340B Ceiling Price
Definition
The 340B ceiling price is the statutory maximum price manufacturers must charge covered entities for covered outpatient drugs. It is calculated quarterly using the formula: 340B Ceiling Price = AMP (Average Manufacturer Price) minus URA (Unit Rebate Amount). HRSA publishes ceiling prices in OPAIS on a quarterly basis.
Ceiling prices are drug-specific and manufacturer-specific. They apply to the smallest unit of measure for the drug. When the ceiling price calculation results in a value less than one cent, the price is set at $0.01 (penny pricing). Manufacturers are required to charge at or below the ceiling price—charging above it is a violation of the Pharmaceutical Pricing Agreement.
In practice, covered entities often purchase drugs through wholesalers at contracted prices that may differ from the published ceiling price. The ceiling price is the legal maximum; actual transaction prices may be at or below it. Covered entities and their TPAs should monitor whether the prices they are paying are at or below the applicable ceiling price to identify potential overcharges.
Frequently Asked Questions
Why 340B Ceiling Price Matters
The 340B ceiling price is the legal price floor of the program's savings mechanism. Covered entities that are being charged above the ceiling price are being overcharged, which can be disputed through the administrative dispute resolution (ADR) process. Monitoring pricing accuracy is an important program integrity function.
How Virtue 340B Uses It
Virtue 340B evaluates pricing accuracy as part of our audit and monitoring services, helping covered entities identify whether they are receiving the correct 340B pricing on their drug purchases and flagging potential overcharges.