BILL ANALYSIS Ó SENATE COMMITTEE ON HEALTH Senator Ed Hernandez, O.D., Chair BILL NO: SB 671 --------------------------------------------------------------- |AUTHOR: |Hill | |---------------+-----------------------------------------------| |VERSION: |April 14, 2015 | --------------------------------------------------------------- --------------------------------------------------------------- |HEARING DATE: |April 29, 2015 | | | --------------------------------------------------------------- --------------------------------------------------------------- |CONSULTANT: |Melanie Moreno | --------------------------------------------------------------- SUBJECT : Pharmacy: biological product SUMMARY :1. Permits a pharmacist filling a prescription for a biological product to select an alternative, interchangeable biological product if the prescriber does not personally indicate "Do not substitute," or words of similar meaning, as specified. Existing federal law: 1.Requires drug manufacturers to obtain approval of new drugs from the federal Food and Drug Administration (FDA). 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). 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). 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. 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. Existing state law: SB 671 (Hill) Page 2 of ? 1.Establishes the Food and Drug Branch (FDB) within the California Department of Public Health (DPH) 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 from human or animal tissues or micro-organisms. 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). 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. 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." 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 SB 671 (Hill) Page 3 of ? 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." This bill: 1.Permits a pharmacist filling a prescription for a biological product to select an alternative biological product only if: a. The alternative biological product is interchangeable. Defines "interchangeable" as a biological product that the FDA has determined meets standards specified in federal regulations 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; and, b. The prescriber does not personally indicate "Do not substitute," or words of similar meaning, as specified. Specifies that this does not prohibit a prescriber from checking a box on a prescription marked "Do not substitute," provided that the prescriber personally initials the box or checkmark. For an electronic data transmission prescription, permits a prescriber to indicate "Do not substitute," or words of similar meaning, in the prescription as transmitted by electronic data, or may check a box marked on the prescription "Do not substitute." In either instance, specifies that it is not required that the prohibition on substitution be manually initialed by the prescriber. 2.Requires a dispensing pharmacist or the pharmacists' designee, within five days following the dispensing of any biological product, to communicate to the prescriber the specific biological product provided to the patient, including the name of the biological product and the manufacturer. Requires the communication to be conveyed by: a. Making an entry into an interoperable electronic medical records (EMR) system, through electronic prescribing technology, or a pharmacy record that is electronically accessible by the SB 671 (Hill) Page 4 of ? prescriber; or, b. Using facsimile, telephone, electronic transmission, or other prevailing means. In this instance, prohibits that communication from being required to the prescriber when there is no FDA-approved interchangeable biological product for the product prescribed or when a refill prescription is not changed from the product dispensed on the prior filling of the prescription. 3.Makes a selection of an alternative biological product within the discretion of the pharmacist, except as provided in b) of 1) above. Requires a pharmacist who selects an alternative biological product to assume the same responsibility as would be incurred in filling a prescription for a biological product prescribed by name. 4.Prohibits any liability on the prescriber for an act or omission by a pharmacist in selecting, preparing, or dispensing an alternative biological product. 5.Prohibits the pharmacist, in any case, 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. Requires "cost," for these purposes, to include any professional fee that may be charged by the pharmacist. 6.Requires this bill to apply to all prescriptions, including for Medi-Cal enrollees. 7.Requires the substitution of a biological product to be communicated to the patient. 8.Requires the Board of Pharmacy (BOP) to maintain on its Web site a link to the current list, if available, of biological products determined by the FDA to be interchangeable. 9.Specifies that this bill does not prohibit the administration of immunizations by pharmacists. 10.Specifies that this bill does not prohibit a health plan or insurer from requiring prior authorization or imposing other appropriate utilization controls in approving coverage for any biological product. SB 671 (Hill) Page 5 of ? FISCAL EFFECT : This bill has not been analyzed by a fiscal committee. COMMENTS : 1.Author's statement. According to the author, SB 671 updates California law so when the FDA approves interchangeable biosimilars, California pharmacists can substitute those lower cost biosimilars for brand name biologics. In order for biosimilars 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. 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. 2.Generics. 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. 3.Biologics. According to the FDA, biologics include a wide range of products such as vaccines, blood and blood components, allergenics, somatic cells, gene therapy, tissues, and recombinant therapeutic proteins. Biologics can be composed of sugars, proteins, or nucleic acids or complex combinations of these substances, or may be living entities such as cells and tissues. Biologics are isolated from a variety of natural sources - human, animal, or microorganism - and may be produced by biotechnology methods and other cutting-edge technologies. Gene-based and cellular biologics, for example, often are at the forefront of biomedical research, and may be used to treat a variety of medical conditions for which no other treatments are available. In contrast to most drugs that are chemically synthesized and SB 671 (Hill) Page 6 of ? their structure is known, most biologics are complex mixtures that are not easily identified or characterized. Biological products, including those manufactured by biotechnology, tend to be heat sensitive and susceptible to microbial contamination. Therefore, it is necessary to use aseptic principles from initial manufacturing steps, which is also in contrast to most conventional drugs. Biologic medicines 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 physicians' offices, oncology clinics, specialty pharmacies, hospitals or dialysis centers. 4.Biosimilars. According to the FDA, a biosimilar is a biological product that is approved based on a showing that it is highly similar to a FDA-approved biological product, known as a reference product, and has no clinically meaningful differences in terms of safety and effectiveness from the reference product. Only minor differences in clinically inactive components are allowable in biosimilar products. An interchangeable biological product is biosimilar to an FDA-approved reference product and meets additional standards for interchangeability. An interchangeable biological product may be substituted for the reference product by a pharmacist without the intervention of the health care provider who prescribed the reference product. 5.Regulation of biosimilars. 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. 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 SB 671 (Hill) Page 7 of ? biosimilar to or interchangeable with a reference biological product (an already-licensed FDA biological product). On March 6, 2015, the FDA approved the first biosimilar: Zarxio. Produced by Sandoz, the drug is biosimilar to Amgen's Neupogen (filgrastim), which was originally licensed in 1991. Zarxio is approved for the same indications as Neupogen, and can be prescribed for patients: a. with cancer receiving myelosuppressive chemotherapy; b. with acute myeloid leukemia receiving induction or consolidation chemotherapy; c. with cancer undergoing bone marrow transplantation; d. with severe chronic neutropenia; and, e. undergoing autologous peripheral blood progenitor cell collection and therapy. 1.Similar Legislative Efforts in Other States. In the past two years, at least 23 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. 2.Double referral. This bill was heard in the Senate Business, Professions, and Economic Development Committee on April 13, 2015, and passed with a 7-0 vote. 3.Prior legislation. SB 598 (Hill) of 2013 was substantially SB 671 (Hill) Page 8 of ? similar to this bill. SB 598 was vetoed by the Governor, who stated about the prescriber notification provision of SB 598: This requirement, which on its face looks reasonable, is for some reason highly controversial. Doctors with whom I have spoken would welcome this information. 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? has not yet determined what standards will be required for biosimilars to meet the higher threshold for "interchangeability." Given this fact, to require physician notification at this point strikes me as immature. AB 1139 (Lowenthal) of 2013 would have permitted 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. AB 1139 was not heard in a policy committee. 4.Support. The Arthritis Foundation states that 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 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. Johnson & Johnson states that this bill updates Pharmacy Law to allow for substitution of a new class of FDA-approved medicines and will do so in a manner that 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 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 SB 671 (Hill) Page 9 of ? National Black Nurses Association, Inc. states that 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. The National Kidney Foundation states that 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. Novartis Pharmaceuticals writes that 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. 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 substitution, should the FDA grant such a designation, are treated the same in its defined substitution process. 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. 5.Support if amended. Alliance of Specialty Medicine, in response to a previous version of this bill, writes that this bill addresses key policy issues to ensure patient safety is preserved, and urges the author to define "reasonable time" for purposes of notifying a prescriber that a biologic had been dispensed. This bill was amended on April 14, 2015 to clarify that the notification is required to be made within five days of a pharmacist dispensing a product. SB 671 (Hill) Page 10 of ? 6.Opposition. The Academy of Managed Care Pharmacy writes that this 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. America's Health Insurance Plans states that the notification requirement in this bill creates a false impression about the safety of biologics, will hinder their use and creates unnecessary burdens, and 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. The California Association of Health Plans states that 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 states 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. 7.Oppose unless amended. The California Pharmacists Association (CPhA) states 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. CPhA 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. The California Retailers Association (CRA) writes that it appreciates use of the verb "communicate" over prior efforts using "notification," the organization still believes this SB 671 (Hill) Page 11 of ? 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 writes 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. The National Association of Chain Drug Stores, 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. According to the Pharmaceutical Care Management Association, 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 states that will make the notification process workable. Walgreens states 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. SB 671 (Hill) Page 12 of ? 8.Technical amendment. On page 3, beginning on line 23 (d) Selection pursuant to this section is within the discretion of the pharmacist, except as provided in subdivision (c). A pharmacist who selectsthean alternative biological product to be dispensed pursuant to this section shall assume the same responsibility for substituting the biological product as would be incurred in filling a prescription for a biological product prescribed by name. SUPPORT AND OPPOSITION : Support: AIM at Melanoma Foundation Amgen Arthritis Foundation Biocom Biotechnology Industry Organization California Healthcare Institute Chrohn's and Colitis Foundation of America Express Scripts Genentech Hospira Johnson and Johnson Kidney Cancer Association Lilly USA, LLC Medical Oncology Association of Southern California Merck and Co., Inc. National Black Nurses Association National Kidney Foundation Novartis Pharmaceuticals Novo Nordisk, Inc. Pharmaceutical Research and Manufacturers of America Sandoz Sanofi State Building and Construction Trades Council UCB, Inc. Oppose: Academy of Managed Care Pharmacy America's Health Insurance Plans Association of California Life and Health Insurance Companies California Association of Health Plans California Pharmacists Association (unless amended) California Retailers Association (unless amended) CVS Health (unless amended) SB 671 (Hill) Page 13 of ? Kaiser Permanente Molina Healthcare of California Mylan National Association of Chain Drug Stores (unless amended) National Community Pharmacists Association Pharmaceutical Care Management Association (unless amended) Walgreens (unless amended) -- END --