BILL ANALYSIS Ó
SB 600
Page 1
SENATE THIRD READING
SB 600 (Lieu)
As Amended June 30, 2014
Majority vote
SENATE VOTE :39-0
BUSINESS & PROFESSIONS 12-0
APPROPRIATIONS 17-0
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|Ayes:|Bonilla, Jones, |Ayes:|Gatto, Bigelow, |
| |Bocanegra, Campos, | |Bocanegra, Bradford, Ian |
| |Dickinson, Gordon, | |Calderon, Campos, |
| |Hagman, Holden, | |Donnelly, Eggman, Gomez, |
| |Maienschein, Mullin, | |Holden, Jones, Linder, |
| |Skinner, Ting | |Pan, Quirk, |
| | | |Ridley-Thomas, Wagner, |
| | | |Weber |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Repeals provisions of current pharmacy law to conform
to the federal Drug Quality and Security Act (DQSA) and declares
any that foreign dangerous drug that is not approved by the
United States Food and Drug Administration (FDA) or that is
obtained outside the state-licensed supply chain is misbranded,
and that anyone who purchases that drug is guilty of a
misdemeanor and subject to a fine of not more than $10,000.
Specifically, this bill :
1)Repeals provisions of current pharmacy law to conform to the
federal DQSA.
2)Declares any foreign dangerous drug that is not approved by
the FDA or that is obtained outside of the licensed supply
chain regulated by the FDA, California State Board of Pharmacy
(BOP), or State Department of Public Health (DPH) to be
misbranded.
3)Declares it a misdemeanor for any person to purchase a foreign
dangerous drug or medical device, illegitimate product, or
suspect product, as specified, that is not approved by the FDA
or that is obtained outside of the licensed supply chain
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regulated by the FDA, BOP, or DPH. States that a person who
does this is subject to imprisonment for not more than one
year in the county jail, a fine of not more than $10,000 per
occurrence, or both the imprisonment and fine.
4)States that no reimbursement is required by this act because
the only costs that may be incurred by a local agency or
school district will be incurred because this act creates a
new crime or infraction, as specified.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)Negligible costs to Board of Pharmacy. Current law
invalidates California's e-pedigree requirements if superseded
by a federal requirement. This bill simply updates statute
and should not result in additional costs.
2)Unknown, potentially higher penalty revenue for misbranded
drugs, depending on enforcement.
COMMENTS :
1)Purpose of this bill. This bill repeals provisions of current
pharmacy law to conform to federal law and also declares that
anyone who purchases a foreign dangerous drug that is not
approved by the FDA or that is obtained outside the state
licensed supply chain is guilty of a misdemeanor. This bill
is intended to reduce circumvention of approved purchasing
channels by punishing the purchase of drugs that are not
regulated by the state or federal government. This bill is
author-sponsored.
2)California's e-pedigree law and DQSA. E-pedigree was
California's statutory program to prevent counterfeit medicine
from entering the legitimate supply chain. E-pedigree was
created by SB 1307 (Figueroa), Chapter 857, Statutes of 2004,
and began implementation the following year, with full
operability anticipated by 2015.
The "pedigree" was a chain of custody record in electronic
form containing information regarding each transaction
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resulting in a change of ownership of a prescription drug.
The goal of the program was for any owner or possessor of a
prescription drug located at a licensed wholesaler,
repackager, reverse distributor, or pharmacy in California to
be able to show the lineage of the drug from the manufacturer
through the drug distribution channel. The e-pedigree was
required to contain specific information required by the
statute, and had to be made and passed through an electronic
track and trace system based on unique identification numbers
affixed at the point of manufacture.
The federal DQSA was signed into law by President Barack Obama
on November 27, 2013. This bill was prompted by the fungal
meningitis outbreak in 2012 linked to unsanitary conditions at
a Massachusetts compounding pharmacy, as well as concerns
regarding increases in counterfeit, falsified, substandard and
dangerous prescription medications. DQSA contained two parts
- the Compounding Quality Act and the Drug Supply Chain
Security Act.
The Compounding Quality Act created a voluntary compliance
regime where compounding pharmacies that voluntarily register
as "outsourcing facilities" will be subject to oversight by
the FDA in much of the same way that traditional
pharmaceutical manufacturers are monitored.
The Drug Supply Chain Security Act (Act) built upon
California's e-pedigree efforts to create a national
electronic track and trace system for prescription drugs. The
Act will replace the patchwork system adopted by individual
states and create a unified national program. In doing this,
the Act explicitly preempted any state's requirements for
tracing products through the distribution system that are
inconsistent with, more stringent than, or in addition to any
of the requirements under the Act. Thus, California's
e-pedigree system is currently invalid by operation of law.
This law repeals those invalid sections.
3)Counterfeit drugs. Counterfeit and unapproved drugs pose a
serious threat to consumers. Efforts to combat the use of
counterfeit and unapproved drugs have become increasingly
challenging, as supply chains have become more complex and
global. According to the FDA, nearly 40% of the drugs
Americans take are made elsewhere, and about 80% of
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manufacturing sites of active pharmaceutical ingredients used
in drugs manufactured inside the United States are located in
more than 150 countries.
Counterfeit drugs falsely represent a product's identity
through unauthorized representation of a legitimate trademark,
trade name, or other likenesses. Counterfeiting can apply to
both branded and generic products, and counterfeit drugs may
fail to meet the quality and safety standards established by
national and state regulatory authorities, and may contain
dangerous substances, incorrect dosages, or no active
ingredient.
According to a 2013 report from the Brookings Institution,
Although data associated with counterfeit and
unapproved drugs are limited due to the clandestine
nature of counterfeiting, certain trends have emerged
which may indicate that a wide spectrum of counterfeit
drugs are being manufactured and distributed. While
reports of counterfeit and unapproved drugs were
initially associated with "lifestyle drugs" (e.g.,
those for erectile dysfunction, weight loss),
counterfeiters have expanded into more profitable and
specialty markets, including drugs for chronic and
life threatening diseases. Investigations and
seizures have revealed counterfeit and unapproved
versions of HIV/AIDS drugs, pain drugs, antibiotics,
insulin, cholesterol drugs, hormone replacement
therapy, flu drugs, cancer drugs, anti-arthritic
drugs, cardiac drugs, anti-parasitic drugs, and
antihistamines. Research has indicated that in 2011,
cancer drugs represented the eighth most commonly
counterfeited medical product worldwide.
In recent years, unscrupulous distributors have
expanded their tactics to target clinical settings for
the sale of counterfeit and unapproved drugs. Medical
offices are often contacted through mass advertising
campaigns via "blast faxes," phone calls, direct
email, and online marketing. These distributors often
target clinics and hospitals for sale of
physician-administered drugs, including a variety of
injectable drugs.
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The report notes that most of the nationwide efforts to combat
counterfeit and unapproved products have focused on the major
players in the drug supply chain, such as drug manufacturers
and distributors. However, there have been fewer inroads in
targeting the purchasing of drugs by patients and health care
professionals, who may be lured by significantly lower prices
from drugs available outside the nationwide supply.
This bill targets this practice by clarifying in state law
that a drug that is not approved by the FDA or obtained
outside of the federal and state licensed supply chain is a
"misbranded drug," and that purchasing a misbranded drug is a
misdemeanor. This bill also increases the fine for violations
from $1,000 to $10,000.
Analysis Prepared by : Sarah Huchel / B., P. & C.P. / (916)
319-3301
FN: 0004570