Legislature(2023 - 2024)BELTZ 105 (TSBldg)
03/11/2024 01:30 PM Senate LABOR & COMMERCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| SB121 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 121 | TELECONFERENCED | |
| *+ | SB 203 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
March 11, 2024
1:33 p.m.
MEMBERS PRESENT
Senator Jesse Bjorkman, Chair
Senator Click Bishop, Vice Chair
Senator Elvi Gray-Jackson
Senator Kelly Merrick
Senator Forrest Dunbar
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
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."
- HEARD & HELD
SENATE BILL NO. 203
"An Act relating to business license fees; and providing for an
effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: SB 121
SHORT TITLE: PHARMACIES/PHARMACISTS/BENEFITS MANAGERS
SPONSOR(s): SENATOR(s) GIESSEL BY REQUEST
03/31/23 (S) READ THE FIRST TIME - REFERRALS
03/31/23 (S) L&C, FIN
02/08/24 (S) SPONSOR SUBSTITUTE INTRODUCED-REFERRALS
02/08/24 (S) L&C, FIN
02/28/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/28/24 (S) Heard & Held
02/28/24 (S) MINUTE(L&C)
03/06/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/06/24 (S) Heard & Held
03/06/24 (S) MINUTE(L&C)
03/11/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
SENATOR CATHY GIESSEL, District E
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 121 by request.
DAN NELSON, Director of Pharmacy
Tanana Chiefs Conference
Fairbanks, Alaska
POSITION STATEMENT: Testified by invitation on SB 121.
MARY STOLL, Founder
Stoll Law Group, PLLC
Advisor to Pacific Health Coalition
Seattle, Washington
POSITION STATEMENT: Testified with concerns on SB 121.
GREG LOUDON, Vice President & Account Executive
Parker, Smith and Feek
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to SB 121.
DEREK MUSTO, Organizer and Business Agent
Alaska Teamsters Local 959
Anchorage, Alaska
POSITION STATEMENT: Testified with concerns on SB 121.
BRENDA SNYDER, Lead Director
Government Affairs
CVS Health/Aetna
Tacoma, Washington
POSITION STATEMENT: Testified in opposition to SB 121.
GARY B. STRANNIGAN, Vice President
Congressional and Legislative Affairs
Premera Blue Cross
Everett, Washington
POSITION STATEMENT: Testified in opposition to SB 121.
LAUREE MORTON, representing self
Juneau, Alaska
POSITION STATEMENT: Testified in support of SB 121.
ACTION NARRATIVE
1:33:08 PM
CHAIR JESSE BJORKMAN called the Senate Labor and Commerce
Standing Committee meeting to order at 1:33 p.m. Present at the
call to order were Senators Gray-Jackson, Dunbar, Merrick,
Bishop, and Chair Bjorkman.
SB 121-PHARMACIES/PHARMACISTS/BENEFITS MANAGERS
1:34:01 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."
1:34:25 PM
SENATOR CATHY GIESSEL, District E, Alaska State Legislature,
Juneau, Alaska, sponsor of SB 121 by request. She shared a quote
from a recent White House discussion on pharmacy benefit
managers (PBM):
I genuinely believe that CEOs do not understand how
their healthcare costs work - particularly as it
applies to the rebates that you see from their PBMs.
They tend to look at rebates as cash paid by drug
manufacturers. Nothing could be further from the
truth. The reality is the rebates are not paid by the
drug manufacturers. The rebates are paid for by these
companies sickest and oldest employees.
-Mark Cuban, Cost Plus Drugs
SENATOR GIESSEL expressed her agreement and shared her belief
that Alaskan pharmacists will show that the PBM reforms included
in SB 121 will allow Alaskans to enjoy cost savings on their
health plans. She noted that Idaho recently passed PBM reform
legislation that contained many of the same provisions as SB
121. She added that 39 states are considering PBM reform and
asserted that there is a reason for this. She said that seasoned
Alaskan pharmacists will bring forward the inequities of the PBM
business model in Alaska.
1:36:23 PM
SENATOR GIESSEL said that these pharmacists will illustrate that
PBM reform will result in cost savings. She stated that change
is difficult. She asserted that it is easier for those opposing
SB 121 to instill fear of change than it is for them to prove
that maintaining the current structure is saving consumers
money. However, states that have passed PBM reform have reported
millions of dollars in savings. She opined that if the extensive
documentation provided in committee packets is considered, it is
difficult to deny that PBM reform is desperately needed.
1:37:33 PM
CHAIR BJORKMAN said that individuals who support PBMs have
expressed concerns that SB 121 would not allow their insurance
plans to provide maintenance drugs via mail order to pharmacy
customers. He sought clarification of this issue.
1:38:02 PM
SENATOR GIESSEL answered no. She clarified that SB 121 allows
individuals to choose between local pharmacies and mail order.
1:38:14 PM
CHAIR BJORKMAN said he has heard concerns that SB 121 would
remove "network" pharmacies - specifically removing the ability
for plans to create a group of contract pharmacies that would
provide benefits for their plan. He sought clarification of his
issue.
1:38:36 PM
SENATOR GIESSEL replied that this is something PBMs do in PBM
contracts - by mandating which pharmacies can be used by the
consumer.
1:38:48 PM
CHAIR BJORKMAN asked for clarification that SB 121 allows for
the creation of "network" pharmacies.
1:39:09 PM
SENATOR GIESSEL clarified by offering an example. She said that
Optum is the PBM for [the State of Alaska]. She explained that
PBM subscribers can use other pharmacies; however, there is a
lower cost when the PBM pharmacy is utilized.
1:39:56 PM
DAN NELSON, Director of Pharmacy, Tanana Chiefs Conference,
Fairbanks, Alaska, testified by invitation on SB 121. He
advanced to slide 2 of his PowerPoint presentation and explained
the pharmacy reimbursement model. He said that the total
pharmacy reimbursement amount is made up of the drug product
cost and the pharmacy dispensing fee.
1:40:50 PM
MR. NELSON noted that at this time, much of the overall drug
spend is weighted on the ingredient cost (99.5 percent was
ingredient cost, according to recent Division of Retirement and
Benefits (DRB) data). He explained that SB 121 would create a
new pharmacy reimbursement model: average acquisition cost
(National Average Drug Acquisition Cost (NADAC)) plus the cost
of dispensing (both set by a survey of pharmacies and overseen
by the Commissioner of the Division of Insurance). He
acknowledged that the overall impact would be an increase in the
dispensing fee; however, there would be drastic decrease in the
ingredient cost-spend. This would result in a net-neutral change
with the potential for cost-savings.
1:41:59 PM
MR. NELSON said that he would provide several examples of what
has been spent. He noted that these examples are multiple
sclerosis drugs which are very expensive and added that this
information came from an analysis of DRB data. He advanced to
slide three, showing prescription data for methyl fumarate 240
mg - 93 prescriptions filled by Optum Retail, 1 prescription
filled by Optum Specialty. For this drug, the state of Alaska
paid $410,226 - about $4,400 per prescription. He contrasted
this with the $35,746 max cost when using the formula in SB 121
(using an estimated $13.36 dispensing fee) - a savings of over
1000 percent - about $384 per prescription.
1:43:09 PM
MR. NELSON advanced to slide 4 and discussed 32 prescriptions
for Copaxone 40mg-ml PFS (filled by Optum). In this case, SOA
paid $153,717 - around $4,800 per prescription.
1:43:39 PM
SENATOR DUNBAR asked for clarification on the dispensing cost
used in the estimates.
1:43:54 PM
MR. NELSON replied that the calculations in his presentation
used a dispensing cost of $13.36.
1:44:12 PM
SENATOR DUNBAR commented that even with a $13 dispensing fee,
the cost would be half.
1:44:14 PM
MR. NELSON noted that where a prescription is filled can have a
drastic impact on the reimbursement amount. He surmised that
some upcoming testimony may claim that "specialty pharmacies"
save costs; however, he stated that when the data was examined,
utilizing specialty pharmacies increased the fee by over $1,000
per prescription. He asserted the argument that specialty
pharmacies save money does not hold.
1:45:03 PM
CHAIR BJORKMAN asked about the difference between a specialty
pharmacy and a regular pharmacy.
1:45:16 PM
MR. NELSON answered that the term "specialty pharmacy" was
created out of thin air by the PBM industry and there is not a
single accepted definition. He said that essentially, it boils
down to the expensive nature of the drugs in question. He
emphasized that while these drugs account for roughly two
percent of the volume of prescriptions filled in the United
States (US), they account for over 50 percent of the overall US
drug spend. He pointed out that, once generic options become
available, drugs are no longer considered "specialty" and
asserted that there is nothing special about the drug itself;
rather, the costs associated with the drug are what make it a
specialty drug.
1:46:37 PM
SENATOR BISHOP asked if Mr. Nelson and his peers have the
education and training necessary to handle specialty drugs.
1:47:05 PM
MR. NELSON answered that they absolutely have the necessary
training, expertise, knowledge, facilities, and infrastructure
to handle specialty drugs. He argued that - especially in
Alaska, with its unique geographical landscape - they do a
better job. He emphasized that patients receive their
medications in a timely manner, and it is not frozen - which is
a huge logistical undertaking that requires a great deal of
coordination with health aides and patients while utilizing a
variety of delivery options. He asserted that when these
prescriptions are sent to Alaskan villages from Florida via the
United States Postal Service (USPS) or FedEx, 50 percent of them
are wasted.
1:48:11 PM
CHAIR BJORKMAN asked how things would change for insurance plans
and the insured if there were more specialty pharmacies.
1:48:51 PM
MR. NELSON replied that it depends. He reiterated that the
distinction of "specialty" drugs is a made-up term and opined
that differentiating between "specialty" and "non-specialty" is
unhealthy. He explained that when prescriptions must be filled
at different pharmacies, the pharmacist is not aware of other
prescription drugs the patient is taking and is therefore unable
to take drug interactions into consideration. He asserted that
this creates a dangerous situation and provides an inferior
level of care. He opined that an increase in specialty
pharmacies would be a move in the wrong direction.
1:49:57 PM
MR. NELSON advanced to slide 5, which showed how much the State
of Alaska (SOA) paid for the drug Ampyra (10mg ER tablet) in
2022. According to the data, SOA paid nearly $200 thousand -
more than 2,400 percent more than what is proposed by SB 121's
transparent and fair reimbursement model. Additionally, SOA paid
3 thousand times more for OptumRX mail. He contrasted this with
the rates proposed by SB 121, which would be under $8 thousand.
1:51:02 PM
CHAIR BJORKMAN asked if Mr. Nelson was familiar with the
Department of Retirement and Benefits (DRB) fiscal note.
1:51:12 PM
MR. NELSON replied yes.
1:51:15 PM
CHAIR BJORKMAN asked if, to his knowledge, this fiscal note used
the same formula (NADAC pricing plus dispensing fee).
1:51:31 PM
MR. NELSON replied no and emphasized that there was no way the
same formula could have been used.
1:51:35 PM
CHAIR BJORKMAN asked how the fiscal note was created.
1:51:39 PM
MR. NELSON replied that this is a very good question for DRB. He
shared his belief that the fiscal note was derived from "on-
road" and "off-road" dispensing fees that were offered during
testimony on SB 121. He surmised that these numbers were
multiplied by the volume of prescriptions filled by the state in
2022 and then contrasted with the benchmark example - the
current maximum of $0.80. He asserted that this calculation is
laughable and does not consider that SB 121 would eliminate
spread pricing and would decrease ingredient costs.
1:52:22 PM
MR. NELSON advanced to slide 6 and discussed spread pricing. He
explained that to compile this data, they considered all
prescriptions reimbursed for under $1 at a single pharmacy in
Alaska in 2022 (a total of roughly 70 thousand prescriptions).
He surmised that this low reimbursement amount is why pharmacies
across the state are going out of business. Of the 70 thousand
prescriptions, 35 thousand were reimbursed at an average of 47
cents per prescription. He explained that the cost for the
pharmacy to buy the drugs (not including additional costs
related to prescription preparation or business overhead) was
over $10 per prescription. The acquisition cost for the 35
thousand prescriptions was $366 thousand. The pharmacy
reimbursement amount was only $16 thousand. However, there is
reason to believe that the plan was charged $832 thousand for
those prescriptions. This results in a spread - which the PBMs
kept - of over $816 thousand. He emphasized the drastic
difference in these numbers and the negative impact this has on
pharmacies.
1:54:38 PM
MR. NELSON advanced to page 7 and emphasized that not all
pharmacists are "anti-PBM". He noted that there are some
transparent PBMs, including one in Kansas that does not practice
spread pricing and does not retain rebates or require a
specialty pharmacy. They have a flat, per-prescription/per
patient/per month administrative fee. Everything is above-board
and this saves municipalities hundreds of thousands - if not
millions - of dollars per year. He opined that this type of PBM
is possible in Alaska, but the current system needs to be fixed.
1:55:53 PM
SENATOR BISHOP asked how pharmacies interface with PBMs.
1:56:08 PM
MR. NELSON answered that it is a "David vs Goliath" situation.
He explained that the PBMs are some of the biggest companies in
the world, and noted that Express Scripts, CVS, and OptumRx are
all in the top 15 of the Fortune 500 companies. He said that
they will periodically receive a fax or email of a contract
(anywhere from 60 to 132 pages long) and requesting a signature
for the pharmacy to receive reimbursements from the PBM. He
emphasized that any changes - or requests to make changes - to
the contract results in rejection of the contract by the PBM.
1:56:45 PM
SENATOR BISHOP asked if they have considered trying to negotiate
any of these contracts.
1:56:56 PM
MR. NELSON answered that 3 months ago, he tried to negotiate a
contract. The contract he received was laughable and he could
not bring himself to sign it without saying something about it.
He explained that a Maximum Allowable Cost (MAC) pricing list
allows the PBM to set their own costs for various dugs. He
pointed out that PBMs do not share their MAC lists with the
pharmacies (even though state law requires them to share this
information). The contract in question required the acceptance
of several MAC pricing lists. He said that in response to this
request, he told the PBM that he would accept one MAC pricing
list - and he requested that the list be made available (as
required by state law). The PBM denied this request. He compared
this to the PBM requiring them to sign a blank check. He fought
the contract for 3 months before finally breaking down and
signing - otherwise they would not have been able to bill
anything.
1:58:10 PM
SENATOR BISHOP asked if he would be amenable to sitting down
with PBMs to discuss this issue.
1:58:21 PM
MR. NELSON replied yes.
1:58:35 PM
[CHAIR BJORKMAN reopened public testimony on SB 121.]
1:58:34 PM
MARY STOLL, Founder, Stoll Law Group, PLLC, Advisor to Pacific
Health Coalition, Seattle, Washington, testified with concerns
on SB 121. She said that Pacific Health Coalition (PHC) covers
49 health plans in five states and represents over 250 thousand
lives. One hundred ten thousand of those covered live in Alaska.
She added that, because 50 percent of Alaska residents are
federal program beneficiaries, one in three Alaskan citizens are
members of a plan that is a member of PHC.
1:59:40 PM
MS. STOLL posed two questions to the committee and encouraged
members to consider them prior to moving SB 121 out of
committee:
• Is SB 121 preempted by the Employee Retirement
Income Security Act of 1974 (ERISA)?
• Is SB 121 fair and equitable for working
families?
MS. STOLL gave a brief history of ERISA and explained its
"preemption clause". She then referred to a recent case in
Oklahoma where legislation similar to SB 121 was struck down due
to restrictions on ERISA fiduciary duties. She explained the
role of ERISA fiduciaries and emphasized their importance.
2:01:13 PM
MS. STOLL pointed out that ERISA fiduciaries are held both
civilly and criminally liable if they are not utilizing funds
and assets for the sole and exclusive benefit of their
participants. She opined that they take their duties very
seriously as they negotiate PBM contracts. PBM contracts are
carefully negotiated as part of the fiduciary's plan design. She
noted that the Oklahoma case was decided by a US Circuit Court
utilizing US Supreme Court determinations and is the prevailing
law. She asserted that, like the Oklahoma legislation, SB 121
violates the Supreme Court determinations by regulating ERISA
plan trustees and the fiduciaries' plan design. She opined that
trustees take their jobs very seriously and are sophisticated in
the contracts they negotiate with the PBMs.
MS. STOLL explained that spread pricing is optional and the
inclusion of spread pricing is taken into consideration with the
assistance of professional PBM consultants. PHC utilizes audits
and Requests for Proposal (RFP) to evaluate cost/spend. She
reiterated that trustees take their jobs seriously. She noted
that ERISA plans have beneficiaries in multiple states, and it
would not be feasible to administer an ERISA plan in multiple
states with different laws. This is why ERISA plans fall under
federal regulation. She asserted that problems with PBMs should
be left to the federal government.
2:03:58 PM
MS. STOLL briefly discussed the Affordable Care Act and taxes on
ERISA plan administrators that are then passed to the plan
(because this is a federal law it is not preempted). She
asserted that SB 121 is essentially a tax on the health plans -
it is not going to hurt PBMs. She opined that it is misguided to
think that the cost would not be passed along to the workers who
contribute - in many cases through collective bargaining - into
their health plan. If money taken from employee paychecks and
earmarked for their health benefit plan is then used for other
purposes - such as an increased dispensing fee - this is not
benefitting the plan participants and is therefore a breach of
trustees' fiduciary duty. She noted that the increased
dispensing fee would apply to all pharmacies. She questioned
whether this would be a fair shift of cost, as it would divert
funds from important medical treatments.
2:05:27 PM
MS. STOLL said that fiduciaries have limited levers to pull to
address increased plan cost. They can implement cost-containment
provisions (e.g. PBM contracts may include aggregate buying to
decrease costs), increase contributions (the economy in Alaska
does not favor additional contribution), or cut benefits/
increase out-of-pocket costs and deductibles. All of these hurt
the hard-working men and women in the state. She urged members
to carefully consider the preemption issue, which will apply to
all legislation of this kind across the country.
2:07:09 PM
SENATOR DUNBAR asked if PHC would be giving a presentation.
2:07:29 PM
MS. STOLL replied that Greg Louden would be giving a
presentation on behalf of PHC.
2:07:30 PM
SENATOR DUNBAR asked if the legislation in Oklahoma was struck
down in its entirety and, if specific provisions were struck
down, which ones are analogous to SB 121.
2:07:46 PM
MS. STOLL replied that the prohibition on preferred network and
specialty pharmacy networks and the prohibition on mandated
maintenance drug mail order. She added that the 10th Circuit
Court remanded the case back to the Federal District Court to
determine what portions of the law are severable from the
preempted issues. She agreed that a state has the right to
license, audit, and provide for administrative remedies for any
business operating within its jurisdiction. She shared her
belief that provisions in the bill relating to these issues
would be upheld, as it is appropriate for a state to do this.
She reiterated that the legislation went wrong by requiring the
ERISA plans to administer different laws in different states.
2:09:18 PM
SENATOR DUNBAR asked for clarification that the ERISA concerns
arise from the in-network issue and the mail order issue.
2:09:34 PM
MS. STOLL replied yes, along with the specialty pharmacy
restrictions.
2:09:42 PM
SENATOR DUNBAR referred to earlier testimony that SB 121 does
not disallow mail order maintenance drugs and asked if this
distinguishes SB 121 from the Oklahoma case.
2:09:58 PM
MS. STOLL offered her understanding that SB 121 does not allow
companies to mandate mail-order drugs. She explained that mail-
order maintenance drugs are usually optional and benefit the
participant by ensuring they maintain their health routine - and
there is generally no out-of-pocket cost. While it is not a
common practice, some plans mandate mail-order maintenance
prescriptions because there is a big cost savings. She opined
that this is better for the participant because there is no out-
of-pocket cost.
2:10:36 PM
SENATOR DUNBAR commented that an amendment allowing mail-order
maintenance drugs might address this concern.
2:10:47 PM
MS. STOLL suggested that it would be better to consider this
question from the preemption perspective, which states that this
question should be left up to the fiduciaries when they are
deciding the plan terms. It is the fiduciary's responsibility to
determine whether the plan terms include that a certain
medication, taken regularly, will be sent via mail-order because
it is much less expensive for the plan (thus saving money to
treat life-threatening diseases, support wellness programs,
etc.).
2:11:16 PM
SENATOR DUNBAR commented that Alaska is a unique state when it
comes to the mail system and temperatures. For instance, many
people do not have mailboxes for their mail to go to. He asked
for clarification that, if a plan mandated mail-order for a drug
that was known to spoil when being shipped to rural areas in
Alaska, there is nothing that can be done about this.
2:11:43 PM
MS. STOLL replied that there is something that the plan can do
about this. She stated that PHC's PBMs do not ship
environmentally sensitive drugs (like insulin) to
environmentally rough places like Alaska. She asserted that
PHC's mail-order program has never shipped insulin and had it
freeze on someone's doorstep. She reiterated that PHC serves 1
in 3 Alaskans and said that over the last two years there were
two instances when mail-order drugs did not arrive timely. In
those instances, a manual override was done and those
prescriptions were filled at a retail pharmacy.
2:12:34 PM
CHAIR BJORKMAN asked for clarification that PHC covers 110
thousand lives in Alaska.
2:12:45 PM
MS. STOLL replied yes.
2:12:48 PM
CHAIR BJORKMAN stated that this translates to 1 in 7 Alaskans.
2:12:52 PM
MS. STOLL replied that this is correct; however, in addition to
this, 50 percent of Alaskans are enrolled in federal programs
such as Indian Health Services (IHS).
2:13:19 PM
SENATOR BISHOP asked Ms. Stoll to provide information regarding
her work with PHC and her work history.
2:13:31 PM
MS. STOLL briefly shared her education and work history and
offered an overview of her work for PHC.
2:14:20 PM
SENATOR BISHOP asked if this includes day-to-day negotiations
between PBMs and the trusts.
2:14:28 PM
MS. STOLL replied that this is why the PBM contract is managed
by a PBM consulting firm - National CooperativeRx. This firm has
the aggregated clout that allows them to negotiate on an even
basis with PBMs.
2:14:52 PM
SENATOR BISHOP commented that he is a 50-year member of
Operating Engineers Local 302 and has some experience with these
kinds of negotiations. He asked how they can be sure that the
trustees are getting accurate information from the PBMs.
2:15:49 PM
MS. STOLL answered that National CooperativeRx reports their
investigation, audit, and RFP findings PHC. Member plans have
access to this information. She expressed confidence that PHC
receives the information needed but acknowledged that she does
not agree with all decisions made by PBMs and added that there
are some transparency problems. She noted that these
transparency concerns are being addressed at a federal level,
which is where this issue belongs, as it relates to a federal
law.
2:16:49 PM
CHAIR BJORKMAN asked for more information on the Supreme Court
decision in Rutledge v Pharmaceutical Care Management
Association (PCMA).
MS. STOLL explained that this was an Arkansas law that dealt
with the relationship between the PBM and the pharmacy and
involved an additional cost (which would have been passed down
to the health plans). In this case, the court stated that
because the proposed cost (imposed though a third-party vendor
to the health plan) was not mandating changes to the plan
design, it was not preemptive. Instead, it was considered an
ancillary cost to the plan.
CHAIR BJORKMAN asked for clarification that, according to this
interpretation, a dispensing fee increase would be allowed but
mandating delivery would not.
MS. STOLL replied that this is correct and added that the latter
would be considered "plan design" and would therefore fall under
the purview of the plan fiduciaries.
2:19:02 PM
CHAIR BJORKMAN referred to the Supreme Court Case New York State
Conference of Blue Cross & Blue Shield Plans et al. v Travelers
Insurance Co. et al., which related to ERISA plans and differing
hospital fees, and asked how this would speak to PBMs having
different price structures for in-network vs out-of-network
pharmacies.
2:19:33 PM
MS. STOLL replied that the aforementioned case dealt with the
tax on hospital in New York - it did not deal with a pricing
issue between the PBMs and the plan. She reiterated that the
plans contract with the PBMs and SB 121 is a PBM bill - however,
the net effect is to drive and mandate plan design changes by
ERISA plans.
2:20:00 PM
MS. STOLL referred to the dispensing fee and PHC plans and
stated that SB 121 would increase the yearly cost by $2.7
million. Currently, PHC dispensing fees are $4 - a $9.36
difference from the fee proposed by SB 121. She restated her
earlier questions related to preemption, fairness, and equity
and asked why those who are setting money aside via collective
bargaining should be required to fund a private entity at a
level that is higher than what they have already negotiated.
2:20:41 PM
CHAIR BJORKMAN commented that this is an interesting question.
He pointed out that the parties present disagree on the facts,
emphasizing the 3,000 percent difference in the numbers
presented. With respect to negotiated agreements and collective
bargaining, he commented that if he was paying money from his
check monthly, he would want to know that the cost of the
benefits being negotiated actually are less - and that the
arrangements made are actually saving him money. He stated that,
if even 10 percent of what the pharmacists have shared during
their testimony is true, he would have questions about what
union dues are worth. He said that he would be unlikely to
continue paying dues if he did not receive great answers.
MS. STOLL expressed her agreement.
CHAIR BJORKMAN emphasized the importance of considering the data
and understanding the differences between the numbers reported -
why they exist and what they are. He added that until he
receives a rational answer for the difference between the NADAC
prices and what the plans pay out - he will have a hard time
believing testimony that insists plan members are getting a good
deal.
MS. STOLL said that Greg Loudon, who is a PHC consultant, would
provide additional documentation to support this claim.
2:23:05 PM
GREG LOUDON, Vice President & Account Executive, Parker, Smith
and Feek, Anchorage, Alaska, testified in opposition to SB 121.
He said that he is an employee benefit consultant for PHC. He
explained that PHC provides group contracting for self-insured
health plans and he assists PHC to contract with PBMs,
hospitals, and primary care providers, among others. PHC works
to aggregate volume of beneficiaries and then negotiates on
behalf of a much larger group.
2:24:06 PM
MR. LOUDON directed attention to a presentation titled "SB 121"
and advanced to slide 2:
[Original punctuation provided.]
Who is the Pacific Health Coalition?
• Alaska based non-profit coalition representing
self-funded health plans
• Public entities and labor/management trusts.
• Primary goals
• Lower costs and increase quality for
members
• Global membership is 49 plans and 250,000 lives
• Alaska membership is 29 plans and 110,000 lives
2:24:26 PM
MR. LOUDON advanced to slide 3:
[Original punctuation provided.]
Why we oppose this bill
• SB 121 increases costs to our members.
• Reduces our ability to:
• Manage costs
• Steer members to high quality pharmacies
• Trade increased volume for reduced rates
MR. LOUDON emphasized the importance of trading increased volume
for reduced rates. He stated that PHC represents hard-working
families who have recently been faced with unprecedented
inflation and wages have not been able to keep up. Workers trade
compensation for benefits packages and now these benefits are
being diminished to benefit one group.
2:25:27 PM
SENATOR DUNBAR asked for clarification of what is meant by
"steer members to high quality pharmacies" and if independent
Alaskan pharmacies - pharmacies that are in support of SB 121 -
are not considered "high quality".
2:25:49 PM
MR. LOUDON suggested that there likely are some pharmacies that
are not "high quality". He indicated that PHC has had negative
interactions with some pharmacies that did not provide the
quality, oversight, and value that PHC expects for its members.
2:26:15 PM
SENATOR DUNBAR requested more information on what is meant by
"high quality" - and specifically how the practices of a "high
quality" pharmacy would differ from those of a "low quality"
pharmacy.
2:26:27 PM
MR. LOUDON replied that the Tanana Chiefs Conference pharmacy -
which actively manages specialty products and adjusts practices
to meet unique geographical needs, offers blood testing to
determine whether a medication is working, etc. - is one example
of a "high quality" pharmacy. He stated that smaller pharmacies
- e.g. those run by one or two people in rural locations - do
not have the capacity to provide the necessary services and
oversight. He explained that, in addition to negotiating
discounts, PBMs ensure that providers utilize best practices.
2:27:25 PM
MR. LOUDON advanced to slide 4:
[Original punctuation provided.]
Why we oppose this bill
• Complicated relationship with PBMs
• PBMs provide a needed and valuable service
but we don't always like them
• Consider vendors like cell phone
companies, cable TV, car dealerships
• Health plans cannot contract with every
pharmacy directly
• Our plan sponsors hire, fire, and manage the
services provided by the PBMs
MR. LOUDON emphasized both the complicated relationship PHC has
with its PBMs and the importance of the service they provide.
2:29:37 PM
SENATOR BISHOP asked if SB 121 could be adjusted in a way that
would satisfy all parties and stated the importance of finding
common ground.
2:30:18 PM
MR. LOUDON replied that PHC could come up with some good
recommendations; however, SB 121 in its totality is difficult
for PHC and it would be difficult to suggest amendments that
would make it palatable. He explained that PHC - along with
other private entities - were caught off guard by the lack of
discussion with stakeholders and implied that discussions would
have resulted in provisions for SB 121 that would have benefited
all involved. He opined that many things have been taken out of
context and acknowledged that disputed facts make it difficult
for the legislature to make sound decisions.
2:31:11 PM
MR. LOUDON spoke to points on slide 5:
[Original punctuation provided.]
How has the PHC engaged to contract with PBMs
• PHC formed a relationship with a larger non-
profit coalition focused solely on PBM services
• National Cooperative Rx
• 315 Health plans and 480,000 lives
• Independent auditing
• Pricing guarantees and 100 percent return
of rebates
• Pharmacist team to evaluate clinical
programs and recommend cost containment
programs
MR. LOUDON gave a brief history of PHC's experience negotiating
PBM contracts and shared how they began working with National
Cooperative Rx. He briefly explained the contract negotiations.
He pointed out that, contrary to previous testimony, PHC
receives a 100 percent return on rebates. He said cost
containment programs are evaluated to determine who they will
most benefit.
2:33:31 PM
SENATOR DUNBAR expressed his understanding that the 100 percent
return on rebates mandated by SB 121 would not impact PHC
because they are already doing this. He surmised that PHC would
therefore not oppose this portion of the bill an asked if this
is correct. He suggested that others may not be getting this
same return on rebates and asked if this is possible.
2:34:23 PM
MR. LOUDON replied that it is possible. He clarified PHC opposes
this provision in SB 121 because it removes a cost-containment
tool. He commented that spread-pricing factors into this and
explained that spread-pricing is a contract tool, and as such is
neither good nor bad.
MR. LOUDON explained that contracts can be transparent - sharing
dispensing fees and ingredient costs at a particular pharmacy -
or the contract can be generic - offering guaranteed discounts
off of a national rate sheet for ingredient costs and a set
number for dispensing fees. In a spread-pricing contract, this
can be made up in rebates - some employers enter into contracts
with either their health insurer or their PBM to give up part of
the rebates. This way, there is no separate administration cost.
2:35:25 PM
SENATOR DUNBAR pointed out that PHC does not do this, since they
get 100 percent of the rebates.
2:35:29 PM
MR. LOUDON agreed that PHC gets 100 percent of the rebates.
2:35:37 PM
CHAIR BJORKMAN stated that one of the goals of SB 121 is that
members would no longer pay unknown costs. He surmised that PHC
has access to the data and could easily make a comparison for
the committee or for plan members who requested it.
Specifically, PHC could provide data to show the difference
between what the plan paid and the NADAC pricing for a
particular prescription. He shared his understanding that
members could potentially pay NADAC pricing - or pay based an
unknown list of costs - the details of which are only available
to certain people.
2:37:00 PM
MR. LOUDON replied maybe, though he is not an expert on pricing.
He stated his belief that earlier testimony regarding the
pricing for multiple sclerosis drugs was taken out of context.
He acknowledged that there may be examples like this - even in
PHC contracts - where costs may be extremely high compared to
other drugs because a different drug is favored over the one in
question. He briefly explained how "preferred pricing" works.
2:37:45 PM
CHAIR BJORKMAN commented that while he cannot say whether this
information is true or not, he is interested to know the runs
for the prescription costs for the past year. Specifically, what
is the difference between what the plan paid - what came out of
members' pockets - and the NADAC pricing that the plan would
have paid if SB 121 had been in effect.
2:38:34 PM
MR. LOUDON advanced to slide 6:
[Original punctuation provided.]
How much do we spend
• National Cooperative Rx is an option for PHC
member plans
• 10 Alaska based groups with 24,481 lives
participate
• Including our lower 48 based PHC members
that utilize National Cooperative Rx we
spend $43.5 million per year on
prescriptions dispensed in Alaska
2:39:29 PM
MR. LOUDON advanced to slide 7:
[Original punctuation provided.]
How will SB 121 affect our Rx costs?
MR. LOUDON stated that SB 121 will have a negative financial
impact on private industry and emphasized the belief that this
legislation holds no benefit for PHC.
2:39:40 PM
MR. LOUDON spoke to points on slide 8, displaying a bar graph
titled, "Specialty Pharmacy Contract Loss," depicting current
exclusive pharmacy plans (marked at $140,000) and all PHC
specialty spend in Alaska (marked at $750,000):
[Original punctuation provided.]
Specialty Pharmacies Lost opportunity
• Only 5 of our plans use an exclusive specialty
pharmacy
• They save 2 percent of their specialty Rx
spend for a savings of $140,000 per year
MR. LOUDON explained that utilizing specialty pharmacies results
in an overall cost savings for members. He indicated that while
only 5 plans currently use an exclusive specialty pharmacy, SB
121 would preclude all PHC plans from utilizing exclusive
specialty pharmacies. This would result in a lost opportunity.
2:40:28 PM
MR. LOUDON responded to earlier comments related to the need for
- and validity of - specialty pharmacies, he acknowledged that
"specialty drugs" are more expensive drugs. These drugs require
special dosage, handling, administration, and storage. They may
need to be injected often or infused and are used to treat
complex, chronic, and/or rare conditions such as cancer,
HIV/AIDS, multiple sclerosis, or rare genetic disorders such as
hemophilia. He explained that most specialty pharmacies have
departments dedicated to helping patients find financial
assistance to help pay for their prescriptions. He briefly
discussed plan design, noting that a plan sponsor may choose
spread-pricing over transparency because they want to limit a
single component - e.g. an administrative cost. Specialty
pharmacies are another way for plans to impact member savings.
Some plans limit total out-of-pocket costs while others offer a
savings for a percentage of the drug cost. This can be a large
sum for those who are taking expensive drugs.
2:42:10 PM
SENATOR DUNBAR commented that some states have already made
changes similar to those in SB 121. He asked if states that have
banned the mandated use of specialty pharmacies have seen a
significant increase in costs.
2:42:30 PM
MR. LOUDON replied that he does not know. He suggested that it
is too early to say.
2:42:46 PM
SENATOR DUNBAR asked why only five plans use an exclusive
specialty pharmacy.
2:42:54 PM
MR. LOUDON replied that they made different choices. He added
the choice to give members the choice of utilizing a specialty
pharmacy - or exclusively using a specialty pharmacy - should be
left to the employer and/or plan sponsors. He said that some
plans value choice over cost. He returned to an earlier comment
regarding the Tanana Chiefs Conference pharmacy and suggested
that this is a specialty pharmacy. He explained that while he
does not utilize this pharmacy, he is an IHS beneficiary and his
pharmacy options are limited as a result.
2:44:14 PM
MR. LOUDON advanced to slide 9, displaying a bar graph titled,
"Mail Order Pharmacy Contract Loss," depicting exclusive mail
order marked at just under $30,000:
[Original punctuation provided.]
Mail Order Pharmacies Lost opportunity
• Only 1 of our plans has exclusive mail order
• They save 2 percent of their total Rx
spend for a savings of $28,850 per year
MR. LOUDON explained that while only one plan has exclusive mail
order requirements, disallowing this would impact other plans
because it would not allow plans to negotiate these agreements
in the future. He shared his understanding that SB 121 would
also restrict the ability for plans to influence members to go
to a mail order pharmacy. Therefore, plans could not increase
the cost when members choose more expensive local retail
pharmacies or lower the cost when members choose mail order.
2:45:35 PM
MR. LOUDON advanced to slide 10, displaying a bar chart titled,
"Increased Dispensing Fees," displaying 'PHC's/Nat Coop Rx Ak'
marked at $2.7 million, 'All PHC Alaska Plans' marked at $7.8
million, and 'All Alaska Commercial Plans and Cash Payers'
marked at $27.5 million. He said that this is the largest
negative financial impact to PHC plans. He said that while the
fiscal note utilized a range of dispensing fees, these
calculations used the lowest fee given in the fiscal note,
$13.26. The average dispensing fees paid by commercial contract
in Alaska are $4. The net increase per prescription is $9.30.
Calculated out, this gives a dispensing fee increase of $2.7
million. When extrapolated out to the members of PHC who do not
participate in PBM contracts (using the average number of
prescriptions per person), this gives an estimate of $7.8
million in increased dispensing fees.
2:47:03 PM
MR. LOUDON explained that utilizing the 2019 numbers from the
Kaiser Family Foundation for commercial and cash payers results
in a $27.5 million increase in dispensing fees. He pointed out
that this does not include Medicare, Medicaid, and any other
federal plans. He went on to say that the $2.7 million increase
estimated for PHC plans is a 6 percent increase in total
prescription drug spend. He pointed out that dispensing fees
apply to all drugs and contrasted this with the earlier
presentation of the costs of multiple sclerosis drugs (he
offered to provide the NADAC pricing at a later time) which are
"low frequency" drugs that are not dispensed regularly or in
large quantities.
2:48:02 PM
MR. LOUDON advanced to slide 11:
[Original punctuation provided.]
Other local protection analogies
• State government is concerned about local grocery
stores.
• Add a $9.36 per meal fee on to groceries
purchased by restaurants and households
• Concerned about local gas stations
• Add a $9.36 per fill-up fee to trucking
companies and car owners
• Concerned about local hardware stores
• Add a $9.36 per purchase fee to every
purchase of hardware goods
MR. LOUDON opined that no one would want to pay these fees. He
stated that while the fees may help struggling businesses, they
would also help the large multi-national firms that operate in
Alaska. In addition, they would increase costs to the end user.
He suggested that this is not an "injection of cash" into the
local economy but is the government confiscating money from
employees and redistributing it to large and small pharmacy
owners.
2:49:28 PM
SENATOR BISHOP repeated his earlier request for ideas that would
result in savings for hard-working Alaskans.
2:50:00 PM
MR. LOUDON said that PHC would be happy to work on some ideas.
2:50:04 PM
CHAIR BJORKMAN reiterated that looking back at one year of NADAC
pricing compared to what plans spent on drugs would be helpful.
He emphasized that if plan members are getting a good deal, they
should be shown this information. If they are not getting a good
deal, other options should be considered.
2:51:03 PM
DEREK MUSTO, Organizer and Business Agent, Alaska Teamsters
Local 959, Anchorage, Alaska, testified with concerns on SB 121.
He referred to previous testimony offered by Senator Giessel
relating to the complicated nature of the PBM business model and
the difficulty in peeling back the opaque layers of this
business model. He expressed his agreement with the statement;
however, he disagreed that SB 121 is the proper vehicle to
address this issue.
MR. MUSTO stated that he wears dual hats as a labor trustee and
labor trustee and shared examples of his responsibility to both.
He shared that his organization has a PBM consultant who assists
with contract negotiations. These contracts allow Alaska
Teamsters Local 959 (AK Teamsters) to audit, control, and reduce
pharmacy spend. He acknowledged that some PBMs refuse to accept
transparent terms but emphasized that a number of PBMs will
agree to these terms.
2:53:03 PM
MR. MUSTO shared that he has attended trainings around the
country and has heard pharmacists who have advocated for these
kinds of controls and cost-saving recommendations. He explained
that trustees are civilly and criminally liable for their
actions - plan assets must be used for reasonable costs for
administering and providing benefits under the plan. He
emphasized that he takes his responsibilities seriously and
shared the ways in which he assists his organization in seeking
out plan design. He asserted that SB 121 would put a strain on
Alaska's health trust and other Alaskan plans by stripping
important cost-saving mechanisms and adding mandatory dispensing
fees. He pointed out that these additional costs do not provide
a benefit to plan members and their families.
2:54:27 PM
MR. MUSTO expressed concern that changes made by SB 121 would
negatively impact the plan and plan members. He stated that this
legislation includes measures that would negatively impact the
ability to establish PBM design and use preferred or exclusive
pharmacy networks, and it would remove access to programs that
directly benefit plan members. He added that this directly
conflicts with his trustee responsibilities. He listed a variety
of cost controlling measures that benefit plan participants. He
asserted that mail order pharmacies provide a cost savings and
have improved outcomes. He shared information about a recent
study that illustrated the benefits of utilizing mail order
pharmacies. He stated that, while he is a proponent of
supporting local businesses, these negotiations must consider
what will be of most benefit to plan participants.
2:56:12 PM
MR. MUSTO asserted that SB 121 would subsidize local pharmacies
at the expense of Alaskans and their families and would likely
result in increased deductibles and other cost-saving measures
that put the burden on plan participants. He opined that this
legislation would increase costs with little to no benefit to
the Alaskan economy. In addition, it would require plans to
utilize plan assets for unreasonable costs, thus preventing
plans from utilizing proven cost-savings mechanisms to subsidize
local pharmacies.
2:57:00 PM
MR. MUSTO shared his belief that the state should not divert
negotiated dollars to support private businesses. He opined that
the state should use urban development dollars or other tools to
help local pharmacies rather than increasing the revenue to all
pharmacies (including large chain pharmacies like Walmart, Fred
Meyer, and Walgreens).
2:57:39 PM
CHAIR BJORKMAN referred to Mr. Musto's testimony that SB 121
would increase costs for plan members and asked if he knows the
difference between the NADAC costs plus dispensing fees (as laid
out in SB 121) and his organization's plan spend was on
prescription drugs for the past year.
2:58:00 PM
MR. MUSTO replied that he defers to the plan professionals when
it comes to spread pricing. He shared that his organization
recently completed an RFP process and expressed confidence that
this resulted in the best benefit possible for plan members. He
noted that they use the coalition when this is a superior
option. He added that he would be willing to have a follow-up
conversation that included the PBM consultant.
2:58:54 PM
CHAIR BJORKMAN expressed his understanding that the answer to
his question was "no". He pointed out Mr. Musto's fiduciary duty
to plan members and encouraged him to take a year lookback at
what was spent on prescription drugs under the current system
and apply the SB 121 model to the plan experience. He requested
that Mr. Musto report back whether participants would have saved
money with the changes made by SB 121 or if they saved money by
allowing the contract to be negotiated under the current system.
He opined that plan members would be interested in this
information, particularly if the claim that SB 121 would
increase costs is accurate. He stated that he cannot support
this claim at this time due to the disparate understanding of
the data. However, if the aforementioned information
(prescription drug costs and NADAC pricing for 2023) is
available, this would provide the answer.
3:00:38 PM
BRENDA SNYDER, Lead Director of Government Affairs, CVS
Health/Aetna, Tacoma, Washington, testified in opposition to SB
121. She asserted that this legislation would significantly
increase prescription drug costs in Alaska. She explained that
employers, insurers, and governments choose to contract with
PBMs. She briefly explained this process.
MS SNYDER said that SB 121 contains several concerning
provisions that eliminate cost-control measures that plan
sponsors utilize. This includes banning insurers from offering
lower costs to those managing chronic conditions who receive
their medications via mail order pharmacies. She added that mail
order pharmacies are particularly important to those with
chronic conditions. She explained that many plans offer lower
prices to those who choose these options - or may require
maintenance drugs to be delivered by mail - which enables plans
to offer the lowest possible premium. She stated that SB 121
would prohibit insurers from offering more affordable pharmacy
options to those requiring high-cost specialty medications and
would effectively ban preferred pharmacy networks, including
specialty pharmacy arrangements.
3:02:25 PM
MS. SNYDER briefly explained why plans utilize these options. In
addition, SB 121 would prevent insurers from telling patients
about less expensive pharmacy options. She asserted that this is
anti-competitive and would harm Alaskan consumers. She stated
that SB 121 ignores the long-standing value-benefit plan design
and includes mandates that remove this flexibility. She briefly
explained the ways this would negatively impact plans and plan
members.
3:03:23 PM
CHAIR BJORKMAN asked what lines in SB 121 ban the use of mail
order pharmacy for maintenance drugs.
3:03:58 PM
MS. SNYDER answered that SB 121 does not say that mail order
pharmacies cannot be used; rather, the use of mail order
pharmacies cannot be required. She explained that some plan
sponsors choose to require the use of mail order pharmacies in
order to reduce costs.
3:04:26 PM
CHAIR BJORKMAN pointed out that the verbiage used in her
testimony could be easily misunderstood by a layperson. He
commented that a number of people have testified that SB 121
bans mail order delivery for maintenance medications and asked
for clarification that Ms. Snyder agrees that this legislation
does not, in fact, ban mail order delivery for maintenance
drugs.
3:05:05 PM
MS. SNYDER agreed that her earlier statement was unclear and
offered an apology. She clarified that SB 121 does not ban mail
order delivery but rather eliminates the ability for a plan
sponsor to make those determinations and requirements that would
provide them with lower cost options.
3:05:32 PM
CHAIR BJORKMAN asked what part of SB 121 eliminates network
pharmacies.
3:05:41 PM
MS. SNYDER answered that SB 121 effectively eliminates network
pharmacies. She explained that plans negotiate for network
pharmacies by agreeing to drive large quantities of business to
a particular pharmacy if they agree to lower costs. Allowing any
pharmacy into the network - and paying all pharmacies the same
amount - removes the incentive for a pharmacy to agree to a
lower cost. Thus, the design of preferred pharmacy networks
(reducing the number of pharmacies that plan members can utilize
while reducing costs) is obliterated.
3:06:34 PM
CHAIR BJORKMAN asked what part of SB 121 outlaws communication.
3:06:41 PM
MS. SNYDER answered that the provisions regarding steerage do
not allow plans to steer patients to lower cost options. She
questioned whether plans would be able to tell members about
lower cost options without this being considered "steering".
3:06:53 PM
CHAIR BJORKMAN expressed his understanding and opined that a
mandate would be needed for something to count as "steering".
3:07:14 PM
GARY B. STRANNIGAN, Vice President of Congressional and
Legislative Affairs, Premera Blue Cross, Everett, Washington,
testified in opposition to SB 121. He stated that Premera is not
owned by -and does not own- a PBM. He added that Premera fully
supports transparency and shares the goal of insuring fair
compensation for pharmacies. He expressed concern with what
Premera considers to be "anti free enterprise" aspects of SB
121, which will increase costs - making healthcare less
affordable. He stated that he is willing to discuss amendments
if there is receptivity to this. He said the concerning sections
include non-affiliated pay parity, anti-mandatory mail order,
and anti-steering provisions. He acknowledged that SB 121 does
not prohibit mail-order but rather prohibits exclusive mail
order design. He noted that Premera does not utilize mandatory
mail order but does not see any reason to restrict this cost
reduction tool.
3:09:05 PM
MR. STRANNIGAN stated that all businesses purchase products and
sell them for more money - which is a simplistic way to look at
spread pricing. He acknowledged that the prescription drug
supply chain is complicated - and each step in the supply chain
takes a spread. He stated his concern that PBMs are the only
part of the supply chain impacted by SB 121. He listed several
other programs that take a large spread and yet are not impacted
by this legislation. He stated that this provision would, in
some cases, result in Premera charging a 10 percent increase in
premium. With respect to "white bagging" and "brown bagging", he
stated that though Premera does not use this in Alaska at this
time, it is preferable to have the option for members in the
future. With respect to dispensing fees, he stated that this is
government setting a price for what is currently subject to
competitive marketplace pricing. He asserted that this would
increase healthcare costs.
3:11:26 PM
MR. STRANNIGAN said that Premera utilizes PBMs for their
negotiating power when working with (sometimes unscrupulous)
drug manufacturers. He expressed concern that the imbalance of
SB 121 would increase the power of those manufacturers, allowing
them to extract more money from plan members by undermining the
PBMs. He expressed his appreciation for the level of engagement
and consideration this legislation has received. He emphasized
that SB 121 has not been vetted and Premera has not had much
time to dig into the proposed changes. He asserted that
developing this type of legislation in isolation is problematic
insofar as it benefits two constituencies over others. He
underscored his appreciation for holding hearings on SB 121 and
allowing for balanced testimony - which will allow Alaskans to
receive a better product.
3:13:17 PM
CHAIR BJORKMAN encouraged Premera (and others) to show the
committee what they paid in prescription drug costs for the last
year and compare this with the NADAC average. He noted that the
NADAC is a rolling average that is updated every week and
compared this to a rolling average that was updated twice a year
(which was exploitative). He encouraged consideration of the
plan numbers on both the plan and the provider side.
3:14:00 PM
LAUREE MORTON, representing self, Juneau, Alaska, testified in
support of SB 121. She said that local pharmacies fill
prescriptions while cultivating relationships. She expressed her
desire to visit pharmacies where trusted staff can help with
non-prescription medications, medical gear, and vaccinations.
She also expressed a desire to support local businesses. She
stated that she would not mind paying more if this keeps Alaskan
businesses open and ensures personalized attention. She opined
that it is important to keep business local, regardless of cost.
She said that she wants to be able to work with her doctor to
choose the best treatment - not a PBM. She emphasized the
importance of regulating the regulators and suggested that PBMs
need more regulation than the businesses they monitor. She
expressed her understanding that the regulatory practices
proposed by SB 121 would protect pharmacies and those they
serve.
3:17:07 PM
[CHAIR BJORKMAN held public testimony on SB 121 open.]
3:17:10 PM
CHAIR BJORKMAN held SSSB 121 in committee.
3:17:43 PM
There being no further business to come before the committee,
Chair BJORKMAN adjourned the Senate Labor and Commerce Standing
Committee meeting at 3:17 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB203 Transmittal Letter 1.22.24.pdf |
SL&C 3/11/2024 1:30:00 PM SL&C 3/25/2024 1:30:00 PM |
SB 203 |
| SB203 Sectional Analysis ver A.pdf |
SL&C 3/11/2024 1:30:00 PM SL&C 3/25/2024 1:30:00 PM |
SB 203 |
| SB203 Presentation for SL&C (Version A).pdf |
SL&C 3/11/2024 1:30:00 PM SL&C 3/25/2024 1:30:00 PM |
SB 203 |
| SB203 Fiscal Note-DCCED-CBPL-01.18.24.pdf |
SL&C 3/11/2024 1:30:00 PM SL&C 3/25/2024 1:30:00 PM |
SB 203 |
| SSSB121 Supporting Document US Cmmttee on Oversight 03.01.23.pdf |
SL&C 3/11/2024 1:30:00 PM |
SB 121 |
| SSSB121 Supporting Document PCMA Lobbying Spend AIS Health 02.15.24.pdf |
SL&C 3/11/2024 1:30:00 PM |
SB 121 |
| SSSB121 Supporting Document-FIERCE Healthcare-Article-PBM Reform Still in Play 02.28.24.pdf |
SL&C 3/11/2024 1:30:00 PM |
SB 121 |
| SSSB121 Supporting Document-One Pager AK Pharmacists Association 03.04.24.pdf |
SL&C 3/11/2024 1:30:00 PM |
SB 121 |
| SSSB121 Supporting Document-Stat News-Article-Big 3 Are Everything Wrong With Industry 03.04.24.pdf |
SL&C 3/11/2024 1:30:00 PM |
SB 121 |
| SSSB121 Supporting Document-Stat News-Article-PBMs Stonewalling FTC 03.27.24.pdf |
SL&C 3/11/2024 1:30:00 PM |
SB 121 |
| SSSB121 Public Testimony Petersburg Rexall Drug 02.26.24.pdf |
SL&C 3/11/2024 1:30:00 PM |
SB 121 |
| SSSB121 Bibliography.2 03-08-24.pdf |
SL&C 3/11/2024 1:30:00 PM |
SB 121 |
| SSSB121 Public Testimony-Letter-PCMA-03.07.24.pdf |
SL&C 3/11/2024 1:30:00 PM |
SB 121 |
| SSSB121 Supporting Document PCMA Bd of Directors 03.05.24.pdf |
SL&C 3/11/2024 1:30:00 PM |
SB 121 |
| SB203 ver A.pdf |
SL&C 3/11/2024 1:30:00 PM SL&C 3/25/2024 1:30:00 PM |
SB 203 |
| SSSB121 Presentation to SLAC by Dan Nelson 03.11.24.pdf |
SL&C 3/11/2024 1:30:00 PM |
SB 121 |
| SSSB121 Presentation to SLAC by Greg Loudon 03.11.24.pdf |
SL&C 3/11/2024 1:30:00 PM |
SB 121 |
| SSSB121 Public Testimony-Letter-Alaska UFCW 1496 03.01.24.pdf |
SL&C 3/11/2024 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 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 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 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 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 |