House approves caps on hospital markups for outpatient drugs after hours of debate

The House of Representatives on the morning calendar voted to concur in the senate proposal of amendment to House Bill 266, an act addressing hospital-administered outpatient prescription drug pricing under the federal 340B program, adopting a further amendment that sets temporary caps tying commercial charges to the federal average sales price (ASP).

Supporters framed the amendment as immediate consumer relief. The member from Winooski (Representative; name not specified), the bill reporter, said Vermonters currently "pay on average 600% more than the national average sales price for hospital administered drugs," and described a cited example in which a hospital-billed price for the cancer-support drug Neulasta was reduced in the speaker's telling from $95,000 to an ASP of $1,357. "That is price gouging," the member said.

The amendment adds a price cap (120% of ASP, with a transitional higher cap for the remainder of 2025 for some drugs) and a twice-yearly updating frequency for the ASP reference. It also prohibits cost shifting, allows hospitals to appeal to the Green Mountain Care Board (GMCB) if the cap demonstrably harms access or quality, and exempts certain non-network critical access hospitals. The committee on health care reported that hospitals and other stakeholders testified and that the amendment includes a mechanism for hospitals to seek relief from the GMCB.

Why it matters: Committee members and several proponents said the change would lower premiums and out-of-pocket costs for commercially insured Vermonters by limiting outsized markups that are unavailable for comparison-shopping because the drugs are administered in a clinical setting. Supporters projected reductions in insurer rate pressure if the cap is in place ahead of a broader shift to reference-based pricing scheduled for later implementation.

Opponents and concerns: Several members raised concerns about the fiscal impact on smaller regional hospitals. The member from Milton (Representative; name not specified) asked whether the committee had received direct testimony from Rutland Regional Medical Center about potential service reductions; the reporter said Rutland had testified previously to the committee about lost revenue from restrictive contract-pharmacy arrangements and that the hospital had reported earlier losses of roughly $8 million for 2024 attributable to contract-pharmacy restrictions. Another member reported an unverified figure of a possible $16 million annual loss for Rutland under the amendment; the committee chair said the committee had not received that $16 million figure from Rutland.

Individual testimony: The member from Morristown (Representative; name not specified) described a personal health-care cost experience and said the bill offered necessary relief: "When I learned I had inoperable stage 4 cancer... the medicine I would be on would cost $30,000 a month," he said, describing the financial and emotional strain on families.

Fiscal and financial context: Committee members cited hospital balance-sheet metrics during debate. The member from Winooski (reporter) read days-cash-on-hand figures presented to the committee: Brattleboro Memorial Hospital ~100 days (adequate), Mount Ascutney ~220 days (very strong), Northwestern Medical Center ~256 days (very strong), Porter Medical Center ~78 days (but with access to network assets), Redland Regional ~243 days, and University of Vermont Medical Center ~136 days. The reporter said some hospitals also have access to hundreds of millions in unrestricted network assets.

Procedure and outcome: The member from Winooski moved that the House concur in the senate proposal of amendment with further amendment; after extensive debate the House voice-voted to concur. The transcript records an affirmative voice outcome: "The ayes do have it, and you have concurred in the senate proposal of amendment with further amendment thereto." The vote was taken by voice and no roll-call tally is recorded in the transcript.

What the amendment does not do: It does not eliminate the federal 340B program; rather, it pairs the underlying bill's changes (allowing hospitals to use contract pharmacies and capture 340B savings) with a temporary cap on commercial charges for outpatient-administered drugs and a GMCB appeal process if patient access is threatened.

Next steps: The concurred amendment will move forward to enrollment consistent with House and Senate procedures; the text adopted includes transition rules through insurance plan year 2026 and anticipates the GMCB's planned work on reference-based pricing by 2027.

Ending: Proponents urged the House to act to deliver immediate, short-term relief while longer-term reforms are constructed; critics urged continued caution to avoid unintended service reductions at smaller hospitals and requested more fiscal detail and coordination with regulators.