Legislature(2023 - 2024)BARNES 124
03/25/2024 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB218 | |
| HB313 | |
| HB324 | |
| HB55 | |
| HB226 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 313 | TELECONFERENCED | |
| *+ | HB 324 | TELECONFERENCED | |
| += | HB 55 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 226 | TELECONFERENCED | |
| += | HB 218 | TELECONFERENCED | |
HB 226-PHARMACIES/PHARMACISTS/BENEFITS MANAGERS
4:48:01 PM
VICE CHAIR RUFFRIDGE announced that the final order of business
would be HOUSE BILL NO. 226, "An Act relating to the Board of
Pharmacy; relating to insurance; relating to pharmacies;
relating to pharmacists; relating to pharmacy benefits managers;
relating to patient choice of pharmacy; and providing for an
effective date." [Before the committee was CSHB 226(HSS).]
4:48:30 PM
VICE CHAIR RUFFRIDGE opened public testimony on HB 226.
4:48:50 PM
BRIAN RIDLEY, Chief/Chairman, Tanana Chief's Conference (TCC),
testified in support of HB 226. He stated that patients and
pharmacists in Alaska are currently in a state of financial
crisis, with prescription drugs becoming unaffordable. He
reported that, through mergers, just three of the 70 pharmacy
benefit managers (PBMs) in the US control 80 percent of the
prescription drug market. He further reported that each of
these three also own a health insurer, a large franchise
pharmacy, and large medical providers, thereby controlling
pricing, coverage, cost control, where prescriptions can be
filled, and the ultimate cost to the employer and patient.
Tribal health organizations, he stated, are the only healthcare
option in many of Alaska's rural communities and their ability
to continue providing pharmacy services is in serious jeopardy
due to the practices of PBMs. Mr. Ridley said [TCC] has
calculated a loss of more than $4 million annually to the bottom
line of [tribal health care] pharmacies and the State of Alaska
is spending nearly $8 million more annually using the current
PBM contract than it would under the provisions included in HB
226. He urged the rapid passage of HB 226.
4:51:22 PM
REPRESENTATIVE FIELDS asked whether it is the Title 21 or Title
39 language in the bill that would have primary impact on tribal
health providers.
MR. RIDLEY answered that he is not sure.
4:52:06 PM
TAMMY THIEL, Executive Director, Denali Oncology Group (DOG),
testified in support of HB 226. She said the bill seeks to
regulate the harmful practices of white bagging and brown
bagging policies employed by insurers and pharmacy benefit
managers (PBMs). White bagging and brown bagging policies, she
explained, require that patient medications be delivered through
an insurer or PBM-designated specialty pharmacy rather than
allowing providers to acquire and dispense these medications
directly. This can lead to many issues for patients and
providers, she noted, including the improper delivery and
storage of medication, delayed end care, and medical waste. She
said DOG believes that healthcare providers, in consultation
with their patients, should maintain the ability to choose the
most appropriate sources for obtaining and administering
necessary medication. She said HB 226 would preserve the
ability of oncologists to manage the procurement and
administration of medication through established and trusted
channels, thereby protecting the wellbeing of cancer patients in
Alaska. She asked that the committee pass HB 226.
4:54:31 PM
JAMES LEE, Director, State Regulation and Policy, Community
Oncology Alliance (COA), testified in support of HB 226. He
said COA believes that white and brown bagging practices
threaten patient safety, compromise treatment efficacy, and pose
significant challenges to the continuity of care for Alaskans
with cancer. He explained that white and brown bagging refers
to the process where insurers and PBM affiliated specialty
pharmacies mail or deliver cancer medications directly to the
physician's office or to the patient's home rather than allowing
the patient's oncologist to directly handle and dispense the
medications. Under white and brown bagging insurer policies, he
argued, the integrity and safety of highly specialized and
fragile cancer medications cannot be guaranteed once they leave
the controlled environment of their affiliated specialty
pharmacy. He pointed out that improper handling, storage, or
temperature control during shipping can compromise the efficacy
of a drug and impact patient outcomes. Dosage changes are
common in cancer care, he noted, but these policies can delay
changes due to the need to reorder and await delivery of new
medication, further complicating a patient's health.
4:57:11 PM
TONIA NEAL, Senior Director, State Affairs, Pharmaceutical Care
Management Association (PCMA), testified in opposition to HB
226. She noted that PCMA is the national trade association for
PBMs. She said PBMs operate within a highly regulated framework
overseen by several federal agencies, and their role is to serve
as a service provider for health plans, not to unilaterally set
pharmacy access or out of pocket cost. Drug pricing is dictated
by manufacturers, she stated, and PBMs promote the use of
generic alternatives which account for 90 percent of dispensed
prescriptions in the US. Specialty drugs are responsible for
about 82.5 percent of the cost, she continued, so the committee
should look at the whole supply chain, not just the one entity
involved in HB 226. She said specialty pharmacies focus on high
cost and high-tech medications that are not self-administered,
that are typically sent to the provider's office to administer,
and that may require special handling, storage, and
administration. She argued that the mandate in HB 226 to shift
pricing to National Average Drug Acquisition Cost (NADAC) will
increase costs to Alaskans without a benefit. She further
argued that the bill's mandate of profit guarantees for
pharmacies could compromise costs and patient safety by
undermining the specialty drugs.
4:58:43 PM
BALLARD SAUL, PharmD, BCPS, representing self, testified in
support of HB 226. He stated that the current practice of white
and brown bagging by PBMs hinders the ability of pharmacists to
ensure the delivery of safe and effective therapy to patients
because pharmacists are unable to certify the medication's
integrity. He asked that committee members consider whether
they would prefer a supply chain that is manned by individuals
who have dedicated their lives to education and training, or one
that is comprised of health care facilities that have invested
millions of dollars to ensure that the medication received by a
patient is safe and effective, or one that has very few checks
and balances to ensure the medication is handled appropriately.
White and brown bagging, he stressed, are a medication safety
concern anywhere, and especially in Alaska.
[VICE CHAIR RUFFRIDGE returned the gavel to Chair Sumner.]
5:01:59 PM
SHAWNA KING, PharmD, BCPS, Providence Alaska Medical Center,
testified in support of HB 226. She stated that the lack of PBM
regulation in Alaska is allowing mail order only practice by
insurance companies, causing local pharmacies in Alaska to close
and thereby limiting access to medications for everyone. It
impacts the appropriate management of chronic diseases, she
maintained, and limits access to medications needed to treat
urgent medical issues, such as antibiotics. Pharmacy benefit
managers do not equally reimburse local pharmacies, she said,
and PBMs claim to reduce medication cost but fail to provide
transparent evidence of medication cost savings to patients.
She related that several home infusion pharmacies and infusion
centers in Anchorage have closed due to the negative financial
impacts of the white bagging and brown bagging practices
required by PBMs. There is unclear chain of medication custody,
she asserted, which violates the Drug Supply Chain Security Act
[of 2013] and appropriate therapy is often delayed for patients
because of the known shipping issues for specialty medications,
especially to Alaska.
5:04:07 PM
LEIF HOLM, PharmD, Owner, Alaska Family Pharmacy, testified in
support of HB 226. He related that Alaska Family Pharmacy
opened its first store in 1960 and grew into four stores serving
Interior Alaska with plans to expand. But instead, he
continued, Alaska Family Pharmacy had to close its tele-pharmacy
in Healy due to unfair reimbursement practices and another
pharmacy due to an employee crisis exacerbated by a lack of
capital from consistently inadequate reimbursements. He said
his pharmacy became the only independent pharmacy in Interior
Alaska in 2022 when the other independent pharmacy closed, and
he is aware of two independent locations in Juneau that closed
recently. He noted that his pharmacy continues to struggle with
reimbursement issues. He asserted that it is not an isolated
case of him being a terrible businessman, but rather it is a
case of the math not adding up given that demand is increasing,
prices are increasing, overhead is increasing, while
reimbursements to pharmacies are shrinking. [Pharmacies] have
no ability to set their prices, he continued, and no other
business has such little power to deal with the inflation that
is happening.
5:06:03 PM
SAMANTHA ERVIN, PharmD, BCACP, representing self, testified in
support of HB 226. support for HB 226. She stated that in her
nearly three years as a pharmacist in Tok she has become
increasingly concerned with current PBM practices because they
put a threat to all small rural pharmacies in Alaska. She
related that prior to the Tok pharmacy opening in 2021, patients
used mail order pharmacies or drove eight hours round trip for
their chronic medication needs. If critical medications came
from a mail order pharmacy, she continued, they arrived with no
counseling support on how to use complicated devices or special
ways to take the medications or which side effects to watch for.
She said some of her concerns with PBMs include forced co-pays
to use local pharmacies, refusal to send diabetic medication for
risk of freezing resulting in a loss in care, continued sending
of medications that were stopped by providers, and sending
critical lifesaving medications late, resulting in patients
going to local pharmacies for the medication to prevent a lapse
in care and having to pay again. The option to use mail order
pharmacies should be kept as an option, she stated, not a must.
5:08:12 PM
DARLENE HUNTINGTON, representing self, testified in support of
HB 226. She stated that she primarily serves patients residing
in villages throughout Interior Alaska. Because the villages
are not connected to a road system, she continued, patients
cannot walk down the street to a local pharmacy to rectify a
prescription that has been damaged in transit or damaged due to
weather. She said the PBM mail order system does not
accommodate for real life scenarios in villages, such as post
offices sometimes being closed for long periods due to
postmaster staffing shortages, medications getting stuck in the
US Postal Service for extended periods of time and having to be
wasted because of going out of an acceptable temperature storage
range, and patients being unable to cross rivers during spring
breakup to get to a post office. She asserted that the current
PBM model does not provide an acceptable level of care and
diligence that is provided by local pharmacists in Alaska and
does not fit or serve the logistical challenges of communities
in rural Alaska.
5:10:30 PM
GERALD "JERRY" BROWN, Pharmacist, representing self, testified
in support of HB 226. He related that about 10 years ago he and
his wife purchased a legacy pharmacy in Fairbanks but lost the
pharmacy because of the negative revenue that was being forced
on them by the PBMs. He stated that 10 years ago the gross
margins were about 22 percent as compared to 2 percent today,
which makes it impossible to hire enough pharmacists and/or
staff to conduct business and so the pharmacy was running in
negative revenue. The purpose of government, he said, is to
provide and develop infrastructure for the state and develop
rules of conduct through legislation to provide a stable tax
state and guide the future of Alaska.
5:12:59 PM
DIRK WHITE, RPh, representing self, testified in support of HB
226. He stated that the retail pharmacy world is under attack
by pharmacy benefit managers. He maintained that PBMs have a
hidden agenda to close all competition, which has been creating
health care deficits across the US, including Alaska. He
recounted that just today two patients informed his pharmacy
that Optum, the State of Alaska's pharmacy benefit manager,
called them trying to get them to move to mail order pharmacy
out of state. How many other patients have been called, he
asked. He argued that it is an egregious policy when Alaska's
retiree and active employee pharmacy benefits manager tries to
remove patients from [local] care and get them to go to mail
order. This pulls money from Alaska's fragile state economy, he
said, and Sitka is isolated on an island without other economic
engines. The PBMs must be stopped, he submitted, because they
only care about their profits and not Alaska's citizens or their
health.
5:14:49 PM
MEGAN PENNER, PharmD, BCPS, representing self, testified in
support of HB 226. She stated that she recently had corneal
transplants, and as a patient herself she has seen the impacts
of PBMs on medication access because limited pharmacies carry
the eye drops that she needs. She said PBMs have forced Tri-
Care's hand on restricting where she can get her prescriptions
filled in Eagle River, resulting in significant delays in
accessing the medication she needs for her transplants. She
related that as a hospital pharmacist she sees the impacts of
PBMs in transitions of care and she often worries that patients
will not receive their prescriptions in a timely manner because
of PBMs. As an educator, she further related, she sees the
impacts of PBMs on new graduates as they have decreased
opportunities for work in Alaska's small local pharmacies.
5:15:52 PM
MARK BOHRER, RPh, Pharmacy Practice Coordinator, Fred Meyer,
testified in support of HB 226. He stated that Fred Meyer
believes HB 226 represents a step towards safeguarding patients'
rights and improving access to quality health care. The reforms
in HB 226, he said, would ensure that patients have the freedom
to choose their pharmacy without undue influence from PBMs;
would bring PBMs within the purview of the Alaska Unfair Trade
Practices and Consumer Protection Act; and would require
reimbursement at an objective and transparent standard. He put
forth that the PBM practice of reimbursing pharmacies below drug
acquisition cost has led to permanent and/or temporary pharmacy
closures within Alaska. Those pharmacies that have not yet had
to close their doors or reduce hours, he advised, have not yet
had to make the difficult decisions of which drugs to stock, how
to remain open without making staffing cuts, or not renewing
certain third-party contracts due too low a reimbursement. He
said HB 226 will help ensure pharmacies continue providing
Alaskans with the same level of service and access to
medication, and will advance patient rights, improve health care
outcomes, and promote fairness in the pharmacy industry.
5:18:12 PM
BRITTANY KARNS, PharmD, representing self, testified in support
of HB 226. She related that she has worked across a spectrum of
pharmacies, and all are being directly impacted by bad PBM
practices. The bottom line, she submitted, is that PBMs are big
businesses that are making big money off unfair practices and
what [Alaska's pharmacies] are asking for is fair practices.
Local pharmacies, she said, are telling the committee today that
they are being choked out by big businesses who want all that
money. She questioned the choice to have white and brown
bagging practices when clinics and hospitals already have
pharmacies staffed with Doctors of Pharmacy, who have completed
residencies. The only reason, she answered, is so the PBMs can
make the money on the drug and other people do all the work.
The medications are shipped with no instructions, she continued,
and then the recipients come to her pharmacy to ask how to do it
and she doesn't make any money. She asserted that the PBM model
is not transparent, and it drives the money out of state, while
constituents tell their legislators that it is killing their
businesses and driving pharmacy out of Alaska.
5:20:32 PM
KAREN MILLER, Pharmacist, representing self, testified in
support of HB 226. She said she is concerned about access to
pharmacy care and noted that in the last two years independent
pharmacies have closed their doors or decreased their hours.
For example, she continued, her employer Denali Pharmacy is
supported by a facility but had to [reduce the time it is open
by five hours]. She said she is concerned about the practices
of PBMs and all she is asking for is transparency. She offered
her belief that when PBMs say they save health care dollars,
these savings turn into a burden of cost to providers,
pharmacies, and patients. [Providers] are having to hire more
staff, she specified, one full time equivalent (FTE) for every
five providers, just to deal with the PBM practices for paying
claims, or contracting with third party vendors for thousands of
dollars a year just to figure out what medication is currently
covered by this pharmacy benefit plan. Further, she related,
pharmacies are not getting reimbursed for the cost of the drug,
let alone a dispensing fee. Patients are paying bigger co-pays
than ever before, she continued. Where are the cost savings,
she asked, to a patient who ends up in the intensive care unit
(ICU) for diabetic ketoacidosis (DKA) because they couldn't
afford to pick up their insulin?
5:23:06 PM
CHAIR SUMNER closed public testimony on HB 226.
[HB 226 was held over.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB313 PowerPoint Presentation for HL&C.pdf |
HL&C 3/25/2024 3:15:00 PM |
HB 313 |
| HB313 ver. A.pdf |
HL&C 3/25/2024 3:15:00 PM |
HB 313 |
| HB313 Transmittal Letter.pdf |
HL&C 3/25/2024 3:15:00 PM |
HB 313 |
| HB313 Sectional Analysis ver. A.pdf |
HL&C 3/25/2024 3:15:00 PM |
HB 313 |
| HB313 Fiscal Note DCCED-RCA.pdf |
HL&C 3/25/2024 3:15:00 PM |
HB 313 |
| HB 324-Sponsor Statement.pdf |
HL&C 3/25/2024 3:15:00 PM |
HB 324 |
| HB 324 Sectional Analysis.pdf |
HL&C 3/25/2024 3:15:00 PM |
HB 324 |
| HB 324 Supporting Documents-State Map.pdf |
HL&C 3/25/2024 3:15:00 PM |
HB 324 |
| HB233 Support Letter - Chair of Automative and Diesel Tech UAA.pdf |
HL&C 3/25/2024 3:15:00 PM |
HB 233 |
| UA TVEP_HLC Committee_3-25-24.pdf |
HL&C 3/25/2024 3:15:00 PM |
HB 55 |
| 2024 UA TVEP Reauthorization Report.pdf |
HL&C 3/25/2024 3:15:00 PM |
HB 55 |
| FY23 AWIB Technical and Vocational Report.pdf |
HL&C 3/25/2024 3:15:00 PM |
HB 55 |
| AWIB Resolution Supporting Reauthorization of TVEP-docx.pdf |
HL&C 3/25/2024 3:15:00 PM |
HB 55 |
| B.pdf |
HL&C 3/25/2024 3:15:00 PM |
HB 324 |
| Summary of Changes HB 324 – Bill Ver A to B.pdf |
HL&C 3/25/2024 3:15:00 PM |
HB 324 |
| 20240325 AK HB 226 COA support.pdf |
HL&C 3/25/2024 3:15:00 PM |
HB 226 |
| HB218 Amendments.pdf |
HL&C 3/25/2024 3:15:00 PM |
HB 218 |