Senate panel backs bill protecting 340B contract pharmacies and requiring hospital reporting

BURLINGTON, Vt. — The Senate Committee on Health & Welfare on May 9 voted to amend and report H.266, legislation that would enshrine protections for covered entities that use 340B contract pharmacies and require hospitals to report aggregated information about their participation in the 340B drug pricing program.

The bill would add a new subchapter to Title 18, Chapter 91 establishing a state-level framework for the federal 340B Drug Pricing Program. Under the draft reported by the committee, manufacturers and their agents could not interfere with a covered entity’s use of a contract pharmacy to acquire 340B-priced outpatient drugs; discounts must be applied at the time of purchase rather than as post‑purchase rebates; and the statute would include a private right of action for covered entities, contract pharmacies or others injured by violations of the subchapter. Legislative counsel described the text as expressly not intended to conflict with federal law.

The requirement that hospitals report their 340B participation to the Green Mountain Care Board would begin with the hospital fiscal year ending in 2025, with the first reports due on or before Jan. 30, 2026. Reports must include aggregated acquisition costs and the aggregated payment amounts hospitals received for those drugs, broken out to distinguish drugs dispensed from in‑house pharmacies, drugs dispensed by contract pharmacies, drugs administered and billed separately, and drugs administered that were paid as part of bundled payments. Hospitals also would report aggregated payments to outside vendors who manage or administer any part of the 340B program and describe how revenue from 340B participation is used to support community programs and access to care. The bill requires hospitals to describe internal review and oversight of 340B participation as required by federal program rules.

A separate provision would require hospitals to provide the board with a list of outside vendors and a brief description of their services; that vendor list would be exempt from public inspection but would be provided to the Office of the Health Care Advocate. The reporting requirement is scheduled to sunset Jan. 1, 2031, giving the state five years of data before the reporting obligation would lapse unless extended.

The draft also temporarily would repeal the statutory ban on “white‑bagging” (insurers or pharmacy benefit managers directing a pharmacy to deliver a medication directly to a health care setting for administration) and then reinstate the ban on Jan. 1, 2030. The Green Mountain Care Board, in consultation with the Department of Financial Regulation, would be required to report to this committee and the House Health Care Committee about the impact of the temporary repeal on hospital budgets, insurance premiums and insurer solvency prior to reinstatement.

Jen Harvey, Office of Legislative Counsel, summarized the bill’s structure, saying the measure creates “a new subchapter in Title 18, Chapter 91” and walked the committee through definitions and prohibitions. Harvey said the bill’s reporting requirements are designed to provide aggregated acquisition cost and payment information while recognizing federal limits on disclosing certain contract prices.

Committee members moved to amend and then to report H.266 favorably as amended. The chair moved the initial motions; a roll call during the vote recorded Senator Dulek voting yes, Chair Lines voting yes and Senator Hart voting yes. The motion passed in committee and the bill was reported to the full Senate for further consideration.

Discussion in committee focused on how contract pharmacies extend the reach of 340B pricing to patients who cannot access an in‑house hospital pharmacy, and on the tension between federal confidentiality rules for acquisition prices and the committee’s desire for transparency. Committee members also discussed practical effects on patients’ out‑of‑pocket costs versus the acquisition price hospitals or contract pharmacies pay, and the reason for collecting aggregated rather than transaction‑level pricing.

The bill text sets the first hospital 340B reports due Jan. 30, 2026, and makes the hospital vendor list confidential but available to the Office of the Health Care Advocate. The committee did not adopt additional committee amendments beyond the strike‑and‑insert amendment adopted during the meeting.

If advanced by the full Senate and enacted, the measure would create a state statutory framework recognizing and protecting covered entities’ use of contract pharmacies for 340B acquisition pricing, increase public reporting on program participation for a five‑year period, and temporarily permit negotiation or use of white‑bagging before reinstating the existing ban in 2030.