H.R. 10919: Safety Net Provider Drug Pricing Protection Act

This bill would change how certain health care providers that participate in the federal 340B drug discount program pay for prescription drugs they buy from manufacturers.

What the bill does

Under current law, some eligible “safety net” health care providers can buy covered outpatient drugs at a discounted 340B price. This bill would require that, for certain providers, the manufacturer’s discounted price must be paid up front at the time of purchase. In other words, these providers could not be charged more than the 340B ceiling price first and then get the discount later through a rebate, reimbursement, or similar refund process.

Who is covered

The new rule would apply to “safety net covered entities,” which include certain types of 340B-covered providers such as:

• specified hospitals and clinics covered under the 340B program,
• certain entities that receive funds directly from a state or local government, and
• sole community hospitals.

How it would work

The bill says the federal government could not enter into a 340B agreement with a drug manufacturer unless the manufacturer charges these providers no more than the 340B ceiling price at the point of purchase. It also says the law should not be interpreted to allow a system where the provider pays more than the ceiling price first and then receives the discount later.

When it would take effect

The changes would take effect as soon as the bill is enacted and would apply to drugs purchased on or after that date. Existing manufacturer agreements would also have to be evaluated under the new rule starting on that date.

Relevant Companies

• None found