HB 25-1094
Fiscal Note
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
HB 25-1094: PHARMACY BENEFIT MANAGER PRACTICES
Prime Sponsors:
Rep. Brown; Johnson
Sen. Pelton B.; Roberts
Published for: House Health & Human Services
Drafting number: LLS 25-0095
Fiscal Analyst:
Kristine McLaughlin, 303-866-4776
kristine.mclaughlin@coleg.gov
Version: Initial Fiscal Note
Date: February 5, 2025
Fiscal note status: The fiscal note reflects the introduced bill.
Summary Information
Overview. The bill regulates pharmacy benefit manager pricing practices and places disclosure
requirements on them.
Types of impacts. The bill is projected to affect the following areas on an ongoing basis:
State Expenditures State Diversions
Appropriations. For FY 2025-26, the bill requires an appropriation of $7,554 to the Department of
Regulatory Agencies.
Table 1
State Fiscal Impacts
Type of Impact
Budget Year
FY 2025-26
Out Year
FY 2026-27
State Revenue $0 $0
State Expenditures $9,499 $9,499
Diverted Funds $9,499 $9,499
Change in TABOR Refunds $0 $0
Change in State FTE 0.0 FTE 0.0 FTE
Page 2
February 5, 2025 HB 25-1094
Table 1A
State Expenditures
Fund Source
Budget Year
FY 2025-26
Out Year
FY 2026-27
General Fund $0 $0
Cash Funds $7,554 $7,554
Federal Funds $0 $0
Centrally Appropriated $1,945 $1,945
Total Expenditures $9,499 $9,499
Total FTE 0.1 FTE 0.1 FTE
Table 1B
State Diversions
Fund Source
Budget Year
FY 2025-26
Out Year
FY 2026-27
General Fund -$9,499 -$9,499
Cash Funds $9,499 $9,499
Net Diversion $0 $0
Summary of Legislation
Pharmacy benefit managers (PBMs) negotiate prices between pharmaceutical companies and
pharmacies and process pharmacy claims. The bill places disclosure requirements on PBMs and
regulates pricing practices including by prohibiting PBMs from keeping income from anything
other than a flat-dollar service fee per prescription drug. The Department of Regulatory
Agencies (DORA) must promulgate rules for regulation enforcement.
State Diversions
Starting in FY 2025-26, this bill diverts about $9,500 per year from the General Fund to the
Division of Insurance Cash Fund. This revenue diversion occurs because the bill increases costs in
the Division of Insurance in the Department of Regulatory Agencies, , which is funded with
premium tax revenue that would otherwise be credited to the General Fund. Page 3
February 5, 2025 HB 25-1094
State Expenditures
The bill increases state expenditures in DORA by about $9,500 per year beginning in FY 2025-26.
These costs, paid from the Division of Insurance Cash Fund, are summarized in Table 2 and
discussed below.
Table 2
State Expenditures
Department of Regulatory Agencies
Cost Component
Budget Year
FY 2025-26
Out Year
FY 2026-27
Personal Services $7,554 $7,554
Centrally Appropriated Costs $1,945 $1,945
Total Costs $9,499 $9,499
Total FTE 0.1 FTE 0.1 FTE
Staff
DORA requires 0.1 FTE to further regulate PBMs as required by the bill. Based on the current
volume of complaints DORA receives regarding PBMs and the average time to process these
complaints, the fiscal note assumes that the new regulations will result in an additional one to
two complaints per month requiring an additional 200 hours of work per year.
Centrally Appropriated Costs
Pursuant to a Joint Budget Committee policy, certain costs associated with this bill are
addressed through the annual budget process and centrally appropriated in the Long Bill or
supplemental appropriations bills, rather than in this bill. These costs, which may include
employee insurance, supplemental employee retirement payments, leased space, and indirect
cost assessments, are shown in the expenditure table(s) above.
Effective Date
The bill takes effect 90 days following adjournment of the General Assembly sine die, assuming
no referendum petition is filed.
State Appropriations
For FY 2025-26, the bill requires an appropriation of $7,554 from the Division of Insurance Cash
Fund to the Department of Regulatory Agencies, and 0.1 FTE. Page 4
February 5, 2025 HB 25-1094
Departmental Difference
DORA, in consultation with the Department of Law, estimates that the bill increases department
expenditures by $20,005 and 0.2 FTE in FY 2025-26 and ongoing. This estimate assumes that the
bill requires additional data collection to determine PBM compliance. The fiscal note assumes
that the existing infrastructure for PBM rulemaking and investigation is sufficient to implement
this bill.
State and Local Government Contacts
Health Care Policy and Financing
Law
Regulatory Agencies
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit the General Assembly website.