CMS Proposed Changes to ASP Calculation Methodology

On August 22, 2006, the Centers for Medicare & Medicaid Services (“CMS”) published in the Federal Register a proposed rule entitled “Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 2007 and Other Changes to Payment Under Part B.” Although the bulk of the proposal is devoted to updates in the physician fee schedule, the proposal also includes provisions relating to payment for drugs and biologics, including proposed changes to the regulation governing the calculation by manufacturers of average sales price (“ASP”). This memorandum summarizes CMS’s ASP-related proposals.