Insurance & Commerce - Senate

Sorry about that chair sees a quorum we're going to start with the two concurrence is of house amendments we'll start with Senate bill five ninety four Senator Dismang this is your bill with or thank you Mr so the first amendment was due to a an unpublished spring court ruling that but clarified some language that we were trying to clarify the bill so that's what the first amendment does a member number one The Amendment number two there was just to catch my understanding with the some language that need to be cleaned up and so that was also that it doesn't change the overall intent of the bill with the exception of just clarifying that Supreme Court ruling that was again published related unlawful detainers. All right any questions for the senator Dismang. On the amendment. Seeing none. Got a motion to adopt the member number one we have a motion to adopt Amendment number one from Saturday's nine DO I have a second Senator Irvin for the second is there any discussion. Seeing no discussion all in favor please say aye. Same opposed. St is it do we just make it a concurrence or what what is the what we need to do here we need to drop both or no I think. Just enter okay then. Hang on the second. If he has been adopted I wasn't thinking of the bill we're just doing a current okay yeah so I would like to with withdraw that a withdrawal that motion to adopt the amendment without objection that amend that motion is withdrawn yeah and like to make a motion to concur in Senate bill five ninety four all right did everybody follow all of that parliamentary procedure there we've got that motion now on the concurrence only and we have a second from Senator Irvin. Should be because of both amendments were adopted at the bill yes okay you have both amendments all right any other discussion. I think we've got a clarified in straight is that correct all in favor say aye. Opposed both amendments Arkansas both concurrence is. Stand will will transmit to the House to the floor let's move on to Senate bill six ninety three senator. Six ninety nine. Okay. All right we have a motion to concur but I haven't introduced the amendment yet so Senator Hammer are you ready. You can do it right there from your desk if you'd like and then a proper time. Six thirty nine. Amendment of concurrence in front of the committee and that and I think Senator Irvin has given me a motion all except the proper time do you want to present this sure real quick I added an amendment to I think she should around the corner there to accommodate you there you M. S. with regards to making sure that has prior authorization on it I'm agreeable to that we've done it for others so it just got overlooked so that's what it does and I appreciate a good vote okay the motion at a proper time the chair now recognizes a motion to I have a second. I have a second from senator Hammer is there any discussion. Saying none all in favor please say aye. Opposed. The concurrence of the amendment passes we will now move on. Two I need to do one line one thing prior to this I need you in your packets is house bill. Nineteen twenty six and without objection I need a motion to hear that bill it is come off the house floor Senator English and representative Meeks are here to present that bill is there any objection to hearing that bill today. If you need a minute to look through the concurrence it's a national standard but we will determine whether you want to hear it via the motion. You're recognized for questions Senator Elliot. So when use as a national and national standard are you saying we are adopting the national stand standard as legislation in our state is that by the don't want to get ahead of the sponsor but that's what I've been told there there into okay all right. That's the case I don't. So without objection. The chair needs a motion to hear that House Bill. And what except that motion at this time. I have a motion from Senator Elliot do I have a second to hear this bill. I have a second from Senator Ingram all in favor of hearing this bill please stay I. Posed we'll put that at the bottom of the calendar. You're good with that. All right now let's move on to it back to the calendar house bill one eight eight one representative gray. Introduce yourself and you may proceed with presenting your bill you are recognized thank you Mr chairman showed gray District sixty two House Bill eighteen eighty one is regarding three for the three for national three forty B. program it's available in all states federal program that allows eligible hospitals and certain clinics are contracted clinics access discounted prices for brand name drugs. most of these clinics and hospitals are found in under served or un an insured areas under insured areas of most a lot of times in our rural areas. And it prevents middle manner pharmacy benefit managers from reducing reimbursement ten discriminating against these Arkansas hospitals and clinics simply because they participate in these programs the original intent of the three forty B. program and the discounts under federal law was for the savings in the program to stay in the local communities not in the pockets of anyone else such as the PBMs this law if passed helps to protect that intent the last thing this does one of the last things is does the legislation also prohibits the manufacturers from discriminating or blocking the hospitals and clinics from partnering with local pharmacies to provide these discounts to their patients in their communities and so what we started to see is we've got manufacturers that are essentially the three forty B. program has grown over the past decade quite a bit and so we're seeing some manufacturers and PBMs decide to discriminate or not send to medications to three forty B. pharmacies a minute in an attempt to keep their pricing. At the original rate not at the discounted rate. I'll be glad to take questions I've got John Vinson with the pharmacy association here and Lycian and Spencer with the community health centers as well Bills you are bring them to the end of the table now only if there's questions that. committee members representative gray has presented her bill are there any questions Senator LA you're recognized for a question. Representative gray I I'm just curious about whether I'll be how the PBMs justify what they're doing I'm assuming they have something that they are saying is there is a reason they can report on quote discrimination that we see John wants to come up with answers that okay all right. Please identify yourself for the record and then you may proceed with the question answer. Thank you very much thanks for the question my name's John Vinson. With the Arkansas pharmacists association and Senator Elliot the my answer to that would be there is not a reason for them to do that what's unjustified there's not a justified reason it's another example of they see dollars on the table if they can insert themselves into grabbing some of those dollars for profit margins for themselves that's what they do and this bill would prevent them from doing that. well I'm just going to more specifically I. Because I I was curious about what it maybe this is not a question for you members for somebody else how do you even begin how do you justify thinking that's a good policy because I just kind of wanted to have a well rounded Sense of where they coming from I think this is okay because I just. Something I want you no no conversations with anybody about we're doing this because. No okay I just take it or leave it and hope you know they just offer take it or leave it contract terms and then they'll put new language and that is in the provider manual or in the contract that just says because you're at three forty B. entity we're going to reduce your reimbursement yeah I have my biases here of course and I just a. Like to be on the side of being fair and see if anybody has a better angel if not discovered yet so I guess I still have thank you Senator Irvin you're recognized for a question thank you service in on page three of the bill it talks about how I third party shall not exclude a pharmacy from a network on the basis of the pharmacies participation in three forty B. drug pricing that we have examples of that where pharmacies have been excluded from networks. yes so. And there's a little bit of semantics involved with that but the. They are necessarily excluded but they exclude or don't allow the manufactures the contracting entities to get the discounts if they contract with a community pharmacy or multiple community pharmacies and yes there have been examples of that particularly II why will it was the first to do it back in the fall of twenty twenty in the middle of the pandemic and this would make them unable to do that and to comply with the federal law and federal rules. Are there any other questions for. Senator Hammer you're recognized for a question thank you Mr you know in the long ongoing debate that we've had down here with regards to PBMs in the laws that we've you know past try to balance it without it going too far the other direction how does this bill balance it so that it's an equal level playing field between the PBMs the local pharmacies and does not tipped scales too far the other direction so I'll answer that one so all we're trying to do right now is ensure that what's in federal law actually stays and works in Arkansas we're not adjusting anything that's not been doing been done for the last twenty years I think there's some lawsuits in place already with some of these practices that I would call deceptive or unfair trade practices across the nation so what we're trying to do is ensure that the three forty B. program remains the same as it has in Arkansas so we're not changing anything pretty trying to keep it the same follow Mr follow granted so this bill is bringing state law in alignment with already existing federal law in if that is correct are you saying that there pending lawsuits. Utilizing the federal law to justify those lawsuits. So it's my understanding there lawsuits where decisions have been made unilaterally by the manufacturers to kind of serving go around at three forty B. program intentions and that's what those lawsuits or about so we're just trying to ensure that we keep that three forty B. framework here in Arkansas okay thank you. Are there any other questions for representative gray. Senator Irvin you're recognized it's not necessarily a question that on page three requiring a patient to use the mail order pharmacy I mean I know personally that that has occurred but I mean you probably have examples of that as well where patients are being now required to use a mail order pharmacy because dictated by their policy is that correct you might wanna live right just on that one point sure thank you senator Ervin said yes and there are. there's another existing law from nineteen eighty seven the on the same subject with with regard to employers and this is the put consistent language in the insurance code that would match that as it relates to three forty so yes and there are some programs out there that if either of required mandatory mail order or they've made it so financially incentivized to the patient that they feel like they have to use mandatory mail order. Any other questions Senator Hickey you're recognized for a question yeah just just along those lines as it was brought up on page two it's is that those that of Tanis signed waiver from a patient before allowing the use of mail order pharmacy. Is that. Several or all. I understand I guess I understand the one former patient the patient's not wired to use a mail order pharmacy. But then it's almost and if there was some Mr reading that right. Or but if I miss reading that skews me. That that patients going to there have to be in a signed waiver before they can even use one is that correct. It's yes Sir it would and it's language consistent with another bill that we've that's down house and right now the to have concurrent language for proper patient pharmacist relationship because there have been attempts by mail order pharmacies to treat patients into given the consent it through the use of an after they've downloaded their medications to an app and then it they don't even know they've consented to use that medication or that excuse me that mail order pharmacy so this would established a clear written consent before they have their medicine sent to a pharmacy and feel that they didn't even know they were attempting to use. What I think about that but let me let me go one step further than just because I don't unless it's in here and I've missed it Justin this quick reading of the so is that going to be on each prescription or is the patient or they're going to be said are they going to be able to say no I'm always I always want to use a. Mailorder always don't want to use it. Because I see on the back it's saying that the insurance commissioners go to promulgate the rules for this so how are they going to promulgate those rules so I'm supportive our organization is supportive of once the patients establish they want to use that pharmacy then there's no more additional worker sign consents needed but it's that first time to establish that relationship to ensure that they really did intend to use that pharmacy. You agree with that representative great have yet they acted like I'll give you an example my dad had a heart of elation done about six months ago and have good funds medication finally found it at a pharmacy thirty miles from his house in about three days a week not picked it up in about three days later my my mother gets a phone call that they're going to start shipping the medication from express scripts so I guess my point is like there using the data they get on claim that their clients own claims data to the and say they're going to use their own pharmacy so essentially what this is just saying this is making sure that patient is aware of what's happening. Okay so but if if I may if I may be granted of the so. What are what you saying they are once the patient is said there okay with using that they're going to be allowed to use it so you're not saying that it's going to be on every prescription that we each and every time I would agree with that I think that's way too cumbersome okay Senator Hammer you're recognized for a question. Per MO Law. Thank you thank you Mr. On Page two line twenty one you gotta you gotta phrase in there says allow a patient the freedom to use any pharmacy are they now not allowed that freedom to do that because the way the law is currently structured. Okay Once again it's the semantics of plan design and semantics of. In theory they could use any pharmacy they want to use but there have been situations where either the PBM a third party for the manufacture interferes when the fight with the pharmacy contract pharmacies ability to participate in the three forty B. processing with the three forty B. entity so it's just clarifying language senator Hammer to make sure that those activity stop and they're allowed to follow Mr your all of granted thank you so with regards to the growth in the program as it is now what has been the gross with regards usage of the pharmacies as it is now and how would that change with the passage of this bill. Yeah I mean so I don't think As far as growth I think you still continue to see the same amount of growth that you seen over the last decade this just ensures that we can continue at least as is. Okay and the waiver being signed is that as much for protection of liability on the part of the pharmacist as it is the part of the patient by having something documented to show that your local pharmacy has communicated clearly to the patient as to what their options are. I sent part of the intent of what that waivers and therefore. Time at the sign waiver yes Sir I would agree with that because if a patient files a complaint with the state board of pharmacy over their prescriptions have been stolen or they've been hip a protected information is been sent to a pharmacy that they didn't intend to send it to I think it would protect both the patient and the pharmacist who's filling those prescriptions for the first time through mail order so I would agree with that that would protect both thank you. Centerman. No there any other questions for representative gray. Seeing none we've got some people to speak for against thank you for your testimony will leave senator or representative great nearby okay if there are and let's see is there anybody that like to speak against this bill we show Lil House or. He's against. Mr Houser please identify yourself for the record and who you're representing you may begin. Morning Mr chairman members of the committee of Leo Houser here today representing pharma the pharmaceutical manufacturers and research of America. Senate bill eighteen eighty one as you've heard seeks to address issues relating to the three forty the drug program. Which was actually started in nineteen ninety two as a joint effort between the federal government and drug manufacturers to ensure that our lowest income and indigent fellow citizens have access to their prescription medications this was achieved by manufacturers making the medicines available that basically penny or pro bono pricing. Eighteen eighty one would seek to impose mandates on manufacturers when it comes to how they participate in the federal program aside from the business arguments generated by this bill another fundamental question is whether or not any state can enact a law that permits it to act as if it were the federal agency that created the three forty B. program and mandate terms and conditions on participants. The narrow contractually defined scope of the three forty B. program leaves no room for state regulation in Arkansas cannot enact a law that allows it to stand in the shoes of the federal government and enforce federally created rights even to a non lawyer like myself the state law seeking to amend how parties under contract with the federal government will be required to do business if this bill passes appears likely to create a compliance collision course. This plus the fact those was rep representative ray mentioned a few minutes ago that the three forty B. debate is currently being argued in multiple court venues across the nation causes me to ask that you do not advance eighteen eighty one from committee with that I'll be happy to try and answer any questions you may have Senator Hammer you're recognized for a question you heard testimony earlier that this is just aligning with what's allowed in federal law so help me understand why we couldn't do it. And state law if it's not going to be greater than what is already currently allowed in federal law just need to get my mind around that please come again answering as a monitor any and certainly not a constitutional expert on the the the the real sense of what is the the bill would require manufacturers to ship. Per the terms of whatever pharmacy submit the need for a resupply when they the. Guidance and basically sold the medicines that they have we're telling a company is you cannot. Respond to market forces we will tell you how you have to do business and I don't believe that was the intent or the letter of the original three forty B. law part of the gets down to the the explosion and girls and representative gray mentioned but me she said she assumed there would probably be the same growth has occurred over the last decade in the last ten years there has been a forty two hundred percent increase in the number of pharmacies the contract to be forty three forty B. contractors that means today we've got a hundred and one thousand pharmacies over half of those represented by the chains like CVS Walmart Walgreens. I don't know the I don't know that there's another hundred and one pharmacies hundred one thousand pharmacies out there in the next decade to sign up for this that's part of the problem is that growth has become so explosive the right now it's a thirty billion dollar a year program the only federal program larger than this is Medicare part D.. Okay thank you. Senator Elliot you're recognized for a question. Thank you Mr chair Mr Houser that the losses that you mentioned which would you repeat for me or if you didn't say and I missed it the basis of the losses that are ongoing. Again I would have to get you some specifics about that all I know is the last I was told from our client the roughly seven lawsuits in process okay the country right now I think we're really getting down to is there's not a person I've talked to that has. I tried to delve into the three forty B. program that doesn't agree it needs reform what it was intended to do and what it has become our day and night but the venue and the appropriate place to make those changes is where the three forty B. program originated with the federal government trying to do respectfully laws state by state around the country to adjust here and tweak their I don't know is going to get us where we need to be but every again everyone I've talked to said this needs to be addressed at the federal level and we would support that. And so what's what's being proposed here you're saying Based on Senator hammers original question this is going further than what's in the federal law or it's not going further in less or something different from federal law and legislation is going further by dictating to manufactures how they will have to conduct business in terms of shipping product to the pharmacies as is noted on on page three. Okay thank you. Are there any other questions for Mr Houser. Seeing no further questions thank you for your testimony Mr Houser is there anybody is there anybody in the audience would like to speak for the bill. Against the bill. Seeing none representative gray would you come to the end of the table again please. Representative gray would you like to close for your bill yes thank you Mr chair and I'll make this quick and. Mr Houser talk about mandates on how they participate that's not what I'm saying at all I'm what I'm if you participate at three forty B. program that something you signed up for federally all I'm saying is once you've signed up you can't discriminate and withhold the medication from the from our local pharmacies in the state if you're going to participate then you participate and and it has nothing to do with market changes and what it has to do with is essentially the drug manufacturers not willing to offer that discount price to all pharmacies in my opinion in an effort to you. Make their profit margins larger and then also not sure where the pharmacy numbers came from because according to what I've seen there's only about eighty eight thousand pharmacies and the whole country so not sure on that numbers any help to me this is just that is a protection bill consumer protection bill and all we're saying is if you participate federally then you have to treat everyone in Arkansas that participates the same way. And I'm closed thank you appreciate a good vote representative gray has close for her bill what is the will of the committee. I have a motion do pass from Senator Ingram do I have a second I have a second from senator of an is there any discussion on the motion. Seeing none all in favor of the motion say aye. Posed. Your bill has passed thank you chair committee members we voted at the beginning of the committee I know some of you were rushed to get here but we voted to hear one final bill and that bill is I don't have in from the house bill nineteen twenty six twenty six it should be in your packet. In the very back of your packet. Representative makes promises me this bill will be easily hurt so that's my goal anyway some representative Meeks you're recognized thank you Mr refers colleagues I'm apologize for the late hour of this bill I filed that originally close to a month ago and right as I got ready to present in the in the committee the uniform Law Commission told me they had an updated version that they preferred that I run so bites what's what I didn't how how we ended up with the the bill we have in front of us the the short short version about what this bill does is this bill defines what virtual currencies are everything from big coin Ethereum toys going and defines the rights of ownership of those coins and the fines the ability for leans to be placed against that currently Arkansas law and this is going to be how businesses relate to each other currently Arkansas law is silent on that so for example if I own a business and I own Senator I also Senator Pitsch you know a hundred thousand dollars and I take all of my assets doubled over into cryptocurrency cryptocurrency Arkansas law silent on that so I can actually hide my assets there this keeps me from being able to to do that it defines that one I own the currency that I actually own the currency so if there's issues with theft or whatever that that those get addressed there's about twelve other states that are in the process of adopting this Arkansas one of the things you all know that we're seeking to do is become technology leaders with governors coding initiatives and so forth we all know crypto currencies are gonna become more more mainstream as we go into the future so this is trying to get us prepared for that future with the adoption of this Statute as we get into the interim looking to further explore for example it group of businesses across the state are starting to accept crypto currency as forms of payment DO we collect sales tax on that stuff if I invest in crypto currency and I make ten thousand dollars you know if if you may ten thousand dollars on Walmart stark you're gonna be paying a capital gains but if you may ten thousand dollars because you invest in bitcoin would you also be paying capital gains several states across the country are also looking at should the state begin accepting these crypto currencies as former payments should Arkansas start looking that is also those are things that that I hope to start looking at an answering during the interim but it begins with we've got a stab us what is cryptocurrency and the rights and so forth and that's what I'm attempting to do with this and and with that I'll be happy to answer any questions chair has questions will go to Senator Dismang this is strictly the definition of cryptocurrency it's not dealing with all of those avenues of use now that you just described now all it does is it defines what they are lays out the rights that you know what you own it you control it and then the ability to place liens on adverse claim is what it's what's called Senator Dismang you're recognized for a question well and so is the only thing I So there is a definition for virtual currency in the money Services Act we passed that out right built it in there is some inconsistencies between this definition in the different definition that's in the money services have and it may be all well and good and it may not matter and you know we've I think there's parts that is touched on in money services that's not touched on in this and then there's parts touched on in this is not in the other and I it may all be well and good I mean I guess what I'd like to do before going to voted out today is just reserving the ability to say Hey there's some problems because these things aren't matching up right which. Like so that I'm not sure why we didn't mimic or why we didn't change. The two. To be identical and so I'm waiting to hear back from securities department on that that's going to create a problem all right and and and and it may be that they were I don't know who drafted your your bill versus my may just be two different builder after that the only difference between the two is the language of the money Services Act of that we just passed was the original language that the UCC had recommended and what I'm doing here is the updated that the only difference between the two is in the original language there was can some concern that in certain video game systems they have these virtual tokens that they can share with each other and they wanted to make sure in this new definition that those video game tokens work caught and so the only the only real difference between the two is that one would allow those video games opens to be counted as a virtual currency where is this one is again you're dealing with businesses here. Says that recognizes those are virtual currencies. Do you believe we can get the answer Senator Dismang and representative makes before this afternoon's I'm working I've been working on insurance will serve all righty and there's a commitment from the sponsor and Senate sponsor Senator English to make sure we get because it may be a situation as the chair sense of maybe we need to fix your definition but also may be heaven for bid centered is going we got affects your definition so whatever we find let's try and do the best we can to get him right right yeah any other questions for representative Meeks. And we shared drafters side under that same graph for okay Bills bill okay. Well that's good to know all right anything else. Is there anybody that would like to speak against this bill. For this bill. Representative makes are you close for your bill yeah I'll just close by and by saying that we said this is just an opportunity for us to be proactive on this instead of a reactive and I would appreciate the committee's consideration. Representative makes is close for his bill what is the will of the committee. I have a do pass from Senator Hickey and the second from Senator Teague is there any discussion on the motion. Seeing none all in favor say aye. All opposed your bill has passed. Members I know everybody's running out the room but let's hang tight we are completed for this session. And I do want to say thank you coming in mid stream trying to change horses in the middle of the stream was a tough thing but I think we got every bill done we've got a couple that are lingering out there but I don't anticipate running them this session so if we'll all get with the members and see if they want to interim study or just let him die a slow down so thank you once again for all your time. Our staff let's absolutely take care. Thank you Teresa and you folks probably more so than I but I can tell you and they say they're making a lot of time so thank you and we are adjourned.