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Bill

SB 154

prohibit pharmaceutical manufacturers from interfering in contracts between 340B entities and pharmacies and to provide a penalty therefor.

2025 Regular Session Introduced by Eric Emery and 10 co-sponsors

South Dakota prohibits pharmaceutical manufacturers from restricting 340B entity-pharmacy contracts, with penalties for violators, to preserve affordable drug access.

Signed by the Governor on 2025-03-13 S.J. 528
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Bill Summary · SB 154

Legislative bill overview

SB 154 prohibits pharmaceutical manufacturers from interfering with or restricting contracts between 340B Program entities (hospitals, clinics, and other healthcare providers) and pharmacies. The bill imposes penalties on manufacturers who violate these restrictions, protecting the ability of covered entities to negotiate pharmacy relationships without pharmaceutical company interference.

Why is this important

The 340B Program allows qualifying healthcare providers to purchase medications at discounted prices for uninsured and low-income patients. Pharmaceutical manufacturers have used contractual restrictions to limit which pharmacies can dispense these discounted drugs, effectively narrowing where patients can access affordable medications. This bill aims to preserve access by preventing manufacturers from controlling the pharmacy supply chain through contract restrictions.

Potential points of contention

  • Manufacturer concerns: Drug makers argue they need contractual controls to prevent "diversion" (resale of 340B drugs at retail) and to protect profit margins on their products
  • Definition and enforcement ambiguity: The bill's language regarding what constitutes "interference" may create litigation over borderline practices and enforcement challenges for regulators
  • Market impact uncertainty: Unclear whether expanded pharmacy access will significantly benefit patients or primarily shift costs/profits between healthcare entities and pharmacies

Compiled from official sources — confirm details with the bill’s official record.

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