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.
This Unofficial Version Includes Committee
Amendments Not Yet Adopted on Second Reading
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.
Page 2, Line 13256b (a)(4). As used in this subsection (2)(c), a drug is considered
Page 2, Line 14"purchased" if it would have been purchased but for the restriction or limitation described in section 6-29-105.
Page 2, Line 15(2) "340B net revenue" means the difference between the
Page 2, Line 16aggregated market rate costs and the aggregated acquisition
Page 2, Line 17costs for 340B drugs.
Page 3, Line 1(3) "340B program" means the federal drug pricing program described in 42 U.S.C. sec. 256b.
Page 3, Line 2(4) "Charity care" means free or reduced-cost health
Page 3, Line 3services provided by a hospital to patients who are unable to pay.
Page 3, Line 5(5) "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 10(6) "Nonprofit hospital" means a hospital that is licensed
Page 3, Line 11by the department of public health and environment and is a
Page 3, Line 12private nonprofit corporation or hospital pursuant to 42 U.S.C.
Page 3, Line 13sec. 256b (a)(4)(L), (a)(4)(M), or (a)(4)(O), but does not include a
Page 3, Line 14sole community hospital described in 42 U.S.C. sec. 256b (a)(4)(O),
Page 3, Line 15a critical access hospital described in 42 U.S.C. sec. 256b
Page 3, Line 16(a)(4)(N), an independent nonprofit hospital with fewer than fifty
Page 3, Line 17licensed beds,Denver health and hospitals, a comprehensive
Page 3, Line 18hemophilia diagnostic treatment center described in 42 U.S.C.
Page 3, Line 19sec. 256b (a)(4)(G), a federally-qualified health center as
Page 3, Line 20defined in 42 U.S.C. sec. 1396d (l)(2)(B), Ryan White clinics, the
Page 3, Line 21Colorado state drug assistance program, or children's hospitals in Colorado.
Page 3, Line 2225.5-2.5-303. Use of 340B drug net revenue.(1) A
Page 3, Line 23nonprofit hospital shall not use 340B net revenue for the following purposes:
Page 4, Line 1(a) Compensation or expense reimbursement for the nonprofit hospital's board of directors;
Page 4, Line 2(b) Tax penalties or fines issued against the nonprofit hospital;
Page 4, Line 3(c) Expenses related to advertising and public relations
Page 4, Line 4that promote the nonprofit hospital's image, services, or
Page 4, Line 5proposals, not including communications required by law or that are essential for patient safety and patient information;
Page 4, Line 6(d) Lobbying expenses and other costs intended to
Page 4, Line 7influence legislation or ballot measures at the local, state, or federal level;
Page 4, Line 8(e) Travel, lodging, food, or beverage expenses for the nonprofit hospital's board of directors and officers;
Page 4, Line 9(f) Gifts or entertainment expenses; and
Page 4, Line 10(g) Salaries for the nonprofit hospital's chief executive
Page 4, Line 11officer, chief financial officer, chief administrative officer,
Page 4, Line 12chief operations officer, or any other senior executive officer at the vice president level or above.
Page 4, Line 13(2) (a) A nonprofit hospital that is a reporting hospital, as
Page 4, Line 14defined in section 25.5-1-701, must spend at least eighty percent
Page 4, Line 15of 340B net revenue on direct patient services or capital
Page 4, Line 16improvements that maintain or increase access to patient care for low-income populations.
Page 4, Line 17(b) For purposes of subsection (2)(a) of this section, direct patient services includes:
Page 4, Line 18(I) Charity care;
Page 5, Line 1(II) The difference between medicare and medicaid payments and the cost of care;
Page 5, Line 2(III) Financial support provided to a federally qualified
Page 5, Line 3health center, a critical access hospital as described in 42 U.S.C
Page 5, Line 4sec. 256b (a)(4)(N), or other 340B covered entity, as defined in
Page 5, Line 5340B (a)(4) of the federal "Public Health Service Act", 42 U.S.C.
Page 5, Line 6sec. 256b (a)(4). that is not a hospital, for the purpose of increasing access to care for low-income patients; and
Page 5, Line 7(IV) Other health-care products and services provided
Page 5, Line 8for low-income patients that are otherwise not reimbursed or reimbursed at below cost.
Page 5, Line 1025.5-2.5-304. Hospital transparency reporting. (1) A
Page 5, Line 11nonprofit hospital that is a reporting hospital, as defined in
Page 5, Line 12section 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 13(a) The aggregate acquisition price for prescription drugs obtained under the 340B program;
Page 5, Line 14(b) The aggregated market price for drugs obtained under the 340B program and dispensed or administered to patients;
Page 5, Line 15(c) The number of transactions for prescription drugs described in subsection (1)(b) of this section;
Page 5, Line 16(d) The sum of the aggregated payments made to:
Page 5, Line 17(I) A contract pharmacy to dispense drugs obtained under the 340B program;
Page 5, Line 18(II) Any other entity, that is not a 340B covered entity as
Page 5, Line 19defined 340B (a)(4) of the federal "Public Health Services Act",
Page 6, Line 142 U.S.C. sec. 256b (a)(4) or a contract pharmacy, for managing any aspect of the covered entity's 340B program.
Page 6, Line 225.5-2.5-305. Access to 340B drugs.Unless the receipt of
Page 6, Line 3340B drugs is prohibited by the federal department of health
Page 6, Line 4and human services, a manufacturer, third-party logistics
Page 6, Line 5provider, or repackager, or an agent, contractor, or affiliate
Page 6, Line 6of a manufacturer, third-party logistics provider, or
Page 6, Line 7repackager, including an entity that collects or processes
Page 6, Line 8health information, shall not, directly or indirectly, deny,
Page 6, Line 9restrict, prohibit, discriminate against, or otherwise limit the
Page 6, Line 10acquisition of a 340B drug by, or delivery of a 340B drug to, a 340B covered entity, as defined in 42 U.S.C. sec. 256b (a)(4).
Page 6, Line 1125.5-2.5-306. Request of information. (1) Beginning
Page 6, Line 12November 1, 2026, and annually thereafter, the joint budget
Page 6, Line 13committee shall issue a request for information to the state
Page 6, Line 14department requesting information on any losses and costs to
Page 6, Line 15the state medical assistance program arising from nonprofit
Page 6, Line 16hospital purchases of 340B drugs and nonprofit hospital practices related to participation in the 340B program.
Page 6, Line 17(2) Beginning November 1, 2026, and annually thereafter,
Page 6, Line 18the joint budget committee shall issue a request for information
Page 6, Line 19to the department of personnel and administration on any
Page 6, Line 20losses and costs to the state medical assistance program arising
Page 6, Line 21from nonprofit hospital purchases of 340B drugs and nonprofit
Page 6, Line 22hospital practices related to participation in the 340B program,
Page 6, Line 23including the total aggregate value of lost manufacturer
Page 6, Line 24rebate revenue.
Page 7, Line 1SECTION 2. Safety clause. The general assembly finds,
Page 7, Line 2determines, and declares that this act is necessary for the immediate
Page 7, Line 3preservation of the public peace, health, or safety or for appropriations for
Page 7, Line 4the support and maintenance of the departments of the state and state institutions.