Rural Colorado pharmacists who say their businesses are struggling were thrown a lifeline under a new bill signed on Tuesday, May 27, by Gov. Jared Polis.
House Bill 1222 aims to keep independent pharmacies open by ensuring fairer reimbursement rates for the prescription drugs they buy.
"We also know that accessing medications is just as important as cutting costs, which is why I'm proud to sign this law today," Polis said in a statement following the bill signing.
The bill was brought forward this legislative session by a bipartisan group of rural lawmakers after hearing concerns from local pharmacists struggling to keep their doors open.
Several store owners who testified on the bill during a March hearing said their dependence on pharmacy benefit managers, the middlemen between drug manufacturers and pharmacies, was the reason.
"Approximately 35% of prescriptions I fill are reimbursed below costs," said David Bonfiglio, who owns a longstanding pharmacy in Routt County. "This situation we are in is unsustainable. ... If allowed to continue, the personal drive to care for our patients may finally be overtaken by the need to cut our losses and close our doors."
Pharmacy benefit managers, meant to negotiate lower drug rates with suppliers, have grown to control approximately 80% of the prescription drug market in the United States at a time when independent pharmacies are shuttering.
A 2024 report by the Federal Trade Commission links the rise of these companies to inflated drug prices and claims they may be "using their market power across the distribution chain to set reimbursement rates at untenably low levels for independent pharmacies."
Rep. Meghan Lukens, D-Steamboat Springs, a lead sponsor of HB 1222, said pharmacies are critical for accessing prescription refills, vaccinations, testing and screenings. Her sweeping mountain district, which stretches across Eagle, Routt, Moffat and Rio Blanco counties, is home to just two pharmacies, one of which belongs to Bonfiglio.
"When rural independent pharmacies close, patients lose access to care," Lukens told fellow lawmakers during the bill's March hearing. "Communities lose health care providers and Coloradans are forced to travel greater distances to access care or are left to forgo care completely."
Beginning in January 2026, HB 1222 requires benefit managers to reimburse rural independent pharmacies at rates equal to or greater than a prescription drug's national average cost. That reimbursement would be in addition to the dispensing fee for filling a prescription.
It also mandates that companies give pharmacy owners a 30-day notice of their right to appeal an audit that may lead to more than $1,000 being recouped from their store. Additionally, it prevents companies from banning pharmacies from working with a third-party courier to deliver prescription drugs to a patient.
Several amendments were made to the bill to ease concerns from health care industry representatives, including a later implementation date and a tighter definition of what constitutes a rural independent pharmacy.
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