Senate committee hears H.266 to protect 340B program, add hospital reporting

Representative Provecco introduced H.266 to the Senate Health & Welfare Committee on March 26, describing the bill as a measure ‘‘to protect the 340B drug pricing program’’ and to introduce transparency and reporting requirements for participating hospitals and health centers.

Representative Provecco told the committee the bill aims to preserve savings that federally eligible providers use to support care for uninsured and underinsured Vermonters. ‘‘340B is intended to allow certain hospitals and health centers that serve vulnerable populations to purchase outpatient prescriptions at significantly reduced prices,’’ Provecco said, adding that the program’s savings are ‘‘critical’’ to the financial stability of FQHCs and several Vermont hospitals and that recent manufacturer practices have reduced contract-pharmacy benefits.

Jen Harvey, legislative counsel, summarized the bill’s legal mechanics. The draft adds a new subchapter to Vermont’s prescription drug cost-containment chapter and includes definitions tied to federal law (the transcript cites 42 U.S.C. 256b for the federal 340B statute). Major provisions presented to the committee include: - A prohibition on manufacturers or their agents from denying access to 340B pricing to a 340B covered entity or a 340B contract pharmacy except where federal law or HHS guidance prohibits such access. - A prohibition on manufacturers requiring claims, utilization, encounter or purchase data from covered entities as a condition of allowing contract-pharmacy acquisition or dispensing, unless such data sharing is required by the U.S. Department of Health and Human Services. - A prohibition on interference with a contract pharmacy’s ability to dispense 340B drugs to eligible patients of the covered entity. - A requirement that manufacturers offer 340B pricing as a discount at the time of purchase rather than as a post-sale rebate (the bill defines ‘‘rebate’’ and disallows reliance on rebates in lieu of point-of-sale discounts). - A private right of action allowing a 340B covered entity, a contract pharmacy, or another injured person to sue in superior court for injunctive relief, compensatory and punitive damages, costs and attorney’s fees for violations; the bill defines a violation to occur each time a prohibited act is committed.

The bill also includes a reporting requirement: annually, on or before January 31, each hospital that participates in the 340B program would submit to the Green Mountain Care Board (GMCB) a report for the prior hospital fiscal year. The required hospital report would include estimated annual savings from 340B participation (compared to group-purchasing pricing or another accepted pricing source), aggregated payments the hospital made to contract pharmacies and to outside vendors or managers that facilitate the 340B program, the number of 340B claims, descriptions of how the hospital uses 340B savings to benefit the community, and a description of internal oversight to ensure compliance with federal rules. The reporting requirement would sunset on January 1, 2031; the first report would be due January 31, 2026.

Sponsor Representative Provecco told the committee the measure grew from testimony and a DFR 2022 report; Provecco also said the committee heard testimony in favor from community health centers and hospitals and in opposition from national manufacturers and trade groups (the transcript lists written opposition from Eli Lilly and an international biotech firm). Committee members said they would review written testimony and the bill drafts and coordinate with the House record. The transcript records a committee vote in the House committee context for H.266 of 10–0–1 as presented to the Senate committee staff.

Ending — Committee staff said they will post submitted testimony and provide the committee with the written materials referenced by the sponsor; senators signaled they will review the GMCB-aggregated data and the federal-law interactions before taking further action.