BILL ANALYSIS Ó SENATE COMMITTEE ON HEALTH Senator Ed Hernandez, O.D., Chair BILL NO: AB 1727 AUTHOR: Rodriguez AMENDED: May 15, 2014 HEARING DATE: June 11, 2014 CONSULTANT: Bain SUBJECT : Prescription drugs: collection and distribution program. SUMMARY : Prohibits a medication that is the subject of a United States Food and Drug Administration managed risk evaluation and mitigation strategy (REMS) from being donated to a prescription drug repository and distribution program if this inventory transfer is restricted by that strategy. Requires the medication that is the subject of the REMS to be managed and dispensed according to the requirements of that strategy. Existing law: 1.Authorizes counties, by ordinance, to establish a program, subject to specified requirements, for medically indigent patients to receive donated prescription drugs free of charge. 2.Allows the following entities to donate medication to a program: a hospital; an acute psychiatric hospital; a skilled nursing facility (SNF); a SNF designated as an institution for mental disease (IMD); an intermediate care facility; a licensed correctional treatment center; a licensed psychiatric health facility; a chemical dependency recovery hospital; a residential care facility for the elderly, an approved mental health rehabilitation center; a pharmacy whose primary or sole purpose is limited to SNF; home health care or mail order; a drug wholesaler; and, a drug manufacturer. 3.Limits the types of pharmacies that can dispense medication through a program to county-owned pharmacies and pharmacies that contract with the county; licensed pharmacies owned and operated by primary care clinics; and, primary care clinics licensed to administer and dispense drugs. 4.Requires a county that elects to establish a program to establish procedures for program eligibility for medically indigent patients, and to ensure proper safety and management of medications, among other requirements. Continued--- AB 1727 | Page 2 5.Prohibits the donation to a program of the following: controlled substance; medication that has been adulterated, misbranded, or stored under conditions contrary to standards set by the United States Pharmacopoeia or the product manufacturer; and, medication that has been in the possession of a patient or any individual member of the public. This bill: 1.Prohibits a medication that is the subject of a United States Food and Drug Administration (FDA) managed risk evaluation and mitigation strategy (REMS) from being donated to a prescription drug repository and distribution program if this inventory transfer is restricted by that strategy. 2.Requires the medication that is the subject of the REMS to be managed and dispensed according to the requirements of that strategy. FISCAL EFFECT : This bill has been keyed non-fiscal. PRIOR VOTES : Assembly Health:19- 0 Assembly Floor:76- 0 COMMENTS : 1.Author's statement. According to the author, this bill seeks to prevent medications that are strictly regulated by the FDA from being donated to county drug repository and distribution programs. There are some medications that may have very serious side effects such as birth defects and vision loss. To ensure the benefits of these drugs outweigh the risks, the FDA requires doctors, pharmacies and drug manufactures to follow strict safety guidelines. For certain drugs, the FDA requires manufacturers to track each prescription from the doctor, through the pharmacy, to the patient. If these highly regulated drugs are sent to repository programs, it would become difficult if not impossible to track each prescription from the doctor, through the pharmacy, to the patient. This bill would ensure that the safety precautions required by the FDA are followed and that patients are safe from unsafe medications. 2.Background. SB 798 (Simitian), Chapter 444, Statutes of 2005, authorized the establishment of a program. Under the program, counties can adopt an ordinance to establish such a program, under which specified entities can donate unused medications AB 1727 | Page 3 for dispensing to medically indigent patients free of charge. Prior to the enactment of SB 798, SNFs were required to either destroy the drugs in the presence of a pharmacist or nurse, or return the drugs to the issuing pharmacy (if unopened and in a sealed container) for disposition. To date, one county (Santa Clara) has established such a program, and Santa Clara indicates it has saved approximately $5,000 through the program as of February 2012. According to an issue brief from the National Conference of State Legislatures, 38 states have enacted laws as of 2010 regarding prescription recycling programs for unused medications. Counties establishing a program have to meet certain requirements, including establishing eligibility for medically indigent patients, developing a formulary of medications appropriate for the program, ensuring the privacy of patients donating medication to the program, and ensuring proper safety and medication management. 3.Federal Risk Evaluation and Mitigation Strategy. The Food and Drug Administration Amendments Act of 2007 gave the FDA the authority to require a REMS from manufacturers to ensure that the benefits of a drug or biological product outweigh its risks. In determining whether to require a REMS, the FDA is required to consider the following: a. The estimated size of the population likely to use the drug involved; b. The seriousness of the disease or condition that is to be treated with the drug; c. The expected benefit of the drug with respect to such disease or condition; d. The expected or actual duration of treatment with the drug; e. The seriousness of any known or potential adverse events that may be related to the drug and the background incidence of such events in the population likely to use the drug; and, f. Whether the drug is a new molecular entity. According to the FDA's web site, approximately 65 drugs have a REMS although not all REMS prohibit inventory transfer. A REMS may be required by the FDA as part of the approval of a new product, or for an approved product when new safety AB 1727 | Page 4 information arises. REMS are a safety strategy to manage a known or potential serious risk associated with a medicine, and to enable patients to have continued access to such medicines by managing their safe use. Since medicines are very different from each other, REMS for each medicine is also different. REMS can be required for a particular drug, or for an entire drug in a class. REMS can require additional information to be provided to patients (such as an information guide), a communication plan to support implementation of the REMS (such as providing information to health care providers and professional medical societies about the risks involved in using the drug drug) and a timetable for determining the effectiveness of the safety measures in the REMS. A REMS can also include "Elements to Assure Safe Use," which requires specific actions by health care providers prior to ordering or dispensing a drug (such as requiring certification by health care providers or pharmacists in order to prescribe or dispense the drug), limiting the drug to only certain settings, requiring patient monitoring when on the drug, or requiring the patient be enrolled in a registry. 4.Double referral. This bill is double referred. Should it pass out of this committee, it will be referred to the Senate Committee on Business, Professions and Economic Development. 5.Prior legislation. SB 1329 (Simitian), Chapter 709, Statutes of 2012 expanded the types of entities that can donate and dispense medication in the prescription drug depository and distribution program that provides donated medication to medically indigent patients, and allows counties to establish a program through an action by the county board or through an action of the public health officer of the county, instead of only through county ordinance under existing law. 6.Support. Celgene Corporation (Celgene), a biotech company based in California, writes in support of this bill to ensure medications with strict FDA restrictions are not distributed in county surplus drug collection and distribution programs. Celgene states this bill works to provide safety to both patients and their families as the federal FDA has imposed strict restricted distribution programs for specified drugs that require drug manufacturers to track each prescription AB 1727 | Page 5 from the doctor, through the pharmacy, to the patient in order to minimize the risk of fetal exposure. Only physicians, pharmacies, and patients registered with these restricted distribution programs are authorized to write, fill, or receive a prescription for these products. This allows manufacturers to reconcile the medication shipped to pharmacies with what is ultimately dispensed to patients. In addition, it ensures that patients receive initial and ongoing education about the risks and necessary precautions associated with these drugs. Celgene argues allowing pharmacies that participate in a repository program to receive and redistribute these types of drugs undermines the safety precautions established by its product REMS programs. Celgene states that other states, including Arizona, Colorado, Montana, Washington and Wisconsin, have incorporated language similar to that in AB 1727 in their drug repository programs either through statute or regulation. Celgene states that, since 2007, all bills to either create such a program or expand an existing program have contained this type of protective language. The March of Dimes writes in support that this bill would establish safeguards in the state's program to ensure that certain prescription drugs with strict FDA restrictions on their use and distribution, such as those that can cause birth defects, are not distributed in county surplus drug programs. One of the medications this would apply to is thalidomide, which is a highly teratogenic drug with a broad spectrum of pharmacological activities and causes severe birth defects when taken during early pregnancy. March of Dimes supports these safeguards and has a deeply vested interest on behalf of the public in ensuring that thalidomide is managed safely in this country, including how, and by whom, the medication is dispensed. 7.Policy and drafting issue. This bill only allows the donation of medication that is the subject of a REMS if this inventory transfer is not restricted by that REMS, and to require this medication to be managed and dispensed according to the requirements of that REMS. However, of the thirteen drugs that are currently subject to a REMS under this bill, inventory transfers are prohibited for some, while others do not prohibit inventory transfers but require the prior approval of the manufacturer. By using the term "restricted," this bill AB 1727 | Page 6 would be prohibiting transfers that may otherwise be allowed under the REMS. SUPPORT AND OPPOSITION : Support: BayBio Biocom California State Board of Pharmacy Celgene Corporation March of Dimes Pharmaceutical Research and Manufacturers of America Oppose:None received. -- END --