BILL ANALYSIS Ó
AB 299
Page 1
Date of Hearing: April 23, 2013
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Richard S. Gordon, Chair
AB 299 (Holden and Bloom) - As Amended: April 16, 2013
SUBJECT : Pharmacy
SUMMARY : Prohibits pharmacies from contracting with a health
care service plan or disability insurer that requires mail-order
only service, or imposes an opt-out process for mail-order
service. Specifically, this bill :
1)Prohibits 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.
2)Makes other technical and clarifying changes.
3)States that no reimbursement is required by this act pursuant
to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
EXISTING FEDERAL LAW requires Medicare Part D sponsors to
include retail pharmacies in their contract pharmacy network.
(Title 42, Chapter IV, Subchapter B, Part 423, Subpart C,
Section 423.120)
EXISTING STATE LAW :
1)Establishes the California Board of Pharmacy to regulate the
Pharmacy Law. (Business and Professions Code (BPC) Section
4000 et seq.)
2)Defines a "nonresident pharmacy" as one that is located
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outside California and ships, mails, or delivers, in any
manner, controlled substances, dangerous drugs, or dangerous
devices into California. (BPC 4112 (a))
3)Establishes the parameters for health care service plans under
the Knox-Keene Health Care Service Plan Act of 1975. (Health
and Safety Code 1340 et seq.)
FISCAL EFFECT : Unknown
COMMENTS :
1)Purpose of this bill . This bill would prohibit health plans
serving Californians from requiring their enrollees or
insureds to receive drugs exclusively through a mail-order
service, or imposing an opt-out provision for mail-order
service rather than an opt-in approach. Supporters contend
that mandatory mail-order prescription fulfillment disrupts
the relationship between the patient and the pharmacist and
does not necessarily result in cost savings, while opponents
argue that it is a necessary tool for cost reduction. This
bill sponsored by the California Pharmacists Association.
2)Author's statement . According to the author, "AB 299 protects
patient choice by putting an end to mandatory mail order
policies and practices that require patients to succumb to
complex and burdensome 'opt out' procedures.
"This bill does not interfere with the mail order process in
any way for patients who want to receive their drugs through
the mail. Furthermore, it also does not interfere with health
plans and insurers' ability to establish pharmacy networks or
cost sharing arrangements.
"This bill will restrict mail-order pharmacies from making [a]
profit from this policy that discriminates against HIV/AIDS
patients, elderly enrollees, women, cancer patients and the
seriously ill by prohibiting mandatory mail order policies."
3)Litigation over new mail-order only policies . Current state
law places no restrictions on whether an insurer can require
mail-order for its beneficiaries. In late 2012, Anthem Blue
Cross (ABC) sent notice to some enrollees that certain drugs
would only be available through a mail-order pharmacy. If the
enrollees wanted to stay with their retail pharmacy, the
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medicine would no longer be covered and the enrollee would
have to pay the full cost. ABC offered an exemption to this
new policy that required the endorsement of a treating
physician, but the exemption was only good for a limited
period of time, and ABC would base that period of time on the
reason for the exemption.
ABC was subsequently sued by Consumer Watchdog on behalf of
HIV/AIDS patients whose drugs came under ABC's mandatory
mail-order program. The lawsuit was premised on the concern
that HIV/AIDS patients were being discriminated against due to
their medical condition, a violation of the Unruh Civil Rights
Act. ABC is in settlement discussions with Consumer Watchdog
and has since suspended its mail-order pharmacy requirement.
4)Role of the pharmacist . Pharmacists are a vital part of a
patient's clinical care team, a fact recognized by both
proponents and opponents of this bill. Mail-order programs
tout 24/7 access to a registered nurse or a pharmacist via
phone, but proponents of this bill emphasize that the
relationship between patients and local retail pharmacists
versus pharmacists available by phone are not the same.
Supporters argue that a patient is likely to visit his or her
local pharmacy more frequently than his or her physician, and
so when issues of adherence, side effects, dosing
complications and other barriers arise, it is often the
pharmacist that first learns of the problem because he or she
is able to have a personal face-to-face intervention with the
patient. Working with the prescriber, as necessary, the
pharmacist can intervene before the problem complicates the
health of the patient. While a pharmacist or nurse on a
telephone may have the capacity to handle these issues, the
barriers presented by technology and anonymity may make the
relationship more tenuous.
Healthcare trends are also moving towards fuller use of a
pharmacists' training, which includes more extensive
interactions with patients, including vaccinations and
wellness counseling.
5)Cost savings . Opponents of the bill argue that prohibiting a
mail-order option restricts the freedom of health plans to
determine the most effective way of controlling rising
prescription drug costs. However, a 2011 article published in
the American Journal of Managed Care suggests that while
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requiring mail-order can result in lower costs, it also
results in higher patient dissatisfaction. Although many
patients voluntarily choose mail-order, those who were
required to receive their drugs by mail tended to discontinue
therapy prematurely.
A more recent study for the National Community Pharmacists
Association Foundation found that cost savings may be less
substantial than anticipated. The study reported that "while
mail order pharmacies may be able to offer lower costs as a
result of efficiencies in dispensing and purchasing, the use
of different ingredient cost schedules for mail and retail
pharmacies, differences in utilization and wastage rates, and
differences in rates of generic substitution could lower the
savings that plans actually realize."
6)Medicare . Medicare currently requires Medicare Part D
sponsors to have a network of retail pharmacies sufficient to
ensure that the majority of beneficiaries are within 2 - 15
miles of a retail pharmacy.
7)Arguments in support . The California Pharmacists Association
writes, "Mandatory mail order policies unfairly restrict
patient choice. They are included in nearly 20% of health
policies, such as the recent Anthem Blue Cross plan that
denied cancer, HIV/AIDS, and other sensitive populations
access to community pharmacies. In mandatory mail programs,
patients are automatically enrolled without their consent.
Patients in these programs no longer have the option to obtain
their prescription medications from in-network community
pharmacies where they have a relationship with a pharmacist
whom they know and trust. This disrupts the patient-provider
relationship that is so important for patients with chronic
and complex medical medications.
"Allowing patients to select the method of receiving their
prescription medications that best suits their needs improves
adherence to prescribed therapies. Research has shown
comparable levels of medication adherence among patients who
receive their prescription drugs in-person and patients who
receive them via mail order when patients have the choice of
selecting what is best for them. However, when patients do
not have a choice, outcomes suffer. A 2011 study found
medication adherence to be higher when mail order is voluntary
than when mail order is mandatory."
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8)Arguments in opposition . Anthem Blue Cross writes, "There are
many advantages when using mail order:
a) Free shipping and choice of delivery site (an enrollee
could elect to have drugs sent to work or home or even
their doctor's office);
b) Medications are shipped directly to the enrollee's house
or location of choice, saving time and gas money;
c) Mail order pharmacy may be particularly beneficial for
elderly or homebound patients, patients with disabilities,
and those with inadequate access to transportation;
d) Longer supply - most mail order benefits allow for a 90
day supply of maintenance drugs as opposed to a 30 day
supply;
e) The longer days' supply usually allows for lower member
out-of-pocket costs; and,
f) Customer service representatives and pharmacists are
available 24 hours a day, seven days a week to enrollees
utilizing mail order services.
"Mail order pharmacies are licensed and utilized for the
delivery of maintenance medications for conditions such as
high cholesterol, high blood pressure and diabetes. They are
not used or required for emergency medications, or episodic
needs such as antibiotics for infections like strep throat.
"AB 299 essentially precludes health plans from requiring
enrollees to use mail order services for certain prescriptions
by prohibiting mail order pharmacies from contracting with
health plans that have such a requirement, even when health
plans offer a straightforward exception (opt-out) process to
enrollees. AB 299 unnecessarily restricts the freedom of
health plans to determine the most effective way of
controlling rising prescription drug costs. Imposing such a
restriction is unnecessary, unwarranted and inflates health
care costs for Californians. AB 299 will increase
prescription drug costs and result in higher co-pays for
enrollees."
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9)Double-referral . This bill is double-referred, and if passed
by this Committee, it will be referred to the Assembly Health
Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
California Pharmacists Association (sponsor)
AARP
AIDS Healthcare Foundation
Black Women for Wellness
California Commission on Aging
California Healthcare Institute
California National Organization for Women
California Senior Legislature
Center for Latino Community Health, Evaluation, and Leadership
Training
Common Ground
Disability Rights California
L.A. Gay and Lesbian Center
National Association of Chain Drug Stores
National Community Pharmacists Association
National Multiple Sclerosis Society
Project Inform
Rite Aid
Opposition
Aetna
Anthem Blue Cross
America's Health Insurance Plans
Blue Shield of California
Express Scripts
California Association of Health Plans
Association of California Life and Health Insurance Companies
Analysis Prepared by : Sarah Huchel / B.,P. & C.P. / (916)
319-3301