Legislature(2017 - 2018)HOUSE FINANCE 519
05/03/2017 01:30 PM House FINANCE
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Audio | Topic |
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Start | |
Presentations: the Economy and Fiscal Policy Overview | |
SB32 | |
Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
+ | TELECONFERENCED | ||
+ | SB 32 | TELECONFERENCED | |
+ | TELECONFERENCED |
SENATE BILL NO. 32 "An Act relating to biological products; relating to the practice of pharmacy; relating to the Board of Pharmacy; and providing for an effective date." 4:01:01 PM SENATOR SHELLEY HUGHES, SPONSOR, asked for direction on the bill presentation. Co-Chair Foster answered that a brief overview would suffice. Senator Hughes complied. She explained that the bill would update statutes to allow pharmacists to substitute a new category of medicines called interchangeable biologic products. The medicines were life-changing for people with debilitating diseases and could make the difference between being bed-ridden or up and functional. The drugs were not the same as generics. She detailed that a biologic is made from a living cell and is a complicated molecular structure. Whereas, a generic drug copies a recipe. She furthered that a biosimilar or interchangeable biologic was trying to replicate a complex cell and the items would not be identical. The bill maintained the physician's control - if the doctor did not want a substitution they could write "dispense as written (DAW)." If the doctor wanted to know whether an interchangeable was available, they could ask the pharmacist to call if it was available. A pharmacist could do the substitution if it was not written on the script pad, but they would be required to communicate the substitution to the physician. The bill also required the pharmacist to receive the patient's consent prior to making a substitution. Representative Wilson asked if the bill pertained to compound prescriptions. Senator Hughes replied in the negative. She stated there were entrepreneurs, small companies, and large pharmaceutical companies who were currently working to make more affordable biologic products as biosimilars and to raise them to the standard where there would be no different clinical reaction for the patient. She relayed that 33 states had passed similar legislation and 7 others had pending legislation. The states had done analysis and had determined there should be some savings to Medicaid budgets because biologics were expensive. Interchangeable biosimilars should help the budget. She did not want to make a claim about what the savings may be, but some states had done so. She continued that the Centers for Medicare and Medicaid Services (CMS) believed interchangeable biosimilars should bring down the cost for Medicaid. Representative Wilson referred to the fiscal note that included the following language: "in addition this bill requires the Board of Pharmacy to post and maintain a link to the U.S. Food and Drug Administration's list of currently approved interchangeable biological products on the board's website." She asked if the board already had to post medications and how much the bill would cost pharmacies. 4:06:49 PM Senator Hughes answered that pharmacists could choose whether to carry interchangeable biological products. Most pharmacists had automated systems to contact physicians. She did not know whether there was a current link to post medications. She thought it was a simple thing. She believed the fiscal note was related to the requirement for the board to send something out by mail to pharmacists around the state. She thought the legislature may want to consider why the information was not being sent electronically. Representative Wilson explained that her question was not related to the fiscal note because the state did not normally care about the cost for the private sector - it only cared about the cost to the state. She asked for follow up on whether there would be a cost to pharmacies or whether it was something the pharmacies already did. She asked about the fiscal note and the legal costs to amend the regulation and printing and postage in the first year. She noted the funding source was receipt services. She asked if all business licenses would pay. She wondered why it was a receipt service "for this area." She reasoned bill's goal was to make things easier for Alaskans. She wondered if the Board of Pharmacy would be solely responsible for paying or whether all corporate licensing would pay a portion for the writing of regulations. Senator Hughes replied that she would follow up. She reiterated that pharmacists could choose whether to carry interchangeable biological products. She specified that not all pharmacists would carry the products that were highly specialized. She deferred to the department for further detail. JANEY HOVENDEN, DIRECTOR, DIVISION OF CORPORATIONS, BUSINESS AND PROFESSIONAL LICENSING, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, answered that they were receipt supported services and the pharmacy program would pay through licensing fees. She could not imagine the cost impacting every licensee. It was a nominal one-time cost to do the regulation project. 4:09:44 PM Representative Wilson asked if pharmacists had asked for the bill. She surmised it appeared to be an improvement over what could be given to Alaskans. She was trying to determine why the fiscal note would not come out of general funds versus being charged back to the pharmacist. She stated the situation was unique - typically items were more closely related to the board when they were paid for by the board. She observed that the bill was different because it was trying to do something positive for Alaskans by making medication more affordable and did not necessarily fall under the board's responsibility. Ms. Hovenden replied that the changes would impact the statutes of the pharmacy program; the Board of Pharmacy members would help design the regulations to implement the legislation. Representative Kawasaki asked for verification that a biosimilar was not identical to another product. He asked for the difference between a biosimilar and an interchangeable. Senator Hughes answered that a generic is a duplicate of a medicine made of various chemicals and ingredients - there was no requirement to communicate between the pharmacist and the doctor. A complicated biologic called a biosimilar was made from living cells (e.g. Insulin and Humira). Companies were trying to develop a product that would have the same clinical impact. The companies were using the same basic thing, but because they were using living cells the product would never be 100 percent identical. The interchangeable biosimilar or interchangeable biologic product was the gold standard of the biosimilar. She detailed that the FDA would test and approve the product as interchangeable because if administered to a patient, the patient would have to have the same clinical results whether they were taking the original biologic, were alternating between the original biologic and the interchangeable, or were only taking the interchangeable. There would be no difference in the clinical results. She continued that biosimilars would not all fit within the interchangeable category. She clarified that the doctor would have to specify on a script when a biosimilar was not categorized as interchangeable. It was a new category that would be somewhat like a generic, but not identical (it would be clinically similar, but the genetic makeup would be different). Representative Kawasaki shared that he took fish oil for cholesterol for triglycerides. He detailed that prescription fish oils were ten times the price of non- prescription fish oils. He asked if a fish oil was considered biosimilar. DR. THOMAS FELIX, DIRECTOR, MEDICAL RESEARCH, AMGEN INC. (via teleconference), communicated that he had worked with the coalition of organizations to present coalition language included in the bill. He replied that a fish oil was not considered a biosimilar product. A biosimilar was something that took a very specific regulatory pathway for approval by the FDA to try to create and reference an existing biologic. A fish oil was not as closely regulated as a biologic and another fish oil from a different manufacturer would not be considered a biosimilar. It was necessary to take the 351(k) pathway to be considered a biosimilar. Representative Kawasaki asked if fish oil would be considered a biosimilar product if it was regulated as other specific drugs. Mr. Felix believed the question was whether fish oil would be considered a biologic because it was derived from living tissues. He relayed that it could be considered a biologic in a very technical definition, but for regulatory purposes it was not considered like or governed like biologics would be. However, in a technical term, because it was derived from living tissues or living cells, it was possible to say that it was a derivative of a biologic entity. Representative Kawasaki asked for verification that the point was for a biosimilar to mimic the exact same thing that an interchangeable would do. Mr. Felix replied it was important to understand why a new industry had been built around the development of biosimilars. He explained that biologic drugs had been on the market for over 40-plus years and intellectual properties around long-existing biologics were coming off patent. He furthered that biosimilars or versions of the older products coming off patent were intended to create competition to lower healthcare costs and the analog was generics. Biosimilars were coming to the market to do what generics have done, but with a different scientific framework and expectation financially. Representative Kawasaki relayed that the bill packet included a letter of opposition from the Board of Pharmacy. He thought the board may support a bill like the one under consideration. He asked for comment. Senator Hughes answered that there were some pharmacists in support of the bill. She explained that pharmacists would prefer having the ability to substitute [drugs] without making the communication. Physicians would probably prefer total control and that substitutions could not be made. She detailed that because of the ability for physicians to specify "dispense as written" they ultimately had full control. She furthered that the change the bill would implement would be best for the patient in terms of affordability. The extra step was communication - something pharmacists did not have to do with generics. Her understanding was that the pharmacies - the number would be relatively low because there were a limited number of individuals with applicable diseases - would probably have the automated system set up, meaning it would not be burdensome. She relayed that the State Medical Association, Alaska State Hospital and Nursing Home Association (ASHNHA), the Alaska Commission on Aging, and the Alaska Cancer Action Network were all in support of the legislation. Senator Hughes corrected her earlier example of biosimilar drugs and clarified she had been referring to the drug Humira for rheumatoid arthritis. She shared an example of a Vietnam veteran from Wasilla named Cajun Bob. She detailed he had been featured in Life or Time Magazine in the 1960s. He had been bed-ridden, and the use of a biologic drug had given him a new lease on life. She stressed the importance of the drugs for Alaskans with debilitating diseases. She discussed that sometimes the effectiveness of a medication wore off for an individual, making it necessary to switch to a new medicine. The goal was to ensure individuals would have immediate access to all options. 4:20:15 PM Representative Kawasaki referred to a letter of opposition from the Alaska Rheumatology Alliance in the packet. He added that members' packets were very comprehensive with letters of support. Senator Hughes replied that her office had worked with the group and it had been helpful for them to learn that they could specify to dispense as written and maintain control. Representative Kawasaki provided a scenario of the receipt of a prescription. He thought in the past he had been asked by the pharmacist whether he wanted the cheaper generic prescription. He asked how it would work with a biosimilar. Senator Hughes answered that the physician would prescribe the biologic. When the patient went to the pharmacy to pick up the prescription the pharmacist would notice there was an interchangeable and would ask the patient if they wanted the interchangeable. She noted that the interchangeable was the FDA approved gold standard. If the patient selected the interchangeable, the pharmacist would be required to inform the physician within three business days that the substitution had been made. She stated that with most pharmacies the information would be instantaneously communicated as the medicine was processed and provided to the patient. BUDDY WHITT, STAFF, SENATOR SHELLEY HUGHES, referred to an earlier question by Representative Wilson and wanted to ensure he understood the question. He noted she had been speaking about links to the FDA's list. He thought he had heard her ask if the pharmacist had to post links. He clarified that the Board of Pharmacy had to post the link to the FDA website with a list of all the interchangeable biological products approved by the FDA. The bill did not require individual pharmacists to provide the information. 4:22:42 PM Representative Ortiz asked how long the term biosimilar had existed. Senator Hughes deferred the question to Dr. Felix. Mr. Felix responded that the term biosimilar had existed since the early 2000s when Europe had been first considering development and existence of a pathway forward for biosimilars. The issue had arisen because their intellectual properties were expiring [audio indecipherable]. Representative Ortiz surmised that the movement towards biosimilars was based on similar motivations of movement towards generics, which had probably taken place in the 1970s or 1980s. He believed the motivation was about trying to provide medications that were equally as effective at a lower price. Senator Hughes replied in the affirmative. The intent was to increase access and affordability. Representative Ortiz referred to a letter of opposition from the Board of Pharmacy dated March 6, 2017. He asked for verification that the group was still in opposition to the bill. Senator Hughes replied that the board had not submitted a letter of support, but individual pharmacists and a national pharmacy association had vocalized support for the bill. The individuals understood the importance of access to the medicines. She stated that the Board of Pharmacy retained its position. 4:25:12 PM Representative Guttenberg believed the biosimilars were a good thing. He referred to letter from the Board of Pharmacy. He believed one of the problems was related to who was paying the bill and who had the burden of fulfilling the legislative requirements for reporting by doctors and pharmacies. He thought the issue of payment may mean large-scale pharmacies would be supportive, but smal1- scale pharmacists may feel burdened. He referred to the last few lines of the letter - the board believed the bill would create an unintended barrier to access. The letter also stated there were currently no available interchangeable biosimilar medications on the market. The board did not see the need for legislation regarding biosimilars, but wanted the legislation to follow the BPCI Act of 2009 [Biologics Price Competition and Innovation Act] and its intent of increasing access to medication. He asked if any changes had happened in the bill regarding some of the board's position on the bill. He did not know what the BPCI Act was. He asked for detail about the act and about the bill's conflict with the act. Senator Hughes deferred the question to Dr. Felix. Mr. Felix replied that the BPCI Act allowed the FDA to create regulatory pathways for approval for biosimilars and interchangeable biologic products. The act had been passed in March 2010 as part of the Affordable Care Act (ACA); it was one of the few portions of the ACA with bipartisan support. He believed the most important recent development was that, at the beginning of the year, the interchangeability designation finally had a draft guidance released by the FDA. The guidance provided transparency to the community in terms of what was required to obtain interchangeability. He spoke to the importance of understanding that for companies that were not developing biosimilars or interchangeables, the area had previously not been clear. However, for developers of biosimilars or interchangeables, the FDA had been transparent in terms of providing direction for the development of clinical trials and data requirements. There had been companies that had completed clinical trials that may satisfy the requirements for an interchangeability designation. Additionally, companies had announced starting clinical trials to pursue an interchangeability designation. He stated that sometimes there was a description that the only reason the legislation was needed was to ensure the facilitation of interchangeability and that substitutions could be made by pharmacists. In general, the community was not aware of what biosimilars were as compared to generics. He shared that five biosimilars had been approved to date [audio indecipherable]. He noted they were awaiting an approval of an interchangeable in the future. People typically thought of biosimilars as generics - most generics were substitutable - but biosimilars were not substitutable. Another reason to pass legislation was to clearly communicate how to use the products when they were approved under different designations. Co-Chair Foster passed the gavel to Vice-Chair Gara. Vice-Chair Gara remarked that some of Dr. Felix's testimony had been difficult to hear. Mr. Felix apologized and reiterated his previous remarks. He restated his previous testimony related to the creation of the BPCI Act and draft guidance released by the FDA in January on the path to obtaining the interchangeability designation. He explained that were companies that had completed trials to try to achieve an interchangeability designation. When they would be approved was currently unknown. Companies had also announced they would be interchangeability trials to pursue the designation. He underscored the importance of the legislation because it would facilitate substitution of an interchangeable by a pharmacist. 4:32:18 PM Mr. Felix reiterated that the legislation clearly communicated how to use biosimilars and interchangeables when they were approved under different designations. The five biosimilars approved to date were only biosimilars and did not have the FDA designation that would allow substitution by a pharmacist. He explained that the products were very different than how generics were viewed. If the community was uneducated and began to think of biosimilars as approved and immediately used their closest analog, which was generic approval, the community may think the biosimilars were substitutable unless clear terms of use were in place. He stated that every aspect of healthcare was trying to increase communication between members of the healthcare team. The bill would allow transparency for a prescriber to know what was ultimately dispensed to the patient for the prescriber to be on top of their care. If there was any change in a patient's response to a medication the prescriber would know exactly what medication the patient was on. Representative Guttenberg spoke to who was paying the bill. He observed that Dr. Felix had not stated whether any of the products were approved by the FDA. He referred to Dr. Felix's testimony about clarity and transparency. He wondered why the decision would not be handled in the doctor's office instead of at the pharmacy. He continued that patients were often in a hurry at the pharmacy and were amenable to whatever was given to them. Alternatively, he thought it made sense to have the physician tell patients what they would receive. He referred to Dr. Felix's earlier testimony that many practitioners and people were not up on the issue. He thought the doctor's office was the best place to do prescribing. He continued that the doctor could specify for a pharmacist to only prescribe a prescription as written. Mr. Felix answered that biologics were distributed through either a medical benefit (administered by a healthcare professional) or were self-administered (pharmacy benefit). The legislation pertained to biologics that were self- administered. The medications would not be dispensed in a physician's office. Often the pharmacist would be the first to become aware, especially when an interchangeable was approved in the marketplace. He explained that medical benefit biologics were typically administered by a healthcare professional in a clinic, hospital, or office setting. Whereas self-administered biologics meant a patient self-injected the medication. The physician or their delegate would not be directly administering the product to the patient. The method of facilitation of substitution by a pharmacist had worked well for generics and had worked to lower cost and facilitate access. 4:38:02 PM Senator Hughes referenced Representative Guttenberg's comments about the letter from the Board of Pharmacy. She agreed there were not any [interchangeables] on the market; the products were in the testing phases. There had been a projection that the products could be out within a month to a year. The primary issue was that they did not want to wait an extra year to provide the products (if they became available) to Alaskans suffering from diseases such as lupus, multiple sclerosis, and rheumatoid arthritis. She reiterated her earlier testimony that pharmacists did not have to carry the products. She relayed that if the communication requirement was not included, it would be bad for patients - patients wanted the substitution listed in their medical records; doctors needed the information because they were not 100 percent identical like a generic. Representative Wilson asked who had requested the bill. Senator Hughes replied it had been a combination of patient groups and companies developing the products. The companies were spending millions on product development; if statutes were not set up, patients would not have access to the products. The individuals suffering, who had tried a biologic, wanted continued access. Representative Wilson stated it had been her understanding that a pharmacist would have to call the physician prior to giving the product to a patient; however, that was not the case. She summarized that there was discussion between the pharmacist and the patient, the patient made the determination, and the doctor may not know what happened for three days. She was uncomfortable with that process. She referred to a letter in members' packets from a physician specifying their practice would be in harm's way because they were not notified right away. She requested to hear from the Board of Pharmacy at a future hearing. She remarked that the bill would charge pharmacists and they had not asked for it. She asked for additional information at a future hearing. Senator Hughes reiterated that the State Medical Association supported the bill. She explained that a physician could retain control by specifying a prescription was to be dispensed as written. She added that the products were FDA approved and clinical results would be no different than the original reference product. Representative Wilson understood, but she surmised it could constitute a significant medical change. She wanted to be very careful. She surmised there could be a change from what the physician wanted. She wanted to ensure all parties were involved, not only groups or outside entities. 4:42:45 PM Mr. Whitt pointed to Section 4 of the bill that specified a pharmacist who substituted a biologic in compliance with the section did not incur any greater liability than would be incurred in filling the original prescription. The section also specified the dispense as written provision. Representative Wilson noted that her concern was with Section 5 related to the three-day timeframe a pharmacist had to communicate a prescription to a physician. She was concerned about the liability to the physician. She was certain that if a person had side effects it would be the physician who was accountable. She stated that prescribing was a physician's duty. She was concerned that the Board of Pharmacy would have to pay for something it was not in favor of. She had not understood earlier that the pharmacy would be telling a physician what prescription was dispensed without obtaining approval from the physician. Senator Hughes noted that the process for medication to be approved by the FDA was incredibly rigorous. She furthered that if a medication was categorized as interchangeable, there was a high assurance level, which was the reason for the State Medical Association's support of the bill. Representative Wilson clarified her concern was that pharmacists were not doctors. She stated that a patient could receive a doctor prescription, but then go to a pharmacy and get something that was slightly different. She was concerned that the doctor would not know for up to three days what prescription had been dispensed. She spoke to the liability to the physician. She believed the bill would allow a medical decision to be made by the pharmacist and patient. She had initially believed the doctor would know about the prescription before it had been dispensed. Senator Hughes answered that the types of pharmacies that would be handling the expensive medication would more than likely have instantaneous notification to the physician. She reasoned that the FDA's rigorous process had been trusted with great success and savings. SB 32 was HEARD and HELD in committee for further consideration. Co-Chair Foster addressed the schedule for the following day.
Document Name | Date/Time | Subjects |
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SB032 Opposing Document-Opposition Letters 04.17.17.pdf |
HFIN 5/3/2017 1:30:00 PM |
SB 32 |
SB032 Sectional Analysis ver J 04.17.17.pdf |
HFIN 5/3/2017 1:30:00 PM |
SB 32 |
SB032 Sponsor Statement 04.17.17.pdf |
HFIN 5/3/2017 1:30:00 PM |
SB 32 |
SB032 Supporting Documents-Support Letters 04.17.17.pdf |
HFIN 5/3/2017 1:30:00 PM |
SB 32 |
SB32_Support_050317.pdf |
HFIN 5/3/2017 1:30:00 PM |
SB 32 |
HFIN Crum ATA.pdf |
HFIN 5/3/2017 1:30:00 PM |