 Thank you, we're back from break it's 11 o'clock on April 27th, and we're in the process of trying to understand some language that was shared with us from folks who've been working together to clarify a section of s 120 on the 340 be language PBM insurance company issues. We have reached out to Sarah teach out to be with us this morning if she can't be here, we will we will reach out again and we'll bring the folk you Helen laban Devon green will bring you back in to have a conversation with us about the language so Jen what i'm going to suggest is that if you don't mind. I think we should have the language up to look at it, and then there are some pretty specific questions about the. The meeting of this overall I think that. You did bring us this recommendation and Sarah teach out is going to be with us in about five minutes, which is good just had a note from her. So we'll we'll we'll go ahead and. I can't see everyone so. Helen or Devon. Do you want to walk us through this at this point and talk about it, I think our specific question, one of our specific questions was on the implication that the patient benefits from. This so why don't you tell why don't you talk with us about what the problem is and then how this solves the problem. Center comings I think you were going to say the same thing I was going to say it, I don't understand what the problem is we're trying to solve. Thank you good so Devon and Helen i'll turn it over to you collectively and you can help us understand what the problem is and how language in this bill might solve that problem. Sure, so Helen layman by State Primary Care Association at this language is responding to a very specific action by pharmacy benefit managers and and in particular express scripts has done this federally, it is a move to increase the regulatory. Or the sorry the administrative burden on pharmacies around 340 be drug prescriptions by changing the system by which they need to report file claims for prescribed drugs that are going to a 340 be entity, and the in the background intent of that move by the PBMs was to both have a chilling effect on participation in 340 be and also set up as a structure by which they might in the future change the pricing on those drugs that are that are in 340 be nationally there is not anything there's safeguards on the 340 be program broadly, but there isn't anything nationally that protects against this particular way of getting. At the PBMs will reducing participation in 340 be, however, if states have something on the books and state statute that says you can't. add an additional regulatory or administrative burdens on top of participating pharmacies, then the PBMs, including express scripts have been. honoring the state statute, so this is very, very narrow, this is part of a national effort state by state to address this problem, I think North Dakota past the yesterday West Virginia is in Utah. Tennessee is looking at it Ohio, so this is a this is a movement by a lot of different states to address this issue. And so is a very targeted piece of legislation that's simply trying to cut off that avenue before all PBMs start down it and, as I said, as part of a national effort in this regard, and we did originally take. statutory language from what was being seen in other states that worked with blue cross blue shield to adjust it to make sure that was appropriately narrowly targeted to this one issue that we're dealing with so that's the intent of this. Language, which is why it probably reads a little bit funny because it is so very targeted. Can you. Before. Devin was at you go ahead. Yes, okay I was just going to say the effect of what express scripts is doing is if the pharmacy doesn't comply with in 10 days they lose the entire express groups contract which creates a real access issue and is a pre draconian response. So, can you explain that clearly for the committee, because it sounds like this then would have an effect on patients, can you talk a little bit about that. yeah and Helen can jump into I think there's a short term and a potential long term effect right so they're saying pharmacies if you don't do this within 10 days. you'll lose your contract with express scripts which creates an access problem for patients and then the other pieces as Helen mentioned it's potentially setting up. prescription drugs that are flagged that may have their prices changed later to reduce the amount of subsidies that healthcare providers receive from the 340 b program so that would go towards. The access around you know, a lot of healthcare providers rely on 340 b funding and if it's cut or if part of it is lost that could potentially lead to. You know, lots of access in other areas like services and other things. Right, I would concur are so the. The impact of this legislation on the patients is preserving the integrity of that 340 b program which is being used to reduce drug costs it's also being used, for example, many of my members use it to invest in prevention rights so they'll use it for. A healthy food programs with schools and with children and families, you know, to prevent those chronic diseases, such as type two diabetes that require drugs down the road so it's a really. strong approach and a strong component of what the fqhcs and other participants in 340 b are are are doing to serve Vermonters and we don't want. That funding to be diverted to national pbm companies we wanted to come to Vermont to serve Vermonters is what we would like to have happened. Senator hooker go ahead. Thank you so thank you women for being here and clarifying this but but to be clear this isn't going to affect and neither does any of the 340 b programming affect the cost of drugs for. Consumers for consumers, but it helps the providers to provide services that they would otherwise not be able to provide because the cost for them for drugs would be at a higher rate. Am I understanding that correctly. Yes, I would say the fqhcs often do pass on the savings so it can be used to reduce the price but you're correct in that the mechanism goes through the practices to the patient. It's not a it's not an automatic discount like 25% off all drugs in Vermont sort of thing. And we are and I should say that this legislation is preserving the status quo that's all we're trying to do is not move backwards and what's currently available so so that's what this is attempting to achieve. Thank you. Senator Cummings. You're muted Senator. I understood some of this. The 340 b is a federal program right. Yes. And that's where the fqhcs and the hospitals by their drugs at a certain rate. How did the farmers, where did the pharmacy benefit managers get to play in this. Well they're sort of the middle man right so I'm, I'm. 340 b drugs go through a PBM. This is Sarah I can jump in. Please do welcome Sarah teach. I'm facing my hand but I don't think you can see it. Now go right ahead. This is a conversation. Yes, so Sarah teach out. I represent Blue Cross Blue Shield of Vermont and health insurance companies use 340 b or. Pharmacy benefit managers to operationalize essentially the drug benefit for our members. And so the 340 or the PBM contracts with the 340 b pharmacy and with all other pharmacies and when commercially insured member goes to get their prescription drug filled at one of these pharmacies. It's the PBM that manages the, you know, the administration of that purchase. So I think I emailed you but commercial commercially insured patients pay the full price for these drugs, and it's the spread on the low price that the 340 p b pharmacy gets the drug for and the amount that they sell it to the commercially insured patient for that's where they make their revenue. You know, the rebate pieces arcane for sure. When we contract with a PBM, we look to these rebates to lower the prices for our members because we build in the price of drugs into the premium, and we also include what we anticipate the rebates to be so when we start losing these rebates what will happen is premiums will increase and that's our concern here. I did want to also say that until this July ESI has been the PBM representing and working for Blue Cross, we are switching to a new PBM starting in July that I don't believe is using these practices. So there'll be a shift at least from Blue Cross's perspective on office forks, and we really would like the study to look at what's happening with the rebates and who's being impacted and that's why we have the piece there about looking at the impact on patients, commercially insured patients as well as the impact on the 340 b pharmacies. Okay, so who would like to help us go through the language here so could Helen can you please restate the problem that we are addressing and then as we go through this language how that language resolves or solves that problem or begins to. Helen can you do that. Certainly I can I can I can state the problem. This is Sarah's language to which we have agreed so I don't want to overstep into her lane and walking through the language that she clearly knows very well since she wrote it. The problem that we are attempting to resolve is that I say PBMs plural express scripts as Sarah mentioned was the first one to actually do this. They have added an additional administrative requirement onto pharmacies who want to participate in 340 b that they that they use a new modifier system to identify those 340 b claims at the time of filing the claim and they have given a very short turnaround to come into compliance or your or the pharmacy cannot participate as part of 340 b program as Devin indicated. We, the pharmacies in Vermont have found it impractical to comply that quickly with this rule so this language would prohibit them from implementing this new administrative burden, it would additionally as Sarah indicated, have a I don't know if it's called a commissioner task force a group with DFR and the AG office to look at the that bigger problem so this is a this is a year long temporary fix it during which time we will have these entities who do have deep knowledge in this world. Look at the issue it and report back with a longer term solution. Okay, that that that actually begins to make some sense, I think, and helpful. So, there was a communication between and among you all I have a couple two questions one, you've included the Attorney General's office here. Can you explain that. This is Sarah and I will admit that I did not ask the Attorney General's offices this is okay but they do, you know, do some reporting to the legislature I believe on what is happening with drug pricing, and so have some, you know, work in this space already. I think we felt like either the AG's office or the Department of Financial Regulation had sort of the appropriate connections with national organizations that could help them do this work. And we have since reached out to the Attorney General's office and they agree that they have that expertise and can participate in this. Oh, thank you, Helen. Okay, so that that answers one of the questions and there was also the concern about the date of January 15, and I think the last email I received this morning, or late last night was that that date might be July 1. So, instead of was it December 31. Was it the December 31 2022 date that would be changed. I'm trying to remember what the backdoor. It's the effective date and if you look down under for the way it's drafted here it takes effect immediately and expires at the end of 2022. I'm not sure if it can take effect immediately. I don't really know how quickly this could happen. And then we were trying to decide whether a year made sense or through a calendar year. You know, plan years aren't exactly the same. For example, Blue Cross contracts with a PBM on a fiscal year we do July 1 to July 1. So I wasn't sure what the right time period made the most sense. Okay. What would be the recommendation from the group. I think we would recommend starting on July 1. I'm always 2021. Right. And then it could go for a year. Okay. I think we would like it to start immediately just because this, this is happening now. And so understanding that it may not be able to happen right away but we, we would rather it go into effect sooner rather than later. Yeah, so it would, it would take away the three or four months for someone to impose an administrative burden of some type. I got it. Okay, I understand that. Okay. So, Jen, do you have specific questions about the language you're looking at or is that something that you can sort out. I think the one that I'm not sure was talked about yet was this in the report language the possible state of purchase to the developing issue of pharmaceutical manufacturers ceasing to pay rebates to commercially insured Vermonters, and we were, I think confused about how the about manufacturer rebates directly to Vermonters and is that what was intended or is this. A good question. They don't pay the rebate directly to the Vermonter. Maybe to benefit Vermonters. Take away. You're suggesting that. So that's something I think that we need to resolve because that right now it's inaccurate so I think I need to understand if this is the issue is the issue really about the manufacturers and and paying rebates to however you want to say it to benefit Vermonters or is it about the PBMs. Not passing along the way I don't I don't I need help framing I think framing this particular issue. I guess more manufacturers ceasing to pay 340B crisis, or to participate in the 340B program. I don't know Sarah is that I mean, this seems to be looking more at rebates at right at at manufacturers and rebates unless at PBMs. Anything having to do with PBMs going forward. Great. So the source of the problem is that the pharmaceutical manufacturers have stopped paying rebates for drugs that are being prescriptions that are being filled through 340B pharmacies. But isn't that a requirement of the of their purchase I mean if they're selling their drugs in the Medicaid program isn't that sort of one of the underpinnings of the 340B program. But what I'm understanding is they're putting in administrative burden on the pharmacist. So once that's in place then they don't have to pay the rebates. PBMs are doing that but there are some manufacturers this is all part of what's happening with 340B right now there are some manufacturers who have just refused to pay the 340B price on some drugs. And so I don't know if that is supposed to be looking at that or if it's looking at rebates. Yeah, so Senator Hardy before you ask your question my suggestion is going to be that this language obviously has isn't isn't clear so we need to add clarity to this. Otherwise it's not helpful. What I'm going to suggest is that that Helen, Devin, Sarah work with Jen to bring clarity to this and this would be something that we, we can look at tomorrow morning. But so but go ahead Senator Hardy. Thank you Madam Chair and thank you for that suggestion because it seems to me that one and two are directed at trying to solve a problem that's been brought on by pharmacy benefit managers. And three is trying to solve a problem that is apparently because of pharmaceutical manufacturers. So there's a disconnect between those two. And if we're trying to solve the first problem then wouldn't we want the report to be on how to solve the first problem and if we're trying to solve the second problem, then we need to have more information about what the second problem is. So, it, there's just a disconnect between one and two and three and that's where I got very confused as to who who is the causing the problem it sounds like maybe there are two problems to solve. But that's not clear in this language. So, comments from Sarah, Devin. I would say that I think that the underlying theme here is that we regret that we were caught a little bit off guard, such that one or one and those one and two were necessary at a late stage in the legislative session and we would like to now get out ahead of what's going to be happening nationally, so that we aren't in this situation again so I believe the number three is meant to be inclusive of multiple brewing national issues including this one so that we aren't having these rush discussions at the end of the session in 2022 but instead have a proactive approach to what we what we're going to accomplish. I do understand that to be the case but it's not clear that that's the case so my suggestion again is for you folks to put your heads together and work. Again, is that makes sense from your perspective to work with those with them and, and keep us in the loop, so that we can come back to this tomorrow morning we'll put it on our agenda. First thing. What we usually started I'm not available at first thing but I can probably what time are you available because I think I can be here because I have a bill going in the house. I think 1030 they move to a different topic that I will, I can catch up on. Okay, so we'll put it on our agenda. For 10 o'clock 101015 has that we'll we can we'll we can firm that up a little bit. Madam chair can I just add one quick thing also when you're looking at it the effective date language seems a little funky. Yeah, that's not yes I will I will. There's a lot there. I need. Yes, I need to better understand the intent there and then I will do it as either just session law language or a perspective repeal of statutory language. Okay, thank you Jen. Okay, so let's take the language down. And I guess one question for the committee is did you I think you heard different testimony from from different witnesses about whether the language to take effect on passage or on July 1 and did you make a decision on that. I would recommend on passage, simply because if we don't put it on passage there's a period of time within which administrative decisions can be made that will interrupt the 340 b program decisions by pbms, or maybe one. I just wanted to confirm that because you, you'd heard. The committee disagrees with that. I would say that. All right, so let's let's do this. We, I think we now are getting closer on that section. Sarah you also sent me an email this morning. I mean, first thing it was later in the morning, because nine o'clock about the section on this administrative costs for insurance. Can you. That is section or is it nine or 10. I think it's section seven. Which one. I think it's sections. So, I guess section seven of all. We provide a ton of information both to the Department of Financial Regulation and to the Green Mountain care board about our administrative costs as do all insurers. And so if you're going to have this additional report, I would recommend including additional information. The two pieces that I would know is that there are a number of contributing factors going into Blue Cross's administrative costs. One of those are the Green Mountain care board bill back, which is increased by on average 17% a year since 2016. And then the other thing is the state's shifting of costs that were typically before this, born by the state of Vermont and general fund dollars which is the billing for Vermont Health Connect, which is now also being shifted to health and administrative costs, as well as the costs to administer health care reform for the state of Vermont. So we've spent millions to change our computer systems to enable the capacity to do capitated payments. And so these are all costs that are drivers of administrative costs and so to just compare simply health insurer administrative costs to the CPI is not a very thorough picture of what's happening. So in this, as you understand it is a Green Mountain care board. This is a report from the Green Mountain care board. So I think this is an opportunity for the legislature to look at some of the issues that you're talking about because one of the things that Blue Cross and Blue Shield has done that is very commendable is to work with our health care reform efforts. So it's not, it's not a negative this is not all negative so but you're suggesting that if we're looking at this, we should ask for broader descriptors. Right, because the what this study asked for right now is just health insurer administrative costs and compare them to the CPI. All right, well, can. Yeah, any other information pretty pretty dry right. Why don't we do this. It would be helpful. If you don't mind providing us with perhaps some categories of information that might inform this a little bit better. Right as a committee whether or not we want to keep this section in the bill after we've looked at that be helpful. We don't I'm not interested in having administrative burden, but it is a Green Mountain care board report and if the data is there, and it helps us understand what's going on in the insurance world, administratively. I think that's helpful. Senator Cummings and then Senator Hardy. I think though it administrative costs in order to get a clear picture we need to add in the things that Sarah listed you know, there's a cost to doing the things we're asking insurers to do and we need. It's like unfunded mandates to school you got it. You exactly and so sometimes the administrative cost is a result of us. I think. Senator Hardy. Thanks. I was just. This was language that you had had requested Madam chair and so again, sort of like what's the problem we're trying to solve. I mean, because it's not very well. It's not fleshed out and so we'll look and see what Sarah if you don't mind bringing us some clarification of what would help us understand the administrative costs. And then we can decide as a committee to include this as a report from the Green Mountain care board or not. That's it. We hear consistently that administrative costs are too high. And then we ask for things like participation in healthcare reform efforts and all payer efforts without understanding that there is an administrative costs associated with that. Some of that needs to be is on our shoulders on us. Okay. So anything else that. So, Sarah, thank you for that and Helen and Devin thank you. And you can reach out or Jen will be reaching out to try to put together some language that makes sense to us and that does articulate and solve the problem all at once. Be helpful. Okay. So committee. So we're, I think we're finished with that part of S 120 of those sections of S 120. That so many states are reacting to this across the country I think is a is an important, important for us to know that so Jen on S 120 as it goes forward. We had talked in committee about making a committee bill but it seems like that becomes complicated. And we're known for complicated in our committee but we don't need that for this bill. So do you want me to put it back as a strike all to S 120. I think unless a committee disagrees, I think that makes a lot of sense. I think that has been confusing to for some people not to know what the bill number is 2,488 goes. Yeah. No, it's fine. It keeps it, it keeps it where it belongs. Senator Hooker when you were in appropriations that the issue came up I understand if you want to. I don't understand what the number was going to be and what they, you know, so I think Jen is correct that it could be simpler if we just kept it the way it was. Keep it simple. Okay. Anything else on that. Okay, it still has a bit of a ways so let's try to solidify our work on S 120 tomorrow morning. Then our clerk can take a vote. Did we actually take a vote. Nellie on Friday. I believe we did. I'll double check that out. We do any paperwork. Okay, did you do paperwork. Senator Taranzini. Well, having voted in the positive I'd like to have a reconsideration of my vote on S 120. So, Senator Alliance Sir to interrupt we had a positive vote of S 20S 120 of a 500. Oh, it was a 500. Alright, having voted in the positive I would like to ask the committee. If I might reconsider my vote. If I might vote on a committee bill was it not Senator Taranzini. This was yes. Yeah, okay. I would like to reconsider my vote. Is there any. That means that we, if you, if you agree with me and allow for me to reconsider my vote, then the vote on Friday becomes null and void and we start over. Okay. Sure. Okay. I mean, that's, that's proper procedure. Got it. Is anyone not all those in favor of allowing for me to reconsider my vote. They I and raise your hand. I. Okay. So now committee I'd like, why don't we hold off on a further vote on S 120. And until tomorrow and we'll try to do what needs to be done to the sections. Senator Hooker. So this just negates the whole committee bill and what Jen will bring us tomorrow will be the strike all that I'll be reporting on. Okay. Yes. That we that that hopefully we'll get to a good place with the PBM language or 340 B language. If not, it's gone. Yeah. After all of our gymnastics with this bill, is there even a, do you know about a path for it, given the late date, we're working on that. Okay. We're working on that. Appreciate nothing. I really would like to have this bill go forward. I think it's very important for it to go forward. So I had a conversation with the pro tem yesterday about it and we're working on it. Thank you. Yeah. Yeah. Okay, anything else on that one. Okay, so we have a little bit of time so you can start to contact people on the Children and Families Council for prevention. Or not anything else. All right, Nellie, we're good.