Average Manufacturer Price (AMP) (Health Care) Law and Legal Definition

Average manufacturer price (AMP) means the average price paid by wholesalers to manufacturers for drugs distributed to retail pharmacy class of trade. AMP helps in determining medicaid drug rebate liabilities. In the calculation of AMP, some manufacturers include discounts to nursing homes and mail order providers.

The term "average manufacturer price" with respect to a covered outpatient drug of a manufacturer for a rebate period, is defined under 42 USCS § 1396r-8 (k) (1)(A) as the average price paid to the manufacturer of a drug in the U.S. by wholesalers for drugs distributed to the retail pharmacy class of trade.

The AMP for a covered outpatient drug does not include customary prompt pay discounts extended to wholesalers, bona fide service fees paid by manufacturers to wholesalers or retail community pharmacies, including distribution service fees, inventory management fees, product stocking allowances, and fees associated with administrative services agreements and patient care programs, reimbursement by manufacturers for recalled, damaged, expired, or otherwise unsalable returned goods, including reimbursement for the cost of the goods and any reimbursement of costs associated with return goods handling and processing, reverse logistics, and drug destruction, and payments received from, and rebates or discounts provided to, pharmacy benefit managers, managed care organizations, health maintenance organizations, insurers, hospitals, clinics, mail order pharmacies, long term care providers, manufacturers, or any other entity that does not conduct business as a wholesaler or a retail community pharmacy[42 USCS § 1396r-8].