The West Virginia Briefing | September 20, 2018



PEIA creates fund to offset premium increases

PEIA had such a good year the Finance Board agreed to create a $38 million fund to offset future premium increases. Members took that action at a Sept. 20 meeting. After spending two years fighting out of a financial hole where “draconian” cuts were contemplated but never carried out because of last-minute funding infusions, PEIA seems to have returned to a solid financial setting. Besides the $38 million set-aside, Chief Financial Officer Jason Haught said officials are now discussing developing a premium stabilization plan to be funded from expected cash surpluses in upcoming years.


PEIA has lost about 2,000 members, lowering its costs. Increased drug rebates contributed to the surplus. Speaking at a PEIA Task Force Coverage and Plan Subcommittee on Aug. 24, PEIA Executive Director Ted Cheatham explained PEIA uses the CVS Caremark prescription drug and medical device national formulary, which changes every quarter. Touching on drug rebates, a national sore spot for many programs, Cheatham called the rebate program “incredible” and said it saves as much as $50 million a year. What he referred to as the “ludicrous” side of that savings is the sometimes necessity for members to change from using long-established drugs to using new drugs to reap a rebate.


One person associated with the drug industry praised PEIA officials for the work it does in managing its CVS Caremark relationship and gaining at least a portion of the rebates the pharmacy benefits manager receives from prescription drug companies.


The Finance Board’s next meeting is Oct. 18. That’s an important meeting. It’s when the Finance Board approves a tentative program plan to be presented at a series of statewide public hearings. With the agency’s comfortable financial situation, Cheatham foresees no major plan changes.


There’s no word yet on PEIA Task Force recommendations. The last subcommittee meeting was the one Cheatham addressed on Aug. 24. No other meetings are announced on the meeting notices portion of the Secretary of State’s website.


Media reports from the task force’s last meeting on Aug. 16 suggest recommendations will be available Oct. 15, the date the statute requires the governor to inform the Finance Board of the amount of money available to the program. (Cheatham says no additional money is needed for the upcoming plan year.)


Advisory opinion out there on marijuana banking issues

We reported Monday: West Virginia’s medical marijuana program is stymied because the two banks with which the state contracts for banking services will not accept “marijuana money.” Diana Stout, general counsel in the treasurer’s office, explained the banking conundrum to the Joint Committee on Health at a meeting on Sept. 17.


BB&T, with which the state does the majority of its business, and US Bank have informed the treasurer’s office they will not accept money from the medical marijuana industry. Since then, Stout said treasurer’s office officials have been working to find a solution but have so far been unsuccessful…


Dianna Stout, general counsel in the treasurer’s office, explained two alternatives to address the situation. One is opening a state bank to receive money from medical cannabis sales. At a proposed $2 million price tag, this approach was deemed too expensive.


The other possibility is a “closed loop system” allowing deposits to be made and withdrawals to occur with a single entity.

The treasurer requested the governor seek an opinion from the attorney general on the legality of the closed system or the state bank. Stout said Monday she was unaware if the attorney general has issued such an opinion.


Informal advisory opinion

The Gazette-Mail takes up the story, reporting, “In May, Justice’s general counsel, Brian Abraham, wrote a letter to Attorney General Patrick Morrisey requesting he draft an opinion on Perdue’s two solutions.


“In a phone call after the meeting, Abraham said Morrisey’s office sent over an informal advisory opinion that cast doubt on the viability of either solution.

“He declined to provide the opinion, stating it is in draft form and subject to attorney-client privilege.


“At first, Curtis Johnson, Morrisey’s press secretary, said there is no request pending for a written opinion regarding medical marijuana. When asked about the accuracy of Abraham’s claim, Johnson said ‘any counsel is advice given to a client and will remain as such until [confidentiality is] waived by the client…’


“When informed that the governor’s office had received an opinion from Morrisey’s office, Committee Chairman Joe Ellington, R-Mercer, said he was curious why that information never made it back to the treasurer’s office.”



Coca-Cola closely watching cannabis-infused beverages. NASDAQ reports, “Responding to media reports, beverages giant Coca-Cola Co. … said … it is ‘ closely watching’ the growth of cannabidiol-infused beverages or CBD.”


…Maybe in ‘serous talks.’ Bloomberg reports, “The Coca-Cola Co. is in ‘serious talks’ with Aurora Cannabis Inc. to develop cannabis-infused beverages, a groundbreaking move that would signal a significant foray into the marijuana sector by one of the world’s most iconic consumer brands…”


…News pushes stocks higher. The Seattle Times reports, “Coca-Cola says it is interested in drinks infused with CBD — the non-psychoactive ingredient in marijuana that treats pain but doesn’t get you high. The news pushed cannabis stocks higher…”


Managed care companies build community resources for opioid recovery. Modern Medicine reports, “When it comes to helping members recover from opioid addiction, the relationships that managed care teams build with community resources  can be leveraged as a healing agent, empowering individuals to return to health while rebuilding their lives.”


Medical cannabis exec says pharmaceutical companies should partner.  CNBC reports, “Pharmaceutical companies have to start thinking about partnering  with cannabis companies as a ‘hedge’ against the burgeoning marijuana industry, Brendan Kennedy, the CEO of medical cannabis producer Tilray, said …on CNBC.”

…Company receives approval to import to U.S. Yahoo Finance reports, “Tilray Inc. is setting a record high — again.


“Shares rose 11 percent to $133.23 at 9:40 a.m. in New York after the British Columbia-based cannabis company received approval from the U.S. government to import medical cannabis into the country for a clinical trial.”


…Deals the primary buzz. The Motley Fool reports, “The launch of adult-use weed hasn’t been the primary buzz around the pot industry of late… Instead, it’s been the rush of announced and rumored deals between marijuana stocks and larger businesses in the alcohol, tobacco, and pharmaceutical space.”


Toronto increases safe injection site staffs. The Eyeopener reports, “As the opioid crisis rages on in Toronto, the city is increasing the number of outreach staff around the safe injection site beside Ryerson.”




Super PACs drop $18 million in West Virginia. The Hill reports, “Senate races in Wisconsin, Florida and West Virginia have all attracted more than $18 million in spending. Contests in Montana, Nevada and Indiana have seen $13 million in outside spending, and the race for an open seat in Arizona has cost outside groups more than $11 million.”



Lawsuit about governor’s residency may be headed to Supremes. MetroNews reports, “The lawsuit over where Gov. Jim Justice lives may be headed to the state Supreme Court.”



Audit says legislature should consider entrance fees for parks. The Gazette-Mail reports, “Legislators should reconsider imposing entrance fees at state parks and forests to help close a multimillion dollar funding gap for needed capital improvements and deferred maintenance, a legislative performance audit released Tuesday concludes”

Here’s a link to the audit, which notes on its title page, “The West Virginia Park System Continues to Lack the Necessary Resources to Adequately Reduce the Number of Deferred Maintenance and Capital Improvement Project”