Senate advances H.266 to expand 340B protections and require hospital reporting to Green Mountain Care Board

The Vermont Senate voted to propose committee amendments and ordered third reading of H.266, a bill that addresses how hospitals and other 340B-covered entities access discounted outpatient drugs and how they must report use of those discounts.

Senator Cummings (Senator from Washington) told colleagues that the 340B program is a federal program that requires manufacturers to offer discounted outpatient pharmaceuticals to certain health care providers, typically hospitals and clinics that serve large numbers of low-income patients. She said manufacturers have sometimes imposed restrictions that make it difficult for covered entities to use contract pharmacies to acquire and dispense 340B drugs.

H.266 would prohibit drug manufacturers from restricting or otherwise interfering with a 340B contract pharmacy's acquisition of 340B drugs, prohibit manufacturers from conditioning access on submission of claims data, and prohibit interference with a contract pharmacy's ability to dispense 340B drugs to eligible patients. The bill would also require manufacturers to offer 340B pricing as a discount at the time of purchase rather than as a later rebate. It specifies that nothing in the chapter applies to Medicaid as a payer.

The bill creates a private right of action allowing a 340B covered entity, contract pharmacy, or other injured person to sue a manufacturer for violations. H.266 also requires hospitals to submit an annual report by Jan. 31 to the Green Mountain Care Board detailing their participation in the 340B program, including aggregate acquisition and payment amounts broken out for in-house and contract pharmacies, how revenue from 340B participation is used to benefit the community, and the hospital's internal oversight of 340B participation; the Board must post the reports on its website. The hospital-reporting requirement is structured to provide more visibility into whether savings are passed to patients or used for other hospital purposes.

Section language in the bill also temporarily lifts a prior ban on "whitebagging" — the practice of delivering drugs from an insurer's wholesaler or PBM directly to a hospital for dispensing — noting that 45 other states permit the practice. The repeal of the ban is limited in time: the provision reverts on Jan. 1, 2030. The reporting requirement in section 2 is set to sunset on Jan. 1, 2031; conferees described these as time-limited experiments to collect information and inform future policy.

Senator Cummings listed witnesses and stakeholders who testified in committee, including the bill reporter Daisy Berbicoe, legal and hospital representatives, the health care advocate's office and insurance representation. The committee reportedly approved the bill on a 5–0 vote. The Senate concurred with the committee's recommendation and ordered the bill for third reading.