HB 382-INSULIN COVERAGE:INSURANCE;MEDICAID  4:32:34 PM CO-CHAIR FIELDS announced that the next order of business would be HOUSE BILL NO. 382, "An Act relating to insurance coverage for pharmacy services." [Before the committee was CSHB 382(HSS).] 4:32:39 PM REPRESENTATIVE SNYDER, as prime sponsor, stated that CSHB 382(HSS) could have immediate and meaningful impacts to the pocketbooks of Alaskans because it addresses the astronomically high cost of insulin. In 1996, she related, the list price for a vial of insulin was $21; today that list price is about $300 - four times the cost that would be expected based on inflation alone. She said this puts many folks with diabetes in a situation where they are making choices about what they can spend their limited household income on when they need to purchase insulin plus pay rent or buy food. REPRESENTATIVE SNYDER specified that about 49,000 Alaskans have been diagnosed with diabetes and an additional 15,000 have diabetes but don't know it yet. Another 5,000 Alaskans are diagnosed with diabetes every year, making it a growing problem. About 34 percent of Alaska's adult population, about 182,000 people, have pre-diabetes. So, she added, this bill has the potential to impact a significant proportion of Alaska's population. REPRESENTATIVE SNYDER pointed out that about 20 states now have similar legislation. In Minnesota, two health insurers decided independently to cap insulin costs at $25 a month for their patients, and Blue Cross/Blue Shield has announced a $0 co-pay cap on insulin for its patients. So, she continued, capping the co-pay is becoming an important mitigation measure for Americans. Medicare Part D plans agreed to cap insulin at $35 per month starting in 2021. This bill is an opportunity for Alaskans to directly feel this same benefit, she stressed. Regarding whether capping co-pays could result in increased insurance premiums for everyone, she cited the 2017 Milliman Study which found that the cost to provide the benefit would be about 70-95 cents per member per year. That doesn't account for the potential to reduce premiums overall, Representative Snyder continued, because better managed diabetes through improved access to insulin decreases healthcare costs associated with the complications of poorly managed diabetes, such as amputations. She further noted that in 2021 the state of Washington voted to cap its insulin co-pays at $100 a month, which resulted in an average proposed rate decrease of almost 2 percent within that year. Kentucky introduced an insulin co-pay cap [at a cost to provide the benefit] of 7-24 cents per person per month on fully insured policies, and California is similar. JAMES HOLZENBERG, Staff, Representative Liz Snyder, Alaska State Legislature, during the hearing on HB 382, explained the change made in CSHB 382(HSS) on behalf of Representative Snyder, prime sponsor. He said the change was on page 2, line 6, Section 2, coverage for treatment of diabetes, where the proposed co-pay cap was brought down to $35. REPRESENTATIVE SNYDER added that the bill is an opportunity to make a small change to something that affects many Alaskans, and it will have a long-term beneficial impact for all Alaskans regardless of whether they experience diabetes themselves. CO-CHAIR FIELDS noted that $35 is consistent with other states and pending federal legislation, hence the change. 4:39:09 PM REPRESENTATIVE MCCARTY asked whether insulin could be purchased in bulk to bring down the price, as is being done in Utah. REPRESENTATIVE SNYDER replied that this opportunity has not yet been explored by the Division of Insurance, but it is something that can be pursued. She said the Utah program has been going for a couple years but there is not yet data on its success. She said she shares Representative McCarty's interest in whether this would be a good option for Alaska. 4:40:53 PM LORI WING-HEIER, Director, Division of Insurance, Alaska Department of Commerce, Community, and Economic Development (DCCED), replied that the House Health and Social Services Standing Committee asked the division about the Vaccine Assessment Council. The council, she explained, is run through the Department of Health and Social Services (DHSS), and the state buys vaccines in bulk and then the providers access the vaccines from the state to get the lowest cost possible for vaccines for children, infants, and adults. She related that DHSS has responded that it could look at the Vaccine Assessment Council much like looking at the Utah program, but it is not addressed in this legislation and would need to be taken up in another bill at another date to either mirror what Utah has done or look at Alaska's own resources. REPRESENTATIVE MCCARTY inquired whether DHSS could do this, provided insulin could be purchased in bulk, rather than wait for a statute change. MS. WING-HEIER deferred to DHSS to answer the question. She offered her belief that when DHSS was before the other committee the department said it did need the legislation and would need to do an analysis to see what it would take to bring it into Alaska as a bulk purchase. 4:42:43 PM REPRESENTATIVE KAUFMAN inquired about the root cause for high insulin prices. REPRESENTATIVE SNYDER replied that while there are different forms of insulin, different ways of delivering it, and different manufacturers, there are no cheaper generic options for insulin. So, she said, it opens the door for pharmaceutical companies to charge ever increasing prices, which has happened over the past several decades because individuals need insulin to survive. REPRESENTATIVE KAUFMAN surmised that "if we're not actually affecting the price, then what we're left with is distributing the cost across the system." REPRESENTATIVE SNYDER stated that this bill is not where she would like to stop with this issue. She agreed that initially it is distributing the cost but that various studies across multiple states show it is very minimal and is a net savings to everyone due to lower costs associated with hospitalizations and adverse impacts associated with uncontrolled diabetes. She argued that passing legislation on co-pay will motivate the insurance companies to put pressure on the pharmaceutical companies to drive down those costs. She related that there has not been pushback on the bill except for one letter from the Association for Health Insurance Providers (AHIP), which is in the committee packet. She said the letter identifies a range of other things that can also be done, with which she agrees, such as improving drug pricing transparency and banning pay for delay. She explained that banning pay for delay has to do with companies paying other pharmaceutical companies to delay the release of generic options. However, she continued, that doesn't really apply here for diabetes, so there are some challenging recommendations in this single letter that aren't quite transparent or accurate. CO-CHAIR FIELDS noted that he asked about root cause when the bill was before the House Health & Social Services Standing Committee. He said the pharmaceutical companies are engaged in price gouging and he understands the administration is exploring action through the attorney general's office because the price increases far exceed anything that could possibly be attributed to production costs. He expressed his support for investigation and follow-up by the attorney general. REPRESENTATIVE KAUFMAN submitted that capping the co-pay and spreading the cost across all insurance subscribers does not result in downward pressure because the insurance company is flexible and can share those costs and it doesn't transmit back to the insulin manufacturer. He asked whether a mechanism could be put into the bill so it would not be a cost sharing bill but would instead apply downward pressure. REPRESENTATIVE SNYDER answered that she would look forward to exploring such an amendment with Representative Kaufman either in this committee or ahead of the floor. CO-CHAIR SPOHNHOLZ offered her appreciation for the sentiment in Representative Kaufman's questions. She related that when the bill was before the House Health and Social Services Standing Committee it was learned that this is a case of making sure that people are getting their insulin and not rationing this life saving medication. She pointed out that in addition to the cost savings of 70-95 cents per member per year identified in the 2017 Milliman Study, there is a net increase in productivity of the Americans who receive access to this care and not having amputations, becoming blind, or having ulcers. REPRESENTATIVE SNYDER confirmed that the statements by Co-Chair Spohnholz are in the ballpark. She said data shows that irregular insulin use can increase in-patient hospital cost by up to 41 percent. A common issue associated with poorly managed diabetes, she explained, is foot ulcers. The charge per foot ulcer can be up to $17,000 per ulcer, which if not treated can lead to amputation, a horrendous and horrendously expensive experience. Another complication, she continued, is end stage renal disease and the price tag for complications associated with that. She said she agrees that there is an additional opportunity to deal with the high prices coming out of the pharmaceutical industry itself, but that a co-pay cap can have an initial first and quick reduction in expenses to both the individual with diabetes and those sharing a plan. 4:50:35 PM CO-CHAIR FIELDS opened public testimony on CSHB 382(HSS). 4:50:47 PM LAURA KELLER, American Diabetes Association (ADA), testified in support of CSHB 382(HSS). She confirmed that many levers can be pulled throughout the chain to address the cost of medications like insulin. However, she advised that as a person with type 1 diabetes, there is no other option and people are rationing and they are dying because they do not have access to the lifesaving medication. MS. KELLER said ADA is urging the committee to act now because this helps people with insurance, which is a great first step that makes a difference in people's lives. She stated that the Utah scenario would be a great secondary thing to do and would impact people who don't have health insurance. She related that a non-partisan study in California showed that with an insulin co-pay cap a state can reduce diabetes related hospitalizations by 10 percent in the first couple years after the bill's passage, and there will be other savings to the state. She stressed that people with diabetes need the insulin, there is no other option. She pointed out that the insulin used in insulin pumps ranges from $3-$7 a vial, which includes a company making back its research and development and marketing. So, she said, this situation is different than many other medications. 4:52:40 PM CO-CHAIR FIELDS closed public testimony after ascertaining that no one else wished to testify. 4:52:51 PM REPRESENTATIVE MCCARTY offered his understanding that a medication goes generic after being around for seven years. He asked whether there is generic insulin given that insulin has been around a long time. MS. KELLER replied that there is not generic insulin on the market currently. She explained that the companies which make insulin have rebranded some of their insulin to be considered a generic. While it is the exact same product and the exact same manufacturers, she continued, those generic medications are priced very similarly and therefore still not a co-pay of $25. REPRESENTATIVE MCCARTY referenced the US Food and Drug Administration (FDA) and asked whether cheaper insulin can be found outside the US. MS. KELLER responded that the FDA is looking at some "bio- similars" and other options of potentially generic insulins, but nothing has been approved into the market yet. She said the insulin under discussion can be purchased in other countries, such as Canada and Mexico, and they are the exact same brand and formula at a much-reduced cost. But, she explained, health insurance is currently unable to provide those insulins in that way because the FDA and the federal government have not approved that through proper channels. REPRESENTATIVE MCCARTY said he has heard that the State of Utah sends employees to Mexico for medication. MS. KELLER offered her belief that that is correct but said she is unfamiliar with how Utah does that and the cost that Utah is paying. She noted that she worked with the representative for the Insulin Utah Purchasing Program which allows people to purchase for the same price as the employee price in the state of Utah. That program has been very successful, she continued, and it is a completely online program. CO-CHAIR FIELDS said he hopes the Department of Health and Social Services will continue examining how to obtain insulin directly from Canada and bypass "pharma" to get lower prices. 4:55:59 PM REPRESENTATIVE SPOHNHOLZ moved to report CSHB 382(HSS) out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 382(HSS) was moved out of the House Labor and Commerce Standing Committee.