The OIG has released the most recent in a series of reports comparing Part B drug average sales prices (ASP) and average manufacturer prices (AMP). The latest report (the 28th in the series) compares second quarter 2012 ASPs and AMPs and their impact on Medicare reimbursement for the fourth quarter of 2012. By way of background, the Social Security Act requires the OIG to notify the HHS Secretary if the ASP for a drug exceeds the drug’s AMP or widely available market price (WAMP) by a threshold, currently set at 5%. If that threshold is met, the Secretary may disregard the drug’s ASP and substitute the lesser of the WAMP or 103% of AMP. The 2012 final Medicare physician fee schedule (MPFS) rule specified the circumstances under which AMP-based price substitutions could occur beginning January 2012 (although CMS has not announced any such substitutions to date), and the final 2013 MPFS updated this policy. The new OIG report announces the OIG’s findings that for 29 drug codes exceeded AMPs by at least 5% in the second quarter of 2012, of which 19 had complete AMP data. If reimbursement for these 19 codes had been based on 103% of AMPs in the fourth quarter of 2012, Medicare would have saved an estimated $553,000 in that quarter. According to the OIG’s calculations, under CMS’s adopted policy, reimbursement for 6 of the 19 drugs would have been reduced, saving about $477,000 in that quarter, and the agency suggests that greater savings could be achieved if the price substitution policy was applied to codes with partial AMP data. The OIG also addresses CMS’s prior comments questioning the utility of OIG’s quarterly pricing comparisons, and OIG chastises the agency for its inaction on prior recommendations. Specifically, the OIG acknowledges that while savings identified in any single report “may be modest relative to total expenditures for Part B drugs, significant savings would have accrued had CMS taken action immediately after OIG issued its first pricing comparison.” Moreover, the OIG argues that over the long term, “savings achieved through price substitution could reduce waste and conserve taxpayer funds at a time when increased focus has been placed on rising health care costs and fiscal responsibility.”