SB 134-PHARMACY BENEFITS MANAGER;3RD PARTY ADMIN                                                                    
                                                                                                                                
2:02:41 PM                                                                                                                    
CHAIR  BJORKMAN   reconvened  the   meeting  and   announced  the                                                               
consideration  of  SENATE  BILL  NO.  134  "An  Act  relating  to                                                               
pharmacy    benefits    managers;   relating    to    third-party                                                               
administrators; and providing for an effective date."                                                                           
                                                                                                                                
2:03:12 PM                                                                                                                    
JANE   ROHR,  Staff,   Senator   Cathy   Giessel,  Alaska   State                                                               
Legislature, Juneau, Alaska, presented  the summary and sectional                                                               
analysis for SB 134. She read the following summary:                                                                            
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     SB  134  relates  to  Third  Party  Administrators  and                                                                    
     Pharmacy  Benefit Mangers;  these agencies  do business                                                                    
     as  intermediaries  between   insurance  companies  and                                                                    
     pharmacies    or     consumers.    Some     of    their                                                                    
     responsibilities include  negotiating medication prices                                                                    
     and processing  claims. Current statute  requires these                                                                    
     agencies  to  be registered  which  only  allows for  a                                                                    
     basic level  of recognition.  The purpose of  this bill                                                                    
     is  to  require  transparency  and  accountability  for                                                                    
     third party  administers and pharmacy  benefit managers                                                                    
     operating in the  State of Alaska by  requiring them to                                                                    
     be licensed  and subject to  oversight by  the division                                                                    
     of insurance.                                                                                                              
                                                                                                                                
2:04:16 PM                                                                                                                    
MS. ROHR read a paraphrased version of the sectional analysis                                                                   
for SB 134:                                                                                                                     
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Sections  1 through  4 give  the division  of insurance                                                                  
     the  ability to  examine  these  business entities  and                                                                    
     make TPAs responsible for  paying costs associated with                                                                    
     a market conduct examination.                                                                                              
                                                                                                                                
     Sections  5  through  7   make  conforming  changes  by                                                                  
     replacing  the term  "registered"  with "licensed"  and                                                                    
     includes TPAs and PBMs in  the list of agencies subject                                                                    
     to the  requirements in the statute  entitled "licensed                                                                    
     required"                                                                                                                  
                                                                                                                                
     Section 8  gives an exemption for  a compliance officer                                                                  
     from a TPA or  PBM to be able to take  an exam before a                                                                    
     license is issued to that entity.                                                                                          
                                                                                                                                
     Section  9 prohibits  TPAs and  PBMs from  operating in                                                                  
     the state with an expired license.                                                                                         
                                                                                                                                
     Sections  10 through  24 require  designated compliance                                                                  
     officers  to be  licensed, and  require exempt  TPAs to                                                                    
     file a  certification with the director  annually on or                                                                    
                      st                                                                                                        
     before February 1,   as well as make conforming changes                                                                    
     by replacing "registered" with "licensed"                                                                                  
                                                                                                                                
     Section 25  requires all TPAs  who operate in  state be                                                                  
     licensed to operate in the state of Alaska                                                                                 
                                                                                                                              
     Sections  26   and  27  makes  conforming   changes  by                                                                  
     replacing "registered" with "licensed"                                                                                     
                                                                                                                                
     Section  28 outlines  new qualifications,  disclosures,                                                                  
     application  requirements,  and required  notifications                                                                    
     for  licensees. Failure  to meet  the minimum  standard                                                                    
     may  result in  denial,  revocation,  or suspension  of                                                                    
     license.                                                                                                                   
                                                                                                                                
     Sections  29 and  30 allows  the director  to establish                                                                  
     fees  for  licensure and  renewal  that  will be  self-                                                                    
      supporting to the division by covering the costs of                                                                       
    salary,    benefits,    technology,   and    continuing                                                                     
     education.                                                                                                               
                                                                                                                              
2:06:12 PM                                                                                                                    
MS. ROHR continued with the sectional analysis for SB 134:                                                                      
                                                                                                                              
      Section 31 amends the definition of a PBM to include                                                                    
       "regardless of ownership of the pharmacy benefits                                                                        
     manager"                                                                                                                   
                                                                                                                                
       Section 32 repeals an unnecessary provision around                                                                     
     "registration"                                                                                                             
                                                                                                                                
     Section 33 sets an effective date January 1, 2026                                                                        
                                                                                                                                
2:06:47 PM                                                                                                                    
[CHAIR BJORKMAN announced invited testimony on SB 134.]                                                                         
                                                                                                                                
2:07:01 PM                                                                                                                    
HEATHER  CARPENTER, Director,  Division of  Insurance, Department                                                               
of   Commerce,  Community   and  Economic   Development  (DCCED),                                                               
Anchorage,  Alaska,  testified  by   invitation  on  SB  134  and                                                               
explained that last year's House  Bill 226 increased oversight of                                                               
pharmacy   benefit   managers   (PBMs)  by   requiring   separate                                                               
registration,  but  the  division  discovered  they  lacked  full                                                               
authority  to  implement  it.  SB   134  now  moves  toward  full                                                               
licensure,  clarifies that  PBMs  are subject  to market  conduct                                                               
examinations,   closes  oversight   loopholes,  and   strengthens                                                               
consumer protections.                                                                                                           
                                                                                                                                
2:08:59 PM                                                                                                                    
CHAIR BJORKMAN held SB 134 in committee.