Scrutiny of Generic Drugmaker Inspections, 340B Pricing Top OIG 2014 Agenda

The HHS Office of Inspector General (OIG) this year plans to analyze the findings from FDA inspections of generic drugmakers’ facilities to determine the effectiveness of inspections on ensuring the quality of generic medicines.

While the effort is a first for the office, OIG spokesman Donald White told DID Feb. 3 the analysis is not driven by any specific event. The OIG has in recent years begun treating products made in violation of good manufacturing practices as potential cases of fraud when they are sold to Medicare and Medicaid programs. The analysis extends the OIG’s interest in quality manufacturing issues to generics.

The OIG also plans a second report in 2014 of interest to drugmakers. The office will examine whether hospitals serving low income patients are receiving the discounted prices for orphan drugs they are entitled to under the 1992 law that created the 340B discount drug program.

The OIG also plans to ensure providers are being given information about the maximum prices drugmakers are allowed to charge under the 340B program to facilitate reporting of any overcharging, the office revealed in its annual work plan for 2014. More than 15,000 providers participate in the 340B program, which accounts for more than $6 billion in sales annually.

The OIG’s 2014 agenda also includes evaluating whether drugmakers should be required to report average sales prices to CMS for drugs covered under Medicare Part B to better determine how pricing varies.

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