Legislature(2023 - 2024)BELTZ 105 (TSBldg)

03/11/2024 01:30 PM Senate LABOR & COMMERCE

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Audio Topic
01:33:08 PM Start
01:34:01 PM SB121
03:17:43 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 121 PHARMACIES/PHARMACISTS/BENEFITS MANAGERS TELECONFERENCED
Heard & Held
-- Invited & Public Testimony --
-- Public Testimony <Time Limit May Be Set> --
*+ SB 203 BUSINESS LICENSE FEES TELECONFERENCED
Scheduled but Not Heard
-- Invited & Public Testimony --
-- Public Testimony <Time Limit May Be Set> --
**Streamed live on AKL.tv**
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                         March 11, 2024                                                                                         
                           1:33 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Jesse Bjorkman, Chair                                                                                                   
Senator Click Bishop, Vice Chair                                                                                                
Senator Elvi Gray-Jackson                                                                                                       
Senator Kelly Merrick                                                                                                           
Senator Forrest Dunbar                                                                                                          
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SPONSOR SUBSTITUTE FOR SENATE BILL NO. 121                                                                                      
"An  Act  relating   to  the  Board  of   Pharmacy;  relating  to                                                               
insurance;  relating  to  pharmacies;  relating  to  pharmacists;                                                               
relating  to  pharmacy  benefits managers;  relating  to  patient                                                               
choice of pharmacy; and providing for an effective date."                                                                       
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
SENATE BILL NO. 203                                                                                                             
"An Act relating to business license fees; and providing for an                                                                 
effective date."                                                                                                                
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 121                                                                                                                  
SHORT TITLE: PHARMACIES/PHARMACISTS/BENEFITS MANAGERS                                                                           
SPONSOR(s): SENATOR(s) GIESSEL BY REQUEST                                                                                       
                                                                                                                                
03/31/23       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/31/23       (S)       L&C, FIN                                                                                               
02/08/24       (S)       SPONSOR SUBSTITUTE INTRODUCED-REFERRALS                                                                
02/08/24       (S)       L&C, FIN                                                                                               
02/28/24       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
02/28/24       (S)       Heard & Held                                                                                           
02/28/24       (S)       MINUTE(L&C)                                                                                            
03/06/24       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/06/24       (S)       Heard & Held                                                                                           
03/06/24       (S)       MINUTE(L&C)                                                                                            
03/11/24       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
SENATOR CATHY GIESSEL, District E                                                                                               
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Sponsor of SB 121 by request.                                                                             
                                                                                                                                
DAN NELSON, Director of Pharmacy                                                                                                
Tanana Chiefs Conference                                                                                                        
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Testified by invitation on SB 121.                                                                        
                                                                                                                                
MARY STOLL, Founder                                                                                                             
Stoll Law Group, PLLC                                                                                                           
Advisor to Pacific Health Coalition                                                                                             
Seattle, Washington                                                                                                             
POSITION STATEMENT: Testified with concerns on SB 121.                                                                        
                                                                                                                                
GREG LOUDON, Vice President & Account Executive                                                                                 
Parker, Smith and Feek                                                                                                          
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in opposition to SB 121.                                                                        
                                                                                                                                
DEREK MUSTO, Organizer and Business Agent                                                                                       
Alaska Teamsters Local 959                                                                                                      
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified with concerns on SB 121.                                                                        
                                                                                                                                
BRENDA SNYDER, Lead Director                                                                                                    
Government Affairs                                                                                                              
CVS Health/Aetna                                                                                                                
Tacoma, Washington                                                                                                              
POSITION STATEMENT: Testified in opposition to SB 121.                                                                        
                                                                                                                                
GARY B. STRANNIGAN, Vice President                                                                                              
Congressional and Legislative Affairs                                                                                           
Premera Blue Cross                                                                                                              
Everett, Washington                                                                                                             
POSITION STATEMENT: Testified in opposition to SB 121.                                                                        
                                                                                                                                
LAUREE MORTON, representing self                                                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of SB 121.                                                                           
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:33:08 PM                                                                                                                    
CHAIR  JESSE  BJORKMAN  called  the  Senate  Labor  and  Commerce                                                             
Standing Committee meeting  to order at 1:33 p.m.  Present at the                                                               
call  to  order  were  Senators  Gray-Jackson,  Dunbar,  Merrick,                                                               
Bishop, and Chair Bjorkman.                                                                                                     
                                                                                                                                
        SB 121-PHARMACIES/PHARMACISTS/BENEFITS MANAGERS                                                                     
                                                                                                                                
1:34:01 PM                                                                                                                    
CHAIR BJORKMAN announced the  consideration of SPONSOR SUBSTITUTE                                                               
FOR  SENATE BILL  NO.  121,  "An Act  relating  to  the Board  of                                                               
Pharmacy;   relating  to   insurance;  relating   to  pharmacies;                                                               
relating to pharmacists; relating  to pharmacy benefits managers;                                                               
relating  to patient  choice of  pharmacy; and  providing for  an                                                               
effective date."                                                                                                                
                                                                                                                                
1:34:25 PM                                                                                                                    
SENATOR  CATHY GIESSEL,  District  E,  Alaska State  Legislature,                                                               
Juneau, Alaska, sponsor of SB 121  by request. She shared a quote                                                               
from  a  recent  White  House   discussion  on  pharmacy  benefit                                                               
managers (PBM):                                                                                                                 
                                                                                                                                
     I  genuinely believe  that CEOs  do not  understand how                                                                    
     their  healthcare  costs  work  -  particularly  as  it                                                                    
     applies to  the rebates that  you see from  their PBMs.                                                                    
     They  tend to  look at  rebates  as cash  paid by  drug                                                                    
     manufacturers.  Nothing  could   be  further  from  the                                                                    
     truth. The reality  is the rebates are not  paid by the                                                                    
     drug manufacturers.  The rebates are paid  for by these                                                                    
     companies sickest and oldest employees.                                                                                    
                                                                                                                                
                               -Mark Cuban, Cost Plus Drugs                                                                     
                                                                                                                                
SENATOR  GIESSEL expressed  her agreement  and shared  her belief                                                               
that Alaskan pharmacists will show  that the PBM reforms included                                                               
in SB  121 will  allow Alaskans  to enjoy  cost savings  on their                                                               
health plans.  She noted  that Idaho  recently passed  PBM reform                                                               
legislation  that contained  many of  the same  provisions as  SB
121.  She added  that 39  states are  considering PBM  reform and                                                               
asserted that there is a reason  for this. She said that seasoned                                                               
Alaskan pharmacists will bring forward  the inequities of the PBM                                                               
business model in Alaska.                                                                                                       
                                                                                                                                
1:36:23 PM                                                                                                                    
SENATOR GIESSEL said that these  pharmacists will illustrate that                                                               
PBM reform  will result in  cost savings. She stated  that change                                                               
is difficult. She  asserted that it is easier  for those opposing                                                               
SB 121  to instill fear  of change than it  is for them  to prove                                                               
that  maintaining  the  current  structure  is  saving  consumers                                                               
money. However, states that have  passed PBM reform have reported                                                               
millions of dollars in savings.  She opined that if the extensive                                                               
documentation provided in committee  packets is considered, it is                                                               
difficult to deny that PBM reform is desperately needed.                                                                        
                                                                                                                                
1:37:33 PM                                                                                                                    
CHAIR  BJORKMAN  said  that individuals  who  support  PBMs  have                                                               
expressed concerns  that SB 121  would not allow  their insurance                                                               
plans to  provide maintenance  drugs via  mail order  to pharmacy                                                               
customers. He sought clarification of this issue.                                                                               
                                                                                                                                
1:38:02 PM                                                                                                                    
SENATOR GIESSEL  answered no.  She clarified  that SB  121 allows                                                               
individuals to choose between local pharmacies and mail order.                                                                  
                                                                                                                                
1:38:14 PM                                                                                                                    
CHAIR  BJORKMAN said  he has  heard  concerns that  SB 121  would                                                               
remove "network"  pharmacies - specifically removing  the ability                                                               
for plans  to create  a group of  contract pharmacies  that would                                                               
provide benefits for  their plan. He sought  clarification of his                                                               
issue.                                                                                                                          
                                                                                                                                
1:38:36 PM                                                                                                                    
SENATOR GIESSEL  replied that  this is something  PBMs do  in PBM                                                               
contracts  - by  mandating which  pharmacies can  be used  by the                                                               
consumer.                                                                                                                       
                                                                                                                                
1:38:48 PM                                                                                                                    
CHAIR BJORKMAN  asked for  clarification that  SB 121  allows for                                                               
the creation of "network" pharmacies.                                                                                           
                                                                                                                                
1:39:09 PM                                                                                                                    
SENATOR GIESSEL clarified  by offering an example.  She said that                                                               
Optum is  the PBM for [the  State of Alaska]. She  explained that                                                               
PBM subscribers  can use  other pharmacies;  however, there  is a                                                               
lower cost when the PBM pharmacy is utilized.                                                                                   
                                                                                                                                
1:39:56 PM                                                                                                                    
DAN  NELSON,  Director  of Pharmacy,  Tanana  Chiefs  Conference,                                                               
Fairbanks,  Alaska,  testified  by   invitation  on  SB  121.  He                                                               
advanced to slide 2 of  his PowerPoint presentation and explained                                                               
the  pharmacy  reimbursement  model.   He  said  that  the  total                                                               
pharmacy  reimbursement amount  is made  up of  the drug  product                                                               
cost and the pharmacy dispensing fee.                                                                                           
                                                                                                                                
1:40:50 PM                                                                                                                    
MR. NELSON  noted that  at this  time, much  of the  overall drug                                                               
spend  is  weighted on  the  ingredient  cost (99.5  percent  was                                                               
ingredient cost,  according to recent Division  of Retirement and                                                               
Benefits (DRB)  data). He  explained that SB  121 would  create a                                                               
new  pharmacy  reimbursement   model:  average  acquisition  cost                                                               
(National Average  Drug Acquisition  Cost (NADAC)) plus  the cost                                                               
of dispensing  (both set by  a survey of pharmacies  and overseen                                                               
by   the  Commissioner   of  the   Division  of   Insurance).  He                                                               
acknowledged that the overall impact  would be an increase in the                                                               
dispensing fee; however,  there would be drastic  decrease in the                                                               
ingredient cost-spend. This would  result in a net-neutral change                                                               
with the potential for cost-savings.                                                                                            
                                                                                                                                
1:41:59 PM                                                                                                                    
MR. NELSON  said that he  would provide several examples  of what                                                               
has  been  spent.  He  noted that  these  examples  are  multiple                                                               
sclerosis  drugs which  are very  expensive and  added that  this                                                               
information came  from an  analysis of DRB  data. He  advanced to                                                               
slide three,  showing prescription  data for methyl  fumarate 240                                                               
mg  - 93  prescriptions filled  by Optum  Retail, 1  prescription                                                               
filled by  Optum Specialty.  For this drug,  the state  of Alaska                                                               
paid  $410,226 -  about $4,400  per  prescription. He  contrasted                                                               
this with the  $35,746 max cost when using the  formula in SB 121                                                               
(using an  estimated $13.36 dispensing  fee) - a savings  of over                                                               
1000 percent - about $384 per prescription.                                                                                     
                                                                                                                                
1:43:09 PM                                                                                                                    
MR. NELSON  advanced to  slide 4  and discussed  32 prescriptions                                                               
for Copaxone  40mg-ml PFS  (filled by Optum).  In this  case, SOA                                                               
paid $153,717 - around $4,800 per prescription.                                                                                 
                                                                                                                                
1:43:39 PM                                                                                                                    
SENATOR  DUNBAR asked  for clarification  on the  dispensing cost                                                               
used in the estimates.                                                                                                          
                                                                                                                                
1:43:54 PM                                                                                                                    
MR.  NELSON replied  that the  calculations  in his  presentation                                                               
used a dispensing cost of $13.36.                                                                                               
                                                                                                                                
1:44:12 PM                                                                                                                    
SENATOR DUNBAR  commented that  even with  a $13  dispensing fee,                                                               
the cost would be half.                                                                                                         
                                                                                                                                
1:44:14 PM                                                                                                                    
MR. NELSON noted  that where a prescription is filled  can have a                                                               
drastic  impact on  the reimbursement  amount.  He surmised  that                                                               
some  upcoming testimony  may claim  that "specialty  pharmacies"                                                               
save costs; however,  he stated that when the  data was examined,                                                               
utilizing specialty  pharmacies increased the fee  by over $1,000                                                               
per  prescription.  He  asserted   the  argument  that  specialty                                                               
pharmacies save money does not hold.                                                                                            
                                                                                                                                
1:45:03 PM                                                                                                                    
CHAIR  BJORKMAN asked  about the  difference between  a specialty                                                               
pharmacy and a regular pharmacy.                                                                                                
                                                                                                                                
1:45:16 PM                                                                                                                    
MR.  NELSON  answered  that the  term  "specialty  pharmacy"  was                                                               
created out of  thin air by the  PBM industry and there  is not a                                                               
single accepted  definition. He said  that essentially,  it boils                                                               
down  to  the expensive  nature  of  the  drugs in  question.  He                                                               
emphasized  that  while  these  drugs  account  for  roughly  two                                                               
percent  of the  volume  of prescriptions  filled  in the  United                                                               
States (US), they  account for over 50 percent of  the overall US                                                               
drug  spend. He  pointed out  that, once  generic options  become                                                               
available,  drugs  are  no   longer  considered  "specialty"  and                                                               
asserted that  there is  nothing special  about the  drug itself;                                                               
rather, the  costs associated with  the drug  are what make  it a                                                               
specialty drug.                                                                                                                 
                                                                                                                                
1:46:37 PM                                                                                                                    
SENATOR  BISHOP  asked if  Mr.  Nelson  and  his peers  have  the                                                               
education and training necessary to handle specialty drugs.                                                                     
                                                                                                                                
1:47:05 PM                                                                                                                    
MR.  NELSON  answered that  they  absolutely  have the  necessary                                                               
training,  expertise, knowledge,  facilities, and  infrastructure                                                               
to  handle  specialty  drugs.  He argued  that  -  especially  in                                                               
Alaska,  with  its unique  geographical  landscape  - they  do  a                                                               
better   job.  He   emphasized   that   patients  receive   their                                                               
medications in a  timely manner, and it is not  frozen - which is                                                               
a  huge logistical  undertaking  that requires  a  great deal  of                                                               
coordination  with health  aides and  patients while  utilizing a                                                               
variety  of  delivery  options.   He  asserted  that  when  these                                                               
prescriptions are sent  to Alaskan villages from  Florida via the                                                               
United States Postal Service (USPS)  or FedEx, 50 percent of them                                                               
are wasted.                                                                                                                     
                                                                                                                                
1:48:11 PM                                                                                                                    
CHAIR BJORKMAN asked how things  would change for insurance plans                                                               
and the insured if there were more specialty pharmacies.                                                                        
                                                                                                                                
1:48:51 PM                                                                                                                    
MR.  NELSON  replied that  it  depends.  He reiterated  that  the                                                               
distinction of  "specialty" drugs  is a  made-up term  and opined                                                               
that differentiating  between "specialty" and  "non-specialty" is                                                               
unhealthy. He  explained that when  prescriptions must  be filled                                                               
at different  pharmacies, the  pharmacist is  not aware  of other                                                               
prescription drugs the patient is  taking and is therefore unable                                                               
to take  drug interactions into  consideration. He  asserted that                                                               
this  creates  a dangerous  situation  and  provides an  inferior                                                               
level  of  care.   He  opined  that  an   increase  in  specialty                                                               
pharmacies would be a move in the wrong direction.                                                                              
                                                                                                                                
1:49:57 PM                                                                                                                    
MR. NELSON advanced  to slide 5, which showed how  much the State                                                               
of Alaska  (SOA) paid  for the  drug Ampyra  (10mg ER  tablet) in                                                               
2022.  According to  the data,  SOA paid  nearly $200  thousand -                                                               
more than  2,400 percent more than  what is proposed by  SB 121's                                                               
transparent and fair reimbursement  model. Additionally, SOA paid                                                               
3 thousand times  more for OptumRX mail. He  contrasted this with                                                               
the rates proposed by SB 121, which would be under $8 thousand.                                                                 
                                                                                                                                
1:51:02 PM                                                                                                                    
CHAIR  BJORKMAN  asked  if  Mr.  Nelson  was  familiar  with  the                                                               
Department of Retirement and Benefits (DRB) fiscal note.                                                                        
                                                                                                                                
1:51:12 PM                                                                                                                    
MR. NELSON replied yes.                                                                                                         
                                                                                                                                
1:51:15 PM                                                                                                                    
CHAIR BJORKMAN asked if, to  his knowledge, this fiscal note used                                                               
the same formula (NADAC pricing plus dispensing fee).                                                                           
                                                                                                                                
1:51:31 PM                                                                                                                    
MR. NELSON  replied no and emphasized  that there was no  way the                                                               
same formula could have been used.                                                                                              
                                                                                                                                
1:51:35 PM                                                                                                                    
CHAIR BJORKMAN asked how the fiscal note was created.                                                                           
                                                                                                                                
                                                                                                                                
1:51:39 PM                                                                                                                    
MR. NELSON replied that this is  a very good question for DRB. He                                                               
shared  his belief  that the  fiscal note  was derived  from "on-                                                               
road"  and "off-road"  dispensing fees  that were  offered during                                                               
testimony  on  SB  121.  He  surmised  that  these  numbers  were                                                               
multiplied by the volume of  prescriptions filled by the state in                                                               
2022  and  then  contrasted  with the  benchmark  example  -  the                                                               
current maximum  of $0.80. He  asserted that this  calculation is                                                               
laughable  and does  not  consider that  SB  121 would  eliminate                                                               
spread pricing and would decrease ingredient costs.                                                                             
                                                                                                                                
1:52:22 PM                                                                                                                    
MR. NELSON advanced  to slide 6 and discussed  spread pricing. He                                                               
explained  that  to  compile  this   data,  they  considered  all                                                               
prescriptions reimbursed  for under  $1 at  a single  pharmacy in                                                               
Alaska in  2022 (a total  of roughly 70  thousand prescriptions).                                                               
He surmised that this low  reimbursement amount is why pharmacies                                                               
across the  state are going out  of business. Of the  70 thousand                                                               
prescriptions, 35  thousand were reimbursed  at an average  of 47                                                               
cents  per  prescription. He  explained  that  the cost  for  the                                                               
pharmacy  to  buy  the  drugs  (not  including  additional  costs                                                               
related  to prescription  preparation or  business overhead)  was                                                               
over  $10  per prescription.  The  acquisition  cost for  the  35                                                               
thousand   prescriptions   was   $366  thousand.   The   pharmacy                                                               
reimbursement  amount was  only $16  thousand. However,  there is                                                               
reason to  believe that  the plan was  charged $832  thousand for                                                               
those prescriptions.  This results in  a spread - which  the PBMs                                                               
kept  -  of  over  $816   thousand.  He  emphasized  the  drastic                                                               
difference in these  numbers and the negative impact  this has on                                                               
pharmacies.                                                                                                                     
                                                                                                                                
1:54:38 PM                                                                                                                    
MR.  NELSON  advanced to  page  7  and  emphasized that  not  all                                                               
pharmacists  are  "anti-PBM".  He   noted  that  there  are  some                                                               
transparent PBMs, including one in  Kansas that does not practice                                                               
spread  pricing  and  does  not   retain  rebates  or  require  a                                                               
specialty  pharmacy.  They   have  a  flat,  per-prescription/per                                                               
patient/per month  administrative fee. Everything  is above-board                                                               
and  this saves  municipalities hundreds  of thousands  - if  not                                                               
millions - of  dollars per year. He opined that  this type of PBM                                                               
is possible in Alaska, but the current system needs to be fixed.                                                                
                                                                                                                                
1:55:53 PM                                                                                                                    
SENATOR BISHOP asked how pharmacies interface with PBMs.                                                                        
                                                                                                                                
1:56:08 PM                                                                                                                    
MR. NELSON  answered that it  is a "David vs  Goliath" situation.                                                               
He explained that  the PBMs are some of the  biggest companies in                                                               
the world, and  noted that Express Scripts, CVS,  and OptumRx are                                                               
all in  the top  15 of  the Fortune 500  companies. He  said that                                                               
they  will periodically  receive a  fax  or email  of a  contract                                                               
(anywhere from 60  to 132 pages long) and  requesting a signature                                                               
for  the pharmacy  to  receive reimbursements  from  the PBM.  He                                                               
emphasized that  any changes - or  requests to make changes  - to                                                               
the contract results in rejection of the contract by the PBM.                                                                   
                                                                                                                                
1:56:45 PM                                                                                                                    
SENATOR BISHOP asked if they  have considered trying to negotiate                                                               
any of these contracts.                                                                                                         
                                                                                                                                
1:56:56 PM                                                                                                                    
MR. NELSON  answered that 3 months  ago, he tried to  negotiate a                                                               
contract. The  contract he  received was  laughable and  he could                                                               
not bring himself  to sign it without saying  something about it.                                                               
He explained  that a  Maximum Allowable  Cost (MAC)  pricing list                                                               
allows  the PBM  to  set their  own costs  for  various dugs.  He                                                               
pointed  out that  PBMs do  not share  their MAC  lists with  the                                                               
pharmacies (even  though state  law requires  them to  share this                                                               
information). The  contract in  question required  the acceptance                                                               
of several  MAC pricing lists. He  said that in response  to this                                                               
request, he  told the PBM  that he  would accept one  MAC pricing                                                               
list  - and  he requested  that the  list be  made available  (as                                                               
required by state law). The  PBM denied this request. He compared                                                               
this to the  PBM requiring them to sign a  blank check. He fought                                                               
the  contract  for 3  months  before  finally breaking  down  and                                                               
signing  -  otherwise they  would  not  have  been able  to  bill                                                               
anything.                                                                                                                       
                                                                                                                                
1:58:10 PM                                                                                                                    
SENATOR  BISHOP asked  if he  would be  amenable to  sitting down                                                               
with PBMs to discuss this issue.                                                                                                
                                                                                                                                
1:58:21 PM                                                                                                                    
MR. NELSON replied yes.                                                                                                         
                                                                                                                                
1:58:35 PM                                                                                                                    
[CHAIR BJORKMAN reopened public testimony on SB 121.]                                                                           
                                                                                                                                
1:58:34 PM                                                                                                                    
MARY STOLL,  Founder, Stoll Law  Group, PLLC, Advisor  to Pacific                                                               
Health  Coalition, Seattle,  Washington, testified  with concerns                                                               
on SB  121. She said  that Pacific Health Coalition  (PHC) covers                                                               
49 health plans  in five states and represents  over 250 thousand                                                               
lives. One hundred ten thousand  of those covered live in Alaska.                                                               
She  added  that, because  50  percent  of Alaska  residents  are                                                               
federal program beneficiaries, one  in three Alaskan citizens are                                                               
members of a plan that is a member of PHC.                                                                                      
                                                                                                                                
1:59:40 PM                                                                                                                    
MS. STOLL  posed two  questions to  the committee  and encouraged                                                               
members  to  consider  them  prior   to  moving  SB  121  out  of                                                               
committee:                                                                                                                      
                                                                                                                                
        • Is SB 121 preempted by the Employee Retirement                                                                        
          Income Security Act of 1974 (ERISA)?                                                                                  
                                                                                                                                
        • Is SB 121 fair and equitable for working                                                                              
          families?                                                                                                             
                                                                                                                                
MS.  STOLL  gave a  brief  history  of  ERISA and  explained  its                                                               
"preemption  clause".  She then  referred  to  a recent  case  in                                                               
Oklahoma where legislation similar to  SB 121 was struck down due                                                               
to  restrictions on  ERISA fiduciary  duties.  She explained  the                                                               
role of ERISA fiduciaries and emphasized their importance.                                                                      
                                                                                                                                
2:01:13 PM                                                                                                                    
MS.  STOLL  pointed out  that  ERISA  fiduciaries are  held  both                                                               
civilly and  criminally liable  if they  are not  utilizing funds                                                               
and  assets  for   the  sole  and  exclusive   benefit  of  their                                                               
participants.  She  opined  that  they  take  their  duties  very                                                               
seriously  as they  negotiate PBM  contracts.  PBM contracts  are                                                               
carefully negotiated as part of  the fiduciary's plan design. She                                                               
noted that  the Oklahoma case was  decided by a US  Circuit Court                                                               
utilizing US  Supreme Court determinations and  is the prevailing                                                               
law. She  asserted that,  like the  Oklahoma legislation,  SB 121                                                               
violates  the Supreme  Court determinations  by regulating  ERISA                                                               
plan trustees and  the fiduciaries' plan design.  She opined that                                                               
trustees take their jobs very  seriously and are sophisticated in                                                               
the contracts they negotiate with the PBMs.                                                                                     
                                                                                                                                
MS.  STOLL explained  that  spread pricing  is  optional and  the                                                               
inclusion of spread pricing is  taken into consideration with the                                                               
assistance of  professional PBM consultants. PHC  utilizes audits                                                               
and  Requests  for Proposal  (RFP)  to  evaluate cost/spend.  She                                                               
reiterated  that trustees  take their  jobs seriously.  She noted                                                               
that ERISA  plans have beneficiaries  in multiple states,  and it                                                               
would not  be feasible  to administer an  ERISA plan  in multiple                                                               
states with  different laws. This  is why ERISA plans  fall under                                                               
federal regulation.  She asserted that problems  with PBMs should                                                               
be left to the federal government.                                                                                              
                                                                                                                                
2:03:58 PM                                                                                                                    
MS. STOLL briefly discussed the  Affordable Care Act and taxes on                                                               
ERISA  plan  administrators that  are  then  passed to  the  plan                                                               
(because  this  is  a  federal  law it  is  not  preempted).  She                                                               
asserted that SB  121 is essentially a tax on  the health plans -                                                               
it is not going to hurt PBMs.  She opined that it is misguided to                                                               
think that the cost would not  be passed along to the workers who                                                               
contribute - in  many cases through collective  bargaining - into                                                               
their health  plan. If  money taken  from employee  paychecks and                                                               
earmarked for  their health benefit  plan is then used  for other                                                               
purposes -  such as  an increased  dispensing fee  - this  is not                                                               
benefitting the  plan participants and  is therefore a  breach of                                                               
trustees'   fiduciary  duty.   She  noted   that  the   increased                                                               
dispensing  fee would  apply to  all  pharmacies. She  questioned                                                               
whether this  would be a fair  shift of cost, as  it would divert                                                               
funds from important medical treatments.                                                                                        
                                                                                                                                
2:05:27 PM                                                                                                                    
MS. STOLL  said that fiduciaries  have limited levers to  pull to                                                               
address increased plan cost.  They can implement cost-containment                                                               
provisions (e.g.  PBM contracts  may include aggregate  buying to                                                               
decrease costs),  increase contributions  (the economy  in Alaska                                                               
does  not  favor  additional   contribution),  or  cut  benefits/                                                               
increase out-of-pocket  costs and deductibles. All  of these hurt                                                               
the hard-working  men and women  in the state. She  urged members                                                               
to carefully consider  the preemption issue, which  will apply to                                                               
all legislation of this kind across the country.                                                                                
                                                                                                                                
2:07:09 PM                                                                                                                    
SENATOR DUNBAR asked if PHC would be giving a presentation.                                                                     
                                                                                                                                
2:07:29 PM                                                                                                                    
MS.  STOLL   replied  that   Greg  Louden   would  be   giving  a                                                               
presentation on behalf of PHC.                                                                                                  
                                                                                                                                
2:07:30 PM                                                                                                                    
SENATOR DUNBAR  asked if the  legislation in Oklahoma  was struck                                                               
down  in its  entirety and,  if specific  provisions were  struck                                                               
down, which ones are analogous to SB 121.                                                                                       
                                                                                                                                
2:07:46 PM                                                                                                                    
MS. STOLL replied  that the prohibition on  preferred network and                                                               
specialty  pharmacy  networks  and the  prohibition  on  mandated                                                               
maintenance  drug mail  order. She  added that  the 10th  Circuit                                                               
Court remanded  the case  back to the  Federal District  Court to                                                               
determine  what  portions  of  the law  are  severable  from  the                                                               
preempted  issues. She  agreed  that  a state  has  the right  to                                                               
license, audit,  and provide for administrative  remedies for any                                                               
business  operating  within  its  jurisdiction.  She  shared  her                                                               
belief  that provisions  in  the bill  relating  to these  issues                                                               
would be  upheld, as it  is appropriate for  a state to  do this.                                                               
She reiterated that  the legislation went wrong  by requiring the                                                               
ERISA plans to administer different laws in different states.                                                                   
                                                                                                                                
2:09:18 PM                                                                                                                    
SENATOR DUNBAR  asked for clarification  that the  ERISA concerns                                                               
arise from the in-network issue and the mail order issue.                                                                       
                                                                                                                                
2:09:34 PM                                                                                                                    
MS.  STOLL  replied  yes,  along   with  the  specialty  pharmacy                                                               
restrictions.                                                                                                                   
                                                                                                                                
2:09:42 PM                                                                                                                    
SENATOR DUNBAR  referred to  earlier testimony  that SB  121 does                                                               
not  disallow mail  order  maintenance drugs  and  asked if  this                                                               
distinguishes SB 121 from the Oklahoma case.                                                                                    
                                                                                                                                
2:09:58 PM                                                                                                                    
MS. STOLL  offered her understanding  that SB 121 does  not allow                                                               
companies to  mandate mail-order drugs. She  explained that mail-                                                               
order  maintenance drugs  are usually  optional  and benefit  the                                                               
participant by ensuring they maintain  their health routine - and                                                               
there  is generally  no out-of-pocket  cost.  While it  is not  a                                                               
common  practice,  some   plans  mandate  mail-order  maintenance                                                               
prescriptions because  there is  a big  cost savings.  She opined                                                               
that this is better for the participant because there is no out-                                                                
of-pocket cost.                                                                                                                 
                                                                                                                                
2:10:36 PM                                                                                                                    
SENATOR DUNBAR  commented that  an amendment  allowing mail-order                                                               
maintenance drugs might address this concern.                                                                                   
                                                                                                                                
2:10:47 PM                                                                                                                    
MS.  STOLL suggested  that it  would be  better to  consider this                                                               
question from the preemption perspective,  which states that this                                                               
question  should be  left up  to  the fiduciaries  when they  are                                                               
deciding the plan terms. It  is the fiduciary's responsibility to                                                               
determine  whether   the  plan  terms  include   that  a  certain                                                               
medication, taken regularly, will  be sent via mail-order because                                                               
it is  much less  expensive for  the plan  (thus saving  money to                                                               
treat  life-threatening  diseases,   support  wellness  programs,                                                               
etc.).                                                                                                                          
                                                                                                                                
2:11:16 PM                                                                                                                    
SENATOR DUNBAR  commented that Alaska  is a unique state  when it                                                               
comes to  the mail  system and  temperatures. For  instance, many                                                               
people do  not have mailboxes for  their mail to go  to. He asked                                                               
for clarification that, if a  plan mandated mail-order for a drug                                                               
that was  known to  spoil when  being shipped  to rural  areas in                                                               
Alaska, there is nothing that can be done about this.                                                                           
                                                                                                                                
2:11:43 PM                                                                                                                    
MS. STOLL  replied that there is  something that the plan  can do                                                               
about   this.  She   stated   that  PHC's   PBMs   do  not   ship                                                               
environmentally    sensitive    drugs     (like    insulin)    to                                                               
environmentally  rough  places  like Alaska.  She  asserted  that                                                               
PHC's mail-order  program has  never shipped  insulin and  had it                                                               
freeze on  someone's doorstep. She  reiterated that PHC  serves 1                                                               
in 3  Alaskans and said that  over the last two  years there were                                                               
two instances  when mail-order  drugs did  not arrive  timely. In                                                               
those   instances,  a   manual  override   was  done   and  those                                                               
prescriptions were filled at a retail pharmacy.                                                                                 
                                                                                                                                
2:12:34 PM                                                                                                                    
CHAIR  BJORKMAN  asked  for clarification  that  PHC  covers  110                                                               
thousand lives in Alaska.                                                                                                       
                                                                                                                                
2:12:45 PM                                                                                                                    
MS. STOLL replied yes.                                                                                                          
                                                                                                                                
2:12:48 PM                                                                                                                    
CHAIR BJORKMAN stated that this translates to 1 in 7 Alaskans.                                                                  
                                                                                                                                
2:12:52 PM                                                                                                                    
MS. STOLL replied  that this is correct; however,  in addition to                                                               
this, 50  percent of  Alaskans are  enrolled in  federal programs                                                               
such as Indian Health Services (IHS).                                                                                           
                                                                                                                                
2:13:19 PM                                                                                                                    
SENATOR BISHOP  asked Ms. Stoll to  provide information regarding                                                               
her work with PHC and her work history.                                                                                         
                                                                                                                                
2:13:31 PM                                                                                                                    
MS.  STOLL briefly  shared  her education  and  work history  and                                                               
offered an overview of her work for PHC.                                                                                        
                                                                                                                                
2:14:20 PM                                                                                                                    
SENATOR  BISHOP asked  if this  includes day-to-day  negotiations                                                               
between PBMs and the trusts.                                                                                                    
                                                                                                                                
2:14:28 PM                                                                                                                    
MS. STOLL  replied that this is  why the PBM contract  is managed                                                               
by a PBM consulting firm  - National CooperativeRx. This firm has                                                               
the aggregated  clout that  allows them to  negotiate on  an even                                                               
basis with PBMs.                                                                                                                
                                                                                                                                
2:14:52 PM                                                                                                                    
SENATOR  BISHOP  commented  that  he   is  a  50-year  member  of                                                               
Operating Engineers Local 302 and  has some experience with these                                                               
kinds of  negotiations. He asked  how they  can be sure  that the                                                               
trustees are getting accurate information from the PBMs.                                                                        
                                                                                                                                
2:15:49 PM                                                                                                                    
MS.  STOLL answered  that  National  CooperativeRx reports  their                                                               
investigation,  audit, and  RFP findings  PHC. Member  plans have                                                               
access  to this  information. She  expressed confidence  that PHC                                                               
receives the  information needed  but acknowledged that  she does                                                               
not agree  with all decisions made  by PBMs and added  that there                                                               
are   some   transparency   problems.  She   noted   that   these                                                               
transparency  concerns are  being addressed  at a  federal level,                                                               
which is  where this issue  belongs, as  it relates to  a federal                                                               
law.                                                                                                                            
                                                                                                                                
2:16:49 PM                                                                                                                    
CHAIR BJORKMAN  asked for more  information on the  Supreme Court                                                               
decision   in   Rutledge   v   Pharmaceutical   Care   Management                                                               
Association (PCMA).                                                                                                             
                                                                                                                                
MS.  STOLL explained  that this  was an  Arkansas law  that dealt                                                               
with  the  relationship between  the  PBM  and the  pharmacy  and                                                               
involved an  additional cost (which  would have been  passed down                                                               
to  the  health plans).  In  this  case,  the court  stated  that                                                               
because the  proposed cost (imposed  though a  third-party vendor                                                               
to  the  health plan)  was  not  mandating  changes to  the  plan                                                               
design,  it was  not preemptive.  Instead, it  was considered  an                                                               
ancillary cost to the plan.                                                                                                     
                                                                                                                                
CHAIR BJORKMAN  asked for clarification  that, according  to this                                                               
interpretation, a  dispensing fee  increase would be  allowed but                                                               
mandating delivery would not.                                                                                                   
                                                                                                                                
MS. STOLL replied that this is  correct and added that the latter                                                               
would be considered "plan design"  and would therefore fall under                                                               
the purview of the plan fiduciaries.                                                                                            
                                                                                                                                
2:19:02 PM                                                                                                                    
CHAIR BJORKMAN referred to the  Supreme Court Case New York State                                                               
Conference of Blue  Cross & Blue Shield Plans et  al. v Travelers                                                               
Insurance Co. et al., which  related to ERISA plans and differing                                                               
hospital  fees, and  asked how  this would  speak to  PBMs having                                                               
different  price  structures  for  in-network  vs  out-of-network                                                               
pharmacies.                                                                                                                     
                                                                                                                                
2:19:33 PM                                                                                                                    
MS. STOLL  replied that  the aforementioned  case dealt  with the                                                               
tax on  hospital in  New York -  it did not  deal with  a pricing                                                               
issue  between the  PBMs and  the plan.  She reiterated  that the                                                               
plans contract with the PBMs and SB  121 is a PBM bill - however,                                                               
the net  effect is to  drive and  mandate plan design  changes by                                                               
ERISA plans.                                                                                                                    
                                                                                                                                
2:20:00 PM                                                                                                                    
MS.  STOLL referred  to  the  dispensing fee  and  PHC plans  and                                                               
stated  that  SB 121  would  increase  the  yearly cost  by  $2.7                                                               
million.  Currently,  PHC  dispensing  fees  are  $4  -  a  $9.36                                                               
difference  from the  fee proposed  by SB  121. She  restated her                                                               
earlier  questions related  to preemption,  fairness, and  equity                                                               
and asked  why those who  are setting money aside  via collective                                                               
bargaining  should be  required to  fund  a private  entity at  a                                                               
level that is higher than what they have already negotiated.                                                                    
                                                                                                                                
2:20:41 PM                                                                                                                    
CHAIR BJORKMAN  commented that this  is an  interesting question.                                                               
He pointed  out that the  parties present disagree on  the facts,                                                               
emphasizing  the   3,000  percent   difference  in   the  numbers                                                               
presented. With  respect to negotiated agreements  and collective                                                               
bargaining, he  commented that  if he was  paying money  from his                                                               
check  monthly, he  would  want  to know  that  the  cost of  the                                                               
benefits  being  negotiated actually  are  less  - and  that  the                                                               
arrangements made are actually saving  him money. He stated that,                                                               
if even  10 percent  of what the  pharmacists have  shared during                                                               
their  testimony is  true,  he would  have  questions about  what                                                               
union  dues are  worth.  He said  that he  would  be unlikely  to                                                               
continue paying dues if he did not receive great answers.                                                                       
                                                                                                                                
MS. STOLL expressed her agreement.                                                                                              
                                                                                                                                
CHAIR BJORKMAN emphasized the importance  of considering the data                                                               
and understanding the differences  between the numbers reported -                                                               
why  they  exist and  what  they  are.  He  added that  until  he                                                               
receives a rational  answer for the difference  between the NADAC                                                               
prices and  what the  plans pay out  - he will  have a  hard time                                                               
believing testimony that insists plan  members are getting a good                                                               
deal.                                                                                                                           
                                                                                                                                
MS. STOLL said  that Greg Loudon, who is a  PHC consultant, would                                                               
provide additional documentation to support this claim.                                                                         
                                                                                                                                
2:23:05 PM                                                                                                                    
GREG LOUDON,  Vice President &  Account Executive,  Parker, Smith                                                               
and Feek, Anchorage,  Alaska, testified in opposition  to SB 121.                                                               
He said  that he is  an employee  benefit consultant for  PHC. He                                                               
explained that  PHC provides  group contracting  for self-insured                                                               
health  plans  and   he  assists  PHC  to   contract  with  PBMs,                                                               
hospitals, and  primary care providers,  among others.  PHC works                                                               
to  aggregate  volume of  beneficiaries  and  then negotiates  on                                                               
behalf of a much larger group.                                                                                                  
                                                                                                                                
2:24:06 PM                                                                                                                    
MR. LOUDON directed  attention to a presentation  titled "SB 121"                                                               
and advanced to slide 2:                                                                                                        
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Who is the Pacific Health Coalition?                                                                                     
                                                                                                                                
        • Alaska based non-profit coalition representing                                                                        
          self-funded health plans                                                                                              
        • Public entities and labor/management trusts.                                                                          
        • Primary goals                                                                                                         
               • Lower costs and increase quality for                                                                           
                  members                                                                                                       
       • Global membership is 49 plans and 250,000 lives                                                                        
       • Alaska membership is 29 plans and 110,000 lives                                                                        
                                                                                                                                
2:24:26 PM                                                                                                                    
MR. LOUDON advanced to slide 3:                                                                                                 
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Why we oppose this bill                                                                                                  
                                                                                                                                
        • SB 121 increases costs to our members.                                                                                
        • Reduces our ability to:                                                                                               
               • Manage costs                                                                                                   
               • Steer members to high quality pharmacies                                                                       
               • Trade increased volume for reduced rates                                                                       
                                                                                                                                
MR. LOUDON emphasized the importance  of trading increased volume                                                               
for  reduced rates.  He stated  that PHC  represents hard-working                                                               
families  who   have  recently  been  faced   with  unprecedented                                                               
inflation and wages have not been  able to keep up. Workers trade                                                               
compensation  for benefits  packages and  now these  benefits are                                                               
being diminished to benefit one group.                                                                                          
                                                                                                                                
2:25:27 PM                                                                                                                    
SENATOR  DUNBAR  asked for  clarification  of  what is  meant  by                                                               
"steer  members to  high quality  pharmacies" and  if independent                                                               
Alaskan pharmacies -  pharmacies that are in support of  SB 121 -                                                               
are not considered "high quality".                                                                                              
                                                                                                                                
2:25:49 PM                                                                                                                    
MR. LOUDON suggested  that there likely are  some pharmacies that                                                               
are not  "high quality". He  indicated that PHC has  had negative                                                               
interactions  with  some  pharmacies  that did  not  provide  the                                                               
quality, oversight, and value that PHC expects for its members.                                                                 
                                                                                                                                
2:26:15 PM                                                                                                                    
SENATOR DUNBAR  requested more  information on  what is  meant by                                                               
"high quality"  - and specifically  how the practices of  a "high                                                               
quality"  pharmacy would  differ from  those of  a "low  quality"                                                               
pharmacy.                                                                                                                       
                                                                                                                                
2:26:27 PM                                                                                                                    
MR. LOUDON replied  that the Tanana Chiefs  Conference pharmacy -                                                               
which actively  manages specialty products and  adjusts practices                                                               
to  meet  unique  geographical needs,  offers  blood  testing  to                                                               
determine whether a medication is  working, etc. - is one example                                                               
of a "high  quality" pharmacy. He stated  that smaller pharmacies                                                               
- e.g.  those run by  one or two people  in rural locations  - do                                                               
not  have the  capacity  to provide  the  necessary services  and                                                               
oversight.  He   explained  that,  in  addition   to  negotiating                                                               
discounts, PBMs ensure that providers utilize best practices.                                                                   
                                                                                                                                
2:27:25 PM                                                                                                                    
MR. LOUDON advanced to slide 4:                                                                                                 
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Why we oppose this bill                                                                                                  
                                                                                                                                
        • Complicated relationship with PBMs                                                                                    
               • PBMs provide a needed and valuable service                                                                     
                 but we don't always like them                                                                                  
               • Consider    vendors    like   cell    phone                                                                    
                  companies, cable TV, car dealerships                                                                          
               • Health plans cannot contract with every                                                                        
                  pharmacy directly                                                                                             
        • Our plan sponsors hire, fire, and manage the                                                                          
          services provided by the PBMs                                                                                         
                                                                                                                                
MR. LOUDON  emphasized both the complicated  relationship PHC has                                                               
with its PBMs and the importance of the service they provide.                                                                   
                                                                                                                                
2:29:37 PM                                                                                                                    
SENATOR BISHOP  asked if SB 121  could be adjusted in  a way that                                                               
would satisfy  all parties and  stated the importance  of finding                                                               
common ground.                                                                                                                  
                                                                                                                                
2:30:18 PM                                                                                                                    
MR.  LOUDON  replied  that  PHC  could come  up  with  some  good                                                               
recommendations;  however, SB  121 in  its totality  is difficult                                                               
for  PHC and  it would  be difficult  to suggest  amendments that                                                               
would  make it  palatable. He  explained  that PHC  - along  with                                                               
other private  entities - were  caught off  guard by the  lack of                                                               
discussion with  stakeholders and implied that  discussions would                                                               
have resulted in provisions for  SB 121 that would have benefited                                                               
all involved. He  opined that many things have been  taken out of                                                               
context and  acknowledged that disputed  facts make  it difficult                                                               
for the legislature to make sound decisions.                                                                                    
                                                                                                                                
2:31:11 PM                                                                                                                    
MR. LOUDON spoke to points on slide 5:                                                                                          
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     How has the PHC engaged to contract with PBMs                                                                            
                                                                                                                                
        • PHC formed a relationship with a larger non-                                                                          
          profit coalition focused solely on PBM services                                                                       
               • National Cooperative Rx                                                                                        
               • 315 Health plans and 480,000 lives                                                                             
               • Independent auditing                                                                                           
               • Pricing guarantees and 100 percent return                                                                      
                  of rebates                                                                                                    
               • Pharmacist team to evaluate clinical                                                                           
                  programs and recommend cost containment                                                                       
                  programs                                                                                                      
                                                                                                                                
MR. LOUDON gave  a brief history of  PHC's experience negotiating                                                               
PBM contracts  and shared  how they  began working  with National                                                               
Cooperative Rx.  He briefly explained the  contract negotiations.                                                               
He  pointed  out  that,  contrary   to  previous  testimony,  PHC                                                               
receives  a  100   percent  return  on  rebates.   He  said  cost                                                               
containment  programs are  evaluated to  determine who  they will                                                               
most benefit.                                                                                                                   
                                                                                                                                
2:33:31 PM                                                                                                                    
SENATOR DUNBAR  expressed his understanding that  the 100 percent                                                               
return  on  rebates mandated  by  SB  121  would not  impact  PHC                                                               
because they are  already doing this. He surmised  that PHC would                                                               
therefore not  oppose this portion of  the bill an asked  if this                                                               
is  correct. He  suggested that  others may  not be  getting this                                                               
same return on rebates and asked if this is possible.                                                                           
                                                                                                                                
2:34:23 PM                                                                                                                    
MR. LOUDON replied that it  is possible. He clarified PHC opposes                                                               
this provision  in SB 121  because it removes  a cost-containment                                                               
tool.  He commented  that spread-pricing  factors  into this  and                                                               
explained that spread-pricing is a  contract tool, and as such is                                                               
neither good nor bad.                                                                                                           
                                                                                                                                
MR. LOUDON explained that contracts  can be transparent - sharing                                                               
dispensing fees and  ingredient costs at a  particular pharmacy -                                                               
or the  contract can be  generic - offering  guaranteed discounts                                                               
off  of a  national rate  sheet for  ingredient costs  and a  set                                                               
number for  dispensing fees. In  a spread-pricing  contract, this                                                               
can be made  up in rebates - some employers  enter into contracts                                                               
with either their health insurer or  their PBM to give up part of                                                               
the rebates. This way, there is no separate administration cost.                                                                
                                                                                                                                
2:35:25 PM                                                                                                                    
SENATOR DUNBAR pointed out that PHC  does not do this, since they                                                               
get 100 percent of the rebates.                                                                                                 
                                                                                                                                
2:35:29 PM                                                                                                                    
MR. LOUDON agreed that PHC gets 100 percent of the rebates.                                                                     
                                                                                                                                
2:35:37 PM                                                                                                                    
CHAIR BJORKMAN  stated that one  of the goals  of SB 121  is that                                                               
members would no  longer pay unknown costs. He  surmised that PHC                                                               
has access  to the data  and could  easily make a  comparison for                                                               
the   committee   or  for   plan   members   who  requested   it.                                                               
Specifically,  PHC  could provide  data  to  show the  difference                                                               
between  what  the  plan  paid   and  the  NADAC  pricing  for  a                                                               
particular  prescription.   He  shared  his   understanding  that                                                               
members could  potentially pay  NADAC pricing -  or pay  based an                                                               
unknown list of  costs - the details of which  are only available                                                               
to certain people.                                                                                                              
                                                                                                                                
2:37:00 PM                                                                                                                    
MR. LOUDON replied maybe, though he  is not an expert on pricing.                                                               
He  stated  his  belief  that  earlier  testimony  regarding  the                                                               
pricing for  multiple sclerosis drugs  was taken out  of context.                                                               
He acknowledged  that there may be  examples like this -  even in                                                               
PHC contracts  - where  costs may be  extremely high  compared to                                                               
other drugs because  a different drug is favored over  the one in                                                               
question. He briefly explained how "preferred pricing" works.                                                                   
                                                                                                                                
2:37:45 PM                                                                                                                    
CHAIR BJORKMAN  commented that while  he cannot say  whether this                                                               
information is  true or not,  he is  interested to know  the runs                                                               
for the prescription costs for  the past year. Specifically, what                                                               
is the difference  between what the plan paid -  what came out of                                                               
members'  pockets -  and the  NADAC pricing  that the  plan would                                                               
have paid if SB 121 had been in effect.                                                                                         
                                                                                                                                
2:38:34 PM                                                                                                                    
MR. LOUDON advanced to slide 6:                                                                                                 
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     How much do we spend                                                                                                     
                                                                                                                                
        • National Cooperative Rx is an option for PHC                                                                          
          member plans                                                                                                          
               • 10 Alaska based groups with 24,481 lives                                                                       
                  participate                                                                                                   
               • Including our lower 48 based PHC members                                                                       
                  that utilize National Cooperative Rx  we                                                                      
                  spend   $43.5   million   per    year   on                                                                  
                  prescriptions dispensed in Alaska                                                                             
                                                                                                                                
2:39:29 PM                                                                                                                    
MR. LOUDON advanced to slide 7:                                                                                                 
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
              How will SB 121 affect our Rx costs?                                                                            
                                                                                                                                
MR.  LOUDON stated  that SB  121 will  have a  negative financial                                                               
impact on  private industry and  emphasized the belief  that this                                                               
legislation holds no benefit for PHC.                                                                                           
                                                                                                                                
2:39:40 PM                                                                                                                    
MR. LOUDON  spoke to points  on slide  8, displaying a  bar graph                                                               
titled,  "Specialty Pharmacy  Contract  Loss," depicting  current                                                               
exclusive  pharmacy  plans  (marked  at  $140,000)  and  all  PHC                                                               
specialty spend in Alaska (marked at $750,000):                                                                                 
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Specialty Pharmacies Lost opportunity                                                                                    
                                                                                                                                
        • Only 5 of our plans use an exclusive specialty                                                                        
          pharmacy                                                                                                              
               • They save 2 percent of their specialty Rx                                                                      
                  spend for a savings of $140,000 per year                                                                    
                                                                                                                                
MR. LOUDON explained that  utilizing specialty pharmacies results                                                               
in an overall  cost savings for members. He  indicated that while                                                               
only 5  plans currently use  an exclusive specialty  pharmacy, SB
121  would  preclude  all  PHC  plans  from  utilizing  exclusive                                                               
specialty pharmacies. This would result in a lost opportunity.                                                                  
                                                                                                                                
2:40:28 PM                                                                                                                    
MR. LOUDON responded to earlier  comments related to the need for                                                               
- and  validity of -  specialty pharmacies, he  acknowledged that                                                               
"specialty drugs"  are more expensive drugs.  These drugs require                                                               
special dosage,  handling, administration, and storage.  They may                                                               
need  to be  injected  often or  infused and  are  used to  treat                                                               
complex,  chronic,   and/or  rare  conditions  such   as  cancer,                                                               
HIV/AIDS, multiple  sclerosis, or rare genetic  disorders such as                                                               
hemophilia.  He explained  that  most  specialty pharmacies  have                                                               
departments   dedicated  to   helping  patients   find  financial                                                               
assistance  to  help  pay for  their  prescriptions.  He  briefly                                                               
discussed  plan design,  noting that  a plan  sponsor may  choose                                                               
spread-pricing  over transparency  because they  want to  limit a                                                               
single  component  -  e.g.   an  administrative  cost.  Specialty                                                               
pharmacies are  another way for  plans to impact  member savings.                                                               
Some plans limit  total out-of-pocket costs while  others offer a                                                               
savings for  a percentage of the  drug cost. This can  be a large                                                               
sum for those who are taking expensive drugs.                                                                                   
                                                                                                                                
2:42:10 PM                                                                                                                    
SENATOR  DUNBAR  commented that  some  states  have already  made                                                               
changes similar to those in SB  121. He asked if states that have                                                               
banned  the mandated  use  of specialty  pharmacies  have seen  a                                                               
significant increase in costs.                                                                                                  
                                                                                                                                
2:42:30 PM                                                                                                                    
MR. LOUDON  replied that he does  not know. He suggested  that it                                                               
is too early to say.                                                                                                            
                                                                                                                                
2:42:46 PM                                                                                                                    
SENATOR  DUNBAR  asked  why  only five  plans  use  an  exclusive                                                               
specialty pharmacy.                                                                                                             
                                                                                                                                
2:42:54 PM                                                                                                                    
MR. LOUDON  replied that  they made  different choices.  He added                                                               
the choice  to give members  the choice of utilizing  a specialty                                                               
pharmacy - or exclusively using  a specialty pharmacy - should be                                                               
left  to the  employer and/or  plan sponsors.  He said  that some                                                               
plans value choice  over cost. He returned to  an earlier comment                                                               
regarding  the Tanana  Chiefs Conference  pharmacy and  suggested                                                               
that this  is a  specialty pharmacy. He  explained that  while he                                                               
does not utilize this pharmacy, he  is an IHS beneficiary and his                                                               
pharmacy options are limited as a result.                                                                                       
                                                                                                                                
2:44:14 PM                                                                                                                    
MR. LOUDON  advanced to slide  9, displaying a bar  graph titled,                                                               
"Mail  Order Pharmacy  Contract Loss,"  depicting exclusive  mail                                                               
order marked at just under $30,000:                                                                                             
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Mail Order Pharmacies Lost opportunity                                                                                   
                                                                                                                                
        • Only 1 of our plans has exclusive mail order                                                                          
               • They save 2 percent of their total Rx                                                                          
                  spend for a savings of $28,850 per year                                                                       
                                                                                                                                
MR. LOUDON explained that while  only one plan has exclusive mail                                                               
order  requirements, disallowing  this would  impact other  plans                                                               
because it  would not allow  plans to negotiate  these agreements                                                               
in  the future.  He shared  his understanding  that SB  121 would                                                               
also restrict  the ability for  plans to influence members  to go                                                               
to a  mail order  pharmacy. Therefore,  plans could  not increase                                                               
the  cost  when  members  choose   more  expensive  local  retail                                                               
pharmacies or lower the cost when members choose mail order.                                                                    
                                                                                                                                
2:45:35 PM                                                                                                                    
MR. LOUDON advanced  to slide 10, displaying a  bar chart titled,                                                               
"Increased Dispensing  Fees," displaying  'PHC's/Nat Coop  Rx Ak'                                                               
marked at  $2.7 million,  'All PHC Alaska  Plans' marked  at $7.8                                                               
million,  and  'All  Alaska Commercial  Plans  and  Cash  Payers'                                                               
marked  at  $27.5 million.  He  said  that  this is  the  largest                                                               
negative financial  impact to PHC  plans. He said that  while the                                                               
fiscal  note   utilized  a  range   of  dispensing   fees,  these                                                               
calculations  used  the lowest  fee  given  in the  fiscal  note,                                                               
$13.26. The  average dispensing fees paid  by commercial contract                                                               
in Alaska  are $4.  The net increase  per prescription  is $9.30.                                                               
Calculated  out, this  gives a  dispensing fee  increase of  $2.7                                                               
million. When extrapolated  out to the members of PHC  who do not                                                               
participate  in  PBM  contracts  (using  the  average  number  of                                                               
prescriptions  per  person),  this  gives  an  estimate  of  $7.8                                                               
million in increased dispensing fees.                                                                                           
                                                                                                                                
2:47:03 PM                                                                                                                    
MR. LOUDON  explained that  utilizing the  2019 numbers  from the                                                               
Kaiser Family  Foundation for commercial and  cash payers results                                                               
in a  $27.5 million increase  in dispensing fees. He  pointed out                                                               
that  this does  not include  Medicare, Medicaid,  and any  other                                                               
federal plans. He  went on to say that the  $2.7 million increase                                                               
estimated  for  PHC  plans  is  a 6  percent  increase  in  total                                                               
prescription  drug spend.  He pointed  out  that dispensing  fees                                                               
apply  to  all  drugs  and   contrasted  this  with  the  earlier                                                               
presentation  of  the  costs  of  multiple  sclerosis  drugs  (he                                                               
offered to provide  the NADAC pricing at a later  time) which are                                                               
"low  frequency" drugs  that are  not dispensed  regularly or  in                                                               
large quantities.                                                                                                               
                                                                                                                                
2:48:02 PM                                                                                                                    
MR. LOUDON advanced to slide 11:                                                                                                
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Other local protection analogies                                                                                         
                                                                                                                                
        • State government is concerned about local grocery                                                                     
          stores.                                                                                                               
               • Add a $9.36 per meal fee on to groceries                                                                       
                  purchased by restaurants and households                                                                       
        • Concerned about local gas stations                                                                                    
               • Add a $9.36 per fill-up fee to trucking                                                                        
                  companies and car owners                                                                                      
        • Concerned about local hardware stores                                                                                 
               • Add a $9.36 per purchase fee to every                                                                          
                  purchase of hardware goods                                                                                    
                                                                                                                                
MR. LOUDON  opined that no one  would want to pay  these fees. He                                                               
stated that while  the fees may help  struggling businesses, they                                                               
would also  help the large  multi-national firms that  operate in                                                               
Alaska. In addition,  they would increase costs to  the end user.                                                               
He suggested  that this is  not an  "injection of cash"  into the                                                               
local  economy  but is  the  government  confiscating money  from                                                               
employees  and  redistributing it  to  large  and small  pharmacy                                                               
owners.                                                                                                                         
                                                                                                                                
2:49:28 PM                                                                                                                    
SENATOR BISHOP repeated his earlier  request for ideas that would                                                               
result in savings for hard-working Alaskans.                                                                                    
                                                                                                                                
2:50:00 PM                                                                                                                    
MR. LOUDON said that PHC would be happy to work on some ideas.                                                                  
                                                                                                                                
2:50:04 PM                                                                                                                    
CHAIR BJORKMAN reiterated that looking  back at one year of NADAC                                                               
pricing compared to  what plans spent on drugs  would be helpful.                                                               
He emphasized that if plan members  are getting a good deal, they                                                               
should be shown this information. If  they are not getting a good                                                               
deal, other options should be considered.                                                                                       
                                                                                                                                
2:51:03 PM                                                                                                                    
DEREK  MUSTO,  Organizer  and Business  Agent,  Alaska  Teamsters                                                               
Local 959, Anchorage, Alaska, testified  with concerns on SB 121.                                                               
He  referred to  previous  testimony offered  by Senator  Giessel                                                               
relating to the complicated nature  of the PBM business model and                                                               
the  difficulty  in  peeling  back  the  opaque  layers  of  this                                                               
business model.  He expressed his  agreement with  the statement;                                                               
however,  he disagreed  that  SB  121 is  the  proper vehicle  to                                                               
address this issue.                                                                                                             
                                                                                                                                
MR. MUSTO stated  that he wears dual hats as  a labor trustee and                                                               
labor trustee and shared examples  of his responsibility to both.                                                               
He shared that his organization  has a PBM consultant who assists                                                               
with   contract  negotiations.   These  contracts   allow  Alaska                                                               
Teamsters Local 959 (AK Teamsters)  to audit, control, and reduce                                                               
pharmacy spend. He  acknowledged that some PBMs  refuse to accept                                                               
transparent  terms but  emphasized  that a  number  of PBMs  will                                                               
agree to these terms.                                                                                                           
                                                                                                                                
2:53:03 PM                                                                                                                    
MR.  MUSTO  shared that  he  has  attended trainings  around  the                                                               
country and  has heard pharmacists  who have advocated  for these                                                               
kinds of  controls and cost-saving recommendations.  He explained                                                               
that  trustees  are  civilly  and  criminally  liable  for  their                                                               
actions  - plan  assets must  be  used for  reasonable costs  for                                                               
administering  and   providing  benefits   under  the   plan.  He                                                               
emphasized  that  he  takes his  responsibilities  seriously  and                                                               
shared the ways  in which he assists his  organization in seeking                                                               
out plan  design. He asserted that  SB 121 would put  a strain on                                                               
Alaska's  health  trust  and other  Alaskan  plans  by  stripping                                                               
important cost-saving mechanisms  and adding mandatory dispensing                                                               
fees. He pointed  out that these additional costs  do not provide                                                               
a benefit to plan members and their families.                                                                                   
                                                                                                                                
2:54:27 PM                                                                                                                    
MR. MUSTO  expressed concern  that changes made  by SB  121 would                                                               
negatively impact the plan and  plan members. He stated that this                                                               
legislation includes  measures that  would negatively  impact the                                                               
ability to  establish PBM design  and use preferred  or exclusive                                                               
pharmacy networks,  and it would  remove access to  programs that                                                               
directly  benefit  plan  members.  He added  that  this  directly                                                               
conflicts with his trustee responsibilities.  He listed a variety                                                               
of cost  controlling measures that benefit  plan participants. He                                                               
asserted that  mail order pharmacies  provide a cost  savings and                                                               
have  improved outcomes.  He shared  information  about a  recent                                                               
study  that  illustrated the  benefits  of  utilizing mail  order                                                               
pharmacies.  He  stated   that,  while  he  is   a  proponent  of                                                               
supporting  local businesses,  these  negotiations must  consider                                                               
what will be of most benefit to plan participants.                                                                              
                                                                                                                                
2:56:12 PM                                                                                                                    
MR. MUSTO asserted  that SB 121 would  subsidize local pharmacies                                                               
at the  expense of Alaskans  and their families and  would likely                                                               
result in  increased deductibles  and other  cost-saving measures                                                               
that put  the burden  on plan participants.  He opined  that this                                                               
legislation would  increase costs  with little  to no  benefit to                                                               
the  Alaskan economy.  In  addition, it  would  require plans  to                                                               
utilize  plan  assets  for unreasonable  costs,  thus  preventing                                                               
plans from utilizing proven  cost-savings mechanisms to subsidize                                                               
local pharmacies.                                                                                                               
                                                                                                                                
2:57:00 PM                                                                                                                    
MR.  MUSTO shared  his belief  that the  state should  not divert                                                               
negotiated dollars to support private  businesses. He opined that                                                               
the state should use urban  development dollars or other tools to                                                               
help local pharmacies  rather than increasing the  revenue to all                                                               
pharmacies (including  large chain pharmacies like  Walmart, Fred                                                               
Meyer, and Walgreens).                                                                                                          
                                                                                                                                
2:57:39 PM                                                                                                                    
CHAIR  BJORKMAN referred  to Mr.  Musto's testimony  that SB  121                                                               
would increase costs  for plan members and asked if  he knows the                                                               
difference between the NADAC costs  plus dispensing fees (as laid                                                               
out  in  SB  121)  and  his  organization's  plan  spend  was  on                                                               
prescription drugs for the past year.                                                                                           
                                                                                                                                
2:58:00 PM                                                                                                                    
MR. MUSTO replied  that he defers to the  plan professionals when                                                               
it  comes to  spread  pricing. He  shared  that his  organization                                                               
recently completed  an RFP process and  expressed confidence that                                                               
this resulted in  the best benefit possible for  plan members. He                                                               
noted  that  they use  the  coalition  when  this is  a  superior                                                               
option. He  added that he  would be  willing to have  a follow-up                                                               
conversation that included the PBM consultant.                                                                                  
                                                                                                                                
2:58:54 PM                                                                                                                    
CHAIR  BJORKMAN expressed  his understanding  that the  answer to                                                               
his question was "no". He  pointed out Mr. Musto's fiduciary duty                                                               
to plan  members and encouraged  him to  take a year  lookback at                                                               
what was  spent on  prescription drugs  under the  current system                                                               
and apply the  SB 121 model to the plan  experience. He requested                                                               
that Mr. Musto report back  whether participants would have saved                                                               
money with the changes  made by SB 121 or if  they saved money by                                                               
allowing the contract to be  negotiated under the current system.                                                               
He  opined  that  plan  members   would  be  interested  in  this                                                               
information,  particularly  if  the   claim  that  SB  121  would                                                               
increase  costs is  accurate. He  stated that  he cannot  support                                                               
this claim  at this  time due to  the disparate  understanding of                                                               
the   data.   However,    if   the   aforementioned   information                                                               
(prescription  drug   costs  and  NADAC  pricing   for  2023)  is                                                               
available, this would provide the answer.                                                                                       
                                                                                                                                
3:00:38 PM                                                                                                                    
BRENDA  SNYDER,   Lead  Director   of  Government   Affairs,  CVS                                                               
Health/Aetna, Tacoma,  Washington, testified in opposition  to SB
121.  She  asserted  that this  legislation  would  significantly                                                               
increase prescription  drug costs  in Alaska. She  explained that                                                               
employers,  insurers, and  governments  choose  to contract  with                                                               
PBMs. She briefly explained this process.                                                                                       
                                                                                                                                
MS  SNYDER   said  that  SB   121  contains   several  concerning                                                               
provisions  that   eliminate  cost-control  measures   that  plan                                                               
sponsors utilize.  This includes  banning insurers  from offering                                                               
lower  costs to  those  managing chronic  conditions who  receive                                                               
their medications via mail order  pharmacies. She added that mail                                                               
order  pharmacies  are  particularly   important  to  those  with                                                               
chronic  conditions. She  explained that  many plans  offer lower                                                               
prices  to  those who  choose  these  options  - or  may  require                                                               
maintenance drugs to  be delivered by mail -  which enables plans                                                               
to  offer the  lowest possible  premium. She  stated that  SB 121                                                               
would prohibit  insurers from  offering more  affordable pharmacy                                                               
options to  those requiring  high-cost specialty  medications and                                                               
would  effectively  ban  preferred pharmacy  networks,  including                                                               
specialty pharmacy arrangements.                                                                                                
                                                                                                                                
3:02:25 PM                                                                                                                    
MS. SNYDER briefly explained why  plans utilize these options. In                                                               
addition,  SB 121  would prevent  insurers from  telling patients                                                               
about less expensive pharmacy options.  She asserted that this is                                                               
anti-competitive  and would  harm Alaskan  consumers. She  stated                                                               
that SB  121 ignores the long-standing  value-benefit plan design                                                               
and includes  mandates that remove this  flexibility. She briefly                                                               
explained the  ways this would  negatively impact plans  and plan                                                               
members.                                                                                                                        
                                                                                                                                
3:03:23 PM                                                                                                                    
CHAIR BJORKMAN  asked what lines  in SB 121  ban the use  of mail                                                               
order pharmacy for maintenance drugs.                                                                                           
                                                                                                                                
3:03:58 PM                                                                                                                    
MS. SNYDER  answered that  SB 121  does not  say that  mail order                                                               
pharmacies  cannot  be  used;  rather,  the  use  of  mail  order                                                               
pharmacies  cannot  be required.  She  explained  that some  plan                                                               
sponsors choose  to require the  use of mail order  pharmacies in                                                               
order to reduce costs.                                                                                                          
                                                                                                                                
3:04:26 PM                                                                                                                    
CHAIR  BJORKMAN  pointed  out  that  the  verbiage  used  in  her                                                               
testimony  could  be  easily misunderstood  by  a  layperson.  He                                                               
commented  that a  number of  people have  testified that  SB 121                                                               
bans mail  order delivery for  maintenance medications  and asked                                                               
for clarification  that Ms. Snyder  agrees that  this legislation                                                               
does  not,  in fact,  ban  mail  order delivery  for  maintenance                                                               
drugs.                                                                                                                          
                                                                                                                                
3:05:05 PM                                                                                                                    
MS.  SNYDER agreed  that her  earlier statement  was unclear  and                                                               
offered an apology.  She clarified that SB 121 does  not ban mail                                                               
order  delivery but  rather  eliminates the  ability  for a  plan                                                               
sponsor to make those determinations  and requirements that would                                                               
provide them with lower cost options.                                                                                           
                                                                                                                                
3:05:32 PM                                                                                                                    
CHAIR  BJORKMAN asked  what  part of  SB  121 eliminates  network                                                               
pharmacies.                                                                                                                     
                                                                                                                                
3:05:41 PM                                                                                                                    
MS. SNYDER  answered that SB  121 effectively  eliminates network                                                               
pharmacies.  She  explained  that  plans  negotiate  for  network                                                               
pharmacies by agreeing  to drive large quantities  of business to                                                               
a particular pharmacy if they  agree to lower costs. Allowing any                                                               
pharmacy into  the network -  and paying all pharmacies  the same                                                               
amount  - removes  the incentive  for a  pharmacy to  agree to  a                                                               
lower  cost.  Thus, the  design  of  preferred pharmacy  networks                                                               
(reducing the number of pharmacies  that plan members can utilize                                                               
while reducing costs) is obliterated.                                                                                           
                                                                                                                                
3:06:34 PM                                                                                                                    
CHAIR BJORKMAN asked what part of SB 121 outlaws communication.                                                                 
                                                                                                                                
3:06:41 PM                                                                                                                    
MS.  SNYDER answered  that the  provisions regarding  steerage do                                                               
not  allow plans  to steer  patients to  lower cost  options. She                                                               
questioned  whether plans  would be  able to  tell members  about                                                               
lower cost options without this being considered "steering".                                                                    
                                                                                                                                
3:06:53 PM                                                                                                                    
CHAIR  BJORKMAN expressed  his understanding  and  opined that  a                                                               
mandate would be needed for something to count as "steering".                                                                   
                                                                                                                                
3:07:14 PM                                                                                                                    
GARY  B.   STRANNIGAN,  Vice   President  of   Congressional  and                                                               
Legislative  Affairs, Premera  Blue  Cross, Everett,  Washington,                                                               
testified in opposition to SB 121.  He stated that Premera is not                                                               
owned by  -and does not own-  a PBM. He added  that Premera fully                                                               
supports  transparency  and  shares  the goal  of  insuring  fair                                                               
compensation  for  pharmacies.  He expressed  concern  with  what                                                               
Premera  considers to  be "anti  free enterprise"  aspects of  SB
121,  which   will  increase  costs  -   making  healthcare  less                                                               
affordable. He  stated that he  is willing to  discuss amendments                                                               
if there is receptivity to  this. He said the concerning sections                                                               
include  non-affiliated pay  parity,  anti-mandatory mail  order,                                                               
and anti-steering  provisions. He  acknowledged that SB  121 does                                                               
not  prohibit  mail-order  but rather  prohibits  exclusive  mail                                                               
order design.  He noted that  Premera does not  utilize mandatory                                                               
mail order  but does  not see  any reason  to restrict  this cost                                                               
reduction tool.                                                                                                                 
                                                                                                                                
3:09:05 PM                                                                                                                    
MR. STRANNIGAN  stated that all businesses  purchase products and                                                               
sell them for more  money - which is a simplistic  way to look at                                                               
spread  pricing.  He  acknowledged  that  the  prescription  drug                                                               
supply chain is  complicated - and each step in  the supply chain                                                               
takes a  spread. He  stated his  concern that  PBMs are  the only                                                               
part of  the supply chain impacted  by SB 121. He  listed several                                                               
other programs that take a large  spread and yet are not impacted                                                               
by  this legislation.  He stated  that this  provision would,  in                                                               
some cases, result  in Premera charging a 10  percent increase in                                                               
premium. With respect to "white  bagging" and "brown bagging", he                                                               
stated that  though Premera does not  use this in Alaska  at this                                                               
time, it  is preferable  to have  the option  for members  in the                                                               
future. With respect  to dispensing fees, he stated  that this is                                                               
government  setting a  price  for what  is  currently subject  to                                                               
competitive  marketplace pricing.  He  asserted  that this  would                                                               
increase healthcare costs.                                                                                                      
                                                                                                                                
3:11:26 PM                                                                                                                    
MR.  STRANNIGAN  said  that  Premera   utilizes  PBMs  for  their                                                               
negotiating  power  when  working with  (sometimes  unscrupulous)                                                               
drug manufacturers.  He expressed  concern that the  imbalance of                                                               
SB 121 would increase the  power of those manufacturers, allowing                                                               
them to extract  more money from plan members  by undermining the                                                               
PBMs. He expressed  his appreciation for the  level of engagement                                                               
and consideration  this legislation  has received.  He emphasized                                                               
that SB  121 has  not been  vetted and Premera  has not  had much                                                               
time  to  dig  into  the   proposed  changes.  He  asserted  that                                                               
developing this  type of legislation in  isolation is problematic                                                               
insofar  as  it  benefits  two  constituencies  over  others.  He                                                               
underscored his appreciation  for holding hearings on  SB 121 and                                                               
allowing for  balanced testimony -  which will allow  Alaskans to                                                               
receive a better product.                                                                                                       
                                                                                                                                
3:13:17 PM                                                                                                                    
CHAIR  BJORKMAN  encouraged  Premera  (and others)  to  show  the                                                               
committee what they paid in  prescription drug costs for the last                                                               
year and compare  this with the NADAC average. He  noted that the                                                               
NADAC  is  a rolling  average  that  is  updated every  week  and                                                               
compared this to a rolling average  that was updated twice a year                                                               
(which  was exploitative).  He  encouraged  consideration of  the                                                               
plan numbers on both the plan and the provider side.                                                                            
                                                                                                                                
3:14:00 PM                                                                                                                    
LAUREE MORTON,  representing self,  Juneau, Alaska,  testified in                                                               
support  of  SB   121.  She  said  that   local  pharmacies  fill                                                               
prescriptions while cultivating  relationships. She expressed her                                                               
desire  to visit  pharmacies where  trusted staff  can help  with                                                               
non-prescription  medications,  medical gear,  and  vaccinations.                                                               
She  also expressed  a desire  to support  local businesses.  She                                                               
stated that she would not mind  paying more if this keeps Alaskan                                                               
businesses open  and ensures  personalized attention.  She opined                                                               
that it is important to  keep business local, regardless of cost.                                                               
She said  that she wants  to be able to  work with her  doctor to                                                               
choose  the  best treatment  -  not  a  PBM. She  emphasized  the                                                               
importance of  regulating the regulators and  suggested that PBMs                                                               
need  more  regulation  than the  businesses  they  monitor.  She                                                               
expressed  her   understanding  that  the   regulatory  practices                                                               
proposed  by  SB 121  would  protect  pharmacies and  those  they                                                               
serve.                                                                                                                          
                                                                                                                                
3:17:07 PM                                                                                                                    
[CHAIR BJORKMAN held public testimony on SB 121 open.]                                                                          
                                                                                                                                
3:17:10 PM                                                                                                                    
CHAIR BJORKMAN held SSSB 121 in committee.                                                                                      
                                                                                                                                
3:17:43 PM                                                                                                                    
There being no further business to come before the committee,                                                                   
Chair BJORKMAN adjourned the Senate Labor and Commerce Standing                                                                 
Committee meeting at 3:17 p.m.                                                                                                  

Document Name Date/Time Subjects
SB203 Transmittal Letter 1.22.24.pdf SL&C 3/11/2024 1:30:00 PM
SL&C 3/25/2024 1:30:00 PM
SB 203
SB203 Sectional Analysis ver A.pdf SL&C 3/11/2024 1:30:00 PM
SL&C 3/25/2024 1:30:00 PM
SB 203
SB203 Presentation for SL&C (Version A).pdf SL&C 3/11/2024 1:30:00 PM
SL&C 3/25/2024 1:30:00 PM
SB 203
SB203 Fiscal Note-DCCED-CBPL-01.18.24.pdf SL&C 3/11/2024 1:30:00 PM
SL&C 3/25/2024 1:30:00 PM
SB 203
SSSB121 Supporting Document US Cmmttee on Oversight 03.01.23.pdf SL&C 3/11/2024 1:30:00 PM
SB 121
SSSB121 Supporting Document PCMA Lobbying Spend AIS Health 02.15.24.pdf SL&C 3/11/2024 1:30:00 PM
SB 121
SSSB121 Supporting Document-FIERCE Healthcare-Article-PBM Reform Still in Play 02.28.24.pdf SL&C 3/11/2024 1:30:00 PM
SB 121
SSSB121 Supporting Document-One Pager AK Pharmacists Association 03.04.24.pdf SL&C 3/11/2024 1:30:00 PM
SB 121
SSSB121 Supporting Document-Stat News-Article-Big 3 Are Everything Wrong With Industry 03.04.24.pdf SL&C 3/11/2024 1:30:00 PM
SB 121
SSSB121 Supporting Document-Stat News-Article-PBMs Stonewalling FTC 03.27.24.pdf SL&C 3/11/2024 1:30:00 PM
SB 121
SSSB121 Public Testimony Petersburg Rexall Drug 02.26.24.pdf SL&C 3/11/2024 1:30:00 PM
SB 121
SSSB121 Bibliography.2 03-08-24.pdf SL&C 3/11/2024 1:30:00 PM
SB 121
SSSB121 Public Testimony-Letter-PCMA-03.07.24.pdf SL&C 3/11/2024 1:30:00 PM
SB 121
SSSB121 Supporting Document PCMA Bd of Directors 03.05.24.pdf SL&C 3/11/2024 1:30:00 PM
SB 121
SB203 ver A.pdf SL&C 3/11/2024 1:30:00 PM
SL&C 3/25/2024 1:30:00 PM
SB 203
SSSB121 Presentation to SLAC by Dan Nelson 03.11.24.pdf SL&C 3/11/2024 1:30:00 PM
SB 121
SSSB121 Presentation to SLAC by Greg Loudon 03.11.24.pdf SL&C 3/11/2024 1:30:00 PM
SB 121
SSSB121 Public Testimony-Letter-Alaska UFCW 1496 03.01.24.pdf SL&C 3/11/2024 1:30:00 PM
SB 121
SSSB121 Sectional Analysis ver H 02.12.24.pdf SL&C 2/28/2024 1:30:00 PM
SL&C 3/11/2024 1:30:00 PM
SL&C 3/20/2024 1:30:00 PM
SB 121
SSSB121 Sponsor Statement 02.11.24.pdf SL&C 2/28/2024 1:30:00 PM
SL&C 3/11/2024 1:30:00 PM
SL&C 3/20/2024 1:30:00 PM
SB 121
SSSB121 Fiscal Note-DCCED-CBPL-02.23.24.pdf SL&C 2/28/2024 1:30:00 PM
SL&C 3/11/2024 1:30:00 PM
SL&C 3/20/2024 1:30:00 PM
SB 121
SSSB121 Fiscal Note-DCCED-DOI-02.23.24.pdf SL&C 2/28/2024 1:30:00 PM
SL&C 3/11/2024 1:30:00 PM
SL&C 3/20/2024 1:30:00 PM
SB 121
SSSB121 ver H.pdf SL&C 2/28/2024 1:30:00 PM
SL&C 3/11/2024 1:30:00 PM
SL&C 3/20/2024 1:30:00 PM
SB 121
SSSB121 Fiscal Note-DOA-DRB 02.24.24.pdf SL&C 2/28/2024 1:30:00 PM
SL&C 3/11/2024 1:30:00 PM
SL&C 3/20/2024 1:30:00 PM
SB 121