BILL ANALYSIS Ó SB 360 Page 1 Date of Hearing: August 17, 2011 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair SB 360 (DeSaulnier) - As Amended: July 7, 2011 Policy Committee: Public SafetyVote:7-0 Urgency: No State Mandated Local Program: Yes Reimbursable: No SUMMARY This bill: 1)Authorizes the Department of Justice (DOJ) to enforce access requirements of its Web-based Prescription Drug Monitoring Program (PDMP) by conducting PDMP audits to protect against unauthorized use, such as sharing patient data with third parties, accessing information of patients not under the physician's care, and selling patient data. DOJ may establish by regulation a citation process, which may contain an abatement order and an administrative fine not to exceed $2,500. Specifically, these provisions: a) Allow, in addition to requesting a hearing, a cited PDMP subscriber to request an informal citation conference with DOJ. b) Require administrative fines be deposited in a DOJ fund for costs associated with DOJ's controlled substances database, the Controlled Substance Utilization Review and Evaluation System (CURES). c) Provide that a PDMP application by a practitioner or pharmacist may be denied for cause, including, but not limited to: i) Falsifying an application ii) Failure to maintain effective controls for access to SB 360 Page 2 the patient activity report iii) Suspension or revocation of a Drug Enforcement Administration (DEA) registration iv) An arrest or conviction for a controlled substance offense or violation of this section v) Accessing PDMP information for any reason not related to patient care 2)Expands and modifies a series of requirements imposed on security printers (persons approved to produce controlled substance prescription forms) by DOJ, including: a) Requiring names and addresses of owners, partners, representatives, or others with access to controlled substance prescription forms; a signed statement regarding any prior criminal convictions for these parties, and fingerprints. b) Clarifying the fee to process security printer applications shall be sufficient to cover inspections of security printers in addition to the other specified processes. c) Requiring a security printer to obtain the customer's photo identification and ship controlled substance prescription forms only to an address verified by the DEA or Medical Board of California. d) Requires DOJ to impose sanctions on security printers who violate statutes and regulations, including failure to comply with guidelines. Sanctions are a fine of up to $1,000 for a first violation, a fine of up to $2,500 for a subsequent violation; and disciplinary proceedings for suspension or revocation of security printer status for a third or subsequent violations. FISCAL EFFECT 1)Unknown significant annual GF costs, in the range of $150,000, for developing regulations, conducting PDMP audits, and holding citation conferences and hearings, offset to some degree by dedicated citation revenue. DOJ states a willingness and ability to absorb the cost of regulations. Moreover, DOJ does not anticipate a significant SB 360 Page 3 number of audits, citations or hearings, contending the deterrent value of the enforcement mechanism will suffice in most cases. 2)Unknown, likely minor and absorbable administrative costs to DOJ for security printer process changes, offset to an unknown degree by increased fines. COMMENTS 1)Rationale . The intent of the author and sponsor (DOJ) is to create a process whereby DOJ can protect against improper and unauthorized use of the PDMP. According to the author, "SB 360 will help to prevent the misuse of confidential information collected through the CURES and ensure the integrity of the program and process for practitioners and pharmacists to appropriately use patient's controlled substances history information." Regarding the changes to the security printer processes, the author states, "While the DOJ has established guidelines for the security of prescription forms, current law lacks sufficient safeguards against theft and fraudulent use of prescription pads and the DOJ has seen an increase in criminal enterprises involved in prescription form theft and fraud. SB 360 provides additional requirements and sanctions for Security Printers to deter fraudulent use of prescription pads and the illegal distribution of controlled substances." 2)CURES and PDMP . The state's controlled substances dispensary database is known as the Controlled Substance Utilization Review and Evaluation System. According to DOJ, CURES contains over 100 million entries of controlled substance drugs dispensed in California. Each year the CURES program responds to more than 60,000 requests from practitioners and pharmacists via the online PDMP system, which makes it easier for authorized health practitioners to review controlled substance information via the automated Patient Activity Report (PAR) in an effort to identify and deter drug abuse and diversion through accurate and rapid tracking of controlled substances. The goal of CURES and PDMP is to reduce pharmaceutical drug diversion without affecting legitimate medical practice or SB 360 Page 4 patient care. 3)Support . According to DOJ, "The PDMP is a valuable investigative, preventative, and educational tool for law enforcement, regulatory boards, and health care providers. However, current efforts at maintaining privacy and control of CURES data are inadequate to protect confidential patient information, and to deter misuse of confidential CURES data. SB 360 authorizes DOJ to initiate administrative enforcement actions to prevent and deter misuse of confidential patient information collected through the CURES program. "Under existing law, DOJ also manages the California Security Prescription Printer Program, including approval of "Security Prescription Printer" applications. Fraudulent prescriptions are lucrative. One blank prescription pad of 500 prescriptions can generate millions of dollars from the illegal sale of controlled substances such as Oxycontin, Xanax, or Vicodin. DOJ has seen an increase in criminal enterprises, from gangs to organized crime, involved in prescription drug fraud. Current law lacks adequate safeguards against the theft and illegal distribution of prescription pads from Security Prescription Printers. SB 360 provides additional requirements and sanctions for Security Printers and their employees who have direct contact with, or access to, controlled substance prescription drug forms to deter fraudulent prescriptions and illegal distribution of controlled substances." 4)Prior Legislation . a) AB 2548 (Block), 2010, was similar to the CURES/PDMP provisions of SB 360, and was held on this committee's Suspense File. b) AB 3042 (Takasugi), Statutes of 1996, established CURES as a three-year pilot program. c) SB 151 (Burton), Statutes of 2004, made the CURES system permanent. Analysis Prepared by : Geoff Long / APPR. / (916) 319-2081 SB 360 Page 5