Legislature advances bill to protect 340B contract-pharmacy arrangements for safety-net providers

Senator Tom Hardin, sponsor of LB168, told the Legislature the bill would protect access to the federal 340B drug discount program for safety-net health providers by preventing drug manufacturers from restricting deliveries to contract pharmacies. The bill was advanced to E & R initial after the body rejected a motion to indefinitely postpone and adopted a committee amendment.

Hardin, a member of the Health and Human Services Committee, said the 340B program — created by Congress in 1992 — lets eligible safety-net providers, including critical access hospitals and federally qualified health centers, purchase outpatient drugs at discounted prices and reinvest savings into services for underserved patients. He told senators the 340B discount is paid by manufacturers and does not use state or federal tax dollars.

The move to indefinitely postpone LB168 (motion MO59, filed by Senator Mikaela Kavanaugh) failed on the floor: the clerk recorded zero ayes and 37 nays, and the motion was not adopted. The Banking, Commerce and Insurance Committee amendment, AM225, was adopted on the floor (42 ayes, no nays). The Legislature then voted to advance LB168 to E & R initial (41 ayes, no nays), sending the bill to the next drafting stage.

Why it matters: Sponsors and supporters told colleagues the bill is intended to prevent manufacturers from disrupting deliveries to contract pharmacies that serve 340B-eligible entities, a protection proponents say helps small rural hospitals stretch scarce resources. Senator Hardin cited a Nebraska Hospital Association figure that “54 percent of all critical access hospitals are currently operating at a loss,” and argued those hospitals rely on 340B savings to remain open.

Supporters pointed to judicial rulings upholding similar laws in other states. Hardin cited litigation in which an Arkansas law like Nebraska's was upheld by the U.S. District Court for the Eastern District of Arkansas and the U.S. Court of Appeals for the Eighth Circuit; the Supreme Court declined to review the appeal. Opponents — including out-of-state trade groups, according to senators — have challenged such state laws in other jurisdictions.

Details and limitations: The bill does not rewrite the federal 340B program, the sponsor said; instead it seeks to regulate how manufacturers may deliver drugs to pharmacies that contract with 340B-eligible entities. The committee amendment AM225 makes limited technical changes to statutory language and was adopted without recorded opposition on the floor. During debate senators emphasized that federal action would be the ultimate fix for program-level issues but defended state-level safeguards in the meantime.

What happened next: With AM225 adopted and the advancement vote recorded, LB168 moves to E & R initial. Further committee or floor amendments and final votes remain possible as the bill proceeds through the legislative process.