BILL ANALYSIS Ó
SB 671
Page 1
Date of Hearing: July 7, 2015
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Susan Bonilla, Chair
SB 671(Hill) - As Amended June 23, 2015
SENATE VOTE: 31-5
NOTE: This bill is double referred, and if passed by this
Committee, it will be referred to the Assembly Committee on
Health.
SUBJECT: Pharmacy: biological product.
SUMMARY: This bill authorizes a pharmacist to substitute an
alternative biological product when filling a prescription for a
prescribed biological product under specified circumstances and
requires the Board of Pharmacy (Board) to maintain a link on its
website to the list of interchangeable biological products
recognized as interchangeable by the federal Food and Drug
Administration (FDA).
EXISTING LAW:
SB 671
Page 2
Federal Law:
1)Under 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))
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)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 of the FDA and which have been
SB 671
Page 3
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) Samples of the drug and of the articles used as
components, as the Secretary may require.
v) Specimens of the labelling proposed to be used
for the drug.
vi) 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
SB 671
Page 4
prescribed, recommended or suggested in the labeling
proposed for the new drug have been previously
approved.
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 new drug is
biologically equivalent the listed drug, except as
specified.
v) 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 262(i)(1))
2) Classifies insulin as a hormone and therefore regulates these
endocrine system derived drugs under the FDCA and not as
SB 671
Page 5
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)
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
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 §
SB 671
Page 6
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:
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
SB 671
Page 7
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.
1)Within five days following the dispensing of a biological
product, a dispensing pharmacist or the pharmacist's designee
shall make an entry of the specific biological product
provided to the patient, including the name of the biological
product and the manufacturer. Provides that the communication
shall be conveyed by making an entry that can be
electronically accessed by the prescriber through:
a) An interoperable electronic medical records system;
b) An electronic prescribing technology;
c) A pharmacy benefit management system; or,
SB 671
Page 8
d) A pharmacy record.
2)Entry into an electronic records system is presumed to provide
notice to the prescriber. If the pharmacy does not have
access to one or more of the aforementioned entry systems, the
pharmacist of 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.
5)Specifies 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."
7)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.
8)Removes liability of a prescriber for an act or omission by a
pharmacist in selecting, preparing or dispensing an
alternative biological product.
9)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.
10)Applies these provisions to all prescriptions, including
those presented by or on behalf of persons receiving
assistance from the federal government or pursuant to the
SB 671
Page 9
Medi-Cal Act (Welfare and Institutions Code Section 14000 et.
seq.).
11)Requires a communication be made to the patient when an
alternative biological product is substituted for a biological
product.
12)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.
13)Clarifies that a pharmacist may still give immunizations
pursuant to a protocol with a prescriber.
14)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.
15)Adds all of the above provisions to the section of Pharmacy
Law specifying actions for substitution of a generic drug.
FISCAL EFFECT: According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, this bill will result
in negligible state costs.
COMMENTS:
Purpose. This bill is sponsored by the author. According to
the author, "SB 671 updates California law so when the federal
Food and Drug Administration 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
SB 671
Page 10
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 so California consumers can save
money."
Background. A "biologic" drug is one that is created by
biological rather than chemical processes. Biologics have been
available for more than 20 years and include enzymes, human
growth hormones, human insulins, interleukins, and vaccines.
Many biologics are among the most costly medicines available,
ranging from $1,000 to $50,000 per treatment.
Biologic drugs represent a fast-growing segment of the
pharmaceutical market, constituting 32% of products in the
development pipeline and accounting for around 10% of
pharmaceutical expenditures (as of 2011). The biologic market
is expected to grow more than 20% per year.
Biologic drugs are currently prescribed to treat blood
conditions, cancers, immune disorders such as Rheumatoid
Arthritis, Psoriasis and Crohn's Disease and neurological
disorders like Multiple Sclerosis and are almost exclusively
administered in physician's offices, oncology clinics, specialty
pharmacies, hospitals or dialysis centers.
A "biosimilar" is a biologic drug that is designed to be
comparable to a particular existing biologic drug, known as the
biologic "reference" drug. It is not generic, the same or
identical. In fact, regulatory agencies including the World
Health Organization, the FDA and the European Medicines Agency
have deemed that biologics cannot scientifically have "generic
or identical versions" and instead can only have "similar"
versions. Some manufacturers will seek "interchangeable" status
for their biosimilar, a designation granted by the FDA that
SB 671
Page 11
means those biosimilar drugs may be substituted for the biologic
reference drug without any expected change in clinical outcomes.
Current Law Relating to Substitutions. In practice, this bill
would allow a pharmacist to substitute an interchangeable
biosimilar for a prescribed biologic to save money, in the same
way a pharmacist may currently substitute a generic for a brand
name drug.
Currently, a pharmacist filling a prescription order for a drug
prescribed by its brand name may substitute a generic drug
instead, unless the prescriber personally indicates verbally or
in writing not to substitute. The prescriber is not liable for
the pharmacist selecting, preparing, or dispensing a generic
drug, and a pharmacist may not substitute a generic drug unless
it results in cost savings for the patient.
These existing provisions of law would apply to the substitution
of interchangeable biosimilars as well, except that a biosimilar
may be substituted which costs the patient the same or less than
the prescribed biological product.
Biologics Price Competition and Innovation Act. The Biologics
Price Competition and Innovation Act (Act) was enacted as part
of the federal Affordable Care Act on March 23, 2010. The Act
created an abbreviated licensure pathway for biosimilars.
The Act defines "biosimilarity" to mean that "the biological
product is highly similar to the reference product
notwithstanding minor differences in clinically inactive
components" and that "there are no clinically meaningful
differences between the biological product in terms of the
safety, purity, and potency of the product."
SB 671
Page 12
The FDA sets an even higher standard for biosimilar drugs that a
manufacturer wants to deem "interchangeable" with a biologic
reference drug. To attain interchangeability, according to the
FDA, "a [manufacturer] must provide sufficient information to
demonstrate biosimilarity, and also to demonstrate that the
[interchangeable biosimilar] can be expected to produce the same
clinical result as the reference product in any given patient
and, if the [interchangeable biosimilar] product is administered
more than once to an individual, the risk in terms of safety or
diminished efficacy of alternating or switching between the use
of the biological product and the reference product is not
greater than the risk of using the reference product without
such alteration or switch."
In other words, a patient should not experience a difference
between an interchangeable biosimilar and its reference
biologic. The Act expressly states that a pharmacist or other
dispenser may substitute an interchangeable biological product
for the reference product without consulting the prescribing
doctor.
Impact on Pharmacies. Only seriously ill patients are
prescribed biologic medicines which are almost exclusively
prescriber administered. In California, biologics represent a
small fraction of prescriptions dispensed at the retail level.
According to a July 2014 MarketScan report for the period
January 2013 to December 2013, retail pharmacies in California
dispensed an average of 3.85 biologic prescriptions per week per
location. Walgreens pharmacies in California currently perform
over 4.5 million physician notifications per month for
traditional prescriptions. In the event of a biosimiliar
substitution, this bill requires that within five days the
substitution information be made available to the prescriber.
Prescriber Notification. This bill would require a pharmacist
SB 671
Page 13
to inform the prescriber of the interchangeable biosimilar
substitution within five business days of the selection.
According to the author, with biologic medicines, adverse
reactions, which occur when a patient's body recognizes a
biologic medicine as a foreign matter, may not manifest until 9
to 12 months after the administration of the drug. In order to
ensure consumer safety, health records should be updated in the
event of any contraindications in patients receiving substituted
biosimilars. 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.
Insulin. Biological products are approved by the FDA under two
different federal statutes: the Public Health Service Act (PHSA)
or the Food, Drug, and Cosmetic Act (FDCA) (insulins, growth
hormones and a few others). Biologics have been classified
under one statute versus the other solely for historical reasons
- not scientific differences. Accordingly, the two categories
of biologics will ultimately be "merged" by federal law on March
23, 2020. According to the author, until then, it is necessary
to include the FDCA products in SB 671 so they can be
automatically substituted when an interchangeable biosimilar is
approved. Currently, there are no insulins that have been
determined by the FDA to be therapeutically equivalent therefore
they are not currently allowed to be automatically substituted.
Prior Related Legislation. SB 538 (Hill) of 2013, was
substantially similar to this measure. NOTE: The bill was
vetoed by the Governor because the FDA had not determined
standards for biosimilars to meet the higher threshold for
interchangeability."
ARGUMENTS IN SUPPORT:
AMGEN supports the bill. In their letter they write, "The
pursuit of science-based medicines that restore health or even
SB 671
Page 14
save lives is fundamental to our values. Amgen's leading
position in biotechnology, long-standing commitment to patient
safety and leadership in manufacturing high quality biologic
medicines mean that Amgen is equipped to develop and produce
safe and effective biosimilars. In fact, we have nine
biosimilar molecules in our pipeline."
The Arthritis Foundation supports the bill and writes, "When
therapeutic innovations come to market, patient safety must
remain the number one priority in any discussion; even if a drug
is less expensive, these advantages mean nothing if the drug
does not successfully treat the patient. It is important to
remember that these are complex medications, and that
interchangeable biological products are not the same as
generics. Because of this, the Arthritis Foundation is
committed to ensuring that concerns of people who take these
medications, and the specialist physicians who treat them, are
kept at the forefront. By doing so, the patient and physician
can continue a dialogue ensuring they receive the optimal care
with these game-changing medications."
The Biotechnology Industry Organization , BIOCOM , and California
Life Sciences Association all support the bill. They write in
their joint letter, "This legislation ensures patients and their
physicians remain in control of their medical treatment options
as the market for complex biologics evolves."
Boehringer-Ingelheim Pharmaceutical Company also supports the
bill and writes, "The leading companies developing and marketing
biologic products, including biosimilars and interchangeable
biologics, have been engaged in discussions on the various state
legislative proposals. Through the legislative process, it has
become clear that physicians, and patients, see value in
transparent communication on all biologic medicines dispensed in
order to maintain a consistent and complete medical record."
SB 671
Page 15
Genentech supports the bill and writes, "SB 671 requires
pharmacists to communicate the substitution of an
interchangeable biosimilar to a patient's prescriber. This
safeguard is critical in the event of an adverse reaction or
change in a patient's chronic condition. It is important that
physicians have access to a patient's health record to best
interpret any health changes or negative clinical responses and
respond appropriately."
The Medical Oncology Association of Southern California, Inc .
writes, "SB 671 is a common sense bill that ensures patients may
have access to life-saving, lower cost, FDA-approved
biosimilars. On behalf of our patients who depend upon safe,
affordable, effective medications for their health and
well-being, we urge passage of SB 671."
The Pharmaceutical Research and Manufacturers of America
supports the bill and writes, "Ensuring patient safety is
essential in the implementation of the Biologic Price
Competitions and Innovation Act of 2009 and the amendment of
state substitution laws to permit the substitution of
interchangeable biosimilars. SB 671 amends California law to
put patient protections in place that recognize the unique
attributes of biosimilar products."
UCB Inc . supports the bill and writes, " If and when the U.S.
Food and Drug Administration determines that certain
"biosimilars" are interchangeable, it is important to have state
substitution laws in place to address issues that are critical
for patient safety."
ARGUMENTS IN OPPOSITION:
SB 671
Page 16
The Academy of Managed Care Pharmacy writes in opposition, "The
restrictive notification requirements in this legislation will
discourage substitution of more affordable interchangeable
biologic products and will potentially increase medication costs
to patients and payers and, thereby, threaten patient access to
these products. It will also discourage drug manufacturers from
developing those products because of the administrative burdens
in Senate Bill 671 that clearly favor the dispensing of more
expensive biologic products."
The Association of California Life & Health Insurance Companies
writes in their letter of opposition, "Recognizing that the FDA
is the only U.S. regulatory body with the scientific expertise
to determine when and how biosimilars and interchangeable
biologics may be substituted for branded biologics, this
legislation is especially concerning as it has the potential to
generate doubt about the safety and effectiveness of
interchangeable biologics in today's market. For this reason we
strongly believe that California should proceed cautiously and
allow the FDA the opportunity to do their job and fully and
effectively evaluate these products."
The California Association of Health Plans opposes the bill and
writes, "SB 671 creates doubt about the safety of biosimilar
drugs by placing notification requirements on drugs that have
been available in international markets for over a decade.
These before-the-fact administrative burdens will do little if
anything to ensure public safety and they will increase the cost
of access to these life-saving drugs."
Molina Healthcare also opposed the bill. In their letter they
state, "Earlier this year, the U.S. Centers for Medicare and
Medicaid Services released guidance relating to these new
medications, calling on state Medicaid programs to see the
approval of new biologics "as a unique opportunity to achieve
measureable cost savings and greater beneficiary access to
SB 671
Page 17
expensive therapeutic treatments for chronic conditions" and to
"encourage and maximize their use." SB 671 would instead hinder
their use through unnecessary notice burdens.
The Pharmaceutical Care Management Association opposes the bill
and writes, "PCMA believes that the notification requirements in
SB 671 are unnecessary and will only prevent the cost savings to
patients and employers that can be achieved with use of
interchangeable biosimilar medication."
REGISTERED SUPPORT:
AMGEN
Arthritis Foundation
Biotechnology Industry Organization
Biocom
Boehringer-Ingelheim Pharmaceutical Company
California Life Sciences Association
ExpressScripts
Genentech
SB 671
Page 18
Medical Oncology Association of Southern California, Inc.
Novartis Pharmaceuticals
Pharmaceutical Research and Manufacturers of America
UCB Inc.
REGISTERED OPPOSITION:
Academy of Managed Care Pharmacy
Association of California Life & Health Insurance Companies
California Association of Health Plans
Kaiser Permanente
Molina Healthcare
Analysis Prepared by:Le Ondra Clark Harvey, Ph.D. / B. & P. /
(916) 319-3301
SB 671
Page 19