Congressionally Mandated ASP/AMP Comparisons

When Congress established average sale prices (ASPs) as the primary basis for Medicare Part B drug reimbursement, it also mandated that OIG compare manufacturer-reported ASPs with the average manufacturer prices (AMPs) reported by manufacturers as part of the Medicaid drug rebate program. If OIG finds that the ASP for a drug exceeds the AMP by a certain threshold - currently, 5 percent - CMS is directed to substitute the ASP-based reimbursement amount with the lesser of the widely available market price (if any) or 103 percent of the AMP.

To comply with its statutory mandate, OIG conducts ASP/AMP comparisons each quarter and provides our findings to CMS. We also issue an annual public report summarizing the results of these quarterly comparisons (Note: OIG also published the quarterly comparisons as individual reports through 2012.) In April 2013, CMS began substituting reimbursement amounts in accordance with its published price substitution policy, which currently applies to only certain drug codes with complete AMP data that exceed the 5-percent threshold in two consecutive quarters or three of the previous four quarters.

Last updated January 22, 2019