BILL ANALYSIS
SB 484
Page 1
Date of Hearing: June 30, 2009
Counsel: Kimberly A. Horiuchi
ASSEMBLY COMMITTEE ON PUBLIC SAFETY
Juan Arambula, Chair
SB 484 (Wright) - As Amended: May 12, 2009
SUMMARY : Provides that any person who obtains ephedrine,
pseudoephedrine, and other related drugs without a prescription,
as specified, shall be guilty of an infraction or misdemeanor.
EXISTING LAW :
1)Provides the following restrictions and requirements for the
sale of ephedrine, pseudoephedrine, norpseudoephedrine or
phenylpropanolamine in over-the-counter retail transactions:
a) A retailer in a single transaction may sell no more than
three packages of a product containing these chemicals.
b) A retailer may sell no more than nine grams of
ephedrine, pseudoephedrine, norpseudoephedrine or
phenylpropanolamine.
c) A first violation of these restrictions is a
misdemeanor, punishable by a jail term of up to six months,
a fine of up to $1,000, or both.
d) A second or subsequent violation is a misdemeanor,
punishable by a jail term of up to one year, a fine of up
to $10,000, or both. [Health and Safety Code (HSC) Section
11100(g).]
2)States any manufacturer, wholesaler, retailer, or any other
person or entity in this state that sells, transfers, or
otherwise furnishes any substance specified in existing law to
a person or business entity in this state or any other state
or who obtains from a source outside of the state any
substance specified in existing law shall submit an
application to, and obtain a permit for the conduct of that
business from, the Department of Justice (DOJ). [HSC Section
11106(a)(1)(A).]
SB 484
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FISCAL EFFECT : Unknown
COMMENTS :
1)Author's Statement : According to the author, "It is estimated
that the yearly cost of the nation's meth epidemic is in
excess of $23 billion. (RAND Study.) Since 1998, California
has led the nation in the number of methamphetamine seizures,
(The DEA's El Paso Intelligence Center) and more than 85% of
the meth in the United States comes from superlabs in
California and Mexico. While criminals use a number of easily
obtained substances to manufacture meth, the one ingredient
they cannot do without is ephedrine/pseudoephedrine. Without
a ready supply of this ephedrine/psuedoephedrine, they cannot
make meth.
"Currently, state law (11100 Health and Safety Code) makes it
illegal for a retail distributor to sell in a single
transaction more than three packages or more than 9 grams of a
product containing ephedrine or pseudoephedrine. The Federal
Combat Methamphetamine Epidemic Act (CMEA) requires that
products containing pseudoephedrine/ephedrine be kept behind
the counter, and sold only after an appropriate form of
identification is provided by the purchaser. Purchasers are
limited to the purchase of 3.6 grams of
pseudoephedrine/ephedrine products in a day.
"The restrictions that have been placed on
pseudoephedrine/ephedrine products are ineffective and not
enforceable. Unfortunately, some retailers are ignoring the
limit and are allowing the purchase of medicines containing
the precursor drugs without controls. Additionally, the
current statutory system includes no way to limit sales when
purchasers buy from multiple retail chains.
"The problem is drug dealers who manufacture methamphetamine
circumvent this daily legal purchasing limit by 'smurfing'
these products, something the law did not take into account.
An accomplished smurfer (someone who makes numerous purchases
of over-the-counter ephedrine for the purpose of manufacturing
methamphetamine) can abuse the California system by purchasing
enough ephedrine/pseudoephedrine-based products in one day to
allow for the production of one pound of methamphetamine.
They utilize co-conspirators, relatives, as well as paying
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homeless people, to purchase these products solely for the
manufacture of methamphetamine.
"Due to the ineffectiveness of current state and federal laws,
methamphetamine is being manufactured throughout California in
increasing amounts. The environmental impact alone is costing
the state hundreds of thousands of dollars per year for
clean-up, in addition to the manpower utilized in law
enforcement to investigate 'smurfers' in order to locate
methamphetamine labs. California spends millions of dollars
each year arresting, prosecuting, and incarcerating meth
manufacturers.
"SB 484 will permit the purchase of ephedrine-based drugs only
through a prescription from a doctor. This legislation is
modeled after a similar and very successful law passed in
Oregon which has resulted in a huge drop in meth labs and meth
production in that state. In 2003, the last year products
with ephedrine/pseudoephedrine were available without
restriction, Oregon discovered 473 meth labs. In 2007, the
first full year the prescription-only requirement was in
place, Oregon found 18 meth labs. Other states are now
considering similar legislation as well as the Congress. This
drop in the number of meth labs constitutes a 96% reduction in
meth laboratories following enactment of the prescription-only
requirement. Based on Oregon's successful statute, Senator
Ron Wyden has introduced the Meth Lab Elimination Act of 2009
in the United States Senate. Like the Oregon State
prescription-only requirement, the bill would make products
with ephedrine/pseudoephedrine prescription-only.
"85 percent of the methamphetamine making its way to the other
49 states comes from or through California, and illicit meth
labs in California produce more meth than produced in any
other state in the nation. In fact, California labs produce
more meth than the next 5 top meth producing states combined.
In 2008, 19 meth superlabs (labs capable of producing at least
10 pounds of meth) were discovered and dismantled nationwide.
17 of those 19 labs were found in California.
"If enacted, SB 484 would wipe out meth labs in California. In
2006, Oregon enacted the first law in the nation making
pseudoephedrine available by prescription only. Prior to
enacting, Oregon busted more than 200 meth labs per year. In
2008, after making pseudoephedrine prescription only, Oregon
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Law Enforcement found 4 meth labs."
2)Background : According to information provided by the AG's
Office (the sponsor of this bill), "Currently, retailers keep
all products containing ephedrine, pseudoephedrine,
phenylpropanolamine, norpseudoephedrine, N-ethylephedrine,
N-methylpseudoephedrine, N-ethypseudoephedrine,
Chloroephedrine, or Chlorospeudoephedirne behind the counter.
Anyone who makes a purchase must show identification and the
purchase is logged either by paper or electronically.
"SB 484 will permit the purchase of ephedrine-based drugs only
through a prescription from a doctor. This legislation is
modeled after a similar and very successful law passed in
Oregon which has resulted in a huge drop in meth labs and meth
production in that state.
" Results in Oregon : In 2003, the last year products with
ephedrine/pseudoephedrine were available without restriction,
Oregon discovered 473 meth labs. In 2007, the first full year
the prescription-only requirement was in place, Oregon found
18 meth labs. This drop in the number of meth labs
constitutes a 96% reduction in meth laboratories following
enactment of the prescription-only requirement. Other states
are now considering similar legislation as well as the
Congress. Based on Oregon's successful statute, Senator Ron
Wyden has introduced the Meth Lab Elimination Act of 2009 in
the United States Senate. Like the Oregon State
prescription-only requirement, the bill would make products
with ephedrine/pseudoephedrine prescription-only nationwide."
3)National Drug Threat Assessment and U.S. Department of Justice
(DOJ) Reports : According to the United States DOJ, National
Drug Intelligence Center, National Drug Threat Assessment
2009:
"Ephedrine and pseudoephedrine import restrictions in Mexico
contributed to a decrease in methamphetamine production in
Mexico and reduced flow of the drug from Mexico to the United
States in 2007 and 2008. Methamphetamine shortages were
reported in some drug markets in the Pacific, Southwest, and
West Central Regions during much of 2007. In some drug
markets, methamphetamine shortages continued through early
2008. In 2008, however, small-scale domestic methamphetamine
production increased in many areas, and some Mexican Drug
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Threat Assessment (DTOs) shifted their production operations
from Mexico to the United States, particularly to California.
The rise in domestic methamphetamine production was fueled by
an increase in domestic pseudoephedrine trafficking by
individuals and criminal groups circumventing national retail
pseudoephedrine sales restrictions. These individuals and
criminal groups often make pseudoephedrine product purchases
at or below the allowable purchase limit from multiple retail
outlets.
" Reduced Mexican methamphetamine production resulted in
decreased methamphetamine availability in many U.S.
methamphetamine markets in 2007 . Analysis of drug
availability data as well as law enforcement reporting reveals
decreased availability of methamphetamine in many U.S. drug
markets beginning in early 2007 and continuing into 2008
(internal citation omitted).
"Rising methamphetamine prices and decreasing purity were
evidence of decreasing methamphetamine availability during
2007. According to the Drug Enforcement Administration's
System to Retrieve Information on Drug Evidence (STRIDE), the
price per pure gram for methamphetamine increased 90 percent
($149.78 to $284.12) from January 2007 through December 2007.
STRIDE data also show that average methamphetamine purity
decreased by 28 percent (56.92% to 40.98%) during the same
period. Also, Quest Diagnostics data show that positive
methamphetamine tests in workplace drug tests declined
steadily through 2007 and like STRIDE data, Quest Diagnostics
data indicate instability in methamphetamine supply and
availability throughout that period. Quest Diagnostics data
show a 38.8 percent decrease in the rate of positive
methamphetamine workplace drug tests from the first quarter of
2007 (0.18%) to the fourth quarter of 2007 (0.11%).
"Methamphetamine seizure data also indicate a reduction in the
flow of methamphetamine and decreased availability in 2007.
Data shows that the amount of methamphetamine seized in the
United States decreased sharply in 2007, particularly during
third quarter 2007. The total amount of methamphetamine seized
in 2007 (4,689.55 kg) was 34 percent lower than in 2006
(7,106.68 kg).
" Mexican DTOs are increasingly circumventing chemical sale and
import restrictions in Mexico by diverting ephedrine and
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pseudoephedrine from elicit sources in South America . DEA
reporting indicates that Mexican DTOs are increasingly using
South America as a source and transshipment zone for ephedrine
and pseudoephedrine shipments destined for methamphetamine
laboratories in Mexico as well as to laboratories tied to
Mexican DTOs that are located in South American countries. For
instance, the amount of ephedrine imported into Argentina
increased from 5 metric tons in 2006 to 26 metric tons in
2007, indicative of an increase in such activity in that
country. Likewise, DEA reporting further indicates that
Argentine authorities seized an operational methamphetamine
laboratory that had ties to a Mexican DTO and that
methamphetamine previously produced in the lab had been
transshipped to Mexico for distribution. Seizure data from
2007 and 2008 indicate that ephedrine and pseudoephedrine are
smuggled from South American source areas in containerized
cargo, aboard commercial flights by couriers, and by mail
delivery services."
According to reports available online, the U.S. DOJ reports
California methamphetamine laboratory incidents decreased from
2003 to 2007 from 1,281 lab incidence in 2003 to 221 lab
incidence in 2007.
[ www.usdoj.gov/dea/pubs/state_factsheets/California.html ,
visited on June 24, 2009.] As further explained by the U.S.
DOJ,
"In recent years, there has been a decrease in the number of
meth labs seized in California and an increase in the number
of meth labs just south of the border in Mexico. Rural areas
in the Central Valley are the source of much of the meth
produced in California and seized elsewhere. As the supply of
pseudoephedrine from Canada has diminished after successful
law enforcement operations, there has been a noticeable
increase in pseudoephedrine and ephedrine seized that
originated from China. Restrictions on pseudoephedrine
importation into Mexico, balance-of-power issues among rival
Mexican cartels, and increased enforcement efforts by the
current Mexican government have all significantly impacted
methamphetamine manufacturing and the smuggling of finished
product into the Los Angeles area." [Id.]
4)Arguments in Support :
a) According to the California Attorney General's Office
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(the sponsor of this bill), "SB 484 would require a
prescription for products containing ephedrine
/pseudoephedrine. This legislation is modeled after a
similar and very successful law passed in Oregon which has
resulted in a huge drop in meth labs and meth production in
that state.
"Currently, state law requires that products containing
pseudoephedrine/ephedrine be kept behind the counter, and
sold only after an appropriate form of identification is
provided by the purchaser. Purchasers are limited to the
purchase of 3.5 grams of pseudoephedrine/ephedrine products
in a day. These restrictions on pseudoephedrine/ephedrine
products are not strict enough and do not work.
Unfortunately, some retailers are ignoring the limit and
are allowing the purchase of medicines containing the
precursor drugs without controls. Additionally, the
current statutory system includes no way to limit sales
when purchasers buy from multiple retail chains.
"The problem is that drug dealers who manufacture
methamphetamine circumvent this daily legal purchasing
limit by "smurfing" these products, something the law did
not take into account. An accomplished smurfer (someone
who makes numerous purchases of over-the-counter ephedrine
for the purpose of manufacturing methamphetamine) can abuse
the California system by purchasing enough
ephedrine/pseudoephedrine-based products in one day to
allow for the production of one pound of methamphetamine.
"The enormous impact of methamphetamine on human life, public
safety and health costs is hard to overemphasize. It is
estimated that the yearly cost of the nation's meth
epidemic is in excess of $23 billion. Since 1998,
California has led the nation in the number of
methamphetamine seizures, and more than 85% of the meth in
the United States comes from superlabs in California and
Mexico. While criminals use a number of easily obtained
substances to manufacture meth, the one ingredient they
cannot do without is ephedrine/pseudoephedrine. Without a
ready supply of this ephedrine/psuedoephedrine, they cannot
make meth.
"Meth is currently the most prevalent manufactured illegal
drug produced in the United States. The drug is made
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easily in clandestine laboratories with relatively
inexpensive over-the-counter ingredients. It can be
snorted, smoked, or injected. Meth is a derivative of
ephedrine/psuedoephedrine, which is contained in many cold
medications and inhalers. The ingredients used to produce
meth include fertilizer (anhydrous ammonia), gun cleaner,
cold remedy pills, lithium (from batteries), acetone,
alcohol, phosphorous (from matches and road flares),
sulfuric acid, and brake cleaner. Producers combine these
ingredients during a process called "cooking," which
creates toxic fumes and waste as by-products. Some of the
chemicals used in the "cooking" process are volatile and
frequently explode. The explosions have resulted in fires,
chemical burns, serious physical injuries, and death.
Every pound of meth produces five pounds of toxic waste,
and cookers frequently dump the toxic waste on the ground
or in the water supply, which pollutes the environment.
"California leads the nation in the amount of meth seized in
the past few years. In 2008, California seized 119 meth
labs, by far the highest total in the Western United
States. Also in 2008, a total of 17 meth 'super labs' were
seized. A super lab is a lab capable of producing in
excess of 10 pounds of meth. 15 of the 17 super labs were
seized in California. None of these figures count meth lab
dump sites which indicate chemical disposal after a
successful meth 'cook.'"
b) According to the California Narcotic Officers'
Association , "The law enforcement community is in support
of Senate Bill 484, which will require a prescription prior
to the sale of products containing pseudoephedrine.
Pseudoephedrine is the key ingredient in the manufacture of
methamphetamine. In addition to the devastating nature of
the drug itself, the meth production process and meth labs
pose an unacceptable risk to communities, the environment,
and to children who are drug endangered by dint of their
being at locations where meth is being manufactured.
"Currently, California has legislation that limits the
packages of pseudoephedrine that may be sold, requires the
showing of identification, and requires that
pseudoephedrine must be kept behind the counter. Although
these measures were successful for a time in tamping down
the diversion of pseudoephedrine into meth production,
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sophisticated smurfing operations can now easily evade
California law. Narcotics enforcement officers estimate
that a sophisticated smurfing operation can purchase enough
pseudoephedrine in one day to manufacture over $20,000
worth of meth.
"In contrast to California's failing system (it is estimated
that over 90% of the pseudoephedrine used to cook meth in
California comes from California retail outlets), Oregon
passed legislation that required a prescription for
pseudoephedrine products prior to sale. The results were
dramatic. Prior to enactment of the Oregon law, there were
an average of 284 methamphetamine labs seized annually (and
this was under a law similar to California's current law).
In 2007, the most recent full year of available meth lab
statistics, only 2 labs and 16 dumpsites and remnant sites
were shut down. In effect, the law virtually eliminated
Oregon's meth labs. Oh, one more thing, prior to enactment
of Oregon law, legislative testimony revealed the 70% of
the pseudoephedrine sales from independent stores and
pharmacies was being diverted into the manufacture of meth;
after the enactment of the Oregon law, those sales dried
up.
"We no longer have to guess what works and what doesn't;
Oregon has shown the way. Senate Bill 484 is drawn from
Oregon law. It is easily the most important
methamphetamine law ever put before the California
Legislature.
"One final note, the sky did not fall when the Oregon law was
enacted. First, many people simply began purchasing some
of the other 30 other cold medications not containing
pseudoephedrine; second, those who continued to use
pseudoephedrine products supported the law; third,
manufacturers of cold medications are accelerating their
reformulation processes to exclude pseudoephedrine in their
products."
5)Arguments in Opposition :
a) According to the Consumer Healthcare Products
Association (CHPA) , "Because of existing restrictions,
millions of consumers wait in line at the pharmacy and
subject themselves to state and federal criminal
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prosecution if they exceed legal quantity limits to buy
pseudoephedrine (PSE). This demonstrates that for many
individuals, PSE is the best remedy even though other
decongestants are available on the shelves are easier to
obtain. Prescription status for PSE would mean substantial
new costs for these consumers, measured in both time and
money, to access important and needed medicines. We must
oppose SB 484 for this reason.
"Since Oregon began requiring a prescription for PSE in 2006,
no other state has followed suit. While Oregon has seen a
significant reduction in meth lab incidents, it is
comparable to the reductions achieved in its neighboring
states which do not require a prescription. The stats
experiencing the highest numbers of meth lab incidents,
such as Missouri, are instead establishing electronic
tracking systems to enforce purchase quantity limits
without all the unintended consequences of moving an
over-the-counter (OTC) to prescription status. Oklahoma
has had its tracking system since 2006 and has reduced its
meth lab incidents by more than 90% from their peak. In
the first full year of using electronic tracking,
Oklahoma's lab incidents were cut in half compared to the
prior year.
"Requiring a prescription for pseudoephedrine would cause
legitimate consumers to take time off to see a doctor when
they need a cold or allergy medicine containing
pseudoephedrine, even though these products are approved by
the U.S. Food and Drug Administration for nonprescription
use. They would have to find a pharmacy, during pharmacy
hours, and wait for their prescription to be filled, and
pay prescription-drug prices or their co-pay for a
nonprescription drug.
"Requiring a prescription for an OTC drug also will impose
directs costs on the state to reimburse physicians every
time a Medicaid or SCHIP recipient sees a doctor to obtain
a PSE prescription. The state will also face increased
health insurance premiums for state employees and will lose
over $4,4600,000 in lost sales tax revenue (based on 2008
sales data, not including Wal Mart) because prescription
drugs are tax-exempt while OTC's are subject to sales tax.
"Since Combat Methamphetamine Epidemic Act (CMEA) and similar
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state restrictions took effect, there has been a 61%
nationwide drop in meth lab incidents. California's lab
incidents have been reduced by 86%, from a high of 2,579
incidents in 1999 to 349 lab incidents in 2008, according
to the U.S. Drug Enforcement Administration statistics.
"California should enforce the sales restrictions that most
states and federal law have already enacted. CHPA
supported the federal CMEA, signed into law in 2006, which
requires all PSE-containing OTC's to be sold from behind
the counter, limits purchases to 3.6 grams per day and 9
grams per 30 days, and requires purchaser signatures in a
logbook. California has yet to enact similar restrictions
that would give state and local law enforcement
jurisdiction to enforce these sale limits."
b) According to the California Grocers Association , "SB 484
seeks to require consumers to obtain a prescription for
purchase of any product containing ephedrine or pseudo
ephedrine. While grocers understand the need to help
control access to products that contain compounds that may
be extracted and used to manufacture methamphetamine, SB
484 is the wrong approach. Products containing ephedrine
and pseudo ephedrine are already kept behind the counter,
with limits on quantities purchased and mandatory tracking.
SB 484 is bad for consumers, because it drives up health
care costs and reduces access to safe and effective
medication. SB 484 is bad for California's bottom line
because it significantly reduces tax revenues to both state
and local governments and increases pressures on already
burdened public health programs.
"For many consumers, especially the poor and uninsured, the
additional cost of having to see a physician to obtain a
prescription creates an insurmountable burden. Consumers
would be forced to take time off work for expensive medical
appointments - a process that could take days or even
weeks. Some of those individuals may not be compensated by
their employer for that time, or may be forced to use paid
sick leave or vacation time that would otherwise be
available for more serious health difficulties. In the
alternative, some consumers may be unable to navigate the
added burdens imposed by SB 484 because they do not have
reliable transportation, a relationship with a physician or
the money to pay for an office visit. They would be forced
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to forego treatment for mild conditions only to see those
ailments progress to much more serious conditions requiring
much more expensive and invasive treatment.
"The state and local governments could also see significant
declines in sales tax revenue as OTC products are subject
to sales tax while prescriptions are not. In 2008, over $4
million was generated in state sales tax revenue from
familiar and effective over-the-counter (OTC) products
(e.g., Sudafed, Claritin-D, Advil Cold and Sinus; Zyrtec-D,
Tylenol Cold, Aleve-D, Mucinex D, ect.) that contain
ephedrine or pseudo ephedrine. That sales tax revenue
would be lost.
"Finally, the state and local government could see dramatic
increases in costs as patients utilize physician services
for office visits to obtain prescriptions and pharmacy
services to purchase products that currently are available
OTC. Medi-Cal enrollees who currently purchase OTC would
have to wait for office visits to obtain a prescription, a
new cost to the Medi-Cal program. In addition, the Healthy
Families program would experience significant new cost
pressures because it does not currently cover OTC drugs,
but it does cover prescriptions."
c) According to Bayer HealthCare , "Products containing
pseudo ephedrine (PSE) have already been restricted, in
terms of access and quantity, in the effort to curb the
manufacturing of methamphetamines. California law requires
all over-the-counter products containing PSE to be sold
from behind the counter, purchases must be limited to 3.6
grams per 30 days, and each purchaser must register their
name in a logbook. SB 484 would heighten the barriers to
these safe and effective products. Rather than consumers
having the ability to treat their colds and allergies with
the convenience of a trip to the store, SB 484 would
require the scheduling of an appointment with a physician
and obtaining a prescription. The 6.5 million uninsured
Californians with no direct access to a physician will be
forced to treat their colds and allergies through a visit
to a hospital emergency room or a community clinic. The
FDA has determined OTC products containing PSE to be safe,
effective, and to be available without a prescription. We
believe consumers should benefit from the convenience and
affordability of these products and their access should not
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be hampered."
6)Prior Legislation : AB 283 (Koretz), of the 2005-06
Legislative Session, would have provided that the dispensing,
sale, or distribution at retail of any compound, mixture, or
preparation containing any detectable quantity of ephedrine,
pseudoephedrine, or any derivative of ephedrine or
pseudoephedrine shall be subject to specified additional
requirements and require the retailer to store and display
the product in a locked cabinet or as specified and the
transaction would be required to be made by a retailer or
employee of a retailer who meets specified requirements. AB
283 was gutted and never heard by the Senate Committee on
Public Safety.
REGISTERED SUPPORT / OPPOSITION :
Support
Association for Los Angeles Deputy Sheriffs
California Association of Code Enforcement Officers
California Attorney General's Office
California Correctional Supervisors Association
California Law Enforcement Telecommunications System Advisory
Committee
California Narcotics Officers' Association
California Peace Officers' Association
California Police Chiefs Association
California State Sheriffs' Association
District Attorney for the City and County of San Francisco,
Kamala Harris
Los Angeles County District Attorney's Office
Los Angeles County Police Chiefs Association
Riverside Sheriffs' Association
Opposition
Anthem Blue Cross
Association of California Life and Health Insurance Companies
Bayer Healthcare
California Association of Health Plans
California Attorneys for Criminal Justice
California Chamber of Commerce
California Grocers Association
California Healthcare Institute
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California Healthcare Products Association
California Manufacturers and Technology Association
California Pharmacists Association
California Retailers Association
Health Net
Johnson & Johnson
Molina Healthcare of California
National Association of Chain Drug Stores
Rite Aid
Schering-Plough
Wyeth Pharmaceuticals
Analysis Prepared by : Kimberly Horiuchi / PUB. S. / (916)
319-3744