As used in this part, the following definitions apply:

Allowed charges means the amount that is inclusive of the beneficiary coinsurance and Medicare payment for the covered Part B item or service.

Applicable calendar quarter means a calendar quarter (January 1 to March 31, April 1 to June 30, July 1 to September 30, or October 1 to December 31), starting with January 1, 2023.

Applicable threshold means the amount determined under § 427.101(c)(2).

Average sales price (ASP) means the manufacturer's price for a quarter for a drug represented by a particular 11-digit National Drug Code (NDC-11) determined under § 414.804 of this chapter.

Benchmark period Consumer Price Index for All Urban Consumers (CPI-U) means the CPI-U as set forth in § 427.302(e).

Billing and payment code means the specific code used to classify and report a drug or biological for purposes of Medicare Part B payment. A Healthcare Common Procedure Coding System (HCPCS) code, as established by CMS, is an example of a billing and payment code used to describe a drug or biological and for which CMS may publish a payment amount.

Billing and payment code FDA approval or licensure date means the earliest approval or licensure date for any FDA application number associated with any NDC ever assigned to the billing and payment code.

Billing unit means the identifiable quantity of a drug or biological product associated with a billing and payment code (for example, a HCPCS code), as established by CMS.

Biosimilar biological product has the meaning set forth in section 1847A(c)(6)(H) of the Act.

CPI-U means the monthly Consumer Price Index for All Urban Consumers (United States city average) index level for all items from the Bureau of Labor Statistics.

Food and Drug Administration (FDA) application means, for the purposes of calculating the Part B rebate amount, a New Drug Application (NDA) or Biologics License Application (BLA) approved by the FDA.

Final action claim means a non-rejected claim for which a Medicare payment has been made, and for which all disputes and adjustments have been resolved.

First marketed date means the earliest date of first sale of any NDC-11 within a billing and payment code among all products and package sizes under the same FDA application. The first marketed date will be identified using ASP data reported by NDC-11 to CMS by a manufacturer as required under sections 1927(b)(3)(A)(iii)(I) and 1847A(f)(2) of the Act, if available.

Grouped billing and payment code, for the purposes of Part B rebate calculations, means a billing and payment code, such as a HCPCS code, other than a Not Otherwise Classified (NOC) code, that typically contains multiple drug products approved under multiple NDAs or BLAs and may be inclusive of, but are not limited to, multiple source billing codes.

Inflation-adjusted payment amount means the amount determined under § 427.302(g).

Manufacturer has the meaning set forth in section 1847A(c)(6)(A) of the Act.

National Drug Code (NDC) means the unique identifying prescription drug product number that is listed with FDA identifying the product and package size and type.

Not Otherwise Classified (NOC) code means a billing and payment code, including an unclassified, unspecified, or unlisted code, for drugs and biological products for which no specific billing and payment code is assigned.

Part B rebatable drug means, subject to the exclusions set forth in § 427.101(b), a single source drug or biological product, including a biosimilar biological product but excluding a qualifying biosimilar biological product, for which payment is made under Part B.

Payment amount benchmark quarter means the calendar quarter set forth in § 427.302(c).

Payment amount in the payment amount benchmark quarter means the amount set forth in § 427.302(d).

Rebate period CPI-U means the CPI-U set forth in § 427.302(f).

Single source drug or biological product has the meaning set forth in section 1847A(c)(6)(D) of the Act.

Sold or marketed means, with respect to an NDC, that the NDC has either a date of first sale identified using ASP data reported by NDC-11 to CMS by a manufacturer as required under sections 1927(b)(3)(A)(iii)(I) and 1847A(f)(2) of the Act, or an NDC Directory start marketing date prior to or during the applicable calendar quarter and meets any of the following criteria:

(1) The NDC has units reported for the rebate quarter;

(2) The end marketing date is during the rebate quarter;

(3) The end marketing date is after the rebate quarter; or

(4) The end marketing date is missing.

Specified amount means the amount set forth in § 427.302(b).

Subsequently approved drug means a drug first approved or licensed by the FDA after December 1, 2020.

Unit means, with respect to a Part B rebatable drug, with respect to each National Drug Code (including package size) associated with a drug or biological, the lowest identifiable quantity (such as a capsule or tablet, milligram of molecules, or grams) of the drug or biological that is dispensed, exclusive of any diluent without reference to volume measures pertaining to liquids as reported under section 1847A(b)(2)(B) of the Act.