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 725.5-2.5-302. Definitions.As used in this part 3, unless the context otherwise requires:
Page 2, Line 8(1) "340B drug" means "means a drug that:
Page 2, Line 9(a) Is a covered outpatient drug within the meaning set forth in 42 U.S.C. sec. 256b;
Page 2, Line 10(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 2, Line 11(c) purchased by a 340B covered entity, as defined in 340B
Page 2, Line 12(a)(4) of the federal "Public Health Service Act", 42 U.S.C. sec. 256b (a)(4).
Page 2, Line 13(2) "340B net revenue" means the difference between the
Page 2, Line 14aggregated market rate costs and the aggregated acquisition costs for 340B drugs.
Page 2, Line 15(3) "340B program" means the federal drug pricing
Page 2, Line 16program described in 42 U.S.C. sec. 256b.
Page 3, Line 1(4) "Charity care" means free or reduced-cost health
Page 3, Line 2services provided by a hospital to patients who are unable to pay.
Page 3, Line 4(5) "Contract pharmacy" means a pharmacy that a
Page 3, Line 5nonprofit hospital has contracted with to dispense 340B drugs
Page 3, Line 6on behalf of the nonprofit hospital to patients of the nonprofit
Page 3, Line 7hospital, whether distributed in-person, by mail, or by other means.
Page 3, Line 9(6) "Nonprofit hospital" means a hospital that is licensed
Page 3, Line 10by the department of public health and environment and is a
Page 3, Line 11private nonprofit corporation or hospital pursuant to 42 U.S.C.
Page 3, Line 12sec. 256b (a)(4)(L), (a)(4)(M), or (a)(4)(O), but does not include a
Page 3, Line 13sole community hospital described in 42 U.S.C. sec. 256b (a)(4)(O),
Page 3, Line 14a critical access hospital described in 42 U.S.C. sec. 256b
Page 3, Line 15(a)(4)(N), an independent nonprofit hospital with fewer than fifty
Page 3, Line 16licensed beds,Denver health and hospitals, a comprehensive
Page 3, Line 17hemophilia diagnostic treatment center described in 42 U.S.C.
Page 3, Line 18sec. 256b (a)(4)(G), a federally-qualified health center as
Page 3, Line 19defined in 42 U.S.C. sec. 1396d (l)(2)(B), Ryan White clinics, the
Page 3, Line 20Colorado state drug assistance program, or children's hospitals in Colorado.
Page 3, Line 2125.5-2.5-303. Use of 340B drug net revenue.(1) A
Page 3, Line 22nonprofit hospital shall not use 340B net revenue for the following purposes:
Page 3, Line 23(a) Compensation or expense reimbursement for the nonprofit hospital's board of directors;
Page 4, Line 1(b) Tax penalties or fines issued against the nonprofit hospital;
Page 4, Line 2(c) Expenses related to advertising and public relations
Page 4, Line 3that promote the nonprofit hospital's image, services, or
Page 4, Line 4proposals, not including communications required by law or that are essential for patient safety and patient information;
Page 4, Line 5(d) Lobbying expenses and other costs intended to
Page 4, Line 6influence legislation or ballot measures at the local, state, or federal level;
Page 4, Line 7(e) Travel, lodging, food, or beverage expenses for the nonprofit hospital's board of directors and officers;
Page 4, Line 8(f) Gifts or entertainment expenses; and
Page 4, Line 9(g) Salaries for the nonprofit hospital's chief executive
Page 4, Line 10officer, chief financial officer, chief administrative officer,
Page 4, Line 11chief operations officer, or any other senior executive officer at the vice president level or above.
Page 4, Line 12(2) (a) A nonprofit hospital that is a reporting hospital, as
Page 4, Line 13defined in section 25.5-1-701, must spend at least eighty percent
Page 4, Line 14of 340B net revenue on direct patient services or capital
Page 4, Line 15improvements that maintain or increase access to patient care for low-income populations.
Page 4, Line 16(b) For purposes of subsection (2)(a) of this section, direct patient services includes:
Page 4, Line 17(I) Charity care;
Page 4, Line 18(II) The difference between medicare and medicaid
Page 4, Line 19payments and the cost of care;
Page 5, Line 1(III) Financial support provided to a federally qualified
Page 5, Line 2health center, a critical access hospital as described in 42 U.S.C
Page 5, Line 3sec. 256b (a)(4)(N), or other 340B covered entity, as defined in
Page 5, Line 4340B (a)(4) of the federal "Public Health Service Act", 42 U.S.C.
Page 5, Line 5sec. 256b (a)(4). that is not a hospital, for the purpose of increasing access to care for low-income patients; and
Page 5, Line 6(IV) Other health-care products and services provided
Page 5, Line 7for low-income patients that are otherwise not reimbursed or reimbursed at below cost.
Page 5, Line 925.5-2.5-304. Hospital transparency reporting. (1) A
Page 5, Line 10nonprofit hospital that is a reporting hospital, as defined in
Page 5, Line 11section 25.5-1-701, shall include the following information in the annual report submitted pursuant to section 25.5-1-703(3):
Page 5, Line 12(a) The aggregate acquisition price for prescription drugs obtained under the 340B program;
Page 5, Line 13(b) The aggregated market price for drugs obtained under the 340B program and dispensed or administered to patients;
Page 5, Line 14(c) The number of transactions for prescription drugs described in subsection (1)(b) of this section;
Page 5, Line 15(d) The sum of the aggregated payments made to:
Page 5, Line 16(I) A contract pharmacy to dispense drugs obtained under the 340B program;
Page 5, Line 17(II) Any other entity, that is not a 340B covered entity as
Page 5, Line 18defined 340B (a)(4) of the federal "Public Health Services Act",
Page 5, Line 1942 U.S.C. sec. 256b (a)(4) or a contract pharmacy, for managing
Page 5, Line 20any aspect of the covered entity's 340B program.
Page 6, Line 125.5-2.5-305. Access to 340B drugs.Unless the receipt of
Page 6, Line 2340B drugs is prohibited by the federal department of health
Page 6, Line 3and human services, a manufacturer, third-party logistics
Page 6, Line 4provider, or repackager, or an agent, contractor, or affiliate
Page 6, Line 5of a manufacturer, third-party logistics provider, or
Page 6, Line 6repackager, including an entity that collects or processes
Page 6, Line 7health information, shall not, directly or indirectly, deny,
Page 6, Line 8restrict, prohibit, discriminate against, or otherwise limit the
Page 6, Line 9acquisition of a 340B drug by, or delivery of a 340B drug to,
Page 6, Line 10a 340B covered entity, as defined in 42 U.S.C. sec. 256b (a)(4); a
Page 6, Line 11pharmacy contracted with 340B covered entity, as defined in
Page 6, Line 12340B (a)(4) of the federal "Public Health Services Act", 42 U.S.C.
Page 6, Line 13sec. 256b (a)(4); or a location otherwise authorized by a 340B
Page 6, Line 14covered entity,as defined in 340B (a)(4) of the federal "Public
Page 6, Line 15Health Services Act", 42 U.S.C. sec. 256b (a)(4) to receive and dispense a 340B drug.
Page 6, Line 1625.5-2.5-306. Request of information. (1) Beginning
Page 6, Line 17November 1, 2026, and annually thereafter, the joint budget
Page 6, Line 18committee shall issue a request for information to the state
Page 6, Line 19department requesting information on any losses and costs to
Page 6, Line 20the state medical assistance program arising from nonprofit
Page 6, Line 21hospital purchases of 340B drugs and nonprofit hospital practices related to participation in the 340B program.
Page 6, Line 22(2) Beginning November 1, 2026, and annually thereafter,
Page 6, Line 23the joint budget committee shall issue a request for information
Page 6, Line 24to the department of personnel and administration on any
Page 6, Line 25losses and costs to the state medical assistance program arising
Page 7, Line 1from nonprofit hospital purchases of 340B drugs and nonprofit
Page 7, Line 2hospital practices related to participation in the 340B program,
Page 7, Line 3including the total aggregate value of lost manufacturer rebate revenue.
Page 7, Line 5SECTION 2. Safety clause. The general assembly finds,
Page 7, Line 6determines, and declares that this act is necessary for the immediate
Page 7, Line 7preservation of the public peace, health, or safety or for appropriations for
Page 7, Line 8the support and maintenance of the departments of the state and state institutions.