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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2606 Introduced in House (IH)]

110th CONGRESS
  1st Session
                                H. R. 2606

 To amend section 340B of the Public Health Service Act to revise and 
  expand the drug discount program under that section to improve the 
    provision of discounts on drug purchases for certain safety net 
                               providers.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                              June 7, 2007

  Mr. Rush (for himself, Mrs. Emerson, and Mr. Stupak) introduced the 
   following bill; which was referred to the Committee on Energy and 
                                Commerce

_______________________________________________________________________

                                 A BILL

 
 To amend section 340B of the Public Health Service Act to revise and 
  expand the drug discount program under that section to improve the 
    provision of discounts on drug purchases for certain safety net 
                               providers.

    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 ``340B Program 
Improvement and Integrity Act of 2007''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Expanded participation in 340B program.
Sec. 3. Extension of discounts to inpatient drugs.
Sec. 4. Improvements to 340B program integrity.
Sec. 5. Other improvements in 340B program.
Sec. 6. Effective dates.

SEC. 2. EXPANDED PARTICIPATION IN 340B PROGRAM.

    (a) Expansion of Covered Entities Receiving Discounted Prices.--
Section 340B(a)(4) of the Public Health Service Act (42 U.S.C. 
256b(a)(4)) is amended by adding at the end the following new 
subparagraphs:
                    ``(M) A children's hospital excluded from the 
                Medicare prospective payment system pursuant to section 
                1886(d)(1)(B)(iii) of the Social Security Act (42 
                U.S.C. 1395ww(d)(1)(B)(iii)) which would meet the 
                requirements of subsection (a)(4)(L), including the 
                disproportionate share adjustment percentage 
                requirement under clause (ii), if the hospital were a 
                subsection (d) hospital as defined by Section 
                1886(d)(1)(B) of the Social Security Act.
                    ``(N) An entity that is a critical access hospital 
                (as determined under section 1820(c)(2) of the Social 
                Security Act (42 U.S.C. 1395i-4(c)(2)).
                    ``(O) An entity receiving funds under title V of 
                the Social Security Act (relating to maternal and child 
                health) for the provision of health services.
                    ``(P) An entity receiving funds under subpart I of 
                part B of title XIX of the Public Health Service Act 
                (relating to comprehensive mental health services) for 
                the provision of community mental health services.
                    ``(Q) An entity receiving funds under subpart II of 
                such part B (relating to the prevention and treatment 
                of substance abuse) for the provision of treatment 
                services for substance abuse.
                    ``(R) An entity that is a medicare-dependent, small 
                rural hospital (as defined in section 1886(d)(5)(G)(iv) 
                of the Social Security Act).
                    ``(S) An entity that is a sole community hospital 
                (as defined in section 1886(d)(5)(D)(iii) of the Social 
                Security Act).
                    ``(T) An entity that is classified as a rural 
                referral center under section 1886(d)(5)(C) of the 
                Social Security Act.''.
    (b) Prohibition on Group Purchasing Arrangements.--Section 340B(a) 
of such Act (42 U.S.C. 256b(a)) is amended--
            (1) in paragraph (4)(L)--
                    (A) by adding ``and'' at the end of clause (i);
                    (B) by striking ``; and'' at the end of clause (ii) 
                and inserting a period; and
                    (C) by striking clause (iii);
            (2) in subsection (a)(5), by redesignating the 
        subparagraphs (C) and (D) as subparagraphs (D) and (E), 
        respectively, and by inserting after subparagraph (B) the 
        following new subparagraph:
                    ``(C) Prohibiting use of group purchasing 
                arrangements.--
                            ``(i) A hospital described in subparagraph 
                        (L), (M), (N), (R), (S), or (T) of subsection 
                        (a)(4) shall not obtain covered outpatient 
                        drugs through a group purchasing organization 
                        or other group purchasing arrangement, except 
                        as permitted or provided pursuant to clause 
                        (ii) or (iii).
                            ``(ii) Clause (i) shall not apply to drugs 
                        purchased for inpatient use.
                            ``(iii) The Secretary shall establish 
                        reasonable exceptions to the requirement of 
                        clause (i)--
                                    ``(I) with respect to a covered 
                                outpatient drug that is unavailable to 
                                be purchased through the program under 
                                this section due to a drug shortage 
                                problem, manufacturer non-compliance, 
                                or any other reason beyond the 
                                hospital's control;
                                    ``(II) to facilitate generic 
                                substitution when a generic covered 
                                outpatient drug is available at a lower 
                                price; or
                                    ``(III) to reduce in other ways the 
                                administrative burdens of managing both 
                                inventories of drugs obtained under 
                                this section and not under this 
                                section, if such exception does not 
                                create a duplicate discount problem in 
                                violation of subparagraph (A) or a 
                                diversion problem in violation of 
                                subparagraph (B).''.

SEC. 3. EXTENSION OF DISCOUNTS TO INPATIENT DRUGS.

    (a) In General.--Section 340B of the Public Health Service Act (42 
U.S.C. 256b) is amended--
            (1) in subsection (b)--
                    (A) by designating the matter beginning ``In this 
                section'' as a paragraph (1) with the heading ``In 
                general'' ; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(2) Covered drug.--In this section, the term `covered 
        drug'--
                    ``(A) means a covered outpatient drug (as defined 
                in section 1927(k)(2) of the Social Security Act); and
                    ``(B) includes, notwithstanding the section 
                1927(k)(3)(A) of such Act, a drug used in connection 
                with an inpatient or outpatient service provided by a 
                hospital described in subparagraph (L), (M), (N), (R), 
                (S), or (T) of subsection (a)(4) that is enrolled to 
                participate in the drug discount program under this 
                section.''; and
            (2) in paragraphs (5), (7), and (9), by striking 
        ``outpatient'' each place it appears.
    (b) Medicaid Credits on Inpatient Drugs.--Subsection (c) of section 
340B of the Public Health Service Act (42 U.S.C. 256b(c)) is amended to 
read as follows:
    ``(c) Medicaid Credits on Inpatient Drugs.--
            ``(1) In general.--For the cost reporting period covered by 
        the most recently filed Medicare cost report under title XVIII 
        of the Social Security Act, a hospital described in 
        subparagraph (L), (M), (N), (R), (S), or (T) of subsection 
        (a)(4) and enrolled to participate in the drug discount program 
        under this section shall provide to each State under its plan 
        under title XIX of such Act --
                    ``(A) a credit on the estimated annual costs to 
                such hospital of single source and innovator multiple 
                source drugs provided to Medicaid recipients for 
                inpatient use; and
                    ``(B) a credit on the estimated annual costs to 
                such hospital of noninnovator multiple source drugs 
                provided to Medicaid recipients for inpatient use.
            ``(2) Calculation of credits.--
                    ``(A) Single source and innovator multiple source 
                drugs.--For purposes of paragraph (1)(A)--
                            ``(i) the credit under such paragraph shall 
                        be equal to the product of--
                                    ``(I) the estimated annual costs of 
                                single source and innovator multiple 
                                source drugs provided by the hospital 
                                to Medicaid recipients for inpatient 
                                use;
                                    ``(II) the average manufacturer 
                                price adjustment; and
                                    ``(III) the minimum rebate 
                                percentage described in section 
                                1927(c)(1)(B) of the Social Security 
                                Act;
                            ``(ii) the estimated annual costs of single 
                        source drugs and innovator multiple source 
                        drugs provided by the hospital to Medicaid 
                        recipients for inpatient use under clause 
                        (i)(I) shall be equal to the product of--
                                    ``(I) the hospital's actual 
                                acquisition costs of all drugs 
                                purchased during the cost reporting 
                                period for inpatient use;
                                    ``(II) the Medicaid inpatient drug 
                                charges as reported on the hospital's 
                                most recently filed Medicare cost 
                                report divided by total inpatient drug 
                                charges reported on the cost report; 
                                and
                                    ``(III) the percent of the 
                                hospital's annual inpatient drug costs 
                                described in subclause (I) arising out 
                                of the purchase of single source and 
                                innovator multiple source drugs;
                            ``(iii) the average manufacturer price 
                        adjustment referenced in clause (i)(II) shall 
                        be determined annually by the Secretary for 
                        single source and innovator multiple source 
                        drugs by dividing on an aggregate basis the 
                        average manufacturer price as defined in 
                        section 1927(k)(1)(D) of the Social Security 
                        Act, averaged across all covered drugs reported 
                        to the Secretary pursuant to section 1927(b)(3) 
                        of such Act by the average 340B ceiling price 
                        for covered drugs calculated pursuant to 
                        subsection (a)(1); and
                            ``(iv) the terms `single source drug' and 
                        `innovator multiple source drug' have the 
                        meanings given such terms in section 1927(k)(7) 
                        of the Social Security Act.
                    ``(B) Noninnovator multiple source drugs.--For 
                purposes of subparagraph (1)(B)--
                            ``(i) the credit under such paragraph shall 
                        be calculated by multiplying--
                                    ``(I) the estimated annual costs to 
                                the hospital of noninnovator multiple 
                                source drugs provided to Medicaid 
                                recipients for inpatient use,
                                    ``(II) the average manufacturer 
                                price adjustment, and
                                    ``(III) the applicable percentage 
                                as defined in section 1927(c)(3)(B) of 
                                the Social Security Act;
                            ``(ii) the estimated annual costs to a 
                        hospital of noninnovator multiple source drugs 
                        provided to Medicaid recipients for inpatient 
                        use under clause (i)(I) shall be equal to the 
                        product of--
                                    ``(I) the hospital's actual 
                                acquisition cost of all drugs purchased 
                                during the cost reporting period for 
                                inpatient use;
                                    ``(II) the Medicaid inpatient drug 
                                charges as reported on the hospital's 
                                most recently filed Medicare cost 
                                report divided by total inpatient drug 
                                charges reported on the cost report;
                                    ``(III) the percent of the 
                                hospital's annual inpatient drug costs 
                                described in subclause (I) arising out 
                                of the purchase of noninnovator 
                                multiple source drugs;
                            ``(iii) the average manufacturer price 
                        adjustment referenced in clause (i)(II) shall 
                        be determined annually by the Secretary for 
                        noninnovator multiple source drugs by dividing 
                        on an aggregate basis the average manufacturer 
                        price as defined in Section 1927(k)(1)(D) of 
                        the Social Security Act, averaged across all 
                        covered drugs reported to the Secretary 
                        pursuant to Section 1927(b)(3) of such Act by 
                        the average 340B ceiling price for covered 
                        drugs calculated pursuant to section 340B(a)(1) 
                        of the Public Health Service Act; and
                            ``(iv) the term `noninnovator multiple 
                        source drug' has the meaning given such term in 
                        section 1927(k)(7) of the Social Security Act.
            ``(3) Payment deadline.--The credits provided by a hospital 
        under paragraph (1) shall be paid within 90 days of the filing 
        of the hospital's most recently filed Medicare cost report.
            ``(4) Opt out.--A hospital shall not be required to provide 
        the Medicaid credit required under paragraph (1) if--
                    ``(A) it can demonstrate to the State that the 
                amount of the credit would not exceed the loss of 
                reimbursement under the State plan resulting from the 
                extension of discounts to inpatient drugs under 
                subsection (b)(2); or
                    ``(B) the hospital and State agree to an 
                alternative arrangement.
        Any dispute between the hospital and the State under this 
        paragraph shall be adjudicated through the administrative 
        dispute resolution process under this section.
            ``(5) Offset against medical assistance.--Amounts received 
        by a State under this subsection in any quarter shall be 
        considered to be a reduction in the amount expended under the 
        State plan in the quarter for medical assistance for purposes 
        of section 1903(a)(1) of the Social Security Act.
            ``(6) References to social security act provisions.--
        Notwithstanding any other provision of law, all references to 
        provisions of the Social Security Act in this section shall be 
        deemed to be references to the Social Security Act as in effect 
        on the effective date of the 340B Program Improvement Act of 
        2007.''.
    (c) Conforming Amendments.--Section 1927 of the Social Security Act 
(42 U.S.C. 1396r-8), is amended--
            (1) in subsection (a)(5)(A), by striking ``covered 
        outpatient drugs'' and inserting ``covered drugs (as defined in 
        section 340B(b)(2) of the Public Health Service Act)'';
            (2) in subsection (a)(5)(D), by striking ``title VI of the 
        Veterans Health Care Act of 1992'' and inserting ``the 340B 
        Program Improvement and Integrity Act of 2007'';
            (3) in subsection (c)(1)(C)(i), by redesignating subclauses 
        (II) through (IV) as subclauses (III) through (V), respectively 
        and by inserting after subclause (I) the following new 
        subclause:
                                    ``(II) any prices charged for a 
                                covered drug as defined in section 
                                340B(b)(2) of the Public Health Service 
                                Act;''; and
            (4) in subsection (k)(1)--
                    (A) in subparagraph (A), by striking ``subparagraph 
                (B)'' and inserting ``subparagraph (B) and (D)''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(D) Calculation for covered drugs.--With respect 
                to a covered drug (as defined in section 340B(b)(2) of 
                the Public Health Service Act), the average 
                manufacturer price is the average price paid to the 
                manufacturer for the drug in the United States by 
                wholesalers for drugs distributed to both the retail 
                pharmacy and acute care classes of trade, after 
                deducting customary prompt pay discounts.''.

SEC. 4. IMPROVEMENTS TO 340B PROGRAM INTEGRITY.

    (a) Integrity Improvements.--Section 340B of the Public Health 
Service Act (42 U.S.C. 256b) is amended by adding at the end the 
following:
    ``(e) Improvements in Program Integrity.--
            ``(1) Manufacturer compliance.--
                    ``(A) In general.--From amounts appropriated under 
                paragraph (4), the Secretary shall provide for 
                improvements in compliance by manufacturers with the 
                requirements of this section in order to prevent 
                overcharges and other violations of the discounted 
                pricing requirements specified in this section.
                    ``(B) Improvements.--The improvements described in 
                subparagraph (A) shall include the following:
                            ``(i) The development of a system to enable 
                        the Secretary to verify the accuracy of ceiling 
                        prices calculated by manufacturers under 
                        subsection (a)(1) and charged to covered 
                        entities, which shall include the following:
                                    ``(I) Developing and publishing 
                                through an appropriate policy or 
                                regulatory issuance, precisely defined 
                                standards and methodology for the 
                                calculation of ceiling prices under 
                                such subsection.
                                    ``(II) Comparing regularly the 
                                ceiling prices calculated by the 
                                Secretary with the quarterly pricing 
                                data that is reported by manufacturers 
                                to the Secretary.
                                    ``(III) Performing spot checks of 
                                sales transactions by covered entities.
                                    ``(IV) Inquiring into the cause of 
                                any pricing discrepancies that may be 
                                identified and either taking, or 
                                requiring manufacturers to take, such 
                                corrective action as is appropriate in 
                                response to such price discrepancies.
                            ``(ii) The establishment of procedures for 
                        manufacturers to issue refunds to covered 
                        entities in the event that there is an 
                        overcharge by the manufacturers, including the 
                        following:
                                    ``(I) Providing the Secretary with 
                                an explanation of why and how the 
                                overcharge occurred, how the refunds 
                                will be calculated, and to whom the 
                                refunds will be issued.
                                    ``(II) Oversight by the Secretary 
                                to ensure that the refunds are issued 
                                accurately and within a reasonable 
                                period of time, both in routine 
                                instances of retroactive adjustment to 
                                relevant pricing data and exceptional 
                                circumstances such as erroneous or 
                                intentional overcharging for covered 
                                drugs.
                            ``(iii) The provision of access through the 
                        Internet website of the Department of Health 
                        and Human Services to the applicable ceiling 
                        prices for covered drugs as calculated and 
                        verified by the Secretary in accordance with 
                        this section, in a manner (such as through the 
                        use of password protection) that limits such 
                        access to covered entities and adequately 
                        assures security and protection of privileged 
                        pricing data from unauthorized re-disclosure.
                            ``(iv) The development of a mechanism by 
                        which--
                                    ``(I) rebates and other discounts 
                                provided by manufacturers to other 
                                purchasers subsequent to the sale of 
                                covered drugs to covered entities are 
                                reported to the Secretary, and
                                    ``(II) appropriate credits and 
                                refunds are issued to covered entities 
                                if such discounts or rebates have the 
                                effect of lowering the applicable 
                                ceiling price for the relevant quarter 
                                for the drugs involved.
                            ``(v) Selective auditing of manufacturers 
                        and wholesalers to ensure the integrity of the 
                        drug discount program under this section.
                            ``(vi) The imposition of sanctions in the 
                        form of civil monetary penalties, which--
                                    ``(I) shall be assessed according 
                                to standards established in regulations 
                                to be promulgated by the Secretary 
                                within 180 days of enactment of this 
                                subsection;
                                    ``(II) shall not exceed $5,000 for 
                                each instance of overcharging a covered 
                                entity that may have occurred; and
                                    ``(III) shall apply to any 
                                manufacturer with an agreement under 
                                this section that knowingly and 
                                intentionally charges a covered entity 
                                a price for purchase of a drug that 
                                exceeds the maximum applicable price 
                                under subsection (a)(1).
            ``(2) Covered entity compliance.--
                    ``(A) In general.--From amounts appropriated under 
                paragraph (4), the Secretary shall provide for 
                improvements in compliance by covered entities with the 
                requirements of this section in order to prevent 
                diversion and other violations of the duplicate 
                discount requirements specified under subsection 
                (a)(5).
                    ``(B) Improvements.--The improvements described in 
                subparagraph (A) shall include the following:
                            ``(i) The development of procedures to 
                        enable and require covered entities to 
                        regularly update (at least annually) the 
                        information on the Internet website of the 
                        Department of Health and Human Services 
                        relating to this section.
                            ``(ii) The development of a system for the 
                        Secretary to verify the accuracy of information 
                        regarding covered entities that is listed on 
                        the website described in clause (i).
                            ``(iii) The development of more detailed 
                        guidance describing methodologies and options 
                        available to covered entities for billing 
                        covered drugs to State Medicaid agencies in a 
                        manner that avoids duplicate discounts pursuant 
                        to subsection (a)(5)(A).
                            ``(iv) The establishment of a single, 
                        universal, and standardized identification 
                        system by which each covered entity site can be 
                        identified by manufacturers, distributors, 
                        covered entities, and the Secretary for 
                        purposes of facilitating the ordering, 
                        purchasing, and delivery of covered drugs under 
                        this section, including the processing of 
                        chargebacks for such drugs.
                            ``(v) The imposition of sanctions, in 
                        appropriate cases as determined by the 
                        Secretary, additional to those to which covered 
                        entities are subject under subparagraph 
                        (a)(5)(D), through one or more of the following 
                        actions:
                                    ``(I) Where a covered entity 
                                knowingly and intentionally violates 
                                subparagraph (a)(5)(E), the covered 
                                entity shall be required to pay a 
                                monetary penalty to a manufacturer or 
                                manufacturers in the form of interest 
                                on sums for which the covered entity is 
                                found liable under paragraph (a)(5)(E), 
                                such interest to be compounded monthly 
                                and equal to the current short term 
                                interest rate as determined by the 
                                Federal Reserve for the time period for 
                                which the covered entity is liable.
                                    ``(II) Where the Secretary 
                                determines a violation of subparagraph 
                                (a)(5)(B) was systematic and egregious 
                                as well as knowing and intentional, 
                                removing the covered entity from the 
                                drug discount program under this 
                                section and disqualifying the entity 
                                from re-entry into such program for a 
                                reasonable period of time to be 
                                determined by the Secretary.
                                    ``(III) Referring matters to 
                                appropriate Federal authorities within 
                                the Food and Drug Administration, the 
                                Office of Inspector General of 
                                Department of Health and Human 
                                Services, or other Federal agencies for 
                                consideration of appropriate action 
                                under other Federal statutes, such as 
                                the Prescription Drug Marketing Act (21 
                                U.S.C. 353).
            ``(3) Administrative dispute resolution process.--
                    ``(A) In general.--Not later than 180 days after 
                the date of enactment of this subsection, the Secretary 
                shall promulgate regulations to establish and implement 
                an administrative process for the resolution of claims 
                by covered entities that they have been overcharged for 
                drugs purchased under this section, and claims by 
                manufacturers, after the conduct of audits as 
                authorized by subsection (a)(5)(D), of violations of 
                subsections (a)(5)(A) or (a)(5)(B), including 
                appropriate procedures for the provision of remedies 
                and enforcement of determinations made pursuant to such 
                process through mechanisms and sanctions described in 
                paragraphs (1)(B) and (2)(B).
                    ``(B) Deadlines and procedures.--Regulations 
                promulgated by the Secretary under subparagraph (A) 
                shall--
                            ``(i) designate or establish a decision-
                        making official or decision-making body within 
                        the Department of Health and Human Services to 
                        be responsible for reviewing and finally 
                        resolving claims by covered entities that they 
                        have been charged prices for covered drugs in 
                        excess of the ceiling price described in 
                        subsection (a)(1), and claims by manufacturers 
                        that violations of subsection (a)(5)(A) or 
                        (a)(5)(B) have occurred;
                            ``(ii) establish such deadlines and 
                        procedures as may be necessary to ensure that 
                        claims shall be resolved fairly, efficiently, 
                        and expeditiously;
                            ``(iii) establish procedures by which a 
                        covered entity may discover and obtain such 
                        information and documents from manufacturers 
                        and third parties as may be relevant to 
                        demonstrate the merits of a claim that charges 
                        for a manufacturer's product have exceeded the 
                        applicable ceiling price under this section, 
                        and may submit such documents and information 
                        to the administrative official or body 
                        responsible for adjudicating such claim;
                            ``(iv) require that a manufacturer must 
                        conduct an audit of a covered entity pursuant 
                        to subsection (a)(5)(D) as a prerequisite to 
                        initiating administrative dispute resolution 
                        proceedings against a covered entity;
                            ``(v) permit the official or body 
                        designated in clause (i), at the request of a 
                        manufacturer or manufacturers, to consolidate 
                        claims brought by more than one manufacturer 
                        against the same covered entity where, in the 
                        judgment of such official or body, 
                        consolidation is appropriate and consistent 
                        with the goals of fairness and economy of 
                        resources; and
                            ``(vi) include provisions and procedures to 
                        permit multiple covered entities to jointly 
                        assert claims of overcharges by the same 
                        manufacturer for the same drug or drugs in one 
                        administrative proceeding, and permit such 
                        claims to be asserted on behalf of covered 
                        entities by associations or organizations 
                        representing the interests of such covered 
                        entities and of which the covered entities are 
                        members.
                    ``(C) Finality of administrative resolution.--The 
                administrative resolution of a claim or claims under 
                the regulations promulgated under subparagraph (A) 
                shall be a final agency decision and shall be binding 
                upon the parties involved, unless invalidated by an 
                order of a court of competent jurisdiction.
            ``(4) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this subsection, 
        such sums as may be necessary for fiscal year 2008 and each 
        succeeding fiscal year.''.
    (b) Conforming Amendments.--Section 340B(a) of such Act (42 U.S.C. 
256b(a)) is amended--
            (1) in subsection (a)(1), by adding at the end the 
        following: ``Each such agreement shall require that the 
        manufacturer furnish the Secretary with reports, on a quarterly 
        basis, of the price for each covered drug subject to the 
        agreement that, according to the manufacturer, represents the 
        maximum price that covered entities may permissibly be required 
        to pay for the drug (referred to in this section as the 
        `ceiling price'), and shall require that the manufacturer offer 
        each covered entity covered drugs for purchase at or below the 
        applicable ceiling price if such drug is made available to any 
        other purchaser at any price.''; and
            (2) in the first sentence of subsection (a)(5)(E), as 
        redesignated by section 2(b), by inserting ``after audit as 
        described in subparagraph (D) and'' after ``finds,''.

SEC. 5. OTHER IMPROVEMENTS IN 340B PROGRAM.

    Section 340B of the Public Health Service Act (42 U.S.C. 256b), as 
amended by section 4(a), is further amended by adding at the end the 
following new subsections:
    ``(f) Use of Multiple Contract Pharmacies Permitted.--Nothing in 
this section shall be construed as prohibiting a covered entity from 
entering into contracts with more than one pharmacy for the provision 
of covered drugs, including such a contract that supplements the use of 
an in-house pharmacy arrangement or as requiring the approval of the 
Secretary for entering into such a contract.
    ``(g) Intra-Agency Coordination.--The Secretary shall establish 
specific measures, policies, and procedures to ensure effective 
communication and coordination between the Centers for Medicare & 
Medicaid Services and the Health Resources and Services Administration 
with respect to all agency actions and all aspects of policy and 
administration affecting or pertaining to the drug discount program 
under this section and in which the functions and responsibilities of 
those agency components are interrelated or interdependent, including 
by establishment of a permanent working group, composed of 
representatives of both the Health Resources and Services 
Administration and the Centers for Medicare & Medicaid Services, to 
identify and oversee matters requiring such coordination.''.

SEC. 6. EFFECTIVE DATES.

    (a) In General.--The amendments made by this Act shall take effect 
on January 1, 2008, and shall apply to drugs purchased on or after 
January 1, 2008.
    (b) General Conforming Reference.--Section 340B(d) of the Public 
Health Service Act (42 U.S.C. 256b(d)) is amended by striking 
``Veterans Health Care Act of 1992'' and inserting ``the effective date 
of the 340B Program Improvement and Integrity Act of 2007''.
    (c) Effectiveness.--The amendments made by this Act shall be 
effective, and shall be taken into account in determining whether a 
manufacturer is deemed to meet the requirements of section 340B(a) of 
the Public Health Service Act (42 U.S.C. 256b(a)) and of section 
1927(a)(5) of the Social Security Act (42 U.S.C. 1396r-8(a)(5)), 
notwithstanding any other provision of law.
                                 <all>
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