Bill to regulate discount drug program narrowed, advanced

Senators advanced a bill from general file March 5 meant to protect certain hospitals and other health care facilities in Nebraska that purchase drugs at discount prices through a federal program.

LB168, as introduced by Sen. Brian Hardin of Gering, would prohibit drug manufacturers and distributors from directly or indirectly denying, restricting or prohibiting acquisition of a 340B Community Benefits Program drug by any location authorized to receive it.

The measure also would empower the Nebraska attorney general or any county attorney to take action on behalf of the state to prevent violations of the bill’s provisions.

Hardin said the federal 340B program was created by Congress in 1992 to authorize eligible critical-access and “safety-net” hospitals and federally qualified health centers to purchase certain outpatient medications from drug manufacturers at discount prices to help offset the cost of providing Medicaid and Medicare services.

“Savings from the 340B program help our Nebraska hospitals provide more comprehensive care for underserved patients,” Hardin said. “They invest these savings back into the communities in many different ways.”

Eight states have passed laws similar to LB168, he said, and 11 more are considering legislation this year to address actions by drug manufacturers and distributors that have narrowed the 340B program.

La Vista Sen. John Arch supported the bill, but said Congress needs to step in. More than 50% of the population is covered by Medicare or Medicaid, he said, but the federal government is unwilling to cover the costs of that care — resulting in a cost shift to the private sector to make up the difference.

“The 340B program is a mess,” Arch said. “I’m going to vote for this bill, but this does not fix the 340B program.”

Sen. George Dungan of Lincoln echoed those sentiments in his support for the measure.

“The feds have to act with regards to some of the issues and problems that come up when you’re talking about the 340B program and the various benefits,” Dungan said. “That being said, I think that we need to take action to ensure that our rural hospitals and patients are being protected.”

After voting 42-0 to adopt a Banking, Commerce and Insurance Committee amendment that would remove drug distributors from the bill’s provisions, lawmakers voted 41-0 to advance LB168 to select file.