BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
SB 809 (DeSaulnier and Steinberg) - Controlled substances:
reporting.
Amended: May 14, 2013 Policy Vote: B&P 7-2, G&F 5-2
Urgency: Yes Mandate: Yes
Hearing Date: May 23, 2013 Consultant: Brendan McCarthy
SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
Bill Summary: SB 809 would require various regulating boards
within the Department of Consumer Affairs to increase licensing
fees and would impose a tax on certain drug manufacturers.
Revenues generated would be used to fund system upgrades and
maintenance of an existing system for tracking prescription drug
use and related enforcement activities by the Department of
Justice.
Fiscal Impact:
One-time costs likely in the low millions for the Board of
Equalization to set up billing and collection procedures,
make information technology changes, and train staff
(General Fund). Because these costs will be incurred before
new tax revenues are collected, they will most likely be
funded from the General Fund.
Ongoing revenues from the tax imposed on certain drug
manufacturers of $4.2 million per year (CURES fund),
beginning in 2015.
Ongoing obligations to increase funding for education of
about $2 million per year (General Fund). The bill would
increase tax proceeds, increasing the state's obligation to
provide funding for education under Proposition 98. Because
the intent of the bill is to dedicate all collected revenues
for the operation of CURES, the increased funding obligation
would be an obligation of the General Fund. The actual
amount owed would vary, based on the requirements of
Proposition 98, but would generally be at least 50 percent
of the tax proceeds.
Potential one-time costs in the hundreds of thousands for
SB 809 (DeSaulnier and Steinberg)
Page 1
various professional regulating boards within the Department
of Consumer Affairs to revise regulations to increase
existing fees (various special funds).
Ongoing revenue increase of $800,000 from increases in
various professional licensing fees (various special funds).
One-time costs of about $4.6 million over two years to
continue operation of the existing CURES system and develop
an upgraded system by the Department of Justice (CURES
fund).
Ongoing costs of about $5.2 million per year to maintain
the upgraded CURES and to support enforcement activities by
the Department of Justice (CURES fund).
Background: Under current law, the California Department of
Justice manages the Controlled Substances Utilization Review and
Evaluation System (CURES). This system is used to track
prescriptions of Schedule II, III, and IV drugs. Pharmacies are
required to submit information on those prescriptions when they
are dispensed. Prescribers (such as physicians), law enforcement
personnel, and regulatory agencies are authorized to access
CURES. For example, a physician (who has been approved by the
Department of Justice) can access CURES to review whether a
patient has already been prescribed controlled substances before
issuing a new prescription.
The 2011 Budget Act eliminated General Fund support for CURES.
To date, the Department of Justice has received funding from
licensing boards to maintain the system.
Proposed Law: SB 809 would require various regulating boards
within the Department of Consumer Affairs to increase licensing
fees.
The following boards and committees would be required to
increase licensing and certification fees by up to 1.16% (not to
exceed the reasonable costs of maintaining CURES):
Medical Board of California;
Dental Board of California;
California State Board of Pharmacy (including licensing
fees for pharmacists, drug wholesalers, and veterinary drug
retailers);
SB 809 (DeSaulnier and Steinberg)
Page 2
Veterinary Medical Board;
Board of Registered Nursing;
Physician Assistant Committee of the Medical Board of
California;
Osteopathic Medical Board of California;
State Board of Optometry;
California Board of Podiatric Medicine;
Board of Pharmacy.
The bill would impose a tax on certain manufacturers of Schedule
II, III, and IV drugs. The amount of this tax would be set at
$4.2 million divided by the number of taxed firms, to be
increased annually by inflation. This tax would be imposed
beginning January 1, 2015.
The bill would also authorize health plans and health insurers
to voluntarily contribute to funding CURES.
Revenues generated under the bill are to be used to fund system
upgrades and maintenance of CURES and related enforcement
activities by the Department of Justice.
The bill requires health care practitioners and pharmacists to
register with the Department of Justice to gain access to the
CURES system. (Currently, it is optional for prescribers and
pharmacists to apply for access to CURES.)
Upon notification by the Department of Justice that the CURES
system is capable of accommodating the workload, health care
practitioners and pharmacists would be required to check the
CURES system before prescribing or dispensing Schedule II, III,
or IV drugs.
This bill is an urgency measure.
Related Legislation:
SB 62 (Price) would require coroner's reports from deaths
related to prescription drug use to be transmitted to the
Medical Board. That bill is on this committee's Suspense
File.
SB 670 (Steinberg) provides the Medical Board with
additional authority to investigate allegations of
overprescribing of controlled substances. That bill is on
SB 809 (DeSaulnier and Steinberg)
Page 3
the Senate Floor.
SB 616 (DeSaulnier, 2012) would have increased licensing
fees for prescribers to fund CURES. That bill failed passage
in the Assembly Business, Professions and Consumer
Protection Committee.
SB 1071 (DeSaulnier, 2010) would have imposed a tax on
manufacturers of Schedule II, III, and IV drugs to fund
CURES. That bill failed passage in the Senate Health
Committee.
Staff Comments: Because implementation of the tax on drug
manufacturers would not begin until 2015, the revenues generated
under the bill may not be sufficient to upgrade CURES until that
time.
The only costs that may be incurred by a local agency relate to
crimes and infractions. Under the California Constitution, such
costs are not reimbursable by the state.
Proposed author's amendments: delete the requirement that
prescribers consult CURES before prescribing controlled
substances, require the Medical Board to provide certain
educational materials to physicians and hospitals, and make a
variety of clarifying and technical changes to the bill.