DELAURO CALLS FOR REVIEW OF MEDICARE DRUG REIMBURSEMENT RATES

Dear Inspector General Levinson:

I write to ask that you review the adequacy of the reimbursement rates established in the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 and their affect on physician practices' ability to obtain drugs and biologicals for the treatment of cancer patients.

The Department of Health and Human Services Office of the Inspector General (OIG) was originally tasked under Section 303 of the MMA to report to Congress on the adequacy of the new reimbursement rates that were established by the MMA. Under the Average Sales Price (ASP) reimbursement program authorized by the MMA, oncologists are paid 106% of the ASP. Congress intended the first OIG report to confirm that this new reimbursement program would not affect access to important cancer treatments. That report, posted in September 2005, concluded that physician practices could "generally purchase drugs for the treatment of cancer patients at less than the MMA-established reimbursement rates."

Since the posting of that report, however, the there has been a significant increase in the number of drug shortages affecting Americans and their healthcare providers. Between 2005 and 2010, the number of drug shortages reported to the Food and Drug Administration nearly tripled. The number of shortages this year has already surpassed those in 2010 and is expected to continue to climb. A staggering 74% of the drugs involved in these drug shortages are generic sterile injectable drugs, many of which are used to treat cancer. Six years after the original OIG report, it is time to re-examine how the current reimbursement system is affecting the prescription drug market and access to these medications using the data since 2005 through the current shortages.

I therefore request that you study this issue, with a focus on the current ability of physician practices of different sizes, including small community clinics and large practices, to obtain drugs and biologicals for the treatment of cancer patients at 106 percent of the average sales price, as intended under the MMA.

Thank you for your attention on this critical public health issue. I look forward to reviewing your findings.

Sincerely,

ROSA L. DeLAURO

Member of Congress