Utah Legislative Recap, Feb. 9, 2024

February 8, 2024

Funding Requests

1. Life Sciences Initiative – Senator Ann Millner

The original initiative requested the legislature provide $7.125M of ongoing funding to higher education in Utah to support the workforce needs of Utah’s Life Sciences industry.  BioUtah has worked closely with Talent Ready Utah, colleges and universities in the state, and other stakeholders to create and promote this initiative.  On February 8, 2024, the Higher Education Appropriations Subcommittee voted on funding priorities.  The Life Sciences Initiative was ranked number one on the priority list, but the amount was cut back to $4M of ongoing funding.  The issue now awaits the Executive Appropriations Committee approval.     

2. Utah Innovation Fund – Senator Cullimore

Through legislation during the 2023 legislative session, the Utah Innovation Lab and Fund were created.  This fund is targeted to invest in early-stage technologies developed primarily at colleges and universities in the state, private and public.  It was initially funded with $15M transferred from the state Fund of Funds.  This request for appropriation asks for an additional $15M from the same fund.  That request is still pending

3. Manufacturing Modernization – Senator Ann Millner

In the 2022 legislative session, the legislature passed the Manufacturing Modernization statute that provides funding for companies desiring to upgrade manufacturing capabilities.  We are supporting a request for another $12-14M to be provided to this fund for the next year. 

Legislation

1. HB305 Post-employment Restrictions – Rep. Brammer

This bill attempts to do two things.  First, it would void any post-employment restrictions on non-exempt employees.  Second, it would void any post-employment restrictions on employees laid off or terminated without cause by an employer.  If passed, the bill would be effective May 1, 2024.  BioUtah’s board has expressed serious concern about the impact of this bill on the life sciences industry.  The bill remains in Rules and has not yet been assigned to a committee for a hearing.    

2. HB132 Pharmacy Amendments – Rep. Ward

This bill provides a mechanism to more easily substitute “substantially equivalent” and “substantially similar” drugs by pharmacists with permission from the prescribing physician.  It also requires the Department of Professional Licensing (DOPL) in consultation with other boards governing licensing of doctors and pharmacists, to publish a list of drugs that are “substantially equivalent” and “substantially similar” that could be substituted through provisions of this bill.  BioUtah feels the sponsor has assured important guardrails are in place to protect patients.  However, there remains some concern about the rigor with which new drugs are evaluated for addition to the “substantially similar” list. The bill acknowledges that certain steps may be taken to increase the rigor to an acceptable level but does not require it.  The bill has passed the House and reported out favorably from the Senate Health and Human Services Committee.  The next step is approval on the floor of the Senate. BioUtah feels the bill benefits patients by speeding up access to needed therapies. 

3. SB152 Cost Sharing Amendments – Sen. Bramble

This bill would require insurance companies and pharmacy benefit managers to apply payments by third parties to patient cost sharing requirements under their plan.  Presently, many insurance companies accept a deductible paid on behalf of a patient by a pharmaceutical manufacturer, but they recharacterize the payment as a discount to the price of the drug without benefitting the intended patient.  In doing so, they can receive multiple “deductibles” on behalf of the patient before requiring the patient to pay their deductible.  The bill was introduced on February 8, 2024 in the Senate Business and Labor Committee where it was reported out by a unanimous vote for consideration by the full Senate.  It is expected to be approved by the Senate and sent to the House where the opposition will be stronger.  Discussions are underway to potentially modify the bill to be a “pilot program” which may make it acceptable to the opposition. 

4. HB 425 Health Insurance Benefit Amendments – Rep. Thurston

This bill requires Pharmacy Benefit Managers (PBMs) pass along rebates they receive from manufacturers to reduce costs to the patient instead of being retained by the PBM’s.  It also addresses the practice of “spread pricing” which occurs when a PBM charges an insurer a different amount for a drug than the PBM reimburses the pharmacy.  The bill has not yet been assigned to a committee for a hearing.  The sponsor is gathering input from stakeholders to determine if changes to the bill are appropriate prior to a hearing.  BioUtah is favorable to the concept of rebates benefitting patients directly rather than being retained by PBMs.    

5. SB199 Placental Tissue Amendments – Sen. Bramble

This bill allows a health care provider whose scope of practice includes the use of stem cell therapy to perform stem cell therapy that is not approved by the FDA so long as the stem cells are not sourced from a fetus or embryo after an abortion.  The bill further outlines the notifications to patients that must be provided by stem cell practitioners.  The bill was reported out favorably by the Senate Health & Human Services committee and is now on the Senate calendar for consideration. 

6. 340B Amendments – Sen. Vickers

Senator Vickers has indicated his intent to run a 340B bill that would require manufacturers of certain drugs to provide those drugs at steep discounts to any, and all, “contract pharmacies” of federally qualified institutions in the state of Utah.  Presently, many drug manufacturers have taken a position that the original 340B legislation does not require them to service more than 1-2 contract pharmacies for any federally qualified institution participating in the 340B program.  The federal government has not resolved the issue on a national basis resulting in states like Utah requiring the drug manufacturers to comply with a broadened interpretation of the law until such time as the federal government provides clarification.  BioUtah opposes such legislation on the grounds it is not consistent with the original intent of the 340B program.  No bill has yet been introduced. 

7. Right to Repair – Sen. Winterton

In the October interim meetings of the legislature, Senator Ron Winterton introduced a right to repair bill targeted primarily at the repair of equipment used in agriculture. It would allow an equipment owner to seek repair services from the provider of their choice instead of being compelled by the original manufacturer to use an authorized provider.  While this does not presently apply to medical devices, it is the proverbial first step.  BioUtah believes manufacturers of medical devices are within their rights to require service of their products only by those trained and authorized to provide the service to protect patients and shield manufacturers from liability.  Presently, Senator Winterton does not intend to introduce legislation this session.  However, another legislator may. 

8. R&D Tax Credit Repeal – Rep. Christopherson

Each year for the past several years Rep. Kay Christopherson has introduced legislation to repeal the tax credit for research and development costs.  His premise is to do away with all proprietary tax credits in favor of lowering the tax rate for all taxpayers.  He also believed companies were abusing the benefit – but could offer no evidence to support his belief.  BioUtah and others met with Representative Christopherson prior to the session.  Discussions focused on identifying whether a real problem exists with companies taking unfair advantage of the R&D Tax Credit.  It was agreed that the focus should be on gathering data to determine if there are abuses and how they could best be addressed rather than proposing legislation on the assumption there is a problem.  BioUtah does not expect any legislation in this session to repeal the R&D Tax Credit. 

9. HB111 Employment Training Requirement Limitations – Rep. Jimenez

This bill is a type of anti-DEI statute that prohibits employers from requiring employees, as a condition of hire, advancement, promotion or demotion to sign a document or attestation professing a belief in various DEI philosophies.  It allows training on such topics but prohibits requiring an employee to sign any kind of document or attestation in support.  BioUtah is concerned that this is an overreach and may have unintended consequences by interfering with the employer-employee relationship.   Presently the bill passed in the House by a 54-20 vote and has been sent to the Senate for consideration.   

10. HB69 Income Tax Amendments – Sen. Wilson

This bill would lower the corporate and individual income tax rate from 4.65% to 4.55%.  BioUtah supports this legislation.  It has been approved in the Senate and is now in the House for consideration. 

11. HB205 Minimum Wage Amendments – Garner

This bill removes an exception for individuals with disabilities from being subject to minimum wage laws.  The statute presently allows employers to pay a disabled or handicapped person lower than minimum wage in certain situations.  This bill would eliminate that exception.  The bill failed in the House Business and Labor Committee. 

12. HB396 Workplace Discrimination Amendments – Rep. Brammer

Prohibits an employer from compelling an employee to communicate or otherwise act in a manner that the employee believes would burden or offend the employee’s religious beliefs. The bill was amended to remove moral or conscientious beliefs.  The bill passed the House Judiciary Committee on a 9-2 vote and is now on the House calendar for consideration. 

13. HB055 – Employment Confidentiality Amendments – Rep. Kera Birkeland

This bill addresses claims of sexual assault or sexual harassment in the workplace.  In addition to making non-disclosure and non-disparagement clauses related to sexual assault and sexual harassment, as a condition of employment, unenforceable but it also prohibits an employer from taking any adverse actions toward an employee if the employee has filed a claim for sexual harassment or sexual assault until the claim has been settled or resolved.  While BioUtah supports creating an environment where victims can safely assert claims of sexual assault or sexual harassment, concerns remain about the unintended consequences of unconditional protection of an employee during the adjudication of a claim.