OIG Cries Foul on CMS Sexual Dysfunction Drug Reimbursements

Taxpayers paid more than $3.1 million in 2007 and 2008 for sexual or erectile dysfunction drugs such as Viagra that should not have been reimbursed under federal rules for Part D, according to a report Monday from the Office of Inspector General.

Since Jan. 1, 2007, Centers for Medicare and Medicaid Services rules prohibit the use of such drugs to treat sexual or erectile dysfunction, although they may be used for other indications approved by the U.S. Food and Drug Administration. One such approved use approved for some of these drugs, for example, is pulmonary hypertension.

"Of approximately $133 billion in gross drug costs included in (Medicare Advantage plans and private prescription drug plans prescriptions) for calendar years 2007 and 2008, CMS accepted (prescriptions) ...totaling $3,107,200 in gross drug costs for ED drugs approved only for the treatment of sexual or erectile dysfunction. Pursuant to Federal requirements, Part D should not have covered these drugs," the OIG report said.

"For example, (Part D) sponsors submitted records totaling $3,021,475 in gross drug costs for the drug Viagra.... FDA had not approved Viagra for the treatment of any condition other than sexual or erectile dysfunction at the time of our audit."

The OIG recommended that CMS determine if it can adjust payments for such drugs when they were used for erectile or sexual dysfunction. It also recommended that CMS strengthen its internal controls and collaborate with the FDA to keep a comprehensive list of such drugs, disseminate the list to drug plans and periodically update the software program to reject payment when the drugs are prescribed just for erectile dysfunction.