e16625 Background: Medicare expenditures and the use of oncology drugs have increased over time. Shahinian, VB, et al (NEJM 2010) determined that changes in Medicare reimbursement policy in 2004 and 2005 were associated with reductions in the use of androgen deprivation therapy. The objective of this study is to evaluate trends in the use of oncology drugs from 2002 through 2009 both before and after changes in Medicare reimbursement policies. METHODS All data were obtained from the Physician/Supplier Procedure Summary (PSPS) Master File from the Centers for Medicare & Medicaid Services (CMS). This PSPS file includes 100% of all Part B carrier claims. The file is arrayed by carrier, pricing locality, Healthcare Common Procedure Coding (HCPC), modifiers, specialty, type of service and place of service. Data are reported for total submitted services and charges and allowed services and charges. Oncology drugs administered and billed in the physician office setting are included in the PSPS file. Oncology drugs administered in other settings of care (e.g., hospital inpatient and outpatient), as well as drugs paid for under Medicare Part D (Prescription Drug Coverage) are not included. RESULTS Allowed charges for oncology drugs (HCPC codes J9000 through J9999) under Part B increased 28% from US $3.2B in 2002 to US $4.0B in 2009 (3.6% compounded annual growth rate). In 2002, Leuprolide Acetate had the highest allowed charge ($680 million). In 2009, the highest allowed charges were for Rituximab ($844 million; indications including non oncology) followed by Bevacizumab ($774 million). Total allowed charges slowed to 1.6% in 2004 and negative 9.4% in 2005 before rising again in 2006 through 2009 (p<0.01). CONCLUSIONS Increases in Medicare Part B expenditures for physician administered oncology drugs from 2002 through 2009 were in line with overall increased in health care costs. However, year to year changes in allowed charges may have been affected by the aging of the population, cancer prevalence, introduction of new technologies, generic competition, changes in reimbursement policies, and other factors.