H.R. 7391 — Community Health Center Drug Pricing Protection Act

This section establishes a new requirement under the 340B drug pricing program (i.e., section 340B of the Public Health Service Act) prohibiting the Secretary from entering into manufacturer agreements that permit federally qualified health centers (FQHCs)—a category of covered entities—to pay more than the applicable ceiling price for covered outpatient drugs at the point of purchase. (As background, the 340B program requires participating drug manufacturers to provide covered outpatient drugs to eligible covered entities, including FQHCs that serve low-income and uninsured patients, at or below a ceiling price equal to the average manufacturer price reduced by the Medicaid rebate percentage.) A rule of construction clarifies that no payment arrangements allowing FQHCs to pay above the ceiling price upfront with later rebates or reimbursements are permitted; the amendments apply to drugs purchased on or after the date of enactment, including with respect to existing agreements.