This week’s policy blog includes updates on federal and state legislation and actions that will impact Colorado’s life sciences, public health, and healthcare landscape: 

• Federal Budget Reconciliation Bill Signed into Law 
• Colorado Special Session Likely Following Passage of Federal Spending Bill 
• CDPHE Faces Layoffs Amid Expiration of Federal Grant Streams 
• New Health-Based Standards on Ethylene Oxide Emissions on the Horizon 
• PDAB Moves Forward with Upper Payment Limit Rulemaking 

Federal Budget Reconciliation Bill Signed into Law 

The federal budget reconciliation bill, the “One Big Beautiful Bill Act” (H.R. 1), was passed on July 3 and signed into law by President Donald Trump on July 4. Many are raising alarm bells about historic federal healthcare cuts of more than $1 trillion, including $930 billion from Medicaid. However, the final package does include the ORPHAN Cures Act and an R&D amortization fix, two of the priority issues CBSA and our partners advocated for in DC in April during the 2025 BIO Fly-In. John F. Crowley, President and CEO of the Biotechnology Innovation Organization (BIO), released the following statement on the passage of the “One Big Beautiful Bill Act” (OBBBA): 
 
“The OBBBA contains important bipartisan provisions that address the needs of companies developing medicines for some of the hardest to treat rare diseases and fixes provisions of the tax code that will allow small, emerging companies to be more nimble and more focused on getting innovative medicines from the lab bench to a patient’s bedside. 
 
The first provision amended the Inflation Reduction Act to encourage critical, follow-on investment into rare disease research. Its passage is a major, life-saving victory for rare disease patients too often overlooked by our society. The second allows for the immediate deduction of research and development costs. 
 
These have been long-time priorities for innovators and patients and will help strengthen America’s leadership in biotechnology, while ensuring continued investment in new medicines that will transform the standard of care for devastating diseases.” 

Colorado Special Session Likely Following Passage of Federal Spending Bill 

As reported by The Sum & Substance on July 3, the Colorado legislature is likely to convene a special session as soon as August following the passage of the federal OBBBA, which significantly reduces funding for Medicaid and other federally supported programs. Governor Jared Polis’ Office of State Planning and Budgeting estimates that the bill will decrease Colorado’s revenues by $500 million and increase state costs by an additional $500 million. These financial impacts may necessitate budget adjustments, potentially affecting various state programs. 

A notable provision removed from the federal bill was a 10-year moratorium on state-level artificial intelligence (AI) laws. This removal could prompt renewed discussions in Colorado regarding the state’s 2024 AI law, which many industry leaders view as burdensome. Colorado’s 2024 AI law did include important exemptions that CBSA fought for, though, so a reconsideration by the state legislature of the AI law might reopen debates about these exemptions. 

The federal bill also introduces work requirements for Medicaid recipients, potentially leading to over 150,000 individuals losing coverage. This change could strain hospitals, especially in rural areas, and shift costs to privately insured patients. Additionally, the bill reduces the federal share of costs for certain Medicaid enrollees from 90% to 50%, compelling Colorado to either cover the difference or disenroll affected individuals. 

Other implications include a projected $10.4 billion loss over five years from the hospital provider fee and a $175 million reduction in Supplemental Nutrition Assistance Program (SNAP) funding. To address these challenges, state legislators are considering options such as reducing tax credits, scaling back reinsurance programs, and increasing higher education tuition. 

Governor Polis has not officially called for a special session, but legislative leaders anticipate it is forthcoming. The session is expected to address Medicaid funding, AI regulation, and potential adjustments to state tax policies in response to the federal bill’s provisions. 

CDPHE Faces Layoffs Amid Expiration of Federal Grant Streams 

Meanwhile, The Denver Post reported on June 28 that the Colorado Department of Public Health and Environment (CDPHE) is bracing for several layoffs—potentially 11 positions—“for workers focused on cancer and heart disease prevention, thanks to the apparent loss of nearly $2 million in federal grant funding and the state’s own bleak fiscal outlook.” CDPHE spokeswoman Vanessa Bernal said, “If the federal funding does not come through, Colorado will lose critical staff and services that prevent disease and reduce long-term health care costs…We are doing everything in our power to minimize workforce impacts. But these changes, if required, won’t just affect our staff — they will affect the health of people across Colorado.” 

New Health-Based Standards on Ethylene Oxide Emissions on the Horizon 

Colorado is also moving ahead with new regulations that could affect life sciences manufacturers, facilities, and research operations that use ethylene oxide (EtO), which is used to sterilize approximately 20 billion, or 50%, of all medical devices in the U.S. each year. The Sum & Substance reported that “business and environmental leaders are gearing up for a September regulatory hearing that will mark the next flash point over Colorado air-pollution regulation” — the establishment of health-based standards for five priority toxic air contaminants (TACs) identified in January by the Colorado Air Quality Control Commission. These first five priority TACs include EtO even though the Environmental Protection Agency (EPA) released its update to the National Emission Standards for Hazardous Air Pollutants (NESHAP) final rule for EtO commercial sterilization facilities in March 2024. Even without Colorado stepping in to regulate EtO, this federal rule will, according to the EPA’s fact sheet, “reduce EtO emissions by over 90 percent.”  

• More information: CBSA’s 3/18/2024 Weekly Policy Blog: EPA Releases Final Rule for EtO Sterilization Facilities 

PDAB Moves Forward with Upper Payment Limit Rulemaking 

Lastly, the Colorado Prescription Drug Affordability Board (PDAB) will be holding its second upper payment limit (UPL) rulemaking hearing for Enbrel on July 11. The PDAB became the first board in the country to move toward capping the price of a drug by holding its first UPL rulemaking hearing for Enbrel on May 23. That May 23 hearing was the first rulemaking hearing (of at least three), for the first drug, by the first state PDAB to try to implement this mechanism to control drug costs.  

• More information: CBSA’s 5/28/2025 Policy Blog: Colorado’s PDAB Begins First UPL Rulemaking  

Following a miscategorization of data in the All Payers Claims Database (APCD) that affected the selection and affordability reviews of the first set of drugs, PDAB staff “presented the addendum to the 2023 Affordability Review Summary Report (ARSR) for Enbrel at the Board’s meeting on May 23. Staff plan on presenting the addendums for Stelara and Cosentyx to the Board at the July 11th meeting. The draft addendums for both drugs can be found on the PDAB website.”