BILL ANALYSIS Ó
AB 377
Page 1
Date of Hearing: April 26, 2011
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
AB 377 (Solorio) - As Amended: April 14, 2011
SUBJECT : Pharmacy
SUMMARY : Allows a hospital pharmacy to compound or repackage
drugs for other hospitals and pharmacies under common ownership.
Specifically, this bill :
1)Provides that a hospital pharmacy, licensed by the California
State Board of Pharmacy (BOP), may 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)Provides that a centralized hospital pharmacy may only provide
pharmaceutical services to its own patients who are either
admitted or registered patients of a hospital within the same
health care system.
3)Requires any unit-dose medication produced by a hospital
pharmacy under common ownership to be barcoded to be readable
at the patient's bedside.
4)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.
5)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.
6)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 or administering the
drug, pursuant to a prescription order, to the patient or
patients named in the prescription or order.
AB 377
Page 2
7)Requires a pharmacy compounding or repackaging a drug as
described in 6) 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 licensure and regulation of pharmacies,
including hospital pharmacies, by the Board of Pharmacy (BOP)
within the Department of Consumer Affairs (DCA).
2)Prohibits the operation of a pharmacy without a license, and
requires a separate license for each pharmacy location.
3)Restricts a hospital pharmacy to providing pharmaceutical
services to registered hospital patients on the premises of
the same physical plant in which the pharmacy is located.
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
agent, pursuant to a prescription.
6)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;
AB 377
Page 3
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.
7)Provides that a knowing violation of the Pharmacy Law is a
crime.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author's office, "The
problem of medication errors in hospitals has been recognized
for a number of years, and there are currently laws addressing
data collection and plans to reduce errors. However, some of
the best approaches to reducing medication errors are expensive.
It is widely accepted that having unit dose medications
packaged and bar-coded for delivery to the bedside for
administration, thereby allowing efficient and accurate
verification before administration, is a sound goal. Hospitals
that are planning to implement programs to accomplish this goal
face both technological and legal impediments. In most
circumstances, it is simply cost prohibitive to invest in the
technology on a per-hospital basis. Even a large hospital may
not be able to afford it; clearly small and rural hospitals
cannot. Thus, a clear patient-safety modernization is beyond
the practical reality for virtually all hospitals."
Background . Current law restricts a hospital pharmacy to
providing "pharmaceutical services only to registered hospital
patients who are on the premises of the same physical plant in
which the pharmacy is located." This bill would allow a single
hospital pharmacy to prepare compounded drugs, repackage and
prepare unit dose packages and compounded unit dose drugs for
single administration to patient populations of multiple
hospitals under common ownership.
AB 377
Page 4
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. Communications from FDA indicate
they are comfortable allowing the state to regulate this level
of manufacturing. The FDA states "Ýthe proposed health facility
pharmacy] system does not need to register as a
repacker/relabler as long as they are servicing their own
hospitals within the state of California and repackaged drugs
are not commercially distributed and used only within your
hospital facilities."
These hospital pharmacies would be regulated by the BOP and
subject to all applicable pharmacy laws and regulations, and
compounding and pedigree requirements.
AB 2077 (Solorio) of 2010, was substantially similar to this
bill. In his veto message of
AB 2077, the Governor stated, "This bill potentially places
vulnerable patients at risk of medication error or exposure to
adulterated or misbranded drugs. Without maintaining strict
adherence to federal Food and Drug Administration requirements,
there is a greater likelihood of product mix-up, loss of product
identity, contamination and cross-contamination, and lack of
adequate control systems. Current law clearly outlines the
regulatory oversight functions for the Department of Public
Health and the Board of Pharmacy. I see no reason to change
these well-defined regulatory roles in California."
Support . California Hospital Association writes, "Allowing a
pharmacy to perform under (the circumstances allowed by this
bill) will improve safety and increase efficiency in preparing
and providing the specified pharmaceutical products."
Previous Legislation.
AB 2077 (Solorio) of 2010, permits a hospital pharmacy to
compound or repackage drugs for other hospitals and pharmacies
under common ownership. This bill was vetoed.
AB 1370 (Solorio) of 2009, authorizes a centralized hospital
packaging pharmacy, as defined, to prepare medications for
administration only to inpatients within its own general acute
AB 377
Page 5
care hospital and one or more general acute care hospitals if
the hospitals are under common ownership. This bill was held in
Assembly Business, Professions, and Consumer Protection
Committee.
SCR 49 (Speier), Resolution Chapter 123, Statutes of 2005,
creates a panel to study the causes of medication errors and
recommend changes in the health care system that reduce errors
associated with the delivery of prescription and over the
counter medication to consumers.
SB 1875 (Speier), Chapter 816, Statutes of 2000, requires
hospitals and surgical clinics, as defined, to adopt a formal
plan to eliminate or substantially reduce medication-related
errors.
REGISTERED SUPPORT / OPPOSITION :
Support
California Hospital Association
California Pharmacists Association
California Society of Health-System Pharmacists
Numerous individuals
Opposition
None on file.
Analysis Prepared by : Angela Mapp / B.,P. & C.P. / (916)
319-3301