Ensuring the equitable treatment of 340B 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: 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 acting on behalf of such plan or issuer, may not discriminate against a covered entity (as defined in subsection (e)(1)), a contract pharmacy (as defined in subsection (e)(2)), or a participant, beneficiary, or enrollee of such plan or coverage 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 contract pharmacies on the basis that the entity or pharmacy is a covered entity or contract pharmacy or that the entity or pharmacy dispenses 340B drugs, 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 acting on behalf of such plan or issuer, may not discriminate against a covered entity, a contract pharmacy, or a participant, beneficiary, or enrollee of such plan or coverage by doing any of the following: (1) Reimbursing a covered entity or contract pharmacy for a quantity of a 340B drug (as defined in subsection (e)) in an amount less than such plan, issuer, or pharmacy benefit 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 contract pharmacy for such quantity of such drug on the basis that the entity or pharmacy is a covered entity or contract pharmacy or that the entity or pharmacy dispenses 340B drugs. (2) Imposing any terms or conditions on covered entities or contract 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 contract pharmacies on the basis that the entity or pharmacy is a covered entity or contract 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 interfere with the ability of a covered entity or contract pharmacy to use the discounts provided under section 340B in accordance with applicable requirements under such section. (3) Interfering with an individual’s choice to receive a 340B drug from a covered entity or contract pharmacy, whether in person or via direct delivery, mail, or other form of shipment, as permitted under section 340B. (4) Interfering with, limiting, or prohibiting actions by a covered entity or contract pharmacy to identify, either directly or through a third party, claims for 340B drugs, including by submission of claims data or use of claims modifiers or indicators. (5) Refusing to contract with a covered entity or contract pharmacy for reasons other than those that apply equally to entities or pharmacies that are not covered entities or contract pharmacies, or on the basis that— (A) the entity or pharmacy is a covered entity or a contract pharmacy; or (B) the entity or pharmacy is described in any of subparagraphs (A) through (O) of section 340B(a)(4). (6) With respect to a group health plan or health insurance issuer for health insurance coverage, denying coverage of a drug on the basis that such drug is a 340B drug. (c) Prohibited actions in derogation of section 340B affordability assistance provisions A group health plan, a health insurance issuer offering group or individual health insurance coverage, or a pharmacy benefit manager acting on behalf of such plan or issuer shall not prohibit or restrict, in contracts with pharmacies in their network that are contract pharmacies or entity pharmacies, or in any other manner, any reduction in or subsidy for the out-of-pocket amount for a 340B drug charged to an individual (including a participant, beneficiary, or enrollee of such plan or coverage) that is required or authorized by subparagraphs (G) or (H) of section 340B(a)(5). Any general prohibition or restriction on reducing or subsidizing the out-of-pocket amount for a drug charged to an individual that lacks an express exemption for any reductions in or subsidies for the out-of-pocket amount for a 340B drug that are required or authorized by subparagraphs (G) or (H) of section 340B(a)(5) is a violation of this subsection. Any contractual provision that violates this subsection in any manner shall be void and unenforceable. (d) 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. (e) Definitions For purposes of this section: (1) 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. (2) Contract pharmacy The term contract pharmacy has the meaning given such term in section 340B(a)(5)(F). (3) Covered entity The term covered entity has the meaning given such term in section 340B(a)(4). (4) Entity pharmacy The term entity pharmacy has the meaning given such term in section 340B(a)(5)(F).. (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: (10) 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: (G) 340B drug discount program Section 1860D–12(b)(10)..