Legislature(2017 - 2018)SENATE FINANCE 532
04/17/2017 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB37 | |
| HB56 | |
| SB4 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 37 | TELECONFERENCED | |
| += | HB 56 | TELECONFERENCED | |
| += | SB 4 | TELECONFERENCED | |
SENATE BILL NO. 37
"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."
9:33:55 AM
Vice-Chair Bishop MOVED to ADOPT proposed committee
substitute (CS) for SB 37, Work Draft 30-LS0191\R (Bruce,
4/15/17).
Co-Chair MacKinnon OBJECTED for discussion.
JANE CONWAY, STAFF, SENATOR CATHY GIESSEL, discussed the
document "Sectional Analysis CS for Senate Bill 37(FIN) -
Version R" (copy on file):
Section 1: Amends AS 08.80.030(b) by adding a new
subsection:
(14): Establishes qualifications and duties of
executive administrator. Executive administrator is
delegated authority in order to conduct board
business.
Section 2: Amends AS 08.80.030(b) by adding a new
subsection:
(15): Amends and allows licensing and inspection for
out-of-state drug distributors, third-party logistics
providers and outsourcing facilities;
Section 3: Amends AS 08.80.030 by adding a new
subsection:
AS 08.80.030(c): Specifications for facilities,
equipment, personnel, and procedures for control of
drugs in compliance with the federal Drug Supply Chain
Security Act.
Section 4: Amends AS 08.80.157 by adding a new
subsection:
(k): Requires wholesale drug distributors, third-party
logistics providers, and outsourcing facilities
outside the state under AS 08.80.159, to be licensed.
Section 5: Amends AS 08.80 by adding a new section:
Sec. 08.80.159: Requires that a wholesale drug
distributor, third party logistics provider, 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 federal 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 6: 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 and
salary range of the executive administrator.
Section 7: Amends AS 08.80.480 by adding a new
paragraph:
AS 08.80.480(37): Defines "outsourcing facility"
AS 08.80.480(38): Defines "third party logistics
provider"
Section 8: Amends AS 39.25.120(c)(7) by adding
(Q) Board of Pharmacy
Sections 9, 10, 11:
Provides transition language and effective date clause
Ms. Conway noted that Sections 1, 6, 8, and 9 had immediate
effective dates. Sections 2, 3, 4, 5, and 7 had an
effective date of July 2018; which gave the department time
to set up the licensing program. The department had
recommended the time frame.
Co-Chair MacKinnon asked if Ms. Conway could point out the
difference between the CS from the Senate Labor & Commerce
Committee, and the CS being considered by the committee.
9:38:55 AM
AT EASE
9:39:48 AM
RECONVENED
Ms. Conway related that the Senate Labor and Commerce
Committee had removed two lines that had stated the
executive administrator shall serve as a liaison to the
legislative and executive branches of state government and
the media, and other state pharmacy boards. She added that
there had been other changes in the current CS to reflect
the companion bill HB 9. She asserted that the companion
bill stated the full intent of the legislation.
Additionally, the companion bill established the range and
partially-exempt status of the executive administrator
position, which had not been in the Senate Labor and
Commerce Committee version of the bill. She informed that
various effective dates had been added to the CS being
considered.
Co-Chair MacKinnon WITHDREW her OBJECTION. There being NO
further OBJECTION, it was so ordered. The CS for SB 37(FIN)
was ADOPTED.
9:41:14 AM
SENATOR CATHY GIESSEL, SPONSOR, referenced the end of the
bill. She noted that the bill was by request of
pharmacists, and authorized an executive administrator
position for the Board of Pharmacy. She discussed Medicaid
reform and the focus on the opioid crisis in the state. She
stated that there had been many new duties delegated to the
Board of Pharmacy. Heretofore the board had relied on
licensing division staff to perform the administrative
duties of the board. Considering the additional
responsibilities, she emphasized that the board needed a
designated executive to oversee functions. She added that
establishment of the position was one of the key pieces of
the proposed legislation.
Senator Giessel stated that the bill addressed where
prescriptions came from. She discussed the origin of
prescription medications, and informed that there were
manufacturers in the Lower 48 that distributed medications
to various pharmacies in the country. She informed that
Alaska was one of only two states that did not license the
medication distributers. She mentioned the Drug Quality
Security Act of 2013, which was a federal law that required
a license for distributors, and would ensure that
medications shipped to Alaskan pharmacies were safe. She
referred to adulterated/contaminated medications that had
caused deaths in the past. She detailed that individuals
had died of meningitis as a result of the contaminated
medications. The bill would establish the ability for the
Board of Pharmacy to license the outsourcing facilities and
drug distributors, and would authorize an inspection. The
board would delegate an individual to do the inspection or
accept another pharmacy board's authorization by
reciprocity. She confirmed that the bill would not result
in more travel expenses for the board.
Senator Giessel emphasized the SB 37 was a public safety
bill, and that it would help the Board of Pharmacy execute
all the duties that the legislature asked them to do. She
relayed that there were six pharmacists that could provide
information on the bill with great detail.
Senator Hughes thanked the sponsor for bringing the bill
forward. She asked if other states that had enacted such
licensure had seen any reduction in access to medications.
Ms. Conway thought the pharmacy board might better answer
the question.
9:45:32 AM
Senator Olson asked about the reported deaths from
adulterated medications, and wondered if they were outside
of Alaska.
Senator Giessel confirmed that the deaths had not been in
the State of Alaska.
Senator Olson asked if the states in which the deaths
occurred had the legislation in place.
Senator Giessel relayed that a nationwide fungal meningitis
outbreak had occurred in 20 states in 2012, and occurred in
Massachusetts at a compounding pharmacy. She clarified that
compounding pharmacies were included in the bill. She was
not sure if the establishment had been licensed and
inspected or not.
Ms. Conway thought that the State of Massachusetts did not
have licensing like what was proposed in the bill.
Senator Olson asked theoretically if the legislation had
been in place in Massachusetts, if people would have been
protected.
Ms. Conway answered in the affirmative.
Senator von Imhof understood that the fiscal note stated
that the total amount of revenue collected approximately
equalled the occupation's actual regulatory cost. She asked
if the sponsor had completed an analysis as to a potential
increase in license fee to support the additional fiscal
note.
Senator Giessel advised that the Board of Pharmacy had
suggested a licensing fee of about $500 per wholesale
distributor or outsourcing facility. She relayed that there
was a very large number of such facilities, therefore it
was ultimately believed to be a zero fiscal note.
9:48:23 AM
Co-Chair MacKinnon OPENED public testimony.
SCOTT WATTS, PHARMACIST, JUNEAU, spoke in support of the
bill. He stated that he had been a local pharmacist for the
previous 27 years, and owned and operated two retail
pharmacies in Juneau. He reasoned that the legislation
would create a secure drug supply chain by allowing the
licensing and inspection (if needed) for wholesalers
outside the state. He stated that all his purchases of
medication occurred outside of Alaska, most of which came
from one of three major wholesalers. He relayed that his
business received many calls from smaller distributors
claiming to have lower prices. He wanted assurance that any
distributor to the State of Alaska would have unadulterated
medications that had been stored properly. He discussed the
opportunity to pursue lower cost products if the facilities
were vetted properly. He thought the bill would allow the
Board of Pharmacy to ensure that medications were safe for
Alaskan residents.
9:51:52 AM
Senator Hughes asked if there was a national certification
for facilities, or if the state would be responsible to
inspect facilities or obtain proxy verification.
Mr. Watts stated that there were national certifications,
and many wholesalers could be certified or licensed through
the State of Alaska by reciprocity without duplicating the
licensures.
Senator Hughes asked if it was anticipated that in order
for a facility to be licensed, it would need a national
certification.
Mr. Watts was not aware of the details, and thought the
board might be able to provide more information.
Senator Hughes thought that a national certification would
provide a level of assurance for the state.
Senator Olson asked how the bill would impact the cost of
medication for patients.
Mr. Watts did not expect there would be any difference to
the cost of medication as a result of the bill.
Senator Olson suggested that someone had to pay for the
inspection of facilities.
Mr. Watts thought that the cost would not get passed on
from the pharmacy.
9:55:22 AM
LEIF HOLM, CHAIR, BOARD OF PHARMACY, FAIRBANKS (via
teleconference), testified in support of the bill. He
stated he was the owner of three independent pharmacies. He
echoed the comments of the previous testifier. He thought
the bill would hold entities accountable to the same
standards of practice as those doing business from within
the state. He thought the proposed requirements were no
different from most professional licensees wishing to do
business in the state from outside. He relayed that the
board felt the proposed position was long overdue, and was
a necessity as the board continued to fall behind with
regard to timely licensing. The board felt the position
would greatly increase efficiency in licensing, as well as
the ability to stay up-to-date on statutes and regulation
changes. He stated that it was the intention of the board
that the funding for the position would rest solely with
the board, and would be easily attainable through new
licensing fees. The position would not require an increase
in fees to those already licensed by the board.
Co-Chair MacKinnon asked why the board chose the name
"administrator" rather than "director" for the proposed
position. She asserted that other boards had commonly used
the title of executive director.
Mr. Holm stated that he only became familiar with the term
after serving on the board.
9:58:05 AM
RICHARD HOLT, VICE CHAIR, BOARD OF PHARMACY, WASILLA (via
teleconference), spoke in support of the bill. He stated
that he was the Vice-Chair of the Board of Pharmacy. He
thought the sponsor had done a superlative job of
presenting the details of the bill. He thought the sponsor
had provided clarity around the issue of patient safety and
understanding where medications came from out of state. He
discussed the complexity and degree of medication
regulation in the bill, and through other legislation. He
addressed the question of reducing the number of sources
for medication distribution. He recalled that previous
testimony had indicated there were over 1,200 wholesale
medication distributors in the country. He thought the
State of Oregon had about 400 or 500 distributors. He did
not think the licensure would decrease the number of
sources for patients in Alaska, but thought it would
increase safety.
Mr. Holt referred to the executive administrator position
and the fiscal note, and clarified that the bill proposed
to create three additional licensing categories. He did not
anticipate seeing any license fee increases for existing
licensees, but the proposed position would be funded
through the licensing category created through the bill. He
thought the bill was needed to ensure the safety of
patients and assist the board with its administrative
function.
Co-Chair Hoffman asked Mr. Holt if the bill would have an
impact on Alaska Native health corporations.
Mr. Holt was not sure of any impact to Alaska Native health
corporations, as he did not know the source of the
corporation's medications.
10:01:10 AM
Senator Hughes asked if Mr. Holt could speak to her earlier
question about national certification for facilities. She
thought the requirement for all distributors to be
inspected was putting a lot of pressure on the board, and
on the executive administrator.
Mr. Holt was not aware of the state requiring a national
certification. He informed that each state had regulation
governing its own practice. The board had discussed a
Verified Accredited Wholesale Distributors (VAWD)
designation which was an inspection through the National
Board of Pharmacy; but he did not know if it was required
in every state. He stated that the board would discuss the
matter when it was creating regulations, so that there
would be standardized approach.
10:03:06 AM
BARRY CHRISTIANSEN, ALASKA PHARMACIST ASSOCIATION,
KETCHIKAN (via teleconference), testified in support of the
bill. He relayed that he was a practicing pharmacist, and
served as Co-chair of the Alaska Pharmacists Association
Legislative Committee. He informed that the association was
made up of pharmacies, pharmacists, and pharmacy
technicians throughout the state. He thought the bill was
very necessary. He spoke in support of previous testimony,
and stated that the association was in full support of the
legislation.
10:04:11 AM
GERALD BROWN, SELF, FAIRBANKS (via teleconference), spoke
in support of the bill. He relayed that he was a pharmacist
and an independent pharmacy owner. He thought the sponsor
had done an excellent job of presenting the bill. He
thought the legislation was needed, and without it there
was no way of knowing the origin of medications. He asked
for the support of the committee.
10:05:30 AM
DIRK WHITE, PHARMACIST, SITKA (via teleconference),
testified in support of the bill. He relayed that he was a
past board member of the Board of Pharmacy. He referred to
the Drug Quality Security Act. He stated that there was
federal legislation moving forward to allow broad drug
importation to the United States. He thought it was more
important than ever to have assurance that medications were
safe. He addressed the VAWD, which he likened to a Good
Housekeeping Seal of Approval for a wholesaler. He thought
many states would use the designation as verification. He
described the designation as a "very thorough top to bottom
inspection" of how drugs were handled.
10:08:24 AM
Senator Olson considered the levels of existing inspection,
and thought there was an implication that the 2013 Drug
Quality Security Act had not been adequate. He wondered
what added benefit the proposed legislation would provide.
Mr. White discussed existing medication quality control,
including inspections by the United States Food and Drug
Administration. He thought any increase in cost as a result
of the bill would be absorbed by wholesalers.
Senator Hughes asked if the state was currently bringing in
medication from wholesalers or suppliers outside of the
United States. She wondered if the bill would give
authority to require licensure for entities out of the
country.
Mr. White stated that currently pharmacists were not
legally allowed to import medications from outside the
country for resale. He stated that there were many
companies that manufactured drugs outside the United States
(U.S.). He believed that there had been legislation to
allow for the import of drugs (during the Clinton
administration), but it had been struck down by the U.S.
Department of Justice. He added that it was possible to
purchase personal medications outside the country.
10:12:56 AM
Co-Chair MacKinnon CLOSED public testimony.
Vice-Chair Bishop discussed FN1(CED), OMB Component number
2360. He detailed that there was an initial cost of
$184,200 in FY 18; and $157,500 annual cost from FY 19
through FY 23. There would be a cost of $136,500 for one
permanent full-time executive administrator at range 23.
There was a travel cost of $6,000 for the administrator to
attend four board meetings per year. There was a legal cost
for $16,700 to help amend regulation, and to include
printing and postage. There was a $15,200 cost in
reimbursable service agreements; and $10,000 in
commodities. He read the last paragraph from the analysis
on the second page of the fiscal note:
Professional licensing programs within the Division of
Corporations, Business and Professional Licensing are
funded by Receipt Supported Services, fund source 1156
Rcpt Svcs (DGF). Licensing fees for each occupation
are set per AS 08.01.065 so the total amount of
revenue collected approximately equals the
occupation's actual regulatory costs.
Co-Chair MacKinnon set the bill aside.
SB 37 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| CSSB 37 (FIN) Sectional Analysis version R 4-14-17.pdf |
SFIN 4/17/2017 9:00:00 AM |
SB 37 |
| SB 37 Work Draft Version R.pdf |
SFIN 4/17/2017 9:00:00 AM |
SB 37 |
| CS SB 37 (FIN) vsn R Sponsor Statement.pdf |
SFIN 4/17/2017 9:00:00 AM |
SB 37 |
| SB 37 CSSB 37(SFIN) Responses to Questions 4-17-17 cg.pdf |
SFIN 4/17/2017 9:00:00 AM |
SB 37 |