Penny Pricing
Definition
The 340B ceiling price is calculated as the Average Manufacturer Price (AMP) minus the Unit Rebate Amount (URA). In some cases—particularly for generic drugs with low AMPs and high URAs—this calculation can result in a value of zero or less. The penny pricing policy, established in the 2017 Civil Monetary Penalties Regulation, addresses this by setting the floor at $0.01 per unit.
When a ceiling price equals or rounds to zero, it is published in OPAIS as $0.01 and the manufacturer is required to charge $0.01 per unit to covered entities. This ensures that covered entities can still access these drugs under 340B even when the mathematical calculation would otherwise produce a zero or negative price.
Penny pricing drugs are among the most deeply discounted 340B products. Covered entities should ensure their purchasing systems are configured to capture penny pricing correctly and that their TPAs and wholesalers are passing through the correct pricing.
Frequently Asked Questions
Why Penny Pricing Matters
Penny pricing drugs represent maximum program savings. Covered entities that are not capturing penny pricing correctly—or whose vendors are not passing it through—may be overpaying for some of the most discounted drugs in the program.
How Virtue 340B Uses It
Virtue 340B reviews pricing accuracy, including penny pricing, as part of our audit and monitoring services to ensure covered entities are receiving the correct pricing on all covered outpatient drug purchases.