OIG HHS ASP Report 1-11

!"#$%&'(#)'!*+!,#%-'.!%)/!,0(%)!
1#&234#5
! OFFICE OF
INSPECTOR
! GENERAL
!
!
!
!
!
67"89:;7!<:=67>?1!
!
@A;!>7BC=!:D:8C:EC7!
!
F7>7;89!";GF1!
!
!
!
!
!
!
"%)3#-!;H!C#23)5*)!!
8)5$#4'*&!F#)#&%-!
I%)0%&J!KLMM!
A78NLONLPNLLQML!
E X E C U T I V E S U M M A R Y
OBJECTIVES!
"# $%!&'()*+(&!(,&!-).+./)+0!)*1+/(!%-!(,&!(2%345+6(&6!6&)*756'&*&.(!
0+8!%.!9&:)/+6&!1+;*&.('!-%6!<+6(!=3/%>&6&:!:658'!2)(,!.&20;!
+>+)0+70&!8&.&6)/!>&6')%.'#!
?# $%!&'()*+(&!2,&.!,)8,3&@1&.:)(56&!76+.:3%.0;!<+6(!=3/%>&6&:!
:658'!2)00!0)A&0;!,+>&!-)6'(38&.&6)/!>&6')%.'!6&+/,!(,&!*+6A&(#!
BACKGROUND
B0(,%58,!9&:)/+6&!<+6(!C!/%>&6'!*%'(!16&'/6)1()%.!:658'D!<+6(!=!
/%.().5&'!(%!/%>&6!+!0)*)(&:!.5*7&6!%-!%5(1+()&.(!16&'/6)1()%.!:658'#!!
<+;*&.(!-%6!*%'(!<+6(!=3/%>&6&:!:658'!)'!&45+0!(%!"EF!1&6/&.(!%-!(,&!
+>&6+8&!'+0&'!16)/&!GBH<I!-%6!+00!>&6')%.'!%-!+!:658#!!9+.5-+/(56&6'!+6&!
6&45)6&:!(%!'57*)(!BH<!:+(+!(%!(,&!J&.(&6'!-%6!9&:)/+6&!K!9&:)/+):!
H&6>)/&'!GJ9HI!2)(,).!LE!:+;'!+-(&6!(,&!/0%'&!%-!&+/,!45+6(&6D!+.:!(,&!
:+(+!+6&!5'&:!(%!/+0/50+(&!(,&!1+;*&.(!+*%5.(!-%6!(,&!-%00%2).8!
45+6(&6#!!B'!+!6&'50(D!(,&6&!)'!+!(2%345+6(&6!0+8!7&(2&&.!2,&.!'+0&'!
%//56!+.:!2,&.!(,&!1+;*&.(!+*%5.(!6&-0&/('!(,%'&!'+0&'#!!$,)'!
6&)*756'&*&.(!0+8!)'!&'1&/)+00;!16%70&*+()/!2,&.!.&20;!+>+)0+70&!
8&.&6)/!:658'!&.(&6!(,&!*+6A&(D!+'!(,&)6!BH<'!+6&!%-(&.!'57'(+.()+00;!
0%2&6!(,+.!(,&)6!76+.:!/%5.(&61+6('D!75(!1+;*&.(!+*%5.('!6&*+).!+(!
(,&!,)8,&6!76+.:!0&>&0!-%6!(2%!45+6(&6'!%6!*%6&#!!!
B!16&>)%5'!M--)/&!%-!N.'1&/(%6!O&.&6+0!GMNOI!6&1%6(!,)8,0)8,(&:!(,&!
>50.&6+7)0)()&'!%-!(,&!(2%345+6(&6!0+8!7;!&'()*+().8!(,&!+*%5.(!(,+(!
9&:)/+6&!2%50:!,+>&!'+>&:!)-!6&)*756'&*&.(!,+:!7&&.!7+'&:!%.!+/(5+0!
*+6A&(!'+0&'!16)/&'!-%6!%.&!,)8,3&@1&.:)(56&!<+6(!=3/%>&6&:!:658#!!MNO!
6&/%**&.:&:!(,+(!J9H!&@10%6&!%1()%.'!(%!&.'56&!(,+(!1+;*&.(!
+*%5.('!6&-0&/(!+/(5+0!*+6A&(!16)/&'!).!+!*%6&!()*&0;!*+..&6#!!J9H!
/%./566&:!2)(,!%56!6&/%**&.:+()%.P!,%2&>&6D!+'!%-!9+;!?E"ED!J9H!,+'!
;&(!(%!*+A&!+.;!/,+.8&'!(%!)('!6&)*756'&*&.(!16%/&''#!
Q%6!(,)'!'(5:;D!2&!&@+*).&:!(,&!9&:)/+6&!1+;*&.(!+*%5.('!-%6!"F!<+6(!
=3/%>&6&:!:658'!(,+(!2&!):&.()-)&:!+'!,+>).8!-)6'(38&.&6)/!>&6')%.'!
6&+/,!(,&!*+6A&(!).!?EERD!?EESD!%6!(,&!-)6'(!(2%!45+6(&6'!%-!?EET#!!Q%6!
&+/,!%-!(,&!:658'D!2&!:&(&6*).&:!,%2!*5/,!<+6(!=!'1&.:).8!2%50:!
,+>&!:&/6&+'&:!,+:!(,&6&!7&&.!.%!(2%345+6(&6!0+8!:56).8!(,&!).)()+0!
1&6)%:!%-!8&.&6)/!+>+)0+7)0)(;!G)#&#D!(,&!-)6'(!(,6&&!45+6(&6'!).!2,)/,!
8&.&6)/'!2&6&!+>+)0+70&I#!!U&!(,&.!(%(+0&:!(,&'&!-)856&'!(%!:&(&6*).&!(,&!
.&(!-).+./)+0!)*1+/(!%-!(,&!(2%345+6(&6!0+8!%.!<+6(!=!+.:!)('!
7&.&-)/)+6)&'#!!$%!16%>):&!/%.(&@(!-%6!(,&!-5(56&!)*1+/(!%-!(,&!!!!!!!!!!!!!
OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S !

)
!"#$%&'(!)(*+',-*")*'+.#*()%&).!)/*0(#1*!2)*3##/*'4/*5(&,*
6/1747.!('!7#4*83569*!2)*).!71'!)/*/'!)*#0*,)4)(7:*';;(#<'+*0#(*!2)*!#;*
/#++'($<#+&1)*=('4/*/(&,.*:#<)()/*&4/)(*>'(!*?@*
FINDINGS
Medicare could have saved an estimated $111 million had payment
amounts immediately reflected generic sales prices for 16 drugs.**
A2)*074'4:7'+*71;':!*#0*!2)*!"#$%&'(!)(*()71=&(.)1)4!*+',*74*!2)*;)(7#/*
#0*747!7'+*,)4)(7:*'<'7+'=7+7!B*0#(*CD*4)"+B*'<'7+'=+)*,)4)(7:*/(&,.*
!#!'+)/*';;(#E71'!)+B*FCCC*17++7#4@**A2).)*;#!)4!7'+*.'<74,.*'::#&4!)/*
0#(*GH*;)(:)4!*#0*!#!'+*)E;)4/7!&().*0#(*!2).)*/(&,.*/&(74,*!2)*.'1)*
;)(7#/@**I!*7.*4#!*J&.!*!2)*;(#,('1*7!.)+0-*=&!*'+.#*K)/7:'()*=)4)07:7'(7).*
"2#*0))+*!2)*074'4:7'+*)00):!*#0*!2)*()71=&(.)1)4!*+',*8=):'&.)*#0*:#.!*
.2'(74,9@*
3&(!2)(1#()-*7!*1'B*!'L)*B)'(.*0#(*K)/7:'()*!#*()'+7M)*!2)*0&++*.'<74,.*
#0*,)4)(7:*<)(.7#4.@**A2)*'<)(',)*;'B1)4!*'1#&4!.*0#(*!2)*/(&,.*&4/)(*
()<7)"*:#4!74&)/*!#*/):+74)*=)B#4/*!2)*;)(7#/*#0*747!7'+*,)4)(7:*
'<'7+'=7+7!B-*)4/74,*"7!2*'4*'<)(',)*;'B1)4!*'1#&4!*G*B)'(.*'0!)(*!2)*
74!(#/&:!7#4*#0*,)4)(7:.*!2'!*"'.*4)'(+B*DN*;)(:)4!*+)..*!2'4*!2'!*#0*!2)*
#(7,74'+*=('4/$#4+B*;'B1)4!*'1#&4!@**6//7!7#4'++B-*=('4/*/(&,.*")()*
747!7'++B*O*!71).*1#()*)E;)4.7<)*!2'4*!2)7(*,)4)(7:*<)(.7#4.-*#4*'<)(',)@*
According to FDA, numerous high-expenditure drugs could have
first-generic versions approved in the next several years. 6::#(/74,*
!#*356-*GD*#0*!2)*PQ*!#;*/#++'($<#+&1)*=('4/*/(&,.*:#<)()/*&4/)(****
>'(!*?*)7!2)(*'+()'/B*2'<)*#(*:#&+/*2'<)*,)4)(7:*<)(.7#4.*';;(#<)/*0#(*
!2)*07(.!*!71)*74*!2)*4)E!*.)<)('+*B)'(.@**A2).)*GD*/(&,.*2'/*:#1=74)/*
>'(!*?*)E;)4/7!&().*#0*#<)(*FG@Q*=7++7#4*74*GNNR@**A2)*()1'7474,***********
GG*/(&,.*'()*=7#+#,7:.-*"27:2*:#1;(7.)*4)'(+B*2'+0*#0*'++*:&(()4!*******
27,2$/#++'(*=('4/$#4+B*>'(!*?*/(&,.-*'4/*8=):'&.)*#0*():)4!*+),7.+'!7#49*
1'B*2'<)*,)4)(7:*<)(.7#4.*';;(#<)/*74*!2)*0&!&()@**>'(!*?*.;)4/74,*#4*
!2)*!#;*GG*=7#+#,7:.*!#!'+)/*#<)(*FH@O*=7++7#4*74*GNNR@*
Significant obstacles remain in proactively identifying newly
available generic drugs. 6+!2#&,2*356*;&=+7.2).*!2)*/'!)*#0*';;(#<'+*
0#(*07(.!*,)4)(7:.-*!27.*/'!)*7.*#0!)4*4#!*'4*'::&('!)*74/7:'!#(*#0*!2)*)4!(B*
#0*,)4)(7:*<)(.7#4.*74!#*!2)*1'(L)!*=):'&.)*7..&).*.&:2*'.*;'!)4!*
+7!7,'!7#4*'4/*1'(L)!74,*',())1)4!.*1'B*'00):!*!2)*/'!)*#0*,)4)(7:*
'<'7+'=7+7!B@**S&(*'4'+B.7.*7/)4!707)/*'*4&1=)(*#0*/(&,.*"7!2************
356$).!71'!)/*/'!).*#0*,)4)(7:*';;(#<'+*!2'!*/7/*4#!*:#74:7/)*"7!2*!2)*
,)4)(7:*1'(L)!*)4!(B*/'!).-*74:+&/74,*!"#*/(&,.*356*7/)4!707)/*'.*
OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S *

77
!"#$%&'($)*+,&-%-)$.'#-)*$/%*'01+'"22-")'+/'!"#-'%-#-)')-".!-3'+!-'
4")5-+6''7/)'"%/+!-)'&)/12'/('3)1&*8'&-%-)$.'4"%1(".+1)-)*'("$9-3'+/'
)-2/)+':;<*'$%'"'+$4-9='4"%%-)8'$%.)-"*$%&'+!-'3$(($.19+='$%'*-++$%&'
2"=4-%+'"4/1%+*'+!"+'"..1)"+-9=')-(9-.+'*"9-*'/('%->9='"#"$9"09-'
&-%-)$.'3)1&*6'
RECOMMENDATION
?!$*'$*'+!-'*-./%3'@AB')-2/)+'+/'$3-%+$(='*=*+-4$.'#19%-)"0$9$+$-*'$%''
<")+'C'"*'"')-*19+'/('+!-'+>/,D1")+-)'9"&'$%'2"=4-%+*'(/)'%->9='
"#"$9"09-'&-%-)$.'3)1&*6''E-'(/1%3'+!"+'F-3$.")-'2"=4-%+'"4/1%+*'
>-)-'*$&%$($."%+9='!$&!-)'+!"%'4")5-+'2)$.-*'(/)'"%'-G+-%3-3'2-)$/3'(/)'
+!-'%->9='"#"$9"09-'&-%-)$.'3)1&*'1%3-)')-#$->6''A%'/+!-)'>/)3*8'&-%-)$.'
#-)*$/%*'/('+!-*-'3)1&*'>-)-'0-$%&'"34$%$*+-)-3'/)'3$*2-%*-3'+/'
0-%-($.$")$-*8'01+'F-3$.")-'>"*'*+$99'2"=$%&'0)"%3'2)$.-*6'':9+!/1&!'
/+!-)'&/#-)%4-%+'"%3'2)$#"+-9='*2/%*/)-3'2)-*.)$2+$/%'3)1&'2)/&)"4*'
")-'3-*$&%-3'+/'+"5-'"3#"%+"&-'/('9/>-),2)$.-3'&-%-)$.'3)1&*8'/1)'
($%3$%&*'3-4/%*+)"+-'+!"+'+!-'<")+'C')-$401)*-4-%+'*=*+-4'("$9*'+/'
."2+1)-'+!-*-'2/+-%+$"9'*"#$%&*'(/)'"+'9-"*+'+>/'D1")+-)*6'
E$+!'4/)-'+!"%'!"9('/('+!-'+/2'3/99"),#/914-'0)"%3'3)1&*'./#-)-3'1%3-)'
<")+'C'2/+-%+$"99='&"$%$%&'"22)/#"9'$%'&-%-)$.'(/)4'/#-)'+!-'%-G+'''''''''''
H'=-")*8'"%3'+!-'.)-"+$/%'1%3-)'+!-'<"+$-%+'<)/+-.+$/%'"%3':((/)3"09-'
I")-':.+'/('"'%->'"22)/#"9'2"+!>"='(/)'&-%-)$.'0$/9/&$.*8'+!$*'
#19%-)"0$9$+='>$99'9$5-9='./%+$%1-'+/'&)/>'$('IF;'3/-*'%/+'4"5-'.!"%&-*'
+/'$+*'<")+'C'2"=4-%+'*=*+-46''E-'+!-)-(/)-')-./44-%3'+!"+J'
CMS work with Congress to require manufacturers of first generics
to submit monthly ASP data during the period of initial generic
availability. C=')-D1$)$%&'4"%1(".+1)-)*'/('($)*+'&-%-)$.*'+/')-2/)+':;<*'
/%'"'4/%+!9='0"*$*'>!-%'+!-'&-%-)$.*'($)*+'0-./4-'"#"$9"09-8'IF;'./193'
*10*+"%+$"99=')-31.-'+!-'+>/,D1")+-)'9"&'"%3'4"5-'F-3$.")-'2"=4-%+'
"4/1%+*'4/)-')-(9-.+$#-'/('".+1"9'4")5-+'2)$.-*6 A('IF;'($%3*'+!$*'+/'0-'
"%'-((-.+$#-'4-"%*'(/)'"99-#$"+$%&'+!-'($%"%.$"9'$42".+'/('+!-''''''''''''''
+>/,D1")+-)'9"&8'+!-'"&-%.='4"='>$*!'+/'./%*$3-)')-D1$)$%&'4/%+!9='
:;<'*104$**$/%*'(/)'"99'<")+'C,./#-)-3'3)1&*6''
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL

RESPONSE
IF;'3$3'%/+'./%.1)'>$+!'/1)')-./44-%3"+$/%8'.$+$%&'2/+-%+$"9'2)/09-4*'
>$+!'4"%1(".+1)-)'2)$.-'*104$**$/%*'"%3'$%.)-"*-3'"34$%$*+)"+$#-'
01)3-%*'1%3-)'"'2)/2/*-3'4/%+!9=':;<')-2/)+$%&')-D1$)-4-%+6''IF;'
OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S '

$$$
$%&'!&($()*!(+$(!"(!,)%")#)&!(+)!(-'./0$1()1!%$2!31'()4(&!5)*"4$1)!$6*!"(&!
,)6)7"4"$1")&!71'8!064+)49)*!31"4)!"641)$&)&!$6*!"&!$6!"64)6("#)!7'1!
7$&()1!2)6)1"4!0("%":$("'6;!!!
<)4$0&)!'7!(+)!(-'./0$1()1!%$2=!>$1(!<!$6*!"(&!,)6)7"4"$1")&!$1)!*)6")*!
&"26"7"4$6(!3'()6("$%!&$#"62&!-+)6!2)6)1"4!#)1&"'6&!7"1&(!,)4'8)!
$#$"%$,%);!!?+)1)7'1)=!-)!,)%")#)!(+$(!(+)!&$#"62&!71'8!$!1)*04)*!
1)"8,01&)8)6(!%$2!8$@!'0(-)"2+!$6@!*"77"40%(")&!-"(+!"83%)8)6("62!$!
8'6(+%@!AB>!1)3'1("62!&@&()8;!!C01(+)18'1)=!-)!6'()!(+$(!(+)!!!!!!!!
AB>.,$&)*!1)"8,01&)8)6(!&@&()8!D"6!-+"4+!$%%!#)1&"'6&!'7!$!*102!
$&&"26)*!('!'6)!3$@8)6(!4'*)!$1)!3$"*!$(!(+)!&$8)!$8'06(E!"&!$!6$(01$%!
"64)6("#)!7'1!8$607$4(01)1&!('!%"8"(!1$3"*!31"4)!"641)$&)&=!$&!-)%%!$&!7'1!
31'#"*)1&!('!0("%":)!2)6)1"4!#)1&"'6&;!

"#
T A B L E O F C O N T E N T S
EXECUTIVE SUMMARY !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!"
I N T R O D U C T I O N ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! #$
F I N D I N G S ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! #%$
$ &'(")*+'$),-.($/*0'$1*0'($*2$'13"4*3'($5###$4"..",2$/*($$$$$$$$$$
6*74'23$*4,-231$"44'("*3'.7$+'8.')3'($9'2'+")$1*.'1$6+")'1$8,+$$$$$$$$
#:$(+-91! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! #%$
$ ;)),+("29$3,$<=;>$2-4'+,-1$/"9/?'@6'2("3-+'$(+-91$),-.($/*0'$$$$
8"+13?9'2'+")$0'+1",21$*66+,0'($"2$3/'$2'@3$1'0'+*.$7'*+1 ! ! ! ! ! ! ! #A$
$ B"92"8")*23$,C13*).'1$+'4*"2$"2$6+,*)3"0'.7$"('23"87"29$2'D.7$$
*0*".*C.'$9'2'+")$(+-91 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! #:$
R E C O M M E N D A T I O N ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! #E$
;9'2)7$F,44'231$*2($G88")'$,8$H216')3,+$I'2'+*.$J'16,21' ! ! ! KL$
A P P E N D I X E S ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! K%$
$ ;M$$='3*".'($&'3/,(,.,97$8,+$H('23"87"29$<"+13?I'2'+")$=+-91$$$$$$$$$$
*2($N/'"+$=*3'1$,8$&*+O'3$P23+7! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! K%$
$ QM$$<"+13?I'2'+")$=+-91$H2).-('($"2$G-+$;2*.71"1! ! ! ! ! ! ! ! ! ! ! ! ! KA$
$ FM$$&'(")*+'$R*74'23$;4,-231$8,+$#:$S'D.7$;0*".*C.'$I'2'+")$$
=+-91 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! K:$
$ =M$$P13"4*3'($I'2'+")$;66+,0*.$N"4'."2'$8,+$3/'$N,6$$$$$$$$$$$$$$$$$$$$$$$$$
K:$=,..*+?T,.-4'$Q+*2(?G2.7$R*+3$Q$=+-91$UQ",.,9")1$$$$$
P@).-('(V>$;)),+("29$3,$<=; ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! KW$
$ PM$$N,6$KK$=,..*+?T,.-4'$Q",.,9")1$X2('+$R*+3$Q! ! ! ! ! ! ! ! ! ! ! ! ! KE$
$ <M$$F,46*+"1,2$,8$<=;Y1$;S=;$;66+,0*.$=*3'1$*2($;)3-*.$$
$$$$$$$$$$$$$$$I'2'+")$P23+7$=*3'1 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! %L$
$ IM$$;9'2)7$F,44'231 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! %#$
A C K N O W L E D G M E N T S ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! %:
I N T R O D U C T I O N
OBJECTIVES
!" #$%&'()*+(&%(,&%-).+./)+0%)*1+/(%$-%(,&%(2$345+6(&6%6&)*756'&*&.(%
0+8%$.%9&:)/+6&%1+;*&.('%-$6%<+6(%=3/$>&6&:%:658'%2)(,%.&20;%
+>+)0+70&%8&.&6)/%>&6')$.'"%
?" #$%&'()*+(&%2,&.%,)8,3&@1&.:)(56&%76+.:3$.0;%<+6(%=3/$>&6&:%
:658'%2)00%0)A&0;%,+>&%-)6'(38&.&6)/%>&6')$.'%6&+/,%(,&%*+6A&("%
BACKGROUND
B.%?CCDE%9&:)/+6&%'1&.(%+116$@)*+(&0;%F!!%7)00)$.%$.%<+6(%=3/$>&6&:%
:658'" ! %%9&:)/+6&%1+;'%-$6%*$'(%16&'/6)1()$.%:658'%/$>&6&:%5.:&6%<+6(%
=%7+'&:%$.%*+.5-+/(56&636&1$6(&:%+>&6+8&%'+0&'%16)/&'%GHI<J"%%=&/+5'&%
1+;*&.(%+*$5.('%+6&%:&(&6*).&:%5').8%HI<%:+(+%-6$*%(2$%45+6(&6'%
&+60)&6E%)(%*+;%(+A&%K%*$.(,'%$6%*$6&%-$6%9&:)/+6&%6&)*756'&*&.(%($%
6&-0&/(%+.;%16)/&%/,+.8&'%).%(,&%*+6A&(10+/&"%
H%16&>)$5'%L--)/&%$-%B.'1&/($6%M&.&6+0%GLBMJ%6&1$6( ? %-$5.:%(,+(%(,)'%%%%%
(2$345+6(&6%6&)*756'&*&.(%0+8%,+:%.&8+()>&%-).+./)+0%/$.'&45&./&'%-$6%
(,&%9&:)/+6&%16$86+*%+.:%)('%7&.&-)/)+6)&'%G(,6$58,%,)8,&6%
/$).'56+./&J%2,&.%0$2&6316)/&:%8&.&6)/%>&6')$.'%$-%(,&%/+./&6%:658%
)6).$(&/+.%-)6'(%6&+/,&:%(,&%*+6A&("%%B.%)('%/$**&.('%($%(,+(%6&1$6(E%(,&%
N&.(&6'%-$6%9&:)/+6&%O%9&:)/+):%I&6>)/&'%GN9IJ%/$./566&:%2)(,%$56%
6&/$**&.:+()$.%(,+(%(,&%+8&./;%&@10$6&%$1()$.'%(,+(%2$50:%+00$2%
1+;*&.(%+*$5.('%($%*$6&%+//56+(&0;%6&-0&/(%.&2%8&.&6)/%16)/&'"%%N9I%
'(+(&:%(,+(%)(%)'%).(&6&'(&:%).%+.;%'588&'()$.'%LBM%*+;%,+>&%($%)*16$>&%
(,&%*&(,$:'%5'&:%($%/$00&/(%+.:%+66+;%:+(+%5.:&6%(,&%HI<%';'(&*" P %%
Q$2&>&6E%N9I%,+'%;&(%($%*+A&%+.;%/,+.8&'%(,+(%2$50:%+00$2%9&:)/+6&%
($%(+A&%+:>+.(+8&%$-%(,&%0$2&6%16)/&'%$-%.&20;%+>+)0+70&%8&.&6)/%:658'%).%
+%*$6&%()*&0;%*+..&6"%%#$%(,+(%&.:E%(,)'%'(5:;%&@1+.:'%$.%16&>)$5'%
2$6A%7;%&@+*).).8%(,&%)*1+/(%$-%(,&%(2$345+6(&6%0+8%$.%+%76$+:&6%'/+0&"%%
Payment for Medicare Part B-Covered Drugs
H0(,$58,%9&:)/+6&%<+6(%R%/$>&6'%*$'(%$5(1+()&.(%16&'/6)1()$.%:658'E%
N9I%/$.().5&'%($%/$>&6%+%0)*)(&:%.5*7&6%$-%$5(1+()&.(%16&'/6)1()$.%
:658'%+.:%7)$0$8)/+0'%G,&6&).+-(&6%6&-&66&:%($%+'%:658'J%5.:&6%)('%<+6(%=%
7&.&-)("%%<+6(%=3/$>&6&:%:658'%8&.&6+00;%-+00%).($%(,&%-$00$2).8%
!%<+6(%=%H.+0;()/'%S&1$6().8%G<=HSJ%GDT%1&6/&.(%$-%/0+)*'%6&1$6(&:J"%%H//&''&:%$.%%%%%%%
9+6/,%?DE%?C!C"%
?%LBME%9&:)/+6&%<+;*&.(%-$6%B6).$(&/+.E%LUB3CP3CT3CCP!CE%H585'(%?CCT"%
P%B7):"%
OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S %

!
!"#$%&'($)*++,'-%)+.-'/()0$,+(/!(,$/#+#&+"+102)(!("/3)+)$'4(!$+++++++++++++
5$6%67+(/8$!#"9:$+,'-%)+-)$,+(/+!&//$!#(&/+;(#0+#0$+#'$"#<$/#+&.+!"/!$'=7+
,'-%)+$>1:(!(#:2+!&4$'$,+92+)#"#-#$+5$6%67+)&<$+4"!!(/$)+"/,+&'":+
"/#(!"/!$'+,'-%)=7+"/,+,'-%)+-)$,+(/+!&/8-/!#(&/+;(#0+,-'"9:$+<$,(!":+
$?-(1<$/#+5$6%67+(/0":"#(&/+,'-%)=6 @ +++
A&+&9#"(/+B$,(!"'$+1"2<$/#+.&'+C"'#+DE!&4$'$,+,'-%)7+102)(!("/)+"/,+
)-11:($')+)-9<(#+!:"(<)7+-)(/%+#0$+F$":#0!"'$+G&<<&/+C'&!$,-'$+
G&,(/%+H2)#$<+5FGCGH=+!&,$)7+#&+!:"(<)E1'&!$))(/%+!&/#'"!#&')6++A0$+
FGCGH+!&,$)+1'&4(,$+"+)#"/,"',(I$,+)2)#$<+.&'+,$)!'(9(/%+)1$!(.(!+
(#$<)+"/,+)$'4(!$)+1'&4(,$,+(/+#0$+,$:(4$'2+&.+0$":#0+!"'$6++J/+#0$+!")$+&.+
1'$)!'(1#(&/+,'-%)7+$"!0+FGCGH+!&,$+,$.(/$)+#0$+,'-%+(/%'$,($/#+/"<$+
"/,+9(::(/%+-/(#+)(I$+9-#+,&$)+/&#+)1$!(.2+#0$+<"/-."!#-'$'+&'+1"!K"%$+
)(I$6++L)+"+'$)-:#7+FGCGH+!&,$)+.&'+)(/%:$E)&-'!$+,'-%)+5(6$67+,'-%)+;(#0+
/&+"4"(:"9:$+%$/$'(!+4$')(&/)=+#21(!"::2+(/!:-,$+1'&,-!#)+.'&<+&/:2+&/$+
<"/-."!#-'$'7+"/,+FGCGH+!&,$)+.&'+<-:#(1:$E)&-'!$+,'-%)+5(6$67+,'-%)+
;(#0+%$/$'(!+4$')(&/)=+(/!:-,$+1'&,-!#)+.'&<+<-:#(1:$+<"/-."!#-'$')6++
GBH+1"2)+.&'+<&)#+C"'#+DE!&4$'$,+,'-%)+9")$,+&/+#0$('+LHC)6 M ++A0$+
LHC+()+,$.(/$,+")+"+<"/-."!#-'$'3)+)":$)+&.+"+,'-%+#&+"::+1-'!0")$')+(/+
#0$+N/(#$,+H#"#$)+(/+"+!":$/,"'+?-"'#$'+,(4(,$,+92+#0$+#&#":+/-<9$'+&.+
-/(#)+&.+#0$+,'-%+)&:,+92+#0$+<"/-."!#-'$'+(/+#0"#+)"<$+?-"'#$'6 O ++A0$+
LHC+()+/$#+&.+"/2+1'(!$+!&/!$))(&/)7+)-!0+")+4&:-<$+,()!&-/#)7+++++
1'&<1#E1"2+,()!&-/#)7+!")0+,()!&-/#)7+.'$$+%&&,)+!&/#(/%$/#+&/+
1-'!0")$+'$?-('$<$/#)7+!0"'%$9"!K)7+"/,+'$9"#$)+&#0$'+#0"/+#0&)$+
&9#"(/$,+#0'&-%0+#0$+B$,(!"(,+,'-%+'$9"#$+1'&%'"<6 P ++H":$)+#0"#+"'$+
/&<(/":+(/+"<&-/#+"'$+$>$<1#$,+.'&<+#0$+LHC+!":!-:"#(&/7+")+"'$+)":$)+
$>!:-,$,+.'&<+#0$+,$#$'<(/"#(&/+&.+Q9$)#+1'(!$R+(/+#0$+B$,(!"(,+,'-%+
'$9"#$+1'&%'"<6 S7+T +++
B$,(!"'$+1"2<$/#+"<&-/#)+.&'+<&)#+C"'#+DE!&4$'$,+1'$)!'(1#(&/+,'-%)+
"'$+$?-":+#&+UVO+1$'!$/#+&.+#0$+4&:-<$E;$(%0#$,+LHC)+.&'+#0$+FGCGH+
@+OS+W$,6+X$%6+MV@YS7+MV@YT+5L-%6+YV7+YVVZ=6+
M+H$4$'":+C"'#+D+,'-%)7+(/!:-,(/%+!$'#"(/+4"!!(/$)+"/,+9:&&,+1'&,-!#)7+"'$+/&#+1"(,+-/,$'+
#0$+LHC+<$#0&,&:&%26+
O+H$!#(&/+US@PL5!=+&.+#0$+H&!(":+H$!-'(#2+L!#+5#0$+L!#=7+")+",,$,+92+#0$+B$,(!"'$+
C'$)!'(1#(&/+['-%7+J<1'&4$<$/#7+"/,+B&,$'/(I"#(&/+L!#+&.+YVVZ+5BBL=7+C6\6+UVSEUPZ6+
P+H$!#(&/+US@PL5!=5Z=+&.+#0$+L!#6+
S+C-')-"/#+#&+)$!#(&/+UTYP5!=5U=5G=5(=+&.+#0$+L!#7+Q9$)#+1'(!$R+()+#0$+:&;$)#+1'(!$+"4"(:"9:$+
.'&<+#0$+<"/-."!#-'$'+,-'(/%+#0$+'$9"#$+1$'(&,+#&+"/2+;0&:$)":$'7+'$#"(:$'7+1'&4(,$'7+0$":#0+
<"(/#$/"/!$+&'%"/(I"#(&/7+/&/1'&.(#+$/#(#27+&'+%&4$'/<$/#":+$/#(#2+;(#0(/+#0$+N/(#$,+
H#"#$)7+;(#0+!$'#"(/+$>!$1#(&/)6+
T+H$!#(&/+US@PL5!=5Y=+&.+#0$+L!#6+
OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S +

Y
!"#$%&''($#)!*+$',$-$.)!)*+)$%'*+$'+$%/"-%),0$'."+'12'/$+!$-3'".'34)%'
*5"6-3')-'34$'."+5'".'!")-%6+*-!$&'
Manufacturer Reporting Requirements
ASP data.''(*-6.*!36+$+%'7)34'($#)!*)#'#+68'+$,*3$'*8+$$5$-3%')-'
$..$!3'56%39'*5"-8'"34$+'34)-8%9'/+":)#$';(<'7)34'/+)!)-8')-."+5*3)"-9'
)-!06#)-8'34$'=<>'."+'$*!4'".'34$)+'>*+3'?@!":$+$#'#+68%'*-#'34$'
*:$+*8$'5*-6.*!36+$+'/+)!$'A=(>B'."+'$*!4'".'34$)+'($#)!*)#@!":$+$#'
#+68%& C29'CC ''(*-6.*!36+$+%'+$/"+3'=<>%'."+'>*+3'?@!":$+$#'#+68%',D'
-*3)"-*0'#+68'!"#$%'AEF;B9'74)!4'*+$'CC@#)8)3'-65$+)!'!"#$%'#):)#$#'
)-3"'34+$$'%$85$-3%')#$-3).D)-8'ACB'34$'.)+5'34*3'5*-6.*!36+$%9'
#)%3+),63$%9'"+'+$/*!G*8$% C1 '34$'#+68'/+"#6!3'A)&$&9'34$'0*,$0$+'!"#$BH'''''
A1B'34$'%/$!).)!'%3+$-8349'#"%*8$'."+59'*-#'."+560*3)"-'".'34$'/+"#6!3H'
*-#'AIB'34$'/+"#6!3J%'/*!G*8$'%)K$&''(*-6.*!36+$+%'*+$'+$L6)+$#'3"'
/+":)#$';(<'7)34'34$'=<>'*-#':"065$'".'%*0$%'."+'$*!4'EF;'7)34)-'''
I2'#*D%'".'34$'$-#'".'$*!4'L6*+3$+& CI ''?$!*6%$'($#)!*+$'/*D5$-3'."+'
>*+3'?@!":$+$#'#+68%')%',*%$#'"-'M;>;<'!"#$%'+*34$+'34*-'EF;%'*-#'
5"+$'34*-'"-$'EF;'5*D'5$$3'34$'#$.)-)3)"-'".'*'/*+3)!60*+'M;>;<'
!"#$9';(<'4*%'#$:$0"/$#'*'.)0$'34*3'N!+"%%7*0G%O'5*-6.*!36+$+%J'EF;%'
3"'M;>;<'!"#$%&'
(*-6.*!36+$+%'5*D'.*!$'!):)0'5"-$D'/$-*03)$%'"+'%6%/$-%)"-'".'34$)+'
+$,*3$'*8+$$5$-3%').'34$D'G-"7)-80D'/+":)#$'.*0%$')-."+5*3)"-'*,"63'
34$)+'=<>%9'.*)0'3"'+$/"+3'=<>'#*3*')-'34$'+$L6)+$#'3)5$.+*5$9'"+'5*G$'
5)%+$/+$%$-3*3)"-%')-'+$/"+3)-8'=<>%& CP ''Q4$'/$-*03)$%'*%%"!)*3$#'7)34'
0*3$'%6,5)%%)"-%'5*D',$')-!+$*%$#',D'6/'3"'RC29222'."+'$*!4'#*D'=<>'
#*3*'*+$'-"3'/+":)#$#& CS'
The Two-Quarter Lag in Reimbursement for Part B-Covered Drugs
;(<J%'=<>'/*D5$-3'5$34"#"0"8D'4*%'*-')-4$+$-3'0*8',$37$$-'34$'3)5$'
74$-'%*0$%'"!!6+'*-#'74$-'34$'%*0$%',$!"5$'34$',*%)%'."+'/*D5$-3'
*5"6-3%&''(*-6.*!36+$+%'56%3'/+":)#$';(<'7)34'34$'+$L6)+$#'=<>'
C2'T"+'T$#$+*0'/*D5$-3'3"',$'*:*)0*,0$'."+'!":$+$#'"63/*3)$-3'#+68%'/+":)#$#'6-#$+'
($#)!*)#9'%$!3)"-%'CU1VA*BACB'*-#'A,BACB'".'34$'=!3'5*-#*3$'34*3'#+68'5*-6.*!36+$+%'$-3$+'
)-3"'+$,*3$'*8+$$5$-3%'7)34'34$'<$!+$3*+D'".'M$*034'W'M65*-'<$+:)!$%'*-#'/*D'L6*+3$+0D'
+$,*3$%'3"'<3*3$'($#)!*)#'*8$-!)$%&'
CC'($#)!*)#'+$,*3$%'*+$',*%$#'"-'=(>%&''=<>%'*+$'-"3'6%$#')-'34$'!*0!60*3)"-'".'
($#)!*)#'+$,*3$%&'
C1'='+$/*!G*8$+'/6+!4*%$%'#+68%'.+"5'5*-6.*!36+$+%'*-#'3D/)!*00D'+$/*!G*8$%'34$5')-3"'
%5*00$+'L6*-3)3)$%&'
CI'<$!3)"-'CU1VA,BAIB'".'34$'=!3'*-#'P1';TX'Y'PCP&Z2PA*BASB&'
CP'<$!3)"-%'CU1VA,BAIBA;BA)B'*-#'A))B'".'34$'=!3'*-#'Y'CZPV=A#BAPB'".'34$'=!3&'
CS'<$!3)"-'CU1VA,BAIBA;BA)B'".'34$'=!3&'

I
!"#"$%&'$(")*$+,-$./#*/0$12$!"34$"%#('$#*($)5&4($&%$(")*$67"'#('8$$-9:$
#*(0$)"5)75"#(4$"$;&57<(=.(/>*#(!$?:@$%&'$(")*$A-@-:$)&!(8$$B*/4$
?:@$C()&<(4$#*($C"4/4$%&'$#*($D"3<(0#$"<&70#$%&'$#*($%&55&./0>$
67"'#('8$$E&'$(F"<D5(G$#*/'!=67"'#('$H22I$?:@$!"#"$%'&<$
<"07%")#7'('4$.('($!7($#&$-9:$12$!"34$"%#('$#*($(0!$&%$#*($#*/'!$
67"'#('$J/8(8G$K)#&C('$12G$H22ILG$.*/)*$-9:$74(!$"4$#*($C"4/4$%&'$$$$$$
%/'4#=67"'#('$H2M2$9(!/)"'($D"3<(0#$"<&70#48$$:(($B"C5($M$%&'$"$
!(4)'/D#/&0$&%$#*($'(/<C7'4(<(0#$#/<(5/0(8$
Table 1: ASP-Based Reimbursement Timeline
Quarter in Which
Manufacturer Sales Period ASP Data Due to CMS ASP-Based Payment
Amount Applied
First-Quarter 2009 Apr. 30, 2009 Third-Quarter 2009
Second-Quarter 2009 July 30, 2009 Fourth-Quarter 2009
Third-Quarter 2009 Oct. 30, 2009 First-Quarter 2010
Fourth-Quarter 2009 Jan. 30, 2010 Second-Quarter 2010

Source: OIG analysis of ASP-based reimbursement, 2009.
B*($#.&=67"'#('$5">$)"74(4$9(!/)"'($"0!$/#4$C(0(%/)/"'/(4$#&$</44$&7#$&0$
/<<(!/"#($4";/0>4$"03#/<($"$!'7>N4$?:@$!()5/0(4G$"4$#*($D"3<(0#$
"<&70#$#&$D'&;/!('4$J(8>8G$D*34/)/"04$"0!$D*"'<")/(4L$'(<"/04$"#$#*($
D'(;/&74$J*/>*('L$5(;(5$%&'$#.&$67"'#('4$&'$<&'(O(;(0$#*&7>*$#*(4($
D'&;/!('4$"'($")67/'/0>$#*($!'7>$"#$#*($'()(0#53$'(!7)(!$D'/)(8$$B*/4$/4$
(4D()/"553$'(5(;"0#$.*(0$>(0('/)$;('4/&04$&%$"$!'7>$%/'4#$C()&<($
";"/5"C5(8$$B3D/)"553G$.*(0$#*($%/'4#=>(0('/) MP $;('4/&0$&%$"$!'7>$(0#('4$
#*($<"'Q(#G$/#4$4"5(4$D'/)(4$"'($47C4#"0#/"553$5&.('$#*"0$#*&4($&%$#*($
!'7>N4$C'"0!$(67/;"5(0#8$$?!!/#/&0"553G$>(0('/)$;('4/&04$&%#(0$67/)Q53$
"))&70#$%&'$#*($<"R&'/#3$&%$7#/5/S"#/&0$%&'$#*"#$!'7>G$&;('#"Q/0>$#*($<&'($
(FD(04/;($C'"0!$%&'<8$$A&.(;('G$C()"74($&%$#*($#.&=67"'#('$5">$/0$#*($
?:@$)"5)75"#/&0G$#*($5&.('$D'/)(4$"0!$/0)'("4(!$7#/5/S"#/&0$&%$>(0('/)$
;('4/&04$"'($0&#$/<<(!/"#(53$%")#&'(!$/0#&$)"5)75"#/&04$&%$#*($9(!/)"'($
D"3<(0#$"<&70#$%&'$#*($)&''(4D&0!/0>$A-@-:$)&!(8$$B*('(%&'(G$
D'&;/!('$")67/4/#/&0$)&4#4$%&'$#*(4($!'7>4$./55$<&4#$5/Q(53$!()'("4($
47C4#"0#/"553$/0$#*($%/'4#$67"'#('$&%$>(0('/)$";"/5"C/5/#3G$"5#*&7>*$
9(!/)"'($D"3<(0#$"<&70#4$./55$#"Q($"#$5("4#$#.&$67"'#('4$#&$'(%5()#$#*($
)*"0>(8$
MP$A('(/0"%#('G$#*($#('<$T%/'4#$>(0('/)U$./55$'(%('$#&$#*($/0/#/"5$>(0('/)$;('4/&0J4L$&%$"$!'7>$
"DD'&;(!$70!('$"0$?CC'(;/"#(!$+(.$,'7>$?DD5/)"#/&0$J?+,?L$"4$5/4#(!$C3$#*($E&&!$"0!$
,'7>$?!</0/4#'"#/&0$JE,?L$&0$#*($E/'4#=B/<($V(0('/)$,'7>$?DD'&;"54$5/4#8$$E,?G$?+,?$
JV(0('/)L$,'7>$?DD'&;"548$$?))(44(!$"#$*##DWXX...8%!"8>&;$&0$?D'/5$HYG$H2M28$
OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S $

Z
FDA’s Generic Approval Process

!"#$%&%"'()&#"*&(+,*$&-#.*$.&-"/.*0.+/$&12&.3*&4565&7#.*$.&#$%&
8"#%*9#":&;<<+0*&</"&#&0*".#+$&-*"+/%&=(*$*"#>>2&?@&2*#")&<"/9&.3*&%#.*&
/<&<+>+$(A5 BC &&4-/$&#--"/,#>&12&DEFG&9#$'<#0.'"*")&#"*&#>)/&("#$.*%&
9#":*.&*H0>')+,+.2&</"&.3*&%"'(G&I3+03&9#2&/"&9#2&$/.&"'$&0/$0'""*$.>2&
I+.3&.3*&-#.*$.&-"/.*0.+/$5 BJ &&K+.3&0*".#+$&*H0*-.+/$)G&(*$*"+0&%"'()&
0#$$/.&1*&9#":*.*%&1*</"*&.3*&1"#$%&%"'(L)&-#.*$.&#$%&9#":*.&
*H0>')+,+.2&*H-+"*5 BMG&?@ &&!*</"*&9#":*.+$(&#&(*$*"+0&,*")+/$&/<&#&1"#$%&
%"'(G&#&-3#"9#0*'.+0#>&0/9-#$2&9').&/1.#+$&DEF&#--"/,#>&12&
)'19+..+$(&#$&FNEF5 ?B &&O*$*"#>>2G&#&(*$*"+0&%"'(&9').&1*&.3*&)#9*&#)&
#&1"#$%&%"'(&I+.3&"*)-*0.&./&0/$%+.+/$)&/<&')*&=I+.3&0*".#+$&*H0*-.+/$)AG&
#0.+,*&+$("*%+*$.=)AG&"/'.*&/<&#%9+$+)."#.+/$G&%/)#(*&</"9G&)."*$(.3G&#$%&
>#1*>+$(5 ?? &&P$&#%%+.+/$G&I+.3&0*".#+$&*H0*-.+/$)G&.3*&(*$*"+0&%"'(&9').&
1*&1+/*Q'+,#>*$.&./&=+5*5G&-*"</"9&+$&.3*&)#9*&9#$$*"&#)A&.3*&1"#$%&
%"'(5&
R#03&9/$.3G&DEF&-'1>+)3*)&#&>+).&/<&$*I&<+").S.+9*&(*$*"+0&%"'(&
#--"/,#>)&=$/.*T&&.3*&#--"/,#>&/<&#&%"'(&%/*)&$/.&9*#$&.3#.&+.&"*#03*)&
.3*&9#":*.A5 ?U &&D'".3*"9/"*G&.3*&DEF&F--"/,*%&E"'(&7"/%'0.)&
%+"*0./"2&=VE"'()WDEFXA&-"/,+%*)&*#03&%"'(L)&#--"/,#>&3+)./"2G&
+$0>'%+$(&I3*.3*"&+.&I#)&#--"/,*%&'$%*"&#$&FNEFG&.3*"*12&+$%+0#.+$(&
#&(*$*"+0&%"'(5&&E"'()WDEF&+)&)*#"03#1>*&12&#-->+0#.+/$&$'91*"G&
-"/-"+*.#"2&%"'(&$#9*G&#$%&#0.+,*&+$("*%+*$.5 ?Y &&
Previous OIG Work
F&?@@J&;PO&"*-/".&+%*$.+<+*%&,'>$*"#1+>+.+*)&+$&.3*&7#".&!&-#29*$.&
)2).*9&I3*$&.3*&<+").S(*$*"+0&,*")+/$)&/<&#&-"*)0"+-.+/$&%"'(&*$.*"&.3*&
9#":*.5 ?Z &&P$&.3#.&"*-/".G&I*&*).+9#.*%&.3#.&-"/,+%*")&-#+%&[ZB5ZM&-*"&&
?@&9+>>+("#9)&/<&+"+$/.*0#$&=#&0#$0*"&%"'(&.3#.&I#)&#,#+>#1>*&+$&(*$*"+0&
BC&4565&7#.*$.&#$%&8"#%*9#":&;<<+0*5&O*$*"#>&P$</"9#.+/$&\/$0*"$+$(&7#.*$.)T&&N#.'"*&
/<&7#.*$.&#$%&7#.*$.&]+(3.)5&&F00*))*%&#.&3..-T^ÎII5')-./5(/,&/$&_'$*&CG&?@B@5&
BJ&DEFG&D"*Q'*$.>2&F):*%&`'*).+/$)&/$&7#.*$.)&#$%&RH0>')+,+.25&&F00*))*%&#.&
III5<%#5(/,&/$&_'>2&?JG&?@B@5&
BM&P1+%5&
?@&4565&7#.*$.&#$%&8"#%*9#":&;<<+0*G&>/05&0+.5&
?B&?B&\D]&a&UBY5B@Z=%A5&
??&?B&4565\5&a&UZZ=bA=?A&=a&Z@Z=bA=?A&/<&.3*&D*%*"#>&D//%G&E"'(G&#$%&\/)9*.+0&F0.Ac&&&&&&&&&&&&
?B&\D]&aa&UBY5M?&#$%&UBY5B@Z=0A5&
?U&DEFG&FNEF&=O*$*"+0A&E"'(&F--"/,#>)5&&F00*))*%&#.&3..-T^ÎII5<%#5(/,&/$&&&&&&&&&&&&&
F-"+>&?CG&?@B@5&
?Y&F00*))*%&#.&3..-T^ÎII5<%#5(/,&/$&d#"03&?eG&?@B@5&
?Z&;POG&d*%+0#"*&7#29*$.&</"&P"+$/.*0#$G&;RPS@US@JS@@UB@G&F'(').&?@@J5&
OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S &

Z
!"#$%&'()**)*(%)*%+'&#,-#.%/0012%)*%34'%!)#53%6,-#3'#%"!%/0017%%84'%
9':);-#'%<-.$'*3%-$",*3%)*%34'%5-$'%6,-#3'#%=-5%$"#'%34-*%:",&>'%
34-3%-$",*3%?@A/B7CA27%%D'%!",*:%34-3%9':);-#'%'E<'*:)3,#'5%;",>:%
4-F'%&''*%#':,;':%&.%-*%'53)$-3':%@/B%$)>>)"*%4-:%9':);-#'%
#')$&,#5'$'*3%)$$':)-3'>.%#'!>';3':%-;3,->%$-#G'3%<#);'5%&'3=''*%
9-#;4%-*:%H,*'%/001%?34'%<'#)":%)*%=4);4%<-.$'*3%-$",*35%='#'%53)>>%
!,>>.%&-5':%"*%34'%&#-*:%<#);'527%
D'%#';"$$'*:':%34-3%I9J%'E<>"#'%"<3)"*5%?)*;>,:)*(%-%<"55)&>'%
>'()5>-3)F'%;4-*('2%34-3%=",>:%->>"=%<-.$'*3%-$",*35%3"%$"#'%
-;;,#-3'>.%#'!>';3%*'=%('*'#);%<#);'57%%I9J%;"*;,##':%=)34%",#%
#';"$$'*:-3)"*%-*:%'E<#'55':%)35%;"$$)3$'*3%3"%'*5,#)*(%-;;,#-3'%
<-.$'*35%!"#%:#,(%<#":,;35%,*:'#%34'%KJL%$'34":">"(.M%)*;>,:)*(%
="#G)*(%=)34%NOP%3"%)$<#"F'%34'%$'34":5%I9J%,5'5%3"%;">>';3%:-3-7%%
Q"='F'#M%-5%"!%9-.%/0A0M%I9J%4-5%*"3%3-G'*%-*.%-;3)"*5%3"%-::#'55%
<"3'*3)->%"F'##')$&,#5'$'*3%!"#%!)#53%('*'#);57%
METHODOLOGY
Data Sources
84'%!">>"=)*(%:-3-%5",#;'5%='#'%,5':%)*%",#%-*->.5)5%3"%):'*3)!.%*'=>.%
-F-)>-&>'%('*'#);%:#,(5M%;->;,>-3'%34'%!)*-*;)->%)$<-;3%"!%34'%%%%%%%%%%%%%%
3="R6,-#3'#%>-(M%-*:%'53)$-3'%=4'*%4)(4R'E<'*:)3,#'%&#-*:R"*>.%%%%%
L-#3%SR;"F'#':%:#,(5%=)>>%>)G'>.%4-F'%!)#53R('*'#);%F'#5)"*5%#'-;4%34'%
$-#G'37
FDA’s monthly list of first-generic drug approvals. T-;4%$"*34M%+UK%
<,&>)54'5%"*%)35%D'&%5)3'%-%>)53%"!%!)#53R3)$'%('*'#);%:#,(%-<<#"F->57 /B %%
84)5%>)53%;"*3-)*5%34'%:#,(%*-$'M%!"#$M%53#'*(34M%-*:%$-*,!-;3,#'#%"!%
'-;4%!)#53R('*'#);%:#,(%-<<#"F':%)*%34-3%$"*347%%O3%:"'5%*"3%>)53%34'%
VUI5%"#%QILIJ%;":'5%!"#%34'%*'=>.%-<<#"F':%:#,(57%
FDA’s Approved Drug Products directory (“Drugs@FDA”). 84)5%+UK%
:)#';3"#.%;"*3-)*5%34'%-<<#"F->%4)53"#.%"!%->>%:#,(5M%)*;>,:)*(%-<<#"F':%
>-&'>5%-*:%=4'34'#%-%:#,(%=-5%-<<#"F':%,*:'#%-%V'=%U#,(%K<<>);-3)"*%
"#%KVUK7 /W %%O3%:"'5%*"3%>)53%-*.%"!%34)5%)*!"#$-3)"*%&.%VUI%"#%QILIJ%
;":'7%
/B%+UKM%KVUK%?P'*'#);2%U#,(%K<<#"F->57%%K;;'55':%-3%433<XYY===7!:-7("F%"*%%%%%%%%%%%%%
K<#)>%/WM%/0A07%
/W%+UKM%+UK%K<<#"F':%U#,(%L#":,;357%%K;;'55':%-3%433<XYY===7!:-7("F%"*%%%%%%%%%%%%%%%
9-#;4%/BM%/0A07%

B
FDA staff. !"#$"%&"'(")#*+,-$./(*-+#,$-.#'(/,,#/(#012#$"3/(*+4#(-#(5"#

4"+"$*6#/77$-8/3#'(/(&'#-,#6"$(/*+#5*459":7"+)*(&$"#;$/+)9-+3<#)$&4'#
6-8"$")#&+)"$#=/$(#>?#
CMS’s quarterly crosswalk file. @/65#%&/$("$A#BCD#7&;3*'5"'#/#,*3"#(5/(#
3*'('#/33#E1B'#(5/(#6-$$"'7-+)#(-#"/65#FB=BD#6-)"#,-$#)$&4'#7/*)#&+)"$#
=/$(#>? GH#
CMS’s quarterly Part B payment-limit file. @/65#%&/$("$A#BCD#7-'('#/#,*3"#
6-+(/*+*+4#(5"#7/<."+(#/.-&+(#;<#FB=BD#6-)"#,-$#)$&4'#7/*)#&+)"$#
=/$(#>? GI#
CMS’s quarterly ASP background file. BCD#7$-8*)"'#JKL#M*(5#(5"#2D=#
;/6N4$-&+)#,*3"#"/65#%&/$("$?##O5*'#,*3"#6-+(/*+'#2D=#)/(/#P*+63&)*+4#(5"#
2D=#*('"3,#/+)#(5"#+&.;"$#-,#&+*('#'-3)#*+#(5"#%&/$("$Q#,-$#/33#E1B'#
P4$-&7")#;<#(5"*$#6-$$"'7-+)*+4#FB=BD#6-)"'Q#(5/(#M"$"#$"7-$(")#*+#
(5/(#%&/$("$?##O5"#)/(/#*+#(5*'#,*3"#/$"#&'")#(-#6/36&3/("#(5"#7/<."+(#
/.-&+(#,-$#"/65#FB=BD#6-)"#/'#3*'(")#*+#(5"#%&/$("$3<#=/$(#>##
7/<."+(93*.*(#,*3"?
CMS’s monthly AMP file. BCD#7$-8*)"'#JKL#M*(5#/#,*3"#6-+(/*+*+4#
./+&,/6(&$"$9$"7-$(")#2C=#)/(/#"/65#.-+(5?##2C=#)/(/ RS #/$"#&'")#*+#
(5"#)"("$.*+/(*-+#-,#$";/("'#&+)"$#(5"#C")*6/*)#)$&4#$";/("#7$-4$/.#
/+)#/$"#$"7-$(")#;<#(5"#E1B?#
CMS’s labeler file. BCD#7&;3*'5"'#/#,*3"#(5/(#3*'('#"/65#./+&,/6(&$"$#
M*(5#/#C")*6/*)#)$&4#$";/("#/4$""."+(A#(5"#/4$""."+(T'#",,"6(*8"#)/("A#
/+)#(5"#./+&,/6(&$"$T'#3/;"3"$#6-)"#P*?"?A#(5"#,*$'(#,*8"#)*4*('#-,#(5"#
E1BQ? RU#
CMS’s Part B quarterly utilization data. V&/$("$3<#=/$(#>#&(*3*W/(*-+#)/(/#
,-$#7$"'6$*7(*-+#)$&4'#/$"#/8/*3/;3"#(5$-&45#BCDT'#=/$(#>#@:($/6(#/+)#
D&../$<#D<'(".#P>@DDQ#/+)#=>2X#'<'(".?##O5"'"#)/(/#7$-8*)"#(5"#
GH#BCDA#2D=#E1B9FB=BD#B$-''M/3N?##266"''")#/(#5((7YZZMMM?6.'?4-8#-+#C/<#GHA#GSUS?#
GI#BCDA#2D=#=$*6*+4#0*3"?##266"''")#/(#5((7YZZMMM?6.'?4-8#-+#C/<#GHA#GSUS?#
RS#D"6(*-+#[SSUP;QPUQP2Q#-,#(5"#1",*6*(#X")&6(*-+#26(#-,#GSS\#$"%&*$"'#./+&,/6(&$"$'A#
;"4*++*+4#]/+&/$<#UA#GSSÂ#(-#$"7-$(#2C='#(-#BCD#-+#;-(5#/#.-+(53<#/+)#/#%&/$("$3<#
;/'*'A#M*(5#.-+(53<#'&;.*''*-+'#)&"#RS#)/<'#/,("$#(5"#63-'"#-,#"/65#7"$*-)?##2'#4"+"$/33<#
)",*+")#*+#'"6(*-+#UIG^PNQPUQ#-,#(5"#26(A#/'#/."+)")#;<#'"6(*-+#G\SRP/QPGQ#-,#(5"#=/(*"+(#
=$-("6(*-+#/+)#2,,-$)/;3"#B/$"#26(#P2B2QA#=?_?#UUU9U`HA#(5"#2C=#*'#(5"#/8"$/4"#7$*6"#7/*)#
(-#./+&,/6(&$"$'#,-$#)$&4'#*+#(5"#a+*(")#D(/("'#;<#M5-3"'/3"$'#,-$#)$&4'#)*'($*;&(")#(-#
$"(/*3#6-..&+*(<#75/$./6*"'#/+)#;<#$"(/*3#6-..&+*(<#75/$./6*"'#(5/(#7&$65/'"#)$&4'#
)*$"6(3<#,$-.#./+&,/6(&$"$'?#
RU#BCDA#=/$(*6*7/(*+4#1$&4#B-.7/+*"'?##266"''")#/(#5((7YZZMMM?6.'?55'?4-8#-+########
27$*3#GHA#GSUS?#
OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S #

^
!"!#$%&'(!)%#'*%!"!#$%#+"&'!%,-(+.&,)-*%/",%-#01%23435%0"*-%*&,('6%#%
6(7-'%8&#,!-,%",%9-#,:%%
Micromedex’s quarterly Red Book file. ;1-%<-*%="">%/($-%()%#'%%%%%%%%%
('*&)!,9?@,"*&0-*%0"+@-'*(&+%0"'!#('('6%*,&6%@,"*&0!%('/",+#!("'%
#'*%@,(0('6%*#!#%#!%!1-%AB3%$-7-$:%%CDE%,-0-(7-)%&@*#!-*%<-*%="">%*#!#%
-#01%8&#,!-,:
Manufacturer online press releases. ;1,"&61%+#'&/#0!&,-,%F-.%)(!-)%#'*%
"'$('-%!,#*-%@&.$(0#!("')G%+#'&/#0!&,-,)%@-,("*(0#$$9%#''"&'0-%!1-%
$#&'01%"/%,-0-'!$9%#@@,"7-*%6-'-,(0%*,&6):%
Identification of Newly Available Generic Drugs
F-%0"')&$!-*%HBIJ)%+"'!1$9%$()!%"/%/(,)!?6-'-,(0%*,&6%#@@,"7#$)%!"%
(*-'!(/9%#$$%*,&6)%!1#!%1#*%/(,)!?6-'-,(0%7-,)("')%@"!-'!(#$$9%.-0"+-%
#7#($#.$-%('%KLLMG%KLLNG%",%!1-%/(,)!%!O"%8&#,!-,)%"/%KLLP: QK %%F-%
0"+@#,-*%!1()%$()!%"/%*,&6)%!"%3R5J)%4#,!%=%0,"))O#$>%/($-)%!"%*-!-,+('-%
O1(01%"/%!1-)-%/(,)!?6-'-,(0%*,&6)%O-,-%0"7-,-*%&'*-,%4#,!%=%#'*%
,-(+.&,)-*%.#)-*%"'%!1-%I54%@#9+-'!%+-!1"*"$"69:%
=-0#&)-%())&-)%)&01%#)%@#!-'!%('/,('6-+-'!%$(!(6#!("'%@,-7-'!%)"+-%
HBI?#@@,"7-*%/(,)!%6-'-,(0)%/,"+%.-0"+('6%#7#($#.$-%",%#7#($#.$-%
(++-*(#!-$9%#/!-,%#@@,"7#$G%O-%@-,/",+-*%!1-%/"$$"O('6%#**(!("'#$%
01-0>)%!"%*-!-,+('-%O1-!1-,%4#,!%=%*,&6)%"'%HBIJ)%$()!%#0!&#$$9%
,-#01-*%!1-%+#,>-!%('%KLLMG%KLLNG%",%!1-%/(,)!%!O"%8&#,!-,)%"/%KLLPS%
T: F-%/(,)!%&)-*%3R5J)%8&#,!-,$9%I54%.#0>6,"&'*%/($-)%!"%*-!-,+('-%!1-%
'&+.-,%"/%+#'&/#0!&,-,)%!1#!%,-@",!-*%)#$-)%"/%@"!-'!(#$%%%%%%%%%%%%%
/(,)!?6-'-,(0%*,&6)%0"7-,-*%&'*-,%4#,!%=%#'*%!1-%*,&6)J%
0",,-)@"'*('6%AB3):%%=-0#&)-%+#'&/#0!&,-,)%#,-%,-8&(,-*%!"%)&.+(!%
8&#,!-,$9%I54%*#!#%!"%3R5G%!1-%.#0>6,"&'*%/($-)%-'#.$-*%&)%!"%
(*-'!(/9%!1-%'&+.-,%"/%+#'&/#0!&,-,)%!1#!%)"$*%-#01%*,&6%('%-#01%
8&#,!-,G%!1-,-.9%0"'/(,+('6%O1-!1-,%HBIJ)%/(,)!?6-'-,(0%#@@,"7#$%
*#!-%0"('0(*-*%O(!1%!1-%+#,>-!%-'!,9%"/%'-O%+#'&/#0!&,-,)%/",%-#01%
*,&6:%%2"O-7-,G%.-0#&)-%@,-7("&)%CDE%O",> QQ %/"&'*%!1#!%
+#'&/#0!&,-,)%*"%'"!%#$O#9)%,-@",!%I54)%('%#%!(+-$9%+#''-,G%O-%
QK%=-0#&)-%!1-,-%()%"/!-'%#%6#@%.-!O--'%!1-%!(+-%O1-'%#%*,&6%,-0-(7-)%HBI%#@@,"7#$%#'*%
O1-'%(!%.-0"+-)%#7#($#.$-%"'%!1-%+#,>-!@$#0-G%O-%#$)"%('0$&*-*%*,&6)%/,"+%HBIJ)%$()!%"/%
6-'-,(0%*,&6)%#@@,"7-*%('%A"7-+.-,%#'*%B-0-+.-,%KLLU%(/%*#!#%)"&,0-)%('*(0#!-*%!1-9%*(*%
'"!%.-0"+-%#7#($#.$-%&'!($%KLLM:%
QQ%CDEG%I7-,#6-%5#$-)%4,(0-)S%%R#'&/#0!&,-,%<-@",!('6%#'*%3R5%C7-,)(61!G%%%%%%%%%%%%%%%%
CVD?LQ?LN?LLWNLG%H-.,&#,9%KLTL:%

N
!"#$%&$$'%!(()&)$*!"%#&+,#%&$%)(+*&)-.%/0+&0+1%!*(%/0+*%!%,1$(23&%
1+!30+(%&0+%4!1'+&5%
65 7+%,+1-$14+(%#)4)"!1%30+3'#%2#)*8%9:;<#%4$*&0".%=:>%-)"+#%!*(%
:)31$4+(+?<#%@+(%A$$'%-)"+%&$%-21&0+1%3$*-)14%&0+%(!&+%$-%&0+%-)1#&%
1+,$1&+(%#!"+#%$-%+!30%8+*+1)3%(1285%%A.%4!&30)*8%&0+%BC9#%1+,$1&+(%
D.%+!30%8+*+1)3%4!*2-!3&21+1%)*%&0+%=;>%D!3'81$2*(%-)"+#%&$%&0+%
BC9#%")#&+(%)*%&0+%=:>%-)"+#E%/+%/+1+%!D"+%&$%(+&+14)*+%&0+%-)1#&%
4$*&0%&0!&%8+*+1)3%#!"+#%/+1+%1+,$1&+(%&$%9:;5%%F0+%#!4+%BC9#%
/+1+%!"#$%2#+(%&$%(+&+14)*+%&0+%-)1#&%G2!1&+1%&0!&%8+*+1)3%
4!*2-!3&21+1#%1+,$1&+(%,1$(23&%)*-$14!&)$*%&$%@+(%A$$'E%/0)30%
#+1H+(%!#%!*%!(()&)$*!"%3$*-)14!&)$*%$-%&0+%(!&+%$-%8+*+1)3%4!1'+&%
+*&1.5%%%
I5 =#%!%-)*!"%30+3'E%/+%1+H)+/+(%8+*+1)3%4!*2-!3&21+1%$*")*+%,1+##%
1+"+!#+#%!**$2*3)*8%&0+%!H!)"!D)")&.%$-%8+*+1)3%(128#%&$%3$*-)14%&0+%
(!&+%$-%4!1'+&%+*&1!*3+5%
F0)#%,1$3+##%,1$(23+(%!%-)*!"%")#&%$-%JK%>!1&%A%(128#%&0!&%0!(%%%%%%%%%%%
-)1#&L8+*+1)3%H+1#)$*#%!,,+!1%$*%&0+%4!1'+&%)*%6MMNE%6MMOE%$1%&0+%-)1#&%
&/$%G2!1&+1#%$-%6MMP5 IQE%IR%
S$1%#$4+%(128#E%*$&%!""%$-%&0+#+%(!&!%#$213+#%4+*&)$*+(%!D$H+%,1$H)(+(%
&0+%#!4+%(!&+%$-%8+*+1)3%+*&1.5%%7)&0%4$#&%()#31+,!*3)+#E%/+%30$#+%&0+%
3$*#+*#2#%(!&+%!4$*8%4$#&%$-%&0+#+%(!&!%#$213+#5%%70+*%&0+1+%/!#%*$%
3"+!1%3$*#+*#2#%TI%$-%&0+%JK%(128#UE%/+%(+-+11+(%&$%&0+%-)1#&%-2""%4$*&0%$-%
8+*+1)3%#!"+#%")#&+(%!4$*8%!""%(!&!%#$213+#5%%%
V*%#$4+%)*#&!*3+#E%&0+#+%(!&+%()#31+,!*3)+#%)*()3!&+(%!%-!)"21+%$-%
4!*2-!3&21+1#%&$%1+,$1&%=;>#E%!#%1+G2)1+(5%%S$1%+?!4,"+E%3$4,!1)*8%
BC9#%)*%&0+%G2!1&+1".%=;>%D!3'81$2*(%-)"+#%&$%&0$#+%")#&+(%)*%&0+%
IQ%W21%!*!".#)#%)*)&)!"".%)(+*&)-)+(%JO%-)1#&L8+*+1)3%(128#5%%F/$%(128#%T"+H!"D2&+1$"%
)*0!"!&)$*%#$"2&)$*%2*)&%($#+%!*(%"+H!"D2&+1$"%)*0!"!&)$*%#$"2&)$*%3$*3+*&1!&+U%1+!30+(%&0+%
4!1'+&E%D2&%3$()*8%!*(%,!.4+*&%)##2+#%31+!&+(%()--)32"&)+#%/)&0%!*.%!*!".#)#5%%V*%8+*+1!"E%
-$1%4230%$-%&0+%1+H)+/%,+1)$(E%:+()3!1+%,!.4+*&%!4$2*&#%-$1%"+H!"D2&+1$"%/+1+%*$&%D!#+(%
#$"+".%$*%)&#%$/*%=;>#E%D2&%!"#$%$*%&0+%=;>#%-$1%!%()--+1+*&%(128%T!"D2&+1$"U%!#%/+""5%%F0+%
1+4$H!"%$-%&0+#+%6%(128#%D1$280&%&0+%-)*!"%*24D+1%$-%-)1#&%8+*+1)3#%2*(+1%1+H)+/%&$%JK5%%;++%
&0+%WVX%1+,$1&%+*&)&"+(%A+*+-)3)!1.%Y&)")Z!&)$*%$-%="D2&+1$"%!*(%[+H!"D2&+1$"%Y*(+1%
:+()3!1+%>!1&%AE%W\VLMILMNLMMQQME%=282#&%6MMPE%-$1%!%-2""%(+#31),&)$*%$-%&0+%*24+1$2#%
3$()*8%!*(%,!.4+*&%30!*8+#%-$1%"+H!"D2&+1$"%#)*3+%6MMI5%%
IR%7+%2#+%&0+%&+14%](128^%0+1+%&$%(+#31)D+%!%2*)G2+%_9>9;%3$(+`%%&0+%-)*!"%")#&%)*3"2(+(%
JK%2*)G2+%_9>9;%3$(+#E%1+,1+#+*&)*8%JQ%(128%)*81+()+*&#%T81!*)#+&1$*%0.(1$30"$1)(+%0!(%
#+,!1!&+%_9>9;%3$(+#%-$1%)*a+3&)$*%!*(%&!D"+&%-$14#E%!*(%(1$*!D)*$"%$1!"%0!(%#+,!1!&+%
_9>9;%3$(+#%-$1%65R%48%!*(%R%48UE%D2&%D+3!2#+%+!30%_9>9;%3$(+%0!#%)&#%$/*%>!1&%A%
,!.4+*&%!4$2*&E%/+%3$*#)(+1+(%&0+%&$&!"%")#&%$-%-)1#&%8+*+1)3#%&$%)*3"2(+%JK%(128#5%

P
!"#$%&'()*+(,-&./(.#01&.2(3/($"(2.$.4!-#.(5%.$%.4(6.#.4-7(
!0#3,07$34.4/(5.4.(&0$.($"(4.8"4$()9+/:((;#(/37%(70/./<(5.(3/.2($%.(
=*9(&01.&.4(,-&./($"(2.$.4!-#.(5%.$%.4($%"/.(!0#3,07$34.4/(%02(0(
*.2-70-2(2436(4.10$.(064..!.#$(>0#2($%3/(5.4.(4.?3-4.2($"(/31!-$(
)9+/@:((9..()88.#2-A()(,"4(0(2.$0-&.2(2./74-8$-"#(",("34(!.$%"2"&"6'(,"4(
-2.#$-,'-#6(,-4/$(6.#.4-7/:(
Financial Impact of the Two-Quarter Lag During Initial Generic Availability
B"(2.$.4!-#.($%.(,-#0#7-0&(-!807$(",($%.(4.-!134/.!.#$(&06(,"4($%.((((((
CD(#.5&'(0E0-&01&.(6.#.4-7(2436/<(5.(,-4/$(70&73&0$.2($%.(.,,.7$($%.(&06(
%02("#(80'!.#$(0!"3#$/(-#(.07%(?304$.4:((F.(2-2($%-/(1'(7"!804-#6(
$%.(+04$(G(80'!.#$(0!"3#$(,4"!(=*9H/(80'!.#$I&-!-$(,-&.(-#($%.(
?304$.4(3#2.4(4.E-.5($"($%.(80'!.#$(0!"3#$(,4"!($5"(?304$.4/(&0$.4:((
G.703/.($%.(80'!.#$(0!"3#$(,4"!($5"(?304$.4/(&0$.4(50/(10/.2("#(
/0&./($%0$("77344.2(234-#6($%.(?304$.4(3#2.4(4.E-.5<(-$(/.4E.2(0/(0#(
./$-!0$.(",(5%0$($%.(80'!.#$(0!"3#$(5"3&2(%0E.(1..#(%02($%.4.(1..#(
#"(&06:((B"(2.$.4!-#.($%.(0!"3#$(/8.#2-#6(5"3&2(%0E.(2.74.0/.2(%02(
$%-/(80'!.#$(0!"3#$(1..#(-#(.,,.7$<(5.(>C@(70&73&0$.2($%.(8.47.#$06.(
2-,,.4.#7.(1.$5..#($%.(80'!.#$(0!"3#$(234-#6($%.(?304$.4(3#2.4(
4.E-.5(0#2($%.(80'!.#$(0!"3#$(,4"!($5"(?304$.4/(&0$.4(0#2(((((((((((((((
>J@(!3&$-8&-.2($%.(8.47.#$06.(2-,,.4.#7.(1'($%.($"$0&(0!"3#$(4.-!134/.2(
-#($%0$(?304$.4: KD(
F.(8.4,"4!.2($%-/(0#0&'/-/(234-#6($%.(-#-$-0&(6.#.4-7(0E0-&01-&-$'(8.4-"2(
",(.07%(2436L(-:.:<($%.(?304$.4(-#(5%-7%(6.#.4-7/(5.4.(,-4/$(0E0-&01&.(-#(
$%.(!04M.$<(0/(5.&&(0/($%.(/31/.?3.#$($5"(?304$.4/N'-.&2-#6($%4..(
?304$.4/(",(0#0&'/-/(,"4(.07%(2436: KO (()&$%"36%(80'!.#$(0!"3#$/(04.(
0&50'/(10/.2("#()9+/(,4"!($5"(?304$.4/(84.E-"3/<($%.(-#-$-0&(.,,.7$/(",(
$%.(&06(",$.#(.A$.#2(-#$"($%.($%-42(?304$.4(",(6.#.4-7(0E0-&01-&-$':((P"4(
.A0!8&.<(-,(0(,-4/$(6.#.4-7(2-2(#"$(1.7"!.(0E0-&01&.(3#$-&($%.(!-22&.(",(0(
?304$.4(>.:6:<(P.14304'(CQ<(JRRS@<($%.(E"&3!.I5.-6%$.2()9+(,"4($%0$(
?304$.4(>,-4/$I?304$.4(JRRS@(5-&&(#"$(4.,&.7$(0(,3&&(8.4-"2(",(/0&./(",(
6.#.4-7(E.4/-"#/N0#2(7"#/.?3.#$&'<($%.(2436H/(*.2-704.(80'!.#$(
0!"3#$(-#($%-42I?304$.4(JRRS(5-&&("#&'(4.,&.7$(804$-0&(6.#.4-7(/0&./:(()/(
0(4./3&$<($%.(.,,.7$/(",($%.(4.-!134/.!.#$(&06(5-&&(/$-&&(1.(,.&$(-#($%.(
$%-42(?304$.4(",(JRRS(>-:.:<($%.($%-42(?304$.4(",(6.#.4-7(0E0-&01-&-$'@:((G'(
KD(F.("1$0-#.2(3$-&-T0$-"#(20$0(,4"!(GU99(0#2(+G)V(,"4(.07%(?304$.4(0#2(2436(3#2.4(
4.E-.5:(
KO(P"4($%.(8348"/.(",($%-/(0#0&'/-/<(0($5"I?304$.4(4.-!134/.!.#$(&06(-/(0//3!.2(,"4(0&&(
#.5&'(0E0-&01&.(6.#.4-7(2436/:(
OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S (

CR
!"#$%&!"'()*+()*!,&(-%.,)+,(/0('+"+,!#(.1.!$.2!$!)3(!"(/%,(0!"."#!.$(
!45.#)(.".$36!67(8+(8+,+(.2$+()/(.##/%")(0/,()*+6+(+9)+"&+&(+00+#)6:(
;"(!"6)."#+6(!"(8*!#*(.(0!,6)('+"+,!#(8.6(.55,/1+&(.0)+,()*+(0!,6)(4/")*(
/0(.(-%.,)+,(<."&()*+,+0/,+(8.6(.1.!$.2$+(0/,(/"$3(.(5/,)!/"(/0()*+(
-%.,)+,=7(8+(%6+&(5,/5/,)!/".$(%)!$!>.)!/"(&.).()/(,+0$+#)()*+(.4/%")(/0(
)!4+()*+('+"+,!#6(8+,+(.1.!$.2$+(!"()*.)(-%.,)+,:?@ (((
A"#+(8+(+6)!4.)+&()*+(0!"."#!.$(!45.#)(0/,(+.#*(&,%'7(8+()/).$+&()*+6+(
0!'%,+6()/(&+)+,4!"+()*+("+)(0!"."#!.$(!45.#)(/0()*+()8/B-%.,)+,(
,+!42%,6+4+")($.'(/"(C.,)(D(."&(!)6(2+"+0!#!.,!+6(0/,()*+(EF(&,%'6(/1+,(
)*+!,(!"!)!.$(5+,!/&6(/0('+"+,!#(.1.!$.2!$!)3:((G+(#/45.,+&()*+()/).$(
5/)+")!.$(6.1!"'6()/()*+()/).$(.4/%")(,+!42%,6+&(0/,(.$$(&,%'6(/1+,()*+(
6.4+(5+,!/&(."&(&+)+,4!"+&()*+(5,/5/,)!/"(/0(5/)+")!.$$3(+9#+66!1+(
+95+"&!)%,+6(,+6%$)!"'(0,/4()*+()8/B-%.,)+,($.':(
Comparison of generic and brand ASPs.((H*+(1/$%4+B8+!'*)+&(IJC(0/,(.(
KLCLJ(#/&+(!6(#.$#%$.)+&(%6!"'()*+(!"&!1!&%.$(IJC6(0/,(.$$(
#/,,+65/"&!"'(MNL6:((G!)*!"(+.#*(KLCLJ(#/&+7()*+(IJC6(0/,()*+(2,."&(
."&(."3('+"+,!#(MNL6(/0)+"(1.,3(#/"6!&+,.2$3(<+1+"()*/%'*()*+(
O+&!#.,+(5.34+")(.4/%")(!6()*+(6.4+(0/,(.$$(MNL6(%"&+,(.(KLCLJ(
#/&+=:((H/(*!'*$!'*)()*+(&!00+,+"#+(2+)8++"('+"+,!#B/"$3(."&(2,."&B/"$3(
IJC6(8*+"(.('+"+,!#(1+,6!/"(0!,6)(2+#/4+6(.1.!$.2$+7(8+(%6+&(LOJP6(
2.#Q',/%"&(0!$+6()/(6+5.,.)+$3(#.$#%$.)+()*+(1/$%4+B8+!'*)+&(IJC(/0(
'+"+,!#(."&(2,."&(1+,6!/"6(/0(+.#*(&,%'(!"()*+(0!,6)(-%.,)+,(!"(8*!#*()*+(
'+"+,!#6(8+,+(.1.!$.2$+: ?R(
Analysis of payment levels beyond the period of initial generic availability.
S1+"(.0)+,('+"+,!#6(2+#/4+(0%$$3(.##/%")+&(0/,(!"()*+(O+&!#.,+(5.34+")(
.4/%")(<!:+:7(.0)+,()*+(5+,!/&(/0(!"!)!.$('+"+,!#(.1.!$.2!$!)3=7()*+(((((((((
)8/B-%.,)+,($.'(4.3(6)!$$(*.1+(.("+'.)!1+(+00+#)(!0(4.,Q+)(5,!#+6(
#/")!"%+()/(0.$$:((H*+,+0/,+7(!"(.&&!)!/"()/(-%.")!03!"'()*+(0!"."#!.$(
!45.#)(/0()*+()8/B-%.,)+,($.'(&%,!"'()*+(5+,!/&(/0(!"!)!.$('+"+,!#(
.1.!$.2!$!)37(8+(.$6/(),.#Q+&(O+&!#.,+(5.34+")(.4/%")6(0/,()*+(((((((((((
EF(&,%'6(0/,(%5()/(T(3+.,6 UV (.0)+,()*+!,(0!,6)B'+"+,!#(1+,6!/"6(2+#.4+(
.1.!$.2$+:((H/(&/(6/7(8+(#/45.,+&()*+(O+&!#.,+(5.34+")(.4/%")6(
&%,!"'()*+(-%.,)+,(2+0/,+('+"+,!#6(2+#.4+(.1.!$.2$+()/()*+(5.34+")(
?@(LOJP6(IOC(0!$+6(.$$/8+&(%6()/(&+)+,4!"+()*+(0!,6)(4/")*(/0('+"+,!#(.1.!$.2!$!)3:(
?R(N.).(8+,+(%".1.!$.2$+(0/,()8/(&,%'6:(
UV(D+#.%6+()*,++(&,%'6(&!&("/)(,+.#*()*+(4.,Q+)(%")!$(0!,6)B(/,(6+#/"&B-%.,)+,(TVVR7(
5.34+")(.4/%")6(0/,()*+6+(&,%'6(8+,+("/)(.1.!$.2$+(0/,()*+(0%$$(T(3+.,6:(

EE
!"#$%&'()(*+!,'(-!&+,. /0 ((1*(2#"3!,4%5(&6+(7+842!,+(3!*"+%&(!"#$%&'(
9+:#,+(!%8(!:&+,(5+%+,42('!-+'(;+,+(,+:-+2&+8(4%(&6+(<#-$"+=;+456&+8(
>?@'A(;+(;+,+(!9-+(&#(4--$'&,!&+(&6+(-#%5=&+,"(+::+2&(#:(5+%+,42'(#%(
7+842!,+(3!*"+%&(!"#$%&'(!'(;+--(!'(6#;(&6+(&;#=B$!,&+,(-!5("!*(
2#%&4%$+(&#(!::+2&(3!*"+%&(!:&+,(&6+(3+,4#8(#:(4%4&4!-(5+%+,42(!<!4-!94-4&*.(
Identification of Future First-Generic Drugs
C+(3,#<48+8(DE>(;4&6(!(-4'&(#:(&6+(&#3(/F(9,!%8=#%-*(8,$5'(G9*(
7+842!,+(+H3+%84&$,+I(2#<+,+8($%8+,(@!,&(1(!%8(,+B$+'&+8(!%(+'&4"!&+(
#:(;6+%(+!26(8,$5(;!'(-4J+-*(&#(6!<+(:4,'&=5+%+,42(<+,'4#%'(,+2+4<+(
!33,#<!-. /) ((K#(2#"34-+(&6+(-4'&A(;+(,+'+!,26+8(&6+(&#3(8#--!,=<#-$"+(
8,$5'(2#<+,+8($%8+,(@!,&(1(4%()LLF(&#(8+&+,"4%+(;6426(8,$5'(;+,+(
!<!4-!9-+(#%-*(4%(9,!%8(:#,". /M ((DE>(3,#<48+8(&6+(+'&4"!&+8(8!&+(#:(
5+%+,42(!33,#<!-(:#,(+!26(9,!%8(8,$5(9!'+8(#%(;6+%(!%(>NE>(2#$-8(
:4,'&(9+(!33,#<+8.(
Limitations
O$,(!%!-*'4'(;!'(9!'+8(#%(8!&!(3,#<48+8(9*(DE>(!%8(P7?A(!%8(;+(848(
%#&(<+,4:*(&6+(8!&!Q'(!22$,!2*(#,(2#"3-+&+%+''.((>884&4#%!--*A(DE>Q'(
5+%+,42(!33,#<!-(&4"+-4%+(:#,(9,!%8(8,$5'(;!'(9!'+8(#%-*(#%(&6+(
+'&4"!&+8(8!&+(#:(3#''49-+(>NE>(!33,#<!-(!%8(848(%#&(&!J+(4%&#(!22#$%&(
#&6+,(:!2&#,'(G+.5.A(3!&+%&(-4&45!&4#%I(&6!&("!*(!::+2&(&6+(8!&+(#:(!2&$!-(
"!,J+&(+%&,*.(
Standards
K64'('&$8*(;!'(2#%8$2&+8(4%(!22#,8!%2+(;4&6(&6+(R$!-4&*(?&!%8!,8'(:#,(
S%'3+2&4#%'(!33,#<+8(9*(&6+(P#$%24-(#:(&6+(S%'3+2&#,'(T+%+,!-(#%(
S%&+5,4&*(!%8(U::424+%2*.(
/0(K6+()(*+!,'(<!,4+8(:#,(+!26(8,$5A(9$&(#$,(!%!-*'4'(848(%#&(+H&+%8(9+*#%8(((((((((((((
'+2#%8=B$!,&+,()L0L.(
/)(O,454%!--*A(;+(3,#<48+8(DE>(;4&6(!(-4'&(#:(VL(9,!%8=#%-*(8,$5'.((C+(,+"#<+8(&;#(
8,$5'(:,#"(&64'(-4'&(!:&+,(;+(8+&+,"4%+8(&6!&(:4,'&=5+%+,42(<+,'4#%'(6!8(9++%(!33,#<+8(9*(
DE>.((S%(&6+(2!'+(#:("*2#36+%#-!&+("#:+&4-A(#$,(8!&!('#$,2+'(2#%&!4%+8(%#(+<48+%2+(!&(&6+(
&4"+(;+(#,454%!--*(2#%&!2&+8(DE>(&6!&(5+%+,42'(6!8(,+!26+8(&6+("!,J+&(G!-&6#$56(&6+*(
'$9'+B$+%&-*(848(8$,4%5(&6+(3+,4#8(2#<+,+8(9*(#$,(,+<4+;I.((S%(&6+(2!'+(#:(9$8+'#%48+A(((
:4,'&=5+%+,42(<+,'4#%'(6!8(9++%(!33,#<+8(!%8(6!8(9,4+:-*(,+!26+8(&6+("!,J+&W(6#;+<+,A(!'(
&6+(,+'$-&(#:(3!&+%&(-4&45!&4#%A(%#(5+%+,42(<+,'4#%'(,+"!4%+8(#%(&6+("!,J+&(8$,4%5(&6+(3+,4#8(
2#<+,+8(9*(#$,(!%!-*'4'.((K64'(9,#$56&(&6+(:4%!-(-4'&(&#(/F(9,!%8=#%-*(8,$5'.(
/M(C+($'+8(P7?Q'(9!2J5,#$%8(:4-+'A("!%$:!2&$,+,(C+9('4&+'A(!%8(DE>Q'(-4'&(#:(5+%+,42(
8,$5(!33,#<!-'(&#(8+&+,"4%+(;6+&6+,(!(8,$5(;!'(9,!%8=#%-*(#,(!<!4-!9-+(4%(5+%+,42(:#,".(

0)
F I N D I N G S
!"#$%&'('$)''*$*+$%,+-./"(%'($
Medicare could have saved an estimated
('01)/(2'1'*%$3"4$#/(0*4$%&'$
$111 million had payment amounts immediately 5'(0+#$+6$0*0%0"3$4'*'(07$
reflected generic sales prices for 16 drugs "8"03")030%9 :: $6+($;<$#(/42=$,'$
'2%01"%'$%&"%$>'#07"('$"*#$0%2$
)'*'6070"(0'2$7+/3#$&"8'$2"8'#$?;;;$10330+*@ :A=$:< $$B&'$5+%'*%0"3$2"80*42$
"77+/*%'#$6+($CA$5'(7'*%$+6$D"(%$E$'F5'*#0%/('2$6+($%&'2'$#(/42$0*$%&'0($
5'(0+#$+6$0*0%0"3$4'*'(07$"8"03")030%9@$$B&(''$#(/42 :G $'"7&$&"#$"*$
'2%01"%'#$?CH$10330+*$+($1+('$0*$%+%"3$5+%'*%0"3$2"80*42$+8'($%&'$7+/(2'$
+6$%&'$%&(''$./"(%'(2$/*#'($('80',@$$I''$J55'*#0F$E$6+($"$302%$+6$'"7&$
#(/4K2$5+%'*%0"3$2"80*42@$
E'7"/2'$+6$7+2%-2&"(0*4$+)304"%0+*2=$>'#07"('$)'*'6070"(0'2$"32+$
'F5'(0'*7'$%&'$60*"*70"3$'66'7%$+6$%&'$('01)/(2'1'*%$3"4@$$L+($'F"153'=$
,&'*$%&'$+("3$8'(20+*$+6$%&'$"*%0'1'%07$#(/4$4("*02'%(+*$60(2%$)'7"1'$
"8"03")3'$0*$4'*'(07$6+(1$0*$60(2%-./"(%'($CHHM=$5(+80#'(2$,&+$5/(7&"2'#$
%&'$4'*'(07$8'(20+*$5"0#=$+*$"8'("4'=$?;C@MN$5'($103304("1$O14P@ :M $$B&'$
>'#07"('$5"91'*%$"1+/*%$%&"%$./"(%'($O?AH@CC$5'($14P=$&+,'8'(=$,"2$
)"2'#$+*39$+*$)("*#$8'(20+*2@$$J2$"$('2/3%=$%&'$CH-5'(7'*%$)'*'6070"(9$
7+0*2/("*7'$"%$%&02$%01'$O?;H@H:$5'($14P$,"2$+*39$2304&%39$3'22$%&"*$%&'$
'*%0('$"7./020%0+*$7+2%$+6$%&'$4'*'(07$#(/4@$
Because of the reimbursement lag, it may take years for Medicare to
realize the full savings of generic versions
B&'$*'4"%08'$'66'7%2$+6$%&'$('01)/(2'1'*%$3"4$"('$*+%$*'7'22"(039$
3010%'#$%+$%&'$60(2%$%&(''$./"(%'(2$+6$4'*'(07$"8"03")030%9@$$>'#07"('$
5"91'*%$"1+/*%2$,033$'F7''#$"7%/"3$1"(Q'%$5(07'2$"*9%01'$JID2$
#'730*'@$$B&'('6+('=$,&'*$JID2$6+($"$#(/4$,0%&$*',$4'*'(07$8'(20+*2$
::$B&'$5'(0+#$+6$0*0%0"3$4'*'(07$"8"03")030%9$02$#'60*'#$"2$%&'$60(2%$%&(''$./"(%'(2$4'*'(07$
8'(20+*2$,'('$"8"03")3'@$
:A$I"80*42$'2%01"%'2$6+($'"7&$#(/4$,'('$)"2'#$+*$%&(''$./"(%'(2$+6$"*"39202$O0@'@=$%&'$
5'(0+#$+6$0*0%0"3$4'*'(07$"8"03")030%9P=$)/%$)'7"/2'$%&'$;<$#(/42$)'7"1'$"8"03")3'$0*$4'*'(07$
6+(1$"%$#066'('*%$%01'2=$%&'$%&(''$./"(%'(2$/*#'($('80',$8"(0'#$6(+1$#(/4$%+$#(/4@$
:<$E'7"/2'$4'*'(07$1"*/6"7%/('(2$6+($%,+$+6$%&'$#(/42$0*$+/($"*"39202$#0#$*+%$('5+(%$"*9$
JID2=$,'$7+/3#$*+%$7"37/3"%'$%&'$60*"*70"3$015"7%$+6$*',$4'*'(07$8'(20+*2$+6$%&'2'$%,+$
#(/42@$
:G$B&'2'$#(/42$,'('$197+5&'*+3"%'$1+6'%03$+("3=$"3)/%'(+3$2/36"%'R05("%(+50/1$)(+10#'$
0*&"3"%0+*$2+3/%0+*=$"*#$0(0*+%'7"*$0*S'7%0+*@$$T(0*+%'7"*$1"9$)'$"%9507"3$0*$%&"%$*/1'(+/2$
4'*'(07$1"*/6"7%/('(2=$("%&'($%&"*$+*'$4'*'(07$1"*/6"7%/('(=$('5+(%'#$2"3'2$0*$%&'$5'(0+#$
+6$0*0%0"3$4'*'(07$"8"03")030%9@$
:M$B&'$8+3/1'-,'04&%'#$JID$6+($"33$8'(20+*2$0*$%&'$!UDUI$7+#'$,"2$"7%/"339$?;<@CH$5'($
14=$)'7"/2'$2+1'$5(+80#'(2$"%$%&"%$5+0*%$,'('$2%033$#025'*20*4$%&'$)("*#$8'(20+*$+6$%&'$
#(/4@$

;V
F I N D I N G S
!"#$%#&'($"()*++(,-"..%/+0(/'!*&.'(")(%#!1'*.%#2(&$%+%3*$%"#(")(2'#'1%!(
4'1.%"#.("1(5"1'(2'#'1%!(4'1.%"#.(1'*!6%#2($6'(5*17'$89($6'($:";<&*1$'1(
+*2(6*.(*#('=$'#>'>(%5-*!$(/'!*&.'($6'(?'>%!*1'(-*05'#$(*5"&#$(%.(
*+:*0.(.+":($"(1')+'!$($6'(!"#$%#&"&.+0(>'!1'*.%#2(@ABC(((
D"1('=*5-+'9(D%2&1'(E(.6":.($6'(?'>%!*1'(-*05'#$(*5"&#$.()"1($6'(
*#$%'5'$%!(>1&2("#>*#.'$1"#(60>1"!6+"1%>'("4'1(*(F;0'*1(-'1%">(
/'2%##%#2(%#($6'()%1.$(<&*1$'1(")(FGGHC((I&1%#2($6'(-'1%">(")(%#%$%*+(
2'#'1%!(*4*%+*/%+%$0(,%C'C9()%1.$;<&*1$'1(FGGH($61"&26($6%1>;<&*1$'1(FGGH89(
$6'(?'>%!*1'(-*05'#$(*5"&#$()"1("#>*#.'$1"#(60>1"!6+"1%>'(>'!+%#'>(
/0(JF(-'1!'#$C((K6'(-*05'#$(*5"&#$(!"#$%#&'>($"(>'!1'*.'('*!6(
.&/.'<&'#$(<&*1$'1($61"&26($6'($6%1>(<&*1$'1(")(FGGL9(:6'#(%$(:*.((((((
ME(-'1!'#$(+'..($6*#($6'(-*05'#$(*5"&#$(%#($6'()%1.$(<&*1$'1(2'#'1%!.(
:'1'(*4*%+*/+'C(
Figure 1: Medicare Payment Amounts and ASPs for Ondansetron
Hydrochloride (Oral, 8-mg Version)
( $40.00
( $35.00
( $30.00
$25.00
(
Payment amount
$20.00
( ASP + 6 percent
$15.00
(
$10.00
(
$5.00
(
$0.00
*
08
07
07
08
08
08
)
07
s
ric
2Q
4Q
1Q
2Q
3Q
4Q
3Q
e
en
tG
rs
i
(F
07
1Q
Source: CMS’s posted Part B payment limits.

* Represents the first quarter in which generic sales were reflected in the payment amount.(
N4'1*++9(?'>%!*1'(-*05'#$(*5"&#$.(.$'*>%+0(>'!1'*.'>($61"&26"&$($6'(
)%1.$(F(0'*1.(")(2'#'1%!(*4*%+*/%+%$0()"1($6'(>1&2.(&#>'1(1'4%':C((N#(
*4'1*2'9(*)$'1(F(0'*1.9($6'(-*05'#$(*5"&#$.(:'1'(#'*1+0(OG(-'1!'#$(
+'..($6*#($6'("1%2%#*+(/1*#>;"#+0(-*05'#$(*5"&#$.C PM ((Q'!*&.'("&1(
PM(K:"()&++(0'*1.(")(>*$*(:'1'(*4*%+*/+'()"1(EJ(>1&2.("#+0R(F(")($6'.'(EJ(>1&2.(:'1'(
1'5"4'>()1"5($6'(.*4%#2.(*#*+0.%.(/'!*&.'(2'#'1%!(5*#&)*!$&1'1.(>%>(#"$(1'-"1$(*#0(@AB.C(

EP
F I N D I N G S
!"#$%&!'"%"()!$!'$%*(+,-,'.%()'/0-'1$2!/'/02--'3+"2/-2!'.1'-"*0',2+&4!'
&-%-2$*'"#"$("5$($/)6'5+/'/0-',-*($%-'$%'7")8-%/'"8.+%/!'*.%/$%+-,'1.2'
+7'/.'9')-"2!6'/0-'7./-%/$"('!"#$%&!'.1':;;;'8$(($.%'+%,-2-!/$8"/-'/0-'
/./"('7./-%/$"('!"#$%&!'/0"/'<.+(,'2-!+(/'$1'/0-'/<.=3+"2/-2'("&'<-2-'
-($8$%"/-,>''?--'@77-%,$A'B'1.2'"'1+(('($!/'.1'7")8-%/'"8.+%/!'1.2'-"*0'
,2+&'.#-2'"'9=)-"2'7-2$.,>'
On average, brand drugs were initially 3 times more expensive than their
generic versions
C+2$%&'/0-'1$2!/'3+"2/-2'.1'&-%-2$*'"#"$("5$($/)'1.2'-"*0',2+&6'/0-'52"%,'
#-2!$.%!4'@?D!'<-2-6'.%'"#-2"&-6'9>EF'/$8-!'/0"/'.1'/0-$2'&-%-2$*'
-3+$#"(-%/!> FG ''H.2';',2+&6'/0-'52"%,'@?D'<"!'.#-2';G'/$8-!'/0"/'.1'/0-'
&-%-2$*'-3+$#"(-%/'$%'/0-'!"8-'3+"2/-2>'
H.2'/02--',2+&!'$%'.+2'"%"()!$!6'52"%,'#-2!$.%!'<-2-'72$*-,'(.<-2'/0"%'
/0-$2'&-%-2$*'-3+$#"(-%/!'$%'/0-'1$2!/'3+"2/-2'.1'&-%-2$*'"#"$("5$($/)>''
I.<-#-26'/0-'7")8-%/'"8.+%/!'1.2'"(('/02--',2+&!'!/$(('!0.<-,'&2",+"('
,-*($%-!6'2-!+(/$%&'$%'7./-%/$"('!"#$%&!'1.2'-"*0>''H.2'-A"87(-6'$%'/0-'
1$2!/'3+"2/-2'.1'&-%-2$*'"#"$("5$($/)6'/0-'#.(+8-=<-$&0/-,'@?D'1.2'52"%,'
!+8"/2$7/"%'<"!'.#-2';J'7-2*-%/'(.<-2'/0"%'/0"/'.1'/0-'&-%-2$*'
#-2!$.%!>''K)'/<.'3+"2/-2!'("/-26'0.<-#-26'/0-'&-%-2$*'@?D'0",',2.77-,'
FL'7-2*-%/'"%,'/0-'52"%,'@?D'0",',2.77-,'9M'7-2*-%/6'2-!+(/$%&'$%'"'
,-*2-"!-'$%'.#-2"(('#.(+8-=<-$&0/-,'@?D'.1'NJ'7-2*-%/>''O0$!'2-1(-*/-,'
"%'.#-2"(('/2-%,'$%'.+2'"%"()!$!6'"!'/0-'-%/2)'.1'1$2!/=&-%-2$*'#-2!$.%!'
2-!+(/-,'$%'"',-*($%-'$%'72$*-!'.#-2'/$8-6'<0-/0-2'5-*"+!-'.1'/0-'
-8-2&-%*-'.1'(.<-2=72$*-,'&-%-2$*!'.2'/0-'(.<-2$%&'.1'52"%,'72$*-!>'
'
According to FDA, numerous high-expenditure @**.2,$%&'/.'HC@6'9P'.1'/0-''''''''

NE'52"%,=.%()',2+&!'<$/0'/0-'
drugs could have first-generic versions
0$&0-!/'D"2/'K'-A7-%,$/+2-!'0"#-'
approved in the next several years
0",'.2'8")'0"#-'&-%-2$*'#-2!$.%!'
"772.#-,'1.2'/0-'1$2!/'/$8-'$%'/0-'%-A/'!-#-2"(')-"2!>''Q-%-2$*'#-2!$.%!'.1'
/0-!-'9P',2+&!'"2-'-A7-*/-,'/.'&"$%'"772.#"('$%'&2",+"(()'$%*2-"!$%&'
%+85-2!'/02.+&0'9G;N> F; ''O0-!-'9P'52"%,',2+&!'0",'*.85$%-,'D"2/'K'
-A7-%,$/+2-!'.1'.#-2':9>E'5$(($.%'"%,'"**.+%/-,'1.2'9F'7-2*-%/'.1'D"2/'K'
FG'C"/"'<-2-'"#"$("5(-'1.2';9',2+&!'.%()>'
F;'?7-*$1$*"(()6'N'.1'/0-'9P',2+&!'0"#-'5-*.8-'&-%-2$*'!$%*-'.+2'2-#$-<'5-&"%R'N',2+&!'"2-'
*+22-%/()'-($&$5(-'1.2'&-%-2$*'"772.#"(R'"%'",,$/$.%"('M',2+&!'8")'5-*.8-'&-%-2$*'5-&$%%$%&'
$%'9G;;R';M',2+&!'8")'5-*.8-'&-%-2$*'5-&$%%$%&'$%'9G;9R';',2+&'8")'5-*.8-'&-%-2$*'
5-&$%%$%&'$%'9G;MR'"%,';',2+&'8")'5-*.8-'&-%-2$*'5-&$%%$%&'$%'9G;N>'

;F
F I N D I N G S
!"#$%&'()*+,-%.+%/0012%%34%'+!%56*+%,6*-*%/7%!"#$-%8*9:)*%';'.<'8<*%.+%
$*+*".9%4:")=%,6*."%&'()*+,%'):#+,-%5.<<%8*%-#8>*9,%,:%,6*%-')*%,5:?
@#'",*"%<'$%,6',%*A.-,-%#+!*"%,6*%BCD?8'-*!%-(-,*)2%
EFB%9:#<!%+:,%&":;.!*%*A'9,%!',*-%4:"%,6*%*A&*9,*!%$*+*".9%'&&":;'<%:4%
,6*-*%!"#$-2%%3+-,*'!=%.,%$';*%'+%*-,.)',*%:4%,6*%*'"<.*-,%&:--.8<*%!',*%:4%
BGFB%'&&":;'<2%%H6*%!',*%:4%'9,#'<%)'"I*,%*+,"(%)'(%!.44*"%4":)%,6.-%
*-,.)',*=%'-%*A,*"+'<%4'9,:"-=%-#96%'-%&',*+,%<.,.$',.:+=%)'(%&":<:+$%,6*%
.+,":!#9,.:+%:4%$*+*".9%;*"-.:+-%8*(:+!%,6*%!',*%:4%BGFB%'&&":;'<2%%C**%
B&&*+!.A%F%4:"%'%<.-,%:4%,6*-*%/7%8"'+!?:+<(%D'",%J?9:;*"*!%!"#$-%'+!%
,6*."%EFB?*-,.)',*!%$*+*".9%'&&":;'<%,.)*-2%
Nearly half of the current high-dollar brand-only Part B drugs are biologics;
the ACA recently created a pathway for generic approval of biological
products
H6*%"*)'.+.+$%//%:4%,6*%,:&%KL%8"'+!?:+<(%D'",%J?9:;*"*!%!"#$-%'"*%
8.:<:$.9-=%.+9<#!.+$%,6*%M%D'",%J%!"#$-%5.,6%,6*%6.$6*-,%N*!.9'"*%
*A&*+!.,#"*-%.+%/0012%%D".:"%,:%,6*%&'--'$*%:4%,6*%BOB=%+:%&',65'(%
*A.-,*!%4:"%,6*%'&&":;'<%:4%$*+*".9%;*"-.:+-%:4%8.:<:$.9-P%6:5*;*"=%-*9,.:+%
M00/%:4%,6*%BOB%&":;.!*-%4:"%'&&":;'<%:4%8.:-.).<'"-%Q.2*2=%$*+*".9%
8.:<:$.9-R2%%B-%'%"*-#<,=%$*+*".9%4:")-%:4%,6*-*%//%!"#$-%)'(%$'.+%
'&&":;'<%.+%,6*%4#,#"*2 S/ %%3+%/001=%,6*-*%//%8.:<:$.9-%'99:#+,*!%4:"%:;*"%
TS2U%8.<<.:+%.+%D'",%J%-&*+!.+$2%%C**%B&&*+!.A%V%4:"%'%<.-,%:4%,6*%,:&%//%
8.:<:$.9-%#+!*"%D'",%J2%
%
J*9'#-*%:4%.--#*-%-#96%'-%&',*+,%
Significant obstacles remain in proactively
<.,.$',.:+%'+!%)'"I*,.+$%
identifying newly available generic drugs
'$"**)*+,-=%,6*%!',*%:4%EFBW-%
'&&":;'<%:4%$*+*".9%;*"-.:+-%:4,*+%!:*-%+:,%9:.+9.!*%5.,6%,6*%!',*%:4%
'9,#'<%$*+*".9%)'"I*,%*+,"(2%%3+%4'9,=%U%:4%,6*%X7%$*+*".9%!"#$-%.+%:#"%
'+'<(-.-%!.!%+:,%"*'96%,6*%)'"I*,%#+,.<%',%<*'-,%7%):+,6-%'4,*"%EFBW-%
!',*%:4%$*+*".9%'&&":;'<2%%C**%B&&*+!.A%E%4:"%'%9:)&'".-:+%:4%,6*%!',*-%
:4%BGFB%'&&":;'<-%'+!%,6*%!',*-%:4%'9,#'<%$*+*".9%*+,"(2%
H5:%'!!.,.:+'<%!"#$-%+:,%.+9<#!*!%.+%:#"%'+'<(-.-%Q$*)9.,'8.+*%'+!%
,:"-*).!*R%5*"*%<.-,*!%8(%EFB%'-%6';.+$%6'!%4."-,?$*+*".9%;*"-.:+-%
'&&":;*!%!#".+$%:#"%,.)*4"')*%Q.2*2=%8*,5**+%4."-,?@#'",*"%/00M%'+!%%%%%%%%%%%%
S/%J*9'#-*%:4%8'"".*"-%,:%)'"I*,%*+,"(=%,6*%9:)&<*A.,.*-%:4%)'+#4'9,#".+$%,6*-*%&":!#9,-=%
'+!%'%-<.$6,<(%!.44*"*+,%&'()*+,%)*,6:!:<:$(=%8.:<:$.9-%)'(%+:,%-6:5%,6*%-')*%!*$"**%:4%
!*9<.+*%.+%&'()*+,%'):#+,-%56*+%$*+*".9%;*"-.:+-%"*'96%,6*%)'"I*,=%9:)&'"*!%,:%,6*%
!"#$-%.!*+,.4.*!%.+%,6.-%"*&:",2%

X7
F I N D I N G S
!"#$%&'()*+,"+-.//012-3),-%$-4"%"+5#-6"+!5$%!-*77"*+"&-,$-8*6"-+"*#8"&-
,8"-9*+:",-*!-$;-,8"-;$)+,8-()*+,"+-$;-.//0< => --?%-,8"-#*!"-$;-*%$,8"+-
&+)4-@3)&"!$%5&"12-4"%"+5#-6"+!5$%!-A"+"-*77+$6"&-3B-CDE-*%&-+"*#8"&-
,8"-9*+:",-;$+-*-;"A-&*B!2-3),-*!-*-+"!)F,-$;-7*,"%,-F5,54*,5$%2-4"%"+5#-
6"+!5$%!-#"*!"&-3"5%4-9*+:","&-&)+5%4-,8"-7"+5$&-)%&"+-+"65"A< =G --
H8"!"-5!!)"!-8548F548,-,8"-#$97F5#*,5$%!-5%-7+"&5#,5%4-A8"%-4"%"+5#-
6"+!5$%!-*+"-F5:"FB-,$-3"#$9"-*6*5F*3F"2-9*:5%4-5,-&5;;5#)F,-,$-*%,5#57*,"-
#8*%4"!-5%-EIJ!< -
For a number of drugs, generic manufacturers were late to report ASPs or
did not report ASPs at all
H8"-;5+!,'4"%"+5#-EIJ!-;$+-,A$-&+)4!-@*F3),"+$F-!)F;*,"K57+*,+$75)9-
3+$95&"-5%8*F*,5$%-!$F),5$%-*%&-;$9"75L$F"-5%M"#,5$%1-A"+"-+"7$+,"&-$%"-
()*+,"+-*;,"+-,8"-*#,)*F-4"%"+5#-"%,+B-&*,"-@!""-H*3F"-.1< == --N"%"+5#-
9*%);*#,)+"+!-;$+-,A$-$,8"+-&+)4!-%"6"+-+"7$+,"&-EIJ!-,$-OPI2-&"!75,"-
,8"-&+)4!Q-3"#$95%4-*6*5F*3F"-5%-4"%"+5#-;$+9< =R-
EFF-;$)+-&+)4!-A5,8-F*,"-$+-)%+"7$+,"&-4"%"+5#-EIJ!-A"+"-!$F&-3B-4"%"+5#-
9*%);*#,)+"+!-,8*,-8*&-P"&5#*5&-&+)4-+"3*,"-*4+""9"%,!-A5,8-OPI-*,-
,8"-,59"-$;-,8"5+-9*+:",-"%,+B-*%&-A"+"-+"()5+"&-,$-+"7$+,-EIJ!-5%-,8"-
;5+!,-()*+,"+-5%-A85#8-!*F"!-$##)++"&<--?%-5%!,*%#"!-5%-A85#8-EIJ!-*+"-
+"7$+,"&-*-()*+,"+-F*,"-$+-%$,-*,-*FF2-,8"-P"&5#*+"-7*B9"%,-*9$)%,!-
,*:"-"6"%-F$%4"+-,$-+";F"#,-!*F"!-$;-4"%"+5#!<--S*&-,8"-9*%);*#,)+"+!-$;-
,8"!"-%"AFB-*6*5F*3F"-4"%"+5#-&+)4!-+"7$+,"&-EIJ!-5%-*-,59"FB-;*!85$%2-
,8"-7$,"%,5*F-!*65%4!-,$-J*+,-T-5&"%,5;5"&-5%-$)+-*%*FB!5!-#$)F&-8*6"-
3""%-"6"%-4+"*,"+<-
-
-
=>-U"!"*+#8-5%,$-OPIQ!-3*#:4+$)%&-;5F"!-*%&-9*%);*#,)+"+-7+"!!-+"F"*!"!-B5"F&"&-%$-
"65&"%#"-$;-4"%"+5#-6"+!5$%!<-
=G-?%-.//02-P"&5#*+"-*%&-5,!-3"%";5#5*+5"!-7*5&-V.R=-95FF5$%-;$+-3)&"!$%5&"<--E##$+&5%4-,$-
,8"-!",,F"9"%,-*4+""9"%,-A5,8-*-4"%"+5#-9*%);*#,)+"+2-4"%"+5#-3)&"!$%5&"-A*!-*FF$A"&-,$-
3"-9*+:","&-*4*5%-!,*+,5%4-$%-D"#"93"+-W=2-.//0<--E##"!!"&-*,-8,,7XKKAAA<,"6*78*+9<#$9-
$%-Y)FB-W2-./W/<-
==-H8"-9*%);*#,)+"+'+"7$+,"&-EIJ!-;$+-,8"!"-&+)4!-A"+"-&","+95%"&-,$-8*6"-3""%-
!)395,,"&-F*,"-3*!"&-$%-,8"-;*#,-,8*,-4"%"+5#-9*%);*#,)+"+!-+"7$+,"&-ZDO!-5%-,8"-9$%,8FB-
EPJ-;5F"!-5%-,8"-()*+,"+-3";$+"-EIJ!-A"+"-+"7$+,"&-5%-,8"-3*#:4+$)%&-;5F"!-;$+-,8$!"-!*9"-
ZDO!<-
=R-Z$-4"%"+5#-EIJ!-A"+"-+"7$+,"&-*!-$;-,8"-;$)+,8-()*+,"+-$;-.//0<--["-A5FF-+";"+-,8"-
9*%);*#,)+"+!-$;-,8"!"-,A$-&+)4!-,$-OPI-*%&-A$+:-A5,8-,8"-*4"%#B-,$-)%&"+,*:"-
*77+$7+5*,"-*#,5$%<-
OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S -

W\
F I N D I N G S
Table 2: First Generics With ASP Reporting Issues

Period Covered
FDA Generic Estimated Actual
HCPCS Drug by First Reported
Approval Date Generic Entry Date 1
Generic ASP
Albuterol sulfate/
J7620 ipratropium bromide inh. soln. Dec. 21, 2006 July–Sept. 2007 4Q 2007
J1451 Fomepizole inj. Dec. 14, 2007 Jan. 2008 2Q 2008

2 3
Q0167 Dronabinol oral, 2.5 mg June 27, 2008 July 2008 (none listed)
2 3
Q0168 Dronabinol oral, 5 mg June 27, 2008 July 2008 (none listed)
! Source: FDA's ANDA (Generic) Drug Approvals and OIG analysis.!
1
Based on the first appearance of generic manufacturer NDC(s) in the ASP background file. See Appendix A for a
description of this analysis.
2
These drugs were not included in our potential savings analysis.
3
No generic ASPs were reported as of fourth-quarter 2009.

"#
R E C O M M E N D A T I O N S
R E C O M M E N D A T I O N
"#$%!$%!&#'!%'()*+!,-.!/'0)/&!&)!$+'*&$12!%2%&'3$(!456*'/78$6$&$'%!$*!!
97/&!:!0723'*&%!1)/!0/'%(/$0&$)*!+/5;%!7%!7!/'%56&!)1!&#'!&<)=>57/&'/!
67;!$*!/'$385/%'3'*&?!!@'!1)5*+!&#7&!0723'*&!73)5*&%!<'/'!
%$;*$1$(7*&62!#$;#'/!&#7*!37/A'&!0/$('%!1)/!7*!'B&'*+'+!0'/$)+!1)/!&#'!
*'<62!747$6786'!;'*'/$(!+/5;%!5*+'/!/'4$'<?!!-*!)&#'/!<)/+%C!+5/$*;!&#'!
0'/$)+!)1!$*$&$76!;'*'/$(!747$678$6$&2C!;'*'/$(!4'/%$)*%!)1!&#'%'!+/5;%!
<'/'!8'$*;!7+3$*$%&'/'+!)/!+$%0'*%'+!&)!8'*'1$($7/$'%C!85&!D'+$(7/'!
<7%!%&$66!072$*;!&#'!8/7*+!0/$('%?!
E6&#)5;#!)&#'/!;)4'/*3'*&!7*+!0/$47&'62!%0)*%)/'+!0/'%(/$0&$)*!+/5;!
0/);/73%!7/'!+'%$;*'+!&)!&7A'!7+47*&7;'!)1!6)<'/!0/$('+!;'*'/$(!+/5;%!
F'?;?C!37*+7&)/2!;'*'/$(!%58%&$&5&$)*!0)6$($'%GC!)5/!1$*+$*;%!+'3)*%&/7&'!
&#7&!&#'!97/&!:!/'$385/%'3'*&!%2%&'3!17$6%!&)!(70&5/'!&#'%'!0)&'*&$76!
%74$*;%!1)/!7&!6'7%&!&<)!>57/&'/%?!!HDI!#7%!'B0/'%%'+!$*&'/'%&!$*!
'B06)/$*;!)0&$)*%!&)!$30/)4'!$&%!/'$385/%'3'*&!0/)('%%C!85&!$&!#7%!2'&!
&)!37A'!%0'($1$(!(#7*;'%?!!@$&#!3)/'!&#7*!#761!)1!&#'!&)0!+)667/=4)653'!
8/7*+!+/5;%!()4'/'+!5*+'/!97/&!:!0)&'*&$7662!;7$*$*;!700/)476!$*!
;'*'/$(!1)/3!)4'/!&#'!*'B&!J!2'7/%C!7*+!&#'!(/'7&$)*!5*+'/!&#'!EHE!)1!7!
*'<!700/)476!07&#<72!1)/!;'*'/$(!8$)6);$(%C!&#$%!456*'/78$6$&2!<$66!6$A'62!
()*&$*5'!&)!;/)<!$1!HDI!+)'%!*)&!37A'!(#7*;'%!&)!$&%!97/&!:!0723'*&!
%2%&'3?!!!
@'!&#'/'1)/'!/'()33'*+!&#7&K!
CMS work with Congress to require manufacturers of first generics to

submit monthly ASP data during the period of initial generic availability
-1!;'*'/$(!37*517(&5/'/%!<'/'!/'>5$/'+!&)!%583$&!EI9!+7&7!82!&#'!'*+!
)1!'7(#!3)*&#!+5/$*;!&#'!0'/$)+!)1!$*$&$76!;'*'/$(!747$678$6$&2C!HDI!
()56+!+'4'6)0!7!3)/'!700/)0/$7&'!+/5;!0723'*&!73)5*&!&#7&!/'16'(&%!
&#)%'!;'*'/$(!%76'%C!7*+!%'&!&#7&!0723'*&!73)5*&!1)/!&#'!1)66)<$*;!
>57/&'/?!!"#$%!<)56+!%58%&7*&$7662!/'+5('!&#'!&<)=>57/&'/!67;!7*+!<)56+!
37A'!0723'*&!73)5*&%!3)/'!/'16'(&$4'!)1!7(&576!37/A'&!0/$('%!1)/!
*'<62!747$6786'!;'*'/$(!+/5;%C!&#'/'82!&7A$*;!7+47*&7;'!)1!&#'$/!6)<'/!
0/$('%?!!HDI!()56+!76%)!70062!&#'!/'>5$/'3'*&!&)!37*517(&5/'/%!)1!
;'*'/$(!8$)6);$(%C!)*('!&#'%'!0/)+5(&%!8';$*!&)!8'!700/)4'+?!
,5/!1$*+$*;%!76%)!+'3)*%&/7&'!&#7&!&#'!456*'/78$6$&2!0)%'+!82!&#'!!!!!
&<)=>57/&'/!67;!$%!*)&!6$3$&'+!&)!0'/$)+%!)1!$*$&$76!;'*'/$(!747$678$6$&2C!7%!
D'+$(7/'!0723'*&!73)5*&%!<$66!'B(''+!7(&576!37/A'&!%76'%!7*2!&$3'!
EI9%!+'(6$*'?!!"#'/'1)/'C!$1!HDI!1$*+%!&#7&!&#'!$306'3'*&7&$)*!)1!7!
3)*&#62!EI9!/'0)/&$*;!/'>5$/'3'*&!1)/!1$/%&!;'*'/$(%!#'60%!766'4$7&'!&#'!
1$*7*($76!$307(&!)1!&#'!&<)=>57/&'/!67;C!&#'!7;'*(2!372!<$%#!&)!()*%$+'/!

LM
!"#$%&!&'$&$()!')#)*'$!+,-)./0)"12'"!&$()%-%!1*)3'")#,,)0#"!)456'71"18)
8"9(%:)
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL

RESPONSE
;</)8&8)$'!)6'$69")=&!+)'9")"16'**1$8#!&'$:));</)%!#!18)!+#!)
"1>9&"&$()*#$93#6!9"1"%)!')%9?*&!)*'$!+,-)./0)8#!#)='9,8)$'!)?1)
31#%&?,1)3'")1&!+1")*#$93#6!9"1"%)'");</@)#$8)!+1)#(1$6-)6&!18)!+1)+&(+)
"#!1%)'3)*#$93#6!9"1")2"&61)"1%!#!1*1$!%)3'")*'$!+,-).<0%)A&$)6'$!"#%!)
!')>9#"!1",-)./0%B)#%)17&81$61)'3)!+1)#8*&$&%!"#!&71)?9"81$)'3)*'$!+,-)
"12'"!&$()'$)*#$93#6!9"1"%:));</)$'!18)!+#!)CDE)+#8)&81$!&3&18)#)
$9*?1")'3)*#$93#6!9"1"%)!+#!)3#&,18)!')%9?*&!)>9#"!1",-)./0)8#!#@)#%)
"1>9&"18@)#$8)!+#!)!+&%)2"'?,1*)6'9,8)?1)1F#61"?#!18)?-)*'$!+,-)
"12'"!&$()"1>9&"1*1$!%:))G+1)#(1$6-)"16'**1$818)!+#!)CDE)6'$!#6!)
!+1%1)*#$93#6!9"1"%)!')81!1"*&$1)=+-)./0%)=1"1)$'!)"12'"!18)#$8)
=+1!+1")#$-)21$#,!&1%)#"1)=#""#$!18:));</)=1$!)'$)!')%!#!1)!+#!)&!)&%)
8171,'2&$()#)2"'61%%)!')&81$!&3-)*#$93#6!9"1"%)!+#!)8')$'!)%9?*&!)
>9#"!1",-)./0%)&$)#)!&*1,-)*#$$1"@)#$8)!+1$)"131")!+1%1)*#$93#6!9"1"%)
!')CDE)=+1$)#22"'2"&#!1:)))
;</)#,%')%922'"!18)!+1)!='5>9#"!1"),#()3"'*)#)2',&6-)21"%216!&71@)
%!#!&$()!+#!)AHB)!+1),#()2"'!16!%)<18&6#"1)#$8)&!%)?1$13&6&#"&1%)3"'*)
9$6+16I18)2"&61)&$6"1#%1%@)#%)*#$93#6!9"1"%)*#-),&*&!)"#&%&$()2"&61%)
?#%18)'$)!+1&")#=#"1$1%%)'3)2'!1$!&#,)2"'7&81")"1&*?9"%1*1$!)&%%91%@)
#$8)AJB)!+1),#(),1#8%)!')!+1)*'"1)"#2&8)9!&,&K#!&'$)'3)(1$1"&6%@)#%)
2"'7&81"%)+#71)#$)&$61$!&71)!')>9&6I,-)%=&!6+)!'),'=1"52"&618)71"%&'$%)
89"&$()!+1),&*&!18)21"&'8)=+1$)!+1)2#-*1$!)%2"1#8)&%)#!)&!%)+&(+1%!:))
;</)#,%')81%6"&?18)*1!+'8%)!+#!)!+1)#(1$6-)+#8)6'$%&81"18)!'),1%%1$)
!+1)!='5>9#"!1"),#(@)#$8)&!)6'$!1$818)!+#!)#$-)2',&6-)&*2,1*1$!&$()
!+1%1)#22"'#6+1%)='9,8)?1)!16+$&6#,,-)&$31#%&?,1)'"),1#8)!')*'"1)
&$#669"#!1)#$8)9$%!#?,1)2#-*1$!)"#!1%:)
.,!+'9(+)!+1)#8*&$&%!"#!&71)31#%&?&,&!-)#$8)6'*2,&#$61)?9"81$)'3)#$-)
$1=)"12'"!&$()"1>9&"1*1$!%)%+'9,8)?1)!#I1$)&$!')#66'9$!@)CDE)?1,&171%)
!+#!)!+1)6'%!)%#7&$(%)3'")<18&6#"1)#$8)&!%)?1$13&6&#"&1%)!+#!)='9,8)?1)
#6+&1718)?-)"1896&$()!+1)69""1$!)"1&*?9"%1*1$!),#()*#-)'9!=1&(+)#$-)
2'!1$!&#,)&%%91%)3'");</)#$8)*#$93#6!9"1"%:))L1(#"8&$()!+1),#!!1"@)CDE)
&%)='"I&$()6,'%1,-)=&!+);</)!')&*2"'71)6'*2,&#$61)=&!+)2"&615"12'"!&$()
"1>9&"1*1$!%)#$8)"161$!,-)&%%918)#$)#87&%'"-)?9,,1!&$)$'!&3-&$()
*#$93#6!9"1"%)'3)#)$1=)CDE)1$3'"61*1$!)&$&!&#!&71)!+#!)#88"1%%1%),#!1)
OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S )

JM
!"#$%&''&"($#!)!*$$+'$,!-)$./$)0&'$&"&)&!)&123$456$7&88$9."'&#2-$,:-':&"($
,2"!8)&2'$/.-$%!":/!9):-2-'$)0!)$/!&8$).$-2,.-)$+;<'*$
=:-)02-%.-23$72$#.$".)$>28&212$)02$>2')$,-.)29)&."$!(!&"')$,-&92$
&"/8!)&."$'0.:8#$>2$!$-2&%>:-'2%2")$'?')2%$)0!)$&'$'8.7$).$-2/829)$
%!-@2)$)-2"#'3$.-$)0!)$)02$>2')$2"9.:-!(2%2")$/.-$(2"2-&9$':>')&):)&."$
&'$."2$)0!)$9!:'2'$A2#&9!-2$!"#$&)'$>2"2/&9&!-&2'$).$,!?$':>')!")&!88?$
%.-2$)0!"$,-.1&#2-$9.')'*$$B!)02-3$)02$"!):-2$./$)02$1.8:%2C72&(0)2#$
+;<C>!'2#$-2&%>:-'2%2")$'?')2%$&)'28/$D&"$70&90$!88$EFG'$!''&("2#$).$
."2$HG<G;$9.#2$!-2$,!&#$!)$)02$'!%2$!%.:")I$&'$!"$&"92")&12$/.-$
%!":/!9):-2-'$).$8&%&)$-!,&#$,-&92$&"9-2!'2'3$!'$7288$!'$/.-$,-.1&#2-'$).$
:)&8&J2$(2"2-&9$12-'&."'*$$K2)3$>29!:'2$./$)02$)7.CL:!-)2-$8!(3$<!-)$M$!"#$
&)'$>2"2/&9&!-&2'$!-2$#2"&2#$'&("&/&9!")$,.)2")&!8$'!1&"('$702"$)02'2$
(2"2-&9$12-'&."'$/&-')$>29.%2$!1!&8!>82*$$+8)0.:(0$72$!,,-29&!)2$GA;N'$
9."'&#2-!)&."$./$!8)2-"!)&12$,-&92$-2,.-)&"($)&%28&"2'3$72$".)2$)0!)$)02$
%2)0.#'$.:)8&"2#$>?$GA;$&"$&)'$9.%%2")'$!-2$".)$)02$."8?$,.''&>82$
!,,-.!902'*$$O02-2/.-23$)02$!(2"9?N'$9."98:'&."'$!>.:)$/2!'&>&8&)?$!"#$
,-&92$')!>&8&)?$%!?$".)$!,,8?$).$.)02-$%2)0.#'$)0!)$9.:8#$>2$:'2#$).$
-2#:92$)02$-2&%>:-'2%2")$8!(*$$$
GA;$!8'.$2P,-2''2#$9."92-"'$7&)0$.:-$'!1&"('$2')&%!)2*$$O02$!(2"9?$
')!)2#$)0!)Q$
x &)$&'$".)$982!-$/-.%$)02$-2,.-)$)0!)$)02$,.)2")&!8$'!1&"('$./$$$$$$$$$$$
RSSS$%&88&."$!-2$".)$!"":!8&J2#$'!1&"('T$$$
x !8%.')$UV$,2-92")$./$.:-$2')&%!)2#$'!1&"('$!-2$!))-&>:)!>82$).$)0-22$
#-:('3$!"#$)02-2/.-2$".)$-2,-2'2")!)&12$./$<!-)$M$,-&9&"($)-2"#'$
.12-!88T$$
x )02$'!1&"('$2')&%!)2$./$RSSS$%&88&."$!'':%2'$)0!)$)02$8!($7.:8#$>2$
9.%,82)28?$28&%&"!)2#3$70&90$&'$!#%&"&')-!)&128?$&%,.''&>82T$!"#$
x 456N'$/&"#&"($-2(!-#&"($)02$/:):-2$!1!&8!>&8&)?$./$(2"2-&9$>&.8.(&9'$
&%,8&2'$'&("&/&9!")$,.)2")&!8$'!1&"('T$0.7212-3$&)$&'$:"92-)!&"$)0!)$
)02$)7.CL:!-)2-$8!($7.:8#$9!:'2$,!?%2")$(!,'$/.-$)02'2$,!-)&9:8!-$
,-.#:9)'*$
+'$72$')!)2$&"$>.)0$)02$%2)0.#.8.(?$!"#$/&"#&"('$'29)&."'$./$)02$-2,.-)3$
.:-$.12-!88$'!1&"('$2')&%!)2$&'$".)$&")2"#2#$).$>2$!"$!"":!8&J2#$/&(:-2T$
-!)02-$)02$RSSS$%&88&."$-2,-2'2")'$)02$2')&%!)2#$'!1&"('$0!#$)02-2$>22"$
".$)7.CL:!-)2-$8!($#:-&"($)02$,2-&.#$./$&"&)&!8$(2"2-&9$!1!&8!>&8&)?$$$$$
D&*2*3$:,$).$)0-22$L:!-)2-'I$/.-$SW$#-:('*$$M29!:'2$.:-$/&"#&"('$'0.7$)0!)$
)02$+;<'$/.-$)02'2$#-:('$9.")&":2#$).$#-.,$>2?."#$)02$)0-22$L:!-)2-'$./$
!"!8?'&'3$.:-$2')&%!)2#$'!1&"('$8&@28?$7.:8#$0!12$>22"$'&("&/&9!")8?$

XS
!"#$%#"&'$(&)#&*$+*,+$%#(&%'#&%-%$+&*-.%&-/&%'#&%)-01,$"%#"&+$!&/-"&%'#&
#2%3"#&4#"3-(&/"-5&6$2,$"7&899:&%-&6,2#&899;<&&&
=2&$((3%3-2>&?@A&3.&*-""#*%&%'$%&%'"##&(",!.&$**-,2%&/-"&%'#&B$.%&
5$C-"3%7&-/&%'#&DEEE&53++3-2&32&4-%#2%3$+&.$B32!.<&&F-)#B#">&)#&(3.$!"##&
%'$%&%'3.&5#$2.&%'$%&-,"&"#.,+%.&$"#&2-%&"#4"#.#2%$%3B#<&&=2&899;>&&&&&&&&&
GH&F?I?A&*-(#.&$**-,2%#(&/-"&;9&4#"*#2%&-/&%'#&DEE&J3++3-2&32&
#K4#2(3%,"#.&/-"&&I$"%&L&(",!.>&)3%'&-2+7&EM&-/&%'#.#&*-(#.&"#4"#.#2%32!&
%'#&5$C-"3%7&NO8&4#"*#2%P&-/&.4#2(32!<&&Q'#"#/-"#>&3%&/-++-).&%'$%&-,"&
#.%35$%#.&)-,+(&J#&+$"!#+7&("3B#2&J7&%'#&.$B32!.&$%%"3J,%$J+#&%-&%'#&/#)&
'3!'0(-++$"&(",!.&%'$%&'$(&2#)&!#2#"3*&B#".3-2.&J#*-5#&$B$3+$J+#&
(,"32!&%'#&4#"3-(&,2(#"&"#B3#)<&&R,"&/32(32!.&$+.-&3++,.%"$%#&%'$%&%'3.&
%"#2(&3.&+3S#+7&%-&*-2%32,#>&$.&8G&J"$2(&(",!.&"#4"#.#2%32!&-B#"&&&&&&&&&
D8<T&J3++3-2&$2(&8O&4#"*#2%&-/&I$"%&L&.4#2(32!&5$7&J#*-5#&!#2#"3*&32&
%'#&2#K%&.#B#"$+&7#$".<&&&
U,"%'#"5-"#>&)#&"#$+3V#&%'$%&3%&5$7&J#&354-..3J+#&%-&*-54+#%#+7&
#+3532$%#&%'#&"#35J,".#5#2%&+$!>&$2(&%'$%&-,"&.$B32!.&#.%35$%#&
4"#.#2%.&$&J#.%0*$.#&.*#2$"3-<&&F-)#B#">&!3B#2&%'#&'3!'&*-.%&$2(&
.,J.%$2%3$+&#K4#2(3%,"#.&/-"&5$27&I$"%&L&(",!.>&$27&"#(,*%3-2&32&%'#&
%)-01,$"%#"&+$!&)-,+(&+#$(&%-&.3!23/3*$2%&.$B32!.&%-&%'#&4"-!"$5&$2(&%-&
@#(3*$"#&J#2#/3*3$"3#.&32&%'#&/-"5&-/&"#(,*#(&*-32.,"$2*#<&
U32$++7>&#B#2&%'-,!'&%'#&%)-01,$"%#"&+$!&5$7&-"&5$7&2-%&$//#*%&!#2#"3*&
J3-+-!3*.&32&%'#&.$5#&5$22#"&$.&-%'#"&I$"%&L&(",!.>&%'#&/$*%&%'$%&
@#(3*$"#&$2(&3%.&J#2#/3*3$"3#.&.4#2%&DO<M&J3++3-2&-2&C,.%&88&J3-+-!3*&
4"-(,*%.&32&899;&5#$2.&%'$%&$27&(#+$7&32&%$S32!&$(B$2%$!#&-/&#B#2&
.+3!'%+7&+#..&#K4#2.3B#&!#2#"3*&B#".3-2.&)-,+(&'$B#&$&4"-/-,2(&354$*%&
-2&%'#&4"-!"$5&$2(&3%.&J#2#/3*3$"3#.<&
U-"&%'#&/,++&%#K%&-/&?@AW.&*-55#2%.>&.##&X44#2(3K&Y<&
&
&
&
&
&
&
&
&
&
OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S &
88
A P P E N D I X ~ A
Detailed Methodology for Identifying First-Generic Drugs and

Their Dates of Market Entry
!" The Food and Drug Administration’s (FDA) monthly list of first-generic drug
approvals. #$%#&'()*#+,-.'/%0#1#/')*#,&#1//#0(23)#/')*%0#240%(#5678)#
&'()*93%4%('+#0(23#1..(,:1/)#&,(#1//#-,4*;)#<%*=%%4#>1421(?#@AAB#
140#>24%#@AAC"##D%+12)%#=%#=%(%#'4*%(%)*%0#'4#'0%4*'&?'43#0(23)#
=;'+;#<%+1-%#1:1'/1</%#='*;'4#,2(#*'-%&(1-%E#=%#1/),#'4+/20%0#
0(23)#'4#*;')#141/?)')#*;1*#=%(%#1..(,:%0#='*;'4#@#-,4*;)#<%&,(%#,2(#
*'-%&(1-%#F'"%"E#G,:%-<%(#@AAHI#'4#+1)%#14?#,&#*;,)%#0(23)#1+*21//?#
;'*#*;%#-1(J%*#)*1(*'43#'4#>1421(?#@AAB"##K;%#567#/')*#.(,:'0%0#*;%#
0(23#41-%E#&,(-E#)*(%43*;E#140#-142&1+*2(%(#<2*#0'0#4,*#/')*#*;%#
L%1/*;+1(%#M,--,4#N(,+%02(%#M,0'43#O?)*%-#FLMNMOI#+,0%#,&#%1+;#
0(23"##K;%(%&,(%E#=%#;10#*,#)%1(+;#*;%#M%4*%()#&,(#P%0'+1(%#Q#
P%0'+1'0#O%(:'+%)8#FMPOI#+(,))=1/J#&'/%)#<?#0(23#41-%#*,#'0%4*'&?#
*;%#0(238)#LMNMO#+,0%#140#*,#0%*%(-'4%#=;%*;%(#*;%#5679/')*%0#
0(23#=1)#+,:%(%0#240%(#N1(*#D"##R&#1#0(23#41-%#/')*%0#<?#567#0'0#
4,*#+/%1(/?#-1*+;#*;1*#'4#*;%#+(,))=1/J#&'/%E#=%#0'0#4,*#'4+/20%#'*#'4#
*;%#141/?)')"#
@" CMS’s quarterly background files.##S4+%#=%#;10#0%*%(-'4%0#%1+;#0(238)#
LMNMO#+,0%E#=%#)%1(+;%0#*;%#<1+J3(,240#&'/%)#<?#LMNMO#+,0%#*,#
'0%4*'&?#1//#-142&1+*2(%()#*;1*#(%.,(*%0#1:%(13%#)1/%)#.('+%)#F7ONI#
&,(#%1+;#0(23#'4#1//#T21(*%()#'4#,2(#141/?)')"##D%+12)%#*;%#&'()*#&':%#
0'3'*)#,&#1#41*',41/#0(23#+,0%#FG6MI#0%4,*%#*;%#-142&1+*2(%(E#=%#
=%(%#1</%#*,#2)%#*;%#G6M)#/')*%0#'4#*;%#<1+J3(,240#&'/%)#*,#'0%4*'&?#
*;%#42-<%(#,&#24'T2%#-142&1+*2(%()#.%(#0(23"##$%#*;%4#(14#*;')#/')*#
,&#G6M)#131'4)*#*;%#U%0#D,,J#*,#%V+/20%#14?#G6M)#*;1*#*;%#U%0#
D,,J#'0%4*'&'%0#1)#(%.1+J13%()"##$%#1/),#%V+/20%0#14?#G6M)#*;1*#
MPO#;10#&/133%0#'4#*;%#<1+J3(,240#&'/%#1)#<%'43#.(,</%-1*'+#,(#
%V+/20%0#&(,-#*;%#7ON#+1/+2/1*',4#'4#*;1*#T21(*%("##S4+%#=%#(%.%1*%0#
*;')#.(,+%))#'4#%1+;#T21(*%(E#=%#=%(%#1</%#*,#)%%#=;%4#1#0(23#=%4*#
&(,-#,4%#-142&1+*2(%(#*,#-2/*'./%#-142&1+*2(%()E#*;%(%<?#
'40'+1*'43#*;%#%4*(?#,&#3%4%('+#:%()',4)"##K;%#<1+J3(,240#&'/%#1/),#
/')*)#1#:1('1</%#*,#0%4,*%#=;%*;%(#*;%#0(23#')#1#<(140#,(#3%4%('+#
:%()',4E#140#*;')#=1)#2)%0#1)#14#100'*',41/#+;%+J#*,#+,4&'(-#*;1*#*;%#
4%=#-142&1+*2(%(#=1)#-1(J%*'43#1#3%4%('+#:%()',4#(1*;%(#*;14#1#
+,-.%*'43#<(140#:%()',4"#
W" CMS’s monthly average manufacturer price (AMP) files.##$%#2)%0#*;%#

-,4*;/?#7PN#&'/%)#*,#+,4&'(-#*;%#01*%#,&#&'()*93%4%('+#%4*(?"##D%+12)%#
*;%#7PN#&'/%)#/')*#,4/?#G6M)#140#4,*#LMNMO#+,0%)E#=%#;10#*,#(%/?#

@W
A P P E N D I X ~ A
!"#$%&#'()*#+,*$&-#,"#$%&#./0123!4"-#5,+&*#$!#,-&"$,56#'()*#,"#$%&#
789#5,+&*:#
;: Red Book.##<&#3&=&/$&-#$%&#*/>&#=3!0&**#4*&-#,"#$%&#789#/"/+6*,*#
$!#,-&"$,56#$%&#&/3+,&*$#/==&/3/"0&#!5#/"#'()#,"#$%&#?&-#@!!1:###
A: Manufacturer press releases.##<&#3&*&/30%&-#>/"45/0$43&3#=3&**#
3&+&/*&*#/"-#<&.#*,$&*#$!#0!"5,3>#2&"&3,0#-342#'()*#/"-#-/$&*#!5#
>/31&$#&"$36:#
B%&3&#C&3&#!5$&"#-,*03&=/"0,&*#,"#$%&#-/$&*#!5#2&"&3,0#&"$36#2,D&"#.6#$%&#
/.!D&#-/$/#*!430&*:##E"#>!*$#,"*$/"0&*#!5#-,*03&=/"0,&*F#C&#0%!*&#$%&#
0!"*&"*4*#C%&"#>!*$#!5#$%&*&#-/$/#*!430&*#C&3&#,"#/23&&>&"$#!"#$%&#
-/$&#!5#>/31&$#&"$36:##<%&"#$%&#./0123!4"-#5,+&#C/*#$%&#!"+6#-/$/#
*!430&#$!#3&=!3$#/#-,55&3&"$#-/$&F#C&#$!!1#$%,*#$!#>&/"#$%/$#$%&#
>/"45/0$43&3#C/*#+/$&#$!#3&=!3$#7G9*#,"#$%&#./0123!4"-#5,+&:##E"#
,"*$/"0&*#,"#C%,0%#$%&3&#C/*#"!#0+&/3#0!"*&"*4*#HI#!5#$%&#JK#-342*LF#C&#
-&5&33&-#$!#$%&#&/3+,&*$#+,*$&-#2&"&3,0#>/31&$#&"$36#-/$&#/>!"2#/++#-/$/#
*!430&*:##M!3#&N/>=+&F#,5#/#-342#C/*#+,*$&-#,"#$%&#./0123!4"-#5,+&*#
*$/3$,"2#,"#5,3*$OP4/3$&3#QRRS#.4$#C/*#"!$#+,*$&-#,"#$%&#789#5,+&*#4"$,+#
8/6#QRRSF#C&#/**4>&-#$%&#-/$&#!5#2&"&3,0#>/31&$#&"$36#C/*#$%&#5,3*$#
P4/3$&3#!5#QRRS:##E5#,$#C/*#"!$#0+&/3#C%&$%&3#/#-342#%/-#5,3*$O2&"&3,0#
D&3*,!"*#.&0!>&#/D/,+/.+&#C,$%,"#!43#$,>&53/>&F#,$#C/*#"!$#,"0+4-&-#,"#
$%&#/"/+6*,*:##<&#/+*!#&N0+4-&-#53!>#!43#*/D,"2*#/"/+6*,*#-342*#53!>#
>/"45/0$43&3*#$%/$#5/,+&-#$!#3&=!3$#/"6#2&"&3,0#'()*#,"#$%&#
./0123!4"-#5,+&*:###
#

Q;
A P P E N D I X ~ B
Table B-1: First-Generic Drugs Included in Our Analysis

Part B Expenditures During Potential Savings During
HCPCS Brand First Generic
Drug Name 1 the Three Quarters of Initial the Three Quarters of
Code Name Entry Date 2
Generic Availability Initial Generic Availability
Amifostine, inj.,
J0207 500 milligrams (mg) Ethyol May 2008 $8,479,381 $1,364,634
Cefepime inj.,
J0692 500 mg Maxipime Jan.–Mar. 2008 $567,286 $48,719
Epoprostenol inj.,
J1325 0.5 mg Flolan May 2008 $19,576,492 $66,109
Fomepizole inj.,
J1451 15 mg Antizol Jan. 2008 $23 -$2
Granisetron inj.,
J1626 0.1 mg Kytril Jan. 2008 $13,040,208 $1,816,964
Sumatriptan
J3030 Succinate inj., 6 mg Imitrex Feb. 2009 $957 $75
Mycophenolate
Mofetil oral,
J7517 250 mg Cellcept May 2009 $132,035,240 $28,958,160
Albuterol Sulfate/
Ipratropium
Bromide inh. soln.,
J7620 2.5 mg/0.5 mg Duoneb July–Sept. 2007 $165,624,799 $32,073,194
Irinotecan inj.,
J9206 20 mg Camptosar Mar. 2008 $90,705,689 $44,131,109
Melphalan inj.,
J9245 50 mg Alkeran June 2009 $277,347 $9,909
Pentostatin inj.,
J9268 10 mg Nipent Aug. 2007 $3,915,369 $273,111
Granisetron oral,
Q0166 1 mg Kytril Jan. 2008 $649,379 $375,497
Ondansetron oral,
Q0179 8 mg Zofran Jan.–Mar. 2007 $4,296,612 $1,859,387
Fosphenytoin inj.,
Q2009 50 mg Cerebyx Aug. 2007 $61 $48
Dronabinol oral,
3
Q0167 2.5 mg Marinol July 2008 (n/a) (n/a)
Dronabinol oral,
3
Q0168 5 mg Marinol July 2008 (n/a) (n/a)
Total $439,168,842 $110,976,913

Source: Office of Inspector General analysis of newly available generic drugs, 2009.
1
For some drugs, we could not determine from the available data the specific month in which generics first became available. For these drugs, we
provided the first quarter of generic availability (e.g., January–March 2008).
2
Part B Analytics Reporting (98 percent of claims reported). Accessed on March 25, 2010.
3
Generic manufacturers for these two drugs did not report any average sales prices and were therefore not included in our savings analysis.

"#
A P P E N D I X ~ C
Table C-1: Medicare Payment Amounts for 16 Newly Available Generic Drugs
J0207 J0692 J1325 J1451 J1626 J3030 J7517 J7620
Quarter 1
(2Q 2008) (1Q 2008) (2Q 2008) (1Q 2008) (1Q 2008) (1Q 2009) (2Q 2009) (3Q 2007)
Q0
(Brand Only)
Payment
Amount $496.281 $8.026 $14.526 $12.924 $5.792 $72.575 $3.190 $1.148
Q1
(First Generic
Reaches Market)
Payment
Amount $511.217 $5.718 $14.362 $13.731 $4.721 $74.704 $3.436 $1.105
Q2 Payment
Amount $511.316 $6.749 $14.368 $14.115 $6.046 $84.495 $3.441 $1.079
Q3 Payment
2
Amount $424.029 $5.711 $14.332 $14.804 $5.341 $82.659 $2.494 $0.805
Q4 Payment
3
Amount $386.293 $5.721 $14.355 $11.850 $4.329 $56.559 $2.600 $0.830
Q5 Payment
Amount $373.298 $5.249 $14.218 $11.412 $4.053 $43.545 $1.884 $0.581
Q6 Payment (data
Amount $367.756 $4.589 $14.101 $10.100 $3.292 $46.678 unavailable) $0.307
Q7 Payment (data (data

Amount $356.806 $4.417 $14.023 $8.753 $2.344 unavailable) unavailable) $0.273
Q8 Payment (data (data

Amount $340.108 $3.781 $14.032 $8.146 $2.004 unavailable) unavailable) $0.243
1
Quarter and year in parenthesis denote the first quarter in which generics were available. (continued on next page)
2
Q3 refers to the quarter in which the Medicare payment amount begins to reflect sales of the first generic(s).
3
Q4 refers to the quarter in which the Medicare payment amount fully reflects sales of the first generic(s).
!
!

"#
A P P E N D I X ~ C
Table C-1: Medicare Payment Amounts for 16 Newly Available Generic Drugs (Continued)
2 2
J9206 J9245 J9268 Q0166 Q0179 Q2009 Q0167 Q0168
Quarter 1
(1Q 2008) (2Q 2009) (3Q 2007) (1Q 2008) (1Q 2007) (3Q 2007) (3Q 2008) (3Q 2008)
Q0
(Brand Only)
Payment
Amount $125.800 $1,624.598 $1,934.913 $50.436 $36.064 $5.555 $5.415 $10.835
Q1
(First Generic
Reaches Market)
Payment
Amount $126.309 $1,624.598 $1,977.801 $50.224 $36.829 $5.795 $5.387 $11.711
Q2 Payment
Amount $126.235 $1,624.598 $2,071.219 $46.955 $36.550 $5.813 $5.876 $11.838
Q3 Payment
3
Amount $74.753 $1,654.023 $1,858.684 $17.173 $25.029 $3.595 $5.822 $11.508
Q4 Payment
4
Amount $36.997 $1,549.472 $1,828.915 $17.877 $18.543 $0.817 $5.824 $11.676
Q5 Payment
Amount $21.715 $1,500.321 $1,741.579 $16.583 $9.169 $1.217 $6.799 $13.515
Q6 Payment (data
Amount $18.296 unavailable) $1,622.651 $9.244 $4.604 $0.728 $6.795 $13.567
Q7 Payment (data
Q8 Payment (data
Source: Centers for Medicare & Medicaid Services’ posted Part B payment limits.
1
Quarter and year in parenthesis denote the first quarter in which generics were available.
2
Not included in our savings analysis.
3
Q3 refers to the quarter in which the Medicare payment amount begins to reflect sales of the first generic(s).
4
Q4 refers to the quarter in which the Medicare payment amount fully reflects sales of the first generic(s).
!
!
!

"#
A P P E N D I X ~ D
Table D-1: Estimated Generic Approval Timeline for the Top 26 Dollar-Volume Brand-Only Part B
Drugs (Biologics Excluded), According to FDA
FDA-Estimated Generic 2009 Part B 2009 Part B

Drug Name Brand Name 1 2 3
Approval Timeline Expenditures Rank
4
Oxaliplatin Eloxatin Approved in generic form $307,305,870 8
Docetaxel Taxotere After February 10, 2012 $273,059,887 9
Zoledronic acid Zometa After April 30, 2012 $228,200,463 12
Pemetrexed Alimta Currently eligible for approval $224,725,011 13
Gemcitabine hydrochloride Gemzar Approved in generic form $214,841,468 14
Bortezomib Velcade After August 31, 2011 $157,915,565 19
Leuprolide acetate Lupron Approved in generic form $148,807,207 20
Palonosetron hydrochloride Aloxi After April 30, 2012 $141,432,119 22
Treprostinil sodium Remodulin After April 30, 2012 $112,277,602 26
Octreotide acetate Sandostatin Lar Depot After April 30, 2012 $107,672,719 28
Azacitidine Vidaza After May 19, 2011 $101,648,346 29
Zoledronic acid Reclast After May 18, 2011 $100,768,293 30
Arformoterol tartrate Brovana After March 30, 2012 $77,081,333 32
Paclitaxel protein-bound Abraxane After April 30, 2012 $72,033,094 36

Currently eligible for approval
Adenosine Adenoscan (legal disputes remain) $69,316,718 39
Triptorelin pamoate Trelstar After April 30, 2012 $67,684,223 40
Decitabine Dacogen After May 2, 2013 $62,196,704 42
Doxorubicin hydrochloride liposome Doxil After May 17, 2014 $49,619,144 47
Iloprost Ventavis Currently eligible for approval $48,970,602 48
Mycophenolate acid Myfortic After January 17, 2012 $46,469,720 51
Sirolimus Rapamune After April 30, 2012 $45,449,381 52
Topotecan hydrochloride Hycamtin Approved in generic form $43,430,255 54
Fulvestrant Faslodex After March 30, 2012 $40,709,396 57
Ibandronate sodium Boniva Currently eligible for approval $25,710,811 66
Imiglucerase Cerezyme After April 30, 2012 $24,355,150 70
Verteporfin Visudyne After April 30, 2012 $17,308,914 80
Total $2,808,989,996
Source: Food and Drug Administration (FDA) analysis of Part B drugs, 2009.
1
Approximate date of April 30, 2012, is used by FDA to estimate how long it would take to approve an abbreviated new drug application if it is
submitted before November 10, 2009, with a Paragraph IV Patent Certification.
2
Part B Analytics Reporting (98 percent of claims reported). Accessed on March 29, 2010. Figures do not add to total because of rounding.
3
Rankings include single-source drugs, multiple-source drugs, and biologics.
4
Generic versions of this drug were initially approved and marketed, but litigation brought by the brand manufacturer against the generic
manufacturers resulted in the discontinuation of generic sales.

"#
A P P E N D I X ~ E
Table E-1: Top 22 Dollar-Volume Biologics Under Part B
2009 Part B 2009 Part B

Drug Name Brand Name 1 2
Expenditures Rank
Ranibizumab Lucentis $814,869,580 1
Rituximab Rituxan $807,136,671 2

!
Bevacizumab Avastin $723,336,581 3
!
Infliximab Remicade $605,603,464 4
! Pegfilgrastim Neulasta $493,788,366 5
! Darbepoetin alfa Aranesp $426,599,502 6
! Epoetin alfa Epogen/Procrit $332,792,303 7
Trastuzumab Herceptin $211,603,637 15

!
Cetuximab Erbitux $165,132,074 18
!
Abatacept Orencia $145,050,591 21
!
Antihemophilic factor VIII
(Recombinant) (All brands) $125,289,250 24
!
Botulinum toxin type A Botox $88,997,730 31
!
Coagulation factor VIIa Novoseven $74,330,848 33
!
Filgrastim Neupogen $69,897,511 38
!
Natalizumab Tysabri $54,497,650 46
! Omalizumab Xolair $43,285,268 55
! Immune globulin Vivaglobin $42,709,895 56
! Immune globulin Gammagard Liquid $30,226,662 61 !

Panitumumab Vectibix $27,170,683 63
Coagulation factor IX
Recombinant Benefix $25,176,467 67
Antihemophilic factor VIII:C

Human (All brands) $24,453,801 69
Immune globulin, powder (All brands) $21,200,286 74
Total $5,353,148,820
Source: Food and Drug Administration analysis of Part B drugs, 2009.
1
Part B Analytics Reporting (98 percent of claims reported). Accessed on March 29, 2010.
2
Rankings include single-source drugs, multiple-source drugs, and biologics.

"#
A P P E N D I X ~ F
Table F-1: Comparison of FDA’s ANDA Approval Dates and Actual Generic
Entry Dates
HCPCS FDA Generic Estimated Actual

Drug Name
Code Approval Date Generic Entry Date
First Generics With Comparable Entry Dates
J0207 Amifostine, inj. Mar. 14, 2008 May 2008
J1325 Epoprostenol inj. Apr. 23, 2008 May 2008
J1451 Fomepizole inj. Dec. 14, 2007 Jan. 2008
J1626 Granisetron inj. Dec. 31, 2007 Jan. 2008
J3030 Sumatriptan succinate inj. Feb. 6, 2009 Feb. 2009
J9206 Irinotecan inj. Feb. 20, 2008 Mar. 2008
J9245 Melphalan inj. June 9, 2009 June 2009
J9268 Pentostatin inj. Aug. 7, 2007 Aug. 2007
Q0166 Granisetron oral Dec. 31, 2007 Jan. 2008
Q0179 Ondansetron oral Dec. 26, 2006 Jan.–Mar. 2007
Q2009 Fosphenytoin inj. Aug. 6, 2007 Aug. 2007

1
Q0167 Dronabinol oral, 2.5 mg June 27, 2008 July 2008
1
Q0168 Dronabinol oral, 5 mg June 27, 2008 July 2008
First Generics With Conflicting Entry Dates
J0692 Cefepime inj. June 18, 2007 Jan.–Mar. 2008
J7517 Mycophenolate mofetil oral July 29, 2008 May 2009
Albuterol sulfate/
J7620 ipratropium bromide inh. soln. Dec. 21, 2006 July–Sept. 2007
2
FDA-Identified First Generics Which Did Not Come to Market
(Generics did not

1
J9201 Gemcitabine inj. Dec. 18, 2008 come to market)
(Generics did not

1
J3265 Torsemide inj. June 10, 2008 come to market)
FDA-Identified First Generics Which Temporarily Came to Market
(Products were launched in

Nov. 2008 and ceased being
distributed for sale by the generic
1
J7626 Budesonide inh. soln. Nov. 18, 2008 manufacturer later that month)
Source: Food and Drug Administration's (FDA) Abbreviated New Drug Application (ANDA) Generic Drug Approvals and
Office of Inspector General analysis.
1
These drugs were not included in our savings analysis.
2
No generics available as of fourth-quarter 2009.

"#
A P PEN 0 x G
Agency Comments
/ - ...
( DEPARTMENT OF HEALTH & HUMAN SERVICES Cenlers for MedIcare & Medicaid Services
AdministrAtor
Washington, DC 20201
DATE:
OCT 0 7 2010
TO: Daniel R. Levinson

Inspector General
FROM: Donald Berwick, M.D. /S/

Administrator
SUBJECT: Office of Inspector General (OIG) Draft Report: Medicare Payments for Newly
Available Generic Drugs (OEI"03-09-0051 0)
The Centers for Medicare & Medicaid Services (CMS) appreciates the opportunity to review and
respond to the OIG Draft Report entitled, "Medicare Payments for Newly Available Generic
Drugs" (OEI-03-09-0051 0). We appreciate the OIG's continuing efforts to examine payment
made under the average sales price (ASP) methodology.
The OIG report presents findings from a comparison ofMedicare payment amounts to market
prices for certain newly available generic drugs. The report finds differences between the
Medicare payment limits and the market prices for the generic drugs and attributes these
differences primarily to the "two-quarter lag" inherent in the Medicare payment limit calculation
process. The OIG claims that Medicare could have saved $111 million ifMedicare payment
limits had reflected sales prices during the period of initial generic availability of 16 different
drugs, and, therefore, urges that the two quarter lag be eliminated.
However, this estimate is based on the premise that no time lag would exist between the
introduction and inclusion of generics in the ASP. Such potential savings could not be achieved
because any calculation of payment that relies on manufacturer reporting would require a lag
time to allow manufacturers to calculate and submit their pricing data. Moreover, the 01G's
estimate also assumes that providers would immediately switch from branded to generic products
without factoring the lag time associated with the introduction of any new product in the market.
In addition, it is not clear from the report that the $111 million is not an annualized savings
amount, but instead a sum of potential savings over the course of several years.
CMS notes that almost 95 percent of the OIG's reported savings are attributed to three drugs and,
therefore, the 0I0's savings projections may not be accurate. Nearly $105 million of the $111
million in projected savings is attributed to three products, mycophenolate mofetil (generic
CeIlCept), albuterol sulfateiipratropium Bromide (generic DuoNeb) and irinotecan (generic
Camptostar). We do not believe that extrapolating savings projections that are based on such a
small subset of drugs to all generic drugs correctly represents Part B drug price changes due to
the introduction of generic drugs.
OEI·03·09·00510 MEDICARE PAYMENTS FOR NEWLY AVAILABLE GENERIC DRUGS

31
A P P E N D I X ~ G

"#
A P P E N D I X ~ G

""
A P P E N D I X ~ G

"#
A P P E N D I X ~ G

"#
A C K N O W L E D G M E N T S
!
$%&'!()*+(,!-.'!*()*.()/!01/)(!,%)!/&()2,&+1!+3!4+5)(,!67!8&,+9!4):&+1.;!
<1'*)2,+(!=)1)(.;!3+(!>?.;0.,&+1!.1/!<1'*)2,&+1'!&1!,%)!@%&;./);*%&.!
():&+1.;!+33&2)9!.1/!A.?&/!>7!$.-)'9!A&()2,+(!+3!,%)!B)/&2.()!.1/!
B)/&2.&/!@()'2(&*,&+1!A(0:!C1&,7!
D)?&1!B26;++1!')(?)/!.'!;)./!.1.;E',!3+(!,%&'!',0/E7!!F)1,(.;!+33&2)!',.33!
-%+!2+1,(&50,)/!&12;0/)!G.,.'%.!H(.1I;&19!D)?&1!B.1;)E9!.1/!J2+,,!
B.1;)E7!!

"#
!""#$%&'"&()*+%$,'-&.%)%-/0&
1,,+233'#4511*54'6&
&
71%&8#**#')&'"&,1%&!""#$%&'"&()*+%$,'-&.%)%-/0&9!(.:;&/*&8/)</,%<&=>&?@=0#$&A/B&CDEFDG;&/*&
/8%)<%<;&#*&,'&+-',%$,&,1%&#),%4-#,>&'"&,1%&H%+/-,8%),&'"&I%/0,1&/)<&I@8/)&J%-6#$%*&
9IIJ:&+-'4-/8*;&/*&B%00&/*&,1%&1%/0,1&/)<&B%0"/-%&'"&=%)%"#$#/-#%*&*%-6%<&=>&,1'*%&
+-'4-/8*5&&71#*&*,/,@,'->&8#**#')&#*&$/--#%<&'@,&,1-'@41&/&)/,#')B#<%&)%,B'-K&'"&/@<#,*;&
#)6%*,#4/,#')*;&/)<&#)*+%$,#')*&$')<@$,%<&=>&,1%&"'00'B#)4&'+%-/,#)4&$'8+')%),*2&
!""#$%&'"&L@<#,&J%-6#$%*&
71%&!""#$%&'"&L@<#,&J%-6#$%*&9!LJ:&+-'6#<%*&/@<#,#)4&*%-6#$%*&"'-&IIJ;&%#,1%-&=>&$')<@$,#)4&
/@<#,*&B#,1&#,*&'B)&/@<#,&-%*'@-$%*&'-&=>&'6%-*%%#)4&/@<#,&B'-K&<')%&=>&',1%-*5&&L@<#,*&
%M/8#)%&,1%&+%-"'-8/)$%&'"&IIJ&+-'4-/8*&/)<3'-&#,*&4-/),%%*&/)<&$'),-/$,'-*&#)&$/-->#)4&
'@,&,1%#-&-%*+%$,#6%&-%*+')*#=#0#,#%*&/)<&/-%&#),%)<%<&,'&+-'6#<%&#)<%+%)<%),&/**%**8%),*&'"&
IIJ&+-'4-/8*&/)<&'+%-/,#')*5&&71%*%&/**%**8%),*&1%0+&-%<@$%&B/*,%;&/=@*%;&/)<&
8#*8/)/4%8%),&/)<&+-'8',%&%$')'8>&/)<&%""#$#%)$>&,1-'@41'@,&IIJ5&
!""#$%&'"&N6/0@/,#')&/)<&()*+%$,#')*&
71%&!""#$%&'"&N6/0@/,#')&/)<&()*+%$,#')*&9!N(:&$')<@$,*&)/,#')/0&%6/0@/,#')*&,'&+-'6#<%&
IIJ;&O')4-%**;&/)<&,1%&+@=0#$&B#,1&,#8%0>;&@*%"@0;&/)<&-%0#/=0%&#)"'-8/,#')&')&*#4)#"#$/),&
#**@%*5&&71%*%&%6/0@/,#')*&"'$@*&')&+-%6%),#)4&"-/@<;&B/*,%;&'-&/=@*%&/)<&+-'8',#)4&
%$')'8>;&%""#$#%)$>;&/)<&%""%$,#6%)%**&'"&<%+/-,8%),/0&+-'4-/8*5&&7'&+-'8',%&#8+/$,;&!N(&
-%+'-,*&/0*'&+-%*%),&+-/$,#$/0&-%$'88%)</,#')*&"'-&#8+-'6#)4&+-'4-/8&'+%-/,#')*5&&
!""#$%&'"&()6%*,#4/,#')*&
71%&!""#$%&'"&()6%*,#4/,#')*&9!(:&$')<@$,*&$-#8#)/0;&$#6#0;&/)<&/<8#)#*,-/,#6%&#)6%*,#4/,#')*&
'"&"-/@<&/)<&8#*$')<@$,&-%0/,%<&,'&IIJ&+-'4-/8*;&'+%-/,#')*;&/)<&=%)%"#$#/-#%*5&&P#,1&
#)6%*,#4/,'-*&B'-K#)4&#)&/00&DQ&J,/,%*&/)<&,1%&H#*,-#$,&'"&O'0@8=#/;&!(&@,#0#R%*&#,*&-%*'@-$%*&
=>&/$,#6%0>&$''-<#)/,#)4&B#,1&,1%&H%+/-,8%),&'"&S@*,#$%&/)<&',1%-&T%<%-/0;&J,/,%;&/)<&0'$/0&
0/B&%)"'-$%8%),&/@,1'-#,#%*5&&71%&#)6%*,#4/,#6%&%""'-,*&'"&!(&'",%)&0%/<&,'&$-#8#)/0&
$')6#$,#')*;&/<8#)#*,-/,#6%&*/)$,#')*;&/)<3'-&$#6#0&8')%,/->&+%)/0,#%*5&
!""#$%&'"&O'@)*%0&,'&,1%&()*+%$,'-&.%)%-/0&
71%&!""#$%&'"&O'@)*%0&,'&,1%&()*+%$,'-&.%)%-/0&9!O(.:&+-'6#<%*&4%)%-/0&0%4/0&*%-6#$%*&,'&
!(.;&-%)<%-#)4&/<6#$%&/)<&'+#)#')*&')&IIJ&+-'4-/8*&/)<&'+%-/,#')*&/)<&+-'6#<#)4&/00&
0%4/0&*@++'-,&"'-&!(.U*&#),%-)/0&'+%-/,#')*5&&!O(.&-%+-%*%),*&!(.&#)&/00&$#6#0&/)<&
/<8#)#*,-/,#6%&"-/@<&/)<&/=@*%&$/*%*&#)6'06#)4&IIJ&+-'4-/8*;&#)$0@<#)4&T/0*%&O0/#8*&L$,;&
+-'4-/8&%M$0@*#');&/)<&$#6#0&8')%,/->&+%)/0,>&$/*%*5&&()&$'))%$,#')&B#,1&,1%*%&$/*%*;&!O(.&
/0*'&)%4',#/,%*&/)<&8')#,'-*&$'-+'-/,%&#),%4-#,>&/4-%%8%),*5&&!O(.&-%)<%-*&/<6#*'->&
'+#)#')*;&#**@%*&$'8+0#/)$%&+-'4-/8&4@#</)$%;&+@=0#*1%*&"-/@<&/0%-,*;&/)<&+-'6#<%*&',1%-&
4@#</)$%&,'&,1%&1%/0,1&$/-%&#)<@*,->&$')$%-)#)4&,1%&/),#EK#$K=/$K&*,/,@,%&/)<&',1%-&!(.&
%)"'-$%8%),&/@,1'-#,#%*5&

OIG HHS ASP Report 1-11

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

OIG HHS ASP Report 1-11

Uploaded by

Copyright:

Available Formats

!"#$%&'(#)'!*+!,#%-'.!%)/!,0(%)!

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S !

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S *

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S '

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S !

EXECUTIVE SUMMARY !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!"

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S %

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S +

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S '

First-Quarter 2009 Apr. 30, 2009 Third-Quarter 2009

Second-Quarter 2009 July 30, 2009 Fourth-Quarter 2009

Third-Quarter 2009 Oct. 30, 2009 First-Quarter 2010

Fourth-Quarter 2009 Jan. 30, 2010 Second-Quarter 2010

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S $

FDA’s Generic Approval Process

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S &

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S %

FDA staff. !"#$"%&"'(")#*+,-$./(*-+#,$-.#'(/,,#/(#012#$"3/(*+4#(-#(5"#

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S #

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S %

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S %

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S (

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S (

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S (

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S $

Source: CMS’s posted Part B payment limits.

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S (

According to FDA, numerous high-expenditure @**.2,$%&'/.'HC@6'9P'.1'/0-''''''''

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S '

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S %

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S -

Table 2: First Generics With ASP Reporting Issues

J1451 Fomepizole inj. Dec. 14, 2007 Jan. 2008 2Q 2008

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S !

CMS work with Congress to require manufacturers of first generics to

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S !

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S )

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S $

Detailed Methodology for Identifying First-Generic Drugs and

W" CMS’s monthly average manufacturer price (AMP) files.##$%#2)%0#*;%#

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S #

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S #

Table B-1: First-Generic Drugs Included in Our Analysis

Total $439,168,842 $110,976,913

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S !

Q7 Payment (data (data

Q8 Payment (data (data

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S !

OEI-03-09-00510 M E D I C A R E PAY M E N T S FOR N E W LY A V A I L A B L E G E N E R I C D R U G S !

FDA-Estimated Generic 2009 Part B 2009 Part B

Docetaxel Taxotere After February 10, 2012 $273,059,887 9

Zoledronic acid Zometa After April 30, 2012 $228,200,463 12

Pemetrexed Alimta Currently eligible for approval $224,725,011 13

Gemcitabine hydrochloride Gemzar Approved in generic form $214,841,468 14

Bortezomib Velcade After August 31, 2011 $157,915,565 19

Leuprolide acetate Lupron Approved in generic form $148,807,207 20

Palonosetron hydrochloride Aloxi After April 30, 2012 $141,432,119 22

Treprostinil sodium Remodulin After April 30, 2012 $112,277,602 26

Azacitidine Vidaza After May 19, 2011 $101,648,346 29

Zoledronic acid Reclast After May 18, 2011 $100,768,293 30

Arformoterol tartrate Brovana After March 30, 2012 $77,081,333 32

Paclitaxel protein-bound Abraxane After April 30, 2012 $72,033,094 36

FDA staff. !"#$"%&"'(")#+,-$./(-+#,$-.#'(/,,#/(#012#$"3/(*+4#(-#(5"#