Legislature(2023 - 2024)BELTZ 105 (TSBldg)

02/28/2024 01:30 PM Senate LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 121 PHARMACIES/PHARMACISTS/BENEFITS MANAGERS TELECONFERENCED
Heard & Held
-- Invited & Public Testimony --
-- Public Testimony <Time Limit May Be Set> --
+ SB 115 PHYSICIAN ASSISTANT SCOPE OF PRACTICE TELECONFERENCED
Heard & Held
-- Invited & Public Testimony --
-- Public Testimony <Time Limit May Be Set> --
**Streamed live on AKL.tv**
       SSSB 121-PHARMACIES/PHARMACISTS/BENEFITS MANAGERS                                                                    
                                                                                                                                
1:35:05 PM                                                                                                                    
CHAIR BJORKMAN announced the  consideration of SPONSOR SUBSTITUTE                                                               
FOR  SENATE BILL  NO.  121,  "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."                                                                                                                
                                                                                                                                
1:35:22 PM                                                                                                                    
SENATOR  CATHY GIESSEL,  District  E,  Alaska State  Legislature,                                                               
Juneau,  Alaska,  sponsor  of  SB   121.  She  stated  that  this                                                               
legislation addresses a very complex  subject and highlighted the                                                               
secretive - yet  dangerous - nature of the work  done by Pharmacy                                                               
Benefit Managers (PBM). PBMs are  employed by pharmaceutical drug                                                               
chains.  She said  that  PBMs significantly  affect  the cost  of                                                               
prescription   medications   -   and  these   effects   are   not                                                               
transparent. She  stated that she  has been working  with various                                                               
agencies  to  put  forth  the   best  legislation  possible.  She                                                               
explained that  the Department of  Law became involved  when they                                                               
unsuccessfully attempted to access  details of "secret" contracts                                                               
between the  PBMs and the State  of Alaska. There is  a companion                                                               
bill. She  commented that former  Senator Egan worked  on similar                                                               
legislation many years ago.                                                                                                     
                                                                                                                                
1:38:11 PM                                                                                                                    
SENATOR  GIESSEL  said  that  in 2018,  she  worked  with  former                                                               
Representative  Guttenberg  to   pass  the  first  pharmaceutical                                                               
transparency  legislation;  this  removed  a gag  rule  that  had                                                               
prevented pharmacists  from sharing information about  lower cost                                                               
alternatives to  prescribed medications.  She explained  that the                                                               
intention of  SB 121  is transparency in  pricing and  freedom of                                                               
choice for  patients. She said  that the largest three  PBMs take                                                               
in more  than $300 billion  per year.  She added that  this money                                                               
comes from customer  pockets - and from the State  of Alaska. She                                                               
noted that  Congress is  attempting to address  this as  are many                                                               
individual  states.  She  drew attention  to  a  bibliography  in                                                               
members' packets that provides additional information.                                                                          
                                                                                                                                
1:41:00 PM                                                                                                                    
CHAIR  BJORKMAN  announced  Representative Ruffridge  joined  the                                                               
meeting at 1:35 p.m.                                                                                                            
                                                                                                                                
1:41:24 PM                                                                                                                    
BRANDY   SEIGNEMARTIN,   Executive   Director   Alaska   Pharmacy                                                               
Association,  Anchorage, Alaska,  testified by  invitation on  SB
121. She said  that she is a pharmacist and  teaches with the UAA                                                               
Doctor of Pharmacy program. She  said that the current system has                                                             
allowed a few PBMs to  monopolize the marketplace and drive local                                                               
brick  and mortar  pharmacies out  of business.  She then  gave a                                                               
presentation  titled:   SB  121:  Transparency   in  Prescription                                                               
Pricing & Patient Freedom of  Pharmacy Choice. She moved to slide                                                               
2 and discussed the role of Pharmacy Benefit Managers (PBM):                                                                    
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     What is a Pharmacy Benefit Manager (PBM)?                                                                                
                                                                                                                                
       • Third party companies that act as intermediaries                                                                       
        between insurance companies, drug manufacturers,                                                                        
     pharmacies, & patients                                                                                                     
       • Originally created to help insurers control drug                                                                       
       spend, but have become perversely incentivized to                                                                        
     increase drug spend                                                                                                        
                                                                                                                                
       Why are they incentivized to increase drug spend?                                                                      
          • Create and manage formularies                                                                                       
          • Negotiate rebates                                                                                                   
          • Process claims                                                                                                      
          • Manage pharmacy networks                                                                                            
          • Operate mail-order and "specialty" pharmacies                                                                       
                                                                                                                                
MS. SEIGNEMARTIN said  that PBMs only exist in  the United States                                                               
and suggested  that this is  one reason pharmaceuticals  are more                                                               
expensive in  this country. She  stated that PBMs  take advantage                                                               
of   rebate  systems,   increasing   the  cost   of  brand   name                                                               
pharmaceuticals as they negotiate  rebates. She acknowledged that                                                               
many employers  depend on the  rebates to offset their  costs and                                                               
pointed out that rebates are not  addressed in SB 121. She stated                                                               
that PBMs  also operate their own  low-cost mail-order pharmacies                                                               
and  they demand  and/or  coerce Alaskan  patients  to use  these                                                               
pharmacies.                                                                                                                     
                                                                                                                                
1:44:10 PM                                                                                                                    
MS.   SEIGNEMARTIN  read   from  a   letter  from   the  National                                                               
Association of Attorneys General:                                                                                               
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     RE: Support for Reforming Pharmacy Benefit Managers                                                                      
                                                                                                                                
     Dear   Speaker   Johnson,  Majority   Leader   Schumer,                                                                    
     Minority Leader Jeffries, Minority Leader McConnell,                                                                       
                                                                                                                                
     In  recent  years, our  offices  and  other offices  of                                                                    
     state attorneys  general have  worked to  hold Pharmacy                                                                    
     Benefit Managers (PBMs) accountable.                                                                                       
                                                                                                                                
     The  PBMs'   original  purpose   was  to   protect  and                                                                    
     negotiate on  behalf of  employers and  consumers after                                                                    
     pharmaceutical   manufacturers   were  criticized   for                                                                    
     overpricing   medications.  Unfortunately,   in  recent                                                                    
     years,  the  PBMs  have only  made  the  pharmaceutical                                                                    
     market  more opaque  and have  been a  cause of  rising                                                                    
     drug prices.                                                                                                               
                                                                                                                                
     A small  number of  PBMs hold significant  market power                                                                    
     and are reaping abundant profits  at the expense of the                                                                    
     patients,  employers, and  government  payors the  PBMs                                                                    
     are  supposed   to  help.  Pharmaceutical   buyers  and                                                                    
     sellers  have   little  choice  but  to   employ  PBMs,                                                                    
     allowing  them to  extract both  monopoly profits  from                                                                    
     individuals  and  monopsony  profits from  the  market.                                                                    
     Moreover,  PBMs often  dictate reimbursement  rates and                                                                    
     rules  to independent  pharmacies, making  it difficult                                                                    
     for many to survive.                                                                                                       
                                                                                                                                
     Our offices and other  state attorneys general are very                                                                    
     concerned about actions taken by  PBMs that have unduly                                                                    
     raised drug  prices for consumers, and  we are engaging                                                                    
     on  the   issue  on  a  number   of  fronts,  including                                                                    
     investigation,    litigation,   and    advocating   for                                                                    
     legislative and policy reforms.                                                                                            
                                                                                                                                
     Further,  state  legislatures   have  taken  action  to                                                                    
     regulate PBMs with new and  amended state laws that are                                                                    
     often more stringent than federal  law. For example, in                                                                    
     2018 and  2019, respectively, Ohio and  Arkansas passed                                                                    
     legislation prohibiting spread pricing,  in which a PBM                                                                    
     charges payors such as Medicare  more than they pay the                                                                    
     pharmacies  supplying   the  medication,   keeping  the                                                                    
     difference   for   the   PBM.   The   U.S.   House   of                                                                    
     Representatives also passed  legislation barring spread                                                                    
     pricing for Medicaid  just this month, but  it is still                                                                    
     awaiting a vote in the Senate.                                                                                             
                                                                                                                                
     While state law can provide  the basis for oversight of                                                                    
     and lawsuits against PBMs,  States often face arguments                                                                    
     by PBMs that federal  jurisdiction and preemption limit                                                                    
     states' authority  to regulate  PBMs. For  instance, in                                                                    
     response  to  early  State   efforts  to  regulate  PBM                                                                    
     pricing, a PBM trade  association launched a barrage of                                                                    
     litigation across the  country arguing such regulations                                                                    
     were  preempted  by   the  Employee  Retirement  Income                                                                    
     Security  Act   of  1974  and  those   efforts  largely                                                                    
     succeeded  until,   years  later,  the   Supreme  Court                                                                    
     unanimously  rejected  that  argument  in  Rutledge  v.                                                                    
     PCMA, 592 U.S.  80 (2020). And now,  PBMs routinely try                                                                    
     to  evade  state  law  and  obstruct  state  regulatory                                                                    
     efforts  by   refusing  to   disclose  data   to  state                                                                    
     regulators as  well as their own  clients (i.e., health                                                                    
     plans operated by employers and the government).                                                                           
                                                                                                                                
     Thus, the FTC  and Congress must act  to ensure fulsome                                                                    
     regulation of PBMs  nationwide. Such legislation should                                                                    
     reform  PBM  practices  to  curtail  their  ability  to                                                                    
     unreasonably raise  the price  of drugs and  to require                                                                    
     greater transparency.  Such transparency  should, among                                                                    
     other things,  require PBMs to produce  pricing data to                                                                    
     health  plans and  federal and  state  regulators in  a                                                                    
     standardized format.  This will enable health  plans to                                                                    
     negotiate  better  deals  with   PBMs  and  will  allow                                                                    
     regulators to better hold PBMs accountable.                                                                                
                                                                                                                                
     Proposed  legislation to  combat high  healthcare costs                                                                    
     is before  Congress and  deserves debate  and inclusion                                                                    
     in much  needed reforms.  The DRUG  Act (S1542/HR6283),                                                                    
     Protecting  Patients Against  PBM  Abuses Act  (HR2880)                                                                    
     and The  Lower Costs,  More Transparency  Act (HR5378),                                                                    
     which is in the  Senate following recent House passage,                                                                    
     are three  such bills;  and we  believe several  of the                                                                    
     proposals  they  convey  would  be  an  important  step                                                                    
     toward reforming  this industry. With  stronger federal                                                                    
     law, state and federal  regulators can work together to                                                                    
     better meet  their shared  responsibility to  hold PBMs                                                                    
     accountable  and  improve  the  country's  health  care                                                                    
     system overall.                                                                                                            
                                                                                                                                
1:45:35 PM                                                                                                                    
MS. SEIGNEMARTIN moved to slide 3 and discussed how PBMs impact                                                                 
healthcare costs:                                                                                                               
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     How PBMs Impact Healthcare Costs                                                                                         
                                                                                                                              
        • How do they increase drug costs?                                                                                    
                                                                                                                                
             o Rebates and fees demanded of manufacturers                                                                   
               for formulary placement - responsible for                                                                        
               42% of every dollar spent on brand medicines                                                                     
               in the commercial market                                                                                         
             o Incentivize spend on higher-cost drugs in                                                                      
               order to maximize profit margin                                                                                  
             o Reimburse self-owned pharmacies at higher                                                                      
               rates than other pharmacies                                                                                    
             o Invented the fallacy of "specialty" pharmacy                                                                   
               as a guise to increase spend on higher-                                                                          
               profit margin prescriptions that they steer                                                                      
               to their owned pharmacies                                                                                        
             o Spread pricing - charging the plans more for                                                                   
               a claim than they reimburse the pharmacies                                                                       
                                                                                                                                
MS. SEIGNEMARTIN  said that the  three big PBMs control  the flow                                                               
of commerce and data in  the prescription marketplace. She shared                                                               
a  story of  her experience  working  as a  pharmacist and  being                                                               
required to  offer a higher cost  medication to a patient  when a                                                               
cheaper option was available.                                                                                                   
                                                                                                                                
1:47:40 PM                                                                                                                    
MS.  SEIGNEMARTIN  stated that  PBM  audits  do not  include  the                                                               
action  of the  PBM side  of the  claim. She  gave an  example of                                                               
"spread pricing."                                                                                                               
                                                                                                                                
1:49:54 PM                                                                                                                    
SENATOR BISHOP asked if spread pricing is real.                                                                                 
                                                                                                                                
MS.  SEIGNEMARTIN replied  yes.  She added  that  there are  many                                                               
reports detailing the  scale and scope of this  issue and offered                                                               
two examples,  one in Ohio  and one  in Utah. She  commented that                                                               
Alaska may not  be able to access the full  data to determine how                                                               
much this  is occurring in  the state, as  this is often  kept as                                                               
proprietary data.                                                                                                               
                                                                                                                                
SENATOR BISHOP said that as a union member this is alarming.                                                                    
                                                                                                                                
MS.  SEIGNEMARTIN agreed  and stated  that  many pharmacies  have                                                               
closed  and/or  have business  disrupted  as  a result  of  these                                                               
practices.                                                                                                                      
                                                                                                                                
1:52:31 PM                                                                                                                    
MS. SEIGNEMARTIN moved to slide 4:                                                                                              
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     PBMs are Harming Alaskans                                                                                                
                                                                                                                                
        • Pharmacies across Alaska are closing  crumbling                                                                       
          public  health  infrastructure  due  to  deceptive                                                                    
          practices by Pharmacy Benefit Managers                                                                                
        • 25 percent of independent pharmacies have closed                                                                      
          since  2018,  even   more  chain  and  independent                                                                    
          pharmacies  limited  staffing  and  hours.  Tribal                                                                    
          health systems feel the impact on overall care.                                                                       
        • Recently closed or closing soon: Ron's Apothecary                                                                   
          (Juneau), Foodland  Drug (Juneau),  Medical Center                                                                    
          Pharmacy   (Fairbanks),  Infusion   pharmacies  x2                                                                    
          (Anchorage), Geneva Woods (Anchorage and Wasilla)                                                                     
        • Limited services: Walgreens (rolling closures at                                                                    
          various locations), Fred  Meyer break with Express                                                                    
          Scripts,  Most have  limited hours  / staffing  in                                                                    
          some form                                                                                                             
        • At risk of limited services or closing this year:                                                                   
          Tribal   health  organizations,   35  percent   of                                                                    
          surviving independent and chain pharmacies                                                                            
                                                                                                                                
MS. SEIGNEMARTIN noted that chain  pharmacies support SB 121. She                                                               
emphasized that  this is  a broken  reimbursement model  and that                                                               
PBMs monopoly power must be broken.                                                                                             
                                                                                                                                
1:54:20 PM                                                                                                                    
SENATOR DUNBAR  questioned where  the monopoly power  comes from.                                                               
He expressed his understanding that  it does not come from access                                                               
to the drugs but from reimbursements.                                                                                           
                                                                                                                                
MS. SEIGNEMARTIN replied yes and advanced  to slide 5 to show how                                                               
the  monopoly power  works. She  stated that  PBMs have  not been                                                               
regulated   before   now.   They   are   considered   third-party                                                               
administrators and  are therefore not  beholden to any  rules and                                                               
regulations (at the state or  federal level) that insurance plans                                                               
are.  As a  result, they  have profited  greatly from  the system                                                               
they  have created.  Referring to  the slide,  she explained  the                                                               
role  of vertical  integration and  noted that  the stars  on the                                                               
slide indicate fortune 500 companies and their placement.                                                                       
                                                                                                                                
1:56:07 PM                                                                                                                    
MS. SEIGNEMARTIN moved to slide  13, showing how three large BPMs                                                               
monopolize 79 percent  of the marketplace. This  includes CVS (33                                                               
percent), Express Scripts (24 percent)  and OptumRx (22 percent).                                                               
She  asserted  that,  as  a   result  of  this  power  imbalance,                                                               
pharmacies  have zero  negotiating  power. She  pointed out  that                                                               
there are very  few state laws governing the  contracts and added                                                               
that more laws  would put guardrails around the  system and allow                                                               
more  fair  trade to  occur.  She  said  that if  pharmacists  go                                                               
against the  PBM contracts,  the contracts  can be  pulled. These                                                               
"big  three" PBMs  are under  investigation by  Congress and  the                                                               
Federal Trade  Commission (FTC).  According to  the FTC,  PBM are                                                               
stonewalling requests for information.                                                                                          
                                                                                                                                
1:57:24 PM                                                                                                                    
SENATOR DUNBAR  asked what  "pull the  contract" means.  He asked                                                               
for clarification that  the contract is between  the pharmacy and                                                               
the insurance company.                                                                                                          
                                                                                                                                
MS.  SEIGNEMARTIN returned  to  slide 5  and  explained that  the                                                               
contract is  between the  pharmacy and  the PBMs.  She reiterated                                                               
that the  direct contracting is vastly  unregulated and expressed                                                               
concern that  SB 121  would not go  into effect  until 2025-2026,                                                               
allowing time  for many  more pharmacies to  go out  of business.                                                               
She then scrolled through headlines  of Alaska news that show the                                                               
limiting of  medications and pharmacy  closures. She  returned to                                                               
slide  5 and  explained that  the  companies shown  are PBMs  and                                                               
companies  abusing the  system. She  surmised that  any testimony                                                               
against  SB 121  would be  directly from  PBMs or  from companies                                                               
concerned (as  a result  of bullying from  PBMs) that  this would                                                               
increase costs.  She emphasized  that this is  not the  case. She                                                               
noted that other states have  passed similar legislation and have                                                               
not seen an increase in costs.                                                                                                  
                                                                                                                                
1:59:42 PM                                                                                                                    
MS. SEIGNEMARTIN returned to slide  13 and discussed the vertical                                                               
integration and  stonewalling that  is occurring.  She emphasized                                                               
that this is indicative of  a pattern of questionable actions and                                                               
stonewalling by PBMs.                                                                                                           
                                                                                                                                
2:00:20 PM                                                                                                                    
SENATOR GRAY-JACKSON  commented that  this is alarming  and asked                                                               
if  PBMs  make   more  money  through  mail   order  versus  when                                                               
prescriptions are filled at local pharmacies.                                                                                   
                                                                                                                                
MS. SEIGNEMARTIN  replied that patients  are steered to  PBM mail                                                               
order partners and in doing so the PBMs increase their profit.                                                                  
                                                                                                                                
2:01:30 PM                                                                                                                    
MS. SEIGNEMARTIN moved to slide 14 and discussed spread pricing:                                                                
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Spread Pricing                                                                                                           
                                                                                                                              
        • Harms    Alaskan    employers,    patients,    and                                                                    
          pharmacies!                                                                                                           
        • Alaska Employer Example                                                                                               
        • Alaska Care                                                                                                           
        • In other states, investigations have found that                                                                       
          PBMs were overcharging their plans by millions of                                                                     
          dollars                                                                                                               
             o $223.7 million in Ohio in one year                                                                               
             o Utah uncovered $8 per prescription average                                                                       
               spread                                                                                                           
                                                                                                                                
MS.  SEIGNEMARTIN  stated  that  spread pricing  is  rampant  and                                                               
ubiquitous.   She  declared   that  this   practice  must   cease                                                               
immediately.  She noted  that Congress  is slowly  working toward                                                               
change  but  insisted  that  the   state  Legislature  must  take                                                               
immediate action. She then shared  an example of a pharmacy where                                                               
spread   pricing  was   discovered  related   to  an   employee's                                                               
prescription. When they began to  investigate, the pharmacist was                                                               
told  to cease  and  desist their  investigation  and sharing  of                                                               
proprietary  information,  or  they   would  have  all  contracts                                                               
pulled. She emphasized that this  hurts Alaskans. She also shared                                                               
examples from the state of Ohio.                                                                                                
                                                                                                                                
2:04:18 PM                                                                                                                    
SENATOR BISHOP asked  if the PBMs in Ohio made  changes once this                                                               
was discovered.                                                                                                                 
                                                                                                                                
MS.   SEIGNEMARTIN  replied   that  Ohio   has  taken   extensive                                                               
legislative action to change PBMs behavior.                                                                                     
                                                                                                                                
2:04:46 PM                                                                                                                    
CHAIR BJORKMAN announced Senator Tobin joined the meeting.                                                                      
                                                                                                                                
MS. SEIGNEMARTIN moved to slide 15:                                                                                             
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Anti-competitive, unfair trade practices                                                                                 
                                                                                                                              
        • Monopolistic practices lead to artificially                                                                           
          inflated drug costs because PBMs control the flow                                                                     
          of pharmacy commerce, reap the benefits by                                                                            
          driving business to themselves                                                                                        
        • Anti-competitive practices to discourage or                                                                           
          squash competition:                                                                                                   
             o Make ludicrous requirements and fees for                                                                         
               pharmacies wanting to dispense "specialty"                                                                       
               drugs to edge out competition                                                                                    
             o Contractually disallow local pharmacies from                                                                     
               mailing prescriptions                                                                                            
        • As PBMs grow in power and continue to have lack                                                                       
          of oversight, they are crushing Alaska pharmacies                                                                     
          with non-negotiable contracts and forcing them                                                                        
          out of business                                                                                                       
        • Reports show that PBMs reimburse their affiliated                                                                     
          pharmacies at much higher rates than local                                                                            
          pharmacies                                                                                                            
                                                                                                                                
MS.  SEIGNEMARTIN  pointed  out that  pharmacists  hold  advanced                                                               
degrees and  have a  depth of knowledge  of all  medications. She                                                               
asserted that  the reason PBMs  have additional  requirements for                                                               
"specialty" medications is solely based on financial gain.                                                                      
                                                                                                                                
2:07:05 PM                                                                                                                    
MS.  SEIGNEMARTIN advanced  to  slide 16,  which  showed a  graph                                                               
titled,  "Brand Name  Margin Over  Acquisition  Cost by  Pharmacy                                                               
Grouping in  Top 6  MCOs, 2018-2019  (Excl. 340B)"  and explained                                                               
that   PBM-owned  pharmacies   show   a  much   higher  rate   of                                                               
reimbursement (~$79-$206)  over the acquisition cost  of the drug                                                               
when compared  to smaller pharmacies (~$1-$4).  She asserted that                                                               
this is wrong.                                                                                                                  
                                                                                                                                
2:08:25 PM                                                                                                                    
MS. SEIGNEMARTIN moved to slide 17:                                                                                             
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Patient Steering                                                                                                         
                                                                                                                                
        PBMs steer patients to their own high-cost, low                                                                         
     quality mail-order pharmacies                                                                                              
        head2right Causes delays in patient care, poor outcomes,                                                                
          increased healthcare costs                                                                                            
                                                                                                                                
      Patients deserve the right to choose where they get                                                                       
     their medications!                                                                                                         
                                                                                                                                
MS.  SEIGNEMARTIN  stated  that steering  patients  to  PBM-owned                                                               
mail-order pharmacies  causes many  problems. She  explained that                                                               
often, patients show  up in a panic because  their medication did                                                               
not arrive,  or it  froze in  transit and  is no  longer useable.                                                               
This  causes delayed  and  fractured care,  which  leads to  poor                                                               
prognosis and  poor patient outcomes,  including hospitalization.                                                               
With  respect to  clinician-administered drugs  - a.k.a.  "white-                                                               
bagging" and  "brown bagging" -  she stated that the  practice of                                                               
mandatory patient steering creates  a system that circumvents the                                                               
federal Drug Supply Chain Security  Act (DSCSA). This act ensures                                                               
the  safe and  proper chain  of  custody for  drug products.  She                                                               
explained  that clinician-administered  drugs are  often used  in                                                               
situations  such  as  chemotherapy   for  cancer  treatment.  She                                                               
pointed out  that chemotherapy medications  need to be  dosed and                                                               
administered within a  short time (often a single  day) after the                                                               
patient's  lab  work  was  done.  She asserted  that  it  is  not                                                               
possible for medications to arrive  to Alaska from Florida within                                                               
this  timeframe. When  the medication  does not  arrive in  time,                                                               
doctors must find  a work-around. She reiterated  that this often                                                               
results  in  poor patient  outcomes  and  increases the  risk  of                                                               
medication  errors.  She  emphasized  that this  is  a  dangerous                                                               
situation.                                                                                                                      
                                                                                                                                
2:11:19 PM                                                                                                                    
SENATOR BISHOP asked who is liable in these situations.                                                                         
                                                                                                                                
2:11:25 PM                                                                                                                    
MS.  SEIGNEMARTIN replied  that  this is  a  great question.  She                                                               
explained that many healthcare systems  in Alaska have disallowed                                                               
the  practice of  white bagging  and brown  bagging, because  the                                                               
clinician is liable.  She said that if the medication  is sent to                                                               
the  mail  room  at the  hospital  or  if  it  is brought  by  an                                                               
individual - rather  than being handled properly  at the pharmacy                                                               
- the pharmacist is responsible  for ensuring that the patient is                                                               
safe  through this  process. She  stated that  this puts  a great                                                               
deal of liability on the  healthcare systems and pointed out that                                                               
this  is  one  reason  why the  Alaska  Hospital  and  Healthcare                                                               
Association (AHHA) is in support of SB 121.                                                                                     
                                                                                                                                
2:12:15 PM                                                                                                                    
MS. SEIGNEMARTIN  moved to slide  18 and discussed  Tribal Health                                                               
impacts:                                                                                                                        
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Tribal Health Patient & Pharmacy Impacts                                                                                 
                                                                                                                                
        head2right Patients are often unable to fill prescriptions                                                              
         at Tribal Health Organization (THO) pharmacies                                                                         
        head2right THO pharmacies forced to   either    send                                                                    
          prescriptions out to PBM-owned mail order                                                                             
          pharmacies or "eat" 100% of the cost of what                                                                          
          should be a covered prescription                                                                                      
        head2right This is not only an issue for the private sector                                                             
            THOs ability to provide care is impacted as                                                                         
          well                                                                                                                  
                                                                                                                                
MS.  SEIGEMARTIN  reiterated  that   PBMs  are  not  beholden  to                                                               
insurance laws  and explained how this  impacts Tribal healthcare                                                               
Organizations   (THO).   She   stated  that   PBMs   ignore   the                                                               
congressionally   mandated  payments   required  by   the  Indian                                                               
Healthcare  Improvement Act  (IHCIA).  She  explained that  IHCIA                                                               
requires that if  insurance covers a service  in other locations,                                                               
it must also cover the treatment  at THOs. However, PBMs are able                                                               
to control the  flow of commerce away from  THO pharmacies, which                                                               
impacts patient care.                                                                                                           
                                                                                                                                
2:13:19 PM                                                                                                                    
MS. SEIGNEMARTIN moved to slide 19:                                                                                             
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     To whom are PBMs responsible?                                                                                            
                                                                                                                                
        head2right Currently, the big PBMs are only beholden to their                                                           
          shareholders                                                                                                          
        head2right Should PBMs have a responsibility to the health of                                                           
          Alaskans?                                                                                                             
                                                                                                                                
MS. SEIGNEMARTIN stated  that SB 121 would  extend this fiduciary                                                               
responsibility  to plan  sponsors  and to  the  state of  Alaska,                                                               
ensuring  that patients  and employers  pay  the lowest  possible                                                               
price. She opined that this is appropriate.                                                                                     
                                                                                                                                
2:13:51 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
2:14:18 PM                                                                                                                    
CHAIR BJORKMAN reconvened the meeting.                                                                                          
                                                                                                                                
2:14:34 PM                                                                                                                    
MS. SEIGNEMARTIN moved to slide 20:                                                                                             
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Impacts of PBM Practices on Alaskans                                                                                     
                                                                                                                                
        head2right Crumbling public health infrastructure                                                                       
        head2right Pharmacy closures and reduction in hours,                                                                    
          staffing                                                                                                              
        head2right Increased healthcare costs for employers and                                                                 
          patients                                                                                                              
        head2right Poor health outcomes                                                                                         
        head2right Shipping delays, breaks in therapy, fractured                                                                
          care, lack of care coordination                                                                                       
        head2right Disease progression and poor prognosis                                                                       
                                                                                                                                
MS.  SEIGNEMARTIN   stated  that   these  negative   impacts  are                                                               
heightened in  patients with  low health  literacy and  those who                                                               
experience  social determinants  of health  that make  navigating                                                               
the  healthcare  system  difficult.  She  shared  a  story  of  a                                                               
chemotherapy  patient who  was required  to utilize  a PBM  mail-                                                               
order  pharmacy for  medication -  which resulted  in a  delay in                                                               
treatment.                                                                                                                      
                                                                                                                                
2:16:04 PM                                                                                                                    
MS. SEIGNEMARTIN moved to slide 21:                                                                                             
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     SB 121 / HB 226 Provisions                                                                                               
                                                                                                                                
        head2right Gives patients right to access medication at                                                                 
          pharmacy of their choice                                                                                              
             • Bans   patient  steering   to  PBM-owned   or                                                                    
               affiliated pharmacies                                                                                            
        head2right Ensures safe access to physician-administered                                                                
          medications                                                                                                           
             • Bans  PBM-required  white bagging  and  brown                                                                    
               bagging                                                                                                          
        head2right Requires a transparent reimbursement model                                                                   
             • Saves  money for  patients and  plan sponsors                                                                    
               on prescription drug spend                                                                                       
             • Gets   rid   of    complicated   and   opaque                                                                    
               reimbursement methodologies                                                                                      
        head2right How?                                                                                                         
             • Bans spread pricing                                                                                              
             • Requires  reimbursement  floor   of  NADAC  +                                                                    
               dispensing fee                                                                                                   
             • Requires  payment  parity  between  PBM-owned                                                                    
               pharmacies and local pharmacies                                                                                  
             • Fiduciary  responsibility from  PBMs to  plan                                                                    
               sponsors                                                                                                         
                                                                                                                                
                                                                                                                                
2:18:49 PM                                                                                                                    
SENATOR DUNBAR asked how the NADAC price is determined.                                                                         
                                                                                                                                
MS.  SEIGNEMARTIN  replied  that  the Centers  for  Medicare  and                                                               
Medicaid Services  (CMS) sends  out a  weekly survey.  The survey                                                               
gathers information  for various National Drug  Codes (NDC) based                                                               
on invoice prices.                                                                                                              
                                                                                                                                
2:20:35 PM                                                                                                                    
SENATOR DUNBAR  commented that  Alaska is  a small  state without                                                               
much impact on  the national price average. He asked  if there is                                                               
a regulatory agency  that would limit the price  increase if more                                                               
states were to adopt similar legislation.                                                                                       
                                                                                                                                
MS. SEIGNEMARTIN replied that the  NADAC is based on the purchase                                                               
price from  wholesaler rather than  on the  reimbursement amount;                                                               
therefore, it would not be affected.                                                                                            
                                                                                                                                
2:21:25 PM                                                                                                                    
SENATOR  DUNBAR  asked if  there  are  enough competitive  prices                                                               
amongst wholesalers  to prevent  the NADAC price  from ratcheting                                                               
up.                                                                                                                             
                                                                                                                                
MS. SEIGNEMARTIN replied yes.                                                                                                   
                                                                                                                                
2:22:03 PM                                                                                                                    
MS. SEIGNEMARTIN NADAC continued her  discussion of slide 21. She                                                               
reiterated that the actual cost of  drugs is not known, and NADAC                                                               
is  the  only  transparent  pricing   available.  She  said  that                                                               
overpayment  to  PBM-owned  mail-order  pharmacies  needs  to  be                                                               
disincentivized. This  would be done by  requiring payment parity                                                               
between PBM  pharmacies and local  pharmacies. She said  that the                                                               
fiduciary  responsibility  between  PMB   and  plan  sponsors  is                                                               
necessary   to  ensure   that  the   state   health  plan,   plan                                                               
beneficiaries,  and other  employers and  employees in  the state                                                               
are at the heart of the contract.                                                                                               
                                                                                                                                
MS. SEIGNEMARTIN clarified  that SB 121 does not  limit the sight                                                               
of care  for clinician administered  drugs. She said that  SB 121                                                               
only  applies to  where the  drug is  dispensed -  PBMs would  no                                                               
longer  be   able  to   specify  what   pharmacy  can   be  used.                                                               
Additionally, SB  121 requires that  a pharmacy become  a network                                                               
pharmacy and  agree to network  terms in order to  participate in                                                               
the  network  prior  to serving  patients.  This  includes  price                                                               
guarantees  and  ensures  that pharmacies  cannot  demand  higher                                                               
payment for services than the network contract allows.                                                                          
                                                                                                                                
2:24:14 PM                                                                                                                    
MS. SEIGNEMARTIN moved to slide 22:                                                                                             
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Supporters of SB 121                                                                                                     
                                                                                                                                
        • Alaska Native Health Board & All Tribal Health                                                                        
          Organizations                                                                                                         
        • Alaska Hospital and Healthcare Association                                                                            
        • Alaska Primary Care Association                                                                                       
        • Alaska Medical Board                                                                                                  
        • Alaska Board of Pharmacy                                                                                              
        • Alaskan Chain Drug Stores - National Association                                                                      
          of    Chain   Drug    Stores        Fred    Meyer,                                                                    
          Carr's/Albertsons, Walgreens, Costco                                                                                  
        • Alaska Independent Pharmacies                                                                                         
        • Patient Protection Groups                                                                                             
                                                                                                                                
MS.  SEIGNEMARTIN commented  the,  in effect,  the entire  Alaska                                                               
health care system is in support of SB 121                                                                                      
                                                                                                                                
2:25:22 PM                                                                                                                    
PALMER WETZELL  III, Deputy Director,  Chief Andrew  Isaac Health                                                               
Center, Fairbanks, Alaska, testified by  invitation on SB 121. He                                                               
continued the presentation. He moved  to slide 23, titled "Alaska                                                               
DRB 2022  Overall Rx Spend  vs. SB121 Pricing (utilizing  NADAC +                                                               
$13.36*)" and  explained the potential  fiscal impact of  SB 121.                                                               
He noted that  if the formula included in SB  121 would have been                                                               
in place in  2022, the state would have  saved approximately $4.3                                                               
million.                                                                                                                        
                                                                                                                                
2:26:20 PM                                                                                                                    
MR. WETZEL moved  to slide 24 and explained that  the Division of                                                               
Retirement and Benefits  (DRB) could potentially save  up to $7.9                                                               
million.                                                                                                                        
                                                                                                                                
MR.  WETZEL moved  to slide  25,  and said  it is  based on  2019                                                               
Kaiser  Family Foundation  (KFF) prescription  data utilized  for                                                               
data analysis  for SB  121. He explained  that, if  claim numbers                                                               
remain consistent  and with a  dispensing fee of $13.36  for each                                                               
claim,  SB 121  would  add  close to  $50  million  to the  local                                                               
economy  with  dispensing  fees  alone.  He  added  that  Alaskan                                                               
employers would save money.                                                                                                     
                                                                                                                                
2:27:22 PM                                                                                                                    
MR. WETZEL  moved to  slide 26 and  stated that  Alaska employers                                                               
overall cost savings potential is $43.8 million.                                                                                
                                                                                                                                
MR. WETZEL moved  to slide 27 and discussed an  example of spread                                                               
resulting  from under-reimbursement.  He explained  the following                                                               
data  and stated  that  it is  evidence of  the  urgent need  for                                                               
transparency:                                                                                                                   
                                                                                                                                
     Acquisition Cost: $366,342.84                                                                                              
                                                                                                                                
     Reimbursed: $16,207.98                                                                                                     
                                                                                                                                
     Fair Reimbursement: $832,980.20                                                                                            
                                                                                                                                
2:29:11 PM                                                                                                                    
MR. WETZEL moved  to slide 28 titled,  "SB121/HB226 is Pro-Alaska                                                               
economy   by   preventing   forced   mail   order   and   patient                                                               
steering/coercion."  He  explained  how   SB  121  would  benefit                                                               
patients by allowing  them to fill prescriptions  locally if they                                                               
choose.  Currently, pharmacies  can  only fill  for  30 days  and                                                               
amounts over  30 days must  be done by  mail order. He  said that                                                               
this  would  potentially  infuse   $34  million  to  $36  million                                                               
annually  into  Alaska's  local economy  while  saving  employers                                                               
money.                                                                                                                          
                                                                                                                                
2:31:31 PM                                                                                                                    
SENATOR BJORKMAN  referred to  slide 23  commented that  the cost                                                               
savings to  DRB would be  about $4.3  million and asked  how much                                                               
DRB would receive of the $49.4 million on slide 25.                                                                             
                                                                                                                                
MR. WETZEL answered  that this number is an  extrapolation of the                                                               
roughly 3.7 million claims for  commercial Medicare. He explained                                                               
that this number  would be divided by the 668  thousand claims to                                                               
reach  this  number,  which  he  estimated  to  be  around  $5.53                                                               
[million].  He surmised  that  the number  of  claims has  likely                                                               
increased since 2019 and therefore the total would be much more.                                                                
                                                                                                                                
2:32:58 PM                                                                                                                    
SENATOR BISHOP  asked if  SB 121  would increase  the time  to 90                                                               
days in Anaktuvuk Pass.                                                                                                         
                                                                                                                                
MS. SEIGNEMARTIN  replied yes and  clarified that there  would be                                                               
no limitations.                                                                                                                 
                                                                                                                                
SENATOR BISHOP commented that the  recent cold spell in Fairbanks                                                               
grounded flights for up  to a week or more. He  said that 30 days                                                               
would be on the edge, while 90 days would provide extra padding.                                                                
                                                                                                                                
2:33:39 PM                                                                                                                    
SENATOR  DUNBAR  referred to  slide  21  and inquired  about  the                                                               
enforcement mechanism for the provision.                                                                                        
                                                                                                                                
2:34:21 PM                                                                                                                    
SENATOR GIESSEL replied  that the Division of  Insurance would be                                                               
responsible for enforcement.                                                                                                    
                                                                                                                                
2:34:33 PM                                                                                                                    
SENATOR DUNBAR  expressed curiosity about what  enforcement would                                                               
look like. He  commented that the companies in  question are some                                                               
of the largest in the country  and questioned how the Division of                                                               
Insurance  would   get  them  to   pay  fines  and   cease  these                                                               
activities.                                                                                                                     
                                                                                                                                
SENATOR  GIESSEL differed  to Lori  Wing-Heier,  Director of  the                                                               
Division of Insurance.                                                                                                          
                                                                                                                                
2:35:27 PM                                                                                                                    
LORI WING-HEIER,  Director, Division of Insurance,  Department of                                                               
Commerce, Community and  Economic Development, Anchorage, Alaska,                                                               
answered questions on SB 121. She  stated some of this (fines and                                                               
penalties)  would be  addressed in  regulations. She  pointed out                                                               
that  SB  121   has  a  large  fiscal  note  due   to  the  added                                                               
responsibilities required  by SB 121.  She added that  this would                                                               
include  working with  consultants and  contractors to  determine                                                               
where a PBM has not met the intent  of the law. She said that the                                                               
Division of Insurance currently does this with market conduct.                                                                  
                                                                                                                                
2:36:35 PM                                                                                                                    
SENATOR DUNBAR  asked about the effectiveness  of the regulations                                                               
created by other states.                                                                                                        
                                                                                                                                
MS. WING HEIR replied that  Oklahoma and New Hampshire have spent                                                               
a great  deal of time  enforcing regulations like  those included                                                               
in  SB 121.  Ohio has  also  had to  hire additional  enforcement                                                               
staff.                                                                                                                          
                                                                                                                                
2:37:56 PM                                                                                                                    
ASHLEY  SCHABER,  Chair,  Alaska Board  of  Pharmacy,  Anchorage,                                                               
Alaska,  testified by  invitation on  SB  121. She  gave a  brief                                                               
history of her  experience working on the issues  addressed by SB
121.  She said  the  goal of  SB  121 is  to  ensure an  adequate                                                               
pharmacy  infrastructure in  Alaska. She  stated that  the Alaska                                                               
Board of  Pharmacy (ABP)  unanimously supports  this legislation.                                                               
This legislation  gives patients  the right to  access medication                                                               
at the pharmacy  of their choice, if their pharmacy  is a willing                                                               
provider  and  contracted  with   a  PBM.  Additionally,  SB  121                                                               
provides a framework for transparency  and fair reimbursement for                                                               
pharmacies   and  patients   and  protects   patient  access   to                                                               
clinician-administered medication by  restricting the practice of                                                               
white-bagging  and brown-bagging.  She explained  that the  board                                                               
updates its strategic plan yearly  and noted that the FY2023 plan                                                               
includes the goal  of growing the Alaska  economy while promoting                                                               
community health and safety. The  board believes this goal is met                                                               
by  SB 121.  She said  that the  board's mission  is to  promote,                                                               
preserve, and protect  the public health, safety,  and welfare by                                                               
and through the effective control  and regulation of the practice                                                               
of pharmacy.  She noted that  over the  last few years  the board                                                               
has  received  comment  from   the  public,  Alaska  pharmacists,                                                               
technicians,  and organizations  regarding the  current practices                                                               
limiting  access  to  Alaskan  pharmacies  and  compromising  the                                                               
safety of medications received in the state.                                                                                    
                                                                                                                                
2:40:10 PM                                                                                                                    
MS.  SCHABER   stated  that   multiple  community   and  infusion                                                               
pharmacies  have closed  since  efforts on  SB  121 began,  which                                                               
severely  limits access.  She added  that  this legislation  will                                                               
help to ensure  that Alaska's pharmacies will  continue to safely                                                               
serve Alaskans.                                                                                                                 
                                                                                                                                
2:40:36 PM                                                                                                                    
SENATOR BISHOP asked  if passage of SB 121 would  result in local                                                               
pharmacies making a comeback.                                                                                                   
                                                                                                                                
MS.  SCHABER stated  her  belief that  it  would encourage  local                                                               
pharmacies  to  return  to  business   or  start  a  business  by                                                               
decreasing barriers to providing services.                                                                                      
                                                                                                                                
2:41:45 PM                                                                                                                    
BARRY  CHRISTENSEN,   Pharmacist,  Island   Pharmacy,  Ketchikan,                                                               
Alaska, testified by  invitation on SB 121. He said  that he is a                                                               
2nd generation pharmacist and added  that his father opened their                                                               
family pharmacy  over 50 years  ago. He  said that the  future of                                                               
his pharmacy  - and the patients  he serves - is  in jeopardy and                                                               
requested support  of SB 121.  He explained that  Island Pharmacy                                                               
is the  only pharmacy  in Ketchikan  that offers  unique services                                                               
such as compliance packaging and  the compounding of commercially                                                               
unavailable medications. He  stated that if his  pharmacy were to                                                               
close, like  25 percent of  individual pharmacies  have, patients                                                               
would suffer  from lack of services.  He pointed out that  SB 121                                                               
impacts pharmacies across  the state. He said that  six years ago                                                               
he  testified  in  favor  of  the  prescription  benefit  manager                                                               
legislation. He  explained that, at that  time, opponents claimed                                                               
that the  resulting costs would  be financially damaging  to plan                                                               
sponsors.  However, it  did not  drive  costs up.  He shared  his                                                               
belief that SB 121 would allow  plan sponsors to save money while                                                               
providing  relief  to Alaska  pharmacies  and  the patients  they                                                               
serve. He  said his  pharmacy currently employs  12 people  - all                                                               
Alaskans  -  and emphasized  their  dedication  to serving  their                                                               
fellow Alaskans. He  contrasted this with PBM  employees, who are                                                               
entirely out-of-state.  He expressed gratitude and  the hope that                                                               
committee members would support this legislation.                                                                               
                                                                                                                                
2:43:44 PM                                                                                                                    
DIRK WHITE, Owner, White's Pharmacy,  Sitka, Alaska, testified by                                                               
invitation  on  SB  121.  He  said   that  he  has  a  family  of                                                               
pharmacists and has run White's Pharmacy  for 40 years. He has 35                                                               
employees. He  said that he  has witnessed  the rise of  PBMs and                                                               
continued  rise  in pharmaceutical  costs.  He  stated that  PBMs                                                               
claim to reduce costs - yet  the US has the highest percentage of                                                               
gross  domestic product  (GDP) spent  on  pharmaceuticals in  the                                                               
world. He  expressed confusion  at the  promotion of  this money-                                                               
saving fallacy. He commented that  PBMs take egregious actions to                                                               
steal money from community pharmacies  - causing them to close or                                                               
reduce services.                                                                                                                
                                                                                                                                
2:45:13 PM                                                                                                                    
MR.  WHITE  said  that  since  2020  payroll  is  up  40  percent                                                               
(primarily  due to  the Covid-19  pandemic) and  health insurance                                                               
has gone up 17 percent. He  shared that in the previous month, he                                                               
paid $17  thousand with  1-2 percent claim  on the  insurance. He                                                               
stated that his workers' compensation  insurance has gone up 45.5                                                               
percent - with  zero claims, which he asserted is  even worse. In                                                               
response  to an  earlier  question about  pharmacy contracts,  he                                                               
explained that he must contract  with the PBM, who then contracts                                                               
with the insurance companies. He  stated that reimbursements have                                                               
gone down  over the past  four years  on all these  contracts and                                                               
emphasized that  they are required, non-negotiable  contracts. He                                                               
went on to  say that, when questioned, PBMs  claim that increased                                                               
costs are a part of doing  business. He reiterated that his costs                                                               
have  gone  up  while  his  reimbursements  have  gone  down.  He                                                               
referenced a  $10 thousand audit from  a PBM (not named  for fear                                                               
of  retribution)  and  explained  that  the  audit  was  for  two                                                               
medications for  one patient.  In this case,  a single  field was                                                               
not properly  filled in on  the forms (although  this information                                                               
was on the prescription). He  questioned why someone did not stop                                                               
and  request  the  information,  which  could  have  easily  been                                                               
supplied by  the pharmacist.  He shared a  story about  a patient                                                               
who was  told that her insulin  was not covered. She  was told to                                                               
contact the PBM's  mail order pharmacy, where it  would likely be                                                               
covered. He  expressed hope  that his pharmacy  would be  able to                                                               
provide whatever  the PBM requires  in order for this  patient to                                                               
receive her insulin.                                                                                                            
                                                                                                                                
2:50:45 PM                                                                                                                    
CHAIR BJORKMAN opened public testimony on SSSB 121.                                                                             
                                                                                                                                
2:51:09 PM                                                                                                                    
PATRICK SHIER,  Alaska Membership Representative,  Pacific Health                                                               
Coalition, Wasilla,  Alaska, testified  in opposition to  SB 121.                                                               
He  briefly explained  that the  Pacific  Health Coalition  (PHC)                                                               
represents  individuals  whose  healthcare is  paid  for  through                                                               
health and welfare  benefit trusts. He noted that  the trusts are                                                               
regulated by the Employee Retirement  Income Security Act of 1974                                                               
(ERISA). He  added that  the penalty for  falling short  of ERISA                                                               
requirements is  jailtime and fines; therefore,  most individuals                                                               
are  careful to  meet these  requirements. He  said that  the PHC                                                               
trusts hire,  fire, and  manage PBMs. He  explained that  this is                                                               
done on  the advice  of expert council  and consultants  who have                                                               
been in  the business for  many years.  This is done  to maximize                                                               
pharmacy spend  and efficacy and  is based on the  best available                                                               
scientific and market  knowledge. He said that PHC  also offers a                                                               
purchasing option  called National Cooperative Rx  - a nonprofit,                                                               
member   owned   and   operated  organization   that   negotiates                                                               
aggressively with PBMs to provide  nation-leading benefits at the                                                               
lowest possible price and best  possible quality. He suggested SB
121 be  held for further  analysis due  to the complexity  of the                                                               
issues addressed.                                                                                                               
                                                                                                                                
2:54:23 PM                                                                                                                    
BRENDA  SNYDER,  Lead  Director, State  Government  Affairs,  CVS                                                               
Health, Seattle  Washington, testified  in opposition to  SB 121.                                                               
She said  that CVS believes that  access to care is  paramount to                                                               
improving  health  outcomes  and supports  policies  that  expand                                                               
access to quality and affordable  healthcare. However, she stated                                                               
that SB  121 is a "cost  driver" rather than a  "cost saver". She                                                               
asserted  that  this legislation  would  not  increase access  to                                                               
healthcare  in  Alaska.  She   stated  that  employer  insurance,                                                               
insurance, and  governments choose  to hire  PBMs to  manage drug                                                               
spend  and drug  portion of  healthcare benefits.  She said  that                                                               
PBMs offer a  menu of options that plan sponsors  can choose from                                                               
-  and SB  121  takes away  the sponsor's  ability  to choose  by                                                               
creating  mandates.   She  highlighted  two  cost   drivers:  the                                                               
mandated dispensing  fee and  restrictions on  pharmacy networks.                                                               
She expressed concern about how  SB 121 would effect the patient.                                                               
She  reiterated  that  her organization  supports  policies  that                                                               
increase access to care but added  that it also needs to continue                                                               
to be affordable.                                                                                                               
                                                                                                                                
2:56:56 PM                                                                                                                    
TONIA  NEAL,   Senior  Director,  Pharmaceutic   Case  Management                                                               
Association, Shelten,  Washington, testified in opposition  to SB
121. She said Pharmaceutic Case  Management (PCM) is the national                                                               
association for PBMs.  She stated that PCM has  not been involved                                                               
in any  of the work sessions  for SB 121. She  indicated that the                                                               
depiction of PBMs has been  one-sided. She said that PBMs provide                                                               
multiple  services, from  providing  databases  to pharmacies  to                                                               
negotiating  with manufacturers  and  pharmacies  for price.  She                                                               
explained  that pharmacy  negotiations occur  through a  Pharmacy                                                               
Services Administrative  Organization (PSAO) - which  she said is                                                               
the  equivalent  of  a  PBM.  She  clarified  that  during  these                                                               
negotiations, the insurance plans are  represented by the PBM and                                                               
the pharmacy is represented by  the PSAO. She disagreed that PBMs                                                               
maintain a  monopoly. She said that  PBMs want to be  involved in                                                               
these discussions.  She stated that  their goal is for  the plans                                                               
and patients to have the best access and price available.                                                                       
                                                                                                                                
2:59:43 PM                                                                                                                    
CHAIR BJORKMAN commented that he  has made requests for data from                                                               
various organizations but has not  received a reply. He expressed                                                               
willingness to meet and discuss  these issues with those who have                                                               
expressed  concerns  with  the  changes  put  forth  by  SB  121;                                                               
however,  he  surmised that  when  requests  for information  are                                                               
ignored, it  is likely  that the answers  to those  questions are                                                               
not good.                                                                                                                       
                                                                                                                                
3:00:25 PM                                                                                                                    
DESIREE MOLINA,  representing self, Palmer, Alaska,  testified in                                                               
support of SB  121. She said she is a  fourth-year student in the                                                               
University  of  Alaska  Anchorage  (UAA)/Idaho  State  University                                                               
(ISU) doctor of pharmacy program.  She is currently employed as a                                                               
pharmacist intern. She  said that during the course  of her study                                                               
and work as  an intern, she has seen firsthand  how unethical PBM                                                               
practices harm patients.  She shared a story about  a patient who                                                               
needed to receive  medication to treat a blood  clot. The patient                                                               
was unable to  receive the medication due to  restrictions set by                                                               
their  PBM. The  patient was  told they  needed to  use the  PBMs                                                               
mail-order  pharmacy rather  than the  local pharmacy.  When they                                                               
attempted  to opt-out,  their co-pay  made  the medication  cost-                                                               
prohibitive  and they  were  forced to  go  without. The  patient                                                               
returned to the hospital after  several days. They were placed in                                                               
intensive care  and later  died. She  emphasized that  this death                                                               
was preventable  and asserted that  the lives of  Alaskans should                                                               
not be in the hands of PBMs.  She drew attention to the number of                                                               
pharmacies that have  been forced to close. She  stated that this                                                               
is a health crisis that must be addressed.                                                                                      
                                                                                                                                
3:02:55 PM                                                                                                                    
HARRY  ROGERS, representing  self, Petersburg,  Alaska, testified                                                               
in  support of  SB 121.  He shared  a personal  story related  to                                                               
prescription   medications.  When   he   attempted   to  fill   a                                                               
prescription at  the local pharmacy,  he was told  his medication                                                               
would come through  a specialty pharmacy located  in Florida. His                                                               
medication needed  refrigeration, which would be  provided for 48                                                               
hours;  however,  it is  not  possible  for deliveries  to  reach                                                               
Alaska in  this amount of  time. This prescription was  then sent                                                               
to a pharmacy in Seattle  where again, shipment was not possible.                                                               
He  said he  suggested  gold  streak; however,  this  was not  an                                                               
option. He explained that his local  pharmacy was able to get the                                                               
medication for him in the end  - a month after the medication was                                                               
prescribed.                                                                                                                     
                                                                                                                                
3:05:44 PM                                                                                                                    
DELILAH   BERNALDO,   representing  self,   Petersburg,   Alaska,                                                               
testified in support of SB 121.  She said she is a retired nurse.                                                               
She expressed  her belief  that patients have  a right  to choose                                                               
where  they get  their  medications.  She expressed  satisfaction                                                               
with her  local pharmacy. She  added that  she has asked  the PBM                                                               
pharmacy not  to call  her and this  request has  been repeatedly                                                               
ignored.                                                                                                                        
                                                                                                                                
3:06:59 PM                                                                                                                    
CATHERINE  KOWALSKI,   representing  self,   Petersburg,  Alaska,                                                               
testified in  support of  SB 121.  She said that  she has  been a                                                               
pharmacist for  35 years and  her family has operated  a pharmacy                                                               
for  55  years.  She  briefly  detailed  her  experience  in  the                                                               
industry and  expressed support  for the  patient's right  to use                                                               
the pharmacy of  their choice. She said that patients  pay into a                                                               
benefit  and  should  not  be coerced  to  use  an  out-of-state,                                                               
specialty pharmacy  or bombarded  by phone  calls from  PBMs. She                                                               
asserted  that   SB  121  makes   economic  sense   by  requiring                                                               
transparency  and accountability  from PBMs.  Additionally, money                                                               
would  stay  in  the  state. She  questioned  how  closing  local                                                               
pharmacies  benefits  healthcare  or the  economic  viability  of                                                               
communities.                                                                                                                    
                                                                                                                                
3:09:49 PM                                                                                                                    
GREG  LOUDON, Consultant,  Employee Benefits,  Parker, Smith  and                                                               
Feek Insurance, Anchorage, Alaska,  testified in opposition to SB
121. He  said he  works as  a consultant  for the  Pacific Health                                                               
Coalition (PHC). He  spoke to the financial impact of  SB 121. He                                                               
said PHC  has ten  groups and 24,841  lives participating  in PBM                                                               
contracts that  PHC has helped negotiate.  He said PBMs act  as a                                                               
third-party   administrator  that   helps  the   insurance  plans                                                               
purchase prescription drugs. He said  that five of the ten groups                                                               
us an exclusive specialty plan  design. He offered a breakdown of                                                               
the  savings for  various plans.  He said  that, using  lower-end                                                               
numbers, there would be a $2.7  million increase in costs for the                                                               
ten plans.                                                                                                                      
                                                                                                                                
3:11:43 PM                                                                                                                    
MARY  STOLL, Legal  Counsel, Pacific  Health Coalition,  Seattle,                                                               
Washington, testified in  opposition to SB 121. She  said that SB
121 seeks  to regulate PBMs  who serve as third-party  vendors to                                                               
ERISA  health benefit  plans. Regulating  PBMs at  a state  level                                                               
would  force ERISA  health plans  in Alaska  to redesign  benefit                                                               
plan  provisions -  including  existing  preferred and  specialty                                                               
pharmacy  arrangements.  She  stated  that  this  conflicts  with                                                               
federal laws  regulating ERISA. She  referred to PCMA  v Mulready                                                               
in Oklahoma and explained why this  ruling would also apply to SB
121.  She asserted  that  it  is crucial  to  consider the  legal                                                               
challenges  this  legislation  may   face  based  on  established                                                               
precedent. She  pointed out that  ERISA was enacted 50  years ago                                                               
to   ensure   a   consistent   nationwide   framework   for   the                                                               
administration of  health and pension plans.  Congress included a                                                               
preemption  clause to  prevent conflicting  state law  that could                                                               
impede plan  administrators' ability to design  benefits that are                                                               
in the  best interest of  their participants. She  suggested that                                                               
stakeholders  be engaged  in meaningful  dialogue to  address the                                                               
concerns while respecting ERISTA guidelines and legal precedent.                                                                
                                                                                                                                
3:13:56 PM                                                                                                                    
LUCY   LAUBE,  State   Government  Relations   Manager,  National                                                               
Psoriasis Foundation,  Portland, Oregon, testified in  support of                                                               
SB  121.  She  said  that  she  takes  medication  that  requires                                                               
refrigeration  and she  empathized with  those who  are concerned                                                               
about their  life-saving medications on time.  She explained that                                                               
for  individuals suffering  from  psoriatic  arthritis, this  can                                                               
have  irreversible,  long-term effects.  She  said  that the  top                                                               
three PBMs control  80 percent of the market -  and regardless of                                                               
whether  this  is   considered  a  "monopoly,"  it   is  a  power                                                               
imbalance.  She  agreed   that  supporting  local  pharmaceutical                                                               
businesses makes  financial sense for  Alaska and opined  that it                                                               
is  common  sense  for insurance  companies  to  reimburse  local                                                               
Alaskan  pharmacies  at  the  same rate  as  PBM  mail-order  and                                                               
specialty   pharmacies.    She   emphasized   the    danger   and                                                               
inconvenience   and  danger   of  steering   patients  to   these                                                               
pharmacies  - medications  that must  come from  out-of-state run                                                               
the risk  of arriving late and/or  freezing in transit -  both of                                                               
which can  be life-threatening.  She surmised that  the potential                                                               
for inclement weather  and long transit times  impact Alaska more                                                               
than other states.  She said she has seen similar  laws passed in                                                               
other  states  and  suggested  that  this  issue  deserves  extra                                                               
consideration in Alaska.                                                                                                        
                                                                                                                                
3:16:36 PM                                                                                                                    
THOMAS   WADSWORTH,   representing   self,   Anchorage,   Alaska,                                                               
testified in  support of  SB 121.  He said that  while he  is the                                                               
interim Dean  of the University  of Alaska  Anchorage/Idaho State                                                               
University (UAA/ISU)  Doctor of Pharmacy program,  he is speaking                                                               
as a pharmacist and executive  who operates a non-profit pharmacy                                                               
that is  loosely tied to  UAA/ISU. He explained that  the UAA/ISU                                                               
pharmacy program began  with the intent of  creating a non-profit                                                               
community  pharmacy that  would  serve some  of  the more  remote                                                               
communities in Alaska. He emphasized  that this pharmacy would be                                                               
a  not-for-profit   with  the  mission  of   serving  underserved                                                               
communities. The pharmacy program  has partnered closely with the                                                               
Board of Pharmacy and the  Alaska Pharmacist Association in order                                                               
to achieve this goal. With respect  to the question of whether SB
121 would  result in  the return of  local pharmacies,  he shared                                                               
his belief that  this would absolutely happen.  He explained that                                                               
the  system  is currently  "upside-down"  -  making a  non-profit                                                               
pharmacy untenable.  He emphasized that the  changes contained in                                                               
this  legislation  would  make it  possible  for  the  non-profit                                                               
pharmacy to open. He said they  will continue to pursue this goal                                                               
and  explained  how the  non-profit  pharmacy  would operate.  He                                                               
stated that  many UAA/ISU pharmacy  graduates would like  to open                                                               
local  pharmacies; however,  payment  models  preclude them  from                                                               
doing so.                                                                                                                       
                                                                                                                                
3:19:14 PM                                                                                                                    
KAREN  MILLER,  Director,  Denali  Pharmacy,  Fairbanks  Memorial                                                               
Hospital, Fairbanks, Alaska, testified in support of SB 121.                                                                    
She shared her  belief that PBMs are hurting  Alaskans. She added                                                               
that PBMs  are not lowering  healthcare costs or drug  prices for                                                               
patients. She said  that her job is to  safely discharge patients                                                               
from the hospital  in a timely manner  - and an extra  day or two                                                               
in the  hospital drives up  healthcare costs. She shared  a story                                                               
involving a  patient with Clostridioides difficile  (C. diff) and                                                               
the medication required for treatment.  She briefly explained the                                                               
roadblocks to access that patients face.                                                                                        
                                                                                                                                
3:22:23 PM                                                                                                                    
GARY  STRANNIGAN, Vice  President, Congressional  and Legislative                                                               
Affairs,  Premera  Blue Cross  Blue  Shield  of Alaska,  Seattle,                                                               
Washington,  testified in  opposition  to SB  121.  He said  that                                                               
Premera  is not  owned and  does  not own  a PBM.  He added  that                                                               
Premera  supports  access  to  pharmacies  and  transparency  for                                                               
members. He  requested that section  14 be removed.  He expressed                                                               
concern that  this section could  cause already high  premiums to                                                               
increase  by as  much as  10 percent.  He pointed  to the  ban on                                                               
spread  pricing  and  the in-network  versus  out-of-network  pay                                                               
parity  provision as  particularly  troubling. He  said that  the                                                               
latter is  anti-competitive. He stated that  Premera also opposes                                                               
the  dispensing  fee   in  section  9.  He   explained  that  the                                                               
dispensing fee would insulate  pharmacy services from competitive                                                               
pressures and  accountabilities and would have  a negative impact                                                               
on  the  cost  and  quality of  members'  pharmacy  services.  He                                                               
commented that  SB 121 is  a complicated bill and  suggested that                                                               
careful  consideration  be  given   to  this  complex  issue.  He                                                               
expressed concern  that restrictions for PBMs  and spread pricing                                                               
are  not equal  for all  players. He  noted extreme  prescription                                                               
markups  by  hospitals. He  emphasized  that  Premera depends  on                                                               
pharmacists  to  meet the  needs  of  members and  expressed  the                                                               
importance of working together to meet  these needs in a way that                                                               
maintains  the  importance  of   quality,  cost,  and  value.  He                                                               
asserted that with sections [9] and  14 included, SB 121 does not                                                               
maintain this standard.                                                                                                         
                                                                                                                                
3:24:57 PM                                                                                                                    
CHAIR BJORKMAN held SSSB 121 in committee.                                                                                      

Document Name Date/Time Subjects
SSSB121 ver H.pdf SL&C 2/28/2024 1:30:00 PM
SL&C 3/11/2024 1:30:00 PM
SL&C 3/20/2024 1:30:00 PM
SB 121
SSSB121 Sponsor Statement 02.11.24.pdf SL&C 2/28/2024 1:30:00 PM
SL&C 3/11/2024 1:30:00 PM
SL&C 3/20/2024 1:30:00 PM
SB 121
SSSB121 Sectional Analysis ver H 02.12.24.pdf SL&C 2/28/2024 1:30:00 PM
SL&C 3/11/2024 1:30:00 PM
SL&C 3/20/2024 1:30:00 PM
SB 121
SSSB121 Fiscal Note-DCCED-CBPL-02.23.24.pdf SL&C 2/28/2024 1:30:00 PM
SL&C 3/11/2024 1:30:00 PM
SL&C 3/20/2024 1:30:00 PM
SB 121
SSSB121 Fiscal Note-DCCED-DOI-02.23.24.pdf SL&C 2/28/2024 1:30:00 PM
SL&C 3/11/2024 1:30:00 PM
SL&C 3/20/2024 1:30:00 PM
SB 121
SSSB121 Fiscal Note-DOA-DRB 02.24.24.pdf SL&C 2/28/2024 1:30:00 PM
SL&C 3/11/2024 1:30:00 PM
SL&C 3/20/2024 1:30:00 PM
SB 121
SSSB121 Public Testimony-Letter NACDS-Support 02-26-24.pdf SL&C 2/28/2024 1:30:00 PM
SB 121
SSSB121 Public Testimony-Letter-AHIP 02.27.24.pdf SL&C 2/28/2024 1:30:00 PM
SB 121
SSSB121 Public Testimony-Letter-ASCO 02.28.24.pdf SL&C 2/28/2024 1:30:00 PM
SB 121
SSSB121 Public Testimony-Letter-Karen Miller-Support 02-22-24.pdf SL&C 2/28/2024 1:30:00 PM
SB 121
SSSB121 Public Testimony-Letter-PHC-Opposition 02.27.24 .pdf SL&C 2/28/2024 1:30:00 PM
SB 121
SSSB121 Support Document-AKPHA Petition 02.20.24.pdf SL&C 2/28/2024 1:30:00 PM
SB 121
SSSB121 Support Emails as of 02.20.24.pdf SL&C 2/28/2024 1:30:00 PM
SB 121
SSSB121 Support Emails Batch #2 02-26-24.pdf SL&C 2/28/2024 1:30:00 PM
SB 121
SSSB121 Supporting Document FTC 05.17.23.pdf SL&C 2/28/2024 1:30:00 PM
SB 121
SSSB121 Supporting Document FTC reverses support for PBMs 07.20.23.pdf SL&C 2/28/2024 1:30:00 PM
SB 121
SSSB121 Supporting Document Lobbying group spends millions 07.18.23.pdf SL&C 2/28/2024 1:30:00 PM
SB 121
SSSB121 Supporting Document Ohio AG sues PBM 03.27.23.pdf SL&C 2/28/2024 1:30:00 PM
SB 121
SSSB121 Supporting Document PBM Consolidation chart.pdf SL&C 2/28/2024 1:30:00 PM
SB 121
SSSB121 Letter of Support Alaska Attorney General 02.20.24.pdf SL&C 2/28/2024 1:30:00 PM
SB 121
SSSB121 Letter of Support Nelson 02.14.24.pdf SL&C 2/28/2024 1:30:00 PM
SB 121
SSSB121 Letters of Support 15 Batched 02.20.24.pdf SL&C 2/28/2024 1:30:00 PM
SB 121
SSSB121 Supporting Document-AK Journal of Commerce Article 02.11.24.pdf SL&C 2/28/2024 1:30:00 PM
SB 121
SSSB121 Supporting Document-STAT News Article-FTC reverses support for PBMs 07.20.23 (1).pdf SL&C 2/28/2024 1:30:00 PM
SB 121
SSSB121 Supporting Document-Medical World News Article 12.2022.pdf SL&C 2/28/2024 1:30:00 PM
SB 121
SSSB121 Supporting Document-STAT News Article-PBMs stonewalling FTC 03.27.24.pdf SL&C 2/28/2024 1:30:00 PM
SB 121
SSSB121 Supporting Document Ron's Apothecary closure 12.05.23.pdf SL&C 2/28/2024 1:30:00 PM
SB 121
SSSB121 Supporting Document The Hill 10.14.23.pdf SL&C 2/28/2024 1:30:00 PM
SB 121
SB115 ver U.pdf SL&C 2/28/2024 1:30:00 PM
SB 115
SB115 Sponsor Statement.pdf SL&C 2/28/2024 1:30:00 PM
SB 115
SB115 Sectional Analysis 02.28.24.pdf SL&C 2/28/2024 1:30:00 PM
SB 115
SB115 Fiscal Note-DCCED-CBPL-01.18.24.pdf SL&C 2/28/2024 1:30:00 PM
SB 115
SB115 Summary of Additional Supporting Documents 02.28.24.pdf SL&C 2/28/2024 1:30:00 PM
SB 115
SB115 Supporting Documents-Research AAPA Issue Brief-PA Education 02.23.24.pdf SL&C 2/28/2024 1:30:00 PM
SB 115
SB115 Public Testimony-ASPS 02.26.24.pdf SL&C 2/28/2024 1:30:00 PM
SB 115
SSSB121 Presentation -revised- to SLAC Seignemartin-Wetzel 02-28-24.pdf SL&C 2/28/2024 1:30:00 PM
SB 121
SSSB121 Bibliography 02-28-24.pdf SL&C 2/28/2024 1:30:00 PM
SB 121