[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 5244 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
2d Session
S. 5244
To amend the Public Health Service Act with respect to the drug
discount program, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
August 5, 2026
Mr. Moran (for himself, Ms. Baldwin, Mrs. Capito, Mr. Kaine, Mr.
Boozman, and Mr. Hickenlooper) introduced the following bill; which was
read twice and referred to the Committee on Health, Education, Labor,
and Pensions
_______________________________________________________________________
A BILL
To amend the Public Health Service Act with respect to the drug
discount program, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Supporting
Underserved and Strengthening Transparency, Accountability, and
Integrity Now and for the Future of 340B Act'' or the ``SUSTAIN 340B
Act''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Sense of Congress.
Sec. 3. Contract pharmacy.
Sec. 4. Patient definition.
Sec. 5. 340B Rebate Model Pilot Program sunset.
Sec. 6. Child sites.
Sec. 7. Transparency.
Sec. 8. Enhancing program integrity.
Sec. 9. Preventing duplicate discounts.
Sec. 10. Patient financial assistance.
Sec. 11. Ensuring the equitable treatment of covered entities and
pharmacies participating in the 340B drug
discount program.
Sec. 12. User fee program.
Sec. 13. Studies and reports.
Sec. 14. Additional resources.
Sec. 15. Definitions.
Sec. 16. Effective date.
SEC. 2. SENSE OF CONGRESS.
It is the sense of Congress that the purpose of the drug discount
program under section 340B of the Public Health Service Act (42 U.S.C.
256b) is to stretch scarce Federal resources and help safety net
providers maintain, improve, and expand patient access to health care
services by requiring drug manufacturers, as a condition of
participation in the Medicaid program under title XIX of the Social
Security Act (42 U.S.C. 1396 et seq.) and the Medicare program under
part B of title XVIII of the Social Security Act (42 U.S.C. 1395j et
seq.), to provide discounts at the point of purchase to covered
entities that serve a disproportionate share of low-income and
underserved patients or medically vulnerable patients.
SEC. 3. CONTRACT PHARMACY.
(a) Use of Contract Pharmacies.--Section 340B(a) of the Public
Health Service Act (42 U.S.C. 256b(a)) is amended by adding at the end
the following:
``(11) Contract pharmacies.--
``(A) In general.--A covered entity may elect to
use one or more wholly-owned pharmacies, in addition to
one or more contract pharmacies, to acquire and
dispense to patients of the covered entity covered
outpatient drugs purchased by the covered entity
pursuant to an agreement described in paragraph (1).
``(B) Limits on certain contract pharmacies.--
``(i) In general.--Subject to clause (ii),
each covered entity that elects to use one or
more contract pharmacies to dispense covered
outpatient drugs purchased by the covered
entity pursuant to an agreement described in
paragraph (1) to patients of the covered entity
shall cancel the contract with any such
pharmacy that has not dispensed any covered
outpatient drugs to such patients in the most
recent 12-month period.
``(ii) Exceptions.--A covered entity is not
required to cancel the contract of a pharmacy
that has not dispensed covered outpatient drugs
in the most recent 12-month period, as
described in clause (i), if--
``(I) there is a change of
ownership of the covered entity or
pharmacy requiring a new contract to
continue an established arrangement;
``(II) there is a change to the
covered entity's service area;
``(III) the contract pharmacy is
necessary for the covered entity to
preserve access for emergency or
contingency use; or
``(IV) other circumstances exist,
as the Secretary may determine
appropriate.
``(iii) Threshold for high number of
contract pharmacies.--The Secretary may develop
a process that is not overly burdensome to the
covered entities to increase audits on covered
entities that use a high number of contract
pharmacies, as determined by the Secretary.
``(C) Registration of contract.--A covered entity
shall register with the Secretary, and annually
recertify, any contract for a contract pharmacy
arrangement, in accordance with such registration
requirements as the Secretary may establish through
regulations. Such registration requirements shall
include requiring the covered entity to do each of the
following:
``(i) Submit all contract pharmacy
agreements to the Secretary in a timely manner,
prior to implementing the contract pharmacy
agreement.
``(ii) Register each contract pharmacy
arrangement with the Secretary prior to
implementing the contract pharmacy agreement.
``(iii) Attest to the covered entity's
compliance with the requirements under this
section.
``(D) Contract review process.--The Secretary shall
establish a process to review written agreements
between a covered entity and each of its contract
pharmacies described in subparagraph (E)(i), to ensure
compliance with the requirements under this subsection.
``(E) Improvements in contract pharmacy arrangement
integrity.--To ensure the integrity of contract
pharmacy arrangements described in this paragraph,
including to prevent diversion and duplicate discounts
described in paragraph (5)(A), the Secretary shall
promulgate rules to carry out the following:
``(i) Require a written agreement between a
covered entity and one or more contract
pharmacies of the covered entity. Each such
agreement shall--
``(I) list the address of each
contract pharmacy location that will
dispense drugs on behalf of the covered
entity or reference the list of such
covered entity sites that are active
sites in the 340B Office of Pharmacy
Affairs Information System (or a
successor to such system);
``(II) be signed and in effect not
later than the day before the contract
pharmacy begins dispensing covered
outpatient drugs purchased under this
section on behalf of the covered
entity; and
``(III) include the standard
contract provisions established under
clause (ii).
``(ii) Develop standard contract provisions
that are required to be included in each
written agreement described in clause (i),
including provisions providing that--
``(I) the contract pharmacy is
required to provide pharmacy services;
``(II) the contract pharmacy is
required to provide data to the covered
entity to support the submission by the
covered entity of covered outpatient
data to a clearinghouse contracted
entity described in section 1150D(a) of
the Social Security Act;
``(III) neither the contract
pharmacy nor the covered entity will
require a patient to use a certain
pharmacy or to obtain a prescription
from the covered entity, or otherwise
interfere with patient choice of a
pharmacy provider, except in the case
of a covered entity participating in
the program under section 2616;
``(IV) the contract pharmacy may
provide other services to the covered
entity or its patients at the option of
the covered entity, such as home care,
delivery, or reimbursement services;
``(V) regardless of the services
provided by the contract pharmacy,
access to covered outpatient drugs
purchased under this section will be
restricted to patients of the covered
entity;
``(VI) the contract pharmacy will
provide the covered entity with any
information requested consistent with
customary business practices, such as
quarterly billing statements, status
reports of collections, or receiving
and dispensing records;
``(VII) the covered entity and the
contract pharmacy will develop and
implement a system to verify
eligibility of patients, in accordance
with subsection (b)(3), and will
establish and maintain safeguards to
prevent diversion of covered outpatient
drugs;
``(VIII) the contract pharmacy may
not use covered outpatient drugs
purchased under this section to
dispense prescriptions that are
reimbursed under the Medicaid program
under title XIX of the Social Security
Act, unless the covered entity, the
contract pharmacy, and the State
Medicaid agency have established an
arrangement to prevent duplicate
discounts, consistent with paragraph
(5)(A), and such arrangement is
reported to the Secretary;
``(IX) the contract pharmacy agrees
to be subject to annual independent
audits commissioned by the covered
entity; and
``(X) both the covered entity and
the contract pharmacy shall be subject
to audits, by the Secretary and drug
manufacturers, of records that pertain
to the covered entity's compliance with
paragraph (5), to prevent diversion and
violations of the duplicate discount
prohibition.
``(iii) Review written agreements, at the
time of registration or recertification, or
more frequently if the Secretary determines
necessary, between covered entities and
contract pharmacies to ensure compliance with
the requirements under this section, to analyze
program operations, and to provide program
oversight.
``(iv) Provide specific guidance to covered
entities regarding the practices and procedures
for contract pharmacy oversight, including the
scope and frequency of such oversight.
``(v) Establish a retention period of at
least 3 years during which covered entities and
contract pharmacies are required to maintain
all relevant auditable records in relation to
contract pharmacy arrangements, including
records relating to transactions of drugs
purchased pursuant to an agreement under
paragraph (1), sufficient to demonstrate
compliance with the requirements described in
paragraph (5).''.
(b) Manufacturer Requirements.--Section 340B(a) of the Public
Health Service Act (42 U.S.C. 256b(a)), as amended by subsection (a),
is further amended by adding at the end the following:
``(12) Manufacturer requirements.--A manufacturer of a
covered outpatient drug that is subject to an agreement with
the Secretary under paragraph (1) shall, as a condition of such
agreement, comply with the following requirements:
``(A) Offer the covered entity covered outpatient
drugs for purchase at or below the applicable ceiling
price described in paragraph (1) regardless of whether
the drug is dispensed directly by the covered entity or
through a contract pharmacy of the covered entity.
``(B) Deliver or allow the delivery of covered
outpatient drugs purchased by a covered entity at or
below the applicable ceiling price described in
paragraph (1) to locations, including pharmacy
locations as requested by a covered entity, in
accordance with the covered entity's contract pharmacy
agreements.
``(C) Not, directly or indirectly, place any of the
following conditions on the offers made to a covered
entity to purchase a covered outpatient drug at or
below the applicable ceiling price described in
paragraph (1) for dispensing according to the
applicable written contract pharmacy arrangements:
``(i) Restricting distribution options only
with respect to covered outpatient drugs,
covered entities, or contract pharmacies.
``(ii) Requiring the submission of claims
data to the manufacturer, except for
submissions to the entity receiving the
contract to maintain the clearinghouse under
section 1150D of the Social Security Act.
``(iii) Such other conditions as the
Secretary may prohibit through notice and
comment rulemaking.''.
(c) Program Integrity.--Section 340B(d)(1)(B)(vi)(III) of the
Public Health Service Act (42 U.S.C. 256b(d)(1)(B)(vi)(III)) is
amended--
(1) by striking ``intentionally charges'' and inserting the
following: ``intentionally--
``(aa) charges'';
(2) by striking the period and inserting a semicolon; and
(3) by adding at the end the following:
``(bb) refuses to offer a
covered outpatient drug for
purchase at or below the
ceiling price;
``(cc) refuses to deliver a
covered outpatient drug
purchased by a covered entity
at or below the ceiling price;
or
``(dd) places conditions on
the ability of a covered entity
to purchase a covered
outpatient drug at or below the
ceiling price.''.
(d) Transparency.--Paragraph (11) of section 340B(a) of the Public
Health Service Act (42 U.S.C. 256b(a)), as added by subsection (a), is
amended by adding at the end the following:
``(F) Transparency.--Each covered entity that uses
one or more contract pharmacies as described in this
paragraph shall make the following information about
each contract pharmacy arrangement pursuant to this
paragraph and registered under subparagraph (C)
available to the Secretary for publication on the
website of the Department of Health and Human Services:
``(i) The name of the covered entity,
including each child site, that uses a contract
pharmacy.
``(ii) The name and address of each
contract pharmacy location to which the
contract pharmacy arrangement applies.
``(iii) The effective date of the contract
pharmacy arrangement.
``(iv) The last year a covered outpatient
drug was dispensed under the contract pharmacy
arrangement from each location.
``(v) The number of covered outpatient
drugs dispensed annually from each location
under this section.
``(vi) Whether the contract pharmacy is a
mail-order or payer-mandated pharmacy.''.
(e) Auditing.--Section 340B(a)(5)(C) of the Public Health Service
Act (42 U.S.C. 256b(a)(5)(C)) is amended--
(1) by striking ``A covered entity'' and inserting the
following:
``(i) In general.--A covered entity''; and
(2) by adding at the end the following:
``(ii) Contract pharmacy audits.--
``(I) In general.--A covered entity
that uses one or more contract
pharmacies shall permit the Secretary
or the manufacturer of a covered
outpatient drug that the covered entity
or pharmacy purchased under this
section to audit at the Secretary's or
the manufacturer's expense the records
of the covered entity and contract
pharmacy to assess compliance with the
contract pharmacy requirements under
paragraph (11) with respect to drugs of
the manufacturer.
``(II) Process.-- In order to
initiate an audit under subclause (I),
a manufacturer shall--
``(aa) demonstrate credible
allegations to the Secretary
about noncompliance under
subparagraph (B) or (C) of
paragraph (11) and evidence of
good faith outreach to
determine compliance, including
through--
``(AA) notification
to the covered entity
in writing when the
manufacturer determined
that the covered entity
may have violated the
requirements under
subparagraph (B) or (C)
of paragraph (11); and
``(BB) providing
the covered entity a
30-day period,
beginning on the date
of notification under
subitem (AA), to
resolve the matter; and
``(bb) submit to the
Secretary evidence of the
credible allegations described
in item (aa) to request
authorization to proceed with
an audit of the covered entity.
``(III) Corporate officers.--A
corporate officer of the covered entity
shall be responsible for corrections of
noncompliance identified in an audit
conducted under this clause.
``(IV) Authority to establish audit
process.--The Secretary shall
establish, through notice and comment
rulemaking, a process for making a
determination of a credible allegation
under this clause, a timeline for
making such a determination, and the
audit process relating to the number,
scope, and duration of audits
authorized under this clause.''.
SEC. 4. PATIENT DEFINITION.
(a) Patient Definition.--
(1) In general.--Section 340B(b) of the Public Health
Service Act (42 U.S.C. 256b(b)) is amended to add at the end of
the following:
``(3) Patient.--
``(A) In general.--In this section, the term
`patient', with respect to a covered entity, means an
individual who--
``(i) has received an outpatient health
care service from the covered entity at any
point within the preceding 2 years;
``(ii) has a relationship with the covered
entity such that the covered entity creates and
maintains an auditable medical record in a form
and manner consistent with State and Federal
law, that demonstrates the existence of a
patient relationship in accordance with this
paragraph for each prescription or order for a
covered outpatient drug, and maintains such
record for a period of at least 3 years, or
longer if required by State or Federal law; and
``(iii) received a prescription or order
for a covered outpatient drug--
``(I) from a practitioner as a
result of an outpatient health care
service described in clause (i); or
``(II) as a result of a referral
described in subsection (a)(13).
``(B) AIDS drug purchasing assistance program
patients.--An individual registered in the program of a
covered entity described in subsection (a)(4)(E) is a
patient of the covered entity for purposes of this
paragraph.
``(C) State or political subdivision of a state
receiving funding under section 318.--An individual who
receives a drug purchased by a State or political
subdivision of a State, for the treatment of a disease
or condition for which the State or political
subdivision of a State has received such award under
section 318, is a patient exclusively of the State or
political subdivision of the State for the purpose of
qualifying that prescription for 340B pricing under
this section.
``(D) Exclusions.--For purposes of this section, an
individual shall not be considered a patient of a
covered entity if the outpatient health care services
received by the individual consist only of--
``(i) the administration of a drug, or the
dispensing of a drug for subsequent self-
administration or administration in the home
setting; or
``(ii) an infusion of a drug.
``(E) Exception for discharge prescriptions.--In
the case of a patient discharged from an emergency
department or inpatient hospital stay from a covered
entity described in any of subparagraph (A) through (O)
of subsection (a)(4) that results in an outpatient
prescription, a covered entity may provide such drug to
the individual as a covered outpatient drug pursuant to
the program under this section, and shall be deemed to
meet the requirements for establishment of a patient
under subparagraph (A) in the same manner and under the
same conditions as the covered entity would provide
such drug to such patient had the covered entity
prescribed the drug.
``(4) Outpatient health care service.--The term `outpatient
health care service' means an outpatient health care service--
``(A) that was furnished pursuant to a valid,
written order that is documented or a referral that is
documented in the medical record for the patient that
is maintained by the covered entity; and
``(B)(i) for which reimbursement under title XVIII
or XIX of the Social Security Act would be available
when the services were furnished;
``(ii) that can be identified by a CPT established
by the American Medical Association or HCPCS code
established by the Centers for Medicare & Medicaid
Services as of the date the services were furnished; or
``(iii) in the case of covered entity described in
any of subparagraphs (A) through (K) of subsection
(a)(4), that is a service that is consistent with the
scope of the grant or designation described in the
applicable such subparagraph.
``(5) Practitioner.--The term `practitioner' means a health
care practitioner who--
``(A)(i) is an employee or independent contractor
of a covered entity, and the covered entity bills for
such services and is responsible for the care furnished
by such practitioner; or
``(ii) furnishes health care services under an
ongoing contractual obligation to a covered entity,
cooperative arrangement pursuant to section 330 with a
covered entity described in subsection (a)(4)(A), or,
only in the case of a covered entity that is prohibited
to enter into contractual obligations, pursuant to
medical staff membership with a covered entity, such
that the covered entity maintains clinical
responsibility for the health care services that
resulted in the patient receiving a prescription or
order for the covered outpatient drug; and
``(B) is not excluded, pursuant to section 1128 of
the Social Security Act, from participation in the
Medicare program or a State health care program (as
defined in section 1128(h) of the Social Security
Act).''.
(2) Audits.--Section 340B(a)(5)(C) of the Public Health
Service Act (42 U.S.C. 256b(a)(5)(C)), as amended by section
3(e), is further amended by adding at the end the following:
``(iii) Audits relating to patient
status.--
``(I) In general.--A covered entity
providing covered outpatient drugs
pursuant to an agreement under
paragraph (1) shall permit the
Secretary and the manufacturer to
audit, at the Secretary's or
manufacturer's expense, the records of
the entity with respect to drugs of the
manufacturer that directly pertain to
the entity's compliance with--
``(aa) treating individuals
as patients of the entity only
as described in subsection
(b)(3); and
``(bb) the requirements for
providing such drugs to
referred patients pursuant to
paragraph (13).
``(II) Auditing.--The Secretary
shall audit the records of covered
entities with respect to records
described in this clause not less
frequently than every 3 years, and
shall audit high-risk and high-volume,
as defined by the Secretary, covered
entities more frequently, in a manner
that is not overly burdensome to the
covered entity. The Secretary shall
establish a mechanism for manufacturers
to request and authorize audits
specific to referral prescription
eligibility under paragraph (13) upon
demonstration of a credible allegation
of non-compliance.
``(III) Authority to establish
process.--The Secretary shall
establish, through notice and comment
rulemaking, a process for manufacturers
and covered entities to make a good
faith attempt to resolve any concerns
identified by a manufacturer prior to
the initiation of an audit under this
clause. A manufacturer shall provide to
the covered entity the same materials
that the manufacturer provided to the
Secretary to support a credible
allegation under this clause, as
determined by the Secretary.''.
(3) Enforcement.--Section 340B(a)(5)(D) of the Public
Health Service Act (42 U.S.C. 256b(a)(5)(D)) is amended--
(A) by striking ``subparagraphs (A)'' and inserting
``subparagraph (A)'';
(B) by striking ``If the Secretary'' and inserting
the following:
``(i) In general.--If the Secretary''; and
(C) by adding at the end the following:
``(ii) Sanctions for noncompliance with
patient status requirements.--If the Secretary
determines, after an audit described in
subparagraph (C)(iii), a covered entity to not
be in compliance with the requirements of
treating an individual as a patient of the
covered entity as described in subsection
(b)(3) or the requirements of paragraph (13)--
``(I) the covered entity shall
develop a corrective action plan, which
shall be subject to approval and
monitoring by the Secretary; and
``(II) if the Secretary determines
that the covered entity has not
adequately corrected its noncompliance
in accordance with such plan--
``(aa) the covered entity
shall be ineligible to
participate in the drug
discount program under this
section for a period determined
by the Secretary, not to exceed
3 years; and
``(bb) the Secretary may
order the covered entity to pay
civil monetary penalties,
pursuant to subpart O of part
1003 of title 42, Code of
Federal Regulations (or any
successor regulations), with
respect to any covered
outpatient drugs purchased by
the covered entity during the
period in which the covered
entity was found to be not in
compliance with the
requirements of treating an
individual as a patient of the
entity as described in
subsection (b)(3) or the
requirements of paragraph
(13).''.
(b) Covered Entity Registration.--Section 340B(a)(5) of the Public
Health Service Act (42 U.S.C. 256b(a)(5)) is amended by adding at the
end the following:
``(E) Covered entity registration.--As a condition
for participation in the drug discount program under
this section, a covered entity shall register with the
Secretary and be listed on the 340B Office of Pharmacy
Affairs Information System (or a successor to such
system).''.
(c) Treatment of Certain Prescriptions for Patients Referred to
Non-340B Providers.--Section 340B(a) of the Public Health Service Act
(42 U.S.C. 256b(a)), as amended by section 3(b), is further amended by
adding at the end the following:
``(13) Referral prescriptions.--
``(A) In general.--In the case of a patient of an
eligible covered entity who is referred by such covered
entity to a prescribing provider who is not providing
care on behalf of a covered entity, and such
prescribing provider prescribes a drug within 12 months
of the patient receiving such referral, the eligible
covered entity may provide such drug to such patient as
a covered outpatient drug pursuant to the program under
this section, in the same manner and under the same
conditions as the covered entity would provide such
drug to such patient had the covered entity prescribed
the drug, in accordance with the requirements under
subparagraph (C).
``(B) Eligible covered entity.--For purposes of
this paragraph, a covered entity is an eligible covered
entity if such entity is--
``(i) an entity described in any of
subparagraphs (A) through (K) or (N) of
paragraph (4); or
``(ii) a sole community hospital described
in paragraph (4)(O).
``(C) Requirements.--
``(i) In general.--An eligible covered
entity may provide a drug to a patient as
described in subparagraph (A) only if--
``(I) the covered entity has a
documented relationship with the
patient, as described in subsection
(b)(3), and has documentation of the
provision of care provided by the
covered entity and the prescribing
provider and consultation with the
prescribing provider regarding such
patient, including documentation of the
referral and the prescription;
``(II) the patient was referred to
the prescribing provider who prescribed
the drug by the covered entity;
``(III) the prescription is filled
at the covered entity's wholly-owned
pharmacy or contract pharmacy;
``(IV) the covered entity
maintains, for a period of at least 3
years, documentation of compliance with
this paragraph, including all documents
subject to audit under paragraph
(5)(C);
``(V) the covered entity does not
share the savings received from
purchasing the covered outpatient drug
with the prescribing provider; and
``(VI) the covered entity meets
such other requirements as the
Secretary may establish through notice
and comment rulemaking.
``(ii) Excepted drugs.--
``(I) In general.--Except as
provided in subclause (II), a covered
entity may not provide a patient a
covered outpatient drug pursuant to
subparagraph (A) if such drug--
``(aa) is an infused drug;
``(bb) is a clinician-
administered drug; or
``(cc) otherwise requires
administration by a clinician.
``(II) Exceptions.--A covered
entity may provide a patient a covered
outpatient drug described in subclause
(I) pursuant to subparagraph (A) if--
``(aa) the eligible covered
entity is a covered entity
described in paragraph (4)(A)
and was providing infusion
services necessary to deliver a
required primary health service
or an additional health service
(as defined in section
330(b)(1)) pursuant to funding
received under section 330, as
of the date of enactment of the
SUSTAIN 340B Act; or
``(bb) the Secretary
determines, through notice and
comment rulemaking, that low-
income, medically underserved
residents of the service area
of the eligible covered entity
lack access to infusion
services within a reasonable
distance and based on this
determination, the eligible
covered entity receives
approval from the Secretary to
provide these services pursuant
to funding provided under
section 330, subject to all the
requirements of that section.
``(D) Rule of construction.--Nothing in this
paragraph shall be construed to affect the application
of subsection (e).
``(E) Addressing significant volume of drugs
provided to referred patients.--
``(i) In general.--The Secretary shall
audit any eligible covered entity that, in any
year, provides covered outpatient drugs to
patients who received a prescription for such
drug from a provider who is not a covered
entity in a volume that exceeds the lesser of--
``(I) 20 percent of the total
number of covered outpatient drugs
purchased by the covered entity at or
below the applicable ceiling price and
dispensed by the covered entity for the
year; or
``(II) the average annual
percentage over the most recent 3-year
period, of the total number of covered
outpatient drugs purchased by the
covered entity at or below the
applicable ceiling price for the year
and dispensed by the covered entity to
patients, that were dispensed to
patients who received a prescription
for such drug from a provider who is
not a covered entity.
``(ii) Hardship exceptions.--The Secretary
shall develop specific criteria for a hardship
exceptions process, that is not overly
burdensome to a covered entity, under which an
eligible covered entity may exceed the
threshold established under clause (i) without
requiring an audit described in such clause
only if the eligible covered entity provides
required information to the Secretary to
demonstrate such hardship, such as a medical
need or workforce shortage, in accordance with
the criteria established by the Secretary.
``(iii) Reporting.--A covered entity shall
report annually to the Secretary--
``(I) the percentage of the covered
entity's revenue under the drug
discount program derived from drugs
prescribed by a prescribing provider
pursuant to this subsection; and
``(II) the percentage of the total
number of covered outpatient drugs
purchased by the covered entity that
were prescribed by a prescribing
provider pursuant to this subsection.
``(iv) Public availability of
information.--The Secretary shall make
aggregate information on eligible covered
entities identified under clause (i) available
on the website of the Health Resources and
Services Administration, in such form and
manner that the Secretary determines
appropriate, and shall not identify any
specific covered entity.
``(F) Enforcement.--
``(i) Corrective action plan.--In the case
that the Secretary finds that a covered entity
has failed to comply with any requirement under
this paragraph, such covered entity shall be
required to submit a corrective action plan to
the Secretary, which shall be subject to
approval and monitoring by the Secretary.
``(ii) Loss of referral authorization.--A
covered entity that fails to comply with a
corrective action plan within 180 days of
approval of such plan by the Secretary under
clause (i) shall become ineligible to provide
covered outpatient drugs to referred patients
under subparagraph (A) for such period of time
determined by the Secretary under the
corrective action plan, not to exceed 3 years.
``(iii) Monetary penalties.--The Secretary
may impose civil monetary penalties, pursuant
to subpart O of part 1003 of title 42, Code of
Federal Regulations (or any successor
regulations), on a covered entity for any
discounts received by such entity on covered
outpatient drugs provided to referred patients
under this paragraph, if the covered entity is
found to be noncompliant with the requirements
of this paragraph with respect to the relevant
drug.
``(G) Definitions.--For the purposes of this
paragraph--
``(i) the term `prescribing provider' means
a licensed health care provider who prescribes
a drug to a patient of a covered entity based
on the referral of the patient by the covered
entity to the provider; and
``(ii) the term `referral' means a written,
electronic, or otherwise documented order by a
licensed health care provider ordering, or the
recertifying of the need for, a health
service.''.
(d) OIG Report on Referral Prescriptions.--The Inspector General of
the Department of Health and Human Services shall--
(1) during the 12-year period beginning on the date of
enactment of this Act, conduct an annual study on covered
outpatient drugs provided pursuant to prescriptions for
referred patients under paragraph (13) of section 340B(a) of
the Public Health Service Act (42 U.S.C. 256b(a)), as added by
subsection (c); and
(2) not later than 2 years after the date of enactment of
this Act, and for each of the next 10 years, submit to Congress
a report on the study under paragraph (1).
SEC. 5. 340B REBATE MODEL PILOT PROGRAM SUNSET.
Not later than 1 year after the date of enactment of this Act, the
Secretary of Health and Human Services (referred to in this section as
the ``Secretary'') shall conclude the 340B Rebate Model Pilot Program,
or a substantially similar program established by the Department of
Health and Human Services. The 340B Rebate Model Pilot Program, or a
substantially similar program, shall not be expanded. One year after
the date of enactment of this Act, the Secretary shall discontinue the
340B Rebate Model Pilot Program, or a substantially similar program,
and transition to the 340B Drug Discount Program Data Clearinghouse
established under section 1150D of the Social Security Act, as added by
section 9(a).
SEC. 6. CHILD SITES.
(a) In General.--Section 340B(a) of the Public Health Service Act
(42 U.S.C. 256b(a)), as amended by section 4(c), is further amended by
adding at the end the following:
``(14) Child sites.--
``(A) In general.--A covered entity described in
subparagraph (L), (M), (N), or (O) of paragraph (4)
that owns and operates a child site that participates
in the drug discount program under this section shall
maintain documentation of, and annually recertify to
the Secretary through such certification processes
established under title XVIII of the Social Security
Act, that each such child site is wholly-owned by the
entity and clinically and financially integrated with
the covered entity and providing care consistent with
the policies of the covered entity, including by--
``(i) registering each child site with the
Secretary, which, in the case of a child site
that is eligible for participation as described
in subparagraph (B)(ii), shall include
submission of the attestation (absent billing
requirements) that the child site meets the
Medicare provider-based rules under section
413.65 of title 42, Code of Federal Regulations
(or any successor regulations);
``(ii) applying the same financial
assistance policy for patients as applies with
respect to other sites operated by the covered
entity; and
``(iii) ensuring that each child site
complies with the Medicare provider-based rules
under section 413.65 of title 42, Code of
Federal Regulations (or any successor
regulations), or meets the requirements of
subparagraph (B)(i).
``(B) Eligibility for child sites.--
``(i) In general.--A child site is eligible
for participation in the drug discount program
under this section, through the eligibility of
the covered entity that owns and operates such
child site, only if the covered entity
demonstrates that the child site meets the
following requirements:
``(I) The child site applies the
same financial assistance policy for
patients as the covered entity.
``(II) The child site ensures that
the providers who order or dispense
covered outpatient drugs purchased
under this section at the child site or
a contract pharmacy of the covered
entity have clinical responsibility for
health care services that result in the
receipt of a prescription or order of
the covered outpatient drug purchased
under this section that is dispensed.
``(III) The child site provides a
clinically meaningful range of
services, as determined by the services
that providers or suppliers employed
by, contracted with, or authorized to
provide services at, the child site are
qualified to deliver.
``(IV) The child site is operated
under the same license as the covered
entity, except in areas where the State
requires a separate license for the
child site, or in States where State
law does not permit licensure of the
child site and the covered entity under
a single license. If a State health
facilities cost review commission or
other agency that has authority to
regulate the rates charged by providers
in a State finds that a child site is
not part of the covered entity, the
child site shall not be eligible for
the drug discount program under this
section.
``(V) The clinical services of the
child site and the covered entity are
integrated as evidenced by the
following:
``(aa) Professional staff
of the child site have clinical
privileges at the covered
entity.
``(bb) The covered entity
maintains the same monitoring
and oversight of the child site
as for any other owned entity
or subsidiary of the covered
entity.
``(cc) The medical director
of the child site maintains a
reporting relationship with the
chief medical officer or other
similar official of the covered
entity that has the same
frequency, intensity, and level
of accountability that exists
in the relationship between the
medical director of a
department of the covered
entity and the chief medical
officer or other similar
official of the covered entity,
and is under the same type of
supervision and accountability
as any other director, medical
or otherwise, of the covered
entity.
``(dd) Medical staff
committees or other
professional committees at the
covered entity are responsible
for medical activities in the
child site, including quality
assurance, utilization review,
and the coordination and
integration of services, to the
extent practicable, between the
child site and covered entity.
``(ee) Medical records for
patients treated in the child
site are integrated into a
unified retrieval system, or
have the ability to be readily
accessed by the covered entity.
``(ff) Inpatient and
outpatient services of the
child site and the covered
entity are integrated, and
patients treated at the child
site who require further care
have full access to all
services of the covered entity
and are referred where
appropriate to the
corresponding inpatient or
outpatient department or
service of the covered entity.
``(VI) The financial operations of
the child site are fully integrated
within the financial system of the
covered entity, as evidenced by shared
income and expenses between the covered
entity and the child site. For purposes
of the Medicare program under title
XVIII of the Social Security Act, the
costs of a child site are reported in
the appropriate cost center or cost
centers of the covered entity, and the
financial status of any child site is
incorporated and readily identified in
the covered entity's trial balance.
``(VII) The child site is held out
to the public as part of the covered
entity, such that, when patients enter
the child site, they are aware that
they are entering the covered entity.
``(VIII) The child site is operated
under the ownership and control of the
covered entity, as evidenced by the
following:
``(aa) The business
enterprise that constitutes the
child site is 100 percent owned
by the covered entity.
``(bb) The covered entity
and the child site have the
same governing body.
``(cc) The child site is
operated under the same
organizational documents as the
covered entity, and is subject
to common bylaws and operating
decisions of the governing body
of the covered entity.
``(dd) The covered entity
has final responsibility for
administrative decisions, final
approval for contracts with
outside parties, final approval
for personnel actions, final
responsibility for personnel
policies (such as fringe
benefits or code of conduct),
and final approval for medical
staff appointments at the child
site.
``(IX) The reporting relationship
between the child site and the covered
entity have the same frequency,
intensity, and level of accountability
that exists in the relationship between
the covered entity and its other
departments, as evidenced by compliance
with the following requirements:
``(aa) The child site is
under the direct supervision of
the covered entity.
``(bb) The child site is
operated under the same
monitoring and oversight by the
covered entity as any other
department of the covered
entity, and is operated as any
other department of the covered
entity with regard to
supervision and accountability.
The director or individual
responsible for daily
operations at the child site--
``(AA) maintains a
reporting relationship
with a manager at the
covered entity that has
the same frequency,
intensity, and level of
accountability that
exists in the
relationship between
the covered entity and
its existing
departments; and
``(BB) is
accountable to the
governing body of the
covered entity, in the
same manner as any
department head of the
covered entity.
``(X) The following administrative
functions of the child site are
integrated with the functions of the
covered entity: billing services,
records, human resources, payroll,
employee benefit package, salary
structure, and purchasing services.
Either the same employees or group of
employees handle such administrative
functions for the child site and the
covered entity, or the administrative
functions for both the child site and
the covered entity are--
``(aa) contracted out under
the same contract agreement; or
``(bb) handled under
different contract agreements,
with the contract of the child
site being managed by the
covered entity.
``(XI)(aa) The child site is listed
on the covered entity's most recently
filed Medicare cost report on a line
that is reimbursable under the Medicare
program (or, if the covered entity does
not file a Medicare cost report, the
covered entity submits to the Secretary
a signed statement certifying that the
site would be correctly included on a
reimbursable line of a Medicare cost
report if the covered entity filed a
cost report).
``(bb) Such cost report
demonstrates that the services provided
at the child site have associated costs
and charges for covered entity
outpatient department services under
title XVIII of the Social Security Act
(or, if the covered entity does not
file a Medicare cost report, the
covered entity submits to the Secretary
a signed statement certifying that the
services provided at the child site
include or consist solely of outpatient
services).
``(ii) HRSA deeming.--
``(I) In general.--If the
Administrator of the Centers for
Medicare & Medicaid Services has
determined a site to be qualified as a
provider-based entity and in compliance
with the provider-based requirements
under section 413.65 of title 42, Code
of Federal Regulations (or any
successor regulations), the Secretary
shall deem the site to have met the
requirements described in clause (i).
``(II) Rule of construction.--This
clause shall authorize the Secretary to
establish a process to determine
whether a child site, as determined by
the Administrator of the Centers for
Medicare & Medicaid Services, complies
with the Medicare provider-based rules
under section 413.65 of title 42, Code
of Federal Regulations (or any
successor regulations).
``(iii) Process for registration.--The
Secretary shall develop a process for the
registration of child sites that are eligible
for participation under clause (i) or (ii).
``(iv) Eligibility delay for certain child
sites.--
``(I) Newly acquired sites.--
``(aa) In general.--Except
as provided in item (bb), a
child site acquired by a
covered entity after the date
of enactment of the SUSTAIN
340B Act that was not eligible
to participate in the drug
discount program prior to such
date shall not be eligible to
participate in the drug
discount program under this
section until the date that is
3 years after the date of such
acquisition.
``(bb) Hardship
exemption.--The Secretary may,
on a case-by-case basis,
determine that a newly acquired
child site will be eligible to
participate in the drug
discount program under this
section on a specified date
within 180 days after the date
of acquisition by the covered
entity.
``(II) Newly constructed sites.--A
newly constructed child site that began
operations after the date of enactment
of the SUSTAIN 340B Act shall not be
eligible to participate in the drug
discount program as described in clause
(i) unless such site meets all of the
requirements under this subparagraph.
``(C) Inappropriate treatment of a provider as a
child site.--Not later than 180 days after the first
recertification of the covered entity that occurs after
the date of enactment of the SUSTAIN 340B Act, the
Secretary shall establish a process through notice and
comment rulemaking for determining the status of a
child site that, prior to such date of enactment, was
deemed qualified as a child site but that does not meet
the criteria set forth in this subsection.
``(D) Reports.--
``(i) GAO report on program integrity.--Not
later than 3 years after the date of enactment
of the SUSTAIN 340B Act, the Comptroller
General of the United States shall submit to
the appropriate committees of Congress a report
that analyzes relevant data, including data
made available pursuant to subsection (d)(5),
and makes recommendations with respect to any
policies needed to address program integrity
issues associated with child sites in the drug
discount program under this section.
``(ii) HHS reports to congress.--Not later
than 2 years after the date of enactment of the
SUSTAIN 340B Act, and every 2 years thereafter,
the Secretary shall submit to the appropriate
committees of Congress a report that analyzes
the use of child sites in the drug discount
program under this section, and that--
``(I) characterizes the scope and
nature of child sites in the drug
discount program under this section,
including--
``(aa) the number of newly
acquired child sites;
``(bb) the number of newly
constructed child sites;
``(cc) the concentration of
the child sites across
geographic areas; and
``(dd) the payer-mix of the
child sites;
``(II) assesses the effect of
eligibility delays described in
subparagraph (B)(iv); and
``(III) makes recommendations with
respect to policies needed to address
any issues identified in such report.
``(iii) GAO report on best practices.--Not
later than 1 year after the date of enactment
of the SUSTAIN 340B Act, the Comptroller
General of the United States shall submit a
report to the appropriate committees of
Congress that--
``(I) analyzes input solicited from
relevant stakeholders, including
covered entities and manufacturers,
regarding potential best practices for
ensuring savings received by child
sites through participation in the drug
discount program under this section are
used to meaningfully improve access to
care, including by expanding access to
health care services or health-related
benefits for patients and communities
served by the covered entity, including
child sites of the covered entity; and
``(II) makes recommendations to the
Secretary and appropriate committees of
Congress with respect to implementation
of best practices identified and
analyzed pursuant to subclause (I).''.
(b) Recordkeeping.--Section 340B(a)(5) of the Public Health Service
Act (42 U.S.C. 256b(a)(5)), as amended by section 4(b), is further
amended by adding at the end the following:
``(F) Child site recordkeeping.--In the case of a
covered entity that has registered a child site
pursuant to paragraph (14), the covered entity shall
maintain auditable records for a period of at least 3
years and be subject to audits by the Secretary of
records that pertain to the compliance of the covered
entity and child site with the provisions of paragraph
(14).''.
SEC. 7. TRANSPARENCY.
(a) In General.--Section 340B(d) of the Public Health Service Act
(42 U.S.C. 256b(d)) is amended by adding at the end the following:
``(5) Reporting of program savings.--
``(A) In general.--Not later than 1 year after the
date of enactment of the SUSTAIN 340B Act, and annually
thereafter, each covered entity shall report to the
Secretary the following information with respect to the
covered entity, including with respect to all child
sites and contract pharmacy arrangements, for the
preceding year:
``(i) The total number of individuals who
were dispensed or administered covered
outpatient drugs during such preceding year
that were subject to an agreement under
subsection (a)(1).
``(ii) The total number of prescriptions
dispensed or administered with covered
outpatient drugs purchased under this section
and billed to insurance, organized by type of
health insurance coverage (as specified by the
Secretary, including by the Medicare program
under title XVIII of the Social Security Act,
the Medicaid program under title XIX of such
Act, the Children's Health Insurance Program
under title XXI of such Act, health insurance
coverage offered in the individual or group
market or a group health plan (as such terms
are defined in section 2791), and uninsured).
``(iii)(I) The cost incurred at each
covered entity for charity care, reported as a
fraction, where the numerator is the amount of
charity care reported on worksheet S-10 of the
Medicare cost report (or any successor), and
the denominator is the total operating cost of
the covered entity, as reported for the most
recent cost reporting period; or
``(II) in the case of a covered entity that
is not required to submit a Medicare cost
report, a qualitative description of the
charity care provided by the covered entity, to
the extent applicable under the scope of the
grant for a covered entity described in any of
subparagraphs (A) through (O) of subsection
(a)(4), in such manner that is not overly
burdensome to covered entities, as the
Secretary may require.
``(iv) At the option of the covered entity,
information pertaining to under-reimbursed care
provided by the covered entity.
``(v)(I) A description, submitted in a
standardized form and manner prescribed by the
Secretary, of the covered entity's use of the
savings received through participation in the
drug discount program under this section,
including a description of health care services
or health-related benefits used to benefit the
patients and communities served by the covered
entity, delineated by categories of services
and benefits and populations served, including
such services and benefits provided to
underserved, uninsured, or medically vulnerable
patients and communities; and
``(II) an attestation by the chief
executive officer, chief executive financial
officer, or chief operating officer certifying
that such savings have been used to benefit the
patients and communities served by the covered
entity.
``(vi) The financial demographics of
patients of the covered entity, including--
``(I) the percentage of patients
eligible for financial assistance
programs and sliding scale fees;
``(II) the percentage of patients
who reside in a health professional
shortage area (as defined in section
332) or a medically underserved
community (as defined in section 799B);
``(III) the percentage of patients
who reside in or are part of a
medically underserved population (as
defined in section 330(b)(3));
``(IV) the percentage of uninsured
patients;
``(V) the percentage of patients
who are Medicaid beneficiaries; and
``(VI) the percentage of patients
who are Children's Health Insurance
Program beneficiaries.
``(vii) Policies of the covered entity to
promote access and adherence to prescribed
medication.
``(viii) In the case of a nongovernmental
hospital, any contracts between such hospital
and a State or local governmental entity, and
any modifications to any such contract.
``(ix) Any third-party administrators in
contract with the covered entity for the
administration of the drug discount program.
``(x) The funding shortfall for the covered
entity attributable to services provided to
Medicare and Medicaid beneficiaries, as
reported on the Internal Revenue Service Form
990.
``(xi) The number of patients using the
outpatient services of the covered entity.
``(xii) Operation costs to the covered
entity related to the drug discount program
under this section.
``(B) Records retention.--A covered entity shall
retain records described in subparagraph (A) for a
period of at least 3 years and provide such records and
reports as the Secretary determines necessary for
purposes of carrying out this paragraph.
``(C) Availability of information.--
``(i) In general.--Not later than 90 days
after receiving the information reported by
covered entities under paragraph (1), the
Secretary shall publish such information on the
public website of the Department of Health and
Human Services, which may include the website
of the 340B Office of Pharmacy Affairs
Information System (or a successor to such
system).
``(ii) Format.--Data published under clause
(i) shall be published in an electronic and
searchable format that shows each category of
data reported both in the aggregate and
identified by each type of covered entity
described in subsection (a)(4). In carrying out
this paragraph, with respect to data reported
pursuant to paragraph (1), the Secretary shall
ensure that any proprietary information be
redacted from contracts submitted pursuant to
subparagraph (A)(viii) before posting such
contracts.
``(D) Submission process.--Not later than 1 year
after the date of enactment of the SUSTAIN 340B Act,
the Secretary shall establish a process by which the
information required to be submitted under subparagraph
(A) may be submitted directly to the 340B Office of
Pharmacy Affairs Information System (or a successor to
such system).
``(E) Reports to congress.--Not later than 1 year
after the date of the enactment of the SUSTAIN 340B
Act, and annually thereafter, the Secretary shall
submit a report to the appropriate committees of
Congress on the information collected under
subparagraph (A).
``(F) Regulations.--The Secretary may promulgate
regulations to carry out this paragraph.''.
(b) Auditing.--Section 340B(a)(5)(C) of the Public Health Service
Act (42 U.S.C. 256b(a)(5)(C)), as amended by section 4(a)(2), is
further amended by adding at the end the following:
``(iv) Audits of program savings records.--
A covered entity shall permit the Secretary to
audit, at the Secretary's expense, the records
of the covered entity used for purposes of
reporting under subsection (d)(5)(A), including
how the discount from drugs subject to an
agreement under paragraph (1) is used by the
covered entity.''.
SEC. 8. ENHANCING PROGRAM INTEGRITY.
(a) Audits.--
(1) In general.--Section 340B(a)(5)(C) of the Public Health
Service Act (42 U.S.C. 256b(a)(5)(C)), as amended by section
7(b), is further amended by adding at the end the following:
``(v) Additional audits.--
``(I) In general.--In addition to
the audits otherwise authorized under
this subparagraph, the Secretary may
audit, to assess compliance with
requirements under this section--
``(aa) covered entities,
including the child sites of a
covered entity and contract
pharmacies, to identify any
violations under this section,
including violations related to
improperly claiming eligibility
for the program under this
section, drug diversion,
duplicate discounts, use of
contract pharmacies, or
claiming a discount under this
section on a drug that is not a
covered outpatient drug
purchased pursuant to an
agreement under paragraph (1);
and
``(bb) manufacturers,
including to identify any
failure to provide an accurate
ceiling price.
``(II) Standards.--The Secretary
shall conduct audits described in this
clause in accordance with generally
accepted standards that the Secretary
determines appropriate and shall make
the protocol for such audits publicly
available.
``(III) Requirements.--The
Secretary may not close an audit
described in subclause (I) before a
corrective action plan required by the
Secretary has been fully implemented,
as applicable.
``(IV) 340B vendor information.--To
meet the requirements for submission of
information for audits under this
clause, with respect to carrying out
the program under this section, a
covered entity shall contract only with
vendors agreeing to--
``(aa) submit data to the
Secretary and independent
outside auditors contracting
with the covered entity as
necessary to determine the
covered entity's compliance
with statutory and regulatory
requirements under this
program, prohibitions on drug
diversion and duplicate
discounts, use of contract
pharmacies, and claims for
discounts on covered outpatient
drugs purchased pursuant to
agreements under paragraph (1);
and
``(bb) respond to requests
from auditors in a timely
manner, as determined by the
Secretary.
``(V) Consequences of audit.--The
Secretary shall ensure that, in the
case of an audit finding that--
``(aa) a covered entity did
not meet one or more of the
eligibility criteria for being
a covered entity, as defined in
paragraph (4), during the full
period under review in an
audit, the audit results in
consequences that are
consistent and appropriate with
the violation and that do not
treat the failure to meet
eligibility criteria as an
issue that can be corrected
retroactively; or
``(bb) a manufacturer did
not meet its requirements
pursuant to an agreement under
paragraph (1) during the full
period under review in an
audit, the audit results in
consequences that are
consistent and appropriate with
the violation and that do not
treat the failure to meet the
criteria as an issue that can
be corrected retroactively.
``(VI) Regulations.--Not later than
1 year after the date of enactment of
the SUSTAIN 340B Act, the Secretary
shall establish, through notice and
comment rulemaking, the audit and
reporting procedures required by this
clause.''.
(2) Additional sanctions authority.--Section 340B(d)(2)(B)
of the Public Health Service Act (42 U.S.C. 256b(d)(2)(B)) is
amended--
(A) in clause (v)(II), by inserting ``or where the
covered entity knowingly and intentionally fails to
implement a corrective action plan relating to a
violation involving improperly claiming eligibility for
the program under this section, drug diversion,
duplicate discounts, compliance with contract pharmacy
requirements, or claiming a discount on a drug that is
not a covered outpatient drug (or claiming a rebate on
a drug in the case of an AIDS drug purchasing
assistance program, as determined by the Secretary),
within 180 days of the Secretary notifying the entity
of the requirement for such plan, unless the Secretary
determines it is appropriate to allow additional time
for compliance,'' after ``knowing and intentional,'';
and
(B) by adding at the end the following:
``(vi) Increasing the frequency of audits
conducted for entities previously found to be
in violation of requirements of the drug
discount program that relate to eligibility,
drug diversion, duplicate discounts, compliance
with contract pharmacy requirements, or
claiming a discount on a drug that is not a
covered outpatient drug (or claiming a rebate
on a drug in the case of an AIDS drug
purchasing assistance program described in
subsection (a)(4)(E), as determined by the
Secretary), and assigning responsibility for
making corrections relating to such a violation
to a corporate officer of the covered entity.
``(vii)(I) Establishing a process for a
covered entity to develop and implement a
corrective action plan, and a process by which
the Secretary provides for proper and timely
notification of a potential violation by a
covered entity.
``(II) Disenrolling from the program a
covered entity that fails to implement a
corrective action plan within 180 days of
issuance of a final audit report related to a
statutory violation involving improperly
claiming eligibility for the program under this
section, drug diversion, duplicate discounts,
compliance with contract pharmacy requirements,
claiming a discount on a drug that is not a
covered outpatient drug (or claiming a rebate
on a drug in the case of an AIDS drug
purchasing assistance program described in
subsection (a)(4)(E), as determined by the
Secretary), or failing to comply with reporting
of program savings and use of program savings
as required.''.
(b) Verification of Private Non-Profit Hospital Contracts With
State or Local Governments.--Section 340B(a)(5) of the Public Health
Service Act (42 U.S.C. 256b(a)(5)), as amended by section 6(b), is
further amended by adding at the end the following:
``(G) Verification of private non-profit hospital
contracts with state or local governments.--
``(i) In general.--In the case of a private
non-profit hospital that has a contract with a
State or local government to provide health
care services to low-income individuals who are
not eligible for Medicaid or Medicare, whether
the hospital is registered or seeking to
register for the drug discount program as a
covered entity described under subparagraph
(L), (M), (N), or (O) of paragraph (4), the
Secretary shall take all of the following
steps, each of which shall be documented:
``(I) Prior to registering or
approving annual recertification of
such a hospital (or while carrying out
any program audit of such a hospital),
the Secretary shall obtain and review
the hospital's contract with a State or
local government and shall verify and
document that--
``(aa) the document
provided by the hospital is a
contract, in that it is a
mutually binding agreement for
the hospital to provide health
care services or supplies in
exchange for something of
value;
``(bb) the contract clearly
lists the name of the hospital
and the unit of State or local
government that are parties to
the contract and is signed and
appropriately dated by
appropriate officials of the
hospital and the unit of State
or local government;
``(cc) the contract
specifies an effective date;
``(dd) the contract clearly
is in effect and not expired at
the time of registration (or at
the time of recertification, in
the case of annual
recertification, or for the
full period examined in an
audit, in the case of an
audit); and
``(ee) the contract
explicitly requires that the
hospital provide health care
services, and that such
services must be provided to
individuals who are both low-
income and not eligible for
either the Medicaid program or
the Medicare program.
``(II) The Secretary shall verify
the contracts meeting the requirements
of clause (i) for all covered entities
described in this subparagraph and
registered as of the date of enactment
of the SUSTAIN 340B Act by no later
than 1 year after the date of enactment
of the SUSTAIN 340B Act.
``(III) The Secretary shall not
register or recertify any covered
entity described in this subparagraph
if the entity's contract with a State
or local government does not satisfy
items (aa) through (ee) of subclause
(I).
``(ii) Process.--The Secretary shall
develop a process to verify the contracts
meeting the requirement of clause (i)(I),
including specifying a timeline.''.
(c) Verification of Certain Covered Entities.--Section
340B(a)(4)(L)(i) of the Public Health Services Act (42 U.S.C.
256b(a)(4)(L)(i)) is amended by inserting ``(provided that such a
private non-profit hospital annually submits to the Secretary
verification of such an active contract with a State or local
government and verification of its non-profit status)'' before the
semicolon.
SEC. 9. PREVENTING DUPLICATE DISCOUNTS.
(a) 340B Drug Discount Program Data Clearinghouse.--Part A of title
XI of the Social Security Act (42 U.S.C. 1301 et seq.) is amended by
adding the following the following new section:
``SEC. 1150D. 340B DRUG DISCOUNT PROGRAM DATA CLEARINGHOUSE.
``(a) Clearinghouse Contracting Entity.--Not later than 1 year
after the date of enactment of this section, the Secretary shall enter
into a contract with an independent, third-party entity (who shall be
free of conflicts of interest with covered entities, manufacturers,
health plans, third-party administrators of health plans, entities
providing pharmacy benefit management services to health plans, and of
other conflicts of interest as specified by the Secretary) for purposes
of carrying out the clearinghouse duties under subsection (b) with
respect to the 340B drug discount program to prevent duplicate
discounts and ensure proper accounting. Such contract shall provide
that the third-party entity shall perform the duties described in
subsection (b) and shall be for a 4-year term that may be renewed after
a subsequent bidding process or using competitive procedures, as
defined in section 132 of title 41, United States Code.
``(b) Duties.--With respect to 340B drugs that are dispensed to
individuals who are entitled to or eligible for benefits under the
Medicare program under title XVIII, the Medicaid program under title
XIX (including benefits provided under the Medicaid program through a
managed care arrangement), the Children's Health Insurance Program
under title XXI (including benefits provided under the Children's
Health Insurance Program through a managed care arrangement), or a
health plan, a third-party entity with a contract in effect under
subsection (a) shall--
``(1) request and receive, in the most efficient and least
burdensome manner practicable--
``(A) claims-level rebate file data under section
1927, from State Medicaid agencies;
``(B) claims-level data from covered entities; and
``(C) any other data specified by the Secretary as
necessary for the entity to carry out this section;
``(2) request, receive, and maintain data described in
paragraph (1) in a confidential manner;
``(3) ensure that claims-level data submissions by covered
entities are complete and accurate, and if not, obtain complete
and accurate data from the covered entity;
``(4) notify the covered entity, the Secretary, the State
Medicaid agency, and the manufacturer of any violation
described in subsection (c) to allow for remediation;
``(5) provide the manufacturer of a 340B drug with claims-
level data submitted by a covered entity, so that the
manufacturer may identify units of a 340B drug that may
generate a rebate or discount under a voluntary rebate or
discount arrangement, such as those related to commercial
plans;
``(6) where feasible, share with a covered entity, the
Secretary, a Medicaid State agency, or a manufacturer, data the
third-party entity identifies in a timely manner with the
purpose of preventing any of the violations described in
section 2729A(b)(2) of the Public Health Service Act;
``(7) determine total sales of 340B drugs to such
individuals for purposes of being used as the basis for
determining user fees under section 340B(a)(15) of such Act;
and
``(8) allow covered entities described in subparagraphs (A)
through (K) of section 340B(a)(4) of the Public Health Service
Act, which have the lowest decile of patient volume, as
calculated by the Secretary, to make submissions required under
this section in an aggregated retrospective basis.
``(c) Hardship Exemption.--The Secretary may, on a case-by-case
basis, determine that a covered entity may submit aggregate data if the
Secretary determines that it is not feasible for the entity to submit
claims-level data, as required under this section.
``(d) Restrictions on Contracting Entity.--The entity receiving a
contract under subsection (a) shall--
``(1) ensure that it has no conflicts of interest,
including no direct contractual involvement with any covered
entity, payer, or manufacturer participating in the drug
discount program under section 340B of the Public Health
Service Act;
``(2) not disclose confidential information obtained
through carrying out the clearinghouse duties under this
section other than as necessary to carry out the purposes of
this section, including for program integrity functions;
``(3) not sell or otherwise generate revenue by licensing
or making available the data described in subsection (b)(1);
and
``(4) not collect pricing information regarding drugs that
are not 340B drugs from covered entities.
``(e) Duties of Covered Entity.--Covered entities shall facilitate
and participate in data transmission with the third-party entity with a
contract in effect under subsection (a), including with respect to
reporting on data available through contract pharmacies.
``(f) Restrictions on Manufacturer and PBM Use of Data.--
``(1) In general.--A manufacturer who receives data under
subsection (b)(5) may use such data only for the purpose of
preventing duplicate discounts and diversion under this
section.
``(2) Restrictions on plans, issuers, and pbms.--A health
plan, third-party administrator of a health plan, or entity
providing pharmacy benefit management services may use data
received from the clearinghouse only for the purpose of
preventing duplicate discounts and diversion under this
section.
``(3) Enforcement.--Any manufacturer or other person found
by the Secretary to have used data received under subsection
(b)(5) for uses other than those described in paragraphs (1)
and (2), such as for pricing or marketing, shall be subject to
civil monetary penalties, pursuant to subpart O of part 1003 of
title 42, Code of Federal Regulations (or any successor
regulations), subject to the discretion of the Secretary.
``(g) Privacy Requirements.--The information exchange required by
subsection (b) shall occur in a manner consistent with the privacy,
security, and breach notification regulations promulgated under section
264(c) of the Health Insurance Portability and Accountability Act of
1996.
``(h) Repayment to Manufacturers.--The Secretary shall require a
covered entity to work with affected manufacturers regarding identified
duplicate discounts for 340B drugs, regardless of the method used to
dispense the 340B drug, which shall include repayment--
``(1) by the covered entity as a result of the covered
entity's noncompliance with section 340B of the Public Health
Service Act;
``(2) by a State Medicaid program of rebates improperly
requested by the State Medicaid program; or
``(3) by a State Medicaid program where the financial
benefit of the duplicate discount accrues to the State Medicaid
program, regardless of whether the duplicate discount occurred
under the fee-for-service or managed care payment arrangement.
``(i) Definitions.--In this section:
``(1) 340B drug.--The term `340B drug' means a drug that
is--
``(A) a covered outpatient drug (as defined for
purposes of section 340B of the Public Health Service
Act); and
``(B) purchased under an agreement in effect under
such section.
``(2) Covered entity.--The term `covered entity' means an
entity described in section 340B(a)(4) of the Public Health
Service Act.
``(3) Diversion.--The term `diversion', with respect to a
covered entity and a 340B drug, means the resale or otherwise
transferring of the drug to a person who is not a patient, as
defined in section 340B(b)(3) of the Public Health Service Act,
of the covered entity.
``(4) Duplicate discount.--The term `duplicate discount'
means a payment under title XIX for medical assistance
described in section 1905(a)(12) with respect to a 340B drug if
the drug is subject to the payment of a rebate to the State
under section 1927.
``(5) Health plans.--The term `health plan' has the meaning
given to that term in section 1128C(c).
``(6) Manufacturer.--The term `manufacturer' has the
meaning given to that term in section 1927(k)(5).''.
(b) Prohibited Actions of Group Health Plans and PBMs.--
(1) In general.--A group health plan, a health insurance
issuer offering group or individual coverage (as such terms are
defined in section 2791 of the Public Health Service Act (42
U.S.C. 300gg-91)), or an entity providing pharmacy benefit
management services may not interfere with the ability of
covered entities, contract pharmacies (as such terms are
defined in section 340B of the Public Health Service Act (42
U.S.C. 254b)), or manufacturers of drugs to prevent duplicate
discounts or to recoup the full amount of any identified
duplicate discounts pursuant to the drug discount program under
section 340B of the Public Health Service Act (42 U.S.C. 254b).
(2) Enforcement.--The Secretary of Health and Human
Services shall impose civil monetary penalties, pursuant to
subpart O of part 1003 of title 42, Code of Federal Regulations
(or any successor regulations), on any group health plan,
health insurance issuer, or entity providing pharmacy benefit
management services that violates paragraph (1).
(c) Oversight.--Not later than 1 year after the date of enactment
of this Act, the Secretary of Health and Human Services, acting through
the Administrator of the Centers for Medicare & Medicaid Services and
the Administrator of the Health Resources and Services Administration,
shall issue a report to the appropriate committees of Congress
detailing coordinated efforts, including through the use of existing
resources to address duplicate discounts.
(d) Regulations.--The Secretary of Health and Human Services may
promulgate such rules through notice and comment rulemaking as the
Secretary determines appropriate to advance the purpose of the drug
discount program under section 340B of the Public Health Service Act
(42 U.S.C. 256b) and prevent duplicate discounts through the
clearinghouse established by the amendment made by subsection (a).
(e) Definition.--In this section, the term ``duplicate discount''
has the meaning given such term in section 1150D(h) of the Social
Security Act, as added by subsection (a).
SEC. 10. PATIENT FINANCIAL ASSISTANCE.
Section 340B(a)(5) of the Public Health Service Act (42 U.S.C.
256b(a)(5)), as amended by section 8(b), is further amended by adding
at the end the following:
``(H) Patient financial assistance.--
``(i) In general.--Each covered entity
shall--
``(I) ensure that its financial
assistance policy is transparent to
patients at point of care and publicly
reported;
``(II) apply such financial
assistance policy to patients served by
child sites and contract pharmacies;
and
``(III) upon request of the
Secretary, submit its financial
assistance policy to the Secretary.
``(ii) Records.--The Secretary shall
require covered entities to maintain, for a
period of at least 3 years, auditable records
related to the implementation and enforcement
of this subparagraph.
``(iii) Financial assistance policy
defined.--In this subparagraph, a `financial
assistance policy' means--
``(I)(aa) a written financial
assistance policy described in section
501(r)(4)(A) of the Internal Revenue
Code of 1986, provided, at least, to
patients at 200 percent of the Federal
poverty level or less; and
``(bb) a sliding fee scale for
covered outpatient drugs dispensed to
patients under the drug discount
program under this section, as
applicable; or
``(II) such other alternative
policy as the Secretary may determine
with respect to a specific covered
entity.
``(iv) Oversight.--The Comptroller General
of the United States shall conduct a study and
report to Congress on the impact of
requirements of this subparagraph on patient
access to covered outpatient drugs purchased
under this section.
``(v) Language requirements.--A covered
entity shall make the financial assistance
policy described in clause (i) available to
patients, including patients served by child
sites and contract pharmacies in plain language
(as defined in section 1311(e)(3)(B)of the
Patient Protection and Affordable Care Act).
``(vi) Rule of construction.--Compliance
with this subparagraph shall not be considered
a prohibited act under section 1128A, 1128B(b),
or 1877 of the Social Security Act.
``(vii) Delayed effective date for certain
entities.--With respect to a child site or
contract pharmacy, the requirements of this
subparagraph shall apply beginning on the date
that is 3 years after the date of enactment of
the SUSTAIN 340B Act.''.
SEC. 11. ENSURING THE EQUITABLE TREATMENT OF COVERED ENTITIES AND
PHARMACIES PARTICIPATING IN THE 340B DRUG DISCOUNT
PROGRAM.
(a) Group Health Plan and Health Insurance Issuer Requirements.--
Subpart II of part A of title XXVII of the Public Health Service Act
(42 U.S.C. 300gg-11 et seq.) is amended by adding at the end the
following:
``SEC. 2729A. REQUIREMENTS RELATING TO THE 340B DRUG DISCOUNT PROGRAM.
``(a) In General.--A group health plan, a health insurance issuer
offering group or individual health insurance coverage, or an entity
providing pharmacy benefit management services on behalf of such a plan
or issuer may not discriminate against a covered entity, a 340B
pharmacy, or a participant, beneficiary, or enrollee of such plan or
coverage by imposing requirements, exclusions, reimbursement terms, or
other conditions on such entity or 340B pharmacy that differ from those
applied to entities or pharmacies that are not covered entities or 340B
pharmacies on the basis that the entity or pharmacy is a covered entity
or 340B pharmacy or that the entity or 340B pharmacy dispenses 340B
drugs, including by taking any action prohibited under subsection (b).
``(b) Specified Prohibited Actions.--A group health plan, a health
insurance issuer offering group or individual health insurance
coverage, or an entity providing pharmacy benefit management services
on behalf of such a plan or issuer may not discriminate against a
covered entity, a 340B pharmacy, or a participant, beneficiary, or
enrollee of such plan or coverage by doing any of the following:
``(1) Reimbursing a covered entity or 340B pharmacy for a
quantity of a 340B drug (as defined in subsection (d)) in an
amount less than such plan, issuer, or entity providing
pharmacy benefit management services (as applicable) would pay
to any other similarly situated (as specified by the Secretary)
entity or pharmacy that is not a covered entity or a 340B
pharmacy for such quantity of such drug on the basis that the
entity or pharmacy is a covered entity or 340B pharmacy or that
the entity or pharmacy dispenses 340B drugs.
``(2) Imposing any terms or conditions on any covered
entity or 340B pharmacy, with respect to any of the following
that differ from such terms or conditions applied to other
similarly situated (as specified by the Secretary) entities or
pharmacies that are not covered entities or 340B pharmacies on
the basis that the entity or pharmacy is a covered entity or
340B pharmacy or that the entity or pharmacy dispenses 340B
drugs:
``(A) Fees, chargebacks, clawbacks, adjustments, or
other assessments.
``(B) Professional dispensing fees.
``(C) Restrictions or requirements regarding
participation in standard or preferred pharmacy
networks.
``(D) Requirements relating to the frequency or
scope of audits or to inventory management systems
using generally accepted accounting principles.
``(E) Any other restrictions, conditions,
practices, or policies that, as specified by the
Secretary, interfere with the ability of a covered
entity to maximize the value of discounts provided
under section 340B.
``(3) Interfering with an individual's choice to receive a
340B drug from a covered entity or 340B pharmacy, whether in
person or via direct delivery, mail, or other form of shipment.
``(4) Requiring a covered entity or 340B pharmacy to
identify, either directly or through a third party, 340B drugs.
``(5) Refusing to contract with a covered entity or 340B
pharmacy for reasons other than those that apply equally to
entities or pharmacies that are not covered entities or 340B
pharmacies, or on the basis that--
``(A) the entity or pharmacy is a covered entity or
a 340B pharmacy; or
``(B) the entity or pharmacy is described in any of
subparagraphs (A) through (O) of section 340B(a)(4).
``(6) With respect to a group health plan or health
insurance issuer offering group or individual health insurance
coverage, denying coverage of a drug on the basis that such
drug is a 340B drug.
``(7) Requiring a covered entity to make use of any 340B
pharmacy in a manner that--
``(A) does not meet the requirements set forth in
section 340B for the use of contract pharmacies; or
``(B) is inconsistent with patient need and access.
``(8) Failing to enable pharmacies to distinguish at the
point-of-sale between private health plans and State Medicaid
plans sponsored by the same payer, through methods such as
using the same bank identification number and processor control
number to identify individual enrolled in both types of plans.
``(c) Civil Monetary Penalties.--The Secretary shall impose
monetary penalties, pursuant to subpart O of part 1003 of title 42,
Code of Federal Regulations (or any successor regulations), on any
group health plan, health insurance issuer offering group or individual
health insurance coverage, or entity providing pharmacy benefit
management services on behalf of such a plan or issuer that violates
the requirements of this section. Such penalty shall not exceed $5,000
per violation per day. The Secretary shall issue proposed regulations
to implement this subsection not later than 180 days after the date of
the enactment of this section and shall finalize such regulations not
later than 1 year after such date of enactment. The penalties under
this subsection may be in addition to other enforcement actions
available under this title.
``(d) Definitions.--For purposes of this section:
``(1) Contract pharmacy.--The term `contract pharmacy' has
the meaning given such term in section 340B(b).
``(2) Covered entity.--The term `covered entity' has the
meaning given such term in section 340B(a)(4).
``(3) 340B drug.--The term `340B drug' means a drug that
is--
``(A) a covered outpatient drug (as defined for
purposes of section 340B); and
``(B) purchased under an agreement in effect under
such section.
``(4) 340B pharmacy.--The term `340B pharmacy' means a
pharmacy that is wholly-owned by a covered entity or that is a
contract pharmacy.''.
(b) Medicare Prescription Drug Plan and MA-PD Plan Requirements.--
Section 1860D-12 of the Social Security Act (42 U.S.C. 1395w-112) is
amended by adding at the end the following new subsection:
``(i) Nondiscrimination.--
``(1) In general.--A PDP sponsor offering a prescription
drug plan or an MA organization offering an MA-PD plan may not
require a covered entity to make use of any 340B pharmacy in a
manner that--
``(A) does not meet the requirements set forth in
section 340B of the Public Health Service Act for the
use of 340B pharmacies; or
``(B) is inconsistent with patient need and access.
``(2) Definitions.--In this subsection--
``(A) the term `contract pharmacy' has the meaning
given such term in section 340B(b) of the Public Health
Service Act;
``(B) the term `covered entity' has the meaning
given such term in section 340B of the Public Health
Service Act; and
``(C) the term `340B pharmacy' means a pharmacy
that is wholly-owned by a covered entity or that is a
contract pharmacy.''.
SEC. 12. USER FEE PROGRAM.
(a) In General.--Section 340B(a) of the Public Health Service Act
(42 U.S.C. 256b(a)), as amended by section 6(a), is further amended by
adding at the end the following:
``(15) User fee program.--
``(A) Establishment of quarterly fee.--Beginning in
fiscal year 2031, the Secretary shall in accordance
with this section assess user fees on, and collect such
fees from, each covered entity participating in the
program under this section. The fees shall be assessed
for a fiscal year and collected quarterly during the
last 3 quarters of such fiscal year and the first
quarter of the subsequent fiscal year, and the total
amount assessed and collected for a fiscal year shall
be the amount specified in subparagraph (B)(i) for such
year, subject to subparagraph (C).
``(B) Assessment of user fees.--
``(i) Amount of assessment.--The total
amount of user fees authorized to be assessed
and collected under subsection (a) for a fiscal
year is--
``(I) $50,000,000 for fiscal year
2031; and
``(II) for fiscal year 2032 and
each subsequent fiscal year, the amount
authorized to be assessed and collected
in the previous fiscal year adjusted by
the average annual percent change that
occurred in the Consumer Price Index
for all urban consumers (Washington-
Arlington-Alexandria, DC-VA-MD-WV; Not
Seasonally Adjusted; All items; Annual
Index) in the 12-month period ending
June 30 preceding the fiscal year for
which fees are being established.
``(ii) Allocations of assessment by covered
entity.--
``(I) In general.--The total user
fees assessed and collected under
subparagraph (A) each fiscal year with
respect to each covered entity shall be
an amount that is equal to the
applicable percentage of covered
outpatient drugs dispensed by such
covered entity for the fiscal year
multiplied by the amount specified in
clause (i) for the fiscal year.
``(II) Applicable percentage.--For
purposes of subclause (I), the
applicable percentage of each covered
entity for a fiscal year shall be
determined by--
``(aa) dividing--
``(AA) the number
of prescriptions for
covered outpatient
drugs dispensed by the
covered entity in the
previous fiscal year;
by
``(BB) the total
number of prescriptions
for covered outpatient
drugs dispensed by all
covered entities in
such fiscal year; and
``(bb) multiplying the
amount determined under item
(aa) by 100.
``(iii) Timing of assessment.--The
Secretary shall notify each covered entity
subject to this section of the amount of the
annual assessment imposed on such covered
entity under this subsection not later than
December 31 of the fiscal year for which such
fees apply. Payments of such assessments shall
be made in 4 equal installments, which shall be
made by the last day of each quarter of the
calendar year immediately following the
notification.
``(C) Use of fees.--Any fee collected under this
paragraph shall be used by the Secretary for purposes
of administering this section and enhancing program
integrity and oversight activities under this section,
including--
``(i) the development of a multi-functional
web-based system to collect fees under this
paragraph;
``(ii) the establishment, use, and
maintenance of the data clearinghouse under
section 1150D of the Social Security Act;
``(iii) the improvement of the integrity,
transparency, security, searchability, and
reliability of the 340B Office of Pharmacy
Affairs Information System (or a successor to
such system);
``(iv) improvements to the compliance tool
used to integrate all information related to
manufacturers that have entered into agreements
with the Secretary under paragraph (1) and
covered entities;
``(v) audits under this section of covered
entities and such manufacturers; and
``(vi) any other uses for the purposes of
program integrity, as the Secretary determines
appropriate.
``(D) Supplement not supplant.--Any fees collected
under this paragraph shall be used to supplement and
not supplant amounts otherwise provided in
appropriations Acts to carry out this section.
``(E) Regulations.--The Secretary may promulgate
rules through notice and comment rulemaking as
necessary to carry out the user fee program under this
paragraph, which shall include establishment of a
process to provide for exceptions to the fee amount
under subparagraph (B), including the circumstances
under which such exceptions may apply to certain
covered entities.
``(F) Oversight of user fee program.--The Inspector
General of the Department of Health and Human Services
shall--
``(i) conduct an annual review of the user
fee program under this paragraph for the first
5 years of such program; and
``(ii) not later than September 30 of each
year for which a review is required under
clause (i), submit to Congress a report on the
review conducted under clause (i), together
with such recommendations as the Inspector
General determines appropriate.''.
(b) Conforming Amendment.--Section 340B(a)(4) of the Public Health
Service Act (42 U.S.C. 256b(a)(4)) is amended, in the matter preceding
subparagraph (A), by inserting ``, has submitted user fees to the
Secretary in the amount assessed under paragraph (15) for the current
year,'' after ``paragraph (5)''.
SEC. 13. STUDIES AND REPORTS.
(a) GAO Report.--Not later than 2 years after the date of enactment
of this Act, the Comptroller General of the United States shall submit
to Congress a report on the debt collection practices of hospitals,
including hospitals that participate in the drug discount program under
section 340B of the Public Health Service Act (42 U.S.C. 256b) as
covered entities described in subparagraphs (L) through (O) of
subsection (a)(4)of such section 340B.
(b) HHS Study and Report.--For the purpose of establishing
reasonable dispensing fees for purposes of the drug discount program
under section 340B of the Public Health Service Act (42 U.S.C. 256b),
the Secretary of Health and Human Services shall--
(1) conduct a study on such dispensing fees; and
(2) not later than 2 years after the date of enactment of
this Act, submit to Congress a report on the study under
paragraph (1).
(c) ASPE Study.--The Assistant Secretary for Planning and
Evaluation (referred to in this subsection as the ``Assistant
Secretary'') shall conduct a study on the interactions of the
clearinghouse established under section 1150D of the Social Security
Act (as added by section 9) and any data collection system established
by the Secretary to carry out section 1193(d) of the Social Security
Act (42 U.S.C. 1320f-2(d)) or section 1860D-14B(b)(1)(B) of such Act
(42 U.S.C. 1395w-114b(b)(1)(B)) to limit duplicative discounts for
outpatient prescription drugs. The Assistant Secretary shall make
recommendations to Congress on ways to streamline and effectively
operate such clearinghouse and data collection systems.
SEC. 14. ADDITIONAL RESOURCES.
(a) Funding.--Section 340B of the Public Health Service Act (42
U.S.C. 256b(d)(4)) is amended by adding at the end the following:
``(f) Authorization of Appropriations.--
``(1) Authorization of appropriations for audits,
investigations, and other oversight and enforcement
activities.--In addition to amounts made available under
subsection (d)(4), there are authorized to be appropriated, to
the Inspector General of the Department of Health and Human
Services, $3,000,000 for each of fiscal years 2027 through
2031, for purposes of conducting audits, investigations, and
other oversight and enforcement activities with respect to the
drug discount program under this section.
``(2) Authorization of appropriations for general
purposes.--In addition to amounts made available under
paragraph (1) and subsection (d)(4), there are authorized to be
appropriated $9,000,000 for each of fiscal years 2027 through
2030, for purposes of implementing the activities under this
section, as added by the SUSTAIN 340B Act.''.
(b) Hiring Authority; Regulations.--Section 340B of the Public
Health Service Act (42 U.S.C. 256b), as amended by subsection (a), is
further amended by adding at the end the following:
``(g) Hiring Authority.--The Administrator of the Health Resources
and Services Administration may hire such additional staff as may be
necessary for purposes of carrying out this section.
``(h) Regulations.--The Secretary shall promulgate regulations
through notice and comment rulemaking, as appropriate to implement this
section.''.
SEC. 15. DEFINITIONS.
Section 340B(b) of the Public Health Service Act (42 U.S.C.
256b(b)), as amended by section 4(a), is further amended by adding at
the end the following:
``(6) Child site.--In this section, the term `child site'
means a site that is wholly-owned and operated by a covered
entity.
``(7) Contract pharmacy.--In this section, the term
`contract pharmacy' means a pharmacy with which a covered
entity has contracted to dispense covered outpatient drugs on
behalf of the covered entity whether distributed in person or
via mail.''.
SEC. 16. EFFECTIVE DATE.
This Act, including the amendments made by this Act, shall take
effect on the date of enactment of this Act.
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