Improvements to section 340B program

(a)

Expansion of covered entities receiving discounted prices

Subsection (a)(4) of section 340B of the Public Health Service Act (42 U.S.C. 256b) is amended by adding at the end the following subparagraphs:

(M)An entity receiving funds under title V of the Social Security Act (relating to maternal and child health) for the provision of health services. (N)An entity receiving funds under subpart I of part B of title XIX of this Act (relating to comprehensive mental health services) for the provision of community mental health services. (O)An entity receiving funds under subpart II of such part B (relating to the prevention and treatment of substance abuse) for the provision of treatment services for substance abuse.

(b)

Extension of discounts to inpatient drugs

Subsection (b) of such section is amended by inserting before the period at the end the following: , except that the terms covered outpatient drug and covered drug include a drug provided in an inpatient setting. (c)

Elimination of group purchasing prohibition for certain hospitals

Subsection (a)(4)(L) of such section is amended— (1)by adding and at the end of clause (i); (2)by striking ; and at the end of clause (ii) and inserting a period; and (3)by striking clause (iii). (d)

Permitting use of multiple contract pharmacies

Such section is amended by adding at the end the following new subsection:

(e)

Permitting use of multiple contract pharmacies

Nothing in this section shall be construed as prohibiting a covered entity from entering into contracts with more than one pharmacy for the provision of covered drugs, including such a contract that supplements the use of an in-house pharmacy arrangement or as requiring the approval of the Secretary for entering into such a contract.

(e)

Improvements in program administration

Such section is further amended by adding at the end the following new subsection:

(f)

Improvements in program administration

(1)

In general

The Secretary shall provide, from funds appropriated under paragraph (2), for improvements in the integrity and administration of the program under this section in order to prevent abuse and misuse of discounted prices made available under this section. Such improvements shall include the following: (A)The development of a system to verify the accuracy of information regarding covered entities that is listed on the website of the Department of Health and Human Services relating to this section. (B)The establishment of a third-party auditing system by which covered entities and manufacturers are regularly audited to ensure compliance with the requirements of this section. (C)The conduct of such audits under subsection (a)(5)(C) that supplement the audits conducted under subparagraph (B) as the Secretary finds appropriate and the implementation of dispute resolution guidelines and other compliance programs. (D)The development of more detailed guidance regarding the definition of section 340B patients and describing options for billing under the medicaid program under title XIX of the Social Security Act in order to avoid duplicative discounts. (E)The issuance of advisory opinions within defined time periods in response to questions from manufacturers or covered entities regarding the application of the requirements of this section in specific factual circumstances. (F)Insofar as the Secretary deems it feasible, providing access through the website of the Department of Health and Human Services on the prices for covered drugs made available under this section, but only in a manner (such as through the use of password protection) that limits such access to covered entities. (2)

Authorization of appropriations

There are authorized to be appropriated for fiscal year 2005 and each succeeding fiscal year such sums as may be necessary to carry out paragraph (1).