[Federal Register Volume 69, Number 66 (Tuesday, April 6, 2004)]
[Rules and Regulations]
[Pages 17935-17941]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-7715]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 414

[CMS-1380-IFC]
RIN 0938-AN05


Medicare Program; Manufacturer Submission of Manufacturer's 
Average Sales Price (ASP) Data for Medicare Part B Drugs and 
Biologicals

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Interim final rule with comment period.

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SUMMARY: This interim final rule with comment period will implement the 
provisions of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (MMA) related to the calculation and 
submission of manufacturer's average sales price (ASP) data on certain 
Medicare Part B drugs and biologicals to CMS by manufacturers.

DATES: Effective date: These regulations are effective on April 30, 
2004.
    Comment date: Comments will be considered if we receive them at the 
appropriate address, as provided below, no later than 5 p.m. on June 7, 
2004.

ADDRESSES: In commenting, please refer to file code CMS-1380-IFC. 
Because of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    Submit electronic comments to http://www.cms.hhs.gov/regulations/ecomments or to http://www.regulations.gov. Mail written comments (one 
original and three copies) to the following address ONLY: Centers for 
Medicare & Medicaid Services, Department of Health and Human Services, 
Attention: CMS-1380-IFC, P.O. Box 8010, Baltimore, MD 21244-1850.
    Please allow sufficient time for mailed comments to be timely 
received in the event of delivery delays.
    If you prefer, you may deliver (by hand or courier) your written 
comments (one original and three copies) to one of the following 
addresses: Room 445-G, Hubert H. Humphrey Building, 200 Independence 
Avenue, SW., Washington, DC 20201, or Room C4-26-05, 7500 Security 
Boulevard, Baltimore, MD 21244-1850.

(Because access to the interior of the HHH Building is not readily 
available to persons without Federal Government identification, 
commenters are encouraged to leave their comments in the CMS drop slots 
located in the main lobby of the building. A stamp-in clock is 
available for commenters wishing to retain a proof of filing by 
stamping in and retaining an extra copy of the comments being filed.)

    Comments mailed to the addresses indicated as appropriate for hand 
or courier delivery may be delayed and could be considered late.
    All comments received before the close of the comment period are 
available for viewing by the public, including any personally 
identifiable or confidential business information that is included in a 
comment. After the close of the comment period, CMS posts all 
electronic comments received before the close of the comment period on 
its public website.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Marjorie Baldo, (410) 786-0548.

SUPPLEMENTARY INFORMATION:
    Submitting Comments: We welcome comments from the public on all 
issues set forth in this rule to assist us in fully considering issues 
and developing policies. You can assist us by referencing the file code 
CMS-1380-IFC and the specific ``issue identifier'' that precedes the 
section on which you choose to comment.
    Inspection of Public Comments: Comments received timely will be 
available for public inspection as they are received, generally 
beginning approximately 3 weeks after publication of a document, at the 
headquarters of the Centers for Medicare & Medicaid Services, 7500 
Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of 
each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view 
public comments, call telephone number: (410) 786-7197.

I. Background

    [If you choose to comment on issues in this section, please include 
the caption ``BACKGROUND'' at the beginning of your comments.]
    Section 303(c) of the MMA amends Title XVIII of the Social Security 
Act (the Act) by adding new section 1847A. This new section establishes 
the use of the ASP methodology for payment for drugs and biologicals 
described in section 1842(o)(1)(C) of the Act furnished on or after 
January 1, 2005. For calendar quarters beginning on or after January 1, 
2004, the statute requires manufacturers to report manufacturer's ASP 
data to CMS for Medicare Part B drugs and biologicals paid under 
sections 1842(o)(1)(D), 1847A, or 1881(b)(13)(A)(ii) of the Act. 
Manufacturers are required to submit their initial quarterly ASP data 
to us beginning April 30, 2004. Subsequent reports are due not later 
than 30 days after the last day of each calendar quarter. The types of 
Medicare Part B covered drugs and biologicals paid under sections 
1842(o)(1)(D), 1847A, or 1881(b)(13)(A)(ii) of the Act include drugs 
furnished incident to a physician's service, drugs furnished under the 
durable medical equipment (DME) benefit, certain oral anti-cancer 
drugs, and oral immunosuppressive drugs.
    All Medicare Part B covered drugs and biologicals paid under 
sections 1842(o)(1)(D), 1847A, or 1881(b)(13)(A)(ii) of the Act are 
subject to the ASP reporting requirements. Certain drugs and 
biologicals, for example, radiopharmaceuticals, are not paid under 
these sections of the Act and will not be subject to the ASP reporting 
requirements.
    We are issuing this interim final rule with comment period in order 
to allow us to implement the manufacturer ASP reporting requirement of 
section 303(i)(4) of the MMA within the time frames established by the 
MMA. Therefore, effective April 30, 2004, this interim final rule with 
comment period will provide implementation guidelines for manufacturers 
to submit their ASP data to us. We expect to publish a proposed rule on 
the 2005 ASP based payment system later this year.

II. Provisions of the Interim Final Rule

    [If you choose to comment on issues in this section, please include 
the caption ``Provisions of the Interim Final Rule'' at the beginning 
of your comments.]
    In this interim final rule with comment period, we are adding a new 
subpart J (Submission of Manufacturer's Average Sales Price Data) to 
Part 414 that implements section 1927(b)(3)(A)(iii) of the Act by 
specifying the requirements for submission of a manufacturer's ASP data 
for certain drugs and biologicals covered under Part B of Title XVIII 
of the Act that are paid under sections 1847A, 1842(o)(1)(D), or 
1881(b)(13)(A)(ii) of the Act.

[[Page 17936]]

A. Calculation of ASP Data

    New section 1847A(c)(1) of the Act defines the manufacturer's ASP 
for a National Drug Code (NDC) associated with a drug or biological to 
be the manufacturer's sales to all purchasers in the United States 
(excluding units associated with sales exempted below) for the NDC for 
a quarter divided by the total number of units of that NDC sold by the 
manufacturer in that quarter (excluding units associated with sales 
exempted below). Section 1847A(c)(6)(A) of the Act adopts the 
definition of ``manufacturer'' set forth in section 1927(k)(5) of the 
Act. In that section, the term ``manufacturer'' means any entity that 
is engaged in the following (This term does not include a wholesale 
distributor of drugs or a retail pharmacy licensed under State law):
     Production, preparation, propagation, 
compounding, conversion or processing of prescription drug product, 
either directly or indirectly by extraction from substances of natural 
origin, or independently by means of chemical synthesis, or by a 
combination of extraction and chemical synthesis.
     Packaging, repackaging, labeling, relabeling, or 
distribution of prescription drug products. (Manufacturers that also 
engage in wholesaler activities are required to report ASP data for 
those drugs that they manufacture.)
    In performing this calculation, manufacturers must use the NDC at 
the standardized 11-digit level. For the purposes of the ASP 
calculation, the ``unit'' is the product represented by the 11-digit 
NDC as defined in section 1847A(b)(2)(B) of the Act. In other words, 
the denominator is the total number of the ASP applicable sales of that 
NDC.

B. Sales Exempted From ASP Calculation Other Than Nominal Sales

    Section 1847A(c)(2)(A) of the Act requires that in calculating the 
manufacturer's ASP, a manufacturer must exclude sales that are exempt 
from the Medicaid best price calculation under sections 
1927(c)(1)(C)(i) and 1927(c)(1)(C)(ii)(III) of the Act.

C. Sales to an Entity That Are Nominal in Amount Are Exempted From the 
ASP Calculation

    Section 1847A(c)(2)(B) of the Act requires that sales to an entity 
that are nominal in amount are to be exempted from the ASP calculation. 
Sales to an entity that are nominal in amount are defined for purposes 
of section 1927(c)(1)(C)(ii)(III) of the Act for the Medicaid drug 
rebate program in the Medicaid drug rebate agreement.

D. Inclusion of Rebates and Other Price Concessions in the ASP 
Calculation

1. General Rule
    Section 1847A(c)(3) of the Act requires that in calculating the 
manufacturer's ASP, a manufacturer must include volume discounts, 
prompt pay discounts, cash discounts, free goods that are contingent on 
any purchase requirement, chargebacks, and rebates (other than rebates 
under the Medicaid drug rebate program).
2. Estimation Methodology
    a. Use of the Most Recent 12-Month Period Available
    Section 1847A(c)(5)(A) of the Act states that the ASP is to be 
calculated by the manufacturer on a quarterly basis. To the extent that 
data on volume discounts, prompt pay discounts, cash discounts, free 
goods that are contingent on any purchase requirement, chargebacks, and 
rebates are available on a lagged basis, the manufacturer is required 
to apply a methodology based on the most recent 12-month period 
available to estimate costs attributable to these price concessions. 
Specifically, a manufacturer should add the volume discounts, prompt 
pay discounts, cash discounts, free goods that are contingent on any 
purchase requirement, chargebacks, and rebates for the most recent 12-
month period available and divide by 4 to determine the estimate to 
apply in calculating the manufacturer's ASP for the quarter being 
submitted.
    b. Allocation to Individual NDCs
    For situations in which a manufacturer is unable to associate 
volume discounts, prompt pay discounts, cash discounts, free goods that 
are contingent on any purchase requirement, chargebacks and rebates, 
with a specific NDC, the manufacturer will allocate those discounts, 
rebates, free goods, and chargebacks to associated NDCs. This 
association will be based on the percentage of sales (in dollars) 
attributable to each particular NDC within the group of NDCs for which 
the manufacturer can associate discounts, rebates, free goods, and 
chargebacks.
    c. Future Changes to the Methodology
    As we gain more experience with the ASP system, we may seek to 
change the methodology to estimate costs attributable to rebates and 
chargebacks and the scope of price concessions for years after 2004. 
Pursuant to section 1847A(c)(5)(A) of the Act, the Secretary may 
establish a uniform methodology to estimate and apply those costs. For 
years after 2004, the Secretary may include in the calculation of the 
ASP, other price concessions which may be based upon recommendations of 
the Inspector General that would result in a reduction of the cost to 
the purchaser.

E. Reporting of ASP Data to CMS

1. Format
    Manufacturers must report the ASP data to us in Microsoft Excel 
using the template provided in Addendum A. Manufacturers are required 
to calculate and report the ASP information to us at the 11-digit NDC 
level, along with the associated units used in the calculation of the 
ASP. As we gain more experience with the ASP system, we may seek to 
modify these requirements in the future.
2. Contacts
    As indicated in Addendum B, manufacturers must submit the names of 
one or more individuals that we may contact if we have questions or 
issues with respect to the data submission.
3. Certification by the Chief Executive Officer or Chief Financial 
Officer
    Due to the consequences of failing to submit accurate and timely 
ASP data, each quarterly ASP data submission must be certified by one 
of the following: the manufacturer's Chief Executive Officer (CEO), the 
manufacturer's Chief Financial Officer (CFO), or an individual who has 
delegated authority to sign for, and who reports directly to, the 
manufacturer's CEO or CFO.

F. Penalties Associated With the Failure To Submit Timely and Accurate 
ASP Data

    Section 1847A(d)(4) of the Act specifies the penalties for 
misrepresentations associated with ASP data. If the Secretary 
determines that a manufacturer has made a misrepresentation in the 
reporting of ASP data, a civil money penalty in an amount of up to 
$10,000 may be applied for each price misrepresentation and for each 
day in which the price misrepresentation was applied. Section 1927 of 
the Act, as amended by section 303(i)(4) of the MMA, specifies the 
penalties associated with a manufacturer's failure to submit timely 
information or the submission of false information.

III. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed with a subsequent document, we will

[[Page 17937]]

respond to the comments in the preamble to that document.

IV. Waiver of Proposed Rulemaking

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register and invite public comment on the proposed rule. The 
notice of proposed rulemaking includes a reference to the legal 
authority under which the rule is proposed, and the terms and 
substances of the proposed rule or a description of the subjects and 
issues involved. This procedure can be waived, however, if an agency 
finds good cause that a notice-and-commentprocedure is impracticable, 
unnecessary, or contrary to the public interest and incorporates a 
statement of the finding and its reasons in the rule issued. In 
addition, the Administrative Procedure Act normally requires a 30-day 
delay in the effective date of a final rule. Furthermore, the 
Congressional Review Act generally requires an agency to delay the 
effective date of a major rule by 60-days in order to allow for 
congressional review of the agency action. Section 1871 of the Act 
provides for publication of a notice of proposed rulemaking and 
opportunity for public comment before CMS issues a final rule. However, 
section 1871(b)(2)(B) of the Act provides an exception when a law 
establishes a specific deadline for implementation of a provision and 
the deadline is less than 150 days after the law's date of enactment. 
The MMA was enacted by Congress on November 25, 2003, and signed into 
law by the President on December 8, 2003. The provisions of this 
interim final rule with comment period are required to be implemented 
by April 30, 2004. Therefore, these provisions are subject to waiver of 
proposed rulemaking and public comment in accordance with section 
1871(b)(2)(B) of the Act.
    Even if section 1871(b)(2)(B) of the Act were not directly 
applicable here, we would find good cause to waive the requirement for 
publication of a notice of proposed rulemaking and public comment on 
the grounds that it is impracticable, unnecessary, and contrary to the 
public interest. This interim final rule with comment period sets forth 
non-discretionary provisions of MMA with respect to the calculation and 
submission of ASP data for certain Medicare Part B drugs and 
biologicals. Because the rule is generally ministerial, we believe that 
pursuing notice and comment is unnecessary. Moreover, because that 
process would delay the implementation of congressionally-mandated 
submissions of drug payment-related data, we find that pursuing that 
process would be both impracticable and contrary to the public 
interest.
    With respect to the requirement of a 60-day delay in the effective 
date of any final rule pursuant to the Congressional Review Act (CRA), 
see 5 U.S.C. section 801, the CRA provides that the 60-day delayed 
effective date shall not apply to any rule ``which an agency for good 
cause finds * * * that notice and public procedure thereon are 
impracticable, unnecessary, or contrary to the public interest.'' (5 
U.S.C. section 808(2)). For the reasons set forth above, we believe 
that additional notice and comment rulemaking on this subject would be 
impracticable, unnecessary, or contrary to the public interest. 
Therefore, we do not believe that the CRA requires a 60-day delay in 
the effective date of this interim final rule with comment period.

V. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, we are required to 
provide notice in the Federal Register and solicit public comment 
before a collection of information requirement is submitted to the 
Office of Management and Budget (OMB) for review and approval. In order 
to fairly evaluate whether an information collection should be approved 
by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 
requires that we solicit comment on the following issues:
     The need for the information collection and its 
usefulness in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information 
collection burden.
     The quality, utility, and clarity of the 
information to be collected.
     Recommendations to minimize the information 
collection burden on the affected public, including automated 
collection techniques.
    We are, however, requesting an emergency review of the information 
collection referenced below. In compliance with the requirement of 
section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995, we have 
submitted to the Office of Management and Budget (OMB) the following 
requirements for emergency review. We are requesting an emergency 
review because the collection of this information is needed before the 
expiration of the normal time limits under OMB's regulations at 5 CFR 
Part 1320. This is necessary to ensure compliance with a statutory 
deadline. We cannot reasonably comply with the normal clearance 
procedures because of an unanticipated event.
    CMS is requesting OMB review and approval of this collection by 
April 23, 2004, with a 180-day approval period. Written comments and 
recommendations will be accepted from the public if received by the 
individuals designated below by April 16, 2004. During this 180-day 
period, we will publish a separate Federal Register notice announcing 
the initiation of an extensive 60-day agency review and public comment 
period on these requirements.
    We are soliciting public comment on each of these issues for the 
following sections of this document that contain information collection 
requirements:
    In summary, this interim final rule with comment period requires 
manufacturers of Medicare Part B covered drugs and biologicals paid 
under sections 1847A, 1842(o)(1)(D), or 1881(b)(13)(A)(ii) of the Act 
to submit manufacturer's quarterly ASP data to CMS beginning April 30, 
2004. This interim final rule with comment period lays out the 
requirements and provides the template manufacturers should use to 
report their ASP data to CMS.
    The burden associated with the requirements in this rule is the 
time and effort required by manufacturers of Medicare Part B drugs and 
biologicals to prepare and submit the required data to CMS. We estimate 
that it will take approximately 4 hours for each submission. We also 
estimate that this requirement will affect approximately 120 
manufacturers. Therefore, we estimate the total reporting burden to be 
approximately 480 hours per quarter for a total of 1920 hours annually.
    As required by section 3504(h) of the Paperwork Reduction Act of 
1995, we have submitted a copy of this document to OMB for its review 
of these information collection requirements.
    If you comment on these information collection and recordkeeping 
requirements, please mail copies directly to the following: Centers for 
Medicare & Medicaid Services, Office of Strategic Operations and 
Regulatory Affairs, Regulations Development and Issuances Group, Attn: 
Dawn Willinghan, CMS-1380-IFC, Room C5-14-03, 7500 Security Boulevard, 
Baltimore, MD 21244-1850; and Office of Information and Regulatory 
Affairs, Office of Management and Budget, Room 10235, New Executive 
Office Building, Washington, DC 20503, Attn: Brenda Aguilar, CMS Desk 
Officer, [email protected]. Fax (202) 395-6974.

VI. Regulatory Impact

    We have examined the impact of this rule as required by Executive 
Order 12866 (September 1993, Regulatory Planning and Review), the 
Regulatory

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Flexibility Act (RFA) (September 16, 1980, Pub. L. 96-354), section 
1102(b) of the Social Security Act, the Unfunded Mandates Reform Act of 
1995 (Pub. L. 104-4), and Executive Order 13132.
    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). A regulatory impact 
analysis (RIA) must be prepared for major rules with economically 
significant effects ($100 million or more in any 1 year). This rule 
does not reach the economic threshold and thus is not considered a 
major rule.
    The RFA requires agencies to analyze options for regulatory relief 
of small businesses. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and government agencies. 
Most hospitals and most other providers and suppliers are small 
entities, either by nonprofit status or by having revenues of $6 
million to $29 million in any 1 year. Individuals and States are not 
included in the definition of a small entity. We are not preparing an 
analysis for the RFA because we have determined that this rule will not 
have a significant economic impact on a substantial number of small 
entities.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 604 for final rules 
of the RFA. For purposes of section 1102(b) of the Act, we define a 
small rural hospital as a hospital that is located outside of a 
Metropolitan Statistical Area and has fewer than 100 beds. We are not 
preparing an analysis for section 1102(b) of the Act because we have 
determined that this rule will not have a significant impact on the 
operations of a substantial number of small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule that may result in expenditure in any 1 year by State, 
local, or tribal governments, in the aggregate, or by the private 
sector, of $110 million. While this interim final rule with comment 
period does implement a new statutory data reporting requirement for 
drug manufacturers, the costs associated with this requirement are 
expected to be below the $110 million annual threshold established by 
section 202 of the Unfunded Mandates Reform Act.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. Since this regulation does not impose any costs on State 
or local governments, the requirements of E.O. 13132 are not 
applicable.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

List of Subjects in 42 CFR Part 414

    Administrative practice and procedure, Health facilities, Health 
professions, Kidney diseases, Medicare, Reporting and recordkeeping 
requirements.

0
For the reasons set forth in the preamble, the Centers for Medicare & 
Medicaid Services amends 42 CFR Chapter IV, as set forth below:

PART 414--PAYMENT FOR PART B MEDICAL AND OTHER HEALTH SERVICES

0
1. The authority citation for part 414 continues to read as follows:

    Authority: Secs. 1102, 1871, and 1881(b)(1) of the Social 
Security Act (42 U.S.C. 1302, 1395hh, and 1395rr(b)(1)).

0
2. Part 414 is amended by adding a new subpart J to read as follows:

Subpart J--Submission of Manufacturer's Average Sales Price Data

Sec.
414.800 Purpose.
414.802 Definitions.
414.804 Basis of payment.
414.806 Penalties associated with the failure to submit timely and 
accurate ASP data.


Sec.  414.800  Purpose.

    This subpart implements section 1847A of the Act by specifying the 
requirements for submission of a manufacturer's average sales price 
data for certain drugs and biologicals covered under Part B of Title 
XVIII of the Act that are paid under sections 1842(o)(1)(D), 1847A, and 
1881(b)(13)(A)(ii) of the Act.


Sec.  414.802  Definitions.

    As used in this subpart, unless the context indicates otherwise--
    Drug means both drugs and biologicals.
    Manufacturer means any entity that is engaged in the following 
(This term does not include a wholesale distributor of drugs or a 
retail pharmacy licensed under State law):
    (1) Production, preparation, propagation, compounding, conversion 
or processing of prescription drug products, either directly or 
indirectly by extraction from substances of natural origin, or 
independently by means of chemical synthesis, or by a combination of 
extraction and chemical synthesis.
    (2) The packaging, repackaging, labeling, relabeling, or 
distribution of prescription drug products.
    Unit means the product represented by the 11-digit National Drug 
code.


Sec.  414.804  Basis of payment.

    (a) Calculation of manufacturer's average sales price.
    (1) The manufacturer's average sales price for a quarter for a drug 
or biological represented by a particular 11-digit National Drug Code 
must be calculated as the manufacturer's sales to all purchasers in the 
United States for that particular 11-digit National Drug Code (after 
deducting the types of items and transactions listed in paragraph 
(a)(2) of this section and excluding sales referenced in paragraph 
(a)(4) of this section) divided by the total number of units sold by 
the manufacturer in that quarter (after excluding units associated with 
sales referenced in paragraph (a)(4) of this section).
    (2) In calculating the manufacturer's average sales price, a 
manufacturer must deduct the following types of transactions and items:
    (i) Volume discounts.
    (ii) Prompt pay discounts.
    (iii) Cash discounts.
    (iv) Free goods that are contingent on any purchase requirement.
    (v) Chargebacks and rebates (other than rebates under the Medicaid 
drug rebate program).
    (3) To the extent that data on volume discounts, prompt pay 
discounts, cash discounts, free goods that are contingent on any 
purchase requirement, chargebacks and rebates (other than rebates under 
the Medicaid drug rebate program) are available on a lagged basis, the 
manufacturer should add the data for the most recent 12-month period 
available and divide by 4 to determine the estimate to apply in 
calculating the manufacturer's average sales price for the quarter 
being submitted.
    (4) In calculating the manufacturer's average sales price, a 
manufacturer must exclude sales that are exempt from the Medicaid best 
price calculation under sections 1927(c)(1)(C)(i) and 
1927(c)(1)(C)(ii)(III) of the Act.

[[Page 17939]]

    (5) The manufacturer's average sales price must be calculated by 
the manufacturer every calendar quarter and submitted to CMS within 30 
days of the close of the quarter. The first quarter submission must be 
submitted by April 30, 2004. Subsequent reports are due not later than 
30 days after the last day of each calendar quarter.
    (6) Each report must be certified by one of the following:
    (i) The manufacturer's Chief Executive Officer (CEO).
    (ii) The manufacturer's Chief Financial Officer (CFO).
    (iii) An individual who has delegated authority to sign for, and 
who reports directly to, the manufacturer's CEO or CFO.


Sec.  414.806  Penalties associated with the failure to submit timely 
and accurate ASP data.

    Section 1847A(d)(4) specifies the penalties associated with 
misrepresentations associated with ASP data. If the Secretary 
determines that a manufacturer has made a misrepresentation in the 
reporting of ASP data, a civil money penalty in an amount of up to 
$10,000 may be applied for each price misrepresentation and for each 
day in which the price misrepresentation was applied. Section 
1927(b)(3)(C) of the Act, as amended by section 303(i)(4) of the MMA, 
specifies the penalties associated with a manufacturer's failure to 
submit timely information or the submission of false information.
(Catalog of Federal Domestic Assistance Program No. 93.774, 
Medicare--Supplementary Medical Insurance Program)

    Dated: March 4, 2004.
Dennis G. Smith,
Acting Administrator, Centers for Medicare & Medicaid Services.
    Approved: March 23, 2004.
Tommy G. Thompson,
Secretary.
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