BILL ANALYSIS
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Elaine K. Alquist, Chair
BILL NO: AB 830
A
AUTHOR: Cook
B
AMENDED: July 6, 2009
HEARING DATE: July 15, 2009
8
CONSULTANT:
3
Bain/
0
SUBJECT
Drugs and devices
SUMMARY
Deletes statutory references to specified drug compendia (a
compendia is a listing of federal Food and Drug
Administration-approved drugs and biologics) and adds other
specified drug compendia approved by the federal Centers
for Medicare and Medicaid Services (CMS) in existing law
provisions requiring health plan coverage of "off label"
medication used to treat life-threatening or chronic and
seriously debilitating conditions, and Medi-Cal coverage of
drugs to treat AIDS-associated opportunistic infections and
cancer.
CHANGES TO EXISTING LAW
Existing law:
Existing law prohibits health plans and health insurers
which cover prescription drug benefits from limiting or
excluding coverage for a drug on the basis that the drug is
prescribed for a use that is different from the use for
which that drug has been approved for marketing by the
federal Food and Drug Administration (FDA). This is known
as an "off label" coverage requirement. To be covered, the
drug must be FDA-approved, used for treatment of a
Continued---
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life-threatening or chronic and seriously debilitating
condition, and be recognized for treatment of that
condition by two articles from peer-reviewed medical
journals, or one of the following drug compendia:
The American Medical Association Drug Evaluations (AMA
Drug Evaluation);
The American Hospital Formulary Service Drug Information
(AHFSDI); or
The United States Pharmacopoeia Dispensing Information,
Volume 1 (U.S. Pharmacopoeia).
Existing law requires health plans and insurers to provide
an external, independent review process to examine plan's
coverage denials of experimental or investigational
therapies for individual enrollees who have a
life-threatening or seriously debilitating condition and
who meet other specified criteria. Under existing law, one
of the criteria a patient must meet to be eligible for such
a review is for the patient's non-contracting physician to
have requested a therapy that, based on two documents from
the medical and scientific evidence, as defined, is likely
to be more beneficial for the enrollee than any available
standard therapy. The independent medical reviewer must
base his or
her determination on relevant medical and scientific
evidence. Medical and scientific evidence means specified
sources of information (such as peer-reviewed scientific
studies), and includes the following standard reference
compendia:
The AMA Drug Evaluation;
The AHFSDI;
The American Dental Association Accepted Dental
Therapeutics; or,
The U.S. Pharmacopoeia.
Existing law requires coverage, as a Medi-Cal covered
STAFF ANALYSIS OF ASSEMBLY BILL 830 (Cook) Page
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benefit, for any drug or biologic used to treat
opportunistic infections associated with AIDS that has been
found to be a medically accepted indication that has either
been approved by the FDA or recognized for use by the AMA
Drug Evaluation or the U.S. Pharmacopoeia.
Existing law requires coverage, as a Medi-Cal covered
benefit, for any drug or biologic used in an anti-cancer
chemotherapeutic regimen for a medically accepted
indication which has been approved by the FDA, or
recognized for that use in the AMA Drug Evaluation or the
U.S. Pharmacopoeia.
This bill:
Deletes statutory references in the existing law provisions
described above to "AMA Drug Evaluation" and "U.S.
Pharmacopoeia," and instead inserts references in those
existing law provisions to the following compendia, as
approved by CMS, as follows:
The AHFSDI (already required in existing law for health
plans);
Elsevier Gold Standard's Clinical Pharmacology;
National Comprehensive Cancer Network (NCCN) Drug and
Biologics Compendium; and,
Thomson Micromedex DrugDex.
Additionally, this bill would include in the off-label
health plan requirements, two articles from peer reviewed
medical journals as compendia approved by CMS.
FISCAL IMPACT
According to the Assembly Appropriations Committee analysis
of the previous version of this bill, no direct fiscal
STAFF ANALYSIS OF ASSEMBLY BILL 830 (Cook) Page
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impact for providers and payers to continue to provide
treatment and reimbursement for off-label uses of
medications, especially medications used in oncology.
BACKGROUND AND DISCUSSION
According to the author, this bill allows California codes
to stay up-to-date and current with federal compendia
approved by the CMS for Medicare by deleting obsolete
recognized reference guides, and instead substituting
Elsevier Gold Standard's Clinical Pharmacology, the NCCN
Drug and Biologics Compendium, and the Thomson Micromedex
DrugDex. As cancer-treating physicians, medical
oncologists rely heavily on "off-label drugs" to treat
their patients. Off-label drug use is the practice of a
prescribing medication for treating a disease or condition
that is outside the scope of a drug's original approved
use. Off-label drugs approved for treating certain cancers
are listed in CMS-approved compendia, and then the State of
California recognizes the approved compendia by adding them
to the codes. This bill strikes the names of the
out-of-date compendia and inserts an updated list of
currently approved reference guides. Having an out-of-date
list of compendia risks non-payment for the medical
oncologist and a lack of access to the most cutting-edge,
innovative therapies for cancer patients. This author
states that this bill simply brings the codes up to date
with recent CMS action.
Background on compendia
According to the federal CMS, a compendium is a listing of
FDA-approved drugs and biologics. A compendium includes a
summary of the pharmacologic characteristics of each drug
or biological, and may include information on dosage as
well as recommended or endorsed uses in specific diseases.
This bill deletes in state law statutory references to the
AMA Drug Evaluation and U.S. Pharmacopoeia. The federal
government indicates the AMA Drug Evaluation is no longer
in publication, and U.S. Pharmacopoeia has been purchased
by Thomson Micromedex.
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A recent change in federal law allows the Secretary of the
federal Department of Health and Human Services to revise
the statutory list of compendia as appropriate for
identifying medical accepted indications for drugs used in
an anti-cancer chemotherapeutic regimen in Medicare.
Federal regulations establish a process for listing
compendia for determining medically accepted uses of drugs
in anti-cancer treatment, including a formal written
request for changes to the list of compendia, publishing
the list of the requests and soliciting public comment,
considering the compendium's attainment of the Medicare
coverage advisory committee's (MedCAC) recommended
desirable characteristics of compendia, and considering the
compendium's grading of evidence. MedCAC identified the
following desirable characteristics in compendia:
Extensive breadth of listings.
Quick processing from application for inclusion to
listing.
Detailed description of the evidence reviewed for every
individual listing.
Use of pre-specified published criteria for weighing
evidence.
Use of prescribed published process for making
recommendations.
Publicly transparent process for evaluating therapies.
Explicit "Not recommended" listing when validated
evidence is appropriate.
Explicit listing and recommendations regarding therapies,
including sequential use or combination in relation to
other therapies.
Explicit "Equivocal" listing when validated evidence is
equivocal.
Process for public identification and notification of
potential conflicts of interest of the compendia's parent
and sibling organizations, reviewers and committee
members, with and established procedure to mange
recognized conflicts.
The federal government recognizes different compendia for
Medicaid (Medi-Cal in California) and Medicare, and
different compendia within Medicare for anti-cancer
medication. For Medicare Part D (prescription drug
coverage), CMS indicates it recognizes two compendia for
non -cancer drugs: AHFSDI and Thomson Micromedex DrugDex.
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For cancer drugs in Medicare Part B (physician services)
and Part D, CMS recognizes the four compendia referenced in
this bill: AHFSDI, Elsevier Gold Standard's Clinical
Pharmacology, NCCN Drug and Biologics Compendium, and
Thomson Micromedex DrugDex . CMS declined a request to add
Thomson Micomedex DrugPoints to the list of compendia,
stating it failed to satisfactorily address several of the
desirable characteristics recommended by the MedCAC and
referenced in federal regulation, including that it did not
explicitly note when the use of a drug or biologic is not
recommended, nor did it explicitly note an "Equivocal"
listing when validated evidence is equivocal.
The compendia not specifically listed in federal law were
recognized by Medicare for anti-cancer drug coverage
following CMS review. Effective January 1, 2010, no
compendia can be included on the list for anti-cancer
medication unless the compendia has a publicly transparent
process for evaluating therapies and for identifying
potential conflicts of interest.
Federal Medicaid law requires a drug use review program.
The program is required to assess data on drug use against
pre-determined standards, consistent with peer-reviewed
medical literature and three statutorily listed compendia:
AHFSDI, U.S. Pharmacopoeia (or its successor publications)
and the DrugDex Information System. CMS indicates federal
law does not give it the authority to add or delete
compendia.
The chart below shows the list of compendium under existing
state law, and what the listed compendium would be under
this bill. Items marked with an "*" are compendia that are
no longer published, and items marked with "**" are not CMS
approved for Medicare anti-cancer drugs:
------------------------------------------------------------
|Existing Law | Current Law | AB 830 Compendium (must |
| | Compendium | be CMS approved) |
|-------------+--------------------+-------------------------|
|Health plan | AHFSDI | AHFSDI |
|"off label" | AMA Drug | Elsevier Gold |
|law | Evaluations* | Standard's Clinical |
| | U.S. States | Pharmacology |
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| | Pharmacopoeia* | NCCN Drug Biologics |
| | | Compendium |
| | | Thomson Micromedex |
| | | DrugDex |
|-------------+--------------------+-------------------------|
|Health plan | AHFSDI | AHFSDI |
|experimental | ADA Accepted | ADA Accepted Dental |
|treatment | Dental | Therapeutics** |
|review law | Therapeutics | Elsevier Gold |
| | AMA Drug | Standard's Clinical |
| | Evaluations* | Pharmacology |
| | U.S. | NCCN Drug Biologics |
| | Pharmacopoeia* | Compendium |
| | | Thomson Micromedex |
| | |DrugDex |
|-------------+--------------------+-------------------------|
|Medi-Cal | AMA Drug | AHFSDI |
|cancer drugs | Evaluations* | Elsevier Gold |
| | U.S. | Standard's Clinical |
| | Pharmacopoeia* | Pharmacology |
| | | NCCN Drug Biologics |
| | | Compendium |
| | | Thomson Micromedex |
| | |DrugDex |
|-------------+--------------------+-------------------------|
|Medi-Cal | AMA Drug | AHFSDI |
|AIDS drugs | Evaluations* | Elsevier Gold |
|for | U.S. | Standard's Clinical |
|opportunistic| Pharmacopoeia* | Pharmacology |
| infections | | NCCN Drug Biologics |
| | | Compendium |
| | | Thomson Micromedex |
| | |DrugDex |
------------------------------------------------------------
Following the CMS action to add the additional compendia
for anti-cancer drugs, the Wall Street Journal published an
article stating a number of cancer doctors and drug
companies urged CMS to take the step, arguing that patients
needed more help paying for expensive treatments when
others were not working. In the same article, the pharmacy
director of an insurance plan that processes Medicare
claims stated the new system was biased toward the
compendia and influence from drug makers, and the president
of a breast cancer patient advocacy group stated an
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independent government panel should decide coverage,
stating these decisions were being made by associations
with conflicts of interest.
Annals of Internal Medicine Study
According to a March 2009 article in the Annals of Internal
Medicine (AIM), off-label prescribing is common across
medical disciplines, but is critical in oncology, in which
effective treatment options are often limited, prognoses
are often grim, and submission of FDA applications for
every combination of agent and cancer is impractical. In
1991, a U.S. General Accounting Office study reported that
up to 33 percent of all anti-cancer drug prescriptions were
written for off-label indications. By 2005, the NCCN
estimated that 50 percent to 75 percent of all uses of
cancer therapy were off-label.
The Social Security Act covers, through Medicare,
anti-cancer drugs and biologics for off-label uses. This
statute recognizes certain compendia as authoritative
sources for determining a "medically accepted indication"
of drugs and biological agents, unless the Secretary of
Health and Human Services determines otherwise. The AIM
study stated, in response to concerns about the influence
of compendia, CMS proposed various changes, including
review of currently approved compendia, additional
compendia approval, and an annual review process. To
inform policy discussions, CMS commissioned the Agency for
Healthcare Research and Quality to sponsor a project
exploring the extent to which compendia provide
comprehensive, evidence-based, and timely information for
guiding off-label prescribing of cancer drugs.
The resulting review, published in March 2009 in AIM,
reviewed six drug compendia, the compendia's stated
methods, literature related to off-label indications of 14
cancer drugs in 2006; updated literature related to one
off-label indication between 2006 and 2008; and the
completeness of compendia content and citations. The 2006
analysis was limited to 14 off-label indications, and the
2008 update examined one indication, and only off-label
indications for cancer drugs were included. The AIM study
states the results cannot be generalized to non-cancer
drugs or indications. The conclusion of the AIM study was
that oncologists rely on compendia for up-to-date access to
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evidence and reimbursement information for off-label
indications, and that current compendia lack transparency,
cite little current evidence, and lack systematic methods
to review or update evidence.
The AIM study stated compendia play an integral role in
oncology practice, serving as a mechanism for ensuring that
patients have access to the newest, most effective
registered drugs when evidence becomes available to support
specific off-label indications. The authors of that study
stated that although their study was not intended to
develop recommendations, they asked whether, in their
current state, compendia can be relied upon as
authoritative, comprehensive, and timely sources of
information on off-label indications in oncology. The
authors questioned whether compendia could achieve
near-continuous systematic review of large numbers of
indications. They also noted that the FDA is neither
equipped nor authorized to provide the up-to-date,
rigorous, and comprehensive review that is being expected
of the compendia, and that the compendia's role in listing
off-label indications largely came about because of lags in
the FDA review and approval process. The authors of the
AIM study stated that all discussions of process
improvement or alternate scenarios must retain a focus on
the goal: to ensure that patients have access to the most
recent, evidence-based, effective, and safe treatments.
Arguments in support
The Medical Oncology Association of Southern California
(MOASC) and the Association of Northern California
Oncologists (ANCO) jointly sponsor this bill, arguing this
bill updates California codes in regards to off-label
compendia approved by CMS. MOASC writes that off-label
drugs approved for treating certain cancers are listed in
CMS-approved compendia, and that the State of California
recognizes the approved compendia by adding them to the
codes. MOASC states the problem is that each individual
compendium is listed by name in the California codes, and
when CMS approves a new compendium, legislation needs to be
introduced in California to put the new name of the
compendium in the codes. MOASC writes that medical
oncologists risk non-reimbursement from payers for the
off-label drug during the time period when state law does
not contain current compendia because the codes have yet to
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be updated. MOASC writes this bill makes the codes more
efficient by keeping them current with CMS action.
Previous legislation
AB 1985 (Speier), Chapter 1268, Statutes of 1992, prohibits
health plans that cover prescription drugs from limiting or
excluding coverage for a drug that is prescribed off-label
for the treatment of a life-threatening condition, if the
drug is FDA-approved, and if the drug has been recognized
for treatment of that condition by the AMA Drug
Evaluations, the AHA Formulary Service Drug Information, or
the U.S. Pharmacopoeia.
SB 2046 (Speier), Chapter 852, Statutes of 2000, expanded
the a prohibition in AB 1985 against health plans limiting
or excluding coverage for a drug that is prescribed for
off-label use, by including drugs prescribed to treat
chronic and seriously debilitating conditions, as
specified.
PRIOR ACTIONS
Assembly Floor: 77-0
Assembly Appropriations: 16-0
Assembly Health: 19-0
COMMENTS
1.Additional compendia approved under federal law.
The additional compendia recognized by CMS for anti-cancer
treatment in Medicare Part B (physician services) and
Part D followed a process CMS established in federal
regulations. That process includes considering a formal
written request for changes to the list of compendia,
publishing the list of the requests and soliciting public
comment, considering the compendium's attainment of a
specific Medicare coverage advisory committee's
recommended desirable characteristics of compendia, and
considering the compendium's grading of evidence.
Effective January 1, 2010, no compendia can be included
on the list for anti-cancer medication unless the
compendia has a publicly transparent process for
evaluating therapies and for identifying potential
conflicts of interest. CMS indicates its compendia
review process only pertained to compendia for use in the
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determination of drugs and biologicals in an anti-cancer
treatment regimen. As drafted, this bill adds these
additional compendia to state law, but these compendia
would be included in state law provisions that extend
beyond coverage of anti-cancer treatments. Medicare
currently only recognizes two compendia for non-cancer
drugs (AHFSDI and Thomson Micromedex DrugDex). Should
the additional compendia being added to state law by this
bill be limited to those recognized by CMS for use in an
anti-cancer therapeutic regimen?
2.Federal Medicaid law.
Federal Medicaid law requires states to have a drug use
review program for covered outpatient prescription drugs,
to ensure drugs are appropriate, medically necessary, and
not likely to result in adverse medical results. Federal
law requires the program to assess data on drug use
against predetermined standards, consistent with
specified factors, including compendia consisting of the
following: AHFSDI, the U.S. Pharmacopoeia (or its
successor publications), and the DrugDex Information
System.
The compendia in this bill in the Medi-Cal related
provisions of this bill include additional compendia
beyond those referenced in federal Medicaid law. DHCS
indicates this may affect the state's receipt of federal
matching funds in Medi-Cal for drugs mentioned in the
non-federally recognized compendium.
3.State Off-Label Law and Medi-Cal.
Existing law, enacted through AB 1985 (Speier), Chapter
1268, Statutes of 1992, exempts health plan contracts for
the delivery of Medi-Cal services under the Waxman-Duffy
Prepaid Health Plan Act from the "off label" requirement.
However, most Medi-Cal managed care plan contracts since
1992 have been entered into other provisions of Medi-Cal
law, which are not specifically exempted from the off
label provisions of existing law. This bill would amend
the health plan off label law to change the compendia,
which would also affect Medi-Cal managed care plans that
are not specifically exempted from the current off label
law. For Knox-Keene plans generally (not limited to
Medi-Cal plans), the director of the Department of
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Managed Health Care (DMHC) has the authority to waive any
requirement of any rule or form in situations where in
the director's discretion such requirement is not
necessary in the public interest or for the protection of
the public, subscribers, enrollees, or plans subject to
the Knox-Keene Act (the body of law regulating health
plans). If plans did not seek and the DMHC were not to
grant such a request, this bill could create General Fund
costs in Medi-Cal for coverage of off-label drugs to the
extent that compendia in this bill result in drug
coverage that is more expensive than the current
compendia approved in federal Medicaid law.
4.Additional clarifying amendments.
Staff recommends additional clarifying amendments to the
provisions of this bill that include peer reviewed
medical literature in the definition of compendia to
ensure this bill meets the author's intent.
POSITIONS
Support: Association of Northern California Oncologists
(sponsor)
Medical Oncology Association of Southern
California (sponsor)
California Medical Association
Oppose: None received
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