Senate committee debates H.266 reporting requirements for hospitals in 340B drug program

The Senate Health and Welfare Committee on May 1 debated proposed changes to H.266 that would require Vermont hospitals participating in the federal 340B drug-pricing program to submit annual reports to the Green Mountain Care Board detailing drug acquisition costs, payments by distribution channel, and vendor arrangements.

Committee members and witnesses spent most of the session on Section 2 of the bill, which would add an annual reporting requirement to Title 18 related to the 340B program. Ben Hardy of the Office of Legislative Counsel summarized the draft language, saying the section would require each hospital participating in the federal 340B program to submit a report “in a form and manner prescribed by the board” and that reports would be posted on the Green Mountain Care Board website. Hardy also said the reporting provisions would be repealed on Jan. 1, 2031, and that the first reports would be due Jan. 30, 2026.

Devin Green, policy director at the Vermont Association on Hospitals and Health Systems, described technical changes the hospital association supports for the bill’s reporting mechanics, particularly how hospitals should estimate payments when drug reimbursement is included in bundled payments. “For this first year, it’s not gonna be a science. We may need to come back and adjust it,” Green said, urging the committee to allow an estimation method tied to the wholesale acquisition cost, or WAC. Green also said hospitals asked that information about third-party administrators be kept confidential, with access limited to the Green Mountain Care Board and the state Health Care Advocate to avoid chilling vendor relationships.

Under the draft changes discussed, hospitals would report an aggregated acquisition cost for all prescription drugs obtained through 340B and the aggregated payment amounts received for those drugs, broken down by distribution channels: drugs dispensed from an in-house pharmacy, drugs dispensed from a contract pharmacy, drugs administered and paid separately, and drugs administered and paid as part of bundled payments. The proposal would also require hospitals to report aggregated payments made to contract pharmacies and to any outside vendor that manages, administers, or facilitates aspects of the hospital’s 340B program; the vendors would be identified by name with a brief description of the work performed, subject to limited confidentiality protections requested by hospitals.

Committee members asked about a contested drafting choice in the bill: whether to label the reported figure as “savings” or “revenue.” Hardy noted there is “no value placed on the word revenue” in the statute text itself, and committee members said the label matters for public perception of how hospitals use 340B proceeds. The drafted language would describe how hospitals use revenue from 340B participation to benefit their communities, including services that hospitals said they could not continue without that revenue.

The committee also reviewed Section 1 of the bill, which creates a new subchapter in 18 VSA chapter 91 on the 340B drug-pricing program. That section would prohibit manufacturers or their agents from denying or restricting acquisition or delivery of 340B drugs to contract pharmacies, or from requiring a 340B-covered entity to submit claims, utilization, encounter, purchase, or other data as a condition of providing 340B pricing, except where required by the U.S. Department of Health and Human Services. The subchapter would not apply to Medicaid, and it would permit a 340B-covered entity, contract pharmacy, or other injured person to sue in superior court for injunctive relief, compensatory and punitive damages, costs and attorney’s fees for violations.

Committee members and witnesses acknowledged technical challenges in producing precise figures when drug payments are bundled with other services and agreed the WAC-based estimation approach would be a starting point that might require adjustment. The committee planned to circulate revised draft language to stakeholders and review it again; the chair said staff would try to prepare updated language later in the day and scheduled further consideration for the committee’s next meeting.

No formal motions or votes on H.266 were taken during the session excerpted here; the discussion was procedural and technical and focused on drafting the reporting requirements and confidentiality carve-outs.