[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 5021 Introduced in Senate (IS)]

<DOC>






118th CONGRESS
  2d Session
                                S. 5021

    To ensure the accessibility of drugs furnished through the drug 
 discount program under section 340B of the Public Health Service Act.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 11, 2024

   Mr. Welch introduced the following bill; which was read twice and 
  referred to the Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
    To ensure the accessibility of drugs furnished through the drug 
 discount program under section 340B of the Public Health Service Act.

    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 would be possible 
        without such program.
            (2) Such 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 program and part B of the 
        Medicare program, and drug manufacturers are required to offer 
        drug discount pricing to covered entities when requested.
            (3) Savings on the purchase of drugs through the program 
        under section 340B of the Public Health Service Act 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 such program, covered entities 
        have contracted with pharmacies to dispense covered outpatient 
        drugs purchased by a covered entity at drug discount program 
        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 contract 
        pharmacy relationships to stretch scarce resources and support 
        patient care, consistent with the purpose of the program.
            (6) Section 340B of the Public Health Service Act requires 
        drug manufacturers to offer drug discount 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 of the Public Health Service Act does not 
        allow drug manufacturers to place conditions on the ability of 
        a covered entity to purchase or use a covered outpatient drug 
        at drug discount program pricing regardless of the manner or 
        location in which a drug is dispensed, including by restricting 
        a covered entity's ability to dispense drugs purchased through 
        such program 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) Such section 340B's inflationary penalty provisions, 
        which have saved part D of the Medicare program $7,000,000,000 
        between 2013 and 2017, have a proven record of reducing drug 
        price increases, and use of 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 of the Public 
        Health Service Act is 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)--
                    (A) requires drug manufacturers to offer drug 
                discount pricing pursuant to an agreement under 
                subsection (a) of such section with respect to drugs 
                purchased by a covered entity regardless of the manner 
                or location in which the drug is dispensed; and
                    (B) prohibits drug manufacturers from placing 
                conditions on the ability of covered entities to 
                purchase drugs pursuant to an agreement under 
                subsection (a) of such section, regardless of the 
                manner or location in which such drugs are dispensed.
            (2) To clarify that--
                    (A) covered entities may contract with pharmacies 
                to dispense drugs purchased pursuant to an agreement 
                under section 340B(a) of the Public Health Service Act 
                (42 U.S.C. 256b(a)) on a covered entity's behalf, to 
                assist covered entities in stretching resources to 
                provide care to more patients and provide more 
                comprehensive services; and
                    (B) the requirements and prohibitions that apply to 
                manufacturers under section 340B of such Act 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 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 by 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 the 
                manufacturer may impose conditions described in this 
                subparagraph 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:
            ``(11) Contract pharmacies.--The requirements and 
        prohibitions under paragraph (1) shall apply in the case of a 
        covered entity that elects to contract with one or more 
        pharmacies to dispense, to patients of the covered entity, 
        covered outpatient drugs purchased by the covered entity at or 
        below the applicable ceiling price described in paragraph 
        (1).''.
    (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), in the matter preceding 
        subclause (I), 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 (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 (a)(11), 
                                other than an overcharge;
                                    ``(III) shall not exceed $2,000,000 
                                for each day of such violation;
                                    ``(IV) shall be in an amount 
                                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 (a)(11).''; 
                                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 subsections (a)(1) and 
                (a)(11) under the process promulgated under 
                subparagraph (A).''.
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