SB 25-071
Fiscal Note
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
SB 25-071: PROHIBIT RESTRICTIONS ON 340B DRUGS
Prime Sponsors:
Sen. Michaelson Jenet; Rich
Rep. Martinez; Taggart
Published for: Senate Health & Human Services
Drafting number: LLS 25-0361
Fiscal Analyst:
Brendan Fung, 303-866-4781
brendan.fung@coleg.gov
Version: Initial Fiscal Note
Date: February 3, 2025
Fiscal note status: This fiscal note reflects the introduced bill.
Summary Information
Overview. The bill prohibits manufacturers from imposing restrictions on 340B Drug Pricing Program
facilities and requires covered hospitals to publish certain information.
Types of impacts. The bill is projected to affect the following areas on an ongoing basis:
Minimal State Workload
State Revenue
Local Government
Appropriations. No appropriation is required.
Table 1
State Fiscal Impacts
Type of Impact
Budget Year
FY 2025-26
Out Year
FY 2026-27
State Revenue $0 $0
State Expenditures $0 $0
Transferred Funds $0 $0
Change in TABOR Refunds $0 $0
Change in State FTE 0.0 FTE 0.0 FTE
Page 2
February 3, 2025 SB 25-071
Summary of Legislation
The bill prohibits pharmaceutical manufacturers and other related entities from imposing
limitations or restrictions on covered hospitals, contract pharmacies, federally qualified health
centers, or other facilities participating in the federal 340B Drug Pricing Program. Additionally,
manufacturers may not require covered entities or pharmacies to submit health information
unless it is directly related to a claim under a federal health care program. Lastly, covered
hospitals are required to annually publish their total financial benefit from participating in the
340B program and how these savings are utilized.
The bill makes noncompliance with these provisions a deceptive trade practice. Individuals
regulated by the State Board of Pharmacy who violate these provisions may also face
disciplinary action.
Background
The 340B Drug Pricing Program is a federal program that requires drug manufacturers
participating in Medicaid to provide outpatient drugs to covered entities at a discount. To
participate in the 340B program, covered entities must register and comply with all program
requirements administered by the federal Health Resources & Services Administration. In
Colorado, an estimated 68 hospitals and 20 federally qualified health centers participate in the
340B program.
State Revenue
Starting in FY 2025-26, the bill may increase state revenue from civil penalties and court filing
fees by a minimal amount.
Civil Penalties
Under the Colorado Consumer Protection Act, a person committing a deceptive trade practice
may be subject to a civil penalty of up to $20,000 for each violation. Additional penalties may be
imposed for subsequent violations of a court order or injunction. This revenue is classified as a
damage award and not subject to TABOR. Given the uncertainty about the number of cases that
may be pursued by the Attorney General and district attorneys, as well as the wide range in
potential penalty amounts, the fiscal note cannot estimate the potential impact of these civil
penalties.
Filing Fees
The bill may increase revenue to the Judicial Department from an increase in civil case filings.
Revenue from filing fees is subject to TABOR. Page 3
February 3, 2025 SB 25-071
State Expenditures
Beginning in FY 2025-26, the bill may increase workload in several state agencies, as described
below.
Department of Public Health and Environment
Workload in the Department of Public Health and Environment may increase if hospitals fail to
publish certain information and the department investigates complaints about noncompliance.
This workload is expected to be minimal and no change in appropriations is required.
Department of Regulatory Agencies
The bill minimally increases workload in the Department of Regulatory Agencies to conduct
outreach to individuals regulated by the State Board of Pharmacy. This workload is expected to
be minimal and no change in appropriations is required.
Department of Law
Workload in the Department of Law will minimally increase to the extent that deceptive trade
practice complaints are filed. The department will review complaints under the bill and prioritize
investigations as necessary within the overall number of deceptive trade practice complaints and
available resources.
Judicial Department
The trial courts in the Judicial Department may have an increase in cases filed under the
Colorado Consumer Protection Act from the addition of a new deceptive trade practice. It is
assumed that pharmaceutical manufacturers and covered hospitals will abide by the law and
that any violation of the legislation will result in minimal number of new cases. The fiscal note
assumes that this can be accomplished within existing resources and that no change in
appropriations is required.
Local Government
Similar to the state, to the extent district attorneys receive deceptive trade practice complaints
related to the new deceptive trade practice under the bill, workload will increase to investigate
complaints and seek relief when appropriate. It is assumed most such cases will be handled at
the state level by the Attorney General.
Effective Date
The bill takes effect 90 days following adjournment of the General Assembly sine die, assuming
no referendum petition is filed. Page 4
February 3, 2025 SB 25-071
State and Local Government Contacts
Health Care Policy and Financing
Human Services
Judicial
Law
Public Health and Environment
Regulatory Agencies
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit the General Assembly website.