124 STAT. 822 PUBLIC LAW 111–148—MAR. 23, 2010 a sole community hospital, as defined by section 1886(d)(5)(C)(iii) of such Act, and that both meets the requirements of subparagraph (L)(i) and has a dispropor- tionate share adjustment percentage equal to or greater than 8 percent.’’. (b) EXTENSION OF DISCOUNT TO INPATIENT DRUGS.—Section 340B of the Public Health Service Act (42 U.S.C. 256b) is amended— (1) in paragraphs (2), (5), (7), and (9) of subsection (a), by striking ‘‘outpatient’’ each place it appears; and (2) in subsection (b)— (A) by striking ‘‘OTHER DEFINITION’’ and all that follows through ‘‘In this section’’ and inserting the following: ‘‘OTHER DEFINITIONS.— ‘‘(1) IN GENERAL.—In this section’’; and (B) by adding at the end the following new paragraph: ‘‘(2) COVERED DRUG.—In this section, the term ‘covered drug’— ‘‘(A) means a covered outpatient drug (as defined in section 1927(k)(2) of the Social Security Act); and ‘‘(B) includes, notwithstanding paragraph (3)(A) of sec- tion 1927(k) of such Act, a drug used in connection with an inpatient or outpatient service provided by a hospital described in subparagraph (L), (M), (N), or (O) of subsection (a)(4) that is enrolled to participate in the drug discount program under this section.’’. (c) PROHIBITION ON GROUP PURCHASING ARRANGEMENTS.—Sec- tion 340B(a) of the Public Health Service Act (42 U.S.C. 256b(a)) is amended— (1) in paragraph (4)(L)— (A) in clause (i), by adding ‘‘and’’ at the end; (B) in clause (ii), by striking ‘‘; and’’ and inserting a period; and (C) by striking clause (iii); and (2) in paragraph (5), as amended by subsection (b)— (A) by redesignating subparagraphs (C) and (D) as subparagraphs (D) and (E); respectively; and (B) by inserting after subparagraph (B), the following: ‘‘(C) PROHIBITION ON GROUP PURCHASING ARRANGE- MENTS.— ‘‘(i) IN GENERAL.—A hospital described in subpara- graph (L), (M), (N), or (O) of paragraph (4) shall not obtain covered outpatient drugs through a group pur- chasing organization or other group purchasing arrangement, except as permitted or provided for pursuant to clauses (ii) or (iii). ‘‘(ii) INPATIENT DRUGS.—Clause (i) shall not apply to drugs purchased for inpatient use. ‘‘(iii) EXCEPTIONS.—The Secretary shall establish reasonable exceptions to clause (i)— ‘‘(I) with respect to a covered outpatient drug that is unavailable to be purchased through the program under this section due to a drug shortage problem, manufacturer noncompliance, or any other circumstance beyond the hospital’s control; ‘‘(II) to facilitate generic substitution when a generic covered outpatient drug is available at a lower price; or
