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. Definitions.As used in this part 3, unless the context otherwise requires:
Page 2, Line 7(1) "340B drug" means a covered outpatient drug, as
Page 2, Line 8defined in 42 U.S.C. sec. 1396r-8 (k)(2), whether self-administered
Page 2, Line 9or provider-administered, that is subject to reduced prices by a
Page 2, Line 10manufacturer pursuant to 42 U.S.C. sec. 256b (a)(1) and is purchased by a nonprofit hospital.
Page 2, Line 11(2) "340B profits" means the difference between
Page 2, Line 12aggregated payments received from insurers, payers, and
Page 2, Line 13self-paying patients for all 340B drugs and aggregated acquisition costs paid for all 340B drugs.
Page 2, Line 14(3) "340B program" means the federal drug pricing program described in 42 U.S.C. sec. 256b.
Page 2, Line 15(4) "Charity care" means free or reduced-cost health
Page 2, Line 16services provided by a hospital to patients who are unable to
Page 2, Line 17pay.
Page 3, Line 1(5) "Charity care costs" means the total cost incurred by
Page 3, Line 2the nonprofit hospital for providing charity care, including
Page 3, Line 3charity care that is provided at an off-site outpatient facility
Page 3, Line 4associated with the nonprofit hospital, that dispenses 340B drugs purchased by the nonprofit hospital.
Page 3, Line 5(6) "Contract pharmacy" means a pharmacy that a
Page 3, Line 6nonprofit hospital has contracted with to dispense 340B drugs
Page 3, Line 7on behalf of the nonprofit hospital to patients of the nonprofit
Page 3, Line 8hospital, whether distributed in-person, by mail, or by other means.
Page 3, Line 9(7) "Low-income patient" means a patient of the nonprofit
Page 3, Line 10hospital with a family income that does not exceed four hundred percent of the federal poverty line, adjusted for family size.
Page 3, Line 11(8) "Nonprofit hospital" means a hospital that is licensed
Page 3, Line 12by the department of public health and environment and is a
Page 3, Line 13private nonprofit corporation or hospital pursuant to 42 U.S.C.
Page 3, Line 14sec. 256b (a)(4)(L), (a)(4)(M), or (a)(4)(O), but does not include a
Page 3, Line 15sole community hospital described in 42 U.S.C. sec. 256b (a)(4)(O),
Page 3, Line 16a critical access hospital described in 42 U.S.C. sec. 256b (a)(4)(N), or Denver health and hospitals.
Page 3, Line 1725.5-2.5-303. Use of 340B drug profits. (1) Beginning
Page 3, Line 18January 1, 2026, each nonprofit hospital shall use 340B profits according to the following:
Page 3, Line 19(a) Fifty-five percent of 340B profits must be used to
Page 3, Line 20decrease the out-of-pocket costs paid for 340B drugs that are
Page 3, Line 21dispensed or administered to low-income patients, in addition to
Page 3, Line 22existing requirements to provide charity care to uninsured patients; and
Page 4, Line 1(b) Forty percent of 340B profits must be used to decrease other out-of-pocket costs for low-income patients.
Page 4, Line 2(2) (a) At the point of sale, for any 340B drug that is
Page 4, Line 3dispensed or administered to a patient at a pharmacy located
Page 4, Line 4within the nonprofit hospital, the nonprofit hospital must ensure the following:
Page 4, Line 5(I) A patient with a household income at or below one
Page 4, Line 6hundred percent of the federal poverty line pays zero dollars out of pocket; and
Page 4, Line 7(II) A patient with a household income above one hundred
Page 4, Line 8percent but below two hundred percent of the federal poverty line pays no more than three dollars out of pocket.
Page 4, Line 9(b) The requirements of subsection (2)(a) of this section do
Page 4, Line 10not apply to a patient with coverage under a
Page 4, Line 11government-sponsored program, as defined in section 5000A(f) of the federal "Internal Revenue Code of 1986".
Page 4, Line 12(3) A nonprofit hospital shall not use 340B profits for the following purposes:
Page 4, Line 13(a) More than thirty-five percent of total annual
Page 4, Line 14compensation or expense reimbursement for the nonprofit hospital's board of directors;
Page 4, Line 15(b) Tax penalties or fines issued against the nonprofit hospital;
Page 4, Line 16(c) Expenses related to advertising and public relations
Page 4, Line 17that promote the nonprofit hospital's image, services, or
Page 4, Line 18proposals, not including communications required by law or that are essential for patient safety and patient information;
Page 5, Line 1(d) Lobbying expenses and other costs intended to
Page 5, Line 2influence legislation or ballot measures at the local, state, or federal level;
Page 5, Line 3(e) Travel, lodging, food, or beverage expenses for the nonprofit hospital's board of directors and officers; and
Page 5, Line 4(f) Gifts or entertainment expenses.
Page 5, Line 525.5-2.5-304. Hospital transparency reporting. (1) Beginning
Page 5, Line 6July 1, 2026, and by July 1 each year thereafter, a nonprofit
Page 5, Line 7hospital shall submit a report to the state department on
Page 5, Line 8behalf of the nonprofit hospital and each off-site facility
Page 5, Line 9associated with the nonprofit hospital in the form and manner
Page 5, Line 10determined by the state department. The report must contain the following information regarding the prior year:
Page 5, Line 11(a) Delineated by form of insurance or payer type,
Page 5, Line 12including medicaid, medicare, commercial insurance, self-insured employers, and uninsured:
Page 5, Line 13(I) Aggregated acquisition costs paid for 340B drugs used to calculate 340B profits;
Page 5, Line 14(II) Aggregated payments received from insurers, payers,
Page 5, Line 15and self-paying patients for all 340B drugs that were used to calculate 340B profits;
Page 5, Line 16(III) Total number of prescriptions and the percentage of
Page 5, Line 17the nonprofit hospital's prescriptions that were filled using 340B drugs;
Page 5, Line 18(IV) Percentage of low-income patients whose
Page 5, Line 19out-of-pocket costs decreased pursuant to section 25.5-2.5-303(1)(a);
Page 6, Line 1(V) Percentage of low-income patients whose
Page 6, Line 2out-of-pocket costs decreased pursuant to section 25.5-2.5-303 (1)(b); and
Page 6, Line 3(VI) Out-of-pocket costs that decreased pursuant to section 25.5-2.5-303 (1)(b);
Page 6, Line 4(b) Total operating costs of the nonprofit hospital and itemized costs related to:
Page 6, Line 5(I) Lowering out-of-pocket costs for low-income patients pursuant to section 25.5-2.5-303 (1); and
Page 6, Line 6(II) Providing charity care; and
(c) Total payments made to:
Page 6, Line 7(I) Contract pharmacies for 340B program-related services and other functions;
Page 6, Line 8(II) Third-party administrators for managing any components of the nonprofit hospital's 340B program; and
Page 6, Line 9(III) Any other third party in connection with 340B
Page 6, Line 10program-related compliance, legal, educational, or administrative costs.
Page 6, Line 11(2) An officer of the nonprofit hospital shall certify the
Page 6, Line 12completeness and accuracy of the report submitted pursuant to subsection (1) of this section.
Page 6, Line 13(3) The state department shall aggregate the reports
Page 6, Line 14described in subsection (1) of this section to prepare a report
Page 6, Line 15detailing information received from nonprofit hospitals,
Page 6, Line 16including 340B program revenue across all nonprofit hospitals
Page 6, Line 17in the state. Beginning September 15, 2026, and each September 15
Page 7, Line 1thereafter, the state department shall submit the aggregated
Page 7, Line 2report to the general assembly and publish all reports
Page 7, Line 3submitted by a nonprofit hospital pursuant to subsection (1) of this section on a publicly accessible website.
Page 7, Line 425.5-2.5-305. Reporting. (1) Beginning November 1, 2026,
Page 7, Line 5and annually thereafter, the state department shall submit a
Page 7, Line 6report to the joint budget committee on any losses and costs to
Page 7, Line 7the state medical assistance program arising from nonprofit
Page 7, Line 8hospital purchases of 340B drugs and nonprofit hospital practices related to participation in the 340B program.
Page 7, Line 9(2) Beginning November 1, 2026, and annually thereafter,
Page 7, Line 10the department of personnel and administration shall submit a
Page 7, Line 11report to the joint budget committee on any losses and costs to
Page 7, Line 12the state medical assistance program arising from nonprofit
Page 7, Line 13hospital purchases of 340B drugs and nonprofit hospital
Page 7, Line 14practices related to participation in the 340B program, including
Page 7, Line 15the total aggregate value of lost manufacturer rebate revenue.
Page 7, Line 1625.5-2.5-306. Enforcement.(1) A violation of this part 3 is
Page 7, Line 17considered an unfair and deceptive trade practice pursuant to
Page 7, Line 18section 6-1-105 and subject to enforcement by the attorney general.
Page 7, Line 19(2) The attorney general may investigate and bring a civil
Page 7, Line 20action against the nonprofit hospital in a court of competent jurisdiction for a violation of this part 3.
Page 7, Line 21(3) The attorney general shall establish a process for
Page 7, Line 22individuals to report suspected violations of this part 3 to the
Page 8, Line 1attorney general and a process for the attorney general to promptly and fully investigate reports of suspected violations.
Page 8, Line 2SECTION 2. In Colorado Revised Statutes, 6-1-105, add (1)(iiii) as follows:
Page 8, Line 36-1-105. Unfair or deceptive trade practices - definitions.
Page 8, Line 4(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 5(iiii) Violates part 3 of article 2.5 of title 25.5.
Page 8, Line 6SECTION 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 724-31-101. Powers and duties of attorney general. (1) The attorney general:
Page 8, Line 8(i) May independently initiate and bring civil and criminal actions to enforce state laws, including actions brought pursuant to:
Page 8, Line 9(XXII) Part 14 of article 12 of title 38;
and(XXIII) Section 24-34-806; and
Page 8, Line 10(XXIV) Part 3 of article 2.5 of title 25.5.
Page 8, Line 11SECTION 4. Safety clause. The general assembly finds,
Page 8, Line 12determines, and declares that this act is necessary for the immediate
Page 8, Line 13preservation of the public peace, health, or safety or for appropriations for
Page 8, Line 14the support and maintenance of the departments of the state and state institutions.