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House approves bill to limit pharmaceutical firms— ability to restrict 340B contract pharmacies
Summary
Lawmakers passed Senate Bill 154 to bar drug manufacturers from restricting 340B drug sales to contract pharmacies, with supporters saying the change protects rural hospitals and community pharmacies.
The South Dakota House passed Senate Bill 154 on March 5, 2025, a bill aimed at preventing pharmaceutical manufacturers from restricting 340B pricing to contract pharmacies and protecting rural hospital and pharmacy revenue streams.
Representative Rayfeld, the bill's floor sponsor, told the chamber the 340B Drug Pricing Program is a federal program designed to help safety‑net providers extend scarce resources and that recent manufacturer restrictions have "severely impacted healthcare providers' ability to offer affordable medications to the patients who need them most." Rayfeld said the bill would ensure manufacturers cannot "directly or indirectly restrict, deny, or prohibit 340B entities from acquiring drugs at 340B prices for use in contract pharmacies."
Supporters including Representative Grama, Representative Whitman, and others described local examples where manufacturers' practices had left smaller pharmacies and rural hospitals at a financial disadvantage. Representative Whitman said the bill "is designed to protect independent pharmacies" and to prevent large pharmaceutical companies from "imposing unnecessary restrictions on 340B drug pricing."
Opponents raised questions about fiscal impact and federal‑state interactions. Representative Schapauer asked whether Medicaid recipients benefit from the 340B program; Rayfeld replied that providers participating in 340B would benefit, and witnesses and LRC staff told members a fiscal note could not be precisely quantified at that time. Representative Garcia and others urged caution about large federal programs and fiscal impacts.
The House approved the bill by a vote of 65 ayes to 5 nays. Supporters said the change preserves local access to medications and stabilizes revenue for rural providers; critics said some fiscal and federal‑law implications remained unclear.
The bill now proceeds according to legislative processing for final enrollment and transmittal.
