Legislature(2005 - 2006)CAPITOL 106
04/25/2006 03:00 PM House HEALTH, EDUCATION & SOCIAL SERVICES
| Audio | Topic |
|---|---|
| Start | |
| HB322 | |
| HJR30 | |
| HB452 | |
| Overview(s) || American Heart Association – Obesity and Health | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 322 | TELECONFERENCED | |
| *+ | HB 452 | TELECONFERENCED | |
| *+ | HB 396 | TELECONFERENCED | |
| *+ | HCR 31 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| += | HJR 30 | TELECONFERENCED | |
HB 452-ALASKA PRESCRIPTION DRUG TASK FORCE 4:06:27 PM CHAIR WILSON announced that the next order of business would be HOUSE BILL NO. 452, "An Act establishing the Alaska Prescription Drug Task Force; and providing for an effective date." REPRESENTATIVE SEATON moved to adopt HB 452, Version A, as the working document. There being no objection, HB 452 was before the committee. 4:06:43 PM REPRESENTATIVE DAVID GUTTENBERG, Alaska State Legislature, sponsor of HB 452, reminded the committee that the legislature has recently addressed the Public Employees' Retirement System (PERS) and Teachers' Retirement System (TRS) and workers' compensation, all of which are related to rising health care costs. He related the following: pharmaceuticals are the fastest growing segment of Alaska's rising health care costs, one of four of Alaska's seniors choose between taking medication and purchasing food, an average American consumes about 3 billion prescriptions a year. In fact, between 1995 and 2003, the average increase for prescription drug expenditures was 15 percent higher than any other health expenditure. He pointed out that the committee packet should include a chart that illustrates that prescription drug expenditures are about triple that of other health care costs. Representative Guttenberg then related that the March 2006 research survey of the Institute of Social and Economic Research (ISER) found that the average price for retail prescriptions was 25 percent higher in Alaska than in other states. He noted that there are many issues on the table that address more than the cost of the drug. With regard to the proposed task force, Representative Guttenberg said that it doesn't restrict or limit the many options that are available to reduce the cost of prescription drugs. 4:10:33 PM SHARON TREAT, Executive Director, National Legislative Association on Prescription Drug Prices (the Association), began by relating that the Association is a group of legislators who came together back in 2000. The Association has grown and researches ways in which to reduce prescription drug prices. The legislation before the committee provides the committee with the opportunity to coordinate the various agencies that have a piece of the prescription drug and health care issue as well as experts throughout the state in order to ensure that affordable prescription drugs can be accessed by as many people as possible within the budget constraints of the state. Ms. Treat related that HB 452 is very similar to legislation passed in West Virginia in 2004 and in Maine in 2005. Such legislation is pending in several other states as well. MS. TREAT explained that the legislation in both West Virginia and Maine established a task force to review bulk purchasing and pooling of prescription drugs within the state as well as with other states, as is proposed in HB 452. [Bulk purchasing/pooling of prescription drugs] is a way to leverage a good price when negotiating for Medicaid programs. One of the big issues being faced by many states, including Alaska, is that all those Medicaid recipients who have been moved to Medicare Part D are now not in the purchasing pool. The aforementioned makes it more difficult to negotiate a good price and thus [HB 452] is a way of "beefing that up." In Maine there's a three- state purchasing pool that has already saved $1 million in the Medicaid program over the last year. The aforementioned purchasing pool has benefited Maine's program that helps provide access to [prescription] drugs to the elderly, which is similar to Alaska's program. Ms. Treat noted that her written testimony, included in the committee packet, provides more information. She then informed the committee that Colorado is considering a purchasing pool for which the savings have been projected to be about $3 million. Furthermore, the proposed task force would review other ways to provide information to physicians and other health care practitioners in order to reduce the cost of prescription drugs. She then informed the committee that Pennsylvania is providing independent, objective information that Alaska could utilize to its benefit. The task force would review various other ideas. She highlighted that HB 452 suggests that Alaska join the Association, which the Association certainly supports. 4:16:27 PM CHAIR WILSON asked if there are other western states besides Colorado that are interested in joining the purchasing pool. MS. TREAT opined that Utah is possibly addressing this matter. She indicated that perhaps similar size states would come together, particularly those with smaller populations. There has been much review in the states of Washington and Oregon with regard to evidence-based medicine and providing information to physicians with regard to alternatives. In fact, Washington has a purchasing pool that, even with a limited preferred drug list (PDL), has saved money. 4:18:22 PM MS. TREAT commented that it's not the easiest thing for several states to come together [for a purchasing pool] because every state has a slightly different Medicaid program. In fact, the sovereign states group hired a nonprofit organization that was adept at working with various [groups] to help them [leverage purchasing drugs]. In a slightly different fashion, West Virginia and other states attempted to do joint purchases. REPRESENTATIVE GUTTENBERG indicated that the state is in a multi-state pool for Medicare with states similar in size, such as West Virginia, Maine, and Vermont. 4:20:24 PM REPRESENTATIVE SEATON inquired as to how this ties in with state's that have different preferred drug lists. MS. TREAT said that it may complicate things. However, the states that have entered into the earlier mentioned purchasing pool have a memorandum of understanding that specifies that each state will plan its own Medicaid programs but that they will work together. This is just one opportunity to save money, she said. Ms. Treat commented that she didn't know the extent to which Alaska utilizes programs that promote the purchase of generic brands. This task force, she opined, allows experts to come together and review a number of opportunities with the goal of determining what works best for Alaska. 4:22:32 PM REPRESENTATIVE SEATON expressed interest in the relationship of the claw back and Medicare Part D. He recalled that at one point the states may pay more than 100 percent of the federal obligation under Medicare Part D; he asked if that's correct. MS. TREAT answered that it depends upon the state. She offered to research it for Alaska. Ms. Treat then explained that the claw back was based on the formula, which was based on the increase of drug prices and state Medicaid prices over a specified period of time. States that had been utilizing programs such as preferred drug lists and purchasing pools and kept their costs down are penalized under the formula because it assumes that the Medicaid costs were much higher than they actually were. However, other states that had not implemented cost saving measures benefited. For example, Maryland received more funds than it was able to utilize for various wrap-around prescription drug services for those who applied for Medicare Part D. However, Maine had implemented so many cost saving measures that the level of inflation was well below that of other states and thus Maine will have to pay more than it actually cost to provide the Medicare benefit. MS. TREAT explained that with regard to the purchasing pool, the states that are negotiating with drug companies to obtain a good Medicaid price, part of that ability to negotiate was tied to the people tied to the purchasing pool. However, now that people have been moved to Medicare Part D, those individuals are out of the state purchasing pool, which leaves the states with much less leverage and control over the health of those individuals. 4:26:06 PM PAUL RICHARDS, Lobbyist, Pharmaceutical Research and Manufacturers of America (PhRMA) Incorporated, testified in opposition to HB 452, which PhRMA believes "would establish a process to control prescription drug prices, regulate advertising and marketing, determine what information health care practitioners provide to patients, and essentially regulate a private sector industry." He noted that the committee packet should include a written statement from PhRMA. He then informed the committee that PhRMA has worked to educate and reduce costs. In fact, PhRMA has worked in each state in patient prescription drug programs to identify and involve seniors in the state with patient programs for each pharmaceutical company represented by PhRMA. Over 14,000 Alaskans are signed up for patient prescription assistance programs in the state due to PhRMA's efforts. CHAIR WILSON explained that the drug companies will be called into testify on this matter. 4:28:27 PM DWAYNE PEEPLES, Director, Division of Health Care Services (DHCS), Department of Health and Social Services (DHSS), informed the committee that the department implemented a preferred drug list in 2003. Alaska was also one of the first pool states that was referenced earlier. He recalled that initially Alaska pooled with five other states. Some of the states involved in the pool were Nevada, Michigan, Vermont, and Wisconsin. He noted that Vermont is initiating separation from the pool in order to create a nonprofit corporation pool. Originally, Alaska pooled under the state's current fiscal agent, First Health Services. CHAIR WILSON asked if the state has realized savings due to the pool. MR. PEEPLES replied yes. The pooling of the lives into purchasing power resulted in a supplemental rebate, which amounted to about $6-$7 million a year until the state transitioned to Medicare Part D. Additionally, the state established a preferred drug list that was operated under the auspices of the PNT committee. With the supplemental rebate and moving prescribing behavior to generic and cheaper drugs contributed $1-$2 million in savings. Therefore, Alaska's experience was positive until this January when the state transitioned to Medicare Part D. In further response to Chair Wilson, Mr. Peeples explained that there are several ways to implement a PDL. With the cooperation of the vast majority of the physicians in the state, Alaska requires that if one is going off of the PDL drug, the prescription must specify "medically necessary." The medical community has been very cooperative and supportive. Mr. Peeples related that when balancing the cost of operating a restrictive program versus how Alaska has run its program, the state has been reasonably successful. [HB 452 was held over.]
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