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Sen. Kaler urges state limits on manufacturer restrictions to protect 340B 'original grantees'
Summary
Senator Kaler testified in favor of Senate Bill 198 to bar certain manufacturer restrictions on 340B drug discounts so community health centers and other original covered entities can retain access and reinvest savings in patient care; committee members asked about Planned Parenthood and eligibility issues.
Senator Kaler urged the Senate Health Committee to pass Senate Bill 198 on sponsor testimony, saying the bill would protect the ‘‘original grantees’’ of the federal 340B drug-pricing program and preserve discounted drugs for community health centers and other safety-net providers.
Kaler told the committee that the 340B program, created in 1992, lets eligible safety-net providers — including federally qualified health centers (FQHCs) and HIV/AIDS clinics — purchase outpatient drugs at discounted prices and reinvest savings in patient services such as behavioral health, dental care and transportation. She said the Affordable Care Act’s later expansion of eligibility to more hospitals has ‘‘inflated’’ the program and that manufacturers have begun placing restrictions that limit contract pharmacies and require patient claim-level data from covered entities.
"This bill simply tries to protect the original grantees as set forth in 1992," Kaler said, and she framed SB198 as focused on restoring the program’s original intent. She told the committee that 37 pharmaceutical manufacturers have imposed restrictions that affect FQHCs and that the bill would prevent those company-imposed limits from being applied to the community health center community.
Kaler said SB198 would not address hospitals; instead, the version before the committee would exclude hospitals so the law targets original grantees. She also said the sponsor’s office will seek a technical amendment to clarify that the bill protects original-grantee contract pharmacies as well as in-house pharmacies and pointed to transparency measures in House Bill 96 that would require an annual report to DOH listing total payments to contract pharmacies and prescription counts per contract pharmacy.
Committee members asked how the bill would interact with manufacturers’ decisions to participate in 340B and whether manufacturers could continue to impose restrictions. Kaler responded that SB198 is intended to remove those restrictions as applied to FQHCs while not addressing manufacturer–hospital arrangements.
A committee member cited a letter signed by Gov. Mike DeWine and ‘‘about 10 other governors’’ asking federal administrators to reject requests by Planned Parenthood for 340B designation and asked whether SB198 could be amended to address that concern. Kaler said she would review the letter and share it with the committee and consider whether language could be added.
Ranking Member Liston thanked the sponsor and asked for clarification that SB198 would not itself determine which entities are eligible for 340B; Kaler agreed eligibility selection is a separate question and suggested additional witnesses could be called to resolve that issue.
The chair closed the first hearing on SB198 with no vote taken; the committee signaled the matter may return for additional testimony or amendment.
