Public Health Service Act (PHSA)
Definition
The Public Health Service Act (PHSA) is the foundational federal legislation that governs the 340B Drug Pricing Program. Section 340B of the PHSA, codified at 42 USC §256b, establishes the program’s requirements: it defines covered entities, sets the ceiling price formula, prohibits diversion and duplicate discounts, and authorizes HRSA to administer the program.
The PHSA is also the authorizing legislation for many of the covered entity types eligible for 340B participation, including Ryan White HIV/AIDS program grantees, federally qualified health centers, and various federally funded clinic programs. Understanding which sections of the PHSA authorize each entity type is relevant to eligibility determinations.
Legal disputes about the 340B program—including manufacturer restrictions on contract pharmacy arrangements—often center on the interpretation of the PHSA’s requirements and authorities.
Frequently Asked Questions
Why Public Health Service Act (PHSA) Matters
The PHSA is the source of legal authority for the entire 340B program. When manufacturers, covered entities, and regulators disagree about program requirements, the PHSA is the primary legal reference. Understanding its provisions helps covered entities understand their rights and obligations.
How Virtue 340B Uses It
Virtue 340B grounds all compliance guidance in the statutory requirements of the PHSA, ensuring that our recommendations reflect the actual legal framework of the program rather than industry convention alone.