Changes in Best Price for Outpatient Drugs Purchased by HMOs and Hospitals
HEHS-94-194FS: Published: Aug 5, 1994. Publicly Released: Aug 5, 1994.
- Full Report:
Pursuant to a congressional request, GAO reviewed the best prices for the drugs purchased by health maintenance organizations (HMO) and group purchasing organizations (GPO), focusing on the difference between the drugs' best prices and their best price discount.
GAO found that: (1) in the 2 years since the Omnibus Budget Reconciliation Act (OBRA) was enacted, the average best price for outpatient drugs purchased by HMO and GPO increased at a faster rate than the drugs' average manufacturer price (AMP) or the producer price index for prescription drugs; (2) the drugs' average best price discount decreased because their average best price increased faster than their AMP; (3) by 1993, the drugs' average best price discount had fallen to nearly the minimum rebate amount required by OBRA; (3) between 1991 and 1992, the median best price discount for drugs purchased by HMO and GPO decreased by 6 percent; (4) the fall in the average best price discount for HMO and GPO drugs continued between 1992 through 1993; (5) by 1993, the median best price discount for drugs purchased by HMO and GPO approximated the minimum rebate amount owed the Medicaid program; (6) the extent to which the drug prices changed during the 2-year period could not be determined because data on the drug prices paid by HMO and GPO were limited; and (7) during the last 6 months of 1991, the average best price and average purchase price for drugs purchased by HMO and GPO did not noticeably change.