First Regular Session
Seventy-fifth General Assembly
STATE OF COLORADO
INTRODUCED
LLS NO. 25-0153.01 Chelsea Princell x4335
SENATE BILL 25-124
Senate Committees House Committees
Health & Human Services
A BILL FOR AN ACT
C
ONCERNING OUTPATIENT DRUGS THAT ARE SOLD AT A DISCOUNT TO101
NONPROFIT HOSPITALS THROUGH THE FEDERAL 340B DRUG102
PRICING PROGRAM.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
.)
The bill requires nonprofit hospitals (hospitals) to use 340B profits
to decrease out-of-pocket costs for low-income patients.
The bill requires entities covered under the federal 340B drug
pricing program that are hospitals licensed by the state to report
information related to their participation in the 340B program, their use
SENATE SPONSORSHIP
Kirkmeyer and Gonzales J.,
HOUSE SPONSORSHIP
Brown and Garcia Sander,
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law. 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.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, add part 3 to article2
2.5 of title 25.5 as follows:3
PART 34
SAVING PEOPLE MONEY ON5
PRESCRIPTION MEDICATIONS ACT6
25.5-2.5-301. Short title. T
HE SHORT TITLE OF THIS PART 3 IS7
"S
AVING PEOPLE MONEY ON PRESCRIPTION MEDICATIONS ACT".8
25.5-2.5-302. Definitions. A
S USED IN THIS PART 3, UNLESS THE9
CONTEXT OTHERWISE REQUIRES :10
(1) "340B
DRUG" MEANS A COVERED OUTPATIENT DRUG , AS11
DEFINED IN 42 U.S.C. SEC. 1396r-8 (k)(2), WHETHER SELF-ADMINISTERED12
OR PROVIDER-ADMINISTERED, THAT IS SUBJECT TO REDUCED PRICES BY A13
MANUFACTURER PURSUANT TO 42 U.S.C. SEC. 256b (a)(1) AND IS14
PURCHASED BY A NONPROFIT HOSPITAL .15
(2) "340B
PROFITS" MEANS THE DIFFERENCE BETWEEN16
AGGREGATED PAYMENTS RECEIVED FROM INSURERS , PAYERS, AND17
SELF-PAYING PATIENTS FOR ALL 340B DRUGS AND AGGREGATED18
ACQUISITION COSTS PAID FOR ALL 340B DRUGS.19
(3) "340B
PROGRAM" MEANS THE FEDERAL DRUG PRICING20
PROGRAM DESCRIBED IN 42 U.S.C. SEC. 256b.21
(4) "C
HARITY CARE" MEANS FREE OR REDUCED -COST HEALTH22
SERVICES PROVIDED BY A HOSPITAL TO PATIENTS WHO ARE UNABLE TO23
PAY.24
SB25-124-2- (5) "CHARITY CARE COSTS" MEANS THE TOTAL COST INCURRED BY1
THE NONPROFIT HOSPITAL FOR PROVIDING CHARITY CARE , INCLUDING2
CHARITY CARE THAT IS PROVIDED AT AN OFF -SITE OUTPATIENT FACILITY3
ASSOCIATED WITH THE NONPROFIT HOSPITAL , THAT DISPENSES 340B4
DRUGS PURCHASED BY THE NONPROFIT HOSPITAL .5
(6) "C
ONTRACT PHARMACY " MEANS A PHARMACY THAT A6
NONPROFIT HOSPITAL HAS CONTRACTED WITH TO DISPENSE 340B DRUGS7
ON BEHALF OF THE NONPROFIT HOSPITAL TO PATIENTS OF THE NONPROFIT8
HOSPITAL, WHETHER DISTRIBUTED IN-PERSON, BY MAIL, OR BY OTHER9
MEANS.10
(7) "L
OW-INCOME PATIENT" MEANS A PATIENT OF THE NONPROFIT11
HOSPITAL WITH A FAMILY INCOME THAT DOES NOT EXCEED FOUR HUNDRED12
PERCENT OF THE FEDERAL POVERTY LINE , ADJUSTED FOR FAMILY SIZE.13
(8) "N
ONPROFIT HOSPITAL" MEANS A HOSPITAL THAT IS LICENSED14
BY THE DEPARTMENT OF PUBLIC HEALTH AND ENVIRONMENT AND IS A15
PRIVATE NONPROFIT CORPORATION OR HOSPITAL PURSUANT TO 42 U.S.C.16
SEC. 256b (a)(4)(L), (a)(4)(M), OR (a)(4)(O), BUT DOES NOT INCLUDE A17
SOLE COMMUNITY HOSPITAL DESCRIBED IN 42 U.S.C. SEC. 256b (a)(4)(O),18
A CRITICAL ACCESS HOSPITAL DESCRIBED IN 42 U.S.C. SEC. 256b19
(a)(4)(N),
OR DENVER HEALTH AND HOSPITALS .20
25.5-2.5-303. Use of 340B drug profits. (1) B
EGINNING21
J
ANUARY 1, 2026, EACH NONPROFIT HOSPITAL SHALL USE 340B PROFITS22
ACCORDING TO THE FOLLOWING :23
(a) F
IFTY-FIVE PERCENT OF 340B PROFITS MUST BE USED TO24
DECREASE THE OUT-OF-POCKET COSTS PAID FOR 340B DRUGS THAT ARE25
DISPENSED OR ADMINISTERED TO LOW -INCOME PATIENTS, IN ADDITION TO26
EXISTING REQUIREMENTS TO PROVIDE CHARITY CARE TO UNINSURED27
SB25-124
-3- PATIENTS; AND1
(b) F
ORTY PERCENT OF 340B PROFITS MUST BE USED TO DECREASE2
OTHER OUT-OF-POCKET COSTS FOR LOW-INCOME PATIENTS.3
(2) (a) A
T THE POINT OF SALE, FOR ANY 340B DRUG THAT IS4
DISPENSED OR ADMINISTERED TO A PATIENT AT A PHARMACY LOCATED5
WITHIN THE NONPROFIT HOSPITAL , THE NONPROFIT HOSPITAL MUST6
ENSURE THE FOLLOWING:7
(I) A
PATIENT WITH A HOUSEHOLD INCOME AT OR BELOW ONE8
HUNDRED PERCENT OF THE FEDERAL POVERTY LINE PAYS ZERO DOLLARS9
OUT OF POCKET; AND10
(II) A
PATIENT WITH A HOUSEHOLD INCOME ABOVE ONE HUNDRED11
PERCENT BUT BELOW TWO HUNDRED PERCENT OF THE FEDERAL POVERTY12
LINE PAYS NO MORE THAN THREE DOLLARS OUT OF POCKET .13
(b) T
HE REQUIREMENTS OF SUBSECTION (2)(a) OF THIS SECTION DO14
NOT APPLY TO A PATIENT WITH COVERAGE UNDER A15
GOVERNMENT-SPONSORED PROGRAM, AS DEFINED IN SECTION 5000A(f) OF16
THE FEDERAL "INTERNAL REVENUE CODE OF 1986".17
(3) A
NONPROFIT HOSPITAL SHALL NOT USE 340B PROFITS FOR THE18
FOLLOWING PURPOSES:19
(a) M
ORE THAN THIRTY-FIVE PERCENT OF TOTAL ANNUAL20
COMPENSATION OR EXPENSE REIMBURSEMENT FOR THE NONPROFIT21
HOSPITAL'S BOARD OF DIRECTORS;22
(b) T
AX PENALTIES OR FINES ISSUED AGAINST THE NONPROFIT23
HOSPITAL;24
(c) E
XPENSES RELATED TO ADVERTISING AND PUBLIC RELATIONS25
THAT PROMOTE THE NONPROFIT HOSPITAL 'S IMAGE, SERVICES, OR26
PROPOSALS, NOT INCLUDING COMMUNICATIONS REQUIRED BY LAW OR27
SB25-124
-4- THAT ARE ESSENTIAL FOR PATIENT SAFETY AND PATIENT INFORMATION ;1
(d) L
OBBYING EXPENSES AND OTHER COSTS INTENDED TO2
INFLUENCE LEGISLATION OR BALLOT MEASURES AT THE LOCAL , STATE, OR3
FEDERAL LEVEL;4
(e) T
RAVEL, LODGING, FOOD, OR BEVERAGE EXPENSES FOR THE5
NONPROFIT HOSPITAL'S BOARD OF DIRECTORS AND OFFICERS; AND6
(f) G
IFTS OR ENTERTAINMENT EXPENSES .7
25.5-2.5-304. Hospital transparency reporting. (1) B
EGINNING8
J
ULY 1, 2026, AND BY JULY 1 EACH YEAR THEREAFTER , A NONPROFIT9
HOSPITAL SHALL SUBMIT A REPORT TO THE STATE DEPARTMENT ON10
BEHALF OF THE NONPROFIT HOSPITAL AND EACH OFF -SITE FACILITY11
ASSOCIATED WITH THE NONPROFIT HOSPITAL IN THE FORM AND MANNER12
DETERMINED BY THE STATE DEPARTMENT . THE REPORT MUST CONTAIN13
THE FOLLOWING INFORMATION REGARDING THE PRIOR YEAR :14
(a) D
ELINEATED BY FORM OF INSURANCE OR PAYER TYPE ,15
INCLUDING MEDICAID , MEDICARE, COMMERCIAL INSURANCE ,16
SELF-INSURED EMPLOYERS, AND UNINSURED:17
(I) A
GGREGATED ACQUISITION COSTS PAID FOR 340B DRUGS USED18
TO CALCULATE 340B PROFITS;19
(II) A
GGREGATED PAYMENTS RECEIVED FROM INSURERS , PAYERS,20
AND SELF-PAYING PATIENTS FOR ALL 340B DRUGS THAT WERE USED TO21
CALCULATE 340B PROFITS;22
(III) T
OTAL NUMBER OF PRESCRIPTIONS AND THE PERCENTAGE OF23
THE NONPROFIT HOSPITAL'S PRESCRIPTIONS THAT WERE FILLED USING24
340B
DRUGS;25
(IV) P
ERCENTAGE OF LOW -INCOME PATIENTS WHOSE26
OUT-OF-POCKET COSTS DECREASED PURSUANT TO SECTION 25.5-2.5-30327
SB25-124
-5- (1)(a);1
(V) P
ERCENTAGE OF LOW -INCOME PATIENTS WHOSE2
OUT-OF-POCKET COSTS DECREASED PURSUANT TO SECTION 25.5-2.5-3033
(1)(b);
AND4
(VI) O
UT-OF-POCKET COSTS THAT DECREASED PURSUANT TO5
SECTION 25.5-2.5-303 (1)(b);6
(b) T
OTAL OPERATING COSTS OF THE NONPROFIT HOSPITAL AND7
ITEMIZED COSTS RELATED TO:8
(I) L
OWERING OUT-OF-POCKET COSTS FOR LOW-INCOME PATIENTS9
PURSUANT TO SECTION 25.5-2.5-303 (1); AND10
(II) P
ROVIDING CHARITY CARE; AND11
(c) T
OTAL PAYMENTS MADE TO :12
(I) C
ONTRACT PHARMACIES FOR 340B PROGRAM-RELATED13
SERVICES AND OTHER FUNCTIONS ;14
(II) T
HIRD-PARTY ADMINISTRATORS FOR MANAGING ANY15
COMPONENTS OF THE NONPROFIT HOSPITAL 'S 340B PROGRAM; AND16
(III) A
NY OTHER THIRD PARTY IN CONNECTION WITH 340B17
PROGRAM-RELATED COMPLIANCE , LEGAL, EDUCATIONAL , OR18
ADMINISTRATIVE COSTS.19
(2) A
N OFFICER OF THE NONPROFIT HOSPITAL SHALL CERTIFY THE20
COMPLETENESS AND ACCURACY OF THE REPORT SUBMITTED PURSUANT TO21
SUBSECTION (1) OF THIS SECTION.22
(3) T
HE STATE DEPARTMENT SHALL AGGREGATE THE REPORTS23
DESCRIBED IN SUBSECTION (1) OF THIS SECTION TO PREPARE A REPORT24
DETAILING INFORMATION RECEIVED FROM NONPROFIT HOSPITALS ,25
INCLUDING 340B PROGRAM REVENUE ACROSS ALL NONPROFIT HOSPITALS26
IN THE STATE. BEGINNING SEPTEMBER 15, 2026, AND EACH SEPTEMBER 1527
SB25-124
-6- THEREAFTER, THE STATE DEPARTMENT SHALL SUBMIT THE AGGREGATED1
REPORT TO THE GENERAL ASSEMBLY AND PUBLISH ALL REPORTS2
SUBMITTED BY A NONPROFIT HOSPITAL PURSUANT TO SUBSECTION (1) OF3
THIS SECTION ON A PUBLICLY ACCESSIBLE WEBSITE .4
25.5-2.5-305. Reporting. (1) B
EGINNING NOVEMBER 1, 2026,5
AND ANNUALLY THEREAFTER , THE STATE DEPARTMENT SHALL SUBMIT A6
REPORT TO THE JOINT BUDGET COMMITTEE ON ANY LOSSES AND COSTS TO7
THE STATE MEDICAL ASSISTANCE PROGRAM ARISING FROM NONPROFIT8
HOSPITAL PURCHASES OF 340B DRUGS AND NONPROFIT HOSPITAL9
PRACTICES RELATED TO PARTICIPATION IN THE 340B PROGRAM.10
(2) B
EGINNING NOVEMBER 1, 2026, AND ANNUALLY THEREAFTER ,11
THE DEPARTMENT OF PERSONNEL AND ADMINISTRATION SHALL SUBMIT A12
REPORT TO THE JOINT BUDGET COMMITTEE ON ANY LOSSES AND COSTS TO13
THE STATE MEDICAL ASSISTANCE PROGRAM ARISING FROM NONPROFIT14
HOSPITAL PURCHASES OF 340B DRUGS AND NONPROFIT HOSPITAL15
PRACTICES RELATED TO PARTICIPATION IN THE 340B PROGRAM, INCLUDING16
THE TOTAL AGGREGATE VALUE OF LOST MANUFACTURER REBATE17
REVENUE.18
25.5-2.5-306. Enforcement. (1)
A VIOLATION OF THIS PART 3 IS19
CONSIDERED AN UNFAIR AND DECEPTIVE TRADE PRACTICE PURSUANT TO20
SECTION 6-1-105 AND SUBJECT TO ENFORCEMENT BY THE ATTORNEY21
GENERAL.22
(2) T
HE ATTORNEY GENERAL MAY INVESTIGATE AND BRING A CIVIL23
ACTION AGAINST THE NONPROFIT HOSPITAL IN A COURT OF COMPETENT24
JURISDICTION FOR A VIOLATION OF THIS PART 3.25
(3) T
HE ATTORNEY GENERAL SHALL ESTABLISH A PROCESS FOR26
INDIVIDUALS TO REPORT SUSPECTED VIOLATIONS OF THIS PART 3 TO THE27
SB25-124
-7- ATTORNEY GENERAL AND A PROCESS FOR THE ATTORNEY GENERAL TO1
PROMPTLY AND FULLY INVESTIGATE REPORTS OF SUSPECTED VIOLATIONS .2
SECTION 2. In Colorado Revised Statutes, 6-1-105, add (1)(iiii)3
as follows:4
6-1-105. Unfair or deceptive trade practices - definitions.5
(1) A person engages in a deceptive trade practice when, in the course of6
the person's business, vocation, or occupation, the person:7
(iiii) V
IOLATES PART 3 OF ARTICLE 2.5 OF TITLE 25.5.8
SECTION 3. In Colorado Revised Statutes, 24-31-101, amend9
(1)(i)(XXII) and (1)(i)(XXIII); and add (1)(i)(XXIV) as follows:10
24-31-101. Powers and duties of attorney general. (1) The11
attorney general:12
(i) May independently initiate and bring civil and criminal actions13
to enforce state laws, including actions brought pursuant to:14
(XXII) Part 14 of article 12 of title 38; and
15
(XXIII) Section 24-34-806;
AND16
(XXIV) P
ART 3 OF ARTICLE 2.5 OF TITLE 25.5.17
SECTION 4. Safety clause. The general assembly finds,18
determines, and declares that this act is necessary for the immediate19
preservation of the public peace, health, or safety or for appropriations for20
the support and maintenance of the departments of the state and state21
institutions.22
SB25-124
-8-