Preventing duplicate discounts

(a) 340B drug discount program data clearinghouse Part A of title XI of the Social Security Act (42 U.S.C. 1301 et seq.) is amended by adding the following the following new section: 1150D. 340B drug discount program data clearinghouse (a) Clearinghouse contracting entity Not later than 1 year after the date of enactment of this section, the Secretary shall enter into a contract with an independent, third-party entity (who shall be free of conflicts of interest with covered entities, manufacturers, health plans, third-party administrators of health plans, entities providing pharmacy benefit management services to health plans, and of other conflicts of interest as specified by the Secretary) for purposes of carrying out the clearinghouse duties under subsection (b) with respect to the 340B drug discount program to prevent duplicate discounts and ensure proper accounting. Such contract shall provide that the third-party entity shall perform the duties described in subsection (b) and shall be for a 4-year term that may be renewed after a subsequent bidding process or using competitive procedures, as defined in section 132 of title 41, United States Code. (b) Duties With respect to 340B drugs that are dispensed to individuals who are entitled to or eligible for benefits under the Medicare program under title XVIII, the Medicaid program under title XIX (including benefits provided under the Medicaid program through a managed care arrangement), the Children’s Health Insurance Program under title XXI (including benefits provided under the Children's Health Insurance Program through a managed care arrangement), or a health plan, a third-party entity with a contract in effect under subsection (a) shall— (1) request and receive, in the most efficient and least burdensome manner practicable— (A) claims-level rebate file data under section 1927, from State Medicaid agencies; (B) claims-level data from covered entities; and (C) any other data specified by the Secretary as necessary for the entity to carry out this section; (2) request, receive, and maintain data described in paragraph (1) in a confidential manner; (3) ensure that claims-level data submissions by covered entities are complete and accurate, and if not, obtain complete and accurate data from the covered entity; (4) notify the covered entity, the Secretary, the State Medicaid agency, and the manufacturer of any violation described in subsection (c) to allow for remediation; (5) provide the manufacturer of a 340B drug with claims-level data submitted by a covered entity, so that the manufacturer may identify units of a 340B drug that may generate a rebate or discount under a voluntary rebate or discount arrangement, such as those related to commercial plans; (6) where feasible, share with a covered entity, the Secretary, a Medicaid State agency, or a manufacturer, data the third-party entity identifies in a timely manner with the purpose of preventing any of the violations described in section 2729A(b)(2) of the Public Health Service Act; (7) determine total sales of 340B drugs to such individuals for purposes of being used as the basis for determining user fees under section 340B(a)(15) of such Act; and (8) allow covered entities described in subparagraphs (A) through (K) of section 340B(a)(4) of the Public Health Service Act, which have the lowest decile of patient volume, as calculated by the Secretary, to make submissions required under this section in an aggregated retrospective basis. (c) Hardship exemption The Secretary may, on a case-by-case basis, determine that a covered entity may submit aggregate data if the Secretary determines that it is not feasible for the entity to submit claims-level data, as required under this section. (d) Restrictions on contracting entity The entity receiving a contract under subsection (a) shall— (1) ensure that it has no conflicts of interest, including no direct contractual involvement with any covered entity, payer, or manufacturer participating in the drug discount program under section 340B of the Public Health Service Act; (2) not disclose confidential information obtained through carrying out the clearinghouse duties under this section other than as necessary to carry out the purposes of this section, including for program integrity functions; (3) not sell or otherwise generate revenue by licensing or making available the data described in subsection (b)(1); and (4) not collect pricing information regarding drugs that are not 340B drugs from covered entities. (e) Duties of covered entity Covered entities shall facilitate and participate in data transmission with the third-party entity with a contract in effect under subsection (a), including with respect to reporting on data available through contract pharmacies. (f) Restrictions on manufacturer and PBM use of data (1) In general A manufacturer who receives data under subsection (b)(5) may use such data only for the purpose of preventing duplicate discounts and diversion under this section. (2) Restrictions on plans, issuers, and PBMs A health plan, third-party administrator of a health plan, or entity providing pharmacy benefit management services may use data received from the clearinghouse only for the purpose of preventing duplicate discounts and diversion under this section. (3) Enforcement Any manufacturer or other person found by the Secretary to have used data received under subsection (b)(5) for uses other than those described in paragraphs (1) and (2), such as for pricing or marketing, shall be subject to civil monetary penalties, pursuant to subpart O of part 1003 of title 42, Code of Federal Regulations (or any successor regulations), subject to the discretion of the Secretary. (g) Privacy requirements The information exchange required by subsection (b) shall occur in a manner consistent with the privacy, security, and breach notification regulations promulgated under section 264(c) of the Health Insurance Portability and Accountability Act of 1996. (h) Repayment to manufacturers The Secretary shall require a covered entity to work with affected manufacturers regarding identified duplicate discounts for 340B drugs, regardless of the method used to dispense the 340B drug, which shall include repayment— (1) by the covered entity as a result of the covered entity's noncompliance with section 340B of the Public Health Service Act; (2) by a State Medicaid program of rebates improperly requested by the State Medicaid program; or (3) by a State Medicaid program where the financial benefit of the duplicate discount accrues to the State Medicaid program, regardless of whether the duplicate discount occurred under the fee-for-service or managed care payment arrangement. (i) Definitions In 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 of the Public Health Service Act); and (B) purchased under an agreement in effect under such section. (2) Covered entity The term covered entity means an entity described in section 340B(a)(4) of the Public Health Service Act. (3) Diversion The term diversion, with respect to a covered entity and a 340B drug, means the resale or otherwise transferring of the drug to a person who is not a patient, as defined in section 340B(b)(3) of the Public Health Service Act, of the covered entity. (4) Duplicate discount The term duplicate discount means a payment under title XIX for medical assistance described in section 1905(a)(12) with respect to a 340B drug if the drug is subject to the payment of a rebate to the State under section 1927. (5) Health plans The term health plan has the meaning given to that term in section 1128C(c). (6) Manufacturer The term manufacturer has the meaning given to that term in section 1927(k)(5).. (b) Prohibited actions of group health plans and PBMs (1) In general A group health plan, a health insurance issuer offering group or individual coverage (as such terms are defined in section 2791 of the Public Health Service Act (42 U.S.C. 300gg–91)), or an entity providing pharmacy benefit management services may not interfere with the ability of covered entities, contract pharmacies (as such terms are defined in section 340B of the Public Health Service Act (42 U.S.C. 254b)), or manufacturers of drugs to prevent duplicate discounts or to recoup the full amount of any identified duplicate discounts pursuant to the drug discount program under section 340B of the Public Health Service Act (42 U.S.C. 254b). (2) Enforcement The Secretary of Health and Human Services shall impose civil 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, or entity providing pharmacy benefit management services that violates paragraph (1). (c) Oversight Not later than 1 year after the date of enactment of this Act, the Secretary of Health and Human Services, acting through the Administrator of the Centers for Medicare & Medicaid Services and the Administrator of the Health Resources and Services Administration, shall issue a report to the appropriate committees of Congress detailing coordinated efforts, including through the use of existing resources to address duplicate discounts. (d) Regulations The Secretary of Health and Human Services may promulgate such rules through notice and comment rulemaking as the Secretary determines appropriate to advance the purpose of the drug discount program under section 340B of the Public Health Service Act (42 U.S.C. 256b) and prevent duplicate discounts through the clearinghouse established by the amendment made by subsection (a). (e) Definition In this section, the term duplicate discount has the meaning given such term in section 1150D(h) of the Social Security Act, as added by subsection (a).