BILL ANALYSIS Ó AB 623 Page 1 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 properties. AB 623 Page 2 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 AB 623 Page 3 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 drug. 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 treatment. 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. AB 623 Page 4 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 judgment; 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 committee. COMMENTS: 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 AB 623 Page 5 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. 2)BACKGROUND. 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. AB 623 Page 6 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 opioids. 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 manipulated. 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 AB 623 Page 7 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 evolving. 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 abuse. 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 AB 623 Page 8 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 AB 623 Page 9 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 AB 623 Page 10 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 formulations. 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 deterrence. The Pharmaceutical Care Management Association, a national association of pharmacy benefit managers (PBM) states that AB 623 Page 11 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. 6)PREVIOUS LEGISLATION. 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 AB 623 Page 12 (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 Committee. 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 AB 623 Page 13 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 AB 623 Page 14 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. REGISTERED SUPPORT / OPPOSITION: Support Power of Pain Foundation (sponsor) AB 623 Page 15 U.S. Pain Foundation (sponsor) Alliance for Patient Access American GI Forum Biocom 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 AB 623 Page 16 Partnership for Drug Free Kids Peace Officers Research Association of California Opposition California Association of Health Plans California Chamber of Commerce Express Scripts Pharmaceutical Care Management Association Analysis Prepared by:Kelly Green / HEALTH / (916) 319-2097