By Jen Schumann | Contributing Writer, Rocky Mountain Voice
If Senate Bill 25-071 fails, Julie Lonborg says her neighbor could end up driving from Lone Tree to Thornton just to pick up a single prescription. That’s not some theoretical what-if. It’s a glimpse into what hospital leaders say is already unfolding in Colorado, especially for patients in rural communities who depend on access to affordable medication through the federal 340B drug discount program.
SB25-071, known as the Colorado 340B Contract Pharmacy Protection Act, aims to stop pharmaceutical manufacturers from placing limits on where and how hospitals dispense discounted drugs to vulnerable patients.
Supporters say it’s the only thing standing between local hospitals and a set of restrictions from out-of-state drug companies that could strip millions of dollars from already struggling health care providers.
“For them, it’s about profit. For us, it’s about survival,” said Lonborg, who serves as Senior Vice President of Communications for the Colorado Hospital Association.
Congress set up the 340B program in 1992 to make drug companies give discounts to hospitals that serve low-income patients, in return for access to Medicare and Medicaid markets.
The program is zero cost to taxpayers, while qualifying healthcare providers must treat Medicare and Medicaid patients. Healthcare providers who participate in the program must also invest in local communities whether through charity care, healthcare education or essential services.
But hospital leaders like Lonborg say those pharmaceutical companies are now chipping away at the deal—mainly by limiting how hospitals can use contract pharmacies, which are often the easiest way for patients to get their prescriptions.
SB25-071 was introduced to protect 340B’s original intent, sponsored by Sens. Dafna Michaelson Jenet and Janice Rich and Reps. Matthew Martinez and Rick Taggart. Rich asserts the bill is a way to safeguard access to care in the state’s most vulnerable communities.
“This bill is about ensuring that rural Colorado and our safety-net hospitals can continue to serve vulnerable patients,” Rich stated during the March 13 Senate Health and Human Services committee hearing.
Colorado’s hospitals aren’t claiming the program is perfect. But they argue that SB25-071 simply preserves the status quo—one that works for patients—by stopping drug companies from interfering with how prescriptions are filled.
According to the bill text, manufacturers would be barred from denying, restricting or limiting 340B drug delivery to a hospital or its pharmacy partners.
Supporters say that restriction matters because the margins are razor-thin. In some places, disappearing altogether.
Community Hospital in Grand Junction estimates it would lose $12 to $14 million annually if the program were gutted.
That’s the difference between keeping the doors open or closing entire services.
“Even our smallest hospitals, if you take away a couple million dollars, they’re going to be a couple million in the red,” Lonborg said.
According to data provided by the Colorado Hospital Association, 89% of 340B-participating hospitals operate at negative or unsustainable margins. And those hospitals provided over $330 million in charity care last year alone.
The savings from the 340B program, Lonborg explained, don’t go into hospital profits—they subsidize trauma care, behavioral health, OB units and services that routinely lose money but serve essential public needs.
“This is not a theory. This is happening now. We’ve had OB units shut down. We’ve had two behavioral health hospitals close. This hasn’t happened since the 1980s,” she said.
Some critics claim that 340B is being misused by large hospital systems or that contract pharmacies are clustered in wealthier areas. Lonborg pushed back.
“We partner with pharmacies along major transit routes so patients without cars or with limited mobility can actually access meds,” she said.
She also emphasized that the program is under strict federal audit requirements, and that the narrative of system abuse ignores the realities faced by rural and underserved populations.
At the center of the debate is a comparison that’s hard to ignore: Colorado hospitals provided $2.42 billion in community benefits last year.
Meanwhile, the top 16 pharmaceutical companies raked in $684 billion in global earnings.
“The legislature has a choice,” Lonborg said. “Big Pharma’s profits—or your local hospitals and patients.”
SB25-071 passed out of the Senate Health & Human Services Committee and heads next to the full Senate for debate on March 25. 4:34:19
Coloradans can track the bill’s progress by visiting the session schedule at: https://leg.colorado.gov/session-schedule.
To weigh in, testimony can be shared in person, over Zoom, or submitted in writing. Instructions are available at: https://www.leg.state.co.us/clics/clics2025A/commsumm.nsf/NewSignIn.xsp.