BILL ANALYSIS Ó
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|Hearing Date: April 1, 2013 |Bill No:SB |
| |294 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Curren D. Price, Jr., Chair
Bill No: SB 294Author:Emmerson
As Introduced: February 15, 2013 Fiscal: Yes
SUBJECT: Sterile drug products.
SUMMARY: Requires an inspection by the California Board of Pharmacy
(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.
Existing law, the Business and Professions Code:
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. (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 :
a) A pharmacy compounding a drug for parenteral therapy, pursuant
to a prescription.
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b) A pharmacy that, at a patient's request, repackages a drug
previously dispensed to a patient, or to the patient's agent,
pursuant to a prescription. (Id.)
1) Specifies that "manufacturer" means :
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. (Id.)
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
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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 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) Requires annual inspection and direct licensure by the Board of a
compounding pharmacy before that pharmacy may compound or
distribute sterile compounded substances in this state.
2) Requires out-of-state compounding pharmacies to pay for the Board
to inspect their facilities.
3) Requires a compounding pharmacy to notify the Board within 24 hours
of initiating any recall on sterile drugs the compounding pharmacy
produced.
4) Requires a compounding pharmacy to provide a list of all drugs it
compounds to the Board.
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5) Requires a compounding pharmacy to notify the Board of any
discipline or suspension of accreditation that occurs in any
jurisdiction.
FISCAL EFFECT: Unknown. This bill has been keyed "fiscal" by
Legislative Counsel.
COMMENTS:
1. Purpose. This bill is sponsored by the California Board of
Pharmacy . According to the Author, current law allows for
accreditation in lieu of licensure, which prevents the Board from
appropriately regulating compounding pharmacies. In the case of
nonresident sterile compounding pharmacies, the Board cannot
inspect such facilities to ensure compliance with pharmacy law.
This bill will require licensure by the board and will expressly
authorize the Board to conduct inspections of facilities that are
licensed to ship compounded products into California. This will
ensure consistent oversight of all such entities.
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
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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
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
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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
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. AB 299 (Holden) prohibits a pharmacy in
California or out of the 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. The
bill is pending in the Assembly Committee on Business, Professions
and Consumer Protection.
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
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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
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. The bill
died on the Senate Floor.
AB 2077 (Solario) of 2010 was virtually identical to AB 377. The
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. The bill was held in
the Assembly Committee on Business and Professions.
7. Arguments in Support. The California Board of Pharmacy (Board)
sponsored and supports this bill. The Board wants to strengthen
state oversight of pharmacies that compound sterile drugs,
including out-of-state pharmacies, to protect consumers from
tainted compounded substances. The Board currently cannot inspect
out-of-state compounding pharmacies prior to issuing a license.
The Board believes that requiring out-of-state pharmacies to submit
to and pay for a Board inspection will allow the board to ensure
that every pharmacy that distributes sterile compounded drugs into
California meets the same uniform standards.
The California Pharmacists Association (CPA), writing in support of
this bill, states that in light of the NECC tragedy, California
should no longer rely on other states or entities to inspect and
accredit out-of-state compounding pharmacies. According to CPA,
California consumers will be better protected by holding
out-of-state pharmacies to the same strict standards the Board has
held in-state compounding pharmacies to for the past decade.
8. Issues of Concern: The California Hospital Association , (CHA)
indicates that it is supportive of increased scrutiny of
organizations that prepare compounded sterile preparations, but is
concerned that creating unique California regulations will cause
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some out-of-state compounding pharmacies to withdraw from the
California market. This is a concern because compounding
pharmacies plays an important role in alleviating prescription drug
shortages, and ensuring timely access to drugs and continuity of
patient care. The CHA asserts that out-of-state compounding
pharmacies should already comply with the industry standards
promulgated by the United States Pharmacopeial Convention (USP).
9. Staff Comments: Potential Limitations on the Board's Ability to
Inspect Compounding Facilities. Granting the Board the ability to
conduct inspections of out-of-state compounding pharmacies may
definitely improve the health and safety of California patients
receiving products from these facilities. However, the Board's
ability to perform robust inspections could be hindered by certain
circumstances the Board currently faces.
During the Board's Compounding Subcommittee meeting on March, 15,
2013, the Board stated that inspectors do not always know what they
should be looking for to certify that a compounding pharmacy is
following adequate safety procedures to maintain sterility. Board
inspectors provided testimony that they do not always know what
sterile processes or quality assurance measures should be in place
at a particular facility, or when compounding a particular
substance. This suggests that Board inspections may not catch
subtle violations. It would be helpful for the Committee to better
understand how the Board can increase its inspector training and
duties to ensure inspections prevent bad products like those at
NECC from reaching California patients.
The Board is also currently subject to travel and hiring
restrictions which are impacting the Board's ability to conduct
inspections of its many licensees located within California. The
Board may have trouble meeting the obligations to inspect all of
the out-of-state facilities that want licensure. It would be
helpful for the Board to receive exemptions from any travel or
hiring restrictions to allow for quality inspections of facilities
it licenses, particularly those producing drugs injected into the
bodies of California patients.
The Board already has a heavy workload inspecting in-state
pharmacies. It is unclear how the Board can meet its existing
mandate to inspect in-state pharmacies, plus the new responsibility
to inspect out-of-state pharmacies if it is not authorized to hire
more of the unique, specialized inspectors that perform
inspections.
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SUPPORT AND OPPOSITION:
Support :
California Board of Pharmacy
California Pharmacists Association
Opposition :
Consultant: Kristin Webb