Letter to the Honorable Daniel Levinson, Inspector General of the Dept. of Health and Human Services - Conduct Study to Determine Amount of Federak Waste From One-Size-Fits-All Drug Vials

Letter

Dear Inspector General Levinson:

We are writing to request that the Department of Health and Human Services Office of Inspector General (HHS-OIG) conduct a study on the amount of waste from the top 20 single use vial drugs as identified by the JW modifier. We request the HHS-OIG provide specific examples of where a different vial size could significantly reduce waste.

A recent report published in BMJ shows drug manufacturers are distributing single use drugs in vials that contain larger dosages than needed by the average patient, resulting in the excessive waste of highly-valuable drugs. Since Medicare Part B beneficiaries pay copayments of up to 20 percent for prescription drugs, seniors are paying higher out-of-pocket costs for drugs they do not need or receive.

When submitting claims to Medicare for reimbursement, some physicians, hospitals and other providers use the JW modifier to calculate the amount of discarded drug or biological not administered to the patient. We strongly support the Centers for Medicare and Medicaid Services (CMS) recent transmittal requiring all physicians, hospitals and other providers to use the JW modifier starting July 1, 2016. This mandatory reporting nationwide will provide the data necessary to quantify the amount of drugs that are unused and the cost to taxpayers from that waste.

According to the HHS-OIG, Medicare Part B paid $11.6 billion in 2013 and 2014 for the 20 drugs that we are asking to be reviewed. The JW modifier was only reported on drugs accounting for $2.1 billion of that total, showing $195 million was spent on waste. Since the JW modifier was not mandatory, it is not known how much of the remaining $9.5 billion that Medicare spent on discarded drug.

We are aware that some drugs are available in other vial sizes to patients in other countries but are not marketed in the United States. We request that the HHS-OIG identify those cases and present the restrictions that limit the Food and Drug Administration in making other vial sizes available in the United States.

Thank you for your attention to this important matter and we look forward to working with you on this study and to reviewing your findings.

Sincerely,