HB 68 - BOARD OF PHARMACY Number 0065 CHAIRMAN ROKEBERG announced the committee's first order of business is HB 68, "An Act extending the termination date of the Board of Pharmacy to June 30, 2005; and providing for an effective date." Number 0123 CATHERINE REARDON, Director, Division of Occupational Licensing, Department of Commerce and Economic Development, came forward to testify in support of HB 68. She stated, "I am here today to speak in support of the extension of the Board of Pharmacy, which my division staffs and assists. The Board of Pharmacy has achieved a lot during the last sunset period. They worked hard ... to support legislation that rewrote the pharmacy statute, and then follow it up ... with a comprehensive rewrite of all of their regulations, which was quite a large project, and the purpose of all that was to try to bring the pharmacies' laws up to date with modern drug and business practices. I think it's an example of a situation in which a board is very important, it would have been very difficult for my staff, with our lack of technical knowledge, to have carried out such a project. You really need to know a lot about pharmacy to effectively regulate that profession. The sunset audit does recommend extending the board for this length of time, and had very little to suggest in the way of changes, and this board, like all of our licensing programs, is financially self-sufficient in that the license fees cover the costs of regulation. So, I do have a zero fiscal note for this bill, at the same time acknowledging that the ongoing costs built into the budget already are approximately $61,000 a year." Number 0270 REPRESENTATIVE MURKOWSKI said, "Apparently there was a requirement that you state your height, your weight, your hair color, and all that, and in the recommendation it indicated that there was reasonable cause to request this information, because it's important when licensing individuals working with controlled substances." She asked, "Do they do ... criminal background checks, or what's the extent of the investigation?" MS. REARDON responded that they do not do fingerprinting or criminal background checks at the time of licensure. She said that they do take a photograph of the person and have it notarized, in order to verify that the person and the photograph match. She noted they do ask questions on the initial application about someone's criminal background, but they do not verify the answers unless someone were to answer yes indicating that they were convicted of something. Ms. Reardon commented that the issue has come up recently with regards to medical licenses; the desire to have physician applicants fingerprinted. The Federal Bureau of Investigation (FBI) will only provide criminal background information if there is a state law specifically saying that we need to get FBI background checks. This means, if the legislature wants that to take place, they will initiate a statute change. Number 0440 REPRESENTATIVE MURKOWSKI commented that as a lawyer for the state you are fingerprinted and there are character investigations, which is basically a criminal background check. If the state is going to require it of lawyers, than we might want to consider requiring it of those handling controlled substances. MS. REARDON said that she doesn't know whether the Drug Enforcement Administration (DEA) is doing a criminal background check before issuing the DEA license. The division does require pharmacists to have DEA licenses, so there is a backup in that profession, but that would not be the case for most of the division's professions. CHAIRMAN ROKEBERG noted the chairman of the Board of Pharmacy is participating via teleconference and the committee may want to direct the more technical questions toward him. REPRESENTATIVE CISSNA wondered if there has ever been any problems with controlled substances and pharmacists. Number 0564 MS. REARDON noted she would defer this question to the chairman of the Board of Pharmacy. However she said she suspects in the country as a whole there have probably been problems with theft or misuse of drugs in that profession, just as there would be in any profession with that kind of access to amphetamines, et cetera. Ms. Reardon stated she has looked into the issue with regards to physicians because of questions from legislators and citizens. She said there has not been any history of a public complaint about the quality of a practice and then later discovery of an undisclosed criminal background. There does not seem to be a connection between "bad doctors" and some secret undisclosed criminal background. She said that she is not sure if the lack of criminal background checks with regards to physicians has contributed to any public harm. REPRESENTATIVE HALCRO stated, "There seems to be some disagreement with one of the recommendations - Prior Year Recommendation Number 5 - where it states in the report that it encourages several organizations to establish fee levels that are more reflective of the regulatory costs of the occupation [Audit Report, August 25, 1998, Division of Legislative Audit]. And in Commissioner Sedwick's [Deborah B. Sedwick, Commissioner, Department of Commerce and Economic Development] response, dated October 27, 1998, she states, 'We don't concur, we don't agree with this.'" Representative Halcro asked, "Can you give me a summary on what's happening with this?" Number 0707 MS. REARDON replied, "This a recommendation that you will probably see appear in a lot of audits to come, because it's a difference of opinion that isn't playing out just in the pharmacy board, but in all of our programs. ... Alaska Statute 08.01.065(c) says that the Department of Commerce will set license fees so that the revenue generated from an occupation is approximately equal to the regulatory costs." Ms. Reardon continued, "We've been audited several times on this topic, and in the early '90s an audit indicated that the use of the term 'occupation' meant that not just a board area, like Board of Pharmacy or [State] Medical Board, but the actual occupations within the board -- in pharmacy there are pharmacy technicians, and facilities and pharmacists. In the Medical Board there'd be physician assistants, paramedics, physicians, osteopaths, podiatrists -- that it needed to be carried down to that level. That was an audit, actually, by the Office of Management and Budget, I believe, and in response, the division did begin tracking costs at the occupation level, not just the program board level. ... But we have not strictly applied the law to always ensure that an occupation, versus a board or program, is covering its own costs." Ms. Reardon continued, "I've been open about that with future auditors and the legislature, in that we have a 100 and some different occupations within our 36, 37 board areas. ... When you get down to having self-sufficiency at that level, you have a lot more occupations, a lot more groups, that have fewer than 50 people - some fewer than 20 people - to pay, and when you really make a group that small pay its own regulatory costs, you get extremely volatile fees. Maybe someone appeals their license denial - in a group of only 20 people, or 10 people in some of these cases - it costs us $3 [$3,000] or $4,000 in legal fees to take that appeal through. You've got so few people to spread that cost to, their fees might ... become 2,000 bucks each ... for one period and then drop back down." Number 0871 MS. REARDON further stated, "It's bad enough as it is with self-sufficiency at the board or program level, with fees like the psychology fees ... going up or down. At some point we thought to exacerbate that by having 120 fees shooting up and down, and their deficits and surpluses rolling forward from the previous two years continually, that when a profession or a board seemed amenable to a little bit of sharing going on within their program, we weren't strictly ... saying, 'No, you may not share.' For example, in the Medical Board it seems that the medical community accepts the idea that the physicians will pay a little bit more, so that the paramedics can pay a little bit less than they cost. As long as everyone is pretty much getting along, we haven't pushed it and said, 'No, you may not share.' When, in a profession, there isn't that kind of getting along within a board area, and someone pushes, then, quite honestly, I usually get into a situation where I go, 'Okay, we have to lower the boom and do something more strict,' and then we do. But the auditors, I think, are looking at us and saying, 'It might be a perfectly good public policy ... decision to let programs pay for themselves, but it's not how we read the strict letter of the law. Stop it.' We're just worried about what that really means for your constituents and our licensees. How many $1,000 fees we're going to get. That's a long answer, but that's where the 'push and shove' is coming." REPRESENTATIVE CISSNA asked if there would be a difference in terms of the cost of administering those 100 different professions if the administration is broken down to those 100 different professions. Number 0987 MS. REARDON replied, "Yes, I believe there would be, in that part of it is the tracking of the roll forward of deficits and surpluses. We've been tracking that by program, by board area, so you're 50,000 in the hole, you're 120,000 ahead, and we credit that; but when you try to do that for 120 [professions], it becomes a bigger challenge to be doing that every year. ... Another part of this ... that we have an honest difference of opinion with the auditors -- ... we track our revenue for a profession based on licensing statistics. If we licensed 200 pharmacists, which we know out of our database, we know how much money we got for that whole board area in a year. When we get checks in the mail, we don't actually credit them right then to the occupation, we just credit them to the board area. Then we divvy up that revenue within a board area, based on how many people we licensed, by using our statistics out of our computer. The auditors would prefer that as we open up each check, we right then decide which of the sub-occupations it goes to, that slows up our paper work and getting those checks in the bank. So, we respectfully suggest that our statistical data is good enough, but they disagree in the audit ...." Number 1064 CHAIRMAN ROKEBERG stated, "This is an ongoing battle we have with the department, and something the chair is - and the old-timers here are very familiar with. ... I would just like to point out that there is a bill that's going to be introduced regarding the Real Estate Commission Surety Fund and the licensing fee, which will take up this very issue in a more generic sense ...." MS. REARDON noted she would be happy to answer questions in another setting from any of the committee members regarding this fee setting issue. REPRESENTATIVE HARRIS questioned if Ms. Reardon was familiar with the Peter Crack (ph) case, a Dillingham pharmacist. MS. REARDON replied she was vaguely familiar. Number 1113 REPRESENTATIVE HARRIS commented that Mr. Crack (ph) was a pharmacist who had been stealing drugs through the pharmacy and giving them to boys for favors. He asked, "Do you have any idea how that somebody could get away with that for that long ... without being detected?" MS. REARDON responded that she would need to review the case in order to give a good answer. REPRESENTATIVE HARRIS stated he thought it was an ongoing thing for a long time. He indicated he hopes the system would have enough checks and balances in it, since they are dealing with fairly heavy drugs, to discover other similar situations if those situations are occurring. MS. REARDON said she believed there was first criminal action against the pharmacist and then the Board of Pharmacy was able to take licensing action very promptly. She thought the situation involving Mr. Crack (ph) was uncovered through more of a criminal investigation by the police in that town; the board hadn't received any complaints, et cetera, about him. REPRESENTATIVE HARRIS asked, "Aren't certain drugs through ... the department, aren't they supposed to be monitored on a quarterly or yearly basis, or something, to keep control of them?" MS. REARDON asked if she could defer that question to the pharmacy board chair. CHAIRMAN ROKEBERG answered in the affirmative. He thanked Ms. Reardon, asking her to stand by in case any follow-up is needed. He indicated the committee would take teleconference testimony from the chairman of the Board of Pharmacy, Paul Gionet. Number 1231 PAUL GIONET, Chairman, Board of Pharmacy, testified via teleconference from Anchorage. He stated, "Regarding the Crack (ph) case and others similar to that -- ... the Crack (ph) case was, as Catherine Reardon pointed out, ... brought to us ... from a criminal side and then we were able to get Mr. Crack (ph) to suspend his license and voluntarily do that rather quickly. As far as drug usage amongst pharmacists, we do not monitor that. That would have to be staffed by a team of investigators full time. Usually in other states there are actually pharmacists as police agents, and there just is not the amount of pharmacies or pharmacists or moneys available in the state of Alaska to do that. The DEA does not require the Boards of Pharmacies to monitor drug activity; they take a stance of finding out about it if it occurs on the criminal side, for the most part." CHAIRMAN ROKEBERG asked Mr. Gionet if he had any additional comments. Number 1299 MR. GIONET stated, "I did want to mention [to] the first person asking the question about the height, weight and color of eyes - that is an optional question on the application that we have, any applicant does not have to answer those questions. There was another question about do we verify the photographs, and, currently, as an applicant comes and takes the jurisprudence exam in front of a board member, we do verify their drivers' licenses against their photographs." Mr. Gionet noted that concluded his comments, stating, "As Ms. Reardon stated, we did quite a few projects in the last four to six years, rewriting a lot of our statutes and regulations. We also wrote regulations regarding sterile pharmaceuticals and home infusions. We're rewriting regulations on nuclear pharmacy and ... we also licensed technicians in the last year or two. ... We do require licensing of out-of-state pharmacies, such as mail-order pharmacies, and we're also looking at the issue of Internet pharmacies, of which is hitting in the news now, and we're going to have to deal with this as a safety issue in Alaska." Number 1369 REPRESENTATIVE SANDERS asked, "To your knowledge, with Mr. Crack (ph) or with anyone else who has been prosecuted over pharmaceuticals in Alaska, do you know if a background check on any of those people would have turned up anything in their history that might have prevented them from getting in that position if we had been doing so?" MR. GIONET answered, "I don't believe that we do any background criminal checks, but if they have any licensing actions against them in any other state, that's reported to us before we issue their license. I believe Mr. Crack (ph) had had his license for quite a few years here in Alaska, and until a complaint is brought to us by the public, either on the criminal side or to the board, or to occupational licensing - to the investigators - then there's really no way of us monitoring that or finding that out. But as far as someone perhaps practicing in another state with problems with their licenses - those are brought to our attention on a fairly regular basis. ... I've been on the board six years, [and] I'm sure at least ten of those have been brought to the Board of Pharmacy, and they have been acted upon, and many licenses have been denied because of that." REPRESENTATIVE SANDERS questioned, "Then do you feel that we should look into background checks, as a legislature -- into passing something that would authorize you to do background checks?" MR. GIONET replied he thought it would be a good idea, but it depends on the cost to the state and if investigators are willing to do some of that. He stated it would protect the public more. Referring to the Crack (ph) case, Mr. Gionet said he believed Mr. Crack's (ph) actions began while Mr. Crack (ph) was in Alaska and there weren't too many ways for the board to find out, unfortunately, until something happened. Number 1475 CHAIRMAN ROKEBERG clarified that background checks would not be a cost to the state, but a cost to Mr. Gionet and his colleagues. REPRESENTATIVE MURKOWSKI asked Mr. Gionet if he would define nuclear pharmacy. MR. GIONET replied, "It actually has been occurring for quite a few years. If you go into any hospital and you have any radiation treatment for cancer, you're being treated with nuclear radio-particles -- and, actually in the last two years, there is an official nuclear pharmacy that was established in Alaska. ... Most of their statutes and regulations are included on a federal level because they are regulated by federal agencies, so we're actually excited that we can write some regulations to incorporate the federal regulations for the state of Alaska. But this has been something that goes on in every hospital, practically, throughout the state of Alaska and has always been monitored by radiologists or radiologist technician[s], and there are nuclear pharmacies all over the country. ... It's something that will help the public safety." REPRESENTATIVE HARRIS asked Mr. Gionet if people who are not pharmacists or doctors are allowed to dispense drugs in rural Alaska. Number 1570 MR. GIONET stated, "No, they are not allowed. There are a few instances under the Medical Board where physicians may, nurse practitioners, and physician assistants, but otherwise no one is allowed to dispense drugs. There are some still, I believe, rural health aides under the federal program with the Natives that are allowed to do things either under the federal law or under the Medical Board of Alaska." REPRESENTATIVE HARRIS asked if the Board of Pharmacy monitors that activity. MS. GIONET replied, "We do not have authorization by statute to monitor any of that activity regarding the Medical Board or the federal program." CHAIRMAN ROKEBERG asked, "Can you describe, to the committee, what the technical licensing is of the tech [technician]?" Number 1616 MR. GIONET noted, "[In] any normal retail pharmacy in any state there are always assistants to the pharmacists. ... In the last probably 10 to 20 years ... we're getting more in tune to people that are having alcohol abuse, and drug abuse, and mental problems, and [we're] starting to encourage them to get help, and, if they don't, have licensing action against them. There are so many assistants in the pharmacy realm that we felt it necessary to license these people in order to take some actions against them in case we had some technicians that were in trouble. ... Last June, we did license the technicians, and since then we've already been able to suspend one license of a technician that was in a rural area abusing narcotics along with the pharmacist. Had we not had the technicians licensed, no action would have been taken against that person, and they could just keep going on." CHAIRMAN ROKEBERG asked Mr. Gionet if he believes the Board of Pharmacy has the ability to control the pharmacy in the state's Pioneers' Home system [Alaska Pioneers' Homes, Division of Alaska Longevity Programs, Department of Administration], and if the board needs any legislative authority, or his feelings. Number 1693 MR. GIONET commented he would defer the question to Ms. Reardon. He stated it is an active case with the investigators, they have some sealed documents with the Board of Pharmacy, and he thinks the board has been requested not to discuss the issue. CHAIRMAN ROKEBERG commented, "Obviously you have jurisdiction ... if it's being investigated." MR. GIONET responded, "It's being investigated, but the investigators won't tell us yet, because they're actively investigating it, what we're even to rule on. ... I'm assuming maybe we'll have some part of it, but it's total secrecy because we act as jurors in the case." Number 1723 CHAIRMAN ROKEBERG asked Mr. Gionet if he was aware of any prohibitions that disallow the board from jurisdiction in a state institution. MR. GIONET answered in the negative. CHAIRMAN ROKEBERG thanked Mr. Gionet for his testimony and asked if there were any further questions or testimony. There being none, the chairman stated the public hearing on HB 68 is closed. Number 1774 REPRESENTATIVE HALCRO made a motion to move HB 68 out of committee with the attached zero fiscal note and individual recommendations. There being no objections, HB 68 moved out of the House Labor and Commerce Standing Committee.