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DENVER, CO — The House today passed two complementary bills to lower the cost of prescription drugs for Coloradans. Both SB25-124 and SB25-071 improve transparency in reporting, guard against profiteering, and work to save low and middle income Coloradans' money on health care.
“The federal 340B program has needed additional transparency and accountability for some time, while pharmaceutical companies have continued to rake in profits,” said Rep. Kyle Brown, D-Louisville, sponsor of SB25-124. “This important bill adds accountability measures on how non-profit hospitals can spend 340B revenue to ensure they are investing in lowering health care costs for low-income Coloradans, as the program was intended. SB25-124 also ramps up transparency by requiring hospitals to provide an annual report on how their 340B revenue was spent.”
SB25-124 would improve transparency and establish revenue spending guardrails for Colorado hospitals that utilize the federal 340B Drug Pricing Program. Under this bill, non-profit hospitals would be required to reinvest at least 80 percent of their 340B revenue toward lowering the cost of health care for low and middle income Coloradans.
Additionally, non-profit hospitals would not be allowed to use 340B revenue for certain expenses, including administrative compensation, penalties and fines, advertising, and lobbying. To preserve access to life-saving prescription medications, manufacturers or providers of 340B drugs could not limit 340B prescription drugs to community hospitals and safety net providers.
To improve transparency, non-profit hospitals must submit an annual report on their
340B program profits, including their operating costs for the 340B program, and charity care. SB25-124 passed by a vote of 42-23.
“We must ensure that Coloradans in rural and underserved communities receive the prescription drugs they need to lead healthy lives,” said Rep. Matt Martinez, D-Monte Vista, sponsor of SB25-071. “This bipartisan bill ensures that pharmaceutical companies do not impose restrictions on the local pharmacies, clinics and safety net providers that are dependent on 340B and serve our rural communities.”
The House also passed SB25-071, which ensures prescription drug manufacturers do not impose restrictions on facilities, such as pharmacies and clinics, that utilize 340B prescription drug pricing, and requires hospitals to include certain information in their annual reports.
The goal of SB25-071 is to preserve access to affordable prescription drugs across Colorado, especially in Colorado’s rural and underserved communities. 89 percent of rural hospitals in Colorado are running on low or negative margins. This bill would help preserve no-cost clinics and vaccines that help keep Coloradans healthy. SB25-071 passed by a vote of 57 to 8and is also sponsored by Rep. Rick Taggart, R-Grant Junction.
The 340B Drug Pricing Program is a federal program that requires drug manufacturers participating in Medicaid to provide outpatient drugs to covered hospitals, clinics, or pharmacies at a discount. To qualify for these reduced drug prices, health care facilities must serve a high percentage of low-income patients.
In Colorado, an estimated 68 hospitals and 20 federally qualified health centers participate in the 340B program. There are currently no requirements on how covered entities must use savings or revenues generated by the purchase of discounted 340B drugs, beyond the federal guidelines of using savings to expand and lower the cost of healthcare for low-income individuals.