PROTECT 340B Act of 2021
Bill: H.R.4390 | Sponsor: Rep. McKinley, David B. (R-WV)
Policy area: Health

Summary:
Preserving Rules Ordered for The Entities Covered Through 340B Act of 2021 or the PROTECT 340B Act of 2021
This bill prohibits pharmacy benefit managers (PBMs) and health insurance plans from discriminating against health providers participating in the 340B drug pricing program, including pharmacies contracted with such providers to dispense 340B drugs. The 340B program allows certain providers to receive covered outpatient drugs at reduced prices from manufacturers.
Specifically, PBMs and insurance plans may not
Violations of this bill are subject to a civil penalty of not more than $5,000 per violation per day.
These prohibitions also apply to prescription drug (Part D) sponsors under Medicare.
The bill also provides for a process to prevent duplicate 340B drug discounts to states under Medicaid.

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.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Preserving Rules Ordered for The 
Entities Covered Through 340B Act of 2021'' or the ``PROTECT 340B Act 
of 2021''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--Congress finds the following:
            (1) The 340B drug pricing program is an essential 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 incomes, 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 access to health care.
            (5) 340B supports care for those in need without using 
        taxpayer dollars.
            (6) Some commercial payers and pharmacy benefit managers 
        are paying less to 340B covered entities and their contract 
        pharmacies for 340B drugs, requiring identification of 340B 
        drug claims or otherwise discriminating against 340B covered 
        entities and their contract pharmacies on the basis of their 
        status as providers or pharmacies that dispense 340B drugs.
            (7) These types of discriminatory actions undermine the 
        purpose of the 340B program and harm the patients served by 
        340B covered entities. Commercial payers and pharmacy benefit 
        managers' imposition of requirements on a 340B pharmacy because 
        it is a pharmacy that dispenses 340B drugs, or requirements 
        with respect to the use of and billing for drugs purchased 
        under 340B because they are 340B drugs is inconsistent with 
        public policy because of the deleterious effects on the 
        nation's health care safety net.
    (b) Purposes.--The purposes of this Act are the following:
            (1) To prohibit discriminatory actions, including 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 
        pharmacies and requiring them to be treated as any other 
        provider or pharmacy.
            (2) To provide for the imposition of civil monetary 
        penalties on pharmacy benefit managers that violate the new 
        protections and require the Health Services and Resources 
        Administration to promulgate 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 prevent Medicaid duplicate 
        discounts.

SEC. 3. ENSURING THE EQUITABLE TREATMENT OF COVERED ENTITIES AND 
              PHARMACIES PARTICIPATING IN THE 340B DRUG DISCOUNT 
              PROGRAM.

    (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 insurance coverage, or a pharmacy 
benefit manager may not discriminate against a covered entity (as 
defined in subsection (d)(1)) or a specified pharmacy (as defined in 
subsection (d)(2)) by imposing requirements, exclusions, reimbursement 
terms, or other conditions on such entity or pharmacy that differ from 
those applied to entities or pharmacies that are not covered entities 
or specified pharmacies on the basis that the entity or pharmacy is a 
covered 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 benefit manager may not discriminate against a 
covered entity 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 Secretary) entity or pharmacy that is not a 
        covered entity 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 covered 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 specified pharmacies on the basis that the entity 
        or pharmacy is a covered entity or specified pharmacy or that 
        the entity or pharmacy dispenses 340B drugs:
                    ``(A) Fees, chargebacks, clawbacks, adjustments, or 
                other assessments.
                    ``(B) Professional dispensing fees.
                    ``(C) Restrictions or requirements regarding 
                participation in standard or preferred pharmacy 
                networks.
                    ``(D) Requirements relating to the frequency or 
                scope of audits or to inventory management systems 
                using generally accepted accounting 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 ability 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 specified pharmacy, whether 
        in person or via direct delivery, mail, or other form of 
        shipment.
            ``(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 section 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 Secretary 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 regulations not later than 180 days after such date of 
enactment.
    ``(d) Definitions.--For purposes of this section:
            ``(1) Covered entity.--The term `covered entity' has the 
        meaning given such term in section 340B(a)(4).
            ``(2) Specified pharmacy.--The term `specified pharmacy' 
        means a pharmacy with which a covered 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 effect under 
                such section.''.
    (b) Application of Requirements to Medicare.--
            (1) Part d.--Section 1860D-12(b) of the Social Security Act 
        (42 U.S.C. 1395w-112(b)) is amended by adding at the end the 
        following new paragraph:
            ``(8) Application of requirements relating 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 to such sponsor, and to any pharmacy benefit manager 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 section.''.
            (2) Part c.--Section 1857(f)(3) of the Social Security Act 
        (42 U.S.C. 1395w-27(f)(3)) is amended by adding at the end the 
        following new subparagraph:
                    ``(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 Discounts.--
            ``(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 interest, as specified by the Secretary) for 
        purposes of--
                    ``(A) identifying claims for 340B drugs (as defined 
                in section 2730(d) of the Public Health 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 contract in 
                effect under paragraph (1) shall--
                            ``(i) request and review, in the most 
                        efficient and least burdensome manner 
                        practicable--
                                    ``(I) claims level data from 
                                covered 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) and (II) 
                        of clause (i) in a confidential manner; and
                            ``(iii) notify the State and the Secretary 
                        of any violation described in paragraph (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 effect under paragraph (1) 
                shall allow such covered 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 Service Act (42 U.S.C. 256b(a)(5)) 
                is amended by adding at the end the following new 
                subparagraph:
                    ``(E) Provision of information to contracted entity 
                for medicaid claims review.--A covered entity shall 
                furnish to the entity with a contract in effect under 
                section 1927(l) of the Social Security Act, upon 
                request 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 described in paragraph (2)(A)(ii) of 
        such section and remove from any rebate request described in 
        paragraph (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 implement 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 patients for 340B drugs (as 
defined in section 2730(d) of the Public Health Service Act, as added 
by subsection (a)).
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