BILL ANALYSIS Ó
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|Hearing Date:June 13, 2011 |Bill No:AB |
| |377 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Curren D. Price, Jr., Chair
Bill No: AB 377Author:Solorio
As Amended:April 14, 2011 Fiscal: Yes
SUBJECT: Pharmacy.
SUMMARY: Provides for centralized pharmacy packaging in a hospital,
allowing the pharmacy to be located outside of the hospital on either
the same premises or separate premises that is regulated under a
hospital's license. Modifies the definition of "manufacturer" so that
the compounding that is done at a pharmacy serving multiple hospitals
does not inappropriately transform the same compounding activities,
that are now lawful at a hospital pharmacy, into manufacturing
activities which would be considered as unlawful.
Existing law:
1) Provides for the practice of pharmacy and the licensing and
regulation of pharmacies and pharmacists by the Board of Pharmacy
(Board) within the Department of Consumer Affairs (DCA). (Business
and Professions Code (BPC)).
2) Defines "hospital pharmacy" as a pharmacy licensed by the Board,
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. (BPC § 4029)
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 issued by the
California Department of Corrections or California Department of
Youth Authority. Specifies that the pharmacy in another physical
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plant shall provide pharmaceutical services only to registered
hospital patients who are on the premises of the same physical
plant in which the hospital is located. Specifies that the
pharmacy services provided shall be directly related to the
services or treatment plan administered in the physical plant.
(Id.)
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. (BPC § 4033)
5) Specifies that "manufacturer" does not mean :
a) A pharmacy compounding a drug for parenteral therapy, pursuant
to a prescription.
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. (Id.)
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 (NDA) and an
Abbreviated New Drug Application (ANDA) or a Biologics License
Application (BLA).
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.
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. (Id.)
7)States that any pharmacy that contracts to compound a drug for
parenteral therapy, pursuant to a prescription, for delivery to
another pharmacy, must report that contractual arrangement to the
Board within 30 days of commencing that compounding. (BPC § 4123)
This bill:
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1) Clarifies that "hospital pharmacy" also includes a licensed
pharmacy located outside of the hospital, in another physical plant
on the same premises or on a separate premises located within a
100-mile radius of the hospital that is regulated under a
hospital's license. Clarifies 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. States that this provision is not
intended to restrict or expand services that a hospital pharmacy
may provide.
2) Specifies that any unit dose medication produced by a hospital
pharmacy under common ownership licensed by the board, that may be
located outside of the hospital, in another physical plant on the
same premises, or on a separate premises located within a 100-mile
radius of the hospital that is regulated under a hospital's
license, shall be bar-coded to be readable at the patient's
bedside.
3) Provides that a hospital pharmacy may prepare and store a limited
quantity of unit-dose drugs in advance of receipt of a
patient-specific prescription only in such quantity as is necessary
to ensure continuity of care for an identified population of
inpatients of the hospital, based on a documented history of
prescriptions for that patient population.
4) Clarifies that "manufacturer" does not mean a pharmacy compounding
or repackaging a drug for parenteral therapy or oral therapy in a
hospital for delivery to another pharmacy or hospital under common
ownership, pursuant to a prescription.
5) Specifies that a pharmacy compounding or repackaging for delivery
to another pharmacy or hospital under common ownership shall notify
the board, in writing within 30 days of initiating this service, of
the location where the compounding or repackaging is being
performed. Clarifies that any change in this information must be
reported to the board in writing within
30 days.
6) Clarifies that a licensed hospital pharmacy, hospital or pharmacist
is still obligated to comply with all applicable federal and state
laws.
FISCAL EFFECT: According to the May 4, 2011 Assembly Committee on
Appropriations analysis, this measure may result in minor absorbable
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workload to the California Board of Pharmacy to continue oversight of
hospital-based pharmacies.
COMMENTS:
1. Purpose. The Author is the Sponsor of this measure. According to
the Author, 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
notes that hospitals that are planning to implement programs to
accomplish the goal of reducing medication errors face both
technological and legal impediments, and that in most
circumstances, it is simply cost prohibitive to invest in the
technology on a per-hospital basis. The Author believes that
current law limits the opportunity to invest in important
technology that would improve efficiency and enhance patient
safety.
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," 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."
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3. FDA Position. 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). Last year, in an email
pertaining to a Virginia hospital using a model as proposed in this
bill, which is virtually identical to the Author's AB 2077 of 2010,
the FDA stated that "Ýthe proposed health facility pharmacy] system
does not need to register as a repacker/relabeler 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." While there has not been an
official change in FDA policy, it is clear in the FDA's Compliance
Policy Guide (460.200) as follows: "FDA will continue to defer to
state authorities regarding?pharmacy compounding of human drugs."
4. Board Compounding Regulations. New regulations governing
compounding took effect last summer. According to the Board, a
Workgroup on Compounding was formed in 2004 comprised of board
members, board staff and industry representatives. The workgroup
recognized that current pharmacy regulations addressing compounding
only govern the physical circumstances, procedures and record
keeping requirements for general compounding and do not address
quality, strength or purity.
The Board adopted regulations in Article 7 of Division 17 of Title
16 of the California Code of Regulations (commencing with Section
1751) to implement provisions for pharmacies that compound sterile
injectable products as required in statute. As there were no
similar provisions in regulation for general compounding, the board
approved the addition of language that will establish parameters
and provide uniformity for pharmacies that carry out compounding in
general (including sterile injectable). Pharmacies that compound
sterile injectable products must go above and beyond the
requirements for compounding in general.
5. Related Legislation. AB 2077 (Solario) of 2010, in its final
version, was virtually identical to this measure. The bill was
vetoed by the Governor. In his veto message, the Governor
expressed concern that the bill could result in "a greater
likelihood of product mix-up, loss of product identity,
contamination and cross-contamination, and lack of adequate control
systems."
AB 1370 (Solario) of 2009 was similar to this bill but created a
separate licensing category for centralized hospital pharmacies.
The bill was held in the Assembly Committee on Business and
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Professions.
SCR 49 (Speier) 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.
SB 1875 (Speier) Chapter 816, Statutes of 2000 required hospitals
to adopt a formal plan to eliminate or substantially reduce
medication-related errors.
6. Arguments in Support. According to the California Hospital
Association , this bill will improve safety and increase efficiency
in preparing and providing pharmaceutical products for hospital
patients.
The California Pharmacists Association writes in support of the
bill, stating that it will "make it easier for hospital pharmacies
to meet the needs of their patients, who will now be able to obtain
their prescriptions at the hospital most accessible to them."
The California Society of Health-System Pharmacists states that
barcode medication administration helps to verify that the right
drug is being administered to the right patient, at the right
doses, by the right route, and at the right time.
SUPPORT AND OPPOSITION:
Support:
California Hospital Association
California Pharmacists Association
California Society of Health-System Pharmacists
Numerous individuals
Opposition:
None received as of June 8, 2011
Consultant:Sarah Mason
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