2006 proposed fee schedule - American Society of Clinical Oncology

customers (for example, physicians) via a wholesaler (or
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distributor). Wholesaler chargeback arrangements may vary
in scope and complexity. However, simply put, the
wholesaler administers contract prices negotiated between
the manufacturer and end purchasers (for example, physician
or other health care providers), or otherwise implements
pricing terms established by the manufacturer (for example,
pricing that varies by type of purchaser or class of trade).
The wholesaler charges the customer a certain price and
charges back the manufacturer an agreed upon amount for the
purposes of making up the difference between the
wholesaler’s price (for example, WAC) and the customer’s
price.
Under the current estimation methodology for lagged
price concessions, total lagged price concessions, including
lagged wholesaler chargebacks, for the 12-month period are
divided by total sales for that same period to determine a
ratio that is applied to the total sales for the reporting
period. The ratio of lagged price concessions to sales is
calculated over all sales, both indirect sales (sales to
wholesalers and distributors and other similar entities that
sells to others in the distribution chain) and direct sales
(sales directly from manufacturer to providers, such as
hospitals or HMOs). To the extent that the relationship
between total dollars for indirect sales and total dollars