BILL ANALYSIS Ó AB 1069 Page 1 Date of Hearing: May 5, 2015 ASSEMBLY COMMITTEE ON HEALTH Rob Bonta, Chair AB 1069 (Gordon) - As Amended March 26, 2015 SUBJECT: Prescription drugs: collection and distribution program. SUMMARY: Modifies the handling and repackaging requirements for donated pharmaceuticals at voluntary, county-operated prescription drug collection and distribution programs. EXISTING LAW: 1)Establishes a voluntary, county-operated prescription drug collection and distribution program (Program) to distribute surplus medications to persons in need of financial assistance to ensure access to necessary pharmaceutical therapies. 2)Requires a county to establish written procedures for its Program including, at a minimum, the following: a) Establishing eligibility for medically indigent patients AB 1069 Page 2 who may participate in the Program; b) Ensuring that patients eligible for the program are not charged for any medications provided under the Program; c) Developing a formulary of medications appropriate for the Program; d) Ensuring proper safety and management of any medications collected by and maintained under the authority of a participating entity; and, e) Ensuring the privacy of individuals for whom the medication was originally prescribed. 3)Establishes a licensure and regulatory framework for a "surplus medication collection and distribution intermediary" (SMCDI) to facilitate the donation of surplus medications in California. 4)Specifies that only medication that is donated in unopened, tamper-evident packaging or modified unit dose containers that meet specified standards is eligible for donation to the program, provided that lot numbers and expiration dates are affixed; and, prohibits medication donated in opened containers from being dispensed by the program. AB 1069 Page 3 5)Establishes the California Board of Pharmacy (BOP) to regulate the practice of pharmacy and enforce the pharmacy law. Authorizes the BOP to adopt rules and regulations pertaining to establishments wherein any drug or device is compounded, prepared, furnished, or dispensed. 6)Requires, under federal law, all prescription drugs for human use be labeled with specific information including, but not limited to, the recommended or usual dosage, the active ingredients, and an identifying lot or control number from which it is possible to determine the complete manufacturing history of the package of the drug. FISCAL EFFECT: None. COMMENTS: 1)PURPOSE OF THIS BILL. The author states that this bill is necessary to improve current and future Programs by making four necessary operational changes which would allow for the packaging of medications in advance, address the handling of recalls, allow for transfers to non-adjacent counties, and define tamper-evident packaging in state law. When the Program was initially enacted, it was one of the first in the country and had few examples to draw from. The Program has been operational for almost five years and has provided enough medications to fill over 30,000 prescriptions. According to the author, it has become evident that improvements are needed to help streamline the program's operations, encourage additional counties to participate, and help more low-income Californians get the medicine that they need to stay healthy. AB 1069 Page 4 2)BACKGROUND. The Program was created by SB 798 (Simitian), Chapter 444, Statutes of 2005, and SB 1329 (Simitian), Chapter 709, Statutes of 2012, which authorizes counties to establish a system to facilitate the collection and distribution of surplus unused medications to medically indigent persons. To date, two counties in California (Santa Clara and San Mateo) have established a Program through local ordinance, although the Santa Clara Program is the only current operational program. Supporting Initiatives to Redistribute Unused Medicine (SIRUM), the sponsor of this bill, is a tax-exempt nonprofit organization that connects safety-net clinics with unexpired, unopened donated drugs from suppliers, pharmacies, and health facilities. SIRUM works with Santa Clara County through their Program. SIRUM has reported that over 150 participating health facilities currently donate eligible medication. An October 2013 California Healthline report stated that, to date, SIRUM had administered the redistribution of 444,380 units of medicine worth about $1.5 million wholesale. 3)Similar Programs in Other States. According to the National Conference of State Legislatures, as of January 2015, at least 38 states and Guam have enacted laws and programs which are similar to the Program a county may establish under current California law. While many other state programs exist at the state level or as part of a statewide effort, California is unique in that a Program is established at the county level. Virtually all laws across states include some restrictions designed to assure purity, safety and freshness of the products. Unless otherwise noted, all programs require: a) Donated drugs must not be expired and must have a AB 1069 Page 5 verified future expiration date; b) Controlled substances defined by the DEA must be excluded; c) A state-licensed pharmacist or pharmacy must be part of the verification and distribution process; and, d) Each patient receiving a drug must have a valid prescription form. 4)SUPPORT. SIRUM, sponsor of this bill, states that this bill will increase access to necessary, and in many cases life-sustaining, prescription drugs to medically indigent Californians while at the same time reducing the environmental impact of pharmaceutical waste. SIRUM states that with shrinking budgets for the healthcare safety net and rising healthcare costs for all Californians, enacting this bill would allow California to maximize quality patient care by reducing the financial burden of pharmaceutical acquisitions and promote environmentally sustainable healthcare practices. The Santa Clara County Board of Supervisors states that improving this program would encourage more counties to consider implementation of a drug collection and distribution program. 5)OPPOSITION. The BOP opposes this bill because it would create conflicts between state and federal law. Regulation of drug distribution is complex, with a myriad of state and federal laws designed to ensure the safety and efficacy of prescription drugs. BOP states that they understand the AB 1069 Page 6 author's intent to address the needs of indigent patients to secure access to medications; however, this bill in its current form eliminates existing patient protections established in state and federal law and, if improperly done, could harm patients. 6)PREVIOUS LEGISLATION. a) AB 467 (Stone), Chapter 10, Statutes of 2014, establishes a license and regulatory framework for an SMCDI to facilitate the donation of surplus medications in California. b) SB 1329 expands the types of entities that can donate and dispense medication in the Program that provides donated medication to medically indigent patients, and allows counties to establish a program through an action by the county board or through an action of the public health officer of the county. c) SB 798 establishes a voluntary drug collection and distribution program to allow surplus medications to be shared with persons in need of financial assistance. 7)POLICY COMMENTS: a) Repackaging is not appropriate for all drugs. While the language of this bill intends to make the process of repackaging faster for pharmacists and waiting patients, it fails to address concerns that some classes of drugs should not be repackaged. Due to their chemical structure, some drugs may degrade when exposed to light or oxygen, and potentially lose efficacy each time they are repackaged. AB 1069 Page 7 Moving forward, the author may wish to work with BOP to clarify certain drug classes which should have limited handling and repackaging. b) There is only one county currently participating. Current law limits transfers of donated drugs to adjacent counties. This bill would remove that limitation, allowing transfer to any other county-operated pharmacy in the state. Since there is currently only one county operating a drug collection and redistribution pharmacy, the Committee may wish to consider whether this change is premature. 8)SUGGESTED AMENDMENTS. a) Tamper-evident packaging definition is problematic. The definition created in this bill would be in conflict with federal law. That provision of this bill should be stricken. b) Lot numbers are required under federal law. Provisions of this bill that would allow participating entities to hold and redistribute medications without lot numbers may be in conflict with federal law. Lot numbers are necessary, in case of recalls, to be able to track the entire manufacturing history and chain of custody of a medicine. Provisions of the bill removing the requirements for lot numbers should be stricken. c) The number of times medicine is repackaged should be limited. Current law requires pharmacies to repackage donated drugs before distributing to new patients. The sponsors state that repackaging while the patient waits is unduly time consuming. However, there are concerns that AB 1069 Page 8 the repackaging provisions of this bill are too vague. The author should amend the bill to limit the number of times medication can be repackaged. REGISTERED SUPPORT / OPPOSITION: Support Supporting Initiatives to Redistribute Unused Medicine (sponsor) California Association of Health Facilities California Chronic Care Coalition (in concept) Santa Clara County Board of Supervisors Opposition California State Board of Pharmacy (unless amended) Analysis Prepared by:Dharia McGrew / HEALTH / (916) 319-2097 AB 1069 Page 9