A Bill for an Act
Page 1, Line 101Concerning certain practices by persons participating in the
Page 1, Line 102supply chain of drugs purchased under the federal 340B
Page 1, Line 103drug pricing 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.)
Under the federal 340B drug pricing program (340B program), a covered entity, including certain hospitals, programs, and federally qualified health centers (covered entity), that serves patients with low income receives discounted outpatient drugs (340B drugs) from manufacturers that participate in the federal medicaid and medicare programs.
Unless the receipt of 340B drugs is prohibited by the federal department of health and human services, the bill prohibits a manufacturer, wholesaler, third-party logistics provider, or repackager in this state, or an agent, contractor, or affiliate of those entities, including an entity that collects or processes health information, from directly or indirectly denying, restricting, prohibiting, discriminating against, or otherwise limiting the acquisition of a 340B drug by, or delivery of a 340B drug to, a covered entity, a pharmacy contracted with a covered entity, or a location otherwise authorized by a covered entity to receive and dispense 340B drugs.
The bill also prohibits a manufacturer from directly or indirectly requiring a covered entity, a pharmacy contracted with a covered entity, or any other location authorized to receive 340B drugs by a covered entity to submit any health information, claims or utilization data, or other specified data that does not relate to a claim submitted to certain federal health care programs, unless the data is voluntarily furnished or required to be furnished under federal law.
A violation of the prohibitions in the bill is an unfair or deceptive trade practice under the "Colorado Consumer Protection Act" (act), and the violator is subject to the enforcement provisions and penalties contained in that act. The attorney general may investigate and enforce the provisions of the bill, as well as a business harmed by a violation of the provisions of the bill. In addition, a person regulated by the state board of pharmacy (pharmacy board) that violates the provisions of the bill may be subject to discipline by the pharmacy board against the person's license, certification, or registration, as well as other penalties.
The bill requires a covered entity that is a hospital to annually post on its public-facing website information concerning the annual, estimated, aggregate financial benefit to the hospital covered entity resulting from its ability to acquire pharmaceuticals at a discount through the 340B program and a description of how the hospital covered entity uses savings from participation in the 340B program.
Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:
Page 2, Line 2SECTION 1. In Colorado Revised Statutes, 6-1-105, add (1)(iiii) as follows:
Page 2, Line 36-1-105. Unfair or deceptive trade practices - definitions.
Page 2, Line 4(1) A person engages in a deceptive trade practice when, in the course of
Page 2, Line 5the person's business, vocation, or occupation, the person:
(iiii) Violates article 29 of this title 6.
Page 3, Line 1SECTION 2. In Colorado Revised Statutes, add article 29 to title 6 as follows:
Page 3, Line 2ARTICLE 29
Colorado 340B Contract Pharmacy Protection Act
Page 3, Line 36-29-101. Short title.The short title of this article 29 is the "Colorado 340B Contract Pharmacy Protection Act".
Page 3, Line 46-29-102. Legislative declaration. (1) The general assembly finds and determines that:
Page 3, Line 5(a) The 340B drug pricing program requires drug
Page 3, Line 6manufacturers to provide drug discounts on identified
Page 3, Line 7outpatient drugs to 340B covered entities as a condition of medicaid and medicare part B covering those drugs;
Page 3, Line 8(b) Congress created the 340B program in 1992, stating
Page 3, Line 9that the program's benefits "enable [covered] entities to stretch
Page 3, Line 10scarce Federal resources as far as possible, reaching more
Page 3, Line 11eligible patients and providing more comprehensive services." (H.R. Rep. No.102-384 (II), at 12 (1992)).
Page 3, Line 12(c) The 340B program supports Colorado's medically
Page 3, Line 13vulnerable and underserved populations by providing
Page 3, Line 14additional resources to 340B covered entities and allowing
Page 3, Line 15these entities to determine the most effective use of these resources;
Page 3, Line 16(d) The 340B program is a critical component of Colorado's safety net infrastructure;
Page 3, Line 17(e) Colorado has sixty-eight hospitals statewide that
Page 3, Line 18participate in the 340B program, with nearly ninety percent of
Page 4, Line 1these hospitals operating under unsustainable long-term margins;
Page 4, Line 2(f) Additionally, Colorado has twenty federally
Page 4, Line 3qualified health centers, or FQHCs, all of which participate in
Page 4, Line 4the 340B program and sixty-five percent of which currently operate with negative margins;
Page 4, Line 5(g) Colorado hospitals participating in the 340B program
Page 4, Line 6utilize program benefits to address their communities' unique
Page 4, Line 7needs, which include providing direct prescription drug
Page 4, Line 8discounts, subsidizing uncompensated charity care and medicaid
Page 4, Line 9underpayments to remain financially operational, supporting
Page 4, Line 10opioid use disorder treatment, funding mobile health-care and
Page 4, Line 11immunization clinics, and paying for chemotherapy and infusion centers;
Page 4, Line 12(h) Colorado's FQHCs are the primary care medical home
Page 4, Line 13for one in seven Coloradans, with eighty-nine percent of FQHCs'
Page 4, Line 14patients in 2023 living with family incomes below two hundred
Page 4, Line 15percent of the federal poverty guideline and twenty-three percent were uninsured;
Page 4, Line 16(i) Colorado's FQHCs utilize 340B program benefits to
Page 4, Line 17address their communities' unique needs, which include reduced
Page 4, Line 18drug prices for patients, provider recruitment and retention,
Page 4, Line 19and expansion of oral health and behavioral health services that the FQHCs would otherwise not be able to offer;
Page 4, Line 20(j) Further, Colorado's FQHCs experienced an estimated
Page 4, Line 21loss of four million three hundred dollars in 340B program
Page 4, Line 22savings in the last two years;
Page 5, Line 1(k) Conversely, in 2023, sixteen of the largest
Page 5, Line 2pharmaceutical companies reported six hundred eighty-four
Page 5, Line 3billion dollars in earnings in their annual financial reports, a
Page 5, Line 4figure that was higher than the gross domestic product of eighty-eight percent of the countries in the world;
Page 5, Line 5(l) In addition, the eight largest pharmaceutical
Page 5, Line 6companies paid a combined two billion dollars in federal taxes
Page 5, Line 7on two hundred fourteen billion dollars of domestic revenue in 2022, according to their 10-K annual financial reports;
Page 5, Line 8(m) In 2022, Colorado hospitals provided two billion one hundred million dollars of community benefit;
Page 5, Line 9(n) Starting in 2020, pharmaceutical manufacturers began
Page 5, Line 10to unlawfully place restrictions on 340B covered entities using
Page 5, Line 11contract pharmacies to dispense drugs to patients, unilaterally limiting the 340B program's benefits; and
Page 5, Line 12(o) In a letter dated July 28, 2023, from William Tong,
Page 5, Line 13attorney general of Connecticut, to the United States senate
Page 5, Line 14340B working group, and signed by twenty-two other bipartisan
Page 5, Line 15attorneys general, the attorneys general declared that
Page 5, Line 16"outpatient pharmacies are a key mechanism for the delivery of
Page 5, Line 17life-saving drugs to eligible patients, including those who have
Page 5, Line 18limited access to transportation, live in remote or rural areas,
Page 5, Line 19or are confined to their homes and rely on mail-order pharmacies."
Page 5, Line 20(2) Therefore, the general assembly declares that this
Page 5, Line 21article 29 prohibiting pharmaceutical manufacturers from
Page 5, Line 22imposing limitations or placing restrictive conditions on 340B
Page 6, Line 1covered entities is necessary to protect Colorado's vulnerable
Page 6, Line 2patients and safety net providers and to ensure that
Page 6, Line 3much-needed financial resources generated by the 340B program remain in Colorado.
Page 6, Line 46-29-103. Definitions.As used in this article 29, unless the context otherwise requires:
Page 6, Line 5(1) "340B covered entity" or "covered entity" has the
Page 6, Line 6meaning set forth in section 340B (a)(4) of the federal "Public Health Service Act", 42 U.S.C. sec. 256b (a)(4).
Page 6, Line 7(2) "340B drug" means a drug that:
Page 6, Line 8(a) Is a covered outpatient drug within the meaning set forth in 42 U.S.C. sec. 256b;
Page 6, Line 9(b) Has been subject to any offer for reduced prices by a manufacturer pursuant to 42 U.S.C. sec. 256b (a)(1); and
Page 6, Line 10(c) Is purchased by a covered entity. As used in this
Page 6, Line 11subsection (2)(c), a drug is considered "purchased" if it would
Page 6, Line 12have been purchased but for the restriction or limitation described in section 6-29-105.
Page 6, Line 13(3) "340B drug pricing program" or "340B program" means the program described in 42 U.S.C. sec. 256b (a)(1).
Page 6, Line 14(4) "Board" means the state board of pharmacy created in section 12-280-104.
Page 6, Line 15(5) "Federal health care program" has the meaning set forth in section 42 U.S.C. sec. 1320a-7b (f).
Page 6, Line 16(6) "Health information" means information, including
Page 6, Line 17demographic information collected from an individual or a
Page 6, Line 18group of individuals that:
Page 7, Line 1(a) Is created or received by a health-care provider,
Page 7, Line 2pharmacy, health benefit plan, employer, or health-care clearinghouse; and
Page 7, Line 3(b) Relates to the past, present, or future physical or
Page 7, Line 4mental health or condition of an individual, the provision of
Page 7, Line 5health care to an individual, or the past, present, or future payment for the provision of health care to an individual.
Page 7, Line 6(7) "Manufacturer" has the meaning set forth in section 12-280-103 (27).
Page 7, Line 7(8) "Package" has the meaning set forth in 21 U.S.C. sec. 360eee (11)(A).
Page 7, Line 8(9) "Pharmacy" has the meaning set forth in section 12-280-103 (43).
Page 7, Line 9(10) "Repackager" has the meaning set forth in section 12-280-103 (46).
Page 7, Line 10(11) "Third-party logistics provider" has the meaning set forth in section 12-280-103 (52.5).
Page 7, Line 11(12) "Wholesaler" has the meaning set forth in section 12-280-103 (55).
Page 7, Line 126-29-104. Applicability.This article 29 applies to a
Page 7, Line 13manufacturer, wholesaler, third-party logistics provider, or
Page 7, Line 14repackager of a manufacturer's drugs doing business in this
Page 7, Line 15state and engaged in the production, manufacture, distribution, or sale of a 340B drug in this state.
Page 7, Line 166-29-105. Acquisition of 340B drugs - prohibited acts -
Page 7, Line 17enforcement - penalties - nonpreemption - data exclusions.
Page 7, Line 18(1) Prohibited acts.On and after the effective date of this article 29:
Page 8, Line 1(a) Unless the receipt of the 340B drugs is prohibited by
Page 8, Line 2the federal department of health and human services, a
Page 8, Line 3manufacturer, wholesaler, third-party logistics provider, or
Page 8, Line 4repackager, or an agent, contractor, or affiliate of a
Page 8, Line 5manufacturer, wholesaler, third-party logistics provider, or
Page 8, Line 6repackager, including an entity that collects or processes
Page 8, Line 7health information, shall not, directly or indirectly, deny,
Page 8, Line 8restrict, prohibit, discriminate against, or otherwise limit the
Page 8, Line 9acquisition of a 340B drug by, or delivery of a 340B drug to, a
Page 8, Line 10340B covered entity, a pharmacy contracted with a 340B
Page 8, Line 11covered entity, or a location otherwise authorized by a 340B covered entity to receive and dispense 340B drugs; and
Page 8, Line 12(b) A manufacturer shall not directly or indirectly
Page 8, Line 13require, including as a condition, a 340B covered entity, a
Page 8, Line 14pharmacy contracted with a 340B covered entity, or any other
Page 8, Line 15location authorized to receive 340B drugs by a 340B covered
Page 8, Line 16entity to submit any health information, claims or utilization
Page 8, Line 17data, purchasing data, payment data, or other data that does
Page 8, Line 18not relate to a claim submitted to a federal health care
Page 8, Line 19program, unless such data is voluntarily furnished by such
Page 8, Line 20covered entity or otherwise required to be furnished under applicable federal law.
Page 8, Line 21(2) Enforcement - penalties. (a) The attorney general may
Page 8, Line 22investigate a complaint concerning a violation of this article
Page 8, Line 2329. A person that violates this article 29 engages in an unfair or
Page 8, Line 24deceptive trade practice pursuant to section 6-1-105 (1)(iiii) and
Page 9, Line 1is subject to the enforcement provisions, civil penalties, and damages set forth in article 1 of this title 6.
Page 9, Line 2(b) Each package of a 340B drug that constitutes a
Page 9, Line 3prohibited act under this article 29 constitutes a separate violation of subsection (1) of this section.
Page 9, Line 4(c) Limited distribution of a drug required under 21 U.S.C. sec. 355-1 does not constitute a violation of this article 29.
Page 9, Line 5(d) A person regulated by the state board of pharmacy
Page 9, Line 6created in section 12-280-104 may be subject to discipline
Page 9, Line 7pursuant to section 12-280-108 (1)(c), (1)(d), or (1)(i) for violating this article 29.
Page 9, Line 8(3) Nonpreemption.Nothing in this article 29 shall be
Page 9, Line 9construed or applied to be less restrictive than any federal law
Page 9, Line 10applying to persons regulated by this section. Nothing in this
Page 9, Line 11section shall be construed or applied to be in conflict with any of the following:
Page 9, Line 12(a) Applicable federal law and related regulations; or
Page 9, Line 13(b) Other laws of this state, if the laws are compatible with applicable federal law.
Page 9, Line 14(4) Data exclusions.Subsection (1) of this section does not
Page 9, Line 15prohibit a manufacturer from requiring health information or
Page 9, Line 16other data that a covered entity is required to furnish to the
Page 9, Line 17manufacturer under applicable federal law, including data
Page 9, Line 18relating to an audit in accordance with procedures established
Page 9, Line 19by the federal department of health and human services under 42 U.S.C. sec. 256b (a)(5)(C).
Page 9, Line 20SECTION 3. In Colorado Revised Statutes, add 25-3-132 as follows:
Page 10, Line 125-3-132. 340B drug pricing program transparency - definitions. (1) As used in this section:
Page 10, Line 2(a) "340B drug pricing program" or "340B program" means the program described in 42 U.S.C. sec. 256b (a)(1).
Page 10, Line 3(b) "Hospital covered entity" means a hospital licensed or
Page 10, Line 4certified by the department pursuant to the department's
Page 10, Line 5authority under section 25-1.5-103 (1)(a) and that is a "covered entity" as defined in 42 U.S.C. sec. 256b (a)(4).
Page 10, Line 6(2) Except as provided in subsection (3) of this section,
Page 10, Line 7each hospital covered entity shall annually post the following information on its public-facing website:
Page 10, Line 8(a) The annual, estimated, aggregate financial benefit to
Page 10, Line 9the hospital covered entity resulting from its ability to acquire
Page 10, Line 10pharmaceuticals at a discount through the 340B drug pricing
Page 10, Line 11program, using a standardized methodology developed and published publicly by a statewide association of hospitals; and
Page 10, Line 12(b) A description of how the hospital covered entity uses savings from participation in the 340B program.
Page 10, Line 13(3) Nothing in this section requires the public disclosure
Page 10, Line 14of records that are public records under the "Colorado Open
Page 10, Line 15Records Act", part 2 of article 72 of title 24, but that are exempted from disclosure under that act.
Page 10, Line 16SECTION 4. Severability. If any provision of this act or the
Page 10, Line 17application thereof to any person or circumstance is held invalid, such
Page 10, Line 18invalidity does not affect other provisions or applications of the act that
Page 10, Line 19can be given effect without the invalid provision or application, and to this end the provisions of this act are declared to be severable.
Page 11, Line 1SECTION 5. Act subject to petition - effective date. This act
Page 11, Line 2takes effect at 12:01 a.m. on the day following the expiration of the
Page 11, Line 3ninety-day period after final adjournment of the general assembly; except
Page 11, Line 4that, if a referendum petition is filed pursuant to section 1 (3) of article V
Page 11, Line 5of the state constitution against this act or an item, section, or part of this
Page 11, Line 6act within such period, then the act, item, section, or part will not take
Page 11, Line 7effect unless approved by the people at the general election to be held in
Page 11, Line 8November 2026 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.