BILL ANALYSIS Ó
AB 377
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Date of Hearing: April 12, 2011
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
AB 377 (Solorio) - As Introduced: February 14, 2011
SUBJECT : Pharmacy.
SUMMARY : Provides that a hospital pharmacy license can include
a centralized hospital pharmacy physically located outside of
the hospital or at a separate facility that is located within a
100-mile radius of the hospital and regulated under the
hospital's license. Authorizes the centralized pharmacy to
deliver non-patient specific unit dose medications to hospitals
and to prepare both pill/capsule, as well as injectable and
intravenous medications for hospital patients. Specifically,
this bill :
1)Provides that a hospital pharmacy, licensed by the California
State Board of Pharmacy (BOP), is permitted to be located
outside the hospital, in either another physical plant on the
same premise or on a separate premise, located within a
100-mile radius of the hospital.
2)Requires any unit-dose medication produced by a hospital
pharmacy under common ownership to be barcoded to be readable
at the patient's bedside.
3)Permits a hospital pharmacy to prepare and store a limited
quantity of unit-dose medications in advance of receipt of a
patient-specific prescription in a quantity as is necessary to
ensure continuity of care for an identified population of
patients of the hospital based on a documented history of
prescriptions for that patient population.
4)Prohibits any language in this bill from limiting the
obligation of a hospital pharmacy, hospital, or pharmacist to
comply with all applicable federal and state laws.
5)Prohibits "manufacturer" from meaning a pharmacy repackaging a
drug for parenteral therapy or oral therapy in a hospital for
delivery to another pharmacy or hospital under common
ownership for the purpose of dispensing the drug, pursuant to
a prescription order, to the patient or patients named in the
prescription or order.
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6)Requires a pharmacy compounding or repackaging a drug as
described in 5) above to notify the BOP in writing of the
location where the compounding or repackaging is being
performed within 30 days of initiating the compounding or
repackaging. Requires the pharmacy to report any change in
that information to the BOP in writing within 30 days of the
change.
EXISTING LAW :
1) Provides for the practice of pharmacy and the licensing and
regulation of pharmacies and pharmacists by the BOP within
the Department of Consumer Affairs.
2) Defines "hospital pharmacy" as a pharmacy licensed by the
BOP, located within any licensed hospital, institution, or
establishment that maintains and operates organized
facilities for the diagnosis, care, and treatment of human
illnesses to which persons may be admitted for overnight
stay.
3) Provides that "hospital pharmacy" also includes a pharmacy
that may be located outside of the hospital, in another
physical plant that is regulated under a hospital's
consolidated license. Requires the pharmacy in another
physical plant to provide pharmaceutical services only to
registered hospital patients who are on the premises of the
same physical plant in which the hospital is located.
Requires the pharmacy services provided to be directly
related to the services or treatment plan administered in the
physical plant.
4) Defines "manufacturer" as every person who prepares, derives,
produces, compounds, or repackages any drug or device except
a pharmacy that manufactures on the immediate premises where
the drug or device is sold to the ultimate consumer.
5) Specifies that "manufacturer" does not mean :
a) A pharmacy compounding a drug for parenteral therapy,
pursuant to a prescription; or,
b) A pharmacy that, at a patient's request, repackages a
drug previously dispensed to a patient, or to the patient's
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agent, pursuant to a prescription.
1) Specifies that "manufacturer" means :
a) A person who prepares, derives, manufactures, produces,
or repackages a dangerous drug, as defined;
b) A holder of or holders of a New Drug Application and an
Abbreviated New Drug Application or a Biologics License
Application;
c) A manufacturer's third-party logistics provider;
d) 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; and,
e) The distributor 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 distributor site.
FISCAL EFFECT : This bill has not been heard by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author of this bill,
medication errors in hospitals have been a public policy
concern for years, and despite on-going efforts, the incidence
of these errors remains unacceptably high. The author
maintains that studies show that the ability of hospitals to
deliver bar-coded unit doses to patients' bedsides can
effectively reduce the incidence of medication errors and
that, unfortunately, the cost of this technology is
prohibitively expensive, because current law mandates that
only an on-site hospital pharmacy can prepare drugs for
in-patients. The author argues that hospitals that want to
implement a bar-coded unit dose system face both technological
and legal impediments. In most circumstances, according to
the author, it is simply too expensive to invest in this
technology on a per hospital basis, even for larger hospitals.
Additionally, the author asserts, certain medications,
notably injectable compounds that are prepared within a
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hospital pharmacy, would come under federal "manufacturing"
regulations if prepared off-site unless there is a state
regulatory law to govern this activity.
2)BACKGROUND . Current law requires medications for a hospital's
patients to be prepared by a licensed pharmacy located on the
hospital's premises. Automated processes implemented by a
hospital or health system have the potential to provide
additional patient protection through a reduction in
medication errors. Many medication errors in hospitals have
resulted from inadequate and inconsistent labeling and a lack
of proper mechanisms to track medication through the
distribution process to the patient. Recent reports show that
technology, like bar-coding, facilitates more efficient
medication administration and decreases medication errors.
According to a study published in the New England Journal of
Medicine, "Effect of Bar-Code Technology on the Safety of
Medication Administration," the use of the bar-code
substantially decreased the rate of errors as well as
potential adverse drug events. The report also concluded that
the bar-code electronic medication administration is an
important intervention to improve patient safety.
There are many different manufacturers of technology throughout
the state, nation, and world whose aim is improving medication
administration. While there is an inherent public health
benefit that arises from use of bar-coding and other
technologies, this bill does not mandate the use of any
specific technology or vendor. The measure allows hospitals
and health systems, which do invest in new technology that may
reduce medication errors, to legally implement the technology
in one location without violating federal definitions of
manufacturer.
Repackaging, distribution, and compounding in advance of a
patient prescription are activities currently available only
to licensed manufacturers, which are regulated by the United
States Food and Drug Administration (FDA). This bill seeks an
exemption from federal regulation on account of the relatively
small scale of production. According to the sponsor of this
bill, the California Hospital Association (CHA),
communications from FDA indicate they are comfortable allowing
the state to regulate this level of manufacturing. CHA
maintains that the FDA states "Ýthe proposed health facility
pharmacy] system does not need to register as a
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repacker/relabler as long as they are servicing their own
hospitals within the state and repackaged drugs are not
commercially distributed and used only within the hospital
facilities."
The hospital pharmacies referenced in this bill would be
regulated by the BOP and subject to all applicable pharmacy
laws and regulations, and compounding and pedigree
requirements.
3)SUPPORT . The California Society of Health-System Pharmacists,
Mercy General Hospital, Antelope Valley Hospital, Touro
University and SHARP write in support of this bill that many
medication errors in hospitals have resulted from inadequate
and inconsistent labeling, and/or the lack of proper
mechanisms, such as bar coding, to track medications through
the distribution process to the patient. Supporters recognize
that hospitals are moving towards the implementation of
barcode medication administration and at the most basic level,
bar-coding helps to verify that the right drug is being
administered to the right patient, at the right dose, by the
right route, and at the right time. Supporters maintain that
a centralized pharmacy operations approach makes it more
practical to take advantage of high speed automated equipment,
economies of scale, and more quality controlled processes.
Supporters further state that many smaller hospitals cannot
afford to meet the physical requirements mandated to meet
federal standards for sterile compounding environments.
Supporters argue that this bill would allow sterile
compounding to be performed at larger hospitals that are more
capable of producing these sterile admixtures for their sister
hospitals under common ownership.
4)PRIOR LEGISLATION .
a) AB 2077 (Solorio) of 2010 and AB 1370 (Solorio) of 2009
were substantially similar to this bill. AB 2077 was
vetoed by Governor Arnold Schwarzenegger who stated that
this bill potentially places vulnerable patients at risk of
medication error or exposure to adulterated or misbranded
drugs. The message further stated that current law clearly
outlines the regulatory oversight functions for the
Department of Public Health and BOP and there is no reason
to change these well-defined regulatory roles in
California. AB 1370 was held in the Assembly Committee on
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Business and Professions.
b) SCR 49 (Speier), Resolution Chapter 123, Statutes of
2005, created a panel to study the causes of medication
errors and recommend changes in the health care system that
reduces errors associated with the delivery of prescription
and over the counter medication to consumers.
c) SB 1875 (Speier), Chapter 816, Statutes of 2000 required
hospitals to adopt a formal plan to eliminate or
substantially reduce medication-related errors.
5)DOUBLE REFERRAL . This bill is double referred. Should this
bill pass out of this committee, it will be referred to the
Assembly Committee on Business, Professions & Consumer
Protection.
6)TECHNICAL AMENDMENT . The Committee suggests adding language
that clarifies the author's intent that the centralized
pharmacy only serves those hospitals under common ownership or
control as the pharmacy.
REGISTERED SUPPORT / OPPOSITION :
Support
California Hospital Association (sponsor)
California Pharmacists Association
Antelope Valley Hospital
California Society of Health-System Pharmacists
Mercy General Hospital
Sharp
St. Joseph's Medical Center, Pharmacy Department
Touro University, College of Pharmacy
Individual Pharmacists
Opposition
None on file.
Analysis Prepared by : Tanya Robinson-Taylor / HEALTH / (916)
319-2097
AB 377
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