Legislature(2017 - 2018)BELTZ 105 (TSBldg)
03/14/2017 01:30 PM LABOR & COMMERCE
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SB 37-PHARMA BD & EMPLOYEES; DRUG DIST/MANUFAC 3:01:47 PM CHAIR COSTELLO announced the consideration of SB 37. She noted this is the first hearing. The intent is to hear from the sponsor, take members' questions, take public testimony, and hold the bill for further consideration. 3:02:40 PM SENATOR CATHY GIESSEL, Alaska State Legislature, sponsor of SB 37, said she appreciates teaming SB 79 with SB 37. She noted the bill is at the request of the Board of Pharmacy. It is not a new issue; a similar bill was heard last session. She stated that SB 37 ensures a more secure drug supply chain to ensure that Alaskans receive safe, non-counterfeit, unadulterated medications. In Alaska, when a pharmacy, doctor, or hospital orders a supply of prescription medications, they may order from one of the wholesale distributors in Alaska or one in the Lower 48. Alaska is one of two states that does not license out-of-state wholesale distributors. In 2012 contaminated medicines were distributed that resulted in the death of many people in the Lower 48. To protect Alaska, SB 37 would ensure that out-of-state applicants seek licensure and comply with the same regulations Alaska wholesale distributors comply with. She said that SB 37 also brings Alaska into compliance with a federal law - the Drug Quality Security Act of 2013 - and will create a new license category under the Board of Pharmacy for out-of-state wholesale distributors. The Division of Corporations, Business, and Professional Licensing estimates that this will equal about 400 new licensees. Currently, the Alaska Board of Pharmacy has no authority to regulate out-of- state wholesale distributors and SB 37 would provide that. It would require certain guidelines for the distributor: obtain a license in Alaska, authorize inspection by a designee of the Board, and give the Board the authority to appoint an agent to examine the distributor's facility. She highlighted the definition section of the bill, noting that one definition - "outsourcing facility" - is a facility that compounds sterile drugs. It is an example of an entity that would fall under SB 37. 3:05:55 PM SENATOR GIESSEL advised that the Board of Pharmacy is being asked to take on more responsibilities. Last year under the Medicaid reform bill the Prescription Drug Monitoring [Program] (PDMP) was established, which puts more responsibilities on the Board. SB 37 will allow the Board to create an executive administrator position to implement statutes and regulations and manage the Board's new responsibilities. She noted a fiscal note for SB 37 and that the services provided are all receipt services. Monies will be recovered through wholesale license fees and the executive administrative position will be funded by licensees of the Board of Pharmacy. CHAIR COSTELLO noted that Sara Chambers from the Division of Corporations, Business, and Professional Licensing, Department of Commerce, Community and Economic Development was available to answer questions. 3:07:45 PM JANE CONWAY, Staff, Senator Cathy Giessel, Alaska State Legislature, presented the sectional analysis of SB 37 on behalf of the sponsor. She read the following: Section 1: Amends AS 08.80.030(b) (14): Amends and allows licensing and inspection for out-of-state drug distributors and outsourcing facilities (15): Establishes qualifications and duties of executive administrator. Executive administrator is delegated authority in order to conduct board business Section 2: Amends AS 08.80.030 by adding a new subsection: AS 08.80.030(c): Specifications for facilities, equipment, personnel, and procedures for control of drugs in compliance with the federal Drug Supply Chain Security Act. Section 3: Amends AS 08.80.157 by adding a new subsection: (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, that 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 federal 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. 3:09:53 PM 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: Amends AS 08.80.480 by adding a new paragraph: AS 08.80.480(37): Defines "outsourcing facility" 3:10:26 PM SENATOR STEVENS asked if Alaska wholesalers receive federal inspections and inspections by other states. SENATOR GIESSEL said she did not know. She suggested asking pharmacists. 3:11:00 PM SENATOR GARDNER asked about reciprocity and why Alaska can't rely on inspection standards of other states for wholesale drug companies. 3:11:33 PM SENATOR GIESSEL said she did not know. She suggested asking the pharmacists. She said one provision in the bill is that the Board could designate someone in another state to examine that state's wholesaler. SENATOR GARDNER asked how much medication is brought into Alaska by wholesalers and how many wholesalers are in Alaska. SENATOR GIESSEL said she believes there is one wholesale distributor in Alaska. 3:13:23 PM CHAIR COSTELLO opened public testimony on SB 37. She requested that Mr. Christensen address members' questions. BARRY CHRISTENSEN, Co-Chair, Alaska Pharmacists Association, testified in support SB 37. He deferred to Mr. Holm to answer members' questions. He said the bill is necessary to ensure that Alaskans are receiving good medications. He agreed that the Board of Pharmacy has been taxed with doing more with minimal staffing. He supported having an executive administrator on the Board. 3:15:00 PM LEIF HOLM, Chair, Board of Pharmacy, testified in support of SB 37. He reiterated the purpose of the bill. He voiced support for the executive assistant position due to the increased workload of the Board. He repeated the funding mechanisms outlined in the fiscal note. SENATOR STEVENS asked, if the federal government inspects wholesalers in Alaska, why there is a need for an extra inspection. He also wondered whether other states inspect Alaska wholesalers. MR. HOLM clarified that the bill is written so that Alaska "may" do an inspection. He did not have information on what other states do. He added that there are 21 states that recognize the National Association of the Boards of Pharmacy's Verified Accredited Wholesale Distributor Program (VAWD), which is a built-in inspection. The Alaska Board of Pharmacy accepts that as part of the licensure process. 3:18:37 PM CHAIR COSTELLO asked if the Board can direct an individual to conduct the inspection. She asked whether the VAWD fulfills that requirement. MR. HOLM said he believes that would work. 3:19:14 PM SENATOR GARDNER asked if it is customary in some places for pharmaceutical wholesalers to be licensed to hold VAWD accreditation. MR. HOLM responded that four states require that accreditation to do business in their state. SENATOR GARDNER asked if it would make sense for Alaska to require VAWD certification. MR. HOLM said not at this point. Other states also have other extensive pharmacy inspections that Alaska accepts. He did not want to limit the drug supply, just insure its quality. 3:20:50 PM SENATOR GARDNER asked if passing SB 37 means that if an Alaskan pharmacist were to purchase drugs they would have to buy them from an Alaskan wholesaler or an outside distributer with an Alaskan license and certificate of inspection. MR. HOLM said he believes they would have to have an Alaskan wholesale license. 3:22:07 PM SENATOR HUGHES asked Mr. Holms to explain the current makeup of the Board. She wondered if the new executive position would be covered by outside license fees and if pharmacist license fees will increase. She also inquired whether pharmacists support SB 37. 3:23:08 PM MR. HOLM related that the Board's licensing examiner is backlogged with work. The wholesale license fee is anticipated to be $1,000 to $5,000, which should be more than sufficient to cover the cost of an executive administrator. He did not anticipate that pharmacist license fees will increase. CHAIR COSTELLO closed public testimony on SB 37 and held the bill in committee for further consideration.