§ 414.904 Average sales price as the basis for payment.
(a) Method of payment. Payment for a drug furnished on or after January 1, 2005 is based on the lesser of—
(1) The actual charge on the claim for program benefits; or
(2) 106 percent of the average sales price, subject to the applicable limitations specified in paragraph (d) of this section or subject to the exceptions described in paragraph (e) of this section.
(3) For purposes of this paragraph—
(i) CMS calculates an average sales price payment limit based on the amount of product included in a vial or other container as reflected on the FDA-approved label.
(ii) Additional product contained in the vial or other container does not represent a cost to providers and is not incorporated into the ASP payment limit.
(iii) No payment is made for amounts of product in excess of that reflected on the FDA-approved label.
(b) Multiple source drugs—(1) Average sales prices. The average sales price for all drug products included within the same multiple source drug billing and payment code is the volume-weighted average of the manufacturers' average sales prices for those drug products.
(2) Calculation of the average sales price. (i) For dates of service before April 1, 2008, the average sales price is determined by—
(A) Computing the sum of the products (for each National Drug Code assigned to the drug products) of the manufacturer's average sales price and the total number of units sold; and
(B) Dividing that sum by the sum of the total number of units sold for all NDCs assigned to the drug products.
(ii) For dates of service on or after April 1, 2008, the average sales price is determined by—
(A) Computing the sum of the products (for each National Drug Code assigned to such drug products) of the manufacturer's average sales price, determined by the Secretary without dividing such price by the total number of billing units for the National Drug Code for the billing and payment code and the total number of units sold; and
(B) Dividing the sum determined under clause (A) by the sum of the products (for each National Drug Code assigned to such drug products) of the total number of units sold and the total number of billing units for the National Drug Code for the billing and payment code.
(iii) For purposes of this subsection and subsection (c), the term billing unit means the identifiable quantity associated with a billing and payment code, as established by CMS.
(c) Single source drugs—(1) Average sales price. The average sales price is the volume-weighted average of the manufacturers' average sales prices for all National Drug Codes assigned to the drug or biological product.
(2) Calculation of the average sales price. (i) For dates of service before April 1, 2008, the average sales price is determined by—
(A) Computing the sum of the products (for each National Drug Code assigned to the drug product) of the manufacturer's average sales price and the total number of units sold; and
(B) Dividing that sum by the sum of the total number of units sold for all NDCs assigned to the drug product.
(ii) For dates of service on or after April 1, 2008, the average sales price is determined by—
(A) Computing the sum of the products (for each National Drug Code assigned to such drug products) of the manufacturer's average sales price, determined by the Secretary without dividing such price by the total number of billing units for the National Drug Code for the billing and payment code and the total number of units sold; and