BILL ANALYSIS Ó SENATE COMMITTEE ON BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT Senator Jerry Hill, Chair 2015 - 2016 Regular Bill No: SB 671 Hearing Date: April 13, 2015 ----------------------------------------------------------------- |Author: |Hill | |----------+------------------------------------------------------| |Version: |February 27, 2015 | ----------------------------------------------------------------- ---------------------------------------------------------------- |Urgency: |No |Fiscal: |Yes | ---------------------------------------------------------------- ----------------------------------------------------------------- |Consultant|Sarah Mason, Janelle Miyashiro | |: | | ----------------------------------------------------------------- Subject: Pharmacy: biological product. SUMMARY: Authorizes a pharmacist to substitute an alternative biological product when filling a prescription for a prescribed biological product under specified circumstances. Existing Federal law: 1)The Food, Drug and Cosmetics Act (FDCA) requires drug manufacturers to obtain approval of new drugs from the federal Food and Drug Administration (FDA). (21 U.S.C. Sec. 355) 2)Prohibits a person from delivering for introduction into interstate commerce any biological product unless a license is issued pursuant to the Public Health Service Act (PHSA). (42 U.S.C. Sec. 262) 3)Creates an abbreviated pathway for biological products that are similar to or interchangeable with licensed biological products, known as the Biologics Price Competition and Innovation Act of 2009 (BPCIA). (42 U.S.C. Sec. 262 (k)) 4)Requires that, for a biological product to be considered biosimilar to a reference product, data must be derived from analytical, animal and clinical studies as specified. (42 U.S.C. Sec. 262 (k)(2)) SB 671 (Hill) Page 2 of ? 5)Clarifies that a product is biosimilar to a reference product under the BPCIA if the proposed biosimilar product is highly similar to the reference product, notwithstanding minor differences in clinically inactive components, and that no clinically meaningful differences exist between the proposed biosimilar product and the reference product in terms of safety, purity and potency. (42 U.S.C. Sec. 262(i)(2)(A) and (B)) 6)Clarifies that state law governs how and when pharmacists may make prescription drug substitutions. (1 Food and Drug Admin. Sec. 13:197 (2011)) 7)States that new drugs cannot be introduced into interstate commerce unless an approval of an application is filed by either: a) Full report of investigations to be filed with an application to the Secretary and which have been made to show: i) Whether or not the drug is safe and effective for use. ii) A full list of the components and composition of the drug. iii) A full description of the methods used in, and the facilities and controls used for the manufacturing, processing, and packing of the drug. iv) Specimens of the labelling proposed to be used for the drug. v) Any assessments required under Section 355c. (21 U.S.C Section 355(b)) a) Abbreviated application of a new drug to be filed with the Secretary and which must contain: i) Information to show that the conditions of use prescribed, recommended or suggested in the labeling proposed for the new drug have been previously approved. SB 671 (Hill) Page 3 of ? ii) Information to show that the new drug has the same active ingredient(s) as the listed drug referred to. iii) Information to show that the route of administration, the dosage form, and the strength of the new drug are the same as those of the listed drug referred to. iv) Information to show that the labeling proposed for the new drug is the same as the labeling approved for the listed drug referred to unless the new drug and listed drug are produced or distributed by different manufacturers. (21 U.S.C Section 355(j)) 1) Defines a biological product as a virus, therapeutic serum, toxin, antitoxin, vaccine, blood, blood component or derivative, allergenic product, protein (except for any chemically synthesized polypeptide), or analogous product. (42 U.S.C. Section 252i(1)) 2) Classifies insulin as a hormone and therefore regulates these endocrine system derived drugs under the FDCA and not as biological products under the PHSA. 3) States that a drug intended for use is limited to use under the professional supervision of a practitioner licensed by law to administer the drug. (21 U.S.C. Section 353(b)) Existing California law: 1)Establishes the Food and Drug Branch (FDB) within the California Department of Public Health (CDPH) to assure that foods, drugs, medical devices, cosmetics and certain other consumer products are safe and are not adulterated, misbranded nor falsely advertised; and that drugs and medical devices are effective. 2)Defines biologics as human whole blood; human whole blood derivatives specified by regulations; serum, vaccine, live vaccine, killed vaccine, tissue vaccine, autogenous vaccine, live virus, killed virus, live bacterial culture, killed bacterial culture, bacterin, hormone, tissue extract, gland extract, gland preparation, insulin, and similar products made SB 671 (Hill) Page 4 of ? from human or animal tissues or micro-organisms. (Health and Safety Code § 1600.1) 3)Under the Pharmacy Law, provides for the licensure and regulation of pharmacies, pharmacists and wholesalers of dangerous drugs or devices by the Board within the Department of Consumer Affairs (DCA). (Business and Professions Code (BPC) § 4000 et seq.) 4)Specifies certain requirements regarding the dispensing and furnishing of dangerous drugs and devices, and prohibits a person from furnishing any dangerous drug or device except upon the prescription of a physician, dentist, podiatrist, optometrist, veterinarian or naturopathic doctor. (BPC § 4059) 5)Authorizes pharmacists filling prescription orders for drug products prescribed by their trade or brand names to substitute generic drugs for orders if the generic contains the same active chemical ingredients of equivalent strength and duration of therapy, subject to a patient notification and bottle labeling requirement, unless the prescriber specifies that a pharmacist may not substitute another drug product by either indicating on the form submitted for the filling of the prescription drug orders "Do not substitute" or words of similar meaning or selecting a box on the form marked "Do not substitute." (BPC § 4073) 6)Authorizes pharmacists filling prescription orders for drug products prescribed by their trade or brand names to substitute a drug product with a different form of medication with the same active chemical ingredients of equivalent strength and duration of therapy as the prescribed drug product when the change will improve the ability of the patient to comply with the prescribed drug therapy, subject to a patient notification and bottle labeling requirement, unless the prescriber specifies that a pharmacist may not substitute another drug product by either indicating on the form submitted for the filling of the prescription drug orders "Do not substitute" or words of similar meaning or selecting a box on the form marked "Do not substitute." (BPC § 4052.5) This bill: SB 671 (Hill) Page 5 of ? 1)Defines "biological product" according to the definition within the federal PHSA. 2)Defines "interchangeable" as a biological product that the FDA has determined meets the standards set forth in the BPCIA or has been deemed therapeutically equivalent by the FDA as set forth in the latest addition or supplement of the Approved Drug Products with Therapeutic Equivalence Evaluations (known as the Orange Book). 3)Defines "prescription", with respect to a biological product, as a prescription for a product compounded in an outsourcing facility can qualify for exemptions from the FDA approval requirements, under Section 503B of the FDCA. 4)Updates permitted functions for pharmacists to allow a pharmacist to substitute an alternative biological product only for a prescribed biological product only if : a) The alternative biological product is interchangeable. b) The prescriber has not personally indicated, either orally or in his or her own handwriting "Do not substitute" or words of similar meaning. Clarifies that a prescriber may still check a box on the prescription marked "Do not substitute" if the prescriber personally initials the box or checkmark. Clarifies that for electronic data transmission prescriptions, a prescriber may indicate "Do not substitute" or words of similar meaning, or may check a box on the prescription marked "Do not substitute" but is not required to manually initial this indication. c) Within a reasonable time following the dispensing of a biological product, a dispensing pharmacist or the pharmacist's designee shall communicate to the prescriber the specific biological product provided to the patient, including the name of the biological product. Provides that the communication shall be conveyed by making an entry into an interoperable electronic medical records system, through electronic prescribing technology, or a pharmacy record that is electronically accessible by the prescriber. Provides that otherwise, the pharmacist or pharmacist's designee shall communicate the name of the biological SB 671 (Hill) Page 6 of ? product dispensed to the prescriber using facsimile, telephone, electronic transmission or other prevailing means. 5)Clarifies that communication is not required to be made to a prescriber when either there is no FDA-approved interchangeable biological product or a refill prescription is not changed from the product dispensed on the prior filing of the prescription. 6)Provides that selection of an alternative biological product is within the discretion of the pharmacist except when a prescriber indicates "Do not substitute". States that a pharmacist who selects the biological product according to the provisions of this bill assumes the same responsibility for substituting an alternative biological product as would be incurred in filling a prescription for a biological product prescribed by name. 7)Removes liability of a prescriber for an act or omission by a pharmacist in selecting, preparing or dispensing an alternative biological product. 8)Prohibits a pharmacist from selecting an alternative biological product unless the cost to the patient is the same or less than the cost of the prescribed biological product, including any professional fee that may be charged by the pharmacist. 9)Applies the provisions to all prescriptions, including those presented by or on behalf of persons receiving assistance from the federal government or pursuant to the Medi-Cal Act (Welfare and Institutions Code, Section 14000-14199.2 et. seq.). 10)Requires a communication be made to the patient when an alternative biological product is substituted for a biological product. 11)Requires the Board to maintain a link to the current list, if available, of biological products determined by the FDA to be interchangeable, on its website. 12)Clarifies that a pharmacist may still give immunizations SB 671 (Hill) Page 7 of ? pursuant to a protocol with a prescriber. 13)Clarifies that a disability insurer or health care service plan is not prohibited from requiring prior authorization or imposing other appropriate utilization controls in approving coverage for any biological product. 14)Adds all of the above provisions to the section of Pharmacy Law specifying actions for substitution of a generic drug. FISCAL EFFECT: Unknown. This bill has been keyed "fiscal" by Legislative Counsel. COMMENTS: 1.Purpose. The Author is the Sponsor of this bill. According to the Author, "SB 671 updates California law so when the federal Food and Drug Administration (FDA) approves interchangeable biosimilars, California pharmacists can substitute lower cost biosimilars for brand name biologics." According to the Author, "on March 6th, the FDA approved the first biosimilar, (Zarxio) and there are at least four more applications in the approval pipeline. Therefore, it is essential that a bill be passed this year making clear the procedures for substitution." The Author notes that "in order to reflect the emerging technology of biosimilars and allow for them to be substituted for a biologic, California must update its Pharmacy Practice Act. The Business and Professions Code does not define biosimilars and existing generic pill definitions do not apply." According to information provided by the Author, this bill allows a pharmacist to substitute a biosimilar medication for a brand biologic when the biosimilar is deemed interchangeable by the FDA which mirrors California's patient protections for generic pill substitution and adds a provision that requires a pharmacist, within a reasonable amount of time after the substitution is made, to enter information about the biologic product dispensed into an interoperable patient record system or record system accessible to the prescriber. If that cannot be done, the pharmacy will be required to communicate SB 671 (Hill) Page 8 of ? information about the dispensed product to the patient's prescriber. The Author states that no communication is required if no interchangeable biosimilar is available or for a refill of an existing prescription. According to information provided by the Author, "a communication to the prescribing physician after dispensing does not alter the policy goal of offering a lower cost option for patients. The purpose of prescriber communication is to provide a record of the substitution, in the event of an adverse reaction, or other clinical responses to the biologic." Background information from the Author notes that there is nothing in this legislation that will impact a health plan's ability to make changes to its preferred drug lists or formularies or any other aspect of a health plans' commercial business. Existing law and current practice afford health plans the ability to structure their prescription drug benefits in such a way, either through tiered coverage and/or preferred drug lists that would incentivize or require the dispensing of the biosimilar drug product over the biologic. In that background information, the Author adds that, for example, health plans could limit their prescription drug plan coverage to biosimilars or charge higher co-payments for the biologic. In that instance, the health plan formulary would eliminate the substitution issue completely, as the biosimilar would be a "preferred" drug product in the policy. The Author states that ultimately, through use of their formularies, health plans will be able to drive utilization of biosimilars. This is how health plans currently incentivize the use of generic drugs or lower cost therapeutically similar drugs over certain branded drugs. 2.Biologics. Biologic medicines are sensitive medications that typically treat very serious diseases and conditions, including blood conditions, cancers, immune disorders like Rheumatoid Arthritis, Psoriasis and Crohn's Disease and neurological disorders like Multiple Sclerosis. These treatments are almost exclusively administered in physician's offices, oncology clinics, specialty pharmacies, hospitals or dialysis centers. Biological products are generally derived from living material, human, animal, or microorganism and FDA regulations specify that biological products include blood-derived products, vaccines, in vivo diagnostic allergenic products, immunoglobulin products, products SB 671 (Hill) Page 9 of ? containing cells or microorganisms, and most protein products. These treatments are not widespread but rather used as specialty drugs to treat very ill patients; according to a MarketScan report, there were almost 380 million pills dispensed in California in 2011, with only 1.7 biologic prescriptions dispensed per week from the over 5,000 retail pharmacies in California, representing just 13 percent of all prescriptions dispensed by retail pharmacies. According to the FDA, biologics are regulated under the federal PHSA while drugs, including insulin and other hormone therapies, are regulated under the FDCA. Both the FDA's Center for Drug Evaluation and Research and Center for Biologics Evaluation and Research have regulatory responsibility for therapeutic biological products, including premarket review and oversight. Following initial laboratory and animal testing that show the use of a particular biological product in humans is reasonably safe, biological products (like other drugs), can be studied in clinical trials in humans under an investigational new drug application. If trials and studies demonstrate that a product is safe and effective for its intended use, the FDA may then approve the market of a biologic by granting a biologics license. There are some individuals who are not good candidates for use of therapeutic biological products, such as those who are immunocompromised. Individuals can also have or develop allergic or other adverse reactions to biological products. The FDA defines a generic drug as the same as a brand name drug in dosage, safety, strength, how it is taken, quality, performance, and intended use. Before approving a generic drug product, FDA requires many rigorous tests and procedures to assure that the generic drug can be substituted for the brand name drug. According to the FDA, it bases evaluations of substitutability, or "therapeutic equivalence," of generic drugs on scientific evaluations. Generic drug products must contain the identical amounts of the same active ingredient(s) as the brand name product. A drug that is determined to be "therapeutically equivalent" can be expected to have equal effect and no difference when substituted for the brand name product. The FDA produces a publication titled "Approved Drug Products with Therapeutic Equivalence Evaluations" (the List, commonly known as the Orange Book) which identifies drug products approved on the basis of safety and effectiveness SB 671 (Hill) Page 10 of ? under the FDCA. According to the FDA, since February 2005 it has been providing daily Electronic Orange Book (EOB) updates as a means of providing product information for new generic drug approvals. FDA notes that daily generic updates provide the consumer with the current list of approved generic products which is important for substitution purposes. 3.Alternative Biological Products - Biosimilars. Biologics, often referred to as originator biological products or reference biological products, when discussing interchangeability and therapeutic equivalence, are large, complex protein molecules used in the treatment, diagnosis or prevention of disease. These are quite different from small molecule drugs, pills, which are not as structurally complex and are instead relatively simple, organic substances produced by chemical methods. Biologic medicines, on the other hand, are made in living organisms to produce proteins by genetically modifying cell constructs or cell lines. Biologics are grown, cultivated and purified and are typically administered as injectables. Biosimilars are similar but not identical versions of the original biologic. The active ingredient of a biosimilar is expected to closely resemble that of the original biologic and unlike generic pills which require the active ingredient to be identical, the exact manufacturing process of an original biologic cannot be exactly duplicated. Biosimilars are not clinically identical to their reference products. Biosimilars have been defined by the World Health Organization as "a biotherapeutic product which is similar in terms of quality, safety and efficacy to an already licensed biotherapeutic product," by the European Medicines Agency as a "copy version of an already authorized biological medicine product with demonstrated similarity in physiochemical characteristics, efficacy and safety, based on a comprehensive comparability exercise," and by the FDA as a biological product which is "highly similar to the reference product notwithstanding minor differences in clinically inactive components and for which there are no clinically meaningful differences between the biological product and the reference product in terms of safety, purity and potency of the product." In response to increases in an aging population and larger numbers of patients suffering from chronic disease, there has SB 671 (Hill) Page 11 of ? been a rise in use of biologics, and accordingly a rise in the production efforts of biosimilars. Biosimilars go through an extensive review process and manufacturers are required to submit immense studies and data demonstrating a products' efficacy and ensuring it is safe for use by consumers. Manufacturers also have to establish ongoing monitoring programs to ensure the safety of biosimilars. While biosimilars are currently available in the EU, and other nations are in the process of adopting guidelines and regulatory processes, biosimilars are still a relatively new option in the larger health care delivery and treatment conversation. A pathway for biosimilar regulation in the U.S. was established as a provision of the 2008 Patient Protection and Affordable Care Act (ACA) and in 2012 the FDA issued draft guidelines for biosimilars. The guidance included which types of studies manufacturers should undertake in order to ensure product safety, potency and purity. In addition to the draft guidelines for biosimilars the FDA has also compiled a list of biological products, including any biosimilar and interchangeable biological products licensed by the FDA under the PHSA. This list, known as the "Purple Book", includes the date a biological product was licensed under the PHSA and whether FDA evaluated the biological product for reference product exclusivity under section 351(k)(7) of the PHSA. The Purple Book is analogous to the Orange Book. The Purple Book will enable a prescriber or dispenser of a biological product to see whether a biological product licensed under the PHSA has been determined by FDA to be biosimilar to or interchangeable with a reference biological product (an already-licensed FDA biological product). Biosimilar and interchangeable biological products licensed under section 351(k) of the PHSA will be listed under the reference product to which biosimilarity or interchangeability was demonstrated. These lists will be updated periodically when FDA licenses a biological product and/or makes a determination regarding date of first licensure for a biological product licensed under the PHSA. Currently, only one biosimilar product has been approved by the FDA. On March 6, 2015, the FDA approved, Zarxio (filgrastim-sndz). Zarxio is manufactured by Sandoz, Inc. and is biosimilar to Amgen Inc.'s Neupogen (filgrastim). SB 671 (Hill) Page 12 of ? Filgrastim is used to treat patients undergoing chemotherapy by stimulating the body's neutrophil (white blood cell) production. Zarxio has been approved as biosimilar to Neupogen but not as an interchangeable product. The FDA approved Zarxio based on structural and functional characterization, animal study data, human pharmacokinetic and pharmacodynamics data, clinical immunogenicity data and other clinical safety and effectiveness data that demonstrated Zarxio is biosimilar to Neupogen. There are currently no interchangeable biological products approved by the FDA and the timeline for approval of an interchangeable biological product is unknown. 4.The Prescription Drug Pinch on Californians' Wallets and Potential Cost Savings From Biosimilars. Costs of prescription medication have skyrocketed over the past number of years. According to a 2008 report issued by the Kaiser Family Foundation on prescription drug trends, spending in the U.S. for prescription drugs was $216.7 billion in 2006, more than 5 times the $40.3 billion spent in 1990. In response, many consumers are turning to a variety of methods to reduce their prescription costs including requesting cheaper drugs or generic drugs from their physicians and pharmacies, using the Internet and other sources to make price comparisons, using the Internet to purchase drugs, buying at discount stores, buying over-the-counter instead of prescribed drugs, buying drugs in bulk and pill-splitting, using mail-order pharmacies, and using pharmaceutical company or state drug assistance programs. The report stated that 62 percent of physicians say they switch patients to less expensive drugs after discussing out-of-pocket costs of medicines with patients. This financial burden leads to many patients with legitimate chronic illnesses to forgo prescribed medications and adversely affect their health. According to a 2005 Federal Trade Commission report on Pharmacy Benefit Managers (PBMs) and mail-order pharmacies, many health plan sponsors offer their members prescription drug insurance and hire PBMs to manage these pharmacy benefits on their behalf. As part of the management of these benefits, PBMs assemble networks of retail and mail-order pharmacies so that the plan sponsor's members can fill prescriptions easily and in multiple locations. When a consumer fills a SB 671 (Hill) Page 13 of ? prescription at a local pharmacy, the pharmacist usually asks whether the consumer has insurance to cover the prescription's cost. If there is coverage, the consumer provides the insurance card to the pharmacist. While the pharmacist fills the prescription, sophisticated computer interactions between the pharmacy and the PBM ensure that the prescription is filled according to the insurance coverage provided by the plan sponsor. According to the report, the consumer usually is unaware of these processing interactions, and the consumer's only additional responsibility is to pick up the filled prescription and pay the retail pharmacy the copayment that is due. A 2013 New York Times article noted that drugs account for about 15 percent of the nation's health care expenditures and that while there appear to be small decreases in spending on prescription drugs, costs associated with specialty drugs like biologics increased almost 20 percent. Out-of-pocket costs to patients are typically higher to receive biologics than for generic drugs and while biosimilars may provide significant cost savings, they will not be discounted at near the rate as generic drugs. Biosimilars are still seen, though as playing an important part in medication cost reductions by providing cost-effective alternatives to very expensive originator biological products and are anticipated to play a key role in the treatment of illnesses and chronic conditions in the U.S. According to a 2007 Congressional Budget Office (CBO) report issued when the BPCIA was being considered in Congress, "In recent years, total spending on biologics has grown rapidly, with nominal spending growth averaging roughly between 15 percent and 20 percent annually; spending amounted to about $40 billion in 2006." The CBO report noted that BPCIA would reduce total expenditures on biologics by $0.2 billion over the 2009-2013 period, and by about $25 billion over the 2009-2018 period. (Over that 10-year period, such savings would equal roughly 0.5 percent of national spending on prescription drugs, valued at wholesale prices.) The report estimated that as a result of the Act, direct spending by the federal government would decrease by $46 million over 2009-2013 period, and by $5.9 billion over the 2009-2018 period. A November 2014 RAND study similarly identified a $44.2 billion reduction in direct spending on biologic drugs from 2014 to 2024, or about 4 percent of total biologic spending over the same period, with a range of $13 billion to SB 671 (Hill) Page 14 of ? $66 billion. 5.Similar Legislative Efforts in Other States. In the past two years, at least twenty-three states have considered, or are in the process of considering, legislation similar to this measure that outlines procedures by which a pharmacist may substitute a prescribed biologic drug for a biosimilar. The bills and surrounding conversation in these states mirror what is pending in California. Like this bill, many of the 2015 versions create requirements related to all biological product substitution if there is an FDA approved interchangeable biological product and many do make specific reference to "biosimilars" but rather use the term "alternative biological product". As reported in a recent Pew Charitable Trusts article, most of the measures proposed this year require notification to occur after the dispensing of the biosimilar and that where possible, notification be made through electronic medical records. Most of the new bills reduce the period of time that pharmacies must keep the record of substitution from five years to two and the new bills use the word "communicate" rather than "notify," which the article cites as significant to biosimilar manufacturers who want to avoid any hint to the public that biosimilars are inferior products. 6.Prior Related Legislation. SB 598 (Hill) of 2013 would have authorized pharmacists to substitute a biosimilar for a biologic under specified circumstances, including a requirement that notification of the substitution be provided, and defined "biological product," "biosimilar," and "interchangeable" according to their definitions within the PHSA. ( Status: The bill was vetoed by Governor Brown who noted that "CalPERS and other large purchasers warn that the requirement itself would cast doubt on the safety and desirability of more cost-effective alternatives to biologics?.The FDA, which has jurisdiction for approving all drugs, has not yet determined what standards will be required for biosimilars to meet the higher threshold for "interchangeability.") AB 1139 (Lowenthal) of 2013 would have authorized a pharmacist to substitute a biosimilar for a biological product if the product is deemed by the FDA to be interchangeable with the biological product. ( Status: The bill was never heard in a SB 671 (Hill) Page 15 of ? policy committee of the Legislature.) 7.Arguments in Support. The Alliance of Specialty Medicine , a coalition of national medical specialty societies representing more than 100,000 physicians and surgeons, is supportive of this bill with amendments, stating that this bill addresses key policy issues to ensure patient safety is preserved, including physician authority to prevent substitutions and ensuring that the treating physician is notified if another version of the biologic medicine is substituted for the version prescribed by the doctor but remains concerned that the bill fails to define reasonable time regarding the timely notification of a substitution to the prescriber and asks that the Author further define "reasonable time". According to the Arthritis Foundation , this bill takes a step in the right direction to ensure that both the patient and the physician are notified and will encourage a high level of communication between all players on the healthcare team. The Biotechnology Industry Organization (BIO ) writes that this bill ensures patients and their physicians remain in control of their medical treatment options as the market for complex biologics evolves. Express Scripts notes that it worked closely with stakeholders on both sides to find consensus and that this bill takes a very important step forward, ensuring that less expensive FDA-approved interchangeable biologics can be automatically substituted by a pharmacist when they become available. According to Johnson & Johnson , this bill updates Pharmacy Law to allow for substitution of a new class of FDA-approved medicines and will do so in a manner than ensures patient access to these important medications while providing for a communication about the substitution to be shared with the patient's health care provider. Lilly USA, LLC supports this bill to ensure that all biologics are treated equally in California and to ensure that all patients taking biologic medicines are afforded the same patient protections. Merck & Co., Inc and Genentech write that communicating SB 671 (Hill) Page 16 of ? substitution of an interchangeable biosimilar to a patient's prescriber is a safeguard that is critical in the event of an adverse reaction or change in a patient's chronic condition. The National Black Nurses Association, Inc. (NBNA) encourages state legislators and regulators to incorporate strong language requiring active pharmacist-prescriber communication and states that it is critical for prescribing physicians to have knowledge of which biologic has been dispensed to a patient as a means of supporting patient care. NBNA highlights the complexity and variability of treatment paradigms using biologics which will be a continuing concern to prescribers serving American Indian and Alaska Native, African-American, Asian American and Hispanic patients and states that to this end, both physicians and patients must be aware of which complex biological product has been dispensed. According to the National Kidney Foundation , differences in composition of biosimilars compared to the original innovator product are likely to occur and to monitor for adverse events, it is vital that patients and physicians know which medication was dispensed. The kidney community is especially cautious regarding the possibility of substituting or alternating between reference drugs and biosimilars or between biosimilars based on allergic reactions in patients not seen during clinical trials for treatments used by kidney patients. According to Novartis Pharmaceuticals , California law already addresses the process pharmacists must follow to substitute traditional, generic drugs for their branded equivalent and this bill would create a similar process for substituting a branded biologic drug with a biosimilar drug the FDA has designated as interchangeable. Novartis states that many provider and patient groups have studies the issue of biologics and interchangeable biologic substitution and agree with the principles for substitution included in this bill. Novo Nordisk., Inc. states that unless California's Pharmacy Practice Act is changed, the substitution of several proteins approved under what is known as the 505b pathway numbering more than 30 product categories will provide difficult given an inconsistency between state and federal statute. According to the company, this bill resolves the inconsistency by ensuring that all proteins eligible for potential therapeutic SB 671 (Hill) Page 17 of ? substitution, should the FDA grant such a designation, are treated the same in its defined substitution process. The bill bridges the four year gap (since FDA approval pathways merge in 2020) by creating a substitution process for all protein medications considered biologics per guidance from FDA. UCB, Inc . writes that it is important to have state substitution laws in place to address the following issues that are critical for patient safety: substitution should only occur when the FDA has designated a biologic product as interchangeable; prescribers should be able to prevent substitution; a pharmacist shall communicate with the prescriber after a substitution occurs; patients should be notified when a substitution occurs and; records should be kept of the substitution. 8.Arguments in Opposition. The California Pharmacists Association (CPhA) is opposed to this bill unless amendments are taken. According to CPhA, pharmacists and other healthcare providers must be allowed to work together, using their professional judgment to ensure optimal medication therapy for their patients, unhindered by burdensome or unnecessary statutory frameworks. CPhA notes that many pharmacists are unable to send the electronic communications authorized in the bill due to current technological limitations, for example, the inability of electronic prescribing technology to allow pharmacies to communicate information back to prescribers. The group also states that as the bill is currently drafted, all pharmacists selecting alternative products or dispensing biological products for which there is an approved interchangeable biosimilar product available will face untenable liability exposure, depending upon whether each individual prescriber has access to specific electronic records systems and that it is impossible for pharmacists to know that they are complying with the bill's mandates unless they first confirm with each prescriber whether or not they access certain electronic records systems. According to the California Retailers Association (CRA) , which is also opposed to this bill unless it is amended, this bill creates new and unnecessary requirements for the substitution of interchangeable biosimilar products, effectively putting into place additional hurdles that would discourage the SB 671 (Hill) Page 18 of ? dispensing of biosimilar products. While CRA appreciates use of the verb "communicate" over prior efforts using "notification", the organization still believes this creates access challenges, negatively affects the acceptance of interchangeable biosimilars and slows anticipated cost-savings, forcing patients to pay more out-of-pocket costs. CRA is also concerned that the bill does not require acknowledgement by the prescriber that notification from the pharmacy was made so it remains questionable whether or not all of the effort by CRA-member pharmacies will actually be acknowledged and kept by the prescriber or simply get lost in a physician's office. CVS Health is also opposed to this bill unless amended, writing that any communication potentially delaying prescriber or patient acceptance or creating doubt as to the safety and/or efficacy of FDA-approved interchangeable biosimilars is wholly unnecessary and a disservice to patients and payers in the U.S. CVS Health believes that once the standard for interchangeable is met, pharmacists, health plans and patients should find their path to the least expensive therapy unencumbered. The National Association of Chain Drug Stores (NACDS) , which has also taken an oppose unless amended position on this bill, is concerned that this bill would undermine dispensing of cost-effective biologic medications and that in requiring pharmacies to inform physicians of the drug manufacturer and name for each biologic or biosimilar drug dispensed, this legislation imposes a corresponding obligation on physicians to maintain the information provided by pharmacies in patients' charts, even if not explicitly stated. NACDS also believes that it is important to maintain focus on patient care issues that need resolution, and not to overwhelm prescribers with information that is likely irrelevant for the vast majority of patients and is not guaranteed to make it into patients' charts. According to the Pharmaceutical Care Management Association (PCMA) , the notifications in this bill are unnecessary and will prevent cost savings to patients and employers that can be achieved with the use of interchangeable biosimilar medications but the group will remove its opposition if the Author accepts amendments using language from another of SB 671 (Hill) Page 19 of ? states that will make the notification process workable. Walgreens is also opposed to this bill unless it is amended, stating that it supports updating state laws to recognize and allow for substitution of interchangeable biosimilars consistent with current practice for generic drugs, however it does not support efforts like this bill or efforts in the 22 other states considering identical legislation sponsored by pharmaceutical manufacturers that impose special notification for products the FDA has approved as interchangeable. According to Walgreens, the passive notification process accessible to providers by using an interoperable electronic medical records system as this bill proposes is used for the majority of retail chain prescriptions dispensed but not all prescriptions. Walgreens adds that most pharmacies expected to dispense interchangeable biologics are specialty pharmacies that dispense high complexity, high cost products for patients with complex medical conditions to physician offices or clinics where these can be administered, rather than dispensing to patients and the system outlined in this bill permitting communication to a prescriber would in fact be unavailable for these settings, what Walgreens calls the majority of pharmacies dispensing interchangeables. The groups above requesting amendments to this bill have proposed language that permits the entry of information into a pharmacy benefit management system to constitute a communication (which has been accepted in some of the other legislation throughout the nation similar to this bill) and exempts biological products paid for in cash from being subject to the notification requirements set forth in this bill. According to the Academy of Managed Care Pharmacy (AMCP) , which is opposed to this bill, the bill is problematic because while the overall health industry continued to increase its use of electronic technology, it has not yet reached a level of participation by a majority of prescribers and pharmacies. AMCP states that at this time, the use of an interoperable health records system or other means of electronic interchange between prescribers and pharmacists is not the primary method of communication and adds that the burdensome restrictions in this bill are intended to discourage substitution. SB 671 (Hill) Page 20 of ? America's Health Insurance Plans (AHIP) is opposed to this bill, stating that the notification requirement in this bill creates a false impression about the safety of biologics, will hinder their use and creates unnecessary burdens. According to AHIP, legislation that limits biosimilar or interchangeable biologic substitution is unnecessary, will increase costs for consumers and employers and limit access to crucial therapies and that the price of a biologic should not be a factor in their use. According to the California Association of Health Plans , which also opposes this bill, the before-the-fact administrative burdens created in this bill will do little if anything to ensure public safety and will increase the cost and access to these life savings drugs. The National Community Pharmacists Association (NCPA) is also opposed to this bill, stating that patients have a long standing, trusting relationship with their pharmacist and it is clear that this bill does little more than set cumbersome roadblocks to drive patients to higher cost products while diminishing the ability of pharmacists to substitute extensively evaluated and approved interchangeable cost saving versions of these products, at the request of the prescribing practitioner. 9.Recommended Amendments the Author May Wish to Take in the Senate Committee on Health. a) The bill outlines a "reasonable time frame" by which communication must be made to a prescriber when a pharmacist has dispensed an alternative biological product. To ensure clarity for pharmacists as well as for Board enforcement purposes, the Author may wish to further define a time frame by assigning a number of days. The Committee suggests five days as a reasonable amount of time for the communication to be made following substitution of an alternative biological product for a biological product. On page 2, line 11, strike "a reasonable time" and replace with "five days". (b) Withina reasonable timefive days following the dispensing of a biological product, a dispensing SB 671 (Hill) Page 21 of ? pharmacist or the pharmacists' designee shall communicate to the prescriber the specific biological product provided to the patient, including the name of the biological product and the manufacturer. The communication shall be conveyed by making an entry into an interoperable electronic medical records system, through electronic prescribing technology, or a pharmacy record that is electronically accessible by the prescriber. Otherwise, the pharmacist or the pharmacist's designee shall communicate the name of the biological product dispensed to the prescriber using facsimile, telephone, electronic transmission, or other prevailing means, except that communication shall not be required in this instance to the prescriber when either of the following apply: b) The bill creates a new definition of prescription for prescriptions of biological product. Within this definition, the bill refers to Section 503B of the FDCA. Section 503B deals with outsource facilities and compounding drugs. It appears that the Author's intention is instead to reference Section 503(b) of the FDCA which refers to labeling and dispensing of prescription drugs thus the Author may wish to clarify that reference in this bill. On page 4, line 20, strike "503B" and replace with "503(b)" (3) "Prescription," with respect to a biological product, means a prescription for a product that is subject to Section503B503 (b) of the federal Food, Drug, and Cosmetic Act (21 U.S.C. Sec. 353(b)). c) The bill clarifies that its provisions do not prohibit pharmacists from administering immunizations (biological products in some instances) and references authority for pharmacists to do so in BPC § 4052. Advanced practice pharmacists (APPs) were also provide authority to administer immunizations in 2013 (SB 493, Hernandez, Chapter 469, Statutes of 2013). The Author may wish to add reference to that authority for APPs administering immunizations. SB 671 (Hill) Page 22 of ? On page 4, line 23, after "4052" add " and 4052.8" (i) This section shall not prohibit the administration of immunizations, as permitted in Section 4052 and 4052.8 . NOTE : Double-referral to Senate Committee on Health. SUPPORT AND OPPOSITION: Support: Arthritis Foundation Biotechnology Industry Organization (BIO) BIOCOM California Healthcare Institute (CHI) Express Scripts Genentech Hospira Johnson & Johnson Lilly USA, LLC Merck & Co., Inc. National Black Nurses Association, Inc. National Kidney Foundation Novartis Pharmaceuticals Novo Nordisk, Inc. Sandoz UCB, Inc. Support if Amended: Alliance of Specialty Medicine Oppose Unless Amended: California Pharmacists Association (CphA) California Retailers Association (CRA) CVS Health National Association of Chain Drug Stores (NACDS) Pharmaceutical Care Management Association (PCMA) Walgreens SB 671 (Hill) Page 23 of ? Opposition: Academy of Managed Care Pharmacy (AMCP) America's Health Insurance Plans (AHIP) California Association of Health Plans Kaiser Permanente National Community Pharmacists Association -- END --