BILL ANALYSIS Ó
SENATE COMMITTEE ON
BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Jerry Hill, Chair
2015 - 2016 Regular
Bill No: SB 619 Hearing Date: April 27,
2015
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|Author: |Morrell |
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|Version: |April 6, 2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Janelle Miyashiro, Sarah Mason |
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Subject: Pharmacy: outsourcing facilities: licensure
SUMMARY: Requires an outsourcing facility, as defined by federal law,
to be licensed by the California State Board of Pharmacy before
doing business within and across state lines.
Existing federal law:
1)Establishes the United States Food and Drug Administration
(FDA) to protect the public health by assuring the safety,
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.)
2)Establishes the Drug Supply Chain Security 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.
a) Includes in the term "current good manufacturing
practice", the implementation of oversight and controls
over the manufacture of drugs to ensure quality, including
managing the risk of and establishing the safety of raw
materials, materials used in the manufacturing of drugs,
and finished drug products. (21 USC § 351)
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1)Establishes standards for introduction of new drugs into
interstate commerce, including submission of safety and
effective use reports, list of articles and compositions used
as components in the drug, methods used, and the manufacture,
processing, and packing of the drug. (21 USC § 355)
2)Establishes the DQSA, which:
a) Defines an outsourcing facility as a facility at one
geographic location or address that:
i) Is engaged in the compounding of sterile human
drugs.
ii) Has elected to register as an outsourcing facility.
iii) Complies with all of the requirements in the newly
enacted Section 503B, including:
1. Reporting biannually to the Secretary of
Health and Human Services (HHS) on what drugs are
compounding in the facility, the source of ingredients
used to compound, and submission of all adverse event
reports.
2. Compliance with the Current Good Manufacturing
Practice (CGMP) regulations.
3. Drugs are compounded under the direct
supervision of a licensed pharmacist in a registered
facility.
4. Annual registration with the FDA.
a) Exempts drug products compounded at an outsourcing
facilities from FDA approval requirements in section 505 of
the FD&C Act and from requirements to label products with
adequate directions from use if the requirements in section
503B listed above are met. (21 USC § 353b)
Existing California law:
1)Establishes the practice of pharmacy and provides for the
licensing and regulation of pharmacies and pharmacists by the
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Board of Pharmacy (Board). (Business and Professions Code
(BPC) § 4000 et seq.)
2)Authorizes Board inspectors to inspect all pharmacies,
wholesalers, dispensaries, stores or places where drugs or
devices are compounded, prepared, furnished, dispensed or
stored. (BPC § 4008)
3)Prohibits an out-of-state pharmacy from selling or
distributing dangerous drugs or devices in California through
any other method than a Board-licensed wholesaler, unless the
out-of-state pharmacy is licensed by the Board. (BPC § 4120)
4)States that any pharmacy that contracts to compound a drug for
parenteral therapy, pursuant to a prescription, for delivery
to another pharmacy, must report that contractual arrangement
to the Board within 30 days of commencing that compounding.
(BPC § 4123)
5)Requires the Board to adopt regulations establishing standards
for compounding injectable sterile drug products (sterile
injectables) in a pharmacy. Clarifies that a pharmacy cannot
compound sterile injectables unless the pharmacy is licensed
by the Board. States that a license to compound sterile
injectables cannot be renewed without a Board inspection.
Exempts pharmacies with accreditation by the Joint Commission
on Accreditation of Healthcare Organizations or other
accrediting agencies approved by the Board from these
requirements. (BPC §§ 4127-4127.1)
6)States that a nonresident pharmacy cannot compound sterile
drug products for shipment into California without a sterile
compounding pharmacy license issued by the Board. (BPC §
4127.2)
7)Authorizes the Board to issue a cease and desist order to a
pharmacy compounding sterile injectables whenever the Board
has reasonable belief, based on information obtained through
an investigation or inspection, that there is an immediate
threat to public health or safety. (BPC § 4127.3)
8)Allows a centralized hospital packaging pharmacy to prepare
medications for administration only to inpatients within its
own general acute care hospital, and one or more general acute
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care hospitals, if the hospitals are under common ownership
and located within a 75-mile radius of each other. Requires a
centralized hospital packaging pharmacy to obtain a specialty
license from the Board. Authorizes a centralized hospital
packaging pharmacy to: prepare unit dose packages for single
administration to inpatients from bulk containers; prepare
compounded unit dose drugs for parenteral therapy for
administration to inpatients; and prepare compounded unit dose
drugs for administration to inpatients. Authorizes a
centralized hospital packaging pharmacy to prepare and store a
limited quantity of unit dose drugs prior to receiving a
patient-specific prescription according to certain
circumstances. Clarifies that all compounding functions shall
only be performed in the licensed centralized hospital
pharmacy. (BPC §§ 4128-4128.6)
9)Grants the Board certain enforcement abilities against
out-of-state pharmacies, authorizes the Board to report
actions against an out-of-state pharmacy and authorizes the
Board to take any action against an out-of-state pharmacy that
it would against a pharmacy in this state if the grounds for
action are also grounds for action in the state in which the
out-of-state pharmacy is permanently located.
(BPC § 4303)
This bill:
1) Requires outsourcing facilities [as defined under federal
law] to register with the Board annually.
2) Requires a licensed outsourcing facility to compound drugs in
compliance with federal Current Good Manufacturing Practices.
3) Prohibits an outsourcing facility to be simultaneously
licensed with the Board as a sterile compounding pharmacy at
the same location.
4) Prohibits a licensed outsourcing facility from filling
patient specific prescriptions.
5) Requires an outsourcing facility to notify the Board of any
disciplinary or other action taken by another state or the
FDA within 10 days of the action.
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6) Requires an outsource facility to notify the Board within 24
hours of any recall notices or the reporting of any adverse
events potentially attributable to an outsourcing facility's
products.
7) Requires the Board to inspect the location of a nonresident
outsourcing facility to ensure that the facility is in
compliance with all laws and regulations before issuing or
renewing a nonresident outsourcing facility's license. This
includes:
a) A revision of a current copy of the nonresident
outsourcing facility's policies and procedures for sterile
and non-sterile compounding.
b) Copies of all inspection reports of the nonresident
outsourcing facility's premises conducted in the past 12
months.
c) A list of all sterile and non-sterile drug products
compounded within the past
12 months.
1) Authorizes the Board to issue a cease and desist order to an
outsourcing facility if the Board has reasonable belief,
based on information obtained during an inspection or
investigation, that the products produced by the facility
poses an immediate threat to the public health or safety.
2) Establishes a fine of up to $5,000 per occurrence for a
violation of any of the provisions or regulations outlined
above.
FISCAL
EFFECT: Unknown. This bill has been keyed "fiscal" by
Legislative Counsel.
COMMENTS:
1. Purpose. This bill is sponsored by the California State
Board of Pharmacy . The Author states that this bill creates
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California licensing requirements for a new category of
prescription drug compounding entity called an outsourcing
facility. The Author adds that the federal government has
created this new category of compounding facilities at the
federal level via the Drug Quality and Security Act (DQSA)
and that the DQSA allows for federal registration of
outsourcing facilities under section 503B (in order to
recognize specialized businesses that compound prescription
medication in large quantities which are typically not
pursuant to a patient-specific prescription that typically
sell this medication to practitioners, hospitals and
sometimes patients in multiple states.)
The Author cites the 2012 incident related to compounded drug
products from the New England Compounding Center in
Massachusetts, when more than 65 people in multiple states
were killed and hundreds of others were severely injured due
to contaminated compounded medication, as sparking state and
federal policy actions. The Author states that "each of the
50 states is grappling with how to regulate these outsourcing
facilities as a new category of prescription drug compounder"
in order to hold these compounding facilities to a high
standard for public health and safety.
2. Background. On November 27, 2013, President Obama signed the
DQSA which established provisions relating to the oversight
of compounded human drugs. Title I of the DQSA, the
Compounding Quality Act, removed certain provisions from
section 503A of the FDCA that were found to be
unconstitutional by the U.S. Supreme Court in 2002. The
Compounding Quality Act simultaneously created a new section,
503B, to allow compounding facilities to become a registered
"outsourcing facility". Registration as an outsourcing
facility is a voluntary program, and companies must meet the
requirements in 503B to continue operating as an outsourcing
facility.
The law defines an "outsourcing facility" as a facility at
one geographic location or address that is engaged in the
compounding of sterile human drugs, has elected to register
as an outsourcing facility, and complies with all of the
requirements of section 503B; including biannual reporting to
the Secretary of Health and Human Services on what drugs are
compounded in the facility, the source of ingredients used to
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compound, submission of all adverse event reports, and
compliance with the CGMP regulations. Outsourcing facilities
are subject to inspection by the FDA according to a
risk-based schedule and must meet FDA reporting requirements
for product recalls and adverse events. An outsourcing
facility is not required to be a licensed pharmacy and may or
may not obtain prescriptions from identified individual
patients.
Drugs that are compounded by an outsourcing facility can
qualify for exemptions from the FDA new drug approval
requirements and the requirement to label products with
adequate directions for use if all the conditions in 503B are
met. However, drug products compounded by a registered
outsourcing facility must have a prominent label that
identifies the drug as a compounded drug product.
Currently, there are no specific FDA requirements for
licensure as an outsourcing compounding facility. The FDA
released draft guidance in February 2015 titled "For Entities
Considering Whether to Register as Outsourcing Facilities
Under Section 503B of the Federal Food, Drug, and Cosmetic
Act" for those facilities that are considering registration
under 503B. This draft guidance, however, does not include
CGMP standards, inspection schedules, or staffing
requirements specific to outsourcing facilities. The FDA has
currently issued licenses to 54 outsourcing facility entities
that ship compounded drug products within and across state
lines. Three of these federally licensed outsourcing
facilities are located in California.
There has been some debate as to how outsourcing facilities
should be licensed and regulated at the state level. An
outsourcing facility must be licensed federally with the FDA
to perform the duties of large scale compounding. Under
current California and federal law, a pharmacy may compound
medication prescribed for a patient by a prescriber. The
Board licenses these entities as resident sterile compounding
pharmacies if they are located in California or as
non-resident compounding pharmacies if the pharmacy ships the
sterile compounded products into California.
However, outsourcing facilities integrate both the functions
traditionally performed by drug manufacturers (non-patient
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specific mass drug manufacturing) with the traditional
functions of pharmacies (compounding and supplying drug
products to prescribers and hospitals). The FDA does not
require an entity to be licensed as a pharmacy in order to be
licensed as an outsourcing facility. However, the FDA does
not authorize pharmacies to compound and distribute
non-patient specific medications.
This bill will create new licensure requirements, specific to
the state of California, for in state and out of state
outsourcing facilities doing business within and across state
lines. These new requirements will prohibit an outsourcing
facility to be located in the same licensed premises as a
pharmacy, therefore only allowing outsourcing facilities to
distribute compounded drugs for non-patient specific
prescriptions. Since the FDA has yet to release specific
federal requirements for outsourcing facilities, this bill
anticipates future federal requirements and creates
California specific standards by which licensed outsourcing
facilities must comply.
3. Prior Related Legislation. SB 600 (Lieu, Chapter 492,
Statutes of 2014) repealed California's electronic pedigree
law to conform to the DQSA and declared that any foreign
dangerous drug that is not approved by the FDA, or that is
obtained outside the licensed supply chain, to be misbranded
and that anyone who purchases or sells that drug is guilty of
a misdemeanor and subject to a fine of not more than $10,000.
AB 2605 (Bonilla, Chapter 507, Statutes of 2014) requires
third party logistic providers who provide storage, handling,
or distribution services, to be licensed by the California
Board of Pharmacy.
SB 294 (Emmerson, Chapter 565, Statutes of 2013) requires an
inspection by the California Board of Pharmacy (Board) prior
to licensure for all compounding pharmacies that make or
distribute compounded drugs in California. Requires a
compounding pharmacy to notify the Board within 24 hours of
initiating any recall, to provide a list of all drugs it
compounds to the Board, and to notify the Board of any
discipline or suspension of accreditation.
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SUPPORT AND OPPOSITION:
Support:
Board of Pharmacy (Sponsor)
Opposition:
None on file as of April 21, 2015.
.
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