Utah Legislative Recap: February 23, 2024

February 22, 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

No additional funding will be provided this session.

Legislation

1. HB305 Post-employment Restrictions – Rep. Brammer

This bill attempted to do two things.  First, it would have made void any post-employment restrictions on non-exempt employees.  Second, it would have made void any post-employment restrictions on employees laid off or terminated by an employer.  BioUtah’s board expressed serious concern about the impact of this bill on the life sciences industry.  The bill was assigned to the House Business & Labor Committee but the sponsor withdrew the bill before it was heard in committee as there were unresolved issues such as the concerns expressed by BioUtah.

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 or non-profit foundation, 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 exhausting the third party support and then require the patient 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 was passed unanimously by the Senate on February 12, 2024.  However, the bill is expected to face opposition in the House.  In discussions with the sponsor, BioUtah believes a substitute compromise bill is forthcoming that may make it more palatable for passage in the House.

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.  It originally addressed 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 but in the first substitute this provision was revised to be applicable only in certain circumstances.  It also added provisions for PBM audits of pharmacies. The bill was favorably recommended by the House Business and Labor committee on February 13, 2024 and the second substitute was approved February 22, 2024 by the full House.  The bill has been sent to the Senate for consideration.  There remains opposition to the bill based on increasing cost of insurance and concerns about the administrative burden and challenges it presents.

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 on February 8, 2024 and approved by the full Senate on February 13, 2024.  It has been stuck in the House Rules committee and has yet to be assigned to a House Committee for a hearing.

6. SB256 – Medication Amendments – Sen. Vickers

On Friday, February 16, 2024, Senator Vickers introduced SB256.  The bill proposed a state mandate to compel pharmaceutical manufacturers to provide drugs under disputed measures of the Federal 340B program.  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.  This bill would require them to service unlimited number of contract pharmacies.  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 and that there is federal legislation recently introduced to address the issue.  SB256 was heard in committee this week. BioUtah testified against the bill.  The sponsor recognized there remain issues with the legislation and withdrew the bill from committee consideration.

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.   The bill passed in the House by a 54-20 vote on February 1, 2024 but failed in the Senate Business and Labor Committee on February 8, 2024.

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.  It was assigned on February 22, 2024 to the House Revenue and Tax Committee. Likelihood of passage increased when final tax revenue numbers were released showing a higher surplus than forecast.

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 was unanimously approved by the full House and sent to the Senate for consideration. On February 20, 2024, the Senate Business & Labor committee forwarded the bill to full Senate for consideration on a 4-2-2 vote.  In its most basic form, the bill reaffirms religious protections already protected by law.

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 unenforceable as a condition of employment, it also prohibited 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 sexual harassment claim.  The sponsor agreed to an amendment that removes prohibitions of adverse actions during adjudication of a claim so long as the adverse actions cannot be characterized as retaliation.  With these amendments, BioUtah no longer opposes the bill.  The amended bill has been approved by both the House and the Senate and sent to the Governor for signature.

14. HB 549 – Product Disclosure Amendments – Rep. Lee

This bill creates a labeling and disclosure requirement for genetically modified meat products. However, it includes in the definition of genetically modified meat products any animal that has been treated with an mRNA vaccine.  BioUtah has pointed out to the sponsor and committee members that mRNA vaccines do not modify DNA of the inoculated animal and requiring such labeling would imply that it does.  The bill will be heard in committee on February 23, 2024.  BioUtah is opposing the bill.