Average Sales Price (ASP)
Definition
Average Sales Price (ASP) is a drug pricing metric used primarily as the basis for Medicare Part B reimbursement for drugs and biologicals administered in hospital outpatient departments and physician offices. ASP is the weighted average of all non-federal sales to wholesalers, net of chargebacks, discounts, rebates, and other price concessions.
In the 340B context, ASP is relevant because many covered entities—particularly hospitals—bill Medicare Part B for drugs administered in outpatient settings at ASP plus a dispensing fee. When these drugs are purchased at 340B prices (which are significantly below ASP), the spread between the purchase price and the reimbursement rate generates significant savings for the covered entity.
This ASP-minus dynamic—buying at 340B prices and billing at ASP rates—has been a focus of Congressional and regulatory scrutiny. CMS has implemented reduced reimbursement rates for 340B-acquired drugs in certain settings, which has affected the economics of the program for hospital-type covered entities.
Frequently Asked Questions
Why Average Sales Price (ASP) Matters
ASP reimbursement for 340B-acquired drugs has been a significant driver of hospital 340B savings. CMS reimbursement changes affecting ASP rates for 340B drugs can materially affect program economics for hospital-type covered entities.
How Virtue 340B Uses It
Virtue 340B helps hospital-type covered entities understand the financial implications of CMS reimbursement policies for 340B-acquired drugs and evaluate their program economics under current reimbursement frameworks.