[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7635 Introduced in House (IH)]

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118th CONGRESS
  2d Session
                                H. R. 7635

      To amend title III of the Social Security Act to ensure the 
 accessibility of drugs furnished under the 340B drug discount program.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 12, 2024

  Ms. Matsui introduced the following bill; which was referred to the 
                    Committee on Energy and Commerce

_______________________________________________________________________

                                 A BILL


 
      To amend title III of the Social Security Act to ensure the 
 accessibility of drugs furnished under the 340B drug discount program.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as ``The 340B Pharmaceutical Access To Invest 
in Essential, Needed Treatments & Support Act of 2024'' or ``The 340B 
PATIENTS Act of 2024''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds the following:
            (1) Section 340B of the Public Health Service Act (42 
        U.S.C. 256b) enables covered entities to stretch scarce 
        resources as far as possible, reaching more patients and 
        providing more comprehensive services than without such 
        program;
            (2) Section 340B requires drug manufacturers to offer 
        discounted prices on covered outpatient drugs to covered 
        entities participating in the program, as a condition of 
        participating in the Medicaid or Medicare Part B programs, and 
        drug manufacturers must offer 340B pricing to covered entities 
        and sell 340B and deliver 340B drugs to covered entities when 
        requested irrespective of the manner or location through which 
        a 340B drug is dispensed.
            (3) Savings from section 340B enables hospitals, clinics, 
        and health centers' to provide comprehensive services to the 
        communities they serve, and covered entities are in the best 
        position to assess the use of their savings for community 
        needs.
            (4) Since the early years of the 340B program, covered 
        entities have contracted with pharmacies to dispense covered 
        outpatient drugs purchased by a covered entity at 340B pricing 
        to patients of the covered entity, consistent with how Congress 
        intended for covered entities to use the program.
            (5) Covered entities use savings generated through 340B 
        contract pharmacy relationships to stretch scarce resources and 
        support patient care, consistent with the purpose of the 
        program.
            (6) Section 340B requires drug manufacturers to offer 340B 
        pricing for drugs purchased by covered entities regardless of 
        the manner or location in which a drug is dispensed, including 
        drugs dispensed through contract pharmacies.
            (7) Section 340B does not allow drug manufacturers to place 
        conditions on the ability of a covered entity to purchase or 
        use a covered outpatient drug at 340B pricing regardless of the 
        manner or location in which a drug is dispensed, including by 
        restricting a covered entity's ability to dispense 340B drugs 
        to patients through a contractual relationship with a 
        contracted pharmacy or refusing to ship covered outpatient 
        drugs to a pharmacy or location identified by a covered entity.
            (8) Section 340B's inflationary penalty provisions, which 
        have saved $7 billion in Medicare Part D spending between 2013 
        and 2017, have a proven record of reducing drug price 
        increases, and use of 340B in contract pharmacies contributes 
        to these savings.
            (9) Specialty drugs, which are often used to treat chronic, 
        serious, or life-threatening conditions such as cancer, 
        rheumatoid arthritis, growth hormone deficiency, and multiple 
        sclerosis, play a critical role in the care provided by covered 
        entities. These drugs often require specialized handling, are 
        not usually available to walk-in customers, and are typically 
        available only through specialty or mail order pharmacies that 
        are located hundreds of miles from a covered entity. The use of 
        contract pharmacy arrangements under Section 340B are often the 
        only means by which covered entities can access these vital 
        drugs.
    (b) Purposes.--The purposes of this Act are the following:
            (1) To clarify that section 340B of the Public Health 
        Service Act (42 U.S.C. 256b) requires drug manufacturers to 
        offer 340B pricing for drugs purchased by a covered entity 
        regardless of the manner or location in which the drug is 
        dispensed, and section 340B prohibits drug manufacturers from 
        placing conditions on the ability of covered entities to 
        purchase and use 340B drugs, regardless of the manner or 
        location in which they are dispensed.
            (2) To clarify that covered entities under section 340B may 
        contract with pharmacies to dispense on a covered entity's 
        behalf drugs purchased by a covered entity under section 340B 
        to generate savings to assist covered entities to stretch 
        resources to provide care to more patients and provide more 
        comprehensive services, and the requirements and prohibitions 
        that apply to manufacturers under section 340B apply in the 
        case of a covered entity that elects to contract with a 
        pharmacy to dispense 340B drugs.

SEC. 3. ENSURING THE ACCESSIBILITY OF DRUGS FURNISHED UNDER THE 340B 
              DRUG DISCOUNT PROGRAM.

    (a) In General.--Section 340B(a) of the Public Health Service Act 
(42 U.S.C. 256b(a)) is amended--
            (1) in paragraph (1)--
                    (A) by striking ``that the manufacturer furnish'' 
                and inserting the following: ``that--
                    ``(A) the manufacturer furnish'';
                    (B) by striking ```ceiling price'), and'' and 
                inserting ```ceiling price');'';
                    (C) by striking ``shall require that the 
                manufacturer offer'' and inserting the following:
                    ``(B) the manufacturer offer''; and
                    (D) by striking the period at the end and inserting 
                the following: ``, regardless of the manner or location 
                in which the drug is dispensed; and
                    ``(C) the manufacturer not place conditions on the 
                ability of a covered entity to purchase and use a 
                covered outpatient drug at or below the applicable 
                ceiling price, regardless of the manner or location in 
                which the drug is dispensed, including but not limited 
                to placing limits on the delivery of drugs, placing 
                limits on the mechanisms through which drugs may be 
                purchased, placing limits on where such drugs may be 
                delivered, administered, or dispensed, requiring a 
                covered entity's assurance of compliance with 
                requirements under this section, or requiring the 
                submission of claims data or other information, except 
                that, notwithstanding this subparagraph, the 
                manufacturer may impose such conditions after receiving 
                advance approval from the Secretary (or, with respect 
                to conditions specified by the Secretary, without such 
                advance approval) if such conditions would not 
                discourage covered entities from purchasing the 
                manufacturer's drugs through the drug discount program 
                under this section or otherwise undermine the objective 
                of this section, either by singling out covered 
                entities from other customers for such conditions or by 
                imposing conditions that disproportionately impact 
                covered entities.''; and
            (2) by adding at the end the following new paragraph:
            ``(11) Contract pharmacies.--The requirements and 
        prohibitions under subsection (a)(1) shall apply, in the case 
        of a covered entity that elects to contract with one or more 
        pharmacies to dispense covered outpatient drugs purchased by a 
        covered entity at or below the applicable ceiling price 
        described in paragraph (1), to patients of the covered 
        entity.''.
    (b) Manufacturer Compliance.--Section 340B(d) of the Public Health 
Service Act (42 U.S.C. 256b) is amended--
            (1) in paragraph (1)(B)(vi), by inserting ``in the case of 
        an overcharge'' after ``penalties'';
            (2) in paragraph (1)(B), by adding at the end the 
        following:
                            ``(vii) The imposition of sanctions in the 
                        form of civil monetary penalties in the case of 
                        a violation of subsection (a)(1) or subsection 
                        (a)(11), other than an overcharge, which--
                                    ``(I) shall be assessed according 
                                to standards established in regulations 
                                to be promulgated by the Secretary not 
                                later than 180 days after the date of 
                                enactment;
                                    ``(II) shall apply to any 
                                manufacturer with an agreement under 
                                this section that knowingly and 
                                intentionally violates a requirement 
                                under subsection (a)(1) or subsection 
                                (a)(11), other than an overcharge;
                                    ``(III) shall not exceed $2,000,000 
                                for each day of such violation;
                                    ``(IV) shall be determined by the 
                                Secretary, taking into account factors 
                                such as the nature and extent of the 
                                violation and harm resulting from such 
                                violation, including, where applicable, 
                                the number of drugs affected and the 
                                number of covered entities affected; 
                                and
                                    ``(V) shall continue to be imposed 
                                each day until such manufacturer is no 
                                longer in violation of a requirement 
                                under subsection (a)(1) or subsection 
                                (a)(11), other than an overcharge.''; 
                                and
            (3) in paragraph (3), by adding at the end the following:
                    ``(D) Not later than 180 days after the date of the 
                enactment of this subparagraph, the Secretary shall 
                promulgate regulations to permit covered entities to 
                assert claims of violations of subsection (a)(1) and 
                subsection (a)(11) under the process promulgated under 
                subparagraph (A).''.
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