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  




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            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  




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            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  




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            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  




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            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.




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