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LB 198

Change provisions of the Pharmacy Benefit Manager Licensure and Regulation Act

109th Legislature (2025-2026) Introduced by Bob Hallstrom and 2 co-sponsors

LB 198 tightens PBM oversight, bans spread pricing, requires pricing transparency, expands protections for pharmacies, and improves access and pricing for patients.

Provisions/portions of LB109 amended into LB198 by AM1201
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Bill Summary · LB 198

Summary — LB 198 (2025)

Title: Change provisions of the Pharmacy Benefit Manager Licensure and Regulation Act
Introduced: January 14, 2025 (Sen. Tony Sorrentino) — Enacted May 20, 2025

Purpose

LB 198 strengthens state oversight of pharmacy benefit managers (PBMs) by expanding definitions, clarifying PBM duties, protecting pharmacies (including specialty pharmacies) from certain PBM practices, and prohibiting spread pricing. The bill amends the Pharmacy Benefit Manager Licensure and Regulation Act (Neb. Rev. Stat. §§ 44-4601 et seq.).

Key provisions and changes

  • New and revised definitions: adds/clarifies terms such as network pharmacy, network pharmacist, pharmacy acquisition cost, specialty pharmacy, clinician‑administered drug, PBM affiliate, and spread pricing.
  • Specialty pharmacy protections (amends § 44-4610):
    • A Nebraska specialty pharmacy that holds national specialty accreditation cannot be excluded from a PBM specialty network if it will accept the PBM’s agreement terms.
    • PBMs may not impose terms on unaffiliated specialty pharmacies that are stricter than those applied to PBM-affiliated specialty pharmacies.
    • Limits data/reporting requirements from specialty pharmacies to no more than quarterly unless more frequent reporting is reasonably necessary for legal reporting, payment integrity, rebate administration, or related narrowly defined reasons.
  • PBM duty of care and transparency: establishes a “pharmacy benefit manager duty” to perform services with care, skill, prudence, fairness, transparency, and professionalism and to act in the best interests of covered persons, providers, and health plans (hierarchy prioritizes covered individuals and providers).
  • Maximum Allowable Cost (MAC) and appeals (as reflected in committee amendments): extends appeal, investigation, and dispute-resolution protections to reimbursements tied to MAC pricing and requires PBMs to maintain accessible MAC lists and timely investigate appeals. (Procedural specifics appeared in committee/standing-committee amendments.)
  • Pharmacy financial protection and dispensing refusal: authorizes a network pharmacy or network pharmacist to decline to dispense a drug if reimbursement would be below the pharmacy’s acquisition cost.
  • Prohibition of spread pricing: defines and bans spread pricing by PBMs, health carriers, and health benefit plans (i.e., charging the health plan an amount that differs from what the PBM pays the pharmacy in a way that creates an undisclosed spread).
  • Contracting and harmonization: requires new contracts to acknowledge prohibitions and ensures PBM contractual terms comply with the Act.
  • Enforcement/administration: expands Department of Insurance authority and regulatory oversight (including provisions added in committee amendments; the enacted bill provides enforcement mechanisms and harmonizes related statutory provisions).

Who is affected

  • PBMs and PBM affiliates
  • Specialty and retail pharmacies and pharmacists (network and non‑affiliated)
  • Health carriers, plan sponsors, and self‑funded plans
  • Patients/covered persons (through potential changes in access, pharmacy networks, and pricing transparency)

Procedural/timeline notes

  • Committee hearing: March 3, 2025 (Banking, Commerce & Insurance)
  • Committee amendments (AM1201, AM1229) revised and expanded the bill; AM1201 incorporated portions of LB 109.
  • Passed Legislature: Final Reading 49–0–0 on May 14, 2025.
  • Presented to Governor: May 14, 2025.
  • Approved by Governor: May 20, 2025 (became law).

Fiscal note

Multiple fiscal notes were filed (Feb. 28, May 8, May 9, 2025). Refer to the Department of Insurance and Legislature fiscal materials for state cost and impact estimates.

Practical impact

LB 198 increases regulatory constraints on PBM practices, strengthens protections for pharmacies (especially specialty pharmacies), limits data/reporting burdens, raises transparency expectations, and eliminates spread pricing — all intended to reduce practices that can push pharmacies to dispense at a loss and to improve accountability in drug benefit administration.

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

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