SESSION HIGHLIGHTS, MAR 7-11, 2016
Bill Assigning Strict Liability for Oil and Gas Companies Passes
Rep. Joe Salazar (D-Thornton) passed a bill this week out of the House Health, Insurance and Environment committee which he says will hold oil and gas drillers liable for any earthquakes they supposedly cause.
This bill, HB16-1310, attaches the concept of “strict liability” to the production of oil and gas. In tort law, strict liability is an imposition of liability on a party without a finding of fault. The claimant would only need to prove that an act occurred and then the defendant would be legally responsible. This means that oil and gas companies would be considered inherently dangerous and opponents of the bill say that the bill has no basis in reality and serves only to inflame the opponents of development. The Colorado Supreme Court has ruled that the state is headed away from this standard.
Six hours were spent on testimony with half coming from anti-oil and gas environmental groups or citizens aligned with them and the other half being pro-oil and gas development groups including agriculture groups, business associations, and regional economic development associations.
The bill passed on a party-line vote, 7-6, and now moves to the House floor.
House Debates Immunizations
The focus of Thursday's debate was HB16-1164, would require parents of school-age children to file their vaccination-exemption notices online with the Colorado Department of Public Health and Environment rather than submit paper forms to their local schools. Right now, all children must be immunized to attend public schools, but state law allows parents to opt out for religious, medical or "personal objection" reasons. Supporters argue the change through HB16-1164 will take a burden off school nurses and secretaries, provide more complete data to the department and be easy for parents.
Republican members, who oppose the bill, repeatedly raised two big questions during debate: who protects the data and what is the fate of exemption?
Several GOP amendments were defeated on the floor, sans one major surprise – an amendment that would allow parents to voluntarily include children's vaccination information in the state's immunization tracking system. Current law automatically puts that information in the system and allows parents to have it removed. The parent-option amendment was adopted at the end of first consideration, when members are allowed to offer amendments a second time and recorded votes are taken. The vote was 34-33, but the Democrats used a procedural tool to get the bill back to the way it left committee.
The exemptions bill has been contentious from the start. A House committee spent nearly seven hours on the issue last month before passing it party-line on a vote of 7-6. The bill passed on third reading this morning and now will be heard in the Senate.
Pharmaceutical Reporting Bill Dies in House
Colorado was the latest state to introduce a “pharmaceutical cost transparency act,” following six others— New York, California, Oregon, Massachusetts, North Carolina, and Pennsylvania. Like the bills before it, Colorado would require pharmaceutical manufacturers to submit a report to a state entity outlining the total costs of the production of certain expensive drugs.
HB16-1102, sponsored by Rep. Joann Ginal (D-Fort Collins) stated that each manufacturer of a prescription drug, made available in New York, that has a treatment cost of $50,000 or more would have to file a report to the Colorado Cost Commission that contains:
The total costs of the production of the drug, including:
•The total research and development costs paid by the manufacturer, and separately, the total research and development costs paid by any predecessor in the development of the drug.
•The total costs of clinical trials and other regulatory costs paid by the manufacturer, and separately, the costs paid by any predecessor in the development of the drug.
•The total costs for materials, manufacturing, and administration attributable of the drug.
•Any other costs to acquire the drug, including costs for the purchase of patents, licensing or acquisition of any corporate entity owning any rights to the drug while in development, or all of these.
•The total marketing and advertising costs for the promotion of the drug directly to consumers, including, but not limited to, costs associated with direct to consumer coupons and amount redeemed, total marketing and advertising costs for promotion of the drug directly or indirectly to prescribers, and any other advertising for the drug.
The report also must have contained:
•The cumulative annual history of increases in the average wholesale price and wholesale acquisition cost of the drug.
•The total company profits attributable to the drug, and
•The total amount of financial assistance the manufacturer has provided through patient prescription assistance programs.
Colorado's bill was almost identical to other state's drug cost disclosure bills, with the exception of Massachusetts's, which allows the state to impose pricing caps on certain drugs. Other states require a cost report—to be posted publicly—which advocates suggest will somehow lower the cost of drugs.
Opponents of the bill, who ultimately came out ahead, argued that simply the legislation's requirements would result in an inaccurate and misleading portrayal of the cost of developing new treatments while failing to provide patients with any additional information about their out-of-pocket costs for medicines.
One of the major problems that legislators saw in the bill is that it only focuses on the medicines that make it to market, while completely ignoring the 90% that fail during testing, a costly yet vital part of discovering new treatments.
Rep. Su Ryden (D-Aurora) asked the bill sponsor, “It seems this bill only focuses on the cost to the state, but avoids all the benefits. Shouldn’t we be looking at legislation by a cost-benefit analysis?”
Her question illustrates the other major problem with the bill: it did not take into account the tremendous value these medicines provide to patients, Colorado’s healthcare system and the state’s economy.
Even after a strike below amendment was introduced that dramatically changed the bill, it still was not enough to make the majority of members comfortable enough to vote for it. HB16-1102 died on a bipartisan vote of 9-4 and was postponed indefinitely on a vote of 12-1.
Tax-Haven Bill Leaves House, Faces Poor Fate in Senate
The House passed a bill from Reps. Mike Foote (D-Lafayette) and Brittany Pettersen (D-Lakewood) which could penalize companies who are doing business outside of the United States. Proponents believe that the bill cracks down on off-shore tax havens, but the bill does not distinguish between legitimate taxpayers and companies trying to evade state taxes causing concern by the business community.
The bill passed the House on a party–line vote, Democrats outnumbering Republicans 34-31. The bill has already been assigned to the Senate State, Veterans and Military Affairs committee affectionately known as the “kill committee.” Because of that, this bill may end up having the same fate as a similar bill that was ran by the same sponsors last year; passing last year in the House, but dying in the Senate.