Second Regular Session
Seventy-third General Assembly
STATE OF COLORADO
ENGROSSED
This Version Includes All Amendments Adopted
on Second Reading in the House of Introduction
LLS NO. 22-0243.02 Christy Chase x2008
HOUSE BILL 22-1122
House Committees Senate Committees
Health & Insurance
Appropriations
A BILL FOR AN ACT
C
ONCERNING PROHIBITING CERT AIN PRACTICES BY ENTITIES101
OBLIGATED TO PAY FOR PRESCRIPTION DRUG
BENEFITS, AND, IN102
CONNECTION THEREWITH , MAKING AN APPROPRIATION .103
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
.)
For contracts between a pharmacy benefit manager (PBM) and a
pharmacy entered into or renewed on or after January 1, 2023, section 1
of the bill prohibits the PBM or its representative from reimbursing a
pharmacy for a prescription drug in an amount less than the national
average drug acquisition cost for the prescription drug.
HOUSE
Amended 2nd Reading
April 19, 2022
HOUSE SPONSORSHIP
Will and Lindsay, Lontine
SENATE SPONSORSHIP
Jaquez Lewis,
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing statute.
Dashes through the words indicate deletions from existing statute. Section 2 enacts the "Colorado 340B Prescription Drug Program
Anti-discrimination Act" (act), which prohibits health insurers, PBMs,
and other third-party payers (third-party payers) from discriminating
against entities, including pharmacies, participating in the federal 340B
drug pricing program (340B covered entity). Specifically, the bill
prohibits a third-party payer from:
! Refusing to reimburse a 340B covered entity for dispensing
340B drugs, imposing additional requirements or
restrictions on 340B covered entities, or reimbursing a
340B covered entity for a 340B drug at a rate lower than
the amount paid for the same drug to pharmacies that are
not 340B covered entities;
! Assessing a fee, charge back, or other adjustment against
a 340B covered entity, or restricting a 340B covered
entity's access to the third-party payer's pharmacy network,
because the covered entity participates in the 340B drug
pricing program;
! Requiring a 340B covered entity to contract with a specific
pharmacy or health coverage plan in order to access the
third-party payer's pharmacy network;
! Imposing a restriction or an additional charge on a patient
who obtains a prescription drug from a 340B covered
entity; or
! Restricting the methods by which a 340B covered entity
may dispense or deliver 340B drugs.
Section 2 makes a violation of the act an unfair or deceptive act or
practice in the business of insurance and authorizes the commissioner of
insurance to adopt rules to implement the act.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, 10-16-122.1, add2
(3.5), (5)(a.5), and (5)(h) as follows:3
10-16-122.1. Contracts between PBMs and pharmacies -4
carrier submit list of PBMs - prohibited practices - exception - short5
title - definitions. (3.5)
(a) FOR ANY CONTRACT ENTERED INTO OR6
RENEWED ON OR AFTER JANUARY 1, 2023, BETWEEN A PBM AND A7
PHARMACY DESCRIBED IN SUBSECTION (3.5)(b) OF THIS SECTION, A PBM8
OR THE REPRESENTATIVE OF THE PBM SHALL NOT REIMBURSE A9
1122-2- PHARMACY FOR A PRESCRIPTION DRUG IN AN AMOUNT THAT IS LESS THAN :1
(I) THE NATIONAL AVERAGE DRUG ACQUISITION COST FOR THE2
PRESCRIPTION DRUG AT THE TIME THE DRUG IS ADMINISTERED OR3
DISPENSED, PLUS A PROFESSIONAL DISPENSING FEE; OR4
(II) IF THE NATIONAL AVERAGE DRUG ACQUISITION COST IS NOT5
AVAILABLE AT THE TIME A PRESCRIPTION DRUG IS ADMINISTERED OR6
DISPENSED, THE WHOLESALE ACQUISITION COST OF THE DRUG , PLUS A7
PROFESSIONAL DISPENSING FEE.8
(b) THIS SUBSECTION (3.5) APPLIES ONLY TO A CONTRACT9
BETWEEN A PBM AND A PHARMACY THAT IS:10
(I) LOCATED IN A COUNTY WITH A POPULATION OF FEWER THAN11
ONE HUNDRED THOUSAND PEOPLE ; AND12
(II) OWNED BY A LICENSED PHARMACIST .13
(5) As used in this section and section 10-16-122.9, unless the14
context otherwise requires:15
(a.5) "N
ATIONAL AVERAGE DRUG ACQUISITION COST " MEANS THE16
DRUG PRICING BENCHMARK DEVELOPED BY THE FEDERAL CENTERS FOR17
MEDICARE AND MEDICAID SERVICES IN THE UNITED STATES DEPARTMENT18
OF HEALTH AND HUMAN SERVICES , WHICH BENCHMARK IS BASED ON DATA19
COLLECTED FROM A MONTHLY NATIONWIDE SURVEY OF RETAIL20
COMMUNITY PHARMACY OUTPATIENT DRUG PRICES .21
(h) "W
HOLESALE ACQUISITION COST " HAS THE MEANING SET22
FORTH IN 42 U.S.C. SEC. 1395w-3a (c)(6)(B).23
SECTION 2. In Colorado Revised Statutes, add part 15 to article24
16 of title 10 as follows:25
PART 1526
340B PRESCRIPTION DRUG PROGRAM 27
1122
-3- ANTI-DISCRIMINATION ACT 1
10-16-1501. Short title. T
HE SHORT TITLE OF THIS PART 15 IS THE2
"C
OLORADO 340B PRESCRIPTION DRUG PROGRAM ANTI-DISCRIMINATION3
A
CT".4
10-16-1502. Legislative declaration. (1) T
HE GENERAL5
ASSEMBLY DECLARES THAT THE PURPOSE OF THIS PART 15 IS TO:6
(a) P
ROHIBIT A PHARMACY BENEFIT MANAGER OR CARRIER FROM7
IMPOSING FEES, CHARGE BACKS, OR OTHER ADJUSTMENTS ON COVERED8
ENTITIES OR CONTRACT PHARMACIES BASED ON THEIR PARTICIPATION IN9
THE 340B DRUG PRICING PROGRAM;10
(b) P
ROHIBIT A PHARMACY BENEFIT MANAGER OR CARRIER FROM11
REQUIRING A CLAIM FOR A DRUG TO INCLUDE A MODIFIER TO INDICATE12
THAT THE DRUG IS A 340B DRUG UNLESS THE CLAIM IS FOR PAYMENT ,13
DIRECTLY OR INDIRECTLY, BY THE MEDICAID PROGRAM; AND14
(c) P
ROVIDE FOR POWERS AND DUTIES OF THE COMMISSIONER AND15
THE DIVISION.16
10-16-1503. Definitions. A
S USED IN THIS PART 15, UNLESS THE17
CONTEXT OTHERWISE REQUIRES :18
(1) "340B
COVERED ENTITY" MEANS A COVERED ENTITY , AS19
DEFINED IN SECTION 340B (a)(4) OF THE FEDERAL "PUBLIC HEALTH20
S
ERVICE ACT", 42 U.S.C. SEC. 256b (a)(4), AS AMENDED.
21
(2) "340B
DRUG" MEANS A DRUG PURCHASED THROUGH THE 340B22
DRUG PRICING PROGRAM BY A 340B COVERED ENTITY.23
(3) "340B
DRUG PRICING PROGRAM" OR "340B PROGRAM" MEANS24
THE PROGRAM DESCRIBED IN 42 U.S.C. SEC. 256b.25
(4) "C
ONTRACT PHARMACY " MEANS A PHARMACY OPERATING26
UNDER CONTRACT WITH A 340B COVERED ENTITY TO PROVIDE DISPENSING27
1122
-4- SERVICES TO THE 340B COVERED ENTITY AS DESCRIBED IN 75 FED. REG.1
10272
(2010) OR ANY SUPERSEDING GUIDANCE .2
(5) (a) "D
RUG COVERAGE" MEANS COVERAGE OR PAYMENT FOR A 3
PRESCRIPTION DRUG DISPENSED BY A PHARMACY TO A PATIENT PURSUANT4
TO:5
(I) A
HEALTH COVERAGE PLAN; 6
(II) A
MANAGED CARE ORGANIZATION , AS DEFINED IN SECTION7
25.5-5-403
(5); OR8
(III) A
NY OTHER CONTRACTUAL OR OTHER LEGAL OBLIGATION TO9
PROVIDE COVERAGE OR PAYMENT FOR A PRESCRIPTION DRUG DISPENSED10
BY A PHARMACY TO A PATIENT.11
(b) "D
RUG COVERAGE" DOES NOT INCLUDE:12
(I) R
EIMBURSEMENT FOR COVERED OUTPATIENT DRUGS , AS THAT13
TERM IS DEFINED IN SECTION 42 U.S.C. SEC. 1396r-8 (k)(2), ON A14
FEE-FOR-SERVICE BASIS UNDER THE MEDICAID PROGRAM ; OR15
(II) A
NY AMOUNTS PAID BY AN INDIVIDUAL ON THE INDIVIDUAL 'S16
OWN BEHALF OR ON BEHALF OF ANOTHER INDIVIDUAL WITHOUT A17
CONTRACTUAL OR LEGAL OBLIGATION TO DO SO .18
(6)
"MEDICAID PROGRAM" MEANS THE MEDICAL ASSISTANCE19
PROGRAM ESTABLISHED PURSUANT TO ARTICLES 4 TO 6 OF TITLE 25.5.20
(7) (a) "T
HIRD PARTY" MEANS:21
(I) A
CARRIER OR PHARMACY BENEFIT MANAGER THAT PROVIDES22
OR MANAGES DRUG COVERAGE UNDE R A HEALTH COVERAGE PLAN ;
OR23
(II) A
SYSTEM OF HEALTH INSURANCE FOR STATE OR LOCAL24
GOVERNMENT EMPLOYEES , THEIR DEPENDENTS, AND RETIREES, INCLUDING25
A GROUP BENEFIT PLAN, AS DEFINED IN SECTION 24-50-603 (9), AND A26
GROUP HEALTH CARE PROGRAM DESIGNED PURSUANT TO SECTION
27
1122
-5- 24-51-1202.1
(b) "T
HIRD PARTY" DOES NOT
INCLUDE:2
(I) AN INSURER THAT PROVIDES COVERAGE UNDER A POLICY OF3
PROPERTY AND CASUALTY INSURANCE; OR4
(II) AN INSURER OR ENTITY THAT PROVIDES HEALTH COVERAGE ,5
BENEFITS, OR COVERAGE OF PRESCRIPTION DRUGS AS PART OF COVERAGE6
REQUIRED UNDER THE "WORKERS' COMPENSATION ACT OF COLORADO",7
ARTICLES 40 TO 47 OF TITLE 8, OR WORKERS' COMPENSATION COVERAGE8
REQUIRED UNDER FEDERAL LAW .9
10-16-1504. Applicability - exclusions. (1) THIS PART 1510
APPLIES TO ANY THIRD PARTY THAT REIMBURSES 340B COVERED ENTITIES11
OR CONTRACT PHARMACIES IN THIS STATE .12
(2) NOTHING IN THIS PART 15:13
(a) PROHIBITS A THIRD PARTY FROM MAINTAINING DIFFERENTIAL14
REIMBURSEMENT RATES FOR PARTICIPATING AND NONPARTICIPATING15
PROVIDERS, SO LONG AS THE RATES ARE NOT DETERMINED ON THE BASIS16
OF A PROVIDER'S STATUS AS A 340B COVERED ENTITY OR CONTRACT17
PHARMACY;18
(b) AFFECTS A THIRD PARTY'S ABILITY TO ESTABLISH COVERAGE19
GUIDELINES AND EXCLUDE SPECIFIC DRUGS FROM ITS PRESCRIPTION DRUG20
FORMULARIES, SO LONG AS THE GUIDELINES AND EXCLUSIONS ARE NOT21
DETERMINED ON THE BASIS OF A PROVIDER'S STATUS AS A 340B COVERED22
ENTITY OR CONTRACT PHARMACY OR OF A DRUG'S STATUS AS A 340B23
DRUG; OR24
(c) REQUIRES A THIRD PARTY TO CONTRACT WITH A 340B25
COVERED ENTITY OR CONTRACT PHARMACY FOR PURPOSES OF26
PARTICIPATING IN THE THIRD PARTY'S NETWORK, SO LONG AS THE THIRD27
1122
-6- PARTY'S CONTRACTING DECISIONS ARE NOT DETERMINED ON THE BASIS OF1
A PROVIDER'S STATUS AS A 340B COVERED ENTITY OR CONTRACT2
PHARMACY.3
10-16-1505. Prohibition on 340B discrimination. (1) A
THIRD4
PARTY THAT REIMBURSES A 340B COVERED ENTITY
OR CONTRACT5
PHARMACY FOR 340B DRUGS SHALL NOT:6
(a) R
EIMBURSE THE 340B COVERED ENTITY
OR CONTRACT7
PHARMACY FOR A PHARMACY -DISPENSED DRUG AT A RATE LOWER THAN8
THE AMOUNT PAID FOR THE SAME DRUG TO PHARMACIES SIMILAR IN9
PRESCRIPTION VOLUME THAT ARE NOT 340B COVERED ENTITIES OR10
CONTRACT PHARMACIES ;11
(b) A
SSESS ANY FEE, CHARGE BACK, OR OTHER ADJUSTMENT12
AGAINST THE 340B COVERED ENTITY
OR CONTRACT PHARMACY ON THE13
BASIS THAT THE 340B COVERED ENTITY OR CONTRACT PHARMACY14
PARTICIPATES IN THE 340B PROGRAM;15
(c) R
ESTRICT ACCESS TO THE THIRD PARTY'S PHARMACY NETWORK16
FOR ANY 340B COVERED ENTITY
OR CONTRACT PHARMACY ON THE BASIS17
THAT THE 340B COVERED ENTITY OR CONTRACT PHARMACY PARTICIPATES18
IN THE 340B PROGRAM;19
(d) R
EQUIRE THE 340B COVERED ENTITY
OR CONTRACT20
PHARMACY TO ENTER INTO A CONTRACT WITH A SPECIFIC PHARMACY OR21
HEALTH COVERAGE PLAN TO PARTICIPATE IN THE THIRD PARTY 'S22
PHARMACY NETWORK ;23
(e) C
REATE A RESTRICTION OR AN ADDITIONAL CHARGE ON A24
PATIENT WHO CHOOSES TO RECEIVE DRUGS FROM A 340B COVERED ENTITY25 OR CONTRACT PHARMACY ; 26
(f) R
ESTRICT THE METHODS BY WHICH A 340B COVERED ENTITY27
1122
-7- OR CONTRACT PHARMACY MAY DISPENSE OR DELIVER 340B DRUGS;1
(g) R
EFUSE TO PROVIDE REIMBURSEMENT OR COVERAGE FOR 340B2
DRUGS; OR3
(h) C
REATE ANY ADDITIONAL REQUIREMENTS OR RESTRICTIONS ON4
A 340B COVERED ENTITY
OR CONTRACT PHARMACY .5
(2) U
NLESS A CLAIM IS FOR PAYMENT, DIRECTLY OR INDIRECTLY,6
BY THE MEDICAID PROGRAM , A PHARMACY BENEFIT MANAGER OR ANY7
OTHER THIRD PARTY THAT REIMBURSES A 340B COVERED ENTITY
OR8
CONTRACT PHARMACY FOR 340B DRUGS SHALL NOT REQUIRE A CLAIM FOR9
A 340B DRUG TO INCLUDE:10
(a) A
MODIFIER TO INDICATE THAT THE DRUG IS A 340B DRUG; OR11
(b) A
NY OTHER METHOD OF IDENTIFYING THE CLAIM FOR A 340B12
DRUG.13
(3) W
ITH RESPECT TO A PATIENT ELIGIBLE TO RECEIVE 340B14
DRUGS, A PHARMACY BENEFIT MANAGER OR ANY OTHER THIRD PARTY15
THAT MAKES PAYMENT FOR THE DRUGS SHALL NOT DISCRIMINATE16
AGAINST A 340B COVERED ENTITY
OR CONTRACT PHARMACY IN A MANNER17
THAT PREVENTS OR INTERFERES WITH THE PATIENT 'S CHOICE TO RECEIVE18
THE DRUGS FROM THE 340B COVERED ENTITY OR CONTRACT PHARMACY. 19
10-16-1506. Enforcement - rules. (1) A
THIRD PARTY THAT20
VIOLATES THIS PART 15 ENGAGES IN AN UNFAIR OR DECEPTIVE ACT OR21
PRACTICE IN THE BUSINESS OF INSURANCE UNDER SECTION 10-3-110422
(1)(tt),
AND THE ACT OF THE THIRD PARTY THAT VIOLATES THIS PART 15 23
IS VOID AND UNENFORCEABLE.24
(2) T
HE COMMISSIONER MAY ADOPT RULES AS NECESSARY TO25
IMPLEMENT THIS PART 15. 26
SECTION 3. In Colorado Revised Statutes, 10-3-1104, add27
1122
-8- (1)(tt) as follows:1
10-3-1104. Unfair methods of competition - unfair or deceptive2
practices. (1) The following are defined as unfair methods of3
competition and unfair or deceptive acts or practices in the business of4
insurance:5
(tt) A
VIOLATION OF PART 15 OF ARTICLE 16 OF THIS TITLE 10.6
SECTION 4. Appropriation. For the 2022-23 state fiscal year,7
$17,109 is appropriated to the department of regulatory agencies for use8
by the division of insurance. This appropriation is from the division of9
insurance cash fund created in section 10-1-103 (3), C.R.S., and is based10
on an assumption that the division will require an additional 0.3 FTE. To11
implement this act, the division may use this appropriation for personal12
services.13
SECTION 5. Act subject to petition - effective date. This act14
takes effect at 12:01 a.m. on the day following the expiration of the15
ninety-day period after final adjournment of the general assembly; except16
that, if a referendum petition is filed pursuant to section 1 (3) of article V17
of the state constitution against this act or an item, section, or part of this18
act within such period, then the act, item, section, or part will not take19
effect unless approved by the people at the general election to be held in20
November 2022 and, in such case, will take effect on the date of the21
official declaration of the vote thereon by the governor.22
1122
-9-