Senate Health & Welfare reviews H.266 to limit manufacturer interference with 340B access and require hospital reporting to Green Mountain Care Board

The Senate Health & Welfare Committee reviewed H.266 on April 23, a bill that would add a new subchapter to Title 18, Chapter 91 addressing prescription drug cost and payment and that would restrict actions by manufacturers that interfere with 340B program access, committee discussion shows.

Charles Becker, staff attorney with the Office of the Health Care Advocate, urged changes to the bill’s reporting provisions and to the language describing hospitals’ use of 340B proceeds. Becker told the committee the advocate’s office asked for reporting to be submitted “in a form and manner prescribed by the Green Mountain Care Board” and recommended replacing the word “savings” with “revenue” throughout the reporting section.

Nut graf: H.266 would prohibit manufacturers or their agents from denying or restricting the acquisition or delivery of 340B drugs to contract pharmacies acting on behalf of 340B covered entities, would require hospitals that participate in the 340B program to file annual reports to the Green Mountain Care Board on program participation and financial flows, and would create a civil enforcement mechanism for covered parties harmed by prohibited conduct.

Committee staff summarized the bill’s key provisions: it would bar a manufacturer or its agent from directly or indirectly denying, restricting, prohibiting, or otherwise interfering with a contract pharmacy’s acquisition or delivery of 340B drugs on behalf of a covered entity unless the contract pharmacy is prohibited from receiving the drug by the U.S. Department of Health and Human Services. The bill would also bar a manufacturer or agent from requiring a covered entity to submit claims, utilization, encounter, purchase, or other data as a condition for allowing access—except where such reporting is required by HHS.

The draft requires manufacturers to make 340B pricing available at the time of purchase as a discount rather than through a rebate mechanism. The bill would leave Medicaid unaffected, states that nothing should be construed to conflict with federal law, and offers an enforcement path: a covered entity, contract pharmacy, or other injured person could bring an action seeking injunctive relief, punitive damages proportionate to harm, costs, and reasonable attorney’s fees. The draft defines each prohibited act and treats each affected package of 340B drugs as a separate violation.

Section 2 would require hospitals participating in the 340B program to submit an annual report to the Green Mountain Care Board. The bill lists minimum report elements: estimated annual savings (the bill’s current language), comparisons of 340B acquisition prices to group purchasing organization pricing or other accepted pricing sources, the aggregate payment amounts hospitals made to contracted pharmacies for dispensing 340B drugs, the aggregate amounts paid to outside vendors for managing or administering 340B program elements, the number of claims for prescription drugs obtained through 340B, descriptions of how hospitals use program savings to benefit community programs and services, and an internal review and oversight description demonstrating compliance with federal requirements. The bill would sunset the reporting requirement after five years and specifies that the first hospital report would be due on or before Jan. 31, 2026.

Charles Becker recommended several specific edits during the hearing. He asked that reporting be prescribed in a form and manner by the Green Mountain Care Board; that hospitals report actual aggregated acquisition costs and aggregated payments received (rather than comparative GPO pricing) so the state could “get an actual, accurate dollar figure of the amount of 340B revenue that hospitals are generating”; and that reports capture drugs both dispensed and administered (for example, outpatient infusions). Becker also asked that hospitals be asked to estimate revenue derived from drugs when payments are bundled and to disclose vendor identities and services and to explain why any services claimed to rely on 340B revenue could not continue without it. Finally, Becker suggested replacing “savings” with “revenue” to reflect that hospitals purchase at discounted prices and then bill at higher rates.

Committee members asked practical questions about how hospitals would separate drug revenue when drugs are paid under bundled payments; Becker replied that hospital finance staff and experts would be better positioned to outline methodologies but said hospitals should be asked to estimate revenue and to disclose their methodology.

A committee staff member confirmed that federally qualified health centers (FQHCs) are not considered hospitals under the bill and that the reporting requirement, as drafted, is limited to hospitals. Hospital representatives were present and available to respond, staff said.

Ending: Committee members said they will re-post materials and hold a hospital panel to get additional input before next action. No formal vote on H.266 was recorded at the hearing.