05/13/2025 03:15 PM House HEALTH & SOCIAL SERVICES

        HB 149-PHARMACY BENEFITS MANAGER;3RD PARTY ADMIN                                                                    
                                                                                                                                
4:00:18 PM                                                                                                                    
                                                                                                                                
CHAIR MINA  announced that the  final order of business  would be                                                               
HOUSE  BILL  NO.  149,  "An Act  relating  to  pharmacy  benefits                                                               
managers; relating  to third-party administrators;  and providing                                                               
an effective date."                                                                                                             
                                                                                                                                
4:01:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FIELDS, as  prime  sponsor, presented  HB 149  by                                                               
reading  the sponsor  statement  [in the  committee file],  which                                                               
read as follows [original punctuation provided]:                                                                                
                                                                                                                                
     House Bill 149  will require Third-Party Administrators                                                                    
     (TPAs)  and Pharmacy  Benefits  Managers  (PBMs) to  be                                                                    
     licensed  in  the  state  of   Alaska  and  outlines  a                                                                    
     licensing   fee   that   reflects   the   Division   of                                                                    
     Insurance's   cost   of    managing   said   licensure.                                                                    
     Currently,  the state  requires  only registration  for                                                                    
     these entities. Registration provides  a basic level of                                                                    
     verification;  in  contrast,  licensure  is  a  legally                                                                    
     mandated  process  granting  the right  to  practice  a                                                                    
     profession. Moving  to licensure gives the  Division of                                                                    
     Insurance the  same authority over  TPAs and  PBMs that                                                                    
     they hold over any other licensed business entity.                                                                         
                                                                                                                                
     Insurers continue to out-source  many core functions to                                                                    
     external  entities such  as PBMs  and TPAs,  with staff                                                                    
     managing vendor  contracts instead of  performing those                                                                    
     functions internally.  Since TPAs  and PBMs  operate as                                                                    
     separate business  entities, they are not  regulated as                                                                    
     an insurer  under a Certificate of  Authority (COA) nor                                                                    
     a  firm  under  a   license.  This  shift  has  created                                                                    
     pathways to  circumvent Alaska insurance  code, thereby                                                                    
     increasing division staff  time dedicated to clarifying                                                                    
     legal questions from TPAs. If a  TPA or a PBM is not an                                                                    
     insurance carrier with a COA,  they should be a license                                                                    
     holder with a license.                                                                                                     
                                                                                                                                
     Last  year the  Alaska State  Legislature passed  House                                                                    
     Bill  226 that  pertained  to  PBM business  practices.                                                                    
     During  the committee  process, language  incorporating                                                                    
     PBMs into  the examination  of insurers'  statutes from                                                                    
     AS 21.06.120    AS 21.06.160 was not  addressed. HB 149                                                                    
     addresses  this  omission  to ensure  the  division  is                                                                    
     meeting  the intent  of the  legislature in  regulating                                                                    
     PBMs,  including conducting  Market Conduct  Exams when                                                                    
     concerning business  practices occur. In  addition, the                                                                    
     legislation certifies  that PBMs  are treated  the same                                                                    
     as insurance  agencies, by making them  responsible for                                                                    
     the cost of these exams.                                                                                                   
                                                                                                                                
     Please  join  me in  supporting  HB  149 to  allow  the                                                                    
     Division   of   Insurance   to   regulate   Third-Party                                                                    
     Administrators   and  Pharmacy   Benefit  Managers   as                                                                    
     licensees in the state of Alaska.                                                                                          
                                                                                                                                
4:02:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RUFFRIDGE noted that House Bill 226 had been                                                                     
sponsored by Representative Sumner.                                                                                             
                                                                                                                                
4:02:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRAY asked to hear from the administration.                                                                      
                                                                                                                                
4:02:43 PM                                                                                                                    
                                                                                                                                
HEATHER  CARPENTER,  Deputy   Director,  Division  of  Insurance,                                                               
Department of Commerce, Community  & Economic Development, stated                                                               
that HB 149  was a "clean-up" bill.  She  explained that when the                                                               
legislature had considered the implementation  of House Bill 226,                                                               
a  loophole was  found  where pharmacy  benefits managers  (PBMs)                                                               
could push back  if the State of Alaska were  conducting a market                                                               
conduct  exam  in  response  to  patterns  it  found  concerning.                                                               
Enacting HB 149 would move  third-party administrators (TPAs) and                                                               
PBMs to  full licensure  and would  require PBMs  to pay  for the                                                               
cost  of   the  market   conduct  exam   should  they   be  under                                                               
investigation.    Such  categorization would  provide  regulatory                                                               
clarity  to both  TPAs and  PBMs since  there exists  a different                                                               
regulatory scheme if  such entities are registered  as opposed to                                                               
if they were licensed.                                                                                                          
                                                                                                                                
REPRESENTITIVE GRAY expressed support for HB 149.                                                                               
                                                                                                                                
4:04:32 PM                                                                                                                    
                                                                                                                                
CHAIR  MINA   opened  public   testimony  on   HB  149.     After                                                               
ascertaining there was  no one who wished to  testify, she closed                                                               
public testimony.                                                                                                               
                                                                                                                                
4:05:16 PM                                                                                                                    
                                                                                                                                
CHAIR MINA announced that HB 149 was held over.