,,ii  #aahth ,,congress  #b;d ,session  
,s4 #ejba  ,,in ,,the ,,senate ,,of     
,,the ,,united ,,states  ,september #aa1
 #bjbd,mr4 ,welch introduced the        
following bill2 which was read twice and
 referred to the ,committee on ,health1 
,education1 ,labor1 and ,pensions  ,a   
,,bill  ,to ensure the accessibility of 
drugs furnished through the drug        
discount program under section #cdj;,b  
of the ,public ,health ,service ,act4   
#a4 ,short title ,this ,act may be cited
 as the #cdj;,b ,pharmaceutical ,access 
,to ,invest in ,essential1 ,needed      
,treatments  ,support ,act of #bjbd or  
the #cdj;,b ,,patients ,act of #bjbd4   
#b4 ,findings and purposes  7a7         
,findings ,congress finds the following3
 7#a7 ,section #cdj;,b of the ,public   
,health ,service ,act 7#db ,u4,s4,c4    
#bef;b7 enables covered entities to     
stretch scarce resources as far as      
possible1 reaching more patients and    
providing more comprehensive services   
than would be possible without such     

program4  7#b7 ,such section #cdj;,b    
requires drug manufacturers to offer    
discounted prices on covered outpatient 
drugs to covered entities participating 
in the program1 as a condition of       
participating in the ,medicaid program  
and part ,b of the ,medicare program1   
and drug manufacturers are required to  
offer drug discount pricing to covered  
entities when requested4  7#c7 ,savings 
on the purchase of drugs through the    
program under section #cdj;,b of the    
,public ,health ,service ,act enables   
hospitals1 clinics1 and health centers  
to provide comprehensive services to the
 communities they serve1 and covered    
entities are in the best position to    
assess the use of their savings for     
community needs4  7#d7 ,since the early 
years of such program1 covered entities 
have contracted with pharmacies to      
dispense covered outpatient drugs       
purchased by a covered entity at drug   
discount program pricing to patients of 
the covered entity1 consistent with how 

,congress intended for covered entities 
to use the program4  7#e7 ,covered      
entities use savings generated through  
contract pharmacy relationships to      
stretch scarce resources and support    
patient care1 consistent with the       
purpose of the program4  7#f7 ,section  
#cdj;,b of the ,public ,health ,service 
,act requires drug manufacturers to     
offer drug discount pricing for drugs   
purchased by covered entities regardless
 of the manner or location in which a   
drug is dispensed1 including drugs      
dispensed through contract pharmacies4  
7#g7 ,section #cdj;,b of the ,public    
,health ,service ,act does not allow    
drug manufacturers to place conditions  
on the ability of a covered entity to   
purchase or use a covered outpatient    
drug at drug discount program pricing   
regardless of the manner or location in 
which a drug is dispensed1 including by 
restricting a covered entity's ability  
to dispense drugs purchased through such
 program to patients through a          

contractual relationship with a         
contracted pharmacy or refusing to ship 
covered outpatient drugs to a pharmacy  
or location identified by a covered     
entity4  7#h7 ,such section #cdj;,b's   
inflationary penalty provisions1 which  
have saved part ,d of the ,medicare     
program #g1jjj1jjj1jjj between #bjac and
 #bjag1 have a proven record of reducing
 drug price increases1 and use of       
contract pharmacies contributes to these
 savings4  7#i7 ,specialty drugs1 which 
are often used to treat chronic1        
serious1 or life-threatening conditions 
such as cancer1 rheumatoid arthritis1   
growth hormone deficiency1 and multiple 
sclerosis1 play a critical role in the  
care provided by covered entities4      
,these drugs often require specialized  
handling1 are not usually available to  
walk-in customers1 and are typically    
available only through specialty or mail
 order pharmacies that are located      
hundreds of miles from a covered entity4
 ,the use of contract pharmacy          

arrangements under section #cdj;,b of   
the ,public ,health ,service ,act is    
often the only means by which covered   
entities can access these vital drugs4  
7b7 ,purposes ,the purposes of this ,act
 are the following3 7#a7 ,to clarify    
that section #cdj;,b of the ,public     
,health ,service ,act 7#db ,u4,s4,c4    
#bef;b7-- 7,a7 requires drug            
manufacturers to offer drug discount    
pricing pursuant to an agreement under  
subsection 7a7 of such section with     
respect to drugs purchased by a covered 
entity regardless of the manner or      
location in which the drug is dispensed2
 and  7,b7 prohibits drug manufacturers 
from placing conditions on the ability  
of covered entities to purchase drugs   
pursuant to an agreement under          
subsection 7a7 of such section1         
regardless of the manner or location in 
which such drugs are dispensed4  7#b7   
,to clarify that-- 7,a7 covered entities
 may contract with pharmacies to        
dispense drugs purchased pursuant to an 

agreement under section #cdj;,b7a7 of   
the ,public ,health ,service ,act 7#db  
,u4,s4,c4 #bef;b7a77 on a covered       
entity's behalf1 to assist covered      
entities in stretching resources to     
provide care to more patients and       
provide more comprehensive services2 and
  7,b7 the requirements and prohibitions
 that apply to manufacturers under      
section #cdj;,b of such ,act apply in   
the case of a covered entity that elects
 to contract with a pharmacy to dispense
 #cdj;,b drugs4  #c4 ,ensuring the      
accessibility of drugs furnished under  
the drug discount program  7a7 ,in      
general ,section #cdj;,b7a7 of the      
,public ,health ,service ,act 7#db      
,u4,s4,c4 #bef;b7a77 is amended-- 7#a7  
in paragraph 7#a7-- 7,a7 by striking    
that the manufacturer furnish and       
inserting the following3 that-- 7,a7 the
 manufacturer furnish  2  7,b7 by       
striking ceiling price71 and and        
inserting ceiling price722  7,c7 by     
striking shall require that the         

manufacturer offer and inserting the    
following3  7,b7 the manufacturer offer 
2 and  7,d7 by striking the period at   
the end and inserting the following3 1  
regardless of the manner or location in 
which the drug is dispensed2 and 7,c7   
the manufacturer not place conditions on
 the ability of a covered entity to     
purchase and use a covered outpatient   
drug at or below the applicable ceiling 
price1 regardless of the manner or      
location in which the drug is dispensed1
 including by placing limits on the     
delivery of drugs1 placing limits on the
 mechanisms through which drugs may be  
purchased1 placing limits on where such 
drugs may be delivered1 administered1 or
 dispensed1 requiring a covered entity's
 assurance of compliance with           
requirements under this section1 or     
requiring the submission of claims data 
or other information1 except that the   
manufacturer may impose conditions      
described in this subparagraph after    
receiving advance approval from the     

,secretary 7or1 with respect to         
conditions specified by the ,secretary1 
without such advance approval7 if such  
conditions would not discourage covered 
entities from purchasing the            
manufacturer's drugs through the drug   
discount program under this section or  
otherwise undermine the objective of    
this section1 either by singling out    
covered entities from other customers   
for such conditions or by imposing      
conditions that disproportionately      
impact covered entities4  2 and  7#b7 by
 adding at the end the following3  7#aa7
 ,contract ,pharmacies ,the requirements
 and prohibitions under paragraph 7#a7  
shall apply in the case of a covered    
entity that elects to contract with one 
or more pharmacies to dispense1 to      
patients of the covered entity1 covered 
outpatient drugs purchased by the       
covered entity at or below the          
applicable ceiling price described in   
paragraph 7#a74  4  7b7 ,manufacturer   
compliance ,section #cdj;,b7d7 of the   

,public ,health ,service ,act 7#db      
,u4,s4,c4 #bef;b7 is amended-- 7#a7 in  
paragraph 7#a77;,b77vi71 in the matter  
preceding subclause 7,i71 by inserting 1
 in the case of an overcharge after     
penalties2  7#b7 in paragraph 7#a77;,b71
 by adding at the end the following3    
7vii7 ,the imposition of sanctions in   
the form of civil monetary penalties in 
the case of a violation of subsection   
7a77#a7 or 7a77#aa71 other than an      
overcharge1 which-- 7,i7 shall be       
assessed according to standards         
established in regulations to be        
promulgated by the ,secretary not later 
than #ahj days after the date of        
enactment2  7,,ii7 shall apply to any   
manufacturer with an agreement under    
this section that knowingly and         
intentionally violates a requirement    
under subsection 7a77#a7 or 7a77#aa71   
other than an overcharge2  7,,iii7 shall
 not exceed #b1jjj1jjj for each day of  
such violation2  7,,iv7 shall be in an  
amount determined by the ,secretary1    

taking into account factors such as the 
nature and extent of the violation and  
harm resulting from such violation1     
including1 where applicable1 the number 
of drugs affected and the number of     
covered entities affected2 and  7,v7    
shall continue to be imposed each day   
until such manufacturer is no longer in 
violation of a requirement under        
subsection 7a77#a7 or 7a77#aa74  2 and  
7#c7 in paragraph 7#c71 by adding at the
 end the following3  7,d7 ,not later    
than #ahj days after the date of the    
enactment of this subparagraph1 the     
,secretary shall promulgate regulations 
to permit covered entities to assert    
claims of violations of subsections     
7a77#a7 and 7a77#aa7 under the process  
promulgated under subparagraph 7,a74  4