definiens: means the gross amounts invoi ced by the Royalty Paying Party, its Affiliates or sublicensees for sales of Product in finished package form ( ready for use by the ultimate consumer ) in th e Territory to a Third Party, including, but not limited to, sales to wholesalers or other customers typical in each country in bona fide, arm 's length transact ions . In determining Net Sales, certain deductions may be taken against the gross amount invoiced to the extent not reimbursed by a Third Party . These allow able deductions are : 1.35.1 ( a ) discounts, including cash disc ounts, discounts to managed care or similar organizations or government organiz ations, administrative fees paid to pharmacy benefits managers, ( b ) rebates pai d or credited, including government rebates such as Medicaid chargebacks or rebates, and ( c ) retroactive price reductions or allowances actually allowed or granted from the billed amount ; 1.35.2 credits or allowances actually gra nted upon claims, rejections or returns of such sales of Products ; 1.35.3 taxes, duties or other governmenta l charges levied on or measured by the billing amount when included in bil ling, as adjusted for rebates, charge - backs and refunds ; 1.35.4 freight, postage, shipping and ins urance charges to the extent included on the same invoice by the Royalty Paying Party or its sublicensee for delivery of such Products ; and 1.35.5 the actual amount of any write - off s for bad debt