03/27/2024 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB179 | |
| HB251 | |
| HB200 | |
| Presentation(s): Pacific Health Coalition | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 179 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| *+ | HB 271 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 251 | TELECONFERENCED | |
| += | HB 200 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 27, 2024
3:20 p.m.
MEMBERS PRESENT
Representative Jesse Sumner, Chair
Representative Justin Ruffridge, Vice Chair
Representative Mike Prax
Representative Dan Saddler
Representative Stanley Wright
Representative Ashley Carrick
Representative Zack Fields
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 179
"An Act relating to employee rights; and providing for an
effective date."
- HEARD & HELD
HOUSE BILL NO. 251
"An Act exempting certain foods and drinks prepared in a
person's uninspected home kitchen from state labeling,
licensing, packaging, permitting, and inspection requirements;
and permitting a person to acquire meat from a producer by way
of an ownership share in an animal if certain conditions are
met."
- MOVED CSHB 251(L&C) OUT OF COMMITTEE
HOUSE BILL NO. 200
"An Act relating to pull-tabs; relating to persons prohibited
from involvement in gaming; and relating to the duties of the
Department of Revenue."
- MOVED CSHB 200(L&C) OUT OF COMMITTEE
PRESENTATION(S): PACIFIC HEALTH COALITION
- HEARD
HOUSE BILL NO. 271
"An Act relating to social media and minors; and providing for
an effective date."
- BILL HEARING CANCELED
PREVIOUS COMMITTEE ACTION
BILL: HB 179
SHORT TITLE: EMPLOYEE RIGHTS, EMPLOYER SPEECH
SPONSOR(s): REPRESENTATIVE(s) WRIGHT
04/26/23 (H) READ THE FIRST TIME - REFERRALS
04/26/23 (H) L&C, JUD
01/24/24 (H) L&C AT 3:15 PM BARNES 124
01/24/24 (H) <Bill Hearing Canceled>
02/12/24 (H) L&C AT 3:15 PM BARNES 124
02/12/24 (H) Scheduled but Not Heard
02/26/24 (H) L&C AT 3:15 PM BARNES 124
02/26/24 (H) Scheduled but Not Heard
03/27/24 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 251
SHORT TITLE: EXEMPTIONS FOR HOMEMADE FOODS
SPONSOR(s): REPRESENTATIVE(s) RAUSCHER
01/16/24 (H) PREFILE RELEASED 1/12/24
01/16/24 (H) READ THE FIRST TIME - REFERRALS
01/16/24 (H) L&C, RES
02/02/24 (H) L&C AT 3:15 PM BARNES 124
02/02/24 (H) <Bill Hearing Rescheduled to 02/05/24>
02/05/24 (H) L&C AT 3:15 PM BARNES 124
02/05/24 (H) Heard & Held
02/05/24 (H) MINUTE(L&C)
02/14/24 (H) L&C AT 3:15 PM BARNES 124
02/14/24 (H) Scheduled but Not Heard
02/21/24 (H) L&C AT 3:15 PM BARNES 124
02/21/24 (H) -- MEETING CANCELED --
03/15/24 (H) L&C AT 3:15 PM BARNES 124
03/15/24 (H) -- MEETING CANCELED --
03/27/24 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 200
SHORT TITLE: GAMING; ELECTRONIC PULL-TABS
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
05/10/23 (H) READ THE FIRST TIME - REFERRALS
05/10/23 (H) L&C, FIN
02/09/24 (H) L&C AT 3:15 PM BARNES 124
02/09/24 (H) -- MEETING CANCELED --
02/12/24 (H) L&C AT 3:15 PM BARNES 124
02/12/24 (H) Heard & Held
02/12/24 (H) MINUTE(L&C)
02/16/24 (H) L&C AT 3:15 PM BARNES 124
02/16/24 (H) -- MEETING CANCELED --
02/26/24 (H) L&C AT 3:15 PM BARNES 124
02/26/24 (H) Heard & Held
02/26/24 (H) MINUTE(L&C)
03/13/24 (H) L&C AT 3:15 PM BARNES 124
03/13/24 (H) Heard & Held
03/13/24 (H) MINUTE(L&C)
03/18/24 (H) L&C AT 3:15 PM BARNES 124
03/18/24 (H) -- MEETING CANCELED --
03/27/24 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
RACHAEL GUNN, Staff
Representative Stanley Wright
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: During the hearing on HB 179, spoke to the
bill on behalf of Representative Wright, prime sponsor.
PATRICK FITZGERALD, Political Coordinator
Teamsters Local 959
Anchorage, Alaska
POSITION STATEMENT: Provided invited testimony in favor of HB
179.
RYAN MCKEE, Staff
Representative George Rauscher
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: On behalf of Representation Rauscher, prime
sponsor, provided a summary of the changes made in the proposed
CS for HB 251, Version S.
MARY STOLL, Attorney
Stoll Law Group PLLC
General Counsel to Pacific Health Coalition (PHC)
Seattle, Washington
POSITION STATEMENT: Co-offered the Pacific Health Coalition
presentation during which she made comments in opposition to HB
226.
DEREK MUSTO, Board Member
Pacific Health Coalition (PHC)
Anchorage, Alaska
POSITION STATEMENT: Co-offered the Pacific Health Coalition
presentation during which he made comments in opposition to HB
226.
GREG LOUDON, Vice President and Account Executive
Parker, Smith & Feek
Anchorage, Alaska
POSITION STATEMENT: During the Pacific Health Coalition
presentation, had his PowerPoint presentation, titled "HB 226,"
in opposition to HB 226, presented by Pat Shier.
PAT SHIER, Alaska Membership Representative
Pacific Health Coalition
Wasilla, Alaska
POSITION STATEMENT: During the Pacific Health Coalition
presentation, following his presentation of Mr. Loudon's
PowerPoint, answered questions.
ACTION NARRATIVE
3:20:01 PM
CHAIR JESSE SUMNER called the House Labor and Commerce Standing
Committee meeting to order at 3:20 p.m. Representatives
Saddler, Prax, Wright, Carrick, Fields, Ruffridge, and Sumner
were present at the call to order.
HB 179-EMPLOYEE RIGHTS, EMPLOYER SPEECH
3:20:47 PM
CHAIR SUMNER announced that the first order of business would be
HOUSE BILL NO. 179, "An Act relating to employee rights; and
providing for an effective date."
3:21:22 PM
REPRESENTATIVE WRIGHT, as the prime sponsor, introduced HB 179.
He said HB 179 would put an end to meetings held during work
hours where employees are forced to listen to religious or
political discussions with the threat of punishment if they
don't comply. Such practices undermine democracy, the freedom
of thought, and the right to disagree, he submitted. He stated
that HB 179 proposes a solution that is a fair compromise in
that it allows for political or religious discussion in the
workplace while ensuring these conversations are voluntary and
employees are respected and protected in the workplace,
balancing the freedom of expression with individual rights.
3:23:14 PM
RACHAEL GUNN, Staff, Representative Stanley Wright, ,Alaska
State Legislature, spoke to HB 179 on behalf of Representative
Wright, prime sponsor. She stressed that there is an inherent
power imbalance in the workplace because the boss controls the
employee's schedule, vacation time, raises, and can terminate an
at-will employee. On the clock, hours-long captive audience
meetings, she continued, illuminate these power dynamics because
they are aimed at indoctrinating employees with specific
political or religious ideologies, not enhancing productivity or
fostering teamwork, and they send a clear message to fall in
line or face the consequences.
MS. GUNN said the crux of coercion is the clear distortion of
choice. She cited a 2015 study which found that one in four
workers have been contacted by their employer regarding a
political matter. Of these workers, she continued, 20 percent
received messages from their boss that included one or more
threats of job loss, business closure, or changes to wages and
hours, which calculates into the figure of 5 percent of workers
nationally being subjected to coercive meetings. She reported
that US employers annually pour 433 million tax deductible
dollars into union avoidance strategies, such as hiring
consultants and subjecting employees to as many as 10 captive
audience meetings during union election campaigns. She stated
that HB 179 ensures dignity and balance in the workplace by
ensuring that employees are no longer subjected to coercive
captive audience meetings, thus protecting their right to think,
speak, and vote according to their own beliefs without fear of
retribution or coercion.
3:25:34 PM
PATRICK FITZGERALD, Political Coordinator, Teamsters Local 959,
provided invited testimony in favor of HB 179. He defined a
"captive audience meeting" as a group of workers being summoned
by their employer or manager to a meeting during work hours and
subjugated to listening to a one-way conversation of the
personal beliefs of their employer or manager. He said captive
audience meetings happen all the time in Alaska. He cited one
example of a garbage truck operation that hired a consultant to
dissuade its workers from joining a union, and another example
where non-union workers were told to take their tools and go
home if they didn't want to be filmed in advertisements for a
political candidate.
MR. FITZGERALD said the most worrisome of captive audience
meetings are those that begin as a safety meeting, which are
allowed, but the meeting then rapidly changes to a coercive
meeting that tries to influence the workers for political or
religious purposes. He stated that HB 179 provides protection
when such meetings take place and workers identify the change in
tone and decide to exercise their right not to participate. He
advised that the bill does not offer protection for workers who
choose to leave a meeting that is discussing real safety updates
or operational information that employees need to know. He
further advised that the bill does not prevent a business owner
or manager from posting the aspects of these meetings and the
workers are allowed to return to work when the scope of the
meetings finds its way to political or religious coercion. He
said the protections provided in HB 179 are needed in Alaska and
will allow for workers to have their right of freedom of speech
at the workplace and to not feel political or religious pressure
from their boss or supervisor. He urged that HB 179 be passed.
3:28:56 PM
REPRESENTATIVE PRAX inquired about anecdotes such as newspaper
stories or other public records that could help determine how
frequently captive audience meetings are occurring in Alaska.
MR. FITZGERALD replied that he will check on whether anything is
available publicly that he can share with the committee. He
added that Teamsters Local 959 has heard firsthand experiences
about such meetings, but he doesn't know the extent of that
being public and will get back to the committee.
3:30:03 PM
REPRESENTATIVE SADDLER recalled Mr. Fitzgerald's statement that
captive audience meetings "happen all the time" and asked what
this is based on. He further recalled Ms. Gunn's statistic that
5 percent of workers nationally have been subjected to coercive
meetings. He asked whether there are any extrapolations which
might indicate that more or less than 5 percent of workers in
Alaska are subjected to such meetings.
MR. FITZGERALD answered that he used the phrase "all the time"
because Local 595 is witness to it as a labor union and offers
protection to workers. He deferred to Ms. Gunn for providing a
percentage.
REPRESENTATIVE SADDLER asked whether "all the time" means a
continual or endless series of meetings given no objective
number is specified.
MR. FITZGERALD replied that he is referring to it happening
multiple times in multiple industries and multiple companies.
He related that Local 959 has had it happen every now and then
when trying to organize and employees were subjected to coercive
meetings trying to influence them to not be part of a union. He
added that it happens with non-union organizations quite a bit.
REPRESENTATIVE SADDLER stated that multiple times does not give
him a basis on which to make a decision, so he would like to
hear an objective measure to understand how often it happens.
MS. GUNN responded that extrapolating data for Alaska is hard,
but according to the Economic Policy Institute's 2015 national
level study that she cited earlier one in four American workers
has been contacted by their employer regarding a political
matter, and 20 percent out of that 25 percent had directly
received threats of job loss, business closure, or changes to
wages and hours.
3:33:21 PM
REPRESENTATIVE FIELDS noted that Amazon has used these coercive
tactics in every job site where employees have attempted to
unionize. This is timely, he continued, given Amazon is opening
a facility in Anchorage and Alaska is having more international
commerce from very large union busting companies.
3:33:42 PM
CHAIR SUMNER drew attention to the sponsor's list of exemptions.
He asked whether the exemption for an employer that is a
political organization is or is not addressed [in HB 179].
MS. GUNN replied that Section 2(c) of the bill provides that an
employer or its representative is not prohibited from
communicating information that is legally required or necessary
for an employee's job duties. She provided two examples: an
employer that hosts wedding events would need to communicate to
staff the cultural sensitives of a wedding done under a certain
religion; and when there is a ballot initiative that an employer
has an extremely vested interest in conveying the employer's
viewpoint to its employees.
CHAIR SUMNER asked whether it would be a violation under the
bill if an employer opened its meetings with a prayer.
MS. GUNN responded that the bill doesn't ban religious imagery
or communication in the workplace, rather the bill's primary
purpose is political or religious ideology sharing. She said an
employer or employee is not prohibited from having imagery in
the workplace if that is accepted by the employer and the
employer could have religious imagery or a prayer.
3:36:03 PM
REPRESENTATIVE CARRICK asked whether the threat of retaliation
makes it difficult to gather solid data from employees on how
frequently this practice happens.
MR. FITZGERALD answered that under labor organizations an unfair
labor practice (ULP) is filed through an organized working group
and those can be tracked. With an organized union employees
have protection to share that information, he said, but with
non-organized industries or workplaces it's a more difficult to
find that information.
3:37:23 PM
REPRESENTATIVE PRAX inquired whether this may already be covered
via employees filing a complaint with the Human Rights
Commission or, in the case of a labor union, by both the people
trying to organize a union and the company filing complaints
that are resolved by the National Labor Relations Board (NLRB).
MS. GUNN responded that the 2010 Supreme Court ruling in
Citizens United v. Federal Election Commission gave cart blanche
for political spending and essentially gave a federal license
for these political meetings for captive audiences. There is a
federal preemption for labor organizing activities under the
National Labor Relations Act (NLRA), she continued, but the NRLA
does not protect from captive audience meetings because of the
2010 supreme court Citizens United ruling.
REPRESENTATIVE PRAX asked whether the sponsor has checked with
the Human Rights Commission regarding any cases.
MS. GUNN replied that she will get back to the committee with an
answer.
REPRESENTATIVE PRAX related that his father ran a restaurant
where politically oriented books were sold, so employees were
exposed to those views when selling the books. He further
related that he himself had a bookstore where he sold
politically oriented books. He asked how things would come into
play in these two examples.
MS. GUNN answered that the bill is exclusively referring to
employers taking adverse actions against employees who refuse to
attend meetings where the primary function is to communicate the
employer's views on political or religious matters, unless, as
provided in the exemptions, it has something to do with the
employees' job. For example, she continued, if a prayer is
conducted where everybody is forced to pray together out loud
and to say what they got from the prayers, and retaliation was
taken against someone who was unwilling to participate in that
conversation.
3:42:07 PM
REPRESENTATIVE SADDLER surmised that employees would be paid for
attending a safety meeting called by their employer. He further
surmised that employees would also be paid for attending a
meeting called for coercive purposes.
MS. GUNN responded that while the sponsor has seen evidence of
captive audience meetings taking place outside of work hours,
that isn't the primary purpose of the bill. This legislation,
she said, is intended to carve out the ability for an employee
to choose to go back to their regular work rather than attend a
meeting that the employee knows will be a union busting meeting
or on a political or religious topic.
3:43:28 PM
CHAIR SUMNER announced that HB 179 was held over.
HB 251-EXEMPTIONS FOR HOMEMADE FOODS
3:43:37 PM
CHAIR SUMNER announced that the next order of business would be
HOUSE BILL NO. 251, "An Act exempting certain foods and drinks
prepared in a person's uninspected home kitchen from state
labeling, licensing, packaging, permitting, and inspection
requirements; and permitting a person to acquire meat from a
producer by way of an ownership share in an animal if certain
conditions are met."
3:43:51 PM
REPRESENTATIVE RUFFRIDGE moved to adopt the proposed committee
substitute (CS) for HB 251, Version 33-LS0888\S, Bullard, 3/6/24
("Version S"), as the working document.
CHAIR SUMNER objected for discussion purposes.
3:44:26 PM
RYAN MCKEE, Staff, Representative George Rauscher, Alaska State
Legislature, on behalf of Representation Rauscher, prime
sponsor, provided a summary of the changes made in the proposed
CS for HB 251, Version S. He spoke from the document provided
in the committee packet titled "House Bill HB 251 Explanation of
Changes," which read as follows [original punctuation provided]:
Article 7aSection 17.20.332 Exemption for homemade
food: This section adds or removes language to some
sections to make it more specific to the intentions of
the legislation.
Page 1 lines 8-11 and adds a new language on page 1
line 13 clarifying that the sale of homemade foods is
only for personal consumption.
Page 2 subsection c, language following "commercial
food establishment" was removed.
Page 2 subsection d lines 16 and 17 was removed
Page 2 subsections f & g lines 3-14 were removed
Page 2 subsections h & I were reworded creating 2
clear things a seller must do before selling
unpackaged homemade food
Page 4 lines 24- page 5 line 9 changes the wording on
the relationship to other laws
Section 17.20.338
Changes were made to the various definitions and
number 6 was removed
MR. MCKEE noted that most of the changes are cleanup language
that was discussed with the Department of Environmental
Conservation (DEC).
3:45:59 PM
CHAIR SUMNER removed his objection. There being no further
objection, Version S was before the committee.
3:46:18 PM
REPRESENTATIVE RUFFRIDGE moved to report CSHB 251, Version 33-
LS0888\S, Bullard, 3/6/24, out of committee with individual
recommendations and the accompanying fiscal notes.
REPRESENTATIVE PRAX objected. He inquired about whether the
bill has another committee of reference.
3:47:02 PM
CHAIR SUMNER replied that the bill will next be heard by the
House Resources Standing Committee.
REPRESENTATIVE PRAX removed his objection. There being no
further objection, CSHB 251(L&C) was reported out of the House
Labor and Commerce Standing Committee.
3:47:26 PM
The committee took an at-ease from 3:47 p.m. to 3:50 p.m.
HB 200-GAMING; ELECTRONIC PULL-TABS
3:50:01 PM
CHAIR SUMNER announced that the next order of business would be
HOUSE BILL NO. 200, "An Act relating to pull-tabs; relating to
persons prohibited from involvement in gaming; and relating to
the duties of the Department of Revenue." [Before the committee
was the proposed committee substitute (CS) for HB 200, Version
33-GH1054\S, Wallace, 2/8/24, ("Version S"), adopted as the
working document on 2/12/24.]
CHAIR SUMNER noted that HB 200 is by request of the governor.
3:50:19 PM
REPRESENTATIVE RUFFRIDGE moved to report CSHB 200, Version 33-
GH1054\S, Wallace, 2/8/24, out of committee with individual
recommendations and the accompanying fiscal notes.
3:50:40 PM
REPRESENTATIVE FIELDS objected. He shared his concern that the
widespread deployment of electronic pull-tabs (E-tabs) would
likely reduce money for charities given the higher recovery rate
of money by players and that money would also flow to an E-tabs
company. This would require a correspondingly higher rate of
gambling, he argued, to just pull even for charities. He noted
that Alaska currently has a low rate of gambling addiction and
urged caution on introducing policies that will lead to
increased rates of gambling addiction. He recalled that
according to testimony a bill could be crafted that would
substantially increase the amount of money going to charities
with minimal risk of substantially increased gambling addiction,
something he would be in favor of. He stated he will be voting
no on HB 200.
3:52:23 PM
REPRESENTATIVE SADDLER said his understanding from the testimony
heard is that there is some countervailing increase in revenue
to the charities because it allows for more complete usage of
the chances and because the machine manages the money so less
staff time is needed for money management.
3:53:16 PM
REPRESENTATIVE CARRICK stated that she opposes moving the bill
primarily because it goes too far in putting E-tabs ahead of the
current pull-tab system, including in the payouts and mechanism
of gambling. She concurred with the concerns of Representative
Fields about increased gambling in general. She further stated
that the legislation hasn't been vetted enough by the industry
folks working to get E-tabs in Alaska as well as by the current
charitable gambling industry in Alaska.
3:54:37 PM
A roll call vote was taken. Representatives Wright, Prax,
Ruffridge, Saddler, and Sumner voted in favor of reporting CSHB
200, Version 33-GH1054\S, Wallace, 2/8/24 out of committee.
Representatives Carrick and Fields voted against it. Therefore,
CSHB 200(L&C) was reported out of the House Labor and Commerce
Standing Committee by a vote of 5-2.
3:55:11 PM
The committee took an at-ease from 3:55 p.m. to 3:57 p.m.
^PRESENTATION(S): PACIFIC HEALTH COALITION
PRESENTATION(S): PACIFIC HEALTH COALITION
[Contains discussion of HB 226.]
3:57:38 PM
CHAIR SUMNER announced that the final order of business would be
the Pacific Health Coalition presentation.
3:58:02 PM
MARY STOLL, Attorney, Stoll Law Group PLLC, General Counsel to
the Pacific Health Coalition (PHC), gave the Pacific Health
Coalition presentation and made comments in opposition to HB
226. She stated she has 30 years of experience as an attorney
representing Employee Retirement Income Security Act (ERISA) and
public sector plans. She paraphrased from a written statement
provided in the committee packet, which read as follows
[original punctuation provided]:
I am general counsel to the Pacific Health Coalition
which has 10 member plans in Alaska constituting over
110,000 covered lives, or roughly 1 in every 3
Alaskans, excluding Federal benefits entitled
citizens. I am testifying today in opposition to
HB226.
I ask the Committee to consider 2 questions before
deciding to pass the bill out of Committee.
1) Are the regulations proposed in the bill preempted
by ERISA, and
2) Are the proposed regulations fair and equitable to
the hardworking Alaskans who are covered by ERISA
health plans, many of which are part of a negotiated
wage and benefit package in a collective bargaining
agreement[.]
MS. STOLL expounded on the first question. She explained that
ERISA was passed in 1974 to address the lack of regulation of
private sector benefit plans resulting in mismanagement of those
plans. The preemption clause in ERISA, she stated, was designed
to prevent conflicting state laws impacting employee benefit
plans by providing a comprehensive legal and regulatory umbrella
applied consistently over all 50 states. She said state laws
impacting ERISA benefit plans erode the nationwide consistent
legal framework that the rest of the plans rely upon for
efficient provision of promised employee benefits. Those states
which have passed PBM regulations, she related, are facing legal
challenges. She paraphrased from her written statement:
th
Oklahoma passed a law remarkably similar law. The 10
Circuit unanimously struck down the law as preempted
by ERISA, ruling that the regulation of the PBMs
operations in the state mandated changes to the plan
design of ERISA plans, which is reserved to the ERISA
plan fiduciaries, not states.
The 10th Circuit relied in part on the [Supreme Court
of the United States (SCOTUS)] decision in Rutledge v.
PCMA where the court held that state regulation of PBM
[pharmacy benefit manager] activities that interfere
with plan design discretion for ERISA plans is
preempted.
MS. STOLL related that this decision was made in 2020, about the
same time that states started enacting regulations on PBMs. The
states ran with one proposition in the Rutledge decision, she
said, which was that if a regulation between a prescription
benefit manager and a pharmacy impacts cost only to the plan,
then it is not preempted. However, she continued, [SCOTUS]
stated that if it mandates the plan design change interfere with
the ERISA plan design, it will be preempted. She said HB 226
would require ERISA plans in Alaska to change their plan design
to eliminate preferred and specialty pharmacy networks and
mandatory mail order pharmacy options. Prohibition of network
pharmacy arrangement, she noted, is considered an "any willing
provider" (AWP) mandate. She said the acronym "AWP provision"
th
was used by the [10 Circuit Court] in its [2023] decision on
[Pharmaceutical Care Management Association (PCMA) v. Mulready.
th
She related that in deciding Mulready, the 10 Circuit held that
ERISA preempted the AWP provision as it mandated plan design
change for that ERISA plan. She further related that the court
also specifically held that state law can be preempted even if
it only regulates a third-party vendor to the ERISA plan if the
regulation limits or mandates changes to the ERISA plan design
structure, and in this case the PBM was that third party vendor.
MS. STOLL argued that the restrictions HB 226 imposes upon PBMs
in Alaska (prohibiting preferred and specialty pharmacy networks
and putting restrictions on mail order drugs) do mandate plan
design change. She pointed out that each of the Pacific Health
Coalition (PHC) plans that she represents, and most other self-
funded plans in Alaska, utilize PBMs and have designed their
plans to include preferred and specialty pharmacy networks and
other options. Those plan design options would not be allowed
under HB 226, she stated, and thus the regulation is prohibited
based upon existing federal precedent. She noted that these
conclusions were supported by the opinion memorandum from Megan
Wallace, Chief Counsel, Alaska [Legislative Legal Services],
th
citing both the Rutledge [SCOTUS] decision and the Mulready [10
Circuit] decision.
MS. STOLL expounded on the second of the two questions that she
requested the committee to consider. She paraphrased from her
written testimony:
The plans have only three levers to adjust to rising
cost of operating the plan 1) implement cost
containment plan design options, 2) increase
contribution, or 3) cut benefits or increase
deductibles and OOP [out of pocket] maximums for
participants.
The Plan fiduciaries are charged with the
responsibility to design the health plans for the sole
and exclusive benefit of the plan participants and
their beneficiaries. ERISA has a specific definition
for fiduciary, a person who: 1) is the "named
fiduciary," as formally designated by the plan; 2)
exercises discretion with respect to management or
administration of the plan; 3) exercises discretion
with respect to the management or disposition of plan
assets; or 4) provides investment advice. The plan
fiduciaries can be held both civilly and criminally
liable for breaching their fiduciary duty by failing
to use the plan assets for the sole benefit of the
participants.
4:05:59 PM
MS. STOLL added that these fiduciaries endeavor to use the
limited funds that are available to these plans as efficiently
as possible for the benefit of the employees and their
dependents. Their mandate, she argued, does not include
implementing plan design for the benefit of private sector
businesses such as independent pharmacies. She said PHC is
concerned about tying reimbursements to the National Average
Drug Acquisition Cost (NADAC) given that only 1 percent of
pharmacies report to NADAC, making it questionable that this is
a reasonable benchmark for reimbursements. She maintained that
the mandate to change to NADAC would increase costs to Alaskans
without any corresponding benefit. She further argued that
since nearly half the drugs dispensed from specialty pharmacies
are not recorded under NADAC, NADAC can't be used for pricing or
reimbursements for those specialty drugs.
MS. STOLL said PHC is concerned with the provision in HB 226
that would allow the director to set dispensing fee rates. She
related that PHC plans have negotiated dispensing fees in their
PBM contracts, and those costs are priced into the plan design.
She said PHC is also concerned with the potential to increase
dispensing fees within the limited contribution dollars to plans
utilized to cover all the plan claims and all plan expenses.
She paraphrased from her written statement:
Those are dollars that won't go to plan participants'
benefits or care or treatment. Funds that won't pay
for well-baby care or treatment for dread diseases.
That dispensing fee goes to the pharmacies, both
independent and Krogers [sic] CVS or Carrs. Roughly
90% of the pharmacies in Alaska are not independent or
rural and the dispensing fee would benefit them as
well. If the goal is to subsidize the rural and
independent pharmacies, this is not targeted to them.
The state has the ability to implement an urban
development plan to bolster a particular segment of
the economy, but it should be targeted to only the
segment in need. Nor, as was presented by the
pharmacist lobby do the funds go into the AK economy.
They benefit the pharmacies, not the general public.
The bill will not add the claimed $50 million to the
state economy, rather it will divert $50 million of
plan assets to the pharmacies.
This is a health plan issue, not a PBM issue. It will
not cost the PBMs, it will cost the health plans and
ERISA Trusts. If there is an added cost to the PBMs,
that cost will be passed along to the health plans
that they contract with to administer their
prescription benefit plans. No plan is capable of
negotiating drug prices individually with the
pharmaceutical manufacturers. Health plans can only
achieve savings by aggregating their buying power
through the pharmacy benefit manager. Well run plans
utilize a PBM consultant, audit the PBMs and carefully
select options such as spread pricing or transparent,
or rebating contracts to the benefit of their
participants, as the ERISA fiduciaries are entitled to
do.
The funds that would go to the dispensing fee increase
and the lost savings from prohibiting cost saving
tools like preferred and specialty pharmacy networks
in ERISA plan design will raise costs for the plans.
The contributions that fund the plans are part of the
employees' wage and benefit package. The contributions
to the health plans are designated for the care and
treatment of the employees and their families. Is it
fair and equitable to subsidize independent pharmacies
from funds intended to provide health benefits to
working Alaskans? ...
Please consider the burden on the already cash
strapped self-insured health plans in the state before
adding to that burden by restricting cost containment
steerage options and restrictions on the fiduciaries
ability to design their plans to the needs of their
participants.
MS. STOLL asserted that adding additional costs to the existing
health plans in Alaska would result in the diminishment of
benefits they provide, which erodes the ability of those
employers to recruit and retain workers. She said that while
PHC appreciates the challenges faced by rural and independent
pharmacies, HB 226 is not the solution to their survival.
4:10:46 PM
MS. STOLL, in response to Representative Saddler, agreed to
provide a written copy of her testimony.
REPRESENTATIVE SADDLER drew attention to PHC's February letter
in the committee packet in which PHC states it is not a PBM. He
commented that Ms. Stoll seems to be arguing strongly in favor
of the positions of PBMs. He inquired about the purpose of this
strong advocacy.
MS. STOLL replied that PBMs are problematic and PHC has issues
with transparency. She stated that a bill looking to assist
health plans and pharmacists should address transparency in very
specific deliverables, which HB 226 does not do. She said PHC
is not a PBM but utilizes a PBM because it is a necessity. She
argued that the real gargoyle of this situation is big pharmacy
manufacturers because PHC has no control over what they charge
for drugs, which puts PHC in the untenable position of having to
hire a go-between to negotiate discounts in exchange for
steerage. She related that PHC does its best to oversee the PBM
that it has hired as a third-party vendor is doing the job for
PHC and doing this as transparently as possible. This is why
PHC's product for a PBM through CVS includes National
CooperativeRx, a PBM monitor that routinely audits; evaluates
formularies, biosimilars, and discount sharing; negotiates 100
percent passthrough of rebates; and when negotiating a contract
helps PHC to evaluate whether a spread pricing model or a
transparent pricing model is to its advantage. She said PHC is
not arguing for the PBMs in its opposition to HB 226, rather PHC
is aligned with PBMs on this issue because of the cost impact
that it would have on PHC and the diminution of the ability of
ERISA fiduciaries to design their plans.
[Chair Sumner passed the gavel to Vice Chair Ruffridge.]
4:13:40 PM
REPRESENTATIVE CARRICK drew attention to the last statement in
Ms. Stoll's written testimony and requested an example of how
the bill would have a negative impact on the fiduciaries ability
to design their plans to the needs of their participants.
MS. STOLL responded that one example is specialty drugs, some of
which can cost as much as $1 million - $1.6 million a year. She
explained that to best serve its participants needs, [PHC]
utilizes the specialty pharmacy to buy high-expense drugs in
bulk from the manufacturer because the likely number of
individuals needing the drugs is known. The manufacturer can
provide a discount to the specialty pharmacy, she continued,
because it has certitude on how much it will be delivering. If
specialty pharmacy networks are eliminated, she further
explained, or if someone goes to an any willing provider located
where such a drug is infrequently needed, there is no ability to
negotiate a discount on that drug and the plan is reimbursing an
exorbitant amount for that treatment. Addressing testimony from
the pharmacists in favor of HB 226, she stated that there is no
pharmaceutical manufacturer in Alaska, so the drugs must be
shipped from somewhere to either the specialty pharmacist and
then to the provider to administer those drugs, or to the
pharmacist and then to the provider to administer those drugs.
She said the pharmacist is not going to be the place of
administration or providing instruction or education on that
drug because that is up to the hospital or clinic who is
administering the drug.
REPRESENTATIVE CARRICK requested an example of a specific drug
that a local pharmacy might not have the ability to educate on
and that would require what Ms. Stoll just described.
MS. STOLL answered that cancer and multiple sclerosis infusion
drugs are very expensive. She stated that a pharmacist handling
that drug would send it to a provider, not hand carry the drug
or provide it to the participant to carry to the infusion center
to be administered, which is called brown bagging, and which
doesn't exist. She said the infusion center or the oncology
office, not the pharmacist, educates the participant about how
that drug is going to interact with their body.
4:18:53 PM
REPRESENTATIVE PRAX asked whether Ms. Stoll has an estimate of
when this will probably have to be resolved by the [Supreme
Court of the United States (SCOTUS).
MS. STOLL offered her understanding that Oklahoma may, but has
not petitioned, for certiorari before SCOTUS. She stated that
generally a case will be taken on certiorari if the court finds
that there is going to be a significant chance of a split in the
circuits. For example, an opportunity to appeal to SCOTUS would
occur if the Fifth Circuit held that it is not preempted, and
the Tenth Circuit says that it is. She advised, however, that
in this situation there is no split in the circuit. She cited
an amicus brief that she filed before SCOTUS in DaVita, Inc. v.
Marietta Memorial Hospital, which considered plan design and
preemption and fiduciaries ability to design their plans for the
best interest of their participants consistently.
[Vice Chair Ruffridge returned the gavel to Chair Sumner.]
4:20:53 PM
REPRESENTATIVE FIELDS requested Ms. Stoll to elaborate on the
analysis of whether to use spread pricing versus transparent
pricing when PHC is choosing how to use a PBM vendor.
MS. STOLL replied that PHC does not specifically negotiate those
terms as individual plans, rather PHC's PBM consultant National
CooperativeRx evaluates whether there is a benefit to spread
versus transparent, or in the case of a rebating contract
whether the rebates are going to be beneficial as opposed to a
non-rebating contract. She said she isn't the one negotiating
those, but she is consulted with by National CooperativeRx for
the plans for which she is direct general counsel. She offered
to provide a written supplement to her answer.
REPRESENTATIVE FIELDS asked what Ms. Stoll would recommend for
transparency provisions that would empower multi-employer plans
in Alaska if she were writing a PBM bill from scratch.
MS. STOLL responded that on the federal level the Consolidated
Appropriations Acts of 2021 and 2022 both included transparency
provisions that apply to PBM's, such as no-gag orders and
attestations that their contracts do not include those. She
said the Prescription Benefit Management Act was introduced by
US Senators Cantwell and Grassley, and while she doesn't know
how far the bill went [in the congressional process] it
specifically addressed broad spectrum transparency rules on
federal level. This would be appropriate, she continued, for
purposes of ERISA plans because it falls within the general
federal umbrella so there aren't differing transparency rules
depending upon the state it is in or where someone's benefit is
being paid. She offered to follow up with PHC's PBM consultant
on what it believes doable and to evaluate the Cantwell/Grassley
bill, then provide the committee with a written response.
REPRESENTATIVE FIELDS said he would like to receive that.
4:24:17 PM
REPRESENTATIVE RUFFRIDGE, regarding steerage and the fiduciary
responsibility to require that steerage, inquired about where
patients with PHC are steered to.
MS. STOLL answered that, not specific to prescription benefits,
Pacific Health Coalition has steerage in network arrangement.
For example, she continued, since nearly all surgeons and
physicians are licensed or credentialed at both Providence and
Alaska Regional hospitals within the Municipality of Anchorage,
PHC can achieve some very significant savings by providing
steerage to Alaska Regional in exchange for per diem discount
rates. The same would hold true for exclusivity in preferred
pharmacy networks, she advised, the more exclusive the network
is the better savings it is. She further advised that since
Alaska has broad geographic boundaries and a very small
population dispersed over a small area, PHC must be careful to
make sure that any type of steerage is going to provide for
adequate access for its participants.
REPRESENTATIVE RUFFRIDGE inquired whether, in the case of PBMs,
there is a specific place to which PHC's plans typically steer
patients for their prescription medications.
MS. STOLL replied that it would be through Caremark CVS.
REPRESENTATIVE RUFFRIDGE inquired about Ms. Stoll's relationship
with the Pacific Health Coalition (PHC), as well as that of Mr.
Loudon whom he believes works for Aetna CVS.
MS. STOLL responded that that is incorrect, Mr. Loudon is a
consultant with Parker, Smith & Feek, a national employee
benefits consulting firm, and she is general counsel to the
Pacific Health Coalition. She added that she and Mr. Loudon are
not affiliated, nor is Mr. Loudon affiliated with Aetna.
REPRESENTATIVE RUFFRIDGE stated that before the [3/26/24]
meeting of the House Health and Social Services Standing
Committee, Mr. Loudon testified on behalf of Aetna as an Aetna
representative.
MS. STOLL answered that she has no knowledge of that and said he
is not an employee of Aetna.
REPRESENTATIVE RUFFRIDGE insisted that Mr. Loudon is an Aetna
employee and urged Ms. Stoll to listen to Mr. Loudon's
testimony. [See Representative Ruffridge's correction at
4:48:07 p.m. timestamp]
MS. STOLL agreed to do so.
4:27:56 PM
The committee took a brief at-ease.
4:28:44 PM
REPRESENTATIVE CARRICK requested an estimate of what the added
cost of a dispensing fee would be for an individual on a self-
insured health plan in Alaska.
MS. STOLL replied that Mr. Pat Shier will provide graphics that
demonstrate the increased cost. She stated she didn't address
the dispensing fee because HB 226 includes the authority of the
director to set dispensing fees as opposed to the mandate
included in SB 121. She said estimates show an additional cost
of approximately $2.7 million to the 110,000 participants in the
PHC plans alone over a period of a year.
4:31:43 PM
DEREK MUSTO, Board Member, Pacific Health Coalition (PHC), co-
offered the Pacific Health Coalition presentation and made
comments in opposition to HB 226. He related that he works for
Teamsters Local 959 and is one of eight union employer trustees
for the Alaska Teamster-Employer Welfare Trust ("Teamster
Trust"). He stated that HB 226 would negatively impact the
Teamster Trust's plan. He said he agrees that the business
model of pharmacy benefit managers (PBMs) is opaque but
disagrees that HB 226 or SB 121 [its Senate companion bill] is
the proper vehicle to address the PBM matrix and pharmaceutical
costs across the board. To be effective, he argued, a National
Average Drug Acquisition Cost (NADAC) mandate would have to be
addressed and mandated on the federal level. He said the
Teamster Trust's plan utilizes a transparent request for
proposals (RFP) contracting process and utilizes a specialized
PBM consultant for advice.
MR. MUSTO stated that HB 226 would strip important cost saving
mechanisms currently used by the Teamster Trust's plan to lower
participant costs, and SB 121 would add mandatory dispensing
fees and other additional costs without providing a benefit to
participants. He said measures which deprive the Teamster
Trust's plan of its ability to establish a pharmacy network
benefit design, use preferred or exclusive pharmacy networks, or
remove access to programs that benefit members directly conflict
with his responsibilities as a trustee. He noted that cost
controlling measures like the setting of copays, coupon savings
programs for specialty and non-specialty drugs, mandatory mail
order for maintenance medications, and securing drug rebates
offer a significant savings to the plan and its participants.
He related that after moving to mandatory mail order the
Teamster Trust's plan had a small number of complaints but no
significant issues with the delivery of prescription drugs as
expressed by proponents of the bill. He cited a 2010 study
where Kaiser found that diabetes patients using a mail order
pharmacy had an increased medication adherence of 7-8 percent.
MR. MUSTO argued that HB 226 would subsidize local pharmacies at
the expense of Alaskans and would likely increase the use of
unfavorable cost saving measures like benefit cuts, increased
deductibles, and larger out of pocket expenses, which do nothing
more than shift the cost to the individual participant. He
related that the Teamster Trust's negotiated price with Costco
as the PBM is better [than it would be with NADAC pricing]. He
advised that forcing to NADAC pricing, as suggested in HB 226,
would immediately increase the cost to the Teamster Trust's plan
for generics and specialty drugs don't always have a NADAC.
Forcing NADAC and removing the plan's various cost savings and
negotiation tools, he continued, would raise drug costs and the
dispense fee, and likely increase the plan's PBM administration
fees to offset the PBM's loss of revenue due to Alaska's
mandated changes. He urged that urban development dollars or
other tools be used by the state if there is a true need to help
independent pharmacies and communities around Alaska. He asked
the committee to oppose passage of HB 226.
4:39:44 PM
REPRESENTATIVE PRAX stated he sympathizes with the pharmacists
and thinks there are problems which need to be resolved but
agrees with the previous testifier that [the bill] is on shaky
ground legally. He inquired about how to get together to sort
things out.
MR. MUSTO replied that part of the issue with both bills is that
that wasn't a process where many of the various participants
were able to communicate and work to address the issues at hand.
He said the Alaska Teamster-Employer Welfare Trust would be
willing to meet to share experiences and discuss tools.
4:41:34 PM
REPRESENTATIVE RUFFRIDGE inquired about when an RFP last went
out on behalf of the Pacific Health Coalition (PHC).
MR. MUSTO responded that the Teamster Plan does not use the PBM
through PHC. He explained that PHC has an "ala carte" menu that
various participants can use, and it depends upon if the
Teamster Plan can get better discounts or if PHC's discounts are
better based on negotiations. He said the Teamster Plan is
contracted with Costco because Costco was found to be the
cheapest PBM and offering the best savings.
REPRESENTATIVE RUFFRIDGE stated he was unaware that Costco is a
PBM. He requested clarity on when the RFP mentioned by Mr.
Musto was offered and who typically responds to the RFP.
MR. MUSTO answered that Costco is a PBM and offers various
services whether it is mail order or retail pharmacy. He said
that during his time as a trustee, an RFP process has been
undertaken on multiple occasions and each time different terms
were negotiated to get the most value.
REPRESENTATIVE RUFFRIDGE surmised, then, that an RFP is offered
every two years or so. He asked who typically responds to those
and whether it is for the coalition as a whole or each plan.
MR. MUSTO replied that generally it is recommended that an RFP
go out every three years or so depending on a plan's spend and
the parameters that the plan has. He stated that the RFP is an
open process that tries to capture as many entities as possible
and responses have come from large PBMs. Every RFP process is a
little bit different, he added, so he will provide follow-up to
the committee.
REPRESENTATIVE RUFFRIDGE asked whether Costco runs its own PBM
or partners with another entity to run its prescription benefits
program.
MR. MUSTO responded that the Teamster Trust went to Costco
Health Solutions for its PBM services in October 2023. He
offered his belief that Costco has its own PBM plus owns a stake
in a PBM.
4:46:55 PM
The committee took an at-ease from 4:46 p.m. to 4:48 p.m.
4:48:07 PM
REPRESENTATIVE RUFFRIDGE corrected his previous statement to Ms.
Stoll regarding Mr. Greg Loudon. He said Mr. Loudon mentioned
Aetna in his testimony before the House Health and Social
Services Standing Committee, but did introduce himself as the
representative for Parker, Smith & Feek.
4:48:40 PM
GREG LOUDON, Vice President and Account Executive, Parker, Smith
& Feek, during the Pacific Health Coalition presentation, had
his PowerPoint presentation [hardcopy included in committee
packet], titled "HB 226," in opposition to HB 226, presented by
Pat Shier. Mr. Shier said Parker, Smith & Feek is one of the
progenitors of the Pacific Health Coalition (PHC) when it first
began, and Mr. Loudon is in a commercial insurance brokerage and
consulting firm based in Alaska. Mr. Shier moved to slide 2,
"Who is the Pacific Health Coalition?" He related that PHC
focuses on hospitals, primary care, specialists, dental, vision,
pharmacy, hearing benefits, and other services for its
membership. He explained that the 29 Alaska member trusts,
three school districts, and two local governments can choose one
or more of the 35 different benefit contracts that PHC has
negotiated, thereby designing their own programs in which to
participate. He noted that only 10 of the 29 currently use
PHC's PBM management contract with National CooperativeRx.
4:50:34 PM
MR. SHIER turned to slides 3 and 4, "Why we oppose this bill."
He stated that during the recent unprecedented inflation,
workers have consistently traded compensation for benefit
packages. He submitted that this would be diminished to assist
one industry, and it isn't clear whether HB 226 will solve the
problem examples shared by proponents. He pointed out that PBMs
provide a valuable middleman role of negotiating and managing a
distribution network to provide prescriptions to PHC's members
and negotiate with drug manufacturers to aggregate buying power.
He said plan sponsors and trustees only purchase those services
offered by a PBM that provide value to participants, and plan
sponsors hire, fire, and manage these services and these PBMs as
they see fit.
4:51:47 PM
MR. SHIER spoke to slide 5, "How has the PHC engaged to contract
with PBMS." He explained that PHC formed a relationship with
National CooperativeRx, a non-profit cooperative that is a good
investment for its $5 million total annual budget. He disclosed
that he serves as secretary/treasurer of National CooperativeRx.
He reported that National CooperativeRx returned $22 million in
rebates to its plans last year, and it saved PHC members about
$24 million in spend on the specialty program through its
special pharmacy savings program.
4:53:05 PM
MR. SHIER reviewed slide 6, "How much do we spend?" He stated
that, including the 10 Alaska based groups and the Lower 48
groups that utilize National CooperativeRx, PHC spends $43.5
million per year on prescriptions dispensed in Alaska. He
pointed out that several of the trusts in the Pacific Northwest
have people who travel to Alaska to conduct work and because of
the ERISA exemption these workers can travel from state to state
and receive the same kind of benefits that were negotiated in
their home state.
4:54:09 PM
MR. SHIER presented slide 7, "How will HB 226 affect our Rx
costs?" He stated that the untold fiscal note is the negative
financial impact to private industry. Alaska has the highest
health care costs nationally, including workers' compensation,
he continued, and HB 226 would increase aggregate costs even
more. He displayed slide 8, "Specialty Pharmacies Lost
opportunity" and pointed out that PHC is able to negotiate at
least a 2 percent discount [$140,000 per year] in specialty
pharmacy because it contracts with a single specialty provider.
If that same opportunity is applied to all PHC's specialty spend
just in Alaska, then $750,000 more would be saved. He explained
that many specialty medications cannot be found in local
pharmacies, and that sometimes the manufacturers limit the
number of pharmacies which can distribute the product so that
they have greater quality control assurance.
4:55:27 PM
MR. SHIER discussed slide 9, "Mail Order Pharmacies Lost
opportunity." He said PHC has only one of the ten plans that
use the National CooperativeRx and that plan [saves] about
$28,850 [per year]. He reported that mail order grew 35 percent
between 2016 and 2021. He said that, in part, this growth was
due to the growth of the "Amazon, COVID 19, Door-Dash culture."
4:56:39 PM
MR. SHIER moved to slide 10, "Increased Dispensing Fees," and
stated that this is by far the largest negative financial impact
to PHC's plans. He said the average dispensing fee paid in
Alaska by commercial contract is $4.00, and the Medicare
dispensing fees are currently $13.26 outside of Alaska, $15.86
on the road system, and $23.78 off the road system. He
specified that if a net increase of, say, $9.36, is applied to
the almost 3 million prescriptions that were billed in Alaska,
[an increase of] $27.5 million would be seen [for all Alaska
commercial plans and cash payers], according to the Kaiser
Family Foundation in 2019. [The increase] for those 10 plans
that use National CooperativeRx would be $2.7 million, he
continued, and if that number is extrapolated to all 29 groups
that are in PHC Alaska plans, [the increase] would be $7.8
million.
4:57:45 PM
MR. SHIER addressed slide 11, "PHC NADAC Repricing." He stated
that the graph represents PHC's best estimate for those 10 plans
that are with National CooperativeRx and calculates both the
ingredient cost and dispensing fee changes. He said there would
be significant increased costs in brand medications but slight
savings in generic and specialty at retail. What is not had, he
noted, is the effect of rebates, which are often significant.
He said there is no repricing available on approximately 6,000
specialty scripts that were let during the same time period,
totaling $38 million in gross cost, since no NADAC metrics are
reported for that. He pointed out that of the 63,000 pharmacies
in the US, between [400] and 600 regularly report and only three
states currently use NADAC. He added that it is unclear if
NADAC alone would provide relief sought by pharmacies or if most
Alaska pharmacies currently report to NADAC.
4:58:53 PM
MR. SHIER concluded Mr. Loudon's presentation with slide 12,
"Other local protection analogies." He explained that the
examples on the slide provide perspective that $9.36 is a
significant increase: What if $9.36 was added as a fee per meal
on groceries, or as a fee per vehicle fill-up, or as a fee for
every purchase of hardware goods? For the record as an
alternative view, he shared that PHC has heard that the profits
for PBMs are more than $315 billion, and the "10-K reports"
available through the Securities Exchange Commission (SEC) show
the net income for the biggest three PBMs was $36.3 billion in
2022/2023. He said he will record any questions that he is
unable to answer today and provide them to Mr. Greg Loudon to
answer.
[Chair Sumner passed the gavel to Vice Chair Ruffridge.]
5:00:16 PM
REPRESENTATIVE FIELDS requested PHC's recommendations for any
amendments that might be introduced to increase transparency
over PBMs, to increase leverage of Alaska employers and the
state itself, and to enhance PHC's bargaining powers when using
PBMs.
5:00:44 PM
VICE CHAIR RUFFRIDGE recalled Mr. Shier stating that there would
be a negative fiscal impact with private industry. He asked
whether it would be better for the Pacific Health Coalition if
all prescription medication was steered to one hub and then
distributed to people in Alaska. He surmised this would lead to
significant savings to PHC and individual patients and would
drive down costs for the coalition.
PAT SHIER, Alaska Membership Representative, Pacific Health
Coalition, apologized if he seemed to indicate that. He said
PHC's "secret sauce" is predicated on the idea that the needs of
each of these trusts is unique, and they are free to
individually negotiate all the terms of a PBM contract, such as
transparency and return of rebates. While PHC would of course
like to have all 29 use PHC's purchasing solution, he said they
are all free to do their own. He added that he cannot say PHC
would move to try to compel them all to use only one solution.
VICE CHAIR RUFFRIDGE requested Mr. Shier to describe what he
meant by a negative fiscal impact with private industry.
MR. SHIER replied that his statement should have been "negative
impact 'to' private industry." "In other words," he continued,
"What would be the costs borne by these non-profit and for-
profit plans that are out there right now?"
5:03:10 PM
The committee took a brief at-ease.
5:03:55 PM
VICE CHAIR RUFFRIDGE called the meeting back to order.
5:04:19 PM
The committee took an at-ease from 5:04 p.m. to 5:05 p.m.
5:05:05 PM
VICE CHAIR RUFFRIDGE stated that, given the time, it would be
better to have Mr. Steve Raymos, Division of Retirement and
Benefits, State of Alaska, provide his invited testimony at a
future committee meeting.
VICE CHAIR RUFFRIDGE asked whether any committee members would
like to make a comment.
5:05:46 PM
REPRESENTATIVE PRAX stated it is imperative to get together with
people in a discussion designed to see if there is some sort of
win-win, in-between [solution] that would work. This has huge
impacts on pharmacies, and he wants to see the pharmacies
maintained, he opined, but there is great concern in both the
legal sense and practical business sense of how this is supposed
to work.
5:07:06 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
5:07 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 226 Presentation GLoudon.pdf |
HL&C 3/27/2024 3:15:00 PM |
HB 226 |
| HB226 Testimony of Mary Stoll PHC Attorney 3_18_2024.pdf |
HL&C 3/27/2024 3:15:00 PM |
HB 226 |
| HB 179 Sectional Analysis.pdf |
HL&C 3/27/2024 3:15:00 PM |
HB 179 |
| HB 179 Sponsor Statement.pdf |
HL&C 3/27/2024 3:15:00 PM |
HB 179 |
| HB 251 explanation of Changes Between Version A and CS Version.pdf |
HL&C 3/27/2024 3:15:00 PM |
HB 251 |
| S.pdf |
HL&C 3/27/2024 3:15:00 PM |
HB 251 |
| HB 226 Updated Presentation GL 032624.pdf |
HL&C 3/27/2024 3:15:00 PM |
HB 226 |