BILL ANALYSIS Ó
AB 377
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 377 (Solorio)
As Amended August 24, 2012
Majority vote
-----------------------------------------------------------------
|ASSEMBLY: |70-0 |(May 12, 2011) |SENATE: |32-0 |(August 29, |
| | | | | |2012) |
-----------------------------------------------------------------
Original Committee Reference: HEALTH
SUMMARY : Authorizes a centralized hospital packaging pharmacy
to prepare medications, by performing specified functions for
administration only to inpatients within its own general acute
care hospital, or one or more general acute care hospitals under
the same ownership and located within 75 miles of each other.
Imposes issuance and annual renewal fees for a specialty license
from the State Board of Pharmacy (BOP).
The Senate amendments :
1)Authorize a centralized hospital packaging pharmacy to prepare
medications for administration only to inpatients within its
own general acute care hospital and one or more general acute
care hospitals if the hospitals are under common ownership and
located within 75-mile radius of each other, by performing the
following specialized functions:
a) Preparing unit dose packaging for single administration
to inpatients from bulk containers, if each unit dose
package is barcoded to contain information required by this
bill;
b) Preparing compounded unit dose drugs for parenteral
therapy for administration to inpatients, if each
compounded unit dose drug is barcoded to contain at least
the information required by this bill; and,
c) Preparing compounded unit dose drugs for administration
to inpatients, if each unit dose package is barcoded to
contain at least the information required by this bill.
2)Define common ownership where the ownership information on
file with the BOP for the licensed pharmacy is consistent with
AB 377
Page 2
the ownership information on file with the BOP for other
licensed pharmacy or pharmacies for purposes of preparing
medications, as specified.
3)Require a centralized hospital packaging pharmacy to obtain a
specialty license from the BOP prior to engaging in functions
authorized by 1) above.
4)Require an applicant seeking a specialty license to apply to
the BOP on specified forms. Specifies other requirements for
licensure and licensure renewals, including fees for the
issuance and renewal of a license.
5)Require the BOP, prior to issuing a specialty license to
inspect a pharmacy and ensure that the pharmacy is in
compliance with specified requirements.
6)Specify that a license to perform the functions specified in
1) above may only be issued to a pharmacy that is licensed by
the BOP as a hospital pharmacy.
7)Authorize a centralized hospital packaging pharmacy to prepare
and store a limited quantity of the united dose drugs
authorized by 1) above 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
inpatients of the general acute care hospital based on a
documented history of the prescriptions for that patient
population.
8)Require any dose medication produced by a centralized hospital
packaging pharmacy to be barcoded to be readable at the
inpatient's bedside. States that upon reading the barcode,
the following information shall be retrievable:
a) The date the medication was prepared;
b) The components used in the drug product;
c) The lot number or control number;
d) The expiration date;
e) The National Drug Code Director number; and,
AB 377
Page 3
f) The name of the centralized hospital packaging pharmacy.
9)Require the label for each unit dose medication produced by a
centralized hospital packaging pharmacy to contain all of the
following:
a) The expiration date;
b) The established name of the drug;
c) The quantity of the active ingredient;
d) Special storage or handling requirements.
10)Require that all compounding and packaging functions
specified in 1) above to be performed only in the licensed
centralized hospital packaging pharmacy and that pharmacy must
comply with all applicable federal and state statutes and
regulations, including, but not limited to, regulations
regarding compounding and, when appropriate, sterile
injectable compounding.
11)Require a centralized hospital packaging pharmacy and the
pharmacists working in the pharmacy to be responsible for the
integrity, potency, quality, and labeled strength of any unit
dose drug product prepared by the centralized hospital
packaging pharmacy.
AS PASSED BY THE ASSEMBLY , this bill provided 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. This bill
also authorized 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.
FISCAL EFFECT : According to the Senate Appropriations
Committee, this bill would have minor costs annually to BOP from
the Pharmacy Board Contingent Fund, offset by fees. This bill
would also have potentially major costs annually to the
Department of Public Health from the Licensing and Certification
Program Fund.
AB 377
Page 4
COMMENTS : 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 hospital pharmacy, would come under federal
"manufacturing" regulations if prepared off-site unless there is
a state regulatory law to govern this activity.
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
AB 377
Page 5
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 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.
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.
AB 2077 (Solorio) of 2010 and AB 1370 (Solorio) of 2009 were
AB 377
Page 6
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 Business and Professions Committee. 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. SB 1875 (Speier), Chapter 816,
Statutes of 2000, required hospitals to adopt a formal plan to
eliminate or substantially reduce medication-related errors.
Analysis Prepared by : Rosielyn Pulmano / HEALTH / (916)
319-2097
FN: 0004847