COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:2459H.01P Bill No.:Perfected HB 1154 Subject:Department of Health and Senior Services; Education, Higher; Drugs and
Controlled Substances
Type:Original Date:March 31, 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
($5,746,792 to
$7,746,792)($18,633,746)($18,646,752)
Likely to exceed
($25,297,362)
Total Estimated
Net Effect on
General
Revenue
($5,746,792 to
$7,746,792)($18,633,746)($18,646,752)
Likely to exceed
($25,297,362)
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.01P
Bill No. Perfected HB 1154
Page 2 of
March 31, 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 Revenue
5 FTE5 FTE5 FTE5 FTE
Total 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 L.R. No. 2459H.01P
Bill No. Perfected HB 1154
Page 3 of
March 31, 2023
HWC:LR:OD
FISCAL ANALYSIS
ASSUMPTION
§192.950 – Alternate therapies
Officials from the Department of Health and Senior Services (DHSS), Division of
Administration state 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 psilocybin, 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.
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 L.R. No. 2459H.01P
Bill No. Perfected HB 1154
Page 4 of
March 31, 2023
HWC:LR:OD
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 psilocybin (after inflation adjusted) = $5,115,854;
Phase 2 clinical trial for three drugs (after inflation adjusted) = $17,905,487.
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 psilocybin after successful completion of phase 1 and phase 2 at
the end of three years:
Phase 3 clinical trial for psilocybin (after inflation adjusted) = $24,556,097
FDA – New Drug Application (NDA) review phase (after inflation adjusted) = $ 2,557,927
Phase 4 clinical trial for psilocybin (after inflation adjusted) = $ 17,905,487
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
institution of higher education in Missouri and would require at least four (4) FTE to
coordinate/oversee the clinical trials in collaboration with institutions of higher education. The 4
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 L.R. No. 2459H.01P
Bill No. Perfected HB 1154
Page 5 of
March 31, 2023
HWC:LR:OD
first three years:
Clinical Study Medical Writer (One FTE @ $76,090 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 @ $175,252 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 @ $86,647 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 @ $48,302 annual salary) - to support the
managers.
One Procurement Analyst will be needed to accommodate the additional contracts for DCPH.
The Division of Administration cannot absorb the additional workload Section 192.150 of the
proposed legislation would require the Department of Health and Senior Services (DHSS) to
conduct clinical trials for alternative therapies in collaboration with a hospital operated by an
institute of higher education in Missouri.
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 $17,905,487
provided by DHSS for Phase 4 Clinical Trials. It is unknown in what year the provisions of this
proposal would be concluded.
DHSS also states the provisions of House Amendment 1 (HA) provided that §194.479.4 requires
DHSS to provide grant funds in the amount of $2,000,000 for research on the use and efficacy of
psilocybin, subject to appropriation.
Oversight assumes the provisions of §194.479.4 allows DHSS to provide grants for $2,000,000,
if appropriated, in FY 2024. For fiscal note purposes, Oversight assumes costs of $0 to
($2,000,000) to the General Revenue Fund for the research grants. Oversight notes that the L.R. No. 2459H.01P
Bill No. Perfected HB 1154
Page 6 of
March 31, 2023
HWC:LR:OD
proposal specifies a total of $2,000,000 for grants. For simplification purposes it is assumed an
FY 2024 appropriation.
Bill as a whole
Officials from the Attorney General’s Office, the Department of Commerce and Insurance,
the Department of Mental Health, the Department of Public Safety – Missouri Veterans
Commission, the Department of Social Services, the Missouri Office of Prosecution Services
and the 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 did not respond to Oversight’s request for a
statement of fiscal impact. L.R. No. 2459H.01P
Bill No. Perfected HB 1154
Page 7 of
March 31, 2023
HWC:LR:OD
FISCAL IMPACT – State
Government
FY 2024
(10 Mo.)
FY 2025FY 2026Fully
Implemented
(FY Unknown)
GENERAL REVENUE
FUND
Costs – DHSS (§191.479)
grants for research on
use/efficacy of psilocybin p.5
$0 to
($2,000,000)$0 $0 $0
Costs – DHSS (§192.950) –
clinical trial
Likely to
exceed...
Personal service($361,239)($442,157)($451,000)($451,000) Fringe benefits($200,088)($243,350)($246,658)($246,658) Equipment and expense($69,611)($42,752)($43,607)($43,607) Contracts – Phase 1($5,115,854)$0$0$0 Contracts – Phase 2$0($17,905,487)($17,905,487)$0 Contracts – Phase3+$0$0$0($24,556,097)Total Costs - DHSS($5,746,792)($18,633,746)($18,646,752)($25,297,362) FTE Change - DHSS5 FTE5 FTE5 FTE5 FTEESTIMATED NET EFFECT
ON THE GENERAL
REVENUE FUND
($5,746,792
to
$7,746,792)($18,633,746)($18,646,752)
Likely to
exceed
($25,297,362)
Estimated Net FTE Change on
the General Revenue Fund5 FTE5 FTE5 FTE5 FTE L.R. No. 2459H.01P
Bill No. Perfected HB 1154
Page 8 of
March 31, 2023
HWC:LR:OD
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 provides, subject to appropriation, the Department of Health and Senior Services shall
provide grants totaling two million dollars for research on the use and efficacy of psilocybin for
specified persons. (§191.479 – HA 1)
The department shall prepare and submit to the governor, lieutenant governor, and the general
assembly annual reports on any information collected by the department on the implementation
and outcomes of the use of psilocybin.
The Department of Health and Senior Services, any health care providers, and any other person
involved in the acts provided for in the legislation, shall not be subject to criminal or civil
liability or sanction under the laws of this state, except in cases of gross negligence or willful
misconduct. No health care provider shall be subject to discipline against his or her professional
license for providing care to a person engaged in acts allowed under the provisions of this
proposal. In addition, a physician shall not be subject to criminal or civil liability or sanction for
providing documentation that a person suffers from the conditions provided for in the proposal
nor shall a state agency or regulatory board revoke, fail to renew, or take any other action against
a physician’s licensed based solely on the physician’s provision of documentation relating to the
condition suffered by the person.
No state agency, or employees therein, shall disclose to the federal government, federal
government employee or any unauthorized third party the statewide list or any individual
information of the person who meet the requirements of this section. (§191.479 – HA 1)
This proposal requires the Department of Health and Senior Services, in collaboration with a
hospital operated by an institution of higher education in this state or contract research
organizations conducting trials approved by the US Food and Drug Administration shall L.R. No. 2459H.01P
Bill No. Perfected HB 1154
Page 9 of
March 31, 2023
HWC:LR:OD
conduct a study on the efficacy of using alternative medicines and therapies, including the use of
psilocybin in the treatment of patients who suffer from post-traumatic stress disorder, major
depressive disorder or substance use disorders, or who require end-of-life care.
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 as well as a highlight of those clinical
practices that appear to be most successful as well as any safety or health concerns.
The Department shall maintain the confidentiality of any personally identifiable protected
information collected during the clinical trial. (§192.950)
This legislation is not federally mandated, would not duplicate any other program but would
require additional capital improvements or rental space.
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
Department of Social Services
Missouri Office of Prosecution Services
Office of the State Courts Administrator
Julie MorffRoss StropeDirectorAssistant DirectorMarch 31, 2023March 31, 2023