Medicare overpaid for irinotecan, a cancer drug sold by Pfizer under the name Campostar, by $6.5 million in March because of a delay in updating its pricing formula, according to a report released Aug. 26 by the Department of Health and Human Services Office of Inspector General. A generic version of the drug was approved for sale on Feb. 20. However, a two-month delay in integrating the new generic prices into the agency’s payment system resulted in the additional expense. According to the report, Medicare was paying $126 per dose of irinotecan in March despite average generic prices of $41 for the drug. When sales of the branded version were factored in, the drug’s average price in March was $52.
“The underlying pricing issues identified in this report are not limited to irinotecan because of the two-quarter lag in CMS’s standard process for establishing Medicare payment amounts,” says the report. “Absent a change in the standard process, Medicare payment amounts for drugs with new generic versions will continue to be temporarily higher than manufacturer sales prices, sometimes substantially.” Read the report.
