BILL ANALYSIS
------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 1307|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
UNFINISHED BUSINESS
Bill No: SB 1307
Author: Ridley-Thomas (D)
Amended: 8/14/08
Vote: 21
SENATE BUS., PROF. & ECON. DEVEL. COMMITTEE : 6-2, 4/7/08
AYES: Ridley-Thomas, Calderon, Corbett, Harman, Simitian,
Yee
NOES: Aanestad, Denham
NO VOTE RECORDED: Florez
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SENATE FLOOR : 21-14, 5/29/08
AYES: Alquist, Calderon, Corbett, Ducheny, Harman, Kehoe,
Kuehl, Lowenthal, Machado, Negrete McLeod, Oropeza,
Padilla, Perata, Ridley-Thomas, Romero, Scott, Simitian,
Steinberg, Torlakson, Vincent, Wiggins
NOES: Aanestad, Ackerman, Ashburn, Battin, Cogdill, Cox,
Denham, Dutton, Florez, Hollingsworth, Margett,
McClintock, Runner, Wyland
NO VOTE RECORDED: Cedillo, Correa, Maldonado, Migden, Yee
ASSEMBLY FLOOR : 74-3, 8/18/08 - See last page for vote
SUBJECT : Pharmacy: pedigree
SOURCE : California Board of Pharmacy
DIGEST : This bill establishes a graduated implementation
CONTINUED
SB 1307
Page
2
schedule for compliance with the electronic drug pedigree
law beginning on January 1, 2015, and ending on July 1,
2017, as specified.
Assembly Amendments made numerous changes which recast and
revise the bill with a similar intent as it left the
Senate. Specifically, the amendments revise the graduated
implementation schedule for drug manufacturer compliance
with drug pedigree requirements, revise the pedigree
compliance date by prohibiting, beginning July 1, 2016, any
wholesaler or repacker from selling, trading, acquiring, or
transferring a prescription drug without providing a
pedigree, revise the pedigree compliance date by
prohibiting, beginning July 1, 2017, any pharmacy from
selling, trading, acquiring, or transferring a prescription
drug without providing a pedigree, and make specified
exemptions from the pedigree requirement
ANALYSIS :
Existing Law
1. Provides for the licensure and regulation of pharmacies,
pharmacists and wholesalers of dangerous drugs or
devices by the California State Board of Pharmacy
(Board) in the Department of Consumer Affairs.
2. Prohibits, beginning on January 1, 2009, any wholesaler
or pharmacy from selling, trading, or transferring a
prescription drug at wholesale without providing a
pedigree, and prohibits a wholesaler or pharmacy from
acquiring a dangerous drug without receiving a pedigree.
3. Defines "pedigree" as a record in electronic form
containing the history of all transactions that result
in a change of ownership of prescription drugs from the
manufacturer to the pharmacy.
4. Requires the pedigree to contain the following:
A. The source of the dangerous drug, including the
name, federal manufacturer's registration number or
a state license number and principal address of the
source.
SB 1307
Page
3
B. The trade or generic name of the drug, the
quantity of the dangerous drug, its dosage form and
strength, the date of the transaction, the sales
invoice number, the container size, the number of
containers, the expiration dates and the lot
numbers.
C. The business name, address and the federal
manufacturer's registration number or a state
license number of each owner of the dangerous drug
and the dangerous drug shipping information,
including the name and address of each person
certifying delivery or receipt of the dangerous
drug.
D. A certification under penalty of perjury from a
responsible party of the source of the dangerous
drug that the information contained in the pedigree
is true and accurate.
5. Permits the Board to extend the effective date of the
pedigree requirement until January 1, 2011, if it
determines that additional time is required to implement
electronic technologies to track the distribution of
prescription drugs. (Note: the Board voted to extend
the implementation date to January 1, 2011, at its March
25th hearing.)
This bill:
1.Establishes a graduated implementation schedule for drug
manufacturers that requires compliance with the
e-pedigree requirement for 50 percent of drugs by
January 1, 2015, and the remaining 50 percent drugs by
January 2016, and requires manufacturers to inform the
Board of Pharmacy (Board) of the drugs it designates for
each implementation cycle.
2.Defines "manufacturer" to mean a person who prepares,
derives, manufactures, produces, or repackages a
dangerous drug, device, or cosmetic. "Manufacturer"
also means the holder or holders of a New Drug
Application (NDA), an Abbreviated New Drug Application
SB 1307
Page
4
(ANDA), a Biologics License Application (BLA), provided
that such application has been approved; a
manufacturer's third party logistics provider; a private
label distributor for whom the private label
distributor's prescription drugs are originally
manufactured and labeled for the distributor and have
not been repackaged; or the distribution agent for the
manufacturer, contract manufacturer or private label
distributor whether the establishment is a member of the
manufacturer's affiliated group or is a contract
distribution site.
3.Permits the percentages required for each implementation
stage to be based, at the manufacturer's discretion, on
either unit volume, product package type or drug product
family.
4.Prohibits, beginning July 1, 2016, any wholesaler or
repackager from selling, trading, acquiring or
transferring a prescription drug without providing a
pedigree.
5.Prohibits, beginning July 1, 2017, any pharmacy from
selling, trading, acquiring or transferring a
prescription drug without providing a pedigree.
6.Defines "repackager" to mean a person or entity that is
registered with the federal Food and Drug Agency as a
repackager and operates an establishment that packages
finished drugs from bulk or that repackages dangerous
drugs into different containers, excluding shipping
containers.
7.Defines "third party logistics provider" or "reverse
third party logistic provider" to mean an entity
licensed as a wholesaler that contracts with a dangerous
drug manufacturer to provide or coordinate warehousing,
distribution, or other similar services on behalf of a
manufacturer, but for which there is no change of
ownership in dangerous drugs. This bill exempts these
providers from the requirement that they generate or
update pedigree documentation and from recordkeeping
requirements if they only accept decommissioned drugs
from pharmacies or wholesalers.
SB 1307
Page
5
8.Makes allowances for non-pedigreed drugs that are in the
supply chain on or after the e-pedigree implementation
date as follows:
A. Allows manufacturers, wholesalers, and
pharmacies that own or possess drugs received prior
to the pedigree operative date to prepare a written
declaration, under penalty of perjury, designating
those drugs as not subject to the pedigree
requirement.
B. Requires the written declaration to include the
National Drug Code directory number and lot number
of all designated drugs and be submitted to the
Board within 30 days after the e-pedigree operative
date. Requires the person or entity submitting the
declaration to keep a copy of the declaration for
three years and have it available for Board
inspection.
C. Permits the Board to develop regulations to
specify the requirements and procedures for
creating and submitting written declarations, and
specifies that the declarations are trade secrets
and shall be kept in confidence by the Board.
9.Exempts the following from the e-pedigree requirement:
A. Radioactive drugs, as defined, for two years
while the Board evaluates the risk of
counterfeiting or diversion of those drugs. If the
Board, after two years, determines there is a risk
of counterfeiting or diversion of these drugs, this
section will become inoperative.
B. Drugs that are labeled for "veterinary use
only."
C. Medical gases, as defined.
D. Solutions that are either administered
intravenously for the replenishment of fluids and
electrolytes used to maintain the equilibrium and
SB 1307
Page
6
minerals in the body or products and sterile water
that are used for irrigation, reconstitution, and
injection.
E. Intracompany sales or transfers of a dangerous
drug between a division, subsidiary, parent, and/or
affiliated or related company under the common
ownership and control of the same corporate or other
legal entity.
F. Dangerous drugs received by the state or a local
government entity from a department or agency of the
federal government, or an agent of the federal
government specifically authorized to deliver
dangerous drugs to the state or local government
entity.
G. Dangerous drugs that are placed in a sealed
package with a medical device of medical supplies at
the point of first shipment and the package remains
sealed until used for surgical purposes.
H. A product that meets either of the following:
(1) A product comprised of two or more
regulated components, such as drug/device,
biologic/device, or drug/device/biologic, that
are physically, chemically, or otherwise
combined or mixed and produced as a single
entity.
(2) Two or more separate products packaged
together in a single package or as a unit and
comprised of drug and device products or
device and biologic products.
10.Specifies that drugs returned to the manufacturer are
subject to the
e-pedigree requirement only if the drugs will be
distributed in California. Drugs manufactured in
California for distribution outside of the state are not
subject to the e-pedigree requirement at either the
initial time of distribution or return to the
manufacturer.
SB 1307
Page
7
11.Deletes the January 1, 2015 sunset date on drug
wholesaler bonding requirements.
12.Makes the pedigree requirements null and void upon the
effective date of federal legislation or adoption of a
federal regulation addressing pedigree or serialization
measures for dangerous drugs, and requires the Board to
publish a notice and adopt emergency regulations to
reflect the nullification of state law.
Background
In response to a growing threat to the pharmaceutical
supply chain from counterfeit, misbranded, adulterated or
diverted drugs, California enacted
SB 1307 (Figueroa), Chapter 857, Statutes of 2004, which
made comprehensive changes to the drug distribution system
to protect the integrity of the pharmaceutical supply
chain. That legislation enacted the nation's strongest
pharmaceutical consumer protection measure and included
provisions pertaining to the licensure and qualifications
of wholesalers, restrictions on furnishing and the
requirement, beginning January 1, 2007, of an electronic
pedigree to accompany and validate drug distributions for
the purpose of tracking each prescription drug at the
saleable unit (item) level through the distribution system.
Portions of the legislation were implemented in 2005 and
2006.
Subsequent Board sponsored legislation SB1476 (Figueroa),
Chapter 658, Statutes of 2006, delayed the implementation
date for the electronic pedigree component to January 1,
2009, and granted the Board of Pharmacy the authority to
extend the deadline an additional two years to allow the
industry additional time to implement technologies
necessary for electronic pedigrees. SB 1476 also augmented
and clarified portions of the electronic pedigree
requirements.
California Board of Pharmacy Actions . Since enactment of
the pedigree requirement and other features of the 2004
law, the Board has engaged in a substantial public
education effort to engage the parties necessary to ensure
SB 1307
Page
8
compliance with the law by the January 1, 2009, date for
the pedigree requirement. Since December 2005, the Board
has held quarterly public meetings of an E-Pedigree
Workgroup dedicated entirely to implementation.
Additionally, the Board and its staff have participated in
numerous industry conferences and meetings with industry
members, technology vendors, legislators, regulators and
other affected parties. Since 2004, significant progress
has been made towards the timely compliance with the
pedigree requirements.
In those meetings, the Board solicited feedback and heard
from a wide majority of the industry about the challenges
to complying with the
January 1, 2009 implementation date. Even those companies
that could themselves be ready by January 1, 2009,
acknowledge that their own readiness will to some degree
depend on, or be hampered by, others' unreadiness. In
letters submitted to the Board, many members of the
industry have asserted that an additional two years would
be crucial to development of the necessary technical
infrastructure. Therefore, on March 25th this year, the
Board exercised it statutory authority to extend the
pedigree implementation requirement to allow additional
time for the development and testing of technological
innovations and applications used in the pedigree process.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 8/19/08)
California Board of Pharmacy (source)
Abbott Laboratories
Amgen
Arena Pharmaceuticals
Barr Pharmaceuticals
Baxter Healthcare
Bayer Healthcare
Biocom
California Healthcare Institute
California Pharmacists Association
California Retailers Association
California Society of Health-System Pharmacists
SB 1307
Page
9
California State Association of Counties
Cardinal Health
Compressed Gas Association
Council on Radionuclides and Radiopharmaceuticals
Daiichi-Sankyo
Genentech
Generic Pharmaceutical Association
Gray Panthers
Healthcare Distribution Management Association
Hospira
Johnson and Johnson
McKesson Corporation
Merck, Inc.
Mylan, Inc.
National Association of Chain Drug Stores
National Coalition of Pharmaceutical Distributors
Novartis Pharmaceuticals
Pfizer
Pharmaceutical Research and Manufacturers of America
Rite Aid
Sandoz, Inc.
Teva Pharmaceuticals, USA
Walgreens
Wyeth
ASSEMBLY FLOOR :
AYES: Adams, Aghazarian, Anderson, Arambula, Beall,
Benoit, Berg, Berryhill, Blakeslee, Brownley, Caballero,
Charles Calderon, Carter, Cook, Coto, Davis, De La Torre,
De Leon, DeSaulnier, DeVore, Duvall, Dymally, Emmerson,
Eng, Evans, Feuer, Fuentes, Fuller, Furutani, Gaines,
Galgiani, Garcia, Garrick, Hancock, Hayashi, Hernandez,
Horton, Houston, Huff, Huffman, Jeffries, Jones,
Karnette, Keene, La Malfa, Laird, Leno, Levine, Lieber,
Lieu, Ma, Maze, Mendoza, Mullin, Nakanishi, Nava, Niello,
Nunez, Plescia, Portantino, Price, Ruskin, Salas,
Saldana, Silva, Smyth, Solorio, Spitzer, Strickland,
Swanson, Torrico, Tran, Wolk, Bass
NOES: Parra, Villines, Walters
NO VOTE RECORDED: Krekorian, Sharon Runner, Soto
JJA:do 8/20/08 Senate Floor Analyses
SB 1307
Page
10
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****