Quarters Prior to 2017
For "N" drugs, the unit rebate amount (URA) is equal to 13% of average manufacturer price (AMP).
Step 1: URA Calculation
Product “X” AMP = 0.1243
Formula: URA = AMP x 13%
- 0.1243 x 13% = 0.016159
URA = 0.016159
Step 2: Rounding
The resulting URA is calculated to 6 decimal places and rounded to 4.
- URA = 0.016159
- Final URA = 0.0162
Quarters Beginning 2017
For "N" drugs, the URA is equal to the sum of the basic URA and (if applicable) the additional URA.
Step 1: Basic URA Calculation
- Product “X” Market Date = 1/1/2010
- Product “X” Baseline AMP (derived from 3Q2014) = 0.244795
- Product “X” Quarterly AMP (QAMP) = 0.357911
- Product “X” Baseline CPI-U (CPI-U value for September 2014) = 238.031
- Quarter “X” Quarterly CPI-U = 239.083
Basic Rebate Calculation (AMP x Ratio)
- 0.357911 x 0.13 = 0.0465284
QAMP Ratio Basic Rebate Amount 0.357911 0.13 0.0465284 (Rounded 7 Places)
Step 2: Additional Rebate Calculation
Additional Rebate = AMP – [(Baseline AMP / Baseline CPI-U) x Quarterly CPI-U]
Additional Rebate Calculation (Base AMP/Base CPI-U) * Quarterly CPI-U)
- Baseline AMP/Baseline CPI-U = (0.244795 / 238.031) x 239.083 = 0.2458769
Base AMP Base CPI-U Quarterly CPI-U Additional Rebate Amount 0.244795 238.031 239.083 0.2458769 (Rounded 7 Places)
Compare Additional Rebate Amount to QAMP
- Compare the additional rebate amount to the quarterly AMP. If the resulting amount is less than the quarterly AMP, then subtract the resulting amount from the quarterly AMP to arrive at the additional rebate amount. If resulting is equal to or greater than the quarterly AMP, then the additional rebate amount is equal to zero.
Additional Rebate Amount QAMP 0.2458769 0.357911
0.357911 is greater than 0.2458769, therefore additional URA = .1120341
Step 3: Total Rebate Calculation
Total Rebate Calculation = Basic Rebate Amount (Rounded to 7 Places) + Additional Rebate Amount (Rounded to 7 Places)
Basic Rebate = Additional Rebate = 0.0465284 + 0.1120341 = 0.1585625
- 3.B Basic Rebate + Additional Rebate, Rounded to 7 Places 0.1585625
- 3.C Basic Rebate + Additional Rebate, Rounded to 6 Places 0.158563
- 3.D Total Rebate Amount, Rounded to 4 Places 0.1586
Total Rebate Amount = 0.1586
Step 4: Comparison of Total Rebate Amount to Quarterly AMP
If the total rebate amount is greater than the quarterly AMP, it is reduced to equal AMP.
- Total Rebate Amount = 0.1586
- Quarterly AMP = 0.357911
Since the quarterly AMP is greater than the total rebate amount, the total rebate amount does not change and remains 0.1586.