Colorado’s 340B Expansion Bill Faces Pushback from Taxpayer Watchdogs

Colorado is making headlines in the 340B world once again—this time with a bold legislative proposal aimed at expanding the reach of the program statewide. But while many hospitals and advocates see the bill as a step toward improving access to affordable medication, others—especially fiscal conservatives and taxpayer groups—are sounding the alarm.

Senate Bill 71 (SB71) seeks to expand 340B eligibility and reinforce protections for contract pharmacy use throughout Colorado. Supporters argue it’s a necessary measure to level the playing field for providers who serve Colorado’s rural and underserved communities.

But the National Taxpayers Union (NTU) disagrees—and they’re making their opposition known.

What’s in Colorado’s SB71?

The bill proposes several changes to how 340B operates at the state level, including:

• Prohibiting drug manufacturers from limiting or denying access to 340B pricing based on how or where medications are dispensed (i.e., contract pharmacy use).

• Expanding the types of health care providers eligible to participate in the program.

• Setting enforcement mechanisms to penalize manufacturers that fail to comply with the state’s interpretation of 340B access.

On paper, it sounds like a win for patients and providers. But the bill’s opponents say it may open the door to financial abuse without delivering real value to consumers.

The NTU’s Criticism: “A Prescription for Disaster”

In a statement published earlier this month, the National Taxpayers Union called SB71 “a prescription for disaster,” arguing that the expansion could result in higher health care costs for insured consumers and little accountability for how 340B savings are used.

Their key concerns include:

• Lack of transparency: The bill does not include mandatory reporting on how 340B savings are spent by hospitals or clinics.

• Potential for abuse: Critics argue that large hospital systems could use the expansion to grow profits without passing on savings to patients.

• Market distortion: Expanding the program without new oversight could incentivize hospitals to consolidate pharmacy relationships or shift services for financial gain.

The NTU’s message is clear: without safeguards, 340B expansions like SB71 may do more harm than good—especially to small businesses, taxpayers, and insured individuals who don’t directly benefit from the program.

Advocates Push Back

Supporters of SB71 aren’t backing down. They say the legislation is urgently needed to combat manufacturer-imposed restrictions that are choking off access to discounted drugs—particularly in rural counties where hospitals rely on contract pharmacy partnerships to serve their communities.

“Drug companies are putting profits over patients,” said one advocacy group in Denver. “Colorado families are paying the price. This bill gives local providers the power to push back and keep care affordable.”

Several community health centers and public hospitals have voiced strong support, noting that the 340B program has helped them expand services, fund outreach programs, and reduce medication costs for thousands of uninsured patients.

What’s Next?

SB71 is still making its way through the Colorado legislature, and the debate is far from over. Lawmakers on both sides are now facing increasing pressure—from health care organizations, patient advocates, taxpayer watchdogs, and pharmaceutical lobbyists alike.

If the bill passes, Colorado could become a national example for how states can push back against drug company restrictions and reclaim some local control over 340B. But if critics succeed in slowing or killing the bill, it could signal rising momentum against state-led 340B protections across the country.

The Bottom Line

The debate over Colorado’s SB71 reflects a larger tension at the heart of the 340B conversation: who really benefits, and how do we ensure the program remains focused on those most in need?

Whether you’re a covered entity, a policy advocate, or just someone keeping a close eye on 340B developments, this story is one to watch. The outcome in Colorado could influence similar legislation—and opposition—in states around the country.