BILL ANALYSIS Ó
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|Hearing Date:June 17, 2013 |Bill No:AB |
| |1045 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Ted W. Lieu, Chair
Bill No: AB 1045Author:Quirk-Silva
As Amended:June 6, 2013 Fiscal: Yes
SUBJECT: Sterile compounding and nonresident pharmacies.
SUMMARY: Requires patients to be notified within 24 hours of a recall
notice for a sterile compounded drug, and requires the automatic
suspension or revocation of a California pharmacy license if an
out-of-state pharmacy's home state license is suspended or revoked.
Existing law:
1) Provides for the practice of pharmacy and the licensing and
regulation of pharmacies and pharmacists by the Board of Pharmacy
(Board) within the Department of Consumer Affairs (DCA).
2) Authorizes the Board inspectors to inspect all pharmacies,
wholesalers, dispensaries, stores or places where drugs or devices
are compounded, prepared, furnished, dispensed or stored.
(Business and Professions Code (BPC) § 4008)
3) Defines "manufacturer" as every person who prepares, derives,
produces, compounds or repackages any drug or device except a
pharmacy that manufactures on the immediate premises where the drug
or device is sold to the ultimate consumer. (BPC § 4033)
4) Specifies that "manufacturer" does not mean : (Id.)
a) A pharmacy compounding a drug for parenteral therapy, pursuant
to a prescription.
b) A pharmacy that, at a patient's request, repackages a drug
previously dispensed to a patient, or to the patient's agent,
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pursuant to a prescription.
1) Specifies that "manufacturer" means : (Id.)
a) A person who prepares, derives, manufactures, produces or
repackages a dangerous drug, as defined.
b) A holder of or holders of a New Drug Application (NDA) and an
Abbreviated New Drug Application (ANDA) or a Biologics License
Application (BLA).
c) A manufacturer's third-party logistics provider.
d) A private label distributor for whom the private label
distributor's prescription drugs are originally manufactured and
labeled for the distributor and have not been repackaged.
e) The distributor agent for the manufacturer, contract
manufacturer, or private label distributor, whether the
establishment is a member of the manufacturer's affiliated group
or is a contract distributor site.
5)Prohibits an out-of-state pharmacy from selling or distributing
dangerous drugs or devices in California through any other method
than a Board-licensed wholesaler, unless the out-of-state pharmacy
is licensed by the Board. (BPC § 4120)
6)States that any pharmacy that contracts to compound a drug for
parenteral therapy, pursuant to a prescription, for delivery to
another pharmacy, must report that contractual arrangement to the
Board within 30 days of commencing that compounding. (BPC § 4123)
7)Requires the Board to adopt regulations establishing standards for
compounding injectable sterile drug products (sterile injectables)
in a pharmacy. Clarifies that a pharmacy cannot compound sterile
injectables unless the pharmacy is licensed by the Board. States
that a license to compound sterile injectables cannot be renewed
without a Board inspection. Exempts pharmacies with accreditation
by the Joint Commission on Accreditation of Healthcare Organizations
or other accrediting agencies approved by the Board from these
requirements. (BPC § 4127-4127.1)
8)Authorizes the Board to issue a cease and desist order to a pharmacy
compounding sterile injectables whenever the Board has reasonable
belief, based on information obtained through an investigation or
inspection, that there is an immediate threat to public health or
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safety. (BPC § 4127.3)
9)Allows 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 a 75-mile radius of each other. Requires a centralized
hospital packaging pharmacy to obtain a specialty license from the
Board. Authorizes a centralized hospital packaging pharmacy to:
prepare unit dose packages for single administration to inpatients
from bulk containers; prepare compounded unit dose drugs for
parenteral therapy for administration to inpatients; and, prepare
compounded unit dose drugs for administration to inpatients.
Authorizes a centralized hospital packaging pharmacy to prepare and
store a limited quantity of unit dose drugs prior to receiving a
patient-specific prescription according to certain circumstances.
Clarifies that all compounding functions shall only be performed in
the licensed centralized hospital pharmacy. (BPC § 4128-4128.6)
10)Grants the Board certain enforcement abilities against out-of-state
pharmacies, authorizes the Board to report actions against an
out-of-state pharmacy and authorizes the Board to take any action
against an out-of-state pharmacy that it would against a pharmacy in
this state if the grounds for action are also grounds for action in
the state in which the out-of-state pharmacy is permanently located.
(BPC § 4303)
This bill:
1) Provides that a pharmacy licensed by the Board to compound
injectable sterile drug products in this state, or an out-of-state
pharmacy that compounds sterile drug products for shipment into the
state of California and licensed by the Board, which issues a
recall notice regarding a sterile compounded drug shall, in
addition to any other duties, contact the recipient pharmacy,
prescriber or patient of the recalled drug and the Board within 24
hours of the recall notice if both of the following apply:
a) Use or exposure to the recalled drug may cause serious adverse
health consequences or death.
b) The recalled drug was dispensed, or is intended for use, in
California.
2)Provides that the recall notice shall be made according to the
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following:
a) If the recalled drug was dispensed directly to the patient,
the recall notice shall be made to the patient.
b) If the recalled drug product was dispensed directly to the
prescriber, the recall notice shall be made to the prescriber who
shall ensure the patient is notified.
c) If the recalled drug was dispensed directly to a pharmacy, the
notice shall be made to the pharmacy who shall notify the
prescriber or patient as appropriate. If the pharmacy notifies
the prescriber, the prescriber shall ensure the patient is
notified.
3)Provides that if the home state license of an out-of-state pharmacy
also licensed by the Board is revoked or suspended for any reason,
the license issued by the Board shall be immediately revoked or
suspended by operation of law.
FISCAL EFFECT: This measure has been keyed "fiscal" by Legislative
Counsel. According to the Assembly Committee on Appropriations
analysis dated May 15, 2013, this bill will result in minor and
absorbable costs to the Board.
COMMENTS:
1. Purpose. This bill is sponsored by the Author . According to the
Author, AB 1045 protects patients from drugs made by compound
pharmacies that may cause serious adverse health consequences or
death by codifying the proper procedure to ensure patients are
safe.
According to information provided by the Author, California
requires pharmacies that compound sterile injectable drug products
to have a special license. Currently, there are
286 licensed sterile injectable compounding pharmacies in
California, and 93 licensed sterile injectable compounding
pharmacies operating in another state. The Author states that
California has some of the most comprehensive laws and regulations
for compounding pharmacies in the nation, and in the last decade,
the Board developed its own sterile injectable compounding
requirements, and created a licensing system for sterile injectable
compounding facilities in California and in other states.
The Author states that even with these protections, the recent New
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England Compounding Center (NECC) product contamination of 2012
affected California because California relies on the pharmacy's
home regulator, the Food and Drug Administration (FDA), and private
accreditors to certify safety in out-of-state pharmacies; none of
which acted after receiving multiple warnings.
Later on October 4, 2012, the Board issued a cease and desist order
to NECC following notice of the outbreak so NECC could no longer
ship products into the state. However, if the Board had the
authority, the Board would have also revoked or suspended the
California license, in addition to obtaining the cease and desist
order.
2. The Current Regulatory Framework. Under the current regulatory
system, drug manufacturers are regulated by the federal Food and
Drug Administration (FDA). Compounding organizations are regulated
by their respective states of residence. Compounding organizations
also make drugs, but they are limited to producing small amounts in
response to a specific patient's prescription, or to create a small
supply for an identifiable patient population to ensure continuity
of treatment. The state-by-state approach to regulating
compounding organizations yields inconsistent standards and varying
levels of enforcement on an industry that ships dangerous drugs
across state lines.
3. New England Compounding Center: Outbreak of Fungal Meningitis: In
October 2012, the New England Compounding Center (NECC), based in
Massachusetts, shipped contaminated product throughout the country,
including California, that resulted in the death of more than 40
people and 461 patients have become ill from the tainted steroid
injections.
NECC's compounding facility had obvious ongoing safety violations,
but continued to operate and ship products despite employee
whistleblower complaints to management. The compounding facility
failed to maintain its clean room. The air intake for the clean
room was contaminated and shared with the neighboring furniture
recycling facility, and employees discovered mold on various work
and storage surfaces several times per year. Yet, NECC remained
accredited and was licensed to ship sterile compounded injectable
products into California.
Because California's Board had to rely on third party
accreditation, the Board asserts that it did not have the
opportunity or authority to inspect NECC or prevent NECC from
shipping products into California until patients in other states
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had already been harmed.
NECC is not the only compounding pharmacy to have recently caused
significant patient harm. In June 2012, a sterile injectable
pharmacy located in Florida shipped contaminated product into
California which resulted in significant patient harm, including
blindness in some cases. According to the Board, it was again only
able to take protective actions after patient harm had already
occurred.
The Author asserts that these events clearly demonstrate the need
to increase oversight of compounding pharmacies to ensure that
sterile drug products are safe for California consumers.
4. FDA Oversight
a) The Federal Role in Inspecting Compounding Facilities: The
FDA's oversight authority is limited, and according to the
agency, is not the right fit to provide appropriate and efficient
oversight of the growing compounding industry. The FDA is
currently working with states to inspect certain state-licensed
pharmacies that produce sterile drug products that the FDA
believes may present the highest risk. However, even during this
time of heightened awareness, FDA inspectors are being delayed in
their work or denied full access to records at some of the
facilities they are inspecting.
b) The Federal Response to NECC and Proposed Federal Regulation:
It is possible that regulation may occur at the federal level,
pre-empting state law on this issue. The FDA has been working
with Congress to craft legislation authorizing increased federal
oversight of compounding pharmacies. The FDA asserts that there
should be minimum federal standards for firms that compound
sterile drug products in advance of or without a prescription and
ship them interstate. The FDA also wants clear authority to
proactively inspect pharmacies to determine the scope and nature
of their operations.
5. Recent Action by the Board - Compounding Regulations. New
regulations governing compounding took effect last summer.
According to the Board, a Workgroup on Compounding was formed in
2004 comprised of board members, board staff and industry
representatives. The workgroup recognized that current pharmacy
regulations addressing compounding only govern the physical
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circumstances, procedures and record keeping requirements for
general compounding and do not address quality, strength or purity.
The Board adopted regulations in Article 7 of Division 17 of Title
16 of the California Code of Regulations (commencing with Section
1751) to implement provisions for pharmacies that compound sterile
injectable products as required in statute. As there were no
similar provisions in regulation for general compounding, the Board
approved the addition of language that will establish parameters
and provide uniformity for pharmacies that carry out compounding in
general (including sterile injectable). Pharmacies that compound
sterile injectable products must now go above and beyond the
requirements for compounding in general.
Subsequent to that workgroup activity, in response to patient
deaths and recalls due to contaminated compounded drugs, the Board
recently formed a Compounding Sub-Committee to address the issues
unique to effectively regulating compounding pharmacies located in
or shipping into this state. The Sub-Committee's first meeting
occurred on March 15, 2013. The Compounding Sub-Committee is
responsible for shaping the Board's future changes to its
regulations on compounding pharmacies.
6. Related Legislation This Session. SB 294 (Emmerson) requires an
inspection by the Board prior to licensure for all compounding
pharmacies that make or distribute compounded drugs in California.
Requires a compounding pharmacy to notify the Board within 24 hours
of initiating any recall, to provide a list of all drugs it
compounds to the Board, and to notify the Board of any discipline
or suspension of accreditation. ( Status : The bill is pending in
the Assembly.)
7. Prior Related Legislation. AB 377 (Solario, Chapter 687, Statutes
of 2012) provides for centralized pharmacy packaging in a hospital,
allowing the pharmacy to be located outside of the hospital on
either the same premises or separate premises that is regulated
under a hospital's license. Modifies the definition of
"manufacturer" so that the compounding that is done at a pharmacy
serving multiple hospitals does not inappropriately transform the
same compounding activities, that are now lawful at a hospital
pharmacy, into manufacturing activities which would be considered
as unlawful.
AB 2779 (Solario) of 2010 would have set conditions for
reimbursement of a compounded drug under workers' compensation law
according to specified conditions, including a requirement that all
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active ingredients in the compounded drug are ingredients in drug
products that have been approved by the FDA and all other
ingredients are listed by the United States Pharmacopeia. ( Status :
The bill failed passage on the Senate Floor.)
AB 2077 (Solario) of 2010 was virtually identical to AB 377.
( Status : This bill was vetoed by the Governor. In his veto
message, the Governor expressed concern that the bill could result
in "a greater likelihood of product mix-up, loss of product
identity, contamination and cross-contamination, and lack of
adequate control systems.")
AB 1370 (Solario) of 2009 would have created a separate licensing
category for centralized hospital pharmacies. ( Status : The bill
was held in the Assembly Committee on Business and Professions.)
8. Arguments in Support. According to supporters, like the Board of
Pharmacy and the California Senior Legislature , this bill takes
preventive measure to ensure that patients are immediately notified
of any serious public health risks or safety recalls of drugs from
compounding pharmacies.
9. Suggested Author's Amendment. Providing immediate and timely
notification to patients, pharmacies and providers when a
compounding pharmacy has received notice that one of their products
has been recalled, is an imperative aspect of consumer protection
and will ensure that patients take swift action in the event they
have come into contact with a recalled product.
The Committee suggests that the Author ensure that patients are
notified as soon as possible, no later than 12 hours of a recall
being activated, rather than the current 24 hour time frame as
outlined in the bill.
On page 5, line 28, after "board, before "within", insert ", as
soon as possible,"
On page 5, line 28, strike "24" and replace it with "12"
(a) A pharmacy licensed pursuant to Section 4127.1 or 4127.2,
including a pharmacy that is exempt from licensure pursuant to
subdivision (d) of Section 4127.1 and subdivision (c)
of Section 4127.2, that issues a recall notice regarding a sterile
compounded drug shall, in addition to any other duties, contact the
recipient pharmacy, prescriber, or patient of the recalled drug and
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the board , as soon as possible, within 24 12 hours of the recall
notice if both of the following apply:
10.Suggested Technical Amendments. At the request of the Board, the
Author is amending the bill to include reference to a "cancelled
license" in another state as a trigger for the Board to also revoke
the California license of an out-of-state compounding pharmacy.
On page 6, line 15, insert "cancel," after "may" and before "deny".
"The board may cancel, deny, revoke, or suspend a nonresident"
On page 6, line 24, insert "cancelled," after "is" and before
"revoked".
On page 6, line 26, insert "cancelled," before "revoked".
"(c) If the home state pharmacy license of a nonresident
pharmacy is cancelled, revoked or suspended for any reason, any
license
issued pursuant to Section 4112 or 4127.2 shall be immediately
cancelled, revoked or suspended by operation of law."
SUPPORT AND OPPOSITION:
Support:
California Senior Legislature
California Society of Health-System Pharmacists
California State Board of Pharmacy
Opposition:
None on file as of June 12, 2013.
Consultant: Sarah Mason