Legislature(2015 - 2016)BELTZ 105 (TSBldg)
03/31/2016 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearings | |
| SB201 | |
| Confirmation Hearings | |
| SB175 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | SB 201 | TELECONFERENCED | |
| *+ | SB 175 | TELECONFERENCED | |
| *+ | SB 166 | TELECONFERENCED | |
| *+ | SB 169 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
March 31, 2016
1:32 p.m.
MEMBERS PRESENT
Senator Mia Costello, Chair
Senator Cathy Giessel, Vice Chair
Senator Kevin Meyer
MEMBERS ABSENT
Senator Gary Stevens
Senator Johnny Ellis
COMMITTEE CALENDAR
CONFIRMATION HEARINGS
State Medical Board
Stephen Craig Humphreys - Soldotna
Camille (Cam) Olson Carlson - Fairbanks
Bruck Ann Clift - Mat-Su Valley
Joy Marasco Neyhart - Juneau
Grant Thomas Roderer - Anchorage
- HEARD & HELD
SENATE BILL NO. 201
"An Act relating to the Board of Pharmacy; relating to the
licensing and inspection of certain facilities located outside
the state; relating to drug supply chain security; and creating
a position of executive administrator for the Board of
Pharmacy."
- HEARD & HELD
SENATE BILL NO. 175
"An Act relating to the registration and duties of pharmacy
benefits managers; relating to procedures, guidelines, and
enforcement mechanisms for pharmacy audits; relating to the cost
of multi-source generic drugs and insurance reimbursement
procedures; relating to the duties of the director of the
division of insurance; and providing for an effective date."
- HEARD & HELD
SENATE BILL NO. 166
"An Act relating to the controlled substance prescription
database; relating to the Board of Dental Examiners; relating to
the State Medical Board; relating to the Board of Nursing;
relating to the Board of Examiners in Optometry; relating to the
Board of Pharmacy; and providing for an effective date."
- BILL HEARING CANCELED
SENATE BILL NO. 169
"An Act relating to the authority of pharmacists to prescribe
and dispense self- administered hormonal contraceptives;
relating to the duties of the Board of Pharmacy; relating to
insurance coverage for contraceptives prescribed by pharmacists;
and providing for an effective date."
- BILL HEARING CANCELED
PREVIOUS COMMITTEE ACTION
BILL: SB 201
SHORT TITLE: PHARMA BD & EMPLOYEES; DRUG DIST/MANUFAC
SPONSOR(s): SENATOR(s) GIESSEL
02/22/16 (S) READ THE FIRST TIME - REFERRALS
02/22/16 (S) L&C, FIN
03/31/16 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 175
SHORT TITLE: PHARMACY BENEFITS MANAGERS
SPONSOR(s): SENATOR(s) GIESSEL BY REQUEST
02/10/16 (S) READ THE FIRST TIME - REFERRALS
02/10/16 (S) L&C, FIN
03/31/16 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
DR. STEPHEN CRAIG HUMPHREYS, Appointee
State Medical Board
Soldotna, Alaska
POSITION STATEMENT: Testified as appointee to the State Medical
Board.
CAMILLE (CAM) OLSON CARLSON, Appointee
State Medical Board - public seat
Fairbanks, Alaska
POSITION STATEMENT: Testified as appointee to the State Medical
Board.
DR. BRUCK ANN CLIFT, Appointee
State Medical Board
Mat-Su Valley, Alaska
POSITION STATEMENT: Testified as appointee to the State Medical
Board.
DR. JOY MARASCO NEYHART, Appointee
State Medical Board
Juneau, Alaska
POSITION STATEMENT: Testified as appointee to the State Medical
Board.
DR. GRANT THOMAS RODERER, Appointee
State Medical Board
Anchorage, Alaska
POSITION STATEMENT: Testified as appointee to the State Medical
Board.
EMMIE VAN WYHE, Intern
Senator Cathy Giessel
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided the sectional analysis for SB 201.
JANE CONWAY, Staff
Senator Cathy Giessel
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented information related to SB 201 and
SB 175.
JANEY HOVENDEN, Director
Division of Corporations, Business and Professional Licensing
Department of Commerce, Community and Economic Development
Juneau, Alaska
POSITION STATEMENT: Presented information on SB 201.
MOLLY GRAY, Executive Director
Alaska Pharmacists Association
Anchorage, Alaska,
POSITION STATEMENT: Testified in support of SB 201 and SB 175.
DIRK WHITE, representing himself
Sitka, Alaska
POSITION STATEMENT: Testified in support of SB 201 and SB 175.
JOHN COTTER, President
Board of Pharmacy
Fairbanks, Alaska
POSITION STATEMENT: Testified in strong support of SB 201.
JASON TAPLEY, Community Pharmacist
Juneau, Alaska
POSITION STATEMENT: Testified in support of SB 175.
MARGARET SODEN, representing herself
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of SB 175.
GERALD BROWN, representing himself
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of SB 175.
SCOTT WATTS, Community Pharmacy
Juneau, Alaska
POSITION STATEMENT: Testified in strong support of SB 175.
CINDY LAUBACHER
Express Scripts
Roseville, California
POSITION STATEMENT: Testified in opposition to SB 175.
ERIC DOUGLAS
CVS Health
Washington, DC
POSITION STATEMENT: Testified in opposition to SB 175.
BARRY CHRISTENSEN, Co-Chair
Alaska Pharmacists Association
Ketchikan, Alaska
POSITION STATEMENT: Testified in support of SB 175.
JENNY CASTILLO, Trust Administrator
Alaska Teamster Employer Welfare Trust
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to SB 175.
CHRIS MURRAY, Program Coordinator
Division of Insurance
Department of Commerce, Community and Economic Development
Juneau, Alaska
POSITION STATEMENT: Answered questions related to SB 175.
ACTION NARRATIVE
1:32:46 PM
CHAIR MIA COSTELLO called the Senate Labor and Commerce Standing
Committee meeting to order at 1:32 p.m. Present at the call to
order were Senators Giessel, Meyer, and Chair Costello. She
reviewed the agenda.
^Confirmation Hearings
CONFIRMATION HEARINGS
State Medical Board
1:34:01 PM
CHAIR COSTELLO announced the first order of business would be
confirmation hearings for Governor Walker's appointments to the
State Medical Board.
She asked Dr. Humphreys to express his interest in serving on
the State Medical Board.
1:34:11 PM
STEPHEN CRAIG HUMPHREYS, Appointee, State Medical Board, said
he's been on the board for a little over a year and hopes to
bring a positive, unique perspective to the board.
CHAIR COSTELLO asked what the board is doing to address the
backlog in processing applications for individuals seeking to
practice medicine in Alaska.
DR. HUMPHREYS said they're addressing the applications as fast
as they can while still maintaining quality. Some states have
tried to make the process more automated and the board and staff
are looking at that option.
CHAIR COSTELLO asked if he would like to highlight any
experience that has been particularly helpful.
DR. HUMPHREYS talked about growing up in Anchorage and the broad
patient base in Alaska. Trying to deal with the numbers while
keeping it economical is a challenge. It's been inspiring to
hear from other board members.
CHAIR COSTELLO thanked Dr. Humphreys. She asked Ms. Carlson to
tell the committee her interest in continuing to serve on the
State Medical Board.
1:40:41 PM
CAMILLE (CAM) OLSON CARLSON, Appointee, State Medical Board,
noted hers is the public seat on the board. She shared her
history in Alaska and work on past boards. She found the State
Medical Board work the last four years very interesting and
challenging.
SENATOR GIESSEL asked what she looks for when she considers the
licensing of a physician.
MS. CARLSON said both public and medical board members look for
the most competent candidates. They look at the person's record
to ensure they come well qualified and are filling their
obligations to patients.
CHAIR COSTELLO thanked her for her service. She asked Dr. Clift
to tell the committee her interest in serving on the board.
1:43:21 PM
DR. BRUCK ANN CLIFT, Appointee, State Medical Board, said she is
a family physician practicing in the Mat-Su Valley. She
described her educational background. She said she was
originally asked to serve on the Midwifery Board, but then was
appointed to the State Medical Board.
CHAIR COSTELLO noted Dr. Clift is a new appointee. She asked her
what she hopes to contribute if appointed to the board.
DR. CLIFT said she is particularly interested in ethical
policies for licensure in the state, as well as expedited
licensing of out-of-state physicians to practice in Alaska.
SENATOR GIESSEL asked if anything else is a priority. She also
inquired about what interested her in the Midwifery Board.
DR. CLIFT said she was asked to serve by a midwife and felt
under-qualified because she is not an OBGYN.
SENATOR GIESSEL asked if she has attended any board meetings.
DR. CLIFT said no.
CHAIR COSTELLO thanked Dr. Clift for her interest in serving.
She informed the committee that there are two additional
appointees for consideration to the State Medical Board but they
are not available at this time. She stated that she will hold
all the appointments and forward them in one batch.
1:46:40 PM
At ease
SB 201-PHARMA BD & EMPLOYEES; DRUG DIST/MANUFAC
1:47:27 PM
CHAIR COSTELLO announced the consideration of SB 201. She noted
this is the first hearing.
1:48:03 PM
SENATOR CATHY GIESSEL, Alaska State Legislature, sponsor of SB
201, explained that the bill is an opportunity for Alaska to
come into compliance with the federal Drug Quality Security Act
established in 2013. It will create a new license category for
out-of-state wholesale drug distributors. The bill deals with
the safe practice of pharmaceutical manufacturing and what is
shipped to Alaska for distribution. This is of utmost concern
due to an increase in prescription drug counterfeiting.
Currently, the Board of Pharmacy has no authority to regulate
out-of-state wholesale drug distributors or third-party
logistics providers. Alaska is one of few remaining states that
does not license out-of-state drug distributors. The bill would
ensure that they comply with the same regulations as Alaska
wholesalers. It requires out-of-state drug distributors, or
outsourcing facility, to follow specific guidelines. This
includes obtaining a license, authorizing inspection, appointing
an agent before shipping, mailing or delivering prescription
drugs, or advertising. An outsourcing facility must comply with
the Drug Quality and Security Act.
She pointed out that SB 201 would also allow the Board of
Pharmacy to create an executive administrator position to serve
as the liaison, to implement statutes and regulations, and aid
in managing new licensees.
1:50:37 PM
EMMIE VAN WYHE, Intern, Senator Cathy Giessel, Alaska State
Legislature, provided the following sectional analysis for SB
201:
Section 1: AS 08.80.130(13): Allows licensing and
inspecting for out-of-state drug distributors and
outsourcing facilities.
AS 08.80.130(14): Establishes qualifications and
duties of executive administrator. Executive
administrator is delegated authority in order to
conduct board business.
Section 2: AS 08.80.03(c): Specifications for
facilities, equipment, personnel, and procedures for
control of drugs.
Section 3: AS 08.80.157(k): Applies to wholesale drug
distributors and outsourcing facilities outside the
state under AS 08.80.159, regarding licensing.
Section 4: Amends AS 08.80 by adding a new section:
Sec. 08.80.159: Requires that a wholesale drug
distributor or outsourcing facility have a license in
Alaska before shipping, mailing, or delivering
prescription drugs to a licensee in the state or
before advertising in the state, an agent must be
appointed in the state, and a designee of the board
must authorize inspection of the facility.
An outsourcing facility, in addition, must comply with
the Drug Quality and Security Act of 2013. The board
may require an inspection of facilities located
outside of the state, approve a designee to inspect.
The board shall adopt regulations to implement this
section.
Section 5: Amends AS 08.80 by adding new section to
Article 2: Sec. 08.80.270: Allows the Board to create
an executive administrator position. Defines the role
of the executive administrator.
Section 6: AS 08.80.480(37): Defines "outsourcing
facility"
1:52:45 PM
SENATOR MEYER asked if there's been a problem with counterfeit
drugs coming to Alaska.
MS. VAN WYHE said the bill is a result of an occurrence in 2012
when a compounding facility in Massachusetts shipped unsanitary
medication to nine different states. Alaska is one of the only
states that hasn't come into compliance with the federal law.
SENATOR MEYER asked if the federal government provides money for
implementation.
1:54:25 PM
JANE CONWAY, Staff, Senator Giessel, Alaska State Legislature,
said the federal government would impose regulations if the
state doesn't come into compliance with this federal law. Most
other states have determined that they would rather do it
themselves.
She noted that John Cotter from the Board of Pharmacy is online
to answer technical questions.
SENATOR MEYER asked if an executive administrator is necessary.
MS. CONWAY said the board doesn't have the capacity to do the
extra work. The licenses will cover the cost of that position.
1:55:55 PM
SENATOR GIESSEL added that most of the larger professional
boards have an executive administrator.
1:57:01 PM
JANEY HOVENDEN, Director, Division of Corporations, Business and
Professional Licensing, Department of Commerce, Community and
Economic Development (DCCED), presented information on SB 201.
She advised that the Board of Pharmacy has entertained the idea
of an executive administrator position for some time.
CHAIR COSTELLO asked her to review the fiscal note.
MS. HOVENDEN said the first year anticipates a cost of $124.4
thousand. The personal services cost will be $100.9 thousand.
Some travel for the executive administrator to attend Board of
Pharmacy meetings is included. The bill requires a change in
regulations at a cost of $2.5 thousand, and there is a one-time
overhead cost for the new position.
CHAIR COSTELLO asked if the fiscal note includes travel for
licensing and inspecting of out-of-state wholesale drug
distributors. She inquired about the board's budget.
MS. HOVENDEN said no; those services would be on contract within
those states. The Board of Pharmacy currently has a surplus
budget.
1:59:43 PM
CHAIR COSTELLO opened public testimony on SB 201.
1:59:56 PM
MOLLY GRAY, Executive Director, Alaska Pharmacists Association,
testified in support of SB 201. It is vitally important to bring
all pharmacists in Alaska into compliance with federal law. The
bill aligns with the association's mission and ensures
compliance with the federal mandate.
2:01:04 PM
DIRK WHITE, representing himself, testified in support of SB
201. Speaking as a community hospital pharmacist in Sitka and a
former president of the board when this issue first came up, he
said he supports the bill and asks that it be moved out of
committee. He offered to answer questions.
2:01:52 PM
JOHN COTTER, President, Board of Pharmacy, testified in strong
support of SB 201. Alaska is one of the few states that doesn't
regulate 503B pharmacies and that is a loophole that should be
closed in order to ensure that drugs being brought into the
state are safe. The license fees will fully cover the costs of
doing this business and most of the new position. The cost of
inspections would be borne by the pharmacy that is inspected.
The cost of the bill is reasonable and the need is important.
SENATOR GIESSEL asked for examples of in-state and out-of-state
wholesale distributors.
MR. COTTER said the issue is with smaller companies that are
secondary suppliers that pick up drugs on the open market for
resale. There is often a problem with the pedigree of those
drugs.
SENATOR MEYER assumed that out-of-country drug suppliers aren't
an issue.
MR. COTTER said they can't ship to the state, but that doesn't
keep them from selling over the Internet.
2:06:02 PM
SENATOR MEYER asked if Puerto Rico is considered a state.
MR. COTTER said yes.
CHAIR COSTELLO asked if telemedicine is affected by the bill.
MR. COTTER said no.
2:06:39 PM
CHAIR COSTELLO stated she would keep public testimony open and
hold SB 201 in committee for further review.
^Confirmation Hearings
CONFIRMATION HEARINGS
State Medical Board
CHAIR COSTELLO stated that the committee would hear from two
additional appointees to the State Medical Board.
CHAIR COSTELLO asked Dr. Neyhart to tell the committee her
interest in serving on the State Medical Board.
2:07:10 PM
DR. JOY MARASCO NEYHART, Appointee, State Medical Board, said
the Governor asked her to serve and she is eager to do so.
CHAIR COSTELLO asked if she is a new appointee.
DR. NEYHART said yes.
CHAIR COSTELLO asked what perspectives she brings to the board.
DR. NEYHART replied she has the Southeast Alaska perspective as
a practicing pediatrician and wants to see the implementation of
telemedicine in a safe and appropriate way.
CHAIR COSTELLO thanked Dr. Neyhart and asked Dr. Roderer to tell
the committee about his interest in serving on the State Medical
Board.
2:08:48 PM
DR. GRANT THOMAS RODERER, Appointee, State Medical Board, said
he has served for about two years and is interested in
continuing to serve. His interest is in pain management and the
problem with over prescribing for this condition.
CHAIR COSTELLO asked whether he sees any challenges the board
will be facing.
DR. RODERER said the board has to address the problem of over
prescribing opioids to patients. He hopes to help the board
draft regulations to regulate this form of treatment.
CHAIR COSTELLO noted there is a prescription drug database being
reviewed in current legislation.
SENATOR GIESSEL highlighted the Medicaid reform bill moving
through the legislative process that incorporates Centers for
Disease Control and Prevention (CDC) recommendations which
include a more robust use of the prescription drug monitoring
program. She asked what can be done to educate clinicians on the
safe prescribing of opioids.
DR. RODERER said having the database available will help
physicians know if there is a potential for multiple
prescriptions. He cautioned that compliance to use the database
may be another issue.
SENATOR GIESSEL said she's hearing about fear of harsh penalties
for noncompliance. She asked if he knows of disciplinary actions
the board might take.
DR. RODERER stated it will take much more discussion to define
disciplinary actions. The board first adopts regulations before
determining sanctions. There has to be a law first and then the
board can adopt regulations.
SENATOR GIESSEL thanked Dr. Roderer.
CHAIR COSTELLO echoed appreciation for his service.
[The names were held in committee with the intention of sending
all the confirmation candidate names forward in one batch.]
2:13:50 PM
At ease
SB 175-PHARMACY BENEFITS MANAGERS
2:14:33 PM
CHAIR COSTELLO reconvened the meeting and announced the
consideration of SB 175. She noted that this is the first
hearing and a committee substitute is forth coming.
2:15:43 PM
SENATOR CATHY GIESSEL, Alaska State Legislature, as sponsor,
introduced SB 175. She noted that the Labor and Commerce
Committee is very supportive of small businesses in Alaska, of
which local pharmacies are one. Small businesses are a vital
part of Alaska's economy and that is the focus of SB 175. It has
to do with fair and reasonable treatment and predictable
guidelines that come from an entity called a pharmacy benefit
manager (PBM). Local pharmacies must deal with PBMs in order to
run their businesses. Currently, there are no real guidelines
for reimbursements by PBMs to local pharmacies so PBMs can
change reimbursement rates and request audits at will. They can
also refuse to respond to, or pay pharmacies, for the dispensing
medications. Pharmacies have no legal recourse at this point. SB
175 will provide an avenue of appeal to an unreasonable audit as
their last recourse.
She noted support letters from many small pharmacies and some
include examples of unfair treatment by PBMs. Several pharmacies
have been driven out of business by PBMs. She also noted the
four-page letter from a large pharmaceutical company from
Washington, DC, that outlines reasons not to pass the
legislation. She provided the history behind the profitable PBM
industry.
SENATOR GIESELL said 33 other states have passed similar
legislation demanding transparency in pricing and fair audits.
She concluded that she considers PBMs as "pharmacy billion-
dollar middlemen."
JANE CONWAY, Staff, Senator Cathy Giessel, Alaska State
Legislature, presented information related to SB 175. She
delivered a PowerPoint to explain PBMs. She said PBMs started in
1970 as claims processors and have since become intertwined in
almost every aspect of the pharmaceutical supply chain. They are
almost unregulated at the state and federal levels and they
represent some of the largest companies in the nation.
She listed examples of PBM's market power and influence:
CVS/Caremark, Express Scripts, and OptumRX control over 70
percent of all U.S. scripts.
She said PBMs are designed to reduce administrative costs for
insurers, validate patient eligibility, administer plan
benefits, negotiate costs between pharmacies and health plans,
and audit pharmacies for fraud. PBMs also develop pharmacy
provider networks, and pharmacies must accept PBM contracts.
She noted every opposition letter talks about negotiated
contracts, but they are really "take it or leave it" contracts.
She cited an example.
MS. CONWAY continued to say that PBMs influence what drugs are
dispensed, collect money from drug manufacturers, and restrict
pharmacies on how many pills they can dispense at a given time.
They dictate how much pharmacies will be paid for the drugs they
dispense, have free reign to dictate what pharmacies are
permitted to do in a given network, operate their own mail-order
pharmacies, and audit pharmacies at will.
2:23:19 PM
MS. CONWAY explained how PBMs work. The insurer hires a PBM to
manage drug costs and it negotiates prices for both
insurers/manufacturers and insurers/pharmacies, then with
manufacturers, and finally with manufacturers/wholesalers.
Finally, the PBM negotiates insurer reimbursement for drugs and
dispensing fees with pharmacies.
MS. CONWAY said SB 175 brings fairness to audits and doesn't
allow audits during the first seven days of each month because
of high patient volume. It is designed to prevent targeting of
clerical errors and it establishes a reasonable timeframe to
prepare for an audit.
The bill also establishes an audit appeals process for
pharmacies and guidelines for PBMs to follow regarding patient
confidentiality. Extrapolation cannot be used in assessing fees
and penalties. Alaska pharmacists would not be penalized for
providing mail-order service to their customers. Finally, the
bill does not prevent the recoupment of funds where fraud,
waste, and abuse exist.
She noted that 33 states have already enacted fair audit
legislation and 24 states have already enacted Maximum Allowable
Cost (MAC) transparency legislation.
MS. CONWAY said the bill will also require registration of PBMs
with the Division of Insurance. It sets up guidelines for
generic drug MAC pricing, establishes a mechanism for a pharmacy
to appeal MAC pricing, and prevents auditing local pharmacists
out of a job.
2:26:28 PM
She related that there are many stories from pharmacists about
the abuses of PBMs. She reviewed an audit from her hometown
pharmacy in Soldotna. The PBM extrapolated a .1 percent error
and came up with a $7,300 bill. The pharmacist found no recourse
but to sell his business to an outside company.
2:28:15 PM
MS. CONWAY turned to the maximum allowable cost (MAC) that can
be reimbursed to the pharmacist for dispensing a prescription.
Typically, PBMs use an aggressively low MAC price list to
reimburse their contracted pharmacies and a different, higher
list of prices when they sell to their clients or plan sponsors.
They reimburse low and charge high, pocketing the significant
spread between the two prices. Most plan sponsors are unaware
that multiple MAC lists are being used and have no real concept
of how much revenue the PBM retains.
She said when PBMs fail to update MAC lists in a timely manner,
pharmacies are forced to dispense at a loss, sometimes as high
as $100 or more, or not dispense at all. When prices increase,
PBMs often wait weeks or even months before updating MAC lists.
The acquisition price spike/lagging reimbursement trend has a
very significant impact on pharmacies' ability to remain in
business. Neither plan sponsors nor contracted retail network
pharmacies have any transparency into the MAC process.
2:30:52 PM
MS. CONWAY addressed what SB 175, a MAC transparency bill, does.
It sets reasonable standards on what can be MAC'd, requires
regular reporting of MACs to a pharmacy in a useable format, and
provides for a defined MAC appeals process.
It does not mandate that a PBM reimburse a pharmacy at a higher
amount, or represent an administrative burden on the PBM, nor
does it mandate that a PBM approve a pharmacy's MAC appeal. It
does not result in increased costs to the healthcare system.
2:31:38 PM
She reviewed the statistics on the total pharmacies in Alaska;
of the 84 pharmacies, 20 are independents.
She said that 24 states have passed similar legislation and 33
have passed fair and uniform pharmacy audits.
2:32:33 PM
CHAIR COSTELLO opened public testimony.
2:33:10 PM
JASON TAPLEY, Community Pharmacist, testified in support of SB
175. He said he works for SEARCH. He has had 5-10 audits where
he has had to prove "that the money was yours," and to show
documentation that he could recover the costs. This bill will
provide a clear, consistent process for these audits to occur.
2:35:13 PM
MARGARET SODEN, representing herself, said she is a retired
pharmacist testifying in support of SB 175. She recalled her
fifty years in the field and the current policy of third-party
billing. She said she has undergone a number of audits, but with
proper notification and conduct they can be done and cause the
least disruption. She shared a personal story of undergoing an
audit in mid-winter in Fairbanks and opined that this bill will
establish some parameters for audits to make them easier.
2:38:56 PM
GERALD BROWN, representing himself, said he is a pharmacist and
business owner testifying in support of SB 175. A lot of
contracts are sent by PBMs and this would provide some structure
for those contracts, most of which are "take it or leave it."
The MAC provision is very important because of the terrible
reimbursement reductions. The take it or leave it contracts make
it impossible to negotiate.
2:41:56 PM
SCOTT WATTS, Community Pharmacy, said he is a business owner
testifying in strong support of SB 175. The bill establishes
strong standards for audits and does away with the penalties for
clerical errors. He provided an example of a recent audit that
contained clerical errors and the pharmacy was charged $6,000
recoupment for the entire prescription.
He noted that MAC pricings need to be updated or the pharmacy
ends up dispensing at a lower cost. There is currently no way to
get through to a PBM. While the contract is signed by a
pharmacist, there is no room for negotiation.
2:44:48 PM
MOLLY GRAY, President, Alaska Pharmacists Association, testified
in support of SB 175. It aligns with the pharmacy's mission to
provide quality care. They are asking for a standard set of
rules for audits.
2:46:17 PM
DIRK WHITE, representing himself, testified in support of SB
175. He said he has been a community hospital pharmacist for 31
years. Their primary issue is the low cost reimbursement; it is
all about MAC pricing. Last year they lost $22,176.42 on
prescriptions in the grocery store pharmacy. He provided other
examples of losses.
The said the bill wouldn't limit audits. He mentioned that his
contract does not allow mail order prescriptions to rural areas.
2:49:07 PM
CINDY LAUBACHER, Express Scripts, testified in opposition to SB
175. She voiced concern about cost implications the bill would
have on their clients and the limitations on auditing. It
restricts the number of claims that can be reviewed and the
lookback timeframe.
She said MAC was created as a means of incentivizing the
purchase of generic drugs. That became the industry standard for
reimbursing pharmacies. If the pharmacy disputes the
reimbursement, they have the opportunity to request an audit.
This bill would destroy any incentive to prescribe less
expensive medications.
2:51:48 PM
ERIC DOUGLAS, CVS Health, testified in opposition to SB 175. He
addressed misnomers mentioned in today's testimony. He said SB
175 is an omnibus bill aimed at every anti-PBM legislation that
has been introduced. He said there are multiple audit laws in
the U.S. He said CVS was not contacted to discuss this bill.
The audit provision in SB 175 is not how they operate. They
don't extrapolate and there is an appeal process available. He
disputed the statement about MAC reimbursement levels. Generic
drugs are commoditized and they set a maximum allowable cost. He
maintained that there is an appeals process. Putting PBMs under
the insurance division regulations is wrong because they aren't
insurance companies.
SENATOR GIESSEL asked if he has supported this type of
legislation in any of the 33 states that have passed it.
MR. DOUGLAS answered no, but they have supported some audit
bills.
2:57:07 PM
BARRY CHRISTENSEN, Co-Chair, Alaska Pharmacists Association,
testified in support of SB 175. He noted that this topic has
been discussed since 2008 when a similar bill passed the Senate.
He disputed the statement that there hadn't been meetings or
negotiations with PBMs; he recalled a meeting Senator Egan held.
PBMs also have lobbyists in Juneau.
He noted he submitted written testimony listing reasons why the
bill is needed. Pharmacies in Alaska need help with the audit
process and the amount they're getting paid for generic
prescription drugs.
2:59:47 PM
JENNY CASTILLO, Trust Administrator, Alaska Teamster Employer
Welfare Trust, testified in opposition to SB 175. She stated
that their PBM performs infrequent on-site audits; the audits
are multi-source claim reviews and are concurrent to claim
submissions to mitigate client prolonged risk to inaccurate
payments and decreased repetitive errors through timely
corrections. Their PBM conducts many audits and the parameters
are clearly outlined. The relationship is a negotiated
arrangement and should remain that way. It should not be
legislated.
3:01:59 PM
CHAIR COSTELLO kept public testimony open on SB 175. She asked
if the administration has a position on the bill.
3:02:14 PM
CHRIS MURRAY, Program Coordinator, Division of Insurance,
Department of Commerce, Community and Economic Development
(DCCED), said he does not have a position on SB 175.
CHAIR COSTELLO asked if he agrees PBMs need regulation.
MR. MURRAY said he just recently learned about this issue and
isn't prepared to answer.
CHAIR COSTELLO asked if it is appropriate for the division to
regulate PBMs.
MR. MURRAY said they would be able to do the job, should the
legislation pass.
CHAIR COSTELLO held SB 175 in committee awaiting a committee
substitute.
3:04:15 PM
There being no further business to come before the committee,
Chair Costello adjourned the Senate Labor and Commerce Standing
Committee meeting at 3:04 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 24 - State Medical Board.pdf |
SL&C 3/31/2016 1:30:00 PM |
State Medical Board |
| Medical Board Fact Sheet.pdf |
SL&C 3/31/2016 1:30:00 PM |
State Medical Board |
| Medical - Carlson #1.pdf |
SL&C 3/31/2016 1:30:00 PM |
State Medical Board |
| Medical - Clift #1.pdf |
SL&C 3/31/2016 1:30:00 PM |
State Medical Board |
| Medical - Neyhart #1.pdf |
SL&C 3/31/2016 1:30:00 PM |
State Medical Board |
| Medical - Humphreys #1.pdf |
SL&C 3/31/2016 1:30:00 PM |
State Medical Board |
| Medical - Roderer #1.pdf |
SL&C 3/31/2016 1:30:00 PM |
State Medical Board |
| SB 175 vsn W.pdf |
SL&C 3/31/2016 1:30:00 PM |
SB 175 |
| SB 175- Sectional Analysis.pdf |
SL&C 3/31/2016 1:30:00 PM |
SB 175 |
| SB 175 - Sponsor Statement.pdf |
SL&C 3/31/2016 1:30:00 PM |
SB 175 |
| SB 175 - Supporting Document - White 3-11-16.pdf |
SL&C 3/31/2016 1:30:00 PM |
SB 175 |
| SB 175 - Supporting Document - Cordova Drug 3-15-16.pdf |
SL&C 3/31/2016 1:30:00 PM |
SB 175 |
| SB 175 - Supporting Document - AKPhA.pdf |
SL&C 3/31/2016 1:30:00 PM |
SB 175 |
| SB 175 - Supporting Document - Island Pharm 3-11-16.pdf |
SL&C 3/31/2016 1:30:00 PM |
SB 175 |
| SB 201 - Sectional Analysis.pdf |
SL&C 3/31/2016 1:30:00 PM |
SB 201 |
| SB 201 Sponsor Statement.pdf |
SL&C 3/31/2016 1:30:00 PM |
SB 201 |
| SB 201 Hearing Request.pdf |
SL&C 3/31/2016 1:30:00 PM |
SB 201 |
| SB 201 - Supporting Document - Board of Pharmacy.pdf |
SL&C 3/31/2016 1:30:00 PM |
SB 201 |
| SB 201 - Supporting Document - AKPha.pdf |
SL&C 3/31/2016 1:30:00 PM |
SB 201 |
| SB 175 - News Article - Anthem vs Express Scripts.pdf |
SL&C 3/31/2016 1:30:00 PM |
SB 175 |
| SB 175 - Opposition Letter - Teamsters.pdf |
SL&C 3/31/2016 1:30:00 PM |
SB 175 |
| SB 175 - PBM and MAC Presentation.pdf |
SL&C 3/31/2016 1:30:00 PM |
SB 175 |
| SB 175 - Supporting Document - Info NACDS.pdf |
SL&C 3/31/2016 1:30:00 PM |
SB 175 |
| SB 175 - Supporting Document - Soden.pdf |
SL&C 3/31/2016 1:30:00 PM |
SB 175 |
| SB 175 - Supporting Document PBM Watch - other states legislation.pdf |
SL&C 3/31/2016 1:30:00 PM |
SB 175 |