Legislature(2011 - 2012)CAPITOL 106
02/28/2012 03:00 PM House HEALTH & SOCIAL SERVICES
| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearing(s): State Medical Board | |
| HB310 | |
| HB218 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 310 | TELECONFERENCED | |
| *+ | HB 218 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE
February 28, 2012
3:06 p.m.
MEMBERS PRESENT
Representative Wes Keller, Chair
Representative Alan Dick, Vice Chair
Representative Bob Herron
Representative Paul Seaton
Representative Beth Kerttula
Representative Bob Miller
MEMBERS ABSENT
Representative Charisse Millett
COMMITTEE CALENDAR
CONFIRMATION HEARING(S):
State Medical Board
Camille Carlson - Fairbanks
Dr. Elizabeth Kohnen - Fairbanks
Dr. David Miller - Juneau
Dr. David Powers - Dillingham
- CONFIRMATION(S) ADVANCED
HOUSE BILL NO. 310
"An Act temporarily reinstating the child and adult immunization
program in the Department of Health and Social Services; and
providing for an effective date."
- MOVED CSHB 310(HSS) OUT OF COMMITTEE
HOUSE BILL NO. 218
"An Act prohibiting an insurer from using a drug formulary
system of specialty tiers under certain circumstances."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 310
SHORT TITLE: STATE IMMUNIZATION PROGRAM
SPONSOR(s): REPRESENTATIVE(s) HERRON
02/01/12 (H) READ THE FIRST TIME - REFERRALS
02/01/12 (H) HSS, FIN
02/14/12 (H) HSS AT 3:00 PM CAPITOL 106
02/14/12 (H) Heard & Held
02/14/12 (H) MINUTE(HSS)
02/28/12 (H) HSS AT 3:00 PM CAPITOL 106
BILL: HB 218
SHORT TITLE: PRESCRIPTION DRUG SPECIALTY TIERS
SPONSOR(s): HEALTH & SOCIAL SERVICES
03/31/11 (H) READ THE FIRST TIME - REFERRALS
03/31/11 (H) HSS, L&C
02/28/12 (H) HSS AT 3:00 PM CAPITOL 106
WITNESS REGISTER
CAMILLE CARLSON, Appointee
State Medical Board
Fairbanks, Alaska
POSITION STATEMENT: As appointee to the State Medical Board,
answered questions during the confirmation hearings.
ELIZABETH KOHNEN, MD, Appointee
State Medical Board
Fairbanks, Alaska
POSITION STATEMENT: As appointee to the State Medical Board,
answered questions during the confirmation hearings.
DAVID MILLER, MD, Appointee
State Medical Board
Juneau, Alaska
POSITION STATEMENT: As appointee to the State Medical Board,
answered questions during the confirmation hearings.
DAVID POWERS, MD, Appointee
State Medical Board
Dillingham, Alaska
POSITION STATEMENT: As appointee to the State Medical Board,
answered questions during the confirmation hearings.
JILL LEWIS, Deputy Director-Juneau
Central Office
Division of Public Health
Department of Health and Social Services
Juneau, Alaska
POSITION STATEMENT: Answered questions during the discussion of
HB 310.
WARD HURLBURT, MD, Chief Medical Officer/Director
Division of Public Health
Central Office
Department of Health and Social Services
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the discussion of
HB 310.
MARIE DARLIN, Coordinator
AARP Capital City Task Force
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 310.
DENISE DANIELLO, Executive Director
Alaska Commission on Aging
Division of Senior and Disabilities Services
Department of Health and Social Services (DHSS)
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 310.
JANET OGAN, Staff
Representative Wes Keller
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As committee aide, presented HB 218 on
behalf of the House Health and Social Services Standing
Committee.
LEONARD SORRIN, Attorney
Director of Congressional and Legislative Affairs
Premera Blue Cross Blue Shield of Alaska
Seattle, Washington
POSITION STATEMENT: Testified in opposition to HB 218.
BRENDA ROBERTSON
Eagle River, Alaska
POSITION STATEMENT: Testified during discussion of HB 218.
ROBERT LADA, MD
Providence Alaska Medical Center
Anchorage, Alaska
POSITION STATEMENT: Testified during discussion of HB 218.
ANTONIA FIFLIS-FOWLER, Executive Director
Alaska Multiple Sclerosis Foundation
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 218.
ACTION NARRATIVE
3:06:26 PM
CHAIR WES KELLER called the House Health and Social Services
Standing Committee meeting to order at 3:06 p.m.
Representatives Keller, Miller, Kerttula, Herron, and Seaton
were present at the call to order. Representative Dick arrived
as the meeting was in progress.
^CONFIRMATION HEARING(S): State Medical Board
CONFIRMATION HEARING(S): State Medical Board
3:06:54 PM
CHAIR KELLER announced that the first order of business would be
the confirmation hearings for the State Medical Board.
3:09:05 PM
CAMILLE CARLSON, Appointee, State Medical Board, established
that she had lived in Fairbanks for 45 years, and that she had
served on the Board of Psychologist and Psychological
[Associate] Examiners. She expressed her desire to continue
service on a state board. She stated that she was conscientious
and did not rubber stamp decisions.
3:10:08 PM
CHAIR KELLER asked why she was interested in serving on the
board.
MS. CARLSON replied that she liked to be a good citizen, and
that, as she was retired, she had the time.
3:10:33 PM
REPRESENTATIVE HERRON asked about the most difficult aspect of
being a board member, and what had surprised her the most.
MS. CARLSON responded that she had been expected to grade
examinations, and, as this was not her profession, it was more
difficult.
MS. CARLSON, in response to Representative Herron, said that
nothing had surprised her. She declared that, although it was a
small 5 member board, it was what she had expected.
3:12:04 PM
REPRESENTATIVE KERTTULA asked what she had been grading.
MS. CARLSON said that it was a subjective examination, with a
key. She affirmed that she had stated that she should not be
grading an exam as a public member, but that the key had made it
possible. She shared that all the board members graded the
exams.
MS. CARLSON said that she was willing and interested to serve on
the State Medical Board or the Alaska Judicial Council.
3:13:31 PM
CHAIR KELLER asked what she believed would be the main issues.
MS. CARLSON replied that she did not have any pre conceptions
for the problems.
3:13:54 PM
REPRESENTATIVE SEATON asked if she had direct participation with
anything that could be perceived to have any conflict of
interest.
MS. CARLSON offered her belief that any direct financial benefit
should result in that member recusing themselves.
REPRESENTATIVE SEATON, referencing earlier debates for medical
procedures, asked if she had affiliation with any occupational
practice.
MS. CARLSON stated that she had no affiliation with any medical
practices in Alaska, but that her daughter was a physical
therapist in the State of Washington.
REPRESENTATIVE SEATON asked if she viewed the medical board as a
regulator to the practice of medicine, or as a constraint for
other health care practitioners.
MS. CARLSON listed the professions that were covered by the
State Medical Board.
REPRESENTATIVE SEATON asked if alternative practitioners should
be included under the purview of the State Medical Board.
MS. CARLSON responded that this was a decision to be made by the
legislature.
3:19:02 PM
REPRESENTATIVE KERTTULA posed that if the law required a
physician to offer certain treatment, would she follow the law
even if it differed from her personal feelings.
MS. CARLSON replied that she would follow the law.
3:20:35 PM
ELIZABETH KOHNEN, MD, Appointee, State Medical Board, stated
that she first came to Bethel, Alaska in 1990, as a public
health service employee. She moved to Fairbanks in 1992, and
began a private practice. She declared that she had since
earned her Master's Degree in Public Health. She likened this
degree to working on the State Medical Board, as they both
allowed a greater overview of medicine.
3:22:14 PM
REPRESENTATIVE MILLER disclosed that Dr. Kohnen was his family
physician.
3:22:55 PM
REPRESENTATIVE SEATON asked if she had direct participation with
anything that could be perceived to have any conflict of
interest.
DR. KOHNEN replied that she had been reading previous board
meeting minutes for the issues. She offered her belief that
when you know more about an area, you can often vote more
intelligently. She opined that she could vote against her own
financial interest, but she would recuse herself if it would
result in her personal financial gain. She gave an example of
payment to medical practitioners, noting that she felt doctors
were overpaid, and that she would vote against her own financial
interest in this instance.
3:25:12 PM
REPRESENTATIVE SEATON asked if alternative practitioners should
be included under the purview of the State Medical Board.
DR. KOHNEN, in response, expressed her need for more education,
as she did not know the regulations on alternative medicine.
She declared that no group should run amok without being held to
the same higher ethical standards as other medical professions.
She stated that she would follow the law.
3:26:27 PM
CHAIR KELLER reiterated that the committee would forward all the
appointee names on to the next committee. He commented that the
committee did not have an expectation of non-bias, pointing out
that legislators declared any potential conflict when a vote was
called. He offered his belief that rarely were legislators not
allowed to vote because of a declared conflict of interest. He
said, "Alaska is a small town and we expect you to represent who
you're there to represent."
REPRESENTATIVE SEATON clarified that "a board in a regulatory
capacity is different than our public vote in forming policy
statewide. I would not want to give the people the impression
that the executive ethics act lets them vote in financial
conflict of interest, 'cause it specifically excludes that." He
pointed out that his questions were "related to times in which
the [State] Medical Board has not followed the ethics act, and
allowed people to vote with the direct conflict of interest."
He declared that regulatory boards did not follow the same
[voting] requirements as the legislature.
3:28:28 PM
DAVID MILLER, MD, Appointee, State Medical Board, established
that he had served on the State Medical Board for the last four
years. He pointed out that, upon his appointment, there were no
other surgeons on the board. He shared that he had lived in
Juneau for 10 years, and had arrived in Alaska with the military
in 1995.
3:30:10 PM
REPRESENTATIVE HERRON asked what had surprised him and
disappointed him during his tenure as a board member.
DR. MILLER, in response, said that he was "always surprised when
members of our profession fall short with various issues such as
drug and alcohol dependence, patient improprieties, and worse
..." He declared that, although these were emotional issues for
every physician, responsibility for serving on the board
included regulation within the profession. He stated that he
was surprised how enjoyable board service was, especially when
he observed physicians on probation "turn their lives around,
and get the help that they need, and come back before us, and
once again can join the physician's community in Alaska and
serve what is certainly an underserved state." He declared that
it was a privilege to serve on the board.
3:31:23 PM
REPRESENTATIVE SEATON asked if alternative practitioners should
be included under the purview of the State Medical Board.
DR. MILLER replied that the statute was very clear, and it was
necessary to follow this. He emphasized that it was a privilege
to practice medicine, not a right. He enumerated the years of
education, peer review, and nationally standardized examinations
necessary to receive that privilege. He declared the [State]
Medical Board to be a "proper avenue within its legislative
scope" for restoration of the privilege to practice medicine.
He endorsed that it was the legislature which would determine
whether alternative medicine was placed under the regulation of
the [State] Medical Board. He confirmed that he was not well-
versed to the education, training criteria, and supplements
provided by alternative medicine, and opined that it would not
be within the scope of the board for regulation of a group which
they did not understand.
3:33:58 PM
REPRESENTATIVE KERTTULA asked if Dr. Miller could put aside his
personal beliefs and enforce the law.
DR. MILLER replied, "Absolutely. Those are the easy decisions.
If the law requires a particular action that is a pretty easy
action to take."
3:35:10 PM
DAVID POWERS, MD, Appointee, State Medical Board, established
that this would be his second term on the State Medical Board.
He ascertained that he brought a rural perspective and its
unique issues to the board. He listed some of these issues to
include transporting patients over wide distances and working
with mid-level health aides. He endorsed his board experience,
and his ability to contribute. He shared that he came to Alaska
in 1984, and his employment in public health at the Alaska
Native Medical Center resulted in work in many of the rural
communities.
3:37:03 PM
CHAIR KELLER stated appreciation for his service in rural
communities.
3:37:19 PM
REPRESENTATIVE HERRON asked what had surprised him and
disappointed him during his tenure as a board member.
DR. POWERS replied that he was most surprised by the numerous,
often dumb things that providers did to get into trouble. He
affirmed that a large part of the board function was to maintain
high standards for the benefit and safety of the public. He
relayed his disappointment for the myriad of trivial or
meritless complaints.
3:39:10 PM
REPRESENTATIVE KERTTULA, reflecting on her board service, asked
about drug and alcohol abuse in the medical profession.
DR. POWERS, in response, said that the abuse was not increasing,
and expressed his support for the thoroughness of the
evaluations, tasks, and safeguards necessary to restore
professional licenses. He agreed that, although the severity of
some sanctions could seem harsh, it was a privilege to practice
medicine. He affirmed that the State Medical Board had done
well at policing its own.
REPRESENTATIVE KERTTULA asked if he could put aside his personal
beliefs and enforce the law.
DR. POWERS replied, "Absolutely." He agreed that these
decisions were in black and white, and that it was necessary to
follow the law.
3:41:41 PM
REPRESENTATIVE DICK moved to advance the confirmations for the
State Medical Board to the joint session of the House and Senate
for consideration. There being no objection, it was so ordered.
HB 310-STATE IMMUNIZATION PROGRAM
3:42:28 PM
CHAIR KELLER announced that the next order of business would be
HOUSE BILL NO. 310, "An Act temporarily reinstating the child
and adult immunization program in the Department of Health and
Social Services; and providing for an effective date."
REPRESENTATIVE HERRON moved to adopt Amendment A.1, labeled 27-
LS1273\A.1, Luckhaupt/Mischel, 2/28/12, which read:
Page 1, line 12:
Delete "recommended"
Page 1, line 13:
Delete "recommended"
Page 3, line 1:
Delete "recommended"
Page 3, lines 3 - 8:
Delete all material and insert:
"(f) The vaccines included in the program
(1) for a child under 19 years of age are
all vaccines required for school attendance under
AS 14.30.125 and influenza and pneumococcal vaccines;"
Page 3, line 13, following "standards":
Insert ", the recommendations of the federal
advisory committee on immunization practices,"
CHAIR KELLER objected for discussion.
REPRESENTATIVE HERRON explained that proposed Amendment A.1
would delete "recommended" as it was a hard word to define.
Referring to page 3, lines 3-8, he explained that all the
vaccines approved by the commissioner [Department of Health and
Social Services] for school attendance would now be included.
He listed the required immunizations for school attendance to be
diphtheria, tetanus, polio, pertussis, measles, mumps, Hepatitis
A and B, rubella, and varicella.
3:44:48 PM
CHAIR KELLER asked if the Department of Health and Social
Services (DHSS) had reviewed the proposed amendment and if it
had any impact to the fiscal note. He clarified that public
testimony was still open from the previous meeting [February 14,
2012].
3:45:18 PM
JILL LEWIS, Deputy Director-Juneau, Central Office, Division of
Public Health, Department of Health and Social Services,
acknowledged that DHSS had reviewed the proposed amendment, and
had not found there to be any impact on the fiscal note.
3:45:55 PM
WARD HURLBURT, MD, Chief Medical Officer/Director, Division of
Public Health, Central Office, Department of Health and Social
Services, expressed his agreement with Ms. Lewis, and stated
that the proposed amendment clarified the use of the most cost
effective vaccines, and offered flexibility to DHSS.
3:46:56 PM
MARIE DARLIN, Coordinator, AARP Capital City Task Force, stated
that AARP supported proposed HB 310. Speaking from the
standpoint of the older citizens, she said that AARP recognized
that providing free vaccines for adults was "a good effective
public health measure" and a good preventative issue. She
declared support for the immunization of children, as well. She
pointed to the large number of AARP members, who, as
grandparents, were raising grandchildren.
3:48:18 PM
DENISE DANIELLO, Executive Director, Alaska Commission on Aging,
Division of Senior and Disabilities Services, Department of
Health and Social Services (DHSS), testified in support of
proposed HB 310. She stated that prevention and vaccinations
were good health measures for every one of every age, and were
especially important for older people as immune systems weakened
with age. These programs enhanced a person's health and
independence. She reminded the committee that Alaska was the
leader in the rate of senior population growth, and declared the
importance for immunizations, vaccines, and healthy behaviors to
maintain good health. She pointed out that many seniors,
including those who had lived a subsistence life style, were
uninsured or ineligible for Medicare, and would benefit from
proposed HB 310. She asked that the committee consider the
addition of an immunization for shingles. She described
shingles as a painful rash that, if in contact with the eyes,
could lead to blindness. She pointed out that the risk of
shingles increased with age. She declared support for proposed
HB 310.
3:51:54 PM
REPRESENTATIVE KERTTULA asked if shingles fit into a nationally
recognized public health standard, so that DHSS could add this
to the list of vaccinations.
3:52:29 PM
DR. HURLBURT said that proposed HB 310 would allow the
flexibility to add a vaccination for shingles. He pointed out
that it was an expensive vaccine, but that an efficient use of
funding would allow the addition of vaccinations for rotavirus
and shingles as the next cost effective vaccines.
3:53:26 PM
CHAIR KELLER closed public testimony and asked the committee if
there were any more questions on the proposed amendment.
3:53:55 PM
CHAIR KELLER removed his objection to Amendment A.1. There
being no further objection, Amendment A.1 was passed.
3:54:12 PM
REPRESENTATIVE MILLER asked if it was necessary to add shingles
to the language in proposed HB 310.
CHAIR KELLER replied that he was satisfied that DHSS would
support the inclusion of the shingles vaccination, and that it
did not need to be mandated in the proposed bill.
3:54:49 PM
REPRESENTATIVE DICK moved to report HB 310, as amended, out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, CSHB 310(HSS) was
reported from the House Health and Social Services Standing
Committee.
The committee took a brief at-ease.
HB 218-PRESCRIPTION DRUG SPECIALTY TIERS
3:57:39 PM
CHAIR KELLER announced that the final order of business would be
HOUSE BILL NO. 218, "An Act prohibiting an insurer from using a
drug formulary system of specialty tiers under certain
circumstances."
3:58:08 PM
JANET OGAN, Staff, Representative Wes Keller, Alaska State
Legislature, as aide to the House Health and Social Services
Standing Committee, introduced proposed HB 218 on behalf of the
committee. She read the sponsor statement:
Specialty medications used to treat complex chronic
diseases continue to be the fastest growing segments
of overall drug spend. While traditional drug spend
slowed to an increase of only 1.5 percent in 2008,
specialty drug spend continued its steady climb,
increasing 15.4 percent.
House Bill 218 protects patients with critical
illnesses from sudden changes in their drug treatment
and therapy protocols which may un-expectantly deprive
the patient from critical therapies due to the
inability to pay for the drug or sufficient time to
plan alternative financial or therapeutic strategies.
Currently, insurance companies can change their
reimbursement policies with only a 30 day notice,
often forcing the patient to absorb thousands of
dollars of unexpected costs for expensive specialty
drug therapy. By extending the notification period
the savings for the patient will be absorbed by rest
of the policy holders on the plan. This may give the
patient additional time to explore other options which
may allow for a transition to a more affordable plan
with similar therapeutic results.
Without these specialty drugs quality of life
deteriorates and long term health care costs may
increase. Additionally, cost savings may be achieved
by exploring options like management through specialty
pharmacies that use drug-utilization monitoring
specifically designed for hard to manage conditions.
4:00:35 PM
CHAIR KELLER clarified that proposed HB 218 was a House Health
and Social Services Standing Committee bill, and that it would
behoove the committee to understand the bill. He declared that,
as pharmaceuticals were getting more expensive, Medicare was
using a tier system to adjust the co-pays in an attempt to
manage the rising costs. He reported that the average tier IV
specialty drugs now cost $2500 each month, and that these price
increases had been accompanied with only a 30 day notice. He
pointed out that the proposed bill had a zero fiscal note, with
the additional cost passed to the insurers.
4:03:12 PM
REPRESENTATIVE HERRON asked why there was a request for 90 days,
if 30 days was the status quo.
MS. OGAN replied that 90 days was felt to be a fair and adequate
amount of time.
4:03:54 PM
REPRESENTATIVE HERRON, referring to a letter from Jack McRae,
Senior Vice President of Premera [Included in members' packets],
read: "This change will inflate costs for specialty drugs and
will increase overall healthcare premiums for Alaskans." He
asked for this to be "expanded in explanation," in writing, for
the committee.
4:05:02 PM
CHAIR KELLER declared that he had no intent to move the bill
today, as he only wanted to hear a discussion.
4:05:17 PM
REPRESENTATIVE KERTTULA asked if it were different drugs that
caused the prices to rise so quickly.
MS. OGAN replied that these were specialty drugs for auto immune
diseases and chronic conditions. She relayed that some people
were paying a co-insurance of 30 percent of the retail cost.
She explained the difference between co-pay, which was a flat
payment, and co-insurance, which was a percentage of cost.
4:07:05 PM
REPRESENTATIVE KERTTULA stated that although she liked the idea
of giving notice, she had concerns for the availability of the
older drug.
4:07:52 PM
REPRESENTATIVE SEATON, referring to the aforementioned letter
from Mr. McRae, directed attention to page 2, "Less than 3
percent of private health plan members use specialty
pharmaceuticals; however, these members account for 25 - 30
percent of total private payer medical costs." He acknowledged
that the medical costs to the State of Alaska retirement system
for Alaskan retirees prior to 65 years of age, accounted for 75
percent of the unfunded liability. He asked if proposed HB 218
would increase the unfunded liability to the state retirement
plan, and if so, to what extent.
MS. OGAN replied that she would research that information.
REPRESENTATIVE SEATON pointed out that any proposed legislation
which affected benefits to the retirement system was required in
statute to have a fiscal note. He asked if this tier system was
just for new drugs, and, opining that this was on a drug by drug
basis, asked for clarification as to who this would impact.
MS. OGAN relayed that discussion with drug manufacturers would
determine if these drugs should be tiered. She clarified that
some of these were not new drugs, but that the expense was now
being passed on to the consumers.
4:11:38 PM
CHAIR KELLER affirmed that he had also presumed that this cost
increase was for new drugs. He expressed the need for caution
in identifying any of the groups as "good guys" or "bad guys."
4:13:04 PM
CHAIR KELLER passed the gavel to Vice Chair Dick.
4:13:21 PM
REPRESENTATIVE MILLER asked for the definition of "a drug
formulary system."
MS. OGAN replied that she would research that definition.
4:13:56 PM
REPRESENTATIVE SEATON offered his belief that drugs needed to go
through a public vetting process prior to designation. He
questioned the length of time necessary for a drug to be listed
on a formulary.
4:15:42 PM
REPRESENTATIVE MILLER asked if the proposed bill could include a
required notification to patients that a change was pending.
MS. OGAN replied that the suggestion should be explored.
4:17:08 PM
LEONARD SORRIN, Attorney, Director Of Congressional and
Legislative Affairs, Premera Blue Cross Blue Shield of Alaska,
stated that Premera Blue Cross was in opposition to HB 218. He
stated that Premera understood the financial burden of specialty
drugs on health care consumers and on the health care system.
He noted that this increase in drug cost was a key driver to the
increase in health care costs over the next few years. He
opined that the health care system would be "struggling for a
number of years to figure out how best to finance these sorts of
drugs, how best to provide them." He stated that this
discussion would need to include the pharmaceutical industry.
He directed attention to the aforementioned letter from Mr.
McRae, which outlined the Premera concerns with proposed HB 218.
He pointed out that Premera currently supplied a written
notification regarding any policy change 30 days in advance of
the change in terms. He said that he was not aware of any
complaints or concerns from members. He cited that the market
standard for notification was 30 days, and that the shift to 90
days for notification would inflate the costs for specialty
drugs and would increase the overall health care premiums for
all Alaskans. He detailed that the longer a health plan needed
to wait until a change was instituted, the higher the cost to
the system, which would increase premiums for the entire system.
4:19:57 PM
VICE CHAIR DICK asked for any suggestions to proposed HB 218
that would be workable for Premera.
4:20:15 PM
MR. SORRIN replied that this was a complicated set of issues.
He offered his belief that this "requires a broader based effort
to consider how the system at large ought to respond to these
types of costs and ought to finance these types of costs."
4:21:02 PM
VICE CHAIR DICK asked that any suggestions for solutions be sent
to the committee.
MR. SORRIN agreed to respond.
4:22:15 PM
REPRESENTATIVE KERTTULA asked Mr. Sorrin if he worked with
Premera and the State of Alaska health plan.
MR. SORRIN replied that he was with Premera Blue Cross Blue
Shield of Alaska, which, until a few years ago, had administered
the Alaska employee benefit plan. He shared that his company
was still very involved with health plans in the Alaska market.
4:23:11 PM
REPRESENTATIVE KERTTULA said that, for the record, she had
complained about this problem. She asked for the kinds of drugs
being referenced.
MR. SORRIN said that he could not provide names of drugs, but
that the legislative intent of proposed HB 218 was for
biological drugs which provided treatment for acute and chronic
illnesses. He pointed out that these drugs were extremely
expensive, and were, generally, new drugs. He stated that there
was a crisis for how to finance and spread the cost for these
expensive drugs.
4:25:23 PM
REPRESENTATIVE KERTTULA asked for a breakdown to the cost of the
drugs, to include the cost of research, the profit, and the cost
to the customer.
4:25:49 PM
REPRESENTATIVE SEATON opined that Premera had managed the State
of Alaska health care during the establishment of the tiered
formulary. He asked if these current tiers were the same tiers
which the State of Alaska had used, or an in-house tier of drugs
which Premera had designated for its insured patients.
MR. SORRIN replied that these tiers were developed by Premera
for its insured and self-insured accounts. He declared that the
vast majority of the self-insured accounts used the Premera
formulary. He reported that Premera was presently transitioning
to a value based formulary, which assessed value to the overall
holistic value of a drug compared with another drug. He
explained that this value would include the medical costs
foregone by the use of one drug over another. He noted that the
prescription drug formulary process was in a continual evolution
for adaptation to the pharmaceutical marketplace.
4:27:34 PM
REPRESENTATIVE SEATON asked if drugs designed for specific body
chemistry or genetics were categorically specified for a tier,
and was it necessary for the drugs to be released before
entering the tier process.
MR. SORRIN, in response, explained that a drug, subsequent to
its approval by the U.S. Food and Drug Administration (FDA), was
reviewed by a health plan to determine its placement on the
formulary. He stated that disease specific drugs were generally
the biological drugs included in the specialty listing.
4:29:11 PM
REPRESENTATIVE SEATON asked about the time necessary for
placement of a drug in the formulary.
MR. SORRIN replied that he did not know how long after FDA
approval that the process began, but deciding where to place it
on the formulary was a relatively quick process. He reported
that Premera had a pharmacy and therapeutic committee, comprised
of outside pharmaceutical medical experts and ethical experts,
which met regularly for assessment and placement of drugs.
4:30:31 PM
BRENDA ROBERTSON shared a personal experience for the dramatic
increase in the cost of a drug. She stated that her husband,
Steven, had been taking copaxone to treat multiple sclerosis
(MS) for 10 years. She reported that, in addition to their
monthly insurance premium, they would now have to pay an
additional $1000 each month for the copaxone. She remarked:
we thought that we had done all the right things
because we were paying our insurance premiums
faithfully every month, so we wouldn't have to deal
with a surprising financial burden. And yet, here we
were facing this unbelievable expense.
MS. ROBERTSON conveyed that they had learned to live with the
challenges of MS, never asking for special treatment or
assistance, but had not expected to be penalized for being sick.
She commented: "this practice of specialty tiering
discriminates against the sickest among us and puts their lives
in danger." She pointed out that there was not a generic
alternative drug, all MS drugs were included in a specialty
tier. She stressed "that is unfair and it is unconscionable" to
raise the cost by several thousand percent, with no notice, for
a lifesaving medication with no generic options. She expressed
her understanding for the need of insurance companies to save
money, but, she stated:
this is not the way. Realizing their savings on the
backs of the most vulnerable Alaskans, the sickest,
the weakest, and yet, generally the ones that are
still getting up every day, pushing through their
hardships, going to work, and contributing to the
state economy, there cannot be anything moral or
ethical about it.
MS. ROBERTSON observed that many states had banned the practice
of specialty tiers, with an additional 16 states enacting
legislation to either ban the specialty tiers, or limit the
annual cost increase to patients. She opined that a result of
drug tiers could be the chronically ill becoming the
responsibility of the state. She stated her support for HB 218,
but she emphasized that the increased costs to patients for
specialty drugs was a bigger problem. She urged the passage of
legislation to ban the specialty tiers, or, at the least, cap
the annual patient payments. She affirmed that many of these
specialty tier drugs were not new drugs.
4:36:48 PM
MS. ROBERTSON, in response to Representative Miller, replied
that the drug was copaxone, and that it was manufactured by TEVA
pharmaceutical.
4:37:38 PM
REPRESENTATIVE KERTTULA expressed that she was outraged,
especially as this was not a new drug.
MS. ROBERTSON, in response to Representative Kerttula, said that
they had been informed of the cost increase by the pharmacy.
She offered her belief that having insurance was supposed to
protect people from this type of financial crisis, and that
people would stop taking the medication if prices increased so
dramatically, because they had no choices.
4:40:11 PM
ROBERT LADA, MD, Providence Alaska Medical Center, stated that
he was a neurologist and a specialist in sleep medicine. He
expressed concern with proposed HB 218. He declared that most
of the MS medications had been released in the early 1990s, and
allowed the patient to have a normal life span and the ability
to work. He pointed out that during the 1990s, the insurance
companies had labeled the MS medications as experimental, and
therefore, most patients could not afford the treatment. In
later years, as insurance coverage was expanded by the insurance
companies, the prices to patients were more affordable. He
established that this tier system would increase the cost to
patients so dramatically that they could only afford the less
effective drugs previously used for treatment in the 1980s,
which would not allow them "to go through life in the best way
possible, with the less amount of the disability and be able to
work." He established that options were limited no matter the
lead time for notification, but that a 90 day notification at
least allowed the opportunity to explore other options.
4:44:25 PM
REPRESENTATIVE KERTTULA asked if the drug prices were also
increasing for existing drugs, and not just new drugs.
DR. LADA replied that all drug prices were increasing, although
there were options for some of the drugs.
4:45:37 PM
VICE CHAIR DICK asked why the cost would increase for a drug
that had no additional research to increase its expense.
DR. LADA explained that it was the insurance coverage that was
being removed and that cost was being transferred to the patient
responsibility.
4:46:50 PM
ANTONIA FIFLIS-FOWLER, Executive Director, Alaska Multiple
Sclerosis Foundation, stated that the foundation supported HB
218. She shared that there had not many treatments when she was
diagnosed with MS 30 years prior. She touted the results from
the new MS drugs, and expressed her agreement with Dr. Lada that
removal of the affordable access for these drugs would be
regressive. She noted that although HB 218 only proposed a
simple notification change, it brought an awareness of the
unfair burden for drug costs to the chronically ill. She
acknowledged that the stress of not knowing whether an increase
in financial obligations was looming would exacerbate the MS
symptoms. She expressed agreement for a ban to the specialty
drug tiers as these tiers were discriminatory toward people with
chronic conditions. She encouraged support for HB 218. In
response to an earlier question from Representative Kerttula,
she listed the other drugs for treatment of MS. In response to
an earlier question from Representative Seaton, she defined
specialty tier IV drugs as "drugs made of proteins from living
cells that are needed to be infused or injected."
4:51:44 PM
VICE CHAIR DICK announced that public testimony would remain
open.
REPRESENTATIVE SEATON suggested assembling information from
other states addressing this issue, in order to better
understand the effects of various actions.
4:52:27 PM
REPRESENTATIVE MILLER emphasized the need for a conversation
about:
the sudden increase in cost or how its formulated
because its somewhere between the manufacturers of a
drug claiming that they have high R&D [research and
development] costs bringing that product to market and
... the costs that insurance companies decide need to
be brought forward. ... It seems that this entire
industry is always profitable, several points ahead of
inflation, year after year after year after year. For
20 or 30 years this has been going on. I have never
been satisfied with knowing what is the true causer of
all this cost increase. I find it constant that the
insurance coverages are less and less, co-pays are
higher or impossible, and I think it's time we start
investigating this all the way down to the very bottom
level. Where is the research starting? Who's paying
for it? What is it really cost? What are the mark-
ups? Where are these people making all the profits?
This has got to be discovered. ... I certainly want
to know these things.
VICE CHAIR DICK expressed appreciation for the work of the
pharmaceutical companies, but affirmed that "there certainly are
some mysteries going on."
4:54:15 PM
REPRESENTATIVE SEATON directed attention to a recent report
about health care costs. He asked for more information about
the costs for infusion drugs in Alaska, relative to the costs in
other western states.
[HB 218 was held over.]
4:55:05 PM
ADJOURNMENT
There being no further business before the committee, the House
Health and Social Services Standing Committee meeting was
adjourned at 4:55 p.m.