BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON
          BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
                              Senator Jerry Hill, Chair
                                2015 - 2016  Regular 

          Bill No:            AB 1069         Hearing Date:    July 6,  
          2015
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          |Author:   |Gordon                                                |
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          |Version:  |July 1, 2015    Amended                               |
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          |Urgency:  |No                     |Fiscal:    |No               |
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          |Consultant|Sarah Mason                                           |
          |:         |                                                      |
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              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) Provides for the practice of pharmacy and licensing and  
             regulation of pharmacies and pharmacists in the Pharmacy Law  
             by the Board of Pharmacy (Board) and within the Department of  
             Consumer Affairs (DCA).

          2) Exempts from the definition of manufacturer in Pharmacy Law a  
             pharmacy that, at a patient's request, repackages a drug  
             previously dispensed to the patient or to the patient's  
             agent, pursuant to a prescription.  (Business and Professions  
             Code (BPC) § 4033 (a) (3))

          3) Defines "repackager" as a person or entity that is registered  
             with the federal FDA as a repackager and operates an  
             establishment that packages finished drugs from bulk or that  
             repackages dangerous drugs into different containers,  
             excluding shipping containers.  (BPC § 4044)

          4) Establishes a licensure category under the authority of the  
             Board for a "surplus medication collection and distribution  







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             intermediary" (Intermediary) operating for the purpose of  
             facilitating the donation of medications to, or transfer of  
             medications between, participating entities under a county's  
             unused medication repository and distribution program  
             (Program).  (BPC § 4169.5)

          5) Defines "donor organization" as any of the following health  
             and care facilities that may donate centrally stored unused  
             medications under the Program:

             a)   A licensed general acute care hospital.

             b)   A licensed acute psychiatric hospital.

             c)   A licensed skilled nursing facility, including a skilled  
               nursing facility designated as an institution for mental  
               disease.

             d)   A licensed intermediate care facility.

             e)   A licensed intermediate care facility/developmentally  
               disabled-rehabilitative facility.

             f)   A licensed intermediate care facility/developmentally  
               disabled-nursing facility.

             g)   A licensed correctional treatment center.

             h)   A licensed psychiatric health facility.

             i)   A licensed chemical dependency recovery hospital.

             j)   A licensed residential care facility for the elderly  
               with 16 or more residents.

             aa)  An approved mental health rehabilitation center. (Id.)

          6)Prohibits an Intermediary from taking possession, custody, or  
            control of dangerous drugs and devices. (Id.)

          7)Requires an Intermediary to ensure that notification is  
            provided to participating entities that a package has been  
            shipped, when the surplus medication collection and  
            distribution intermediary has knowledge of the shipment and  








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            provided logistical support to facilitate a shipment directly  
            from a donor organization. (Id.)

          8)Establishes the Sherman Food, Drug, and Cosmetic Law (Sherman  
            Law), administered by the State Department of Public Health,  
            which regulates the packaging, labeling, and advertising of  
            drugs and devices. (Health and Safety Code (HSC) §§ 109875 et  
            seq.)

          9)Defines "manufacture" with the Sherman Law as the preparation,  
            compounding, propagation, processing, or fabrication of any  
            food, drug, device, or cosmetic. The term "manufacture"  
            includes repackaging or otherwise changing the container,  
            wrapper, or labeling of any food, drug, device, or cosmetic in  
            furtherance of the distribution of the food, drug, device, or  
            cosmetic. The term "manufacture" does not include repackaging  
            from a bulk container by a retailer at the time of sale to its  
            ultimate consumer.  (HSC § 109970) 

          10)Establishes a voluntary Program for the purpose of  
            distributing surplus medications to persons in need of  
            financial assistance to ensure access to necessary  
            pharmaceutical therapies.  (HSC § 150200-150207)

          11)Authorizes a county to establish a Program, by an action of  
            the county board of supervisors or by an action of the public  
            health officer of the county, as directed by the county board  
            of supervisors.  Requires the county to notify the Board  
            within 30 days from the date it establishes a Program.  (HSC §  
            150204)

          12) Provides for the following related to medication donated to  
            the Program:  (Id)

             a)   The medication shall not be a controlled substance.

             b)   The medication shall not have been adulterated,  
               misbranded, or stored under conditions contrary to  
               standards set by the United States Pharmacopoeia (USP) or  
               the product manufacturer.

             c)   The medication shall not have been in the possession of  
               a patient or any individual member of the public, and in  
               the case of medications donated by a health or care  








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               facility, shall have been under the control of a staff  
               member of the health or care facility who is licensed in  
               California as a health care professional or has completed,  
               at a minimum, certain training requirements.

             d)   Only medication that is donated in unopened,  
               tamper-evident packaging or modified unit dose containers  
               that meet USP standards is eligible for donation to the  
               Program, provided lot numbers and expiration dates are  
               affixed.  Medication donated in opened containers shall not  
               be dispensed by the Program and once identified, shall be  
               quarantined immediately and handled and disposed of in  
               accordance with the Medical Waste Management Act.

             e)   A pharmacist or physician at a participating entity  
               shall use his or her professional judgment in determining  
               whether donated medication meets certain standards before  
               accepting or dispensing any medication under the Program.

             f)   A pharmacist or physician shall adhere to standard  
               pharmacy practices, as required by state and federal law,  
               when dispensing all medications.

             g)   Medication that is donated to the Program shall either  
               be dispensed to an eligible patient, destroyed, returned to  
               a reverse distributor or licensed waste hauler or  
               transferred to another participating entity within the  
               county to be dispensed to eligible patients.  Medication  
               that is donated shall not be transferred by any  
               participating entity more than once, and after it has been  
               transferred, shall be dispensed to an eligible patient,  
               destroyed, or returned to a reverse distributor or licensed  
               waste hauler.  Medication transferred pursuant to this  
               paragraph shall be transferred with documentation that  
               identifies the drug name, strength, and quantity of the  
               medication, and the donation facility from where the  
               medication originated shall be identified on medication  
               packaging or in accompanying documentation. 

             h)   Medication that is donated to the Program that does not  
               meet the above requirements shall not be distributed or  
               transferred under this program and shall be either  
               destroyed or returned to a reverse distributor. 









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             i)   Medication donated to the Program shall be maintained in  
               the donated packaging units until dispensed to an eligible  
               patient under this program, who presents a valid  
               prescription. When dispensed to an eligible patient under  
               the Program, the medication shall be in a new and properly  
               labeled container, specific to the eligible patient and  
               ensuring the privacy of the individuals for whom the  
               medication was initially dispensed. Expired medication  
               shall not be dispensed.

             j)   Medication donated to the Program shall be segregated  
               from the participating entity's other drug stock by  
               physical means, for purposes including, but not limited to,  
               inventory, accounting, and inspection.

             aa)  A participating entity shall keep complete records of  
               the acquisition and disposition of medication donated to,  
               and transferred, dispensed, and destroyed under the  
               Program. These records shall be kept separate from the  
               participating entity's other acquisition and disposition  
               records and be readily retrievable.

             bb)  Local and county protocols established conform to the  
               Pharmacy Law regarding packaging, transporting, storing,  
               and dispensing all medications.

             cc)  County protocols established for packaging,  
               transporting, storing, and dispensing medications that  
               require refrigeration, including, but not limited to, any  
               biological product as defined in Section 351 of the Public  
               Health Service Act (42 U.S.C. Sec. 262), an intravenously  
               injected drug, or an infused drug, shall include specific  
               procedures to ensure that these medications are packaged,  
               transported, stored, and dispensed at appropriate  
               temperatures and in accordance with USP standards and the  
               Pharmacy Law.

             dd)  A participating entity shall follow the same procedural  
               drug pedigree requirements for donated drugs as it would  
               follow for drugs purchased from a wholesaler or directly  
               from a drug manufacturer. 

          1)Establishes the United States Food and Drug Administration  
            (FDA) to protect the public health by assuring the safety,  








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            effectiveness, quality, and security of human and veterinary  
            drugs, vaccines and other biological products, and medical  
            devices through the Food, Drug, and Cosmetic Act (FDCA).  (21  
            United States Code (USC) 301 et seq.)

          14)Establishes the Drug Supply Chain Security Act (Act), as part  
             of the Drug Quality and Security Act (DQSA), which outlines  
             steps to build an electronic, interoperable system to  
             identify and trace certain prescription drugs as they are  
             distributed in the United States.  (21 USC 351 et seq.)

          This bill:

          1) Authorizes a participating entity to transfer eligible  
             medication that has been donated to a Program to a  
             participating entity in another county that has adopted a  
             Program.

          2) Authorizes a pharmacy to transfer up to fifteen percent of  
             its donated medications annually.

          3) Authorizes donated medication to be repackaged up to two  
             times but does not require that donated medication must be  
             repackaged two times.  Requires the following safeguards to  
             be met when donated medication is repackaged:

             a)   Medication shall be repackaged into a container than  
               holds an individual prescription for a supply of up to 90  
               days or less. 

             b)   Repackaged medication shall be labeled with all  
               applicable lot numbers. 

             c)   Repackaged medication shall be labeled with the earliest  
               expiration date. 

             d)   Repackaged medication shall be identifiable as donated  
               medication. 

             e)   Repackaged medication shall be labeled with the number  
               of times that medication has been repackaged.

          4) Makes technical changes.









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          FISCAL  
          EFFECT:  Unknown.  This bill is not keyed "fiscal" by  
          Legislative Counsel.


          COMMENTS:
          
          1. Purpose.  This measure is sponsored by  Supporting Initiatives  
             to Redistribute Unused Medicine  (SIRUM).  According to the  
             Author, "because of the voluntary drug repository and  
             distribution program's operational requirements, Santa Clara  
             County is currently the only county with an active program.  
             When the program was initially enacted, it was one of the  
             first in the country and had few examples to draw from. Now  
             that the voluntary drug repository and distribution program  
             has been operational for almost 5 years and has provided  
             enough medications to fill over 30,000 prescriptions, 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."  
             
             According to the Author, this bill makes two operational  
             changes that would improve the voluntary drug repository and  
             distribution program, specifically allowing for transfers of  
             eligible donated medication from one county to another,  
             regardless of whether the counties are adjacent as well as  
             allowing for medication to be "repackaged" in advance.  

             The Author notes that under existing law, transfers between  
             participating counties are only allowed when the counties are  
             adjacent. Currently, only Santa Clara County operates a drug  
             repository and distribution program, however, the Author  
             states that in the future as counties establish the program,  
             they would be limited to transfers if the counties are not  
             adjacent. According to the Author, this restriction is  
             unnecessary and can be viewed as a disincentive for counties  
             looking to establish the program. The Author states that this  
             bill removes the barrier by enabling transfers between  
             participating counties that have established the program  
             regardless of whether or not the counties are adjacent.









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             According to the Author, under the current law, participating  
             entities must repackage medications in a new container prior  
             to dispensing to a patient, but cannot do this in advance.   
             The Author states that repackaging donated medicine is very  
             time-consuming because most medicine comes in unit-dose  
             packaging, which means each pill needs to be individually  
             popped out and placed in a new container.  The Author is  
             concerned that this currently must be done while the patient  
             waits and that allowing participating entities to repackage  
             the medications in advance alleviates the time pressure on  
             the pharmacist and prevents the patient from a needlessly  
             long wait.  The Author states that this bill would also  
             prohibit donated medication from being repackaged more than  
             two times so that prescription drugs which require limited  
             handling are not needlessly repackaged.

          2. Background.  The issue of rising prescription drug costs,  
             coupled with concerns about methods for disposal of unused or  
             expired medication has led to efforts throughout the nation  
             to reuse or recycle medication from certain, controlled  
             health care settings and in turn make that medication  
             available to indigent patients.  
              
             For many years, a common practice at many health care  
             facilities has been to dispose of unused pharmaceuticals by  
             flushing them down the toilet or pouring them down the drain,  
             which in turn impacts water quality and water supply.   
             According to a report by the Environmental Protection Agency  
             (EPA), Unused Pharmaceuticals in the Health Care Industry,  
             this practice stems from certain regulations governing  
             acceptable methods for destroying unused drugs, as well as  
             factors like size, ease and access of disposal and cost.   
             Certain federal regulations constrain how some medications  
             are destroyed or disposed, including the Controlled  
             Substances Act (which includes disposal down the drain as an  
             acceptable destruction option), Resource Conservation and  
             Recovery Act (which requires certain types of medication and  
             other hazardous wastes to be transported in approved  
             containers to permitted hazardous waste disposal facilities  
             by a hazardous waste transporter, a costly effort for many  
             health facilities) and the Health Insurance Portability and  
             Accountability Act (which requires long-term care facilities  
             to destroy all pharmaceutical labels that contain personal  
             information).  The report states that some facilities are  








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             flushing to sewers as a primary means of disposal because it  
             is easy and accessible, and in the past, public health  
             agencies and health-related organizations advised the public  
             to destroy unused medications this way as well.           

          3. California's Efforts to Donate Unused Medication.   SB 798   
             (Simitian, Chapter 444, Statutes of 2005) took effect in  
             2006, authorizing California counties to establish a "surplus  
             prescription drug collection and distribution program"  
             (Program) for the distribution of unused, unexpired  
             medication to medically indigent patients.  Under the  
             Program, counties could adopt an ordinance to establish such  
             a Program, under which skilled nursing facilities (SNFs), and  
             SNFs that are institutions for mental disease, drug  
             wholesalers, and drug manufacturers could donate unused  
             medications to county-owned pharmacies, or pharmacies that  
             contract with the county for dispensing to medically indigent  
             patients free of charge.  Prior to the enactment of SB 798,  
             SNFs were required to either destroy the drugs in the  
             presence of a pharmacist or nurse, or return the drugs to the  
             issuing pharmacy (if unopened and in a sealed container) for  
             disposition.  

              SB 1329  (Simitian, Chapter 709, Statutes of 2012) made a  
             number of changes to the way a Program could be authorized  
             and the entities eligible to donate medications under a  
             Program.   The bill authorized a county public health  
             officer, as delegated by a county board of supervisors, to  
             implement a Program, in addition to Program implementation  
             via county ordinance as authorized in SB 798.  SB 1329 also  
             added several categories of licensed health care facilities  
             that may donate medications.  The bill also allowed both  
             primary care clinic pharmacies and primary care clinics that  
             have Board licensees, to administer and dispense medication,  
             provided these Board licensees are in good standing with the  
             Board.  
             SB 1329 established procedures relating to county and Board  
             approval of participating entities, as well as authority for  
             a county and the Board to prohibit a certain entity from  
             participating in a Program.  

             In 2013,  AB 467  (Stone, Chapter 10, Statutes of 2014)  
             established a licensure category in the Pharmacy Law for a  
             surplus medication collection and distribution Intermediary  








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             like SIRUM.  The license requires an Intermediary to apply to  
             the Board, provide certain information, pay a fee and  
             maintain three years of complete records for which it  
             facilitated the donation of medications to, or transfer of  
             medications between, participating entities under the  
             Program.  AB 467 also expressly exempted an Intermediary  
             licensee from licensure as a wholesaler.  To date, there is  
             no licensed intermediary in the state.  

             Two counties in California (Santa Clara and San Mateo) have  
             established a Program through ordinance, although the Santa  
             Clara Program is the only current operational program.  As a  
             result of changes in SB 1329, medication can be donated from  
             a number of organizations, facilities and entities throughout  
             the state, but the only recipients of donated medications  
             must be located within Santa Clara County.  Program efforts  
             in Santa Clara County are coordinated by SIRUM.

          4. Similar Programs in Other States.  According to the National  
             Conference of State Legislatures (NCSL), at least 38 states  
             and Guam have enacted similar laws and programs which are  
             similar to the Program a county may establish under current  
             California law.  While not all authorized programs are  
             operational, California is unique in that a Program is  
             established at the county level, while many other state  
             programs exist at the state level or as part of a statewide  
             effort. 

             The majority of laws throughout the nation authorizing the  
             creation of a Program have the following characteristics: 

                       Authorize the return of prescription drugs in  
                  single use or sealed packaging from state programs,  
                  nursing homes and other medical facilities.

                       Provisions in place for the financial terms of the  
                  donations or regulating sales.

                       Restrictions are in place aimed at assuring  
                  purity, safety and freshness of the products.

             According to NCSL,  all  Programs provide that: 

                       Donated drugs must not be expired and must have a  








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                  verified future expiration date.

                       Controlled substances defined by the DEA must be  
                  excluded.

                       A state-licensed pharmacist or pharmacy must be  
                  part of the verification and distribution process.

                       Each patient receiving a drug must have a valid  
                  prescription form. 

             Examples of similar programs to California's:

                        Connecticut  (HB 6002, 2000) allows long-term care  
                  facilities to donate prescription drug products to  
                  vendor pharmacies or the state Department of Social  
                  Services for drug repackaging and reimbursement.  The  
                  drugs are then donated to eligible patients.  The drugs  
                  must be sealed in individually packaged units, returned  
                  to the vendor pharmacy within the recommended shelf,  
                  inspected by a licensed pharmacist, and cannot be a  
                  controlled substance. 

                        Ohio  (HB 221, 2003) allows any person, drug  
                  manufacturer, or healthcare facility to donate  
                  prescription drugs to any pharmacy, hospital, or  
                  nonprofit clinic that has elected to participate in the  
                  program and meets certain eligibility requirements  
                  established in rules adopted by their Pharmacy Board.  
                  The drugs can then be donated to individuals with a  
                  prescription.  The drugs must be in their original  
                  sealed tamper-evident unit dose packaging. 

                        Arkansas  (HB 1031, 2005) allows a nearby nursing  
                  facility to donate drugs to charitable clinic  
                  pharmacies.  The drugs are then donated to qualified  
                  indigent patients who are not eligible for Medicaid and  
                  cannot afford private health insurance.  The charitable  
                  pharmacy can only accept drugs in their original sealed  
                  and tamper-evidence packaging, and it cannot accept  
                  controlled substances. 

                        Iowa  (HF 724, 2005) allows any person to donate  
                  prescription drugs and supplies to participating medical  








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                  facilities or pharmacies.  The drugs are donated to  
                  individuals or other eligible facilities or pharmacies  
                  for use.  The drugs must be inspected and in their  
                  original sealed and tamper evidence packaging.  The  
                  program is operated by the Iowa Prescription Drug  
                  Corporation, a non-profit organization that contracts  
                  with the State Department of Public Health. 

                        Oklahoma  (SB 1640, 2006) which inspired SB 798,  
                  allows pharmaceutical manufacturers and certain medical  
                  and skilled care facilities to donate unused  
                  prescription drugs to state, county, and city pharmacies  
                  and charitable clinics for the purpose of distributing  
                  the medications.  The drugs are then donated to Oklahoma  
                  residents who are medically indigent. Controlled  
                  substances are not accepted. 

                        Guam  established medicine banks in 2004 which  
                  distribute donated drugs to indigent individuals. 

              Colorado  ,  Florida  ,  Kentucky  ,  Minnesota  , and  Nebraska  have  
             also enacted programs but only for cancer drugs.
              Michigan  ,  New Mexico  ,  Alabama  and I  ndiana  programs allow  
             donations between correctional facilities. 

              New Hampshire  only allows manufacturer's samples to be  
             donated.

              New York  allows donations back to the specific pharmacy that  
             initially distributed it.

              North Carolina  ,  Oregon  ,  South Carolina  , and  West Virginia   
             have state medication repurposing policies but do not allow  
             repositories. 

          1. Drug Supply Regulation.  The Food, Drug and Cosmetic Act  
             (FDCA) was passed by Congress to ensure public confidence in  
             our drug distribution system and to require that drugs are  
             both safe and effective.  The FDCA requires FDA to regulate  
             drug manufacturers and to approve drugs for sale but also  
             requires state governments to regulate the drug distribution  
             system by licensing and regulating drug wholesalers.  In the  
             simplest situation, a manufacturer sells drugs directly to  
             one of the major wholesalers who then sell the drugs to a  








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             hospital or pharmacy.  However, this simple distribution  
             pattern is not the only distribution route taken through the  
             supply chain.  Typically, there is more than one wholesaler  
             who receives the drugs before they reach the pharmacy.  These  
             transactions include transfers between separate facilities  
             owned by major wholesalers and transfers between the major  
             wholesalers and the large drug store chains that have their  
             own wholesale facilities in the company distribution system.   
             Common carriers may transport the drugs between licensed  
             entities and in some cases will store, select and then ship  
             products to pharmacies at the direction of manufacturers.

             The distribution system is further complicated by the  
             practice of "repackaging."  Unlike European countries and  
             Canada, most drugs in the United States are not packaged in a  
             "unit of use" size by the drug manufacturers.  Instead, many  
             drugs are sold by the manufacturers in large bulk containers  
             and then are repackaged by additional companies into smaller  
             containers for resale to the pharmacy.  And the distribution  
             system is complicated yet again by the existence of a  
             "secondary" wholesale market.  "Secondary" wholesalers are  
             smaller companies (often regional down to small family owned  
             companies) that focus their business on selling drugs to  
             other wholesalers and serving smaller niche clients that are  
             not routinely served by the major wholesalers (individual  
             practitioners, small clinics, rural locations, etc.).   
             Drugs routinely move between both primary and secondary  
             wholesalers and from pharmacies to secondary wholesalers as  
             well.  These intermediate steps pose the greatest  
             opportunities for compromising the integrity of the drug  
             distribution system.  The primary threat to system integrity  
             is the introduction of counterfeit products.  Counterfeit  
             drugs are most likely to be introduced into a distribution  
             system that involves multiple wholesalers because drugs are  
             largely untraceable unless they are only handled by a major  
             wholesaler who purchases directly from the manufacturer.   
             Without being able to trace a drug back, there is no  
             assurance to the consumer that the drug has been stored and  
             handled appropriately to preserve its potency and safety.

             In response to a growing threat to the pharmaceutical supply  
             chain from counterfeit, misbranded, adulterated or diverted  
             drugs, California enacted  SB 1307  (Figueroa, Chapter 857,  
             Statutes of 2004) which made comprehensive changes to the  








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             drug distribution system to protect the integrity of the  
             pharmaceutical supply chain.  That legislation enacted the  
             nation's strongest pharmaceutical consumer protection measure  
             and included provisions pertaining to the licensure and  
             qualifications of wholesalers, restrictions on furnishing and  
             the requirement, beginning January 1, 2007, of an electronic  
             pedigree (e-pedigree) to accompany and validate drug  
             distributions for the purpose of tracking each prescription  
             drug at the saleable unit (item) level through the  
             distribution system.  Subsequent Board sponsored legislation,  
              SB 1476  (Figueroa, Chapter 658, Statutes of 2006) delayed the  
             implementation date for the e-pedigree component to January  
             1, 2009 and granted the Board the authority to extend the  
             deadline an additional two years to allow the industry  
             additional time to implement technologies necessary for  
             electronic pedigrees.  In 2008, the Board sponsored SB 1307   
             (Ridley-Thomas, Chapter 713, Statutes of 2008), which amended  
             the law to resolve implementation issues, specifically  
             staggering and extending the implementation dates for 
             e-pedigree compliance, establishing grandfathering of  
             existing stock in the supply chain, allowing the Board to  
             establish criteria for inference, and preempting California's  
             requirements in the event federal legislation is enacted in  
             this area.  Per SB 1307, California's e-pedigree requirements  
             for prescription drugs would have taken effect on a staggered  
             basis from January 1, 2015 through July 1, 2017: 
             50 percent of a manufacturer's products by 2015 would have  
             had to have an 
             e-pedigree; the remaining 50 percent of the manufacturer's  
             products would have had to have an e-pedigree by 2016;  
             wholesalers and repackagers would have had to accept and  
             forward products with the e-pedigree by July 1, 2016 and;  
             pharmacy and pharmacy warehouses would have had to accept and  
             pass e-pedigrees by 
             July 1, 2017.

             In 2013, Congress passed and President Obama signed H.R.  
             3034, the DQSA.  Among other provisions, the bill created a  
             national set of standards to track pharmaceuticals through  
             the distribution chain, aimed at curbing illegal importation  
             and patient harm caused by counterfeit drugs and devices.   
             The new law contained two parts - the Compounding Quality Act  
             and the Drug Supply Chain Security Act.   The Compounding  
             Quality Act created a voluntary compliance regime where  








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             compounding pharmacies that voluntarily register as  
             "outsourcing facilities" will be subject to oversight by the  
             FDA in much of the same way that traditional pharmaceutical  
             manufacturers are monitored.  The Drug Supply Chain Security  
             Act built upon California's e-pedigree efforts to create a  
             national electronic track and trace system for prescription  
             drugs.  The Act replaced the patchwork system adopted by  
             individual states and created a unified national program.  In  
             doing this, the Act explicitly preempted any state's  
             requirements for tracing products through the distribution  
             system that are inconsistent with, more stringent than, or in  
             addition to any of the requirements under the Act,  
             effectively preempting California's e-pedigree law.

          2. Prior Related Legislation.   AB 467  (Stone, Chapter 10,  
             Statutes of 2014) established a licensure category for a  
             surplus medication collection and distribution intermediary  
             established for the purpose of facilitating the donation of  
             medications to, or transfer of medications between,  
             participating entities under a county's unused medication  
             repository and distribution program.     
             
              SB 1329  (Simitian, Chapter 709, Statutes of 2012) revised and  
             recasted provisions authorizing a county to establish a drug  
             repository and distribution program, to authorize a program  
             to be established by an action of the county board of  
             supervisors, or by the county public health officer, as  
             specified and expanded the types of entities that are  
             eligible to participate in a program.  
              
             SB 798  (Simitian, Chapter 444, Statutes of 2005) authorized  
             the establishment of a voluntary prescription drug collection  
             and distribution program for the purpose of distributing  
             surplus prescription drugs to medically indigent patients  
             free of charge.

          3. Arguments in Support.  Writing in support of the bill,  SIRUM   
             and the  California Assisted Living Association  (CALA) state  
             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  
             environment impact of pharmaceutical waste.  According to the  
             groups, AB 1069 will bring the program more in line with  
             other states, enable additional counties to participate, and  








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             help more Californians get the medicine that they need to  
             stay healthy.

             The  California Association of Health Facilities  (CAHF)  
             states, "With shrinking budgets for the healthcare safety net  
             and rising healthcare costs for all Californians, enacting AB  
             1069 allows California to maximize quality patient care by  
             reducing the financial burden of medicine acquisition and  
             promoting environmentally sustainable healthcare practices."

             The  California Chronic Care Coalition  (CCCC) states that  
             supports the concepts of this bill in part due to the  
             documented success of Santa Clara County, currently the only  
             county to have developed a voluntary drug repository and  
             distribution program in our state.  CCCC hopes that as a  
             consequence of the changes in this bill, other counties  
             throughout the state will be encouraged to seriously consider  
             adopting this worthy program of merit.

          4. Arguments in Opposition.  The  Board of Pharmacy  has an oppose  
             unless amended position on this bill.  According to the  
             Board, the proposed amendments would remove a pharmacist from  
             the several aspects of the redistribution program, allow a  
             participating entity to transfer drugs like a distributor  
             without appropriate licensure and control and allow for the  
             unlawful repackaging of and co-mingling of previously  
             dispensed medications, including donated medications from  
             various sources.  According to the Board, this is all to the  
             detriment of the patient.  The Board states that the bill  
             will eliminate existing patient protections established in  
             state and federal law that are afforded to all Californians.   
             The Board states that the elimination of important patient  
             safety safeguards for a specific population of Californians -  
             - indigent patients-- is both inappropriate and contrary to  
             the Board's consumer protection mandate.

           5. Policy Issues:   
           
               a)   Is the Intention for Participating Entities to Repackage  
               Medication?   The goal of provisions in this bill related to  
               repackaging are to decrease wait times for patients while  
               easing pharmacist workload when dispensing donated  
               medications.  However, use of the term "repackage" may not  
               be appropriate given the federal requirements outlined  








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               above for repackaging and given the constraints outlined in  
               federal and state law for repackaging, which in a pharmacy  
               setting, is only allowable for patient specific  
               prescriptions.  While certain facilities are authorized  
               under federal law to perform anticipatory compounding  
               before a patient actually needs the drug, the allowance is  
               only for a limited amount, based on a patient's prescribing  
               history.  U.S. Pharmacopeia guidance for those engaging in  
               repackaging specifies that the functions are beyond the  
               practice of a regular pharmacist.  While it does not appear  
               to be the Author's intention to expand the authority of  
               pharmacists participating in a Program beyond that of  
               colleagues dispensing medication outside of a Program, the  
               current language in this bill conflicts with current  
               federal requirements outlining who can repackage.  

              b)   Is the Intention for non-pharmacist personnel to perform  
               the duties outlined in this bill for purposes of a Program?   
                A participating entity under the Program includes  
               facilities other than pharmacies, like primary care  
               clinics, that may employ a pharmacist to perform  
               inspections and provide some oversight of the facilities'  
               drug supply, but are not required to be present and on the  
               premises at all times.  It may not be the Author's  
               intention to allow individuals other than pharmacists to  
               perform the activities outlined in the bill.
          

          SUPPORT AND OPPOSITION:
          
           Support:  

          Supporting Initiatives to Redistribute Unused Medicine (Sponsor)
          California Assisted Living Association
          California Association of Health Facilities
          California Chronic Care Coalition

           Opposition:  

          Board of Pharmacy


                                      -- END --
          








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