Split at Ohio hearing over SB198: manufacturers call for federal fixes; health centers defend 340B use

A lengthy hearing on Senate Bill 198 drew competing testimony about the 340B drug‑discount program, with industry groups, manufacturers and employer representatives arguing the program has been exploited and needs federal reform, and health‑center advocates warning that restrictions now in manufacturer practice reduce access for vulnerable patients.

Kip Snyder, who identified himself as State Policy lead for PhRMA, testified in opposition, calling the 340B program “very broken” and arguing that state mandates expanding contract‑pharmacy access would lock in opportunities for exploitation. Snyder framed the program’s growth as dramatic: he told the committee the program is now a roughly "$66,000,000,000" federal program and said contract‑pharmacy arrangements grew from about 2,300 in 2010 to "over 205,000" last year. He warned that state laws requiring manufacturers to ship to unlimited contract pharmacies would create a costly patchwork of state rules and urged Congress to enact reforms and improve federal transparency.

Representatives of Ohio employers and manufacturers echoed concerns about costs and accountability. James Lee of the Ohio Manufacturers Association said expanding the program ‘‘may worsen existing challenges’’ and cited an IQVIA study he described as showing an additional $275,000,000 in annual costs to Ohio employers tied to the program’s current structure. William Smith of the Pioneer Institute argued the program enables ‘‘arbitrage’’ and highlighted ‘‘penny pricing’’ distortions; he recommended upfront reporting from 340B entities about revenue and how savings are used.

Witnesses pressing the other side said SB198 focuses narrowly on grantees such as federally qualified health centers (FQHCs) rather than hospitals. Jason Redish, an attorney who said he represents the Ohio Association of Community Health Centers, said health centers rely on 340B savings to subsidize care for uninsured and vulnerable patients and use contract pharmacies to reach patients who cannot access an in‑house pharmacy. Redish said health centers already report how they spend 340B dollars and warned that broad daily claims reporting to many manufacturers would require staff time and distract centers from patient care.

Testimony included contested policy claims and pointed examples. Trent England (Save Our States) raised political and cultural objections to some uses of 340B funds and cited public statements from clinics that listed Planned Parenthood and gender‑affirming care among services supported by 340B savings; those remarks were presented by the witness as examples and framed as his concerns. Committee members and other witnesses repeatedly said federal reforms and greater transparency should be central to any durable solution.

Committee members asked detailed questions about who benefits from 340B discounts, how rebates and commercial reimbursements interact, and how state reporting requirements might affect health centers’ administrative burden. Witnesses pointed to court decisions affecting manufacturer restrictions on contract pharmacies and to ongoing Congressional attention — including a CBO report and federal investigations mentioned by testifiers — as reasons to consider federal fixes alongside any state action.

The hearing produced no vote on SB198. Chair closed the third hearing after receiving multiple written testimonies and live statements from industry, think‑tank and health‑center representatives.