definiens: means, with respect to API Bulk Drug Substance and Finished Product, as the case may be, thereasonable internal and external costs of a Party incurred in Manufacturing such API Bulk Drug Substance or FinishedProduct, including : ( a ) to the extent that such API Bulk Drug Substance or Finished Product is Manufactured by a Party, thefully allocated cost of Manufacture of such API Bulk Drug Substance or Finished Product, consisting of direct material anddirect labor costs, plus Manufacturing overhead attributable to such API Bulk Drug Substance or Finished Product ( includingwithout limitation facilities ’ start - up costs, all directly incurred Manufacturing variances and a reasonable allocation of relatedManufacturing administrative and facilities costs to be provided for such API Bulk Drug Substance or Finished Product, butexcluding corporate administrative overhead, depreciation and/or costs associated with excess capacity ), all calculated strictlyin accordance with generally accepted accounting principles in the United States consistently applied by the applicable Party, and ( b ) to the extent that such API Bulk Drug Substance or Finished Product is Manufactured by a Third Party manufacturer, the actual fees paid by a Party to the Third Party for the Manufacture, supply and packaging of such API Bulk Drug Substanceor Finished Product and any reasonable out - of - pocket costs actually incurred by such Party in managing or overseeing theThird Party relationship . Cost of Goods Sold shall not include royalties, license or other fees paid to Third Parties in respect ofNecessary Third Party IP