BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 294|
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THIRD READING
Bill No: SB 294
Author: Emmerson (R)
Amended: 5/28/13
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEV. COMM. : 10-0, 4/1/13
AYES: Price, Emmerson, Block, Corbett, Galgiani, Hernandez,
Hill, Padilla, Wyland, Yee
SENATE APPROPRIATIONS COMMITTEE : 7-0, 5/23/13
AYES: De León, Walters, Gaines, Hill, Lara, Padilla, Steinberg
SUBJECT : Pharmacy: sterile drug products
SOURCE : California Board of Pharmacy
DIGEST : This bill, among other things, requires an inspection
by the 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, provide a list
of all drugs it compounds to the Board, and notify the Board of
any discipline or suspension of accreditation; and delays
implementation of these provisions until July 1, 2014.
ANALYSIS :
Existing law:
1.Provides for the practice of pharmacy and the licensing and
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regulation of pharmacies and pharmacists by the Board within
the Department of Consumer Affairs.
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.
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.
4.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.
5.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.
6.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.
7.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 safety.
8.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
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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.
9.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.
This bill:
1.Requires the Board to annually inspect and license a
compounding pharmacy before that pharmacy may compound or
distribute sterile compounded substances in this state.
Requires the Board to establish the fee for the issuance or
renewal of a nonresident sterile compounding pharmacy license,
in an amount not to exceed reasonable regulatory costs of
issuing and renewing the license, or $2,800, whichever is
less.
2.Requires out-of-state compounding pharmacies to pay the Board
for costs incurred in connection with inspection of
out-of-state facilities.
3.Requires a compounding pharmacy to notify the Board within 24
hours of initiating any recall on sterile drugs produced by
the compounding pharmacy.
4.Requires a compounding pharmacy to provide the Board with a
list of all drugs it compounds.
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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.
6.Delays implementation of these provisions until July 1, 2014.
Background
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.
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 becoming 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
had already been harmed.
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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 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.
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 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
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first meeting occurred on March 15, 2013. The Sub-Committee is
responsible for shaping the Board's future changes to its
regulations on compounding pharmacies.
Comments
According to the author's office, existing 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.
Prior Legislation
AB 377 (Solorio, 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee, projected
ongoing costs to the Board for inspections and licensing
activities of about $1 million per year (Pharmacy Board
Contingent Fund). These costs will be covered by fees and
reimbursements from regulated compounding pharmacies. Fee
revenues may not be sufficient to fully cover the expected
workload required under this bill.
SUPPORT : (Verified 5/28/13)
California State Board of Pharmacy (source)
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California Optometric Association
California Pharmacists Association
Health Officers Association of California
ARGUMENTS IN SUPPORT : According to the bill's sponsor, the
California Board of Pharmacy 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) 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.
MW:ej 5/28/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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