Legislature(2017 - 2018)ADAMS ROOM 519

04/12/2018 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 37 PHARMACY BD & STAFF;DRUG DISTRIB/MANUFACT TELECONFERENCED
Moved CSSB 37(FIN) Out of Committee
-- Public Testimony --
+ SB 15 E-CIGS/TOBACCO/NICOTINE & MINORS; SALES TELECONFERENCED
Heard & Held
-- Public Testimony --
+ SB 155 REAL ESTATE APPRAISAL MNGMT. COMPANIES TELECONFERENCED
Scheduled but Not Heard
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= SB 158 OIL/HAZARDOUS SUB.:CLEANUP/REIMBURSEMENT TELECONFERENCED
Moved SB 158 Out of Committee
CS FOR SENATE BILL NO. 37(FIN)                                                                                                
                                                                                                                                
     "An Act relating to the  Board of Pharmacy; relating to                                                                    
     the  licensing of  certain entities  and inspection  of                                                                    
     certain facilities located  outside the state; relating                                                                    
     to drug  supply chain security; creating  a position of                                                                    
     executive administrator for the  Board of Pharmacy; and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
1:52:08 PM                                                                                                                    
                                                                                                                                
JANE CONWAY,  STAFF SENATOR CATHY GIESSEL,  SPONSOR, relayed                                                                    
that  SB 37  brought Alaska  into compliance  with the  Drug                                                                    
Quality  Security Act  (DQSA), which  created a  new license                                                                    
category  for  "Out-of-State  Wholesale  Drug  Distributors"                                                                    
established  in 2013  to provide  oversight  to large  scale                                                                    
drug compounders.  She expounded  that currently,  the Board                                                                    
of  Pharmacy  had  no  authority  to  regulate  out-of-state                                                                    
wholesale  drug  distributors  and  the  bill  provided  the                                                                    
authority.  The   legislation  allowed  Alaska  to   act  to                                                                    
eliminate   wholesalers  looking   for   loopholes  in   the                                                                    
regulatory  system and  ensure that  out-of-state applicants                                                                    
seeking  licensure  comply  with  the  same  regulations  as                                                                    
Alaskan  wholesalers.  She  reported   that  only  one  drug                                                                    
wholesaler operated in Alaska; McKesson Drugs Company.                                                                          
                                                                                                                                
Ms. Conway  relayed an incident  relating to  wholesale drug                                                                    
distributors.  She  detailed   that  in  2012,  contaminated                                                                    
medications were  distributed which  resulted in  the deaths                                                                    
of  people from  meningitis.  In 2012,  a nationwide  fungal                                                                    
meningitis outbreak  resulted in  751 patients in  20 states                                                                    
being  diagnosed and  64  patients in  9  states dying.  The                                                                    
outbreak   was  linked   to   a   compounding  facility   in                                                                    
Massachusetts.  It   was  found  that  the   employees  were                                                                    
producing  medications in  an  unsafe  manner in  unsanitary                                                                    
conditions  and the  company allowed  the medications  to be                                                                    
shipped out  anyway. The tragedy highlighted  the dangers of                                                                    
unregulated, large scale  compounders. She communicated that                                                                    
SB  37 ensured  that prescriptions  were pure,  sanitary and                                                                    
safe. Passage  of the bill  would create a more  secure drug                                                                    
supply chain  and ensure that  Alaskans were  receiving non-                                                                    
counterfeit, unadulterated medications.  She delineated that                                                                    
when  a  pharmacy, doctor,  or  hospital  in Alaska  ordered                                                                    
supplies  of prescription  medications, they  may go  to the                                                                    
one wholesale distributer in  Alaska(McKesson), but they may                                                                    
also order from  one of hundreds of others in  the Lower 48.                                                                    
The  bill  required  any out-of-state  drug  distributor  or                                                                    
outsourcing   facility   to   follow   specific   guidelines                                                                    
including:  obtaining  a   license  in  Alaska,  authorizing                                                                    
inspection by a  designee of the board,  appointing an agent                                                                    
before shipping,  mailing, or delivering  prescription drugs                                                                    
to a licensee in the state  or advertising in the state. She                                                                    
pointed   out  that   that  last   provision  identified   a                                                                    
responsible  party (agent)  to  serve  subpoenas for  citing                                                                    
infractions  or   filing  suit  in  case   of  problem.  She                                                                    
continued that an outsourcing facility  must comply with the                                                                    
Drug Quality  and Security Act  (DQSA) of 2013.  She defined                                                                    
that  an  "outsourcing  facility"  was  a  facility  in  one                                                                    
geographical location  that was  engaged in  the compounding                                                                    
of  sterile drugs  for a  facility  at another  geographical                                                                    
location.  They were  companies that  made large  batches of                                                                    
compounded   drugs   that   had    the   highest   risk   of                                                                    
contamination.  The  Division  of Corporate,  Business,  and                                                                    
Professional  Licensing (DCBPL)  estimated that  registering                                                                    
and   regulating    the   drug   wholesalers    equated   to                                                                    
approximately 400 new licensees.                                                                                                
                                                                                                                                
Ms. Conway offered  that a provision of the  bill created an                                                                    
executive  administrator position  for the  Alaska Board  of                                                                    
Pharmacy.  The  board had  ever-increasing  responsibilities                                                                    
under several  healthcare reform  bills and  opioid response                                                                    
legislation that  passed recently. The position  would allow                                                                    
the board  more capacity to  respond more quickly  to issues                                                                    
and  concerns,  manage  the licensing  of  new  wholesalers,                                                                    
implement statutes and regulations,  and manage the multiple                                                                    
new  responsibilities  relating  to  the  Prescription  Drug                                                                    
Monitoring  Program (PDMP).  The board  currently relied  on                                                                    
the   division  for   routine  operations   assistance.  The                                                                    
position  would  be  paid  by   the  fees  supplied  by  the                                                                    
wholesale  drug  distributor  licensees along  with  current                                                                    
licensee fees and would not impact the general fund.                                                                            
                                                                                                                                
1:59:17 PM                                                                                                                    
                                                                                                                                
Representative  Wilson  questioned  whether Ms.  Conway  was                                                                    
aware that  the Massachusetts facility was  inspected but no                                                                    
one  performed  any follow  up.  Ms.  Conway deferred  to  a                                                                    
pharmacist  online to  answer  the question.  Representative                                                                    
Wilson was aware  of the circumstances and  relayed that the                                                                    
Massachusetts manufacturer was regulated  and fined. She was                                                                    
concerned   about   the   federal  mandate   requiring   the                                                                    
legislation and wondered what  repercussions the state would                                                                    
incur if  the legislation  was not  adopted. Ms.  Conway was                                                                    
unsure what  the federal government would  do. She suspected                                                                    
that the message  to consumers would be that  Alaska did not                                                                    
care about  the quality  of its  medicine. She  thought that                                                                    
Alaskan consumers  expected the drugs to  be manufactured in                                                                    
a  regulated  facility   that  maintained  quality  control.                                                                    
Representative  Wilson  declared  that   she  did  care  but                                                                    
explained that  her concern focused  on requiring  the state                                                                    
to perform  the inspections.  She thought the  mandate would                                                                    
result  in additional  liability  for the  state. She  asked                                                                    
whether  her assumption  was correct.  Ms. Conway  responded                                                                    
that  it   was  possible   that  the  state   would  perform                                                                    
inspections.  However,  since  most  other  states  required                                                                    
licensure the criteria adopted by  other states would likely                                                                    
comply with Alaska's criteria. The  inspection could just be                                                                    
a  matter of  reciprocity with  other states  licensure that                                                                    
would place  an approved wholesaler  in another state  on an                                                                    
Alaskan list  of approved facilities.  Representative Wilson                                                                    
asked  whether  Ms.  Conway was  aware  of  any  problematic                                                                    
incidents  with wholesalers  in Alaska.  Ms. Conway  was not                                                                    
aware  of  any  incidents.  She referred  to  a  handout  in                                                                    
member's packets  titled "The Deadly Counterfeit  Drug Trade                                                                    
Thrives in Alaska" (copy on  file). She indicated that there                                                                    
were  several  places  in the  wholesale  drug  distribution                                                                    
process   where   counterfeiting    actions   could   occur.                                                                    
Representative Wilson  asked how the bill  worked. She asked                                                                    
what   provisions  in   the   bill   identified  where   the                                                                    
counterfeiting  actions   could  occur  and   prevented  the                                                                    
activity.                                                                                                                       
                                                                                                                                
2:04:19 PM                                                                                                                    
                                                                                                                                
Ms. Conway responded that bill  licensed the entities of the                                                                    
wholesale  drug  distributors, the  outsourcing  facilities,                                                                    
and  the  third-party  logistical providers;  all  would  be                                                                    
licensed under  the bill. She maintained  that the licensing                                                                    
of  all entities  handling the  drugs prevented  counterfeit                                                                    
activities.    Representative    Wilson    mentioned    that                                                                    
compounding  drugs were  recently  excluded  in the  state's                                                                    
active  employee   health  plan.   She  asked   whether  the                                                                    
legislation would  cover compound drugs with  passage of the                                                                    
bill.  Ms.  Conway  deferred to  the  appropriate  available                                                                    
testifier to answer the question.                                                                                               
                                                                                                                                
2:06:08 PM                                                                                                                    
                                                                                                                                
Representative  Kawasaki   noted  she  had   mentioned  that                                                                    
currently  there  were  400  out-of-state  drug  wholesalers                                                                    
engaged in  business activities in Alaska.  He asked whether                                                                    
his statement was correct. Ms.  Conway answered that the 400                                                                    
number   was  an   estimate.   She   relayed  that   Alaskan                                                                    
pharmacists avoided  engaging with most of  the out-of-state                                                                    
drug  wholesalers  because  they   did  not  know  who  were                                                                    
reputable. The  division had informed her  that many out-of-                                                                    
state companies  were inquiring  whether the  state required                                                                    
licensing, some wanting to take  advantage of the unlicensed                                                                    
environment. There  was a limited  number of  suppliers that                                                                    
Alaska pharmacists  would purchase  drugs from and  the bill                                                                    
would provide the larger estimated pool of wholesalers.                                                                         
                                                                                                                                
Representative Kawasaki related a  scenario where an out-of-                                                                    
state drug  wholesaler did  not want  to become  licensed in                                                                    
Alaska.  He asked  whether the  bill contained  transitional                                                                    
language  that  allowed  an Alaskan  heath  care  entity  to                                                                    
continue  to do  business with  them. Ms.  Conway could  not                                                                    
imagine  a wholesaler  not  wanting to  sell  to vendors  in                                                                    
Alaska and not obtaining  a license. Representative Kawasaki                                                                    
restated his question.  Ms. Conway responded that  all but 4                                                                    
other  states required  licensure  so  the wholesalers  were                                                                    
registered  in many  other states  and was  common practice.                                                                    
Representative Kawasaki asked  whether the out-of-state drug                                                                    
wholesaler  regulations  were  standardized and  similar  in                                                                    
every state.  Ms. Conway  replied that  the state  of Alaska                                                                    
would apply  the current  set of  regulations it  applied to                                                                    
McKesson to the out-of-state drug wholesalers.                                                                                  
                                                                                                                                
2:10:55 PM                                                                                                                    
                                                                                                                                
Representative  Kawasaki asked  why  the  Board of  Pharmacy                                                                    
could not just allow  out-of-state drug wholesalers that met                                                                    
the criteria of another state  to operate in Alaska and gain                                                                    
an  Alaskan license  by merely  qualifying for  licensure in                                                                    
another state. He thought it  would save the time and effort                                                                    
required to  develop regulation and inspect  facilities. Ms.                                                                    
Conway  indicated that  every state  had  adopted their  own                                                                    
criteria; some  maybe more or  less stringent.  She restated                                                                    
the  possibility for  reciprocity with  states that  had the                                                                    
same criteria  as Alaska's. She  expounded that there  was a                                                                    
national   certifier   called   the   "Verified   Accredited                                                                    
Wholesale Distributor" (VAWD) but was  only used by 3 states                                                                    
due  to  the  registration  fee costs.  However,  23  states                                                                    
accepted the certification.                                                                                                     
                                                                                                                                
2:13:27 PM                                                                                                                    
                                                                                                                                
Representative Pruitt  guessed the transition time  would be                                                                    
established through  regulation. He cited the  two effective                                                                    
dates  in the  bill,  an immediate  effective date  allowing                                                                    
time  to   establish  regulations  and  the   hiring  of  an                                                                    
executive director.  The second  effective date was  July 1,                                                                    
2019 when  the law  would be  implemented. He  asked whether                                                                    
the  July  1   date  offered  enough  time   "to  allow  the                                                                    
transition to take place."                                                                                                      
                                                                                                                                
SARA  CHAMBERS, DEPUTY  DIRECTOR, DIVISION  OF CORPORATIONS,                                                                    
BUSINESS   AND   PROFESSIONAL   LICENSING,   DEPARTMENT   OF                                                                    
COMMERCE,   COMMUNITY   AND    ECONOMIC   DEVELOPMENT   (via                                                                    
teleconference),  thought the  time frame  was adequate  for                                                                    
notifying involved  entities and allowing them  input in the                                                                    
board's public process for regulation adoption.                                                                                 
                                                                                                                                
Representative  Pruitt  asked   whether  the  date  provided                                                                    
enough time for the public  to provide input on the proposed                                                                    
regulations. Ms. Chambers answered in the affirmative.                                                                          
                                                                                                                                
2:15:47 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster OPENED public testimony.                                                                                        
                                                                                                                                
2:16:32 PM                                                                                                                    
                                                                                                                                
RICHARD  HOLT,  CHAIR,  ALASKA   STATE  BOARD  OF  PHARMACY,                                                                    
ANCHORAGE (via  teleconference), testified on behalf  of the                                                                    
board  in  support  of  the  bill.  He  explained  that  the                                                                    
legislation provided  the board two  imperative authorities:                                                                    
to  license  out-of-state  wholesale drug  distributors  who                                                                    
were  shipping  pharmaceuticals  into the  state,  and  out-                                                                    
sourcing facilities and whole  sale logistics providers. The                                                                    
other  authority  allowed the  board  to  hire an  executive                                                                    
administrator   using   the   licensing  fees.   The   board                                                                    
determined that  the licensure was necessary  to fulfill its                                                                    
responsibility  to  ensure  the  practice  of  pharmacy  was                                                                    
acting in the best interest  of Alaskans. He emphasized that                                                                    
the  out-of-state wholesalers  shipped anything  they wanted                                                                    
to  the state  because of  the  lack of  oversight from  the                                                                    
board.  He  relayed  that   the  board's  licensee  examiner                                                                    
received  many   inquiries  from   out-of-state  wholesalers                                                                    
asking whether  the state required a  license. He reiterated                                                                    
that  the state  was unaware  of what  the wholesalers  were                                                                    
shipping  into  the  state.  He   relayed  that  recently  a                                                                    
registered out-of-state  wholesaler turned its  license back                                                                    
over to  the state and  choose to operate as  an outsourcing                                                                    
facility to  avoid oversight. He commented  that the board's                                                                    
workload continued  to increase, and the  executive director                                                                    
position was necessary  to assist the board  in carrying out                                                                    
its statutory duties. He urged  members to vote "yes" on the                                                                    
bill.                                                                                                                           
                                                                                                                                
Representative Kawasaki  mentioned that the  state typically                                                                    
joined    interstate    compacts   for    protections    and                                                                    
efficiencies.  He  asked  whether  "it would  be  easier  to                                                                    
dovetail"  off the  other 47  states  that already  required                                                                    
licensure. DR.  Holt responded that  when the  board drafted                                                                    
regulations  they  examined   the  provisions  other  states                                                                    
adopted.  The board  would  dovetail  regulations that  were                                                                    
appropriate   but  would   tailor   regulations  to   ensure                                                                    
Alaskan's safety and that they met the state's needs.                                                                           
                                                                                                                                
2:20:56 PM                                                                                                                    
                                                                                                                                
Representative Wilson asked  if Dr. Holt felt  that the bill                                                                    
would help  restore state  employee benefits  for compounded                                                                    
drugs.  Mr.  Holt  replied  that  the  state  currently  had                                                                    
regulations  for   compounding  in  12   AAC.52.440  [Alaska                                                                    
Administrative Codes].  He suggested  that the issue  was an                                                                    
insurance  related  issue.  Representative  Wilson  conveyed                                                                    
that  the employees  received notice  that the  coverage was                                                                    
eliminated  due  to  safety concerns,  yet  state  retirees'                                                                    
compounded drug prescriptions were  still covered. She hoped                                                                    
the  bill  would grant  the  state  more confidence  in  the                                                                    
safety  of compounded  drugs. She  appreciated all  the work                                                                    
accomplished by the  board. Dr. Holt affirmed  that the bill                                                                    
would  provide  that  state more  assurances  regarding  the                                                                    
safety of compounding drugs.                                                                                                    
                                                                                                                                
2:23:11 PM                                                                                                                    
                                                                                                                                
LEIF   HOLM,   BOARD   OF    PHARMACY,   NORTH   POLE   (via                                                                    
teleconference),  wanted to  echo Dr.  Holt's sentiments  on                                                                    
behalf of the  board in support of the bill.  He offered his                                                                    
testimony   from   the   perspective   of   an   independent                                                                    
pharmacists.  He   conveyed  that   ultimately,  pharmacists                                                                    
wanted  to   have  confidence  that  the   medications  they                                                                    
purchased  were  safe. He  relayed  that  he restricted  his                                                                    
purchasing with  primarily one large wholesalers  because he                                                                    
could not  quickly asses where the  small wholesalers' drugs                                                                    
were coming from. Pharmacists were  always searching for the                                                                    
lowest  prices   but  revealed   that  it   was  potentially                                                                    
dangerous with  some of  the "unscrupulous  characters" that                                                                    
were  making  substandard  drugs,   and  the  situation  was                                                                    
serious.  He noted  that the  state currently  regulated in-                                                                    
state wholesalers and he did  not believe it would take much                                                                    
effort  to  implement  the  regulations.  He  mentioned  the                                                                    
likelihood of the board  reciprocally accepting other states                                                                    
standards  and  did  not  anticipate  having  to  travel  to                                                                    
another  state  to  do inspections.  He  was  available  for                                                                    
questions.                                                                                                                      
                                                                                                                                
Representative  Kawasaki   asked  how  Dr.   Holm  currently                                                                    
determined who was a legitimate  wholesaler. Dr. Holm voiced                                                                    
that  the situation  was difficult.  He  elaborated that  he                                                                    
almost    exclusively    used    the    single    wholesaler                                                                    
AmerisourceBergen  Corporation but  at times  he had  to use                                                                    
another wholesaler  and was not  able to  reliably determine                                                                    
the reputation of another supplier.  He wished he could rely                                                                    
on a  state website that listed  state licensed wholesalers.                                                                    
Representative Kawasaki  asked how  comfortable he  was with                                                                    
using  other  state regulations  and  if  he agreed  that  a                                                                    
wholesaler who was reputable for  another state was probably                                                                    
a  legitimate source  for Alaska.  Dr. Holm  would agree  as                                                                    
long  as  the  standards   mirrored  Alaska's  criteria.  He                                                                    
deduced  that he  could  go to  another  state's website  to                                                                    
determine whether  a wholesaler was licensed  and then check                                                                    
the thoroughness  of the regulations. He  emphasized that he                                                                    
trusted  the  decisions  the board  made  and  would  rather                                                                    
consult  the  state's  licensure  where he  played  a  role.                                                                    
Representative Kawasaki surmised that  the bill provided for                                                                    
an executive  administrator at  a range  23 attached  to the                                                                    
new licensure  and wanted  to find a  less expensive  way to                                                                    
accomplish  the licensing.  He wondered  whether there  were                                                                    
model  regulations from  one state  that the  board approved                                                                    
of, whereby the  board could adopt as their  own rather than                                                                    
using an executive administrator.                                                                                               
                                                                                                                                
2:29:49 PM                                                                                                                    
                                                                                                                                
Dr.   Holm  asked   for  a   restatement  of   the  concern.                                                                    
Representative  Kawasaki wanted  to find  out whether  there                                                                    
was a cheaper way to  accomplish the licensure work by board                                                                    
regulation. Dr. Holm answered that  the position was covered                                                                    
by  the   wholesale  licensing  fees.  He   noted  that  the                                                                    
profession was constantly evolving,  and it was difficult to                                                                    
keep  up  with  the  changes.  He  countered  Representative                                                                    
Kawasaki's  notion that  the board  could do  the regulatory                                                                    
work on  their own. He remarked  on the busy lives  of board                                                                    
pharmacists.  He  shared that  he  had  four jobs  with  his                                                                    
various pharmacies  besides carrying  out his  board duties,                                                                    
which was  very time consuming.  He noted that  other boards                                                                    
like the  medical board and  nursing board had  an executive                                                                    
administrator.  He reported  that  in  person meetings  were                                                                    
much  more  effective   than  teleconferenced  meetings  and                                                                    
reported  that the  board was  restricted to  two in  person                                                                    
meetings per  year. He believed that  the executive position                                                                    
would act as  a liaison, board work would  be expedited, and                                                                    
thought it would  be easier for the board to  stay on top of                                                                    
what other  states were doing.  He would find it  arduous to                                                                    
find the time  to analyze many other  states regulations. He                                                                    
acknowledged that he  had volunteered for the  board, but it                                                                    
did not mean the job did not require significant effort.                                                                        
                                                                                                                                
2:33:18 PM                                                                                                                    
                                                                                                                                
Representative Wilson  wondered whether a  complaint against                                                                    
an out-of-state wholesaler would  force a state investigator                                                                    
to travel  to the state  to perform an  investigation, which                                                                    
was typically  a significant  cost to  the board.  She asked                                                                    
whether the  investigatory costs  would be paid  through the                                                                    
wholesale  licensure or  the profession's  general licensure                                                                    
fees. Dr. Holm responded that  he did not foresee a scenario                                                                    
that required an  Alaskan inspector to travel  out of state.                                                                    
He thought that  as violations were occurring  they would be                                                                    
reported  to   all  states  boards.   Representative  Wilson                                                                    
wondered how the  licensure funds would be  disbursed in the                                                                    
eventuality of an  investigation. Dr. Holm did  not know. He                                                                    
supposed  that  inspection  costs  would  come  out  of  the                                                                    
pharmacy  licensure  "pot"  that   included  fees  from  the                                                                    
technicians, pharmacists, and wholesalers.                                                                                      
                                                                                                                                
Representative     Wilson     spoke    about     compounding                                                                    
prescriptions. She asked how much  revenue Mr. Holm had lost                                                                    
because   the  state   eliminated   employee  coverage   for                                                                    
compounded medications. Dr. Holm  answered he lost thousands                                                                    
of  dollars in  revenues and  many patients  were unable  to                                                                    
obtain their  medications due to high  costs. Representative                                                                    
Wilson asked  if the state  would realize it made  a mistake                                                                    
due to the safety guarantees  embedded in the bill. Dr. Holm                                                                    
stated  it depended  on whether  it was  done for  safety or                                                                    
financial reasons. He could not  speak to exactly what would                                                                    
happen.   Representative  Wilson   thanked   Mr.  Holm   and                                                                    
acknowledged his work.                                                                                                          
                                                                                                                                
2:36:47 PM                                                                                                                    
                                                                                                                                
Representative   Pruitt   asked   whether  the   board   was                                                                    
comfortable  with the  licensure  fee  structure that  would                                                                    
facilitate supporting a new  executive director position. He                                                                    
asked whether  the licensing fees  would increase.  Dr. Holm                                                                    
responded  that the  board  did not  expect  an increase  in                                                                    
existing  licensing  fees.  The   fees  collected  from  the                                                                    
wholesale  licenses   were  expected   to  fully   fund  the                                                                    
position.  He  spoke  with wholesalers  that  supported  the                                                                    
licensure    and   expected    to   pay    licensing   fees.                                                                    
Representative   Pruitt   recounted   that  there   was   an                                                                    
expectation  the board  would not  need to  increase license                                                                    
fees  to pay  for  the executive  director  even though  the                                                                    
director would  carry out duties other  than duties required                                                                    
for the wholesaler licensing. He  continued that there was a                                                                    
problem  with many  boards where  the current  fee structure                                                                    
could not  cover the cost  of an investigation. He  asked if                                                                    
the   board    was   concerned   that    when   out-of-state                                                                    
investigations  did  occur  the  wholesaler  licensing  fees                                                                    
would increase causing "push back" from the wholesalers.                                                                        
                                                                                                                                
2:40:15 PM                                                                                                                    
                                                                                                                                
Dr.  Holm  understood   Representative  Pruitt's  point  and                                                                    
thought  it was  hypothetical  regarding investigations.  He                                                                    
understood  the larger  investigatory  issues pertaining  to                                                                    
boards. He noted  that the pharmacy board  was a well-funded                                                                    
board that  had never operated  with a negative  balance. He                                                                    
opined that the  board would deal with the issue  if or when                                                                    
it happened.  He thought safety  was the number  one concern                                                                    
with  moving  forward  with  the  licensure.  Representative                                                                    
Pruitt agreed that safety should  be the primary concern. He                                                                    
wanted  the industry  to know  that the  expectation of  the                                                                    
state was the  licensure used a "fee for  service model" and                                                                    
fees could increase  to cover board costs.  He asked whether                                                                    
the board  was comfortable with the  structure. He supported                                                                    
moving the  bill forward  if the board  was in  support. Dr.                                                                    
Holm could  not speak  for everyone and  could not  speak to                                                                    
how the  board would decide  on future fee increases  but he                                                                    
would support  "whatever decision needed  to be made  by the                                                                    
board to make this happen."                                                                                                     
                                                                                                                                
Representative  Tilton  referred  to the  fiscal  note  from                                                                    
DCCED that stated  there was no fiscal impact  on the public                                                                    
or  private sectors  in  the state  as  the licensing  would                                                                    
impact entities  outside of the  state [second  paragraph on                                                                    
page  2  of the  fiscal  note].  She  was concerned  that  a                                                                    
potential impact  could happen  in the future.  She wondered                                                                    
whether  any  latent  impact could  increase  costs  to  the                                                                    
consumer. Mr. Holm  answered that he did  not anticipate any                                                                    
fiscal impact on  the wholesaler; the fees  were minimal for                                                                    
a  wholesaler.  He  deduced that  the  bill's  impact  could                                                                    
potentially lower  costs by offering more  possibilities for                                                                    
the pharmacists to source lower costs drugs.                                                                                    
                                                                                                                                
2:44:50 PM                                                                                                                    
                                                                                                                                
BARRY CHRISTENSEN, ALASKA  PHARMACIST ASSOCIATION, KETCHIKAN                                                                    
(via teleconference),  spoke in  support of  the legislation                                                                    
on  behalf   of  the  association.  He   reported  that  the                                                                    
association   attempted  to   address   the  issue   through                                                                    
legislation  for  over  four   years.  The  membership  felt                                                                    
strongly  that the  pharmacies needed  the safety  assurance                                                                    
and a trusted source to  identify and verify wholesalers. He                                                                    
concurred  with   the  previous  statements   regarding  the                                                                    
inability  to  validate  wholesalers.   He  added  that  the                                                                    
national  association   for  the  drug   wholesale  industry                                                                    
reported its support  for the bill as  currently written. He                                                                    
reiterated that the licensure was  the standard practice. He                                                                    
appreciated the work of the  board and endorsed the need for                                                                    
the administrative position.                                                                                                    
                                                                                                                                
Co-Chair Foster CLOSED public testimony.                                                                                        
                                                                                                                                
Representative Wilson reiterated  her question regarding the                                                                    
distribution of  investigative costs under the  new license.                                                                    
Ms. Conway understood that any  investigatory cost was borne                                                                    
by  the  entity  being  investigated. She  voiced  that  the                                                                    
sponsors  envisioned that  investigations  would be  carried                                                                    
out by contracting out an  investigatory work to a qualified                                                                    
provider in the same  state the investigation was necessary.                                                                    
She stated if there was  a problem in California, they would                                                                    
contract with the  proper entity in California.  She did not                                                                    
envision  "sending  people  out  all across  the  nation  to                                                                    
inspect."     Representative     Wilson    remarked     that                                                                    
investigations had been "lopsided"  with most of the state's                                                                    
boards  increasing   licensing  fees.  She   reiterated  her                                                                    
question regarding  how a costly investigation  would affect                                                                    
the  boards  licensing  fees. Ms.  Conway  deferred  to  Ms.                                                                    
Chambers for the answer.                                                                                                        
                                                                                                                                
2:50:53 PM                                                                                                                    
                                                                                                                                
Ms. Chambers answered that the  division, which included all                                                                    
43  of  the  state's  license programs,  did  not  have  the                                                                    
statutory authority  to recoup investigative  costs directly                                                                    
from  the  entity  being   investigated.  She  relayed  that                                                                    
penalties and fines imposed were  deposited into the general                                                                    
fund. The  statutes required  that investigatory  costs were                                                                    
born  by  all  programs  under their  licensing  board.  The                                                                    
division   tried    to   determine   whether    there   were                                                                    
disproportionate investigatory  costs per license  type. She                                                                    
hypothesized  that if  investigative costs  for out-of-state                                                                    
wholesalers were significantly higher  than costs for Alaska                                                                    
pharmacies the division  would work with the  board to raise                                                                    
the wholesaler licensing  fees. She relayed that  HB 90 OCC.                                                                    
(Licensing  Fees;  Investigation  Costs) was  introduced  to                                                                    
remedy the  situation or there  might be legislation  in the                                                                    
future  to  address  the  problem.  However,  currently  the                                                                    
division could  not charge any investigative  fees or recoup                                                                    
investigative  costs;  the  money  was  recovered  from  the                                                                    
licensing  program.  Representative  Wilson  understood  the                                                                    
issue.   However,  she   wondered  how   wholesaler  license                                                                    
investigatory  costs would  be  split  under the  pharmacist                                                                    
licensure.   Ms.  Chambers   responded  that   AS  08.01.065                                                                    
required  that fees  were grouped  together but  allowed the                                                                    
discretion  for   the  board  to  increase   or  lower  fees                                                                    
according to  license type. However, there  was not explicit                                                                    
language that  separated license  type; the  statute covered                                                                    
all licenses regulated under a particular board.                                                                                
                                                                                                                                
Vice-Chair  Gara  reviewed   the  one  previously  published                                                                    
fiscal  impact note  from  the DCCED,  FN1  (CED). The  bill                                                                    
reflected the cost  recovered from board fees  in the amount                                                                    
of  $173.3  thousand in  FY  2019  and decreased  to  $157.5                                                                    
thousand in the out years.                                                                                                      
                                                                                                                                
2:55:14 PM                                                                                                                    
                                                                                                                                
Representative Kawasaki MOVED to  REPORT CSSB 37(FIN) out of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
CSSB 37(FIN) was REPORTED out  of committee with a "do pass"                                                                    
recommendation  and  with   a  previously  published  fiscal                                                                    
impact note: FN2 (CED).                                                                                                         
                                                                                                                                
2:56:00 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:00:20 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                

Document Name Date/Time Subjects
SB37 Supporting Document Partnership for SAFEMEDICINES 2018.pdf HFIN 4/12/2018 1:30:00 PM
SB 37
CSSB 37 (FIN) vsn N Sponsor Statement 2-8-18.pdf HFIN 4/12/2018 1:30:00 PM
SB 37
SB37 Supporting Document Title II Drug Quality and Security Act of 2013.pdf HFIN 4/12/2018 1:30:00 PM
SB 37
SB37 Supporting Document - Why License Board of Pharmacy.pdf HFIN 4/12/2018 1:30:00 PM
SB 37
CSSB37(FIN) Sectional Overview 2-8-18.pdf HFIN 4/12/2018 1:30:00 PM
SB 37
CSSB37(FIN) Summary of Changes 2-15-18.pdf HFIN 4/12/2018 1:30:00 PM
SB 37
SB37 Support Bd of Pharmacy 3-5-17.pdf HFIN 4/12/2018 1:30:00 PM
SB 37
CSSB37 (FIN) Fact Sheet - Review 2-15-18.pdf HFIN 4/12/2018 1:30:00 PM
SB 37
SB37 Support AKPhA 3-3-17.pdf HFIN 4/12/2018 1:30:00 PM
SB 37
002_SB015_E-Cigs_SponsorStatement.pdf HFIN 4/12/2018 1:30:00 PM
SB 15
008_SB015_E-Cigs Poison the Airways.pdf HFIN 4/12/2018 1:30:00 PM
SB 15
009_SB015_E-Cigs_AAAS_AsDangerousAsTobacco.pdf HFIN 4/12/2018 1:30:00 PM
SB 15
013_SB015_E-Cigs_EXCERPTed_Surgeon General Report_E-Cigs Use Among Youth 2016.pdf HFIN 4/12/2018 1:30:00 PM
SB 15
014_SB015_E-Cigs_UnivPittsburgh_E-Cigarettes Promote Smoking.pdf HFIN 4/12/2018 1:30:00 PM
SB 15
015_SB015_E-Cigs_NationalAcademiesScience_EffectsOfE-Cigs.pdf HFIN 4/12/2018 1:30:00 PM
SB 15
016_SB015_E-Cig Sales to AK Youth 2016.pdf HFIN 4/12/2018 1:30:00 PM
SB 15
SB 155 State AMC Bond Requirements.pdf HFIN 4/12/2018 1:30:00 PM
SB 155
017_SB015_E-Cig Sales to AK Youth 2017.pdf HFIN 4/12/2018 1:30:00 PM
SB 15
SB 155 Letter of Support Wells Fargo 1.29.18.pdf HFIN 4/12/2018 1:30:00 PM
SB 155
SB 155 Letter of Support REVAA 1.30.18.pdf HFIN 4/12/2018 1:30:00 PM
SB 155
SB 155 Letter of Support Alaska Chamber 2.8.18.pdf HFIN 4/12/2018 1:30:00 PM
SB 155
018_SB015_E-Cigs_AK Survey_Results_06April2017.pdf HFIN 4/12/2018 1:30:00 PM
SB 15
019_SB015_E-Cigs_ABC_News_SameToxicChemsAsTobacco.pdf HFIN 4/12/2018 1:30:00 PM
SB 15
SB015_E-Cigs_Explanation of Changes From Version T to I.pdf HFIN 4/12/2018 1:30:00 PM
SB 15
SB015_E-Cigs_Sectional_VersionI_02April2018.pdf HFIN 4/12/2018 1:30:00 PM
SB 15
SB015_E-Cigs_Support Letter_ALPHA.pdf HFIN 4/12/2018 1:30:00 PM
SB 15
HCS CSSB 155(L&C) Explanation of Changes V.A to V.N.pdf HFIN 4/12/2018 1:30:00 PM
SB 155
SB 155 Letter of Support Alaska Bankers Association 2.1.18.pdf HFIN 4/12/2018 1:30:00 PM
SB 155
HCS CSSB 155(L&C) Sectional Summary.pdf HFIN 4/12/2018 1:30:00 PM
SB 155
SB 155 DCCED AMC Extension Request.pdf HFIN 4/12/2018 1:30:00 PM
SB 155
SB 155 AMC Registry Fees - Lexology Article.pdf HFIN 4/12/2018 1:30:00 PM
SB 155
SB 155 AMC Framework - Lexology Article.pdf HFIN 4/12/2018 1:30:00 PM
SB 155
HCS CSSB 155(L&C) Sponsor Statement.pdf HFIN 4/12/2018 1:30:00 PM
SB 155
SB015_E-Cigs_YouthAccess_SupportLetter_MatSuHealthFoundation.pdf HFIN 4/12/2018 1:30:00 PM
SB 15
SB 105 HB 353 DHSS letter for HFIN 041318.pdf HFIN 4/12/2018 1:30:00 PM
HB 353
SB 105