BILL ANALYSIS Ó
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THIRD READING
Bill No: AB 1277
Author: Hill (D) and Perea (D), et al.
Amended: 7/5/12 in Senate
Vote: 21
SENATE HEALTH COMMITTEE : 7-0, 6/27/12
AYES: Hernandez, Harman, Alquist, Anderson, Blakeslee,
DeSaulnier, Rubio
NO VOTE RECORDED: De León, Wolk
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 78-0, 5/19/11(Consent) - See last page for
vote
SUBJECT : Sherman Food, Drug, and Cosmetic Law
SOURCE : Author
DIGEST : This bill eliminates licensing inspections by
the Department of Public Health (DPH) for drug and medical
device manufacturers, as specified. Limits DPHs authority
to make investigations or inspections of manufacturers to
situations where DPH has determined the health and safety
of the public is at risk, or when the U.S. Food and Drug
Administration (FDA) has requested assistance for
enforcement activities.
ANALYSIS : Existing law:
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1.Establishes the federal Food, Drug, and Cosmetic Act,
which grants authority to the FDA to oversee the safety
of food, drugs, and cosmetics.
2.Establishes the Sherman Law, administered by DPH, which,
among other things, regulates the packaging, labeling,
and advertising of drugs and medical devices in
California.
3.Prohibits, in the Sherman Law, the sale, delivery, or
giving away of any new drug or new device unless it is
either:
A. A new drug, and a new drug application has been
approved for it by the FDA, pursuant to federal law,
or it is a new device for which a premarket approval
application has been approved, and that approval has
not been withdrawn, terminated, or suspended under the
FDA; or
B. A new drug or new device for which DPH has approved
a new drug or device application, and has not
withdrawn, terminated, or suspended that approval.
1.Requires DPH to adopt regulations to establish the
application form and set the fee for licensure and
renewal of a drug or device license.
2.Requires DPH to inspect the place of business of each
licensed manufacturer of a drug or medical device prior
to issuing a license, to determine ownership, adequacy of
facilities, personnel qualifications, and compliance with
current law.
3.Requires DPH to perform subsequent inspections once every
two years, unless the FDA has inspected the place of
business within the previous two years. Requires DPH to
use the information in the FDA inspection's written
documents, rather than conducting its own inspection.
4.Allows DPH, if necessary, to conduct an inspection to
obtain information not included or not sufficiently clear
in the FDA written documentation, as specified.
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5.Permits a DPH-authorized agent to enter and inspect
specified locations, as specified, to enforce the Sherman
Law.
This bill:
1.Clarifies that biologic products are included in
provisions of existing law prohibiting anyone from
selling, delivering, or giving away any new drug or new
device unless it has been approved under specified
provisions of federal law.
2.Repeals the requirement that DPH inspect each place of
business prior to issuing a new license to a drug or
device manufacturer, and instead requires DPH to receive
from the place of business documentation that evidences
any of the following:
A. The place of business is operating pursuant to a
valid biologics license issued by the United States
Food and Drug Administration (FDA), as specified,
requiring the documentation to include an attestation
from the place of business that a federal inspection
was completed within the past two years from the date
of the attestation;
B. The place of business is operating with a valid
federal establishment registration, as specified;
C. The place of business is operating in compliance
with audits conducted pursuant to the International
Standards Organization standards, as specified; or
D. The place of business is operating pursuant to an
approved investigational new drug issued by the FDA,
or pursuant to an approved investigational device
exemption issued by the FDA, as specified.
1.Prohibits DPH from inspecting the place of business prior
to issuing a license if DPH receives documentation that
satisfies the requirements in #2 above; if this
documentation is not received, DPH is required to inspect
the place of business prior to issuing a license.
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2.Requires DPH to provide an official copy of the valid
license upon request of the place of business.
3.Repeals the requirement that DPH inspect a licensed drug
or device manufacturer once every two years following
initial licensure to determine ownership, adequacy of
facilities, and personnel qualifications.
4.Limits the ability of DPH to make investigations or
inspections of licensed drug or device manufacturers to
only when any of the following occur:
A. DPH makes a determination that the health and
safety of the public is at risk;
B. A complaint has been registered with DPH, and DPH
makes a determination that the public health and
safety is at serious risk;
C. A notification has been sent by the FDA to DPH that
requests assistance regarding certain recall actions;
or
D. The FDA has requested assistance for enforcement
activities, including, but not limited to, embargoes,
seizures, or injunctions.
Background
DPH licensure of drug and device manufacturers. FDB in DPH
is responsible for licensing and inspecting all
manufacturers of pharmaceutical drug products and medical
devices in California, unless the manufacturer is
specifically exempted. DPH currently licenses and inspects
1,673 drug and medical device manufacturing firms in
California. FDB is required to inspect the place of
manufacture before issuing or denying a license; firms
cannot legally manufacture in California without a valid
license. In addition to issuing a license, DPH has the
authority to revoke or suspend a license for any violation
of the Sherman Law. Existing law also requires FDB to
conduct license renewal inspections of these companies once
every two years, and permits additional follow-up
inspections to be conducted "for cause" (e.g., to
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investigate injuries and deaths or following product
recalls).
According to DPH, its inspections are aimed at preventing
the sale and distribution of drugs and medical devices that
have been improperly manufactured; are adulterated,
misbranded or falsely advertised; have not been shown to be
safe or effective; or in the case of medical devices, fail
to meet design verification requirements. As these
products are being used to treat life-threatening diseases
or are necessary for life support, early regulation by DPH
prevents product contamination, misbranding, and a variety
of formulation, fabrication, and labeling problems.
FDA regulation of drug and device manufacturers. Before a
new drug even gets to the manufacturing stage, it must
undergo preclinical testing, followed by clinical testing.
The FDA is involved in each stage of testing, ensuring the
tests conform to FDA's Good Laboratory Practices. After
three phases of clinical trials, and if the FDA does not
require additional information about the drug's efficacy,
safety and side effects, the sponsor of the new drug may
submit a New Drug Application, which contains all relevant
and necessary information about how the drug will be
manufactured. According to the FDA, "Manufacturing issues
are also among the reasons that approval Ýof a New Drug
Application] may be delayed or denied. Drugs must be
manufactured in accordance with standards called good
manufacturing practices, and the FDA inspects manufacturing
facilities before a drug can be approved. If a facility
isn't ready for inspection, approval can be delayed. Any
manufacturing deficiencies found would need to be corrected
before approval.
In addition to approval of each individual drug, federal
law requires every establishment in any state engaged in
the manufacture, preparation, propagation, compounding, or
processing of a drug to register the name of the business
with the FDA. Federal law goes on to require that every
such registered establishment be inspected by the FDA at
least once in the two-year period beginning with the date
of registration and at least once in every successive
two-year period thereafter.
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FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/8/12)
Advanced Medical Technology Association
BayBio
BIOCOM
California Healthcare Institute
Pharmaceutical Research and Manufacturers of America
Silicon Valley Leadership Group
ARGUMENTS IN SUPPORT : This bill is supported by the
California Healthcare Institute (CHI), which states that
the duplicative regulation of drug and medical device
manufacturers is a perfect example of onerous state
regulations. According to CHI, California is the only
state that has duplicate regulations requiring state-level
permitting and inspection of drug and medical device
facilities. According to CHI, the FDA performs stringent
oversight of drug and device manufacturers, with approvals
required and inspections taking place throughout the
development process and on a regular basis thereafter. CHI
states that duplicative state oversight and inspection
place an increased financial burden on manufacturers in
California. CHI stated that in one example, a company
spent more than $200,000 and had more than 40 staff members
involved in a FDB inspection that took 8 days to complete.
CHI states that this was a routine inspection and did not
find any health or safety problems, and was conducted less
than six months after a comprehensive FDA inspection.
ASSEMBLY FLOOR : 78-0, 5/19/11
AYES: Achadjian, Allen, Ammiano, Atkins, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani,
Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Grove,
Hagman, Halderman, Hall, Harkey, Hayashi, Roger
Hernández, Hill, Huber, Hueso, Huffman, Jeffries, Jones,
Knight, Lara, Logue, Bonnie Lowenthal, Ma, Mansoor,
Mendoza, Miller, Mitchell, Monning, Morrell, Nestande,
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Nielsen, Norby, Olsen, Pan, Perea, V. Manuel Pérez,
Portantino, Silva, Skinner, Smyth, Solorio, Swanson,
Torres, Valadao, Wagner, Wieckowski, Williams, Yamada,
John A. Pérez
NO VOTE RECORDED: Alejo, Gorell
CTW:n 8/8/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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