ASP pricing for Medicare drugs
What is ASP pricing for Medicare drugs?
ASP (Average Sales Price) is the main way Medicare sets the maximum it pays for drugs covered under Part B, i.e. drugs given in a doctor's office or hospital outpatient setting. Manufacturers report a net sales price for each product every quarter, and CMS uses those reports to publish quarterly payment limits by billing (HCPCS) code. For most of these drugs the limit is 106 percent of ASP (ASP plus 6 percent).
Approach: The regulatory datasets I can search hold CMS Medicaid NADAC prices and Part B spending data, but nothing that explains ASP. This answer comes from CMS's own pages and the eCFR text of 42 CFR Part 414.
What ASP is and how it's reported
- Each quarter, manufacturers calculate an ASP for each 11-digit NDC (the drug's national product code). It is based on sales to all US purchasers, minus price concessions such as discounts (Social Security Act §1847A(c)).
- Reports are due to CMS within 30 days after the quarter ends (CMS Part B Drug Payment Limits Overview, March 2026).
- When several NDCs share one HCPCS code, CMS uses a volume-weighted average of the manufacturers' ASPs (42 CFR 414.904(b)(1)).
- CMS publishes the limits in the quarterly Medicare Part B Drug Payment Limit Files, with NDC-HCPCS crosswalks and a pricing file for "not otherwise classified" (NOC) drugs. The October 2026 files are posted. CMS says being listed (or not) in these files does not show whether Medicare covers a product (CMS ASP Pricing Files).
Payment rule
- Medicare pays the lower of the actual charge on the claim or 106 percent of ASP (42 CFR 414.904(a)).
- This applies to drugs that are paid separately. It does not apply to drugs paid on a cost basis or included in a bundled payment (CMS overview).
When the limit is set differently (all from the CMS overview unless noted)
- Biosimilars: the biosimilar's own ASP plus 6 percent of the reference biologic's ASP. Qualifying biosimilars get 8 percent instead (§1847A(b)(8)(B)). If the reference product's ASP is above its WAC, the add-on is calculated on the reference product's WAC.
- New drugs with no ASP yet: up to 103 percent of WAC (wholesale acquisition cost, the manufacturer's list price) during the first sales period (42 CFR 414.904(e)(4)).
- Single-source drugs whose ASP is above WAC: in some cases the limit is 106 percent of WAC.
- Price substitutions after an OIG finding:
- AMP-based: when ASP has been at least 5 percent above AMP (average manufacturer price) in two consecutive quarters, or three of the previous four.
- WAMP-based: when ASP has exceeded the widely available market price by 5 percent.
- Vaccines: pneumococcal, influenza, COVID-19 and hepatitis B vaccines are paid at 95 percent of AWP (average wholesale price).
- Negotiated drugs: for Part B drugs selected under the Medicare Drug Price Negotiation Program, the limit becomes 106 percent of the negotiated price (maximum fair price), starting with price applicability year 2028.
- HIV PrEP drugs: paid under a separate fee schedule for preventive-service drugs (42 CFR 410.152(o)(3)).
- Drugs not in CMS's files: the regional Medicare contractor sets the limit in this order: ASP, then Medicaid NADAC (National Average Drug Acquisition Cost), then the VA Federal Supply Schedule price, then invoice price. For new drugs priced on WAC, an add-on of up to 3 percent applies.
The legal basis is Social Security Act §1847A and §1842(o), implemented in 42 CFR 414.804 and 414.904. I can look up a specific HCPCS code's Part B spending or a product's NADAC price next if that would help.
Where does CMS publish the ASP files?
CMS publishes the ASP files on its ASP Pricing Files page on CMS.gov: cms.gov/medicare/payment/part-b-drugs/asp-pricing-files, found under Medicare > Payment > Part B Drugs. The files are grouped by the year they take effect, with one set per quarter, and each file downloads as a ZIP archive.
Approach: The regulatory datasets I can search hold CMS's NADAC prices and Part B spending data, but not the ASP payment limit files. Everything below comes from the CMS page itself.
How the page is organised
- Separate sections for 2026, 2025, 2024, 2023, 2022 and 2021, plus one combined archive for 2005-2020.
- CMS says: "The quarterly Medicare Part B Drug Payment Limit Files are grouped by the year in which they are effective."
- Each quarter has two downloads:
- Medicare Part B Payment Limit Files: the ASP pricing file and the pricing file for "not otherwise classified" (NOC) drugs.
- ASP NDC-HCPCS Crosswalk: matches each product code (NDC) to its billing code (HCPCS).
- Seasonal vaccines have their own price file and crosswalk.
- Each entry shows the date it was posted or revised. Corrections are marked, for example "Final file - revised 09/15/2026".
Files posted for 2026
| File | Date shown |
|---|---|
| October 2026 Payment Limit Files (final) | Posted 09/17/2026 |
| October 2026 NDC-HCPCS Crosswalk (final) | Posted 09/17/2026 |
| 2026-2027 Seasonal Vaccine Price File | Posted 08/27/2026 |
| 2026-2027 NDC-HCPCS Crosswalk for Seasonal Vaccines | Posted 08/27/2026 |
| July 2026 Payment Limit Files (final) | Revised 09/15/2026 |
| July 2026 NDC-HCPCS Crosswalk (final) | Posted 06/17/2026 |
| April 2026 Payment Limit Files (final) | Revised 09/15/2026 |
| April 2026 NDC-HCPCS Crosswalk (final) | Revised 03/30/2026 |
| January 2026 Payment Limit Files (final) | Revised 09/15/2026 |
| January 2026 NDC-HCPCS Crosswalk (final) | Revised 03/30/2026 |
Disclaimers on the page
- "The absence or presence of a HCPCS, NDC code, and/or the payment limits in the Medicare Part B Payment Limit File does not indicate whether Medicare covers a particular product."
- If a product is missing from a quarter's file, the regional Medicare contractor (MAC) may still work out a payment limit and process the claim, as long as the claim is reasonable and necessary and meets all payment requirements.
- CMS may not publish a payment limit or crosswalk for every drug that manufacturers report.
The rules on what manufacturers report, and which drugs are included, are on CMS's separate ASP Reporting page. I can open the October 2026 files and pull the payment limit for a specific HCPCS code if that would help.
How is ASP different from AWP?
ASP is a price set by law and calculated from what a drug actually sold for, after discounts. AWP is a list price printed in commercial pricing guides; no law or regulation defines it, and it does not reflect discounts. Since January 1, 2005, Medicare Part B has paid for most drugs based on ASP instead of AWP. HHS-OIG found ASP to be far lower: about half of AWP at the median.
Approach: The regulatory datasets I can search hold CMS drug price data but no definitions of either price, so this answer comes from HHS Office of Inspector General (OIG) reports and the CMS guidance cited earlier. The OIG figures are from 2005 and 2011 studies, so they show the size of the gap at that time, not today.
| ASP (average sales price) | AWP (average wholesale price) | |
|---|---|---|
| Legal basis | Defined in Social Security Act §1847A(c), added by the MMA (Medicare Prescription Drug, Improvement, and Modernization Act of 2003) (OIG OEI-03-05-00200) | "Not defined in law or regulation" (OIG OEI-03-11-00060) |
| What it measures | The manufacturer's sales to all US purchasers in a quarter, divided by units sold, after discounts (OIG OEI-05-05-00240) | "Often considered a price for wholesalers to charge retailers" (OIG OEI-05-05-00240) |
| Discounts | Deducted: volume, prompt-pay and cash discounts, free goods tied to purchase requirements, chargebacks, and rebates other than Medicaid rebates | Not deducted: AWP "fails to account for prompt pay or other discounts, rebates, and reductions" (OIG OEI-03-11-00060) |
| Based on actual sales? | Yes | "Not necessarily" |
| Who produces it | Manufacturers calculate it each quarter and report it to CMS. It is reported for Part B drugs only | Private publishers such as First Databank and Medi-Span, based on pricing information from manufacturers |
| Main use | Medicare Part B payment limit (106% of ASP) | Historically, Medicaid pharmacy payment, usually AWP minus a percentage. In 2011, 45 states still used it (OIG OEI-03-11-00060) |
Why Medicare switched OIG says the MMA moved Part B payment from AWP to ASP "recognizing the flaws of AWP." OIG, the Department of Justice and others had found that published prices, particularly AWP, "substantially overstate the actual prices pharmacies pay" (OIG OEI-05-05-00240).
How big the gap was (OIG OEI-03-05-00200, third quarter of 2004 data)
- Across 2,077 product codes (NDCs), ASP was 49% below AWP at the median.
- Single-source brand drugs: 26% below.
- Multisource brand drugs: 30% below.
- Generics: 68% below.
Where AWP still matters in Part B As covered earlier, CMS still pays for pneumococcal, influenza, COVID-19 and hepatitis B vaccines at 95% of AWP (CMS Part B Drug Payment Limits Overview).
A related price: WAC WAC (wholesale acquisition cost) is easy to confuse with AWP. Unlike AWP, it is defined in statute (§1847A(c)(6)(B)) as the manufacturer's list price to wholesalers or direct purchasers, not including discounts or rebates. Like AWP, it is "not based on actual sales transactions" (OIG OEI-03-11-00060).
I can pull current Medicaid acquisition-cost prices (NADAC) for a specific product next, to show how a price based on what pharmacies actually pay compares.