine the pricing and availability of 

IVIG from the perspectives of: (1) manufacturers of IVIG, 

(2) distributors and GPOs identified by the manufacturers as involved 

in the sale and distribution of IVIG, and (3) randomly selected 

physicians who billed Medicare for IVIG. 

IVIG is a unique pharmaceutical product that presents payment-related 

issues that may not be typical of other Part B-covered drugs.

19 IVIG is a 

blood plasma derivative; the amount produced is dependent upon 

plasma collection and there is a finite amount of raw material. 

Therefore, the results of this review are applicable only to IVIG. This 

review did not examine the availability of or Medicare payment for any 

other drug products. 

16 The full text of the press release is located on CMS’s Web site: 

http://new.cms.hhs.gov/apps/media/press/release.asp?Counter=1709. Accessed 

February 9, 2006. 

17 Final Rule, 71 Federal Register 69624, 69679 (December 1, 2006). 

18 In the fourth quarter of 2005, the Medicare physician payment amounts were $43.10 

per gram of powder IVIG and $56.30 per gram of liquid IVIG. For the same quarter, the 

Medicare hospital payment amounts were $80.68 per gram of liquid and powder IVIG. In 

the fourth quarter of 2006, the Medicare payment amounts were $50.53 per gram of powder 

IVIG and $60.65 per gram of liquid IVIG. 

19 Medicare Part B covers only a limited number of outpatient prescription drugs. 

Covered drugs include injectable drugs administered by a physician; certain 

self-administered drugs, such as oral anticancer drugs and immunosuppressive drugs; 

drugs used in conjunction with durable medical equipment; and some vaccines. 

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Methodology: Data Sources and Sample 

Manufacturers. We collected 2005 sales prices, sales volume, and 

production volume from the five IVIG manufacturers producing IVIG at 

the time of the review (December 2005). These manufacturers also 

completed a written survey on IVIG pricing and availability. 

Distributors. From August to October 2006, we collected sales and 

pricing data from the three largest distributors for the first three 

quarters of 2006 to gather IVIG sales prices to hospitals and 

physicians.20 In addition, between January and April 2006, we collected 

sales prices and sales volume for 2005 from 13 distributors (including 

the 3 largest distributors) identified by IVIG manufacturers.21 

Physicians. In April 2006, we sent written surveys on pricing and 

availability to 255 randomly selected physicians who billed Medicare for 

IVIG. We asked the physicians how much they paid for IVIG during the 

first quarter of CY 2006, taking into account discounts and rebates. We 

also asked them to submit invoices to document all IVIG purchases. 

Between May and August 2006, 157 physicians (62 percent) responded 

to our written survey and 100 physicians (39 percent) provided their 

purchase volume and acquisition costs for IVIG. 

Data Analysis: Pricing and Sales Data From 2006 

Distributors. We examined 2006 sales and pricing data from the three 

largest IVIG distributors for the first three quarters of 2006. We 

calculated the percentage of IVIG sales to hospitals and physicians at 

prices above and below the Medicare payment amounts for the first 

three quarters of 2006. 

Physicians. Based on the information provided by responding 

physicians, we calculated the percentage of IVIG purchased at prices 

above and below the first-quarter 2006 Medicare physician payment 

amounts. We also determined the percentage of IVIG purchased by 

physicians that was subject to discounts and rebates and examined 

physician responses to our written survey. 

20 Based on data obtained from all distributors, OIG determined that the three largest 

IVIG distributors accounted for approximately 90 percent of distributor-reported sales in 

the fourth quarter of 2005. 

21 The sales volume and pricing data presented were provided by distributors and 

include IVIG sales and prices to GPO and non-GPO members. 

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Pricing and Sales Data From 2005 

Manufacturers. Based on the information provided by the five 

manufacturers, we identified the amount of IVIG sold in 2005 to each 

type of customer. In addition, we analyzed manufacturer responses to 

the written survey on pricing and availability. 

Distributors and group purchasing organizations. For the 13 distributors 

that provided pricing and sales data, we identified the amount of IVIG 

sold in the fourth quarter of 2005 to each type of customer and at 

contract and noncontract prices. For sales to hospitals, we determined 

the percentage of IVIG sold at prices above and below both the Medicare 

outpatient hospital payment amount and the Medicare physician 

payment amount for the fourth quarter of 2005 (the new hospital 

reimbursement amount for the following quarter). For physicians, sales 

prices were compared to the fourth-quarter 2005 physician payment 

amounts only. We calculated the percentage of sales to hospitals and 

physicians at contract and noncontract prices.22 We also examined 

distributor and GPO responses to the written survey on pricing and 

availability. See Appendix A for a detailed description of our 

methodology. 

Limitations 

The findings presented are based only on self-reported data received 

from manufacturers, distributors, GPOs, and physicians. We did not 

verify the data or invoices that we received from manufacturers, 

distributors, GPOs, or physicians. In addition, this analysis applies 

only to responding physicians from our sample; we were unable to make 

projections to the universe of all physicians who billed Medicare for 

IVIG because of the response rate. 

Standards 

This study was conducted in accordance with the “Quality Standards for 

Inspections” issued by the President=s Council on Integrity and 

Efficiency and the Executive Council on Integrity and Efficiency. 

22 For the purposes of this review, IVIG sales to GPO members by distributors at the 

contract prices are considered “contract” sales. The independent resale of IVIG by 

distributors to providers is considered a “noncontract” sale. Distributors typically mark up 

manufacturer sales prices prior to reselling noncontract IVIG directly to customers. 

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Δ FINDINGS

In the third quarter of 2006, just over half of IVIG 

sales to hospitals and physicians were at prices 

below Medicare payment amounts, which 

represents a substantial increase over the 

previous three quarters 

During the third quarter of 2006, 

56 percent of IVIG sales to hospitals 

and 59 percent of IVIG sales to 

physicians by the three largest 

distributors occurred at prices below 

the Medicare payment amounts.23 

This represents a dramatic shift 

from the previous three quarters, when the percentage of IVIG sold at 

prices below the Medicare payment amounts was as low as 23 percent 

for hospitals and 4 percent for physicians. As Tables 1 and 2 illustrate, 

the percentage of IVIG sold at prices at least 10 percent above the 

Medicare reimbursement amount declined substantially in the third 

quarter of 2006 as well. 

Table 1. Distributor Sales to Hospitals From Fourth Quarter of 2005 to Third Quarter of 2006 

IVIG Price Range 

4th Quarter 

2005 

1st Quarter 

2006 

2nd Quarter 

2006 

3rd Quarter 

2006 

Below Medicare payment 37.3% 25.5% 22.8% 56.0% 

0.01%–5.00% greater than Medicare payment 51.2% 30.7% 31.4% 6.1% 

5.01%–10.00% greater than Medicare payment 2.7% 11.5% 9.6% 33.6% 

10.01%–20.00% greater than Medicare payment 6.5% 5.1% 5.2% 3.2% 

20.01%–25.00% greater than Medicare payment 0.4% 25.1% 29.7% 0.7% 

More than 25.01% greater than Medicare payment 1.9% 2.1% 1.4% 0.5% 

Source: IVIG pricing and sales data from the three largest distributors. 

Note: Totals may not add because of rounding. 

Table 2. Distributor Sales to Physicians From Fourth Quarter of 2005 to Third Quarter of 2006 

IVIG Price Range 

4th Quarter 

2005 

1st Quarter 

2006 

2nd Quarter 

2006* 

3rd Quarter 

2006 

At or below Medicare payment* 33.0% 10.5% 3.5% 58.6% 

0.01%–5.00% greater than Medicare payment 48.5% 44.4% 53.9% 8.3% 

5.01%–10.00% greater than Medicare payment 0.1% 7.0% 0.9% 14.0% 

10.01%–20.00% greater than Medicare payment 11.0% 11.6% 18.8% 15.8% 

20.01%–25.00% greater than Medicare payment 1.2% 18.0% 15.4% 2.4% 

More than 25.01% greater than Medicare payment 6.3% 8.4% 7.6% 1.0% 

Source: IVIG pricing and sales data from the three largest distributors. 

Note: Totals may not add because of rounding. 

*Less than 1 percent of sales to physicians during this quarter were at the same price as the Medicare payment amount. 

23 The three largest IVIG distributors accounted for approximately 90 percent of 

distributor-reported sales in the fourth quarter of 2005, including 97 percent of sales to 

hospitals and 66 percent of sales to physicians. Because these distributors account for 

almost all hospital purchases, these data are representative of hospital costs. Most sales by 

these distributors were to GPO members at contract prices. Virtually no IVIG sold by the 

remaining 10 distributors was subject to GPO contracts. However, 34 percent of physician 

purchases came from smaller distributors at noncontract prices, and the percentages in 

Table 2 may overestimate actual amounts of IVIG sales below Medicare payment amounts. 

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F I NDING S 

Purchase prices and invoices supplied by responding physicians for the 

first quarter of 2006 corroborate the distributor data presented in 

Table 2. The pricing data illustrate that approximately 10 percent of 

physician purchases (after subtracting discounts and rebates) were 

made at prices below the Medicare physician payment amounts in the 

first quarter of 2006.24 

The substantial increase in sales below the Medicare payment amounts 

appears to be the result of manufacturer price increases in January 2006 

that were not reflected in increased Medicare payments until the third 

quarter of 2006 

According to data provided by manufacturers, all planned to increase 

IVIG prices at the beginning of 2006. The data provided by distributors 

indicate that these price increases were then passed on to customers. 

However, Medicare payment amounts in the first two quarters of 2006 

were still based on older sales prices from 2005. Therefore, even though 

hospitals and physicians had to pay more for IVIG in early 2006, their 

Medicare payment did not increase at the same time. It appears that 

payment amounts for IVIG started to “catch up” with actual sales prices 

during the third quarter of 2006, and this is reflected in the increase in 

the percentage of sales at prices below the Medicare payment amounts 

shown in Tables 1 and 2. Table 3 below illustrates that Medicare 

payment amounts for IVIG have risen over the last four quarters. The 

largest increase in Medicare payments occurred between the second and 

third quarters of 2006, reflecting manufacturer price increases from two 

quarters prior. 

Table 3. Medicare Payment for IVIG From the Fourth Quarter of 2005 to the Third Quarter of 2006 

IVIG Form 4th Quarter 200525 1st Quarter 2006 2nd Quarter 2006 3rd Quarter 2006 

Liquid IVIG (1 gram) $56.30 $56.72 $58.18 $60.23 

Powder IVIG (1 gram) $43.10 $44.44 $44.52 $49.80 

Source: CMS 2005 and 2006 ASP drug pricing files. 

 OE I-03-05-00 404 

24 Approximately 90 percent of physician-reported purchases were at prices above the 

Medicare payment amount in the first quarter of 2006. In addition, 133 of 157 responding 

physicians (85 percent) reported that they could not purchase either liquid or powder IVIG 

at a price below the Medicare payment amount for that quarter. 

25 These are the Medicare physician payment amounts for the fourth quarter of 2005. 

The Medicare hospital payment amount for this quarter was $80.68 per gram. 

I NTRAVEN O U S I MMUNE GL O B U L I N : MEDI CARE PAYM E N T AND AVA ILA B I L ITY 10 
F I NDING S 

In the fourth quarter of 2005, IVIG obtained by hospitals and physicians 

through GPO contracts was more likely to be sold at prices below the 

Medicare payment amounts than IVIG not obtained through GPO contracts. 

Physicians are less likely than hospitals to obtain IVIG through GPO 

contracts. Most distributor sales to hospitals (87 percent) were at 

contract prices in the fourth quarter of 2005; however, a much smaller 

portion of distributor sales to physicians (44 percent) were at contract 

prices during the same quarter.26 

According to sales data collected from 13 distributors (including the 

3 largest IVIG distributors), 39 percent of contract sales were at prices 

below the Medicare payment amounts during the fourth quarter of 2005 

(see Table 4 on the next page). In contrast, only 2 percent of 

noncontract IVIG was sold at prices below the Medicare physician 

payment amounts during the same quarter. Furthermore, almost 

one-third of noncontract sales exceeded Medicare payment amounts by 

at least 20 percent. Less than 1 percent of contract sales exceeded the 

Medicare payment amounts by that amount. 

Noncontract prices may be higher than contract prices because they are 

subject to additional distributor markups.27 Distributors typically mark 

up manufacturer sales prices prior to reselling IVIG to customers, such 

as physicians or hospitals. Distributor markups have a greater effect on 

noncontract prices because contract prices are set, prenegotiated prices 

between the GPO and manufacturers. Distributors do not determine 

these prices, and any markup is limited by the terms of the contracts. 

The markup limitations do not typically apply to IVIG sold outside of a 

GPO contract, although some manufacturers place limits on distributor 

markups. In the fourth quarter of 2005, distributor markups for 

noncontract sales ranged from 5 to 49 percent. 

OE I-03-05-00 404 

26 For the purposes of this review, IVIG sales to GPO members at the contract prices by 

distributors are considered “contract” sales. Not all sales by distributors are subject to GPO 

contracts. In contrast to the contract sales, sales of IVIG by distributors to providers are 

considered “noncontract” sales. Distributors typically mark up manufacturer sales prices 

prior to reselling noncontract IVIG directly to customers, such as physicians or hospitals. 

27 We are defining markup as the difference between how much a distributor pays the 

manufacturer for IVIG and how much the distributor charges customers for IVIG. 

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F I NDING S 

Table 4. Contract and Noncontract Sales Prices for IVIG in the Fourth Quarter of 2005 

IVIG Price Range 

Percentage of Contract 

Sales 

Percentage of 

Noncontract Sales 

Below Medicare physician reimbursement 39.2% 1.7% 

0.01%–5.00% greater than Medicare physician reimbursement 55.9% 24.6% 

5.01%–20.00% greater than Medicare physician reimbursement 4.7% 40.5% 

20.01%–50.00% greater than Medicare physician reimbursement 0.2% 24.9% 

More than 50.01% greater than Medicare physician reimbursement 0.0% 8.3% 

Source: IVIG pricing and sales data from distributors. 

Note: Totals may not add because of rounding. 

Most physicians and distributors reported 

problems with IVIG availability in 2005 and 

the first quarter of 2006 

The majority (57 percent) of 

responding physicians reported that 

they were unable to provide patients 

with adequate amounts of IVIG 

during the first quarter of 2006. 

These physicians stated that problems with IVIG availability were 

typically related to Medicare payment. 

A small number of responding physicians said that they had stopped 

providing IVIG to Medicare beneficiaries altogether. One responding 

physician stated that payment issues led him to turn patients away: 

“The reimbursement from Medicare does not cover the cost of 

medication. We are unable to provide care for new patients.” Another 

physician added: “We can no longer treat [Medicare] patients with IVIG 

due to losing hundreds of dollars each time.” A third physician cited 

supply issues for the inability to treat patients: “Due to insufficient 

supply, we are forced to turn away patients requiring IVIG.” 

All 13 distributors responding to our January 2006 survey also reported 

problems with IVIG availability. One summarized the situation by 

stating: “Customers have requested more product, but we are unable to 

obtain the extra product needed from the manufacturer.” According to 

their responses, none of the distributors were able to fulfill all customer 

requests for IVIG, and all distributors have asked manufacturers for 

additional product. Most distributors reported that manufacturers were 

unable to provide them with additional IVIG. 

One important reason distributors are unable to obtain additional IVIG 

from manufacturers is that manufacturers are contractually obligated 

to fulfill their GPO allocations first, and, when additional product is 

available, manufacturers reportedly provide it to GPO members first (at 

a noncontract price). Therefore, hospitals and physicians who are not 

GPO members do not have the same access to IVIG products. 

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F I NDING S 

Manufacturers, distributors, and physicians reported that patients were 

being shifted from physicians’ offices to hospitals to receive IVIG 

Manufacturers responded that they received reports in 2005 of some 

patients being moved from physicians’ offices to hospitals for IVIG 

treatment because of payment differentials between the settings at that 

time. Similarly, in responses to our January 2006 survey, a majority of 

the distributors noted that patients were being moved from physicians’ 

offices to hospitals to receive IVIG treatment because of changes in 

Medicare’s physician payment amounts. Physicians also noted in their 

response to our April 2006 survey that an increasing number of patients 

were receiving IVIG treatment in hospitals. Sixty-one percent of 

responding physicians indicated that they had sent patients to hospitals 

for IVIG treatment because of their inability to acquire adequate 

amounts of IVIG or problems with Medicare payment. The most 

common explanation for the shift to hospitals was Medicare payment, 

specifically the inability of physicians to purchase IVIG at prices below 

the Medicare payment amounts. 

Distributor sales data support this claim and indicate that hospitals 

received more IVIG in the fourth quarter of 2005 than in the fourth 

quarter of 2004, while sales to physicians decreased. At that time, 

prices to hospitals were generally lower than prices to physicians, while 

Medicare payment to hospitals for IVIG administered in an outpatient 

setting was substantially higher than Medicare payment to physicians 

in 2005.28 In keeping with the payment reforms in the MMA, CMS 

began paying for most Part B drugs and biologicals administered in 

hospital outpatient departments based on 106 percent of the 

manufacturer’s ASP on January 1, 2006.29 Despite the reduction in 

hospital payments following the change in payment methodology, data 

from the three largest distributors indicate that total sales to hospitals 

continued to increase through the first half of 2006. 

The priority given to GPO contract customers is related to the shift in 

patients to hospitals, because the GPO market comprises primarily 

28 In 2005, CMS reimbursed hospitals for outpatient drugs at 83 percent of the AWP. 

The CMS hospital payment for both powder and liquid IVIG was $80.68 per gram in the 

fourth quarter of 2005, compared to 56.30 (liquid IVIG) and $43.10 (powder IVIG) for 

physicians. 

29 “Medicare Announces Payment Rates and Policy Changes for Hospital Outpatient 

Services in 2006.” Available online at 

http://www.cms.hhs.gov/apps/media/press/release.asp?Counter=1711. Accessed 

April 24, 2006. 

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F I NDING S 

hospitals and nursing homes (although some physicians can purchase 

IVIG through GPOs). According to distributor data, most hospitals 

receive IVIG through their GPO memberships and, as previously stated, 

contract prices are generally lower than noncontract prices. One 

distributor summarized the potential problems with hospitals acquiring 

larger portions of available IVIG by stating: “The product [IVIG] 

allocation is normally based on historical usage data. To meet the new 

increased demands in the hospital outpatient setting, [the distributor] 

used noncontract product to meet those needs. This decreased the 

amount of IVIG available to the noncontract market (e.g., physicians, 

home care and pharmacies).” 

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Δ CONCLUSION 

Based on the data presented in this report, just over half of IVIG sales 

to hospitals and physicians were at prices below the Medicare payment 

amounts in the third quarter of 2006, a substantial increase over 

previous quarters. Distributors and physicians also reported problems 

with IVIG availability. 

The interaction of manufacturer pricing decisions and certain 

ASP-related issues could partially explain our findings regarding IVIG 

pricing and availability. For example, the results of this review indicate 

that the two-quarter lag between manufacturer price increases and 

corresponding increases in Medicare payment amounts may have 

played a major role in substantially increasing the percentage of IVIG 

sales at prices below the Medicare payment amounts in the third 

quarter of 2006. 

Because manufacturer price increases for IVIG in early 2006 were not 

reflected in Medicare reimbursement until the middle of that year, 

hospitals and physicians were initially being charged more for IVIG 

without a corresponding increase in payment. If manufacturers were to 

implement another across-the-board price increase, hospitals and 

physicians might face issues similar to those that they faced in the first 

two quarters of 2006. 

Furthermore, ASPs include manufacturer sales to all classes of trade 

and do not explicitly include distributor markup, which may cause the 

actual acquisition cost of IVIG to exceed the Medicare payment amount 

(especially in a time when increased demand creates incentives for 

distributors to increase markups on noncontracted sales). In the case of 

IVIG, the combination of the two-quarter lag and distributor markups 

could result in a gap between provider acquisition costs and Medicare 

payment amounts, which could lead providers to shift patients to other 

sites of service. When this occurs, beneficiaries may have difficulty 

obtaining treatment in their preferred settings. 

It is important to note that additional factors, including off-label use, 

coding, and plasma industry economics, may drive the difficulties with 

IVIG pricing and availability. Reported recent increases in the use of 

IVIG for off-label indications may strain the tight supply of this product. 

Each IVIG product is a unique brand drug, yet Medicare payment is 

based on a weighted average price of all products. The production of 

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C O NCL USIO N 

IVIG requires substantial resources not typically associated with other 

pharmaceutical products. However, this review did not include an 

in-depth examination of these factors. 

AGENCY COMMENTS 

CMS commented that this report provides initial information on the 

availability and pricing of IVIG and sets the stage for further review of 

certain issues (e.g., off-label use, payment lags, and distributor 

markups) that can bring greater understanding of how the marketplace 

operates for this unique product. CMS also noted that the time lag is a 

feature of the ASP system and applies to all Part B drugs and 

biologicals. CMS stated that the substantial increase in the percentage 

of IVIG sold to hospitals and physicians at prices below the Medicare 

payment amounts is an important development and noted that these 

findings indicate that Medicare payment has adjusted to increases in 

IVIG market prices over time. CMS stated, “We will carefully consider 

this report as we continue our dialogue with manufacturers, patient 

groups, and stakeholders to better understand marketplace 

developments and issues impacting beneficiary access to quality care. 

We strongly encourage the OIG to further study some of the issues 

raised [in CMS’s comments to the draft report].” 

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Δ APPENDIX~A 

DETAILED SCOPE AND METHODOLOGY 

Detailed Scope 

We conducted a multiphase review to examine the pricing and 

availability of intravenous immune globulin (IVIG) from the 

perspectives of: (1) the manufacturers of IVIG, (2) distributors and 

group purchasing organizations (GPOs) identified by the manufacturers 

as involved in the sale and distribution of IVIG, and (3) randomly 

selected physicians who billed Medicare for IVIG. 

Manufacturers. We collected data from the five IVIG manufacturers 

producing IVIG at the time of the survey (December 2005). We did not 

include the American Red Cross in this study because it announced its 

exit from the plasma therapeutics business in July 2005. 

Distributors and group purchasing organizations. Based on information 

collected from the 5 IVIG manufacturers, we identified 17 distributors 

and 7 GPOs involved with the sale and distribution of IVIG. We 

collected data only from distributors and GPOs identified by the 

manufacturers. IVIG manufacturers identified four additional 

companies as distributors in their responses to the Office of Inspector 

General (OIG). We did not include three of these in our analysis 

because these companies do not consider themselves distributors, as 

none of them resells IVIG. The fourth company identified itself as a 

“small independent distributor” and “was not set up to breakout the 

kind of information [OIG] is requesting.” 

For the three largest IVIG distributors, we collected sales and pricing 

data for the first three quarters of 2006. We did not collect any 2006 

sales and pricing data from smaller distributors, who tend to charge 

customers more for IVIG. 

Physicians. We randomly selected physicians who billed Medicare for 

two IVIG procedure codes during the third quarter of 2005. The 

procedure codes are: Q9941—injection, immune globulin, intravenous, 

lyophilized (powder), 1 gram; and Q9943—injection, immune globulin, 

intravenous, nonlyophilized (liquid), 1 gram. These two codes accounted 

for the majority of Medicare payment for IVIG during the last three 

quarters of 2005 (the effective dates of these codes). There were two 

additional IVIG procedure codes in effect during 2005: Q9942 and 

Q9944, which were 10-milligram doses of powder and liquid IVIG, 

respectively. We did not include these two codes in our analysis. 

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APP E N D I X ~A 

Effective January 1, 2006, CMS replaced these four procedure codes 

with two new codes: J1566 and J1567. 

Detailed Methodology: Data Sources and Sample 

Manufacturers. The five manufacturers producing IVIG at the time of 

the survey (December 2005) provided OIG with 2005 IVIG sales prices 

and sales volume. In addition, we asked manufacturers to complete a 

written survey about IVIG access and availability, distribution methods, 

resale policies, customers, and future production plans. 

Distributors and GPOs. Manufacturers identified 17 distributors and 

7 GPOs involved with the sale and distribution of IVIG. Between 

January and April 2006, 14 distributors and 6 GPOs completed a 

written survey concerning IVIG. Two of the seventeen distributors 

submitted survey responses after the deadline for data collection. The 

remaining distributor and one GPO did not complete the survey or 

provide sales and pricing data. Based on manufacturer sales data, 

these nonrespondents made up a very small portion of IVIG sales. 

Thirteen of these distributors also provided us with their sales prices 

and sales volume for 2005. The sales volume and pricing data were 

provided by distributors and include IVIG sales and prices to GPO and 

non-GPO members. 

Based on distributor-reported data, we determined that the three 

largest IVIG distributors accounted for approximately 90 percent of 

distributor-reported sales in the fourth quarter of 2005. We collected 

sales and pricing data from these three largest distributors for the first 

three quarters of 2006. 

Physicians. We extracted all paid Medicare Part B physician claims for 

two IVIG procedure codes from CMS’s 2005 National Claims History 

File with dates of service in the third quarter of 2005 (the most recent 

claims data available at the time we selected our sample). We 

summarized the claims by the physician’s Unique Physician 

Identification Number (UPIN) and profiling identification number. 

After we summarized third-quarter 2005 claims data by UPIN and 

profiling identification number, there were 1,111 observations for Q9941 

and 1,350 observations for Q9943. 

We then selected a simple random sample of 130 physicians for each of 

the two procedure codes. OIG investigative concerns prevented us from 

contacting a small number of physicians; we excluded these physicians 

from our sample. The final sample contained 129 physicians for 

 OE I-03-05-00 404 I NTRAVEN O U S I MMUNE GL O B U L I N : MEDI CARE PAYM E N T AND AVA ILA B I L ITY 18 
APP E N D I X ~ A 

procedure code Q9941 and 126 physicians for procedure code Q9943, for 

a total of 255 physicians. 

In April 2006, we sent written surveys on pricing and availability to the 

255 randomly selected physicians in our sample. We asked physicians 

how much they paid for IVIG during the first quarter of 2006, taking 

into account all discounts and rebates. We asked physicians to submit 

invoices to document all IVIG purchases. We also asked physicians how 

available and accessible IVIG is, what happens when they are unable to 

provide patients with adequate amounts of IVIG, and from what sources 

they purchase IVIG products. 

Between May and August 2006, 157 physicians (62 percent) responded 

to our written survey and 100 physicians (39 percent) provided their 

purchase volume and acquisition costs for IVIG. Some respondents 

reported IVIG purchases and purchase prices for individual physicians 

in our sample, while others provided IVIG purchases and prices for 

physicians’ group practices. We could not identify fundamental 

differences between responding and nonresponding physicians. 

Data Analysis: Pricing and Sales Data From 2006 

Distributors. We examined sales and pricing data for the first three 

quarters of 2006 from the three largest IVIG distributors. We 

calculated the percentage of IVIG sales to hospitals and physicians at 

prices above and below the Medicare payment amounts and identified 

trends in IVIG availability related to increases in IVIG purchase prices 

and Medicare payment. 

Physicians. Based on the information provided by the responding 

physicians, we calculated the percentage of IVIG purchased by 

responding physicians at prices above and below the first-quarter 2006 

Medicare physician payment amounts, which were based on average 

sales prices reflecting manufacturer sales from July through September 

2005. For this analysis, we compared physician-reported prices that 

take into account discounts and rebates with the Medicare physician 

payment amounts. We also determined the percentage of IVIG 

purchased by physicians that was subject to discounts and rebates. We 

examined physician responses to our survey to identify what product 

availability issues exist, what concerns physicians have about Medicare 

payment, from what sources physicians purchase IVIG products, how 

physicians use IVIG, and any other specified issues. 

OE I-03-05-00 404 I NTRAVEN O U S I MMUNE GL O B U L I N : MEDI CARE PAYM E N T AND AVA ILA B I L ITY 19 
APP E N D I X ~ A 

Pricing and Sales Data From 2005 

Manufacturers. Based on the information provided by the five 

manufacturers, we identified the amount of IVIG sold in 2005 to each 

type of customer (e.g., distributor, GPO member, direct customer, and 

home care company). In addition, we analyzed manufacturer responses 

to questions about IVIG access and availability, distribution methods, 

resale policies, customers, future prices, and future production plans. 

Distributors and GPOs. We identified the amount of IVIG sold in the 

fourth quarter of 2005 to each type of customer (e.g., hospital, physician, 

clinic, home care company, etc.). For sales to hospitals, we determined 

the percentage of IVIG sold at prices above and below both the Medicare 

outpatient hospital payment amount and the Medicare physician 

payment amount for the fourth quarter of 2005. We also calculated the 

percentage of sales to hospitals and physicians at contract and 

noncontract prices. For physicians, sales prices were compared only to 

the fourth-quarter 2005 physician payment amounts. 

We identified the amount of IVIG sold in the fourth quarter of 2005 at 

contract and noncontract prices, regardless of customer type. For the 

purposes of this review, IVIG sales to GPO members at the contract 

prices by distributors are considered “contract” (encumbered) sales. 

One distributor that works extensively with GPO members summarized 

the relationship in the following way: “The GPO sends [distributor] the 

allocation spreadsheets that list their members along with the IVIG 

allotment that is agreed upon between the provider and the GPO . . . 

The GPO members call to order their IVIG and [the distributor] ships 

product to the GPO members based on the allocation spreadsheets.” 

Not all sales by distributors are subject to GPO contracts. In contrast to 

the contract sales described above, sales of IVIG that distributors 

independently resell to providers are considered “noncontract” 

(unencumbered) sales. Distributors typically markup manufacturer 

sales prices prior to reselling noncontract IVIG directly to customers, 

such as physicians or pharmacies. Each manufacturer allows 

distributors to sell a portion of their IVIG at noncontract prices. 

We also examined distributor and GPO responses to the pricing and 

availability survey to identify distribution methods, manufacturer 

relationships, resale policies, product availability, pricing, and other 

specified issues. 

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 O E I - 0 3 - 0 5 - 0 0 4 0 4 I NTRAVENOUS I MMUNE GLOBULIN : MEDICARE PAYMENT AND AVAILABILITY 21 

Agency Comments 

Δ APPENDIX~B 
 

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APPENDIX ~ B 
 

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APPENDIX ~ B 
Δ ACKNOWLEDGMENTS 

This report was prepared under the direction of Robert A. Vito, Regional 

Inspector General for Evaluation and Inspections in the Philadelphia 

regional office, and David E. Tawes, Director, Prescription Drug Pricing 

Unit. 

Edward K. Burley served as the team leader for this study. Other 

principal Office of Evaluation and Inspections staff from the 

Philadelphia regional office who contributed to this report include 

Roman Strakovsky and Kriti Sehgal; other central office staff who 

contributed include Linda B. Abbott, Scott Horning, and Barbara 

Tedesco. 

 OE I-03-05-00 404 I NTRAVEN O U S I MMUNE GL O B U L I N : MEDI CARE PAYM E N T AND AVA ILA B I L ITY 24