H.R. 9599: Strengthening the Exercise of Controls and Upgrading Requirements for Efficiency in 340B Act

This bill would make major changes to the federal 340B drug pricing program, which lets certain hospitals, clinics, and safety-net providers buy outpatient drugs at discounted prices. The bill’s main goal is to tighten who can use the program, increase oversight, and add more reporting and enforcement requirements.

Eligibility and site rules

The bill would narrow which facilities and locations can qualify for 340B discounts. It would:

• Define key terms such as “patient” and “prescribing provider” more clearly.
• Limit the use of referral-based discounts.
• Restrict child-site eligibility to locations in ZIP codes with high vulnerability, while allowing exceptions for sites serving Medicaid patients, uninsured patients, or other safety-net populations.
• Tighten rules for nonhospital entities and subgrantees.

Contract pharmacy changes

The bill would place more controls on contract pharmacies—outside pharmacies that dispense drugs on behalf of 340B-covered providers. It would:

• Require contract pharmacies to register and report more information.
• Allow more audits and verification of transactions.
• Use a new drug-claims clearinghouse to help track claims and improve transparency.

Patient protections and debt rules

The bill would require covered providers to adopt policies related to patient assistance and debt collection. It would also include protections meant to limit aggressive collection practices for patients served through the program. In addition, providers would face more public reporting requirements about how they use the program and how patients are affected.

Limits on manufacturer, PBM, and plan conduct

The bill would bar certain practices that could interfere with the program. It would:

• Prohibit discriminatory practices by drug manufacturers toward 340B entities.
• Bar PBMs (pharmacy benefit managers) and health plans from interfering with 340B arrangements.
• Place new rules on how discounts are administered and retained.

Reporting, audits, and enforcement

The bill would significantly expand oversight by requiring more reporting, audits, and data collection. It would:

• Create a 340B data clearinghouse to improve transparency.
• Authorize more audits and verification procedures.
• Add user fees and use appropriated funds to support enforcement.
• Expand the resources and enforcement authority of HRSA (the Health Resources and Services Administration), which oversees the program.

Studies and reports

The bill would require several studies and reports from the Government Accountability Office (GAO) and others. These would examine:

• How hospitals use 340B funds in debt collection.
• State and local hospital contracts.
• Whether hospitals provide charity care and how that compares to the benefits they receive from 340B discounts.
• The gap between drug payment amounts and drug costs.
• Possible violations by Federally Qualified Health Centers (FQHCs).
• How “low-income” is defined for purposes of the program.
• Two broader studies within 1–2 years on dispensing fees and how much of the 340B discount is retained in the system.

Implementation

The bill would take effect immediately, but agencies would have up to 180 days to issue regulations and manage the transition.

Relevant Companies

• MCK — McKesson may be affected through changes to drug distribution, contract pharmacy arrangements, and 340B-related compliance and reporting.
• CVS — CVS Health could be impacted because its pharmacy operations and PBM business may face new limits on how 340B claims and discounts are managed.
• CI — Cigna, through its PBM business, could be affected by restrictions on PBM interference in 340B arrangements.
• ELV — Elevance Health could be indirectly affected if plan administration and PBM-related rules change how 340B drug claims are processed.
• UNH — UnitedHealth, through OptumRx and related services, could be impacted by new PBM and claims transparency requirements.
• WBA — Walgreens could be affected by new rules for contract pharmacies and 340B dispensing oversight.
• RAD — Rite Aid, as a pharmacy operator, could be affected by contract pharmacy and 340B reporting changes.