Legislature(2017 - 2018)BELTZ 105 (TSBldg)
04/04/2017 09:00 AM LABOR & COMMERCE
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SB 37-PHARMA BD & EMPLOYEES;DRUG DIST/MANUFAC 9:36:07 AM CHAIR COSTELLO reconvened the meeting and announced the consideration of SB 37. She advised that this is the second hearing, public testimony is open, and there is a proposed committee substitute (CS). 9:36:23 AM SENATOR MEYER moved to adopt the work draft CS for SB 51, labeled 30-LS0191\J, as the working document. CHAIR COSTELLO objected for an explanation of the changes. 9:36:43 AM WESTON EILER, Staff, Senate Labor and Commerce Committee, Alaska State Legislature, said the changes in the CS for SB 37, version J, primarily removes references to establishing a range 23 executive position that would serve as a legislative liaison/administrator position for the board. He listed the three places where the reference is deleted. 9:38:32 AM SENATOR GARDNER questioned how the record-keeping and follow-up for inspection of facilities outside the state would happen without that position. MR. EILER said this likely would not be a position that would do those site visits. The policy call to remove this position reflects DCCED's budgetary constraints and could be reviewed at a later date. SENATOR GARDNER asked who is expected to do this administrative work and where the funding is if the work is done by contract. MR. EILER said licensing fees and inspections of facilities outside the state will bring in additional revenues. The department can speak to the structure, but the inspections don't necessarily fall to the staff of the Board of Pharmacy. SENATOR GARDNER asked if the board has the flexibility to set the licensing fees at the appropriate level to cover contractual work. MR. EILER said his understanding is that the bill provides for that. 9:41:39 AM SARA CHAMBERS, Division Operations Manager, Division of Corporations, Businesses and Professional Licensing, Department of Commerce, Community and Economic Development (DCCED), stated that the need for executive staff to handle the federal policy changes has pushed the need for higher level staff over the tipping point. SB 37 reflects an additional need the board has expressed to comply with federal changes. Right now, this program has one staff member who is the licensing examiner and has fractions of management that is shared among 42 other licensing programs. Thus, there is no policy position that is assigned to this program, which puts Alaska at a disadvantage among states that do have an executive administrator. The position would be paid through receipt-supported services, so it is not supported by UGF in any way. There is a growing interest in managing opioids and the PDMP and this position would oversee all those responsibilities as well. It would fill quite a variety of needs beyond a liaison to the legislature and it's a position that is desperately needed, she said. SENATOR GARDNER summarized that the board has the authority to raise the licensing fees to cover the cost of complying with the federal requirements of licensing facilities and dealing with the requirements of PDMP and the opioid crisis. MS. CHAMBERS clarified that the division works with the board to set fees. She said the fiscal note includes the cost of an executive administrator, but it does not contemplate the additional receipt authority needed for a contract position. CHAIR COSTELLO noted that the original bill says the duties will be established. She asked Ms. Chambers how she already knows what the position would entail. MS. CHAMBERS said that knowledge is based on the administrative functions that existing boards such as medicine, public accountancy, nursing, and marine pilots perform, and this position proposes to do. "We know the existing needs and we know what the bill will entail to implement." The division would employ the executive administrator and work with the board to make certain that all its priorities and the statutory administrative priorities are met. 9:47:03 AM SENATOR MEYER asked if pharmacy receipt increases are passed along to the consumer. "Is this kind of a hidden tax on our prescriptions?" MS. CHAMBERS explained that all 43 licensing programs are paid for by receipts. "Whether you're getting your hair cut, whether you're vising the doctor, whether you're getting a house built, that's a business decision that those professionals make on how they recoup their licensing costs. But it is not unusual in how statute mandates these programs be paid for." SENATOR MEYER asked if this legislation is modeled on other states. MS. CHAMBERS said yes, it's an outgrowth of a need the federal government expressed after 2012 and compounded by the pharmacy crisis. All but six states have adopted similar legislation. SENATOR MEYER asked if out of state distributors will be assessed a licensing fee should the bill pass. MS. CHAMBERS said only instate wholesale distributors are licensed so there is currently a disparity between instate and out-of-state. Should the bill pass, the division will develop a licensing process and an associated fee to help offset the cost of running the program. CHAIR COSTELLO listed the individuals available to answer questions. SENATOR STEVENS questioned the need for the bill if these out- of-state facilities are already licensed and inspected by another state or the federal government. Concerning reciprocity, he asked if the intention is to automatically license any facility that already has an inspection by another state or the federal government. 9:50:02 AM MS. CHAMBERS deferred the question to Leif Holm or Richard Holt. 9:50:13 AM LEIF HOLM, Chair, Board of Pharmacy, Fairbanks, Alaska, said this bill is needed to protect consumers from counterfeit or increased costs due to diverted medications. He said Alaska is one of four states that does not license outside wholesalers and that presents a problem. A wholesaler that is licensed in another state and doing business in Alaska would follow that other state's laws, but not necessarily the rules and regulations that Alaska has established. This could provide an opportunity for diverters and counterfeiters to exploit Alaska. "We don't have requirements for transaction data history; we don't have requirements for inspections; we don't have any accountability or oversight and it's basically decreasing the confidence in our drug supply." SENATOR STEVENS asked for confirmation that a drug distributor or outsourcing facility that is licensed in another state would not automatically receive a license to operate in Alaska. MR. HOLM said that's correct; a wholesaler would not automatically be granted a license to operate in Alaska based on licensure in another state. Rather, the board would write regulations for wholesalers to follow based on FDA guidelines. The intent is to require inspections, but the board would accept outside third-party inspections upon review. SENATOR STEVENS asked how many facilities will be licensed in Alaska. MR. HOLM said a recent National Association of Boards of Pharmacy (NABP) presentation stated that about 1,163 wholesale distributers are licensed in other states. and could potentially be licensed in Alaska. If each of those paid $500 to apply for licensure in Alaska, that would generate just under $600,000. 9:54:43 AM SENATOR GARDNER asked, should the original bill pass: 1) if he anticipates that Alaska would establish some sort of reciprocity; and 2) the number of licensed distributers that would want to participate in Alaska's licensing process. MR. HOLM said most facilities accept that they must have a license from any state in which they operate. The executive administer position would help make the process more fluid, but he didn't have an estimate for the number of distributors that would apply for licensure. He reiterated that 46 other states have passed similar legislation with no reported issues. SENATOR GARDNER asked how it would be possible to move forward if the committee substitute were to pass with the requirement but no funding for the position to handle the licensing. MR. HOLM said it would be difficult for the one existing licensing examiner to handle 1,100 additional licenses. CHAIR COSTELLO asked what impact the increased fees would have on licensed pharmacists. MR. HOLM replied there probably would not be any licensing fee increase for pharmacists. Should wholesalers be licenses, that would be more than enough to cover any extra costs. 9:58:35 AM CHAIR COSTELLO stated that, based on the testimony today, she would hold SB 37 and continue to work with the sponsor.
|CS SB 37 (L&C) - Ver. J.pdf||
SL&C 4/4/2017 9:00:00 AM
|SB 51 - Support Letter - State Veterinarian Dr Gerlach.pdf||
SL&C 4/4/2017 9:00:00 AM
|CS SB 51 (L&C) - Ver. O.pdf||
SL&C 4/4/2017 9:00:00 AM