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 6886 NOTE PREPARED: Jan 8, 2024
BILL NUMBER: HB 1377 BILL AMENDED:
SUBJECT: Prescription Drug Pricing.
FIRST AUTHOR: Rep. Schaibley BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: The bill provides that the price that a health plan, third party administrator, or
pharmacy benefit manager sets for a covered individual's purchase of a prescription drug from a pharmacist
or pharmacy must be equal to or less than the amount directly or indirectly paid by the health plan, third party
administrator, or pharmacy benefit manager to the pharmacist or pharmacy for the prescription drug.
Effective Date: July 1, 2024.
Explanation of State Expenditures: State Employee Health Plan (SEHP): The state employee health plan
will have a workload increase to let the third party administrator (TPA) or a pharmacy benefit manager
(PBM) contract without traditional reimbursement. In certain circumstances, a transparent or alternative
pricing structure may result in cost savings through pass-through pricing and an administrative fee. If the
PBM or TPA provides services that are compensated through traditional reimbursement, the administrative
fee may increase or fewer services may be provided. [The State Personnel Department awarded a new PBM
contract in July 2022. The state Medicaid program contractually requires pass-through pricing.]
Unfair or Deceptive Acts: Under this bill, the prohibitions on spread pricing is actionable as unfair or
deceptive acts in the business of insurance. The Department of Insurance (DOI) could experience increased
workload to investigate complaints and provide adjudicative proceedings. These actions are within the DOI’s
routine administrative functions and are expected to be accomplished within existing resource and funding
levels. [Administrative funding for the DOI is appropriated through a dedicated agency fund.]
Explanation of State Revenues: Unfair and Deceptive Acts: If this bill increases the number of unfair and
deceptive acts discovered by the DOI, revenue to the state General Fund will increase from civil penalties
HB 1377 1 paid by violators. The penalty for engaging in an unfair and deceptive act is one or both of the following: (1)
a civil penalty between $25,000 and $50,000 for each act or violation and (2) revocation of a person's license
or certificate of authority if they knowingly engaged in an unfair or deceptive act.
Explanation of Local Expenditures: Local units with PBM or TPA contracts that use traditional
reimbursement may need to rebid the contract. Cost savings from pass-through pricing is indeterminate.
Explanation of Local Revenues:
State Agencies Affected: State Personnel Department; Department of Insurance; all state agencies.
Local Agencies Affected: Local units with PBM or TPA contracts.
Information Sources:
Fiscal Analyst: Jasmine Noel, 317-234-1360.
HB 1377 2