I 
117TH CONGRESS 
1ST SESSION H. R. 4390 
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 
JULY 9, 2021 
Mr. MCKINLEY (for himself and Ms. SPANBERGER) 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 sub-
sequently 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 pro-
gram, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Preserving Rules Or-
dered for The Entities Covered Through 340B Act of 
2021’’ or the ‘‘PROTECT 340B Act of 2021’’. 
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SEC. 2. FINDINGS AND PURPOSE. 
(a) FINDINGS.—Congress finds the following: 
(1) The 340B drug pricing program is an es-
sential part of the Nation’s health care safety net. 
(2) 340B enables safety-net providers to stretch 
scarce resources further to offer services and treat 
patients through the savings these providers receive 
under the program. 
(3) 340B savings support hospitals, clinics, and 
health centers’ care for patients who have low in-
comes, including those with low incomes enrolled in 
Medicare and Medicaid. 
(4) 340B savings are critically important to 
rural hospitals that operate on very slim margins 
and serve patients in isolated areas with limited ac-
cess to health care. 
(5) 340B supports care for those in need with-
out using taxpayer dollars. 
(6) Some commercial payers and pharmacy ben-
efit managers are paying less to 340B covered enti-
ties and their contract pharmacies for 340B drugs, 
requiring identification of 340B drug claims or oth-
erwise discriminating against 340B covered entities 
and their contract pharmacies on the basis of their 
status as providers or pharmacies that dispense 
340B drugs. 
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(7) These types of discriminatory actions un-
dermine the purpose of the 340B program and harm 
the patients served by 340B covered entities. Com-
mercial payers and pharmacy benefit managers’ im-
position of requirements on a 340B pharmacy be-
cause it is a pharmacy that dispenses 340B drugs, 
or requirements with respect to the use of and bill-
ing for drugs purchased under 340B because they 
are 340B drugs is inconsistent with public policy be-
cause of the deleterious effects on the nation’s 
health care safety net. 
(b) PURPOSES.—The purposes of this Act are the fol-
lowing: 
(1) To prohibit discriminatory actions, includ-
ing several specified actions, by a pharmacy benefit 
manager, a group health plan, a health insurance 
issuer offering group or individual health insurance, 
or a sponsor of a Medicare part D prescription drug 
plan against 340B covered entities and their phar-
macies and requiring them to be treated as any 
other provider or pharmacy. 
(2) To provide for the imposition of civil mone-
tary penalties on pharmacy benefit managers that 
violate the new protections and require the Health 
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Services and Resources Administration to promul-
gate implementing regulations. 
(3) To authorize the Secretary to contract with 
a third-party entity to collect and review data from 
State Medicaid agencies and covered entities to pre-
vent Medicaid duplicate discounts. 
SEC. 3. ENSURING THE EQUITABLE TREATMENT OF COV-
ERED ENTITIES AND PHARMACIES PARTICI-
PATING IN THE 340B DRUG DISCOUNT PRO-
GRAM. 
(a) GROUP HEALTH PLAN AND HEALTH INSURANCE 
ISSUER REQUIREMENTS.—Subpart II of part A of title 
XXVII of the Public Health Service Act (42 U.S.C. 
300gg–11 et seq.) is amended by adding at the end the 
following new section: 
‘‘SEC. 2730. REQUIREMENTS RELATING TO THE 340B DRUG 
DISCOUNT PROGRAM. 
‘‘(a) IN GENERAL.—A group health plan, a health 
insurance issuer offering group or individual health insur-
ance coverage, or a pharmacy benefit manager may not 
discriminate against a covered entity (as defined in sub-
section (d)(1)) or a specified pharmacy (as defined in sub-
section (d)(2)) by imposing requirements, exclusions, re-
imbursement terms, or other conditions on such entity or 
pharmacy that differ from those applied to entities or 
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pharmacies that are not covered entities or specified phar-
macies on the basis that the entity or pharmacy is a cov-
ered entity or specified pharmacy or that the entity or 
pharmacy dispenses 340B drugs, including by taking any 
action prohibited under subsection (b). 
‘‘(b) SPECIFIED PROHIBITED ACTIONS.—A group 
health plan, a health insurance issuer offering group or 
individual health insurance coverage, or a pharmacy ben-
efit manager may not discriminate against a covered enti-
ty or a specified pharmacy by doing any of the following: 
‘‘(1) Reimbursing a covered entity or specified 
pharmacy for a quantity of a 340B drug (as defined 
in subsection (d)) in an amount less than such plan, 
issuer, or manager (as applicable) would pay to any 
other similarly situated (as specified by the Sec-
retary) entity or pharmacy that is not a covered en-
tity or a specified pharmacy for such quantity of 
such drug on the basis that the entity or pharmacy 
is a covered entity or specified pharmacy or that the 
entity or pharmacy dispenses 340B drugs. 
‘‘(2) Imposing any terms or conditions on cov-
ered entities or specified pharmacies with respect to 
any of the following that differ from such terms or 
conditions applied to other similarly situated entities 
or pharmacies that are not covered entities or speci-
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fied pharmacies on the basis that the entity or phar-
macy is a covered entity or specified pharmacy or 
that the entity or pharmacy dispenses 340B drugs: 
‘‘(A) Fees, chargebacks, clawbacks, adjust-
ments, or other assessments. 
‘‘(B) Professional dispensing fees. 
‘‘(C) Restrictions or requirements regard-
ing participation in standard or preferred phar-
macy networks. 
‘‘(D) Requirements relating to the fre-
quency or scope of audits or to inventory man-
agement systems using generally accepted ac-
counting principles. 
‘‘(E) Any other restrictions, conditions, 
practices, or policies that, as specified by the 
Administrator of the Health Resources and 
Services Administration, interfere with the abil-
ity of a covered entity to maximize the value of 
discounts provided under section 340B. 
‘‘(3) Interfering with an individual’s choice to 
receive a 340B drug from a covered entity or speci-
fied pharmacy, whether in person or via direct deliv-
ery, mail, or other form of shipment. 
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‘‘(4) Requiring a covered entity or specified 
pharmacy to identify, either directly or through a 
third party, 340B drugs. 
‘‘(5) Refusing to contract with a covered entity 
or specified pharmacy for reasons other than those 
that apply equally to entities or pharmacies that are 
not covered entities or specified pharmacies, or on 
the basis that— 
‘‘(A) the entity or pharmacy is a covered 
entity or a specified pharmacy; or 
‘‘(B) the entity or pharmacy is described in 
any of subparagraphs (A) through (O) of sec-
tion 340B(a)(4). 
‘‘(c) ENFORCEMENT MECHANISM
FOR PHARMACY 
BENEFIT MANAGERS.—The Secretary shall impose a civil 
monetary penalty on any pharmacy benefit manager that 
violates the requirements of this section. Such penalty 
shall not exceed $5,000 per violation per day. The Sec-
retary shall issue proposed regulations to implement this 
subsection not later than 60 days after the date of the 
enactment of this subsection and shall finalize such regu-
lations not later than 180 days after such date of enact-
ment. 
‘‘(d) DEFINITIONS.—For purposes of this section: 
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‘‘(1) COVERED ENTITY.—The term ‘covered en-
tity’ has the meaning given such term in section 
340B(a)(4). 
‘‘(2) SPECIFIED PHARMACY.—The term ‘speci-
fied pharmacy’ means a pharmacy with which a cov-
ered entity has contracted to dispense 340B drugs 
on behalf of the covered entity whether distributed 
in person or via mail. 
‘‘(3) 340B DRUG.—The term ‘340B drug’ 
means a drug that is— 
‘‘(A) a covered outpatient drug (as defined 
for purposes of section 340B); and 
‘‘(B) purchased under an agreement in ef-
fect under such section.’’. 
(b) APPLICATION
OF REQUIREMENTS
TO MEDI-
CARE.— 
(1) PART D.—Section 1860D–12(b) of the So-
cial Security Act (42 U.S.C. 1395w–112(b)) is 
amended by adding at the end the following new 
paragraph: 
‘‘(8) APPLICATION OF REQUIREMENTS RELAT-
ING TO THE 340B DRUG DISCOUNT PROGRAM.—Each 
contract entered into under this subsection with a 
PDP sponsor shall provide that the requirements of 
section 2730 of the Public Health Service Act apply 
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to such sponsor, and to any pharmacy benefit man-
ager that contracts with such sponsor, in the same 
manner as such requirements apply with respect to 
a group health plan, a health insurance issuer, or a 
pharmacy benefit manager described in such sec-
tion.’’. 
(2) PART C.—Section 1857(f)(3) of the Social 
Security Act (42 U.S.C. 1395w–27(f)(3)) is amend-
ed by adding at the end the following new subpara-
graph: 
‘‘(E) 340B DRUG DISCOUNT PROGRAM.— 
Section 1860D–12(b)(8).’’. 
(c) MEDICAID REQUIREMENTS.— 
(1) IN GENERAL.—Section 1927 of the Social 
Security Act (42 U.S.C. 1396r–8) is amended by 
adding at the end the following new subsection: 
‘‘(l) 
REVIEW
TO
PREVENT
DUPLICATE
DIS-
COUNTS.— 
‘‘(1) IN GENERAL.—Not later than 1 year after 
the date of the enactment of this subsection, the 
Secretary shall enter into a contract with a third- 
party entity (who shall be free of conflicts of inter-
est, as specified by the Secretary) for purposes of— 
‘‘(A) identifying claims for 340B drugs (as 
defined in section 2730(d) of the Public Health 
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Service Act) for which reimbursement was 
made under a State plan (or waiver of such 
plan); and 
‘‘(B) ensuring such claims are not included 
in any State rebate request under this section 
in violation of section 340B(a)(5)(A) of the 
Public 
Health 
Service 
Act 
or 
section 
1903(m)(2)(A)(xiii) or 1927(j)(1). 
‘‘(2) DUTIES OF CONTRACTING ENTITY.— 
‘‘(A) IN GENERAL.—The entity with a con-
tract in effect under paragraph (1) shall— 
‘‘(i) request and review, in the most 
efficient and least burdensome manner 
practicable— 
‘‘(I) claims level data from cov-
ered entities (as defined in section 
340B of the Public Health Service 
Act) itemizing 340B drugs dispensed 
to individuals enrolled under a State 
plan (or waiver of such plan); and 
‘‘(II) claims level rebate file data 
from State agencies administering 
such plan (or such waiver); 
‘‘(ii) request, receive, and maintain 
data described in either of subclauses (I) 
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and (II) of clause (i) in a confidential man-
ner; and 
‘‘(iii) notify the State and the Sec-
retary of any violation described in para-
graph (1)(B) to ensure that such violation 
is remedied. 
‘‘(B) RETROSPECTIVE
SUBMISSION
OF 
DATA.—In requesting and reviewing claims level 
data described in subparagraph (A)(i)(I) from a 
covered entity, the entity with a contract in ef-
fect under paragraph (1) shall allow such cov-
ered entity the option of submitting such data 
on a retrospective basis.’’. 
(2) ENSURING ACCESS TO INFORMATION.— 
(A) COVERED
ENTITY
REQUIREMENT.— 
Section 340B(a)(5) of the Public Health Serv-
ice Act (42 U.S.C. 256b(a)(5)) is amended by 
adding at the end the following new subpara-
graph: 
‘‘(E) PROVISION OF INFORMATION TO CON-
TRACTED ENTITY FOR MEDICAID CLAIMS RE-
VIEW.—A covered entity shall furnish to the en-
tity with a contract in effect under section 
1927(l) of the Social Security Act, upon request 
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of such entity, the data described in paragraph 
(2)(A)(i) of such section.’’. 
(B) STATE PLAN REQUIREMENT.—Section 
1902(a) of the Social Security Act (42 U.S.C. 
1396a(a)) is amended— 
(i) in paragraph (86), by striking 
‘‘and’’ at the end; 
(ii) in paragraph (87)(D), by striking 
the period and inserting ‘‘; and’’; and 
(iii) by inserting after paragraph (87) 
the following new paragraph: 
‘‘(88) provide for a mechanism to furnish to the 
entity with a contract in effect under section 
1927(l), upon request of such entity, the data de-
scribed in paragraph (2)(A)(ii) of such section and 
remove from any rebate request described in para-
graph (1)(B) of such section any claim that is the 
subject of a notice submitted by such entity under 
paragraph (2)(C) of such section.’’. 
(d) PROHIBITION ON CERTAIN USE OF FUNDS.—No 
funds appropriated under any Act may be used to imple-
ment Executive Order 13937 published on July 29, 2020, 
or to otherwise specify or limit the amount that a covered 
entity (as defined in section 340B(a)(4) of the Public 
Health Service Act (42 U.S.C. 256b(a)(4))) charges pa-
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tients for 340B drugs (as defined in section 2730(d) of 
the Public Health Service Act, as added by subsection 
(a)). 
Æ 
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