BILL ANALYSIS                                                                                                                                                                                                    

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          Date of Hearing:  April 21, 2015

                            ASSEMBLY COMMITTEE ON HEALTH

                                  Rob Bonta, Chair

          AB 623  
          (Wood) - As Amended March 26, 2015

          SUBJECT:  Abuse-deterrent opioid analgesic drug products.

          SUMMARY:  Prohibits a health care service plan (plan) or health  
          insurer (insurer) from requiring the use of opioid drug products  
          that have no abuse-deterrent properties in order to access  
          abuse-deterrent opioid drug products; requires pharmacists to  
          provide a patient receiving an opioid drug product information  
          about proper storage and disposal of the drug; and, authorizes a  
          provider to prescribe a less than 30-day supply of opioids  
          analgesic drugs.  Specifically, this bill:  

          1)Prohibits, where an abuse-deterrent opioid analgesic drug  
            product is available, a plan or insurer from requiring the use  
            of opioid analgesic drug products without abuse-deterrent  
            properties first before allowing access abuse-deterrent opioid  
            analgesic drug products.

          2)Provides that this bill shall not be construed to prevent a  
            plan or insurer from applying prior authorization requirements  
            to abuse-deterrent opioid analgesic drug products, provided  
            that those same requirements are applied to versions of those  
            opioid analgesic drug products without the abuse-deterrent  


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          3)Defines "abuse-deterrent opioid analgesic drug product" as a  
            brand or generic opioid analgesic drug product approved by the  
            federal Food and Drug Administration (FDA) with  
            abuse-deterrent labeling claims that indicate the drug product  
            is expected to result in a meaningful reduction in abuse.

          4)Defines "opioid analgesic drug product" as a drug product in  
            the opioid analgesic drug class that is prescribed to treat  
            moderate to severe pain, or other conditions, whether in  
            immediate release or extended release or long-acting form and  
            whether or not combined with other drug substances to form a  
            single drug product or dosage form.

          5)Authorizes a health care provider to prescribe a less than  
            30-day supply of an opioid analgesic drug product, and  
            requires a plan or insurer to cover a less-than 30-day supply  
            if otherwise covered.

          6)Requires a pharmacist to inform a patient receiving an opioid  
            analgesic drug product on proper storage and disposal of the  
            drug, and authorizes the information to be provided as part of  
            an oral consultation, as specified.

          EXISTING LAW:  

          1)Establishes the Knox-Keene Health Care Service Plan Act of  
            1975 (Knox-Keene Act), which provides for the licensure and  
            regulation of health care service plans by the Department of  
            Managed Health Care, and provides for the regulation of health  
            insurers by the California Department of Insurance (CDI).

          2)Pursuant to DMHC regulations, states that a plan may require  


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            step therapy and requires a plan to have an expeditious  
            process in place to authorize exceptions to step therapy when  
            medically necessary.

          3)Requires plans and insurers to include information on  
            cost-sharing tiers and utilization controls, including prior  
            authorization or step therapy requirements, for each covered  

          4)Prohibits health plans that cover prescription drugs from  
            limiting or excluding coverage for a drug on the basis that  
            the drug is prescribed for use different from that for which  
            the drug has been approved by the FDA, provided that specified  
            conditions have been met, including that the drug is  
            prescribed by a participating licensed health care  
            professional for the treatment of a chronic and seriously  
            debilitating condition, the drug is medically necessary to  
            treat that condition, and the drug is on the plan formulary.

          5)Prohibits health plans that cover prescription drugs from  
            limiting or excluding coverage for a drug for an enrollee if  
            the drug was previously approved for coverage by the plan for  
            a medical condition of the enrollee and the plan's prescribing  
            provider continues to provide the drug for the medical  
            condition, provided that it is safe and effective for  

          6)Prohibits plans that cover prescription drugs from limiting or  
            excluding coverage for a drug on the basis that the drug is  
            prescribed for a use different from the use for which the drug  
            has been approved by the federal FSA, provided that specified  
            conditions have been met, including that the drug is  
            prescribed by a participating licensed health care  
            professional for the treatment of a chronic and seriously  
            debilitating condition, the drug is medically necessary to  
            treat that condition, and the drug is on the plan formulary.


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          7)Provides for the licensure and regulation of pharmacists by  
            the California Board of Pharmacy.

          8)Requires, under existing regulations, a pharmacist to provide  
            oral consultation to a patient in all care settings under the  
            following circumstances:

             a)   Upon request by the patient;

             b)   Whenever the pharmacist deems a consultation is  
               warranted in the exercise of his or her professional  

             c)   When the prescribed drug has not previously been  
               dispensed to a patient; and,

             d)   When the prescription drug is dispensed that has not  
               been previously dispensed to a patient in the same dosage,  
               strengths, or with the same directions.

          FISCAL EFFECT:  This bill has not yet been analyzed by a fiscal  


          1)PURPOSE OF THIS BILL.  According to the author, not enough is  
            being done to curb the growth of opioid abuse, and health care  
            providers and parents need tools to help guard against the  
            abuse of opioid medication.  The author cites education for  
            patients on the proper storage and disposal of opioids, as  
            well as the development and availability of abuse-deterrent  
            opioids, which are formulated to prevent manipulation of the  
            drug for the purpose of misuse, as strategies that should be  
            encouraged to combat opioid abuse.  The author states that  
            crushed or dissolved opioids account for 30% of opioid abuse,  
            and this form of abuse is what results in the majority of  
            emergency room visits, hospitalizations, and deaths.  The  


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            author states that abuse-deterrent opioids are currently  
            available on the market, that we should allow health care  
            providers to exercise their judgment in prescribing  
            abuse-deterrent opioids currently available on the market  
            without worrying about cost-related hurdles.  The author  
            concludes by stating that the more widespread abuse-deterrent  
            opioids become, the greater positive impact we can have on  
            opioid abuse, and that increased availability of  
            abuse-deterrent opioids and competition in the drug market  
            will lead to reduced cost.  


             a)   Opioids and opioid abuse.  Opioids are a class of  
               narcotic drugs that include medications such as hydrocodone  
               (e.g. Vicodine), oxycodone (e.g., OxyContin, Percocet),  
               morphine (e.g., Kadian, Avinza) codeine, and other related  
               drugs.  Taken as prescribed, opioids can be used to manage  
               pain safely and effectively.  However, opioids may also  
               produce other effects, and according to the National  
               Institute on Drug Abuse (NIDA), some individuals experience  
               a euphoric response to opioid medications since these drugs  
               affect the regions of the brain involving reward response.   

             NIDA states that those who abuse opioids may seek to  
               intensify their experience by taking the drug in ways other  
               than those prescribed.  For example, Oxycontin is an oral  
               medication used to treat moderate to severe pain through a  
               slow, steady release of the opioid. However, NIDA states  
               that people who abuse the drug may crush or dissolve the  
               drug in order snort or inject it, thereby increasing their  
               risk for serious medical complications, including overdose.  
                NIDA states that when abused, even a single large dose of  
               opioids can cause severe respiratory depression and death.


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             According to the California Department of Public Health  
               (DPH), in the past, prescription opioids were prescribed  
               for relieving short-term, acute pain.  However, today, they  
               are increasingly being used for long-term (chronic) pain  
               management. As a result, sales of opioid pain relievers  
               quadrupled in the past 10 years. By 2010, enough opioid  
               pain relievers were sold to medicate every American adult  
               (about 240 million people) every four hours for an entire  
               month.  DPH states that in California, deaths involving  
               opioid prescription medications have increased 16.5% since  
               2006. In 2012, there were more than 1,800 deaths from all  
               types of opioids - 72 percent involved prescription  
             b)   Abuse-deterrent opioids. According to the FDA, opioid  
               products can be abused in a number of ways, including being  
               swallowed whole; crushed in order to be swallowed, snorted,  
               smoked; and, dissolved and injected.  Opioids formulated  
               with abuse-deterrent properties are designed to be more  
               difficult to abuse, while retaining the same clinical  
               effectiveness.  For example, abuse-deterrent opioids may be  
               formulated in ways that prevent chewing, crushing, grating,  
               or grinding.  Others may be formulated with agents that can  
               make the drug resistant to dissolving by turning the drug  
               into a gel-like substance when manipulated.  Other  
               formulations can reduce or defeat euphoria associated with  
               the drug, or result in an unpleasant effect if the drug is  

             The FDA released industry guidance on April 1, 2015 regarding  
               the evaluation and labeling of abuse-deterrent opioids,  
               citing the development of abuse-deterrent opioids as a  
               potentially important step toward the goal of creating  
               safer opioid analgesics, and considers the development of  
               abuse-deterrent opioids a high public health priority.  The  
               FDA also noted that abuse-deterrent technologies developed  
               to date have not yet proven successful at deterring the  


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               most common form of abuse - swallowing a number of intact  
               capsules or tables to achieve a feeling of euphoria.   
               Further, the FDA stated that the science of abuse  
               deterrence is relatively new, and both the formulation  
               technologies and the analytical, clinical, and statistical  
               methods for evaluating the technologies are rapidly  

             In order for a drug to be approved as having an  
               abuse-deterrent formulation, a drug manufacture must seek a  
               label as such from the FDA.  There are four general tiers  
               of labeling claims available to describe the potential  
               abuse-deterrent properties of a drug:  
               i)     Tier 1 - The drug is formulated with barriers to  

               ii)    Tier 2 - The drug is expected to reduce or block the  
                 effect of the opioid when manipulated.

               iii)   Tier 3 - The drug is expected to result in a  
                 meaningful reduction in abuse.

               iv)    Tier 4 - The drug has demonstrated reduced abuse in  
                 the community.

               According to the author, four opioids have been approved  
               for abuse-deterrent labeling, each of which meet the  
               requirements for Tier 3, and there are a number of generic  
               and brand opioid products with different types of  
               abuse-deterrent technologies that seek labeling.  One of  
               the four currently approved is OxyContin, which, in 2010,  
               was reformulated as an abuse-deterrent opioid.  It was  
               approved for ADF labeling in April 2013, indicating that  
               the product has physical and chemical properties that are  
               expected to make abuse via injection difficult and to  


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               reduce abuse via snorting.  OxyContin's manufacturer  
               replaced the original OxyContin formulation in 2010 with  
               its abuse-deterrent formulation, and upon approval of the  
               labeling in 2013, the FDA stopped accepting applications  
               for generics that rely upon the approval of original  
               formulation of OxyContin.  Under this bill, plans would be  
               required to cover abuse-deterrent opioids that meet Tier 3.

               In terms of the public health impact of abuse-deterrent  
               opioids, the author cites research published in 2014 in the  
               journal "Pain Management" which estimated that  
               abuse-deterrent formulation of OxyContin reduced overall  
               health care costs by $430 million annually in the U.S.,  
               with an indirect cost savings of $605 million.  The  
               research study determined that these savings represented  
               1.8% of $58.4 billion in overall societal costs of  
               prescription opioid abuse.  The author also cites a study  
               by Econostats that compared the cost between generic  
               opioids without abuse-deterrent properties, and brand name  
               abuse-deterrent opioids, finding that the price gap between  
               the average patented cost of the brand name opioid and the  
               average generic opioid cost was $140.

               Other research has been conducted on abuse-deterrent  
               opioids, including a study published in the New England  
               Journal of Medicine in 2012 which found that  
               abuse-deterrent formulations successfully reduced abuse of  
               specific opioid, but resulted in increased use of heroin as  
               a replacement for the drug, which could reduce societal  
               cost savings.  
             c)   Legislation in other states.  At least 15 other bills  
               regarding abuse-deterrent opioids have been introduced this  
               year in other states, including Colorado, Connecticut,  
               Florida, Kansas, Maryland, Mississippi, Oklahoma, Rhode  
               Island, Tennessee, Vermont, and Virginia.  In 2014,  
               legislation on this topic was introduced in New Jersey.   
               The requirements of the bills vary across states, with some  


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               bills containing similar requirements as those proposed in  
               this bill, but overall, the bills aim to expand coverage  
               and access to abuse-deterrent opioids.

             d)   Step Therapy.  Step therapy is a utilization management  
               technique sometimes applied to prescription drugs by a  
               health plan or insurer.  Health plans and insurers employ  
               utilization management for a variety of reasons, including  
               clinical considerations, and to control the cost of  
               prescription drugs, particularly in therapeutic classes  
               where generic version of the drugs exist.  When implemented  
               by a health plan or insurer, an enrollee may be required to  
               first try an alternative medication (often a generic  
               alternative) prior to receiving coverage for the final  
               medication (often a brand-name medication).

          3)SUPPORT.  The Power of Pain Foundation (POPF), a co-sponsor of  
            this bill, states that we must find a balance between the pain  
            patients who truly need opioid medication for daily living,  
            and those who are abusing the medication.  POPF states that  
            misuse and abuse of opioids is a growing public health problem  
            that is driving up health care, criminal justice, and  
            workplace costs, and that abuse-deterrent opioids represent a  
            significant opportunity to reduce misuse and abuse.  The  
            Partnership for Drug-Free Kids (Partnership) writes that one  
            in four teens reports having misused or abused a prescription  
            drug, and nearly two-thirds of teens who have abused pain  
            relievers say they get them from family members and friends.   
            Partnership states that insurance coverage for abuse-deterrent  
            opioids will lead to a larger share of abuse-deterrent  
            medications in medicine cabinets, and also encourage companies  
            to innovate in this direction.

          The California Academy of Physician Assistants and the  
            California Academy of Eye Physicians and Surgeons state that  


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            this bill would prevent a plan or insurer from imposing  
            barriers to access to abuse-deterrent opioids, if such drugs  
            are deemed the most appropriate option by the prescriber.  Law  
            enforcement organizations state the abuse of prescription  
            drugs continues to increase, particularly among minors who use  
            medicine meant for therapeutic purposes for non-medical  
            reasons.  The organizations state that this bill represents a  
            significant step forward in the effort to end potentially  
            deadly prescription drug abuse by making meaningful changes to  
            reduce opioid abuse through proper storage and disposal,  
            allowing prescriptions for small quantities, and reducing  
            barriers for doctors to prescribe opioids with abuse-deterrent  
          4)OPPOSITION.  The California Association of Health Plans (CAHP)  
            opposes this bill, stating that it is a coverage mandate for  
            one form of drug, abuse-deterrent opioids, of which expensive  
            brand drug manufacturers dominate the market.  CAHP argues  
            that the California Health Benefits Review Program (CHBRP)  
            should analyze this bill before it is considered, and fiscal  
            estimates of this proposal in other states have demonstrated  
            increases in premiums.    CAHP contends that the value of  
            abuse-deterrent drugs is still being evaluated by the FDA, and  
            while the bill attempts to allow prior authorization for  
            abuse-deterrent products, it only does so if the same  
            protocols apply to the non-abuse products which results in  
            micromanagement of the formulary and could lead the prescriber  
            to default to the more expensive abuse-deterrent option even  
            though the effectiveness is still unproven and may be  
            unnecessary.  CAHP concludes by stating that plans must retain  
            their ability to design drug benefits that are affordable and  
            based on the evidence, particularly as drug costs continue to  
            increase, and that abuse-deterrent drugs are fairly new,  
            costly, and have insufficient evidence about their efficacy in  

          The Pharmaceutical Care Management Association, a national  
            association of pharmacy benefit managers (PBM) states that  


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            this bill is part of a nationwide effort to force the use of  
            abuse-deterrent opioids by disallowing generic substitutions,  
            but that abuse-deterrent formulations are not a quick fix for  
            opioid abuse and will raise costs.  Express Scripts, a  
            pharmacy benefit manager, estimates that abuse-deterrent  
            opioids cost about three times as much as non-abuse-deterrent  
            agents, and that the bill would restrict them from using step  
            therapy to promote the use of lower cost, equally effective  
            generics before more expensive brand medications.

          5)RELATED LEGISLATION.  AB 73 (Waldron) provides that drugs in  
            specified therapeutic drug classes that are prescribed by a  
            Medi-Cal beneficiary's treating provider are covered Medi-Cal  
            benefits, and require that a Medi-Cal managed care plan cover  
            the drug upon demonstration by the provider that the drug is  
            medically necessary and consistent with federal rules and  
            regulations for labeling and use.  AB 73 is pending in the  
            Assembly Health Committee. 


             a)   AB 1814 (Waldron) from 2014 would have established that  
               a prescriber's reasonable professional judgment prevails  
               over the policies and utilization controls of the Medi-Cal  
               program, including the utilization controls of a Medi-Cal  
               managed care plan, in prescribing a pharmaceutical from  
               specified therapeutic drug classes.  This bill was held in  
               the Assembly Appropriations Committee.

             b)   AB 831 (Bloom) from 2013 would have required, until  
               January 1, 2016, the California Health and Human Services  
               Agency (CHHSA) to convene a temporary working group to  
               develop a state plan to reduce the rate of fatal drug  
               overdoses and appropriates $500,000 from the General Fund  


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               (GF) to CHHSA to provide grants to local agencies to  
               implement drug overdose prevention and response programs.   
               This bill was held in the Assembly Appropriations  

             c)   AB 889 (Frazier) of 2013 would have prohibited a plan  
               and insurer that provides coverage for medications pursuant  
               to step therapy or fail first protocol from requiring an  
               enrollee or insured to try and fail more than two  
               medications before allowing the enrollee or insured access  
               to the medication originally prescribed by their provider,  
               and would have required plans and insurers to have an  
               expeditious process in place for step therapy exceptions  
               and that the duration of step therapy be consistent with  
               up-to-date evidence-based outcomes and current published  
               peer-reviewed medical and pharmaceutical literature.  This  
               bill was held in the Senate Appropriations Committee.

             d)   AB 369 (Huffman) of 2012 would have prohibited plans and  
                                          insurers that restrict medications for the treatment of  
               pain from requiring a patient to try and fail on more than  
               two pain medications before allowing the patient access to  
               the pain medication, or its generic equivalent, prescribed  
               by his or her physician.  This bill was vetoed with the  
               Governor's veto message stating that a doctor's judgment  
               and a health plan's clinical protocols have a role in  
               ensuring prudent prescribing of pain medications, and any  
               limitations on the practice of step therapy should better  
               reflect a health plan or insurer's legitimate role in  
               determining the allowable steps.  

             e)   AB 1826 (Huffman) of 2010 would have required a plan or  
               insurer that covers prescription drug benefits to provide  
               coverage for a drug that has been prescribed for the  
               treatment of pain without first requiring the enrollee or  
               insured to use an alternative drug or product.  This bill  


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               was held in the Senate Appropriations Committee.

             f)   AB 1144 (Price) of 2009 would have required plans and  
               insurers to report to DMHC and CDI specified information  
               related to chronic pain medication management, including  
               when the plan or insurer requires an enroll to use of more  
               than two formulary alternative medications prior to  
               providing access to a pain medication prescribed by a  
               provider, or to use pain medication other than what was  
               prescribed for more than seven days prior to providing  
               access to the prescribed pain medication.  This bill was  
               held in the Assembly Appropriations Committee.

          7)POLICY COMMENTS.

             a)   Bill will be reviewed by CHBRP.  The committee submitted  
               a request to CHBRP, housed within the University of  
               California, to review this bill and perform an analysis of  
               the clinical efficacy, cost-effectiveness, and public  
               health impact of its provisions.  CHBRP is established in  
               state statute to assess legislation that proposes or  
               repeals a mandated benefit or service for public health,  
               medical and financial impact.  Committee rules provide that  
               the committee may not hear such bills until CHBRP's  
               assessment is received and has been reviewed by committee  
               staff.  Since this bill does not propose a mandate for a  
               new benefit, but rather would require plans and insurers to  
               cover a different formulation of a drug that is already  
               covered, this bill may be heard by the committee without  
               the CHBRP analysis.

             CHBRP's independent analysis will likely provide valuable  
               information about the potential impact of this bill and  
               inform the Legislature on key policy questions regarding  


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               the bill.  For example, as a part of its role in  
               determining the cost-effectiveness and public health  
               impacts of the bill, the CHBRP analysis may estimate the  
               cost implications of requiring brand name abuse-deterrent  
               opioids over generic opioids without abuse-deterrent  
               properties.  Additionally, the bill would not require  
               abuse-deterrent drugs to actually demonstrate reduced abuse  
               in the community before requiring plans to cover them where  
               available.  As such, the CHBRP analysis may provide insight  
               into the actual or potential public health impact of  
               abuse-deterrent opioids in the community through an  
               evaluation of a broader set of available evidence. 
             b)   Bill would impact Medi-Cal managed care plans.  Most  
               Medi-Cal managed care plans are Knox-Keene licensed, and,  
               as such, will have to meet the requirements of this bill.  

             c)   Current law does not prohibit providers from prescribing  
               a less than 30-day supply of opioids.  This bill would  
               authorize a provider to prescribe a less than 30-day supply  
               of opioids.  It does not appear that there are any  
               provisions in statute that would prevent providers from  
               doing this today.  

          8)DOUBLE REFERRED.  This bill is double referred. Upon passage  
            by this Committee, it will be referred to the Assembly  
            Committee on Business and Professions.



          Power of Pain Foundation (sponsor)


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          U.S. Pain Foundation (sponsor)

          Alliance for Patient Access

          American GI Forum

          California Academy of Eye Physicians and Surgeons

          California Academy of Physician Assistants

          California Healthcare Institute

          California Hepatitis C Task Force

          California Pharmacists Association

          California Police Chiefs Association

          California State Sheriff's Association

          Familia Unida

          Neuropathy Action Foundation


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          Partnership for Drug Free Kids

          Peace Officers Research Association of California


          California Association of Health Plans

          California Chamber of Commerce

          Express Scripts

          Pharmaceutical Care Management Association

          Analysis Prepared by:Kelly Green / HEALTH / (916) 319-2097