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: 2729A. 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 an entity providing pharmacy benefit management services on behalf of such a plan or issuer may not discriminate against a covered entity, a 340B pharmacy, or a participant, beneficiary, or enrollee of such plan or coverage by imposing requirements, exclusions, reimbursement terms, or other conditions on such entity or 340B pharmacy that differ from those applied to entities or pharmacies that are not covered entities or 340B pharmacies on the basis that the entity or pharmacy is a covered entity or 340B pharmacy or that the entity or 340B 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 an entity providing pharmacy benefit management services on behalf of such a plan or issuer may not discriminate against a covered entity, a 340B pharmacy, or a participant, beneficiary, or enrollee of such plan or coverage by doing any of the following: (1) Reimbursing a covered entity or 340B pharmacy for a quantity of a 340B drug (as defined in subsection (d)) in an amount less than such plan, issuer, or entity providing pharmacy benefit management services (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 340B pharmacy for such quantity of such drug on the basis that the entity or pharmacy is a covered entity or 340B pharmacy or that the entity or pharmacy dispenses 340B drugs. (2) Imposing any terms or conditions on any covered entity or 340B pharmacy, with respect to any of the following that differ from such terms or conditions applied to other similarly situated (as specified by the Secretary) entities or pharmacies that are not covered entities or 340B pharmacies on the basis that the entity or pharmacy is a covered entity or 340B 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 Secretary, 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 340B pharmacy, whether in person or via direct delivery, mail, or other form of shipment. (4) Requiring a covered entity or 340B pharmacy to identify, either directly or through a third party, 340B drugs. (5) Refusing to contract with a covered entity or 340B pharmacy for reasons other than those that apply equally to entities or pharmacies that are not covered entities or 340B pharmacies, or on the basis that— (A) the entity or pharmacy is a covered entity or a 340B 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 offering group or individual health insurance coverage, denying coverage of a drug on the basis that such drug is a 340B drug. (7) Requiring a covered entity to make use of any 340B pharmacy in a manner that— (A) does not meet the requirements set forth in section 340B for the use of contract pharmacies; or (B) is inconsistent with patient need and access. (8) Failing to enable pharmacies to distinguish at the point-of-sale between private health plans and State Medicaid plans sponsored by the same payer, through methods such as using the same bank identification number and processor control number to identify individual enrolled in both types of plans. (c) Civil monetary penalties The Secretary shall impose monetary penalties, pursuant to subpart O of part 1003 of title 42, Code of Federal Regulations (or any successor regulations), on any group health plan, health insurance issuer offering group or individual health insurance coverage, or entity providing pharmacy benefit management services on behalf of such a plan or issuer 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 180 days after the date of the enactment of this section and shall finalize such regulations not later than 1 year after such date of enactment. The penalties under this subsection may be in addition to other enforcement actions available under this title. (d) Definitions For purposes of this section: (1) Contract pharmacy The term contract pharmacy has the meaning given such term in section 340B(b). (2) Covered entity The term covered entity has the meaning given such term in section 340B(a)(4). (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. (4) 340B pharmacy The term 340B pharmacy means a pharmacy that is wholly-owned by a covered entity or that is a contract pharmacy.. (b) Medicare prescription drug plan and MA–PD plan requirements Section 1860D–12 of the Social Security Act (42 U.S.C. 1395w–112) is amended by adding at the end the following new subsection: (i) Nondiscrimination (1) In general A PDP sponsor offering a prescription drug plan or an MA organization offering an MA–PD plan may not require a covered entity to make use of any 340B pharmacy in a manner that— (A) does not meet the requirements set forth in section 340B of the Public Health Service Act for the use of 340B pharmacies; or (B) is inconsistent with patient need and access. (2) Definitions In this subsection— (A) the term contract pharmacy has the meaning given such term in section 340B(b) of the Public Health Service Act; (B) the term covered entity has the meaning given such term in section 340B of the Public Health Service Act; and (C) the term 340B pharmacy means a pharmacy that is wholly-owned by a covered entity or that is a contract pharmacy..