II 

118TH CONGRESS 

2D SESSION S. 5021 

To ensure the accessibility of drugs furnished through the drug discount 

program under section 340B of the Public Health Service Act. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 11, 2024 

Mr. WELCH introduced the following bill; which was read twice and referred 

to the Committee on Health, Education, Labor, and Pensions 

A BILL 

To ensure the accessibility of drugs furnished through the 

drug discount program under section 340B of the Public 

Health Service Act. 

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 would be possible without such pro6 gram. 

7 (2) Such section 340B requires drug manufac8 turers to offer discounted prices on covered out9 patient drugs to covered entities participating in the 

10 program, as a condition of participating in the Med11 icaid program and part B of the Medicare program, 

12 and drug manufacturers are required to offer drug 

13 discount pricing to covered entities when requested. 

14 (3) Savings on the purchase of drugs through 

15 the program under section 340B of the Public 

16 Health Service Act enables hospitals, clinics, and 

17 health centers to provide comprehensive services to 

18 the communities they serve, and covered entities are 

19 in the best position to assess the use of their savings 

20 for community needs. 

21 (4) Since the early years of such program, cov22 ered entities have contracted with pharmacies to dis23 pense covered outpatient drugs purchased by a cov24 ered entity at drug discount program pricing to pa25 tients of the covered entity, consistent with how 


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1 Congress intended for covered entities to use the 

2 program. 

3 (5) Covered entities use savings generated 

4 through contract pharmacy relationships to stretch 

5 scarce resources and support patient care, consistent 

6 with the purpose of the program. 

7 (6) Section 340B of the Public Health Service 

8 Act requires drug manufacturers to offer drug dis9 count pricing for drugs purchased by covered enti10 ties regardless of the manner or location in which a 

11 drug is dispensed, including drugs dispensed through 

12 contract pharmacies. 

13 (7) Section 340B of the Public Health Service 

14 Act does not allow drug manufacturers to place con15 ditions on the ability of a covered entity to purchase 

16 or use a covered outpatient drug at drug discount 

17 program pricing regardless of the manner or location 

18 in which a drug is dispensed, including by restricting 

19 a covered entity’s ability to dispense drugs pur20 chased through such program to patients through a 

21 contractual relationship with a contracted pharmacy 

22 or refusing to ship covered outpatient drugs to a 

23 pharmacy or location identified by a covered entity. 

24 (8) Such section 340B’s inflationary penalty 

25 provisions, which have saved part D of the Medicare 


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1 program $7,000,000,000 between 2013 and 2017, 

2 have a proven record of reducing drug price in3 creases, and use of contract pharmacies contributes 

4 to these savings. 

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

6 treat chronic, serious, or life-threatening conditions 

7 such as cancer, rheumatoid arthritis, growth hor8 mone deficiency, and multiple sclerosis, play a crit9 ical role in the care provided by covered entities. 

10 These drugs often require specialized handling, are 

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

12 typically available only through specialty or mail 

13 order pharmacies that are located hundreds of miles 

14 from a covered entity. The use of contract pharmacy 

15 arrangements under section 340B of the Public 

16 Health Service Act is often the only means by which 

17 covered entities can access these vital drugs. 

18 (b) PURPOSES.—The purposes of this Act are the fol19 lowing: 

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

21 Health Service Act (42 U.S.C. 256b)— 

22 (A) requires drug manufacturers to offer 

23 drug discount pricing pursuant to an agreement 

24 under subsection (a) of such section with re25 spect to drugs purchased by a covered entity reVerDate Sep 11 2014 02:51 Sep 19, 2024 Jkt 049200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S5021.IS S5021

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1 gardless of the manner or location in which the 

2 drug is dispensed; and 

3 (B) prohibits drug manufacturers from 

4 placing conditions on the ability of covered enti5 ties to purchase drugs pursuant to an agree6 ment under subsection (a) of such section, re7 gardless of the manner or location in which 

8 such drugs are dispensed. 

9 (2) To clarify that— 

10 (A) covered entities may contract with 

11 pharmacies to dispense drugs purchased pursu12 ant to an agreement under section 340B(a) of 

13 the Public Health Service Act (42 U.S.C. 

14 256b(a)) on a covered entity’s behalf, to assist 

15 covered entities in stretching resources to pro16 vide care to more patients and provide more 

17 comprehensive services; and 

18 (B) the requirements and prohibitions that 

19 apply to manufacturers under section 340B of 

20 such Act apply in the case of a covered entity 

21 that elects to contract with a pharmacy to dis22 pense 340B drugs. 


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1 SEC. 3. ENSURING THE ACCESSIBILITY OF DRUGS FUR2 NISHED UNDER THE DRUG DISCOUNT PRO3 GRAM. 

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

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

6 (1) in paragraph (1)— 

7 (A) by striking ‘‘that the manufacturer 

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

9 ‘‘(A) the manufacturer furnish’’; 

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

11 inserting ‘‘ ‘ceiling price’);’’; 

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

13 manufacturer offer’’ and inserting the following: 

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

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

16 inserting the following: ‘‘, regardless of the 

17 manner or location in which the drug is dis18 pensed; and 

19 ‘‘(C) the manufacturer not place conditions 

20 on the ability of a covered entity to purchase 

21 and use a covered outpatient drug at or below 

22 the applicable ceiling price, regardless of the 

23 manner or location in which the drug is dis24 pensed, including by placing limits on the deliv25 ery of drugs, placing limits on the mechanisms 

26 through which drugs may be purchased, placing 


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1 limits on where such drugs may be delivered, 

2 administered, or dispensed, requiring a covered 

3 entity’s assurance of compliance with require4 ments under this section, or requiring the sub5 mission of claims data or other information, ex6 cept that the manufacturer may impose condi7 tions described in this subparagraph after re8 ceiving advance approval from the Secretary 

9 (or, with respect to conditions specified by the 

10 Secretary, without such advance approval) if 

11 such conditions would not discourage covered 

12 entities from purchasing the manufacturer’s 

13 drugs through the drug discount program under 

14 this section or otherwise undermine the objec15 tive of this section, either by singling out cov16 ered entities from other customers for such con17 ditions or by imposing conditions that dis18 proportionately impact covered entities.’’; and 

19 (2) by adding at the end the following: 

20 ‘‘(11) CONTRACT PHARMACIES.—The require21 ments and prohibitions under paragraph (1) shall 

22 apply in the case of a covered entity that elects to 

23 contract with one or more pharmacies to dispense, to 

24 patients of the covered entity, covered outpatient 

25 drugs purchased by the covered entity at or below 


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1 the applicable ceiling price described in paragraph 

2 (1).’’. 

3 (b) MANUFACTURER COMPLIANCE.—Section 

4 340B(d) of the Public Health Service Act (42 U.S.C. 

5 256b) is amended— 

6 (1) in paragraph (1)(B)(vi), in the matter pre7 ceding subclause (I), by inserting ‘‘, in the case of 

8 an overcharge’’ after ‘‘penalties’’; 

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

10 the following: 

11 ‘‘(vii) The imposition of sanctions in 

12 the form of civil monetary penalties in the 

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

14 (a)(11), other than an overcharge, which— 

15 ‘‘(I) shall be assessed according 

16 to standards established in regulations 

17 to be promulgated by the Secretary 

18 not later than 180 days after the date 

19 of enactment; 

20 ‘‘(II) shall apply to any manufac21 turer with an agreement under this 

22 section that knowingly and inten23 tionally violates a requirement under 

24 subsection (a)(1) or (a)(11), other 

25 than an overcharge; 


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1 ‘‘(III) shall not exceed 

2 $2,000,000 for each day of such viola3 tion; 

4 ‘‘(IV) shall be in an amount de5 termined by the Secretary, taking into 

6 account factors such as the nature 

7 and extent of the violation and harm 

8 resulting from such violation, includ9 ing, where applicable, the number of 

10 drugs affected and the number of cov11 ered entities affected; and 

12 ‘‘(V) shall continue to be imposed 

13 each day until such manufacturer is 

14 no longer in violation of a requirement 

15 under subsection (a)(1) or (a)(11).’’; 

16 and 

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

18 following: 

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

20 date of the enactment of this subparagraph, the 

21 Secretary shall promulgate regulations to per22 mit covered entities to assert claims of viola23 tions of subsections (a)(1) and (a)(11) under 


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1 the process promulgated under subparagraph 

2 (A).’’. 

Æ 


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