Prohibit Restrictions on 340B Drugs

Under the federal 340B drug pricing program (340B program), a covered entity, including certain hospitals, programs, and federally qualified health centers (covered entity), that serves patients with low income receives discounted outpatient drugs (340B drugs) from manufacturers that participate in the federal medicaid and medicare programs.

Unless the receipt of 340B drugs is prohibited by the federal department of health and human services, the bill prohibits a manufacturer, wholesaler, third-party logistics provider, or repackager in this state, or an agent, contractor, or affiliate of those entities, including an entity that collects or processes health information, from directly or indirectly denying, restricting, prohibiting, discriminating against, or otherwise limiting the acquisition of a 340B drug by, or delivery of a 340B drug to, a covered entity, a pharmacy contracted with a covered entity, or a location otherwise authorized by a covered entity to receive and dispense 340B drugs.

The bill also prohibits a manufacturer from directly or indirectly requiring a covered entity, a pharmacy contracted with a covered entity, or any other location authorized to receive 340B drugs by a covered entity to submit any health information, claims or utilization data, or other specified data that does not relate to a claim submitted to certain federal health care programs, unless the data is voluntarily furnished or required to be furnished under federal law.

The bill defines "340B savings" as the difference between the aggregated market rate costs and the aggregated acquisition costs for 340 B drugs. Certain hospital covered entities are specifically prohibited from using 340B savings for more than a certain percentage of compensation and expenses for the hospital's board of directors; tax penalties or fines; advertising or public relations to promote the hospital; lobbying expenses; travel, food and beverages, and lodging for the hospital's board; or gifts or entertainment expenses.

A violation of the prohibitions in the bill is an unfair or deceptive trade practice under the "Colorado Consumer Protection Act" (act), and the violator is subject to the enforcement provisions and penalties contained in that act. The attorney general may investigate and enforce the provisions of the bill, as well as a business harmed by a violation of the provisions of the bill. In addition, a person regulated by the state board of pharmacy (pharmacy board) that violates the provisions of the bill may be subject to discipline by the pharmacy board against the person's license, certification, or registration, as well as other penalties.

The bill requires a certain hospital covered entity that is a hospital entities to annually post on its their public-facing websites information concerning the annual, estimated, aggregate financial benefit reported 340B savings to the hospital covered entity resulting from its ability to acquire pharmaceuticals at a discount through the 340B program and a description of how the hospital covered entity uses 340B savings from participation in the 340B program. Further, certain hospital covered entities shall report on costs relating to providing charity care.

(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)

(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)