BILL ANALYSIS Ó AB 1045 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 1045 (Quirk-Silva) As Amended June 19, 2013 Majority vote ----------------------------------------------------------------- |ASSEMBLY: |74-0 |(May 23, 2013) |SENATE: |37-0 |(August 19, | | | | | | |2013) | ----------------------------------------------------------------- Original Committee Reference: B.,P. & C.P. SUMMARY : Requires a recipient pharmacy, prescriber, or patient of a recalled drug and the California Board of Pharmacy (BOP) to be notified within 12 hours of a recall notice for a sterile compounded drug, and requires the automatic suspension, cancellation, or revocation of a California pharmacy license if an out-of-state pharmacy's home state license is suspended, cancelled, or revoked. The Senate amendments : 1)State that a pharmacy must notify a recipient pharmacy, prescriber, or patient of a recalled drug and BOP as soon as possible within 12 hours of notice of a recall, as specified; and, 2)Authorize BOP to cancel a nonresident pharmacy registration if the home state pharmacy license is cancelled. 3)Make technical changes. FISCAL EFFECT : According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs. COMMENTS : 1)Sterile compounding pharmacy problems . A compounding pharmacy is a licensed pharmacy that prepares, alters or combines drugs or drug ingredients by or under the supervision of a licensed pharmacist pursuant to a prescription. There are 286 licensed sterile injectable compounding pharmacies in California and 93 nonresident licensed sterile injectable compounding pharmacies that ship to the state. AB 1045 Page 2 Sterile compounding is a specific sub-type of general compounding in which the compounded drug product is sterile. These products are often placed directly into the body through injection, via eye drops, or inhaled, and so it is exceedingly important these drugs be produced in the most sanitary, regulated environments and be absolutely sterile to avoid infection. Compounding pharmacies have been compounding greater volumes of sterile drugs in recent years because these pharmacies are increasingly asked by hospitals and health care providers to help address drug shortages. According to the Food and Drug Administration (FDA), there has been an almost 500% increase in manufactured drug shortages since 2006, the majority of which are for critical, medically necessary, generic sterile injectable drugs. In September 2012, the New England Compounding Center (NECC), a compounding pharmacy in Massachusetts, was found to be responsible for 47 meningitis deaths across 19 states due to its sale of a contaminated injectable steroid. That pharmacy was primarily regulated by the Massachusetts Board of Pharmacy, with concurrent authority by the FDA. NECC surrendered its license to the Massachusetts Board of Pharmacy, but BOP was unable to immediately revoke NECC's licensed based on its Massachusetts license. 2)Minimal federal regulation of compounding pharmacies . The FDA regards traditional pharmacy compounding as the combining or altering of ingredients by a licensed pharmacist, in response to a licensed practitioner's prescription for an individual patient. FDA regulates compounding only if it rises in scale to the level of manufacturing, but that threshold is not precisely defined. Although compounding originated as patient-specific drug modification, federal law does not prohibit anticipatory compounding (compounding in advance of a prescription) or the compounding of drugs that are essentially copies of FDA-approved drugs. Doctors and hospitals are increasingly turning to compounding pharmacies to meet their patients' drug needs because of shortages caused by diminishing production of generics and the lower prices charged by compounders. As a result, some compounding pharmacies have been producing far AB 1045 Page 3 larger quantities of products than the FDA guidelines might permit. This occurs in large part because of a lack of clarity as to how much production constitutes "manufacturing" requiring federal oversight. This ambiguity leaves primary regulation of small to medium scale compounding pharmacies to the states. 3)California regulation of compounding pharmacies . California currently has some of the most comprehensive laws and regulations for compounding pharmacies in the nation. In the last decade, BOP developed its own sterile injectable compounding requirements and created a licensing system for resident and nonresident (out-of-state) sterile injectable compounding facilities. Even with these protections, however, the NECC product contamination affected California because California generally relies on the pharmacy's home regulator, the FDA, and private accreditors to certify safety in out-of-state pharmacies, none of which acted on multiple warnings in the NECC case. The BOP issued a cease and desist order to NECC on October 4, 2012, following notice of the outbreak so NECC could no longer ship product into the state, but BOP could not act immediately to revoke or suspend its license. Currently, BOP must go through an extensive process to suspend or revoke a license. BOP is required to compile an investigation report that substantiates serious violations of law, and then transfer the report and evidence to Attorney General's office, which prepares and serves an accusation on the pharmacy. If the pharmacy does not respond, the license is cancelled by a default decision. If a statement of defense is filed, BOP will attempt to settle the case with a stipulation that may include a cessation of shipping into the state, or go to hearing to obtain a proposed decision from an administrative law judge to stop shipments. The stipulation or proposed decision must be approved by BOP. Once approved by board vote, the decision generally takes effect in 30 days. This entire process usually takes about two to three years. This bill would immediately suspend, cancel, or revoke an out-of-state pharmacy's California license by operation of law based on the suspension, cancellation, or revocation of its home state license. 4)Drug recalls . Recall is a voluntary process. Drug recalls AB 1045 Page 4 for tainted products or inappropriate labeling may be undertaken voluntarily and at any time by manufacturers, compounders, or distributors, or at the FDA's request. However, since a recall is voluntary, the FDA has no authority to impose or seek sanctions for an entity's refusal to carry out the recall. FDA may institute legal action respecting the underlying violation that led to FDA's request, but this is not usually necessary. There have been eight recalls of sterile compounded drugs nationwide since the beginning of 2013. FDA has issued industry guidelines for recalls, and in the event of a recall works with the recalling entity to develop an effective strategy. After an entity decides to recall its product and notifies the FDA, it is the entity's own responsibility to monitor the progress of the recall. In some cases where it is more difficult for an entity to institute a recall at the consumer level, the FDA, state and local agencies will assist. BOP currently requires pharmacies to subscribe to BOP's mailing list, and BOP sends licensees notifications from FDA on recalled drugs. BOP currently works with pharmacies to appropriately notify and remove recalled products and alert consumers. There are no California statutory provisions guiding this process, however. This bill aims to codify best practices for sterile compounded drug recalls. This bill would require a California or nonresident pharmacy that issues a recall notice for a sterile compounded drug to contact the pharmacy, prescriber, or patient who received the recalled drug and the BOP as soon as possible within 12 hours of the recall notice if use of or exposure to the recalled drug may cause serious adverse health consequences or death. BOP has existing authority to develop any regulations that may be necessary to implement this bill. Analysis Prepared by : Sarah Huchel / B.,P. & C.P. / (916) 319-3301 FN: 0001665 AB 1045 Page 5