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F I S C A L I M P A C T R E P O R T

SPONSOR McSorley

DATE TYPED 2/25/05

HB

SHORT TITLE Prescription Drug Ethical Marketing Act

SB 824

ANALYST Medina

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$25.0

Recurring General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Regulation and Licensing Department (RLD)

Pharmacy Board

SUMMARY

Synopsis of Bill

Senate Bill 824 enacts the Prescription Drug Ethical Marketing Act and appropriates $25.0 from

the general fund to the Office of the Attorney General for the purpose of developing and imple-

menting the provisions of the Act. The Act requires drug manufacturers to report annually to the

Attorney General on their pharmaceutical marketing activities. The Act also requires the Attor-

ney General to facilitate the reporting and in turn issue its own annual report to the Legislature

and the general public. The Attorney General is also authorized by the Act to take action to in-

vestigate and enforce the Act.

Significant Issues

The Regulation and Licensing Department contends that because a significant amount of pre-

scription drug manufacturers’ promotional activities are in television and radio advertisements,

the information required to be reported by this Act are not easily reportable. RLD is also uncer-

tain whether or not continuing education programs provided to health care providers in the state

could potentially be considered promotional (marketing) activities. According to RLD, many

pharmacists obtain their required continuing education from drug manufacturer-sponsored pro-

Senate Bill 824 -- Page 2

grams that are usually live or available on the Internet.

FISCAL IMPLICATIONS

The appropriation of $25.0 contained in this bill is a recurring expense to the general fund. Any

unexpended or unencumbered balance remaining at the end of fiscal year 2006 shall revert to the

general fund.

The Act authorizes but does not mandate that the Attorney General assess a filing fee to support

the administrative cost of implementing the Act (i.e. processing the forms and collecting infor-

mation from the manufacturers). However, the bill does not mandate a fee nor a cap for a fee.

Continuing Appropriations

The LFC FY06 appropriation recommendation is balanced between revenues and expenditures

and any increase in recurring funding must be offset by reductions in other areas of the recom-

mendation. The Legislature must consider all priorities and funding requirements to find reve-

nue to support this legislation.

DXM/yr