Senate Public Health Committee

January 22, 2025

 

Senator Missy Irvin [00:00:00] Okay, members, we will call this meeting to order. Welcome. Good morning to the Public Health Committee meeting. We will go ahead and get started. Just as a note, we are trying to make sure that we have clean agendas. That's beneficial to my members of the committee, also to the members of the public. So, again, if you want to run a bill, just contact me. We'll get it scheduled. And so we can just be a little bit more systematic in our approach. So with that being said, yes, Senator Love.

 

Senator Fredrick Love [00:00:33] Thank you, Madam Chair. SB 17, I want to put that on a special order. I'm waiting for some law enforcement. So I want to put that on a special order. So.

 

Senator Missy Irvin [00:00:45] Okay, let me know the date. So if you'll just let me know the date and we'll get that scheduled for you.

 

Senator Fredrick Love [00:00:51] Okay. Thank you.

 

Senator Missy Irvin [00:00:52] And to that point, good reminder, if you do want a special order because you have testimony coming in, we will get that scheduled. So thank you for that. All right. With that, we will go ahead and get started with SB 58. Senator Dismang, you're recognized. Please proceed. Good morning.

 

Senator Jonathan Dismang [00:01:26] Thank you, Senator. Members, appreciate you guys letting me take the time today to present 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 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. 

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 the local pharmacists that happened to be in the legislature. That's why it exists. 

Two, what I want us to know is that when it was passed originally, it had nothing to do with 340B pricing. Now it has 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 hospitals, our nonprofit hospitals, who 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 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 is exactly what this bill does. 

I do have some folks here today that would like to testify more broadly about how it personally impacts their hospital systems and in particular, the patients. And then also I have James Welborn, if he could sit with me in case we have any more detailed questions about 340B pricing that I may not be able to answer. He is with Saint Bernards, who is a nationally accredited 340B hospital.

 

Senator Missy Irvin [00:03:22] Excellent. Just go ahead and invite them to come on up to the table, please. Go ahead and invite them to come up to the table.

 

Senator Jonathan Dismang [00:03:35] Again, I'll save my introduction, will allow some testimony to take place. 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 why I believe it's the right thing to do by your folks back home that need to help the most.

 

Senator Missy Irvin [00:03:52] All right. Yes. If you'll just state your name for the record, please, and then you may proceed.

 

James Welborn [00:04:00] My name is James Welborn. I am the assistant vice president of pharmacy services at Saint Bernards Medical Center. I have been working in a 340B program for a little over a decade now. I have completed the Apexus Advanced Certification for 340B, and I did that about seven years ago. I'm really just here to answer questions specifically, technical questions regarding 340B.

 

Senator Missy Irvin [00:04:26] I'll just start because I think it's really important that we have a specific lay of the land. Since we're the only state in the country that has this restriction, my understanding is it has complicated hospitals' ability under the 340B structure in order to get these medications for their patients. Can you just elaborate on that?

 

James Welborn [00:04:52] Yes. So from a 340B perspective, 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 or 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. And that's where we're seeing that preventative access for some of our patients.

 

Senator Missy Irvin [00:05:28] Just one further follow up. When you have a physician trying to order medications, how is that complicating the situation for that physician or that hospitalist on behalf of their patients?

 

James Welborn [00:05:41] Sure. So it really comes down to currently we have a bigger focus on specialty medications 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 in our communities that are really for high risk medications, high dollar medications. 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 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 had with out-of-state specialty pharmacies.

 

Senator Missy Irvin [00:06:44] Okay. Thank you. Senator Payton, you're recognized for a question.

 

Senator John Payton [00:06:47] 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 is making making it cheaper? What makes the 340B pricing lower cost?

 

James Welborn [00:07:08] Sure. So part of if a manufacturer wants to 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. But 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.

 

Senator John Payton [00:07:35] So the government sets the price and the manufacturer has to agree to it?

 

James Welborn [00:07:40] So the price is set based on a-- it's a pretty complicated calculation based on average sales price. And then there's a ceiling point. Like I said, it's a pretty complicated calculation that they put together. And then we have Apexus that negotiates with the manufacturers, as well as sets a ceiling price for that. But yes, it is provided through those ways.

 

Senator John Payton [00:08:06] So either way, that price is only available to certain hospitals, not to private industry, private pharmacies or anything like.

 

James Welborn [00:08:17] Correct.

 

Senator Jonathan Dismang [00:08:17] It's made available to them but by a contract. That pricing can then, there's a trade off that they do in the pharmacy. Do you want to walk through a little bit about that? And when we're talking about 340B pricing, that's what they pay for the drug, not what they sell the drug for.

 

Senator John Payton [00:08:31] Well, that leads into my next question.

 

Senator Jonathan Dismang [00:08:33] It's the 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-- and someone else can talk about all the benefits it 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 in talking to several different folks, for instance, if you contract with a pharmacy, which, by the way, we can get in the detail of that later-- I don't believe that's going away and no one has an intent of that going away-- the pharmacy is going to take a percentage off the top. So if it's a high cost drug, maybe it's a $1,000 drug, the agreement is that they take 15% off the top, then that is 15% that then 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 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 indigent care. Their problem is, when you contract to pharmacies and a for-profit takes 15% of that off the top, that means that 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 going to help provide care for people that can't pay for care.

 

Senator John Payton [00:10:00] So if I could have a follow up.

 

Senator Missy Irvin [00:10:01] Yeah.

 

Senator John Payton [00:10:03] So the 15% is the profit margin or the margin that you're saying the private is getting, taking off the top or whatever, correct? So that's used for their over the--

 

Senator Jonathan Dismang [00:10:17] The hospital pays-- let's make it up-- $10 for a drug, it's required to sell it at the rate that everyone else is required to sell one for. So let's say they sell it for $100. The hospital, technically, 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 for their own care. And instead, off the top--

 

Senator John Payton [00:10:37] So when you say into the program, you're talking about overhead, the hospital's overhead.

 

Senator Jonathan Dismang [00:10:44] Not necessarily.

 

Senator John Payton [00:10:44] You make a margin on a product and you use that to pay your overhead.

 

Senator Jonathan Dismang [00:10:47] 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 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.

 

Senator John Payton [00:11:06] Is that not every hospital, private and--?

 

Senator Jonathan Dismang [00:11:08] Absolutely.

 

Senator John Payton [00:11:11] Okay, I'll get out of the queue and let some other questions go.

 

Senator Missy Irvin [00:11:14] Okay. And if you could just put the mic up to your mouth to speak. Sometimes with the heat, it's hard to hear in here. Other questions from members of the committee. All right. Seeing none, let's go ahead. And do you have somebody else that was-- I'm sorry.

 

Senator John Payton [00:11:37] I had more. I just assumed.

 

Senator Missy Irvin [00:11:39] Well, that's why I asked. I didn't have any other questions from members of the committee. So go ahead, Senator Payton.

 

Senator John Payton [00:11:48] 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 they have a positive cash flow in a non profit entity like this?

 

Senator Jonathan Dismang [00:12:13] If they have a positive cash flow, they're required to roll that back into their mission, which is essentially, at the crux of it, to help people. I mean, it's to provide health care. They don't have a choice to pocket that money.

 

Senator John Payton [00:12:24] So basically when they have a positive cash flow, they raise their overhead by rolling it back in. And so my question is, if--

 

Senator Jonathan Dismang [00:12:34] I don't know that I would agree with that. I think it's a little more--

 

Senator John Payton [00:12:37] Well, I'm getting to my question. So my question is, if private, for profit hospitals have the ability to have the pharmacy and they've chosen not to, 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 one of these not for profit hospitals. So I'm looking at whether or not this is a good business decision for them to have a pharmacy. And other than the 340B pricing, which 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.

 

Senator Jonathan Dismang [00:13:37] But you're not going to be asked to subsidize them. I mean, a nonprofit hospital, just like any hospital, is getting paid. 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. And they're getting private pay from your insurance. 

The way that all this is subsidized at the end of the day, and this is a much bigger discussion that I hope that we have, in particular that you all need to have as the Public Health Committee is, who's 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-insureds, 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 access 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 nonprofit hospitals, I would argue that for everybody sitting in this room, most everyone of you, the backbone, the fundamental place of care that you get care from is your nonprofit hospital. The vast majority of us in the state. That may be Unity Health for me and you. It may be White River. It may be Saint Bernards. 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 340B pricing, 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. Not us as a state.

 

Senator Clint Penzo [00:15:38] If you would clarify for me, did you previously say that if a hospital has a contract pharmacy on site that they cannot handle the 340B?

 

Senator Jonathan Dismang [00:15:51] No. Right now, because there's only four grandfathered hospital pharmacies in the state--.

 

Senator Clint Penzo [00:15:56] My question was contract pharmacies.

 

Senator Jonathan Dismang [00:16:00] Yeah, those will still continue. They can still contract with the pharmacy. There's nothing that prevents that.

 

Senator Clint Penzo [00:16:05] Can those contracted pharmacies process the 340B for patients?

 

Senator Jonathan Dismang [00:16:10] They do for a fee. Yes, but not all the time. And I think you'll hear testimony in a little bit about how 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, in particular with specialty drugs. That's my understanding. Someone else can testify to it. But not in all cases, no.

 

Senator Missy Irvin [00:16:32] Any other questions? Yes.

 

Senator John Payton [00:16:34] 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 asking this question as a gotcha or anything like that. One of the arguments that's been made to me is that we're the only state that has this prohibition. And I think most of the hospitals and pharmacies and health care profession in Arkansas supported it. But my question is, when we implemented the private option, how many states had a similar model?

 

Senator Jonathan Dismang [00:17:05] I think there's maybe one or two other states have a QHP model. I don't know the answer to that.

 

Senator John Payton [00:17:10] No, I'm talking about when we implemented it. But 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. Thank you, Madam Chair.

 

Senator Jonathan Dismang [00:17:22] I understand.

 

Senator Missy Irvin [00:17:24] All right. Seeing no other questions, thank you so much. We'll go just straight down the list of the people that have  signed up to testify on the bill. Mr. Gehrig. I'm sorry. Ryan. I'm just going to say Ryan with Mercy. If you'll just identify yourself for the record and who you're associated with or who you're with and you're recognized to speak for SB 58.

 

Ryan Gehrig [00:18:01] Okay. Thank you. Yes. My name is Ryan Gehrig. I'm the president of Mercy in Arkansas. And appreciate the opportunity to share with you why Mercy is for Senate Bill 58 and talk a little bit about what we're not about and then hopefully address just some of the other questions I've heard out there. First and foremost, we can get lost in the weeds on this and it can be very confusing. I want to bring this back to, first and foremost, talk about this in terms of the lens of the patient. 

One of the first and the priority reason why Mercy is behind this bill is we asked the question, will this improve the lives of our patients? And the answer is unequivocally yes. 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. I 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. 

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. That's delayed. They end up having issues. And what happens is they end up 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 in our entire continuum. And so we've got to be thinking about, when you hear about things of our system is broken, there is 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 has 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've 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, it checks that criteria perfectly. Just a few other remarks. 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 will come out in April, but I'll go ahead and share it with you all. We're going to be losing our five star status in Rogers because of the medication adherence requirements and the challenges that we face. 

Just a couple other comments I heard. 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. Have no desire to get into the retail pharmacy business and try to put out our colleagues and friends that are part of the health care community. 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. We have several that we're evaluating and working with on looking to expand that. We don't have any in 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 approval to serve as a 340bB. So we just met that recently. And so we're going through the same process there to look at pharmacy arrangements. So I wanted to address that as well.

 

Senator Missy Irvin [00:23:59] Thank you. Are you open to questions?

 

Ryan Gehrig [00:24:02] Sure. Yes, ma'am.

 

Senator Missy Irvin [00:24:02] I have a quick question. With Arkansas being the only state with this prohibition in place, the quality measures that you were discussing, are those federal quality measures through Medicare?

 

Ryan Gehrig [00:24:16] Yes, they're CMS measures.

 

Senator Missy Irvin [00:24:17] Okay.

 

Ryan Gehrig [00:24:18] CMS leads  the way in payers in adopting similar payment--

 

Senator Missy Irvin [00:24:24] Quality measures.

 

Ryan Gehrig [00:24:25] Right. Yes, ma'am.

 

Senator Missy Irvin [00:24:26] Right. The question is, though, 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.

 

Ryan Gehrig [00:24:48] You're right. That's correct. It's a Medicare policy. We're held accountable for that total care for those patients. And there's an 'all cause readmission.' So if for any reason for these certain disease classes that they end up back in our hospital, we get penalized. I won't get into all the details around reimbursement challenges that we get 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.

 

Senator Missy Irvin [00:25:20]  Okay. All right. Thank you. Senator Wallace.

 

Senator Dave Wallace [00:25:27] Sir, thank you for being here today. This is not an easy bill for any of us. Assuming that this bill would pass and you have a patient that leaves your hospital and he receives his medicine-- I live in a very rural area. For most of my people, the closest hospital is at least 20 miles away. In many cases, 30 miles away. Those people come back to my hometown of Leachville or Monet or Manila, and their 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 I worry that by doing this, we're going to close small town rural Arkansas pharmacies. What's your answer to that?

 

Ryan Gehrig [00:26:30] So Mercy has four critical access hospitals that we operate-- excuse me, five. And in my opinion, and I won't speak for the other critical access hospital administrators in the room, but from Mercy's perspective, if there's a retail pharmacy available in those communities-- Paris, Booneville, Waldron, Berryville, Ozark-- we have no interest in establishing a retail pharmacy in that community. Now, if for some reason that retail pharmacy closed, as you described, I would hope that this bill will be crafted in a way where that rural hospital could operate a retail pharmacy for the reasons you just cited. But we have no interest or plans in those communities to have a retail pharmacy, to open one.

 

Senator Dave Wallace [00:27:21] Follow up, ma'am?

 

Senator Missy Irvin [00:27:21] Yes, sir.

 

Senator Dave Wallace [00:27:23] And I appreciate that and you're blessed where you are. But in Leachville and Monet, Arkansas, if that closes, I've got patients that have a hard time driving a mile or two miles or three miles because of poverty or because of illness. Where do they go if their hometown pharmacy is not there, that 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 got to be another answer. There's got to be a compromise somewhere.

 

Ryan Gehrig [00:27:59] I agree. I think you're also touching on how it takes very little to dissuade somebody from getting their prescription filled.

 

Senator Missy Irvin [00:28:11] Senator Penzo.

 

Senator Clint Penzo [00:28:13] Thank you, Madam Chair. I was asking earlier about the fee for-- it was mentioned that contract pharmacies within hospitals charge a fee to process that 340B. Can you elaborate on that, how it works, what kind of contracts you have with your onsite pharmacies within Mercy?

 

Ryan Gehrig [00:28:35] So I have our VP who is over our pharmacy. Would it be okay for me to invite him to help articulate that?

 

Senator Missy Irvin [00:28:41] Yes, absolutely. If they'll just come forward.

 

Ryan Gehrig [00:28:43] His name is David Fortner. He's a VP of operations.

 

Senator Missy Irvin [00:28:46] If you'll just state your name for the record and who you're with, then just pull that microphone up to your-- there you go. Thanks.

 

David Fortner [00:28:53] How's that?

 

Senator Missy Irvin [00:28:54] Yes, sir.

 

David Fortner [00:28:54] David Fortner, vice president, patient services at Mercy. I'm a pharmacist as well. So, Senator Penzo, to your question, if I understood, you were asking about some of the contract pharmacy arrangements and the fees associated. Is that right?

 

Senator Clint Penzo [00:29:09] Yeah. Just curious what the difference is between if you had your own pharmacy and it was a Mercy pharmacy versus a contract pharmacy on premise at a Mercy hospital.

 

David Fortner [00:29:21] Yes, sir. We've talked already a little bit about 340B. Just kind of my take on this, this is a very complex program. I'll give you my kind of simple answer here.  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 Senator Dismang 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. 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 price for the patient and all is exactly the same. Did I answer your question? It's complex. Yes, sir.

 

Senator Clint Penzo [00:30:33] What is the fee to provide? I mean, because I want to know what the cost difference is 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.

 

David Fortner [00:30:48] If it was a Mercy owned pharmacy.

 

Senator Clint Penzo [00:30:50] A price per prescription? Or I mean, what does that look like?

 

David Fortner [00:30:53] So it is a per prescription price and that's the contract arrangement. So it depends on the contract that you have with the pharmacy. It could be $15 per prescription, just an average number.

 

Senator Clint Penzo [00:31:03] And you mentioned that it was a significant cost for Mercy to set up this arrangement with the pharmacy. Did the pharmacy itself have a financial outlay, a gamble, so to speak, to set up a facility within your hospital?

 

David Fortner [00:31:19] They would. They would have their operating expense to operate a standard pharmacy. Yes, sir.

 

Senator Clint Penzo [00:31:29] So it would depend on the contract what the fee would be.

 

David Fortner [00:31:32] Correct. As part of that arrangement. Yes, sir.

 

Senator Clint Penzo [00:31:34] Okay. Thank you.

 

Senator Missy Irvin [00:31:36] All right. Senator Payton, did you have a question?

 

Senator John Payton [00:31:41] Yes. Thank you, Madam Chair. So I may be misinformed, but I was under the understanding that when you discharged the patient, you could fill their prescription up to 30 days worth of medication.

 

Ryan Gehrig [00:32:00] For the specific 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 Y and Z.

 

Senator John Payton [00:32:18] So why couldn't we just remove that restriction? What keeps us from removing the restriction that says-- 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.

 

Senator Missy Irvin [00:32:41] Yeah, I think that's for Senator Dismang.

 

Senator John Payton [00:32:44] Well, I'll move on. So you said you have pharmacies in Missouri, a deal with a grocery chain or something. And I think you implied that you had pharmacies in other states.

 

Ryan Gehrig [00:32:56] Oklahoma as well.

 

Senator John Payton [00:32:57] 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 a negative to your bottom line?

 

Ryan Gehrig [00:33:14] I don't know specifically, but I do think that they do a good job managing these pharmacies in Missouri and Oklahoma.

 

Senator John Payton [00:33:24] Well, I'm sure in an organization like yours, somebody knows whether they're a net positive or a negative. And I would like to know, if you could get that information, please. 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 medical world. Independent pharmacies, I'm sure hospitals are the same, are demanded to fill prescriptions that are a net loss to them. We've talked about 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?

 

Ryan Gehrig [00:34:16] So our focus on this is getting the patients those meds. So 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. The answer is yes.

 

Senator John Payton [00:34:35] 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 I've got one last question. When we're talking about the 340B pricing, and I think you all called it some sort of contractual agreement with the pharmacist 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 costs $10 and the retail price is $100 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 a pharmacy. So am I reading that right? Is there a margin that the hospital gets to keep even though they're paying a dispensing fee to the pharmacy?

 

David Fortner [00:35:44] Yes, sir. Senator Payton, you're understanding the math and the situation correctly. And as Senator Dismang and my colleague James Welborn 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 by the way, we're required as a 340B covered entity to then provide to the government exactly how those dollars are used and, I'd venture to say that every hospital in the state can provide a report. Because, again, it's something that's asked 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, mobile services, outreach clinics, those types of activities. Yes, sir.

 

Senator John Payton [00:36:38] Okay. Well, those margins are going to go to covering overhead. If you decide to open a retail pharmacy, there's going to be employees and overhead and things like that. Would you say that the margin the hospital keeps is larger or smaller than the dispensing fee?

 

David Fortner [00:36:56] If you just looked at the math, it would be larger, would be my estimation. But again, that's all depending on the contract arrangement with the individuals, and that's going to vary across.

 

Senator John Payton [00:37:07] Yeah. In general. I was just asking for your experience. Thank you. Thank you, Madam Chair.

 

Senator Missy Irvin [00:37:11] 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 could go down the list, but, I mean, in general, your Medicare reimbursement doesn't cover your overhead costs and neither does your Medicaid reimbursement. It doesn't cover your overhead cost either.

 

Ryan Gehrig [00:37:36] 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 for hospitals in the entire country. And so this talk about profits and margins, that's a whole other topic if you want to get into that, in terms of how healthy are the hospital margins to begin with.

 

Senator Missy Irvin [00:38:03] And that's, quite frankly, something that we, federally, it's just astonishing to me that Arkansas is below reimbursement of even, I think, Puerto Rico or other places like that. We're at the very bottom, very bottom when it comes to your Medicare reimbursement, which is why it is particularly difficult for our hospitals to stay thriving and open. 

And 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 Bozeman has dug in on that. I'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 Medicaid, 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 you're serving, the payer is going to be Medicaid or Medicare. And that reimbursement doesn't cover-- I don't know what the percentage may be of what your true overhead is versus what you're getting-- but you can't make it work. So it causes those problems. 

But I believe that 340B was designed to try to help offset a lot of that, which particularly hits and hurts your rural hospitals which are your safety nets, to be frank. Senator Hill, you have a question?

 

Senator Ricky Hill [00:39:42] Over here. Thank you all for coming today. I guess my question is, do y'all release your patients 24/7?

 

Ryan Gehrig [00:39:50] If we can discharge them and they have, sometimes there's challenges with the home environment, if they don't have somebody there-- I mean, we try to, to answer your question, traditionally during daytime hours.

 

Senator Ricky Hill [00:40:03] I was fixing to say-- this is going to the next question-- so you would have availability of your pharmaceutical product whenever the other pharmacies are actually closed.

 

Ryan Gehrig [00:40:12] That's correct.

 

Senator Ricky Hill [00:40:13] The patient may need to continue or to start taking immediately. Is that correct?

 

Ryan Gehrig [00:40:17] That's correct.

 

[00:40:17] 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 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?

 

Ryan Gehrig [00:40:33] You're absolutely correct.

 

Senator Ricky Hill [00:40:34] Thank you.

 

Senator Missy Irvin [00:40:35] All right. Thank you. Senator Payton, you have one more question?

 

Senator John Payton [00:40:39] Yes. Senator Hill just brought this to mind. So 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 situation may have changed. 

But when you discharge a patient late at night or on a 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, like I said, I can't remember how many years ago this was, but I remember dad being discharged and us being told the pharmacy was closed. And we had to wait until we got to Heber Springs the next morning to get his meds.

 

James Welborn [00:41:23] Yes, sir. I will speak 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. 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 up to a 31-day supply. 

You also have to be able to just have the infrastructure to be able to bill those to whether it be 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 under current law. So this would alleviate that and expand that access for our patients.

 

Senator John Payton [00:42:29] 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 okay with you?

 

Senator Missy Irvin [00:42:46] That's probably a Senator Dismang question.

 

Senator John Payton [00:42:49] That's whether or not he would amend it. I'm asking if they would live with it. Okay. Would that keep you from opening a pharmacy?

 

James Welborn [00:43:01] Our hospital pharmacies today are open 24/7 and we will continue to be open 24/7.

 

Senator John Payton [00:43:06] Okay. Thank you.

 

Senator Missy Irvin [00:43:07] Thank you. Okay. Other questions? Seeing none, we'll go down the list. Thank you for your testimony. Appreciate you being here. Okay. So Mr. John Vinson. Just state your name for the record and who you're associated with.

 

John Vinson [00:43:33] Thank you, Madam Chair, members of the committee. My name is John Vinson, CEO of the Arkansas Pharmacists Association. 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, why we're against the bill and what we would ask committees to consider. 

And also to the point of, there's been some attempts to compromise and to come to a compromise 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 feel like the bill sponsor 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 history that Senator Dismang shared earlier because I don't know exactly what happened. But I do know or what I've been told is it had to do with hospitals were at that time able to purchase drugs in a way through group purchasing organizations that were better than what outpatient retail pharmacies could purchase. And there are some parallels there to Senator Dismang's point with 340B that have to be worked through. 

I agree with the part about, I think Senator Dismang 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 David Fortner, my friend Dr. Fortner, talked about that they have to provide to HRSA. It would be nice if the state of Arkansas could look at that data to ensure that-- 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, in The New York Times that was, 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. 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. 

One, 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 any medication 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, and I do agree, I think I even testified two years ago that there were two states that had restrictions, North Dakota and Arkansas. I would say that the devil's in the details on that. And I would agree that we're the only state with this unique 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 or nonprofit after 1963 does have to be owned 51% or greater by a pharmacist or a group of pharmacists that are not part of the hospital. 

So to the point about ARHOME and 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 $3,000 to purchase it, there could there be a scenario where there's not a check and balance with an outside entity to make sure 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, trying to make sure those conflicts are looked at. So for those reasons, we would state and ask that there be an opportunity to sit down and work on a compromise solution. And with that, I'll take questions.

 

Senator Missy Irvin [00:48:27] Quick question for you. Currently, a pharmacist has the ability to not fill a prescription, is that correct? That's currently.

 

John Vinson [00:48:36] Yes. Yes. Under conscience clause, yes.

 

Senator Missy Irvin [00:48:41] Okay. But it's under the conscience 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 going to stock it on my shelves.' And I mean, I don't blame them. And but 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 have specifically stated that a lot of the policies that you have advocated for--

 

John Vinson [00:49:10] And we agree.

 

Senator Missy Irvin [00:49:11] --has 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 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 so, again, I just want to make sure we were clear about the current law. They have the ability to do that. 

But it's 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 complicates that completely and they lose their status. And that can then result in a lot of clawback of that Medicare payment through some of these that I know, for example, Baxter Regional Health care System has been under. So it's kind of a trickle down effect. Would you not agree?

 

John Vinson [00:50:47] I agree. I do. I agree. 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've got to keep working on that to help protect patients and consumers.

 

Senator Missy Irvin [00:51:06] Yeah. So long as they're the ones writing the front of that check and not a patient, I think we agree with that. Senator Hill, you have a question? You're recognized.

 

Senator Ricky Hill [00:51:16] Thank you, Madam Chair. You alluded to, just a while ago, if you had more time, you could work on a compromise, that you feel like we're really close. How much more time do you need? You've had two years since the last time this bill was run.

 

John Vinson [00:51:29] I think we can get something done this session.

 

Senator Ricky Hill [00:51:32] Okay. Well, you've had two years. Why should we believe that? Because you had two years. I see Representative Johnson sitting back behind you.

 

John Vinson [00:51:43] I know. And I'm willing to work on it and get it done this session if I'm given the opportunity, this way I can answer that question.

 

Senator Ricky Hill [00:51:51] Okay. Thank you.

 

Senator Missy Irvin [00:51:53] Senator Penzo, you're recognized.

 

Senator Clint Penzo [00:51:57] There was a statement made earlier that there wasn't an intent to open a nonprofit pharmacy outside of the hospitals. But if the moms and pops went out of business, they would be open to doing it. So that's, to me, kind of a plan to do it if there's a vacancy. If they did open a pharmacy, would that pharmacy be able to compete at an advantage over a small mom and pop through this 340B? Does that give them a competitive advantage? That's something that's been tossed around. And I'm kind of curious if there would be a competitive advantage.

 

John Vinson [00:52:42] Our members feel like there would because of the nonprofit tax status and then also the 340B program. Yes.

 

Senator Clint Penzo [00:52:49] So can you elaborate so we can understand what advantage, the tax status and the 340B, what advantage it would give?

 

John Vinson [00:52:57] I would say that the 340B entities that are in the room are more qualified for me to say the numbers. But some drugs can be purchased for a penny that might be hundreds of dollars ordinarily. Some brand name 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.

 

Senator Clint Penzo [00:53:40] Okay. We've got a Mercy facility in my district, and I love it. That's where I took my father when he was having issues. And they've been great to my family over the years. You made a comment earlier. The government is in the way. And lowering health care costs and increasing access are two of my priorities this legislative session. But what I don't want to do is is robbing Peter to pay Paul. 

I don't want to fix one problem and create a problem in another area. Hospitals and pharmacies are important to me. But 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 health care costs, you 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 don't want to put the patient last and prioritize hospitals. I don't want to prioritize pharmacies. 

So I'm going to be a no today for that specific reason. I don't care what happened two years ago, four years ago, six years ago. I care about what's happening today. And I wasn't involved in those conversations. And if one side is not cooperating to meet in the middle, then I'll make a decision based on that.

 

Senator Missy Irvin [00:55:09] Do you have a question?

 

Senator Clint Penzo [00:55:12] I did.

 

Senator Missy Irvin [00:55:17] I mean, you could go on but maybe get to 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.

 

Senator Clint Penzo [00:55:25] Okay. Well, that's--

 

Senator Missy Irvin [00:55:27] We'll come back to you, though, if you'd like.

 

Senator Clint Penzo [00:55:30] Okay. Well, now that I've been interrupted, I'll go ahead and step out the queue and come back later. Thank you.

 

Senator Missy Irvin [00:55:37] Are there any other questions for Mr. Vinson? Senator Payton, you have a question?

 

Senator John Payton [00:55:44] Thank you, Madam Chair. I mean, I still remember when 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 stopped at ours in Heber Springs and bought braces for my finger or a wrap for my knee or over the counter stuff. 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?

 

John Vinson [00:56:28] I'll defer that question to the-- I don't know the answer to that.

 

Senator John Payton [00:56:31] And I don't either. I'm just seriously considering what that would mean.

 

John Vinson [00:56:36] I would say, to one question or point he made earlier, and this is not disparaging, it's just to provide facts. The four nonprofit hospitals that are grandfathered, they are open 8 to 6 or approximately. Some of them are 8:30 to 5:30. Two of them are open on Saturdays. Two are not. None are open on Sundays. And 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, like Brittany Sanders here in Little Rock, who is open seven days a week and into the evening. So I just would put that on the record.

 

Senator John Payton [00:57:15] Well, and I would think that if that is our motivation to accomplish access that that would be an important component. Wouldn't you agree? Thank you, Madam Chair.

 

John Vinson [00:57:28] Yes.

 

Senator Missy Irvin [00:57:29] All right. Any other questions? Any other questions from members of the committee? Okay. Because we're at that point of questions right now. Mr. Wells. Thank you, Mr. Vinson, for your testimony. Mr. Well.s

 

Troy Wells [00:57:56] Thank you, Senator. My name is Troy Wells. I'm the president and CEO of Baptist Health.

 

Senator Missy Irvin [00:58:00] All right.

 

Troy Wells [00:58:01] Thanks to the committee for allowing me to be here this morning. And maybe just a couple of quick comments, not to be repetitive of my colleagues. First off, I understand concerns about competition from large organizations like Baptist Health or other large health systems. We have heard about that over the years. And so I acknowledge that and understand it. There is, however, this issue of access that's come up earlier. 

This past fall, we all heard pharmacists claim 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 in our metro communities. The 12th Street corridor here in Little Rock is a great example when Walgreens closed. Walgreens is shutting down thousands of stores around the country.

 One more way we could help if current law didn't prevent us from doing so. We often are the safety net for health care services of all kinds in the community. Baptist Health 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 Health and was grandfathered under the existing law. Due to the rules and policies of the state we can't even move it from its existing location. At one time we owned a home infusion 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 hospital, that's one more mechanism that Baptist Health has tried to do that before. And we lost the ability to do that due to the current licensure and law. And just a couple quick other comments. 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 families that Baptist health employs and insures, we recently this past year 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 a group of nonprofit health systems in the United States. 

And so we were forbidden from receiving our medications that way. In closing, I 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.

 

Senator Missy Irvin [00:00:21] All right. Thank you. Are there any questions from members of the committee? All right, Senator Payton, you are recognized for a question.

 

Senator John Payton [00:00:29] Thank you, Madam Chair. So the pharmacy that you operate, is it 24/7/365?

 

Troy Wells [00:00:35] No, sir. Okay.

 

Senator John Payton [00:00:37] Thank you. Thank you, Madam Chair.

 

Senator Missy Irvin [00:00:40] Okay. Any other questions? Senator Penzo? Okay. All right. Any other questions? Okay. Thank you for your testimony. And again, members going straight down the list, but I'll go to against. Galen Perkins. Is Galen Perkins here? Thank you. Please state your name for the record and who you are with. Thank you.

 

Galen Perkins [00:01:30] Thank you. Good morning, ladies and gentlemen. My name is Galen Perkins. I'm a pharmacist and founder of ExpressRX Pharmacy headquartered here in Little Rock. ExpressRX Pharmacy currently has 26 retail pharmacy locations in eight 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 Wal-Mart 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 scripts filled and an even much smaller portion of revenue. Mercy's practice is being cross subsidized by the citizens of Paris.

Neither ExpressRX 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 Paris once Mercy has a retail pharmacy. And based on 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 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 in 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 where neither 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 U.S. through a contract pharmacy. At ExpressRx, 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 precedent in place. I would respectfully ask that we decline SB 58 in favor of a thoughtful consideration of the consequences and guardrails that would protect the public.

 

Senator Missy Irvin [00:05:30] Thank you. Thank you. How many pharmacies, again, do you own?

 

Galen Perkins [00:05:35] 26.

 

Senator Missy Irvin [00:05:36] 26 pharmacies. In how many other states?

 

Galen Perkins [00:05:39] Eight states.

 

Senator Missy Irvin [00:05:40] Eight states. So in seven other states, this prohibition does not exist.

 

Galen Perkins [00:05:46] Correct.

 

Senator Missy Irvin [00:05:47] So it sounds like you have a pretty healthy business model, even in the states where this prohibition does not exist. Is that correct?

 

Galen Perkins [00:05:53] It does.

 

Senator Missy Irvin [00:05:54] Thank you. And are you willing to also provide your own financial benefit analysis to this committee?

 

Galen Perkins [00:06:02] In what way?

 

Senator Missy Irvin [00:06:03] For your company and your organization. You were pretty specific about the hospital's.

 

Galen Perkins [00:06:09] Sure. We file publicly.

 

Senator Missy Irvin [00:06:10] Perfect. If you'll provide that for me, and I'll just send that to members of the committee and that will be appreciated. All right. Any other questions from members of the committee? All right. Seeing none, thank you so much for your testimony. Mr. Mackey. Doctor. I'm sorry. Doctor Mackey. Daniel Mackey.

 

Daniel Mackey [00:06:33] 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. I'm also the chairman of the Medical Oncology Leadership Committee for the entire Mercy system. And I'm here in favor of SB 58. Thank you so much. 40 days, 40 days and counting. That's a long time for a cancer patient, where even one day of waiting 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 chemotherapy yet because he is still trying to navigate the complex mail order pharmacy system. And it's kind of interesting because before I joined Mercy, I was an independent medical oncologist with Cooper Clinic in Fort Smith, and we had our own in-house pharmacy. You know, it's great. Patients receive their medications in a timely fashion. There was high compliance rates. Patients really received excellent care. 

But 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 delays like my patient experiences, it's a very common problem. Many of my patients, many of my partners' patients have the same problem just getting access. Many of the 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 $5,000, $10,000, sometimes $20,000 or $30,000 worth for a pill. It sounds crazy, but yeah, it's hard for these retail pharmacies to keep them in stock. 

Regardless, when I write the prescription, any delay can potentially compromise my patient's health. Now as an oncologist, I'll write prescriptions for I.V. chemotherapy, which we give in the office. And as some of these protocols actually have an oral chemotherapy drug, 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, are they really going to get their drug or not? And if the drugs are not delivered on time, well, that's just going to compromise outcomes. And in this age of value based care, where we look at outcomes, it's a big problem. 

And then also another barrier is transportation. Many of my patients here in Arkansas are in poverty. So it's a struggle just for them to get to my office to receive their treatment. It's hard. So in light of that, for them to be expected to 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. Me expecting them to go through the mail order process, it's simply impossible for them. 

What's interesting about in-house pharmacies, they're generally considered to be more cost effective than mail order pharmacies, oftentimes. I'd write a prescription for my patients and they'd actually get it at a reduced cost compared to a mail order pharmacy. And this is all consistent with value based care, which is the direction the entire country is going. What's also important to note is that in-house pharmacists, hospital based pharmacists, they're also specialized in talking with patients, training them about how to take the drug, how to navigate the adverse side effects, and also try to address any problems with adherence. 

And so this level of personalized support, again, improves outcomes and patient satisfaction and helps keep patients out of the hospital. And another final point, as the chairman of the Medical Oncology Leadership Committee at Mercy I can see how our sister communities in Oklahoma and Missouri, their patients don't have the same kind of barriers to access that we have here in Arkansas. I think local pharmacies do need to be successful. And there's plenty of work to be done. Really what I think this whole conversation is about, it's addressing the gaps in care. It is not our business model to try to run pharmacies. 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, we're 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 it's interesting, when we talk about the prices, the drugs, the profits and things like that, I've been an oncologist 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 and these contracts that Joplin and Fort Smith are piloting for CMS for an entire Mercy system, we're actually looking at how to provide better care at a better price. 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 is getting set up, by 2030, all Medicare and Medicaid beneficiaries are going to be on some sort of value based care system. And so I didn't realize and make a correction until the earlier testimony that Arkansas is really behind the 8-ball. 

We have this kind of prohibition 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 definitely interested in partnering with you all. Happy to work with you all moving forward. I really appreciate the opportunity to be here. Take any questions.

 

Senator Missy Irvin [00:12:28] Thank you so much, Dr. Mackey, for your time here. I have Senator Payton and Senator Penzo, I believe.

 

Senator John Payton [00:12:36] Thank you, Madam Chair. Doctor Mackey, I'm very interested in your testimony and I really appreciate you being here. Thank you. And your expertise and your enthusiasm for Mercy and the hospital model. 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 stock them because they're so expensive. What assurances do we have in this bill that the hospital is going to have those on hand?

 

Daniel Mackey [00:13:23] Right. That's an excellent question. You know, based on prior experience, when I was an oncologist at Cooper Clinic, we had a contract with a dispensing company that was able to ship the drugs quickly to us. It's becoming more of an issue now in my field because every year there's new oral drugs being made for cancer patients. And so, yeah, what's interesting is that, unless you have like multiple pharmacies and, 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 patients.

 

Senator John Payton [00:14:03] And I hate to cut you short. I understand that you're confident that Mercy would act differently than the local pharmacies. You made reference to a 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's going to act the way you described?

 

Daniel Mackey [00:14:43] So I guess your question is-- I guess I'm not following the--

 

Senator John Payton [00:14:49]  By stocking the expensive stuff, making the contractual arrangements.

 

Daniel Mackey [00:14:56] I can put things in perspective there. So in our practice, we probably have, I don't know, 10 or 20 patients with chronic myeloid leukemia. Imatinib. And there's some other tyrosine kinase inhibitors that we can have. And so we can actually kind of project, because we don't want to have-- any pharmacy will not want to have too many drugs at a certain time because it'll expire over time. And so, yeah, you try to do some projections, but even then, I want to get back to the point, 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 and the way the country is going, all these profits are narrowing.

 

Senator John Payton [00:15:32] So if we're trying to fix gaps in access to the drugs, to the care, 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 access? The hours that they're open? Products that they stock? What assurance do we have?

 

Daniel Mackey [00:15:56] Yeah. 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  several days to several weeks. In my patient's case, it's 40 days and counting. 

And, I guess, as far as having access to the drugs for, in his case, the drug that he was needing would be able to arrive at our office probably within, if we didn't have it in stock, which I'd be surprised, we can probably get it within a few days. So if you're looking to have, as far as what the bill itself, I'll have to defer to you as far as what kind of level of assurance would make you comfortable with what we want to do.

 

Senator John Payton [00:16:48] Thank you, Madam Chair.

 

Senator Missy Irvin [00:16:49] Senator Penzo, you're recognized for a question.

 

Senator Clint Penzo [00:16:52] Thank you, Madam Chair. You mentioned that the patient that's been waiting 40 days on mail order. I know a lot of times insurance companies, PBMs, that world dictates where the drug can be filled. Is this patient being forced to use mail order? If you had a pharmacy, can you say that you would be able to fill it? Can another local pharmacy not order that drug and supply it to that person? I mean, would their insurance allow them to do that? Are those things that you're aware of with that particular patient?

 

Daniel Mackey [00:17:28] That's an excellent question. When I had my own retail pharmacy at Cooper Clinic, which was an independent multi-specialty physician organization, we had the resources to help cover our patient. We never had a patient wait more than just a few days to get their drug. You know, as a physician, and my partner will also speak the same way, when we write prescriptions, we expect it to be filled. And so we had the resources to help patients navigate, you're absolutely right, because the insurance and insurance companies dealing with mail order pharmacies, it's very complicated.

 

Senator Clint Penzo [00:18:07] So is that what this is? Or has this individual patient, have they went to a retail pharmacy and tried to acquire the drug?

 

Daniel Mackey [00:18:15] This is not a drug that's available to retail pharmacies. It's probably about a $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 Missy Irvin [00:18:28] Senator Dismang. Several questions have been asked and I think more appropriately answered by Senator Dismang, sponsor of the legislation. So I'm going to recognize Senator Dismang.

 

Senator Jonathan Dismang [00:18:36] And I'll let someone else maybe even speak to how it actually works. But 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, but there's this weird exchange that happens. 

And so for that to happen, for him to get those cancer drugs and to 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 have two $50,000 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. 

So there is no viable way that the pharmacist is going to hold on to a $50,000 drug on their shelf and the hospital is going to hold on to a $50,000 drug on their shelf. And then they go through this weird little swap thing to be able to circumvent the federal laws and then pay the pharmacy 15% for holding that drug. It is just not reasonable that that happened in any way. 

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 are 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. These are not villains. These are people trying to provide care. We're not talking about buying NFL tickets or whatever the laws are. Federal laws prohibit that. Why even bother to say that? To put a notion in your head that there are going to be bad actors, that's crazy. 

Let's have 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 340B pricing and to mail order is because they can't afford to keep that drug. And there's this weird transaction that has to occur where they swap the drugs back and forth and pay a fee. 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 to look at law, that is about two thirds 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 four 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 thrus. 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. Well, they're not open because it doesn't make sense for them because we don't allow them to have drive thrus 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 health care is the enemy. Because they're not.

 

Senator Missy Irvin [00:22:11] Thank you. Senator Penzo, you're recognized for a question.

 

Senator Clint Penzo [00:22:14] Thank you, Madam Chair. We are trying to have a discussion and get to the bottom of some things, and I'm disappointed that somebody is going to sit at the table and say we're calling people villains. I hope that wasn't directed toward me.

 

Senator Jonathan Dismang [00:22:28] Not you. I'm not--

 

[00:22:28] [off-mic]

 

Senator Clint Penzo [00:22:30] I just.

 

Senator Missy Irvin [00:22:31] All right.

 

Senator Clint Penzo [00:22:32] Yeah, but--.

 

Senator Jonathan Dismang [00:22:32] You did.

 

Senator Missy Irvin [00:22:34] Let's go to the question.

 

Senator Clint Penzo [00:22:36] The question was, and here's the reason I asked the question, I know pharmacies or 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 was 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 they're 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's my question. Yeah.

 

Daniel Mackey [00:23:39] 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. But it's a recurring story. But you're actually right. If we're going to have a dispensing pharmacy, I cannot imagine this kind of patient waiting more than a month to get his prescription. There's got to be a way. So that's the intent.

 

Senator Clint Penzo [00:24:04] Thank you.

 

Senator Missy Irvin [00:24:06] Any other additional questions? Thank you, Dr. Mackey. Thank you for your time. Okay. That was for. We're going to go to against. And then we have one more for after Lelan Stice.

 

Lelan Stice [00:24:35] Good morning. Thank you for having me here. I'm Lelan Stice. I'm currently the owner of Doctor's 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. 340B has some huge advantages. It was stated earlier that on average it's about a 30% discount. It's a 30% discount over inpatient GPO prices. When it comes to retail pharmacy, the discounts that are afforded under 340B--

 

Senator Missy Irvin [00:25:18] 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 for, and then we'll go to closing. Okay. And I would just say, let's speak to the bill. There's a lot of discussion, but we need to speak specifically to the bill as it is written. And I'll continue to-- go, go, go forward.

 

Lelan Stice [00:25:42] Thank you. When it comes to retail pricing, the advantage for 340B is anywhere from 30 to 99% discount. It is tremendous. Some commonly dispensed insulins such as Humalog cost a 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. And the Medicaid best price calculation has a piece in it that 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 of 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 discounted cash price on insulins of $16 compared to $150 to $500 that they have to pay at a retail pharmacy. Patient steering through physician owned pharmacies. We already see that happening. We've seen it in the past with some of our FQHCs . 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.

 

Senator Missy Irvin [00:27:22] I'm sorry. You stated something, that there are physician owned pharmacies and they're directing their patients to those pharmacies.

 

Lelan Stice [00:27:29] Not physician owned.

 

Senator Missy Irvin [00:27:31] Okay. That's not correct.

 

Lelan Stice [00:27:34] Hospital owned.

 

Senator Missy Irvin [00:27:35] Well, you said physician owned.

 

Lelan Stice [00:27:37] I misspoke. I'm sorry.

 

Senator Missy Irvin [00:27:38] Yes. Thank you.

 

Lelan Stice [00:27:45] Employees being forced to use only the hospital pharmacy, not having a choice to go to other pharmacies to have their prescriptions filled. This has been happening for quite some time at one 340B facility in the state, and we heard recently with Mercy as well. So the current options, in 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 MPI 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. Six 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. Pharmacies are in contract pharmacy arrangements and we're available to dispense prescriptions. We're open six days a week, 9 to 6. It is not uncommon for myself, for one of my pharmacies 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 non profit hospitals not owning retail pharmacies. This was put in place back in 1975-76 timeframe, 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 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 past 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 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 are 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.

 

Senator Missy Irvin [00:31:03] Thank you. Where are you located again?

 

Lelan Stice [00:31:06] Pine Bluff.

 

Senator Missy Irvin [00:31:07] And how many pharmacies do you own?

 

Lelan Stice [00:31:09] I own six.

 

Senator Missy Irvin [00:31:11] In Pine Bluff.

 

Lelan Stice [00:31:12] No. In White Hall, Pine Bluff, Star City, and one at Hensley.

 

Senator Missy Irvin [00:31:17] Okay. And how many pharmacists do you have working for you?

 

Lelan Stice [00:31:22] Roughly 10 to 12. Because some are part time.

 

Senator Missy Irvin [00:31:27] Okay. Thank you. Any other questions? All right. Seeing none, thank you so much for your testimony. We have one last person to speak for the bill, then we will go to closing. Miss Micah-- Oh, I'm sorry. Micah Knight. I got it right. Ms. Michah Knight. Thank you.

 

Micah Knight [00:31:50] You're correct. Yes. My name is Micah Knight. I'm the assistant vice president for transitions of Care at St Bernard's. That covers a few different services at our hospital, but one in particular is case management and social work. So what I really want to talk about, first of all, is that patients are my passion. 

And our goal is to provide good continuity of care for our patients, to eliminate gaps, to have good coordination of care, and to just give them opportunities so that they can be successful and have good outcomes. I was also allowed, actually, ten years ago this year at our hospital to start a patient family advisory council. So I've been leading that for ten 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. 

The first one is really related to specialty drugs. And so most often we see issues with our cancer patients being able to afford their portion even when they have insurance. One example is a 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 $3,400. Another patient was prescribed two different drugs for lung cancer that totaled over $33,000. After Medicare Part D covered the patient's co-pay, it was still $6,656. So, we attempted to find funding through various charitable organizations but were 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, we could bring dollars back into the state because many times these are coming from an out of state company. We could dispense it quicker, be able to provide more financial assistance based on our patient assistance programs that we have available. 

The other thing that I would say is many times these require prior authorizations, which sometimes is what holds up 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 and we can coordinate that. We can have the prior authorization. We have the documentation that we need right at our fingertips to supply so it will support the decision for the patient to have that drug. 

So the second scenario I want to talk about is really related to our behavioral health patients. Many of these patients, this patient population, need a long acting anti-psychotic med that'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 health care provider administer the drug, a lot of times they wait until they're actively psychotic, which is not the intended use of the med.

 If we could dispense and administer these particular drugs, we could keep up with their regimen, keep the patient 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, about my dad. And 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. Saint Bernards 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 my dad has insurance, and even with that, he had to pay a co-pay of over $400. So the infusion company, I was home with him that day, they called me, said that it was ordered, let me know the co-pay amount that we could pay over the phone 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. He wrote the check and it was ready when they got there. But that's not the case for all patients. 

So several patients don't understand why they really need it. If they can't afford it upfront, they would just choose not to get the antibiotics. In this particular situation, there's a chance of the patient going septic and then ultimately admitting or re-admitting to the hospital. So if we were able to provide home infusion services, we could eliminate that up front cost to the patient. 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 any time you bring in another party, that just opens up opportunity for gaps in care. So that could have been avoided. We could always get better continuity of care to our patients if we can keep that. We have the medical history of the patient. We have their current care plans. Everything is in the EMR, so everybody can see that increased compliance by doing all of that. So in these instances, we always try to intervene if a patient cannot afford something. 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. This has helped, but we sometimes still have delays getting the med started and ultimately we're still paying the company for the services. So if we could just provide the service, 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 he messaged me when he left. And I had called him to let him know I would 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 Hoxie, Arkansas. I know that he's not going to change who his pharmacy is, but he also is on oxygen. He has a trach. He has a peg. So if in that instance yesterday, he could have avoided going one more place before he got home and had his meds that he needed, he would have taken it.

 

Senator Missy Irvin [00:38:53] Thank you. Will you just give your father our best wishes.

 

Micah Knight [00:38:56] Thank you.

 

Senator Missy Irvin [00:38:57] Yes. I have Senator Payton and then Senator Penzo. Senator Penzo.

 

Senator Clint Penzo [00:39:04] I just have a question. Have you seen Senate Bill 86 yet?

 

Micah Knight [00:39:08] I have not.

 

Senator Clint Penzo [00:39:09] Okay. I think it addresses the concerns that you have with your situation. So depending on what happens now, you might take a look at that one. That might be a bill that you support as well, and that's a compromise bill. 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 then let us know if it doesn't. Thank you.

 

Micah Knight [00:39:36] Thank you.

 

Senator Missy Irvin [00:39:37] Any other questions from members of the committee? Seeing none, Senator Dismang, you're recognized to close for your bill.

 

Senator Jonathan Dismang [00:39:58] First, I do want to say that I am thankful for the discussion today, and I am thankful for the questions by the committee. And what I was addressing or attempted to address earlier is the fact that I think we're making a lot of arguments that just aren't necessarily real. I think we've put up lots of windmills, or the 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 also improve outcomes for our patients, which I hope is the goal of this committee. And I think it is. I believe that our nonprofit hospitals will still contract when needed and when appropriate with pharmacies across the state. I think that with the passage of this, we will be able to better treat patients when they need it in the timeframe that they need it. Again, there's lots of questions and discussion about, I'll go back to the 24/7. Why aren't we open 24/7? 

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 we touched about it just a little bit, but FQHCs operating in all corners of the state haven't disrupted the model for our pharmacists. 

In fact, they are themselves contracting with pharmacies just like our nonprofit hospitals do in places that do not need to have their presence because it is being fulfilled by a pharmacist. With that, I close for the bill. I would appreciate a good vote.

 

Senator Missy Irvin [00:41:47] Thank you. Motion do pass. And second. All those in favor say aye. And opposed? Ayes have it. Please call the roll.

 

Staff [00:42:13] Senator Flippo. Senator Flippo is aye. Senator Hill? Senator Hill is aye. Senator Leding? Senator Leding? Senator Penzo? Senator Penzo is no. Senator Payton. Senator Payton is no. Senator Love. Senator Love votes yes. Senator Wallace. Senator Wallace votes no.

 

Senator Missy Irvin [00:43:01] Would anybody like to change their vote or vote that has not voted? All right. Seeing none, there's four ayes, three nays, one non-voting. Bill fails. All right. Any other business to come before the committee? All right. Seeing none, we're adjourned.