BILL ANALYSIS
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Elaine K. Alquist, Chair
BILL NO: SB 341
S
AUTHOR: DeSaulnier
B
AMENDED: March 31, 2009
HEARING DATE: April 15, 2009
3
REFERRAL: Revenue and Taxation
4
CONSULTANT:
1
Moreno/
SUBJECT
Pharmaceuticals: adverse drug reactions: Drug safety and
Effectiveness Program
SUMMARY
Enacts the Drug Safety and Effectiveness Program and
requires the Department of Public Health (DPH) to make
every effort to enter into a contract or agreement with the
University of California (UC) to establish a program to
evaluate scientific literature that UC determines is
relevant to the safety and effectiveness of prescription
drugs in the state.
CHANGES TO EXISTING LAW
Existing federal law:
Establishes the United States Food and Drug Administration
(FDA), an agency within the Department of Health and Human
Services (HHS), to regulate the manufacture, labeling,
sale, and distribution of drugs in the United States under
authority of the Federal Food, Drug, and Cosmetic Act.
Requires the FDA to protect public health by ensuring the
safety and efficacy of all regulated marketed medical
products. Additionally, requires the FDA to ensure that
prescription drug information is truthful, balanced, and
Continued---
STAFF ANALYSIS OF SENATE BILL SB 341 (DeSaulnier)Page 2
accurately communicated to the public.
Existing state law:
Establishes the Sherman, Food, Drug, and Cosmetics Act to
regulate the processing, labeling, advertising, and sale of
food, drugs, devices, and cosmetics under DPH.
This bill:
Program Components
Requires DPH to make every effort to enter into a contract
or agreement with UC to establish a program to evaluate
scientific literature that UC determines is relevant to the
safety and effectiveness of prescription drugs in the
state. Requires the program to include:
1)A determination of the classes of prescription drugs that
are advertised to consumers and/or marketed to physicians
in the state.
2)A web site that reports information on the safety and
effectiveness of brand name and generic drugs in those
classes, including, when available, direct comparisons of
relative safety and effectiveness, and differential
safety and effectiveness of specific drugs according to
age, gender, race, or ethnicity. Requires the web site
to be designed to disseminate information to health care
professionals and consumers in the state. Requires the
website to include a specified statement regarding the
intent of posting of information to the website and an
advisory to consumers about consulting with their
physician before changing medications. Requires the web
site design to ensure that the information is culturally
competent and requires, if studies are relied upon,
demographic information to be included.
3)A pilot project to provide health care professionals who
are licensed to prescribe or dispense prescription drugs
with information and education on the comparative
efficacy, safety, and cost-effectiveness of commonly used
prescription drugs and on the use of the program's
website. The pilot project would conduct in-person
outreach and education sessions with health care
professionals in their place of work, facilitated by
qualified and appropriately trained clinician educators
and conducted on a one-to-one basis, whenever
practicable. The pilot project would be operated in
STAFF ANALYSIS OF SENATE BILL SB 341 (DeSaulnier)Page 3
Contra Costa and one other county, as determined by DPH,
to health care professionals who participate in, contract
with, or are reimbursed by, state-funded health care
programs until January 1, 2015.
The bill requires DPH to adopt regulations to establish
minimum clinical and educational qualifications for
prescriber and dispenser educators employed by or under
contract as part of the pilot, requires training for
educators, and a code of conduct that governs the
behavior of educators in their interactions with health
care professionals and that establishes conflict of
interest guidelines for educators and others involved in
advising, developing, and administering the education
service.
The bill requires DPH, between December 1, 2011, and
December 1, 2015, to annually present to the Assembly and
Senate Committees on Health a report on the development
of the pilot project.
Prohibits the program from including an evaluation of any
drug that is used primarily to treat mental illness, except
that, where the drug has other therapeutic indications, an
evaluation of the drug's safety and efficacy would be
permitted to be performed in relation to those other
therapeutic indications.
Requires the program to rely on the best scientific
information that is available, as determined by UC, in
consultation with a clinical advisory panel, as specified.
When compiling evidence, the program would be required to:
1)Employ a methodology that is transparent, publicly
available, and open and responsive to public comment.
2)Fully disclose its methodology, findings, and
limitations.
3)Acknowledge that no conclusion can be drawn about
effectiveness if sufficient evidence is not available.
4)Have the evidence reviewed by specialists qualified to
review medical literature.
5)Consider good quality peer-reviewed clinical trials and
STAFF ANALYSIS OF SENATE BILL SB 341 (DeSaulnier)Page 4
observational studies that provide research evidence on
the comparative effectiveness, safety, and effect on
subpopulations of prescription drugs, and good quality
studies that link patient adherence, compliance, and
tolerance and alternatives to drug therapy, such as
surgery, diet, and exercise, to improved health outcomes.
6)Consider good quality peer-reviewed research evidence
that documents variations among individuals of differing
age, gender, race, and ethnic subpopulations, the effect
of co-morbidities and co-occurring disorders, and
different patient outcomes based on adherence,
compliance, and tolerance.
7)Report any identified gaps in research and opportunities
to improve on currently available research.
8)Provide a 30-day comment period during which the public,
including manufacturers, providers, and payers, can
provide feedback, including additional information and
studies that might have been overlooked. The 30-day
comment period would be followed by a revision period
before the posting of any final reviews.
Requires the establishment of a clinical advisory panel
that includes physician specialists in the drug class being
reviewed, physicians and pharmacists serving diverse
communities, and patient advocates, including
representatives of voluntary health organizations, and
senior citizen organizations to serve as advisers to the
program at various stages in the process of compiling and
disseminating information.
Requests that UC consider obtaining the assistance of other
research universities and medical research centers in the
state.
Requires a DPH/UC contract to specify the date that safety
and effectiveness reporting will commence and states
legislative intent that the reporting begin as soon as it
is feasible to do so.
Requires the program to develop and implement
conflict-of-interest policies to prohibit a person from
participating in the program's evaluation when he or she
knows or has reason to know that he or she has a material
STAFF ANALYSIS OF SENATE BILL SB 341 (DeSaulnier)Page 5
financial or other interest that would be affected by the
program's evaluation of a given class of prescription
drugs, as specified. Requires the conflict-of-interest
policies to be consistent with, and as rigorous as, the
policies utilized by the California Health Benefits Review
Program.
Manufacturer Fee
Imposes a fee on manufacturers of drugs sold in the state,
to be determined by
DPH, in consultation with UC, to be limited to the amount
necessary to fund the actual and necessary expenses of UC,
DPH, and the State Board of Equalization (BOE) in
implementing the drug safety and effectiveness program.
Limits the total annual assessment on drug manufacturers to
$3.5 million. Requires BOE to assess and collect the fee
annually, in accordance with specified existing law.
Permits BOE to prescribe, adopt, and enforce regulations to
carry out this function, as specified.
Requires the fee to be established by DPH, to the maximum
extent practicable, on the basis of a drug manufacturer's
market share of the total amount of prescription drugs sold
in the state, based on the total dispensed retail dollar
amount in the year prior to the
assessment.
Prohibits a fee from being assessed on a manufacturer that
can demonstrate, as determined by DPH, that it does not
manufacture drugs that are advertised to consumers or
marketed to physicians in the state.
Requires DPH to provide BOE with the name and address of
each person or entity who is
liable for a fee or expense, the amount of the fee, and
date the fee is due.
Requires DHS to provide BOE with information as specified
and specifies administrative mechanisms to be used for
redetermination and refund of fees.
Requires fees collected to be deposited into a new Drug
Safety and Effectiveness Fund, and requires moneys in the
fund to be expended, upon appropriation by the Legislature,
as specified.
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Requires fees and earnings be used solely for the purposes
specified and prohibits DPH from collecting fees in excess
of the amount reasonably anticipated by the UC for
implementation of the program. Permits BOE to delay
collection of the first payment of fees until 7 1/2 months
after a DPH/UC contract is entered into.
FISCAL IMPACT
Unknown.
BACKGROUND AND DISCUSSION
According to the author, Californians are all too familiar
with pervasive direct-to-consumer (DTC) advertising of
prescription drugs, and the billions of dollars spent each
year on it. Even more is spent on marketing drugs to
physicians. Meanwhile, the author states that there is
increasingly a link between these promotional activities
and compromised patient safety, a link that became very
apparent in the scandal over the selling of COX-2
inhibitors like Vioxx, Celebrex and Bextra, which have been
linked to an increased risk of heart attacks and strokes.
Intense DTC advertising and marketing to doctors of COX-2
inhibitors helped make those drugs some of the most widely
prescribed medicines in the U.S. The author asserts that
this bill provides patients and physicians with access to
scientific information about the relative safety and
effectiveness of prescription drugs. The author further
states that UC is fully qualified to see that Californians
get this vital information because through its schools of
medicine and pharmacy, it offers California direct access
to world-class health professionals, leading their fields
in the science of medical quality. UC also has a proven
model for providing the highest-quality drug reviews in the
California Health Benefits Review Program (CHBRP), which
brings together top medical experts to provide state
policymakers with the most reliable information on medical
procedures that have been proposed to be mandated health
insurance benefits. The author states that, under this
bill, qualified UC scientists with expertise in
prescription drug safety and effectiveness will provide
Californians, including physicians, pharmacists, and
patients, with the most scientific information available on
the safety and effectiveness of prescription drugs.
STAFF ANALYSIS OF SENATE BILL SB 341 (DeSaulnier)Page 7
Adverse events
The FDA collects information from annual reports submitted
from drug manufacturers on all unexpected negative side
effects from prescription drugs that have been approved.
The drug manufacturer is required to report to the FDA,
within 15 days, any serious or life threatening adverse
reactions to the drug. Depending on the seriousness of
this adverse event, the FDA may take regulatory actions to
improve product safety, update the product's labeling
information, re-evaluate an approval decision and issue a
recall of the product, or send a letter to inform the
medical community.
Vioxx and Celebrex
The recent highly publicized post-marketing safety concerns
regarding the use of FDA-approved drugs, Vioxx and
Celebrex, has led to increased public scrutiny of the FDA
and heightened awareness of the need for additional
oversight and post-marketing drug surveillance. Vioxx and
Celebrex are both classified as COX-2 inhibitors and belong
to a larger group of drugs known as NSAIDs (non-steroidal
anti-inflammatory drugs). Serious problems have been
associated with the long-term use of NSAIDs, including
bleeding stomach ulcers, intestinal bleeding, heart
problems, and damage to the liver and kidneys. These
complications can occur with or without warning symptoms
and, if severe, can lead to hospitalization or death.
Vioxx and Celebrex were both heavily marketed and
consistently promoted as being less likely to cause the
medical complications associated with older NSAIDs.
In 2004, after a company-sponsored study found more heart
attacks and strokes in patients who took Vioxx than in
those given a placebo, Merck voluntarily pulled the drug
from the market. According to the FDA, more than two
million Americans were taking Vioxx when it was withdrawn.
Subsequent post-market studies comparing Celebrex and
Bextra, a newer COX-2 inhibitor, to a placebo showed an
increased risk of heart attack and stroke with their
continued use, especially if taken for long periods, or by
people at high risk for such problems. In February 2005,
an FDA advisory panel voted to recommend that Merck be
allowed to resume sales of Vioxx. The panel also
recommended allowing both Celebrex and Bextra to remain on
the market, as long as Celebrex had a stronger warning
label.
STAFF ANALYSIS OF SENATE BILL SB 341 (DeSaulnier)Page 8
A 2005 Kaiser Family Foundation (KFF) survey found that 56
percent of adults followed news stories abut Vioxx and
Celebrex in December 2004 either "very closely" or "fairly
closely" and a large majority felt either "very confident"
(28 percent) or "somewhat confident" (52 percent) about the
safety of prescription drugs sold in the United States.
Current sources of drug information
FDA's Medwatch
MedWatch is a voluntary reporting system established in
1993 for health professionals and consumers to report
serious adverse events, product problems, or medication
errors they suspect are associated with the drugs or
medical devices they prescribe, dispense, or use. MedWatch
also lists safety alerts for drugs, biologics, devices, and
dietary supplements, safety-related drug labeling changes,
and other FDA safety-related information.
FDA's Drug Safety Oversight Board
In an effort to make the FDA's review and decision-making
processes more independent and transparent, the FDA created
a new independent Drug Safety Oversight Board in early 2005
to oversee the management of drug safety issues and to
provide emerging information to health providers and
patients about the risks and benefits of medicines. The
Board's panel has been criticized for being biased in favor
of the industry and for holding its meetings in private,
although its makes summaries of its meetings publicly
available.
Clinical Trials Data Bank
To provide the public with better information and easier
access to clinical trials, the Food and Drug Administration
Modernization Act of 1997 required HHS to establish a
publicly accessible data bank of information about clinical
trials for serious or life threatening diseases and
conditions. The web site currently contains more than
28,000 listings, from trials not yet registering to
completed trials. Results of clinical trials are not
required, but some are available. According to FDA
evaluations, compliance with the legislation has been
mixed.
Consumer web sites
STAFF ANALYSIS OF SENATE BILL SB 341 (DeSaulnier)Page 9
AARP and Consumers Union developed and established their
own Internet web sites to serve as an online guide for
specific prescription drugs. Both sites use DERP reports
as a basis for their reports.
PhRMA's www.clinicalstudyresults.org
The pharmaceutical industry has developed an online
clearinghouse to provide greater access to the results of
its clinical studies. According to the Pharmaceutical
Research and Manufacturers of America (PhRMA), the web site
contains the results from all "hypothesis-testing" clinical
studies (mainly phase III and IV studies) completed since
October 1, 2002, for drug products that are approved in the
United States. This will include both published articles
and unpublished study summaries. According to PhRMA, the
group does not keep track of the total clinical trials
currently listed on this web site. With regard to the
clinical trial results listed, approximately 84 companies
are listed with over 500 drugs with studies listed on the
site. For each study, numerous results are identified.
AHRQ Comparative Effectiveness Review
According to the Agency for Healthcare Research and Quality
(AHRQ), it conducts the Effective Health Care Program in
order to help inform health care decisions. As part of the
Medicare Prescription Drug, Improvement, and Modernization
Act of 2003, Congress directed AHRQ to conduct and support
research on the comparative outcomes, clinical
effectiveness, and appropriateness of pharmaceuticals,
devices, and health care services to meet the needs of
Medicare, Medicaid, and the State Children's Health
Insurance Program. In December 2004 the U.S. Department of
Health and Human Services identified 10 priority conditions
to be the addressed by the program: arthritis and
nontraumatic joint disorders, cancer, chronic obstructive
pulmonary disease/asthma, dementia (including Alzheimer's
disease), depression and other mood disorders, diabetes,
heart disease, peptic ulcer/dyspepsia, pneumonia, and
stroke. To date, there have been 15 final reports issued
by the program, however, not all have focused solely on
pharmaceutical therapies.
As part of the American Recovery and Reinvestment Act of
2009, $1.1 billion was included for comparative
effectiveness research. Of the total, $300 million is
intended for the AHRQ, $400 million for the National
STAFF ANALYSIS OF SENATE BILL SB 341 (DeSaulnier)Page 10
Institutes of Health, and $400 million for the Secretary of
Health and Human Services to support comparative
effectiveness research.
Pharmaceutical Direct-to-Consumer (DTC) advertising
The FDA regulates advertisements and other promotional
materials disseminated by or on behalf of the advertised
product's manufacturer, packer, or distributor. In 1997,
the FDA allowed drug manufacturers to advertise directly to
consumers. There are three types of advertisements that
product sponsors use to communicate with consumers:
product-claim, reminder and help-seeking. Only
product-claim advertisements require disclosures of risks
and limitations of efficacy. Reminder advertisements are
not allowed for products with serious warnings in their
labeling. Help-seeking advertisements are not regulated by
the FDA. These ads discuss a disease or condition and
advise the audience to "see your doctor" for possible
treatments. These advertisements do include any risk
information because no drug product is mentioned or
implied; therefore it is not considered to be a drug
advertisement.
According to an article published in the New England
Journal of Medicine in August 2007, spending on
pharmaceutical promotion grew from $11.4 billion in 1996 to
$29.9 billion in 2005. Although during that time, spending
on DTC advertising increased by 330 percent, it made up
only 14 percent of total promotional expenditures in 2005.
The article stated that DTC ads generally begin within a
year after the approval of a product by the FDA.
Prior legislation
SB 606 (Scott, of 2007) would have required pharmaceutical
companies to make available, on a free, publicly accessible
website, the results of all clinical trials, except for
phase I trials, and other specified information, including
an explanation as to why a trial was not completed or was
terminated. These provisions were deleted from the bill in
the Assembly.
AB 71 (Chan, of 2006) contained substantially similar
provisions to those contained in this bill. Died on the
Senate Floor.
SB 380 (Alquist, of 2005) would have required health care
STAFF ANALYSIS OF SENATE BILL SB 341 (DeSaulnier)Page 11
providers to report suspicious serious adverse drug events
to the FDA. Died on the Assembly Floor.
SB 1683 (Scott, of 2005) would have required
pharmaceutical manufacturers to register all clinical
trials and publish all clinical trials' results on the
federal clinical trials database for every medicine they
sell in California, regardless of when the clinical trials
were initiated or completed, or where they were conducted.
Died in the Senate Appropriations Committee.
AB 72 (Frommer, of 2005) would have required sponsors of
clinical trials to certify that they have registered the
clinical trials and that they will publish the results of
the trial, whether positive or negative, as specified.
Died on inactive file on the Assembly Floor.
AB 1674 (Richman, of 2005) would have required the
Department of Managed Health Care (DMHC) to contract with
an academic institution or public policy research
institution for the establishment of a Center for Quality
Medicine to conduct periodic research on various issues
related to medical treatment data. Vetoed by the Governor.
AB 2326 (Corbett, of 2005) would have required the Office
of Patient Advocate at DMHC to publish a report card before
January 1, 2006, and update it annually thereafter, on the
safety, effectiveness, and cost of prescription drugs, to
be posted on DMHC's Internet Web site. Failed in the
Senate Appropriations Committee.
SB 306 (Soto, of 2002) would have required that the Regents
of UC establish a nine-member Pharmaceutical Evaluation
Commission (Commission) and would have permitted the
Commission to establish expert panels on different
therapeutic classes of drugs. SB 306 would have required
the Commission to summarize its findings and make them
accessible on an internet web site and other accessible
formats to health care purchasers, professionals, and
consumers. Would have required the Commission to act as a
general clearinghouse for information to practitioners,
health plans, and consumers on the therapeutic benefits of
drugs and best practices in pharmacy management. These
provisions were deleted from the bill in the Assembly.
AB 1996 (Thomson) Chapter 795, Statutes of 2002, requests
STAFF ANALYSIS OF SENATE BILL SB 341 (DeSaulnier)Page 12
UC to assess legislation proposing a mandated benefit or
service, and to prepare a written analysis with relevant
data on the public health, medical and economic impact of
proposed health care service plan (health plan) and health
insurance benefit mandate legislation. Requires, for
fiscal years 2002-03 to 2005-06, health plans and insurers
to be assessed an annual fee in an amount determined
through regulation to fund the actual and necessary
expenses of UC in implementing this bill, and caps the
total annual assessment on health plans and insurers at $2
million.
Arguments in support
According to the California Alliance for Retired Americans,
prescribers are heavily influenced by drug-makers who have
an incentive to provide only one side of the story on the
safety and effectiveness of their products, as the
pharmaceutical industry spends over $60,000 per physician
per year to support such practices. The California Nurses
Association states that consumers need the best possible
scientific and unbiased information on the safety and
effectiveness of prescription drugs. According to
Community Catalyst, academic detailing programs, such as
the one proposed under this bill, have no other agenda than
providing the best, most up-to-date information to doctors.
The California Labor Federation, the United Food and
Commercial Workers, and the California Federation of
Teachers write that this bill will help drive more
medically and fiscally appropriate health care decisions,
lowering the cost of coverage and helping more working
families keep the coverage they are currently struggling to
afford. The California Council of Community Mental Health
Agencies writes that this bill addresses the need for
patients and physicians to have access to scientific
information about the relative safety and effectiveness of
prescription drugs, which is vital in the case of the
mentally ill.
Arguments in opposition
PhRMA and Novartis Pharmaceuticals Corporation write that
the thrust of this bill is already underway at the federal
level by virtue of language and funding included in the
American Recovery and Reinvestment Act, which includes $1.1
billion allocated for comparative effectiveness research.
AstraZeneca writes that physicians and patients already
have access to a broad range of scientifically accurate,
STAFF ANALYSIS OF SENATE BILL SB 341 (DeSaulnier)Page 13
fair and balanced sources of information about drugs; drug
safety and effectiveness, is already appropriately
evaluated by the FDA, and that it is unreasonable to impose
additional fees on manufacturers to create duplicative
systems that will not supply new information. BIOCOM states
that a subjective cataloging of study data is duplicative
and of minimal or no meaningful utility.
COMMENTS
Technical amendments:
1)On page 5, beginning on line 6:
(c) In implementing this article, any contract or
agreement between the department and the University of
California entered into pursuant to this section the
program shall rely on the best scientific information
that is available, as determined by the University of
California, in consultation with the clinical advisory
panel, giving due consideration to the diversity of the
population of the State of California. When compiling
evidence, any contract or agreement between the
department and the University of California entered into
pursuant to this section the program shall do all of the
following:
2)On page 5, line 16:
The department , no later than January 1, 2011, shall
adopt regulations that establish all of the following:
3)On page 5, lines 29-30:
information that is available, as determined by the
University of California, in consultation with the
clinical advisory panel described in subdivision (d) ,
giving
4)On page 6, beginning on line 23:
(d) Any contract or agreement entered into between the
department and the University of California program
implemented pursuant to this section shall require
include the establishment of a clinical advisory panel
that includes physician specialists in the drug class
being reviewed, physicians and pharmacists serving
diverse communities, and patient advocates, including
representatives of voluntary health organizations, and
senior citizen organizations to serve as advisers to the
program at various stages in the process of compiling and
STAFF ANALYSIS OF SENATE BILL SB 341 (DeSaulnier)Page 14
disseminating information.
5)On page 7, beginning on line 7:
(h) Any contract or agreement entered into between the
department and the University of California program
implemented pursuant to this section shall require that
the University of California begin reporting on the
safety and effectiveness of prescription drugs pursuant
to this article on a date certain specified in the
contract between the department and the University of
California. It is the intent of the Legislature that this
reporting begin as soon as it is feasible to do so.
(i) In order to avoid conflicts of interest, any contract
or agreement entered into between the department and the
University of California program implemented pursuant to
this section shall require that the University of
California develop and implement conflict-of-interest
policies to prohibit a person from participating in the
implementation or operation of the program's evaluation
of a given class of prescription drugs when he or she
knows or has reason to know that he or she has a material
financial or other interest, including, but not limited
to, a person who has a consulting or other agreement with
an organization, that would be affected by the program's
evaluation of that given class of prescription drugs. The
contract shall require that these conflict-of-interest
policies shall be consistent with, and as rigorous as,
the policies utilized by the California Health Benefits
Review Program pursuant to Section 127663.
6)On page 7, line 30, strike "SEC. 3."
POSITIONS
Support: California Alliance for Retired Americans
(sponsor)
American Association of Retired Persons
American Federation of State, County and Municipal
Employees
California Council of Community Mental Health
Agencies
California Federation of Teachers
California Labor Federation, AFL-CIO
California Nurses Association
California Rural Legal Assistance Foundation
California School Employees Association
STAFF ANALYSIS OF SENATE BILL SB 341 (DeSaulnier)Page 15
Community Catalyst
Congress of California Seniors
Health Access California
Health Care for All-California
Mental Health Association in California
Service Employees International Union
Western States Council of the United Food and
Commercial Workers
One individual
Oppose: AstraZeneca
BIOCOM
California Healthcare Institute
Novartis Pharmaceuticals Corporation
Pharmaceutical Research and Manufacturers of America
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