definiens: means, with respect to a Licensed Product(s ) in t he Zai Lab Territory, and subject to Section 7.3.3 ( Royalty Conditions ), the gross amounts invoiced by Zai Lab or any of i ts Affiliates or Sublicensees for sales of such Licensed Product to unaffiliated Third Party purchasers in arms- length transactions ( ), less the following deductions calculated in acc ordance w ith US GAAP, to the extent actually taken, paid, accrued and allowed ( ): ( a ) cash, trade or quantity discounts, retroactiv e price reductions, coupons, charge- back payments, and rebates granted ( in each case, whether in cash or in kind ) to trade customers, hospitals, managed health care organizations, pharmaceutical b enefit managers, group purchasing organizations, and national, state, or local govern ments ; ( b ) credits, rebates or allowances allowed upon p rompt payment or on acc ount of claims, damaged goods, rejections or returns of such Licensed Produ ct, Schedule 1 -- viii including in connection with recalls and withdrawal s, and the amount of any write- offs for bad debt ( provided, that an amount written off as bad d ebt but subsequently recovered will be treated as Net Sales ) ; ( c ) outbound freight, shipment and insurance costs, to the extent included in the price and separately itemized on the invoice price ; ( d ) taxes ( other than taxes addressed in Section 7.14 ( Taxes ) ), duties, tariffs, mandated contribution or other governmental charges levied on the sale of such Licensed Product, including value added tax ( excluding VAT paid on any payment to INC Y under this Agreement ), customs duties, healthcare taxes, excise taxes, use taxes, and sales taxes ( collectively ) ; ( e ) compulsory payments and cash rebates related to sal es of such Licensed Product payable to a governmental authority ( or agent thereof ) pursuant to Applicable Law by reason of any nat ional or local health insurance program or similar progra m that Zai Lab, its Affiliates or Sublicensees, as applicable, allocate to sales of the Licensed Pr oduct(s ) in accordance with Zai Lab ’s, its Affiliates ’ or Sublicensees ’ standard policies and proced ures consistently applied across its products, as applicable ; and ( f ) any other similar and customary deductions ( e .g ., currently, co- pay cards ) that are consistent with US GAAP and Zai Lab ’s actual practice ( or its Affiliates ’ or Sublicensees ’ ) at the time in calculating and reporting its actual product net sa les throughout its businesses ( in the particular country, if applicable ), provided that no item shal l be deducted pursuant to this clause ( f ) if included in any another deduction provided for unde r this definition ( for example, Zai Lab shall not deduct an allowance for bad debts pursuant to t his clause ( f ), as actual bad debts are subject to deduction pursuant to clause ( b ) ), All of the aforementioned deductions shall be deter mined, on a Region - by - Region basis, as incurred in the ordinary course of business in type and amou nt consistent with Zai Lab ’s or its applicable Affiliate ’s or Sublicensee ’s ( as the case may be ) b usiness practices consistently applied across its product lines and accounting standards, as applicab le . All such deductions shall be fairly and equitab ly allocated to such Licensed Product(s ) and other pro ducts of Zai Lab and its Affiliates and Sublicensees