OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
sSB-8
AN ACT CONCERNING DRUG AFFORDABILITY.
AMENDMENT
LCO No.: 5876
File Copy No.: 309
Senate Calendar No.: 197
Primary Analyst: ME 5/7/24
Contributing Analyst(s): (FN)
OFA Fiscal Note
See Fiscal Note Details
The amendment strikes the underlying bill and its associated fiscal
impact resulting in the following impact.
Section 2 requires the Department of Consumer Protection (DCP) to
hire a consultant to study the feasibility of establishing a Canadian
prescription drug importation program resulting in a cost of
approximately $125,000 in FY 26.
Sections 3-11 create the regulatory requirements for the Canadian
drug importation program resulting in a potential cost to DCP. If DCP
chooses to establish the program and the FDA accepts the application
submitted by DCP, DCP will need to hire two additional employees for
annual salary and other expense costs of $203,000 and associated fringe
benefit costs of $82,000 to oversee and regulate the Canadian drug
importation program. The two employees will need to be hired in either
FY 26 or FY 27 depending on when the application is approved.
These sections also may result in a savings to DSS associated with the
Canadian prescription drug importation program to reduce
prescription drug costs for Medicaid and HUSKY B. To the extent the
program is implemented, and this is achieved, and such drugs are
utilized in place of more costly drugs after accounting for rebates, DSS
would experience a corresponding savings. The extent of any savings to 2024SB-00008-R00LCO05876-FNA.DOCX Page 2 of 3
Medicaid and HUSKY B cannot be determined at this time.
If implemented, DSS would incur administrative costs of at least
$150,000 annually associated with pharmacy consultant staff.
Additional staff and/or contract support may be required depending on
the scope of the program.
Sections 12-15 establish a Prescription Drug Affordability Board
(PDAB) within the Office of Health Strategy (OHS) and detail its
administrative responsibilities and capabilities. OHS will incur costs of
$527,000 in salary and fringe benefits beginning in FY 25 to hire three
new staff to directly support PDAB in its activities: a planning specialist,
a lead planning analyst, and a planning analyst.
Sections 16-17 establish an upper payment limit for state entities,
health benefit plans, and participating ERISA plans to purchase drugs.
The savings attributed with the limit will be used to reduce out-of-
pocket costs to consumers, resulting in no fiscal impact to the state or
municipalities. The plans will also submit a report to the PDAB and
OHS describing the savings which will not result in a fiscal impact.
Section 16 requires DCP to issue penalties of up to $50,000 for drug
upper payment limit violations resulting in a potential revenue gain to
the state to the extent violations occur.
Section 18 requires DCP to assess a civil penalty of up to $500,000 for
certain violations determined by the Prescription Drug Affordability
Board resulting in a potential revenue gain to the state to the extent
violations occur.
Sections 19-21 result in a potential cost beginning in FY 26 to fully
insured municipalities that currently impose cost sharing on insulin
products to the extent cost sharing is imposed. Additional costs to
municipalities can be incurred if they do not offer insulin products at
the lowest wholesale acquisition cost. There is no fiscal impact to the
state to impose these provisions as insulin products are currently
covered under the state employee health plan with no cost sharing. 2024SB-00008-R00LCO05876-FNA.DOCX Page 3 of 3
Sections 23 and 24 regarding 340B entities result in an annual
significant positive financial impact to the University of Connecticut
Health Center beginning in FY 25. The health center has multiple 340B
covered entities, including John Dempsey Hospital, and has not been
fully benefiting from the provisions of the 340B program due to
manufacturer and pharmacy benefits manager (PBM) practices. The
health center estimates that the foregone savings and revenue gain due
to these practices has reached approximately $9 million annually and
will continue to increase. It is anticipated that the amendment will
reduce or eliminate the practices it prohibits, and consequently result in
greater 340B savings and revenue gain to UConn Health Center.
Section 24 requires DCP to issue cease and desist orders and civil
penalties for certain violations regarding 340B drugs resulting in a
potential annual salary cost of $194,000 and associated fringe benefit
cost of $80,000 beginning in FY 25. DCP does not have expertise in this
area and may have to hire up to two additional employees depending
on the number of complaints and investigations.
This section also allows DCP to issue civil penalties of up to $50,000
for certain 340B drug violations resulting in a potential revenue gain to
the state to the extent violations occur.
The preceding Fiscal Impact statement is prepared for the benefit of the members of the General Assembly, solely
for the purposes of information, summarization and explanation and does not represent the intent of the General
Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of
informational sources, including the analyst’s professional knowledge. Whenever applicable, agency data is
consulted as part of the analysis, however final products do not necessarily reflect an assessment from any
specific department.