Public Health, Welfare and Labor Committee - Senate

started just as a note, uh, we are trying to, um, Make sure that we have clean agendas, that's beneficial to my members of the committee, also to the members of the public. Um, so again, if you want to run a bill, just contact me. We'll get it scheduled and um so we can, uh, just be a little bit more systematic in our approach. So with that being said, any uh yes senator. Thank you, ma'am. Thank you, Madam Chair. SB 17, I wanna put that on special order. I'm waiting for some law enforcement, so I want to put that on. on special order, so let me know the date. You'll just let me know the date and we'll get that scheduled for you. OK, thank you. And to that point, good reminder, um, If you do want a special order because you have testimony coming in, it we'll get that scheduled. So uh thank you for that. All right, with that, we will go ahead and get started with SB 58, Senator dismay. Right, um, you recognized, please proceed. Good morning. Thank you, Senator. Members, appreciate you guys letting me take the time today to present the Senate Bill 58. I know you've had a lot of discussion with folks in your community, both for and against. And so I think what I really want us to do is have an honest discussion about what we're doing today with this bill. Uh, and, and then a little bit of history. I mean there's been some discussion about how we need to sit down and have a compromise. I will tell you session after session, including the last one, there has been an attempt to compromise that has always been defeated. Last time it was defeated in the House. At the end of the day, it amounts to this. There's a couple of points I want to make. First, we are the only The only state in the country that has this prohibition in place. It was put in place in the 1970s and that was to my understanding to limit competition between UAMS and a local pharmacist that happen to be in the legislature. That's why it exists. 2, what I want us to know is, is that When it was passed originally had nothing to do with 340B pricing. Now it's morphed into that, and I think it's an important part of this conversation that we need to be having right now because unlike every other state in the country, we do not allow our our hospitals, our nonprofit hospitals, provide care for people that can't afford to pay for it to fully utilize the 340B program that's being allowed for by the federal government. And I think we should allow that to occur at the at the crux of everything that we're talking about, we should be talking about increasing our access. For our health care patients and improving the outcomes, which I believe that's exactly what this bill does. I do have some folks here today that would like to testify, uh, more broadly about how it personally impacts their hospital systems and in particular the patients, and then also I have James Wilburn, if he could sit with me in case we have any more detailed questions about 34 to be pricing that I may not be able to answer. He is with Saint Bernard's who is a nationally accredited 340B hospital. and invite them to come on up to the table, please. They go ahead and invite them to come up to the table. Again, I'll, I'll save my introduction. We'll allow some testimony to take place, um, of course, I think everyone is more than happy to take questions and get a better understanding of what's happening with this situation and and why I believe it's the right thing to do by your folks back home that need the help the most. Yes, if you'll just state your name for the record, please, and then you may proceed. I hearing. OK. Uh, my name is James Welborn. I am the assistant vice president of pharmacy services at St. Bernardta Medical Center. Um, I have been working in the 340B program for a little over a decade now. I have completed the apexis advanced certification for 340B, and I've been and I did that about 7 years ago. I'm really just here to answer questions specifically technical questions regarding 340B. I'll, I'll just start because I think it's really important that we have a a specific lay of the land, since we're the only state in the country that that has this restriction. My understanding is it has complicated hospital's ability under the 340B structure in order to get these medications for their patients. Can you just elaborate on that? Yes, so from a 340B perspective, you know, there are really two ways that 340B savings get back to the covered entities. One of those are through treating our outpatients within the four walls of our hospital are in our child sites, and the other way is through outpatient services such as contracted pharmacies and then also through entity owned pharmacies. The entity owned pharmacies within Arkansas is obviously currently one of those ways that we have a major gap. That's where we're seeing that preventative access to access for some of our patients. one father follow up. When you have, when, when a physician is trying to order medications, how is that complicating the situation for that physician or that hospitalist for on behalf of their patients. Sure, um, so It really comes down to currently we have a bigger focus on specialty medications, uh, more than what you would consider non-specialty medications that would be dispensed at your local community pharmacies or your chain pharmacies, and those specialty pharmacies live outside of Arkansas, with the exception of One or two, that are here in the state. And so we aren't able to provide that care, um, in our communities that are really for high-risk medications, high dollar medications, um, and so those have to be sent out of the state. One of the other complications that Arkansas has done a great job with is fighting some of the manufacturer restrictions, but a lot of those do not apply to those specialty pharmacies that are out of state. They only, they only apply to pharmacies that are within the state of Arkansas and so that does prevent those. 340B savings from coming back to those covered entities even through contract pharmacies that we previously have have had with a state specialty pharmacy. OK, thank you, Senator Peyton, you're recognized for question. Thank you, Madam Chair. So I guess I've got some questions about the 340B pricing. What makes it cheaper? Is that something that the government forces the manufacturer to discount or is there federal subsidies, that's making, making it cheaper. What, what makes the 340B? pricing Lower cost, so part of if a manufacturer wants to, um, Work with state Medicaid. They also have to agree to be part of the 340B program and so it's similar discounts to what you would see in a Medicaid rebate program, um, but um, in these cases, it's not funded by any federal program. It's funded by the manufacturers themselves. So they have to provide the discounts on the front end to these covered entities that are safety net hospitals, so the government sets the price and the manufacturer has to agree to it. So the price is set based on uh it's a pretty complicated. population based on average sales price, um, and then there's a, a ceiling point, like I say, it's a pretty complicated um calculation that they put together and then we have a Apexis that negotiates with the manufacturers as well that that set a ceiling price for that, but yes, it is, it is provided through those, through those ways. So either way that price is only available to certain hospitals not to private industry, private pharmacies or anything like that, that's, it's made available to them, but by contract, those that that pricing can can them, there's a trade-off that they do in the pharmacy. Do you want to walk through a little bit about that, and we're talking about. 34 to be pricing, that's what they pay for the drug, not what they sell the drug for? Well, that leads into my next question's difference between those two things, which is what the federal government said you need to push back through for your mission to be able to help provide care for those that can't afford to pay for their care. And so that may be by there's some, someone else can talk about all the benefits they can have, and I think you'll hear from folks here, but again, that's what we're not allowing our hospitals to fully utilize. So it's my understanding, uh, in talking to several different folks. For instance, if you contract with a pharmacy, which, by the way, we can get into the detail of that later. I don't believe that's going away and no one has an intent of that going away, the pharmacist is going to take a percentage off the top. So if it's a high-cost drug, maybe it's a $1000 drug. The agreement is that they take 15% off the top, and that is 15% that then it is given to a for-profit entity that cannot be rolled back into the mission of the hospital. So on the federal level, Pharma has a very big issue with this. So Pharma, the agreement for 340B pricing and the way that the reason they allowed it, and you tell me when I'm wrong, the reason they allowed that to occur was to help the nonprofit hospitals or those hospitals that were providing for intendent care. Their problem is, is when you contract a pharmacist in a for-profit takes 15% of that off the top, that means that's 15% that is not able to go back to the mission. And so there's lots of talks about doing away with 340B pricing, and the number one reason is because those dollars aren't wholly goal to help provide care for people that can't pay for care. So if I could have a follow up. So the 15% is the profit margin or the margin. That you're saying that the private is getting, taking off the top or whatever. Correct. So that's used over the hospital pays let's make it up, $10 for a drug. It's required to sell it at The right that everyone else is required to sell one for, so they, so they sell it for 100. OK. The hospital technically, you know, the whole reason for the 340B pricing was to be able to roll back $90 into their program to help people that can't pay, pay for their own care. So when you say you're talking about overhead. The hospital's overhead. Not necessarily. You make a margin on a product and you use that to pay your overhead. It has to be rolled back to pay for care for folks that can't afford to pay for care or provide services for people that can't afford to pay for them. They are required to be able to take in people that cannot pay for their care. That's not their choice. They are required to take care of people because they have to take care of everyone regardless of their ability to pay. Is that not every hospital, private and, OK, I'll get out of the queue and let some other questions. OK, and if you could just put the mic up to your mouth to speak. We have some sometimes with the heat with the heat, it's hard to hear and here, so. Other questions from members of the committee. All right, see none. Uh, let's go ahead and do you have somebody else that was, I'm sorry. I had more. I just assumed there was, well, that's why I asked. I didn't have any other, any other questions from members of the committee. So go ahead, Senator Payton. So a nonprofit hospital. Means that whatever their overhead is, if they take in less money. They come to us. To be subsidized if they take in more money, what do they do? When, when they have Uh, a positive cash flow in a nonprofit profit entity like this. If they have a positive cash flow, they're required to roll that back into their mission, which is to, I mean, essentially at the crux of it to help people. I mean, it's to provide health care. So they don't have the choice to pocket that money. So basically when they have a positive cash flow, they raise their overhead. By rolling it back in. And so my question is if, if I don't know that I would agree with the, I think it's a little more, I'm getting to my question. So my, my question is, if private for-profit hospitals have the ability to have the pharmacy and they've chosen not to. Then, then they think it's a wise business decision to stay out of the pharmacy business. As a taxpayer, I'm required to cover their Bad decisions if they make one in a in one of these not for profit hospitals. So I'm looking at whether or not this is a good Uh, business decision for them to have a pharmacy. And other than the 340B pricing, what you're saying there's not a margin on that they're forced to reinvest that margin. So it's not going to help their cash flow. And we have independent pharmacies that are going out of business around the state, so I'm wondering whether or not it's a good business decision because I'm going to be asked to subsidize them if it's a bad business decision, but you're not going to be asked to subsidize them. I mean, a nonprofit hospital just like any pharmacy, I mean hospitals getting paid. I mean, it may be Medicare reimbursements that they're getting paid, Medicaid payments, which I think they have to agree to take Medicaid if they're going to be a 340B hospital. They're getting private pay from your insurance. The way, the way that all this subsidized at the end of the day, and this is a much bigger discussion that I hope that we have in particular that y'all need to have as a, a public health committee is whos subsidizing all of it right now because Medicare does not cover the cost. Medicaid does not cover the cost. Our QHPs barely cover the cost. Our self-payers, our self-insured, the people back home that are paying for their health insurance plans, they're subsidizing everyone else in the system because there are not enough dollars to pay for the and care that you need to have coverage. And so it's not us as a state that subsidizes it. At the end of the day, every tool we take away, you and your payers back home that have health insurance and private health insurance are going to be footing that bill because you demand that you have a hospital back home. And the difference between profit and non-profit hospitals. I would argue that for everybody sitting in this room. Most every one of you, the backbone, the fundamental place of care that you get care from is your nonprofit hospital. The vast majority of us on this day, that may be Unity Health for me and you. Maybe White River, it may be Saint Bernard's. It may be mercy. Those are all nonprofit hospitals who are charged with taking care of all of us, even those that cannot pay. And if we don't allow 340 to be pricing and for them to fully utilize 340B pricing, it's not that they're not going to care for people that can't afford to pay for their care. You're going to subsidize it on your personal health insurance plans. EBD will subsidize it. Yeah, Senator us as a state. If, if you would clarify for me, did you previously say that uh if a hospital has a contract pharmacy on site that they cannot handle the 340B? No, right now because there's only 4 grandfathered, uh, hospital pharmacies in the state. My question was contract pharmacies. The, the, yeah, those will still continue. I mean they can still contract with the pharmacy. There's nothing that those contracted pharmacies process the 340B for patients. They do for a fee. Yes, but not all the time, and I think you'll testimony a little bit how, but they cannot provide all the drugs that are needed to be able to provide the care that's needed. That is not always the case, and in particular with specialty drugs. That's my understanding. Someone else can testify to it, uh, but not, not in all cases, no. OK. Any other questions? Yes. This will be my last question. Thank you, Madam Chair, and I'm sure you're going to enjoy answering this one. I'm not. I'm not asking this question is it got you or anything like that? I mean one of the arguments that's been made to me is that we're the only state. That has this prohibition. Uh, and I think most of the hospitals and pharmacies and healthcare profession in Arkansas supported it, but my question is, when we implemented the private option, how many states had a similar model? I think we're, there's maybe one or two other states have a QHP model. I don't know the answer when we implement it, but I mean, obviously. We need to take Notice that we're the only state with this prohibition, but that doesn't always mean that it's something bad. I appreciate it. Thank you, Madam Chair, I understand. Alright, so no other questions. Thank you so much. We'll go just straight down the list of the people that have testified that have signed up to testify on the bill. So, um, that's. Mr. Gehrig, I'm sorry, Ryan, I'm just going to say Ryan with mercy. If you'll just identify yourself for the records and who you're associated with or who you're with, um, and you're, um, Recognized to speak for SB 58. OK. Well, thank you. Yes, my name is Ryan Garri. I'm the president of Mercy in Arkansas. And I appreciate the opportunity to share with you why why mercy is for Senate Bill 58 and talk a little bit about what we're not about. And then hopefully dress just some of the other questions I've heard out there. Um, first and foremost, um, we can get lost in the weeds on this, and it can be very confusing. I want to bring us back to first and foremost, talk about this in terms of uh the lens of the patient, um, one of the, the, the first and, and the priority reason why M mercy's behind this bill is we ask the question, will this improve the life, the lives of our patients. And the answer is unequivocally yes. Um, the patients we care for today that are discharged from our ER, discharged from our hospital. are not routinely getting their prescriptions filled. There's a variety of reasons for that. I'm not going to cast aspersions. It's not entirely the retail pharmacy's fault, um, love what they do, they're a valuable source in our communities. We're not here to put them out of business, but the reality is the retail pharmacy hours and availability has been limited, particularly on nights and weekends, and it's a problem that's a known fact. Uh, the, the second issue That's not the pharmacy's problem at all is just the fact that the patients we care for routinely in our ER in the hospital by nature there are issues with noncompliance. That's not the pharmacy's fault, but if we create any sort of barrier for them to get their prescriptions filled, they don't fill them. And so what we're seeing on a routine basis, these patients, when we discharge them with a great plan of care that's created by our physicians. Which requires them getting on timely meds that's not happening, um, that, that's delayed, they end up um having issues and and what happens is they end up back in our ER and back in our hospital. And so I don't know if anyone can argue the fact that that's not good for the patient when they could be home on these meds and being productive versus being in an ER or in a hospital setting. So that leads sort of to the second question we asked, Is this bill good for the system of care, and I think this gets to a little bit of what Senator Payton was asking about. So think about those same patients that we cared for in the ER and discharged from the hospital with a great plan of care, they're noncompliant with their med, they end up back in the ER, back in the hospital. That is the highest and most expensive setting of care and our entire continuum. And so we've got to be thinking about, uh, when you hear about things of our system is broken, there's not enough dollars going around. Well, this is part of our problem. We need to be thinking about payer reform and policy reform that keeps those unnecessary ER admits and those unnecessary hospital admissions from occurring, that is driving up the cost of care for all of us, and that does trickle down to the taxpayers and to the employers who pass it on to employees and to the goods and services that they provide. So we're pushing all of our chips into the middle of the table at mercy on promoting value, so I'm a hospital guy. I grew up in the hospital. My whole career's been, how do I drive ER visits? How do I drive admissions because that's what drove a bottom line in the traditional archaic model. We got to be thinking about how do we care for those patients at home. How do we keep them out of our ER? How do we keep them out of the hospital? It's going to take thinking like this to change the paradigm shift, and this bill presents it checks that criteria perfectly, um. Just a few other remarks, um, mercy Rogers is one of the only five-star hospitals in the state, and I think all of us should be asking why aren't there more five-star hospitals. There should be. There's 50 quality metrics that we are measured on. 20 of those 50 represent some sort of medication adherence. So we're losing, we just got our data. It'll come out in April, but I'll go ahead and share it with you all. We're gonna be losing our five-star status in Rogers because of the medication adherence requirements and challenges that we face. Just a couple of other comments I heard about um this is the only state where mercy has a footprint where we're not allowed to have a retail pharmacy. It was brought up, well, look what they did in Missouri. We have, I think, 50 some retail pharmacies in Missouri. What's unique, what happened there, Mercy was approached by a grocery chain. They had their own pharmacy. They were struggling. They sought out mercy and asked mercy to come in and take over those pharmacies. Outside of that unique situation, all of the pharmacies are in sites of care that Mercy provided, and that's what we're asking for here in Arkansas as well, had no desire to get into the retail pharmacy business and try to put out our, our colleagues and friends that are part of the uh healthcare community, um, but I did want to address that because I heard that came up as a concern. As far as 340B, we do have two contracts with retail pharmacies in Fort Smith. Uh, we have several that we're evaluating and working with on looking to expand that. We don't have any and Rogers at this time, but the Rogers Hospital just met the criteria to become a 340B hospital in October, and you do have to care for a certain percent of disproportionate patients that triggers that that approval to serve as a 340B. So we just met that recently and so we're going through the the same process there to look at pharmacy arrangements. So I wanted to address that as well. Thank you. Are you open to questions? OK. I have a quick question just on, you know, With Arkansas being that only state with this prohibition in place, the quality measures that you were discussing, are those federal quality measures through Medicare. Yes, there are CMS measures, but I will tell you CMS leads the way and payers end up adopting similar payments, yes, ma'am, right, so I mean, I mean, So I mean, the question is, though, is that Arkansas significantly is at a disadvantage because if the entire country is operating under one model they're going to make these quality measures based on the entire country and not really give an exception to the state of Arkansas, that, I mean, you're right, that's correct. It's, it's, it's a uniform, it's a, it's a Medicare policy. We're held accountable for that total care for those patients, and there's a all cause readmission, so for any reason reason for these certain disease classes that they end up back in our hospital, we get penalized and get um I'll get all the details around reimbursement challenges that we hit when that occurs, but it is affecting, so this fragmented system that we have is one of the reasons we believe why there aren't more five-star hospitals. We've got a hand tied behind our back. OK, and OK. All right, thank you, Senator Wallace. Sir, thank you for being here today. Thank you. It's not a easy uh bill for any of us. Assuming that this bill would pass, And you have a patient that Leaves your hospital and he receives his, his medicine. I, I live in a very rural area. Um For most of my people. The closest hospital At least 20 miles away in many cases 30 miles away. Those people come back to my hometown of Leeville or Monet or Manila. And they're Pharmacy, which has been there for generations. It's no longer there because they're working on a very thin edge of profit right now. Where do they go to get their medicine if they can't go to their local hometown, and, and I worry that by doing this we're going to close. Small town rural Arkansas pharmacies. What, what's your answer to that? So Mercy has 4 critical access hospitals that we operate, excuse me, 5, and um In my opinion, and I don't want to speak for the other laxis hospital administrators in the room, but from from Mercy's perspective, if there's a retail pharmacy available in those communities, Paris, Boonville, Waldron, uh Berryville, Ozark. We have no interest in establishing a retail pharmacy in that community. Now, if for some reason that retail pharmacy closes you described, I would hope that this bill would be crafted in a way where that that rural hospital could operate a retail pharmacy for the reasons you just cited. But we have no interest or plans in those communities that have a retail pharmacy to open one. A follow-up, ma'am. Yes, sir. And I appreciate that and you're blessed whether you are, but in, in Leeshville, I'm in Arkansas. If that closes, I've got patients that have a hard time driving a mile or 2 miles or 3 miles because of poverty or because of illness. Where do they go if their hometown pharmacy is not there. They can't get. Even 10 miles away, 20 miles away, and that's why I worry about this bill and what it's going to do to our rural pharmacies. There's going to be another answer. There's going to be a compromise somewhere. I agree. Thank you. I think you're also touching on how it takes very little. To dissuade somebody from getting their prescription filled. Senator Pinza. Thank you, Madam Chair. Um, I was asking earlier about the fee for, uh, uh. It was mentioned that uh contract pharmacies within uh hospitals charge a fee to process the 340B. Can you elaborate on, on that, how it works, uh, what kind of contracts you have with your onsite pharmacies within Mercy. So I have our VPUs over our pharmacy services, would it be OK for me to invite him to help particulate if they'll just come forward David Fortner is the VP of operations at, you'll just state your name for the record and who you're with, uh and just pull that microphone up to your, there you go. Thanks. Fortner, vice president, patient services at Mercy. I'm a pharmacist as well. So Senator Penzo, to your question, if I understood, you're asking about some of the contract pharmacy arrangements and the fees associated, is that right? Yeah, I'm just curious what the difference is between if you had your own pharmacy that was a mercy pharmacy versus uh contract pharmacy on premise at a Mercy Hospital. Yes, sir. So, and we talked already a little bit about 340B, right? Just kind of my take on this. This is a very complex program. I'll give you my kind of simple answer here, right? These contract pharmacies are great arrangements between these nonprofit hospitals and community pharmacies, the benefit for the community pharmacy is they get a guaranteed fee, so the hospital, as Senatorsmay pointed out, pays the pharmacy an amount to provide that drug to the patient. That's provided by the hospital. What hasn't been mentioned yet is there is a significant expense to the hospital to set up that arrangement. as well, but again, Those 340B savings that we are eligible for help to fund some of that. Uh, so the arrangement is between the hospital and the community pharmacy, the pharmacy benefits, again, because they get that dispensing fee is essentially what it is, but the, the price to the patient and all is exactly the same. Did I answer your question? Don't know it's complex, yes, sir. Um, I guess I'm, I'm just looking for a, I mean, what, what is the fee to provide, I mean, because I want to know what the cost difference is to the To mercy if it's a contract because it was mentioned earlier that there's a fee if it's a contract and that fee wouldn't be there if it was one of your own. If it was a mercy owned pharmacy price per prescription or I mean, what, what does that look like? So that it is a per prescription price and that's the contract arrangement, right? So it depends on the contract that you have with the pharmacy, it could be $15 per prescription, just on, on an average number. And you mentioned that it was uh a significant cost for mercy to set up this arrangement with the pharmacy. Did the, did the pharmacy itself, uh, have a financial outlay, a gamble, so to speak, to set up a facility within your hospital. They would, right? They would have their operating expense to operate a standard pharmacy. Yes, sir. OK, OK. So it would depend on the contract, what the fee would be. Correct. OK. That's part of that arrangement. Yes, sir. OK, thank you. All right, uh, Senator Payton, did you have a question? Yes, thank you, Madam Chair. Um, So I may be misinformed. But I was under the understanding that when you discharge the patient, you could Fill their prescription up to 30 days' worth of medication. Is that the specific um The reason that they sought care up to 31 days, but there are other things, as you know, when a patient comes to the ER complaining of X, you uncover Y and Z. So in those scenarios we're not allowed to also address the couldn't we just remove that restriction? What keeps us from removing the restriction that says, I mean, if they've, if they've come in for a hospital visit and the doctor says you need these prescriptions. Why aren't we addressing that restriction first is what my question would be. Yeah, I think that's for Senator Dimay. Well, I'll move on then, um. So you said you have pharmacies in Missouri, uh, I deal with a grocery chain or something, and, and I think you implied that you had pharmacies in other states, Oklahoma as well. So I would assume an organization like yours would have a pharmacy division that basically manages or oversees that are they net positive to your bottom line or or a negative to your bottom line. Um, I don't know specifically, but um I do think that they do a good job managing these these pharmacies in Missouri and Oklahoma. Well, I'm sure in an organization like yours, somebody knows whether they're net positive or net negative, and I'd like to have, I'd like to know if you could get that information, please. Um, There's been a lot of talk in this committee over the last several years, PBMs and stuff like that. A lot of monopolization going on in the, in the medical world. Uh Independent pharmacies, I'm sure hospitals are the same. Our demanded to fill prescriptions that are a net loss to them that we've talked about the 340B in here. But what about the prescriptions where the pharmacy is losing money on that. Is there going to be any hesitancy by the hospitals to take that loss? We are, so our focus on this is getting the patients those meds so they, there's a much bigger cost that we're talking about here when patients end up in the ER in the hospital because they're not on those meds. So we're trying to take a more holistic view of the total cost of care for that patient, so yes. We're trying to, yes, the answer, so, so that's a long rabbit trail because I've got questions. Way down there about whether or not you'd be motivated to prescribe those drugs, but um I've got one last question. Um When when we're talking about the 340B pricing and I think y'all called it uh some sort of contractual agreement with the pharmacist to, to do that, and they're retaining a dispensing fee. Does that dispensing fee eat up your entire margin. Or are you keeping part of the margin, the profit margin on that product. In other words, the example that was used was something cost $10 and the and the retail price is 100 and and we're giving 15% to the pharmacy to fill it, that still leaves quite a margin for the hospital when you don't have The overhead considerations of maintaining, maintaining a pharmacy. So am I reading that right? Uh, is there a margin that the hospital gets to keep even though they're paying a dispensing fee to the pharmacy? Yes, sir, Senator Payton, there is, you're, you're understanding the math and the situation correctly and as Senator Dismay and, and my colleague James Welburn pointed out, those dollars, which was the original intent of the federal 340B program was to help these nonprofit safety net hospitals. Those dollars then go right back into the mission of the hospital and, and by the way, we're required as nonprofit or 340B covered entities. To then provide to the government exactly how those dollars are used, and I venture to say that every hospital in the state can provide a report because again, it's, it's something that's asked by hersa of us to be able to identify exactly where that goes, and it might be adding services to the community that didn't exist before, um, mobile services, outreach clinics, those types of activities. Yes, sir. OK, well, those margins are going to have to go to covering overhead if you if you decide to open a retail pharmacy, there's to be employees and overhead and things like that. Would you say that the margin in the hospital keeps is larger or smaller than the dispensing fee. If you just looked at the math, it would be larger, it would be my estimation, but again, that's all depending on the contract arrangement with the individuals, and that's gonna vary across uh, in general, I was just asking for your experience. Thank you. Thank you, Madam Chair. Just to follow up on that point though, your Medicare reimbursement, isn't that an offset for the Medicare reimbursement, which doesn't cover The cost of the nurses that are providing the care to that patient, I mean, I could go down the list, but, I mean, in general, your Medicare reimbursement doesn't cover your overhead costs, neither does your Medicaid reimbursement. It doesn't cover your overhead cost either, that's correct and I wasn't trying to make this purely about the dollars, but this keeps going to that, but there's a recent study done by the Northwest Arkansas Council, showing the state of Arkansas has the lowest reimbursement. hospitals in the entire country, and so this talk about profits and margins. That's a whole another topic if we want to get into that in terms of how healthy are the hospital margins to begin with, and that's, and that's quite frankly something that we, I mean, federally, it's, it's just astonishing to me that Arkansas is below reimbursement of even, I think, Puerto Rico or other places like that, it's just we're at the very bottom when it comes to your Medicare reimbursement, um, which is why it is particularly difficult. for our hospitals to stay thriving and open, um, and I I, I don't know who wasn't in the room when this was decided at the federal level, to be honest with you. It's just really something I know that Senator Bozman has dug in on that. We've been up to Northwest Council. It is tremendously difficult because the majority of our population is aging and so so many people are on, particularly in our rural areas that are on Medicare and Medicaid, and if you're in a hospital situation like mine at Mountain View and Stone County Medical Center, primarily the patient population. serving to pay your is going to be Medicaid or Medicare, and that reimbursement doesn't even, it doesn't cover, I don't know what the percentage may be of what your true overhead is versus what you're getting, but it, it just, it, it, it's, it can't make it work. So, it, it, it causes those problems, but I, I believe that 340B was designed to try to help offset a lot of that, which particularly hits and hurts your rural hospitals. Um, which are your safety nets, to be frank, uh, Senator Hill, you had a question. Over here. Thank y'all for coming today. I guess my question is, do y'all release your patients 24/7. Uh, if we can, if we can discharge them and they have sometimes there's challenges with home environment if they don't have somebody there. I mean, there's, we try to to answer your question, traditionally during daytime hours well they did fix this. This is going to the to the next question is, so you would have availability of uh your pharmaceutical products, never the other pharmacies are actually closed. That's that the patient may need to continue or to start taking immediately. Is that correct? So to me that would help the patient. And it wouldn't necessarily hurt the local pharmacy because they're closed and that patient needs to start his meds now, which we could actually help in the long run, and if it has to be refilled, then they can go to their local pharmacy. Am I correct on that? You're absolutely correct. Thank you. All right, thank you. Senator Payton, you have one more question. Yes, Senator Hill just brought this to mind, so I, I'm trying to remember a personal situation with my dad getting out of the hospital here in Little Rock, and this was several years ago, so the, the situation may have changed, but when you discharge a patient late at night or on the weekend. And you have the authority. To give them up to 30 days of the medication. Is your pharmacy always open? I mean, 24/7 because I'm, this, like I said, I can't remember how many years ago this was, but I remember that being discharged and us being told the pharmacy was closed and we had to wait till we got to Hebrew Springs the next morning to get his meds. Yes sir, I will speak to from a mercy perspective in our Major hubs in Fort Smith and in Rogers, our hospital pharmacies are operating 24/7, 365, and we absolutely intend to fill that gap, um, and just one more point to kind of where we're going here with this, and yes, we've got the opportunity today to fill 31, uh, up to a 31 day supply. You also have to be able to just have the infrastructure to be able to build those to Whether it be, you know, government payers or private payers, and again, all of that comes with just the infrastructure, the expense of being able to set up that operation. There are many hospitals that I know of in the state today that do not bill for those, so they just give the medications away because it's the right thing to do for the patient, but they're forced to do that because again, they don't have the opportunity to really set up the retail operation because of the prohibition that we have uh under current law, so they get, this would alleviate that. And expand that access for our patients. One more, I promise. So would you be willing to make the commitment that if this bill was amended to have the requirement that anywhere a nonprofit established a pharmacy, it would have to be 24/7. Would that Be OK with you, I would probably, that's probably Senator Desma question. Well, that's whether or not he would amend it. I'm asking if they would live with those questions. OK. Would that keep you from opening a pharmacy? Our hospital pharmacies today are open 24/7, and we will continue to be open 24/7. OK, thank you. Thank you. OK. Other questions, then we'll go down the list. Thank you for your testimony. Appreciate you being here. OK, uh, Mr. John Vincent. You'll just state your name for the record and who you're associated with. Thank you, Madam Chair. Members of the committee, my name is John Vinson, CEO of the Arkansas Pharmacists Association. Um, I'm here today to testify against the bill. I would like to say that the testimony so far has been accurate. I agree with a lot of what has been said and would like to provide some perspective while we're against the bill and what we would ask committees to consider. Um, and also to the point of There's been some Attempts to compromise and to come to a compromised bill. I would ask the committee to consider that. I think we were really, really close last session. I know Representative Lee Johnson is in the room. I'm not asking him to come up here, but I'm just, I, I feel like the bill sponsored last session and the pharmacists and hospitals were really close. I think there's some compromise that could be had if we had those discussions. This is a 50-year market that has evolved where the government did interfere with this, as everyone has said today, it did happen Before I was born, believe that or not, I wasn't alive when it happened, so I can't attest to the, the history that Senator Dismay um shared earlier because I don't know exactly why it happened, but I do know or what I've been told is it had to do with uh hospitals were at that time able to purchase drugs in a way through group purchasing organizations that um were Better than what outpatient retail pharmacies could purchase that. And there are some parallels there to Senator Dismay's point with 340B that have to be worked through. Um, I agree with the part about, and I think Senator Dismay said about 15% for the contract pharmacy. I know there was a report that came out in December where Minnesota has a transparency law in Minnesota. So some of the data that um David Fortner, my friend Doctor Fortner talked about that they have to provide the hearsa. It would be nice if the of Arkansas could look at that data too to ensure that uh and and I'm not saying anyone in the room would do this, but there have been reports of abuse in the program. There's a hospital in Richmond, Virginia, and the New York Times that was, uh, I don't know if I should say accused, but there was Washington Redskins or Washington commanders training facility and some luxury apartments that were purchased instead of ICU services instead of a nursing school instead of some doctor clinics and so we definitely want to make sure those resources that are being used do go to patient care. We agree with that. Um, we have a couple of pharmacists here today that do have contract pharmacies that can provide more detailed information on how it affects them, so I would encourage them to do that. I wanted to clarify on Act 233 for the 31 day supply. There would be restrictions on a patient couldn't just come off the street to fill a prescription. It would have to be a patient that was in the hospital or in the emergency room under that act, but there's no restrictions on the medicine that they could dispense. They could dispense medication that the that the discharging physician felt like they needed. I don't know of any restrictions on the medicine, so I just wanted to clarify in case any of you had that question from the legislation last session. We are, um, And I do agree. I think I even testified two years ago that there were 2 states that had restrictions, North Dakota and Arkansas, I would say that the devil's and the details on that, and I would agree that we're the only state with this unique uh restriction, but I did want to provide a little bit of context or details about how North Dakota does it. So North Dakota does have some grandfathered nonprofit hospitals before 1963, but any hospital nonprofit after 19. 63 does have to be owned 51% or greater by a pharmacist or a group of pharmacists that are not part of the, the hospital. So to the point about our homes and, and no one the passes where we have a similar situation to try to eliminate or minimize conflicts of interest and have providers at the table. There is a concern in that example with New York Times where if the doctors are employed by the hospital and there's a $25,000 cancer drug and it only costs the hospital $3000 to purchase it. Could there be a scenario where there's not a, a check and balance with an outside entity to make sure that that is really the best therapy at the lowest cost, and I know the American Hospital Association, for example, has similar concerns about physicians owning hospitals of of trying to make sure those conflicts are looked at. So for those reasons, we would stay. and ask that there be an opportunity to sit down and work on a compromise solution, and with that I'll take questions. OK, quick question for you. Currently, if a pharmacist has the ability to not fill a prescription. Is that correct? That's currently yes, uh yes. OK, conscious clause, yes. OK, but it also, it's under the conscious clause, but what is told to patients is, I don't make money on this medication, I'm not going to fill it, I'm not gonna stock it on my shelves and I mean, I don't blame them. And so, but the, the scenario that is occurring is the patient, and I want to go back to the patient and access to care, because I think you've, you have specifically stated that a lot of the policies that you have advocated for, and we agree. been about access to care, access to medication is important, but with that scenario, a lot of times patients then have to go to 3 or 4 different pharmacies in town in order to get all their prescriptions filled because this pharmacist says, and it may be because of the way that they are doing their purchasing of, of their, of their medication, and this one has a different scenario over here than this one, but right now they're having to go around. To kind of get all these prescriptions filled, and again, I don't blame the pharmacist if they're not going to make money, I'm not going to sell this if I can't make any money off of it. I get that, but I go back to the patient and the patient's access to care, and that does complicate it for doctors who are trying to get medication for their patients and, and so again, I just want to make sure we were clear about the current law. They have the ability Do that, but it's complicating a little bit complicated for the landscape of that patient trying to fill their medications, which kind of goes back to the medication adherence, quality measures that we know are being put in place, that if they're getting discharged by the emergency room, it, it complicates that completely and they lose their status, and that, that can then result in a lot of clawback of that Medicare payment through some of these that I know, for example, Baxter Regional Healthcare System has been So it just, it's kind of a trickle down effect, uh, would you not agree? I agree. I do. I agree. I would, I would say that and I don't want to belabor this, but I do think that some of the contracts don't have enforceable terms either, and we need help from the insurance department enforcing that. I know you know that, but we got to keep working on that too to help protect patients and consumers. Yes, so long as they're the ones right in the front side of that check and not a patient, I think we agree with that. Senator Hill, you have a question? You recognized. Thank you, Madam Chair. You, you alluded to just a while ago if you had more time, you could work on a compromise. You feel like you were really close. How much more time do you need? You've had 2 years since the last time this bill was run. I think we can get something done this session. OK, well, you've had 2 years. Why should we? Why should we believe that? Because you've had 2 years with I think I see see Representative Johnson sitting back behind you. I know, and I'm willing to work on it and get it done in this session if I'm given the opportunities where I can answer that question. OK, thank you. Thanks. Senator Penza you recognized? Thanks to the. There was a, a statement made earlier that there wasn't an intent to open a Nonprofit pharmacy outside of the hospitals, but if If the mums and pops went out of business, they would be open to do it, so that's to me kind of a plan to do it if there's a vacancy, um, if they did open a pharmacy, Would that pharmacy be able to compete in an advantage over a small mom and pop with through this 340B, does that give them a competitive advantage, um, that's something that's been tossed around and I'm kind of curious. If there would be a competitive advantage. Our members feel like there would because of the nonprofit tax status and then also the 340B program, yes, so, so can you elaborate so I can understand what the difference, what advantage that the tax status and the 340B would advantage that we would give. I would say that the 340B entities that are in the room are more qualified for me to to say the numbers, but some drugs can be purchased for a penny that might be hundreds of dollars ordinarily, some brand name drug. drugs are not discounted at all, and it probably averages out to some is it 99% off of all brand name drugs, no, but it might be some and I've been told by industry experts it's in the 30% range on the brand name drugs that are eligible. Not every drug would be eligible. They would have to see a provider or prescriber, and the claim would have to be eligible under the rules for it to be counted, but If that gives you some idea. Yeah, I've got, we've got a a mercy facility in my district and uh I, I love it. That's where I took. My father, when he was having issues and uh they've they've been great to, to my family over the years. Um, you, you made a comment earlier, I'd like to get government or the government's in the way and, you know. lowering health care costs and increase in access are two of my priorities this legislative session, um, but I, what I don't want to do is, is rob Peter to pay Paul. I don't want to fix one problem and create a problem in another area, uh, hospitals and, and pharmacies are important to me, but the, the last thing I want to do is put the patient last and if pharmacies and hospitals really want to prioritize patient care and increased access and lowering healthcare cost. costs. Y'all will sit down and come up with a solution that both parties are somewhat happy with. I'm not expecting either side to be extremely happy, but I want to, uh, I don't want to put the patient last and and prioritize hospitals. I don't want to prioritize pharmacies, um, so that's, that's what I'll, I'm gonna be a no today for that specific reason. I don't care what happened two years ago, 4 years ago, 6 years ago. I care about what's happening today, um, and I was involved in those conversations. Um, and if, if one side's not cooperating to meet in the middle, then, uh, I'll, I'll make a decision based on that, but you have a question for Mr. Benson. I did. I mean, you could go on, but maybe, maybe you could do that later. We're just trying to get through the testimony list. I've got a few other people that are speaking for and against. OK, well, that's, that's we'll come back to you though. If you like, OK, well, now that I've been interrupted, I'll go ahead and step out of the queue and come back later. Thank you. Are there any other questions for Mr. Vinson? Senator Payne, you have a question. Thank you, Madam Chair. I mean, I still remember when I I was a kid and the pharmacy had a soda fountain. But these independent pharmacies, they sell a lot of products that are not a prescription. I mean, I know I've stopped at ours in Hebrew Springs and brought, bought braces for my finger or a wrap for my knee or, you know, over the counter stuff, um. When we say that the nonprofit hospitals are tax exempt. How much of an advantage does that create for them in these other fields that are not necessarily prescriptions over the Retail pharmacy. I defer that question to the to the I don't know the answer to that I don't either. I'm just seriously considering what that would mean. I would say to one question or point he made earlier, and this is not disparaging, it's just to provide facts. The for nonprofit hospitals that are grandfathered, they are open 8 to 6 or approximately some of them are 8:30, 5:30. The two of them are open on Saturdays, 2 are not, none are open on Sundays, and I would, I would love it if the ones that currently had one or any decisions made on a compromise, if they were able to fill prescriptions after hours on weekends, on holidays, uh, like Brittany Sanders here in Little Rock who is open 7 days a week and into the evening, so I just would put that on the record. Well, and I would think that if that is our motivation. To accomplish access, that that would be an important component, um. Wouldn't you agree? Thank you, Madam Chair. Yes. All right. Any other questions? Any other questions from members of the committee, OK, because we're at that point of questions right now, Mr. Wells, you, uh, thank you, Mr. Vinson, for your testimony. Mr. Wells. Thank you. Thank you, Senator. My name is Troy Wells. I'm the president and CEO of Baptist Health. Thanks to the committee for allowing me to be here this morning and make just a couple of quick comments, not to be uh repetitive of my colleagues. Uh, 1st, 1st off, I understand concerns about competition from large organizations like Baptist Health or other large health systems. Uh, we have, um, heard about that over the years and so I acknowledge that, understand it. There is, however, this issue of access that's come up earlier. This past fall, we all heard pharmacists claiming that pharmacies, particularly those in small towns, were going to go out of business and then an emergency measure had to be taken by the state to prevent that. And if that's correct, wouldn't it be reassuring that health systems and hospitals could step in and potentially meet this very important need in our community. We often find ourselves stepping in to meet community needs when no one else is willing to do it, especially in rural communities or other underserved areas, uh, in our metro communities, the 12th Street corridor here in Little Rock is a great example. Walgreens closed. Uh, Walgreens is shutting down thousands of stores around the country. One more way we could help if the current law didn't prevent us from doing so, we often are the safety net for healthcare services of all kinds in the community. Baptist He has some unique history with retail pharmacy, as it's been noted earlier, there are some grandfathered pharmacies and medical towers drug is owned by Baptist South and was grandfathered under the existing law, do the rules or policy of the state, we can't even move it from its existing location. At one time we owned a home in Fusion, um, business. where we would go into patient's home to provide IV medications post discharge, for example. That is a retail operation. It has to be tied to a retail license. When the regulations changed and we had to upgrade and enlarge our IV hoods to provide that service. We didn't have room to do it and we couldn't relocate. The law forbid us from relocating so that we ultimately had to shut that business down. So when we talk about value, we talk about lowering costs, keeping people out of the hospital. That's one more mechanism that Baptist Health was trying to. do that before and we lost the ability to do that due to the current um licensure in law. Um, and, and, and just a couple quick other comments. I, I still fail to see the logic as to why we would allow for-profit hospitals to own a license and not a nonprofit hospital. It doesn't follow logic. It's clearly restraint of trade and does not provide fairness under the law. And finally, our own health plan for our 15,000 people, families that Baptist Health employs and insurers. We recently this past year, um, had a restriction placed on it when the pharmacy board sent a cease and desist letter to our out of state pharmacy who provide our specialty medications for our own health plan. Now they did that because this out of state pharmacy providing those specialty medications was owned by uh a group of nonprofit health systems in the United States. And so we were forbidden for receiving our medications that way, um, in closing, I'd urge you to support this bill, pass it through committee so we can make a change. It's been a long time coming in our state, and I appreciate your time this morning and happy to address any questions you might have. All right, thank you. Are there any questions from members of the committee? All right. Senator Payton, you're recognized for the question. Thank you, Madam Chair. So the pharmacy that you operate. Is it 24/7 365? No, sir. OK, thank you. Thank you, Madam Chair. OK. Any other questions? Senator Penzo. They're, OK. All right, any other questions? OK, thank you for your testimony, Mr. Wells. OK And again, members going straight down the list, um, but I'll go to against, uh, Gayen Perkins. It's Galen Perkins here. OK, thank you. Please state your name for the record and who you are with. Thank you. Thank you. Good morning, ladies and gentlemen. My name is Gaylin Perkins. I'm a pharmacist and founder of ExpressRx Pharmacy headquartered here in Little Rock. Express RX Pharmacy currently has 26 retail pharmacy locations in 8 states, including 11 in Arkansas, primarily in rural and underserved areas. I'm here today to discuss Senate Bill 58, based on the interviews provided by some legislative members, I'd like to address two main concerns. Access and competition. Regarding access, I'd like to bring to your attention Paris, Arkansas, and a recent restriction imposed on access by Mercy Health Systems on its own employees. The health system has recently decided that the two pharmacies in Paris expressRX and Walmart pharmacy may only fulfill acute med needs. Chronic medications must be picked up at the Fort Smith facility about one hour away. Some patients have resorted to paying cash for their prescriptions rather than covering the additional cost or time associated with the travel. This tactic may provide some cost savings for the facility, but the practice does not improve access. Given that acute meds make up less than 25% of Scripps filled and an even much smaller portion of revenue, Mercy's practice is being cross-subsidized by the citizens of Paris. Neither express or X or a large pharmacy chain like Walmart could exist on filling just acute medications. I fear this restrictive culture will be further amplified on the citizens of appearance once Mercy has a retail pharmacy. And based on a previous discussion, I would point out that mercy has a retail pharmacy in Joplin, Missouri, where I also have a pharmacy and several other independents and chains operate. As a society, we just, we decided vertical integration was uncompetitive when we moved to break up Standard Oil over 100 years ago. We have continued those practices for the decades after, including recent scrutiny and health care over the practice of PBMs. SB 58 is authorizing vertical integration by entities that enjoy a government crafted advantage such as a nonprofit status. A century ago, vertical integration did not increase the competitive landscape, and that still holds true. While the median hospital has a net income margin of about 5% Mercy Fort Smith's Form 990 from 2023 shows that the entity has a $71 million net income and a net margin of 15%. That is equivalent to the net margin we see in financial services and semiconductor manufacturing, not for an essential service. Some part of that 50 million in above average net income is the result of government subsidy provided by the taxpayers via their nonprofit status. Couple the cost of good advantage these entities have with the 340B program along with the additional net income available to spend on wages and facilities, and it creates a scenario or another expressRX or Walmart of Paris could compete. If access to the retail side of 340B program pricing is truly concerned, this can be addressed as it has been thousands of times across the US through a contract pharmacy had Express RX, we have dozens of these relationships in place with covered entities in many rural and underserved areas. I understand that there's been a persistent request to change the president in place, I would respectively ask that we decline SB 58 in favor of a thoughtful consideration of the consequences and guard wells that would protect the public. Thank you. Thank you. How many pharmacies again do you own? 2626 pharmacies and how many other states? 8 states 8 states. So in 7 other states this prohibition does not exist. So it sounds like you have a pretty healthy business model, even in the states where this prohibition does not exist. Is that correct? It does. Thank you. And are you willing to also show, uh, provide your own financial benefit analysis to this committee. In what way? For your company and your organization, you were pretty specific about the hospitals. Sure, we filed publicly. If you'll provide that for me and I'll dispense that to members of the committee, and that will be, that would be appreciated. Uh, all right, any other questions from members of the committee? All right, see you then. Thank you so much for your testimony. Um, Mr. Mackie, Doctor, I'm sorry, Doctor Mackie. Daniel Mackey. Thank you, Madam Chair. It's an honor to be here, and Senators, thank you so much for all you do. I'm Dr. Daniel Mackey. I'm a medical oncologist at Mercy Fort Smith, and I'm also the chairman of the medical oncology Leadership Committee for the entire M mercy system. And I'm here in favor of EB 58. Thank you so much. Um, 40 days, 40 days and counting, um, that's a long time for a cancer patient where even one day a wedding to get started on your treatment feels like an eternity. So I wrote this prescription for an oral chemotherapy pill for one of my patients back in December, and I saw him in the office on Monday. He had yet to start his his chemotherapy yet because you're still trying to navigate the complex mail order pharmacy system. And it's kind of interesting because before I joined Mercy, you know, I was an independent medical oncologist with Cooper Clinic in Fort Smith, and we had our own in-house pharmacy, and it's great, you know, patients receive their medications in a timely fashion. There was high compliance rates. Patients, you know, really received excellent care. But um when I joined Mercy in 2017, I had to shut the pharmacy down because of Arkansas state law. It's interesting that if I had been in any other state that might not have necessarily been the problem. But you know, delay is like what my patient experience is, you know, it's, it's, you know, it's a very common problem. Many of my patients, many of my partner's patients have the same problem just getting access. Many of these specialized chemotherapy drugs, not available at local retail pharmacies, and I can't blame them. Many of them are quite expensive. We're talking about 5000, 10,000, you know, sometimes 200 or $30,000 worth for a pill. It sounds crazy, but yeah, it's hard for these retail farmers to keep them in stock. Um, regardless. When I write the prescription, any delay can potentially compromise my patient's health. And now it's an oncologist, I'll write prescriptions for IV chemotherapy, which we give in the office, and some of these protocols actually have an oral chemotherapy drug that I need to write the prescription and give it to the patient, send it to the mail order pharmacy, and it's kind of a mystery hour. Are they really going to get their drug or not. And you know, if the drugs are not delivered on time, well, that's just going to compromise outcomes and you know, in this age of value-based care. Where we look at outcomes, you know, it's quite, it's, it's a big problem. And then also another barrier is transportation. Many of my patients here in Arkansas are in poverty. It's a, it's a struggle just for them to get to my office to receive their treatment. Um, it's already, so in light of that, you know, for them to be expected to, you know, even come to my office, get the transportation, and then have to go to a pharmacy to pick up their specialized chemotherapy drugs. It's a complex process, expecting me expecting them to go through the mail order process. Um, and you know, it's, it's simply impossible for them. Um, you know, what's interesting about in-house pharmacies, um, they're generally considered to be more cost effective than mail order pharmacies. Oftentimes when I'd write a prescription for my patients, they, they'd actually get it at a reduced cost compared to a mail order pharmacy, and this is all in consistent with value-based care, which is the direction the entire country is going. Um, what's also important to note is that in-house pharmacists, hospital-based pharmacists. They're also specialized in talking with patients, training about how to take the drug, um, how to navigate the adverse side effects and also try to address any problems with, with adherences. And so this level of personalized support, you know, again, it improves outcomes, patient satisfaction, and helps keep patients out of the hospital. And um, you know, another final point, as the chairman of the Medical Oncology Leadership Committee at Mercy. You know, I can see how our sister communities in Oklahoma and in, in Missouri, you know, their patients don't have the same kind of barriers to access that we have here in Arkansas. You know, I think, you know, I, I, I, I, local pharmacies. do need to be successful, and there's plenty of, there's plenty of work to be done. Really what I think, you know, this whole conversation about it's addressing the gaps in care. Um, it is not our business model to try to run pharmacies, you know, as, you know, as the, you know, as an oncologist, I'm not really interested in running pharmacies on our own. I want the local pharmacist to do well, but what we are interested in is trying to keep patients out of the hospital, addressing gaps in care. And Fort Smith and in Joplin were piloting what's called the Enhanced oncology model. It's a value-based care system that CMS has established, and we're actually beating benchmarks, which is great, but um, you know, it's interesting when we talk about the prices of the drugs, the profits, and things like that. Well, I've been a mycologist for 20 years, you know, it was back in 2005, I think, when the Medicare Modernization Act, when the profits on IV chemotherapy actually became much more narrow. In fact, you know, these, these contracts that Joplin and and Fort Smith are piloting for CMS for the entire Mercy system, um, you know, we're actually looking at how to provide better care at a better price, um, and I agree, you know, there's plenty of stories, plenty of stories about how doctors have abused the system trying to maximize profits and things like that. Well, the way the system's getting set up by 2030, all Medicare and Medicaid beneficiaries aren't going to be on some sort of value-based care system and so I just, I didn't realize to make the connection until the earlier testimony that Arkansas is really behind the eight ball, you know, if we have this kind of prohibition, um, you know, where we can't have hospitals to dispense medications to help patients stay out of the hospital. My field is the specialized medications. Yeah, I think we all have a common goal to take care of the patients in Arkansas, and it's definitely interested in partnering with the all happy to work with y'all moving forward. Um, and I really appreciate the uh the opportunities to be here, um, take any questions. Thank you so much, Doctor May, for your time here. I have Senator Payton and Senator Penzo, I believe. Thank you, Madam Chair. Uh, Doctor Mackey, I'm very interested in your testimony. I mean, I really appreciate you being here and your expertise and your enthusiasm for the, for mercy and the hospital model, um. You, you made several references to how the Hospital pharmacy is going to stock these And have on hand these expensive drugs and the chemotherapy where the local private pharmacy may not have made the financial decision to, to stop them because they're so expensive. What assurances do we have in this bill? The, the hospital's gonna have those on hand. Right, that's an excellent question. Um, you know, based on prior experience when I was an oncologist at Cooper Clinic, um, we, we had a contract with the dispensing company that was able to ship the drugs quickly to us if there was a particular, you know, it's becoming more of an issue now in my field because um every year there's new oral drugs are being made for cancer patients, and so, yeah, you know, it's, it's, uh, you know, what's interesting is that not knowing the final unless you have like, you know, um multiple Um, if you have a, a pharmacist with multiple pharmacies and, you know, I don't know, maybe several million dollars of revenue, Mercy is a large organization, so we would be able to find a way to get those drugs quickly to the patients, and I hate to cut you short, I, I understand that um you're confident. The Mercy would act differently than than the local pharmacist you, you made reference to the large organization. The last man up owned 28 pharmacies. That's a pretty large organization too. But if it's a bad business decision financially to stock it or whatever, or if there's contracts that have to be made with manufacturers, what assurances do we have in this bill? You said you supported it right from the get-go. Have you read it? And if you have read it, what assurances do we have in this bill that anybody is going to act the way you described. So I guess your question is, um, I guess I'm I'm not following the stalking the expensive stuff, making the contractual arrangement perspective there. So you know, in our practice, we probably have, you know, I don't know, 10 or 20 patients with chronic myeloid leukemia, imatinib, and there's some other sine kinase inhibitors that we can have them so we can actually kind of project. because we don't want to have you, you know, any pharmacy will not want to have too many drugs of a certain type because it'll expire over time. And so yeah, you try to do some projections, but even then, even then, I want to get back to the point, you know, we're not in it for the money as much as trying to provide the gaps in care and convenience and things like that, because again, the way the government is the way the country is going, you know, there are all these profits are, are narrowing. So if we're trying to fix gaps in access to the drugs, to the care. And and this is an access thing. What assurances do you see in this bill that it's going to change the access by providing a business model for the pharmacy that changes the, the access, the hours that they're open, the products that they stock, what, what the assurance do we have? Yeah, um. If I see a cancer patient and I need to write a chemotherapy drug. Right now I have to rely on the mail order pharmacy system. I mean, that's how these patients are currently getting their drugs, and we're talking about a delay of, you know, several days to several weeks, my patient in my patient's case, it's 40 days and counting, um, and so you're, you know, I guess the, you know, as far as having, having access to the drugs for like for in his case, um, the drug that he was needing um would be able to arrive at our office probably within, you know, if we didn't have it in stock, which you know I'd be surprised, you know, we can probably get it within a few days, um, so if you're looking to have like, I mean, as far as what the bill itself, I'll have to defer to, you know, to y'all as far as, you know, what would, what kind of level of assurance would make you comfortable with, you know, what we want to do. I mean, OK, thank you, Madam Chair. Senator Penza, you ask for a question. Thank you, Madam Chair. Um, you mentioned that, um, the, the patient that's been waiting 40 days on mail order, um, I know a lot of times insurance companies, PBMs that world dictates where the drug can be filled is this patient being, uh, forced to use mail order, uh, if you had a pharmacy, can you say that you would be able to fill it? Can, can another local pharmacy not order that drug and supply it to that person? I mean, with their insurance allow them to do that? Are those things that you're aware of with that particular patient. That's an excellent question. Uh, when I had my own retail pharmacy at Cooper Clinic, you know, which is an independent, independent multi-specialty. physician organization, um, we, we had the resources to help cover our patients. We never had a patient wait more than just a few days to get their drug, you know, as a physician, and my partners will also speak in the same way, you know, when we write a prescription, we expect it to be filled. And so, um, as far as we, we had the resources to help patients navigate. You're absolutely right, because the insurance, insurance company is dealing with mail order pharmacies. It's a very complicated. It should not be that complicated. So is that what this is or has this uh individual patient have they went to a retail pharmacy and tried to acquire the drug. This is not a drug that's available to retail pharmacies. It's probably about $15,000 drug. so I guess the next question is, do I have my nursing staff call local pharmacies to see if they stock it, you know, they don't have that kind of time. Senator Desma, several questions have been asked, and I think more appropriately answered by Senator Desma sponsor of the legislation. So I'm going to recognize Senator Dima. Yeah, and I'll let someone else maybe even speak to the, how it actually works, but if a what what you're addressing is, in order for a pharmacist and a nonprofit hospital to contract on 340B drugs. There's essentially this weird, I think someone else had a term for it. I won't repeat here, uh, but there's this weird exchange that happens. And so for that to happen, for him to get those cancer drugs and it will qualify for 340B pricing, he would have to have the drug on hand. The hospital would have bought it, and the pharmacy would have to have it on hand. And so you would have $250,000 drugs in both locations and then they swap those drugs per their contract, and then the pharmacist takes a fee off the top. That's how that transaction works with the contracts, and so there is no viable way that the pharmacist is going to hold on to $50,000 drug on their shelf, and the hospital is going to hold on to a 50,000 drug on our shelf, and then they go through this weird little swap thing to be able to circumvent the federal law. And then pay the pharmacy 15% for holding that drug. Like it is just not reasonable that that happened in any way. And, and one of the things I do want to clarify when we talk about 340B pricing. That's actively occurring in the state right now. FQHCs are also entitled to 340B pricing. And as you all know, they're filling gaps across the state that can't be filled by anyone, and they are opening up pharmacies, but they're also contracting with pharmacies to be able to provide that coverage in places that they're not even able to be in where pharmacies are located. I mean, we keep talking about everyone like they're villains. I know. I've been portrayed as a villain by the pharmacy Association. I am fully aware I have got the phone calls. Nonprofit hospitals are not villains. FQHCs are not villains. These are people trying to provide care. Not talking about buying NFL tickets or whatever that was there federal laws prohibit that. Why even bother to say that? Put a notion in your head that they're going to be bad actors. That's crazy. What's happened in an adult conversation about the reality of what it is we're talking about and not some make-believe fantasy because we want to make out the people that are providing care to people that can't afford to pay for it, are villains for some weird reason. We got to get beyond that. Let's have real conversations about what's happening, but the reason that he can't do what he's talking about having to go through 4, 340B pricing and the mail order is because they can't afford to keep that drug and there's this weird transaction that has to court where they swap the drugs back and forth and pay a fee out. Well, no one can afford to do that. You should be able to get them on demand, but you can't. There was questions about why aren't these hospitals retail pharmacies. They have hospital pharmacies, which, by the way, if you want look of law, then it's about 2/3 of the law that we have on pharmacies in general from my summation last night when I was reading. And then we have retail pharmacies. Only 4 nonprofit hospitals can have retail pharmacies in the state. They were grandfathered in. And they're in the middle of the hospital and they can't have drive-throughs. Right? The law says they can't move, so they're not open 24/7 because it would make no sense for them to be open 24/7. Again, we're not going to tell the whole story when we make them out to be victims. Well, I can't understand why they're not open, they're open because it doesn't make sense for them because we don't allow them to have drive-throughs because we won't allow them to switch locations. Let's tell the whole story. Let's have a real conversation. And stop pretending that everybody else in healthcare is the enemy because they're not. Thank you, Senator Penzo, you're recognized for a question. Thank you, Madam Chair. Um. We are trying to have a discussion and get to the bottom of some things and I'm, I'm disappointed that somebody's going to sit at the end of the table and say we're calling people villains. I hope that wasn't directed towards me, not you. I'm not calling you, yeah, but, but, but you did. Let's go to the question, the question was, And here's the reason I asked the question, if I know pharmacies or hospitals, cancer hospitals that have Pharmacies in-house. And those pharmacies are not allowed to fill certain prescriptions under certain insurance companies that are handled by certain PBMs. So when that scenario is brought up, I would like to, I'm curious, is it because it's a PBM? That's getting involved and getting in the way of that patient receiving their drug and their mandated to use a mail order pharmacy that is owned by the PBM if that's the scenario, this has nothing to do, this bill will not fix that. So that's the reason I'm asking the question. So simple answer, it's dictated by their insurance or this particular patient in this particular scenario, we could have filled the prescription if we'd had the drug. That that's my question. Thank you. That's, that's, that's what we need to do and we want to do because when I write a prescription, I want it to be filled immediately, and I can't tell you how angry I was when I saw this poor guy on Monday, I was just But it's, it's a recurring story, but you're absolutely right, we don't want if if we're going to have a dispensing pharmacy, I'll, I cannot imagine. You know, this kind of patient waiting, you know, more than a month to get his prescription. There's got to be a way. So that's that's the intent. Thank you. Any other additional questions? Thank you, Doctor Mackey for your testimony. OK, um, That was 4. We're going to go to against, and then we have one more 4 after, uh, Leland Stice. Good morning. Thank you for having me here. I'm Leland Sty. I'm currently the owner of Doctors Orders Pharmacy previously was the administrative director of pharmacy surgery, cardiovascular and respiratory services at Jefferson Regional in Pine Bluff. In my position at Jefferson Regional, I was in charge of the 340B program for 20 years and currently I consult with other hospitals on 340B. Um, 340B has some huge advantages. It was stated earlier that on average it's about a 30% discount. That's a 30% discount over inpatient GPO prices when it comes to retail pharmacy, the discounts that are afforded under 340B. I'm sorry, one moment, I'm just going to give my members the lay of the land. You're speaking against. We have one more 4 and then we'll go to closing, OK? Um, and I would just say, let's speak to the bill. There's a lot of discussion, but we need to speak, you know, specifically to the bill as as it is written in I'll continue to go for it, go, go, go forward. Thank you. Uh, when it comes to retail pricing, the advantage for 340B is anywhere from 30 to 99% discount. It is, it is tremendous. Some commonly dispensed insulins such as Humalog, cost of retail pharmacy approximately $150 to $500 depending on the strength per vial. In the 340B setting, those are less than $1 per vial. There are some drugs that are priced at a penny in the Medicaid best price calculation has a piece in it that if if the manufacturers are Inflating the cost of the drug beyond the normal inflation of prescription drugs that that calculation can go negative and when it goes negative, they're required to make those drugs available at one penny for the 340B facilities for each quarter that they're below on that calculation. The pricing advantage you know from 340B is such that it is very tempting for recipients to take advantage of that market. That is what we're concerned with advantages such as deeply deeply discounted cash price on insulins of $16 compared to $150 to $500 that they have to pay at a retail pharmacy. Patients steering through physician owned pharmacies. We already see that happening. We've seen it in the past with some of our FQHCs. Uh, we see it at 340B hospitals where they own their own physicians. They own their own pharmacy, and they steer their patients back to their own pharmacy. I, I'm sorry. You, you stated something that there are physician owned pharmacies, and they're directing their patients to the pharmacies. OK, that, that's not correct. Yeah, well, you said physician owned. I'm sorry. Yes, thank you. Employees being forced to use only the hospital pharmacy being not having a choice to go to other pharmacies to have their prescriptions filled. Um, this has been happening for quite some time at 1340B facility in the state and we heard recently with Mercy as well. So the current options, the last legislative session we've heard already the hospitals had the ability to dispense a 31 day prescription at discharge or from the ER or from the hospital. They also had the ability to set up a pharmacy billing account to get an NCPDP number and an NPI number and bill for those prescriptions at discharge if they so choose to do so. If they don't, they give them away at no cost. 6 or 7 hospitals are all that took advantage of the rule that was passed by this legislature the last time around and set up a system where they would be able to dispense those prescriptions. Contract pharmacy arrangements also exist. My pharmacies are in contract pharmacy arrangements and We're available to dispense prescriptions. We're open 6 days a week, 9 to 6. It is not uncommon for myself or one of my pharmacists to get a message on Facebook or via text to take care of a patient, and we do that. I think it's important also to look at why this law was put in place for nonprofit hospitals not owning retail pharmacies. This was put in place back in 1975 to 1976 time frame, and it was done so because exactly well what was happening was in a lawsuit of Abbott versus. Portland Drug Association. That hospitals were using their preferential pricing to In unfairly compete with local retail pharmacies. That case went all the way to the Supreme Court of the United States and the Supreme Court ruled that hospitals should not have that advantage beyond taking care of the very first prescription that is filled for that patient. Any prescription pass that first one, a refill, was deemed not to be in the hospital's purview and needed to be taken care of by the local businesses. We're not opposed to hospitals being allowed a permit to care for their patients. We are opposed to nonprofit entities unfairly competing in the market and that careful thought and consideration should be put in place to ensure fair competition in Arkansas. Nonprofit hospitals already have the ability to request the endorsement on their current license in order to dispense up to a 31 day supply. Beyond that, they're moving into competition with local businesses in an already established market that I don't believe Congress intended, and we know the Supreme Court has said not the intention of nonprofits also. Thank you. Where are you located again? Pine Bluff. Pine Bluff. And how many pharmacies do you own? I own 6 in Palm Bluff. No, Whitehall, Pine Bluff, Star City, and one at Hensley, OK, and how many pharmacists just do you have working for you, roughly. 10 to 12 summer part time. OK, thank you. Any other questions? All right, see Nan, thank you so much for your testimony. We have one last person to speak for the bill, then we will go to closing. Ms. Micah, or I'm sorry. Mike and Knight. I got it right, Miss Micah Knight. Thank you. You're correct. Yes, my name is Micah Knight. I am the assistant vice president for Transitions of care at Saint Bernard's, um, that it covers a few different services at our hospital, but one in particular is case management and social work. So, um, what I really want to talk about first of all is that patients are my passion. Um, and, and our goal is to provide good continuity of care for our patients to eliminate gaps, to have good coordination of care, uh, and to just give them, um, opportunities so that they can be successful and have good outcomes. Uh, I was also allowed actually 10 years ago this year at our hospital to start a patient family advisory council. So I've been leading that for 10 years now, and so, That's a great place for us to be able to hear patients and families and their voices about what they need. So I just want to share a few stories, um, the first one really related to specialty drugs. And so most often uh we see issues with our cancer patients being able to afford their portion, even when they have insurance. One example is the Medicare patient that was recently prescribed a drug for breast cancer. The cost of the treatment was 21,000 and after insurance paid the patient's portion was still over $3400. Another patient was prescribed two different, uh, drugs for lung cancer that totaled over $33,000 after Medicare Part D covered the patient's copay was still $6,656. So attempted, you know, we attempted to find funding through various charitable organizations, but we're unable to do so in either situation. If we were able to have this specialty drug in-house, which has already been talked about a little bit. Uh, we could bring dollars back into the state, because many times these are coming from an out of state. a company, we could dispense it quicker, um, be able to provide more financial assistance, uh, based on our, our patient assistance programs that we have available. The other thing that I would say is many times, you know, these require prior authorizations, which sometimes is what holds up uh a patient being able to get that when they're dealing with the insurance world, and that's something that we have, we're experts in, we can coordinate that. We can, we can have the prior authorization. We have the documentation that we need right at our fingertip. tips to supply so that it will support the decision for the patient to have that drug. So, the second, uh, scenario I want to talk about is really in relating to our behavioral health patients. Many of these patients, uh, this patient population need a long-acting antipsychotic med that's administered as it's administered as injections on a monthly basis. So currently, many retail pharmacies can dispense the drugs, but they will not administer the drug, and so we have mentally unwell patients sent home to potentially incorrectly administer an IM injection to themselves. We've recently had two patients who had to be admitted into the hospital because of their lack of understanding, they had administered the drug themselves, did so in the wrong areas, causing damage and infection in both instances, and both times that caused a lengthy hospital stay. So some of our behavioral health patients, even if they do go elsewhere to have a healthcare provider administer the drug. A lot of times they wait until they are actively psychotic, which is not the intended use of the med. Um, if we could dispense and administer these particular drugs, we could keep up with their regimen, keep the patients safe and out of the hospital. We could decrease readmissions and length of stay, so that we free up beds for other patients who need them. And most importantly, we want to treat these patients in a preventative manner and Make sure that they can have a good quality of life. So the last story that I want to share is really, it's personal uh about my dad and uh back in October, he was at our urology clinic, and he needed IV antibiotics, so he was sent home from that clinic with an order, uh, Saint Bernard's Home Health had already been following him for some months, and so he really didn't understand why we had to have a different company to provide those antibiotics, but I explained that, uh, my dad has insurance and even with that, he had to pay a copay of over $400. So the infusion company, I was home with him that day. They called me, um, said that it was ordered, let me know the copay amount that we could pay over the phone, uh, or that he could pay the next day when they showed up to administer it, but it did have to be paid upfront. So, fortunately, he could afford that and we would have made sure that he got that, um, he wrote the check and it was ready when they got there. But that's not the case for all patients. So, several patients um don't understand why they really need it, if they can't afford it upfront, they would just choose not to get IV antibiotics. In this particular situation, you know, there's a chance of the patient going septic and then ultimately, um, admitting or readmitting to the hospital. So if we were able to provide home infusion services, we could, we could eliminate that upco front up costs upfront cost to the patient. Um, we chose a local company for him, and they did a great job providing the service, but that just introduced yet another entity into the mix of his care that didn't have to be there. And anytime you bring in another party that just opens up opportunity for gaps in care. So, um, that could have been avoided. We could, we could always get better continuity of care to our patients if we can, if we can keep that, we have the medical history of the patient. We have their current care plans, everything is in, in the EMR. so everybody can see that, um. Increase compliance by doing all of that. So in, you know, in these instances, we always try to intervene if a patient cannot afford something, uh, we still see them readmit at times, but we have set up charity agreements in recent years with infusion companies, so we pay for the services if the patient cannot pay themselves because we have this in place for our uninsured or underinsured patients. Um, this has helped, but we sometimes still have delays getting the meds started and Ultimately we're still paying the company for the services. So if we could just provide the service, um, this would eliminate those delays and we could just directly cover the cost. And I will just add one other thing, so he actually had to go back to the urology clinic yesterday and um and he messaged me when he left and I had called him to let him know I'd be speaking about this, and he said, well, I got an antibiotic while I was here. It'd be nice if I could have just got that filled because now I've got to go home and make sure that it gets filled before my pharmacy closes. And he lives in a rural area, a little town called Hoxsey, Arkansas. Um, I know that he's not gonna change who his pharmacy is, but he also is on oxygen. He has a trach, he has a pig. So if in that instance yesterday, he could have avoided going one more place before he got home and had his med that he needed, he would have taken it. Thank you. Well, you just give your father our our best wishes. Thank you. Yes. I have Senator Peyton and then Senator Penzo. OK, sender Penzo. I just have a question. Uh, have you, have you seen Senate Bill 86 yet? I have not. OK, I think it addresses the concerns that you have with your situation, um, so, uh, depending on what happens today, you might take a look at that one because that might be a bill that you support as well, and that's a compromise bill, uh, or the start of a compromise bill, I guess I should say. So if you would take a look at that one and see if it addresses your needs and and let us know if it If it doesn't. Thank you. Thank you. Any other questions from members of the committee. All right, seeing none, Senator Dismay, you're recognized to close for your bill. First, I do want to say that I am thankful for the discussion today. I'm thankful by the questions by the committee, um, and what I was addressing or attempt to address earlier is the fact that I think we're making a lot of, a lot of arguments that just aren't necessarily real. I think we put up lots of windmills where the associate pharmacy Association itself has put up quite a few windmills that just aren't really threats. I believe that with the passage of this, we're going to act like all other 48 states that do not have some type of barrier in place for nonprofit hospitals to have a retail pharmacy. I believe that it's going to increase access for patients and then also improve outcomes for our patients, which I hope is the goal of this committee, and I think that it is. I believe that our nonprofit hospitals will still contract when needed and when appropriate with pharmacies across this state. I think that if the pastors of this, we will be able to better treat patients when they need it in the time frame that they needed. Again, there's lots of questions and discussion about, I'll go back 24/7. Why aren't we open 24/7? Well, how could you be 24/7 if you could only take a walk in? What would be the point of that? But the current law, the way that it's written, bars them from being able to do just that, to have a retail pharmacy that could actually be viable. And then we touched about it just a little bit, but FQHCs operating the state in all corners of the state. Haven't disrupted the model for our pharmacists. In fact, they are themselves contracting with pharmacists just like our nonprofit hospitals do in places that do not need to have their presence because it's being fulfilled by a pharmacist. Uh, with that, I closed for the bill. I would appreciate a good vote. Thank you. Motion to pass and second, all those in favor say aye, aye, and opposed. I have it please call the roll. Sooner Flippo. So was I. Senator Hill. and he is I. Sandy. Senator Lady Santa Penza center Penzos no. Senator Payton, Senator Payton is no. Stand love So Senator Lovos, yes. Senator Wallace. No. in arms about now. Would anybody like to change their vote or vote that has not voted. All right, seeing none. There's 4 eyes, 3 nays, and 1 non-voting bill fails. All right, any other business to come before the committee? All right, seeing none, we're adjourned.