Medicare Illegally Spent $3 Million on Viagra for Seniors

The purchases violated a 2005 ban on covering the drugs under the U.S. health program for the elderly and disabled. Medicare administrators blamed the spending on a software error and said they would try to recover payments to private insurers who administer the program’s drug plans.

Medicare “should not have covered these drugs,” George Reeb, acting deputy inspector general for audit services at the U.S. Department of Health and Human Services, wrote in a report released today. He recommended that Medicare work with the Food and Drug Administration to maintain a list of prohibited drugs. Medicare administrators, in a response to the report, rejected the suggestion as unnecessary.

Medicare paid a total of $3.1 million for erectile dysfunction drugs in the period examined, more than $3 million of which was for Viagra, which had 2010 sales of $1.9 billion based on data compiled by Bloomberg. Other drugs purchased included Eli Lilly & Co. (LLY)’s Cialis, the report said.