Legislative committee reviews H.202 transparency rules for 340B drug program; hospitals and advocates differ on burden and benefit

The House Committee on Health Care on Oct. 12 took a close look at sections of H.202 that would require hospitals participating in the federal 340B drug pricing program to file annual, itemized reports with the Green Mountain Care Board and would require insurers and 340B-covered entities to send annual, consumer-level disclosures about prescription drug spending.

Committee members heard that the bill’s reporting requirements would be posted on the Green Mountain Care Board website and would require hospitals to disclose aggregated acquisition costs, aggregated amounts received for dispensed 340B drugs, payments to contract pharmacies and other vendors, administrative expenses and the names of vendors; the number of 340B claims by payer type; and a description of how hospitals use 340B-generated revenue to support community programs. The bill would take effect July 1, with the first hospital reports due on or before July 1, 2026.

Supporters and staff said the required information would increase transparency about how 340B revenues flow through hospitals and whether they support community programs. Catherine O’Neil, director of prescription drug pricing at the Green Mountain Care Board, told the committee that "hospitals do report some aggregate 340B data already to the Green Mountain Care Board as part of their annual submissions. This bill would expand on that reporting." She and GMCB policy analyst Noah Montemarano recommended clarifying the statute’s purpose, aligning submissions with public-records rules, requiring hospitals to attest to the accuracy of filings and adding specific fields such as patient cost-sharing and percentages that show 340B claims as a share of overall claims.

Noah Montemarano described the current hospital budget filings: "For each hospital, we collect total revenue. That's all. So on their income sheet, there's one line designated for 340B revenue. And so we have just a lump sum value for each hospital. Some hospitals and their narratives detail pharmaceutical expenses, and some of them get into 340B expenses, some of them don't. It's not standardized." He said that GMCB posting the reports would not by itself require substantial staff time, but that additional analysis would increase workload and staffing needs.

Charlie (Charles) Becker, staff attorney with the Office of the Health Care Advocate, told the committee that the 340B program can generate substantial margins when covered entities purchase drugs at discounted prices and later dispense them. "Covered entities buy drugs at a low price and then sell them at a high price, the result being a margin," Becker said, adding that other states’ transparency efforts — notably Minnesota and Maine — have produced revealing reports. Becker urged more detailed, quantitative descriptions from hospitals when they claim that a community program could not continue without 340B-derived revenue.

Committee members pressed on administrative burden. A committee member identified in the record as Woody said the bill ‘‘seems like it’s a lot of administrative requirements for hospitals’’ and questioned how much staff time hospitals and the Green Mountain Care Board would need to comply. Jen Carvey, legislative counsel, summarized the bill’s reporting elements and the calendar for implementation: "It would require annually on or before July 1 that each hospital that participates in the federal 340B drug pricing program submit to the Green Mountain Care Board a report detailing the hospital's participation in the program during the previous calendar year," including the items listed in the bill text.

GMCB recommended several specific changes: define the statute’s purpose (for example, to understand how hospitals use 340B revenue or how 340B affects patient cost-sharing); add a provision that filings are "subject to the Public Records Act" so the board’s handling of confidential claims is clear; require hospitals to certify the accuracy of submissions; include patient cost-sharing in the total payment amount to better capture the full value of 340B transactions; and avoid calling 340B proceeds "savings," recommending instead the terms "revenue" or "margin." GMCB also suggested that if specific negotiated payment amounts are treated by hospitals as trade secrets, the board could publish aggregated totals rather than vendor-level detail.

Advocates said the consumer disclosures in section 4 are also important. Section 4 would require insurers to provide each covered individual, within six months after the plan year ends, a report of the total amount the plan actually spent on the individual's prescription drugs during the plan year, net of rebates and discounts. It would also require covered entities to notify patients annually if any drugs prescribed for that patient were purchased through the 340B program and, for hospitals, to direct patients to the GMCB-hosted report showing how 340B revenue is used to benefit the community.

Becker said the consumer-level accounting could help patients understand how much their care actually costs after rebates and discounts and said Vermont should study Minnesota’s reporting results. He cautioned that disclosure language should be practical and that electronic delivery options could reduce mailing burden.

No formal committee action or votes were recorded during the discussion. GMCB agreed to file written comments and suggested any decision about using the collected data for regulation would require separate legislative direction and potentially additional staff resources for analysis. Committee members indicated they would continue to compare H.202 with related bills, including one described as H.266, and to consider language from Minnesota and Maine as they refine reporting and consumer-disclosure requirements.

The committee will receive written comments from GMCB and the Office of the Health Care Advocate and is expected to continue deliberations in future hearings; no votes were taken on H.202 during this session.