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 27, 2022
BILL NUMBER: SB 88 BILL AMENDED: Jan 27, 2022
SUBJECT: Prescription Drug Rebates and Pricing.
FIRST AUTHOR: Sen. Charbonneau BILL STATUS: 2
nd
Reading - 1
st
House
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: (Amended) The bill provides that, for individual health insurance coverage, the
defined cost sharing for a prescription drug 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.
It also requires that, for group health insurance coverage, an insurer:
(1) pass through to a plan sponsor 100% of all rebates received or estimated to be received
by the insurer concerning the dispensing or administration of prescription drugs to the
covered individuals of the plan sponsor;
(2) provide a plan sponsor, at the time of contracting, the option of calculating defined cost
sharing for covered individuals of the plan sponsor at the point of sale based on a price that
is reduced by some or all of the rebates received or estimated to be received by the insurer
concerning the dispensing or administration of the prescription drug; and
(3) disclose specified information to the plan sponsor.
The bill allows the Department of Insurance (DOI) to enforce the provisions and impose a civil penalty.
Effective Date: (Amended) July 1, 2022; 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.]
(Revised) The impact of the requirements of the bill on individual health insurance provided through the
SB 88 1 health insurance exchanges is indeterminate. The state's benchmark plan for FY 2017 to FY 2023 is Anthem
Insurance Companies Inc. Legacy PPO, with a plan name of Blue 6.0 Blue Access PPO Option 14, Rx G,
provides for copayments rather than cost sharing. [If additional information is received from the DOI, this
fiscal note will be updated.]
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: (Revised) Civil Penalty: If an insurer or health maintenance organization
subject to state law 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.
(Revised) Premium: If premiums increase 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.
Explanation of Local Expenditures:
Explanation of Local Revenues: (Revised) The bill potentially impacts local units of government who offer
health insurance coverage for employees an insurer or health maintenance organization subject ot state laws.
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.
State Agencies Affected: Department of Insurance.
Local Agencies Affected: Local units.
Information Sources: https://www.in.gov/spd/benefits/prescription-coverage/.
Fiscal Analyst: Karen Rossen, 317-234-2106.
SB 88 2