A Bill for an Act
Page 1, Line 101Concerning outpatient drugs that are sold at a discount to
Page 1, Line 102nonprofit hospitals through the federal 340B drug
Page 1, Line 103pricing program.
Bill Summary
(Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.)
The bill requires nonprofit hospitals (hospitals) to use 340B profits to decrease out-of-pocket costs for low-income patients.
The bill requires entities covered under the federal 340B drug pricing program that are hospitals licensed by the state to report information related to their participation in the 340B program, their use of 340B program profits, their provision of charity care, their payments to third parties for 340B program-related services and compliance, and their use of contract pharmacies.
Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:
Page 2, Line 2SECTION 1. In Colorado Revised Statutes, add part 3 to article 2.5 of title 25.5 as follows:
Page 2, Line 3PART 3
SAVING PEOPLE MONEY ON
Page 2, Line 4PRESCRIPTION MEDICATIONS ACT
Page 2, Line 525.5-2.5-301. Short title.The short title of this part 3 is "Saving People Money on Prescription Medications Act".
Page 2, Line 625.5-2.5-302. Legislative declaration. (1) The general assembly finds that:
Page 2, Line 7(a) Nonprofit hospitals covered under the 340B program
Page 2, Line 8use 340B profits to decrease out-of-pocket costs for low-income patients;
Page 2, Line 9(b) Federally qualified health centers, Ryan White
Page 2, Line 10clinics, state AIDS drug assistance programs, and children's
Page 2, Line 11hospitals are required to report certain revenue and use data
Page 2, Line 12to the benefit of the communities they serve. No similarly
Page 2, Line 13situated requirement exists for nonprofit hospitals covered under the 340B program.
Page 2, Line 14(c) Requiring hospitals covered under the 340B program
Page 2, Line 15that are licensed by the state to report information related to
Page 2, Line 16their participation in the 340B program to the state would create parity in the use of 340B program profits.
Page 2, Line 17(2) Therefore, the general assembly declares that the
Page 3, Line 1state of Colorado has both a specified interest in and proper
Page 3, Line 2responsibility to monitor nonprofit hospitals covered under the
Page 3, Line 3340B program and ensure they are appropriately serving their communities and the taxpayer interests of the state.
Page 3, Line 425.5-2.5-303. Definitions.As used in this part 3, unless the context otherwise requires:
Page 3, Line 5(1) "340B drug" means a covered outpatient drug, as
Page 3, Line 6defined in 42 U.S.C. sec. 1396r-8 (k)(2), whether self-administered
Page 3, Line 7or provider-administered, that is subject to reduced prices by a
Page 3, Line 8manufacturer pursuant to 42 U.S.C. sec. 256b (a)(1) and is purchased by a nonprofit hospital.
Page 3, Line 9(2) "340B profits" means the difference between
Page 3, Line 10aggregated payments received from insurers, payers, and
Page 3, Line 11self-paying patients for all 340B drugs and aggregated acquisition costs paid for all 340B drugs.
Page 3, Line 12(3) "340B program" means the federal drug pricing program described in 42 U.S.C. sec. 256b.
Page 3, Line 13(4) "Charity care" means free or reduced-cost health
Page 3, Line 14services provided by a hospital to patients who are unable to pay.
Page 3, Line 16(5) "Contract pharmacy" means a pharmacy that a
Page 3, Line 17nonprofit hospital has contracted with to dispense 340B drugs
Page 3, Line 18on behalf of the nonprofit hospital to patients of the nonprofit
Page 3, Line 19hospital, whether distributed in-person, by mail, or by other means.
Page 4, Line 1(6) "Nonprofit hospital" means a hospital that is licensed
Page 4, Line 2by the department of public health and environment and is a
Page 4, Line 3private nonprofit corporation or hospital pursuant to 42 U.S.C.
Page 4, Line 4sec. 256b (a)(4)(L), (a)(4)(M), or (a)(4)(O), but does not include a
Page 4, Line 5sole community hospital described in 42 U.S.C. sec. 256b (a)(4)(O),
Page 4, Line 6a critical access hospital described in 42 U.S.C. sec. 256b
Page 4, Line 7(a)(4)(N), Denver health and hospitals, a comprehensive
Page 4, Line 8hemophilia diagnostic treatment center described in 42 U.S.C.
Page 4, Line 9sec. 256b (a)(4)(G), a federally-qualified health center as
Page 4, Line 10defined in 42 U.S.C. sec. 1396d (l)(2)(B), Ryan White clinics, the
Page 4, Line 11Colorado state drug assistance program, or children's hospitals in Colorado.
Page 4, Line 1225.5-2.5-304. Use of 340B drug profits.(1) A
Page 4, Line 13nonprofit hospital shall not use 340B profits for the following purposes:
Page 4, Line 14(a) More than thirty-five percent of total annual
Page 4, Line 15compensation or expense reimbursement for the nonprofit hospital's board of directors;
Page 4, Line 16(b) Tax penalties or fines issued against the nonprofit hospital;
Page 4, Line 17(c) Expenses related to advertising and public relations
Page 4, Line 18that promote the nonprofit hospital's image, services, or
Page 4, Line 19proposals, not including communications required by law or that are essential for patient safety and patient information;
Page 4, Line 20(d) Lobbying expenses and other costs intended to
Page 4, Line 21influence legislation or ballot measures at the local, state, or
Page 4, Line 22federal level;
Page 5, Line 1(e) Travel, lodging, food, or beverage expenses for the nonprofit hospital's board of directors and officers; and
Page 5, Line 2(f) Gifts or entertainment expenses.
Page 5, Line 325.5-2.5-305. Hospital transparency reporting. (1) Beginning
Page 5, Line 4July 1, 2026, and by July 1 each year thereafter, a nonprofit
Page 5, Line 5hospital shall submit a report to the state department on
Page 5, Line 6behalf of the nonprofit hospital and each off-site facility
Page 5, Line 7associated with the nonprofit hospital in the form and manner
Page 5, Line 8determined by the state department. The report must contain the following information regarding the prior year:
Page 5, Line 9(a) Delineated by form of insurance or payer type,
Page 5, Line 10including medicaid, medicare, commercial insurance, self-insured employers, and uninsured:
Page 5, Line 11(I) Aggregated acquisition costs paid for 340B drugs used to calculate 340B profits;
Page 5, Line 12(II) Aggregated payments received from insurers, payers,
Page 5, Line 13and self-paying patients for all 340B drugs that were used to calculate 340B profits;and
Page 5, Line 14(III) Total number of prescriptions and the percentage of
Page 5, Line 15the nonprofit hospital's prescriptions that were filled using 340B drugs;
Page 5, Line 17(b) Total operating costs of the nonprofit hospital and itemized costs related to providing charity care; and
Page 5, Line 18(c) Total payments made to:
Page 5, Line 19(I) Contract pharmacies for 340B program-related
Page 5, Line 20services and other functions;
Page 6, Line 1(II) Third-party administrators for managing any components of the nonprofit hospital's 340B program; and
Page 6, Line 2(III) Any other third party in connection with 340B
Page 6, Line 3program-related compliance, legal, educational, or administrative costs.
Page 6, Line 4(2) An officer of the nonprofit hospital shall certify the
Page 6, Line 5completeness and accuracy of the report submitted pursuant to subsection (1) of this section.
Page 6, Line 6(3) The state department shall collect the reports
Page 6, Line 7described in subsection (1) of this section to prepare a report
Page 6, Line 8detailing information received from nonprofit hospitals,
Page 6, Line 9including 340B program revenue across all nonprofit hospitals
Page 6, Line 10in the state. Beginning September 15, 2026, and each September 15
Page 6, Line 11thereafter, the state department shall submit the aggregated
Page 6, Line 12report to the general assembly and publish all reports
Page 6, Line 13submitted by a nonprofit hospital pursuant to subsection (1) of this section on a publicly accessible website.
Page 6, Line 1425.5-2.5-306. Access to 340B drugs.Unless the receipt of
Page 6, Line 15340B drugs is prohibited by the federal department of health
Page 6, Line 16and human services, a manufacturer, wholesaler, third-party
Page 6, Line 17logistics provider, or repackager, or an agent, contractor, or
Page 6, Line 18affiliate of a manufacturer, wholesaler, third-party logistics
Page 6, Line 19provider, or repackager, including an entity that collects or
Page 6, Line 20processes health information, shall not, directly or indirectly,
Page 6, Line 21deny, restrict, prohibit, discriminate against, or otherwise limit
Page 6, Line 22the acquisition of a 340B drug by, or delivery of a 340B drug to,
Page 6, Line 23a hospital that is either a sole community hospital described in
Page 7, Line 142 U.S.C. sec. 256b (a)(4)(O) or a critical access hospital described in 42 U.S.C. sec. 256b (a)(4)(N).
Page 7, Line 225.5-2.5-307. Request of information. (1) Beginning
Page 7, Line 3November 1, 2026, and annually thereafter, the joint budget
Page 7, Line 4committee shall issue a request for information to the state
Page 7, Line 5department requesting information on any losses and costs to
Page 7, Line 6the state medical assistance program arising from nonprofit
Page 7, Line 7hospital purchases of 340B drugs and nonprofit hospital practices related to participation in the 340B program.
Page 7, Line 8(2) Beginning November 1, 2026, and annually thereafter,
Page 7, Line 9the joint budget committee shall issue a request for information
Page 7, Line 10to the department of personnel and administration on any
Page 7, Line 11losses and costs to the state medical assistance program arising
Page 7, Line 12from nonprofit hospital purchases of 340B drugs and nonprofit
Page 7, Line 13hospital practices related to participation in the 340B program,
Page 7, Line 14including the total aggregate value of lost manufacturer rebate revenue.
Page 7, Line 1525.5-2.5-308. Enforcement.(1) A violation of this part 3 is
Page 7, Line 16considered an unfair and deceptive trade practice pursuant to
Page 7, Line 17section 6-1-105 and subject to enforcement by the attorney general.
Page 7, Line 18(2) The attorney general may investigate and bring a civil
Page 7, Line 19action against the nonprofit hospital in a court of competent jurisdiction for a violation of this part 3.
Page 7, Line 20(3) The attorney general shall establish a process for
Page 7, Line 21individuals to report suspected violations of this part 3 to the
Page 7, Line 22attorney general and a process for the attorney general to promptly and fully investigate reports of suspected violations.
Page 8, Line 1SECTION 2. In Colorado Revised Statutes, 6-1-105, add (1)(iiii) as follows:
Page 8, Line 26-1-105. Unfair or deceptive trade practices - definitions.
Page 8, Line 3(1) A person engages in a deceptive trade practice when, in the course of the person's business, vocation, or occupation, the person:
Page 8, Line 4(iiii) Violates part 3 of article 2.5 of title 25.5.
Page 8, Line 5SECTION 3. In Colorado Revised Statutes, 24-31-101, amend (1)(i)(XXII) and (1)(i)(XXIII); and add (1)(i)(XXIV) as follows:
Page 8, Line 624-31-101. Powers and duties of attorney general. (1) The attorney general:
Page 8, Line 7(i) May independently initiate and bring civil and criminal actions to enforce state laws, including actions brought pursuant to:
Page 8, Line 8(XXII) Part 14 of article 12 of title 38;
and(XXIII) Section 24-34-806; and
Page 8, Line 9(XXIV) Part 3 of article 2.5 of title 25.5.
Page 8, Line 10SECTION 4. Safety clause. The general assembly finds,
Page 8, Line 11determines, and declares that this act is necessary for the immediate
Page 8, Line 12preservation of the public peace, health, or safety or for appropriations for
Page 8, Line 13the support and maintenance of the departments of the state and state institutions.