BILL ANALYSIS Ó
SB 671
Page 1
Date of Hearing: July 14, 2015
ASSEMBLY COMMITTEE ON HEALTH
Rob Bonta, Chair
SB
671 (Hill) - As Amended June 23, 2015
SENATE VOTE: 31-5
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 and requires
the Board of Pharmacy (Board) to maintain a link on its Website
to the list of biological products recognized as interchangeable
by the federal Food and Drug Administration (FDA).
Specifically, this bill:
1)Updates permitted functions for pharmacists to allow a
pharmacist to substitute an alternative biological product for
a prescribed biological product only if:
a) The alternative biological product, or biosimilar, is
interchangeable. Defines "interchangeable" as a biological
product that the FDA has determined meets the standards set
forth in federal regulation or has been deemed
SB 671
Page 2
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); or,
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.
2)Requires a pharmacist to communicate to the patient when an
interchangeable alternative biological product is substituted
for a biological product.
3)Requires a pharmacist, 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 prescriber; or,
b) Using facsimile, telephone, electronic transmission, or
other prevailing means if the pharmacy does not have access
to a) above.
SB 671
Page 3
4)Exempts the pharmacist from the communication requirement in
3b) above if 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.
5)Specifies that entry into an EMR system is presumed to provide
notice to the prescriber.
6)Provides that selection of an interchangeable 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
SB 671
Page 4
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
Medi-Cal Act.
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
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.
EXISTING FEDERAL LAW:
SB 671
Page 5
1)Under the Food, Drug and Cosmetics Act (FDCA), requires drug
manufacturers to obtain approval of new drugs from the 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 approval 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.
6)States that new drugs cannot be introduced into interstate
commerce unless an application for approval is filed by
either:
SB 671
Page 6
a) Full report of investigations to be filed with an
application to the Secretary of the FDA and which contain:
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 FDA Secretary may require;
v) Specimens of the labelling proposed to be used for
the drug; or,
vi) Any assessments required under Section 355c. (21
U.S.C Section 355(b)).
b) Abbreviated application of a new drug to be filed with
the FDA Secretary and which must contain:
SB 671
Page 7
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;
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 to the listed drug, except as
specified; or,
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.
7)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.
SB 671
Page 8
8)Classifies insulin as a hormone and therefore regulates these
endocrine system derived drugs under the FDCA and not as
biological products under the PHSA.
9)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.
EXISTING STATE LAW:
1)Establishes the Food and Drug Branch within the California
Department of Public Health 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)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.
3)Authorizes pharmacists filling prescription orders for drug
products prescribed by their trade or brand names to
substitute generic drugs 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
SB 671
Page 9
that a pharmacist may not substitute another drug product.
4)Authorizes pharmacists filling prescription orders for drug
products prescribed by their trade or brand names to
substitute a different form of the 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.
FISCAL EFFECT: According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, this bill will result
in negligible state costs.
COMMENTS:
1)PURPOSE OF THIS BILL. According to the author, this bill
updates California law so when the federal 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.
The author contends that it is therefore essential that a bill
be passed this year making clear the procedures for
substitution so California consumers can save money.
SB 671
Page 10
2)BACKGROUND.
a) Biologics. Conventional medications-drugs-are generally
made from chemicals, or chemically synthesized, and
therefore their structure can be relatively easily defined.
In contrast to most conventional medications, biological
products are generally derived from a living organism.
They can come from many sources, including humans, animals,
microorganisms, or yeast. Biologic products are large
molecules, usually proteins, with complex molecular
structures and manufacturing biologics is a far more
complex process than manufacturing drugs. Biologics
represent a small, but very expensive, section of the
prescription drug market. Biologic medicines 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. They are often administered in physician's
offices, oncology clinics, specialty pharmacies, hospitals
or dialysis centers.
b) Biosimilars. According the FDA, a biosimilar product
(also known as an "alternate biological product") is a
biological product that is approved based on a showing that
it is highly similar to an already-approved biological
product, known as a reference product. The biosimilar also
must show it 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.
Biosimilars are expected to create greater competition in
the medical marketplace. They can provide additional
treatment options for patients, but also lead to less
expensive alternatives to comparable products. In Europe,
SB 671
Page 11
where biosimilars already are available, they have been
priced 15-30% less than their name brand versions. This
savings would be significant, although not as great as
savings from generic versions of conventional drugs, which
can be up to 90% cheaper than branded versions.
c) Interchangeability. According to the FDA, 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.
Although the FDA approved the first biosimilar drug in
March 2015, the drug has not been classified as an
interchangeable biologic. Until the FDA determines
standards for interchangeability of biologics, biosimilars
cannot be substituted for branded pharmaceuticals. Though
the FDA is in the process of creating a pathway for the
approval of interchangeable biologics, they have not yet
issued guidance to manufacturers of what that process may
entail. Specifically, it is not yet known whether the FDA
will allow substitution of interchangeable biosimilars
without involving the prescribing physician.
d) Biosimilars are not the same as generics. Like generic
drugs, biosimilars generally will cost less than their
branded counterparts. Despite the idea that biosimilars
are often called "generic versions of biologics", they can
never be exact chemical duplicates. In view of the
complexity and sensitivity of biologicals to the
manufacturing process, no two biologic medicines can be
exactly the same, hence the term 'biosimilar' and not
biogeneric. As a consequence of their complexity,
automatic substitution of biologicals could potentially
give rise to different clinical consequences and therefore
many believe that this should be ruled out for reasons of
SB 671
Page 12
patient safety.
3)BIOSIMILARS IN EUROPE. Europe is ahead of the United States
when it comes to biosimilar adoption. The European Medicines
Agency (similar to U.S. FDA) approved its first biosimilar in
2006, and sixteen biosimilar products are now available in
European markets. In the European Union (EU), decisions on
pharmacy substitution of biosimilars are made at the Member
State level. According to the Generics and Biosimilars
Institute, a number of EU Member States have explicitly banned
substitution of biologics from different manufacturers. In
2014, France became the first EU country to explicitly
authorize substitution.
4)FEDERAL ACTION ON BIOSIMILARS. The BCPIA was passed as part
of the Patient Protection and Affordable Care Act. The BPCIA
created an abbreviated licensure pathway for biological
products shown to be similar to or interchangeable with the
FDA-licensed biological product, also call the reference
product. The FDA has begun to issue guidance and review
applications for biosimilar drugs, but has not issued guidance
for the full implementation of BPCIA. Federal guidelines for
naming and interchangeability (among other aspects) of
biosimilars are not complete.
5)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 bill 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
SB 671
Page 13
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)SUPPORT. The Pharmaceutical Research and Manufacturers of
America states that ensuring patient safety is essential when
implementing the BPCIA and for updating state substitution
laws to permit the substitution of interchangeable
biosimilars. This bill amends California law to put patient
protections in place that recognize the unique attributes of
biosimilar products. Other supporters point out that
inclusion of biosimilars in the Pharmacy Practices Act mirrors
California's patient protections for generic pill substitution
to ensure patients are afforded the opportunity to consult
with their doctor and pharmacist to make informed decisions on
their healthcare choices, including using less costly
medicines when appropriate. Patient advocacy groups,
including Arthritis Foundation, the National Kidney
Foundation, and others, support this bill because bringing
alternate biological products to market will reduce patient
drug costs for patients with complex diseases that often
require high-priced specialty drugs, including biologics.
7)OPPOSITION. The Association of California Life and Health
Insurance Companies, California Association of Health Plans,
and other insurers oppose this bill because it has the
potential to generate doubt about the safety and effectiveness
of interchangeable biologics in today's market. When
interchangeable drugs are approved by the FDA, they will
establish standards laying out when and how those drugs can be
SB 671
Page 14
substituted. Opponents generally state that administrative
burdens, such as physician notification, will do little if
anything to ensure public safety and they will increase the
cost of access to these life-saving drugs. Additionally, the
FDA is expected to do a thorough review of interchangeable
biosimilars. Enacting early state regulations could create a
potential conflict with federal directives. Instead, state
lawmakers should review any FDA rulings before deciding
whether any restrictions are necessary.
8)PREVIOUS LEGISLATION.
a) SB 538 (Hill) of 2013, was substantially similar to this
measure. 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."
b) 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. The bill was
never heard in a policy committee of the Legislature.
9)POLICY COMMENTS.
a) Although the FDA has approved the first biosimilar
product in the United States, it was not approved as an
interchangeable drug, and therefore would not be subject to
the substitution allowed in this bill. The FDA has not yet
SB 671
Page 15
clarified the rules on interchangeability. When those
guidelines are finalized, this bill might make California's
law for substitution of biological products more stringent
than federal law. The committee may wish to consider
whether this bill is premature given that FDA still has a
lot of work to do before finalizing rules on substitution
of interchangeable biosimilars.
b) This bill requires that pharmacists note the exact brand
and manufacturer in an electronic records system for any
biologic product dispensed. Given the complex nature of
biologic drugs, this information is critical to be tracked
in the patient record of any patient receiving any biologic
drugs. The language exempts from parts of the
communication requirements those pharmacies without access
to electronic records systems, such as very small
independent pharmacies. Although it is unclear how many
small, independent pharmacies in this state would be
dispensing biologic products under this bill, the Committee
may wish to consider whether this partial exemption from
the reporting requirements is necessary.
10)TECHNICAL AMENDMENT.
a) Subdivision (c) appears to mix together two separate
concepts, possibly due to a drafting error. To clarify
legislative intent, the following technical amendment
should be taken:
(c) Entry into an electronic records system as described in
subdivision (b) is presumed to provide notice to the
prescriber.
(d) If the pharmacy does not have access to one or more of
SB 671
Page 16
the entry systems in subdivision (b), 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?
REGISTERED SUPPORT / OPPOSITION:
Support
AIM at Melanona
American Cancer Society - Cancer Action Network
Amgen
Arthritis Foundation
Association of Northern California Oncologists
Biocom
Biotechnology Industry Organization
Boehringer-Ingelheim Pharmaceutical Company
SB 671
Page 17
California Life Sciences Association
Crohn's & Colitis Foundation of America
Express Scripts
Genentech
Hospira
Johnson & Johnson
Lilly USA, LLC
Lupus Foundation
Medical Oncology Association of Southern California, Inc
Merck
National Black Nurses Association
National Kidney Foundation
Novartis Pharmaceuticals
SB 671
Page 18
Novo Nordisk, Inc
Pharmaceutical research and Manufacturers of America
Sandoz
State Building and Construction Trades Council, AFL-CIO
UCB, Inc
Opposition
America's Health Insurance Plans
Association of California Life and Health Insurance Companies
California Association of Health Plans
Kaiser Permanente
Analysis Prepared by:Dharia McGrew / HEALTH / (916)
319-2097
SB 671
Page 19