Last Friday night, CMS posted on its website the actual payment amounts that will be used to pay for Part B covered drugs for the first quarter of 2006. The files at the website link below contain these payment amounts.
Comparing the first quarter 2006 payment amounts with the previous quarters reveals that for the most part average drug prices in the market remain stable. Payment amounts across all drugs have decreased on average (weighted by Medicare expenditures) by less than 1 percent. For the top physician administered drugs, the payment amounts (weighted by Medicare expenditures) in aggregate changed little from last quarter. Preliminary 2005 data for the top physician administered drugs suggests that overall utilization of these drugs appears to have increased compared with 2004 levels.
For most of the higher volume drugs (29 out of the top 39), the payment amounts changed 2 percent or less, and for 23 of these codes the change is about 1 percent. Overall, the payment amounts for 23 of the top 39 drugs increased. Among the top drugs with a decrease, in general, there are a number of competitive market factors at work -- multiple manufacturers, alternative therapies, new products, recent generic entrants, or market shifts to lower priced products.
The payment amounts are 106 percent of the Average Sales Price (ASP) calculated from data submitted by drug manufacturers for the second quarter of 2005. The quarter to quarter price changes are the result of updated data from the manufacturers of these drugs. The pricing files began carrying three decimal places in April 2005.
Recent studies of Medicare payment rates for oncology drugs by the Department of Health and Human Services Office of Inspector General and the Medicare Payment Advisory Commission have found that physicians are generally able to acquire these drugs at prices below the Medicare reimbursement rate. CMS will continue to support groups representing Medicare Part B drug purchasers, especially small and rural purchasers, to help them identify the most favorable drug prices possible.
The ASP payment amounts are available on the CMS website, which you can access using the related links inside CMS below.
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