Calculation of Potential Inflation-Indexed Rebates For Medicare Part B Drugs 2017

Statutorily mandated rebates, which include both basic rebates and inflation-indexed rebates (additional rebates owed when drug prices rise faster than inflation), amount to a substantial percentage of spending on Medicaid prescription drugs. Medicare does not have the authority to collect rebates for Part B drugs and biologicals (i.e., "Part B drugs"). In an earlier report, OIG found that a rebate program for Part B drugs could have resulted in at least $2.7 billion in rebates (both basic rebate and inflation-indexed rebate segments) in 2011. OIG conducted this current review after receiving a congressional request asking us to update our earlier rebate calculations using only the inflation-indexed portion of the Medicaid rebate methodology.