H.R. 9599 — SECURE 340B Act

This section establishes the short title of the Act as the “Strengthening the Exercise of Controls and Upgrading Requirements for Efficiency in 340B Act” or the “SECURE 340B Act” and sets forth the table of contents.

This section defines a "patient" under the 340B program as an individual who received a reimbursable outpatient service from a prescribing provider at a covered entity within the preceding 24 months, obtained the related prescription from that provider, and maintains an auditable provider-patient relationship with the entity. It also defines "prescribing provider" and "physician organization affiliate," requires covered entities to retain auditable records for at least five years, and permits discounted drugs for patients referred outside the entity within 24 months of the referral.

This section requires manufacturers to sell covered outpatient drugs at or below the 340B ceiling price for dispensing through contract pharmacies, prohibits restrictions on distribution, claims data submission, or participation based on contract pharmacy use, and directs the Secretary to establish registration, contract review, and public transparency processes. It further requires written agreements with standard provisions to prevent diversion and duplicate discounts, and mandates public disclosure of covered entity and contract pharmacy names, addresses, effective dates, dispensing volumes, and geographic and designation details.

This section establishes eligibility requirements for child sites of covered entities participating in the 340B drug discount program. It requires such entities to annually certify through Medicare enrollment processes that each child site is wholly owned, applies the same patient financial assistance policies, participates in Medicare and Medicaid without discrimination, ensures clinical responsibility by ordering providers, delivers a clinically meaningful range of services, meets provider-based rules or equivalent standards, maintains integrated clinical services and financial operations, and is held out to the public as part of the covered entity.

This section requires 340B covered entities to extend their financial assistance policies to child sites and contract pharmacies, with transparency, plain-language notice in English and the community’s primary language, and auditable records. Certain entities must apply policies up to at least 400 percent of the federal poverty level and nominal copayments under sliding fee scales; others must apply policies up to at least 200 percent. Contract pharmacies must comply immediately for new locations and within three years for existing ones. The section also prohibits specified entities from selling patient debt (except to satisfy it in full), reporting adverse information to credit agencies, denying medically necessary care for nonpayment, or collecting debt except from patients with income at or above 600 percent of the federal poverty level or assets exceeding 400 percent of the balance owed, and bars interest above state usury limits. The Secretary must conduct annual compliance reviews and impose civil monetary penalties for violations.

This section requires each covered entity in the 340B drug discount program to report annually, beginning one year after enactment, the number of individuals dispensed covered drugs, prescriptions by insurance type, charity care levels, use of program savings, patient financial demographics and insurance status, medication access policies, government contracts, third-party administrators, funding shortfalls, outpatient utilization, program operating costs, and contract pharmacy locations. It directs the Secretary to publish the data on a public HHS website in searchable format within 30 days and requires covered entities to retain records for at least three years.

This section authorizes the Secretary to audit covered entities, their contract pharmacies and child sites, and manufacturers for compliance with 340B requirements, including prohibitions on drug diversion and duplicate discounts. It requires covered entities to engage independent auditors for biennial audits of their operations and contract pharmacies, mandates corrective action plans and repayments above a de minimis threshold, directs the Secretary to issue regulations within one year, and expands sanctions authority for violations.

This section requires manufacturers to provide 340B ceiling prices as upfront purchase-price reductions rather than retrospective rebates for four years after enactment, except for AIDS Drug Assistance Programs already using rebates. It conditions any continuation beyond four years on an OIG-validated certification that a claims clearinghouse processes at least 90 percent of claims as unique non-duplicative transactions, adjudicates 90 percent within Secretary-set timeframes, and receives 95 percent complete and accurate data. It directs direct claims-level data transmission to manufacturers for selected drugs under the Medicare Drug Price Negotiation Program and imposes $5,000-per-day civil monetary penalties for noncompliance.

This section prohibits group health plans, health insurance issuers, and pharmacy benefit managers from discriminating against 340B covered entities or contract pharmacies through lower reimbursement rates, differing fees or network terms, audit requirements, restrictions on drug identification or delivery methods, or refusal to contract, and bars conditioning network participation or formulary placement on sharing 340B discounts or savings. It imposes civil monetary penalties of up to $5,000 per violation per day on violating pharmacy benefit managers and bars Medicare prescription drug plan sponsors from requiring use of noncompliant contract pharmacy sites.

This section establishes a user fee program for the 340B drug discount program beginning in fiscal year 2027. Covered entities must pay an annual fee equal to 0.1 percent of their prior-year purchases of covered outpatient drugs under the program, with proceeds used to administer the program and fund oversight activities including audits, a web-based fee system, the data clearinghouse under section 1150D of the Social Security Act, and improvements to the Office of Pharmacy Affairs Information System. It authorizes appropriations of $3 million annually for fiscal years 2027 through 2031 for audits and enforcement and $9 million annually for fiscal years 2028 through 2031 for general implementation. The Secretary receives direct-hire authority to appoint at least 20 oversight staff, and the HHS Inspector General must review the fee program annually for its first five years and report to Congress.

This section directs the Secretary of Health and Human Services to study dispensing fees and reimbursements paid to pharmacies by Medicare, Medicaid, and commercial payers, separated by 340B status, repeat the study every 24 months, and report results to Congress within 90 days, including recommendations on fee standards. It requires the Comptroller General to study and report within two years on retention of 340B discounts by contract pharmacies, health plans, pharmacy benefit managers, third-party vendors, patients, and covered entities; hospital debt collection practices, including for 340B participants; and contracts between state or local governments and certain nonprofit hospitals claiming 340B eligibility, including assessments of required and actual charity care for individuals at or below 400 percent of the federal poverty level.

This section defines "child site" as any separately registered outpatient department, clinic, or facility of a covered entity under subparagraphs (L), (M), (N), or (O) of subsection (a)(4) that is not the entity's principal operating location. It defines "contract pharmacy" as a pharmacy that dispenses or furnishes covered outpatient drugs to patients on behalf of a covered entity under a contract or arrangement, whether in person, by mail, or through other delivery methods.

This section imposes new conditions on nonhospital covered entities and their subgrantees to participate in the 340B drug pricing program. Entities must be nonprofit or public, may purchase covered drugs only for patients receiving services within the scope and time period of the qualifying Federal grant, must enter written agreements with subgrantees and remain liable for their compliance, and must maintain records of subgrantee eligibility. Subgrantees receiving in-kind contributions from entities under paragraph (4)(K) must demonstrate that the share of patients aged 19–64 enrolled in Medicaid exceeds the state average, using American Community Survey data, and must submit annual plans on use of contributions.

This section provides that amendments made by this Act take effect on the date of enactment. It directs the Secretary to issue final regulations through notice-and-comment rulemaking within 180 days of enactment and to establish transition periods of at least 180 days for covered entities, manufacturers, and contract pharmacies to comply with new substantive obligations.