Second Regular Session
Seventy-third General Assembly
STATE OF COLORADO
REVISED
This Version Includes All Amendments Adopted
on Second Reading in the Second House
LLS NO. 22-0243.02 Christy Chase x2008
HOUSE BILL 22-1122
House Committees Senate Committees
Health & Insurance Health & Human Services
Appropriations 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.
SENATE
Amended 2nd Reading
May 6, 2022
HOUSE
3rd Reading Unamended
April 22, 2022
HOUSE
Amended 2nd Reading
April 19, 2022
HOUSE SPONSORSHIP
Will and Lindsay, Lontine, Bernett, Esgar, Jodeh, Kipp, Ricks, Weissman
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
2
SECTION 1. In Colorado Revised Statutes, add part 15 to article3
16 of title 10 as follows:4
PART 155
340B PRESCRIPTION DRUG PROGRAM 6
ANTI-DISCRIMINATION ACT 7
10-16-1501. Short title. T
HE SHORT TITLE OF THIS PART 15 IS THE8
"C
OLORADO 340B PRESCRIPTION DRUG PROGRAM ANTI-DISCRIMINATION9
1122-2- ACT".1
10-16-1502. Legislative declaration. (1) T
HE GENERAL2
ASSEMBLY DECLARES THAT THE PURPOSE OF THIS PART 15 IS TO:3
(a) P
ROHIBIT A PHARMACY BENEFIT MANAGER OR CARRIER FROM4
IMPOSING FEES, CHARGE BACKS, OR OTHER ADJUSTMENTS ON COVERED5
ENTITIES OR CONTRACT PHARMACIES BASED ON THEIR PARTICIPATION IN6
THE 340B DRUG PRICING PROGRAM;7
(b) P
ROHIBIT A PHARMACY BENEFIT MANAGER OR CARRIER FROM8
REQUIRING A CLAIM FOR A DRUG TO INCLUDE A MODIFIER TO INDICATE9
THAT THE DRUG IS A 340B DRUG UNLESS THE CLAIM IS FOR PAYMENT ,10
DIRECTLY OR INDIRECTLY, BY THE MEDICAID PROGRAM; AND11
(c) P
ROVIDE FOR POWERS AND DUTIES OF THE COMMISSIONER AND12
THE DIVISION.13
10-16-1503. Definitions. A
S USED IN THIS PART 15, UNLESS THE14
CONTEXT OTHERWISE REQUIRES :15
(1) "340B
COVERED ENTITY" MEANS A COVERED ENTITY , AS16
DEFINED IN SECTION 340B (a)(4) OF THE FEDERAL "PUBLIC HEALTH17
S
ERVICE ACT", 42 U.S.C. SEC. 256b (a)(4), AS AMENDED.
18
(2) "340B
DRUG" MEANS A DRUG PURCHASED THROUGH THE 340B19
DRUG PRICING PROGRAM BY A 340B COVERED ENTITY.20
(3) "340B
DRUG PRICING PROGRAM" OR "340B PROGRAM" MEANS21
THE PROGRAM DESCRIBED IN 42 U.S.C. SEC. 256b.22
(4) "C
ONTRACT PHARMACY " MEANS A PHARMACY OPERATING23
UNDER CONTRACT WITH A 340B COVERED ENTITY TO PROVIDE DISPENSING24
SERVICES TO THE 340B COVERED ENTITY AS DESCRIBED IN 75 FED. REG.25
10272
(2010) OR ANY SUPERSEDING GUIDANCE .26
(5) (a) "D
RUG COVERAGE" MEANS COVERAGE OR PAYMENT FOR A27
1122
-3- PRESCRIPTION DRUG DISPENSED BY A PHARMACY TO A PATIENT PURSUANT1
TO:2
(I) A
HEALTH COVERAGE PLAN; 3
(II) A
MANAGED CARE ORGANIZATION , AS DEFINED IN SECTION4
25.5-5-403
(5); OR5
(III) A
NY OTHER CONTRACTUAL OR OTHER LEGAL OBLIGATION TO6
PROVIDE COVERAGE OR PAYMENT FOR A PRESCRIPTION DRUG DISPENSED7
BY A PHARMACY TO A PATIENT.8
(b) "D
RUG COVERAGE" DOES NOT INCLUDE:9
(I) R
EIMBURSEMENT FOR COVERED OUTPATIENT DRUGS , AS THAT10
TERM IS DEFINED IN SECTION 42 U.S.C. SEC. 1396r-8 (k)(2), ON A11
FEE-FOR-SERVICE BASIS UNDER THE MEDICAID PROGRAM ; OR12
(II) A
NY AMOUNTS PAID BY AN INDIVIDUAL ON THE INDIVIDUAL 'S13
OWN BEHALF OR ON BEHALF OF ANOTHER INDIVIDUAL WITHOUT A14
CONTRACTUAL OR LEGAL OBLIGATION TO DO SO .15
(6)
"MEDICAID PROGRAM" MEANS THE MEDICAL ASSISTANCE16
PROGRAM ESTABLISHED PURSUANT TO ARTICLES 4 TO 6 OF TITLE 25.5.17
(7) (a) "T
HIRD PARTY" MEANS:18
(I) A
CARRIER OR PHARMACY BENEFIT MANAGER THAT PROVIDES19
OR MANAGES DRUG COVERAGE UNDE R A HEALTH COVERAGE PLAN ;
OR20
(II) A
SYSTEM OF HEALTH INSURANCE FOR STATE OR LOCAL21
GOVERNMENT EMPLOYEES , THEIR DEPENDENTS, AND RETIREES, INCLUDING22
A GROUP BENEFIT PLAN, AS DEFINED IN SECTION 24-50-603 (9), AND A23
GROUP HEALTH CARE PROGRAM DESIGNED PURSUANT TO SECTION
24
24-51-1202.25
(b) "T
HIRD PARTY" DOES NOT
INCLUDE:26
(I) AN INSURER THAT PROVIDES COVERAGE UNDER A POLICY OF27
1122
-4- PROPERTY AND CASUALTY INSURANCE; OR1
(II) AN INSURER OR ENTITY THAT PROVIDES HEALTH COVERAGE ,2
BENEFITS, OR COVERAGE OF PRESCRIPTION DRUGS AS PART OF COVERAGE3
REQUIRED UNDER THE "WORKERS' COMPENSATION ACT OF COLORADO",4
ARTICLES 40 TO 47 OF TITLE 8, OR WORKERS' COMPENSATION COVERAGE5
REQUIRED UNDER FEDERAL LAW .6
10-16-1504. Applicability - exclusions. (1) THIS PART 157
APPLIES TO ANY THIRD PARTY THAT REIMBURSES 340B COVERED ENTITIES8
OR CONTRACT PHARMACIES IN THIS STATE .9
(2) NOTHING IN THIS PART 15:10
(a) PROHIBITS A THIRD PARTY FROM MAINTAINING DIFFERENTIAL11
REIMBURSEMENT RATES FOR PARTICIPATING AND NONPARTICIPATING12
PROVIDERS, SO LONG AS THE RATES ARE NOT DETERMINED ON THE BASIS13
OF A PROVIDER'S STATUS AS A 340B COVERED ENTITY OR CONTRACT14
PHARMACY;15
(b) AFFECTS A THIRD PARTY'S ABILITY TO ESTABLISH COVERAGE16
GUIDELINES AND EXCLUDE SPECIFIC DRUGS FROM ITS PRESCRIPTION DRUG17
FORMULARIES, SO LONG AS THE GUIDELINES AND EXCLUSIONS ARE NOT18
DETERMINED ON THE BASIS OF A PROVIDER'S STATUS AS A 340B COVERED19
ENTITY OR CONTRACT PHARMACY OR OF A DRUG'S STATUS AS A 340B20
DRUG; OR21
(c) REQUIRES A THIRD PARTY TO CONTRACT WITH A 340B22
COVERED ENTITY OR CONTRACT PHARMACY FOR PURPOSES OF23
PARTICIPATING IN THE THIRD PARTY'S NETWORK, SO LONG AS THE THIRD24
PARTY'S CONTRACTING DECISIONS ARE NOT DETERMINED ON THE BASIS OF25
A PROVIDER'S STATUS AS A 340B COVERED ENTITY OR CONTRACT26
PHARMACY.27
1122
-5- 10-16-1505. Prohibition on 340B discrimination. (1) A THIRD1
PARTY THAT REIMBURSES A 340B COVERED ENTITY OR CONTRACT2
PHARMACY FOR 340B DRUGS SHALL NOT:3
(a) R
EIMBURSE THE 340B COVERED ENTITY
OR CONTRACT4
PHARMACY FOR A PHARMACY -DISPENSED DRUG AT A RATE LOWER THAN5
THE AMOUNT PAID FOR THE SAME DRUG TO PHARMACIES SIMILAR IN6
PRESCRIPTION VOLUME THAT ARE NOT 340B COVERED ENTITIES OR7
CONTRACT PHARMACIES ;8
(b) A
SSESS ANY FEE, CHARGE BACK, OR OTHER ADJUSTMENT9
AGAINST THE 340B COVERED ENTITY
OR CONTRACT PHARMACY ON THE10
BASIS THAT THE 340B COVERED ENTITY OR CONTRACT PHARMACY11
PARTICIPATES IN THE 340B PROGRAM;12
(c) R
ESTRICT ACCESS TO THE THIRD PARTY'S PHARMACY NETWORK13
FOR ANY 340B COVERED ENTITY
OR CONTRACT PHARMACY ON THE BASIS14
THAT THE 340B COVERED ENTITY OR CONTRACT PHARMACY PARTICIPATES15
IN THE 340B PROGRAM;16
(d) R
EQUIRE THE 340B COVERED ENTITY
OR CONTRACT17
PHARMACY TO ENTER INTO A CONTRACT WITH A SPECIFIC PHARMACY OR18
HEALTH COVERAGE PLAN TO PARTICIPATE IN THE THIRD PARTY 'S19
PHARMACY NETWORK ;20
(e) C
REATE A RESTRICTION OR AN ADDITIONAL CHARGE ON A21
PATIENT WHO CHOOSES TO RECEIVE DRUGS FROM A 340B COVERED ENTITY22 OR CONTRACT PHARMACY ; 23
(f) R
ESTRICT THE METHODS BY WHICH A 340B COVERED ENTITY24OR CONTRACT PHARMACY MAY DISPENSE OR DELIVER 340B DRUGS;25
(g) R
EFUSE TO PROVIDE REIMBURSEMENT OR COVERAGE FOR 340B26
DRUGS; OR27
1122
-6- (h) CREATE ANY ADDITIONAL REQUIREMENTS OR RESTRICTIONS ON1
A 340B COVERED ENTITY OR CONTRACT PHARMACY .2
(2) U
NLESS A CLAIM IS FOR PAYMENT, DIRECTLY OR INDIRECTLY,3
BY THE MEDICAID PROGRAM , A PHARMACY BENEFIT MANAGER OR ANY4
OTHER THIRD PARTY THAT REIMBURSES A 340B COVERED ENTITY
OR5
CONTRACT PHARMACY FOR 340B DRUGS SHALL NOT REQUIRE A CLAIM FOR6
A 340B DRUG TO INCLUDE:7
(a) A
MODIFIER TO INDICATE THAT THE DRUG IS A 340B DRUG; OR8
(b) A
NY OTHER METHOD OF IDENTIFYING THE CLAIM FOR A 340B9
DRUG.10
(3) W
ITH RESPECT TO A PATIENT ELIGIBLE TO RECEIVE 340B11
DRUGS, A PHARMACY BENEFIT MANAGER OR ANY OTHER THIRD PARTY12
THAT MAKES PAYMENT FOR THE DRUGS SHALL NOT DISCRIMINATE13
AGAINST A 340B COVERED ENTITY
OR CONTRACT PHARMACY IN A MANNER14
THAT PREVENTS OR INTERFERES WITH THE PATIENT 'S CHOICE TO RECEIVE15
THE DRUGS FROM THE 340B COVERED ENTITY OR CONTRACT PHARMACY. 16
10-16-1506. Enforcement - rules. (1) A
THIRD PARTY THAT17
VIOLATES THIS PART 15 ENGAGES IN AN UNFAIR OR DECEPTIVE ACT OR18
PRACTICE IN THE BUSINESS OF INSURANCE UNDER SECTION 10-3-110419
(1)(tt),
AND THE ACT OF THE THIRD PARTY THAT VIOLATES THIS PART 15 IS20
VOID AND UNENFORCEABLE .21
(2) T
HE COMMISSIONER MAY ADOPT RULES AS NECESSARY TO22
IMPLEMENT THIS PART 15. 23
SECTION 2.
In Colorado Revised Statutes, 10-3-1104, add24
(1)(tt) as follows:25
10-3-1104. Unfair methods of competition - unfair or deceptive26
practices. (1) The following are defined as unfair methods of27
1122
-7- competition and unfair or deceptive acts or practices in the business of1
insurance:2
(tt) A
VIOLATION OF PART 15 OF ARTICLE 16 OF THIS TITLE 10.3
SECTION 3. Appropriation. For the 2022-23 state fiscal year,4
$17,109 is appropriated to the department of regulatory agencies for use5
by the division of insurance. This appropriation is from the division of6
insurance cash fund created in section 10-1-103 (3), C.R.S., and is based7
on an assumption that the division will require an additional 0.3 FTE. To8
implement this act, the division may use this appropriation for personal9
services.10
SECTION 4. Act subject to petition - effective date. This act11
takes effect at 12:01 a.m. on the day following the expiration of the12
ninety-day period after final adjournment of the general assembly; except13
that, if a referendum petition is filed pursuant to section 1 (3) of article V14
of the state constitution against this act or an item, section, or part of this15
act within such period, then the act, item, section, or part will not take16
effect unless approved by the people at the general election to be held in17
November 2022 and, in such case, will take effect on the date of the18
official declaration of the vote thereon by the governor.19
1122
-8-