Senate Health & Welfare reviews bill to tighten 340B reporting, limit manufacturer interference and shield vendor data

The Senate Health & Welfare Committee on May 6 reviewed draft H.266, a bill that would add new state-level requirements and prohibitions related to the federal 340B drug pricing program, including annual hospital reporting to the Green Mountain Care Board and limited public disclosure of vendor data.

Committee members said the bill would bar prescription drug manufacturers or their agents from interfering “directly or indirectly” with a covered entity’s acquisition of 340B drugs or with delivery to a 340B contract pharmacy, and would prohibit requiring claims or utilization data from a covered entity as a condition of allowing 340B purchases unless the U.S. Department of Health and Human Services requires that data. “I did reformat this as a strike-all amendment just so that it's easier to follow,” a committee member said while presenting the draft.

Under the draft, hospitals participating in the 340B program would submit annual reports to the Green Mountain Care Board by Jan. 31 for the previous hospital fiscal year in a form and manner prescribed by the board. The reports must include at least: aggregated acquisition cost for prescription drugs obtained through 340B and dispensed or administered to patients during the previous calendar year; aggregated payment amounts the hospital received for those drugs, reported separately for distribution channels (in-house pharmacy dispensing, contract-pharmacy dispensing, administered drugs paid separately, and administered drugs paid under bundled payments); aggregated payments the hospital made to contract pharmacies and to outside vendors for managing or facilitating any aspect of its 340B program; and a description of how revenue from 340B participation benefits the community and the hospital’s internal review and oversight of compliance with federal requirements.

For administered drugs paid via bundled payments, the bill directs hospitals to estimate the payment amount by comparing the drug’s actual acquisition cost to the drug’s wholesale acquisition cost. Hospitals also would supply a list of all vendors that managed, administered or facilitated any part of the 340B program in the previous calendar year, with a brief description of the work performed by each vendor.

The draft states that the vendor-level information submitted to the board would be exempt from public inspection and copying under the Public Records Act and kept confidential, but the board must provide it to the Office of the Health Care Advocate, “which shall not further disclose this confidential information,” the presenter said.

The bill text shown to the committee specifies that nothing in the measure is intended to affect Medicaid as a payer and that a violation of the statute would permit a 340B covered entity, contract pharmacy or other injured person to bring an action in superior court; the presenter said a violation would be deemed to occur each time a prohibited act is committed (for example, for each package of 340B drugs subject to a discriminatory act by a manufacturer or its agent).

Committee discussion also covered effective dates and phased provisions. The presenter said one underlying statute would be repealed effective Jan. 1, 2031; another restored provision related to so-called “white-bagging” would take effect Jan. 1, 2030; and “the remainder” of the bill would take effect on passage, with the first required Section 2 hospital report due on or before Jan. 31, 2027.

Members discussed who should report on certain financial impacts. Section 6, as drafted, asks the Green Mountain Care Board, in consultation with the Department of Financial Regulation (DFR), to report by Jan. 15, 2029, on the impact of repeal of the white-bagging prohibition on hospital budgets, health insurance premiums and solvency. A committee member noted that DFR is the appropriate agency to report on solvency and that the bill’s language should ensure the right agencies provide the requested analysis.

Committee members asked staff to clean and edit the draft and agreed to review the revised copy; no formal motion or vote was taken during the session. One member said it is important that reporting show where any savings or premium reductions would occur so the committee can understand whether cost changes would be absorbed elsewhere in the system.

Next steps: staff will prepare an edited “clean” copy of H.266 for the committee to review at a subsequent meeting before any motion or vote.