Health Resources and Services Administration January 12, 2007 – Federal Register Recent Federal Regulation Documents

Section 602 of Public Law 102-585, the ``Veterans Health Care Act of 1992,'' enacted Section 340B of the Public Health Service (PHS) Act ``Limitation on Prices of Drugs Purchased by Covered Entities.'' Section 340B provides that in order to obtain Medicaid reimbursement for its covered outpatient drugs, a manufacturer must sign a pharmaceutical pricing agreement with the Secretary of Health and Human Services in which the manufacturer agrees to charge a price to covered entities for outpatient drugs that will not exceed an amount determined under a statutory formula. Section 340B is administered as the ``340B Drug Pricing Program'' and is commonly referred to as ``the 340B Program.'' Section 340B states that it is illegal for covered entities to sell medications purchased under the 340B Program to persons who are not considered ``patients'' of the covered entity. The purpose of this notice is to inform interested parties of proposed clarifications to the definition of ``patient'' for whom the covered entity can purchase discounted pharmaceuticals under the 340B Program. This clarification is necessary to protect the integrity of the 340B Program and to assist covered entities and other participants in their compliance efforts.