SB 25-124
Fiscal Note
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
SB 25-124: REDUCING COSTS OF HEALTH CARE FOR PATIENTS
Prime Sponsors:
Sen. Kirkmeyer; Gonzales J.
Rep. Brown; Garcia Sander
Published for: House Health & Human Services
Drafting number: LLS 25-0153
Fiscal Analyst:
Shukria Maktabi, 303-866-4720
shukria.maktabi@coleg.gov
Version: First Revised Note
Date: April 1, 2025
Fiscal note status: This revised fiscal note reflects the reengrossed bill.
Summary Information
Overview. The bill places requirements on the use of profits from the 340B Drug Pricing Program for
nonprofit hospitals and adds new reporting and enforcement provisions.
Types of impacts. The bill is projected to affect the following areas on an ongoing basis:
Minimal State Workload State Revenue
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
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April 1, 2025 SB 25-124
Summary of Legislation
The bill places requirements on entities participating in the federal 340B Drug Pricing Program
and adds new reporting requirements and enforcement measures, as described below.
The bill prohibits certain nonprofit hospitals from using 340B profits for certain expenses,
including certain administrative compensation, penalties and fines, advertising, and lobbying.
Manufacturers or providers of 340B drugs must not limit the provision of 340B drugs to sole
community hospitals and critical access hospitals.
Beginning July 1, 2026, nonprofit hospitals must submit annual reports to the Department of
Health Care Policy and Financing (HCPF) on 340B program profits, operating costs, charity care,
and payments to third parties. On September 1, 2026 and each year thereafter, HCPF must
report this information to the General Assembly, and publish it online. Additionally, both the
Department of Personnel and Administration (DPA) and HCPF must provide information to the
JBC on impacts of the 340B program on state medical programs beginning November 1, 2026.
Violations of the bill are a deceptive trade practice and subject to enforcement by the Attorney
General.
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. Covered
entities include federally qualified health centers and nonprofit and private hospitals that serve a
high percentage of low income patients. To participate in the 340B program, covered entities
must register and comply with all program requirements administered by the federal Health
Resources and Services Administration. In Colorado, an estimated 68 hospitals and 20 federally
qualified health centers participate in the 340B program. There are currently no requirements on
how covered entities must use savings or profits generated by the purchase of discounted 340B
drugs, beyond the federal guidelines of using savings to expand and lower the cost of
healthcare for low-income individuals.
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 Page 3
April 1, 2025 SB 25-124
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.
State Expenditures
The bill increases state workload in HCPF, Department of Law, Judicial Department, and DPA, as
discussed below.
Department of Health Care Policy and Financing
Beginning in FY 2026-27, workload will increase for HCPF to publish 340B program data
provided by nonprofit hospitals and provide information to the JBC on the impacts of the
program on Medicaid. This workload can be accomplished within existing appropriations.
Department of Law
Beginning in FY 2025-26, 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
Beginning in FY 2025-26, 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 nonprofit 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.
Department of Personnel and Administration
Beginning in FY 2026-27, workload will minimally increase for the DPA to report on the impacts
of 340B program on state health care plans. This can be accomplished within existing resources.
Effective Date
The bill takes effect upon signature of the Governor, or upon becoming law without his
signature. Page 4
April 1, 2025 SB 25-124
State and Local Government Contacts
District Attorneys
Health Care Policy and Financing
Higher Education
Human Services
Law
Personnel
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.