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340B Drug Pricing

Program Legislation



Health Centers & 340B

Under the 340B Drug Pricing Program, safety net providers are mandated to pass the savings from the reduced prices to their patients, helping our low-income uninsured and underinsured patients afford their medications. Health Centers are required by law, regulation, and mission to invest every penny of 340B savings into activities that expand access to care for our medically-underserved patients.


Read an FAQ sheet on 340B and Community Health Centers 


The Issue

Across the country and in Ohio, Pharmacy Benefit Managers (PBMs) and other payers are targeting 340B providers with “discriminatory contracts” (contracts that absorb all or part of the 340B savings, generally by reducing reimbursement). As a result, the PBM diverts the 340B savings - intended to care for underserved patients - and directs it to their for-profit corporation.


Unfortunately, due to a lack of options, covered entities (such as health centers) are left in “take-it-or-leave-it” contract scenarios. If a covered entity signs a discriminatory contract, they give away their savings and support for services. However, if the covered entity does not sign, they both lose the savings and support, and can only offer few, if any, locations for their patients to access needed medications.


The Solution

House Bill 482 and Senate Bill 263, championed by State Representatives Manchester and Clites and Senator Hackett prohibits imposing fees or reducing reimbursement to Ohio 340B providers - just because they are a 340B provider. The bill protects the intent of the 340B Program by ensuring the savings are directed to our most vulnerable and not PBMs.


Bill Updates 

(check back for the latest in the process!)

 Date Action
 January 6-23Co-sponsor request
 January 8Advocate Call to Action for Co-Sponsors (CLOSED)
 January 27Bill numbers released: House Bill 482 and Senate Bill 263
 January 28Press Conference: Video from The Ohio Channel
 January 29HB 482 referred to House Health
 February 5SB 263 referred to Senate Finance
 February 18HB 482 1st hearing, sponsor testimony: Video from The Ohio Channel


News Coverage

 Date Media Coverage
1/8/2020WHIO’s Bill Otte: “Prescription Drug Costs Are The Issue” 
1/13/2020The Columbus Dispatch’s Candisky:Pharmacy middlemen benefit from drug discount program intended to help poor 
1/28/2020The Columbus Dispatch's Candisky: Ohio lawmakers aim to protect clinics for poor form pharmacy middlemen"
1/28/2020 Statehouse News Bureau's Jo Ingles: "Bill Meant To Protect Independent Pharmacies And Community Health Clinics"
 1/29/2020NBC4's Catherine Ross: Ohio lawmakers propose crackdown on pharmacy benefit managers
 1/29/2020Spectrum News 1's Molly Martinez: Lawmakers Introduce Legislation to Curb Predatory Price-Gouging
 1/30/2020Becker's Hospital Review: Ohio lawmakers aim to protect 340B hospitals from PBM price manipulations


Background: Established in 1992, the federal 340B Drug Pricing Program provides certain safety net providers, referred to as covered entities, access to prescription drugs at reduced prices. Drug Manufacturers participating in Medicaid agree to provide outpatient drugs to covered entities at significantly reduced prices. By purchasing medications at a lower cost, covered entities can pass the savings along to their patients through reduced drug prices, and/or use the additional savings to support their mission to expand access and improve health outcomes of their patients.

Eligible covered entities are defined in federal statute and include FQHCs and FQHC Look-alikes, Ryan White Clinics, Hemophiliac Treatment Centers, Medicare/Medicaid Disproportionate Share Hospitals, Children’s Hospitals, and other safety net providers. See the full list of eligible organizations/covered entities.


Some examples of how some Health Centers use 340B savings to expand beyond medical care:

  • Dental
  • Pharmacy
  • Substance abuse disorder treatment services (MAT)
  • Further, extend hours of operation


The ability to reinvest savings to support or expand primary care services ultimately increases patients’ access to the care they need, when they need it and in the appropriate, most cost-effective setting, thus reducing costs elsewhere in the healthcare system.





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