SIGNED! New Law Will Lower the Cost of Prescription Drugs

GRAND JUNCTION, CO – The Governor on Friday signed legislation sponsored by Senate President Pro Tempore Dafna Michaelson Jenet, D-Commerce City, and Representative Matthew Martinez, D-Monte Vista, to lower the cost of prescription drugs. 

“Colorado families are counting on us to put their health and safety first,” Michaelson Jenet said. “This new law will ensure that all Coloradans, especially those who rely on rural hospitals, pharmacies, and providers, don’t lose access to the services they depend on to stay safe and healthy.” 

“We must ensure that Coloradans in rural and underserved communities receive the prescription drugs they need to lead healthy lives,” said Martinez. “This bipartisan law ensures that pharmaceutical companies do not impose restrictions on the local pharmacies, clinics and safety net providers that are dependent on the federal 340B program and serve our rural communities.”

“The federal 340B program has needed additional transparency and accountability for some time, and pharmaceutical companies have continued to rake in profits,” said Chair of the House Health & Human Services Committee Rep. Kyle Brown, D-Louisville. “At the legislature, we've taken steps to lower health care costs for Coloradans. By improving transparency and accountability, we are continuing to take steps to expand access so that more Coloradans can receive high-quality health care."

SB25-071, cosponsored by Senator Janice Rich, R-Grand Junction, and Representative Rick Taggart, D-Grand Junction, will ensure prescription drug manufacturers do not impose restrictions on facilities – such as pharmacies and clinics – that utilize the federal 340B Drug Pricing Program, and will require hospitals to include certain information in their annual reports. The new reporting requirements, including the hospitals' reported 340B savings and how they utilized those savings, aim to improve transparency. 

SB25-071 aims to preserve access to affordable prescription drugs across Colorado, especially in Colorado’s rural and underserved communities. 89 percent of rural hospitals in Colorado are running on low or negative margins. In addition to lowering the cost of prescription drugs, this law will help preserve no-cost clinics and vaccines that help keep Coloradans healthy. To improve accountability and ensure 340B savings are passed down to the consumer, this law prohibits hospitals from spending the 340B savings on executive salaries, gifts, lobbying, and advertising.

The 340B Drug Pricing Program is a federal program that requires drug manufacturers participating in Medicaid to provide outpatient drugs to covered hospitals, clinics, or pharmacies at a discount. To qualify for these reduced drug prices, health care facilities must serve a high percentage of low-income patients.

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 revenues generated by the purchase of discounted 340B drugs, beyond the federal guidelines of using savings to expand and lower the cost of health care for low-income individuals.