LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 6449 NOTE PREPARED: Jan 20, 2022
BILL NUMBER: SB 88 BILL AMENDED:
SUBJECT: Prescription Drug Rebates and Pricing.
FIRST AUTHOR: Sen. Charbonneau BILL STATUS: CR Adopted - 1
st
House
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: The bill provides that the defined cost sharing for a prescription drug under a
covered individual's health insurance coverage must be calculated at the point of sale and based on a price
that is reduced by an amount equal to at least 85% of all rebates received by the insurer in connection with
the dispensing or administration of the prescription drug.
Effective Date: January 1, 2023.
Explanation of State Expenditures: The Department of Insurance (DOI) may have an additional workload
to enforce the requirement of the bill. [The DOI’s expenses are paid from a dedicated agency fund.]
Additional Information - Enforcement of the provisions may be complicated by rebates often being based
on volume of sales over a period of time and calculated after the point of sale on a monthly, quarterly, or
annual basis.
Explanation of State Revenues: If an insurer or health maintenance organization fails to provide point of
sale cost sharing on a rebate-reduced prescription price, the DOI Commissioner may impose a civil penalty
of $10,000 per violation, which would be deposited in the state General Fund. Other enforcement actions
under applicable law may result in judgments revenue to the state General Fund.
If insurers increase plan premiums overall (due to rebates applying to cost sharing rather than premiums),
revenues to the state General Fund could increase from either corporate Adjusted Gross Income Tax or
Insurance Premium Tax collections.
SB 88 1 Explanation of Local Expenditures: The bill potentially impacts local units of government who offer
health insurance coverage for employees through a nonERISA plan. Added local health coverage costs may
be mitigated with adjustments to other benefits or to the total employee compensation packages, or through
the division of costs between the local unit and employees.
Explanation of Local Revenues:
State Agencies Affected: Department of Insurance.
Local Agencies Affected: Local units with nonERISA health insurance plans.
Information Sources: https://www.in.gov/spd/benefits/prescription-coverage/.
Fiscal Analyst: Karen Rossen, 317-234-2106.
SB 88 2