340B Ceiling Price Formula
The formula that is used to calculate the ceiling price for 340B drugs subtracts the Unit Rebate Amount from the Average Manufacturer Price and multiplies the difference by the Drug Package Size. The resulting number is rounded to 2 decimal places and this determined value is used for the drug ceiling price that quarter. Ceiling prices are recalculated each quarter based on the available market data.
|AMP – Average Manufacturer Price|
|URA – Medicaid Drug Rebate Unit Rebate Amount||340B Ceiling Price = [(AMP) – (URA)] * DPS||The resulting number is rounded to 2 decimal places|
|DPS – Drug Package Size|
Where the above formula calculates a ceiling price that rounds to $0.00 or less, the manufacturer enforces a lower limit $0.01. For any drug whose ceiling price calculates as less than $0.01, the ceiling price of $0.01 will be used.
New Drug pricing
Manufacturers estimate the ceiling price for the first 3 quarters that a drug is sold. Then, the ceiling price is calculated with the prescribed formula to determine the fourth quarter ceiling price. The manufacturer is then responsible to retroactively apply this calculated ceiling price to the first three quarters that the drug was sold at an estimated ceiling price and refund their purchasers for any overpricing that occurred.