Senate BillNo. 809


Introduced by Senators DeSaulnier and Steinberg

(Coauthors: Senators Hancock, Lieu, Pavley, and Price)

(Coauthor: Assembly Member Blumenfield)

February 22, 2013


An act to add Section 805.8 to the Business and Professions Code, to amend Sections 11165 and 11165.1 of the Health and Safety Code, and to add Part 21 (commencing with Section 42001) to Division 2 of the Revenue and Taxation Code, relating to controlled substances, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

SB 809, as introduced, DeSaulnier. Controlled substances: reporting.

(1) Existing law classifies certain controlled substances into designated schedules. Existing law requires the Department of Justice to maintain the Controlled Substance Utilization Review and Evaluation System (CURES) for the electronic monitoring of the prescribing and dispensing of Schedule II, Schedule III, and Schedule IV controlled substances by all practitioners authorized to prescribe or dispense these controlled substances.

Existing law requires dispensing pharmacies and clinics to report, on a weekly basis, specified information for each prescription of Schedule II, Schedule III, or Schedule IV controlled substances, to the department, as specified.

This bill would establish the CURES Fund within the State Treasury to receive funds to be allocated, upon appropriation by the Legislature, to the Department of Justice for the purposes of funding CURES, and would make related findings and declarations.

This bill would require the Medical Board of California, the Dental Board of California, the California State Board of Pharmacy, the Veterinary Medical Board, the Board of Registered Nursing, the Physician Assistant Committee of the Medical Board of California, the Osteopathic Medical Board of California, the State Board of Optometry, and the California Board of Podiatric Medicine to increase the licensure, certification, and renewal fees charged to practitioners under their supervision who are authorized to prescribe or dispense controlled substances, by up to 1.16%, the proceeds of which would be deposited into the CURES Fund for support of CURES, as specified. This bill would also require the California State Board of Pharmacy to increase the licensure, certification, and renewal fees charged to wholesalers, nonresident wholesalers, and veterinary food-animal drug retailers under their supervision by up to 1.16%, the proceeds of which would be deposited into the CURES Fund for support of CURES, as specified.

(2) Existing law permits a licensed health care practitioner, as specified, or a pharmacist to apply to the Department of Justice to obtain approval to access information stored on the Internet regarding the controlled substance history of a patient under his or her care. Existing law also authorizes the Department of Justice to provide the history of controlled substances dispensed to an individual to licensed health care practitioners, pharmacists, or both, providing care or services to the individual.

This bill would require licensed health care practitioners, as specified, and pharmacists to apply to the Department of Justice to obtain approval to access information stored on the Internet regarding the controlled substance history of a patient under his or her care, and, upon the happening of specified events, to access and consult that information prior to prescribing or dispensing Schedule II, Schedule III, or Schedule IV controlled substances.

(3) Existing law imposes various taxes, including taxes on the privilege of engaging in certain activities. The Fee Collection Procedures Law, the violation of which is a crime, provides procedures for the collection of certain fees and surcharges.

This bill would impose a tax upon qualified manufacturers, as defined, for the privilege of doing business in this state, as specified. This bill would also impose a tax upon specified insurers, as defined, for the privilege of doing business in this state, as specified. The tax would be administered by the State Board of Equalization and would be collected pursuant to the procedures set forth in the Fee Collection Procedures Law. The bill would require the board to deposit all taxes, penalties, and interest collected pursuant to these provisions in the CURES Fund, as provided. Because this bill would expand application of the Fee Collection Procedures Law, the violation of which is a crime, it would impose a state-mandated local program.

(4) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

(5) This bill would declare that it is to take effect immediately as an urgency statute.

Vote: 23. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

P3    1

SECTION 1.  

The Legislature finds and declares all of the
2following:

3(a) The Controlled Substance Utilization Review and Evaluation
4System (CURES) is a valuable investigative, preventive, and
5educational tool for law enforcement, regulatory boards,
6educational researchers, and the health care community. Recent
7budget cuts to the Attorney General’s Division of Law Enforcement
8have resulted in insufficient funding to support the CURES
9Prescription Drug Monitoring Program (PDMP). The PDMP is
10necessary to ensure health care professionals have the necessary
11data to make informed treatment decisions and to allow law
12enforcement to investigate diversion of prescription drugs. Without
13a dedicated funding source, the CURES PDMP is not sustainable.

14(b) Each year CURES responds to more than 60,000 requests
15from practitioners and pharmacists regarding all of the following:

16(1) Helping identify and deter drug abuse and diversion of
17prescription drugs through accurate and rapid tracking of Schedule
18II, Schedule III, and Schedule IV controlled substances.

19(2) Helping practitioners make better prescribing decisions.

20(3) Helping reduce misuse, abuse, and trafficking of those drugs.

21(c) Schedule II, Schedule III, and Schedule IV controlled
22substances have had deleterious effects on private and public
23interests, including the misuse, abuse, and trafficking in dangerous
24prescription medications resulting in injury and death. It is the
25intent of the Legislature to work with stakeholders to fully fund
P4    1the operation of CURES which seeks to mitigate those deleterious
2effects, and which has proven to be a cost-effective tool to help
3reduce the misuse, abuse, and trafficking of those drugs.

4

SEC. 2.  

Section 805.8 is added to the Business and Professions
5Code
, to read:

6

805.8.  

(a) (1) The Medical Board of California, the Dental
7Board of California, the California State Board of Pharmacy, the
8Veterinary Medical Board, the Board of Registered Nursing, the
9Physician Assistant Committee of the Medical Board of California,
10the Osteopathic Medical Board of California, the State Board of
11Optometry, and the California Board of Podiatric Medicine shall
12increase the licensure, certification, and renewal fees charged to
13practitioners under their supervision who are authorized pursuant
14to Section 11150 of the Health and Safety Code to prescribe or
15dispense Schedule II, Schedule III, or Schedule IV controlled
16substances by up to 1.16 percent annually, but in no case shall the
17fee increase exceed the reasonable costs associated with
18maintaining CURES for the purpose of regulating prescribers and
19dispensers of controlled substances licensed or certificated by these
20boards.

21(2) The California State Board of Pharmacy shall increase the
22licensure, certification, and renewal fees charged to wholesalers
23and nonresident wholesalers of dangerous drugs, licensed pursuant
24to Article 11 (commencing with Section 4160) of Chapter 9, by
25up to 1.16 percent annually, but in no case shall the fee increase
26exceed the reasonable costs associated with maintaining CURES
27for the purpose of regulating wholesalers and nonresident
28wholesalers of dangerous drugs licensed or certificated by that
29board.

30(3) The California State Board of Pharmacy shall increase the
31licensure, certification, and renewal fees charged to veterinary
32food-animal drug retailers, licensed pursuant to Article 15
33(commencing with Section 4196) of Chapter 9, by up to 1.16
34percent annually, but in no case shall the fee increase exceed the
35reasonable costs associated with maintaining CURES for the
36purpose of regulating veterinary food-animal drug retailers licensed
37or certificated by that board.

38(b) The funds collected pursuant to subdivision (a) shall be
39deposited in the CURES accounts, which are hereby created, within
40the Contingent Fund of the Medical Board of California, the State
P5    1Dentistry Fund, the Pharmacy Board Contingent Fund, the
2Veterinary Medical Board Contingent Fund, the Board of
3Registered Nursing Fund, the Osteopathic Medical Board of
4California Contingent Fund, the Optometry Fund, and the Board
5of Podiatric Medicine Fund. Moneys in the CURES accounts of
6each of those funds shall, upon appropriation by the Legislature,
7be available to the Department of Justice solely for maintaining
8CURES for the purposes of regulating prescribers and dispensers
9of controlled substances. All moneys received by the Department
10of Justice pursuant to this section shall be deposited in the CURES
11Fund described in Section 11165 of the Health and Safety Code.

12

SEC. 3.  

Section 11165 of the Health and Safety Code is
13amended to read:

14

11165.  

(a) To assist law enforcement and regulatory agencies
15in their efforts to control the diversion and resultant abuse of
16Schedule II, Schedule III, and Schedule IV controlled substances,
17and for statistical analysis, education, and research, the Department
18of Justice shall, contingent upon the availability of adequate funds
19begin delete fromend deletebegin insert in the CURES accounts withinend insert the Contingent Fund of the
20Medical Board of California, the Pharmacy Board Contingent
21Fund, the State Dentistry Fund, the Board of Registered Nursing
22Fund,begin delete andend delete the Osteopathic Medical Board of California Contingent
23Fund,begin insert the Veterinary Medical Board Contingent Fund, the
24Optometry Fund, the Board of Podiatric Medicine Fund, and the
25CURES Fund,end insert
maintain the Controlled Substance Utilization
26Review and Evaluation System (CURES) for the electronic
27monitoring of, and Internet access to information regarding, the
28prescribing and dispensing of Schedule II, Schedule III, and
29Schedule IV controlled substances by all practitioners authorized
30to prescribe or dispense these controlled substances.

31(b) The reporting of Schedule III and Schedule IV controlled
32substance prescriptions to CURES shall be contingent upon the
33availability of adequate fundsbegin delete fromend deletebegin insert forend insert the Department of Justice
34begin insert for the purpose of finding CURESend insert. The department may seek and
35use grant funds to pay the costs incurred from the reporting of
36controlled substance prescriptions to CURES.begin delete Fundsend deletebegin insert The
37department shall make information about the amount and the
38source of all private grant funds it receives for support of CURES
39available to the public. Grant fundsend insert
shall not be appropriated from
40the Contingent Fund of the Medical Board of California, the
P6    1Pharmacy Board Contingent Fund, the State Dentistry Fund, the
2Board of Registered Nursing Fund, the Naturopathic Doctor’s
3Fund, or the Osteopathic Medical Board of California Contingent
4Fund to pay the costs of reporting Schedule III and Schedule IV
5controlled substance prescriptions to CURES.

6(c) CURES shall operate under existing provisions of law to
7safeguard the privacy and confidentiality of patients. Data obtained
8from CURES shall only be provided to appropriate state, local,
9and federal persons or public agencies for disciplinary, civil, or
10criminal purposes and to other agencies or entities, as determined
11by the Department of Justice, for the purpose of educating
12practitioners and others in lieu of disciplinary, civil, or criminal
13actions. Data may be provided to public or private entities, as
14approved by the Department of Justice, for educational, peer
15review, statistical, or research purposes, provided that patient
16information, including any information that may identify the
17patient, is not compromised. Further, data disclosed to any
18individual orbegin delete agencyend deletebegin insert agency,end insert as described in thisbegin delete subdivisionend delete
19begin insert subdivision,end insert shall not be disclosed, sold, or transferred to any third
20party.

21(d) For each prescription for a Schedule II, Schedule III, or
22Schedule IV controlled substance, as defined in the controlled
23substances schedules in federal law and regulations, specifically
24Sections 1308.12, 1308.13, and 1308.14, respectively, of Title 21
25of the Code of Federal Regulations, the dispensing pharmacy or
26clinic shall provide the following information to the Department
27of Justice on a weekly basis and in a format specified by the
28Department of Justice:

29(1) Full name, address, andbegin delete theend delete telephone number of the ultimate
30user or research subject, or contact information as determined by
31the Secretary of the United States Department of Health and Human
32Services, and the gender, and date of birth of the ultimate user.

33(2) The prescriber’s category of licensure and licensebegin delete number;end delete
34begin insert number, theend insert federal controlled substance registrationbegin delete number;end delete
35begin insert number,end insert and the state medical license number of any prescriber
36using the federal controlled substance registration number of a
37government-exempt facility.

38(3) Pharmacy prescription number, license number, and federal
39controlled substance registration number.

P7    1(4) begin deleteNDC (National Drug Code) end deletebegin insertNational Drug Code (NDC) end insert
2number of the controlled substance dispensed.

3(5) Quantity of the controlled substance dispensed.

4(6) begin deleteICD-9 (diagnosis code), end deletebegin insertInternational Statistical
5Classification of Diseases, 9th revision (ICD-9) Code, end insert
if available.

6(7) Number of refills ordered.

7(8) Whether the drug was dispensed as a refill of a prescription
8or as a first-time request.

9(9) Date of origin of the prescription.

10(10) Date of dispensing of the prescription.

11(e) begin deleteThis section shall become operative on January 1, 2005. end deletebegin insertThe
12CURES Fund is hereby established within the State Treasury. The
13CURES Fund shall consist of all funds made available to the
14Department of Justice for the purposeend insert
begin insert of funding CURES. Money
15in the CURES Fund shall, upon appropriation by the Legislature,
16be available for allocation to the Department of Justice for the
17purposeend insert
begin insert of funding CURES.end insert

18

SEC. 4.  

Section 11165.1 of the Health and Safety Code is
19amended to read:

20

11165.1.  

(a) (1) A licensed health care practitioner eligible
21to prescribe Schedule II, Schedule III, or Schedule IV controlled
22substances or a pharmacistbegin delete mayend deletebegin insert shallend insert provide a notarized
23application developed by the Department of Justice to obtain
24approval to access information stored on the Internet regarding
25the controlled substance history of a patient maintained within the
26Department of Justice,begin delete andend deletebegin insert and, upon approval,end insert the department
27begin delete mayend deletebegin insert shallend insert release to that practitioner or pharmacist, the electronic
28history of controlled substances dispensed to an individual under
29his or her care based on data contained in the CURES Prescription
30Drug Monitoring Program (PDMP).

31(A) An application may be denied, or a subscriber may be
32suspended, for reasons which include, but are not limited to, the
33following:

34(i) Materially falsifying an application for a subscriber.

35(ii) Failure to maintain effective controls for access to the patient
36activity report.

37(iii) Suspended or revoked federal Drug Enforcement
38Administration (DEA) registration.

39(iv) Any subscriber who is arrested for a violation of law
40 governing controlled substances or any other law for which the
P8    1possession or use of a controlled substance is an element of the
2crime.

3(v) Any subscriber accessing information for any other reason
4than caring for his or her patients.

5(B) Any authorized subscriber shall notify the Department of
6Justice within 10 days of any changes to the subscriber account.

7(2) To allow sufficient time for licensed health care practitioners
8eligible to prescribe Schedule II, Schedule III, or Schedule IV
9controlled substances and a pharmacist to apply and receive access
10to PDMP, a written request may be made, until July 1, 2012, and
11the Department of Justice may release to that practitioner or
12pharmacist the history of controlled substances dispensed to an
13individual under his or her care based on data contained in CURES.

14(b) Any request for, or release of, a controlled substance history
15pursuant to this section shall be made in accordance with guidelines
16developed by the Department of Justice.

17(c) begin deleteIn end deletebegin insert(1)end insertbegin insertend insertbegin insertUntil the Department of Justice has issued the
18notification described in paragraph (3), in end insert
order to prevent the
19inappropriate, improper, or illegal use of Schedule II, Schedule
20III, or Schedule IV controlled substances, the Department of Justice
21may initiate the referral of the history of controlled substances
22dispensed to an individual based on data contained in CURES to
23licensed health care practitioners, pharmacists, or both, providing
24care or services to the individual.

begin insert

25(2) Upon the Department of Justice issuing the notification
26described in paragraph (3) and approval of the application
27required pursuant to subdivision (a), licensed health care
28practitioners eligible to prescribe Schedule II, Schedule III, or
29Schedule IV controlled substances and pharmacists shall access
30and consult the electronic history of controlled substances
31dispensed to an individual under his or her care prior to
32prescribing or dispensing a Schedule II, Schedule III, or Schedule
33IV controlled substance.

end insert
begin insert

34(3) The Department of Justice shall notify licensed health care
35practitioners and pharmacists who have submitted the application
36required pursuant to subdivision (a) when the department
37determines that CURES is capable of accommodating the mandate
38contained in paragraph (2). The department shall provide a copy
39of the notification to the Secretary of the State, the Secretary of
40the Senate, the Chief Clerk of the Assembly, and the Legislative
P9    1Counsel, and shall post the notification on the department’s
2Internet Web site.

end insert

3(d) The history of controlled substances dispensed to an
4individual based on data contained in CURES that is received by
5a practitioner or pharmacist from the Department of Justice
6pursuant to this section shall be considered medical information
7subject to the provisions of the Confidentiality of Medical
8Information Act contained in Part 2.6 (commencing with Section
956) of Division 1 of the Civil Code.

10(e) Information concerning a patient’s controlled substance
11history provided to a prescriber or pharmacist pursuant to this
12section shall include prescriptions for controlled substances listed
13in Sections 1308.12, 1308.13, and 1308.14 of Title 21 of the Code
14of Federal Regulations.

15

SEC. 5.  

Part 21 (commencing with Section 42001) is added to
16Division 2 of the Revenue and Taxation Code, to read:

17 

18PART 21.  Controlled Substance Utilization
19Review and Evaluation System (CURES) Tax Law

20

 

21

42001.  

For purposes of this part, the following definitions
22apply:

23(a) “Controlled substance ” means a drug, substance, or
24immediate precursor listed in any schedule in Section 11055,
2511056, or 11057 of the Health and Safety Code.

26(b) “Insurer” means a health insurer licensed pursuant to Part
272 (commencing with Section 10110) of Division 2 of the Insurance
28Code, a health care service plan licensed pursuant to the
29Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2
30(commencing with Section 1340) of Division 2 of the Health and
31Safety Code), and a workers’ compensation insurer licensed
32pursuant to Part 3 (commencing with Section 11550) of Division
332 of the Insurance Code.

34(c) “Qualified manufacturer” means a manufacturer of a
35controlled substance doing business in this state, as defined in
36Section 23101, but does not mean a wholesaler or nonresident
37wholesaler of dangerous drugs, regulated pursuant to Article 11
38(commencing with Section 4160) of Chapter 9 of Division 2 of
39the Business and Professions Code, a veterinary food-animal drug
40retailer, regulated pursuant to Article 15 (commencing with Section
P10   14196) of Chapter 9 of Division 2 of the Business and Professions
2Code, or an individual regulated by the Medical Board of
3California, the Dental Board of California, the California State
4Board of Pharmacy, the Veterinary Medical Board, the Board of
5Registered Nursing, the Physician Assistant Committee of the
6Medical Board of California, the Osteopathic Medical Board of
7California, the State Board of Optometry, or the California Board
8of Podiatric Medicine.

9

42003.  

(a) For the privilege of doing business in this state, an
10annual tax is hereby imposed on all qualified manufacturers in an
11amount of ____ dollars ($____), for the purpose of establishing
12and maintaining enforcement of the Controlled Substance
13Utilization Review and Evaluation System (CURES), established
14pursuant to Section 11165 of the Health and Safety Code.

15(b) For the privilege of doing business in this state, a tax is
16hereby imposed on a one time basis on all insurers in an amount
17of ____ dollars ($____), for the purpose of upgrading CURES.

18

42005.  

Each qualified manufacturer and insurer shall prepare
19and file with the board a return, in the form prescribed by the board,
20containing information as the board deems necessary or appropriate
21for the proper administration of this part. The return shall be filed
22on or before the last day of the calendar month following the
23calendar quarter to which it relates, together with a remittance
24payable to the board for the amount of tax due for that period.

25

42007.  

The board shall administer and collect the tax imposed
26by this part pursuant to the Fee Collection Procedures Law (Part
2730 (commencing with Section 55001)). For purposes of this part,
28the references in the Fee Collection Procedures Law (Part 30
29(commencing with Section 55001)) to “fee” shall include the tax
30imposed by this part and references to “feepayer” shall include a
31person required to pay the tax imposed by this part.

32

42009.  

All taxes, interest, penalties, and other amounts
33collected pursuant to this part, less refunds and costs of
34administration, shall be deposited into the CURES Fund.

35

42011.  

The board shall prescribe, adopt, and enforce rules and
36regulations relating to the administration and enforcement of this
37part.

38

SEC. 6.  

No reimbursement is required by this act pursuant to
39Section 6 of Article XIII B of the California Constitution because
40the only costs that may be incurred by a local agency or school
P11   1district will be incurred because this act creates a new crime or
2infraction, eliminates a crime or infraction, or changes the penalty
3for a crime or infraction, within the meaning of Section 17556 of
4the Government Code, or changes the definition of a crime within
5the meaning of Section 6 of Article XIII B of the California
6Constitution.

7

SEC. 7.  

This act is an urgency statute necessary for the
8immediate preservation of the public peace, health, or safety within
9the meaning of Article IV of the Constitution and shall go into
10immediate effect. The facts constituting the necessity are:

11In order to protect the public from the continuing threat of
12prescription drug abuse at the earliest possible time, it is necessary
13this act take effect immediately.



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