Legislature(1999 - 2000)

02/24/1999 03:18 PM House L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                                                                                
HB 68 - BOARD OF PHARMACY                                                                                                       
                                                                                                                                
Number 0065                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG announced the committee's first order of business                                                             
is HB 68, "An Act extending the termination date of the Board of                                                                
Pharmacy to June 30, 2005; and providing for an effective date."                                                                
                                                                                                                                
Number 0123                                                                                                                     
                                                                                                                                
CATHERINE REARDON, Director, Division of Occupational Licensing,                                                                
Department of Commerce and Economic Development, came forward to                                                                
testify in support of HB 68.  She stated, "I am here today to speak                                                             
in support of the extension of the Board of Pharmacy, which my                                                                  
division staffs and assists.  The Board of Pharmacy has achieved a                                                              
lot during the last sunset period.  They worked hard ... to support                                                             
legislation that rewrote the pharmacy statute, and then follow it                                                               
up ... with a comprehensive rewrite of all of their regulations,                                                                
which was quite a large project, and the purpose of all that was to                                                             
try to bring the pharmacies' laws up to date with modern drug and                                                               
business practices.  I think it's an example of a situation in                                                                  
which a board is very important, it would have been very difficult                                                              
for my staff, with our lack of technical knowledge, to have carried                                                             
out such a project.  You really need to know a lot about pharmacy                                                               
to effectively regulate that profession.  The sunset audit does                                                                 
recommend extending the board for this length of time, and had very                                                             
little to suggest in the way of changes, and this board, like all                                                               
of our licensing programs, is financially self-sufficient in that                                                               
the license fees cover the costs of regulation.  So, I do have a                                                                
zero fiscal note for this bill, at the same time acknowledging that                                                             
the ongoing costs built into the budget already are approximately                                                               
$61,000 a year."                                                                                                                
                                                                                                                                
Number 0270                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI said, "Apparently there was a requirement                                                              
that you state your height, your weight, your hair color, and all                                                               
that, and in the recommendation it indicated that there was                                                                     
reasonable cause to request this information, because it's                                                                      
important when licensing individuals working with controlled                                                                    
substances."  She asked, "Do they do ... criminal background                                                                    
checks, or what's the extent of the investigation?"                                                                             
                                                                                                                                
MS. REARDON responded that they do not do fingerprinting or                                                                     
criminal background checks at the time of licensure.  She said that                                                             
they do take a photograph of the person and have it notarized, in                                                               
order to verify that the person and the photograph match.  She                                                                  
noted they do ask questions on the initial application about                                                                    
someone's criminal background, but they do not verify the answers                                                               
unless someone were to answer yes indicating that they were                                                                     
convicted of something.  Ms. Reardon commented that the issue has                                                               
come up recently with regards to medical licenses; the desire to                                                                
have physician applicants fingerprinted.  The Federal Bureau of                                                                 
Investigation (FBI) will only provide criminal background                                                                       
information if there is a state law specifically saying that we                                                                 
need to get FBI background checks.  This means, if the legislature                                                              
wants that to take place, they will initiate a statute change.                                                                  
                                                                                                                                
Number 0440                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI commented that as a lawyer for the state                                                               
you are fingerprinted and there are character investigations, which                                                             
is basically a criminal background check.  If the state is going to                                                             
require it of lawyers, than we might want to consider requiring it                                                              
of those handling controlled substances.                                                                                        
                                                                                                                                
MS. REARDON said that she doesn't know whether the Drug Enforcement                                                             
Administration (DEA) is doing a criminal background check before                                                                
issuing the DEA license.  The division does require pharmacists to                                                              
have DEA licenses, so there is a backup in that profession, but                                                                 
that would not be the case for most of the division's professions.                                                              
                                                                                                                                
CHAIRMAN ROKEBERG noted the chairman of the Board of Pharmacy is                                                                
participating via teleconference and the committee may want to                                                                  
direct the more technical questions toward him.                                                                                 
                                                                                                                                
REPRESENTATIVE CISSNA wondered if there has ever been any problems                                                              
with controlled substances and pharmacists.                                                                                     
                                                                                                                                
Number 0564                                                                                                                     
                                                                                                                                
MS. REARDON noted she would defer this question to the chairman of                                                              
the Board of Pharmacy.  However she said she suspects in the                                                                    
country as a whole there have probably been problems with theft or                                                              
misuse of drugs in that profession, just as there would be in any                                                               
profession with that kind of access to amphetamines, et cetera.                                                                 
Ms. Reardon stated she has looked into the issue with regards to                                                                
physicians because of questions from legislators and citizens.  She                                                             
said there has not been any history of a public complaint about the                                                             
quality of a practice and then later discovery of an undisclosed                                                                
criminal background.  There does not seem to be a connection                                                                    
between "bad doctors" and some secret undisclosed criminal                                                                      
background.  She said that she is not sure if the lack of criminal                                                              
background checks with regards to physicians has contributed to any                                                             
public harm.                                                                                                                    
                                                                                                                                
REPRESENTATIVE HALCRO stated, "There seems to be some disagreement                                                              
with one of the recommendations - Prior Year Recommendation Number                                                              
5 - where it states in the report that it encourages several                                                                    
organizations to establish fee levels that are more reflective of                                                               
the regulatory costs of the occupation [Audit Report, August 25,                                                                
1998, Division of Legislative Audit].  And in Commissioner                                                                      
Sedwick's [Deborah B. Sedwick, Commissioner, Department of Commerce                                                             
and Economic Development] response, dated October 27, 1998, she                                                                 
states, 'We don't concur, we don't agree with this.'"                                                                           
Representative Halcro asked, "Can you give me a summary on what's                                                               
happening with this?"                                                                                                           
                                                                                                                                
Number 0707                                                                                                                     
                                                                                                                                
MS. REARDON replied, "This a recommendation that you will probably                                                              
see appear in a lot of audits to come, because it's a difference of                                                             
opinion that isn't playing out just in the pharmacy board, but in                                                               
all of our programs.  ... Alaska Statute 08.01.065(c) says that the                                                             
Department of Commerce will set license fees so that the revenue                                                                
generated from an occupation is approximately equal to the                                                                      
regulatory costs."  Ms. Reardon continued, "We've been audited                                                                  
several times on this topic, and in the early '90s an audit                                                                     
indicated that the use of the term 'occupation' meant that not just                                                             
a board area, like Board of Pharmacy or [State] Medical Board, but                                                              
the actual occupations within the board -- in pharmacy there are                                                                
pharmacy technicians, and facilities and pharmacists.  In the                                                                   
Medical Board there'd be physician assistants, paramedics,                                                                      
physicians, osteopaths, podiatrists -- that it needed to be carried                                                             
down to that level.  That was an audit, actually, by the Office of                                                              
Management and Budget, I believe, and in response, the division did                                                             
begin tracking costs at the occupation level, not just the program                                                              
board level.  ... But we have not strictly applied the law to                                                                   
always ensure that an occupation, versus a board or program, is                                                                 
covering its own costs."  Ms. Reardon continued, "I've been open                                                                
about that with future auditors and the legislature, in that we                                                                 
have a 100 and some different occupations within our 36, 37 board                                                               
areas.  ... When you get down to having self-sufficiency at that                                                                
level, you have a lot more occupations, a lot more groups, that                                                                 
have fewer than 50 people - some fewer than 20 people - to pay, and                                                             
when you really make a group that small pay its own regulatory                                                                  
costs, you get extremely volatile fees.  Maybe someone appeals                                                                  
their license denial - in a group of only 20 people, or 10 people                                                               
in some of these cases - it costs us $3 [$3,000] or $4,000 in legal                                                             
fees to take that appeal through.  You've got so few people to                                                                  
spread that cost to, their fees might ... become 2,000 bucks each                                                               
... for one period and then drop back down."                                                                                    
                                                                                                                                
Number 0871                                                                                                                     
                                                                                                                                
MS. REARDON further stated, "It's bad enough as it is with                                                                      
self-sufficiency at the board or program level, with fees like the                                                              
psychology fees ... going up or down.  At some point we thought to                                                              
exacerbate that by having 120 fees shooting up and down, and their                                                              
deficits and surpluses rolling forward from the previous two years                                                              
continually, that when a profession or a board seemed amenable to                                                               
a little bit of sharing going on within their program, we weren't                                                               
strictly ... saying, 'No, you may not share.'  For example, in the                                                              
Medical Board it seems that the medical community accepts the idea                                                              
that the physicians will pay a little bit more, so that the                                                                     
paramedics can pay a little bit less than they cost.  As long as                                                                
everyone is pretty much getting along, we haven't pushed it and                                                                 
said, 'No, you may not share.'  When, in a profession, there isn't                                                              
that kind of getting along within a board area, and someone pushes,                                                             
then, quite honestly, I usually get into a situation where I go,                                                                
'Okay, we have to lower the boom and do something more strict,' and                                                             
then we do.  But the auditors, I think, are looking at us and                                                                   
saying, 'It might be a perfectly good public policy ... decision to                                                             
let programs pay for themselves, but it's not how we read the                                                                   
strict letter of the law.  Stop it.'  We're just worried about what                                                             
that really means for your constituents and our licensees.  How                                                                 
many $1,000 fees we're going to get.  That's a long answer, but                                                                 
that's where the 'push and shove' is coming."                                                                                   
                                                                                                                                
REPRESENTATIVE CISSNA asked if there would be a difference in terms                                                             
of the cost of administering those 100 different professions if the                                                             
administration is broken down to those 100 different professions.                                                               
                                                                                                                                
Number 0987                                                                                                                     
                                                                                                                                
MS. REARDON replied, "Yes, I believe there would be, in that part                                                               
of it is the tracking of the roll forward of deficits and                                                                       
surpluses.  We've been tracking that by program, by board area, so                                                              
you're 50,000 in the hole, you're 120,000 ahead, and we credit                                                                  
that; but when you try to do that for 120 [professions], it becomes                                                             
a bigger challenge to be doing that every year.  ... Another part                                                               
of this ... that we have an honest difference of opinion with the                                                               
auditors -- ... we track our revenue for a profession based on                                                                  
licensing statistics.  If we licensed 200 pharmacists, which we                                                                 
know out of our database, we know how much money we got for that                                                                
whole board area in a year.  When we get checks in the mail, we                                                                 
don't actually credit them right then to the occupation, we just                                                                
credit them to the board area.  Then we divvy up that revenue                                                                   
within a board area, based on how many people we licensed, by using                                                             
our statistics out of our computer.  The auditors would prefer that                                                             
as we open up each check, we right then decide which of the                                                                     
sub-occupations it goes to, that slows up our paper work and                                                                    
getting those checks in the bank.  So, we respectfully suggest that                                                             
our statistical data is good enough, but they disagree in the audit                                                             
...."                                                                                                                           
                                                                                                                                
Number 1064                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG stated, "This is an ongoing battle we have with                                                               
the department, and something the chair is - and the old-timers                                                                 
here are very familiar with.  ... I would just like to point out                                                                
that there is a bill that's going to be introduced regarding the                                                                
Real Estate Commission Surety Fund and the licensing fee, which                                                                 
will take up this very issue in a more generic sense ...."                                                                      
                                                                                                                                
MS. REARDON noted she would be happy to answer questions in another                                                             
setting from any of the committee members regarding this fee                                                                    
setting issue.                                                                                                                  
                                                                                                                                
REPRESENTATIVE HARRIS questioned if Ms. Reardon was familiar with                                                               
the Peter Crack (ph) case, a Dillingham pharmacist.                                                                             
                                                                                                                                
MS. REARDON replied she was vaguely familiar.                                                                                   
                                                                                                                                
Number 1113                                                                                                                     
                                                                                                                                
REPRESENTATIVE HARRIS commented that Mr. Crack (ph) was a                                                                       
pharmacist who had been stealing drugs through the pharmacy and                                                                 
giving them to boys for favors.  He asked, "Do you have any idea                                                                
how that somebody could get away with that for that long ...                                                                    
without being detected?"                                                                                                        
                                                                                                                                
MS. REARDON responded that she would need to review the case in                                                                 
order to give a good answer.                                                                                                    
                                                                                                                                
REPRESENTATIVE HARRIS stated he thought it was an ongoing thing for                                                             
a long time.  He indicated he hopes the system would have enough                                                                
checks and balances in it, since they are dealing with fairly heavy                                                             
drugs, to discover other similar situations if those situations are                                                             
occurring.                                                                                                                      
                                                                                                                                
MS. REARDON said she believed there was first criminal action                                                                   
against the pharmacist and then the Board of Pharmacy was able to                                                               
take licensing  action very promptly.  She thought the situation                                                                
involving Mr. Crack (ph) was uncovered through more of a criminal                                                               
investigation by the police in that town; the board hadn't received                                                             
any complaints, et cetera, about him.                                                                                           
                                                                                                                                
REPRESENTATIVE HARRIS asked, "Aren't certain drugs through ... the                                                              
department, aren't they supposed to be monitored on a quarterly or                                                              
yearly basis, or something, to keep control of them?"                                                                           
                                                                                                                                
MS. REARDON asked if she could defer that question to the pharmacy                                                              
board chair.                                                                                                                    
                                                                                                                                
CHAIRMAN ROKEBERG answered in the affirmative.  He thanked Ms.                                                                  
Reardon, asking her to stand by in case any follow-up is needed.                                                                
He indicated the committee would take teleconference testimony from                                                             
the chairman of the Board of Pharmacy, Paul Gionet.                                                                             
                                                                                                                                
Number 1231                                                                                                                     
                                                                                                                                
PAUL GIONET, Chairman, Board of Pharmacy, testified via                                                                         
teleconference from Anchorage.  He stated, "Regarding the Crack                                                                 
(ph) case and others similar to that -- ... the Crack (ph) case                                                                 
was, as Catherine Reardon pointed out, ... brought to us ... from                                                               
a criminal side and then we were able to get Mr. Crack (ph) to                                                                  
suspend his license and voluntarily do that rather quickly.  As far                                                             
as drug usage amongst pharmacists, we do not monitor that.  That                                                                
would have to be staffed by a team of investigators full time.                                                                  
Usually in other states there are actually pharmacists as police                                                                
agents, and there just is not the amount of pharmacies or                                                                       
pharmacists or moneys available in the state of Alaska to do that.                                                              
The DEA does not require the Boards of Pharmacies to monitor drug                                                               
activity; they take a stance of finding out about it if it occurs                                                               
on the criminal side, for the most part."                                                                                       
                                                                                                                                
CHAIRMAN ROKEBERG asked Mr. Gionet if he had any additional                                                                     
comments.                                                                                                                       
                                                                                                                                
Number 1299                                                                                                                     
                                                                                                                                
MR. GIONET stated, "I did want to mention [to] the first person                                                                 
asking the question about the height, weight and color of eyes -                                                                
that is an optional question on the application that we have, any                                                               
applicant does not have to answer those questions.  There was                                                                   
another question about do we verify the photographs, and,                                                                       
currently, as an applicant comes and takes the jurisprudence exam                                                               
in front of a board member, we do verify their drivers' licenses                                                                
against their photographs."  Mr. Gionet noted that concluded his                                                                
comments, stating, "As Ms. Reardon stated, we did quite a few                                                                   
projects in the last four to six years, rewriting a lot of our                                                                  
statutes and regulations.  We also wrote regulations regarding                                                                  
sterile pharmaceuticals and home infusions.  We're rewriting                                                                    
regulations on nuclear pharmacy and ... we also licensed                                                                        
technicians in the last year or two.  ... We do require licensing                                                               
of out-of-state pharmacies, such as mail-order pharmacies, and                                                                  
we're also looking at the issue of Internet pharmacies, of which is                                                             
hitting in the news now, and we're going to have to deal with this                                                              
as a safety issue in Alaska."                                                                                                   
                                                                                                                                
Number 1369                                                                                                                     
                                                                                                                                
REPRESENTATIVE SANDERS asked, "To your knowledge, with Mr. Crack                                                                
(ph) or with anyone else who has been prosecuted over                                                                           
pharmaceuticals in Alaska, do you know if a background check on any                                                             
of those people would have turned up anything in their history that                                                             
might have prevented them from getting in that position if we had                                                               
been doing so?"                                                                                                                 
                                                                                                                                
MR. GIONET answered, "I don't believe that we do any background                                                                 
criminal checks, but if they have any licensing actions against                                                                 
them in any other state, that's reported to us before we issue                                                                  
their license.  I believe Mr. Crack (ph) had had his license for                                                                
quite a few years here in Alaska, and until a complaint is brought                                                              
to us by the public, either on the criminal side or to the board,                                                               
or to occupational licensing - to the investigators - then there's                                                              
really no way of us monitoring that or finding that out.  But as                                                                
far as someone perhaps practicing in another state with problems                                                                
with their licenses - those are brought to our attention on a                                                                   
fairly regular basis.  ... I've been on the board six years, [and]                                                              
I'm sure at least ten of those have been brought to the Board of                                                                
Pharmacy, and they have been acted upon, and many licenses have                                                                 
been denied because of that."                                                                                                   
                                                                                                                                
REPRESENTATIVE SANDERS questioned, "Then do you feel that we should                                                             
look into background checks, as a legislature -- into passing                                                                   
something that would authorize you to do background checks?"                                                                    
                                                                                                                                
MR. GIONET replied he thought it would be a good idea, but it                                                                   
depends on the cost to the state and if investigators are willing                                                               
to do some of that.  He stated it would protect the public more.                                                                
Referring to the Crack (ph) case, Mr. Gionet said he believed Mr.                                                               
Crack's (ph) actions began while Mr. Crack (ph) was in Alaska and                                                               
there weren't too many ways for the board to find out,                                                                          
unfortunately, until something happened.                                                                                        
                                                                                                                                
Number 1475                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG clarified that background checks would not be a                                                               
cost to the state, but a cost to Mr. Gionet and his colleagues.                                                                 
                                                                                                                                
REPRESENTATIVE MURKOWSKI asked Mr. Gionet if he would define                                                                    
nuclear pharmacy.                                                                                                               
                                                                                                                                
MR. GIONET replied, "It actually has been occurring for quite a few                                                             
years.  If you go into any hospital and you have any radiation                                                                  
treatment for cancer, you're being treated with nuclear                                                                         
radio-particles -- and, actually in the last two years, there is an                                                             
official nuclear pharmacy that was established in Alaska.  ... Most                                                             
of their statutes and regulations are included on a federal level                                                               
because they are regulated by federal agencies, so we're actually                                                               
excited that we can write some regulations to incorporate the                                                                   
federal regulations for the state of Alaska.  But this has been                                                                 
something that goes on in every hospital, practically, throughout                                                               
the state of Alaska and has always been monitored by radiologists                                                               
or radiologist technician[s], and there are nuclear pharmacies all                                                              
over the country.  ... It's something that will help the public                                                                 
safety."                                                                                                                        
                                                                                                                                
REPRESENTATIVE HARRIS asked Mr. Gionet if people who are not                                                                    
pharmacists or doctors are allowed to dispense drugs in rural                                                                   
Alaska.                                                                                                                         
                                                                                                                                
Number 1570                                                                                                                     
                                                                                                                                
MR. GIONET stated, "No, they are not allowed.  There are a few                                                                  
instances under the Medical Board where physicians may, nurse                                                                   
practitioners, and physician assistants, but otherwise no one is                                                                
allowed to dispense drugs.  There are some still, I believe, rural                                                              
health aides under the federal program with the Natives that are                                                                
allowed to do things either under the federal law or under the                                                                  
Medical Board of Alaska."                                                                                                       
                                                                                                                                
REPRESENTATIVE HARRIS asked if the Board of Pharmacy monitors that                                                              
activity.                                                                                                                       
                                                                                                                                
MS. GIONET replied, "We do not have authorization by statute to                                                                 
monitor any of that activity regarding the Medical Board or the                                                                 
federal program."                                                                                                               
                                                                                                                                
CHAIRMAN ROKEBERG asked, "Can you describe, to the committee, what                                                              
the technical licensing is of the tech [technician]?"                                                                           
                                                                                                                                
Number 1616                                                                                                                     
                                                                                                                                
MR. GIONET noted, "[In] any normal retail pharmacy in any state                                                                 
there are always assistants to the pharmacists.  ... In the last                                                                
probably 10 to 20 years ... we're getting more in tune to people                                                                
that are having alcohol abuse, and drug abuse, and mental problems,                                                             
and [we're] starting to encourage them to get help, and, if they                                                                
don't, have licensing action against them.  There are so many                                                                   
assistants in the pharmacy realm that we felt it necessary to                                                                   
license these people in order to take some actions against them in                                                              
case we had some technicians that were in trouble.  ... Last June,                                                              
we did license the technicians, and since then we've already been                                                               
able to suspend one license of a technician that was in a rural                                                                 
area abusing narcotics along with the pharmacist.  Had we not had                                                               
the technicians licensed, no action would have been taken against                                                               
that person, and they could just keep going on."                                                                                
                                                                                                                                
CHAIRMAN ROKEBERG asked Mr. Gionet if he believes the Board of                                                                  
Pharmacy has the ability to control the pharmacy in the state's                                                                 
Pioneers' Home system [Alaska Pioneers' Homes, Division of Alaska                                                               
Longevity Programs, Department of Administration], and if the board                                                             
needs any legislative authority, or his feelings.                                                                               
                                                                                                                                
Number 1693                                                                                                                     
                                                                                                                                
MR. GIONET commented he would defer the question to Ms. Reardon.                                                                
He stated it is an active case with the investigators, they have                                                                
some sealed documents with the Board of Pharmacy, and he thinks the                                                             
board has been requested not to discuss the issue.                                                                              
                                                                                                                                
CHAIRMAN ROKEBERG commented, "Obviously you have jurisdiction ...                                                               
if it's being investigated."                                                                                                    
                                                                                                                                
MR. GIONET responded, "It's being investigated, but the                                                                         
investigators won't tell us yet, because they're actively                                                                       
investigating it, what we're even to rule on.  ... I'm assuming                                                                 
maybe we'll have some part of it, but it's total secrecy because we                                                             
act as jurors in the case."                                                                                                     
                                                                                                                                
Number 1723                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG asked Mr. Gionet if he was aware of any                                                                       
prohibitions that disallow the board from jurisdiction in a state                                                               
institution.                                                                                                                    
                                                                                                                                
MR. GIONET answered in the negative.                                                                                            
                                                                                                                                
CHAIRMAN ROKEBERG thanked Mr. Gionet for his testimony and asked if                                                             
there were any further questions or testimony.  There being none,                                                               
the chairman stated the public hearing on HB 68 is closed.                                                                      
                                                                                                                                
Number 1774                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO made a motion to move HB 68 out of committee                                                              
with the attached zero fiscal note and individual recommendations.                                                              
There being no objections, HB 68 moved out of the House Labor and                                                               
Commerce Standing Committee.                                                                                                    

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