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Community health centers warn 340B contract‑pharmacy carve‑out in HB 96 would cut patient access and center revenues
Summary
Federally qualified health centers and statewide health‑center associations told the House Medicaid Committee that changes to the 340B drug pricing program in House Bill 96 — notably carving out contract pharmacies — would reduce savings used to fund clinics, school‑based health centers and specialty care and could force service cuts or closures.
Leaders from Ohio’s community health centers told the House Medicaid Committee that proposed changes in House Bill 96 to the federal 340B drug pricing program would sharply reduce the discounts centers use to fund services and expand access.
Julie DeRasi King, president and CEO of the Ohio Association of Community Health Centers, said the budget’s 340B provisions ‘‘threaten the progress Ohio’s made in strengthening access to health care.’’ She told the committee that community health centers use 340B savings to support school‑based health centers, behavioral health, pharmacy services, and other programs, and that eliminating contract pharmacy arrangements would create ‘‘pharmacy deserts’’ and reduce centers’ financial flexibility.
Multiple center CEOs offered concrete examples: Tara Baer of Community Health and Wellness Partners described a couple whose monthly diabetic medication costs dropped from $1,500 to $150 through a 340B contract pharmacy; Steven Roller of Primary Health Solutions said his center used 340B savings to subsidize maternal‑fetal services, school‑based health centers and medication deliveries totaling $602,000 in 2024.
Why it matters: 340B discounts are not direct state appropriations; they are manufacturer discounts required under federal rules. Witnesses said the proposed carve‑out would shift rebates or revenue that currently supports community services back toward Medicaid’s rebate streams and possibly to state budgets, leaving centers without a revenue source they use for local services.
Disputed fiscal estimates: Witnesses and committee staff gave different estimates of the fiscal impact. Julie DeRasi King reported survey results suggesting a $40 million hit to community health centers statewide, while the Department of Medicaid reportedly projected roughly $3–4 million for health centers alone. Center leaders said the larger numbers reflected centers’ internal estimates and warned that even smaller losses would force service reductions.
Questions for policymakers: Committee members asked whether compromise solutions were possible, including geographic limits (for example, a contracting radius) or alternative reporting mechanisms so the state and the department could distinguish 340B claims by grantee type. Witnesses said they were willing to negotiate, but warned that hospitals and grantees are affected differently and that contract‑pharmacy limits would disproportionately harm community health centers that lack in‑house pharmacies.
Ending: Health‑center leaders asked the committee to remove or revise the proposed 340B changes in HB 96 and to work with OD M and manufacturers to protect community access while addressing state rebate concerns.
