Legislature(2015 - 2016)SENATE FINANCE 532

04/09/2016 10:00 AM FINANCE

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SENATE BILL NO. 201                                                                                                           
     "An Act relating to the  Board of Pharmacy; relating to                                                                    
     the  licensing  and  inspection of  certain  facilities                                                                    
     located  outside the  state;  relating  to drug  supply                                                                    
     chain security;  and creating  a position  of executive                                                                    
     administrator for the Board of Pharmacy."                                                                                  
10:08:34 AM                                                                                                                   
EMMIE    VAN   WYHE,    STAFF,   SENATOR    CATHY   GIESSEL,                                                                    
offered a sponsor statement (copy on file):                                                                                     
     Passage  of  SB 201  will  create  a more  secure  drug                                                                    
     supply chain  by allowing for licensing  and inspection                                                                    
     of wholesale  drug distributors  outside of  the state.                                                                    
     Currently, Alaska  is one of  the few  remaining states                                                                    
     that  does  not  license  out-of-state  wholesale  drug                                                                    
     distributors.  With laws  and regulations  varying from                                                                    
     state  to state,  licensing  an out-of-state  wholesale                                                                    
     distributor can  prove arduous. With  this legislation,                                                                    
     Alaska  can   take  action  to   eliminate  wholesalers                                                                    
     looking  for loopholes  in  the  regulatory system  and                                                                    
     ensure   that  all   out-of-state  applicants   seeking                                                                    
     licensure comply  with the  same regulations  as Alaska                                                                    
     This  legislation is  critical and  necessary to  bring                                                                    
     Alaska into  compliance with the Drug  Quality Security                                                                    
     Act (DQSA) and create a  new license category for "Out-                                                                    
     of-State Wholesale Drug  Distributors. Currently, there                                                                    
     is no  authority by the  Board of Pharmacy  to regulate                                                                    
     Out-of-State  Wholesale  Drug   Distributors  or  third                                                                    
     party logistic  providers (3PLs).  SB 201  would ensure                                                                    
     safe    delivery    of   controlled,    non-counterfeit                                                                    
     medications to Alaskans.                                                                                                   
     SB 201  would require  that any  out-of-state wholesale                                                                    
     drug   distributor  or   outsourcing  facility   follow                                                                    
     specific  guidelines  including  obtaining  a  license,                                                                    
     authorizing inspection  of the  facility by  a designee                                                                    
     of the board, and  appointing an agent before shipping,                                                                    
     mailing or delivering prescription  drugs to a licensee                                                                    
     in the state or advertising in the state.                                                                                  
     Additionally,  this  legislation  allows the  Board  of                                                                    
     Pharmacy  to create  a new  position titled  "Executive                                                                    
     Administrator"   to  serve   as   a   liaison  to   the                                                                    
     legislative   and    executive   branches    of   state                                                                    
     government,  the   media,  and  other   state  pharmacy                                                                    
     boards,  as  well  as   implement  board  statutes  and                                                                    
    regulations, and aid in managing current licensees.                                                                         
10:11:14 AM                                                                                                                   
Co-Chair MacKinnon requested a sectional analysis.                                                                              
JANE CONWAY, STAFF, SENATOR CATHY GIESSEL, addressed the                                                                        
sectional analysis (copy on file):                                                                                              
     Section 1:                                                                                                               
          AS 08.80.130(13): Allows  licensing and inspecting                                                                  
          for    out-of-state    drug    distributors    and                                                                    
          outsourcing facilities.                                                                                               
          AS  08.80.130(14): Establishes  qualifications and                                                                  
          duties   of  executive   administrator.  Executive                                                                    
          administrator is  delegated authority in  order to                                                                    
          conduct board business.                                                                                               
     Section 2:                                                                                                               
          AS  08.80.03(c):  Specifications  for  facilities,                                                                  
          equipment, personnel,  and procedures  for control                                                                    
          of drugs                                                                                                              
     Section 3:                                                                                                               
          AS   08.80.157(k):  Applies   to  wholesale   drug                                                                  
          distributors  and  outsourcing facilities  outside                                                                    
          the state under                                                                                                       
          AS 08.80.159, regarding licensing.                                                                                    
    Section 4: Amends AS 08.80 by adding a new section:                                                                       
          Sec.  08.80.159: Requires  that  a wholesale  drug                                                                  
          distributor   or  outsourcing   facility  have   a                                                                    
          license  in Alaska  before  shipping, mailing,  or                                                                    
          delivering  prescription drugs  to  a licensee  in                                                                    
          the state  or before advertising in  the state, an                                                                    
          agent  must  be  appointed  in the  state,  and  a                                                                    
          designee  of the  board must  authorize inspection                                                                    
          of the facility.                                                                                                      
          An outsourcing facility,  in addition, must comply                                                                    
          with the  Drug Quality  and Security Act  of 2013.                                                                    
          The board may require  an inspection of facilities                                                                    
          located outside  of the state, approve  a designee                                                                    
          to inspect.  The board shall adopt  regulations to                                                                    
          implement this section.                                                                                               
     Section 5: Amends AS 08.80 by adding new section to                                                                      
     Article 2:                                                                                                                 
          Sec.  08.80.270: Allows  the  Board  to create  an                                                                  
          executive  administrator   position.  Defines  the                                                                    
          role of the executive administrator.                                                                                  
     Section 6:                                                                                                               
          AS 08.80.480(37): Defines "outsourcing facility"                                                                    
10:13:50 AM                                                                                                                   
Co-Chair MacKinnon solicited questions  on the intent of the                                                                    
10:14:01 AM                                                                                                                   
Senator Bishop  understood that  the legislation  was driven                                                                    
by the Drug Supply Chain Act of 2013.                                                                                           
Ms.  Conway  replied  in the  affirmative.  She  added  that                                                                    
Alaska  would  be  the  final   state  to  comply  with  the                                                                    
Senator  Bishop  referred to  section  2  of the  bill,  and                                                                    
wondered how much complying with  the legislation would cost                                                                    
pharmacies in the state.                                                                                                        
Ms.  Conway replied  that the  legislation  should not  cost                                                                    
pharmacies in  the state any  funds. She explained  that the                                                                    
bill  solely pertained  to  the  regulation of  out-of-state                                                                    
wholesalers in  order to protect  pharmacies in  Alaska from                                                                    
receiving counterfeit, or contaminated, drugs.                                                                                  
10:16:04 AM                                                                                                                   
Co-Chair MacKinnon OPENED public testimony.                                                                                     
10:16:44 AM                                                                                                                   
JOHN  COTTER,  CHAIR,  BOARD  OF  PHARMACY,  FAIRBANKS  (via                                                                    
teleconference), testified in support  of the bill. He noted                                                                    
that the  major component of  the bill was the  licensure of                                                                    
wholesalers, which  would insure the integrity  of the drugs                                                                    
being sold within the state.  He added that the Drug Quality                                                                    
Security Act (2013)  had secured the pedigree  of drugs, and                                                                    
the  bill would  ensure that  out-of-state wholesalers  were                                                                    
compliant to  that end. He said  that the hope was  that any                                                                    
revenue from  the bill  would offset the  cost of  adding an                                                                    
executive administrator to manage  the Board of Pharmacy and                                                                    
the growing complexity of board business.                                                                                       
10:19:09 AM                                                                                                                   
DIRK WHITE,  SELF, SITKA (via teleconference),  testified in                                                                    
support of the  legislation. He echoed the  testimony of the                                                                    
previous  speaker.   He believed  the bill  would bring  the                                                                    
state in to  compliance with the Drug  Quality Security Act.                                                                    
He  restated  that  the  bill  was  financially  neutral  to                                                                    
pharmacies in the  state. He reiterated that  the bill would                                                                    
protect the integrity of the  pedigree of the drugs that are                                                                    
sold to the state.                                                                                                              
10:21:25 AM                                                                                                                   
TARA  RUFFNER, ALASKA  PHARMACISTS  ASSOCIATION, KENAI  (via                                                                    
teleconference),  testified  in  support of  the  bill.  She                                                                    
believed    that   the    legislation   would    make   sure                                                                    
pharmaceuticals were tracked through  the supply change in a                                                                    
transparent way.                                                                                                                
10:22:49 AM                                                                                                                   
Co-Chair  MacKinnon asked  whether the  outsourcing facility                                                                    
had to be in the United  States, or would the tracking reach                                                                    
international borders.                                                                                                          
Ms. Ruffner  replied that  she was not  sure of  the answer.                                                                    
She  offered  to   get  back  to  the   committee  with  the                                                                    
10:23:18 AM                                                                                                                   
Vice-Chair Micciche  asked whether an Alaska  resident could                                                                    
order  pharmaceuticals from  outside the  state, and  if so,                                                                    
would the bill cover internet suppliers.                                                                                        
Ms. Ruffner stated that anyone  could go on the internet and                                                                    
order drugs, and doubted that they were regulated.                                                                              
Vice-Chair  Micciche hoped  the  sponsor  would address  the                                                                    
10:24:02 AM                                                                                                                   
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
Co-Chair MacKinnon  asked Ms. Conway  to respond to  the two                                                                    
previous  questions  regarding  international  and  internet                                                                    
Ms.  Conway stated  that  she would  provide  a response  to                                                                    
those issues to the committee at a later date.                                                                                  
10:25:09 AM                                                                                                                   
Vice-Chair Micciche  discussed the fiscal notes  attached to                                                                    
the legislation (copy on file).                                                                                                 
10:26:04 AM                                                                                                                   
Co-Chair   MacKinnon   queried   the  perspective   of   the                                                                    
Department of  Commerce, Community and  Economic Development                                                                    
on  the estimation  of  receipts coming  in  to monitor  the                                                                    
10:26:27 AM                                                                                                                   
JANEY   HOVENDEN,   DIRECTOR,  DIVISION   OF   CORPORATIONS,                                                                    
BUSINESS   AND   PROFESSIONAL   LICENSING,   DEPARTMENT   OF                                                                    
COMMERCE,  COMMUNITY AND  ECONOMIC DEVELOPMENT,  stated that                                                                    
the cost  of the fiscal note  was expected to be  covered by                                                                    
new licensees.                                                                                                                  
SB  201  was  HEARD  and   HELD  in  committee  for  further                                                                    
10:27:06 AM                                                                                                                   
Co-Chair MacKinnon welcomed Co-Chair Kelly to the table.                                                                        

Document Name Date/Time Subjects
SB 8 Public Testimony Packet 1.pdf SFIN 4/9/2016 10:00:00 AM
SB 8