HB 226-PHARMACIES/PHARMACISTS/BENEFITS MANAGERS  4:29:05 PM VICE CHAIR JUSTIN RUFFRIDGE announced that the next order of business would be HOUSE BILL NO. 226, "An Act relating to the Board of Pharmacy; relating to insurance; relating to pharmacies; relating to pharmacists; relating to pharmacy benefits managers; relating to patient choice of pharmacy; and providing for an effective date." [Before the committee was CSHB 226(HSS).] 4:29:13 PM REPRESENTATIVE SADDLER moved to adopt the proposed committee substitute (CS) for HB 226, Version 33-LS0955\D, Wallace, 4/20/24, as a working document. VICE CHAIR JUSTIN RUFFRIDGE objected. 4:29:45 PM MS. HACKENMILLER, on behalf of Representative Sumner, prime sponsor, read the explanation of changes in version D [included in committee packet], which read as follows [original punctuation provided]: Title Amends title removing reference to the Board of Pharmacy. Ver. R Section 1 removed. Section 1 Ver. R Section 2, no change. Section 2 Ver. R Section 3, no change. Section 3 Ver. R Section 4, no change. Section 4 Ver. R Section 5, no change. Section 5 Ver. R Section 6, no change. Section 6 Ver. R Section 7, no change. AS 21.27.945 Drug pricing list; procedural requirements: Section 7 Modifies Ver. R Section 8, AS 21.27.945(a) Modifies (a)(5), reinstating language from the original bill draft (Ver. B) regarding list prices. Section 8 Ver. R Section 9, no change. Section 9 Modifies Ver. R Section 10, AS 21.27.945(d) Modifies (d)(3)(A), removing second phrase "from 60 percent or more of the pharmaceutical wholesalers doing business in the state." Section 10 Modifies Ver. R Section 11. Removes Patient choice of pharmacy (previous new section 21.27.951), following sections renumbered. Sec. 21.27.951. Patient access to clinician- administered drugs. Previous section 21.27.952 with modifications: Modifies (a)(2) removing "or reduce payment to a provider" on line 20. Removes (a)(3); replaces with new language. New (a)(3) states that an insurer or PBM may not require a pharmacy to dispense a clinician-administered drug to a covered person to then transport it to a provider for administration. Removes (a)(5) and (a)(6), following paragraphs renumbered. Section 11 Modifies Ver. R Section 12. Removes Sec. 21.27.960 Coverage for dispensing fees. Sec. 21.27.975. Definitions. Removes the definition of "independent pharmacy," previous paragraph (8). Section 12 Modifies Ver. R Section 13, amends 21.36.520 - Unfair trade practices. Removes Ver. R (e)(1), following paragraphs renumbered. Removes reference to statutes in renumbered (e)(1) through (e)(3). Removes Ver. R (e)(8), following paragraphs renumbered. Removes Ver. R (e)(10), following paragraphs renumbered. Removes (f)(7) "mail-order pharmacy." Section 13 Ver. R Section 14, no change. Section 14 Ver. R Section 15, no change. Section 15 Modifies Ver. R Section 16. Updates referenced sections. Section 16 Ver. R Section 17, no change. Section 17 Modifies Ver. R Section 18. Updates referenced transition regulations. Section 18 Modifies Ver. R Section 19. Updates referenced section and changes effective date from July 1, 2025, to January 1, 2026. REPRESENTATIVE FIELDS asked Steve Ramos to speak to Version D. 4:34:20 PM REPRESENTATIVE FIELDS shared his understanding that Version D eliminates the ability to do spread pricing within in Title 21 plans; however, he asked whether AlaskaCare could still use spread pricing. STEVE RAMOS, Acting Chief Health Administrator, Division of Retirement & Benefits, Department of Administration, answered yes; however, that's not the intent. REPRESENTATIVE FIELDS said if the provision of spread pricing were prohibited, per Version D, would it preserve the ability for AlaskaCare to use spread pricing. MR. RAMOS said his answer remained the same. 4:36:11 PM REPRESENTATIVE PRAX asked how Version D would affect the plans Mr. Ramos manages for the state. MR. RAMOS said it would not affect [the division]. He explained that the provisions in the previous version of bill that would have added expenses were removed. In addition, the plans regulated under AS 39.30.090-AS 39.30.091 were removed, so the bill no longer applies to the division. 4:37:29 PM REPRESENTATIVE FIELDS sought to confirm that both AlaskaCare and Arisa plans could continue to use spread pricing if they wished with no direct impact on cost. MS. WING-HEIER answered yes. She explained that the only plans that could be touched by Version D are plans regulated under Title 21. 4:38:18 PM REPRESENTATIVE PRAX asked how much of the market would be impacted by the bill. MS. WING-HEIER answered 15 percent of the total population of Alaska. 4:38:56 PM VICE CHAIR JUSTIN RUFFRIDGE asked Ms. Wing-Heier to speak to the fiscal note from DCCED. MS. WING-HEIER said there was a concern that the bill may not make it to the floor before the end of session due to its finance referrals and large fiscal notes; consequently, there were discussions about removing all fiscal notes, which was accomplished in Version D. She noted that the following important provisions to protect independent pharmacists remained in the bill: prohibiting spread pricing and brown and white bagging; requiring pharmacists to register; the fiduciary section of the bill; and the unfair trade practices that provide important consumer protections. Anything to do with dispensing fees or reimbursements were removed from the bill, as well as references to AlaskaCare, Arisa plans, and government entities. 4:40:33 PM SYLVAN ROBB, Director, Division of Corporations, Business, and Professional Licensing, Department of Commerce, Community & Economic Development, said the Version D removes sections of the bill that would impact the division, resulting in a zero fiscal note. 4:41:09 PM REPRESENTATIVE PRAX expressed concern that Version D would increase prices for 15 percent of the market. MS. HACKENMILLER emphasized the importance of the bill, adding that this would not be the last the committee sees of reform to the pharmacy benefit managers. VICE CHAIR RUFFRIDGE declared a conflict of interest, as a pharmacist and a pharmacy owner in Alaska. He opined that guardrails are necessary and rejected the idea that the bill would increase the cost of healthcare. He stated that Version D would set sideboards and help Alaskans get their medications in a timeframe that works for them, which is particularly important at a time when pharmacies are being eroded in the state. 4:45:15 PM REPRESENTATIVE PRAX empathized with pharmacies and reiterated that only 15 percent of the market would be dealt with. He shared his belief that providers and insurers need to have a conversation to figure out what works for everyone. REPRESENTATIVE FIELDS said passing the bill would teach the legislature by providing insight into 15 percent of the market. He acknowledged the complexity of the problem and opined the further action could be considered after observing a limited part of the market. 4:47:17 PM REPRESENTATIVE SADDLER moved to report CSHB 226, Version 33- LS0955\D, Wallace, 4/20/24, out of committee with individual recommendations and the accompanying fiscal notes. no objection, bill advanced. There being no objection, CSHB 226(L&C) was reported from the House Labor and Commerce Standing Committee.