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LEGISLATURE OF NEBRASKA
ONE HUNDRED EIGHTH LEGISLATURE
SECOND SESSION
LEGISLATIVE BILL 833
Introduced by Blood, 3.
Read first time January 03, 2024
Committee: Banking, Commerce and Insurance
1 A BILL FOR AN ACT relating to public health; to adopt the Prescription
2 Drug Affordability Act.
3 Be it enacted by the people of the State of Nebraska,
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1 Section 1. Sections 1 to 16 of this act shall be known and may be
2 cited as the Prescription Drug Affordability Act.
3 Sec. 2. (1) The Legislature finds that:
4 (a) Excessive costs for prescription drugs (i) negatively impacts
5 the ability of Nebraskans to obtain prescription drugs and price
6 increases that exceed reasonable levels endanger the health and safety of
7 Nebraskans, (ii) threaten the economic well-being of Nebraskans and
8 endanger their ability to pay for other necessary and essential goods and
9 services, including housing, food, and utilities, (iii) contribute
10 significantly to a dramatic and unsustainable rise in health care costs
11 and health insurance premiums that threaten the financial health of
12 Nebraskans and their ability to maintain their physical health, (iv) pose
13 a threat to the health and safety of all Nebraskans and
14 disproportionately harm people of color and Nebraskans with low incomes,
15 and (v) contribute significantly to rising costs for health care provided
16 to public employees, including employees of state, county, and local
17 governments, school districts, and institutions of higher education, and
18 to public retirees whose health care costs are funded by public programs,
19 thereby threatening the ability of state and local governments to
20 adequately fund those programs and other important services, such as
21 public education and public safety;
22 (b) Lack of transparency in health insurance costs and wholesaler
23 and pharmacy benefit manager discounts and margins prevent policymakers
24 and the public from gaining a true understanding of the cost of
25 prescription drugs; and
26 (c) Information relating to the cost of prescription drugs in
27 Nebraska is necessary to provide accountability to the state and to all
28 Nebraskans for prescription drug pricing.
29 (2) The Legislature therefore declares that it is imperative that
30 Nebraska take measures to reduce excessive prescription drug costs for
31 Nebraskans who cannot afford prescription drugs and create a prescription
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1 drug affordability board with the authority to review prescription drug
2 costs and protect Nebraska residents and entities who purchase or
3 reimburse for prescription drugs from the excessive costs of prescription
4 drugs, including, but not limited to, state and local governments,
5 contractors and vendors, commercial health plans, providers, and
6 pharmacies.
7 Sec. 3. For purposes of the Prescription Drug Affordability Act:
8 (1) Advisory council means the Nebraska Prescription Drug
9 Affordability Advisory Council created in section 11 of this act;
10 (2) Affordability review means an affordability review of a
11 prescription drug performed by the board pursuant to section 5 of this
12 act;
13 (3) Authorized generic drug has the same meaning as set forth in 42
14 C.F.R. 447.502;
15 (4) Biological product has the same meaning as set forth in 42
16 U.S.C. 262(i)(1);
17 (5) Biosimilar drug means a prescription drug produced or
18 distributed in accordance with a biological product license issued
19 pursuant to 42 U.S.C. 262(k)(3);
20 (6) Board means the Nebraska Prescription Drug Affordability Review
21 Board created in section 4 of this act;
22 (7) Brand name drug means a prescription drug produced or
23 distributed in accordance with an original new drug application approved
24 pursuant to 21 U.S.C. 355 and does not include an authorized generic
25 drug;
26 (8) Carrier means any entity that provides health coverage in this
27 state, including a franchise insurance plan, a fraternal benefit society,
28 a health maintenance organization, a nonprofit hospital and health
29 service corporation, a sickness and accident insurance company, and any
30 other entity providing a plan of health insurance or health benefits
31 subject to the insurance laws of Nebraska;
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1 (9) Conflict of interest means an association, including a financial
2 or personal association, that has the potential to bias or appear to bias
3 an individual's decisions in matters related to the board or the advisory
4 council or the conduct of the activities of the board or the advisory
5 council. Conflict of interest includes any instance in which a board
6 member, an advisory council member, or a staff member or a contractor of
7 the Department of Health and Human Services, on behalf of the board, or
8 an immediate family member of a board member, an advisory council member,
9 or a staff member or a contractor of the department, on behalf of the
10 board, has received or could receive a financial benefit (a) of any
11 amount derived from the results or findings of a study or determination
12 reached by or for the board or (b) from an individual that owns or
13 manufactures a prescription drug service or item that is being or will be
14 studied by the board;
15 (10) Department means the Division of Public Health of the
16 Department of Health and Human Services;
17 (11) Financial benefit means honoraria, fees, stock, or any other
18 form of compensation, including increases to the value of existing stock
19 holdings;
20 (12) Generic drug means (a) a prescription drug marketed or
21 distributed in accordance with an abbreviated new drug application
22 approved pursuant to 21 U.S.C. 355(j), (b) an authorized generic drug, or
23 (c) a prescription drug introduced for retail sale before 1962 that was
24 not originally marketed under a new drug application;
25 (13) Health benefit plan means any hospital or medical expense
26 policy or certificate, hospital or medical service corporation contract,
27 or health maintenance organization subscriber contract or any other
28 similar health contract available for use, offered, or sold in Nebraska.
29 Health benefit plan does not include (a) accident only, (b) credit, (c)
30 dental, (d) vision, (e) medicare supplement, (f) benefits for long-term
31 care, home health care, community-based care, or any combination thereof,
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1 (g) disability income insurance, (h) liability insurance including
2 general liability insurance and automobile liability insurance, (i)
3 coverage for onsite medical clinics, (j) coverage issued as a supplement
4 to liability insurance, workers' compensation, or similar insurance, (k)
5 automobile medical payment insurance, or (l) specified disease, hospital
6 confinement indemnity, or limited benefit health insurance if the types
7 of coverage do not provide coordination of benefits and are provided
8 under separate policies or certificates;
9 (14)(a) Large employer means any person, firm, corporation, or
10 association that (i) is actively engaged in business, (ii) employed an
11 average of more than one hundred eligible employees on business days
12 during the immediately preceding calendar year, except as provided in
13 subdivision (c) of this subdivision, and (iii) was not formed primarily
14 for the purpose of purchasing insurance.
15 (b) For purposes of determining whether an employer is a large
16 employer, the number of eligible employees is calculated using the method
17 set forth in 26 U.S.C. 4980H(c)(2)(E).
18 (c) In the case of an employer not in existence throughout the
19 preceding calendar quarter, the determination of whether the employer is
20 a large employer is based on the average number of employees that the
21 employer is reasonably expected to employ on business days in the current
22 calendar year;
23 (15) Manufacturer means a person that (a) engages in the manufacture
24 of a prescription drug sold to purchasers in this state or (b) enters
25 into a lease or other contractual agreement with a manufacturer to market
26 and distribute a prescription drug under the person's own name and sets
27 or changes the wholesale acquisition cost of the prescription drug in
28 this state;
29 (16) Optional participating plan means a self-funded health benefit
30 plan offered in Nebraska that elects to subject its purchases of, or
31 payer reimbursements for, prescription drugs for its members to the
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1 requirements of section 9 of this act;
2 (17) Practitioner means a person licensed in Nebraska to prescribe
3 any drug or device;
4 (18) Prescription drug means a drug that is only intended for human
5 use that (a) is required by any applicable federal or state law to be
6 dispensed only pursuant to an order, (b) is restricted by any applicable
7 federal or state law to use by practitioners only, or (c) prior to being
8 dispensed or delivered, is required under federal law to be labeled with
9 one of the following statements: (i) "Rx only"; or (ii) "Caution: Federal
10 law restricts this drug to use by or on the order of a licensed
11 veterinarian";
12 (19) Pricing information means information about the price of a
13 prescription drug, including information that explains or helps explain
14 how the price was determined;
15 (20)(a) Small employer means any person, firm, corporation,
16 partnership, or association that (i) is actively engaged in business,
17 (ii) has employed an average of at least one but not more than one
18 hundred eligible employees on business days during the immediately
19 preceding calendar year, except as provided in subdivision (d) of this
20 subdivision, and (iii) was not formed primarily for the purpose of
21 purchasing insurance.
22 (b) For purposes of determining whether an employer is a small
23 employer, the number of eligible employees is calculated using the method
24 set forth in 26 U.S.C. 4980H(c)(2)(E).
25 (c) In order to be classified as a small employer with more than one
26 employee when only one employee enrolls in the small employer's health
27 benefit plan, the small employer shall submit to the small employer
28 carrier the two most recent quarterly employment and tax statements
29 substantiating that the employer had two or more eligible employees. Such
30 small employer group shall also meet the participation requirements of
31 the small employer carrier.
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1 (d) In the case of an employer that was not in existence throughout
2 the preceding calendar quarter, the determination of whether the employer
3 is a small employer is based on the average number of employees that the
4 employer is reasonably expected to employ on business days in the current
5 calendar year.
6 (e) The following employers are single employers for purposes of
7 determining the number of employees: (i) A person or entity that is a
8 single employer pursuant to 26 U.S.C. 414(b), (c), (m), or (o); and (ii)
9 an employer and any predecessor employer;
10 (21) State entity means any agency of state government that
11 purchases or reimburses payers for prescription drugs on behalf of the
12 state for a person whose health care is paid for by the state, including
13 any agent, vendor, contractor, or other party acting on behalf of the
14 state;
15 (22) Upper payment limit means the maximum amount that may be paid
16 or billed for a prescription drug dispensed or distributed in Nebraska in
17 any financial transaction concerning the purchase of, or reimbursement
18 for, a prescription drug;
19 (23) Wholesale acquisition cost has the same meaning as set forth in
20 42 U.S.C. 1395w-3a(c)(6)(B); and
21 (24) Wholesaler means a person engaged in the wholesale distribution
22 of prescription drugs to persons, other than consumers, that are
23 authorized by law to possess prescription drugs.
24 Sec. 4. (1) The Nebraska Prescription Drug Affordability Review
25 Board is created in the Division of Public Health of the Department of
26 Health and Human Services.
27 (2)(a) The board consists of five members, who shall each have an
28 advanced degree and experience or expertise in health care economics or
29 clinical medicine.
30 (b) The Governor shall appoint each board member, subject to
31 confirmation by a majority of members of the Legislature.
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1 (c) The term of office of each board member is three years, except
2 that, as to the terms of the members who are first appointed to the
3 board, two such members shall serve three-year initial terms, two such
4 members shall serve two-year initial terms, and one such member shall
5 serve a one-year initial term, to be determined by the Governor.
6 (d) The Governor shall designate one member of the board to serve as
7 the chairperson. A majority of the board constitutes a quorum. The
8 concurrence of a majority of the board in any matter within its powers
9 and duties is required for any determination made by the board.
10 (3)(a) An individual who is being considered for appointment to the
11 board shall disclose any conflict of interest. When appointing a member
12 of the board, the Governor shall consider any conflict of interest
13 disclosed by the prospective member.
14 (b) A board member shall not be an employee, board member, or
15 consultant of: (i) A manufacturer or a trade association of
16 manufacturers; (ii) a carrier or a trade association of carriers; or
17 (iii) a pharmacy benefit manager or a trade association of pharmacy
18 benefit managers.
19 (c) Board members, staff members, and contractors of the department,
20 on behalf of the board, shall recuse themselves from any board activity
21 or vote in any case in which they have a conflict of interest.
22 (d) On and after January 1, 2025, the department shall maintain a
23 page on its public website for the board to use for its purposes. The
24 board shall publish on the website each conflict of interest that is
25 disclosed to the board pursuant to subdivision (3)(c) of this section and
26 section 11 of this act.
27 (e) Board members, staff members, contractors of the department, on
28 behalf of the board, and immediate family members of board members, staff
29 members, or contractors shall not accept a financial benefit or gifts,
30 bequests, or donations of services or property that suggest a conflict of
31 interest or have the appearance of creating bias in the work of the
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