What This Bill Does
This bill stops health insurance companies, pharmacy benefit managers (companies that manage prescription drug benefits for insurance plans), and Medicare prescription drug plan sponsors from treating hospitals and clinics that participate in the 340B drug discount program differently than other pharmacies and providers. The bill also creates penalties for pharmacy benefit managers that break these new rules and sets up a system to prevent double discounting of drugs under Medicaid.
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Who It Affects
- Hospitals, clinics, and health centers that participate in the 340B drug discount program
- Pharmacies that partner with these hospitals and clinics
- Pharmacy benefit managers (companies that manage drug benefits)
- Health insurance companies offering group and individual coverage
- Medicare Part D prescription drug plan sponsors
- State Medicaid agencies
- Patients who use 340B drugs
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Key Provisions
- Insurance companies and pharmacy benefit managers cannot pay 340B covered entities or their contract pharmacies less money for the same drugs than they pay other pharmacies, and cannot require special identification of 340B drugs (Sec. 3(a))
- Insurance companies and pharmacy benefit managers cannot impose different fees, audit requirements, or network restrictions on 340B pharmacies compared to other pharmacies unless those same restrictions apply to all similar pharmacies (Sec. 3(a))
- Pharmacy benefit managers that violate these rules face civil monetary penalties of up to $5,000 per violation per day, with the Secretary required to issue regulations within 60 days and finalize them within 180 days (Sec. 3(a))
- These same protections apply to Medicare Part D prescription drug plans and Medicare Advantage plans (Sec. 3(b))
- The Secretary must contract with a third party to review Medicaid claims and prevent duplicate discounts on 340B drugs within one year of enactment (Sec. 3(c))
- Covered entities must provide claims data to the contracted third party upon request, and states must allow retrospective data submission instead of requiring real-time identification at the point of sale (Sec. 3(c))
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What Changes
Insurance companies, pharmacy benefit managers, and Medicare drug plan sponsors must treat 340B covered entities and their contract pharmacies the same as other pharmacies and providers in terms of payment rates, fees, network participation, and audit requirements. They cannot refuse to contract with these entities based solely on their 340B status or require them to identify 340B drugs. Federal agencies will impose financial penalties on pharmacy benefit managers that violate these rules. States will also work with a contracted third party to prevent Medicaid from paying duplicate discounts on the same 340B drugs.
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Important Definitions
- **340B drug**: A prescription drug purchased under an agreement with the 340B discount program that qualifies as a covered outpatient drug (Sec. 3(a))
- **Covered entity**: Organizations defined in existing section 340B law, which includes qualifying hospitals, clinics, and health centers (Sec. 3(a))
- **Specified pharmacy**: A pharmacy that has a contract with a covered entity to dispense 340B drugs either in person or by mail (Sec. 3(a))
- **Pharmacy benefit manager**: A company that manages prescription drug benefits for health plans (Sec. 3(a))
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Effective Date
Not specified in bill text
I
118TH CONGRESS
1ST SESSION H. R. 2534
To amend title XXVII of the Public Health Service Act to ensure the
equitable treatment of covered entities and pharmacies participating in
the 340B drug discount program, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
APRIL 6, 2023
Ms. SPANBERGER (for herself and Mr. JOHNSON of South Dakota) introduced
the following bill; which was referred to the Committee on Energy and
Commerce, and in addition to the Committee on Ways and Means, for
a period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the com-
mittee concerned
A BILL
To amend title XXVII of the Public Health Service Act
to ensure the equitable treatment of covered entities and
pharmacies participating in the 340B drug discount pro-
gram, and for other purposes.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘Preserving Rules Or-
4
dered for The Entities Covered Through 340B Act of
5
2023’’ or the ‘‘PROTECT 340B Act of 2023’’.
6
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SEC. 2. FINDINGS AND PURPOSE.
1
(a) FINDINGS.—Congress finds the following:
2
(1) The 340B drug pricing program is an es-
3
sential part of the Nation’s health care safety net.
4
(2) 340B enables safety-net providers to stretch
5
scarce resources further to offer services and treat
6
patients through the savings these providers receive
7
under the program.
8
(3) 340B savings support hospitals, clinics, and
9
health centers’ care for patients who have low in-
10
comes, including those with low incomes enrolled in
11
Medicare and Medicaid.
12
(4) 340B savings are critically important to
13
rural hospitals that operate on very slim margins
14
and serve patients in isolated areas with limited ac-
15
cess to health care.
16
(5) 340B supports care for those in need with-
17
out using taxpayer dollars.
18
(6) Some commercial payers and pharmacy ben-
19
efit managers are paying less to 340B covered enti-
20
ties and their contract pharmacies for 340B drugs,
21
requiring identification of 340B drug claims or oth-
22
erwise discriminating against 340B covered entities
23
and their contract pharmacies on the basis of their
24
status as providers or pharmacies that dispense
25
340B drugs.
26
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•HR 2534 IH
(7) These types of discriminatory actions un-
1
dermine the purpose of the 340B program and harm
2
the patients served by 340B covered entities. Com-
3
mercial payers and pharmacy benefit managers’ im-
4
position of requirements on a 340B pharmacy be-
5
cause it is a pharmacy that dispenses 340B drugs,
6
or requirements with respect to the use of and bill-
7
ing for drugs purchased under 340B because they
8
are 340B drugs is inconsistent with public policy be-
9
cause of the deleterious effects on the nation’s
10
health care safety net.
11
(b) PURPOSES.—The purposes of this Act are the fol-
12
lowing:
13
(1) To prohibit discriminatory actions, includ-
14
ing several specified actions, by a pharmacy benefit
15
manager, a group health plan, a health insurance
16
issuer offering group or individual health insurance,
17
or a sponsor of a Medicare part D prescription drug
18
plan against 340B covered entities and their phar-
19
macies and requiring them to be treated as any
20
other provider or pharmacy.
21
(2) To provide for the imposition of civil mone-
22
tary penalties on pharmacy benefit managers that
23
violate the new protections and require the Health
24
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Services and Resources Administration to promul-
1
gate implementing regulations.
2
(3) To authorize the Secretary to contract with
3
a third-party entity to collect and review data from
4
State Medicaid agencies and covered entities to pre-
5
vent Medicaid duplicate discounts.
6
SEC. 3. ENSURING THE EQUITABLE TREATMENT OF COV-
7
ERED ENTITIES AND PHARMACIES PARTICI-
8
PATING IN THE 340B DRUG DISCOUNT PRO-
9
GRAM.
10
(a) GROUP HEALTH PLAN AND HEALTH INSURANCE
11
ISSUER REQUIREMENTS.—Subpart II of part A of title
12
XXVII of the Public Health Service Act (42 U.S.C.
13
300gg–11 et seq.) is amended by adding at the end the
14
following new section:
15
‘‘SEC. 2730. REQUIREMENTS RELATING TO THE 340B DRUG
16
DISCOUNT PROGRAM.
17
‘‘(a) IN GENERAL.—A group health plan, a health
18
insurance issuer offering group or individual health insur-
19
ance coverage, or a pharmacy benefit manager may not
20
discriminate against a covered entity (as defined in sub-
21
section (d)(1)), a specified pharmacy (as defined in sub-
22
section (d)(2)), or a participant, beneficiary, or enrollee
23
of such plan or coverage by imposing requirements, exclu-
24
sions, reimbursement terms, or other conditions on such
25
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•HR 2534 IH
entity or pharmacy that differ from those applied to enti-
1
ties or pharmacies that are not covered entities or speci-
2
fied pharmacies on the basis that the entity or pharmacy
3
is a covered entity or specified pharmacy or that the entity
4
or pharmacy dispenses 340B drugs, including by taking
5
any action prohibited under subsection (b).
6
‘‘(b) SPECIFIED PROHIBITED ACTIONS.—A group
7
health plan, a health insurance issuer offering group or
8
individual health insurance coverage, or a pharmacy ben-
9
efit manager may not discriminate against a covered enti-
10
ty, a specified pharmacy, or a participant, beneficiary, or
11
enrollee of such plan or coverage by doing any of the fol-
12
lowing:
13
‘‘(1) Reimbursing a covered entity or specified
14
pharmacy for a quantity of a 340B drug (as defined
15
in subsection (d)) in an amount less than such plan,
16
issuer, or manager (as applicable) would pay to any
17
other similarly situated (as specified by the Sec-
18
retary) entity or pharmacy that is not a covered en-
19
tity or a specified pharmacy for such quantity of
20
such drug on the basis that the entity or pharmacy
21
is a covered entity or specified pharmacy or that the
22
entity or pharmacy dispenses 340B drugs.
23
‘‘(2) Imposing any terms or conditions on cov-
24
ered entities or specified pharmacies with respect to
25
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•HR 2534 IH
any of the following that differ from such terms or
1
conditions applied to other similarly situated entities
2
or pharmacies that are not covered entities or speci-
3
fied pharmacies on the basis that the entity or phar-
4
macy is a covered entity or specified pharmacy or
5
that the entity or pharmacy dispenses 340B drugs:
6
‘‘(A) Fees, chargebacks, clawbacks, adjust-
7
ments, or other assessments.
8
‘‘(B) Professional dispensing fees.
9
‘‘(C) Restrictions or requirements regard-
10
ing participation in standard or preferred phar-
11
macy networks.
12
‘‘(D) Requirements relating to the fre-
13
quency or scope of audits or to inventory man-
14
agement systems using generally accepted ac-
15
counting principles.
16
‘‘(E) Any other restrictions, conditions,
17
practices, or policies that, as specified by the
18
Administrator of the Health Resources and
19
Services Administration, interfere with the abil-
20
ity of a covered entity to maximize the value of
21
discounts provided under section 340B.
22
‘‘(3) Interfering with an individual’s choice to
23
receive a 340B drug from a covered entity or speci-
24
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•HR 2534 IH
fied pharmacy, whether in person or via direct deliv-
1
ery, mail, or other form of shipment.
2
‘‘(4) Requiring a covered entity or specified
3
pharmacy to identify, either directly or through a
4
third party, 340B drugs.
5
‘‘(5) Refusing to contract with a covered entity
6
or specified pharmacy for reasons other than those
7
that apply equally to entities or pharmacies that are
8
not covered entities or specified pharmacies, or on
9
the basis that—
10
‘‘(A) the entity or pharmacy is a covered
11
entity or a specified pharmacy; or
12
‘‘(B) the entity or pharmacy is described in
13
any of subparagraphs (A) through (O) of sec-
14
tion 340B(a)(4).
15
‘‘(6) With respect to a group health plan or
16
health insurance issuer for health insurance cov-
17
erage, denying coverage of a drug on the basis that
18
such drug is a 340B drug.
19
‘‘(c) ENFORCEMENT MECHANISM
FOR PHARMACY
20
BENEFIT MANAGERS.—The Secretary shall impose a civil
21
monetary penalty on any pharmacy benefit manager that
22
violates the requirements of this section. Such penalty
23
shall not exceed $5,000 per violation per day. The Sec-
24
retary shall issue proposed regulations to implement this
25
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•HR 2534 IH
subsection not later than 60 days after the date of the
1
enactment of this subsection and shall finalize such regu-
2
lations not later than 180 days after such date of enact-
3
ment.
4
‘‘(d) DEFINITIONS.—For purposes of this section:
5
‘‘(1) COVERED ENTITY.—The term ‘covered en-
6
tity’ has the meaning given such term in section
7
340B(a)(4).
8
‘‘(2) SPECIFIED PHARMACY.—The term ‘speci-
9
fied pharmacy’ means a pharmacy with which a cov-
10
ered entity has contracted to dispense 340B drugs
11
on behalf of the covered entity whether distributed
12
in person or via mail.
13
‘‘(3) 340B DRUG.—The term ‘340B drug’
14
means a drug that is—
15
‘‘(A) a covered outpatient drug (as defined
16
for purposes of section 340B); and
17
‘‘(B) purchased under an agreement in ef-
18
fect under such section.’’.
19
(b) APPLICATION
OF REQUIREMENTS
TO MEDI-
20
CARE.—
21
(1) PART D.—Section 1860D–12(b) of the So-
22
cial Security Act (42 U.S.C. 1395w–112(b)) is
23
amended by adding at the end the following new
24
paragraph:
25
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•HR 2534 IH
‘‘(8) APPLICATION OF REQUIREMENTS RELAT-
1
ING TO THE 340B DRUG DISCOUNT PROGRAM.—Each
2
contract entered into under this subsection with a
3
PDP sponsor shall provide that the requirements of
4
section 2730 of the Public Health Service Act apply
5
to such sponsor, and to any pharmacy benefit man-
6
ager that contracts with such sponsor, in the same
7
manner as such requirements apply with respect to
8
a group health plan, a health insurance issuer, or a
9
pharmacy benefit manager described in such sec-
10
tion.’’.
11
(2) PART C.—Section 1857(f)(3) of the Social
12
Security Act (42 U.S.C. 1395w–27(f)(3)) is amend-
13
ed by adding at the end the following new subpara-
14
graph:
15
‘‘(E) 340B DRUG DISCOUNT PROGRAM.—
16
Section 1860D–12(b)(8).’’.
17
(c) MEDICAID REQUIREMENTS.—
18
(1) IN GENERAL.—Section 1927 of the Social
19
Security Act (42 U.S.C. 1396r–8) is amended by
20
adding at the end the following new subsection:
21
‘‘(l)
REVIEW
TO
PREVENT
DUPLICATE
DIS-
22
COUNTS.—
23
‘‘(1) IN GENERAL.—Not later than 1 year after
24
the date of the enactment of this subsection, the
25
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•HR 2534 IH
Secretary shall enter into a contract with a third-
1
party entity (who shall be free of conflicts of inter-
2
est, as specified by the Secretary) for purposes of—
3
‘‘(A) identifying claims for 340B drugs (as
4
defined in section 2730(d) of the Public Health
5
Service Act) for which reimbursement was
6
made under a State plan (or waiver of such
7
plan); and
8
‘‘(B) ensuring such claims are not included
9
in any State rebate request under this section
10
in violation of section 340B(a)(5)(A) of the
11
Public
Health
Service
Act
or
section
12
1903(m)(2)(A)(xiii) or 1927(j)(1).
13
‘‘(2) DUTIES OF CONTRACTING ENTITY.—
14
‘‘(A) IN GENERAL.—The entity with a con-
15
tract in effect under paragraph (1) shall—
16
‘‘(i) request and review, in the most
17
efficient and least burdensome manner
18
practicable—
19
‘‘(I) claims level data from cov-
20
ered entities (as defined in section
21
340B of the Public Health Service
22
Act) itemizing 340B drugs dispensed
23
to individuals enrolled under a State
24
plan (or waiver of such plan); and
25
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•HR 2534 IH
‘‘(II) claims level rebate file data
1
from State agencies administering
2
such plan (or such waiver);
3
‘‘(ii) request, receive, and maintain
4
data described in either of subclauses (I)
5
and (II) of clause (i) in a confidential man-
6
ner; and
7
‘‘(iii) notify the State and the Sec-
8
retary of any violation described in para-
9
graph (1)(B) to ensure that such violation
10
is remedied.
11
‘‘(B) RETROSPECTIVE
SUBMISSION
OF
12
DATA.—In requesting and reviewing claims level
13
data described in subparagraph (A)(i)(I) from a
14
covered entity, the entity with a contract in ef-
15
fect under paragraph (1) shall allow such cov-
16
ered entity the option of submitting such data
17
on a retrospective basis through a data file or
18
another method that does not exclusively re-
19
quire point-of-sale identification.’’.
20
(2) ENSURING ACCESS TO INFORMATION.—
21
(A) COVERED
ENTITY
REQUIREMENT.—
22
Section 340B(a)(5) of the Public Health Serv-
23
ice Act (42 U.S.C. 256b(a)(5)) is amended by
24
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•HR 2534 IH
adding at the end the following new subpara-
1
graph:
2
‘‘(E) PROVISION OF INFORMATION TO CON-
3
TRACTED ENTITY FOR MEDICAID CLAIMS RE-
4
VIEW.—A covered entity shall furnish to the en-
5
tity with a contract in effect under section
6
1927(l) of the Social Security Act, upon request
7
of such entity, the data described in paragraph
8
(2)(A)(i) of such section.’’.
9
(B) STATE PLAN REQUIREMENT.—Section
10
1902(a) of
[Text truncated for display. Full text available on Congress.gov.]