Legislature(2021 - 2022)DAVIS 106
04/26/2022 03:00 PM House HEALTH & SOCIAL SERVICES
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| Audio | Topic |
|---|---|
| Start | |
| HB382 | |
| SB132 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 382 | TELECONFERENCED | |
| += | SB 132 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 382-INSULIN COVERAGE:INSURANCE;MEDICAID
4:55:07 PM
CO-CHAIR ZULKOSKY announced that the first order of business
would be HOUSE BILL NO. 382, "An Act relating to insurance
coverage for pharmacy services."
4:55:44 PM
CO-CHAIR SNYDER refreshed the committee on the purpose of HB
382, stating that the bill focused on the importance of
preventative care and improving access to affordable healthcare.
She explained that over the past few decades, the growth rate of
insulin costs had greatly outpaced that of inflation and become
incredibly expensive, with no generic versions of insulin
available. She reported that there were 50,000 Alaskans
diagnosed with diabetes, and that number increases every year.
In conclusion, she explained that the legislation would cap the
co-pay for insulin at $100 a month.
4:57:40 PM
REPRESENTATIVE MCCARTY, acknowledging that he had missed the
previous hearing, asked what the price of insulin is to the
pharmacies and whether this bill would cause a negative impact
in their ability to procure insulin. He mentioned that some
states have had to "go out of country" to buy medicine and
questioned whether those states were doing the same for insulin.
CO-CHAIR SNYDER explained that insulin currently costs $200 per
vial, in comparison to $20 a vial in 1994. She shared that
while the typical usage for a diabetic patient is two vials a
month, this can go up to as many as five a month depending on a
variety of factors including severity and the ability to manage
the condition through diet and other lifestyle choices. She
stated that the question of going out of country for insulin was
not brought up in the previous hearing.
5:00:14 PM
REPRESENTATIVE PRAX voiced his understanding that HB 382 would
alter the co-pay of existing policies and questioned whether the
bill would also affect future policies.
CO-CHAIR SNYDER confirmed that HB 382 would cap the price of
current and future policies.
5:00:51 PM
REPRESENTATIVE MCCARTY inquired about utilizing the ability of
the Department of Health and Social Services (DHSS) to purchase
large quantities of medication to reduce the cost of insulin for
the state.
REPRESENTATIVE FIELDS suggested that Representative McCarty
refer to a letter from DHSS [included in the committee packet]
which addressed this topic and then direct any further questions
to Lori Wing-Heier, Director of the Division of Insurance,
within the Department of Commerce, Community & Economic
Development.
5:01:38 PM
The committee took a brief at-ease.
5:01:47 PM
CO-CHAIR ZULKOSKY asked Representative McCarty to restate his
question and directed it to Coleman Cutchins from DHSS.
REPRESENTATIVE MCCARTY noted that the state buys large
quantities of other medications, such as hepatitis treatments,
and asked whether the department could do the same with insulin.
5:02:42 PM
COLEMAN CUTCHINS, PharmD, Clinical Pharmacist, Office of
Substance Abuse & Addiction Prevention, Department of Health and
Social Services, explained that insulin is a refrigerated and
sterile product, meaning it requires more effort to store and
transport than other drugs. He noted that it requires extra
personnel to maintain those sorts of medicines and the
department is experiencing staffing issues that could be a
barrier to proper maintenance. He mentioned that there are some
generic versions of insulin available to the state at prices of
$25 a vial when buying in bulk quantities of at least 1,000
units.
REPRESENTATIVE MCCARTY posited that because COVID-19
vaccinations have storage requirements similar to those for
insulin, mainly refrigeration, Alaska had provided employee
training and built up "a lot" of refrigerated facilities, which
he believes put the state in the position to be able to buy
insulin in bulk to reduce costs.
DR. CUTCHINS explained that there are 12-13 types of insulin on
the market which would present the department with the challenge
of deciding which types to carry. He emphasized that
implementing a system to purchase insulin would be complex.
CO-CHAIR ZULKOSKY asked Lori Wing-Heier to share her perspective
on Representative McCarty's question.
5:05:37 PM
LORI WING-HEIER, Director, Division of Insurance, Department of
Commerce, Community & Economic Development, explained that the
state had supplied a letter to the committee to look into a
similar question brought up in the last hearing concerning
Utah's insulin distribution program, and that multiple
departments would be looking into whether or not a similar
program would be viable for Alaska. She reported that another
option the state was investigating was whether the Vaccine
Assessment Council could be amended to provide insulin. She
explained that both courses of action would require answering
the many logistic issues Dr. Cutchins discussed and specifically
the challenge of transporting a refrigerated medication from a
central distribution location to the far reaches of Alaska. She
acknowledged that the state had done this for the COVID-19
vaccines; however, those vaccines were frozen at -80 degrees
Fahrenheit while insulin required less intense refrigeration.
She emphasized that there would need to be statute changes if
the state were to amend the Vaccine Assessment Council and that
the state would be looking into the options for possible insulin
distribution.
REPRESENTATIVE MCCARTY asked whether any of the amendments that
Ms. Wing-Heier mentioned could be added to HB 382 to expedite
the overall process.
MS. WING-HEIER explained that it could be possible to amend HB
382, but stated that based on previous testimony, this bill
would affect only the 15 percent diabetic Alaskans who are
insured. She shared her understanding that the committee would
want to include the uninsured in any state-wide insulin
distribution programs.
5:08:11 PM
REPRESENTATIVE KURKA asked whether HB 382 would cause premium
increases for all those with health insurance or would be
localized to only those who have diabetes.
MS. WING-HEIER explained that any increase to premiums would be
negligible and that there had been no reports of increased
insulin costs from insurance companies dealing with this same
issue in other states.
CO-CHAIR SNYDER shared findings from studies on similar
legislation passed in other states that showed negligible
premium increases of 7-24 cents per person. She noted that a
study on the Washington co-pay cap saw a 2 percent decrease in
premiums. She argued that the initial increase across all
beneficiaries would improve access to insulin and allow diabetic
patients to better manage their health, leading to a cut in cost
overall as hospitalizations and complications associated with
poorly managed diabetes decrease.
5:10:43 PM
REPRESENTATIVE PRAX asked why the price of insulin had gone up
so much and posited that for a drug that has been around for so
long, a generic version should be available.
CO-CHAIR SNYDER explained that individuals with diabetes must
take insulin to live and, with no alternatives available,
companies "can charge whatever they want" for insulin to fill
that demand.
REPRESENTATIVE PRAX referred to the various forms of insulin
previously mentioned and sought confirmation that there were no
alternatives to insulin on the market.
CO-CHAIR SNYDER explained that the varied types of insulin were
due to differences in how patients administered it, as well as
who was producing and supplying it. She deferred to invited
expert Laura Keller for a more detailed explanation.
5:12:55 PM
LAURA KELLER, Managing Director of Advocacy, American Diabetes
Association, stated that there are no other replacements for
taking insulin for Type 1 diabetics such as herself. She
explained that the "generic" form of insulin mentioned
previously is a separate type called regular insulin that is not
used by most diabetic patients. She reported that the most
common type of insulin is analog, which had been out for decades
but has seen a massive jump in cost from $21 to over $300. She
mentioned that the current standard of care recommends insulin
pumps which require analog insulin and are covered by Medicare,
making them the most common devices in use in Alaska. She
acknowledged that regular insulin is available to patients but
has not received Federal Drug Administration (FDA) approval for
use in insulin pumps.
REPRESENTATIVE PRAX opined that the problem seems to be
regulatory and that it is "odd" that the FDA is preventing other
companies from producing insulin.
DR. CUTCHINS said that before working for the state he had
worked as a practitioner in diabetes care. He explained that
regular insulin can be used in a pump but newer drugs are longer
lasting and protect against low blood sugar, which is why they
are preferred for Type 1 diabetes patients. He explained that
insulin, especially the analog types, is an expensive drug to
manufacture and that the lower profits mean many companies are
not interested in creating generic forms of the drugs. He
posited that even when a generic drug is made, it is often "not
much cheaper" than the brand name version.
5:17:18 PM
REPRESENTATIVE SPOHNHOLZ moved to adopt Amendment 1 to HB 382,
labeled 32-LS1494\A.1, Marx, 4/22/22, which read as follows:
Page 2, line 6:
Delete "$100"
Insert "$35"
CO-CHAIR ZULKOSKY objected for the purpose of discussion.
REPRESENTATIVE SPOHNHOLZ reported that diabetes is one of the
most expensive health conditions in the country, leading to 27
percent of patients with diabetes rationing their insulin, which
can result in various complications that are even more expensive
in terms of health care. She explained that regular use of
insulin prevents issues like kidney failure, dialysis, and
amputations, as well as reducing the number of hospital visits
by 29 percent. She stated that the American Diabetes
Association (ADA) recommends a co-pay cap of $35 per month, a
figure that has been successfully adopted in legislation by
several states with varying "operating environments." She
opined that amending the cap from $100 to $35 monthly would
allow "average working Alaskans" better access to their needed
medication.
5:19:09 PM
REPRESENTATIVE KURKA asked how much the average premium cost
would increase with a $35 cap in comparison to the original $100
cap.
REPRESENTATIVE SPOHNHOLZ explained that in other states with a
cap of $35 there are increases as high as a dollar, but there
are also states, like Washington, that had a decrease in overall
cost. She explained that this was because the cost of any acute
care, such as a surgery or long term care [associated with a
diabetes complication], is also borne by all [policy holders on
the same plan].
REPRESENTATIVE KURKA asked whether there are any other factors
in the 1.8 percent decrease of premium costs in Washington.
REPRESENTATIVE SPOHNHOLZ confirmed that the co-pay cap is the
only factor.
CO-CHAIR SNYDER added that the State of Washington passed a
second bill to lower the cap to $35 after the success of the
first cap. She also mentioned that there are 20 other states
who have instituted a cap between $35-$100 a month.
5:21:54 PM
REPRESENTATIVE MCCARTY asked whether there are any states that
passed this legislation that had similar demographics to Alaska
in terms of population and diabetic residents. He also
questioned whether there could be a threat of insurance
companies deciding not to provide insulin in Alaska due to the
cut in co-pay, therein cutting off Alaska's supply of insulin.
REPRESENTATIVE SPOHNHOLZ explained the demographic information
available is about states like Kentucky, Washington, and Utah,
which passed similar legislation. She stated that she could not
make a direct comparison to a "like state," but studies have
shown minimal increase to premiums. In regard to the insurance
companies, she reported that the loss of income from the reduced
premium is offset by a reduction of [expensive] high acuity of
care cases. She opined that instituting a cap is a way to
incentivize the companies to use their "significant market
position" to negotiate better manufacturing and distribution
costs.
5:24:48 PM
REPRESENTATIVE PRAX asked whether the committee had heard any
testimony from insurance companies.
CO-CHAIR SNYDER replied that there is a letter from one company
that had been delivered to committee members' offices.
REPRESENTATIVE SPOHNHOLZ referred to a report from the
Healthcare Cost Institute (HCI) on Type 1 diabetes and the
increasing costs of insulin. She explained that the HCI is an
insurance industry funded organization with the purpose of
examining health care costs in America.
REPRESENTATIVE PRAX shared that in his experience working in
insurance sales, companies and employers invest in preventative
care, such as buying memberships to a gym, because they believe
that doing so saves money in insurance payouts overall. He
posited that if putting a co-pay cap in place decreases costs,
insurance companies would have done so before. He said he
wished to hear directly from insurance companies for that
reason.
CO-CHAIR SNYDER voiced her opinion that the path of least
resistance for insurance companies is going with "the status
quo," and she explained that the legislation would add positive
pressure for those companies to address the problem directly
with insulin manufacturers. She referred to a statement from
America's Health Insurance Plans (AHIP), a national insurance
organization, that suggested many other forms of cost reduction
with which she agreed. However, she stated that [AHIP's]
argument that insurance premiums would rise substantially cited
an out-of-date study from Kentucky, which gave her pause when
considering how much stock to put into that testimony.
5:29:17 PM
REPRESENTATIVE FIELDS recapped part of the conversation held
during the previous hearing by stating that the cost savings
from reducing hospital visits and expensive, long term
complications through the proper use of insulin are harder to
quantify than immediate premium costs, which could account for
why they have not been quantified yet.
5:29:38 PM
REPRESENTATIVE KURKA asked what is currently in statute to
regulate the cost of co-pay and how the split of who would pay
for what portion of prescriptions is structured.
5:30:42 PM
MS. WING-HEIER explained that there is not anything in statute
other than what was directed by the federal government in the
Affordable Care Act, and that the amount of co-pay depends on
the specific plan. She explained that the purpose of this bill
is to rectify that.
REPRESENTATIVE KURKA asked whether there are plans available on
the market with higher premiums that would cover more of the
cost of prescriptions.
MS. WING-HEIER replied that there are plans that cost much more
that would have lower co-pays.
5:32:26 PM
CO-CHAIR ZULKOSKY removed her objection to the motion to adopt
Amendment 1.
REPRESENTATIVE KURKA objected.
5:32:32 PM
A roll call vote was taken. Representatives Sponholz, Fields,
Zulkosky, and Snyder voted in favor of Amendment 1 to HB 382.
Representatives Prax, Kurka, and McCarty voted against it.
Therefore, Amendment 1 was adopted by a vote of 4-3.
5:33:32 PM
CO-CHAIR SNYDER moved to report HB 382, as amended, out of
committee with individual recommendations and the accompanying
fiscal notes.
CO-CHAIR ZULKOSKY noted there was an [inaudible] objection.
A roll call vote was taken. Representatives Sponholz, Fields,
Snyder, and Zulkosky voted in favor of the motion to report HB
382, as amended, out of committee with individual
recommendations and the accompanying fiscal notes.
Representatives Prax, Kurka, and McCarty voted against it.
Therefore, CSHB 382(HSS) was reported out of the House Health
and Social Services Standing Committee by a vote of 4-3.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 382 Amendment #1.pdf |
HHSS 4/26/2022 3:00:00 PM |
HB 382 |
| SB 132 v.A.PDF |
HHSS 4/26/2022 3:00:00 PM |
SB 132 |
| SB 132 Fiscal Notes DCCED 2.1.22.pdf |
HHSS 4/26/2022 3:00:00 PM |
SB 132 |
| SB 132 AKVMA White Paper.pdf |
HHSS 4/26/2022 3:00:00 PM |
SB 132 |
| SB 132 Letters of Opposition as of 4.8.22.pdf |
HHSS 4/26/2022 3:00:00 PM HL&C 5/13/2022 9:00:00 AM |
SB 132 |
| SB 132 Lincoln University Study PDMP Custom Tailoring is needed 2014.pdf |
HHSS 4/26/2022 3:00:00 PM |
SB 132 |
| SB 132 Letters of Support as of 4.13.22.pdf |
HHSS 4/26/2022 3:00:00 PM HL&C 5/13/2022 9:00:00 AM |
SB 132 |
| SB 132 Presentation 4-14-22.pdf |
HHSS 4/26/2022 3:00:00 PM |
SB 132 |
| SB 132 Sectional Analysis.pdf |
HHSS 4/26/2022 3:00:00 PM |
SB 132 |
| SB 132 Sponsor Statement.pdf |
HHSS 4/26/2022 3:00:00 PM HL&C 5/13/2022 9:00:00 AM |
SB 132 |
| HB382 DOI Response to Question from (H)HSS Committee 04.26.2022.pdf |
HHSS 4/26/2022 3:00:00 PM |
HB 382 |