In Colorado, working families are being squeezed at the pharmacy counter while large billion-dollar hospital systems are exploiting a program designed to help patients and under-served communities. The tremendous growth of the Federal 340B Program is now increasing costs to our unions’ health insurance, thus increasing costs for our hardworking tradesmen. Something must be done to shed light on the effects of the unforeseen costs, and we must work to stop any action that continues to promote the program’s loopholes, allowing billions of dollars, meant to reduce costs for working families, to go to large hospitals systems’ bottom lines.

Created in 1992, the 340B Hospital Markup Program began as a vital prescription drug discount program to support critical access hospitals and health care centers serving low-income and rural communities; and the program did just that for decades. Here’s how it works: hospitals buy medications at a significant discount from manufacturers through 340B, then turn around and charge insurance plans — and by extension, workers — in many cases outrageous markups, keeping the difference. Today, the program is now unrecognizable due to lack of oversight, accountability and guardrails, allowing many large “nonprofit” tax-exempt hospital systems to “buy low and sell high,” turning it into a volume game and money-making operation — one that drives up costs on the backs of working Coloradans, showing little-to-no benefit to patients.

Let me be clear, not every 340B entity is abusing this program, but a multitude of reports show these large bad actors account for the exponential growth, while safety-net providers and patients see less benefits and services, and costs shift to Coloradans. For example, a January New York Times article reported about a woman whose hospital purchased her cancer medications under the 340B discount for $2,700 and billed her insurance $22,700 — and when the insurance company only agreed to pay the hospital $10,000, the hospital charged the patient $5,000 in out-of-pocket costs. The 340B program has ballooned from just $5 billion in 2010 to more than $66 billion in 2023, bigger than Medicaid, with no ceiling in sight. That means employers — whether it’s a union health trust, a small business, or even the state government — pay more, while hospitals quietly pocket the difference without reducing prescription drug costs to patients.

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The CBCTC represents Colorado’s building trades, encompassing thousands of skilled journeymen and registered apprentices in 14 crafts in construction, such as our pipefitters, sheet-metal workers, plumbers, laborers and electricians. Many of these trades act as self-insured employers, providing health benefits for their union members. This is a tremendous benefit to our tradesmen, and our union trustees work hard to lower health care costs for their members. Our health funds lose negotiated prescription drug rebates if a member, unbeknownst to them, sought treatment at a facility owned by a 340B health care system. This cycle means higher drug markups, higher copays and more money out of the pockets of hardworking Coloradans.

A 2025 IQVIA study found in 2023, the 340B program cost $152 million in lost rebates for Colorado employers, or $45 per beneficiary. It also found state legislation that allow unlimited contract pharmacies, like Colorado SB-71, will cost Colorado employers an additional $23 million annually in lost rebates.

We support the original intent of the 340B program. If drug companies pay billions in discounts, and patients and vulnerable communities receive reduced costs and increased services to that degree, a slight cost to our funds seems manageable. But that is not what is happening.

Colorado lawmakers must prioritize accountability before they consider expanding the program by looking under the hood to identify good stewards from bad, locate where the money is going, determine increased costs to the overall health care system, and put safeguards in place to ensure 340B serves its original purpose — helping patients.

For these reasons, we urge Colorado lawmakers to support SB-124, requiring meaningful transparency and patient benefit within the 340B program in Colorado, and oppose SB-071, which only continues to protect the bad actors, costing Colorado workers, taxpayers and patients more money. We also encourage legislators to ensure SB-124 includes safeguards for rural hospitals — keeping their doors open and those patients served. Gov. Jared Polis has made prescription drug affordability a priority, but without reform, the unchecked expansion of 340B will only make things worse.

If legislators want to stand with workers, they must first stand up to the bad acting hospitals’ abuse of the system, and fix 340B before it costs workers even more.

Jason L. Wardrip is business manager of the Colorado Building & Construction Trades Council.