I 

118TH CONGRESS 

2D SESSION H. R. 7635 

To amend title III of the Social Security Act to ensure the accessibility 

of drugs furnished under the 340B drug discount program. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 12, 2024 

Ms. MATSUI introduced the following bill; which was referred to the 

Committee on Energy and Commerce 

A BILL 

To amend title III of the Social Security Act to ensure 

the accessibility of drugs furnished under the 340B drug 

discount program. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as ‘‘The 340B Pharmaceutical 

5 Access To Invest in Essential, Needed Treatments & Sup6 port Act of 2024’’ or ‘‘The 340B PATIENTS Act of 

7 2024’’. 

8 SEC. 2. FINDINGS AND PURPOSES. 

9 (a) FINDINGS.—Congress finds the following: 


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1 (1) Section 340B of the Public Health Service 

2 Act (42 U.S.C. 256b) enables covered entities to 

3 stretch scarce resources as far as possible, reaching 

4 more patients and providing more comprehensive 

5 services than without such program; 

6 (2) Section 340B requires drug manufacturers 

7 to offer discounted prices on covered outpatient 

8 drugs to covered entities participating in the pro9 gram, as a condition of participating in the Medicaid 

10 or Medicare Part B programs, and drug manufac11 turers must offer 340B pricing to covered entities 

12 and sell 340B and deliver 340B drugs to covered en13 tities when requested irrespective of the manner or 

14 location through which a 340B drug is dispensed. 

15 (3) Savings from section 340B enables hos16 pitals, clinics, and health centers’ to provide com17 prehensive services to the communities they serve, 

18 and covered entities are in the best position to as19 sess the use of their savings for community needs. 

20 (4) Since the early years of the 340B program, 

21 covered entities have contracted with pharmacies to 

22 dispense covered outpatient drugs purchased by a 

23 covered entity at 340B pricing to patients of the 

24 covered entity, consistent with how Congress in25 tended for covered entities to use the program. 


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1 (5) Covered entities use savings generated 

2 through 340B contract pharmacy relationships to 

3 stretch scarce resources and support patient care, 

4 consistent with the purpose of the program. 

5 (6) Section 340B requires drug manufacturers 

6 to offer 340B pricing for drugs purchased by cov7 ered entities regardless of the manner or location in 

8 which a drug is dispensed, including drugs dispensed 

9 through contract pharmacies. 

10 (7) Section 340B does not allow drug manufac11 turers to place conditions on the ability of a covered 

12 entity to purchase or use a covered outpatient drug 

13 at 340B pricing regardless of the manner or location 

14 in which a drug is dispensed, including by restricting 

15 a covered entity’s ability to dispense 340B drugs to 

16 patients through a contractual relationship with a 

17 contracted pharmacy or refusing to ship covered out18 patient drugs to a pharmacy or location identified by 

19 a covered entity. 

20 (8) Section 340B’s inflationary penalty provi21 sions, which have saved $7 billion in Medicare Part 

22 D spending between 2013 and 2017, have a proven 

23 record of reducing drug price increases, and use of 

24 340B in contract pharmacies contributes to these 

25 savings. 


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1 (9) Specialty drugs, which are often used to 

2 treat chronic, serious, or life-threatening conditions 

3 such as cancer, rheumatoid arthritis, growth hor4 mone deficiency, and multiple sclerosis, play a crit5 ical role in the care provided by covered entities. 

6 These drugs often require specialized handling, are 

7 not usually available to walk-in customers, and are 

8 typically available only through specialty or mail 

9 order pharmacies that are located hundreds of miles 

10 from a covered entity. The use of contract pharmacy 

11 arrangements under Section 340B are often the only 

12 means by which covered entities can access these 

13 vital drugs. 

14 (b) PURPOSES.—The purposes of this Act are the fol15 lowing: 

16 (1) To clarify that section 340B of the Public 

17 Health Service Act (42 U.S.C. 256b) requires drug 

18 manufacturers to offer 340B pricing for drugs pur19 chased by a covered entity regardless of the manner 

20 or location in which the drug is dispensed, and sec21 tion 340B prohibits drug manufacturers from plac22 ing conditions on the ability of covered entities to 

23 purchase and use 340B drugs, regardless of the 

24 manner or location in which they are dispensed. 


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1 (2) To clarify that covered entities under sec2 tion 340B may contract with pharmacies to dispense 

3 on a covered entity’s behalf drugs purchased by a 

4 covered entity under section 340B to generate sav5 ings to assist covered entities to stretch resources to 

6 provide care to more patients and provide more com7 prehensive services, and the requirements and prohi8 bitions that apply to manufacturers under section 

9 340B apply in the case of a covered entity that 

10 elects to contract with a pharmacy to dispense 340B 

11 drugs. 

12 SEC. 3. ENSURING THE ACCESSIBILITY OF DRUGS FUR13 NISHED UNDER THE 340B DRUG DISCOUNT 

14 PROGRAM. 

15 (a) IN GENERAL.—Section 340B(a) of the Public 

16 Health Service Act (42 U.S.C. 256b(a)) is amended— 

17 (1) in paragraph (1)— 

18 (A) by striking ‘‘that the manufacturer 

19 furnish’’ and inserting the following: ‘‘that— 

20 ‘‘(A) the manufacturer furnish’’; 

21 (B) by striking ‘‘ ‘ceiling price’), and’’ and 

22 inserting ‘‘ ‘ceiling price’);’’; 

23 (C) by striking ‘‘shall require that the 

24 manufacturer offer’’ and inserting the following: 

25 ‘‘(B) the manufacturer offer’’; and 


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1 (D) by striking the period at the end and 

2 inserting the following: ‘‘, regardless of the 

3 manner or location in which the drug is dis4 pensed; and 

5 ‘‘(C) the manufacturer not place conditions 

6 on the ability of a covered entity to purchase 

7 and use a covered outpatient drug at or below 

8 the applicable ceiling price, regardless of the 

9 manner or location in which the drug is dis10 pensed, including but not limited to placing lim11 its on the delivery of drugs, placing limits on 

12 the mechanisms through which drugs may be 

13 purchased, placing limits on where such drugs 

14 may be delivered, administered, or dispensed, 

15 requiring a covered entity’s assurance of com16 pliance with requirements under this section, or 

17 requiring the submission of claims data or other 

18 information, except that, notwithstanding this 

19 subparagraph, the manufacturer may impose 

20 such conditions after receiving advance approval 

21 from the Secretary (or, with respect to condi22 tions specified by the Secretary, without such 

23 advance approval) if such conditions would not 

24 discourage covered entities from purchasing the 

25 manufacturer’s drugs through the drug disVerDate Sep 11 2014 20:03 Mar 29, 2024 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H7635.IH H7635

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1 count program under this section or otherwise 

2 undermine the objective of this section, either 

3 by singling out covered entities from other cus4 tomers for such conditions or by imposing con5 ditions that disproportionately impact covered 

6 entities.’’; and 

7 (2) by adding at the end the following new 

8 paragraph: 

9 ‘‘(11) CONTRACT PHARMACIES.—The require10 ments and prohibitions under subsection (a)(1) shall 

11 apply, in the case of a covered entity that elects to 

12 contract with one or more pharmacies to dispense 

13 covered outpatient drugs purchased by a covered en14 tity at or below the applicable ceiling price described 

15 in paragraph (1), to patients of the covered entity.’’. 

16 (b) MANUFACTURER COMPLIANCE.—Section 

17 340B(d) of the Public Health Service Act (42 U.S.C. 

18 256b) is amended— 

19 (1) in paragraph (1)(B)(vi), by inserting ‘‘in 

20 the case of an overcharge’’ after ‘‘penalties’’; 

21 (2) in paragraph (1)(B), by adding at the end 

22 the following: 

23 ‘‘(vii) The imposition of sanctions in 

24 the form of civil monetary penalties in the 

25 case of a violation of subsection (a)(1) or 


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1 subsection (a)(11), other than an over2 charge, which— 

3 ‘‘(I) shall be assessed according 

4 to standards established in regulations 

5 to be promulgated by the Secretary 

6 not later than 180 days after the date 

7 of enactment; 

8 ‘‘(II) shall apply to any manufac9 turer with an agreement under this 

10 section that knowingly and inten11 tionally violates a requirement under 

12 subsection (a)(1) or subsection 

13 (a)(11), other than an overcharge; 

14 ‘‘(III) shall not exceed 

15 $2,000,000 for each day of such viola16 tion; 

17 ‘‘(IV) shall be determined by the 

18 Secretary, taking into account factors 

19 such as the nature and extent of the 

20 violation and harm resulting from 

21 such violation, including, where appli22 cable, the number of drugs affected 

23 and the number of covered entities af24 fected; and 


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1 ‘‘(V) shall continue to be imposed 

2 each day until such manufacturer is 

3 no longer in violation of a requirement 

4 under subsection (a)(1) or subsection 

5 (a)(11), other than an overcharge.’’; 

6 and 

7 (3) in paragraph (3), by adding at the end the 

8 following: 

9 ‘‘(D) Not later than 180 days after the 

10 date of the enactment of this subparagraph, the 

11 Secretary shall promulgate regulations to per12 mit covered entities to assert claims of viola13 tions of subsection (a)(1) and subsection 

14 (a)(11) under the process promulgated under 

15 subparagraph (A).’’. 

Æ 


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