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First Regular Session Seventy-fifth General Assembly STATE OF COLORADO ENGROSSED This Version Includes All Amendments Adopted on Second Reading in the House of Introduction LLS NO.
SB124_H_HHS.001 HOUSE COMMITTEE OF REFERENCE REPORT _______________________________ May 3, 2025 Chair of Committee Date Committee on Health & Human Services.
25-0153.01 Chelsea Princell x4335 SENATE BILL 25-124 SENATE SPONSORSHIP Kirkmeyer and Gonzales J., HOUSE SPONSORSHIP Brown and Garcia Sander, Senate Committees House Committees Health & Human Services A BILL FOR AN ACT C ONCERNING OUTPATIENT DRUGS THAT ARE SOLD AT A DISCOUNT TO NONPROFIT HOSPITALS THROUGH THE FEDERAL 340B DRUG PRICING PROGRAM .
After consideration on the merits, the Committee recommends the following:
Bill Summary (Note:
SB25-124 be amended as follows, and as so amended, be referred to the Committee of the Whole with favorable recommendation:
This summary applies to this bill as introduced and does notreflectanyamendmentsthatmaybesubsequentlyadopted.Ifthisbill 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.) Thebillrequiresnonprofithospitals(hospitals)touse340Bprofits to decrease out-of-pocket costs for low-income patients.
Amend reengrossed bill, page 2, strike lines 9 through 24.
The bill requires entities covered under the federal 340B drug g pricing program that are hospitals licensed by the state to report d e 0 information related to their participation in the 340B program, their use T R , A 2 2 Shading denotes HOUSE amendment.
Page 3, strike lines 1 through 4.
Double underlining denotes SENATE amendment.
Renumber succeeding C.R.S.
E d c Capital letters or bold & italic numbers indicate new material to be added to existing law.
sections accordingly.
Dashes through the words or numbers indicate deletions from existing law.
Page 3, strike lines 7 through 15 and substitute:
e M A 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.
(1) "340B DRUG "MEANS "MEANS A DRUG THAT :
Be it enacted by the General Assembly of the State of Colorado:
(a) IS A COVERED OUTPATIENT DRUG WITHIN THE MEANING SET FORTH IN 42 U.S.C.SEC.
SECTION 1.
25B;
In Colorado Revised Statutes, add part 3 to article 2.5 of title 25.5 as follows:
(b) H AS BEEN SUBJECT TO ANY OFFER FOR REDUCED PRICES BY A MANUFACTURER PURSUANT TO 42 U.S.C.SEC.
PART 3 SAVING PEOPLE MONEY ON PRESCRIPTION MEDICATIONS ACT 25.5-2.5-301.
256b (a)(1AND (c) PURCHASEDBYA 340B COVEREDENTITY ,AS DEFINEDIN 340B (a)(4)OF THE FEDERAL "PUBLICH EALTH SERVICE A CT", 42 U.S.C.SEC.
Short title.
256b (a)(4).
TSHORT TITLE OF THIS PAR3 IS "SAVING PEOPLE M ONEY ON PRESCRIPTIONM EDICATIONSA CT".
A USED IN THIS SUBSECTIO(2)(c)A DRUG IS CONSIDERED "PURCHASED " IF IT WOULD HAVE BEEN PURCHASED BUT FOR THE RESTRICTION OR LIMITATION DESCRIBED IN SECTION6-29-105.
25.5-2.5-302.
(2) "340B NET REVENUE " MEANS THE DIFFERENCE BETWEEN THE AGGREGATED MARKET RATE COSTS AND THE AGGREGATED ACQUISITION COSTS FOR 340B DRUGS .".
Legislative declaration.
Page 4, line 7, before "DVER " insertAN INDEPENDENT NONPROFIT HOSPITAL WITH FEWER THAN FIFTY LICENSED BEDS,".
(1)THE GENERAL ASSEMBLY FINDS THAT:
Page 4, line 13, strike "profits." and substitute "net revenue.".
(a) NONPROFIT HOSPITALS COVERED UNDER THE340B PROGRAM USE 340BPROFITSTODECREASEOUT -OFPOCKETCOSTSFORLOW -INCOME PATIENTS;
Page 4, line 14, strike "ITS" and substitutNET REVENUE ".
(b) FEDERALLY QUALIFIED HEALTH CENTERS , RYAN W HITE CLINICS,STATE AIDS DRUG ASSISTANCE PROGRAMS ,AND CHILDREN S HOSPITALS ARE REQUIRED TO REPORT CERTAIN REVENUE AND USE DATA TO THE BENEFIT OF THE COMMUNITIES THEY SERVE .
Page 4, strike line 16.
NO SIMILARLY SITUATED REQUIREMENT EXISTS FOR NONPROFIT HOSPITALS COVERED UNDER THE 340B PROGRAM .
Page 4, line 17, strike "NSATION " and substitute "(a) COMPENSATION ".
(c) REQUIRING HOSPITALS COVERED UNDER THE340B PROGRAM THAT ARE LICENSEDBYTHE STATETOREPORT INFORMATIONRELATEDTO THEIR PARTICIPATION IN THE340B PROGRAM TO THE STATE WOULD CREATE PARITY IN THE USE O340B PROGRAM PROFITS.
Page 5, line 2, strike the second " Page 5, line 3, strike "SES ." and substituEXPENSES ;AND".
(2) THEREFORE ,THE GENERAL ASSEMBLY DECLARES THAT THE -2- 124 STATE OF COLORADO HAS BOTH A SPECIFIED INTEREST IN AND PROPER RESPONSIBILITYTOMONITORNONPROFITHOSPITALSCOVEREDUNDERTHE 340B PROGRAM AND ENSURE THEY ARE APPROPRIATELY SERVING THEIR COMMUNITIES AND THE TAXPAYER INTERESTS OF THE STAT.
Page 5, after line 3, insert:
25.5-2.5-303.efinitions.
"(g) SALARIES FOR THE NONPROFIT HOSPITA'S CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER,CHIEF ADMINISTRATIVE OFFICER, CHIEF OPERATIONS OFFICER,OR ANY OTHER SENIOR EXECUTIVE OFFICER AT THE VICE PRESIDENT LEVEL OR ABOV.
S USED IN THIS PA3,UNLESS THE CONTEXT OTHERWISE REQUIRES :
(2)(a) ANONPROFITHOSPITALTHATISAREPORTINGHOSPITAL ,AS DEFINED IN SECTION25.5-1-701MUST SPEND AT LEAST EIGHTY PERCENT OF 340B NET REVENUE ON DIRECT PATIENT SERVICES OR CAPITAL IMPROVEMENTS THAT MAINTAIN OR INCREASE ACCESS TO PATIENT CARE FOR LOW -INCOME POPULATIONS.
(1) "340B DRUG" MEANS A COVERED OUTPATIENT DRUG ,AS DEFINEDIN 42U.S.C.SEC.1396r-8(k)(2)WHETHERSELF -ADMINISTERED OR PROVIDER-ADMINISTERED,THAT IS SUBJECT TO REDUCED PRICES BY A MANUFACTURER PURSUANT TO 42 U.S.C.
(b) FORPURPOSESOFSUBSECTION (2)(aOFTHISSECTION ,DIRECT PATIENT SERVICES INCLUDES:
(I) CHARITY CARE;
(II) THE DIFFERENCE BETWEEN MEDICARE AND MEDICAID PAYMENTS AND THE COST OF CARE ;
(III) FNANCIAL SUPPORT PROVIDED TO A FEDERALLY QUALIFIED HEALTHCENTER ,ACRITICALACCESSHOSPITALASDESCRIBEDIN 42U.S.C SEC.
256b (a)(4)(N)OR OTHER 340B COVERED ENTITY ,AS DEFINED IN 340B (a)(4)OFTHE FEDERAL "PUBLICH EALTH SERVICE ACT ", 42U.S.C.
256b (a)(1)AND IS PURCHASED BY A NONPROFIT HOSPITAL.
256b (a)(4).THAT IS NOT A HOSPITAL ,FOR THE PURPOSE OF INCREASING ACCESS TO CARE FOR LOW-INCOME PATIENTS;AND (IV) O THER HEALTH -CARE PRODUCTS AND SERVICES PROVIDED FOR LOW -INCOME PATIENTS THAT ARE OTHERWISE NOT REIMBURSED OR REIMBURSED AT BELOW COST .".
(2) "340B PROFITS" MEANS THE DIFFERENCE BETWEEN AGGREGATED PAYMENTS RECEIVED FROM INSURERS ,PAYERS , AND SELF-PAYING PATIENTS FOR ALL 340B DRUGS AND AGGREGATED ACQUISITION COSTS PAID FOR AL340BDRUGS .
Page 5, strike lines 4 through 27.
(3) "340B PROGRAM " MEANS THE FEDERAL DRUG PRICING PROGRAM DESCRIBED IN 42 U.S.CSEC.
Page 6, strike lines 1 through 17 and substitute:
256b.
"25.5-2.5-304.
(4) "CHARITY CARE "MEANS FREE OR REDUCED COST HEALTH SERVICES PROVIDED BY A HOSPITAL TO PATIENTS WHO ARE UNABLE TO PAY .
Hospital transparency reporting.
(5) "CONTRACT PHARMACY " MEANS A PHARMACY THAT A NONPROFIT HOSPITAL HAS CONTRACTED WITH TO DISPENSE340B DRUGS ON BEHALFOFTHE NONPROFIT HOSPITALTO PATIENTS OFTHE NONPROFIT HOSPITAL, WHETHER DISTRIBUTED INPERSON ,BY MAIL, OR BY OTHER MEANS .
(1) A NONPROFIT HOSPITAL THAT IS A REPORTING HOSPITAL ,AS DEFINED IN SECTION 25.5-1-701,SHALL INCLUDE THE FOLLOWING INFORMATION IN -2- THE ANNUAL REPORT SUBMITTED PURSUANT TO SECTION 25.5-1-703(3):
-3- 124 (6) "NONPROFIT HOSPITAL"MEANS A HOSPITALTHAT ISLICENSED BY THE DEPARTMENT OF PUBLIC HEALTH AND ENVIRONMENT AND IS A PRIVATE NONPROFIT CORPORATIONORHOSPITALPURSUANTTO 42U.S.C.
(a) TEAGGREGATEACQUISITIONPRICEFORPRESCRIPTIONDRUGS OBTAINED UNDER THE 340B PROGRAM ;
SEC.
(b) THEAGGREGATEDMARKETPRICEFORDRUGSOBTAINEDUNDER THE 340B PROGRAM AND DISPENSED OR ADMINISTERED TO PATIENTS;
256b (a)(4)(L), (a)(4)(OR,(a)(4)(OBUT DOES NOT INCLUDE A SOLECOMMUNITYHOSPITALDESCRIBEDIN 42U.S.C.
(c) THE NUMBER OF TRANSACTIONS FOR PRESCRIPTION DRUGS DESCRIBED IN SUBSECTION(1)(b)OF THIS SECTIO;
SEC.256b(a)(4)(O), A CRITICAL ACCESS HOSPITAL DESCRIBED IN 42 U.S.C.
(d) THE SUM OF THE AGGREGATED PAYMENTS MADE TO :
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SEC.
(I) ACONTRACTPHARMACYTODISPENSEDRUGSOBTAINEDUNDER THE 340B PROGRAM ;
256b (a)(4)(N), DENVER HEALTH AND HOSPITALS , A COMPREHENSIVE HEMOPHILIA DIAGNOSTIC TREATMENT CENTER DESCRIBED IN 42 U.S.C.
(II) AYOTHERENTITY ,THAT ISNOT A340B COVEREDENTITYAS DEFINED 340B (a)(4OF THE FEDERAL"P UBLICH EALTH SERVICESA CT", 42 U.S.C.SEC.
SEC.
256b (a)(OR A CONTRACT PHARMACY ,FOR MANAGING ANY ASPECT OF THE COVERED ENTITYS 340B PROGRAM .".
256b (a)(4)(G),A FEDERALLY QUALIFIED HEALTH CENTER AS DEFINED IN42 U.S.C.SEC .
Page 6, line 20, strike "SALER ,".
1396d (l)(2)(B)YAN W HITE CLINIC,THE C OLORADOSTATEDRUGASSISTANCEPROGRAM ,ORCHILDREN SHOSPITALS IN COLORADO .
Page 6, line 22, strike "SALER ,".
25.5-2.5-304.Use of 340B drug profits.
Page 6, strike line 27.
(1) A NONPROFIT HOSPITALSHALL NOT USE 340B PROFITS FOR THE FOLLOWING PURPOSES :
Page 7, strike lines 1 and 2 and substitute "OVERED ENTITY,AS DEFINED IN42 U.S.C.SEC.
(a) M ORE THAN THIRTY FIVE PERCENT OF TOTAL ANNUAL COMPENSATION OR EXPENSE REIMBURSEMENT FOR THE NONPROFIT HOSPITAL'S BOARD OF DIRECTORS;
256b (a)(4)." Page 7, strike lines 18 through 27.
(b) T AX PENALTIES OR FINES ISSUED AGAINST THE NONPROFIT HOSPITAL;
Page 8, strike lines 1 through 16.
(c) EXPENSES RELATED TO ADVERTISING AND PUBLIC RELATIONS THAT PROMOTE THE NONPROFIT HOSPITAL 'S IMAGE, SERVICES, OR PROPOSALS ,NOT INCLUDING COMMUNICATIONS REQUIRED BY LAW OR THAT ARE ESSENTIAL FOR PATIENT SAFETY AND PATIENT INFORMATIO;
Renumber succeeding section accordingly.
(d) L OBBYING EXPENSES AND OTHER COSTS INTENDED TO INFLUENCELEGISLATIONORBALLOTMEASURESATTHELOCAL ,STATE,OR FEDERAL LEVEL ;
** *** ** *** ** -3-
-4- 124 (e) TRAVEL, LODGING,FOOD ,OR BEVERAGE EXPENSES FOR THE NONPROFIT HOSPITALS BOARD OF DIRECTORS AND OFFICER;AND (f) GIFTS OR ENTERTAINMENT EXPENSE.
25.5-2.5-305.ospitaltransparencyreporting.(1) EGINNING JULY 1, 2026,AND BY JULY 1 EACH YEAR THEREAFTER ,A NONPROFIT HOSPITAL SHALL SUBMIT A REPORT TO THE STATE DEPARTMENT ON BEHALF OF THE NONPROFIT HOSPITAL AND EACH OFF -SITE FACILITY ASSOCIATED WITH THE NONPROFIT HOSPITAL IN THE FORM AND MANNER DETERMINED BY THE STATE DEPARTMENT .
THE REPORT MUST CONTAIN THE FOLLOWING INFORMATION REGARDING THE PRIOR YEAR:
(a) DELINEATED BY FORM OF INSURANCE OR PAYER TYPE , INCLUDING MEDICAID , MEDICARE , COMMERCIAL INSURANCE , SELF-INSURED EMPLOYERS,AND UNINSURED :
(I) AGREGATEDACQUISITIONCOSTSPAIDFOR 340B DRUGSUSED TO CALCULATE 340B PROFITS;
(II) AGREGATEDPAYMENTSRECEIVEDFROMINSURERS ,PAYERS , AND SELF-PAYING PATIENTS FOR ALL340B DRUGS THAT WERE USED TO CALCULATE 340B PROFITS;AND (III) OTALNUMBER OFPRESCRIPTIONS ANDTHE PERCENTAGE OF THE NONPROFIT HOSPITAL'S PRESCRIPTIONS THAT WERE FILLED USING 340B DRUGS ;
(b) TOTAL OPERATING COSTS OF THE NONPROFIT HOSPITAL AND ITEMIZED COSTS RELATED TO PROVIDING CHARITY CAR;AND (c) TOTAL PAYMENTS MADE TO :
(I) CONTRACT PHARMACIES FOR 340B PROGRAM -RELATED SERVICES AND OTHER FUNCTIONS;
-5- 124 (II) THIRD-PARTY ADMINISTRATORS FOR MANAGING ANY COMPONENTS OF THE NONPROFIT HOSPITALS 340B PROGRAM ;AND (III) ANY OTHER THIRD PARTY IN CONNECTION WITH 340B PROGRAM -RELATED COMPLIANCE , LEGAL , EDUCATIONAL , OR ADMINISTRATIVE COSTS.
(2) AN OFFICER OF THE NONPROFIT HOSPITAL SHALL CERTIFY THE COMPLETENESSANDACCURACYOFTHEREPORTSUBMITTEDPURSUANTTO SUBSECTION (1)OF THIS SECTI.N (3) THE STATE DEPARTMENT SHALL COLLECT THE REPORTS DESCRIBED IN SUBSECTION(1)OF THIS SECTION TO PREPARE A REPORT DETAILING INFORMATION RECEIVED FROM NONPROFIT HOSPITALS , INCLUDING 340B PROGRAMREVENUE ACROSSALLNONPROFITHOSPITALS INTHESTATE .BEGINNINGS EPTEMBER 15,2026ANDEACH SEPTEMBER 15 THEREAFTER ,THE STATE DEPARTMENT SHALL SUBMIT THE AGGREGATED REPORT TO THE GENERAL ASSEMBLY AND PUBLISH ALL REPORTS SUBMITTED BY A NONPROFIT HOSPITAL PURSUANT TO SUBSECTIO(1)OF THIS SECTION ON A PUBLICLY ACCESSIBLE WEBS.TE 25.5-2.5-306.
Access to 340B drugs.
UESS THE RECEIPT OF 340B DRUGS IS PROHIBITED BY THE FEDERAL DEPARTMENT OF HEALTH AND HUMAN SERVICES ,A MANUFACTURER ,WHOLESALER ,THIRD-PARTY LOGISTICS PROVIDE,OR REPACKAGER ,OR AN AGENT ,CONTRACTOR ,OR AFFILIATE OF A MANUFACTURER,WHOLESALER ,THIRD-PARTY LOGISTICS PROVIDER ,OR REPACKAGER ,INCLUDING AN ENTITY THAT COLLECTS OR PROCESSESHEALTHINFORMATION ,SHALLNOT ,DIRECTLYORINDIRECTLY , DENY ,RESTRICTPROHIBIT,DISCRIMINATEAGAINST,OROTHERWISELIMIT THE ACQUISITION OF 340B DRUG BY,OR DELIVERY OFA340B DRUG TO , A HOSPITAL THAT IS EITHER A SOLE COMMUNITY HOSPITAL DESCRIBED IN -6- 124 42 U.S.C.
SEC.
256b (a)(4)(O) OR A CRITICAL ACCESS HOSPITAL DESCRIBED IN42 U.S.C.SEC.
256b (a)(4)(N).
25.5-2.5-307.
Request of information.
(1) BEGINNING N OVEMBER 1, 2026AND ANNUALLY THEREAFTER ,THE JOINT BUDGET COMMITTEE SHALL ISSUE A REQUEST FOR INFORMATION TO THE STATE DEPARTMENT REQUESTING INFORMATION ON ANY LOSSES AND COSTS TO THE STATE MEDICAL ASSISTANCE PROGRAM ARISING FROM NONPROFIT HOSPITAL PURCHASES OF 340B DRUGS AND NONPROFIT HOSPITAL PRACTICES RELATED TO PARTICIPATION IN T340B PROGRAM .
(2) BEGINNINGNOVEMBER 1,2026,ANDANNUALLYTHEREAFTER , THEJOINTBUDGETCOMMITTEESHALLISSUEAREQUESTFORINFORMATION TO THE DEPARTMENT OF PERSONNEL AND ADMINISTRATION ON ANY LOSSESANDCOSTSTOTHESTATEMEDICALASSISTANCEPROGRAMARISING FROM NONPROFIT HOSPITAL PURCHASES OF340B DRUGS AND NONPROFIT HOSPITALPRACTICESRELATEDTOPARTICIPATIONINTHE 340BPROGRAM , INCLUDING THE TOTAL AGGREGATE VALUE OF LOST MANUFACTURER REBATE REVENUE .
25.5-2.5-308.nforcement.
(1) AVIOLATION OF THIS PAR3 IS CONSIDERED AN UNFAIR AND DECEPTIVE TRADE PRACTICE PURSUANT TO SECTION 6-1-105AND SUBJECT TO ENFORCEMENT BY THE ATTORNEY GENERAL .
(2) TEATTORNEYGENERALMAYINVESTIGATEANDBRINGACIVIL ACTION AGAINST THE NONPROFIT HOSPITAL IN A COURT OF COMPETENT JURISDICTION FOR A VIOLATION OF THIS P3.T (3) THE ATTORNEY GENERAL SHALL ESTABLISH A PROCESS FOR INDIVIDUALS TO REPORT SUSPECTED VIOLATIONS OF THIS PA3TO THE ATTORNEY GENERAL AND A PROCESS FOR THE ATTORNEY GENERAL TO -7- 124 PROMPTLYANDFULLYINVESTIGATEREPORTSOFSUSPECTEDVIOLATIONS .
SECTION2.
InColoradoRevisedStatutes,6-1-105,add(1)(iiii) as follows:
6-1-105.
Unfair or deceptive trade practices - definitions.
(1) Aperson engages inadeceptivetradepracticewhen,inthecourseof the person's business, vocation, or occupation, the person:
(iiii) VOLATES PART 3OF ARTICLE 2.5OF TITLE 25.5.
SECTION 3.
In Colorado Revised Statutes, 24-31-101, amend (1)(i)(XXII) and (1)(i)(XXIII);
and add (1)(i)(XXIV) as follows:
24-31-101.
Powers and duties of attorney general.
(1) The attorney general:
(i) Mayindependentlyinitiateandbringcivilandcriminalactions to enforce state laws, including actions brought pursuant to:
(XXII) Part 14 of article 12 of title 38;
and (XXIII) Section 24-34-806;AND (XXIV) P ART 3OF ARTICLE 2.5OF TITLE25.5.
SECTION 4.
Safety clause.
The general assembly finds, determines, and declares that this act is necessary for the immediate preservationofthepublicpeace,health,orsafetyorforappropriationsfor the support and maintenance of the departments of the state and state institutions.
-8- 124