Legislature(2003 - 2004)

04/13/2004 03:15 PM House HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                          ALASKA STATE LEGISLATURE                                                                            
                HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES                                                                   
                             STANDING COMMITTEE                                                                               
                               April 13, 2004                                                                                   
                                 3:15 p.m.                                                                                      
     MEMBERS PRESENT                                                                                                          
     Representative Peggy Wilson, Chair                                                                                         
     Representative Carl Gatto, Vice Chair                                                                                      
     Representative John Coghill                                                                                                
     Representative Paul Seaton                                                                                                 
     Representative Kelly Wolf                                                                                                  
     Representative Sharon Cissna                                                                                               
     Representative Mary Kapsner                                                                                                
     MEMBERS ABSENT                                                                                                           
     All members present                                                                                                        
     COMMITTEE CALENDAR                                                                                                       
     HOUSE BILL NO. 543                                                                                                         
     "An Act relating to medical  assistance coverage for prescription                                                          
     drugs; and providing for an effective date."                                                                               
          - HEARD AND HELD                                                                                                      
     HOUSE BILL NO. 434                                                                                                         
     "An Act  relating to the  practice of naturopathic  medicine; and                                                          
     providing for an effective date."                                                                                          
          - HEARD AND HELD                                                                                                      
     HOUSE BILL NO. 535                                                                                                         
     "An  Act  relating to  liability  for  expenses of  placement  in                                                          
     certain mental  health facilities; relating to  the mental health                                                          
     treatment  assistance program;  and  providing  for an  effective                                                          
          - SCHEDULED BUT NOT HEARD                                                                                             
     HOUSE BILL NO. 72                                                                                                          
     "An  Act  relating  to  the  qualifications  and  appointment  of                                                          
     members of the Board of Regents  of the University of Alaska; and                                                          
     providing for an effective date."                                                                                          
          - SCHEDULED BUT NOT HEARD                                                                                             
     HOUSE BILL NO. 176                                                                                                         
     "An Act providing that certain obligors can receive credit                                                                 
     against their child support obligation for certain types of                                                                
  noncash child support; and providing for an effective date."                                                                  
          - SCHEDULED BUT NOT HEARD                                                                                             
     PREVIOUS COMMITTEE ACTION                                                                                                
     BILL: HB 543                                                                                                             
     SHORT TITLE: MEDICAID AND PRESCRIPTION DRUGS                                                                               
     SPONSOR(S): HEALTH, EDUCATION & SOCIAL SERVICES                                                                            
     03/25/04       (H)       READ THE FIRST TIME - REFERRALS                                                                   
     03/25/04       (H)       HES                                                                                               
     04/01/04       (H)       HES AT 3:00 PM CAPITOL 106                                                                        
     04/01/04       (H)       Scheduled But Not Heard                                                                           
     04/06/04       (H)       HES AT 3:00 PM CAPITOL 106                                                                        
     04/06/04       (H)       Scheduled But Not Heard                                                                           
     04/13/04       (H)       HES AT 2:00 PM CAPITOL 106                                                                        
     BILL: HB 434                                                                                                             
     SHORT TITLE: NATUROPATHIC MEDICINE                                                                                         
     SPONSOR(S): REPRESENTATIVE(S) HOLM                                                                                         
     02/04/04       (H)       READ THE FIRST TIME - REFERRALS                                                                   
     02/04/04       (H)       L&C, JUD                                                                                          
     02/04/04       (H)       HES REFERRAL ADDED AFTER L&C                                                                      
     02/18/04       (H)       L&C AT 3:15 PM CAPITOL 17                                                                         
  02/18/04       (H)       Heard & Held <Assigned to Subcmte>                                                                   
     02/18/04       (H)       MINUTE(L&C)                                                                                       
     03/03/04       (H)       L&C AT 3:15 PM CAPITOL 17                                                                         
     03/03/04       (H)       <Bill Hearing Postponed>                                                                          
     03/24/04       (H)       L&C AT 3:15 PM CAPITOL 17                                                                         
 03/24/04       (H)       Moved CSHB 434(L&C) Out of Committee                                                                  
     03/24/04       (H)       MINUTE(L&C)                                                                                       
     03/29/04       (H)       L&C RPT CS(L&C) 2DP 2NR 3AM                                                                       
  03/29/04       (H)       DP: CRAWFORD, GUTTENBERG; NR: LYNN,                                                                  
     03/29/04       (H)       DAHLSTROM; AM: GATTO, ROKEBERG,                                                                   
     03/29/04       (H)       ANDERSON                                                                                          
     04/13/04       (H)       HES AT 2:00 PM CAPITOL 106                                                                        
     WITNESS REGISTER                                                                                                         
     DWAYNE PEEPLES, Director                                                                                                   
     Division of Health Care Services                                                                                           
     Department of Health and Social Services                                                                                   
     Juneau, Alaska                                                                                                             
     POSITION STATEMENT:  Testified on HB 543 and answered questions                                                            
     from the members.                                                                                                          
     KIM MARTIN, Regional Director                                                                                              
     Pharmaceutical Research and Manufacturer of America                                                                        
     [No address given]                                                                                                         
     POSITION STATEMENT:  Testified on HB 543.                                                                                  
     BETSY TURNER-BOGREN, Fairbanks District Manager                                                                            
     American Diabetes Association                                                                                              
     Fairbanks, Alaska                                                                                                          
     POSITION STATEMENT:  Testified on HB 543 and answered questions                                                            
     of the members.                                                                                                            
     ELIZABETH LUCAS, State President                                                                                           
     Juneau, Alaska                                                                                                             
     POSITION STATEMENT:  Testified in opposition to HB 543.                                                                    
     MARIE DARLIN, Coordinator                                                                                                  
     Capital City Task Force                                                                                                    
     AARP Alaska                                                                                                                
     Juneau, Alaska                                                                                                             
     POSITION STATEMENT:  Testified in opposition of HB 543 and                                                                 
     answered questions from the members.                                                                                       
     JEAN MISCHEL, Attorney,                                                                                                    
     Legislative Legal and Research Services                                                                                    
     Legislative Affairs Agency                                                                                                 
     Alaska State Legislature                                                                                                   
     Juneau, Alaska                                                                                                             
     POSITION STATEMENT:  As drafter of HB 543 she answered questions                                                           
     from the committee.                                                                                                        
     ROD BETIT, President                                                                                                       
     Alaska State Hospital and Nursing Home Association                                                                         
     Juneau, Alaska                                                                                                             
     POSITION STATEMENT:  Testified in support of HB 543.                                                                       
     ALEX MALTER, MD, President                                                                                                 
     Alaska State Medical Association                                                                                           
     Juneau, Alaska                                                                                                             
     POSITION STATEMENT:  Testified in support of HB 543.                                                                       
     VERNER STILLNER, M.D., Psychiatrist                                                                                        
     Bartlett Regional Hospital;                                                                                                
     Legislative Representative                                                                                                 
     Alaska Psychiatric Association                                                                                             
     Juneau, Alaska                                                                                                             
     POSITION STATEMENT:  Testified on HB 543 and answered questions                                                            
     from the members.                                                                                                          
     JOE FULLER, Senior Manager                                                                                                 
     State Government Affairs                                                                                                   
     AstraZeneca Pharmaceuticals, L.P.                                                                                          
     Juneau, Alaska                                                                                                             
     POSITION STATEMENT:  Testified on HB 543 and answered questions                                                            
     from the members.                                                                                                          
     PAT CARTER, Lobbyist                                                                                                       
     Glaxo SmithKline                                                                                                           
     Juneau, Alaska                                                                                                             
     POSITION STATEMENT:  testified on HB 543.                                                                                  
     REPRESENTATIVE JIM HOLM                                                                                                    
     Alaska State Legislature                                                                                                   
     Juneau, Alaska                                                                                                             
     POSITION STATEMENT:  As sponsor of HB 434, presented the bill                                                              
     and answered questions from the members.                                                                                   
     DANIEL YOUNG, ND, LAC                                                                                                      
     AKANP Legislative Task Force                                                                                               
     Juneau, Alaska                                                                                                             
     POSITION STATEMENT:  Testified in support of HB 434, and                                                                   
     answered questions from the members.                                                                                       
     VERENA NILSSON                                                                                                             
     Anchorage, Alaska                                                                                                          
     POSITION STATEMENT:  Testified in support of HB 434.                                                                       
     STEVE COMPTON, M.D.                                                                                                        
     Alaska Heart Institute                                                                                                     
     Anchorage, Alaska                                                                                                          
     POSITION STATEMENT:  Testified on HB 434 and answered questions                                                            
     from the members.                                                                                                          
     ACTION NARRATIVE                                                                                                         
     TAPE 04-30, SIDE A                                                                                                       
     Number 0001                                                                                                                
     CHAIR PEGGY WILSON called the  House Health, Education and Social                                                        
     Services  Standing  Committee  meeting  to  order  at  3:15  p.m.                                                          
     Representatives Wilson, Gatto, Wolf,  Coghill, Seaton, and Cissna                                                          
     were  present  at the  call  to  order.   Representative  Kapsner                                                          
     arrived as the meeting was in progress.                                                                                    
     HB 543-MEDICAID AND PRESCRIPTION DRUGS                                                                                   
     Number 0150                                                                                                              
     CHAIR WILSON announced that the  first order of business would be                                                          
     HOUSE  BILL  NO. 543,  "An  Act  relating to  medical  assistance                                                          
     coverage for  prescription drugs; and providing  for an effective                                                          
     date."   She explained that this  bill is being sponsored  by the                                                          
     House Health, Education and Social Services Standing Committee.                                                            
  CHAIR WILSON read the following from the sponsor statement:                                                                   
          The  Department  of  Health   and  Social  Services  is                                                               
          currently in  the process  of implementing  a preferred                                                               
          drug   list  (PDL).     This   limitation  on   medical                                                               
          assistance   coverage  is   being   done   as  a   cost                                                               
          containment  measure.    While  we  believe  that  cost                                                               
          containment measures are a  necessary step in achieving                                                               
          cost savings we believe  that we must proceed carefully                                                               
          and judiciously.   To that end, the state  will need to                                                               
          adopt formal  regulations in order  to ensure  that our                                                               
          efforts to  achieve cost saving  is not at  the expense                                                               
          of Alaskans' health and well-being.                                                                                   
          Under   this  bill   the   regulations  must   include:                                                               
          standards,  opportunity for  public comment,  an appeal                                                               
          process,  and provision  for  approved  coverage for  a                                                               
          drug that is not on the  preferred drug list when it is                                                               
          deemed medically necessary.                                                                                           
          HB 543  provides that the  commissioner must  appoint a                                                               
          Prescription  Drug Review  Advisory Committee  prior to                                                               
          the  department  establishing  a  PDL  or  placing  any                                                               
          limitation on coverage of a medication.                                                                               
          HB   543  places   a   temporary   moratorium  on   the                                                               
          implementation  of  a  PDL,  or  restricted  access  to                                                               
          medication  coverage, for  drugs used  to treat  mental                                                               
          illness.  This temporary  moratorium expires January 1,                                                               
          2005.      Mental   health  patients   are   especially                                                               
          vulnerable  to adverse  effects from  changes to  their                                                               
          medications.   HB 543 gives  the department  ample time                                                               
          to ensure  that the  necessary protective  measures are                                                               
          in place prior to discussion of this drug class.                                                                      
     CHAIR WILSON  said she understands  that at the next  meeting [of                                                          
     the Pharmacy  and Therapeutics (P&T)  Committee] there will  be a                                                          
     discussion on a  temporary moratorium on the  implementation of a                                                          
     PDL or  restricted access to  mental health drugs.   Chair Wilson                                                          
     noted that  an unidentified  person is shaking  his head  that is                                                          
     Number 0413                                                                                                                
     DWAYNE  PEEPLES,  Director,  Division of  Health  Care  Services,                                                          
     Department of  Health and  Social Services,  testified on  HB 543                                                          
     and  answered questions  from  the members.    The Department  of                                                          
     Health  and Social  Services  is undertaking  a  whole series  of                                                          
     cost-containment refinancing  efforts to  save general  funds, he                                                          
     said.  One significant cost  centers in operating the pharmacy in                                                          
     the Medicaid  program.  He  told the members that  the department                                                          
     anticipates that in  FY04 the expenditures will  be $100 million.                                                          
     The FY05  budget has a reduction  of $20 million in  the pharmacy                                                          
     expenditure  attributed   to  the  full  implementation   of  the                                                          
     preferred drug  list (PDL),  Mr. Peeples  explained.   There have                                                          
     been  a few  delays,  but  the department  is  targeted for  full                                                          
     implementation during  the first half  of FY05.   He said  if the                                                          
     department  cannot maintain  adequate saving  through the  use of                                                          
     the PDL  it will be  necessary to look  elsewhere to make  up any                                                          
     difference in  the $20 million  reduction.  Mr. Peeples  told the                                                          
     members  that some  of those  areas  may be  reduced services  to                                                          
     Medicaid  beneficiaries and/or  reduced payment  rates to  health                                                          
     care service providers.                                                                                                    
     MR. PEEPLES pointed to page 2  of the handout from the Department                                                          
     of   Health   and   Social  Services,   titled   "Forecast   Drug                                                          
     Expenditure" and  told the  members that  if the  department does                                                          
     not contain  costs it is  anticipated that the costs  will double                                                          
     by the  end of  the decade.   He commented  that the  PDL process                                                          
     itself is not  unique.  A lot of states  have already implemented                                                          
     them.   Alaska is in  the last half  of the  states to do  it, he                                                          
     commented.    Mr. Peeples  stated  that  it is  anticipated  that                                                          
     within the next  12 to 18 months  all but one or  two states will                                                          
     be operating  PDLs.   There has  been a long  history of  PDL use                                                          
     around the country including  in health maintenance organizations                                                          
     and health care plans where  it has been successful in containing                                                          
     some costs.                                                                                                                
     MR.  PEEPLES directed  the members  attention  to page  4 of  the                                                          
     handout  which  shows  information   from  the  department's  PDL                                                          
     website.   This information  basically explains  that the  PDL is                                                          
     being implemented  to contain costs,  provide continuity  of drug                                                          
     utilization in  the state's programs,  and provide  assurance for                                                          
     patient care.                                                                                                              
     Number 0652                                                                                                                
     MR.  PEEPLES  told  the  members that  the  commissioner  of  the                                                          
     Department  of  Health  and  Social  Services  has  setup  a  PDL                                                          
     Pharmacy and Therapeutics (P&T) Committee.   It is composed of 14                                                          
     doctors,  2  dentists,  4  pharmacists,   and  1  advanced  nurse                                                          
     practitioner.   He told the  members that the list  of appointees                                                          
     is  in the  handout.   The P&T  Committee procedures  are on  the                                                          
     website, and a copy  of it is also in the  members' packet.  This                                                          
     page lays  out how the  committee will operate, which  is through                                                          
     public meetings with the agenda advertised before hand.                                                                    
     MR. PEEPLES pointed to the  timeline for the public process which                                                          
     started in August  of 2003.  The first class  of drugs which will                                                          
     go on the PDL begins on May 21.                                                                                            
     Number 0718                                                                                                                
     CHAIR  WILSON  commented that  she  knows  the commissioner  went                                                          
     around the  state advising the  public of the changes  that would                                                          
     be taking  place.  She  asked if there were  in-depth discussions                                                          
     about the PDL at that time.                                                                                                
     MR.  PEEPLES   replied  that   the  commissioner   discussed  the                                                          
     department's   plans  for   the   PDL   with  many   professional                                                          
     organizations, such  as the Alaska State  Medical Association and                                                          
     the  Alaska State  Hospital  and Nursing  Home  Association.   He                                                          
     referred  to  the timeline  before  the  members where  it  lists                                                          
     presentations that were made.                                                                                              
     CHAIR WILSON asked for clarification  that the presentations were                                                          
     actually on the PDL.                                                                                                       
     MR.  PEEPLES  commented  that  while  he  did  not  attend  those                                                          
     meetings  because he  did not  come  to work  for the  department                                                          
     until  October, he  understands that  the commissioner  addressed                                                          
     both the  changes to the  department and  the PDL.   He commented                                                          
     that  he  did attend  a  number  of  presentations given  to  the                                                          
     medical  community and  hospitals that  were done  by the  Health                                                          
     Care  Services staff.    He added  that there  is  a power  point                                                          
     presentation  on  the PDL  that  he  can  make available  to  the                                                          
     members if they wish.                                                                                                      
     MR. PEEPLES  explained that the  committee listed the  classes of                                                          
     drugs that would  be reviewed on the website  and provided public                                                          
     notice  in newspapers.   To  date almost  all of  the 14  initial                                                          
     classes of  drugs have been  reviewed.  He directed  the members'                                                          
     attention to  the agenda  in the members  packet dated  March 19,                                                          
     2004.  These agendas are available  on the website, he added.  He                                                          
     explained  that  the  committee  has  a  contractor  who  is  the                                                          
     financial  intermediary,   First  Health   Services  Corporation.                                                          
     First Health  Services Corporation is  also under contract  to do                                                          
     an analysis of the PDL,  provide the [P&T] committee members with                                                          
     information, and offer recommendations.                                                                                    
     Number 0912                                                                                                                
     MR. PEEPLES explained  that the P & T  Committee members received                                                          
     a packet  of the drug class  analyses about three weeks  prior to                                                          
     the meetings.   Prior to that the department  solicits input from                                                          
     pharmaceutical companies.   That  information and  other comments                                                          
     are  compiled  and sent  in  a  second  packet to  the  committee                                                          
     members approximately 10 to 12  days before the meeting, he said.                                                          
     The committee members study the  material and contact their peers                                                          
     to  get input  from them.   There  is a  committee meeting  where                                                          
     public testimony is  taken first, then a  presentation from First                                                          
     Health   Services  Corporation,   the  committee   discusses  the                                                          
     therapeutic equivalents  of the drugs,  take a motion,  and votes                                                          
     on it.  After a final decision is  made the cost of the drugs are                                                          
     considered  and it  is determined  what  the supplemental  rebate                                                          
     will  be.   The department  publishes and  places on  its website                                                          
     what  has been  selected  by the  committee  along with  detailed                                                          
     notes, he  said.   Mr. Peeples  told the  members that  the first                                                          
     implementation  begins  on  May  21.   There  will  be  a  60-day                                                          
     educational  process where  pharmacists  and  physicians will  be                                                          
     advised of the changes.                                                                                                    
     Number 0994                                                                                                                
     MR. PEEPLES told the members  that currently if a physician wants                                                          
     to  write a  prescription for  a  drug that  is not  on the  PDL,                                                          
     he/she  will  be asked  to  write  "medically necessary"  on  the                                                          
     prescription as the  criteria to override.  Some  of the criteria                                                          
     the department would  like the physicians to  consider when using                                                          
     the  medically  necessary  override   would  be  first,  allergic                                                          
     reactions, second,  contra indications which means  an individual                                                          
     cannot  take  the  drug,  and  three, the  drug  has  not  proven                                                          
     effective  in treatment  of the  diagnosis.   The committee  also                                                          
     asked if the  physician would note if the reason  for override is                                                          
     allergic reaction.   It is  not required, but the  committee felt                                                          
     it would be nice to have  that information for the pharmacists to                                                          
     have for  the patient's safety in  the future, he added.   During                                                          
     the first  60 days the  pharmacists will get an  electronic alert                                                          
     or soft edit  coming back from First  Health Services Corporation                                                          
     saying  that  the  medical override  note  [Medically  Necessary]                                                          
     needs to be  on the prescription for those drugs  that are not on                                                          
     the  PDL.   After that  period of  time there  is an  educational                                                          
     feedback period on that first class of drugs.                                                                              
     Number 1059                                                                                                                
     CHAIR WILSON  asked Mr.  Peeples who notifies  the doctor  that a                                                          
     particular drug is not on the PDL.                                                                                         
     MR. PEEPLES  replied it will be  the pharmacist.  In  response to                                                          
     Chair  Wilson's further  inquiry  he explained  that  this is  an                                                          
     alert process, it is informal feedback.                                                                                    
     CHAIR  WILSON asked  if  the  pharmacists will  be  paid for  the                                                          
     additional work involved.                                                                                                  
     MR. PEEPLES replied no.                                                                                                    
     Number 1111                                                                                                                
     REPRESENTATIVE GATTO asked what the  third reason for override of                                                          
     the PDL is.                                                                                                                
     MR. PEEPLES  responded that the  third reason is that  the doctor                                                          
     believes the drug fails to treat the condition.                                                                            
     REPRESENTATIVE  GATTO  asked  why  any physician  would  write  a                                                          
     prescription that had any of those three components.                                                                       
     MR. PEEPLES explained that what is  being asked is if a physician                                                          
     is going to  write a prescription for  a drug that is  not on the                                                          
     PDL  that  the  medically  necessary  note  be  included  on  the                                                          
     prescription.  These  are general criteria that  the physician is                                                          
     asked to consider when overriding the PDL.                                                                                 
     REPRESENTATIVE  GATTO commented  that it  shouldn't be  necessary                                                          
     because physicians would do that anyway.                                                                                   
     CHAIR WILSON  clarified that  the "medically  necessary" notation                                                          
     would explain why  the physician is using a drug  not on the PDL,                                                          
  because for instance the patient is allergic to other drugs.                                                                  
     Number 1209                                                                                                                
     MR. PEEPLES explained  that after the first 60  days First Health                                                          
     Services Corporation system  goes to what is called  a hard edit.                                                          
     At that point  when the pharmacist enters a drug  into the system                                                          
     that  is not  on the  PDL the  pharmacists will  receive feedback                                                          
     that  says  it  is  a   nonpreferred  drug,  medically  necessary                                                          
     override is not present, it will  not be paid, and please contact                                                          
     the physician  to get medically necessary  override authority, he                                                          
     explained.  He offered that  the pharmacists could still fill the                                                          
     prescription, but it would not  be reimbursed until the medically                                                          
     necessary documentation was  provided.  Mr. Peeples said  it is a                                                          
     fairly  flexible approach  to prescribing  drugs  outside of  the                                                          
  CHAIR WILSON asked if this is commonly done in other states.                                                                  
     MR. PEEPLES  said no.  He  told the members that  when setting up                                                          
     the P&T  Committee the  department reviewed what  a lot  of other                                                          
     states were doing.   While Alaska's P&T Committee  is function as                                                          
     many other states, a successful  implementation of a PDL in other                                                          
     states  has  been  a  fairly strict  interpretation.    In  other                                                          
     states, for  example, if a  physician wanted to prescribe  a drug                                                          
     outside  of the  PDL one  option was  requiring preauthorization.                                                          
     What that  meant is that the  physician would have to  call in to                                                          
     get authority to  fill that drug, he said.   Another option would                                                          
     provide  for  the physician  to  call  for preauthorization,  and                                                          
     would  get  the  preauthorization  automatically,  but  it  would                                                          
     require talking  to whoever  is running  the program  and provide                                                          
     the reason  for using the drug,  he added.  In  this arrangement,                                                          
     the final control rests with the physician.                                                                                
     CHAIR WILSON  commented that most  states are putting  the burden                                                          
     on  the  doctors,  and  Alaska  is  putting  the  burden  on  the                                                          
     MR. PEEPLES  responded that the pharmacists  is the intermediary.                                                          
     After  the first  60  days  if the  doctor  is writing  medically                                                          
  necessary on the prescription there is no burden for anyone.                                                                  
     CHAIR  WILSON clarified  that the  doctor does  not have  to make                                                          
     calls for preauthorization.                                                                                                
     MR. PEEPLES said that is correct.                                                                                          
     CHAIR WILSON asked what the next step is.                                                                                  
     Number 1325                                                                                                                
     MR. PEEPLES replied that the  department is going to monitor this                                                          
     for the first  year after full implementation.  He  added that he                                                          
     does not  expect it  to be  fully implemented  until the  fall or                                                          
     winter.    He  suggested  that  a possible  next  step  might  be                                                          
     requiring physicians  to write  the specific  reason for  using a                                                          
     drug that is not on the PDL.                                                                                               
     Number 1371                                                                                                                
     CHAIR  WILSON  asked for  clarification  that  it will  be  fully                                                          
     implemented in  November and no  changes will be made  until next                                                          
     MR. PEEPLES said  that the department will monitor it  to see how                                                          
     successful it  is.   If it  is found  that prescriptions  are way                                                          
     outside  of  the  PDL,  the  department  may  look  to  providing                                                          
     additional outreach and  education in an effort  to get increased                                                          
     cooperation.  He  commented that he knows the  department will be                                                          
     competing  with  pharmacy  representatives who  will  be  pushing                                                          
     their own products.  Mr.  Peeples emphasized that it is essential                                                          
     to get the costs under  control otherwise the costs will continue                                                          
     to accelerate.                                                                                                             
     CHAIR  WILSON  asked  Mr.  Peeples  if  he  really  believes  the                                                          
     department can save $20 million and in what timeframe.                                                                     
     MR.  PEEPLES acknowledged  that  the experience  in other  states                                                          
     using a totally  volunteer PDL has not been great.   He said that                                                          
     the  department estimates  that if  it uses  a totally  volunteer                                                          
     approach it may get 50 percent participation.                                                                              
     CHAIR WILSON asked  if he hopes to save $10  million in the first                                                          
     MR. PEEPLES  replied he hopes  to have  70 percent to  80 percent                                                          
     participation the first  year.  He said that  the department will                                                          
     be heavily  relying on  the medical community  to assist  in this                                                          
     Number 1482                                                                                                                
     REPRESENTATIVE  SEATON  expressed   concern  for  the  additional                                                          
     effort  pharmacists  will be  required  to  make.   He  asked  if                                                          
     pharmacists   have  to   call   doctors   for  clarification   of                                                          
     prescriptions normally.                                                                                                    
     Number 1506                                                                                                                
     MR. PEEPLES replied yes.  He  explained that there are 14 classes                                                          
     of  prescription   drugs  and   the  plan   is  to   stagger  the                                                          
     implementation to see how it goes.   During the initial 60 to 120                                                          
     days there  will likely  be a higher  level of  exchange [between                                                          
     pharmacists   and  physicians],   but  once   everyone  is   more                                                          
     comfortable and familiar  with the process that  will quiet down,                                                          
     he added.                                                                                                                  
     MR. PEEPLES  wanted the members  to note  that the last  class of                                                          
     prescription drugs  that will be  reviewed are the  mental health                                                          
     drugs.  It  is considered to be the highest  level of concern and                                                          
     anxiety.    Mr.  Peeples  explained   that  an  ad  hoc  advisory                                                          
     committee  of  psychiatrists  to   the  P&T  Committee  has  been                                                          
     appointed.   He  added  that the  ad hoc  committee  will meet  a                                                          
     couple  of  times before  the  May  21st  meeting when  the  full                                                          
     committee  will  take up  mental  health  drugs,  he said.    Mr.                                                          
     Peeples told the members that  there will be meetings this summer                                                          
     going  over the  mental health  drugs and  it is  not anticipated                                                          
     that this class of drugs will  be implemented until all the other                                                          
     classes of drugs  have been implemented, probably  not until next                                                          
     year.  The department wants to  see how the other drug classes do                                                          
     first because the mental health  drugs will be the most difficult                                                          
     to manage,  he explained.   Mr. Peeples  said that  the timeframe                                                          
     has  been   setback  a  little   longer  than   the  commissioner                                                          
 originally wished which was the beginning of the fiscal year.                                                                  
     Number 1590                                                                                                                
     REPRESENTATIVE SEATON  asked if the  mental health drugs  are the                                                          
     class  of  prescription  drugs  where the  most  savings  can  be                                                          
     accomplished.   He asked what  the percentage of  cost reductions                                                          
     are attributed to this class of drugs.                                                                                     
     MR.  PEEPLES replied  that 25  percent of  the total  savings are                                                          
     represented  by  the  mental  health   drugs.    In  HB  543  the                                                          
     department lacks the leverage to work  with the drugs on the PDL,                                                          
     he said.   The leverage the department would need  is to say that                                                          
     if the  system is not working  it would be necessary  to increase                                                          
     the requirements  to use  nonpreferred drugs.   Mr.  Peeples told                                                          
     the   members   that   other   states    have   a   very   strict                                                          
     preauthorization process,  but the P&T  Committee has  chosen not                                                          
     to go that route.   It was done in this way to  make it easier on                                                          
     the prescribing physicians.   If it does not work,  he said, then                                                          
     the  department will  have to  slowly increase  the requirements.                                                          
     No work was  done on preauthorizations on a drug  in the PDL that                                                          
     has to do  with narcotics, he said.  Although  the department has                                                          
     not  done the  mental health  drugs, if  it were  to put  in, for                                                          
     example Oxycodone,  a narcotic, on  the PDL without  allowing any                                                          
     preauthorization  to that,  it would  cause serious  concerns, he                                                          
     said.   In the past  there have  been serious problems  in Alaska                                                          
     with  Medicaid  waste  and  abuse  of this  drug.    Mr.  Peeples                                                          
     explained   that    right   now    there   is    an   established                                                          
     preauthorization and some other controls  on those narcotics.  If                                                          
     it  was put  in the  PDL,  the department  would not  be able  to                                                          
     manage  those drugs  for cost,  waste, abuse,  and other  issues.                                                          
     Mr. Peeples  said that by not  being able to manage  that type of                                                          
     activity  there could  be some  other complications  with federal                                                          
     requirements  for  drug  utilization  review.   In  summary,  Mr.                                                          
     Peeples  told the  committee that  he believes  the approach  the                                                          
     department is  taking in  managing the  PDL is  the best  of both                                                          
     worlds.   He  commented  it  is a  balance  of  allowing as  much                                                          
     flexibility on  the PDL as possible  and trying to get  some cost                                                          
     Number 1783                                                                                                                
     KIM  MARTIN,  Regional   Director,  Pharmaceutical  Research  and                                                          
     Manufacturer  of America,  testified on  HB  543.   She told  the                                                          
     members that  she is encouraged that  this legislation recognizes                                                          
     the need  to allow for a  prescriber's ability to opt  out of the                                                          
     PDL  and prescribe  a medicine  or treatment  that best  fits the                                                          
     medical condition  being confronted.  Ms.  Martin emphasized that                                                          
     only when  a physician  can tailor  treatment for  their patients                                                          
     will  there be  assurance that  Alaskans are  receiving the  best                                                          
     medical care.   She told  the members that she  supports friendly                                                          
     amendments  that address  scientific  standards  and the  appeals                                                          
     Number 1907                                                                                                                
     BETSY   TURNER-BOGREN,  Fairbanks   District  Manager,   American                                                          
     Diabetes  Association,  testified  in   support  of  HB  543  and                                                          
     answered questions  of the  members.  She  told the  members that                                                          
     the association serves  over 40,000 Alaskans who  are affected by                                                          
     diabetes.  While the association  supports HB 543 this time there                                                          
     are questions about  potential gaps.  Ms.  Turner-Bogren asked if                                                          
     the  term   "prescription  drug  list"  includes   the  medically                                                          
     prescribed  supplies  that  are  necessary  to  manage  diabetes.                                                          
     These supplies are, for example,  blood glucose monitors or sugar                                                          
     monitors, test strips, insulin syringes,  and (indisc.).  Without                                                          
     these  supplies the  daily  challenges of  blood  sugar and  safe                                                          
     management cannot  be achieved.   She  said that  the association                                                          
     receives many  calls a week and  75 percent of those  are focused                                                          
     on  access  and  availability  of supplies.    Ms.  Turner-Bogren                                                          
     pointed  out that  people without  sufficient economic  resources                                                          
     often  have an  impossible time  actually managing  their disease                                                          
     because it is impossible for them  to buy the blood sugar monitor                                                          
     and test strips on top of the  insulin.  She urged the members to                                                          
     make  sure  these supplies  are  covered  to protect  the  40,000                                                          
     people in Alaska who are living with diabetes.                                                                             
     Number 1956                                                                                                                
     CHAIR  WILSON  commented that  this  bill  does not  address  the                                                          
     Senior Care program.  She  asked Ms. Turner-Bogren to clarify her                                                          
     concern with respect to HB 543.                                                                                            
     MS. TURNER-BOGREN replied  that there are some  concerns that the                                                          
     language that refers  to "preferred drug list" does  not refer to                                                          
     supplies.   With  the disease  of  diabetes the  supplies are  as                                                          
     integral  in  disease  management  as  the  insulin  itself,  she                                                          
     MR.  PEEPLES  stated  that  the  PDL  does  not  address  medical                                                          
     CHAIR  WILSON  surmised  that  this bill  would  not  change  the                                                          
     process that is now in place.                                                                                              
     MR. PEEPLES replied that is correct.                                                                                       
     Number 2008                                                                                                                
     REPRESENTATIVE  GATTO  asked  if  an individual  who  submits  an                                                          
     insurance  claim  for  insulin  could also  include  the  medical                                                          
     supplies to that claim.                                                                                                    
     MS. TURNER-BOGREN  responded that  three to  four years  ago that                                                          
     issues  was  addressed.   In  Alaska  insurance  companies  cover                                                          
     medication, supplies, and patient education.   She said all three                                                          
     of  these components  are necessary  for effective  management of                                                          
     REPRESENTATIVE  GATTO commented  that this  bill will  not affect                                                          
     those with diabetes if they have insurance coverage.                                                                       
     MS.  TURNER-BOGREN   agreed  with  Representative  Gatto.     She                                                          
     emphasized  that the  people who  are affected  by this  bill are                                                          
     those  who  have  restricted  financial   resources  who  are  on                                                          
     Medicaid.    She  clarified  that   her  concern  is  that  these                                                          
     individuals would  not only get  insulin, but also  the necessary                                                          
     supplies to manage the disease.   Ms. Turner-Bogren surmised that                                                          
     this bill will not affect supplies.                                                                                        
     CHAIR  WILSON confirmed  that is  correct.   This bill  will only                                                          
     address prescription drugs for individuals  who have no insurance                                                          
     and are  on Medicaid.   There will be  no change in  the supplies                                                          
     for Medicaid recipients, she reiterated.                                                                                   
     MR. PEEPLES agreed that is correct.                                                                                        
     Number 2138                                                                                                                
     ELIZABETH  LUCAS,  State  President, AARP  Alaska,  testified  in                                                          
     opposition  to  HB 543.    She  told  the  members that  in  most                                                          
     countries, the  U.S. Veterans  Administration, the  Indian Health                                                          
     Services,  more  the  half  of   the  states,  and  many  private                                                          
     employers utilized  some form of a  PDL.  It does  not make sense                                                          
     to pay  for a more expensive  drug when a less  costly medication                                                          
     is just  as effective  if not  more so.   A  prescription program                                                          
     under Senior  Care will  use a  PDL.  She  told the  members that                                                          
     AARP  believes this  makes sense  for  consumers as  well as  the                                                          
     state.  Ms.  Lucas stated that AARP was pleased  with the benefit                                                          
     package of  Senior Care,  but particularly  pleased to  know that                                                          
     the  PDL would  be  used for  the  program.   There  is a  strong                                                          
     movement  in the  United States  for evidence-based  formularies.                                                          
     She  said  she  appreciates  that the  PDL  identifies  the  most                                                          
  effect, appropriate, and least expensive prescription drugs.                                                                  
     MS.  LUCAS commented  that it  is important  to understand  how a                                                          
     drug company  seeks approval for a  new drug from the  U. S. Food                                                          
     and  Drug  Administration  (FDA).     These  companies  are  only                                                          
     required to show that their new  product is more effective than a                                                          
     sugar pill.   It is  not necessary to prove  that the drug  is as                                                          
     good as  or better than drugs  that are already on  the market to                                                          
     treat a  similar condition,  she explained.   Drug  salesmen tell                                                          
     physicians  which drugs  are best,  but it  is important  to note                                                          
     that these salesmen work for  the company that manufactures them,                                                          
     she pointed out.                                                                                                           
     MS. LUCAS told the members that  the Alaska PDL will serve as the                                                          
     state's consumer  report on how  effective a prescription  is and                                                          
     how it compares  in cost to other medications in  the same class.                                                          
     By  using   the  PDL  other  Medicaid   beneficiaries  and  their                                                          
     prescribing physicians  will have  information that has  not been                                                          
     previously  available, she  said.   This makes  sense.   Everyone                                                          
     will  benefit  from  the comparative  information  that  will  be                                                          
     available  from the  PDL.   Ms.  Lucas emphasized  that the  AARP                                                          
     applauds the medical professionals who are developing the PDL.                                                             
     MS. LUCAS explained that the  AARP looks for consumer protections                                                          
     whenever PDLs are developed.  The  Alaska PDL passes all the AARP                                                          
     checklists  and  urged  the  members   to  support  this  effort.                                                          
     However,  she  said  that  in  order to  support  the  PDL  under                                                          
     Medicaid AARP  believes the  members should reject  HB 543.   The                                                          
     intent  of this  bill is  to  slow down  the PDL  process and  if                                                          
     successful, eliminate it  as tool for the Medicaid  program.  She                                                          
     explained that the pharmacy companies  will say there needs to be                                                          
     more time in  sharing their opinions with the  P&T Committee that                                                          
     develops the PDL.   Ms. Lucas said that AARP  believes the PDL is                                                          
     organized  properly.   It  uses  evidence  based upon  scientific                                                          
     research for  decision-making, not the latest  marketing pitches.                                                          
     Physicians  and the  public hear  enough from  pharmacy companies                                                          
     everyday, she  added.   She stated  that the  PDL belongs  to the                                                          
     people, not the pharmaceutical companies.                                                                                  
     TAPE 04-30, SIDE B                                                                                                       
     Number 2344                                                                                                                
     MS. LUCAS urged the members to vote no on HB 543.                                                                          
     REPRESENTATIVE GATTO  asked how  HB 543 would  slow down  the PDL                                                          
     Number 2299                                                                                                                
     MARIE DARLIN, Coordinator, Capital  City Task Force, AARP Alaska,                                                          
     testified in  opposition of  HB 543  and answered  questions from                                                          
     the  members.    She  told  the  members  that  the  transitional                                                          
     provisions in  HB 543  will slow down  the implementation  of the                                                          
     PDL.   The department  has already indicated  that there  will be                                                          
     more time spent  reviewing psychotropic drugs to  ensure that the                                                          
     first  part of  the  PDL is  working.   Ms.  Darlin rephrased  an                                                          
     earlier statement made by Ms. Lucas  by saying that the bill does                                                          
     not  do anything  to help  implement  the PDL.   It  is for  that                                                          
     reason  that  AARP  does  not  see  a  need  for  the  bill,  she                                                          
     explained.    She  pointed  out that  this  bill  only  addresses                                                          
     Medicaid recipients.   Those with  health insurance  already know                                                          
     that insurance companies  already use PDLs.  Ms.  Darlin said she                                                          
     knows  that  one   of  the  highest  costs  of   health  care  is                                                          
     prescription drugs  and the  use of  a PDL is  an effort  to save                                                          
     money.   However, she  believes HB 543  is more  restrictive than                                                          
     what the  PDL was intended.   She said  that AARP, as  a consumer                                                          
     organization, is  interested in  PDLs so  its members  can become                                                          
     more aware of  what a PDL will  tell them.  The  members will use                                                          
     the list to help them when making decisions.                                                                               
     Number 2136                                                                                                                
     REPRESENTATIVE SEATON  said he believes  that what Ms.  Darlin is                                                          
     referring to is on page 1, lines [5 and 10], which says:                                                                   
          (a)  If the  department undertakes  a cost  containment                                                               
          measure under  this chapter  that involves  a preferred                                                               
          drug list or limitation  of medical assistance coverage                                                               
          for a  drug, the department shall  adopt regulations to                                                               
          the preferred  drug list or the  limitation of coverage                                                               
          before the list or limitation maybe implemented.                                                                      
     REPRESENTATIVE SEATON commented that  the listed criteria must be                                                          
     met before a  PDL could be implemented.  He  pointed to the third                                                          
     item under  that criteria [on  page 2,  lines 2 through  4] which                                                          
     reads as follows:                                                                                                          
          (3) an appeal  process for a person who  is affected by                                                               
          a decision of  the department to place or  not to place                                                               
          a drug on  the preferred drug list or  to limit medical                                                               
          assistance coverage for a drug; and                                                                                   
     REPRESENTATIVE SEATON  pointed out  that this appeals  process is                                                          
     not currently in place.   He said as he reads  the bill, before a                                                          
     PDL   could   be  implemented   there   would   have  to   be   a                                                          
     reauthorization of  the PDL  with the  appeals process  in place.                                                          
     Representative Seaton  surmised that there  would not be  time to                                                          
     reauthorize  a new  list because  the Senior  Care list  does not                                                          
     have the appeals  process in place.  He told  the members that he                                                          
     will offer an amendment to eliminate that section.                                                                         
     Number 2081                                                                                                                
     CHAIR WILSON  explained that  all this  language does  is provide                                                          
     for an  appeals process for an  individual who has been  denied a                                                          
     prescription drug.   She commented that all HB 543  does is place                                                          
     the process in law.   Most of this plan has  already been done by                                                          
     the department in the last six weeks.                                                                                      
     REPRESENTATIVE   SEATON  responded   that   he  understands   the                                                          
     intention,  but he  said  he believes  (3) [on  page  2, lines  2                                                          
     through 4] is  under [AS 47.07] which is the  statute that covers                                                          
     the construction of a PDL.                                                                                                 
     CHAIR WILSON replied the PDL is already in place.                                                                          
     REPRESENTATIVE SEATON said that this is  a new PDL.  The only PDL                                                          
     that is  currently in  place is  under the  Senior Care  bill, he                                                          
  CHAIR WILSON responded that the PDL is all one in the same.                                                                   
     Number 2042                                                                                                                
     REPRESENTATIVE SEATON said he believes  that if the department is                                                          
     required to have regulations for  the construction of a PDL, then                                                          
     it provides that the drug companies  have an appeals process if a                                                          
     drug is  not on the PDL.   In response to  Chair Wilson's comment                                                          
     that it  is a person  who has the right  to appeal, not  the drug                                                          
     companies,  Representative  Seaton said  this  is  not a  natural                                                          
     person, "a  person" can  mean a corporation.   The  language does                                                          
     not refer  to a  patient, he  emphasized.   Representative Seaton                                                          
     reiterated  that  he believes  this  language  would require  the                                                          
     reconstruction of a  new PDL because the appeals  process was not                                                          
     in place while the department was  doing the Senior Care PDL.  He                                                          
     summarized  that he  believes that  is the  root of  some of  the                                                          
     concerns that are coming forward.                                                                                          
     CHAIR WILSON  told the  members that  when the  Legislative Legal                                                          
     and  Research Services  attorney wrote  this legislation  she was                                                          
     advised  that  the  bill  was  patterned  after  other  committee                                                          
     Number 1961                                                                                                                
     REPRESENTATIVE CISSNA commented that she  would like to hear from                                                          
     the department on Representative Gatto's question.                                                                         
     REPRESENTATIVE GATTO asked how the Medicaid claim process works.                                                           
     MR. PEEPLES explained a Medicaid  patient would go to the doctor,                                                          
     get a  prescription, go  to the  pharmacy to  get it  filled, the                                                          
     pharmacist would  contact First Health Services  Corporation, and                                                          
     fair,  quick feedback  would come  back.   The feedback  would be                                                          
     something  like accepted,  not accepted,  and payment  status, et                                                          
     cetera, he said.  The patient  or Medicaid recipient does not get                                                          
     reimbursed  for the  prescription.   The  payment  goes from  the                                                          
     state to  First Health Services  Corporation to the  pharmacy, he                                                          
     REPRESENTATIVE GATTO  asked if  there is  a PDL  in place  at the                                                          
     MR. PEEPLES  responded that there  is a  PDL.  The  committee has                                                          
     reviewed  14   drug  classes  and   the  department   will  begin                                                          
     implementation  on May  21  on  the first  set  of these  classes                                                          
     through the 60-day trial education  process.  After that 60 days,                                                          
     then a  harder denial process  begins if a prescription  comes in                                                          
     for a  drug not on  the PDL, Mr.  Peeples explained.   There will                                                          
     need to be a "medically  necessary" notation on the prescription,                                                          
     he said.                                                                                                                   
     Number 1842                                                                                                                
     REPRESENTATIVE GATTO surmised  that as of today  a physician does                                                          
     not have  to look  at a  PDL before writing  a prescription.   He                                                          
     asked Mr.  Peeples if he  believes HB 543  delays phase I  of the                                                          
     implementation of the PDL.                                                                                                 
     MR. PEEPLES responded  that he does not believe  this bill delays                                                          
     phase I.   What it will  do is prevent the  department from doing                                                          
     any management  of a drug  on the PDL.   There would be  no long-                                                          
     term  incentive  on the  part  of  the prescribing  community  to                                                          
     participate on the PDL.   The physicians would automatically over                                                          
     ride the  preferred drug list.   He  told the members  that other                                                          
     states have experienced  50 percent participation.   That kind of                                                          
     impact over  18 months would  mean that the department  would not                                                          
     be realizing the $20 million savings,  he said.  There would be a                                                          
     projected $10  million loss on  that projected savings  and there                                                          
     would  be a  creeping up  effect due  to inflation  and declining                                                          
     participation   in  writing   against  the   PDL  by   practicing                                                          
     CHAIR  WILSON  asked   how  this  bill  would   change  when  the                                                          
     department plans to put a PDL in place.                                                                                    
     Number 1748                                                                                                                
     MR.  PEEPLES  replied that  the  department  will have  to  adopt                                                          
     regulations which will take some time.                                                                                     
     CHAIR WILSON  commented that she  thought the  department already                                                          
     had regulations in place.                                                                                                  
     MR.  PEEPLES   responded  that   the  department   currently  has                                                          
     regulations  and   authorization  in  statute  to   move  to  the                                                          
     preauthorization  PDL system.   This  is what  the department  is                                                          
     doing now.  He told the  members that he believes this bill would                                                          
     require the  department to codify in  regulations everything that                                                          
     has been  adopted as operating  procedures by the committee.   He                                                          
     emphasized  that establishing  regulations  is a  long drawn  out                                                          
     CHAIR WILSON asked  if the department wants to  proceed with this                                                          
     through regulations.                                                                                                       
     MR.  PEEPLES  replied  that regulations  bind  the  committee  to                                                          
     respond to different  changes.  He explained that  not being able                                                          
     to manage any drug on the  PDL limits the department's ability to                                                          
     pursue cost-containment.                                                                                                   
     Number 1703                                                                                                                
     CHAIR WILSON asked how other states have done this.                                                                        
     MR. PEEPLES said  other states have established what  can be done                                                          
     through  statute  and  regulation,  just as  the  department  has                                                          
     obtained authority to  proceed.  He emphasized  that other states                                                          
     have not codified their P&T Committees and regulations.                                                                    
     CHAIR WILSON asked for clarification  that most states have a PDL                                                          
     in  place and  of those  the majority  have not  done it  through                                                          
     regulation.     It  has   been  accomplished   through  [standard                                                          
     operating procedures] so the rules can be easily changed.                                                                  
     MR. PEEPLES responded  that he has not done a  complete review of                                                          
     each state and could not answer  that question.  However, he said                                                          
     he  understands  that  most  states  have  adopted  PDLs  through                                                          
     standard operating procedures.                                                                                             
     CHAIR  WILSON said  she is  concerned  when rules  can be  easily                                                          
     changed.  She asked if  the department normally adopt regulations                                                          
     to implement programs.                                                                                                     
     Number 1642                                                                                                                
     MR. PEEPLES  said yes.  The  department has a lot  of regulations                                                          
     in and  around the  Medicaid program;  however, the  operation of                                                          
     the  P&T  advisory  committee   has  occurred  through  published                                                          
     operating procedures.   He  commented that  there have  been some                                                          
     changes based upon  concerns that have been raised.   Mr. Peeples                                                          
     told the  members if  all of  this was set  up in  regulations to                                                          
     change,  modify,  and   improve  this  process  it   would  be  a                                                          
     elaborate, expensive process.                                                                                              
     CHAIR WILSON asked if this is  the reason other states have taken                                                          
     two years to  accomplish what the department  has accomplished in                                                          
     six months.                                                                                                                
     MR. PEEPLES  replied no.   He explained  that the  department has                                                          
     taken  advantage  of what  other  states  have already  done  and                                                          
     adapted it to suit Alaska.   The department has emulated a lot of                                                          
     the processes  and used much of  the analysis that has  been done                                                          
     on PDLs  with respect  to therapeutic  equivalents.   Mr. Peeples                                                          
     said  the  department  has  been   using  First  Health  Services                                                          
     Corporation on much  of this, but this  week an intergovernmental                                                          
     agreement  was  signed  with  the   [Oregon  Health  and  Science                                                          
     University] to also provide some  analysis to supplement what has                                                          
     been provided by First Health  Services Corporation.  He told the                                                          
     members that this will likely  be tweaked based upon comments and                                                          
     the  lessons learned.   Mr.  Peeples reiterated  that to  do this                                                          
     process in  regulations is  expensive and  difficult and  that is                                                          
     the  primary   reason  the  department  believes   this  bill  is                                                          
     unnecessary.  Everything in the HB  543 is already being done, he                                                          
     Number 1537                                                                                                                
     REPRESENTATIVE SEATON read  the following portions of  the HB 543                                                          
     [page 1, lines 5 through page 2, lines 4]:                                                                                 
          If  the   department  undertakes  a   cost  containment                                                               
          measure under  this chapter  that involves  a preferred                                                               
          drug list  ... the  department shall  adopt regulations                                                               
          relating  to the  preferred drug  list  ... before  the                                                               
          list   or  limitation   may   be   implemented.     The                                                               
          regulations must  include ... (1) standards  ... (2) an                                                               
          opportunity  for   public  comment  ...(3)   an  appeal                                                               
          process  ...  to place  or  not  place  a drug  on  the                                                               
          preferred drug list ...                                                                                               
     REPRESENTATIVE SEATON asked Mr.  Peeples if those three standards                                                          
     have been  in place  during the construction  of the  current PDL                                                          
     for Senior Care.                                                                                                           
     MR.  PEEPLES addressed  (1)  by saying  that  the department  has                                                          
     standards  for  evaluating  the therapeutic  equivalents  of  the                                                          
     drugs.  There  is a list of steps that  the contractor undertakes                                                          
     including  reviewing  the  Food  and  Drug  Administration  (FDA)                                                          
     status when the drug went  on the market, contra-indications, and                                                          
     dosage.   He explained that  (2) is addressed by  advertising all                                                          
     of the  meetings, and at the  beginning of each meeting  there is                                                          
     an allocated time for public comment.   The comment time for each                                                          
     testifier  is  limited to  5  minutes  to  ensure that  there  is                                                          
     adequate time to address the agenda.   Mr. Peeples said (3) which                                                          
     is  the  appeals  process is  handled  through  the  department's                                                          
     Division  of  Health  Care  Service.   There  is  an  established                                                          
     appeals process all the way up  to a fair hearing where the final                                                          
     determination goes to  the commissioner.  All  these elements are                                                          
     already in place he summarized.                                                                                            
     Number 1442                                                                                                                
     CHAIR WILSON asked how much has already occurred.                                                                          
     MR. PEEPLES responded  that all of it has occurred.   The appeals                                                          
     process is  for providers and  recipient.  The committee  has not                                                          
     dealt with that  because there is already  an established process                                                          
     within the  department that is  long-standing and  established in                                                          
     Number 1386                                                                                                                
     JEAN MISCHEL, Attorney, Legislative  Legal and Research Services,                                                          
     Legislative Affairs Agency, Alaska  State Legislature, as drafter                                                          
     of  HB  543 she  answered  questions  from  the committee.    She                                                          
     explained that  HB 543, Version H,  provides for cost-containment                                                          
     measures  within the  Department of  Health and  Social Services,                                                          
     that specifies the authorization to  adopt a preferred drug list.                                                          
     The  bill  that  passed  last   session  did  not  specify  cost-                                                          
     containment  measures,  but  did  give  broad  authority  to  the                                                          
     department  to  adopted  cost-containment measures.    This  bill                                                          
     provides not only  specific authority for a  preferred drug list,                                                          
     but sets  out specific standards that  must be met in  adopting a                                                          
     PDL, she said.  It calls  for the department to adopt regulations                                                          
     and standards  for placing or  not placing a  drug on the  PDL or                                                          
     otherwise limiting medical assistance for a drug.                                                                          
     CHAIR WILSON  asked Ms. Mischel  if she  looked at the  way other                                                          
     states have accomplished this.                                                                                             
     MS. MISCHEL replied  that she did look at other  states and found                                                          
     that the language  in the bill is fairly standard  language.  She                                                          
     explained  that  Alaska  is  unique  in that  it  does  not  have                                                          
     specific  statutory   requirements  for  state  agencies.     She                                                          
     reiterated that  many states already  have PDLs in place  and the                                                          
     language  used to  implement it  is similar  to this  bill.   The                                                          
     language is also somewhat based  on federal requirements in terms                                                          
     of establishing a PDL.  Ms.  Mischel told the members that it was                                                          
     a policy decision to define the  PDL broadly as other states have                                                          
     a narrower  definition.  It  was decided that a  broad definition                                                          
     of  the  PDL would  give  the  Department  of Health  and  Social                                                          
     Services some latitude.                                                                                                    
     Number 1205                                                                                                                
     MS.  MISCHEL  explained that  the  bill  specifies what  kind  of                                                          
     public involvement  must take place,  an appeals process,  and an                                                          
     over ride of the cost-containment  measure.  She told the members                                                          
     that the  over ride provision  is part  of a federal  mandate for                                                          
     matching  federal funds.    She added  that  when the  department                                                          
     contracts services,  as it  has done  with First  Health Services                                                          
     Corporation,  it  must  be  done in  compliance  with  the  state                                                          
     procurement code.                                                                                                          
     MS.  MISCHEL said  the bill  also defines  and requires  that the                                                          
     department  set  up  a prescription  review  advisory  committee,                                                          
     which is also a federal mandate.   In Section 2 of the bill under                                                          
     Transition  Provisions, if  the  department decides  to make  the                                                          
     advisory committee membership smaller  it does have that latitude                                                          
     as long as  the membership meets the requirements set  out in the                                                          
     bill.   She told the members  that the committee would  assist in                                                          
     setting the standards in determining  whether a drug was included                                                          
     in  the  PDL.    After  reviewing the  minutes  of  the  existing                                                          
     committee  she said  she  found it  difficult  to determine  what                                                          
     standards   were  being   applied   in  reviewing   a  drug   and                                                          
     establishing  the  PDL.    There   was  some  concern  about  the                                                          
     proprietary  cost information  being publicized,  she added.   It                                                          
     appeared  that  the  committee   is  currently  functioning  very                                                          
     heavily on  the recommendations of  the contractor.   In summary,                                                          
     she  said she  could  not  find any  standards  available in  her                                                          
     review of  public documentation.   This  bill would  ensure those                                                          
     standards are reviewed before being adopted.                                                                               
     MS. MISCHEL told the members that  this bill provides for a delay                                                          
     in the  review of all  mental health drugs.   The bill  says that                                                          
     the department could not place a mental health drug on a cost-                                                             
     containment  list or  PDL before  January  1, 2005.   This  would                                                          
     provide  time  for the  department  to  set up  regulations  with                                                          
     respect to the  PDL.  There is  a delay in the  effective date of                                                          
     the bill  up to a six  months period so the  department's work is                                                          
     allowed to continue  as it is reviewing  and adopting regulations                                                          
     consistent with the bill, she said.                                                                                        
     Number 0964                                                                                                                
     REPRESENTATIVE  COGHILL referred  to  page 3,  lines  12 and  13,                                                          
     which refers  to 42 U.S.C.  1396r-8(d), and asked if  the members                                                          
     could be provided a copy of it.                                                                                            
     Number 0905                                                                                                                
     MS.  MISCHEL  replied  that  she  would  provide  copies  to  the                                                          
     committee.  Subsections (A) and (B)  [page 3, lines 6 through 11]                                                          
     are modeled after 42 U.S.C. 1396r-8(d), she added.                                                                         
     CHAIR WILSON  confirmed that  42 U.S.C.  1396r-8(d) is  a federal                                                          
     statute and is required in order to get federal funding.                                                                   
     REPRESENTATIVE CISSNA asked if Ms.  Mischel could provide a line-                                                          
     by-line  review  of language  that  is  required by  the  federal                                                          
     government in order to obtain funding.                                                                                     
     CHAIR WILSON told  the members that Ms. Mischel did  not have any                                                          
     advance notice that she would be testifying today.                                                                         
     MS. MISCHEL  explained that there are  statutory, regulatory, and                                                          
     constitutional law which  may apply.  The  public hearing process                                                          
     is part of a due process right.                                                                                            
     Number 0779                                                                                                                
     CHAIR  WILSON commented  that  she believes  some  states had  to                                                          
     start the  entire process  over again because  it was  found that                                                          
     the request for proposals (RFP) process  was not adhered to.  She                                                          
     asked  if Ms.  Mischel believes  Alaska  is in  jeopardy on  this                                                          
     MS. MISCHEL  replied that RFPs  are part of  state law.   That is                                                          
     not a  federal question, she  added.   It appears that  the state                                                          
     procurement  code  would apply  to  this  contract and  therefore                                                          
     there  was a  bidding  process,  Ms. Mischel  said.   If  someone                                                          
     challenged  that  the  contract was  inappropriately  awarded  it                                                          
     could invalidate the process, she commented.                                                                               
     MS. MISCHEL said  that she does not believe there  is a [federal]                                                          
     requirement for  an appeals  process, but pointed  out if  one is                                                          
     not in place the courts would  have to decide on any objection to                                                          
     the placement or procedure.   In that regard, the appeals process                                                          
     helps alleviate any due process complaints, she added.                                                                     
     Number 0646                                                                                                                
     REPRESENTATIVE  CISSNA asked  for clarification  that on  page 2,                                                          
     line 2,  there needs to  be an administrative appeals  process in                                                          
     place.   She asked if  that process  is currently in  place under                                                          
     existing law.                                                                                                              
     MS.  MISCHEL replied  that arguably  there  is an  administrative                                                          
     process  in place  under the  Administrative Procedures  Act, but                                                          
     there still  needs to  be a  determination that  this is  a final                                                          
     administrative decision.   The  question that  remains is  if the                                                          
     entire  adoption  of the  PDL  would  be  the final  decision  or                                                          
     whether  each decision  to place  each drug  on the  list is  the                                                          
     final  decision.   There  are  regulations  in place  that  would                                                          
     encompass these decisions, she said.                                                                                       
     Number 0559                                                                                                                
     REPRESENTATIVE SEATON referred  to the language on  page 2, lines                                                          
     2 through 4, where it refers  to "a person" and commented that it                                                          
     has been read in two different ways.   One way is that "a person"                                                          
     is a  patient; however, the way  he reads it is  "a person", when                                                          
     talking  about  placing  a  drug  on  the  list,  is  actually  a                                                          
     pharmaceutical corporation.                                                                                                
     MS.  MISCHEL replied  that the  language is  deliberately drafted                                                          
     with  broad language  to  ensure that  a  corporation could  take                                                          
     advantage of the appeals process.                                                                                          
     REPRESENTATIVE SEATON  clarified that this language  would ensure                                                          
     that a drug  company could appeal if its drug  were not placed on                                                          
     the PDL.                                                                                                                   
     MS. MISCHEL replied that is correct.                                                                                       
     CHAIR WILSON  stated that was  not her intention  when requesting                                                          
     the bill be drafted.                                                                                                       
     MS. MISCHEL proceeded in  discussing federally required language,                                                          
     and referred  to subsection  (4) on  page 2,  starting at  line 5                                                          
     [through 10].   She told the members that it  is her opinion that                                                          
     this language is required to  obtain federal matching funds.  She                                                          
     commented that subsection(b), page 2,  lines 11 through 13, which                                                          
     refers to a procurement code,  is also federally mandated.  While                                                          
     the specific language  is not required, some  kind of procurement                                                          
     code is required to be in place.                                                                                           
     MS.  MISCHEL referred  to  subsection (c)(3),  page  2, lines  25                                                          
     through  27, and  clarified  that the  language  is broader  than                                                          
     federal requirements.                                                                                                      
     Number 0261                                                                                                                
     CHAIR WILSON  asked for clarification  that subsection  (c)(3) is                                                          
     federally required.                                                                                                        
     MS. MISCHEL agreed.  Subsection (d),  on page 2, lines 28 through                                                          
     31 [and  page 3, line  1] is all state  law, she commented.   All                                                          
     the definitions  on page  3, starting on  line 2,  is Legislative                                                          
     Legal and  Research Services best  suggested language on  what is                                                          
     federally intended.   Ms. Mischel  reminded the members  that the                                                          
     term  "preferred drug  list"  is more  broadly  defined than  the                                                          
     federal use of the terms.                                                                                                  
     CHAIR WILSON asked  if that definition were narrowed  would it be                                                          
     easier for the department  to accomplish cost-containment through                                                          
     the PDL.   If  not, what  are the  ramification of  narrowing the                                                          
     MS. MISCHEL replied that narrowing  the definition would restrict                                                          
     the discretion of the department.                                                                                          
     CHAIR WILSON  commented that is  not the committee's intent.   It                                                          
     may  be  better  to  leave   the  definition  so  it  is  broadly                                                          
     MS. MISCHEL said under AS  47.07.036 the department currently has                                                          
     broad  authority.   This bill  restricts  the department's  cost-                                                          
     containment authority  with respect to  PDL.  She  commented that                                                          
     if the  members restrict the definition  of PDL there could  be a                                                          
     legislative intent  question; however, by leaving  the definition                                                          
     broad it gives the department more discretion.                                                                             
     Number 0073                                                                                                                
     REPRESENTATIVE SEATON read subsection (3)(C),  on page 3, line 18                                                          
     and 19, on preferred drug list as follows:                                                                                 
          (C) for which the department will not require medical                                                                 
          justification by the prescribe...                                                                                     
     REPRESENTATIVE  SEATON suggested  that  subsection actually  goes                                                          
     counter to what the department  is trying to accomplish.  Doesn't                                                          
     this prevent  the physician from  writing "medially  necessary on                                                          
     the prescription", he asked.                                                                                               
     Number 0031                                                                                                                
     MS. MISCHEL replied no.   The medical justification in subsection                                                          
     (4)  on page  2, [lines  5 through  10], is  an exception  to the                                                          
     medical assistance  restriction, she  said.  The  subsection that                                                          
     Representative  Seaton is  referring to  says that  drugs on  the                                                          
     medical  drug list  do not  require  that medical  justification.                                                          
     The drugs  that are prescribed  in paragraph  (4) are not  on the                                                          
     PDL, she pointed  out.  The drugs prescribed under  (3)(C) are on                                                          
     the PDL.                                                                                                                   
     TAPE 04-31, SIDE A                                                                                                       
     Number 0025                                                                                                                
     REPRESENTATIVE  CISSNA   asked  what  the  impact   would  be  if                                                          
     subsection (3) language on page 3 were removed.                                                                            
     MS. MISCHEL  asked for  clarification that  Representative Cissna                                                          
     is asking  what the impact would  be if the entire  definition of                                                          
     "preferred drug list" were removed.                                                                                        
     REPRESENTATIVE CISSNA restated her question  by saying that if it                                                          
     were her goal to help the department  do a good job in putting in                                                          
     a PDL, what portion of subsection  (3) could be deleted and still                                                          
     accomplish that goal.                                                                                                      
     MS. MISCHEL  responded that PDL could  be defined in a  number of                                                          
     different ways.   The definition in  this bill is intended  to be                                                          
     inclusive of  any PDL  for medical assistance  coverage.   If the                                                          
     committee  restricts that  definition  or simplifies  it, it  may                                                          
     create  some ambiguity  about what  authority the  department has                                                          
     with  respect to  restricting  coverage  for prescription  drugs.                                                          
     She suggested that the department address this point.                                                                      
     Number 0227                                                                                                                
     REPRESENTATIVE  CISSNA  asked  if she  misunderstood  an  earlier                                                          
     comment made by  Ms. Mischel that it would be  possible to narrow                                                          
     the scope of the department's ability to implement a PDL.                                                                  
     Number 0301                                                                                                                
     MS. MISCHEL suggested  that it may be helpful to  look at Section                                                          
     1 of  the bill.   The authority  for the regulations  required in                                                          
     this  bill  only  apply  if the  department  undertakes  a  cost-                                                          
     containment  measure that  involves a  PDL or  the limitation  of                                                          
     medical  assistance  for a  drug.    She  pointed out  that  that                                                          
     language  is  broad.   Anytime  the  department  undertakes  some                                                          
     action to limit  medical assistance for a drug  the standards and                                                          
     regulations  would have  to  be  in place,  she  explained.   The                                                          
     decision  to  do  that  would  have to  go  through  an  advisory                                                          
     MS. MISCHEL  told the members  that the  definition for a  PDL is                                                          
     Legislative Legal and  Research Services best guess  at what this                                                          
     PDL might  look like.   The definition  is not intended  to limit                                                          
     the department; it is meant  to give the department the authority                                                          
 needed to design a cost-containment measure that makes sense.                                                                  
     REPRESENTATIVE  CISSNA  said she  would  like  to hear  from  the                                                          
     department on this issue.  She  added that she would like to hear                                                          
     of any other federally mandated language.                                                                                  
     Number 0422                                                                                                                
     REPRESENTATIVE SEATON  commented that  Ms. Mischel said  that the                                                          
     standards  would have  to  be adopted  by  the Prescription  Drug                                                          
     Advisory Committee.  If this bill  passes by the first of May, he                                                          
     asked what  the timeline  would be  for a  PDL to  be implemented                                                          
     under this bill.                                                                                                           
     MS.  MISCHEL  summarized that  the  normal  process is  a  30-day                                                          
     public  notice and  hearing.   The notice  is mandatory,  but the                                                          
     hearing  is not.    The department  would be  free  to adopt  the                                                          
     regulations as  written; however,  in this bill  the Prescription                                                          
     Drug Advisory  Committee is required to  participate in reviewing                                                          
     the regulations,  so that  could create  some delay  in reviewing                                                          
     and  adopting  regulations.    She  estimated  that  60  days  is                                                          
     probably realistic.   Ms. Mischel added that  the department does                                                          
     not normally move  that quickly, these are  technical issues, and                                                          
     the regulations could  go out for public comment  more than once.                                                          
     The  six-month  timeframe  in  the  bill  was  thought  to  be  a                                                          
     realistic timeframe, she said.                                                                                             
     REPRESENTATIVE SEATON said as he  understands the bill, after the                                                          
     clarified  regulations  are  in  place,   a  drug  list  must  be                                                          
     constructed.   He  asked if  he understands  correctly that  this                                                          
     bill  would require  that the  standards that  have been  adopted                                                          
     would then have to be applied to each of the drugs on the PDL.                                                             
     Number 0622                                                                                                                
     MS.  MISCHEL replied  yes.   That  is her  interpretation of  the                                                          
     bill.   Public  notice must  be  given, usually  30 days,  public                                                          
     testimony is taken, a day or  two to review the evidence, and the                                                          
     committee could make a decision,  she added.  Ms. Mischel pointed                                                          
     out that the appeal process  could delay the ultimate finality of                                                          
     the  PDL.   This  is  only  speculation,  which  is true  of  any                                                          
     administrative decision.                                                                                                   
     CHAIR WILSON asked if the  committee could adopt what has already                                                          
     done, or would the process have to start all over again.                                                                   
     MS. MISCHEL agreed  that the committee could adopt  what has been                                                          
     done.    It  would  be  necessary  to  adopt  the  standards  and                                                          
     procedures  in regulations  that  would be  consistent with  this                                                          
     bill, she  explained.   She said  it would  be necessary  to hold                                                          
     additional public hearings, but  if the decisions were consistent                                                          
     with regulation there should not be much of a delay.                                                                       
     CHAIR WILSON emphasized that Ms.  Mischel agrees the PDL could be                                                          
     implemented within the same timeframe.                                                                                     
     Number 0777                                                                                                                
     REPRESENTATIVE SEATON clarified that  would be true assuming that                                                          
     the standards that are adopted  within regulation are exactly the                                                          
     same standards that  were used to determine the current  PDL.  He                                                          
     pointed  out  that any  difference  in  the two  standards  would                                                          
     require a review  of each drug and a public  hearing based on the                                                          
     standards that were adopted under regulation.                                                                              
     MS. MISCHEL  replied yes.   She  said even  if the  standards are                                                          
     identical,  there  would  still  need  to  be  a  review  and  an                                                          
     additional public hearing.                                                                                                 
     CHAIR WILSON  commented that  this is a  policy call.   Currently                                                          
     there is  nothing in statute,  so the department can  do whatever                                                          
     it wishes, she explained.                                                                                                  
     Number 0878                                                                                                                
     REPRESENTATIVE CISSNA  asked for  the department to  address this                                                          
     Number 0898                                                                                                                
     MR. PEEPLES  noted that there have  been quite a few  comments as                                                          
     to  federal  requirements  for state  eligibility  for  federally                                                          
     matching funds.   All  of the  federal requirements  have already                                                          
     been addressed  by the  department.  The  approval process  to do                                                          
     this  program  is  submitted  through   the  federal  Center  for                                                          
     Medicaid Services (CMS).  It  was necessary for the department to                                                          
     submit  a plan  amendment before  it could  proceed in  the cost-                                                          
     containment  steps  being done  now.    This  has been  done  and                                                          
     approved,  he  stated.    As  part  of  the  plan  amendment  the                                                          
     department had to  provide CMS with its contract to  do this.  He                                                          
     pointed  out that  has been  done.   He reiterated  that all  the                                                          
     criteria  required by  the federal  government  has already  been                                                          
     MR.  PEEPLES told  the members  that  all procurement  procedures                                                          
     have  been in  accordance with  AS 36.30,  the State  Procurement                                                          
     Act, and have  been signed off by the  state procurement officer.                                                          
     He summarized that all the basic criteria has been met.                                                                    
     Number 0972                                                                                                                
     MR.  PEEPLES commented  on  the PDL  discussions  by saying  that                                                          
     there  are  some  problems  with  this.    The  definition  of  a                                                          
     restrictive  formulary  is a  problem  because  the state  cannot                                                          
     offer a  restrictive formulary under  the federal programs.   The                                                          
     department   will  provide   a  PDL   which  offers   therapeutic                                                          
     equivalent  choices, plus  a means  for approval  outside of  the                                                          
     Number 1024                                                                                                                
     ROD  BETIT, President,  Alaska State  Hospital  and Nursing  Home                                                          
     Association (ASHNHA),  testified in support  of HB 543.   He told                                                          
     the members  that ASHNHA  supports PDLs  in the  Medicaid program                                                          
     which is  a good  tool and  is used  widely in  commercial plans.                                                          
     The  association  does not  see  a  problem with  the  department                                                          
     moving forward with this plan.                                                                                             
     MR. BETIT commented that what needs  to be determined is how much                                                          
     the  committee  wants in  statute  and  how much  in  regulation.                                                          
     There needs to  be some assurances through  regulation that there                                                          
     is a  predictability to the process  with respect to the  way the                                                          
     PDL  is managed  and changed.   He  said he  sees the  tug-of-war                                                          
     there  because of  his  past  experience.   There  are  a lot  of                                                          
     reasons why some things are not  put in statute and why an agency                                                          
     is given a lot of discretion.   Mr. Betit explained that Medicaid                                                          
     has  so many  areas of  complexities and  choices for  someone to                                                          
     drive a wedge and  create conflict.  It is for  that reason it is                                                          
     probably not a good idea to  put something in statute where it is                                                          
     so hard to change it, he  commented.  So many interpretations can                                                          
     then flow  from the statute  in terms  of what people  believe it                                                          
     means, Mr. Betit  added.  The word "person" is  a good example of                                                          
     MR. BETIT told the members that  he does not see anything in this                                                          
     bill that  is required  to run  the PDL,  as Mr.  Peeples pointed                                                          
     out.   The  legislature created  Medicaid  and assigned  it to  a                                                          
     department to  manage, and the  government then signs  a document                                                          
     declaring it  the single  state governing  agency for  the state.                                                          
     This is  all done through a  contract with the federal  and state                                                          
     governments, he added.  That  is where all negotiations occur and                                                          
     that  is  what the  federal  government  looks  for in  terms  of                                                          
     documentation to make sure everything  is in order, he explained.                                                          
     The federal government will not  be looking at Alaska's statutes,                                                          
     Mr. Betit told the members.                                                                                                
     Number 1134                                                                                                                
     MR.  BETIT  said  another  important  issue to  look  at  is  the                                                          
     possibility of  allowing the department the  authority to exclude                                                          
     prior  authorization beyond  writing  "medically necessary"  upon                                                          
     the prescription itself.   If this bill would  preclude that from                                                          
     being possible it could  be a problem, he said.   There are a lot                                                          
     of reasons  why it  is important to  look at  medically necessary                                                          
     when written  on a  prescription.  It  is essential  to determine                                                          
     that it  is appropriate.   The department  has taken a  very slow                                                          
     course in addressing that point,  Mr. Betit commented.  There may                                                          
     be a  time when the  department may need to  address it if  it is                                                          
     found that  in certain  areas and physicians  in the  state, when                                                          
     compared to  their peers, appear to  be out of the  "bell curve."                                                          
     It  may be  necessary  to impose  additional  requirements.   Mr.                                                          
     Betit  said  he  does  not   believe  limiting  the  department's                                                          
     flexibility is a good thing.                                                                                               
     MR. BETIT  told the members  that while he doubts  the department                                                          
     would do anything on mental  health drugs before January of 2005,                                                          
     if  the committee  doesn't want  anything to  happen there  until                                                          
     then the fair  trade would be to provide the  department with the                                                          
     difference it  had hoped to  save so  that the loss  in available                                                          
     funding  does not  compromise other  services  the department  is                                                          
     trying provide.                                                                                                            
     Number 1208                                                                                                                
     MR. BETIT told the members  that discerning standards relative to                                                          
     which drugs  are in  and which  drugs are out  is difficult.   He                                                          
     said this is  a PDL not a  formulary.  A formulary  means that is                                                          
     all  you  have,  there is  no  way  off  of  it, he  said.    The                                                          
     discerning standards  question is a  good one, he commented.   He                                                          
     told the members  that he believes Alaska's move  to connect with                                                          
     the [Oregon Health  and Science University] is a good  move.  The                                                          
     program there is being used by more  than 16 states and has a lot                                                          
     of research behind it.  It  is widely accepted across the country                                                          
     now, and  that brings a lot  of credibility to any  choices being                                                          
     made by the Alaska Medicaid Program.                                                                                       
     MR.  BETIT summarized  that he  believes  it is  important to  be                                                          
     concerned  about a  PDL,  where it  is going,  and  who would  be                                                          
     impacted by it.   He told the members that from  what he has seen                                                          
     thus far there  is a real conscience effort by  the department to                                                          
     manage  it in  a responsible  way and  move that  program forward                                                          
     appropriately.  The department has  shown that there will be many                                                          
     opportunities to see how this works  and to speak to any concerns                                                          
     that may occur,  and come back later with any  program changes in                                                          
     order to fix  something if it is felt that  the department is not                                                          
     on the right track, he said.                                                                                               
     Number 1279                                                                                                                
     ALEX  MALTER, MD,  President, Alaska  State Medical  Association,                                                          
     testified in support of HB 543.   He read the following testimony                                                          
     into the record:  [original punctuation provided]                                                                          
          Representative  Wilson, Committee  Members: my  name is                                                               
          Alex Malter.   I  am an  internist in  private practice                                                               
          here  in  Juneau,  Alaska and  have  the  privilege  of                                                               
          representing  the Alaska  State Medical  Association as                                                               
          this year's current president.                                                                                        
          I am  here today to  express ASMA's support of  HB 543.                                                               
          The  Association  submitted  written testimony  to  the                                                               
          Committee earlier this month.   Hopefully, you all have                                                               
          had a  chance to look  at it.  I  would like to  take a                                                               
          couple of minutes  to elaborate on a few  key points of                                                               
          that testimony.                                                                                                       
          ASMA understands  the budgetary stresses  involved with                                                               
          the  Medicaid   program  and   is  supportive   of  the                                                               
          development  of mechanisms  to help  save  money.   The                                                               
          Preferred Drug List is  one such appropriate mechanism.                                                               
          Through  time   and  education,  it   should  encourage                                                               
          physicians     to     prescribe     less     expensive,                                                               
          therapeutically equivalent  drugs and this is  a worthy                                                               
          Since  the  PDL's  inception, however,  ASMA  has  been                                                               
          concerned that economics  could get in the  way of good                                                               
          patient care, and  that the process of  adopting such a                                                               
          program must be  appropriate.  We have  sent letters to                                                               
          Commissioner  Gilbertson,  Director  Peeples,  and  the                                                               
          Special  House  Finance   Subcommittee  expressing  our                                                               
          reservations.      The   Department  has   been   quite                                                               
          responsive  and  on  March  19,  2004  its  ad-hoc  P&T                                                               
          committee  adopted ASMA's  proposal  to streamline  the                                                               
          "medically necessary" override criteria.                                                                              
     Number 1379                                                                                                                
          ASMA supports  HB 543 because it  codifies the solution                                                               
          to  some   of  ASMA's  other  concerns   regarding  the                                                               
          development of the  PDL:  First, the  bill requires the                                                               
          PDL to  be implemented  via the proscribed  process for                                                               
          adopting major policy  changes-by the formal regulation                                                               
          adoption  process  called  for  in  the  Administrative                                                               
          Procedure   Act;  and   second,  the   bill  puts   off                                                               
          implementing  the PDL  for drugs  used to  treat mental                                                               
          illnesses until after January 1, 2005.                                                                                
          As  noted,   we  also  support   a  process   by  which                                                               
          physicians can  override the PDL by  writing "medically                                                               
          necessary" on  a script if  a non-preferred  drug would                                                               
          be more appropriate for a  particular patient.  Indeed,                                                               
          ASMA appreciates  the approach taken by  Medicaid's ad-                                                               
       hoc committee to simplify the override mechanism.                                                                        
     DR. MALTER  said he  thinks the  committee has  done a  very good                                                          
     job.  He told  the members that he has had a chance  to sit in on                                                          
     the  committee meetings  and was  impressed with  their level  of                                                          
     professionalism and expertise.   Dr. Malter continued reading his                                                          
     statement into the record:                                                                                                 
          Mr. Peeples  alluded to a valid  concern; however, that                                                               
          once doctors  realize the "medical  necessity" criteria                                                               
          has  been  memorialized into  law,  they  will be  less                                                               
          motivated to change  their behaviors.  If  after two to                                                               
          three years the Division  of Health Care Services finds                                                               
          this  provision substantially  weakens the  program, we                                                               
          would support reconsidering this  provision of the bill                                                               
          down the line.                                                                                                        
          In  summary,  ASMA  supports  HB   543  and  urges  the                                                               
          Committee to support the bill  as well.  Please keep in                                                               
          mind that  physicians do  not have  an income  stake in                                                               
          this issue.   Rather,  we are primarily  concerned that                                                               
          Alaskan patients receive  high-quality health care, and                                                               
          that as many  Alaskans as possible have  access to that                                                               
          care.    I would  be  happy  to answer  any  questions.                                                               
          Thank you for your attention.                                                                                         
     Number 1448                                                                                                                
     REPRESENTATIVE  SEATON commented  that  the  department told  the                                                          
     members  that the  delay of  implementation of  a PDL  would mean                                                          
     that the $20 million savings that  has been built into the budget                                                          
     would have  to be absorbed  either through reduction  of services                                                          
     or reduced payment rates.  He  asked Dr. Malter if ASMA sees that                                                          
     as a  problem or has any  other solutions in where  to find these                                                          
     funds if it is not saved through the PDL.                                                                                  
     DR. MALTER replied  that he has not had the  opportunity to think                                                          
     that through.  Presumably there is  a valid concern that a lot of                                                          
     time  is being  spent looking  at  the specific  language of  the                                                          
     potential  legislation, he  said.    As a  layperson  it was  his                                                          
     impression that this could slow down  the process.  That would be                                                          
     unfortunate if folks had to come  off of the Medicaid roles if it                                                          
     prolonged  the  process.    He  said  he  believes  that  if  the                                                          
     legislature enacts  legislation it  will be done  in such  as way                                                          
  that it will slow the department down as little as possible.                                                                  
     Number 1568                                                                                                                
     VERNER STILLNER, M.D.,  Psychiatrist, Bartlett Regional Hospital;                                                          
     Legislative   Representative,  Alaska   Psychiatric  Association,                                                          
     testified on HB 543 and answered  questions from the members.  He                                                          
     told the  members that those  in the mental health  community are                                                          
     experiencing     cuts    in     community    health     services,                                                          
     hospitalizations,  transportation  for   the  mentally  ill,  and                                                          
     facilities  that treat  them.   This bill  is very  important, he                                                          
     stated.    Medications  for  the fragile  mentally  ill  and  the                                                          
     Medicaid population are  often a life saver, and  for that reason                                                          
     this bill appropriately asks for  a regulatory process that makes                                                          
     this a more  rational and transparent system.   Dr. Stillner said                                                          
     his  research,  through  the  American  Psychiatric  Association,                                                          
     found  that  the states  that  have  implemented PDLs  have  gone                                                          
     through  the regulatory  process, not  the procedural  process as                                                          
     has been suggested.   He said he believes  the regulatory process                                                          
     provides some safeguards  in spite of the  disadvantages that may                                                          
     DR.  STILLNER  told  the  members  that  there  are  many  models                                                          
     throughout  the country  including those  that completely  exempt                                                          
     psychotropic drugs  from the  PDL process  because it  is thought                                                          
     that  it would  not  save the  Medicaid budget  any  money.   The                                                          
     result  was  that of  cost  shifting  to emergency  room  visits,                                                          
     hospitalization, nursing homes, and  correctional facilities.  He                                                          
     suggested the  exemptions be  provided on  anti-psychotics, anti-                                                          
     depressants,  anti-anxiety, and  mood stabilizers  that are  used                                                          
     for bipolar  disorders or what  was once  called manic-depressive                                                          
     illness, and attention deficit disorder (ADHD).                                                                            
     Number 1662                                                                                                                
     DR. STILLNER suggested a minor change  on page 2, line 14 through                                                          
     19, where  the makeup  of the  Prescription Drug  Review Advisory                                                          
     Committee is  delineated.   He suggested  the committee  have two                                                          
     public members  appointed to the  committee.  He  also recommends                                                          
     that the  members consider changing  the makeup of  the committee                                                          
     to more physician members and  fewer pharmacists since physicians                                                          
     are the main prescribers in Alaska.                                                                                        
     Number 1735                                                                                                                
     DR. STILLNER  explained that he believes  the medically necessary                                                          
     component of the bill is  important because it allows a physician                                                          
     to grandfather a  medication in.  For example, one  young man who                                                          
     is schizophrenic  is currently employed  and has been out  of the                                                          
     hospital for  about nine years.   Prior to that time  he had been                                                          
     hospitalized five  times, both  in state  and out  of state.   He                                                          
     told the  members that  he would  like to  continue to  keep this                                                          
     patient on  the prescription  he is currently  on.   Should those                                                          
     medications  not be  on  the PDL,  the  override provision  would                                                          
     allow him to  continue the present treatment.   This provision is                                                          
     a  very valuable  tool for  a better  clinical judgment  than one                                                          
     that can be made in a  pharmacy or the Juneau Medicaid office, he                                                          
     stated.  There are safety  and clinical effectiveness issues that                                                          
     should prevail,  when for instance,  a clinician with  five years                                                          
     of experience  with an individual  has a better  understanding of                                                          
     what is necessary for treatment.                                                                                           
     DR.  STILLNER summarized  that he  believes  that postponing  the                                                          
     inclusion of psychotropic drugs until  March 2005 is a good idea.                                                          
     He said  he wishes  the date  were 2006.   Dr. Stillner  told the                                                          
     members he supports HB 543 in its current form.                                                                            
     Number 1800                                                                                                                
     REPRESENTATIVE  CISSNA commented  that  it  is her  understanding                                                          
     that  the department  is planning  on delaying  the inclusion  of                                                          
     Psychotropic drugs already.                                                                                                
     DR. STILLNER  replied that was  his impression also;  however, he                                                          
     said  he understands  that  the  May meeting  may  look at  anti-                                                          
     anxiety, anti-depressants, and ADHD drugs.   So three of the five                                                          
     psychotropic drugs he mentioned will be reviewed.                                                                          
     REPRESENTATIVE SEATON  asked for clarification on  Dr. Stillner's                                                          
     comment with respect to the PDL and cost shifting.                                                                         
     Number 1852                                                                                                                
     DR.  STILLNER commented  that it  is a  very appealing  notion to                                                          
     save $20 million  from a budget.  He suggested  that taking money                                                          
     away from one area, actually  shifts the expense to another area.                                                          
     He  told  the members  that  it  has been  found  to  be true  in                                                          
     Michigan, New  Hampshire, and  other states.   The  ultimate cost                                                          
     savings  to Medicaid  may  be  non-existent, he  said.   In  some                                                          
     states the  PDLs have  cut Medicaid  expenditures by  15 percent.                                                          
     However, in  those states there  has been an increased  amount of                                                          
     utilization of the emergency room,  hospitals, nursing homes, and                                                          
     correctional facilities  because people  have not been  cared for                                                          
     properly.    Dr.   Stillner  claimed  that  while   the  PDL  was                                                          
     implemented with  good intentions, it  has the potential  of cost                                                          
     shifting to  other parts of  the Medicaid budget.   He emphasized                                                          
     that  his   comments  are  only  with   respect  to  psychotropic                                                          
     Number 1895                                                                                                                
     REPRESENTATIVE  SEATON responded  that he  believes the  only way                                                          
     cost  shifting could  occur is  if the  team of  20 doctors  plus                                                          
     other  professionals  on  the committee  were  not  effective  in                                                          
     identifying the  most effective  drugs for the  PDL.   He pointed                                                          
     out that  the amount of  drugs prescribed are not  being limited.                                                          
     Representative Seaton asked  Dr. Stillner if there  is some other                                                          
     element that he is missing.                                                                                                
     DR.  STILLNER commented  that it  is an  appealing notion  to say                                                          
     which drug  is the most effective,  but most of the  drugs on the                                                          
     market have  proven to be  more effective  than the placebo.   He                                                          
     said that is how the FDA licenses  the drugs.  There is not a lot                                                          
     of  data out  there comparing  one drug  versus another  drug, he                                                          
     added.  It is  not always an easy call to say  which drug is most                                                          
     effective.   Dr. Stillner explained  that one drug could  be very                                                          
     effective  for  an individual,  and  another  drug that  is  less                                                          
     expensive could be more effective  for another individual.  There                                                          
     is  a  variability there.    That  is  the  reason he  likes  the                                                          
     discretion  of  a medically  necessary  over  ride, Dr.  Stillner                                                          
     Number 2022                                                                                                                
     The committee took an at-ease from 5:25 p.m. to 5:31 p.m.                                                                  
     Number 2038                                                                                                                
     JOE   FULLER,   Senior   Manager,   State   Government   Affairs,                                                          
     AstraZeneca  Pharmaceuticals, L.P.,  testified in  support of  HB
     543 and answered  questions from the members.   He commented that                                                          
     HB 543  will authorize two  primary provisions.  The  first would                                                          
     be to  put regulations in  place for  the development of  the PDL                                                          
     and  the second,  is  to  allow a  simple  hassle-free over  ride                                                          
     provision  for  prescribers.    Mr.  Fuller  commented  that  the                                                          
     committee is  aware of the  fact that PDLs  are in place  in many                                                          
     states around the  country.  Every state that he  is aware of has                                                          
     publicly  debated  the  merits  of PDLs  and  has  either  passed                                                          
     statutes  or adopted  regulations regarding  its development  and                                                          
     implementation.   Mr.  Fuller told  the members  that regulations                                                          
     will  ensure   that  there  is   adequate  due  process   in  the                                                          
     development  of  PDLs,  and  that   it  is  an  open  public  and                                                          
     transparent  process.   This  is  good  government that  Alaskans                                                          
     including AARP  and seniors affected  by the PDL  should support,                                                          
     he added.   He said that his experience with  the current process                                                          
     is that it needs improvement.   It is an evolving process because                                                          
     there is  no regulation  in place  or road map  to follow,  it is                                                          
     always changing,  he suggested.   Mr. Fuller said the  process is                                                          
     getting better, but  by adopting regulations the  state will have                                                          
     an improved process in place.                                                                                              
     Number 2120                                                                                                                
     MR. FULLER  explained that the  current public  testimony allowed                                                          
     for a manufacturer is five  minutes to present any clinical data,                                                          
     regardless of  the number of drugs  that are being reviewed.   He                                                          
     said, for  instance, if his  company has  three or four  drugs up                                                          
     for review  he is given on  45 seconds per drug  to provide input                                                          
     to the committee members.                                                                                                  
     MR. FULLER  said that  while the company  has the  opportunity to                                                          
     submit clinical  data, it  is not  [necessarily provided]  to the                                                          
     P&T   Committee  members,   it  is   to  First   Health  Services                                                          
     Corporation  in  Arlington,  Virginia.    First  Health  Services                                                          
     Corporation synthesizes all the information  and passes it out to                                                          
     the committee  members to make a  decision.  Mr. Fuller  told the                                                          
     members that he  does not have access to the  information that is                                                          
     provided to the  P&T Committee members.  There is  no other state                                                          
     in the  nation that has a  process similar to the  one in Alaska,                                                          
     he commented.                                                                                                              
     Number 2175                                                                                                                
     MR. FULLER told  the members that in Oregon  and Washington there                                                          
     is much more  time taken in the process in  reviewing the classes                                                          
     of  drugs.   It is  taken much  more seriously.   In  Oregon, for                                                          
     instance,  there is  a  cardiac subcommittee  that  looks at  the                                                          
     beta-blocker class  and there  are two  to three  meetings before                                                          
     there  is consensus  on  which  drug is  the  preferred drug,  he                                                          
     summarized.     There   is   also   adequate  public   testimony,                                                          
     opportunities  for manufacturers,  and other  stakeholders.   Mr.                                                          
     Fuller suggested that Alaska look  at Oregon's process as a model                                                          
     that should be consider.                                                                                                   
     Number 2204                                                                                                                
     MR. FULLER agreed  that the over ride provision is  good one.  It                                                          
     ensures  that  the  final  decision  in terms  of  what  drug  is                                                          
     dispensed is  made by the physician.   This is the  same language                                                          
     that is in  the Senior Care bill which was  passed unanimously by                                                          
     both houses and signed by the governor.                                                                                    
     MR. FULLER  commented that  it is  news to  him that  the state's                                                          
     plan to CMS  has been approved.  He questioned  whether there was                                                          
     a request  for proposals  (RFP) put  out to  open bid  when First                                                          
     Health Services  Corporation received  its contract.   Mr. Fuller                                                          
     told the  committee that  to his knowledge  that was  never done,                                                          
     and the  reason he  mentions this is  that the  committee's legal                                                          
     advisor commented  that there  may be  some risk  associated with                                                          
     that.   He told the  members that both  the states of  Nevada and                                                          
     Hawaii had to stop its processes for that very reason.                                                                     
     MR. FULLER  urged the  committee's support of  HB 543  because it                                                          
     will   add  clarity   and  adequate   due   process  before   the                                                          
     implementation of the PDL.                                                                                                 
     Number 2249                                                                                                                
     REPRESENTATIVE GATTO asked Mr. Fuller  if the state would not use                                                          
     regulations in implementing the PDL.                                                                                       
     MR. FULLER replied  that the only regulation that  was passed was                                                          
     signed by the  Lieutenant Governor in January of 2003.   It was a                                                          
     one-liner that  states that the  Department of Health  and Social                                                          
     Services has  the authority  to prior authorize  drugs.   That is                                                          
     the only  regulation in  place that allows  the department  to go                                                          
     forward with the PDL, he explained.                                                                                        
     REPRESENTATIVE  GATTO  questioned  that   the  existing  PDL  was                                                          
     created without regulations by a committee.                                                                                
     MR. FULLER responded that Mr.  Peeples could better speak to that                                                          
     point than  he could.  He  told the members that  his discussions                                                          
     with the commissioner  last session left him  with the impression                                                          
     that  regulations would  be promulgated,  as is  the case  of any                                                          
     other state he is aware of.  The  next time he heard that the PDL                                                          
     was going forward there was a  memo that provided a very detailed                                                          
     process  and the  committee was  already a  few months  into that                                                          
     Number 2317                                                                                                                
     REPRESENTATIVE  SEATON  referred  to   [page  2,  line  2]  which                                                          
     addresses the appeals  process, and asked if  every company whose                                                          
     drug is not on the PDL will appeal the decision.                                                                           
     MR.  FULLER replied  that he  could  tell the  members how  other                                                          
     states  worked.   In  Oregon,  for  example,  if  a drug  is  not                                                          
     included  in the  PDL, there  is  no opportunity  to appeal,  but                                                          
     Oregon reviews each class of drugs  every six months.  That gives                                                          
     the  company  another  opportunity   to  voice  issues  with  its                                                          
     decision  or  provide  any  new   clinical  data  that  might  be                                                          
     available.   He stated  that he believed  the appeals  process in                                                          
     the bill  was specific  to patients or  physicians who  wished to                                                          
     appeal the choices the state made.                                                                                         
     TAPE 04-31, SIDE B                                                                                                       
     Number 2326                                                                                                                
     REPRESENTATIVE  SEATON asked  Mr.  Fuller if  he  would have  any                                                          
     objection to  removing the  appeals process  from the  bill which                                                          
 could result in every drug manufacturer appealing a decision.                                                                  
     MR. FULLER  said speaking  for AstraZeneca  Pharmaceuticals, L.P.                                                          
     he would  not have  a problem  with this.   If the  language were                                                          
     changed  to Alaska  patients or  providers it  would clarify  the                                                          
     intent of that language, he commented.                                                                                     
     Number 2276                                                                                                                
     PAT CARTER, Lobbyist, Glaxo SmithKline,  testified on HB 543.  He                                                          
     told  the  members  that  he  has been  to  every  P&T  Committee                                                          
     meeting.  Glaxo  SmithKline is not opposed  to the implementation                                                          
     of a  PDL, but would like  assurances that there will  be an open                                                          
     and fair process.  Thus far  he believes it has been unsuccessful                                                          
     in that  regard.  He has  talked to department staff  and written                                                          
     letters  to the  department, but  the procedures  that have  been                                                          
     adopted, were  adopted very recently.   While the  procedures may                                                          
     or  may not  have been  in  existence from  the beginning,  Glaxo                                                          
     SmithKline  did  not  have  access   to  anything  that  the  P&T                                                          
     Committee members  see, he stated.   It  is not an  open process,                                                          
     Mr. Carter emphasized.  For  example, the P&T Committee first met                                                          
     in October and  the procedure was loose, the meeting  was held in                                                          
     a small room, it was  teleconferenced to members that were unable                                                          
     to attend via a speakerphone.   People in the room could not hear                                                          
     and the  people trying  to listen in  via speakerphone  could not                                                          
     hear,  there  were votes  taken,  and  the  votes were  not  even                                                          
     CHAIR WILSON asked if that process has been improved.                                                                      
     Number 2193                                                                                                                
     MR. CARTER agreed that there  have been substantive improvements,                                                          
     most  notably  having  professional   equipment  available.    He                                                          
     commented that all public testimony  is taken at the beginning of                                                          
     the  meeting.   For example,  there was  one meeting  where there                                                          
     were nine different  drug classes that were heard, he  said.  Mr.                                                          
     Carter told the members to imagine  having nine bills in front of                                                          
     them, all  public testimony on  those bills were taken  at random                                                          
     at  the beginning  of  that meeting.   He  asked  if the  members                                                          
     believe that  they could  make a  reasonable decision  based upon                                                          
     the information presented on how  to move forward with that piece                                                          
     of legislation.   Mr.  Carter told the  members that  he respects                                                          
     the P&T  Committee members and believes  they are trying to  do a                                                          
     good  job, but  the format  that is  followed is  not one  that a                                                          
     reasonable person could come up  with a reasonable decision based                                                          
     upon the  input from  the public testimony.   Mr.  Carter pointed                                                          
     out that  this is not  sour grapes from Glaxo  SmithKline because                                                          
     every drug that it has tried to  get on the PDL thus far has been                                                          
     placed on the PDL.  He  said he's speaking only about the process                                                          
     because  the  process  is  what will  ensure  that  Alaskans  are                                                          
     Number 2137                                                                                                                
     MR.  CARTER told  the  members  that prior  to  the last  meeting                                                          
     letters  were submitted  in a  timely fashion  to the  department                                                          
     from four of  the six pulmonologist in Alaska.   He added that he                                                          
     knows one of  the letters came in late, but  the other three were                                                          
     submitted well under  the wire.  These physicians  were told that                                                          
     those  letters  would  be  included   in  the  packet,  but  when                                                          
     committee  members were  asked if  they  saw the  letters it  was                                                          
     found  that the  letters were  not in  the packets.   Mr.  Carter                                                          
     asked Dave  Campana [Pharmacy &  Ancillary Services,  Division of                                                          
     Health Care  Services, Department of Health  and Social Services]                                                          
     where the  letters from the  pulmonologists were  since pulmonary                                                          
     drugs were  being reviewed.  Mr.  Carter said he thought  the P&T                                                          
     Committee would  want to hear from  the those that are  using and                                                          
     dispensing  these  drugs;  however,  Mr.  Campana  told  him  the                                                          
     letters were  not included in the  packets.  When asked  why, the                                                          
     response was "just didn't."  Mr.  Carter told the members that he                                                          
     believes that  is unacceptable.   The  idea that  procedures have                                                          
     been adopted does  not mean very much when the  rules change from                                                          
     meeting  to meeting.   For  example, one  meeting may  allow five                                                          
     minutes  per drug  company, one  meeting it  is five  minutes per                                                          
     testifier, and  the next meeting it  is back to five  minutes per                                                          
     drug company again.   Mr. Carter pointed out that  when there are                                                          
     a group  of individuals as  highly educated  as the group  on the                                                          
     P&T Committee it seems desirable  to give them the information in                                                          
     front of  them to make reasoned  decisions.  He said  he believes                                                          
     the  goal  should be  to  make  sure  the right  medication  gets                                                          
     through to the right patient,  then after reaching that goal look                                                          
     to save money.                                                                                                             
     MR. CARTER  suggested that a  better way to conduct  the meetings                                                          
     would be to  take testimony per drug class and  give testifiers a                                                          
     reasonable  time to  present information.    This suggestion  was                                                          
     sent  to the  department  via  a letter  and  has  thus far  been                                                          
     MR. CARTER  said that after  hearing testimony that there  were a                                                          
     number of states that have  moved forward without regulations, he                                                          
     called his  boss, who  handles most  of the  western states.   He                                                          
     told the  members that his boss  does not know of  one state that                                                          
     has moved forward  with a PDL without regulations in  place.  Mr.                                                          
     Carter  told  the   members  that  the  process   that  has  been                                                          
     implemented   leaves   the   state   open   to   huge   liability                                                          
     possibilities if someone  has a problem with a  drug being denied                                                          
     because of a  lack of regulations and good  reasoned due process.                                                          
     If there  is a  heart attack  or stroke  or a  psychotropic event                                                          
     which  causes a  death,  the  state could  be  open to  liability                                                          
     because of that and where are the savings then, he questioned.                                                             
     MR. CARTER emphasized that he is  not trying to stop or slow down                                                          
     the  process, he  just  wants to  see a  fair  and open  process.                                                          
     Since it  is not happening thus  far, he believes this  bill is a                                                          
     good step in that direction.                                                                                               
     Number 1985                                                                                                                
     CHAIR WILSON announced that HB 543 will held in committee.                                                                 
     HB 434-NATUROPATHIC MEDICINE                                                                                             
     Number 1900                                                                                                                
     CHAIR WILSON announced  that the next order of  business would be                                                          
     HOUSE  BILL  NO.  434,  "An  Act  relating  to  the  practice  of                                                          
  naturopathic medicine; and providing for an effective date."                                                                  
     The committee took an at-ease from 5:55 p.m. to 6:01 p.m.                                                                  
     Number 1805                                                                                                                
     REPRESENTATIVE JIM HOLM, Alaska  State Legislature, as sponsor of                                                          
     HB  434,  presented the  bill  and  answered questions  from  the                                                          
     members.   He told the members  that he offered HB  434 to ensure                                                          
     professional safe naturopathic health care  for all Alaskans.  It                                                          
     will  bring  an  outdated  17-year-old  Alaskan  statute  on  the                                                          
     practice of  naturopathic medicine  up to date  and in  line with                                                          
     about 14  other states  that already have  these provisions.   It                                                          
     provides  quality  health  care to  Alaskans  through  continuing                                                          
     education, requirements,  and improved  services in  the practice                                                          
     of  naturopathic  medicine.    It   addresses  the  shortages  of                                                          
     physicians  in  Alaska  while   providing  alternative  care  and                                                          
     reducing  health care  costs  to  Alaskans.   The  bill places  a                                                          
     continuing  education  requirement  in statute  for  naturopathic                                                          
     physicians of Alaska.  It  specifies that naturopathic physicians                                                          
     may perform  minor surgery based upon  their education, training,                                                          
     and licensure, he said.                                                                                                    
     Number 1520                                                                                                                
     DANIEL YOUNG,  ND, LAC, AKANP  Legislative Task  Force, testified                                                          
     in support  of HB 434,  and answered questions from  the members.                                                          
     He provided the following testimony  to the committee:  [Original                                                          
     text, but some formatting changes were made]                                                                               
          Chair Wilson  and Honorable  members of  the committee.                                                               
          Thank you  for allowing me  to testify on behalf  of HB
          434.  Thank you for staying later to hear this.                                                                       
          HB   434  would   allow   naturopathic  physicians   to                                                               
          prescribe substances  that they are trained  to use and                                                               
          to  perform minor  surgery.   You all  know the  issues                                                               
          before  you.     You  have   a  packet  with   all  the                                                               
          comparisons and it is pretty  comprehensive packet.  We                                                               
          have all  met with you  all on an individual  basis and                                                               
          have plead our case.                                                                                                  
          By  now you  have heard  from naturopathic  doctors and                                                               
          patients of  naturopathic medicine that are  in support                                                               
          of this  bill.   You have also  heard from  the medical                                                               
          doctors, doctors of osteopathic  medicine, and even the                                                               
          pharmacy  board.   I don't  think that  you have  heard                                                               
          from  patients of  allopathic  or osteopathic  doctors.                                                               
          Unfortunately, I had a nice  conversation with Dr. Alex                                                               
          Malter   the  head   of   the   Alaska  State   Medical                                                               
          Association in the  fall and we had  a good discussion.                                                               
          It is  too bad he  had to leave  to care for  a patient                                                               
          because I think it would  have been helpful to have the                                                               
          two of us here would have been helpful in this issue.                                                                 
          With  your  permission  I would  like  to  direct  your                                                               
          attention briefly to facts:                                                                                           
          Fact 1:   Education                                                                                                   
          Naturopathic  doctors are  trained  for general  family                                                               
          practice.  We are not  trained to be specialists and do                                                               
          not work  in hospital environments, but  in out patient                                                               
          in the trenches.                                                                                                      
          Naturopathic  doctors   complete  8  years   of  higher                                                               
          education.  Some  receive more, but it is  a minimum of                                                               
          8 years.                                                                                                              
          Requirements  to enter  a  naturopathic medical  school                                                               
          are  almost  identical to  that  of  any other  medical                                                               
          school.  I almost went  to an allopathic medical school                                                               
          and was ready to do that.                                                                                             
          The  curriculum   of  a  naturopathic   medical  school                                                               
          compares  with  allopathic  (MD) and  osteopathic  (DO)                                                               
          schools, in intensity and comprehensiveness.                                                                          
          The  clinical studies  in  naturopathic medical  school                                                               
          also compare  to allopathic  (MD) and  osteopathic (DO)                                                               
          Outpatient  based  clerkships  prepare us  for  how  we                                                               
          In your  packets you  can see  charts that  compare our                                                               
          education with medical schools.                                                                                       
          There has  also been  expert unbiased testimony  by Dr.                                                               
          Clyde Jenson  in previous  committee meetings  and with                                                               
          the other  body.  He  has a unique position  to comment                                                               
          on the  education between  these three  areas.   He has                                                               
          been a  president or administrator of  allopathic (MD),                                                               
          osteopathic  (DO) and  (ND)  medical  schools for  long                                                               
          periods of  time and is  quite versed to attest  to the                                                               
          nature  of their  curriculums.   Their first  two years                                                               
          are  almost identical.   That  is when  you learn  your                                                               
          sciences.   That is anatomy,  physiology, pharmacology,                                                               
          clinical physical diagnosis, and  the lab diagnosis, x-                                                               
          ray, radiology, things like that.                                                                                     
          The  second stage  is the  clinical  sciences that  are                                                               
          learned in  the third and  fourth years.  At  this time                                                               
          naturopathic   physicians   go  through   broad   based                                                               
          training.     They  work  in   manipulation,  botanical                                                               
          medicine,  nutrition, dietetics,  homeopathy, and  some                                                               
          pharmalogical therapeutics, though  not as extensive as                                                               
          a pharmalogical  therapeutics in a  hospital situation.                                                               
          As   you   know   medical  doctors   and   doctors   of                                                               
          naturopathic   medicine   work  extensively   on   very                                                               
          rigorous  internships  where  all that  is  studied  is                                                               
          pharmalogical therapeutics and they  are the experts of                                                               
          that realm of medicine.                                                                                               
     Number 1570                                                                                                                
          We  are skilled  in the  40 percent  of drugs  that are                                                               
          coming  from   a  natural   substance  and   there  are                                                               
          different  generations of  that that  we are  very well                                                               
          versed in the use of that.                                                                                            
          Fact 2: Licensure                                                                                                     
          Graduates   of   naturopathic  medical   schools   pass                                                               
          rigorous  nationally administered  board exams.   These                                                               
          exams have  been examined by federal  institutions that                                                               
          determine the  level of education  that you  would need                                                               
          to  pass  them.    That   is  for  bio-medical  general                                                               
          practice of medicine.                                                                                                 
          Fact 3:   Federal Regulation                                                                                          
          Naturopathic  medical  institutions are  recognized  by                                                               
          Federal and State Accrediting Bodies  as well as by the                                                               
          Council  of Naturopathic  Medical education.   We  wish                                                               
          only  to  be able  to  practice  how  they say  we  are                                                               
          trained to practice.                                                                                                  
          Fact 4: Naturopathic Medicine is Safe                                                                                 
          No patient complaints in 17 years of practice in                                                                      
          Alaska.    Naturopathic  medicine  is  safe.    I  have                                                               
          numbers to show  you on a national  level in comparison                                                               
          that and we can talk about that.                                                                                      
          Fact 5: Scientific Basis                                                                                              
          There is research- see your packet "Naturopathic                                                                      
          Collaborative Events"                                                                                                 
          In the packet there is a very nice presentation,                                                                      
          Representative Coghill has  it.  That shows  all of the                                                               
          clinical  research and  all the  things that  are being                                                               
          done  in Naturopathic  medicine and  complimentary care                                                               
          across the United States.                                                                                             
Number 1497                                                                                                                     
          Fact 6:  Naturopathic Physician = Primary Care                                                                        
          The Journal of American Medical Association or                                                                        
          J.A.M.A. in  1998 - there  is an article in  the packet                                                               
          by Dr. Cooper.  They are  saying that we are trained as                                                               
          primary care  and outpatient based,  which means  we do                                                               
          not work in the hospitals,  but we work seeing patients                                                               
          in our  clinics.  And that  is how our training  is and                                                               
          it is adequate for that.                                                                                              
          Complimentary  medicine  is  the wave  of  the  future;                                                               
          already  Alaska's  clinics  have MD's,  DO's  and  ND's                                                               
          working side  by side.   It  is not as  much as  in the                                                               
          Lower 48, but it is happening.                                                                                        
          We  have letters  of support  from medical  doctors who                                                               
          work with us, as well as other types of practitioners.                                                                
          We have  thousands of signatures from  patients in your                                                               
          districts  that want  access  to complete  Naturopathic                                                               
          scope of practice.                                                                                                    
          Our  current statute  is out  of date  and needs  to be                                                               
          updated   to  reflect   the  quality   of  Naturopathic                                                               
     Number 1443                                                                                                                
          These  letters of  opposition  clearly  indicate to  me                                                               
          that  there is  a misunderstanding  about the  level of                                                               
          our  education  as   naturopathic  physicians  in  this                                                               
          Often  times  these  letters  indicate  that  it  is  a                                                               
          licensing issue.   We have been licensed  for 17 years.                                                               
          All it  is expanding our  scope to include  what should                                                               
          be  rightfully  ours.    For  17  years  we  have  been                                                               
          providing  service to  30,000 Alaskans.   I'm  going to                                                               
          cut this short,  and ask you to consider this  bill.  I                                                               
          appreciate  your  time  and  can  answer  any  of  your                                                               
          questions at this time.                                                                                               
     Number 1413                                                                                                                
     REPRESENTATIVE GATTO asked why the  e-mails he has been receiving                                                          
     have expressed concern  that the legislature may  take away their                                                          
     right to  practice naturopathic medicine.   He commented  that he                                                          
     does not  know how that  information got into the  community, but                                                          
     for  the record,  he said,  there is  nothing in  this bill  that                                                          
     diminishes anything  naturopaths are doing.   He asked  Dr. Young                                                          
     if he would agree with that.                                                                                               
     DR. YOUNG replied that he would  agree with respect to the intent                                                          
     of  the  bill.   There  is  wording in  the  bill  that has  been                                                          
     insulting for 17  years and would like to see  that corrected, he                                                          
     said.  He told the members  that his main concern is patients who                                                          
     want their naturopaths  to be able to provide the  care that they                                                          
     are trained to provide.   For example, natural estrogens, natural                                                          
     progesterone, and  natural thyroids  are prescription  drugs that                                                          
     naturopaths are trained to use,  Dr. Young stated.  He emphasized                                                          
     that  it   is  not  their   intent  to  use  schedule   2  drugs;                                                          
     naturopathic  physicians do  not  use those  drugs.   Naturopaths                                                          
     refer their patients  to other providers in cases  where there is                                                          
     a  need for  more specialized  treatment.   When a  patient comes                                                          
     into  the office  for a  pap [smear],  and it  is found  that the                                                          
     patient needs  a special estrogen  prescription that can  be made                                                          
     for her, but  the naturopath cannot write  the prescription, then                                                          
     that  is a  problem.   The insurance  company gets  billed twice;                                                          
     there is a waiting list; and  a patient's health care is at risk.                                                          
     The   same  thing   applies  to   patients   with  diabetes   and                                                          
     hypertension,  he added.   Dr.  Young commented  that naturopaths                                                          
     are not interested  in using anti-psychotic drugs  because we are                                                          
     not trained for that.   Naturopaths would refer appropriately for                                                          
     treatment outside  of our  area of training,  he commented.   Dr.                                                          
     Young pointed out that the current  bill does not have the [drug]                                                          
     schedules in it.                                                                                                           
     Number 1301                                                                                                                
     REPRESENTATIVE GATTO reiterated that  everyone who currently sees                                                          
     a  naturopath  will  be  able  to continue  to  see  his  or  her                                                          
     naturopaths.    If  the  bill passes  there  will  be  additional                                                          
     privileges that  will be available to  the public.  He  asked Dr.                                                          
     Young  for clarification  that schedules  were taken  out of  the                                                          
     DR. YOUNG replied  that he understands the  [drug] schedules were                                                          
     taken out of the  bill in order to get it out  of the House Labor                                                          
     and Commerce  Standing Committee.  He  explained that naturopaths                                                          
     did not  want schedules [one and]  two because they did  not want                                                          
     drugs   that  have   a  high   incidence  of   physiological  and                                                          
     physiological  dependence and  are hot  topics.   Drugs that  are                                                          
     listed  on  schedules  three,  four,   and  five  are  far  below                                                          
     naturopaths' level  of training,  he commented.   There  are only                                                          
     certain drugs  within those  levels that  a naturopath  would use                                                          
     anyway.   The bill  was originally written  with the  intent that                                                          
     naturopaths would have access to drugs they would use, he said.                                                            
     CHAIR WILSON asked  if Representative Holm would  point out where                                                          
     the language was removed from the bill.                                                                                    
     Number 1234                                                                                                                
     REPRESENTATIVE HOLM referred to  CSHB 434(L&C), Section 08.45.120                                                          
     (4), page  5, line  23, language  addressing scheduled  drugs was                                                          
     after the following:                                                                                                       
          (4) prescribe and implement barrier devices for                                                                       
     REPRESENTATIVE  HOLM commented  that in  the original  version of                                                          
     the bill,  the above language  was numbered (5) and  the language                                                          
     addressing scheduled drugs preceded this language as (4).                                                                  
     CHAIR WILSON  asked where in  the current bill does  it authorize                                                          
     naturopaths to  prescribe schedule  three, four, and  five drugs.                                                          
     She said she believes all of that language was removed.                                                                    
     REPRESENTATIVE HOLM agreed that  all the language authorizing use                                                          
     of scheduled prescription drugs was removed.                                                                               
     CHAIR WILSON stated that the only  thing that is left in the bill                                                          
     is as follows [page 5, lines 14 through 17]:                                                                               
          (1)   prescribe  or   administer  for   preventive  and                                                               
          therapeutic purposes the following:   food, extracts of                                                               
          food,   vitamins,   minerals,  enzymes,   whole   gland                                                               
          substances,   botanical   medicines,  and   homeopathic                                                               
          (2) if authorized under regulations of the department,                                                                
          prescribe or administer legend or prescription drugs,                                                                 
     CHAIR WILSON told the members  that legend drugs are anti-biotic,                                                          
     drugs for high blood pressure,  diabetes, and most medications in                                                          
     general that can be refilled for  one year.  She asked if someone                                                          
     from the  Department of Health  and Social Services  is available                                                          
     to speak to this part of the bill.                                                                                         
     Number 1103                                                                                                                
     REPRESENTATIVE  SEATON  asked  if legend  or  prescription  drugs                                                          
     covers schedule three, four, and five drugs.                                                                               
     DR.  YOUNG  responded  that controlled  substances  represents  a                                                          
     relatively small part  of what is in a pharmacy.   Since 1971 the                                                          
     Controlled Substance  Act put  prescription drugs  into schedules                                                          
     so  that there  are schedules  one, two,  three, four,  and five.                                                          
     The schedules  are based on  the physiological  and psychological                                                          
     dependence.  Five being a  relatively minimal dependence compared                                                          
     to  one  which is  only  used  in  research and  in  governmental                                                          
     research.   Examples  of schedule  one drugs  is heroin,  LSD, or                                                          
     marijuana.   Schedule two drugs  are primarily narcotics  such as                                                          
     oxycodone.   Schedule  three, schedule  four,  and schedule  five                                                          
     drugs are  other controlled substances  as well, but they  are of                                                          
     less  physiological  and  psychological dependence.    Dr.  Young                                                          
     explained that  legend drugs is an  old term for the  legend that                                                          
     use to be on  the side of foods which was  instituted by the FDA.                                                          
     He clarified  that legend drugs  are prescription drugs  that are                                                          
     not controlled substances.                                                                                                 
     Number 1029                                                                                                                
     REPRESENTATIVE  SEATON asked  for  further  clarification on  the                                                          
     term "legend drugs" and asked if  it refers to all five scheduled                                                          
     DR.  YOUNG   replied  no.     He  told   the  members   that  his                                                          
     understanding  of this  terminology is  that this  language would                                                          
     not  allow naturopaths  to provide  any legend  drugs.   However,                                                          
     natural thyroid or anti-biotic could be prescribed.                                                                        
     CHAIR  WILSON noted  that  naturopaths would  not  be allowed  to                                                          
     prescribe those drugs unless the department authorizes it.                                                                 
     DR. YOUNG agreed with Chair Wilson's statement.                                                                            
     REPRESENTATIVE SEATON said he is  trying to ascertain whether the                                                          
     department's  authorization would  include schedule  three, four,                                                          
     and five  drugs.  He  asked if  legend or prescription  drugs are                                                          
     something other than schedules three, four and five drugs.                                                                 
     CHAIR WILSON  replied that prescription drugs  cover any schedule                                                          
     drug.   That  is  a  pretty broad  category  which could  include                                                          
     morphine.   She  commented that  she would  like to  discuss this                                                          
     point with the department.                                                                                                 
     Number 0935                                                                                                                
     REPRESENTATIVE  HOLM  clarified  that   without  an  FDA  license                                                          
     naturopaths cannot prescribe a prescription drug.                                                                          
     Number 0905                                                                                                                
     DR. YOUNG pointed to the original  bill and told the members that                                                          
     the  language was  changed.   He read  from HB  434, 23-LS1574\D,                                                          
     page 5, lines 16 and 17 as follows:                                                                                        
          (4) after becoming registered with the federal Drug                                                                   
          Enforcement Administration, prescribe a controlled                                                                    
     DR. YOUNG commented  that this language is no longer  in the bill                                                          
     that  is before  the committee.    The original  intent was  that                                                          
     naturopaths  could use  prescription  drugs,  but not  controlled                                                          
     substances,  he explained.    Dr.  Young added  that  there is  a                                                          
     misconception that prescription  drugs are controlled substances.                                                          
     He  summarized that  the language  was removed  from the  bill in                                                          
     order to  get it  out of  the House  Labor and  Commerce Standing                                                          
     CHAIR  WILSON  commented  that  by  removing  that  language  and                                                          
     leaving  prescription drugs  in the  bill it  allows a  doctor to                                                          
     write a prescription for anything.                                                                                         
     DR.  YOUNG clarified  that doctors  can only  write prescriptions                                                          
     for  controlled  substances  if he/she  has  a  Drug  Enforcement                                                          
     Administration (DEA) number.                                                                                               
     Number 0871                                                                                                                
     CHAIR WILSON  stated that a  DEA number  is required in  order to                                                          
 have insurance payment.  She questioned how it would be paid.                                                                  
     DR. YOUNG said  he has never come across that  problem because he                                                          
  has always worked in states where he has had a DEA license.                                                                   
     CHAIR WILSON  responded that whenever completing  insurance forms                                                          
     it  is necessary  to provide  the doctor's  DEA number.   Without                                                          
     that number, insurance will not pay for the prescription.                                                                  
     Number 0772                                                                                                                
     REPRESENTATIVE GATTO  pointed to page  5, lines 29 and  30, which                                                          
     reads as follows:                                                                                                          
          (7) use the title of "doctor of naturopathy,"                                                                         
          "naturopath," "naturopathic physician," or their                                                                      
     REPRESENTATIVE  GATTO commented  that  the  use of  "naturopathic                                                          
     physician"  became  a  contentious   point  in  House  Labor  and                                                          
     Commerce Standing Committee meeting.   The thought there was that                                                          
     the  term "physician"  means very  specific  things and  it is  a                                                          
     guarded term.  Representative Gatto  said just because someone is                                                          
     a doctor, does  not make him/her a physician.   He suggested that                                                          
     naturopaths would not want to use  the term because it clouds the                                                          
     Number 0683                                                                                                                
     REPRESENTATIVE HOLM  responded that Representative Gatto  makes a                                                          
     good  point.   However, he  offered  that the  term physician  in                                                          
     layman terms means healer.   There are different methodologies of                                                          
     healing.  There  are illness such as  psychosomatic illness which                                                          
     have  no traditional  ways  of treatment.    Those are  addressed                                                          
     through a  change in  attitude, and  can improve  an individual's                                                          
     health and  truly be considered physicians.   Representative Holm                                                          
     commented  that  nurse practitioners  are  every  bit as  much  a                                                          
     healer as  an allopathic  physician.   He commented  that usually                                                          
     when a person refers to a  physician it is a reference to someone                                                          
     who has  a doctorate degree versus  a nurse practitioner.   It is                                                          
     just one  level up, he  said.  Representative Holm  suggested the                                                          
     members might  wonder if the level  has risen to the  place where                                                          
     naturopaths  should  be call  physicians  or  true healers.    He                                                          
     stated that he believes it does.                                                                                           
     REPRESENTATIVE GATTO replied  that if this bill  becomes law then                                                          
     any  discipline  where  healing   occurs  would  merit  the  term                                                          
     physician.  He  questioned whether the legislature  wants to make                                                          
     the term  physician so broad  that it  cannot be used  anymore to                                                          
     identify what is now known as  a physician.  Currently, this term                                                          
     is  reserved  for  doctors   of  medicine,  Representative  Gatto                                                          
     Number 0547                                                                                                                
     DR.  YOUNG  agreed  that  Representative  Gatto  made  some  good                                                          
     points.  He explained that the  term "physic" is actually a Latin                                                          
     term  for nature.   He  pointed out  that chiropractors  are also                                                          
     called  chiropractic physicians.   Naturopathic  physicians is  a                                                          
     term   used   in   licensed    states   where   naturopaths   are                                                          
     differentiated from those who have  gone through a medical school                                                          
     and have  a doctorate in medicine,  so they are able  to refer to                                                          
     themselves as physicians.  He  explained that a naturopath can go                                                          
     into  any  unlicensed  state  and   hang  a  shingle  which  says                                                          
     "naturopath," but  could not  hang out a  sign that  says medical                                                          
     doctor  or physician.   This  bill  would protect  that term  for                                                          
     those who are practicing naturopathy as physicians.                                                                        
     Number 0457                                                                                                                
     REPRESENTATIVE   COGHILL   referred   to  AS   08.02.010,   under                                                          
     Miscellaneous Provisions, which says:                                                                                      
          Sec.     08.02.010.         Professional    designation                                                               
               (a) An acupuncturist licensed under AS 08.06, an                                                                 
          audiologist  or  speech-language  pathologist  licensed                                                               
          under AS  08.11, a  person licensed in  the state  as a                                                               
          chiropractor under  AS 08.20, a  professional counselor                                                               
          licensed under  AS 08.29, a  dentist under AS  08.36, a                                                               
          dietitian or  nutritionist licensed  under AS  08.38, a                                                               
          marital and  family therapist licensed under  AS 08.63,                                                               
          a medical  practitioner or osteopath under  AS 08.64, a                                                               
          direct-entry  midwife  certified   under  AS  08.65,  a                                                               
          registered nurse  under AS 08.68, an  optometrist under                                                               
          AS  08.72,  a licensed  pharmacist  under  AS 08.80,  a                                                               
          physical therapist  or occupational  therapist licensed                                                               
          under AS  08.84, a  psychologist under  AS 08.86,  or a                                                               
          clinical social  worker licensed under AS  08.95, shall                                                               
          use as professional  identification appropriate letters                                                               
          or  a title  after that  person's name  that represents                                                               
          the person's  specific field  of practice.  The letters                                                               
          or  title shall  appear  on all  signs, stationery,  or                                                               
          other  advertising  in  which   the  person  offers  or                                                               
          displays personal professional  services to the public.                                                               
          In  addition,  a  person engaged  in  the  practice  of                                                               
          medicine or  osteopathy as defined in  AS 08.64.380, or                                                               
          a person engaged in any  manner in the healing arts who                                                               
          diagnoses, treats, tests, or  counsels other persons in                                                               
          relation  to  human  health or  disease  and  uses  the                                                               
          letters "M.D." or the title  "doctor" or "physician" or                                                               
          another title  that tends  to show  that the  person is                                                               
          willing  or  qualified  to diagnose,  treat,  test,  or                                                               
          counsel another  person, shall  clarify the  letters or                                                               
          title    by   adding    the   appropriate    specialist                                                               
          designation,   if   any,   such   as   "dermatologist",                                                               
          "radiologist",  "audiologist",   "naturopath",  or  the                                                               
     REPRESENTATIVE COGHILL  clarified that under Alaska  statutes the                                                          
     term is very broad.                                                                                                        
     Number 0406                                                                                                                
     REPRESENTATIVE  SEATON referred  to the  Journal of  the American                                                          
     Medical  Association   (JAMA),  1998   article  where   there  is                                                          
     discussion about naturopathic physicians.   He said he thinks the                                                          
     distinction that he sees being  made through opposing comments is                                                          
     that  naturopath are  an unlicensed,  unregulated group;  whereas                                                          
     naturopathic  physicians  are  licensed  in state  and  have  the                                                          
     background  and training.   These  are two  different groups,  he                                                          
     emphasized.   For  example, currently  a naturopath  can practice                                                          
     right now  with no training,  but to be a  naturopathic physician                                                          
     an  individual must  meet the  licensing requirements.   That  is                                                          
     what is really being discussed  here, he commented.  He suggested                                                          
     that the  committee look  at the policy  call of  restricting the                                                          
     word  "naturopath" to  refer to  only naturopathic  physicians to                                                          
     prevent  the confusion  that has  occurred in  the testimony  the                                                          
     members have heard.                                                                                                        
     REPRESENTATIVE  COGHILL told  the  committee that  anyone who  is                                                          
     licensed  must have  the credentials.   He  added that  he has  a                                                          
     friend who  is called  doctor, but  he is  not a  medical doctor.                                                          
     Representative  Coghill questioned  what the  committee wants  to                                                          
     Number 0284                                                                                                                
     REPRESENTATIVE  CISSNA asked  the committee  to look  at page  3,                                                          
     lines 26 through 28, which reads as follows:                                                                               
          (B) addiction or severe dependency on alcohol or a                                                                    
          drug that impairs the applicant's or licensee's                                                                   
          ability to practice safely; or                                                                                    
          (C) physical or mental disability; or                                                                             
     REPRESENTATIVE  CISSNA pointed  out that  (C) does  not have  the                                                          
     same qualifying  terms after  the condition that  (B) does.   She                                                          
     pointed out that  there are physical or  mental disabilities that                                                          
     exist that would  not impair an individual's  ability to practice                                                          
     safely.   She suggested including  the same language in  (C) that                                                          
     is included in (B).                                                                                                        
     REPRESENTATIVE CISSNA moved Conceptual Amendment 1 as follows:                                                             
          On Page 3, Line 28, after "disability"                                                                                
          Insert:  "that impairs the applicant's or licensee's                                                                  
          ability to practice safely;"                                                                                          
     Number 0051                                                                                                                
     REPRESENTATIVE COGHILL objected for discussion purposes.                                                                   
     REPRESENTATIVE CISSNA told the members  that there are many kinds                                                          
     of disabilities, both  mental and physical, that would  not be an                                                          
     impairment.   Many  disabilities  do not  affect an  individual's                                                          
     competency in their professional lives.                                                                                    
     REPRESENTATIVE  GATTO agreed  with  Representative  Cissna.   For                                                          
     example,  if a  person has  had an  arm amputated,  it would  not                                                          
     affect that person's ability to practice safely.                                                                           
     TAPE 04-32, SIDE A                                                                                                       
     DR. YOUNG  commented that the Division  of Occupational Licensing                                                          
     will regulate naturopaths appropriately.   He pointed to the flow                                                          
     chart in the members' packet.                                                                                              
     REPRESENTATIVE   COGHILL  said   the  Division   of  Occupational                                                          
     Licensing will have  a hearing officer and if there  is an appeal                                                          
     it can go straight to the court.                                                                                           
     Number 0079                                                                                                                
     REPRESENTATIVE SEATON pointed  to page 3, lines 23  and 24, which                                                          
     reads as follows:                                                                                                          
          (6) is [CONTINUED TO PRACTICE AFTER BECOMING] unfit to                                                        
          practice naturopathic medicine due to                                                                             
     REPRESENTATIVE SEATON commented that he  is not really opposed to                                                          
     the   conceptual  amendment;   however,  he   said  he   believes                                                          
     Representative Cissna's  amendment is  already covered  under (6)                                                          
     where it  says "is  unfit to  practice naturopathic  medicine due                                                          
     to."   He clarified that this  language means that it  would have                                                          
     to first be  determined that the individual is  unfit to practice                                                          
     due to a physical or mental disability.                                                                                    
     Number 0131                                                                                                                
     REPRESENTATIVE CISSNA questioned why  the language is included in                                                          
     (B).  She withdrew her motion to adopt Conceptual Amendment 1.                                                             
     Number 0204                                                                                                                
     VERENA NILSSON  testified in  support of  HB 434.   She  told the                                                          
     members  that  she is  a  patient  of  Avanti Medical  Center  in                                                          
     Anchorage  and supports  the idea  of her  doctors being  able to                                                          
     write prescriptions  for medicines.   Ms. Nilsson  explained that                                                          
     she has had  medical problems for the last 12  years and had gone                                                          
     to traditional doctors;  however, it was not until she  went to a                                                          
     doctor of  naturopathy that  she discovered  what was  wrong with                                                          
     her.   She is  now taking hormones  in order to  get some  of the                                                          
     problems taken  care of.  It  is still a problem  for her because                                                          
     she  has  to  go  back  to  the  conventional  doctor  to  get  a                                                          
     prescription  written.   Ms. Nilsson  told the  members that  she                                                          
     would like all of her family go to naturopathic doctors.                                                                   
     Number 0346                                                                                                                
     STEVE COMPTON, M.D., Alaska Heart  Institute, testified on HB 434                                                          
     and  answered  questions  from  the members.    He  detailed  his                                                          
     training which consisted of four  years of college, four years of                                                          
     medical  school,  three  years of  internal  medicine  residency,                                                          
     three  years of  cardiology fellowship,  and another  year of  an                                                          
     electrophysiology fellowship.  Dr. Compton  told the members that                                                          
     he  finished training  at  the  age of  33,  then  taught at  the                                                          
     University  of  Utah for  four  years.    He  said he  is  pretty                                                          
  familiar with the research basis behind allopathic medicine.                                                                  
     DR. COMPTON told the members that  he is not sure the members are                                                          
     aware  of the  profound differences  between allopathic  medicine                                                          
     and alternative  medicine practices.   The single  most important                                                          
     thing that  defines allopathic  medicine is  that it  is evidence                                                          
     based  on scientific  methods, he  explained.   Dr. Compton  said                                                          
     what that means  is that if patients have a  clinical problem and                                                          
     are  considering  therapy  to  treat  that  problem  or  disease,                                                          
     scientific   methods  are   used  to   design  clinical   trials.                                                          
     Randomized  placebo controlled  trials are  used to  determine if                                                          
     therapy will  actually benefit a  patient, he said.   Dr. Compton                                                          
     told  the  members  that  using   this  approach  helps  them  in                                                          
     developing  new treatment  so patients  will  have longer  better                                                          
     Number 0526                                                                                                                
     DR.  COMPTON said  he believes  what is  not being  understood is                                                          
     that most  naturopathic practices  do not involve  the scientific                                                          
     method.  It tends to be more  of a faith-based practice.  He said                                                          
     that the judgment  that a treatment is effective  should be based                                                          
     on the quality of the  scientific evidence.  Naturopaths are very                                                          
     good at convincing  people that evidence exists  when it actually                                                          
 does not or convincing people to accept substandard evidence.                                                                  
     DR. COMPTON explained  that some of the  practices of naturopathy                                                          
     would  not  stand  up  to  scientific  scrutiny.    For  example,                                                          
     iridology, which says  that it can be determined  if something is                                                          
     wrong with  an individuals organs  by looking  at the color  of a                                                          
     person's  eyes.   He said  that this  is no  different than  palm                                                          
     reading.    Dr. Compton  told  the  members  that many  of  these                                                          
     practices would be  determined to be health  fraud if perpetrated                                                          
     by  medical  doctors.   He  added  that the  differences  between                                                          
     naturopathic medicine  and allopathic medicine has  not been over                                                          
     Number 0661                                                                                                                
     DR. COMPTON  said when  the Massachusetts  legislature considered                                                          
     licensing  naturopaths   three  years   ago  it  had   a  special                                                          
     commission working  for fifteen  months to study  the issue.   He                                                          
 read the conclusion of that study into the record as follows:                                                                  
          For an  occupation with  little semblance  of objective                                                               
          scientific and ethical  basis, licensure legitimizes an                                                               
          otherwise illegitimate  and dangerous activity.   It is                                                               
          the opinion  of the Massachusetts Medical  Society that                                                               
          it would  be irresponsible  and unconscionable  for the                                                               
          commission  to recommend  the licensure  of naturopathy                                                               
          in the Commonwealth of Massachusetts.                                                                                 
     DR. COMPTON said this is  an issue because prescription drugs can                                                          
     be dangerous.   It takes  a lot of  training and judgment  to use                                                          
     them.  He told the members  that he knows of no medical physician                                                          
     that learned  how to prescribe  medications during  their medical                                                          
     school years.  He added  comparing naturopath training to medical                                                          
     school  training  is  not  appropriate.    Prescription  training                                                          
     occurs  as an  intern, resident,  and fellow,  Dr. Compton  said.                                                          
     His  internship was  hardcore training  of  90 to  100 hours  per                                                          
     Number 0769                                                                                                                
     DR.   COMPTON  told   the  committee   that  two   patients  were                                                          
     hospitalized in Denver a couple  of weeks ago after being treated                                                          
     by a  licensed naturopath.   One was a 17  year old girl  who had                                                          
     cardiac  arrest after  having UV  blood irradiation.   This  is a                                                          
     procedure  where the  blood  was removed  from  the girl's  body,                                                          
     irradiated with ultra violet light  and then infused back in her.                                                          
     Another case in 2002, Lawrence  Perry, a naturopath, persuaded an                                                          
     8 year old  diabetic girl's parents to stop her  insulin.  Type I                                                          
     diabetes requires insulin for survival.   There have been several                                                          
     diabetic deaths, Dr. Compton said.                                                                                         
     DR.  COMPTON  shared  another  example   of  a  naturopath  named                                                          
     Reginald  Fenn who  in February  of  2004 was  jailed because  he                                                          
     persuaded parents of an 18-day  old baby with aortic stenosis not                                                          
     to  seek surgery.   He  told the  members the  only way  to treat                                                          
     aortic  stenosis is  through  surgical repair.    The child  died                                                          
     after  treating  it with  herbs  and  proclaiming the  child  was                                                          
     cured.    Dr.  Compton  continued  to  share  other  examples  of                                                          
     naturopathic malpractice  in which  patients were harmed.   After                                                          
     the death of a young girl  following a procedure of a naturopath,                                                          
     Alberta rescinded all licensing of naturopaths.                                                                            
     DR.  COMPTON  said  that  naturopaths   will  say  that  this  is                                                          
     mainstream medicine,  but it is  not.   He told the  members that                                                          
     they  will be  told  that naturopaths  have  these privileges  in                                                          
     other states, but that is not true.   He told the members that it                                                          
     will not be mentioned that  two states have outlawed naturopathy,                                                          
     and  only 11  states that  even bother  with licensure.   Whether                                                          
     licensure  should be  offered is  debatable and  he said,  in his                                                          
     opinion prescriptive authority is unconscionable.                                                                          
     Number 0905                                                                                                                
     DR. COMPTON  suggested that the members  look on the web  site of                                                          
     the American Association  of Naturopathic Physicians.   He read a                                                          
     statement from the web site into the record as follows:                                                                    
          Naturopathic practice excludes major surgery and the                                                                  
          use of synthetic drugs.                                                                                               
     DR.  COMPTON  commented if  the  members  are considering  giving                                                          
     naturopaths prescriptive  authority, what  is being  discussed is                                                          
     not naturopathy,  but medicine.   He advised the members  to talk                                                          
     to people who prescribe drugs  and understand them before passing                                                          
     a bill like this.   He told the members that  there are dozens of                                                          
     drugs  when used  aggressively can  hurt, maim,  or kill  people.                                                          
     The few  classes in  naturopathy schools  is unlikely  to provide                                                          
     the training to prescribe these drugs.                                                                                     
     DR.  COMPTON urged  the  members to  educate  themselves on  this                                                          
     issue and protect Alaskans.                                                                                                
     Number 1036                                                                                                                
     REPRESENTATIVE WOLF commented that  Dr. Compton made reference to                                                          
     iridology.  He  asked if a patient came to  him with yellow itchy                                                          
     eyes, what would be his first reaction.                                                                                    
     DR.  COMPTON responded  that he  believes Representative  Wolf is                                                          
     thinking  of  liver disease,  but  that  is  not  the iris.    He                                                          
     explained  that iridology  suggests that  by looking  at specific                                                          
     color patterns  of a person's  iris and a specific  diagnosis can                                                          
     be  made.   Dr. Compton  agreed with  Representative Wolf  that a                                                          
     person with  liver disease  can get  yellow discoloration  in the                                                          
     white part of the eyes called jaundice.                                                                                    
     DR.  COMPTON said  another questionable  practice is  homeopathy.                                                          
     Their premise  is to take whatever  active drug it is  believed a                                                          
     patient needs,  and repeatedly dilute  it down.  The  idea behind                                                          
     this is  that by doing this  the essence of the  drug is captured                                                          
     and the  more diluted  it is the  more powerful it  is.   He said                                                          
     this makes absolutely  no sense.  He pointed  out that homeopathy                                                          
     won't hurt  anyone, but it  is promoted as  a way to  make people                                                          
     better and  there is no  basis in physiology or  pharmacology for                                                          
     the effectiveness  of homeopathy, but  this is another  main stay                                                          
     of naturopathic medicine.  He  told the member that naturopath is                                                          
     not based  upon science.   Dr.  Compton told  the members  that a                                                          
     great way to  blow a lot of  money on health care is  to spend it                                                          
     on therapies that have not been proven to be effective.                                                                    
     Number 1212                                                                                                                
     REPRESENTATIVE  WOLF  told  Dr.  Compton  of  a  family  member's                                                          
     experience where after  seeing and MD for an  itchy condition she                                                          
     was told to put  on calamine lotion and soak in  Epson salts.  He                                                          
     took her  to a  naturopath who  immediately had  her get  a blood                                                          
     test.  It was  found that she had a tumor in her  bile duct.  She                                                          
     was within  a couple of months  of dying and it  was a naturopath                                                          
     that  saved her  life, he  stated.   The MD  did not  address her                                                          
     medical condition.                                                                                                         
     Number 1263                                                                                                                
     DR.  COMPTON replied  that he  thinks that  there is  a lot  that                                                          
     naturopaths can  offer.  A  lot can be said  for a good  diet and                                                          
  exercise.  He said well-trained physicians do miss diagnose.                                                                  
     REPRESENTATIVE WOLF clarified  that he is not  talking about diet                                                          
     and exercise.                                                                                                              
     DR. COMPTON  admitted that  there are  some naturopaths  that are                                                          
     very  sharp and  well intentioned.   There  are also  those whose                                                          
     training does not  include science.  In allopathic  medicine if a                                                          
     doctor were  to provide a  patient with  a treatment that  had no                                                          
     scientific  or rational  basis and  which had  not been  shown to                                                          
     help people,  it would be  considered malpractice, he said.   Dr.                                                          
     Compton  commented  that  Representative  Wolf's  mother  had  an                                                          
     unfortunate  experience,  but  believes that  another  allopathic                                                          
     doctor  would  have eventually  diagnosed  the  jaundice she  was                                                          
     REPRESENTATIVE  WOLF  asked  if  Dr.  Compton  is  familiar  with                                                          
     multiple  myeloma   and  asked   what  he  would   prescribe  for                                                          
     DR. COMPTON  responded that multiple  myeloma is  usually treated                                                          
     with chemotherapy.   He clarified  that he is a  cardiologist and                                                          
     has not  worked in  oncology in  over 12  years so  he is  not an                                                          
     expert in that field.                                                                                                      
     Number 1408                                                                                                                
     REPRESENTATIVE WOLF  said that several  treatment centers  in the                                                          
     Lower  48  are  now  saying  that  chemotherapy  will  not  touch                                                          
     myeloma.   He explained that  a dear  friend who passed  away had                                                          
     myeloma  and the  doctors wanted  to  prescribe chemotherapy  for                                                          
     DR. COMPTON replied  that this is an  especially vulnerable group                                                          
     of  people.    A  good  oncology practice  will  be  involved  in                                                          
     clinical trials.   The heart of  it is that therapies  for cancer                                                          
     are all pretty  miserable.  He said that if  a therapy is offered                                                          
     it  is  important  to  know  if  it works  or  not.    There  are                                                          
     nationwide protocols  to see if  survival rates can  be improved.                                                          
     A competent oncologist  can tell a patient what the  state of the                                                          
     art treatment is for whatever cancer a  person has.  He said if a                                                          
     cancer patient  goes to a  naturopath he/she could be  assured of                                                          
     getting better with an herb or  therapy, but there is no clinical                                                          
     or trial  data available for the  treatment.  All the  data comes                                                          
     from  testimonial  studies  or  belief systems,  he  added.    In                                                          
     conclusion he said  the strength of allopathic  medicine is based                                                          
     on scientific methods.   All therapies have a  potential for harm                                                          
     and it  is essential to  know that a therapy's  benefit outweighs                                                          
     the potential for harm, Dr. Compton stated.                                                                                
     Number 1589                                                                                                                
     CHAIR WILSON announced that the bill will be held in committee.                                                            
     There being no  further business before the  committee, the House                                                          
     Health, Education and Social  Services Standing Committee meeting                                                          
     was adjourned at 7:05 p.m.                                                                                                 

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