BILL ANALYSIS �
SB 294
Page 1
Date of Hearing: August 13, 2013
ASSEMBLY COMMITTEE ON HEALTH
Richard Pan, Chair
SB 294 (Emmerson) - As Amended: August 5, 2013
SENATE VOTE : 39-0
SUBJECT : Sterile drug products.
SUMMARY : Repeals and recasts existing law relating to the
licensure of a pharmacy that compounds sterile drug products by
the Board of Pharmacy (BOP), and expands the types of sterile
compounded drugs for which a license is required; deletes an
existing licensure exemption for certain types of pharmacies;
and, requires inspection of and imposes additional requirements
for in-state and nonresident sterile compounding pharmacies.
Specifically, this bill :
1)Repeals and recasts, effective July 1, 2014, the following
existing law provisions:
a) The requirement that the BOP adopt regulations
establishing standards for compounding injectable sterile
drug products;
b) The requirement that a pharmacy in this state obtain a
license from the BOP to compound injectable sterile drug
products and must be inspected prior to issuance of
license;
c) The requirement that a nonresident (out-of-state)
pharmacy obtain a license to compound injectable sterile
drug products for shipment into the state; and,
d) The fee schedule for specified licensure categories.
2)Requires a pharmacy that compounds sterile drug products for
administration into the eye or through inhalation to obtain a
license from the BOP.
SB 294
Page 2
3)Repeals a current exemption from licensure of pharmacies
operated by entities that are licensed by the BOP or the
Department of Public Health (DPH) and that have current
accreditation from the Joint Commission on Accreditation of
Health Care Organizations (Joint Commission), or other private
accreditation agencies approved by the BOP.
4)Prohibits the issuance or renewal of a pharmacy's license to
compound sterile drug products, including that of a
nonresident pharmacy, until the BOP does all of the following:
a) Reviews a current copy of the pharmacy's or nonresident
pharmacy's policies and procedures for sterile compounding;
b) Reviews the pharmacy's or nonresident pharmacy's
completed self-assessment form, as specified.
c) Is provided with copies of all inspection reports
conducted of the pharmacy's or nonresident pharmacy's
premises and any reports from a private accrediting agency,
conducted in the prior 12 months documenting the pharmacy's
or nonresident pharmacy's operations; and,
d) Receives a list of all sterile medications compounded by
the pharmacy since last license renewal, or, for purposes
of nonresident pharmacy, within the prior 12 months.
5)Requires a pharmacy that possesses a license to compound
sterile drug products to do all of the following:
a) Provide to the BOP a copy of any disciplinary or other
action taken by another state or for purposes of
nonresident pharmacy, its state of residence, within 10
days of the action;
b) Notify the board within 10 days of the suspension of any
accreditation held by the pharmacy; and,
c) Provide to the BOP, within 12 hours, any recall notice
issued by the pharmacy for sterile drug products it has
compounded, as specified.
SB 294
Page 3
6)Requires a nonresident pharmacy that possesses a license to
compound sterile drug products to do all of the requirements
specified in 5) above and to advise the BOP of any complaint
it receives from a provider, pharmacy, or patient in
California.
7)Requires adverse effects reported or potentially attributable
to a pharmacy's or nonresident pharmacy's sterile drug product
to be immediately reported to the BOP and the MedWatch program
of the federal Food and Drug Administration (FDA).
8)Requires the BOP to inspect the location of a nonresident
pharmacy prior to the issuance or renewal of a license.
Requires a nonresident pharmacy to reimburse the BOP for all
actual and necessary costs incurred by the BOP in conducting
an inspection of the pharmacy at least once annually, as
specified.
9)Authorizes the BOP to adopt emergency regulations for purposes
of sterile drug products, as specified. Sunsets the provision
authorizing the adoption of emergency regulations on January
1, 2015.
10)Requires the fee for the issuance or renewal of a nonresident
sterile compounding pharmacy license to be $780. Requires a
nonresident pharmacy to deposit, when submitting an
application, a reasonable amount as determined by the BOP as
necessary to cover the BOP's estimated cost of performing the
inspection. States that if the required deposit is not
submitted with the application, the application is deemed
incomplete. Provides that if the actual cost of the
inspection exceeds the amount deposited, requires the BOP to
provide to the applicant a written invoice of the remaining
amount and not take action on the application until the full
amount has been paid to the BOP. Requires the BOP to remit
the difference to the applicant if the amount deposited
exceeds the amount of actual or necessary costs incurred.
11)Requires the BOP to adopt regulations in accordance with the
Administrative Procedure Act to establish policies,
SB 294
Page 4
guidelines, and procedures to implement requirements for
sterile drug products, as specified.
12)Makes other technical, conforming, and clarifying changes.
EXISTING LAW :
1)Establishes the BOP to regulate the practice of pharmacy.
Requires any pharmacy that furnishes, sells, or dispenses
dangerous drugs or devices in California, or ships such
products into the state, to be licensed by the BOP. Requires
the licensure of pharmacies that compound injectable sterile
drug products.
2)Requires a pharmacy that compounds injectable sterile drug
products to obtain a license from the BOP. Authorizes the
BOP to issue a temporary license to compound injectable
sterile drug products.
3)Prohibits a nonresident pharmacy from compounding injectable
drug products for shipment into the state unless licensed by
the BOP.
4)Authorizes the BOP to issue a cease and desist order upon
finding that a pharmacy that compounds injectable sterile
products poses an immediate threat to the public health or
safety, as specified.
5)Requires the fee for issuance or renewal of a nongovernmental
license to compound sterile drug products to be $600 and may
be increased to $780.
6)Establishes the FDA to regulate food safety, tobacco products,
dietary supplements, prescription and over-the-counter
pharmaceutical drugs (medications), vaccines,
biopharmaceuticals, blood transfusions, medical devices,
electromagnetic radiation emitting devices, and veterinary
products.
FISCAL EFFECT : According to the Senate Appropriations
Committee, projected ongoing costs to the BOP for inspections
SB 294
Page 5
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.
COMMENTS :
1)PURPOSE OF THIS BILL . The BOP is the sponsor of this bill.
According to the author, recent events have highlighted the
need to increase oversight of sterile compounding pharmacies
to ensure that sterile drug products are safe for consumers.
For instance, 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. Then in October 2012, the
New England Compounding Center (NECC) based in Massachusetts
shipped contaminated drug products throughout the country,
including California, resulting in the death of more than 50
people and 700 patients becoming ill from the tainted steroid
injections. In both instances, the BOP was unable to inspect
the nonresident facilities. This bill strengthens consumer
protection and helps ensure that sterile compounding
pharmacies that dispense or ship sterile drug products meet
California standards.
2)BACKGROUND .
a) Injectable Sterile Drug Products . Existing law requires
a pharmacy to obtain a license from the BOP to compound
injectable sterile drug products in this state.
Additionally, existing law requires the following of these
pharmacies: i) the license is issued only for the location
that is licensed as a pharmacy and may only be issued to
the owner of the pharmacy licensed at that location; and,
ii) the location must be inspected by the BOP prior to
licensure and comply with all regulations adopted by the
BOP. However, pharmacies operated by entities that are
licensed by either the BOP or DPH and that have current
accreditation from the Joint Commission or other private
accreditation agencies approved by the BOP are exempt from
SB 294
Page 6
the requirement to obtain a license. This bill removes the
licensure exemption for pharmacies that are accredited and
specifies additional requirements that must be provided to
the BOP prior to licensure.
A nonresident pharmacy may ship injectable sterile drug
products to California if it obtains a license from the
BOP. Current law does not require the BOP to inspect these
facilities and must rely on a copy of an inspection report
issued by the pharmacy's licensing agency (out of state),
or a report from a private accrediting agency approved by
the BOP, in the prior 12 months documenting the pharmacy's
compliance with BOP regulations regarding the compounding
of injectable sterile drug products and a copy of the
nonresident pharmacy's proposed policies and procedures for
sterile compounding. Nonresident pharmacies operated by
entities that are licensed as a hospital, home health
agency, or a skilled nursing facility and have current
accreditation from the Joint Commission or accrediting
agencies approved by the BOP are exempt from the
requirement to obtain a license. This bill requires the
BOP to inspect the nonresident pharmacy and the exemption
for accredited facilities is eliminated.
b) Meningitis Outbreak . In October 2012, a meningitis
outbreak was reported in the United States. The Centers
for Disease Control and Prevention (CDC) traced the
outbreak of fungal contamination in 3 lots of medication
used for epidural steroid injections, which were packaged
and marketed by NECC, a compounding pharmacy in
Massachusetts. Doses from these lots were distributed to
75 medical facilities in 23 states, and administered to
approximately 14,000 patients after May 21, 2012 and before
September 24, 2012. In California, doses were distributed
to the following clinics: Cypress Surgery Center (Visalia),
Encino Outpatient SurgiCenter (Visalia), Ukiah Valley
Medical Center (Ukiah), and Universal Pain Management
(Palmdale). CDC indicated that the investigation included
fungal meningitis, localized spinal or paraspinal
infections, and infections associated with injections in a
peripheral joint space, such as knee, shoulder, or ankle.
SB 294
Page 7
CDC also received reports of spinal epidural abscesses and
arachnoiditis among a number of patients undergoing
treatment for fungal meningitis associated with the
outbreak. As of July 1, 2013, there were 61 deaths
associated with the outbreak.
The FDA subsequently released NECC's Form 483, which is a
form issued by the FDA to firm management at the conclusion
of an inspection when an investigator(s) has observed any
conditions that in their judgment may constitute violations
of the Food, Drug and Cosmetic Act and related Acts.
According to NECC's Form 483, the FDA observed and has
since confirmed contaminated products and listed a number
of observations regarding conditions in the clean room at
the Massachusetts facility. Additionally, the
investigators observed problems with NECC's ability to
maintain its clean room, which is the enclosed space that
is designed and maintained to have a controlled environment
with low levels of airborne particles and surface
contamination. Production of sterile drug products in a
properly functioning and maintained clean room reduces the
risk of the introduction of microbial contamination into
the drug during processing, including filling into its
final container.
3)SUPPORT . The BOP indicates that compounding pharmacies are
important to produce needed medications that are in short
supply. However, it is equally important that the state's
sterile compounding requirements are met by these specialty
pharmacies and that they are monitored for compliance. This
bill provides enhanced protection and ensures that
California's standards are enforced and patients are
protected.
The California Pharmacists Association and the Health Officers
Association of California state that this bill establishes
uniform standards for all sterile compounding pharmacies,
applying the same strict standards to out-of-state pharmacies
that are required of in-state pharmacies. The recent
multi-state meningitis tragedy proves that California cannot
rely on other states or external organization for inspecting
SB 294
Page 8
or regulating sterile compounding pharmacies to California's
standards.
4)CONCERNS . The California Hospital Association (CHA) and the
Hospital Corporation of America (HCA) indicate that currently
out-of-state organizations preparing compounded sterile
preparations should comply with industry quality standards and
guidelines issued by the United States Pharmacopeial
Convention (USP). USP is a scientific nonprofit organization
that sets standards for the identity, strength, quality, and
purity of medicines, food ingredients and dietary supplements
manufactured, compounded and distributed and consumed
worldwide. For organizations preparing compounded sterile
products, USP developed internationally recognized standards
known as "USP 797." CHA and HCA state that the health care
industry is experiencing extreme shortages of medications.
The reasons for shortages are complex; however, compounding
organizations are offering solutions to reduce incidence of
shortages. CHA and HCA are concerned with any legislation
that may reduce the number of high quality compounding
organizations that are already complying with the industry USP
797 standards. Requiring out-of-state compounding
organizations to comply with unique California regulations may
force some to no longer be interested in the California market
and this would exacerbate the shortage of medications.
5)RELATED LEGISLATION . AB 1045 (Quirk-Silva) requires patients
to be notified as soon as possible and within 12 hours of a
recall notice for a sterile compounded drug and requires the
automatic cancellation, suspension, or revocation of a
California pharmacy license if an out-of-state pharmacy's home
state license is canceled, suspended, or revoked. AB 1045 is
pending in the Senate Appropriations Committee.
6)DOUBLE REFERRAL . This bill is double referred, it was heard
in the Assembly Business, Professions and Consumer Protection
Committee on July 2, 2013 and passed out on a 10-3 vote.
7)SUGGESTED AMENDMENTS . This bill requires adverse effects
reported or potentially attributable to a pharmacy or a
nonresident pharmacy's sterile drug product to be immediately
SB 294
Page 9
reported to the BOP. To provide a clear timeframe, the
Committee may wish to amend this bill to require this
reporting to the BOP within 24 hours.
REGISTERED SUPPORT / OPPOSITION :
Support
California State Board of Pharmacy (sponsor)
California Optometric Association
California Pharmacists Association
California Society of Health-System Pharmacists
Health Officers Association of California
Opposition
None on file.
Analysis Prepared by : Rosielyn Pulmano / HEALTH / (916)
319-2097