,i #aaeth ,,congress #b;d ,session ,h4 ,r4 #fjga ,,in ,,the ,,house ,,of ,,representatives ,june #ab1 #bjah,ms4 ,matsui introduced the following bill2 which was referred to the ,committee on ,energy and ,commerce1 and in addition to the ,committee on ,ways and ,means1 for a period to be subsequently determined by the ,speaker1 in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned ,a ,,bill ,to amend the ,public ,health ,service ,act to clarify the intent of the #cdj;,b program and provide for enhanced #cdj;,b program integrity1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,stretching ,entity ,resources for ,vulnerable ,communities ,act or the ,,serv ,communities ,act4 #b4 ,sense of ,congress related to purpose of the #cdj;,b ,program ,it is the sense of ,congress that-- 7#a7 the program under section #cdj;,b of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7 7in this section referred to as the #cdj;,b program7 enables covered entities to stretch scarce resources as far as possible1 reaching more patients and providing more comprehensive services than without such program2 7#b7 the #cdj;,b program provides health care settings that serve a disproportionate share of underserved patient populations 7referred to as covered entities7 a discount from drug manufacturers on the covered outpatient drugs they purchase to meet health care needs of the community2 7#c7 covered entities that qualify for participation under the #cdj;,b program meet rigorous eligibility criteria1 proving they are safety net health care providers for many underserved patients2 7#d7 such discounts are provided to such covered entities on the basis of meeting eligibility criteria under the #cdj;,b program1 and not directly to individual patients2 7#e7 the #cdj;,b ,program enables covered entities to provide comprehensive services to the communities they serve1 which may include providing free or discounted drugs to vulnerable populations1 but providing free or discounted drugs to patients is not the sole purpose of the program2 7#f7 the #cdj;,b ,program is designed to help covered entities promote health for underserved communities and patients1 regardless of a particular patient's insurance status or inability to pay2 7#g7 savings from the #cdj;,b program are used by covered entities to reach more patients and provide more comprehensive services1 and covered entities are in the best position to assess the use of their savings for community needs2 and 7#h7 drugs purchased under the #cdj;,b program account for a small proportion of overall drug spending and the discounts described in paragraph 7#b7 provided through the #cdj;,b program are not funded by taxpayers4 #c4 ,codifying definition of patient under #cdj;,b program ,section #cdj;,b7b7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7 is amended by adding at the end the following new paragraph3 7#c7 ,patient 7,a7 ,in general ,for purposes of carrying out this section1 the term patient shall have the definition given to such term on pages #eeaef through #eeaeh of title #fa of the ,federal ,register published on ,october #bd1 #aiif4 7,b7 ,clarification ,for purposes of this section1 the ,secretary shall not implement the definition under subparagraph 7,a7 more narrowly than the definition specified in subparagraph 7,a71 including by limiting the application of the definition to particular individuals based on their insurance status4 4 #d4 ,non-discrimination with respect to covered entities ,section #cdj;,b of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7 is amended by adding at the end the following new subsection3 7f7 ,non-,discrimination with respect to covered entities 7#a7 ,terms of agreement ,subject to paragraph 7#c71 no entity that reimburses a covered entity or its contract pharmacy for drugs that are subject to an agreement under this section may discriminate against such covered entity with respect to the terms of such reimbursement1 including terms relating to the level and amount of reimbursement1 on the basis that the covered entity participates in the program under this section4 7#b7 ,patient's choice ,with respect to a patient eligible to receive drugs that are subject to an agreement under this section from a covered entity or its contract pharmacy1 no entity that makes payment for such drugs shall discriminate against the covered entity or its contract pharmacy in a manner that prevents or interferes with the patient's choice to receive such drugs from the covered entity or contract pharmacy4 7#c7 ,exception ,paragraph 7#a7 shall not apply to ,states with respect to retail drugs that are reimbursed by the ,state on a fee-for-service basis pursuant to a ,state plan approved under title ,,xix of the ,social ,security ,act4 4 #e4 ,program integrity 7a7 ,findings ,congress finds the following3 7#a7 ,in response to findings by the ,office of the ,inspector ,general of the ,department of ,health and ,human ,services that nearly #ajj percent of covered entities were overcharged by manufacturers for at least one of the drugs reviewed1 ,congress directed the ,secretary of ,health and ,human ,services in #bjaj to publish the ceiling prices under section #cdj;,b of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7 7in this section referred to as the #cdj;,b ceiling price7 via ,internet website so that covered entities could verify they were being charged the correct price1 however this website has not yet been established1 leaving covered entities vulnerable to continuing manufacturer overcharges4 7#b7 ,in response to findings by the ,office of the ,inspector ,general of the ,department of ,health and ,human ,services of widespread overcharges by manufacturers and a lack of oversight and authority by the ,secretary of ,health and ,human ,services to ensure that covered entities paid no more than the #cdj;,b ceiling price1 ,congress directed the ,secretary to develop standards for calculating #cdj;,b ceiling prices and civil monetary penalties to apply to manufacturers that violate these rules1 however those standards and penalties have not yet been developed1 significantly limiting the ,secretary's ability to oversee manufacturer compliance with such section #cdj;,b of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b74 7#c7 ,there is no public transparency on drug manufacturers' average manufacturer price1 best price in the marketplace1 or how much the average manufacturer price of a drug has increased relative to the rate of inflation4 7#d7 ,information on the average manufacturer price and best price are reported to the ,centers for ,medicare ,medicaid ,services1 but rarely does the ,federal ,government audit the raw data underlying those calculations4 7#e7 ,such data is not submitted and reviewed by the ,health ,resources and ,services ,administration as part of a #cdj;,b program audit4 7#f7 ,furthermore1 the ,office of ,pharmacy ,affairs has conducted only #aa total audits of manufacturers4 7b7 ,parity in audits between manufacturer and hospital audits ,section #cdj;,b7d77#a77;,b77v7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7d77#a77;,b77v77 is amended to read as follows3 7v7 ,selective auditing of manufacturers and wholesalers to ensure the integrity of the drug discount program under this section1 consistent with the following3 7,i7 ,such audits shall be conducted in a form and manner that1 to the greatest extent practicable1 results in parity between such audits and audits under subsection 7a77#e77;,c7 of covered entities1 as measured by comparing the percentage of total manufacturer audits under this clause to the percentage of total audits conducted under such subsection of covered entities described in subsection 7a77#d77,l74 7,,ii7 ,such audits shall include review of average manufacturer price1 best price1 and the inflationary penalty to ensure that manufacturers are calculating the ceiling price accurately4 4 7c7 ,deadline for ,internet ,website with applicable ceiling prices for covered outpatient drugs ,section #cdj;,b7d77#a77;,b77iii7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7d77#a77;,b77iii77 is amended by striking ,the provision and inserting ,not later than #ij days after the date of the enactment of the ,stretching ,entity ,resources for ,vulnerable ,community ,act1 the provision4 7d7 ,civil monetary penalty 7#a7 ,in general ,clause 7vi77,,ii7 of section #cdj;,b7d77#a77;,b7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7d77#a77;,b77 is amended to read as follows3 7,,ii7 shall not exceed1 for each instance of overcharging a covered entity that may have occurred1 the greater of-- 7aa7 #e1jjj2 or 7bb7 #bjj percent of the amount of such overcharge2 and 4 7#b7 ,clarifications ,section #cdj;,b7d77#a7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7d77#a77 is amended by adding at the end the following new subparagraph3 7,c7 ,clarifications ,for purposes of subparagraph 7,b77vi7-- 7i7 an instance of overcharging described in subclause 7,,ii7 of such subparagraph shall-- 7,i7 apply to each unit of a national drug code within an order1 whether placed directly with a manufacturer or through a wholesaler1 authorized distributor1 or agent1 and may not be offset by other discounts provided on any other ,national ,drug ,code or discounts provided on the same ,national ,drug ,code on other transactions1 orders or purchases2 and 7,,ii7 include a manufacturer's failure1 such as through a limited distribution network1 to offer a covered outpatient drug to a covered entity at the #cdj;,b ceiling price to the same extent the manufacturer makes the drug available to non-#cdj;,b providers1 unless such action is taken to narrowly address an actual or imminent shortage and has been approved in advance by the ,secretary pursuant to standards issued through an appropriate policy or regulatory issuance2 and 7ii7 in applying subclause 7,,iii7 of such subparagraph-- 7,i7 the term knowingly shall have the meaning given the term should know in section #ajjc4aja of title #db of the ,code of ,federal ,regulations 7or any successor regulation72 and 7,,ii7 the term intentionally means1 with respect to an overcharge1 that such overcharge is not due to inadvertent error4 4 7#c7 ,non-application of #cdj;,b ceiling price and ,,cmp regulation ,the ,secretary of ,health and ,human ,services shall not take any action to implement1 administer1 or enforce the provision of the final regulation titled #cdj;,b ,drug ,pricing ,program ,ceiling ,price and ,manufacturer ,civil ,monetary ,penalties ,regulation published on ,june #e1 #bjah 7#hc ,fed4 ,reg4 #beidc et seq471 that changes the effective date of the #cdj;,b ,drug ,pricing ,program ,ceiling ,price and ,manufacturer ,civil ,monetary ,penalties ,regulation from ,july #a1 #bjah to ,july #a1 #bjai4 ,the effective date shall be determined as if such final regulation published on ,june #e1 #bjah1 did not apply4 7#d7 ,implementation ,the ,secretary of ,health and ,human ,services shall implement the amendments made by paragraphs 7#a7 and 7#b7 by program instruction or otherwise such that such amendment applies to instances of overcharges occurring on or after the date that is #fj days after the date of the enactment of this ,act4 7#e7 ,,gao report ,not later than one year after the date of the enactment of this ,act1 the ,comptroller ,general of the ,united ,states shall submit to ,congress a report evaluating the extent to which the ,secretary of ,health and ,human ,services is carrying out the provisions of clause 7vi7 of section #cdj;,b7d77#a77;,b7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7d77#a77;,b771 as amended by this subsection4 7e7 ,manufacturer transparency ,section #cdj;,b7d77#a77;,b7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7d77#a77;,b77 is amended by adding at the end the following new clauses3 7vii7 ,the requirement that the applicable ceiling price described in clause 7iii7 for a covered outpatient drug1 with respect to a calendar quarter1 shall be equal to the average manufacturer price under section #aibg7k77#a7 of the ,social ,security ,act from the preceding calendar quarter for the smallest unit of measure minus the unit rebate amount and will be calculated using six decimal places and will be published by the ,secretary rounded to two decimal places1 in accordance with the following3 7,i7 ,in the case that the ceiling price calculation results in an amount less than #j4ja1 the ceiling price will be #j4ja4 7,,ii7 ,for a new covered outpatient drug-- 7aa7 manufacturers shall estimate the ceiling price as of the date the new drug is first available for sale2 7bb7 the estimation shall be calculated as wholesale acquisition cost minus the appropriate rebate percentage until an average manufacturer price is available1 which shall occur no later than the #dth quarter that the drug is available for sale2 and 7cc7 manufacturers shall calculate the actual ceiling price and shall offer to refund or credit the covered entity the difference between the estimated ceiling price and the actual ceiling price within #abj days of the determination by the manufacturer involved that an overcharge occurred4 7viii7 ,the prohibition against discriminatory distribution of drugs1 consistent with the following3 7,i7 ,a manufacturer shall make available each covered outpatient drug to covered entities on the same terms and conditions that the covered outpatient drug is offered to purchasers that are not covered entities except that the manufacturer will charge the covered entity for the covered outpatient drug at or below the ceiling price4 7,,ii7 ,if the ,secretary finds1 after audit as described in subparagraph 7,b77v7 and after notice and hearing1 that a manufacturer is in violation of the requirement described in subclause 7,i71 the manufacturer shall be liable to the covered entity that was not able to purchase the covered outpatient drug involved at a discounted price in an amount equal to the reduction in the price of the drug provided under the agreement between the entity and the manufacturer under this section4 4 #f4 ,including programs funded under the ,community ,mental ,health ,services ,block ,grant or the ,substance ,abuse ,prevention and ,treatment ,block ,grant as covered entities 7a7 ,in general ,section #cdj;,b7a77#d7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b7a77#d77 is amended by adding at the end the following new subparagraph3 7,p7 ,a program carried out through funds received under a grant under the ,community ,mental ,health ,services ,block ,grant or the ,substance ,abuse ,prevention and ,treatment ,block ,grant under part ,b of title ,,xix4 4 7b7 ,effective date ,the amendment made by subsection 7a7 shall apply beginning on the date of the enactment of this ,act4 #g4 ,preventing ,medicare ,hospital ,outpatient ,payment ,cuts for ,hospitals that ,purchase ,drugs under #cdj;,b ,program 7a7 ,in general ,the ,secretary of ,health and ,human ,services shall not take any action to implement1 administer1 or enforce the provision of the final regulation titled the ,medicare ,program3 ,hospital ,outpatient ,prospective ,payment and ,ambulatory ,surgical ,center ,payment ,systems and ,quality ,reporting ,programs published on ,november #ac1 #bjag 7#hb ,fed4 ,reg4 #ebcef et seq471 that changes the payment amount under the ,prospective ,payment ,system for ,hospital ,outpatient ,department ,services under section #ahcc7t7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciel7t77 for separately payable1 nonpass-through drugs and biologicals purchased under the #cdj;,b drug pricing program under section #cdj;,b of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bef;b74 ,the payment amount under such payment system under such section #ahcc7t7 for such a drug or biological provided on or after ,january #a1 #bjah1 shall be determined 7or in the case of claims already processed1 redetermined7 through the same methodology as if such final regulation did not apply4 7b7 ,,opps budget neutrality adjustment ,the first sentence of section #ahcc7t77#i77;,b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciel7t77#i77;,b77 is amended by striking part each place such term appears and inserting subsection each such place4