House Health Care committee reviews H.266 amendments on 340B reporting and temporary repeal of white‑bagging ban

Jen Harvey of the Office of Legislative Council reviewed Senate Health and Welfare markup to H.266 during a House Health Care Committee meeting, describing new hospital reporting requirements for the 340B prescription drug program and a temporary change to a state ban on insurer-directed "white‑bagging."

Harvey said the amended bill would require each hospital that participates in the 340B program to submit an annual report, posted to the Green Mountain Care Board website, with aggregated acquisition costs and aggregated payment amounts for drugs obtained through 340B and dispensed or administered during the previous calendar year. The report would provide separate totals for four distribution channels: drugs dispensed from an in‑house pharmacy, drugs dispensed from a contract pharmacy, drugs administered with separate payment, and drugs administered under bundled payments. For drugs paid under bundled payments, the hospital must estimate the payment amount by comparing the drug's actual acquisition cost to its wholesale acquisition cost. Harvey said, “vendor information reported under this subsection will be exempt from public inspection and copying under the Public Records Act and kept confidential except the board shall provide it to the office of health care advocate, which shall not further disclose this kind of financial information.”

The amendments would also preserve a sunset date for the 340B hospital reporting requirement on Jan. 1, 2031, and add temporary changes to 8 V.S.A. § 4089j (retail pharmacy/white‑bagging language). One provision in the markup would repeal the ban on insurer‑directed white‑bagging for a limited period and then reinstate the ban effective Jan. 1, 2030. Another section would direct the Green Mountain Care Board, in consultation with the Department of Financial Regulation, to report to the House committee and the Senate committee by Jan. 15, 2029, on the repeal’s impact on hospital budgets, health insurance premiums and insurer solvency. Harvey told the committee the first hospital 340B report would be due in January 2026 if the bill is enacted.

Witnesses gave competing views on the white‑bagging provisions and the broader cost impacts. Devin Green, Vermont Association of Hospitals and Health Systems, said white‑bagging refers to insurers sending specialty drugs from a pharmacy they designate to a provider for administration, and urged the committee not to support a permanent repeal. “This is not the typical, you know, oral drugs that you can get on your doorstep or delivered to you by mail. These are specialty drugs,” Green said, citing safety and quality concerns encountered before the 2022 ban, including delays in care, incorrect dosages and storage problems. Green proposed retaining safety and quality requirements, requiring advance notice, a patient‑specific exemption process, same‑day delivery where needed, 24/7 access to a pharmacist or nurse, and reimbursement for hospital costs tied to intake, preparation, compounding, storage, administration and disposal. He also asked the committee to consider a shorter repeal window (he suggested July 1, 2028) if the committee moves forward.

Sarah Teachout of Blue Cross and Blue Shield of Vermont told the committee Vermont’s hospital prices for outpatient, hospital‑administered specialty drugs are far above national benchmarks. Citing RAND and internal data, Teachout said prices at hospitals — particularly the University of Vermont Medical Center — were many times the Medicare average sales price (ASP) and that the state’s prices are growing faster than national averages. She said OptumRx, the PBM used by Blue Cross Blue Shield of Vermont, pays on average about 20% of ASP for these drugs and that, if the insurer could procure the top 50 drugs for its members through its PBM, it estimates a theoretical upper‑bound savings of $46,000,000. Teachout explained there are tradeoffs: if insurers white‑bag, rebates and negotiated PBM prices can reduce premiums, but hospitals and PBMs shift who receives margins on the drugs depending on procurement and billing pathways.

Committee members asked about specifics raised in testimony: the types of drugs affected (witnesses described many as oncology and other specialty infusions), turnaround expectations (a 24‑hour target had been discussed in prior legislation), differences in how claims hit pharmacy versus medical benefits and how out‑of‑pocket costs can vary depending on procurement channel. Green and Teachout both acknowledged some drugs or clinical situations may be inappropriate for white‑bagging and suggested phased or hybrid approaches used in other states.

No formal committee vote was taken at the meeting. Harvey said the Senate Health and Welfare committee had produced the markup and that the bill was on notice in the Senate and may be scheduled for action there; any final text and timing for transmittal to the House remained uncertain at the hearing.