September 30, 2025

Ohio Senate      
Health Committee
South Hearing Room, Senate Building
Ohio Statehouse
1 Capitol Square 
Columbus, Ohio 43215

Dear Senator,

The Senate Health Committee will hold a hearing on SB 198 on Wednesday, October 1, 2025.  On behalf of the 11,348 members and supporters of the Council for Citizens Against Government Waste (CCAGW) in Ohio, I urge you to oppose SB 198, which will change how the federal 340B Drug Pricing Program operates in Ohio and increase government waste and mismanagement.  To participate in Medicaid, Section 340B of the Public Health Service Act requires drug manufacturers to provide drugs at discounts of between 20-50 percent to certain federally funded clinics and hospitals and the private pharmacies with which they contract to dispense these drugs.  However, the statute does not define which patients are eligible to receive 340B discounts or require participating providers to pass their drug savings on to patients.

A September 21, 2025, Wall Street Journal editorial described how well-funded 340B hospitals use 340B discounts to finance the acquisition of competing providers that are not eligible for 340B discounts, which increases healthcare market consolidation and raises costs for insurers and patients.  A September 9, 2025, Congressional Budget Office (CBO) report highlighted the causes of the costs of the 340B program, which rose from $2.4 billion in 2005 to $66.3 billion in 2023.

A February 4, 2025 IQVIA whitepaper, “The Cost of the 340B Program to States,” found that the 340B program costs Ohio’s employers and workers $235 million in foregone rebates annually and Ohio’s taxpayer-funded public employee health insurance plans an additional $40 million annually.

Since 340B is a federal program, essential reforms like a clear definition of eligible patients should be enacted by Congress, but the states can play a key role in requiring greater transparency and accountability for program expenditures.  For example, on November 25, 2024, the Minnesota Department of Health (DOH) issued the first state-level report on how the program works in one state.  Hospitals in Minnesota received at least $630 million in 340B revenue in 2023.  The largest hospitals, which equal 13 percent of the participating hospitals, received more than $500 million, or 80 percent of the revenue.  The highest profit from 340B was $129 million at M Health Fairview University of Minnesota Medical Centers.  The Minnesota DOH report should be a wake-up call not only for Congress to reform 340B by requiring verification of patient eligibility and disclosure of 340B profits by each participating entity, but also for states like Ohio to forgo expanding the program until they analyze how it is impacting patients and taxpayers within their borders.  Ohioans deserve at least the same level of transparency provided by the Minnesota DOH, but SB 198’s restrictions against collecting 340B claims and utilization data would keep taxpayers in the dark.

Rather than expanding 340B and increasing wasteful spending in Ohio, I urge you to contact your congressional delegation and ask them to reform the program.  Again, I ask that you oppose SB 198.

Sincerely,
Tom Schatz
President, CCAGW