HB 218-PRESCRIPTION DRUG SPECIALTY TIERS  3:28:58 PM CHAIR KELLER announced that the next order of business would be HOUSE BILL NO. 218 "An Act prohibiting an insurer from using a drug formulary system of specialty tiers under certain circumstances." 3:29:57 PM REPRESENTATIVE HERRON moved to report HB 218 out of committee with individual recommendations and the accompanying fiscal notes. 3:30:06 PM REPRESENTATIVE SEATON objected for discussion. He directed attention to a letter from Jack C. McRae, Senior Vice President, Premera Blue Cross Blue Shield of Alaska, dated February 14, 2012, [Included in members' packets] which stated concerns for duplicate regulations with proposed HB 218. He declared that although he supported proposed HB 218, he wanted this testimony from the insurance industry on the record. 3:31:23 PM CHAIR KELLER reported that proposed HB 218 would change the notification for terms applicable to specialty pharmacy tiers from 30 days to 90 days, while the Patient Protection and Affordable Care Act would change this notification time frame to 60 days. He agreed with Representative Seaton that proposed HB 218 could conflict with the federal law. 3:32:09 PM SHEELA TALLMAN, Manager, Legislative Affairs, Premera Blue Cross Blue Shield of Alaska, stated that Premera was in opposition to proposed HB 218 in its present form. She declared that Premera desired to maintain transparency to the consumers by providing detailed, accurate information about the benefits, application and renewals, co-payments, cost sharing, and other out of pocket costs at least 30 days prior to any new terms. She added that this was also applicable to the specialty pharmacy tiers and any changes to the formularies when generic drugs were introduced, causing a shift for the brand drug to a different tier. She declared that Premera was concerned with the 90 day notification time frame, as it would impact application and renewal cycles, as well as increase the overall specialty drug spending and premiums. She pointed out that the proposed bill was duplicative with the federal health care reform requirement. She clarified that Premera was required, as of September 23, 2012, to provide specific information to its members about coverage and benefits, including pharmacy benefits with a breakdown of the cost sharing for each tier. She noted that any change to any of the plans required a notification at least 60 days prior to the modification. She declared opposition to any additional notices. 3:36:07 PM REPRESENTATIVE HERRON asked for a monetary value to the expected increase to the premiums due to any change in notification requirements. MS. TALLMAN replied that she did not have that specific information. 3:36:32 PM REPRESENTATIVE SEATON, directing attention to page 2, line 23 of the proposed bill, paraphrased from the section: ... specialty drug tiers may impose cost sharing, deductibles for a unique category or specialty tier prescription drug that exceed the dollar amount of the cost sharing, but only if the insurer notifies within the 90 days. He asked to clarify that this did not say that there could not be a charge for specialty drug tiers, but that it specifically stated that there can be differing charges for specialty drug tiers. He stated that there just had to be notification 90 days in advance. 3:38:10 PM CHAIR KELLER agreed with the clarification. 3:38:49 PM REPRESENTATIVE SEATON removed his objection. 3:38:59 PM There being no further objection, HB 218 was reported from the House Health and Social Services Standing Committee.