Legislature(2021 - 2022)BARNES 124
05/02/2022 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB301 | |
| HB382 | |
| SB190 | |
| Workers' Compensation Appeal Commission | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 301 | TELECONFERENCED | |
| + | HB 382 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 190 | TELECONFERENCED | |
HB 382-INSULIN COVERAGE:INSURANCE;MEDICAID
4:32:34 PM
CO-CHAIR FIELDS announced that the next order of business would
be HOUSE BILL NO. 382, "An Act relating to insurance coverage
for pharmacy services." [Before the committee was CSHB
382(HSS).]
4:32:39 PM
REPRESENTATIVE SNYDER, as prime sponsor, stated that CSHB
382(HSS) could have immediate and meaningful impacts to the
pocketbooks of Alaskans because it addresses the astronomically
high cost of insulin. In 1996, she related, the list price for
a vial of insulin was $21; today that list price is about $300 -
four times the cost that would be expected based on inflation
alone. She said this puts many folks with diabetes in a
situation where they are making choices about what they can
spend their limited household income on when they need to
purchase insulin plus pay rent or buy food.
REPRESENTATIVE SNYDER specified that about 49,000 Alaskans have
been diagnosed with diabetes and an additional 15,000 have
diabetes but don't know it yet. Another 5,000 Alaskans are
diagnosed with diabetes every year, making it a growing problem.
About 34 percent of Alaska's adult population, about 182,000
people, have pre-diabetes. So, she added, this bill has the
potential to impact a significant proportion of Alaska's
population.
REPRESENTATIVE SNYDER pointed out that about 20 states now have
similar legislation. In Minnesota, two health insurers decided
independently to cap insulin costs at $25 a month for their
patients, and Blue Cross/Blue Shield has announced a $0 co-pay
cap on insulin for its patients. So, she continued, capping the
co-pay is becoming an important mitigation measure for
Americans. Medicare Part D plans agreed to cap insulin at $35
per month starting in 2021. This bill is an opportunity for
Alaskans to directly feel this same benefit, she stressed.
Regarding whether capping co-pays could result in increased
insurance premiums for everyone, she cited the 2017 Milliman
Study which found that the cost to provide the benefit would be
about 70-95 cents per member per year. That doesn't account for
the potential to reduce premiums overall, Representative Snyder
continued, because better managed diabetes through improved
access to insulin decreases healthcare costs associated with the
complications of poorly managed diabetes, such as amputations.
She further noted that in 2021 the state of Washington voted to
cap its insulin co-pays at $100 a month, which resulted in an
average proposed rate decrease of almost 2 percent within that
year. Kentucky introduced an insulin co-pay cap [at a cost to
provide the benefit] of 7-24 cents per person per month on fully
insured policies, and California is similar.
JAMES HOLZENBERG, Staff, Representative Liz Snyder, Alaska State
Legislature, during the hearing on HB 382, explained the change
made in CSHB 382(HSS) on behalf of Representative Snyder, prime
sponsor. He said the change was on page 2, line 6, Section 2,
coverage for treatment of diabetes, where the proposed co-pay
cap was brought down to $35.
REPRESENTATIVE SNYDER added that the bill is an opportunity to
make a small change to something that affects many Alaskans, and
it will have a long-term beneficial impact for all Alaskans
regardless of whether they experience diabetes themselves.
CO-CHAIR FIELDS noted that $35 is consistent with other states
and pending federal legislation, hence the change.
4:39:09 PM
REPRESENTATIVE MCCARTY asked whether insulin could be purchased
in bulk to bring down the price, as is being done in Utah.
REPRESENTATIVE SNYDER replied that this opportunity has not yet
been explored by the Division of Insurance, but it is something
that can be pursued. She said the Utah program has been going
for a couple years but there is not yet data on its success.
She said she shares Representative McCarty's interest in whether
this would be a good option for Alaska.
4:40:53 PM
LORI WING-HEIER, Director, Division of Insurance, Alaska
Department of Commerce, Community, and Economic Development
(DCCED), replied that the House Health and Social Services
Standing Committee asked the division about the Vaccine
Assessment Council. The council, she explained, is run through
the Department of Health and Social Services (DHSS), and the
state buys vaccines in bulk and then the providers access the
vaccines from the state to get the lowest cost possible for
vaccines for children, infants, and adults. She related that
DHSS has responded that it could look at the Vaccine Assessment
Council much like looking at the Utah program, but it is not
addressed in this legislation and would need to be taken up in
another bill at another date to either mirror what Utah has done
or look at Alaska's own resources.
REPRESENTATIVE MCCARTY inquired whether DHSS could do this,
provided insulin could be purchased in bulk, rather than wait
for a statute change.
MS. WING-HEIER deferred to DHSS to answer the question. She
offered her belief that when DHSS was before the other committee
the department said it did need the legislation and would need
to do an analysis to see what it would take to bring it into
Alaska as a bulk purchase.
4:42:43 PM
REPRESENTATIVE KAUFMAN inquired about the root cause for high
insulin prices.
REPRESENTATIVE SNYDER replied that while there are different
forms of insulin, different ways of delivering it, and different
manufacturers, there are no cheaper generic options for insulin.
So, she said, it opens the door for pharmaceutical companies to
charge ever increasing prices, which has happened over the past
several decades because individuals need insulin to survive.
REPRESENTATIVE KAUFMAN surmised that "if we're not actually
affecting the price, then what we're left with is distributing
the cost across the system."
REPRESENTATIVE SNYDER stated that this bill is not where she
would like to stop with this issue. She agreed that initially
it is distributing the cost but that various studies across
multiple states show it is very minimal and is a net savings to
everyone due to lower costs associated with hospitalizations and
adverse impacts associated with uncontrolled diabetes. She
argued that passing legislation on co-pay will motivate the
insurance companies to put pressure on the pharmaceutical
companies to drive down those costs. She related that there has
not been pushback on the bill except for one letter from the
Association for Health Insurance Providers (AHIP), which is in
the committee packet. She said the letter identifies a range of
other things that can also be done, with which she agrees, such
as improving drug pricing transparency and banning pay for
delay. She explained that banning pay for delay has to do with
companies paying other pharmaceutical companies to delay the
release of generic options. However, she continued, that
doesn't really apply here for diabetes, so there are some
challenging recommendations in this single letter that aren't
quite transparent or accurate.
CO-CHAIR FIELDS noted that he asked about root cause when the
bill was before the House Health & Social Services Standing
Committee. He said the pharmaceutical companies are engaged in
price gouging and he understands the administration is exploring
action through the attorney general's office because the price
increases far exceed anything that could possibly be attributed
to production costs. He expressed his support for investigation
and follow-up by the attorney general.
REPRESENTATIVE KAUFMAN submitted that capping the co-pay and
spreading the cost across all insurance subscribers does not
result in downward pressure because the insurance company is
flexible and can share those costs and it doesn't transmit back
to the insulin manufacturer. He asked whether a mechanism could
be put into the bill so it would not be a cost sharing bill but
would instead apply downward pressure.
REPRESENTATIVE SNYDER answered that she would look forward to
exploring such an amendment with Representative Kaufman either
in this committee or ahead of the floor.
CO-CHAIR SPOHNHOLZ offered her appreciation for the sentiment in
Representative Kaufman's questions. She related that when the
bill was before the House Health and Social Services Standing
Committee it was learned that this is a case of making sure that
people are getting their insulin and not rationing this life
saving medication. She pointed out that in addition to the cost
savings of 70-95 cents per member per year identified in the
2017 Milliman Study, there is a net increase in productivity of
the Americans who receive access to this care and not having
amputations, becoming blind, or having ulcers.
REPRESENTATIVE SNYDER confirmed that the statements by Co-Chair
Spohnholz are in the ballpark. She said data shows that
irregular insulin use can increase in-patient hospital cost by
up to 41 percent. A common issue associated with poorly managed
diabetes, she explained, is foot ulcers. The charge per foot
ulcer can be up to $17,000 per ulcer, which if not treated can
lead to amputation, a horrendous and horrendously expensive
experience. Another complication, she continued, is end stage
renal disease and the price tag for complications associated
with that. She said she agrees that there is an additional
opportunity to deal with the high prices coming out of the
pharmaceutical industry itself, but that a co-pay cap can have
an initial first and quick reduction in expenses to both the
individual with diabetes and those sharing a plan.
4:50:35 PM
CO-CHAIR FIELDS opened public testimony on CSHB 382(HSS).
4:50:47 PM
LAURA KELLER, American Diabetes Association (ADA), testified in
support of CSHB 382(HSS). She confirmed that many levers can be
pulled throughout the chain to address the cost of medications
like insulin. However, she advised that as a person with type 1
diabetes, there is no other option and people are rationing and
they are dying because they do not have access to the lifesaving
medication.
MS. KELLER said ADA is urging the committee to act now because
this helps people with insurance, which is a great first step
that makes a difference in people's lives. She stated that the
Utah scenario would be a great secondary thing to do and would
impact people who don't have health insurance. She related that
a non-partisan study in California showed that with an insulin
co-pay cap a state can reduce diabetes related hospitalizations
by 10 percent in the first couple years after the bill's
passage, and there will be other savings to the state. She
stressed that people with diabetes need the insulin, there is no
other option. She pointed out that the insulin used in insulin
pumps ranges from $3-$7 a vial, which includes a company making
back its research and development and marketing. So, she said,
this situation is different than many other medications.
4:52:40 PM
CO-CHAIR FIELDS closed public testimony after ascertaining that
no one else wished to testify.
4:52:51 PM
REPRESENTATIVE MCCARTY offered his understanding that a
medication goes generic after being around for seven years. He
asked whether there is generic insulin given that insulin has
been around a long time.
MS. KELLER replied that there is not generic insulin on the
market currently. She explained that the companies which make
insulin have rebranded some of their insulin to be considered a
generic. While it is the exact same product and the exact same
manufacturers, she continued, those generic medications are
priced very similarly and therefore still not a co-pay of $25.
REPRESENTATIVE MCCARTY referenced the US Food and Drug
Administration (FDA) and asked whether cheaper insulin can be
found outside the US.
MS. KELLER responded that the FDA is looking at some "bio-
similars" and other options of potentially generic insulins, but
nothing has been approved into the market yet. She said the
insulin under discussion can be purchased in other countries,
such as Canada and Mexico, and they are the exact same brand and
formula at a much-reduced cost. But, she explained, health
insurance is currently unable to provide those insulins in that
way because the FDA and the federal government have not approved
that through proper channels.
REPRESENTATIVE MCCARTY said he has heard that the State of Utah
sends employees to Mexico for medication.
MS. KELLER offered her belief that that is correct but said she
is unfamiliar with how Utah does that and the cost that Utah is
paying. She noted that she worked with the representative for
the Insulin Utah Purchasing Program which allows people to
purchase for the same price as the employee price in the state
of Utah. That program has been very successful, she continued,
and it is a completely online program.
CO-CHAIR FIELDS said he hopes the Department of Health and
Social Services will continue examining how to obtain insulin
directly from Canada and bypass "pharma" to get lower prices.
4:55:59 PM
REPRESENTATIVE SPOHNHOLZ moved to report CSHB 382(HSS) out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, CSHB 382(HSS) was moved
out of the House Labor and Commerce Standing Committee.