The High Cost of Ignorance: Why Special Interests Are Fighting Prescription Drug Transparency in Colorado

By Rep. Ken DeGraaf | Guest Commentary, Rocky Mountain Voice

Editor’s update: House Bill 26-1056 will be heard in the House Health & Human Services Committee on Tuesday, February 17, 2026, upon adjournment in HCR 0112. The committee is scheduled between 10 a.m. and 2 p.m. Readers may listen live here: https://sg001-harmony.sliq.net/00327/Harmony/en/PowerBrowser/PowerBrowserV2/20260217/-1/18053#handoutFile_ 

“It is difficult to get a man to understand something when his salary depends upon his not understanding it.” — Upton Sinclair

It’s easy to be wrong when it makes you money. 

If the average savings from using a Pharmacy Stewardship Program (PSP) are $1,500 per member per year, and Colorado has around 2 million workers covered by employer health plans, that’s approximately $3 billion reasons to be wrong. HB26-1056, the Prescription Drug Benefit Information Transparency bill, aims to empower self-insured employers with the data they need to access these savings through compliant, optimized drug sourcing.

Yet a chorus of opposition from pharma giants, insurers, and even some patient advocacy groups is drowning out the facts with fear tactics. Let’s cut through the noise.

Special interests are stoking fears that HB26-1056 promotes Alternative Funding Programs (AFPs), which are controversial schemes often criticized for exploiting loopholes and harming patients. But what exactly defines an AFP? Based on analyses from sources like the American Medical Association and patient foundations, AFPs typically exhibit these characteristics:

For-profit vendors targeting self-funded employers: They market themselves as cost-savers by excluding high-cost specialty drugs from plan coverage.

Redirecting patients to external assistance: Patients are funneled to manufacturer coupons, charitable foundations, or Patient Assistance Programs (PAPs) meant for the uninsured or underinsured.

Creating artificial uninsured status: By carving out drugs from benefits, they make insured patients appear eligible for “free” drugs, often delaying access and imposing administrative burdens.

Charging hefty fees: Vendors pocket 25-35% of the “savings” based on retail prices, while depleting charitable resources intended for truly needy individuals.

Lack of clinical oversight: These programs prioritize cost-shifting over patient health, potentially leading to treatment disruptions.

A Pharmacy Stewardship Program, which HB26-1056 enables through transparency and unrestricted access to compliant alternatives, meets none of these criteria. PSPs operate within existing benefits, using FDA-approved sourcing to optimize costs without excluding coverage, faking uninsured status, or exploiting charities. They focus on efficient, legal importation or generics that maintain quality and access—saving money for employers and employees alike, without the deception. As clarified in the bill’s overview: “AFPs are not referenced or authorized in HB26-1056… The voluntary programs described in the bill preserve coverage, and prescriptions not fulfilled through a pharmacy stewardship program continue to process through the existing PBM and network.”

One common complaint is that the bill “expands foreign sourcing” by broadening the definition of “person” in state law. This is a red herring. The legal commercial definition of “person” remains unchanged: Under federal statutes like the Federal Food, Drug, and Cosmetic Act and 21 CFR § 807.3, a “person” includes not just individuals but entities such as corporations, partnerships, or associations. Self-funded health plans, as legal entities, are already entitled to import medications if they meet stringent FDA requirements for safety, labeling, and efficacy. 

HB26-1056 doesn’t invent new loopholes; it simply ensures PBMs and consultants can’t block employers from exercising these existing rights through misleading statements or restrictions. The bill aligns with Colorado’s prior policy under SB19-005 and federal law (21 U.S.C. § 384), expressly stating: “HB26-1056 does not create, expand, or authorize any new importation pathway.”

Then there’s the scare tactic about plan managers carelessly substituting “inferior” medications. Nonsense.

First, any imported or alternative drugs must fully comply with FDA standards—no shortcuts allowed, as “Drug safety is governed by current good manufacturing practice (GMP) and documented chain of custody, not geography.”

Second, unlike Pharmacy Benefit Managers (PBMs), who act as Third Party Administrators (TPAs) with no fiduciary duty to prioritize member health over profits, plan managers bear a legal fiduciary responsibility for the well-being of their members under ERISA.

PBMs thrive on opaque rebates and markups, often retaining millions while driving up costs; HB26-1056 demands disclosure to let employers choose better paths, noting that “ERISA fiduciaries are legally required to act in the interest of plan participants and control plan expenses.”

This opacity is exacerbated by programs like 340B, which mandates discounts to safety-net providers to offset unreimbursed care—helping hospitals and clinics serve low-income patients. While well-intentioned, it leads to “spread pricing,” where providers buy cheap but bill high, shifting costs to commercial payers and inflating list prices. Layer on PBM “shell games”—rebates retained partially, promotions favoring high-margin drugs, and selective discounts—and you get an expensive, non-transparent market. 

Manufacturers hike U.S. prices to balance these dynamics, while PBMs profit from the fog. 

HB26-1056 cuts through this by requiring basic financial data disclosure (e.g., total drug cost per claim, without patient info), enabling employers to fulfill fiduciary duties and reduce exposure to lawsuits.

Look at the lobbyists registered in opposition to HB26-1056: A who’s who of pharma heavyweights like Amgen, Bristol-Myers Squibb, Eli Lilly, Pfizer, and trade groups like PhRMA and BIO. 

Their financial interests are clear—transparency threatens billions in branded drug revenues. Even more troubling, patient advocacy groups opposing the bill are often deeply entangled: Studies show that 67-83% of major U.S. patient groups receive pharma funding, with some deriving up to 45% or more from industry sources. 

In fact, about 80% of these groups are pharma-funded, creating inherent conflicts that can mute calls for real affordability.

Colorado workers deserve better than fear-mongering from those profiting off the status quo. HB26-1056 isn’t radical—it’s common sense. By requiring PBMs to share cost data and stop blocking compliant savings programs, it puts power back in the hands of employers and families. Let’s not let $3 billion in potential savings slip away because some salaries depend on misunderstanding the truth. 

Contact your legislators: Support transparency, support HB26-1056.

Rep. Ken DeGraaf represents Colorado House District 22 and is the sponsor of HB26-1056.

Footnotes

Savings estimate from Limitless Consulting Pharmacy Stewardship Program launch (July 2025): Average $1.5 million per year for every 1,000 employees enrolled. https://www.einpresswire.com/article/829454933/limitless-consulting-launches-pharmacy-stewardship-program-to-achieve-real-time-drug-price-parity-for-employers 

Colorado employer-sponsored coverage: Approximately 50% of Coloradans (~2-2.5 million covered, including dependents/workers) via employer plans; small group ~172,000. Sources: Colorado Division of Insurance reports and Connect for Health Colorado data (2025-2026).

AFP characteristics and distinctions: From the “Overview of HB26-1056: Common Opposition Claims and Factual Clarifications” document.

“Person” definition and no new importation: 21 CFR § 807.3; bill text § 10-16-171; aligns with SB19-005 and 21 U.S.C. § 384.

Drug safety standards: 21 U.S.C. § 351(a)(2)(B) and § 381(a); GAO 2020 on imported ingredients.

ERISA fiduciary duties and court cases: ERISA § 404(a)(1); Lewandowski v. Johnson & Johnson; Stern v. JPMorgan Chase (from bill overview).

340B and PBM opacity: USC Schaeffer and prior analyses; bill disclosure requirements.

Patient advocacy funding: NEJM 2017 study (83% of top 104 groups receive industry funds); Johns Hopkins Bloomberg School (74% of pharma donations to U.S. groups); Public Citizen 2023 ($6B+ grants 2010-2022); KFF/Pre$cription for Power database (some >50% reliant). Range 67-83% synthesized from multiple studies (e.g., JAMA/NEJM surveys).

Editor’s note: Opinions expressed in commentary pieces are those of the author and do not necessarily reflect the opinions of the management of the Rocky Mountain Voice, but even so we support the constitutional right of the author to express those opinions.