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SESSION HIGHLIGHTS, FEB 15-19, 2016

Senate Education Committee Votes to Preserve School Choice

This week the Senate Education Committee debated SB16-052, by Sen. Andy Kerr (D-Lakewood). The bill ─ a repeat of last year's attempt to add layers of accountability for online education providers ─ failed again this week.

Sen. Kerr, and those who supported the bill, were looking to address what they believe are problems with student scores and "authorizer shopping" in multi-district online schools. Opponents saw this bill as an obstruction against school choice. Families with children in online schools believed the bill would add regulatory burdens, but would not provide school accountability.

In the end, the majority party sided with the opponents, agreeing that the bill failed to address major underlying questions that need attention regarding measurement of graduation rate, multiple count dates and other areas of a more student-centered system of accountability; and the bill died on a party-line vote.

During this interim, the Sen. Kerr plans to meet with bill opponents to revise the approach toward accountability with the school practitioners providing this vital educational option for hundreds of families in the state.

Legislators Postpone Action on Pharmaceutical Company Disclosure Bill

Over the course of six hours, the House Health, Insurance and Environment Committee, chaired by Rep. Beth McCann (D-Denver), heard testimony on HB16-1102, but ultimately did not take a vote. The bill requires pharmaceutical companies to disclose (per product) their manufacturing costs, the money spent on research and development, dollars spent on advertising and marketing, and their total profit.

"HB 1102 provides policymakers and Coloradans with a more complete understanding of drug price drivers. This data will help identify policy solutions that address prices, while still promoting and encouraging innovation and investment in new therapies and life-saving treatment," said Rep. Joann Ginal (D-Fort Collins), the bill's sponsor. She was backed by supporters from the insurance industry, the Colorado Education Association, a few consumer advocacy groups and some individual patients. They shared anecdotes and concerns about patients not being able to afford drugs after their insurance denied them coverage

Opponents ─ including International Cancer Action Network, biopharmaceutical companies, the Colorado BioScience Association and the Hepatitis C Coalition ─ did not disagree that all patients need access to the life-saving, innovative medicines, treatments and cures that companies develop. However their position was that the bill does nothing for patients, hurts the culture of innovation and inaccurately represents the bioscience sector as a whole. 

Testimony worked to dispel the notion that patients who can pay for medicines don't receive them, citing the nearly billion dollars of free prescriptions given to patients in need through the numerous prescription assistance programs last year alone. They also clarified the fact that information about company spending on research and development is available to the public through the U.S. Securities and Exchange Commission (SEC) in aggregate. Spending on sales and marketing and advertising is available by product. 

Opponents explained to the committee that what the bill required of them ─ disclosure by product ─ was nearly impossible because science does not allow for it. Leah Lindahl, Vice President of the Colorado BioScience Association (CBSA), and other opponents shared that new medical discoveries on average take 2.4 billion dollars of investment made over a decade to successfully receive approval from the Food and Drug Administration (FDA), and for every drug that is approved, another ten fail along the way. Often companies begin work on one molecule, focused on a specific disease, that fails; but ultimately that research can lead to a discovery that is successful in curing or treating another disease. 

In the end, the committee chair Rep. McCann said she believed people in the audience wanted to work on amendments and the sponsor agreed she wanted more time. The committee also wanted to wait out some budgetary decisions. The entity receiving the compiled information, the Colorado Cost Commission on Affordable Healthcare, needs to secure a half a million dollars in funding from the state's Joint Budget Committee (JBC) in order to continue to meet past July 2016. On Wednesday the JBC will debate their supplemental request.

“As the Committee looks to continue their work on House Bill 1102, we will work with each member to ensure they understand the unintended consequences this legislation could have on the biopharmaceutical industry and the fact that the legislation would provide patients with no new information nor would the outcome lower drug costs,” shared Lindahl after the committee hearing.

The vote for HB16-1102 has not been scheduled. 

OSPB Director Sobanet Gives Budget Update at CACI Government Affairs Council Meeting

This week the Colorado Association of Commerce & Industry (CACI) invited government affairs professionals to a luncheon featuring the Director of the Governor’s Office of State Planning and Budgeting (OSPB), Henry Sobanet. He shared that it is likely that there will be no Taxpayer Bill of Rights (TABOR) refunds this year and that refunds next year will be $91 million, and $100 million for mandated transfers because of SB09-228.

Some Senators like Senate Transportation Committee chairman, Sen. Randy Baumgardner (R-Hot Sulfur Springs) have been shopping around the idea of repealing and replacing those transfers because they can only be counted on when the state budget grows between one and two percent. Sobanet warmed that a solution for transportation funding is not that simple and that if there is “no 228, then there will be $191 million TABOR refund because of the interplay between the 228 and TABOR.” 

Director Sobanet also briefly discussed the Hospital Provider Fee  (HPF) saying that if the fee is "enterprised" (taken out of the general fund) then there will be no TABOR rebate next year or the year following. A question was asked about whether then the HPF enterprise discussion just prolongs the state's budget complications. His answer was yes, but that complication exists with or without the conversation related to the HPF. 

Someone also asked about the varying interpretations on the legality of making the HPF and enterprise and the conflicting legal positions. Sobanet said the first opinion was issued months before the proposal was introduced by Governor Hickenlooper (D) and they still believe that the legislature has the authority to make statutory changes.

The next forecast will come out March 19 and the Joint Budget Committee (JBC), OSPB and Legislative Legal Services are preparing for a potential downgrade due to royalty payments falling off and the weakening of corporate tax growth. But even so, according to monthly data coming out of the Department of Revenue (DOR), right now, the economy is doing 3.8 percent better than it was last year. However, that is a volatile number because what will happen during April's tax season is still unknown.

In his closing remarks, Sobanet also touched on severance tax collection - noting the 70% reduction in severance tax collections. He said that affects grants and inspections among other things democrats in the legislature have been anxious to examine or increase. He said this is one thing that OSPB is taking a close look at and so is the JBC and he anticipates that there will be a bill looking at this collection issue, but was not specific about any plans.

Zoey DeWolf