GMCB Oversight of Drug Prices (S.98) - May 1, 2024

On Tuesday, Nolan Langweil (Principal Fiscal Analyst, Joint Fiscal Office)  reviewed S.98 with the House Appropriations Committee. The bill relates to Green Mountain Care Board (GMCB) authority over prescription drug costs. The House Health Care Committee had made amendments concerning the GMCB Nominating Committee, and then passed the bill on to this Committee.

In summary the bill would require that the GMCB create a framework and methodology for implementing a program to regulate the cost of prescription drugs in Vermont. The bill would create two permanent positions at the GMCB to lead the development and implementation of the prescription drug regulation program. In fiscal year 2025, it would appropriate $495,000 from the Evidenced-Based Education and Advertising Fund to the GMCB for two purposes. One being $245,000 to fund, one Director of Prescription Drug Pricing, and another for Policy Analyst for Prescription Drug Pricing. The second purpose would be $250,000 (one-time) to contract with experts on prescription drug-related issues. Finally, the bill would amend the statute to include the GMCB prescription drug cost regulation initiatives as an allowable use of funds from the Evidence-Based Education and Advertising Fund.

Langweil continued to explain the background of the Evidence-Based Education and Advertising Fund is funded by a manufacturer fee of 1.75% of the Department of Vermont Health Access (DVHA) prescription drug spending in the previous calendar year, based on manufacturer labeler codes as used in the Medicaid Rebate Program. He noted that S.98 would amend the statute to include GMCB prescription drug cost regulation initiatives as an allowable use of Fund monies. According to the Vermont Department of Health (VDH), the Fund is estimated to have an unobligated balance of $5.2 million at the close of FY2024. There will be sufficient funds to cover the $495,000 appropriation in FY2025, but it will need to be considered alongside other priorities of the Administration and General Assembly, including those in VDH’s FY2025 budget recommendation.

The Committee approved S.98 and passed it on to the House floor on May 2nd. Representative Cordes reported the bill on behalf of the Health Care Committee. Representative Holcombe reported on behalf of the Appropriations Committee.  The House voted to pass the bill back to the Senate with their amendments.

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