Colorado has long led the way in protecting vulnerable communities. During the Second National AIDS Research Forum in Denver in 1983, people living with HIV and AIDS laid out a path for how providers, legislators, and more could and should approach the communities affected by HIV.
Famously known as the Denver Principles, the document championed a powerful and unwavering idea: “Nothing about us, without us.” The HIV advocacy community holds this ethos close, and it also drives my work at the Community Access National Network, or CANN, where advocacy is a fight for survival, and health care solutions come from the very people whose lives are on the line.
Nine years after the Denver Principles, the federal government created the 340B drug discount program — intended as a lifeline for marginalized communities. But today, the program serves hospitals more than patients, funneling billions in drug discounts to large “nonprofit” hospitals with no requirement to report or reinvest in charity care.
Given Colorado’s history of standing up for vulnerable communities, it’s troubling that state lawmakers are considering Senate Bill 71, which locks us into the broken 340B system — a program that lacks oversight and transparency as well as a track record of truly benefiting patients.
The 340B program was designed for safety-net providers to purchase outpatient medications at discounted prices to provide care or medication to underserved and low-income patients. When it works as intended, it’s a lifeline — helping deliver affordable care. But today, the 340B program raises more questions than answers.
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According to the federal Health Resources and Services Administration, covered entities purchased over $66 billion in outpatient medications through 340B in 2023. Large hospital systems and pharmacy benefit managers, which manage prescription drug benefits for health insurers and employers, buy medications at discounts of up to 50% but bill insurers full price — pocketing the difference.
Adding insult to injury, 340B hospitals are driving up the already high cost of health care. A 2024 study (published in The New England Journal of Medicine) found that 340B hospitals charged, on average, over 6.5 times higher costs than independent physician practices. Patients doubly bear the brunt of these abuses as higher costs from markups lead to higher insurance premiums.
In Colorado, the numbers tell a concerning story.
The state has 68 hospitals participating in the program that are linked to more than 1,000 pharmacies. Those hospitals provide less charity care than the already underwhelming national average of just 2.28% of their operating costs, despite benefiting from 340B drug discounts meant to support vulnerable patients.
In Colorado, only 25% of contract pharmacies are located in medically underserved areas and 73% of 340B hospitals are below the national average for charity care levels. Nearly half of the state’s 340B contract pharmacies are located in affluent neighborhoods or even outside of state lines.
Despite mounting evidence of abuse, hospitals face zero accountability for how these revenues are helping patients. This is not a numbers game — it’s about real people. Patients in Colorado including those living with HIV/AIDs rely on 340B for life-saving medications and care. Without oversight, there is no guarantee those resources are reaching the communities they are meant to serve.
Unrestricted, unmonitored expansion of the 340B program through contract pharmacies represents the antithesis of the Denver Principles — profits generated in our name, yet without delivering any tangible benefit to us.
Coloradans do not have to settle for a bad bill that makes this situation worse. Senate Bill 71 would lock in the flaws in the current system, including a lack of transparency about whether 340B savings reach patients, as intended.
A better approach would be to install a requirement for patients to receive the direct benefit of 340B discounts at the pharmacy counter and require hospitals to report their use of 340B revenues and other reporting metrics.
With smart reforms, Colorado can redirect the 340B program back to where it belongs — for us.
Jen Laws, of Louisiana, is president and CEO of the Community Access National Network, a nonprofit dedicated to improving access to health care services for people living with HIV/AIDS and/or viral hepatitis.
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