COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:2459H.01I Bill No.:HB 1154 Subject:Department of Health and Senior Services; Education, Higher; Drugs and
Controlled Substances
Type:Original Date:February 27, 2023Bill Summary:This proposal creates provisions relating to alternative therapies.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND
AFFECTED
FY 2024FY 2025FY 2026Fully
Implemented
(FY Unknown)
General Revenue
($15,929,770)($27,526,845)($27,538,658)Likely to exceed
($74,348,718)
Total Estimated
Net Effect on
General
Revenue($15,929,770)($27,526,845)($27,538,658)
Likely to exceed
($74,348,718)
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND
AFFECTED
FY 2024FY 2025FY 2026Fully
Implemented
(FY Unknown)
Total Estimated
Net Effect on
Other State
Funds $0$0$0$0
Numbers within parentheses: () indicate costs or losses. L.R. No. 2459H.01I
Bill No. HB 1154
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February 27, 2023
HWC:LR:OD
ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND
AFFECTED
FY 2024FY 2025FY 2026Fully
Implemented
(FY Unknown)
Total Estimated
Net Effect on
All Federal
Funds $0$0$0$0
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND
AFFECTED
FY 2024FY 2025FY 2026Fully
Implemented
(FY Unknown)
General Revenue5 FTE5 FTE5 FTE5 FTETotal Estimated
Net Effect on
FTE 5 FTE5 FTE5 FTE5 FTE
☒ Estimated Net Effect (expenditures or reduced revenues) expected to exceed $250,000 in any
of the three fiscal years after implementation of the act or at full implementation of the act.
☐ Estimated Net Effect (savings or increased revenues) expected to exceed $250,000 in any of
the three fiscal years after implementation of the act or at full implementation of the act.
ESTIMATED NET EFFECT ON LOCAL FUNDSFUND
AFFECTED
FY 2024FY 2025FY 2026Fully
Implemented
(FY Unknown)
Local
Government$0$0$0$0
FISCAL ANALYSIS L.R. No. 2459H.01I
Bill No. HB 1154
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February 27, 2023
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ASSUMPTION
§192.950 – Alternate therapies
Officials from the Department of Health and Senior Services (DHSS), Division of
Administration state the division cannot absorb the additional workload required by the
provisions of §192.150. The provisions of the proposed legislation would require the DHSS to
conduct clinical trials for alternative therapies in collaboration with a hospital operated by an
institute of higher education in Missouri or a medical center operated by the U.S Department of
Veteran Affairs in Missouri. The Division of Community and Public Health (DCPH) would need
one (1) FTE Procurement Analyst (One FTE @ $47,196 annual salary) - to accommodate the
additional contracts needed for this proposal.
The average cost of phase 1, 2, and 3 clinical trials across therapeutic areas is around $4 million,
$13 million, and $20 million respectively. Pivotal (phase 3) studies for new drugs approved by
the Food and Drug Administration (FDA) of the United States cost a median of $41,117 per
patient. These cost estimates across therapeutic areas were reported by Aylin Sertkaya et al., in a
report submitted to the U.S. Department of Health and Human Services:
https://aspe.hhs.gov/sites/default/files/private/pdf/77166/rpt_erg.pdf (see Table 1)
Since psychedelic drugs, such as those mentioned in this legislation, (MDMA, psilocybin and
ketamine) modulate brain cell activity, cost estimates were developed using the study costs for
the central nervous system therapeutic area (row #3). Furthermore, this report was developed in
2014 and cost estimates were inflation-adjusted using the consumer price index (CPI) inflation
calculator provided by the Bureau of Labor Statistics (BLS) available at: https://data.bls.gov/cgi-
bin/cpicalc.pl. For example: four million dollars (estimated cost of a phase 1 trial) in 2014 would
be $5,115,853.5 in 2023 – a 28% increase since 2014. L.R. No. 2459H.01I
Bill No. HB 1154
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February 27, 2023
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A 2018 study published in the Journal of American Medical Association (JAMA) – Internal
Medicine reviewed pivotal clinical trial cost data from 59 therapeutic agents that were approved
by the Food and Drug Administration (FDA) from 2015 to 2016 and derived a median cost
estimate of $19.0 million (interquartile range, $12.2 million - $33.1 million). However, the cost
of pivotal clinical trials varied greatly by the number of participants and the duration of study.
The median cost for pivotal clinical trials with a duration of 26 weeks or greater was $51.7
million – closer to the number in the above table from the HHS report. Therefore, central
nervous system estimates in the table above adjusted for inflation were used to come up with cost
estimates for this proposed legislation.
Clinical trials are a kind of clinical research designed to evaluate and test new interventions such
as psychotherapy or medications. Clinical trials are often conducted in four phases, not including
the FDA review process –
Phase 1 - Study Participants: 20 to 100 healthy volunteers or people with the disease/condition.
Length of Study: Several months, Purpose – Safety and Dosage;
Phase 2: Study Participants: Up to several hundred people with the disease/condition. Length of
Study: Several months to 2 years, Purpose - Efficacy and side effects;
Phase 3: Study Participants: 300 to 3,000 volunteers who have the disease or condition Length of
Study: 1 to 4 years Purpose: Efficacy and monitoring of adverse reactions
Phase 4: Post-marketing studies, which are conducted after a treatment is approved for use by the
FDA Study Participants: Several thousand volunteers who have the disease/condition, Purpose:
Safety and efficacy
The proposed legislation is asking for a fiscal estimate for three years; therefore, the budget sheet
has estimates only for Phase 1 and Phase 2 clinical trials and not for the more expensive and time
intensive Phase 3 and Phase 4 clinical trials.
Phase 1 clinical trial for three drugs (after inflation adjusted) = $ 5,115,853.55 * 3 =
$15,347,560.65;
Phase 2 clinical trial for three drugs (after inflation adjusted) = $ 17,905,487.44*3 =
$53,716,462.32.
While Phase 3 and Phase 4 clinical costs are not included in the budget sheet, the following is an
estimate for those phases for the three drugs after successful completion of phase 1 and phase 2
at the end of three years:
Phase 3 clinical trial for three drugs (after inflation adjusted) = $24,556,097.06 * 3 =
$73,668,291.18 L.R. No. 2459H.01I
Bill No. HB 1154
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FDA – New Drug Application (NDA) review phase (after inflation adjusted) = $ 2,557,926.78*3
= $7,673,780.34
Phase 4 clinical trial for three drugs (after inflation adjusted) = $ 17,905,487.44*3 =
$53,716,462.32
The DHSS does not conduct clinical trials nor has any experience conducting clinical trials.
DHSS/Office of Epidemiology (OOE) would collaborate with a hospital operated by an institute
of higher education in Missouri or a medical center operated by the U.S Department of Veteran
Affairs in Missouri and would require at least three (3) FTE to coordinate/oversee clinical trials
in collaboration with institutes of higher education. The 3 FTE request is only for the first three
years and to set up the clinical trials. Based on literature review of clinical trials, it is estimated
that the following minimum staff would be needed for the first three years:
Clinical Study Medical Writer (One FTE @ $70,000 annual salary) – The proposed legislation
requires quarterly as well as annual reports on the progress of trials to the legislature. A medical
writer would be needed to produce quarterly reports in conjunction with the entities conducting
trials.
Clinical Research Physician (One FTE @ $161,225 annual salary) – While the clinical trials will
be conducted in collaboration with institutes of higher education, it is essential for DHSS to hire
a clinical research physician so that they can coordinate with the institutes on clinical trial plans
and update DHSS / legislature accordingly on the progress and handle any clinical questions /
issues from stakeholders / legislators on clinical trials.
Clinical Project Manager (One FTE @ $79,712 annual salary)- While the clinical trials will be
conducted in collaboration with institutes of higher education, it is essential for DHSS to hire a
clinical project manager as well who will work the physician to ensure plans / protocols are
being implemented in accordance with the terms and conditions set forth for clinical trials,
handle unexpected issues that arise during clinical trials and to act as a liaison between DHSS /
clinical trial site staff to ensure clinical trials to meet scientific standards and government
regulations.
Administrative Support Professional (One FTE @ $44,436 annual salary)- - to support the
managers.
Oversight does not have any information to the contrary. Based on an internet search of the
average length of time for clinical trials, it is possible for them to go on for 10-15 years.
Therefore, for fiscal note purposes Oversight assumes costs could exceed the $73,668,291
provided by DHSS for Phase 4 Clinical Trials. It is unknown in what year the provisions of this
proposal would be concluded. L.R. No. 2459H.01I
Bill No. HB 1154
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Officials from the Attorney General’s Office, the Department of Commerce and Insurance,
the Department of Mental Health and the Department of Public Safety – Missouri Veterans
Commission each assume the proposal will have no fiscal impact on their respective
organizations. Oversight does not have any information to the contrary. Therefore, Oversight
will reflect a zero impact in the fiscal note for these agencies.
Officials from the University of Missouri System and the Office of the State Courts
Administrator did not respond to Oversight’s request for a statement of fiscal impact.
FISCAL IMPACT – State
Government
FY 2024
(10 Mo.)
FY 2025FY 2026Fully
Implemented
(FY Unknown)
GENERAL REVENUE
FUND
Costs – DHSS (§192.950)Likely to
exceed...
Personal service($23,777)($398,751)($406,726)($406,726) Fringe benefits($186,821)($227,111)($230,094)($230,094) Equipment and expense($69,611)($42,751)($43,607)($43,607) Contracts – Phase 1($15,347,561)$0$0$0 Contracts – Phase 2$0($26,858,231)($26,858,231)$0 Contracts – Phase3+$0$0$0($73,668,291)Total Costs - DHSS($15,929,770)($27,526,845)($27,538,658)($74,348,718) FTE Change - DHSS5 FTE5 FTE5 FTE5 FTEESTIMATED NET EFFECT
ON THE GENERAL
REVENUE FUND
($15,929,770)($27,526,845)($27,538,658)Likely to
exceed
($74,348,718)
Estimated Net FTE Change on
the General Revenue Fund
5 FTE5 FTE5 FTE5 FTE L.R. No. 2459H.01I
Bill No. HB 1154
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FISCAL IMPACT – Local
Government
FY 2024
(10 Mo.)
FY 2025FY 2026Fully
Implemented
(FY
Unknown)
$0$0$0$0
FISCAL IMPACT – Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.
FISCAL DESCRIPTION
This bill requires the Department of Health and Senior Services, in collaboration with a Missouri
university hospital and medical center operated by the Department of Veterans Affairs in
Missouri, to conduct a study on the efficacy of using alternative medicines and therapies,
including, but not limited to, the use of 3, 4- methylenedioxymethamphetamine (MDMA),
psilocybin, and ketamine, for the treatment of patients suffering from post-traumatic stress
disorder, treatment-resistant depression, substance abuse disorders, or who require end-of-life
care.
The bill specifies that such study shall include a clinical trial of psilocybin, as well as a literature
review and the submission of various reports. No person participating in the clinical trial shall be
subjected to criminal or civil liability or sanction for the participation in the clinical trial, except
in cases of gross negligence or willful misconduct.
The Department of Health and Senior Services shall prepare and submit to the Governor,
Lieutenant Governor and the General Assembly: (1) Quarterly reports on the progress of the
study; and (2) A written report, submitted one year after the study begins, containing the results
of the study and any recommendations for legislation.
The Department shall maintain the confidentiality of any personally identifiable protected
information collected during the clinical trial.
This legislation is not federally mandated, would not duplicate any other program but would
require additional capital improvements or rental space. L.R. No. 2459H.01I
Bill No. HB 1154
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February 27, 2023
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SOURCES OF INFORMATION
Attorney General’s Office
Department of Commerce and Insurance
Department of Health and Senior Services
Department of Mental Health
Department of Public Safety –
Missouri Veterans Commission
Julie MorffRoss StropeDirectorAssistant DirectorFebruary 27, 2023February 27, 2023