June 18, 2025

Committee on Insurance   
Ohio House of Representatives
1 Capitol Square
Columbus, Ohio 43215

Dear Representative,

The House Insurance Committee may soon consider HB 276.  On behalf of the 11,346 members and supporters of the Council for Citizens Against Government Waste (CCAGW) in Ohio, I urge you to oppose HB 276, which will impose a manufacturer mandate and change how the federal 340B Drug Discount Program operates in Ohio.

In 2023, forgone rebates on prescriptions filled with 340B pricing increased Ohio’s commercial employer costs by $275 million and state and local government healthcare plans by $40 million.  340B contract pharmacy mandate bills like HB 276 would increase costs by $51 million for commercial employers and $8 million for state and local government plans.

On November 25, 2024, the Minnesota Department of Health (DOH) issued the first report on how the program works in a state.  The hospitals received at least $630 million in 340B revenue in 2023, which may only be half of the total.  The largest hospitals, or 13 percent of participating hospitals, received more than $500 million, or 80 percent of the revenue.  The highest profit was $129 million at M Health Fairview University of Minnesota Medical Centers while federal safety-net grantee clinics generated the least revenue.  The Minnesota DOH report should be a wake-up call not only for Congress to move forward with 340B reform as CCAGW has recommended, including defining a patient as indigent, not eligible for Medicaid, and lacking insurance, as well as verification of patient eligibility by covered entities, but also for states like Ohio to forgo changes to the program at least until they analyze how it is impacting patients and taxpayers within their borders.

Before HB 276 proceeds further, Ohio must conduct a thorough fiscal analysis, which was done for 340B legislation in Tennessee, Texas, and Utah, each of which identified a detrimental impact on state budgets.  For example, a January 23, 2025, fiscal analysis of 340B contract pharmacy mandate legislation in Utah found that, “Enactment of this legislation could also increase pharmacy costs for the Public Employees Health Program (PEHP).  Assuming ten percent more drugs are purchased through 340B pricing, PEHP statewide costs could increase by $1,987,700, ongoing in FY 2026 from the General Fund, Income Tax Fund and Other Financing Sources.”  Without a fiscal analysis of HB 276, the Ohio legislature will blindly risk wasting Ohio taxpayers’ money.

I again ask you to oppose HB 276.  Rather than acting on legislation that impacts a federal program, I urge you to contact your congressional delegation and ask them to reform 340B.  

Sincerely,
Tom Schatz
President, CCAGW