Senate Government Operations
On Tuesday the Senate Government Operations Committee heard bill introductions on S. 286, S. 143, and S. 287. S. 286 and S.143 constitute two retirement eligibility alternatives for various state law enforcement employees. While the Committee did not endorse one option over the other, the Treasurer’s Office suggested they would like to weigh in on whichever alternative is ultimately chosen. S. 287 codifies a contractual relationship between members of the Vermont Retirement System and the state in an effort to protect members by not allowing their benefits to change.
Military Pension State Income Tax Exemption
On Tuesday H.839, a bill which would exempt retired military from the state income tax, was discussed in the House Ways & Means Committee. One veteran testified in favor of the bill. Committee sources say that the bill will most likely stay on the wall this session.
Pharmaceutical Pricing
This week both the House and Senate Health and Welfare Committees took testimony on a number of pharmaceutical bills. Both Committees believe that the price transparency legislation they have passed in recent years does not do enough to curb the trends on rising pharmacy costs. The House Healthcare Committee heard from Brian Murphy, Director of Pharmacy at Blue Cross Blue Shield of Vermont (BCBSVT) and from Nancy Hogue, Director of Pharmacy at the Department of Vermont Health Access (DVHA), Vermont’s Medicaid program. Brian and Nancy both pointed to the price increase of specialty drugs, or biologics, as the primary cause of the continued increase in pharmacy costs. It is not just the cost of the drugs through the pharmacy benefit, but it is also the medical cost to hospitals for administering these drugs which are generally injected in an inpatient or outpatient setting.
Vermont did pass a bill a number of years ago to increase the use of biosimilars here within the state. Biosimilars are basically the generic versions of these specialty drugs. However, the FDA has not yet approved any of these as “interchangeable” with brand specialty drugs. This means that doctors are not required to offer the cheaper biosimilar instead as they do for many pill-form generic drugs.
The Legislature will be looking to curb pharmaceutical trends in a number of ways this year. This will include examining the role of Pharmacy Benefit Managers (PBM’s) in determining the final cost of the drugs when they are purchased through the pharmacies. It will also look at expanding the role of the Green Mountain Care Board (GMCB) to include pharmaceutical price oversight. Finally, the Legislature will look to other states for ideas like California, that is seeking to create a state-owned generic manufacturing plant and their own purchasing pool to buy drugs directly from manufacturers.
Divestment of State Pension Funds
On Thursday the Senate Finance Committee heard testimony from Treasurer Beth Pearce on ongoing efforts towards divesting the State’s Pension Fund away from fossil fuels. According to Pearce, the rough cost of doing divestment is around $9 million annually due to losses and diversifications risks, among other considerations. While the State doesn’t make individual selections, the consultant group managing the funds have been instructed to make greener choices. Several Senators pushed back in favor of divesting from fossil fuels outright, citing efforts to divest from tobacco under Governor Davis. In response, Treasurer Pearce argued that mixing politics and doing legislative changes sets up a slippery slope that the State should not go down and that the proper approach entails concerted engagement. In Pearce’s words, if this approach isn’t effective, then people in Congress wouldn’t be trying to curb state’s ability to engage and that investment is not the answer for the State portfolio.
~Table of bills tracked is provided in current week's reporting~