MEDICARE: HCFA Will Counterstrike Against Inflated Drug Prices
Medicare plans to initiate a major overhaul of its drug reimbursement procedure to help neutralize the prescription drug industry's "artificially inflated" prices and stop what investigators call "massive overpayments" for pharmaceutical products, the Wall Street Journal reports. Within days, HCFA is expected to inform private insurance companies that they should convert to more accurate pricing information for dozens of drugs. Officials say the move could save Medicare hundreds of millions of dollars per year. Federal officials contend that drug companies report overestimated average wholesale prices -- benchmarks used to set payments -- to industry guides used for government reimbursement. According to industry officials, however, wholesale drug prices are only "loose estimates," and companies have not "manipulated the data" and are "complying with the law." The decision to alter Medicare's payment practices comes after HCFA recently took similar steps to ensure more accurate pricing information for Medicaid. Based on government estimates, the two programs have been overpaying at least $1 billion for pharmaceuticals per year (McGinley/Cloud, 5/30).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.