I 

118TH CONGRESS 

1ST SESSION H. R. 2534 

To amend title XXVII of the Public Health Service Act to ensure the 

equitable treatment of covered entities and pharmacies participating in 

the 340B drug discount program, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 6, 2023 

Ms. SPANBERGER (for herself and Mr. JOHNSON of South Dakota) introduced 

the following bill; which was referred to the Committee on Energy and 

Commerce, and in addition to the Committee on Ways and Means, for 

a period to be subsequently determined by the Speaker, in each case for 

consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend title XXVII of the Public Health Service Act 

to ensure the equitable treatment of covered entities and 

pharmacies participating in the 340B drug discount program, and for other purposes. 

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 ‘‘Preserving Rules Or5 dered for The Entities Covered Through 340B Act of 

6 2023’’ or the ‘‘PROTECT 340B Act of 2023’’. 


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1 SEC. 2. FINDINGS AND PURPOSE. 

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

3 (1) The 340B drug pricing program is an es4 sential part of the Nation’s health care safety net. 

5 (2) 340B enables safety-net providers to stretch 

6 scarce resources further to offer services and treat 

7 patients through the savings these providers receive 

8 under the program. 

9 (3) 340B savings support hospitals, clinics, and 

10 health centers’ care for patients who have low in11 comes, including those with low incomes enrolled in 

12 Medicare and Medicaid. 

13 (4) 340B savings are critically important to 

14 rural hospitals that operate on very slim margins 

15 and serve patients in isolated areas with limited ac16 cess to health care. 

17 (5) 340B supports care for those in need with18 out using taxpayer dollars. 

19 (6) Some commercial payers and pharmacy ben20 efit managers are paying less to 340B covered enti21 ties and their contract pharmacies for 340B drugs, 

22 requiring identification of 340B drug claims or oth23 erwise discriminating against 340B covered entities 

24 and their contract pharmacies on the basis of their 

25 status as providers or pharmacies that dispense 

26 340B drugs. 


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1 (7) These types of discriminatory actions un2 dermine the purpose of the 340B program and harm 

3 the patients served by 340B covered entities. Com4 mercial payers and pharmacy benefit managers’ im5 position of requirements on a 340B pharmacy be6 cause it is a pharmacy that dispenses 340B drugs, 

7 or requirements with respect to the use of and bill8 ing for drugs purchased under 340B because they 

9 are 340B drugs is inconsistent with public policy be10 cause of the deleterious effects on the nation’s 

11 health care safety net. 

12 (b) PURPOSES.—The purposes of this Act are the fol13 lowing: 

14 (1) To prohibit discriminatory actions, includ15 ing several specified actions, by a pharmacy benefit 

16 manager, a group health plan, a health insurance 

17 issuer offering group or individual health insurance, 

18 or a sponsor of a Medicare part D prescription drug 

19 plan against 340B covered entities and their phar20 macies and requiring them to be treated as any 

21 other provider or pharmacy. 

22 (2) To provide for the imposition of civil mone23 tary penalties on pharmacy benefit managers that 

24 violate the new protections and require the Health 


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1 Services and Resources Administration to promul2 gate implementing regulations. 

3 (3) To authorize the Secretary to contract with 

4 a third-party entity to collect and review data from 

5 State Medicaid agencies and covered entities to pre6 vent Medicaid duplicate discounts. 

7 SEC. 3. ENSURING THE EQUITABLE TREATMENT OF COV8 ERED ENTITIES AND PHARMACIES PARTICI9 PATING IN THE 340B DRUG DISCOUNT PRO10 GRAM. 

11 (a) GROUP HEALTH PLAN AND HEALTH INSURANCE

12 ISSUER REQUIREMENTS.—Subpart II of part A of title 

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

14 300gg–11 et seq.) is amended by adding at the end the 

15 following new section: 

16 ‘‘SEC. 2730. REQUIREMENTS RELATING TO THE 340B DRUG 

17 DISCOUNT PROGRAM. 

18 ‘‘(a) IN GENERAL.—A group health plan, a health 

19 insurance issuer offering group or individual health insur20 ance coverage, or a pharmacy benefit manager may not 

21 discriminate against a covered entity (as defined in sub22 section (d)(1)), a specified pharmacy (as defined in sub23 section (d)(2)), or a participant, beneficiary, or enrollee 

24 of such plan or coverage by imposing requirements, exclu25 sions, reimbursement terms, or other conditions on such 


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1 entity or pharmacy that differ from those applied to enti2 ties or pharmacies that are not covered entities or speci3 fied pharmacies on the basis that the entity or pharmacy 

4 is a covered entity or specified pharmacy or that the entity 

5 or pharmacy dispenses 340B drugs, including by taking 

6 any action prohibited under subsection (b). 

7 ‘‘(b) SPECIFIED PROHIBITED ACTIONS.—A group 

8 health plan, a health insurance issuer offering group or 

9 individual health insurance coverage, or a pharmacy ben10 efit manager may not discriminate against a covered enti11 ty, a specified pharmacy, or a participant, beneficiary, or 

12 enrollee of such plan or coverage by doing any of the fol13 lowing: 

14 ‘‘(1) Reimbursing a covered entity or specified 

15 pharmacy for a quantity of a 340B drug (as defined 

16 in subsection (d)) in an amount less than such plan, 

17 issuer, or manager (as applicable) would pay to any 

18 other similarly situated (as specified by the Sec19 retary) entity or pharmacy that is not a covered en20 tity or a specified pharmacy for such quantity of 

21 such drug on the basis that the entity or pharmacy 

22 is a covered entity or specified pharmacy or that the 

23 entity or pharmacy dispenses 340B drugs. 

24 ‘‘(2) Imposing any terms or conditions on cov25 ered entities or specified pharmacies with respect to 


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1 any of the following that differ from such terms or 

2 conditions applied to other similarly situated entities 

3 or pharmacies that are not covered entities or speci4 fied pharmacies on the basis that the entity or phar5 macy is a covered entity or specified pharmacy or 

6 that the entity or pharmacy dispenses 340B drugs: 

7 ‘‘(A) Fees, chargebacks, clawbacks, adjust8 ments, or other assessments. 

9 ‘‘(B) Professional dispensing fees. 

10 ‘‘(C) Restrictions or requirements regard11 ing participation in standard or preferred phar12 macy networks. 

13 ‘‘(D) Requirements relating to the fre14 quency or scope of audits or to inventory man15 agement systems using generally accepted ac16 counting principles. 

17 ‘‘(E) Any other restrictions, conditions, 

18 practices, or policies that, as specified by the 

19 Administrator of the Health Resources and 

20 Services Administration, interfere with the abil21 ity of a covered entity to maximize the value of 

22 discounts provided under section 340B. 

23 ‘‘(3) Interfering with an individual’s choice to 

24 receive a 340B drug from a covered entity or speciVerDate Sep 11 2014 21:05 Apr 14, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2534.IH H2534

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1 fied pharmacy, whether in person or via direct deliv2 ery, mail, or other form of shipment. 

3 ‘‘(4) Requiring a covered entity or specified 

4 pharmacy to identify, either directly or through a 

5 third party, 340B drugs. 

6 ‘‘(5) Refusing to contract with a covered entity 

7 or specified pharmacy for reasons other than those 

8 that apply equally to entities or pharmacies that are 

9 not covered entities or specified pharmacies, or on 

10 the basis that— 

11 ‘‘(A) the entity or pharmacy is a covered 

12 entity or a specified pharmacy; or 

13 ‘‘(B) the entity or pharmacy is described in 

14 any of subparagraphs (A) through (O) of sec15 tion 340B(a)(4). 

16 ‘‘(6) With respect to a group health plan or 

17 health insurance issuer for health insurance cov18 erage, denying coverage of a drug on the basis that 

19 such drug is a 340B drug. 

20 ‘‘(c) ENFORCEMENT MECHANISM FOR PHARMACY

21 BENEFIT MANAGERS.—The Secretary shall impose a civil 

22 monetary penalty on any pharmacy benefit manager that 

23 violates the requirements of this section. Such penalty 

24 shall not exceed $5,000 per violation per day. The Sec25 retary shall issue proposed regulations to implement this 


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1 subsection not later than 60 days after the date of the 

2 enactment of this subsection and shall finalize such regu3 lations not later than 180 days after such date of enact4 ment. 

5 ‘‘(d) DEFINITIONS.—For purposes of this section: 

6 ‘‘(1) COVERED ENTITY.—The term ‘covered en7 tity’ has the meaning given such term in section 

8 340B(a)(4). 

9 ‘‘(2) SPECIFIED PHARMACY.—The term ‘speci10 fied pharmacy’ means a pharmacy with which a cov11 ered entity has contracted to dispense 340B drugs 

12 on behalf of the covered entity whether distributed 

13 in person or via mail. 

14 ‘‘(3) 340B DRUG.—The term ‘340B drug’ 

15 means a drug that is— 

16 ‘‘(A) a covered outpatient drug (as defined 

17 for purposes of section 340B); and 

18 ‘‘(B) purchased under an agreement in ef19 fect under such section.’’. 

20 (b) APPLICATION OF REQUIREMENTS TO MEDI21 CARE.— 

22 (1) PART D.—Section 1860D–12(b) of the So23 cial Security Act (42 U.S.C. 1395w–112(b)) is 

24 amended by adding at the end the following new 

25 paragraph: 


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1 ‘‘(8) APPLICATION OF REQUIREMENTS RELAT2 ING TO THE 340B DRUG DISCOUNT PROGRAM.—Each 

3 contract entered into under this subsection with a 

4 PDP sponsor shall provide that the requirements of 

5 section 2730 of the Public Health Service Act apply 

6 to such sponsor, and to any pharmacy benefit man7 ager that contracts with such sponsor, in the same 

8 manner as such requirements apply with respect to 

9 a group health plan, a health insurance issuer, or a 

10 pharmacy benefit manager described in such sec11 tion.’’. 

12 (2) PART C.—Section 1857(f)(3) of the Social 

13 Security Act (42 U.S.C. 1395w–27(f)(3)) is amend14 ed by adding at the end the following new subpara15 graph: 

16 ‘‘(E) 340B DRUG DISCOUNT PROGRAM.— 

17 Section 1860D–12(b)(8).’’. 

18 (c) MEDICAID REQUIREMENTS.— 

19 (1) IN GENERAL.—Section 1927 of the Social 

20 Security Act (42 U.S.C. 1396r–8) is amended by 

21 adding at the end the following new subsection: 

22 ‘‘(l) REVIEW TO PREVENT DUPLICATE DIS23 COUNTS.— 

24 ‘‘(1) IN GENERAL.—Not later than 1 year after 

25 the date of the enactment of this subsection, the 


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1 Secretary shall enter into a contract with a third2 party entity (who shall be free of conflicts of inter3 est, as specified by the Secretary) for purposes of— 

4 ‘‘(A) identifying claims for 340B drugs (as 

5 defined in section 2730(d) of the Public Health 

6 Service Act) for which reimbursement was 

7 made under a State plan (or waiver of such 

8 plan); and 

9 ‘‘(B) ensuring such claims are not included 

10 in any State rebate request under this section 

11 in violation of section 340B(a)(5)(A) of the 

12 Public Health Service Act or section 

13 1903(m)(2)(A)(xiii) or 1927(j)(1). 

14 ‘‘(2) DUTIES OF CONTRACTING ENTITY.— 

15 ‘‘(A) IN GENERAL.—The entity with a con16 tract in effect under paragraph (1) shall— 

17 ‘‘(i) request and review, in the most 

18 efficient and least burdensome manner 

19 practicable— 

20 ‘‘(I) claims level data from cov21 ered entities (as defined in section 

22 340B of the Public Health Service 

23 Act) itemizing 340B drugs dispensed 

24 to individuals enrolled under a State 

25 plan (or waiver of such plan); and 


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1 ‘‘(II) claims level rebate file data 

2 from State agencies administering 

3 such plan (or such waiver); 

4 ‘‘(ii) request, receive, and maintain 

5 data described in either of subclauses (I) 

6 and (II) of clause (i) in a confidential man7 ner; and 

8 ‘‘(iii) notify the State and the Sec9 retary of any violation described in para10 graph (1)(B) to ensure that such violation 

11 is remedied. 

12 ‘‘(B) RETROSPECTIVE SUBMISSION OF

13 DATA.—In requesting and reviewing claims level 

14 data described in subparagraph (A)(i)(I) from a 

15 covered entity, the entity with a contract in ef16 fect under paragraph (1) shall allow such cov17 ered entity the option of submitting such data 

18 on a retrospective basis through a data file or 

19 another method that does not exclusively re20 quire point-of-sale identification.’’. 

21 (2) ENSURING ACCESS TO INFORMATION.— 

22 (A) COVERED ENTITY REQUIREMENT.— 

23 Section 340B(a)(5) of the Public Health Serv24 ice Act (42 U.S.C. 256b(a)(5)) is amended by 


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1 adding at the end the following new subpara2 graph: 

3 ‘‘(E) PROVISION OF INFORMATION TO CON4 TRACTED ENTITY FOR MEDICAID CLAIMS RE5 VIEW.—A covered entity shall furnish to the en6 tity with a contract in effect under section 

7 1927(l) of the Social Security Act, upon request 

8 of such entity, the data described in paragraph 

9 (2)(A)(i) of such section.’’. 

10 (B) STATE PLAN REQUIREMENT.—Section 

11 1902(a) of the Social Security Act (42 U.S.C. 

12 1396a(a)) is amended— 

13 (i) in paragraph (86), by striking 

14 ‘‘and’’ at the end; 

15 (ii) in paragraph (87)(D), by striking 

16 the period and inserting ‘‘; and’’; and 

17 (iii) by inserting after paragraph (87) 

18 the following new paragraph: 

19 ‘‘(88) provide for a mechanism to furnish to the 

20 entity with a contract in effect under section 

21 1927(l), upon request of such entity, the data de22 scribed in paragraph (2)(A)(ii) of such section and 

23 remove from any rebate request described in para24 graph (1)(B) of such section any claim that is the 


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1 subject of a notice submitted by such entity under 

2 paragraph (2)(C) of such section.’’. 

3 (d) PROHIBITION ON CERTAIN USE OF FUNDS.—No 

4 funds appropriated under any Act may be used to imple5 ment Executive Order 13937 published on July 29, 2020, 

6 or to otherwise specify or limit the amount that a covered 

7 entity (as defined in section 340B(a)(4) of the Public 

8 Health Service Act (42 U.S.C. 256b(a)(4))) charges pa9 tients for 340B drugs (as defined in section 2730(d) of 

10 the Public Health Service Act, as added by subsection 

11 (a)). 

Æ 


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