LB200 LB200
2023 2023
LEGISLATURE OF NEBRASKA
ONE HUNDRED EIGHTH LEGISLATURE
FIRST SESSION
LEGISLATIVE BILL 200
Introduced by Briese, 41.
Read first time January 09, 2023
Committee: Health and Human Services
1 A BILL FOR AN ACT relating to public health; to adopt the Canadian
2 Prescription Drug Importation Act.
3 Be it enacted by the people of the State of Nebraska,
-1-
LB200 LB200
2023 2023
1 Section 1. Sections 1 to 8 of this act shall be known and may be
2 cited as the Canadian Prescription Drug Importation Act.
3 Sec. 2. The Legislature finds that:
4 (1) Consumers in the United States pay some of the highest
5 prescription drug prices in the world and it is estimated that United
6 States consumers pay twice as much as Canadian consumers for patented
7 prescription drugs and twenty percent more for generic drugs;
8 (2) Federal law, as codified in 21 U.S.C. 384, authorizes the
9 federal Secretary of Health and Human Services to allow wholesale
10 importation of prescription drugs from Canada if such importation is
11 shown to be both safe and less costly for United States consumers;
12 (3) Importing prescription drugs from Canada would be both safe and
13 less costly, as Canada has a rigorous regulatory system to license
14 prescription drugs, equivalent to the licensing system in the United
15 States;
16 (4) In the United States, Title II of the federal Drug Quality and
17 Security Act, Public Law 113-54, referred to as the Drug Supply Chain
18 Security Act, has significantly improved drug security and safety through
19 a system of pharmaceutical product track-and-trace procedures; and
20 (5) A wholesale drug importation program for the exclusive benefit
21 of Nebraska residents should be designed and implemented to provide
22 Nebraska residents access to safe and less expensive prescription drugs.
23 Sec. 3. For purposes of the Canadian Prescription Drug Importation
24 Act:
25 (1) Canadian supplier means a manufacturer, wholesale distributor,
26 or pharmacy that is appropriately licensed or permitted under Canadian
27 federal and provincial laws and regulations to manufacture, distribute,
28 or dispense prescription drugs;
29 (2) Department means the Department of Health and Human Services;
30 (3) Eligible importer means:
31 (a) A pharmacist or wholesaler approved by the department;
-2-
LB200 LB200
2023 2023
1 (b) A pharmacist or wholesaler employed by, or under contract with,
2 the Department of Correctional Services, for dispensing to inmates; and
3 (c) Commercial plans, as defined by rules and regulations of the
4 department and as approved by the department and the federal government;
5 (4) Federal act means the Federal Food, Drug, and Cosmetic Act, 21
6 U.S.C. 301 et seq.;
7 (5) Pharmacist means a pharmacist licensed under the Pharmacy
8 Practice Act;
9 (6) Pharmacy has the same meaning as in section 71-425;
10 (7) Prescription drug has the same meaning as in section 71-7441;
11 (8) Program means the Canadian Prescription Drug Importation Program
12 created in section 4 of this act;
13 (9) Vendor means a vendor with which the department contracts for
14 the provision of services under the program pursuant to section 4 of this
15 act; and
16 (10) Wholesaler means a wholesale drug distributor licensed under
17 the Wholesale Drug Distributor Licensing Act.
18 Sec. 4. (1) The Canadian Prescription Drug Importation Program is
19 created. The program shall be administered by the department. Upon
20 receiving approval of the program as described in section 6 of this act,
21 the department shall contract with one or more vendors to provide
22 services under the program. For three years following the effective date
23 of this act, the selection of any vendor pursuant to this subsection is
24 exempt from the requirements of sections 73-501 to 73-510.
25 (2)(a) Each vendor, in consultation with the department and any
26 other vendors, shall establish a wholesale prescription drug importation
27 list that identifies the prescription drugs that have the highest
28 potential for cost savings for the people of Nebraska. In developing the
29 list, each vendor shall consider, at a minimum, which prescription drugs
30 will provide the greatest cost savings for the people of Nebraska,
31 including prescription drugs for which there are shortages, specialty
-3-
LB200 LB200
2023 2023
1 prescription drugs, and high-volume prescription drugs. Each vendor shall
2 revise the list at least annually and at the direction of the department
3 pursuant to subdivision (2)(b) of this section.
4 (b) The department shall review the wholesale prescription drug
5 importation list at least once every three months to ensure that it
6 continues to meet the requirements of the program. The department may
7 direct a vendor to revise the list, as necessary.
8 (3) Each vendor, in consultation with the department, shall identify
9 Canadian suppliers who are in full compliance with relevant Canadian
10 federal and provincial laws and regulations and who have agreed to export
11 prescription drugs identified on the wholesale prescription drug
12 importation list. Each vendor shall verify that such Canadian suppliers
13 meet all of the requirements of the program and will export prescription
14 drugs at prices that will provide cost savings for the people of
15 Nebraska. Each vendor shall contract with such eligible Canadian
16 suppliers, or facilitate contracts between eligible importers and
17 Canadian suppliers, to import prescription drugs under the program.
18 (4) Each vendor shall assist the department in developing and
19 administering a distribution program within the program.
20 (5) Each vendor shall assist the department with the annual report
21 described in section 7 of this act and provide any information requested
22 by the department for the report.
23 (6) Each vendor shall ensure the safety and quality of drugs
24 imported under the program, by:
25 (a)(i) For an initial imported shipment, ensuring that each batch of
26 the drug in the shipment is statistically sampled and tested for
27 authenticity and degradation in a manner consistent with the federal act;
28 and
29 (ii) For any subsequent imported shipment, ensuring that a
30 statistically valid sample of the shipment is tested for authenticity and
31 degradation in a manner consistent with the federal act;
-4-
LB200 LB200
2023 2023
1 (b) Certifying that each drug:
2 (i) Is approved for marketing in the United States and is not
3 adulterated or misbranded; and
4 (ii) Meets all of the labeling requirements under 21 U.S.C. 352.
5 (c) Maintaining qualified laboratory records, including complete
6 data derived from all tests necessary to ensure that the drug is in
7 compliance with the requirements of this section; and
8 (d) Maintaining documentation demonstrating that the testing
9 required by this section was conducted at a qualified laboratory in
10 accordance with the federal act and any other applicable federal and
11 state laws and regulations governing laboratory qualifications.
12 (7) All testing required by this section must be conducted in a
13 qualified laboratory that meets the standards under the federal act and
14 any other applicable federal and state laws and regulations governing
15 laboratory qualifications for drug testing.
16 (8) Each vendor shall maintain a list of all eligible importers that
17 participate in the program.
18 (9) Each vendor shall ensure compliance with Title II of the federal
19 Drug Quality and Security Act, Public Law 113-54, by all Canadian
20 suppliers, eligible importers, and other participants in the program.
21 (10) Each vendor shall provide the results of an annual financial
22 audit of its operations to the department. Each vendor shall also provide
23 the department quarterly financial reports specific to the program and
24 shall include information concerning the performance of its
25 subcontractors. The department shall determine the format and content of
26 the reports.
27 (11) Each vendor shall submit evidence of a surety bond with any bid
28 or initial contract negotiation documents and shall maintain
29 documentation of evidence of such a bond with the department throughout
30 the contract term. The surety bond may be from any state in the United
31 States and must be in an amount of at least two hundred fifty thousand
-5-
LB200 LB200
2023 2023
1 dollars. The surety bond or comparable security arrangement must
2 designate the State of Nebraska as a beneficiary. In lieu of the surety
3 bond, a vendor may provide a comparable security arrangement, such as an
4 irrevocable letter of credit or a deposit into a trust account or
5 financial institution that designates the State of Nebraska as a
6 beneficiary, payable to the State of Nebraska. The purposes of the bond
7 or other security arrangement are to:
8 (a) Ensure participation of the vendor in any civil or criminal
9 legal action by the department, any other state agency, or private
10 persons against the vendor as a result of the vendor's failure to perform
11 under the contract, including, but not limited to, causes of actions for
12 personal injury, negligence, and wrongful death;
13 (b) Ensure payment by the vendor of any judgments or penalties
14 entered against the vendor in any civil or criminal action arising from
15 the vendor's participation in the program. The bond or comparable
16 security arrangement may be accessed if the vendor fails to pay any
17 judgment or penalty within sixty days after final judgment or assessment
18 of such penalty; and
19 (c) Allow for civil and criminal claims to be made against the bond
20 or other comparable security arrangements for up to one year after the
21 vendor's contract under the program has ended with the department, the
22 vendor's license is no longer valid, or the program has ended, whichever
23 occurs later.
24 (12) Each vendor shall maintain information and documentation
25 submitted under this section for a period of at least seven years.
26 (13) The department may require each vendor to collect any other
27 information necessary to ensure the protection of the public health.
28 Sec. 5. (1) An eligible importer may import a prescription drug
29 from a Canadian supplier if:
30 (a) The drug meets the federal Food and Drug Administration's
31 standards related to safety, effectiveness, misbranding, and
-6-
LB200 LB200
2023 2023
1 adulteration;
2 (b) Importing the drug does not violate federal patent laws;
3 (c) Importing the drug is expected to generate cost savings; and
4 (d) The drug is not:
5 (i) A controlled substance as defined in 21 U.S.C. 802;
6 (ii) A biological product as defined in 42 U.S.C. 262;
7 (iii) An infused drug;
8 (iv) An intravenously injected drug;
9 (v) A drug that is inhaled during surgery; or
10 (vi) A parenteral drug, the importation of which is determined by
11 the federal Secretary of Health and Human Services to pose a threat to
12 public health.
13 (2) A Canadian supplier may export prescription drugs into the state
14 under the program if the supplier:
15 (a) Is in full compliance with relevant Canadian federal and
16 provincial laws and regulations;
17 (b) Is identified by the vendor as eligible to participate in the
18 program pursuant to subsection (3) of section 4 of this act; and
19 (c) Submits an attestation that the supplier has a registered agent
20 in the United States, which attestation includes the name and United
21 States address of the registered agent.
22 (3) The department shall:
23 (a) Set a maximum profit margin so that a pharmacist, pharmacy,
24 wholesaler, commercial plan, or other participant in the program
25 maintains a profit margin that is no greater than the profit margin that
26 such person would have earned on the equivalent nonimported drug;
27 (b) Exclude generic products if the importation of the products
28 would violate United States patent laws applicable to United States-
29 branded products;
30 (c) Comply with the requirements of 21 U.S.C. 360eee to 360eee-4;
31 and
-7-
LB200 LB200
2023 2023
1 (d) Determine a method for covering the administrative costs of the
2 program, which method may include a fee imposed on each prescription
3 pharmaceutical product sold through the program or any other appropriate
4 method as determined by the department. The department shall not require
5 a fee or other method in an amount the department determines would
6 significantly reduce consumer savings.
7 (4) Canadian suppliers and eligible importers participating under
8 the program:
9 (a) Shall comply with the tracking and tracing requirements of 21
10 U.S.C. 360eee et seq.; and
11 (b) Shall not distribute, dispense, or sell prescription drugs
12 imported under the program outside of the state.
13 (5) A participating eligible importer shall submit to the vendor all
14 of following information about each drug to be acquired by the importer
15 under the program:
16 (a) The name and quantity of the active ingredient of the drug;
17 (b) A description of the dosage form of the drug;
18 (c) The date on which the drug is received;
19 (d) The quantity of the drug that is received;
20 (e) The point of origin and destination of the drug; and
21 (f) The price paid by the importer for the drug.
22 (6) A participating Canadian supplier shall submit to the vendor the
23 following information about each drug to be supplied by the Canadian
24 supplier under the program:
25 (a) The original source of the drug, including:
26 (i) The name of the manufacturer of the drug;
27 (ii) The date on which the drug was manufactured; and
28 (iii) The country, state or province, and city where the drug was
29 manufactured;
30 (b) The date on which the drug is shipped;
31 (c) The quantity of the drug that is shipped;
-8-
LB200 LB200
2023 2023
1 (d) The quantity of each lot of the drug originally received and the
2 source of the lot; and
3 (e) The lot or control number and the batch number assigned to the
4 drug by the manufacturer.
5 (7) The department shall immediately suspend the importation of a
6 specific drug or the importation of drugs by a specific eligible importer
7 if it discovers that any drug or activity is in violation of this section
8 or any federal or state law or regulation. The department may lift the