I 

108TH CONGRESS 

2D SESSION H. R. 4161 

To amend the Public Health Service Act to revise and expand the section 

340B program to improve the provision of discounts on drug purchases 

for certain safety net providers. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 2, 2004 

Mr. RUSH introduced the following bill; which was referred to the Committee 

on Energy and Commerce 

A BILL 

To amend the Public Health Service Act to revise and expand the section 340B program to improve the provision 

of discounts on drug purchases for certain safety net 

providers. 

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 Program Revi5 sion and Expansion Act of 2004’’. 

6 SEC. 2. IMPROVEMENTS TO SECTION 340B PROGRAM. 

7 (a) EXPANSION OF COVERED ENTITIES RECEIVING

8 DISCOUNTED PRICES.—Subsection (a)(4) of section 340B 
2 

•HR 4161 IH 

1 of the Public Health Service Act (42 U.S.C. 256b) is 

2 amended by adding at the end the following subpara3 graphs: 

4 ‘‘(M) An entity receiving funds under title 

5 V of the Social Security Act (relating to mater6 nal and child health) for the provision of health 

7 services. 

8 ‘‘(N) An entity receiving funds under sub9 part I of part B of title XIX of this Act (relat10 ing to comprehensive mental health services) for 

11 the provision of community mental health serv12 ices. 

13 ‘‘(O) An entity receiving funds under sub14 part II of such part B (relating to the preven15 tion and treatment of substance abuse) for the 

16 provision of treatment services for substance 

17 abuse.’’. 

18 (b) EXTENSION OF DISCOUNTS TO INPATIENT

19 DRUGS.—Subsection (b) of such section is amended by in20 serting before the period at the end the following: ‘‘, except 

21 that the terms ‘covered outpatient drug’ and ‘covered 

22 drug’ include a drug provided in an inpatient setting’’. 

23 (c) ELIMINATION OF GROUP PURCHASING PROHIBI24 TION FOR CERTAIN HOSPITALS.—Subsection (a)(4)(L) of 

25 such section is amended— 
3 

•HR 4161 IH 

1 (1) by adding ‘‘and’’ at the end of clause (i); 

2 (2) by striking ‘‘; and’’ at the end of clause (ii) 

3 and inserting a period; and 

4 (3) by striking clause (iii). 

5 (d) PERMITTING USE OF MULTIPLE CONTRACT

6 PHARMACIES.—Such section is amended by adding at the 

7 end the following new subsection: 

8 ‘‘(e) PERMITTING USE OF MULTIPLE CONTRACT

9 PHARMACIES.—Nothing in this section shall be construed 

10 as prohibiting a covered entity from entering into con11 tracts with more than one pharmacy for the provision of 

12 covered drugs, including such a contract that supplements 

13 the use of an in-house pharmacy arrangement or as re14 quiring the approval of the Secretary for entering into 

15 such a contract.’’. 

16 (e) IMPROVEMENTS IN PROGRAM ADMINISTRA17 TION.—Such section is further amended by adding at the 

18 end the following new subsection: 

19 ‘‘(f) IMPROVEMENTS IN PROGRAM ADMINISTRA20 TION.— 

21 ‘‘(1) IN GENERAL.—The Secretary shall pro22 vide, from funds appropriated under paragraph (2), 

23 for improvements in the integrity and administration 

24 of the program under this section in order to pre25 vent abuse and misuse of discounted prices made 
4 

•HR 4161 IH 

1 available under this section. Such improvements 

2 shall include the following: 

3 ‘‘(A) The development of a system to verify 

4 the accuracy of information regarding covered 

5 entities that is listed on the website of the De6 partment of Health and Human Services relat7 ing to this section. 

8 ‘‘(B) The establishment of a third-party 

9 auditing system by which covered entities and 

10 manufacturers are regularly audited to ensure 

11 compliance with the requirements of this sec12 tion. 

13 ‘‘(C) The conduct of such audits under 

14 subsection (a)(5)(C) that supplement the audits 

15 conducted under subparagraph (B) as the Sec16 retary finds appropriate and the implementa17 tion of dispute resolution guidelines and other 

18 compliance programs. 

19 ‘‘(D) The development of more detailed 

20 guidance regarding the definition of section 

21 340B patients and describing options for billing 

22 under the medicaid program under title XIX of 

23 the Social Security Act in order to avoid dupli24 cative discounts. 
5 

•HR 4161 IH 

1 ‘‘(E) The issuance of advisory opinions 

2 within defined time periods in response to ques3 tions from manufacturers or covered entities re4 garding the application of the requirements of 

5 this section in specific factual circumstances. 

6 ‘‘(F) Insofar as the Secretary deems it fea7 sible, providing access through the website of 

8 the Department of Health and Human Services 

9 on the prices for covered drugs made available 

10 under this section, but only in a manner (such 

11 as through the use of password protection) that 

12 limits such access to covered entities. 

13 ‘‘(2) AUTHORIZATION OF APPROPRIATIONS.— 

14 There are authorized to be appropriated for fiscal 

15 year 2005 and each succeeding fiscal year such sums 

16 as may be necessary to carry out paragraph (1).’’. 

Æ