Amended in Assembly May 7, 2013

Amended in Assembly April 16, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 299

Introduced by Assembly Member Holden

(Coauthor: Assembly Member Bloom)

February 12, 2013

begin delete An act to amend Section 4112 of the Business and Professions Code, relating to pharmacy. end delete begin insert An act to add Section 1367.245 to the Health and Safety Code and to add Section 10123.193 to the Insurance Code, relating to health care coverage. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 299, as amended, Holden. begin delete Pharmacy. end delete begin insert Prescription drug benefits. end insert

begin delete

The Pharmacy Law governs the business and practice of pharmacy in this state. That law provides that any pharmacy located outside this state that ships, mails, or delivers, in any manner, controlled substances, dangerous drugs, or dangerous devices into this state is considered a nonresident pharmacy. The law prohibits a person from acting as a nonresident pharmacy unless he or she has obtained a license, and imposes various disclosure and recordkeeping requirements on nonresident pharmacies. Any person who knowingly violates these provisions is guilty of a misdemeanor.

end delete begin delete

This bill would prohibit a nonresident pharmacy or a pharmacy located in this state that delivers prescriptions via mail from entering into, or being a party to, an agreement with a health care service plan or disability insurer that requires a plan enrollee or insured to utilize mail order services or that requires a plan enrollee or insured to opt out of a mail order process. By creating new crimes, the bill would impose a state-mandated local program.

end delete begin insert

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of that act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires every health care service plan that provides prescription drug benefits that maintains one or more drug formularies to provide to members of the public, upon request, a copy of the most current list of prescription drugs on the formulary.

end insert begin insert

This bill would require a health care service plan or health insurer that provides prescription drug benefits to authorize an enrollee or insured to receive those benefits, which may include a 90-day supply of covered drugs, at any of its in-network pharmacies that are retail pharmacies, and would prohibit the plan or insurer from requiring any additional authorizations by the plan or insurer or the prescriber that are not required for the enrollee or insured to receive those benefits at a mail order pharmacy. The bill would specify that these requirements would not apply to drugs that are not available in retail pharmacies because of limited distribution by the manufacturer. Because a willful violation of these requirements by a health care service plan would be a crime, the bill would impose a state-mandated local program.

end insert

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

begin delete

SECTION 1.  

Section 4112 of the Business and Professions
Code is amended to read:

4112.  

(a) Any pharmacy located outside this state that ships,
mails, or delivers, in any manner, controlled substances, dangerous
drugs, or dangerous devices into this state shall be considered a
nonresident pharmacy.

(b) A person may not act as a nonresident pharmacy unless he
or she has obtained a license from the board. The board may
register a nonresident pharmacy that is organized as a limited
liability company in the state in which it is licensed.

(c) A nonresident pharmacy shall disclose to the board the
location, names, and titles of (1) its agent for service of process in
this state, (2) all principal corporate officers, if any, (3) all general
partners, if any, and (4) all pharmacists who are dispensing
controlled substances, dangerous drugs, or dangerous devices to
residents of this state. A report containing this information shall
be made on an annual basis and within 30 days after any change
of office, corporate officer, partner, or pharmacist.

(d) Each nonresident pharmacy shall comply with all lawful
directions and requests for information from the regulatory or
licensing agency of the state in which it is licensed as well as with
all requests for information made by the board pursuant to this
section. The nonresident pharmacy shall maintain, at all times, a
valid unexpired license, permit, or registration to conduct the
pharmacy in compliance with the laws of the state in which it is a
resident. As a prerequisite to registering with the board, the
nonresident pharmacy shall submit a copy of the most recent
inspection report resulting from an inspection conducted by the
regulatory or licensing agency of the state in which it is located.

(e) All nonresident pharmacies shall maintain records of
controlled substances, dangerous drugs, or dangerous devices
dispensed to patients in this state so that the records are readily
retrievable from the records of other drugs dispensed.

(f) Any pharmacy subject to this section shall, during its regular
hours of operation, but not less than six days per week, and for a
minimum of 40 hours per week, provide a toll-free telephone
service to facilitate communication between patients in this state
and a pharmacist at the pharmacy who has access to the patient’s
records. This toll-free telephone number shall be disclosed on a
label affixed to each container of drugs dispensed to patients in
this state.

(g) A nonresident pharmacy shall not permit a pharmacist whose
license has been revoked by the board to manufacture, compound,
furnish, sell, dispense, or initiate the prescription of a dangerous
drug or dangerous device, or to provide any pharmacy-related
service, to a person residing in California.

(h) A nonresident pharmacy or a pharmacy located in this state
that delivers prescriptions via mail is prohibited from entering into,
or being a party to, an agreement with a health care service plan
or disability insurer that requires a plan enrollee or insured to utilize
mail order services or that requires a plan enrollee or insured to
opt out of a mail order process.

(i) The board shall adopt regulations that apply the same
requirements or standards for oral consultation to a nonresident
pharmacy that operates pursuant to this section and ships, mails,
or delivers any controlled substances, dangerous drugs, or
dangerous devices to residents of this state, as are applied to an
in-state pharmacy that operates pursuant to Section 4037 when the
pharmacy ships, mails, or delivers any controlled substances,
dangerous drugs, or dangerous devices to residents of this state.
The board shall not adopt any regulations that require face-to-face
consultation for a prescription that is shipped, mailed, or delivered
to the patient. The regulations adopted pursuant to this subdivision
shall not result in any unnecessary delay in patients receiving their
medication.

(j) The registration fee shall be the fee specified in subdivision
(a) of Section 4400.

(k) The registration requirements of this section shall apply only
to a nonresident pharmacy that ships, mails, or delivers controlled
substances, dangerous drugs, and dangerous devices into this state
pursuant to a prescription.

(l) Nothing in this section shall be construed to authorize the
dispensing of contact lenses by nonresident pharmacists except as
provided by Section 4124.

end delete

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 1367.245 is added to the end insert begin insert Health and
Safety Code end insert begin insert , to read: end insert

begin insert

begin insert 1367.245. end insert   

(a)  A health care service plan that provides
prescription drug benefits shall authorize an enrollee to receive
those benefits, which may include a 90-day supply of covered
drugs, at any of its in-network pharmacies that are retail
pharmacies, and shall not require any additional authorizations
by the plan or the prescriber that are not required for the enrollee
to receive those benefits at a mail order pharmacy. This subdivision
shall not apply to drugs that are not available in retail pharmacies
because of limited distribution by the manufacturer.

(b) A pharmacist who dispenses a 90-day supply of covered
drugs shall comply with Section 4064.5 of the Business and
Professions Code.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 10123.193 is added to the end insert begin insert Insurance Code end insert begin insert , to
read: end insert

begin insert

begin insert 10123.193. end insert   

(a) A health insurer that provides prescription
drug benefits shall authorize an insured to receive those benefits,
which may include a 90-day supply of covered drugs, at any of its
in-network pharmacies that are retail pharmacies, and shall not
require any additional authorizations by the insurer or the
prescriber that are not required for the insured to receive those
benefits at a mail order pharmacy. This subdivision shall not apply
to drugs that are not available in retail pharmacies because of
limited distribution by the manufacturer.

(b) A pharmacist who dispenses a 90-day supply of covered
drugs shall comply with Section 4064.5 of the Business and
Professions Code.

end insert

begin delete SEC. 2. end delete
begin insert SEC. 3. end insert   

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.