Legislature(2017 - 2018)SENATE FINANCE 532

02/05/2018 09:00 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSSB 37(FIN) Out of Committee
Moved SB 126 Out of Committee
+ Bills Previously Heard/Scheduled: TELECONFERENCED
Moved CSSSSB 4(FIN) Out of Committee
SENATE BILL NO. 37                                                                                                            
     "An Act relating to the  Board of Pharmacy; relating to                                                                    
     the  licensing  and  inspection of  certain  facilities                                                                    
     located  outside the  state;  relating  to drug  supply                                                                    
     chain security;  and creating  a position  of executive                                                                    
     administrator for the Board of Pharmacy."                                                                                  
9:11:45 AM                                                                                                                    
SENATOR  CATHY GIESSEL,  SPONSOR,  discussed  the bill.  She                                                                    
noted that  the bill  would help the  Board of  Pharmacy but                                                                    
assuring the  safe practices of  pharmacists and  the safety                                                                    
of  medication entering  the state.  She  offered a  Sponsor                                                                    
     Passage of  Senate Bill  37 will  create a  more secure                                                                    
     drug  supply  chain  by   allowing  for  licensing  and                                                                    
     inspection  of wholesale  drug distributors  outside of                                                                    
     the  state.  Currently,  Alaska   is  one  of  the  few                                                                    
     remaining  states that  does  not license  out-of-state                                                                    
     wholesale drug distributors.  With laws and regulations                                                                    
     varying from state to  state, licensing an out-of-state                                                                    
     wholesale  distributor  can  prove arduous.  With  this                                                                    
     legislation,  Alaska  can   take  action  to  eliminate                                                                    
     wholesalers  looking for  loopholes  in the  regulatory                                                                    
     system and ensure  that out-of-state applicants seeking                                                                    
     licensure comply  with the  same regulations  as Alaska                                                                    
     This  legislation is  critical and  necessary to  bring                                                                    
     Alaska into  compliance with the Drug  Quality Security                                                                    
     Act (DQSA) and create a new license category for "Out-                                                                     
     of-State Wholesale  Drug Distributors."  Currently, the                                                                    
     Board of Pharmacy has no  authority to regulate out-of-                                                                    
     state  wholesale   drug  distributors   or  third-party                                                                    
     logistic providers (3PLs).                                                                                                 
     SB 37  would ensure  safe delivery of  controlled, non-                                                                    
     counterfeit  medications  to   Alaskans.  SB  37  would                                                                    
     require   that   any    out-of-state   wholesale   drug                                                                    
     distributor  or  outsourcing facility  follow  specific                                                                    
     guidelines including  obtaining a  license, authorizing                                                                    
     inspection of the facility by  a designee of the board,                                                                    
     and  appointing an  agent before  shipping, mailing  or                                                                    
     delivering  prescription drugs  to  a  licensee in  the                                                                    
     state or advertising in the state.                                                                                         
     Additionally,  this  legislation  allows the  Board  of                                                                    
     Pharmacy  to create  a new  position titled  "Executive                                                                    
     Administrator"   to  serve   as   a   liaison  to   the                                                                    
     legislative   and    executive   branches    of   state                                                                    
     government,  the   media,  and  other   state  pharmacy                                                                    
     boards,  as  well  as   implement  board  statutes  and                                                                    
    regulations, and aid in managing current licensees.                                                                         
Senator  Giessel stated  that  the fiscal  note was  receipt                                                                    
services. She added  that a recent audit  had been completed                                                                    
on  the  board,  which  currently  had  $275,000  in  excess                                                                    
revenues from  licensing fees that  would pay for  the const                                                                    
of the range 23 position identified in the bill.                                                                                
9:16:50 AM                                                                                                                    
Co-Chair MacKinnon  asked whether Alaska was  the only state                                                                    
that lacked the provision for out-of-state drug providers.                                                                      
Senator Giessel  believed that there  were 4  states without                                                                    
the provision.                                                                                                                  
9:17:22 AM                                                                                                                    
JANE  CONWAY, STAFF,  SENATOR CATHY  GIESSEL, discussed  the                                                                    
Sectional Analysis (copy on file):                                                                                              
     Section  1:  Amends AS  08.80.030(b)  by  adding a  new                                                                  
     (14):   Establishes   qualifications  and   duties   of                                                                  
     executive  administrator.  Executive  administrator  is                                                                    
     delegated   authority  in   order   to  conduct   board                                                                    
     Section  2:  Amends AS  08.80.030(b)  by  adding a  new                                                                  
     (15): Amends  and allows  licensing and  inspection for                                                                  
     out-of-state  drug distributors,  third-party logistics                                                                    
     providers and outsourcing facilities;                                                                                      
     Section  3:  Amends  AS  08.80.030   by  adding  a  new                                                                  
     AS   08.80.030(c):   Specifications   for   facilities,                                                                  
     equipment,  personnel, and  procedures  for control  of                                                                    
     drugs in compliance with the  federal Drug Supply Chain                                                                    
     Security Act.                                                                                                              
     Section  4:  Amends  AS  08.80.157   by  adding  a  new                                                                  
     (k): Requires wholesale  drug distributors, third-party                                                                  
     logistics   providers,   and   outsourcing   facilities                                                                    
     outside the state under AS 08.80.159, to be licensed.                                                                      
    Section 5: Amends AS 08.80 by adding a new section:                                                                       
     Sec.   08.80.159:  Requires   that  a   wholesale  drug                                                                  
     distributor,   third  party   logistics  provider,   or                                                                    
     outsourcing facility  have a  license in  Alaska before                                                                    
     shipping, mailing, or  delivering prescription drugs to                                                                    
     a licensee  in the state  or before advertising  in the                                                                    
     state, an agent  must be appointed in the  state, and a                                                                    
     designee of the board  must authorize inspection of the                                                                    
     An outsourcing facility, in  addition, must comply with                                                                    
     the federal Drug Quality and  Security Act of 2013. The                                                                    
     board may  require an inspection of  facilities located                                                                    
     outside of  the state,  approve a designee  to inspect.                                                                    
     The  board shall  adopt regulations  to implement  this                                                                    
     Section 6:  Amends AS  08.80 by  adding new  section to                                                                  
     Article 2:                                                                                                               
     Sec.  08.80.270:   Allows  the   Board  to   create  an                                                                  
     executive administrator position.  Defines the role and                                                                    
     salary range of the executive administrator.                                                                               
     Section  7:  Amends  AS  08.80.480   by  adding  a  new                                                                  
     AS 08.80.480(37): Defines "outsourcing facility"                                                                         
     AS  08.80.480(38):   Defines  "third   party  logistics                                                                    
     Section 8: Amends AS 39.25.120(c)(7) by adding                                                                           
     (Q) Board of Pharmacy                                                                                                      
     Sections 9, 10, 11:                                                                                                      
     Provides transition language and effective date                                                                            
9:20:00 AM                                                                                                                    
Senator  Micciche  looked  at  Section  8.  He  asked  about                                                                    
television  commercials that  advertised  for  drugs in  the                                                                    
Ms.  Conway replied  that the  language was  directed toward                                                                    
the  licensing   for  the  wholesalers   to  reach   out  to                                                                    
pharmacists   to   promote   their   drugs   and   not   for                                                                    
advertisements for drugs on television.                                                                                         
9:21:23 AM                                                                                                                    
RICHARD HOLT,  VICE CHAIR, ALASKA  BOARD OF  PHARMACY, EAGLE                                                                    
RIVER  (via   teleconference),  agreed  with   Ms.  Conway's                                                                    
9:21:43 AM                                                                                                                    
Mr.  Holt  added  that the  legislation  had  many  positive                                                                    
aspects. He believed that the  bill would ultimately protect                                                                    
the health  and safety of  Alaskans. He reiterated  that the                                                                    
bill  would  have  no  financial  impact  to  Tribal  Health                                                                    
facility purchasing.                                                                                                            
9:24:01 AM                                                                                                                    
LEIF HOLM, CHAIR, ALASKA BOARD  OF PHARMACY, NORTH POLE (via                                                                    
teleconference),  testified in  support of  the legislation.                                                                    
He  echoed  previous  testimony. He  stated  that  licensing                                                                    
wholesalers  in  Alaska  was important  for  the  safety  of                                                                    
Alaskans.   He  said   that  it   could  be   difficult  for                                                                    
pharmacists to  know who they  were doing business  with and                                                                    
the kinds of medications  those businesses were offering. He                                                                    
felt that  the addition  of the administrative  position was                                                                    
long  overdue. He  reiterated the  non-fiscal impact  of the                                                                    
fiscal note.                                                                                                                    
9:28:36 AM                                                                                                                    
BARRY  CHRISTENSEN,  LEGISLATIVE CO-CHAIR,  ALASKA  PHARMACY                                                                    
ASSOCIATION,  KETCHIKAN   (via  teleconference),   spoke  in                                                                    
strong support of the bill.                                                                                                     
9:29:22 AM                                                                                                                    
Senator  Micciche said  that he  had  further questions  for                                                                    
9:29:33 AM                                                                                                                    
DERIK   WHITE,  PHARMACIST,   SITKA  (via   teleconference),                                                                    
testified in  support of  the legislation.  He spoke  of the                                                                    
importance of  regualtion of pharmaceutical  ingredients and                                                                    
9:31:26 AM                                                                                                                    
Senator  Stevens asked  whether  the bill  would affect  the                                                                    
many  Alaskans  who  received  their  prescriptions  through                                                                    
Tribal Health and Veteran Associations.                                                                                         
Senator Geissel replied in the negative.                                                                                        
9:32:33 AM                                                                                                                    
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
9:32:56 AM                                                                                                                    
Vice-Chair   Bishop  MOVED   to  ADOPT   Amendment  1,   30-                                                                    
LS0191\R.1, Radford, 2/2/18 (copy on file):                                                                                     
     Page 6, line 25:                                                                                                           
          Delete "2018                                                                                                          
          Insert "2019"                                                                                                         
Co-Chair MacKinnon OBJECTED for discussion.                                                                                     
9:33:06 AM                                                                                                                    
Co-Chair MacKinnon explained the amendment.                                                                                     
WITHDREW the OBJECTION. There being  NO OBJECTION, it was so                                                                    
9:33:25 AM                                                                                                                    
Vice-Chair   Bishop   adopt  Amendment   2,   30-LS0191\R.2,                                                                    
Radford, 2/2/18 (copy on file):                                                                                                 
     Page 5, line 16, following "shall":                                                                                        
          Insert "(1)"                                                                                                          
     Page 5, line 17, following "board":                                                                                        
          Insert"; and                                                                                                          
               (2) serve as a liaison to the legislative                                                                        
               and executive branches of state government,                                                                      
               the media, and other state pharmacy boards"                                                                      
Co-Chair MacKinnon OBJECTED for discussion.                                                                                     
Co-Chair MacKinnon explained the amendment.                                                                                     
Co-Chair MacKinnon  WITHDREW the  OBJECTION. There  being NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
9:34:30 AM                                                                                                                    
Senator Giessel supported the amendments.                                                                                       
9:35:04 AM                                                                                                                    
JANEY  MCCULLOUGH,  DIRECTOR,  CORPORATIONS,  BUSINESS,  AND                                                                    
PROFESSIONAL  LICENSING, DEPARTMENT  OF COMMERCE,  COMMUNITY                                                                    
AND  ECONOMIC DEVELOPMENT,  related that  she was  available                                                                    
for questions.                                                                                                                  
9:35:12 AM                                                                                                                    
Senator Micciche  asked Ms. McCullough  to explain  that the                                                                    
bill would be of no cost to the state.                                                                                          
Ms.  McCullough explained  that statute  required any  costs                                                                    
associated with  regulating an  occupation would  be covered                                                                    
by licensing fees for said occupation.                                                                                          
9:36:40 AM                                                                                                                    
Ms. McCullough explained that an increase in revenue would                                                                      
be offset any costs.                                                                                                            
9:37:56 AM                                                                                                                    
Co-Chair MacKinnon asked Ms. McCullough to discuss the                                                                          
fiscal note in further detail.                                                                                                  
Ms. McCullough read from the analysis:                                                                                          
     If  the  bill passes  the  following  expenses will  be                                                                    
     incurred:  Personal  Services:  $136.5  (one  permanent                                                                    
     full-time executive administrator, range 23)                                                                               
     Travel:  $6.0 (one  executive  administrator to  attend                                                                    
     four board meetings per year)                                                                                              
     Services:  $16.7  (legal  costs to  amend  regulations,                                                                    
     printing,  and   postage  in  the  first   year)  $15.0                                                                    
     (statewide   core  services   RSAs:  Human   Resources,                                                                    
     financial   support,  mail,   software  licenses,   and                                                                    
     department support costs)                                                                                                  
     Commodities:  $10.0  (computer, office  furniture,  and                                                                    
     other one-time needs in the first year)                                                                                  
9:38:18 AM                                                                                                                    
Vice-Chair Bishop expressed support for the legislation.                                                                        
9:38:46 AM                                                                                                                    
Vice-Chair Bishop MOVED to REPORT CS SB 37(FIN) out of                                                                          
committee with individual recommendations and attached                                                                          
fiscal notes. There being NO OBJECTION, it was so ordered.                                                                      
CSSB 37(FIN) was REPORTED out of committee with a "do pass"                                                                     
recommendation and with one new fiscal note from Department                                                                     
of Commerce, Community and Economic Development.                                                                                
9:39:13 AM                                                                                                                    
AT EASE                                                                                                                         
9:40:45 AM                                                                                                                    

Document Name Date/Time Subjects
SB 4 CSSSSB 4 work draft version U.pdf SFIN 2/5/2018 9:00:00 AM
SB 4
SB 37 Amendment 1 MacKinnon R.1 (002).pdf SFIN 2/5/2018 9:00:00 AM
SB 37
SB 37 Amendment 2 Mackinnon R.2 (002).pdf SFIN 2/5/2018 9:00:00 AM
SB 37
SB 126 Sectional Analysis.pdf SFIN 2/5/2018 9:00:00 AM
SB 126
SB 126 Testimony.pdf SFIN 2/5/2018 9:00:00 AM
SB 126
SB 126 Sponsor Statement.pdf SFIN 2/5/2018 9:00:00 AM
SB 126