Amended in Senate May 31, 2016

Amended in Senate April 13, 2016

Senate BillNo. 1193


Introduced by Senator Hill

(Principal coauthor: Assembly Member Salas)

February 18, 2016


An act to amend Sections 4001, 4003,begin insert 4107, 4110,end insert 4119.1,begin insert 4127, 4127.3, 4127.7, 4127.8, 4127.9, 4128.6, 4161, 4180, 4400,end insert andbegin delete 4400end deletebegin insert 4406end insert of, to add Sections 4034,begin insert 4126.9,end insert 4203.5, and 4316 to, and to add Article 7.7 (commencing with Section 4129) to Chapter 9 of Division 2 of, the Business and Professions Code,begin delete andend delete to amend Section 13401.5 of the Corporations Code,begin insert and to amend Sections 1261.6 and 11164.5 of the Health and Safety Code,end insert relating to healing arts, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

SB 1193, as amended, Hill. Pharmacy:begin delete outsourcing facilities.end deletebegin insert Law.end insert

The Pharmacy Law provides for the licensure and regulation of the practice of pharmacy by the California State Board of Pharmacy, which is within the Department of Consumer Affairs, and authorizes the board to appoint, with the approval of the Director of Consumer Affairs, an executive officer, as specified. That law repeals the provisions establishing the board and authorizing the board to appoint an executive officer as of January 1, 2017. Under existing law, the board is subject to evaluation by the Joint Sunset Review Committee upon its repeal.begin delete Thatend delete

begin insert

This bill would extend the operation of the board and the board’s authorization to appoint an executive officer until January 1, 2021.

end insert
begin insert

The Pharmacy Law authorizes the board to issue a temporary permit to own or operate a pharmacy when the ownership of a pharmacy is transferred from one person to another, as specified.

end insert
begin insert

The bill would authorize the board to issue a temporary permit, as specified, regardless of whether the ownership of a pharmacy is transferred from one person to another.

end insert

begin insert The Pharmacyend insert law authorizes a pharmacy to provide pharmacy services to specified licensed health facilities through the use of an automated drug delivery system.begin delete That law also provides forend delete

begin insert

This bill would require a pharmacy to register use of an automated drug delivery system with the board, including the address and location of use.

end insert
begin insert

Existing law, until January 1, 2012, permitted access by licensed personnel to multiple drugs that are not patient specific only if an automated drug delivery system had both electronic and mechanical safeguards in place to ensure that the only drugs delivered to the patient were specific to that patient. Existing law, until January 1, 2012, required each facility using an automated drug delivery system to notify the State Department of Health Care Services in writing prior to utilization of the system, as provided. Existing law, until January 1, 2012, required the department, as part of its oversight of those facilities, to review a facility’s medication training, storage, and security and its administration procedures related to its use of an automated drug delivery system.

end insert
begin insert

This bill would make these provisions operative by repealing the provision that made them inoperative on January 1, 2012.

end insert

begin insertThe Pharmacy Law requiresend insert the board to issue a license, after an investigation to determine whether the applicant and the premises qualify for a license, that authorizes specified clinics to purchase drugs at wholesale for administration or dispensing, under the direction of a physician and surgeon, to patients registered for care at the clinic. Existing law makes a violation of any provision of the Pharmacy Law punishable as an infraction if no other penalty is provided.

This bill wouldbegin delete extend the operation of the board and the board’s authorization to appoint an executive officer until January 1, 2021. The bill would require a pharmacy to register use of an automated drug delivery system with the board, including the address and location of use. The bill wouldend delete require the board, when a clinic applicant submits specified types of applications, to issue a license or incorporate changes to an existing license within 30 days of receipt of a completed application and payment of fees. The bill wouldbegin insert require that this provisionend insert notbegin insert be construed toend insert limit the board’s authority to investigate to determine whether the applicant and the premises qualify for a license.begin delete By placing new requirements on a pharmacy, this bill would expand an existing crime and would, therefore, impose a state-mandated local program.end delete

The Pharmacy Law prohibits a pharmacy from compounding sterile drug products unless the pharmacy has obtained a sterile compounding pharmacy license from the board and prohibits the board from issuing or renewing that license until the board has, among other things, reviewed a current copy of the pharmacy’s procedures and policies for sterile compounding.begin delete Existing law provides that fees collected on behalf of the board are credited to the Pharmacy Board Contingent Fund, which continuously appropriates fees in the fund.end deletebegin insert That law prohibits the board from issuing more than one site license to a single premises with specified exceptions, including issuing a license to compound sterile injectable drugs to a resident pharmacy.end insert

begin insert

This bill would expand the exception under which the board may issue more than one site license to a single premises to include issuing a license to compound sterile drugs to a pharmacy, regardless of whether those drugs are injectable and regardless of whether the pharmacy is a nonresident pharmacy.

end insert
begin insert

The Pharmacy Law requires a pharmacy that compounds sterile drug products for injection, administration into the eye, or inhalation to possess a sterile compounding pharmacy license.

end insert
begin insert

This bill would require a pharmacy that compounds any sterile drug products to possess a sterile compounding pharmacy license.

end insert
begin insert

The Pharmacy Law authorizes the executive officer of the board, based on a reasonable belief obtained during an investigation or pharmacy inspection by the board, to issue a cease and desist order to a pharmacy requiring the pharmacy to refrain from compounding injectable sterile drug products if that activity poses an immediate threat to the public health or safety.

end insert
begin insert

This bill would expand the authorization of the executive officer of the board to issue a cease and desist order to include requiring the pharmacy to refrain from compounding any sterile drug products if that activity poses an immediate threat to public health or safety.

end insert
begin insert

The Pharmacy Law requires a pharmacy to compound injectable sterile products from one or more nonsterile ingredients in a specified environment.

end insert
begin insert

This bill would require a pharmacy to compound any sterile products from one or more nonsterile ingredients in a specified environment.

end insert
begin insert

The Pharmacy Law authorizes the board to issue a temporary license to compound injectable sterile drug products when the ownership of a pharmacy that is licensed to compound injectable sterile drug products is transferred from one person to another, as specified.

end insert
begin insert

This bill would authorize the board to issue a temporary permit to compound sterile drug products, as specified, regardless of whether the drug product is injectable and regardless of whether the ownership of the pharmacy is transferred from one person to another.

end insert
begin insert

The Pharmacy Law requires a resident or a nonresident pharmacy that issues a recall notice regarding a sterile compounded drug to contact the recipient pharmacy, prescriber, or patient of the recalled drug and the board as soon as possible within 12 hours of the recall notice, if use of or exposure to the recalled drug may cause serious adverse health consequences or death and if the recalled drug was dispensed or is intended for use in this state.

end insert
begin insert

The bill would make a technical correction to this provision and would require a pharmacy that issues a recall notice regarding a nonsterile compounded drug to contact the recipient pharmacy, prescriber, or patient of the recalled drug and the board within 12 hours of the recall notice, if use of or exposure to the recalled drug may cause serious adverse health consequences or death and if the recalled drug was dispensed or is intended for use in this state. The bill would also require a pharmacy that has been advised that a patient has been harmed by using a nonsterile compounded product potentially attributable to the pharmacy to report the event to the MedWatch program of the federal Food and Drug Administration within 72 hours.

end insert
begin delete

The

end delete

begin insertThisend insert bill would require the board to license an outsourcing facility, as defined, and would prohibit an outsourcing facility to be concurrently licensed with the board as a sterile compounding pharmacy at the same location. The bill would require an outsourcing facility to be licensed with the board before doing business within or into the state and would require an outsourcing facility to, among other things, notify the board of any disciplinary or other action taken by another state or the federal Food and Drug Administration within 10 days of the action. The bill would require the board to, among other things, inspect the location of an outsourcing facility to ensure that the outsourcing facility is in compliance with all laws and regulations before issuing or renewing an outsourcing facility’s license. The bill would make a violation of any of these provisions or regulations adopted thereto punishable by a fine of up to $5,000 per occurrence. The bill would, on or after January 1, 2018, require the board to provide a report, as specified, to the Legislature regarding the regulation of nonresident outsourcing facilities.begin delete Theend delete

begin insert

Existing law authorizes specified clinics to purchase drugs at wholesale for administration or dispensing, under the direction of a physician and surgeon, to the clinic’s patients. Existing law requires each clinic location to have a separate license.

end insert
begin insert

This bill would require the board to synchronize license renewal dates and aggregate fees for multiple clinics under common nonprofit ownership at the request of the parent organization.

end insert
begin insert

Existing law requires that fees collected on behalf of the board be credited to the Pharmacy Board Contingent Fund. Existing law continuously appropriates fees in the fund.

end insert

begin insert Thisend insert bill wouldbegin delete alsoend delete authorize the board to collect a fee of $780 for the issuance and renewal of an outsourcing license and a fee of $715 for a temporary license, as specified.begin delete By increasing the amount of money deposited into a continuously appropriated fund, the bill would make an appropriation.end deletebegin insert This bill would provide that the Pharmacy Board Contingent Fund is available for expenditure only upon an appropriation by the Legislature.end insert

Existing law authorizes specified healing arts licensees to be shareholders, officers, directors, or professional employees of a designated professional corporation, subject to certain limitations relating to ownership of shares.

This bill would additionally authorize licensed pharmacists to be shareholders, officers, directors, or professional employees of a designated professional corporation, subject to certain limitations relating to ownership of shares.

begin insert

Existing law authorizes, with the approval of the board and the Department of Justice, a pharmacy or hospital to receive electronic data transmission prescriptions and computer entry prescriptions or orders for controlled substances in Schedule II, III, IV, or V, if authorized by federal law and in accordance with regulations promulgated by the federal Drug Enforcement Administration. Existing law requires the board to maintain a list of all requests and approvals granted. Existing law prohibits an approved pharmacy or hospital receiving an electronic transmission prescription or a computer entry prescription or order for a controlled substance in Schedule II, III, IV, or V from being required to reduce that prescription or order to writing or to hard copy form as long as the pharmacy or hospital is able to immediately produce a specified hard copy upon request.

end insert
begin insert

This bill would remove these provisions.

end insert
begin insert

By placing new requirements on a pharmacy, this bill would expand an existing crime and would, therefore, impose a state-mandated local program.

end insert

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: begin deleteyes end deletebegin insertnoend insert. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

P6    1

SECTION 1.  

Section 4001 of the Business and Professions
2Code
is amended to read:

3

4001.  

(a) There is in the Department of Consumer Affairs a
4California State Board of Pharmacy in which the administration
5and enforcement of this chapter is vested. The board consists of
613 members.

7(b) The Governor shall appoint seven competent pharmacists
8who reside in different parts of the state to serve as members of
9the board. The Governor shall appoint four public members, and
10the Senate Committee on Rules and the Speaker of the Assembly
11shall each appoint a public member who shall not be a licensee of
12the board, any other board under this division, or any board referred
13to in Section 1000 or 3600.

14(c) At least five of the seven pharmacist appointees to the board
15shall be pharmacists who are actively engaged in the practice of
16pharmacy. Additionally, the membership of the board shall include
17at least one pharmacist representative from each of the following
18practice settings: an acute care hospital, an independent community
19pharmacy, a chain community pharmacy, and a long-term health
20care or skilled nursing facility. The pharmacist appointees shall
21also include a pharmacist who is a member of a labor union that
22represents pharmacists. For the purposes of this subdivision, a
P7    1“chain community pharmacy” means a chain of 75 or more stores
2in California under the same ownership, and an “independent
3community pharmacy” means a pharmacy owned by a person or
4entity who owns no more than four pharmacies in California.

5(d) Members of the board shall be appointed for a term of four
6years. No person shall serve as a member of the board for more
7than two consecutive terms. Each member shall hold office until
8the appointment and qualification of his or her successor or until
9one year shall have elapsed since the expiration of the term for
10which the member was appointed, whichever first occurs.
11Vacancies occurring shall be filled by appointment for the
12unexpired term.

13(e) Each member of the board shall receive a per diem and
14expenses as provided in Section 103.

15(f) This section shall remain in effect only until January 1, 2021,
16and as of that date is repealed. Notwithstanding any other law, the
17repeal of this section renders the board subject to review by the
18appropriate policy committees of the Legislature.

19

SEC. 2.  

Section 4003 of the Business and Professions Code is
20amended to read:

21

4003.  

(a) The board, with the approval of the director, may
22appoint a person exempt from civil service who shall be designated
23as an executive officer and who shall exercise the powers and
24perform the duties delegated by the board and vested in him or her
25by this chapter. The executive officer may or may not be a member
26of the board as the board may determine.

27(b) The executive officer shall receive the compensation as
28established by the board with the approval of the Director of
29Finance. The executive officer shall also be entitled to travel and
30other expenses necessary in the performance of his or her duties.

31(c) The executive officer shall maintain and update in a timely
32fashion records containing the names, titles, qualifications, and
33places of business of all persons subject to this chapter.

34(d) The executive officer shall give receipts for all money
35received by him or her and pay it to the department, taking its
36receipt therefor. Besides the duties required by this chapter, the
37executive officer shall perform other duties pertaining to the office
38as may be required of him or her by the board.

39(e) This section shall remain in effect only until January 1, 2021,
40and as of that date is repealed.

P8    1

SEC. 3.  

Section 4034 is added to the Business and Professions
2Code
, to read:

3

4034.  

“Outsourcing facility” means a facility that meets all of
4the following:

5(a) Is located within the United States of America at one address
6that is engaged in the compounding of sterile drugs and nonsterile
7drugs.

8(b) Has registered as an outsourcing facility with the federal
9Food and Drug Administration under Section 503B of the Federal
10Food, Drug, and Cosmetic Act (21 U.S.C. Sec. 353b).

11(c) Is doing business within or into California.

12(d) Is licensed with the board as an outsourcing facility pursuant
13to Article 7.7 (commencing with Section 4129).

14begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 4107 of the end insertbegin insertBusiness and Professions Codeend insertbegin insert is
15amended to read:end insert

16

4107.  

(a) The boardbegin delete mayend deletebegin insert shallend insert not issue more than one site
17license to a single premises except as follows:

18(1) To issue a veterinary food-animal drug retailer license to a
19wholesaler pursuant to Section 4196.

20(2) To issue a license to compound sterilebegin delete injectableend delete drugs to a
21pharmacy pursuant to Sectionbegin delete 4127.1.end deletebegin insert 4127.1 or 4127.2.end insert

22(3) To issue a centralized hospital packaging license pursuant
23to Section 4128.

24(b) For the purposes of this subdivision, “premises” means a
25location with its own address and an independent means of ingress
26and egress.

27begin insert

begin insertSEC. 5.end insert  

end insert

begin insertSection 4110 of the end insertbegin insertBusiness and Professions Codeend insertbegin insert is
28amended to read:end insert

29

4110.  

(a) No person shall conduct a pharmacy in the State of
30California unless he or she has obtained a license from the board.
31A license shall be required for each pharmacy owned or operated
32by a specific person. A separate license shall be required for each
33of the premises of any person operating a pharmacy in more than
34one location. The license shall be renewed annually. The board
35may, by regulation, determine the circumstances under which a
36license may be transferred.

37(b) The board may, at its discretion, issue a temporarybegin delete permit,
38when the ownership of a pharmacy is transferred from one person
39to another,end delete
begin insert permitend insert upon the conditions and for any periods of time
40as the board determines to be in the public interest. A temporary
P9    1permit fee shall be required in an amount established by the board
2as specified in subdivision (a) of Section 4400. When needed to
3protect public safety, a temporary permit may be issued for a period
4not to exceed 180 days, and may be issued subject to terms and
5conditions the board deems necessary. If the board determines a
6temporary permit was issued by mistake or denies the application
7for a permanent license or registration, the temporary license or
8registration shall terminate upon either personal service of the
9notice of termination upon the permitholder or service by certified
10mail, return receipt requested, at the permitholder’s address of
11record with the board, whichever comes first. Neither for purposes
12of retaining a temporary permit nor for purposes of any disciplinary
13or license denial proceeding before the board shall the temporary
14 permitholder be deemed to have a vested property right or interest
15in the permit.

16(c) The board may allow the temporary use of a mobile
17pharmacy when a pharmacy is destroyed or damaged, the mobile
18pharmacy is necessary to protect the health and safety of the public,
19and the following conditions are met:

20(1) The mobile pharmacy shall provide services only on or
21immediately contiguous to the site of the damaged or destroyed
22pharmacy.

23(2) The mobile pharmacy is under the control and management
24of the pharmacist-in-charge of the pharmacy that was destroyed
25or damaged.

26(3) A licensed pharmacist is on the premises while drugs are
27being dispensed.

28(4) Reasonable security measures are taken to safeguard the
29drug supply maintained in the mobile pharmacy.

30(5) The pharmacy operating the mobile pharmacy provides the
31board with records of the destruction of, or damage to, the
32pharmacy and an expected restoration date.

33(6) Within three calendar days of restoration of the pharmacy
34services, the board is provided with notice of the restoration of the
35permanent pharmacy.

36(7) The mobile pharmacy is not operated for more than 48 hours
37following the restoration of the permanent pharmacy.

38

begin deleteSEC. 4.end delete
39
begin insertSEC. 6.end insert  

Section 4119.1 of the Business and Professions Code
40 is amended to read:

P10   1

4119.1.  

(a) A pharmacy may provide pharmacy services to a
2health facility licensed pursuant to subdivision (c), (d), or both, of
3Section 1250 of the Health and Safety Code, through the use of
4an automated drug delivery system that need not be located at the
5same location as the pharmacy.

6(b) Drugs stored in an automated drug delivery system shall be
7part of the inventory of the pharmacy providing pharmacy services
8to that facility, and drugs dispensed from the pharmacy system
9shall be considered to have been dispensed by that pharmacy.

10(c) (1) The pharmacy shall maintain records of the acquisition
11and disposition of dangerous drugs and dangerous devices stored
12in the automated drug delivery system separate from other
13pharmacy records.

14(2) The pharmacy shall own and operate the automated drug
15delivery system.

16(3) The pharmacy shall provide training regarding the operation
17and use of the automated drug delivery system to both pharmacy
18and health facility personnel using the system.

19(4) The pharmacy shall operate the automated drug delivery
20system in compliance with Section 1261.6 of the Health and Safety
21Code.

22(d) The operation of the automated drug delivery system shall
23be under the supervision of a licensed pharmacist. To qualify as a
24supervisor for an automated drug delivery system, the pharmacist
25need not be physically present at the site of the automated drug
26delivery system and may supervise the system electronically.

27(e) The pharmacy shall register use of an automated drug
28delivery system with the board, including the address and location
29of use.

30(f) This section shall not be construed to revise or limit the use
31of automated drug delivery systems as permitted by the board in
32any licensed health facility other than a facility defined in
33subdivision (c) or (d), or both, of Section 1250 of the Health and
34Safety Code.

35begin insert

begin insertSEC. 7.end insert  

end insert

begin insertSection 4126.9 is added to the end insertbegin insertBusiness and Professions
36Code
end insert
begin insert, to read:end insert

begin insert
37

begin insert4126.9.end insert  

(a) A pharmacy that issues a recall notice regarding
38a nonsterile compounded drug product shall, in addition to any
39other duties, contact the recipient pharmacy, prescriber, or patient
P11   1of the recalled drug and the board within 12 hours of the recall
2notice if both of the following apply:

3
(1) Use of or exposure to the recalled drug may cause serious
4adverse health consequences or death.

5
(2) The recalled drug was dispensed, or is intended for use, in
6this state.

7
(b) A recall notice issued pursuant to subdivision (a) shall be
8made as follows:

9
(1) If the recalled drug was dispensed directly to the patient,
10the notice shall be made to the patient.

11
(2) If the recalled drug was dispensed directly to the prescriber,
12the notice shall be made to the prescriber, who shall ensure the
13patient is notified.

14
(3) If the recalled drug was dispensed directly to a pharmacy,
15the notice shall be made to the pharmacy, which shall notify the
16prescriber or patient, as appropriate. If the pharmacy notifies the
17prescriber, the prescriber shall ensure the patient is notified.

18
(c) In cases where patient harm has occurred resulting from
19use of the compounded product, the event shall be reported to
20MedWatch within 72 hours of the pharmacy being advised.

end insert
21begin insert

begin insertSEC. 8.end insert  

end insert

begin insertSection 4127 of the end insertbegin insertBusiness and Professions Codeend insertbegin insert is
22amended to read:end insert

23

4127.  

(a) A pharmacy that compounds sterile drug products
24begin delete for injection, administration into the eye, or inhalationend delete shall possess
25a sterile compounding pharmacy license as provided in this article.

26(b) The board shall adopt regulations in accordance with the
27Administrative Procedure Act (Chapter 3.5 (commencing with
28Section 11340) of Part 1 of Division 3 of Title 2 of the Government
29Code) to establish policies, guidelines, and procedures to
30implement this article.

31(c) The board shall review any formal revision to General
32Chapter 797 of the United States Pharmacopeia and The National
33Formulary (USP-NF), relating to the compounding of sterile
34preparations, not later than 90 days after the revision becomes
35official, to determine whether amendments are necessary for the
36regulations adopted by the board pursuant to subdivision (b).

begin delete

37(d) This section shall become operative on July 1, 2014.

end delete
38begin insert

begin insertSEC. 9.end insert  

end insert

begin insertSection 4127.3 of the end insertbegin insertBusiness and Professions Codeend insert
39
begin insert is amended to read:end insert

P12   1

4127.3.  

(a) Whenever the board has a reasonable belief, based
2on information obtained during an inspection or investigation by
3the board, that a pharmacy compoundingbegin delete injectableend delete sterile drug
4products poses an immediate threat to the public health or safety,
5the executive officer of the board may issue an order to the
6pharmacy to immediately cease and desist from compounding
7begin delete injectableend delete sterile drug products. The cease and desist order shall
8remain in effect for no more than 30 days or the date of a hearing
9seeking an interim suspension order, whichever is earlier.

10(b) Whenever the board issues a cease and desist order pursuant
11to subdivision (a), the board shall immediately issue the owner a
12notice setting forth the acts or omissions with which the owner is
13charged, specifying the pertinent code section or sections.

14(c) The order shall provide that the owner, within 15 days of
15receipt of the notice, may request a hearing before the president
16of the board to contest the cease and desist order. Consideration
17of the owner’s contest of the cease and desist order shall comply
18with the requirements of Section 11425.10 of the Government
19Code. The hearing shall be held no later than five days from the
20date the request of the owner is received by the board. The
21president shall render a written decision within five days of the
22hearing. In the absence of the president of the board, the vice
23president of the board may conduct the hearing permitted by this
24subdivision. Review of the decision of the president of the board
25may be sought by the owner or person in possession or control of
26the pharmacy pursuant to Section 1094.5 of the Code of Civil
27Procedure.

28(d) Failure to comply with a cease and desist order issued
29pursuant to this section shall be unprofessional conduct.

30begin insert

begin insertSEC. 10.end insert  

end insert

begin insertSection 4127.7 of the end insertbegin insertBusiness and Professions Codeend insert
31
begin insert is amended to read:end insert

32

4127.7.  

begin deleteOn and after July 1, 2005, a end deletebegin insertA end insertpharmacy shall
33compound sterilebegin delete injectableend delete products from one or more nonsterile
34ingredients in one of the following environments:

35(a) An ISO class 5 laminar airflow hood within an ISO class 7
36cleanroom. The cleanroom must have a positive air pressure
37differential relative to adjacent areas.

38(b) An ISO class 5 cleanroom.

39(c) A barrier isolator that provides an ISO class 5 environment
40for compounding.

P13   1begin insert

begin insertSEC. 11.end insert  

end insert

begin insertSection 4127.8 of the end insertbegin insertBusiness and Professions Codeend insert
2
begin insert is amended to read:end insert

3

4127.8.  

The board may, at its discretion, issue a temporary
4license to compound injectable sterile drugbegin delete products, when the
5ownership of a pharmacy that is licensed to compound injectable
6sterile drug products is transferred from one person to another,end delete

7begin insert productsend insert upon the conditions and for any periods of time as the
8board determines to be in the public interest. A temporary license
9fee shall be required in an amount established by the board as
10specified in subdivision (u) of Section 4400. When needed to
11protect public safety, a temporary license may be issued for a
12period not to exceed 180 days, and may be issued subject to terms
13and conditions the board deems necessary. If the board determines
14a temporary license was issued by mistake or denies the application
15for a permanent license, the temporary license shall terminate upon
16either personal service of the notice of termination upon the
17licenseholder or service by certified mail, return receipt requested
18at the licenseholder’s address of record with the board, whichever
19comes first. Neither for purposes of retaining a temporary license
20nor for purposes of any disciplinary or license denial proceeding
21before the board shall the temporary licenseholder be deemed to
22have a vested property right or interest in the license.

23begin insert

begin insertSEC. 12.end insert  

end insert

begin insertSection 4127.9 of the end insertbegin insertBusiness and Professions Codeend insert
24
begin insert is amended to read:end insert

25

4127.9.  

(a) A pharmacy licensed pursuant to Section 4127.1
26orbegin delete 4127.2, including a pharmacy that is exempt from licensure
27pursuant to subdivision (d) of Section 4127.1 and subdivision (c)
28of Section 4127.2,end delete
begin insert 4127.2end insert that issues a recall notice regarding a
29sterile compounded drug shall, in addition to any other duties,
30contact the recipient pharmacy, prescriber, or patient of the recalled
31drug and the board as soon as possible within 12 hours of the recall
32notice if both of the following apply:

33(1) Use of or exposure to the recalled drug may cause serious
34adverse health consequences or death.

35(2) The recalled drug was dispensed, or is intended for use, in
36this state.

37(b) A recall notice issued pursuant to subdivision (a) shall be
38made as follows:

39(1) If the recalled drug was dispensed directly to the patient,
40the notice shall be made to the patient.

P14   1(2) If the recalled drug was dispensed directly to the prescriber,
2the notice shall be made to the prescriber, who shall ensure the
3patient is notified.

4(3) If the recalled drug was dispensed directly to a pharmacy,
5the notice shall be made to the pharmacy, who shall notify the
6prescriber or patient, as appropriate. If the pharmacy notifies the
7prescriber, the prescriber shall ensure the patient is notified.

8begin insert

begin insertSEC. 13.end insert  

end insert

begin insertSection 4128.6 of the end insertbegin insertBusiness and Professions Codeend insert
9
begin insert is amended to read:end insert

10

4128.6.  

All compounding and packaging functions specified
11in Section 4128 shall be performed only in the licensed centralized
12hospital packaging pharmacy and that pharmacy shall comply with
13all applicable federal and state statutes and regulations, including,
14but not limited to, regulations regarding compounding and, when
15appropriate, sterilebegin delete injectableend delete compounding.

16

begin deleteSEC. 5.end delete
17
begin insertSEC. 14.end insert  

Article 7.7 (commencing with Section 4129) is added
18to Chapter 9 of Division 2 of the Business and Professions Code,
19to read:

20 

21Article 7.7.  Outsourcing Facilities
22

 

23

4129.  

(a) A facility licensed as an outsourcing facility with
24the federal Food and Drug Administration (FDA) shall be
25concurrently licensed with the board as an outsourcing facility if
26it compounds sterile medication or nonsterile medication for
27nonpatient-specific distribution within or into California.

28(b) A facility premises licensed with the board as a sterile
29compounding pharmacy shall not be concurrently licensed with
30the board as an outsourcing facility at the same location.

31(c) The board may adopt regulations in accordance with the
32Administrative Procedure Act (Chapter 3.5 (commencing with
33Section 11340) of Part 1 of Division 3 of Title 2 of the Government
34Code) to establish policies, guidelines, and procedures to
35implement this article.

36(d) The board shall review any formal requirements or guidance
37documents developed by the FDA regarding outsourcing facilities
38within 90 days after their release in order to determine whether
39revisions are necessary for any regulations promulgated by the
40board.

P15   1(e) An outsourcing facility licensed by the board shall not
2perform the duties of a pharmacy, such as filling individual
3prescriptions for individual patients.

4

4129.1.  

(a) An outsourcing facility that is licensed with the
5federal Food and Drug Administration (FDA) and with an address
6in this state shall also be licensed by the board as an outsourcing
7facility before doing business within this state. The license shall
8be renewed annually and is not transferable.

9(b) An outsourcing facility shall compound all sterile products
10and nonsterile products in compliance with regulations issued by
11the board and with federal current good manufacturing practices
12applicable to outsourcing facilities.

13(c) An outsourcing facility license shall not be issued or renewed
14until the location is inspected by the board and found in compliance
15with this article and regulations adopted by the board.

16(d) An outsourcing facility license shall not be issued or renewed
17until the board does all of the following:

18(1) Prior to inspection, reviews a current copy of the outsourcing
19facility’s policies and procedures for sterile compounding and
20nonsterile compounding.

21(2) Is provided with copies of all federal and state regulatory
22agency inspection reports, as well as accreditation reports, and
23certification reports of facilities or equipment of the outsourcing
24facility’s premises conducted in the prior 12 months.

25(3) Prior to inspection, receives a list of all sterile drugs and
26nonsterile drugs compounded by the outsourcing facility as reported
27to the FDA in the last 12 months.

28(e) An outsourcing facility licensed pursuant to this section shall
29provide the board with all of the following:

30(1) A copy of any disciplinary or other action taken by another
31state or the FDA within 10 days of the action.

32(2) Notice within 24 hours of any recall notice issued by the
33outsourcing facility.

34(3) A copy of any clinically related complaint it receives
35involving an outsourcing facility’s compounded products from or
36involving any provider, pharmacy, or patient in California within
3772 hours of receipt.

38(4) Notice within 24 hours after learning of adverse effects
39reported or potentially attributable to the outsourcing facility’s
40products.

P16   1

4129.2.  

(a) An outsourcing facility that is licensed with the
2federal Food and Drug Administration (FDA) as an outsourcing
3facility and has an address outside of this state but in the United
4States of America is a nonresident outsourcing facility. A
5nonresident outsourcing facility shall not compound sterile drug
6products or nonsterile drug products for distribution or use into
7this state without an outsourcing license issued by the board
8pursuant to this section. The license shall be renewed annually and
9shall not be transferable.

10(b) A nonresident outsourcing facility shall compound all sterile
11products and nonsterile products to be distributed or used in this
12state in compliance with regulations of the board and with federal
13current good manufacturing practices applicable to outsourcing
14facilities.

15(c) A license for a nonresident outsourcing facility shall not be
16issued or renewed until the location is inspected by the board and
17found in compliance with this article and any regulations adopted
18by the board. The nonresident outsourcing facility shall reimburse
19the board for all actual and necessary costs incurred by the board
20in conducting an inspection of the nonresident outsourcing facility
21at least once annually pursuant to subdivision (x) of Section 4400.

22(d) A license for a nonresident outsourcing facility shall not be
23issued or renewed until the board:

24(1) Prior to inspection, reviews a current copy of the nonresident
25outsourcing facility’s policies and procedures for sterile
26compounding and nonsterile compounding.

27(2) begin insert(A)end insertbegin insertend insertIs provided with copies of all federal and state regulatory
28agency inspection reports, as well as accreditation reports, and
29certification reports of facilities or equipment of the nonresident
30outsourcing facility’s premises conducted in the prior 12 months.

begin insert

31
(B) For purposes of this paragraph, “state” refers to the state
32in which the nonresident outsourcing facility resides.

end insert

33(3) Prior to inspection, receives a list of all sterile drug products
34and nonsterile drug products compounded by the pharmacy as
35reported to the FDA within the prior 12 months.

36(e) A nonresident outsourcing facility licensed pursuant to this
37section shall provide the board with all of the following:

38(1) A copy of any disciplinary or other action taken by another
39state or the FDA within 10 days of the action.

P17   1(2) Notice within 24 hours of any recall notice issued by the
2nonresident outsourcing facility.

3(3) A copy of any complaint it receives involving an outsourcing
4facility’s compounded products from or involving any provider,
5pharmacy, or patient in California within 72 hours of receipt.

6(4) Notice within 24 hours after learning of adverse effects
7reported or potentially attributable to a nonresident outsourcing
8facility’s products.

9

4129.3.  

(a) On or before January 1, 2018, the board shall
10provide a report to the Legislature regarding the regulation of
11nonresident outsourcing facilities. The report shall be submitted
12to the Legislature in the manner required pursuant to Section 9795
13of the Government Code. At a minimum, the report shall address
14all of the following:

15(1) A detailed description of board activities related to the
16inspection and licensure of nonresident outsourcing facilities.

17(2) Whether fee revenue collected pursuant to subdivision (x)
18of Section 4400 and travel cost reimbursements collected pursuant
19to subdivision (c) of Section 4129.2 provide revenue in an amount
20sufficient to support the board’s activities related to the inspection
21and licensure of nonresident outsourcing facilities.

22(3) The status of proposed changes to federal law that are under
23serious consideration and that would govern outsourcing facilities
24and compounding pharmacies, including, but not limited to,
25legislation pending before Congress, administrative rules,
26regulations or orders under consideration by the FDA or other
27appropriate federal agency, and cases pending before the courts.

28(4) If applicable, recommended modifications to the board’s
29statutory duties related to nonresident outsourcing facilities as a
30result of changes to federal law or any additional modifications
31necessary to protect the health and safety of the public.

32(b) The requirement for submitting a report imposed under
33subdivision (a) is inoperative on January 1, 2022, pursuant to
34Section 10231.5 of the Government Code.

35

4129.4.  

(a) Whenever the board has a reasonable belief, based
36on information obtained during an inspection or investigation by
37the board, that an outsourcing facility compounding sterile drug
38products or nonsterile drug products poses an immediate threat to
39the public health or safety, the executive officer of the board may
40issue an order to the outsourcing facility to immediately cease and
P18   1desist compounding sterile drug products or nonsterile drug
2products. The cease and desist order shall remain in effect for no
3more than 30 days or the date of a hearing seeking an interim
4suspension order, whichever is earlier.

5(b) Whenever the board issues a cease and desist order pursuant
6to subdivision (a), the board shall immediately issue a notice to
7the owner setting forth the acts or omissions with which the owner
8is charged, specifying the pertinent code section or sections and
9any regulations.

10(c) The cease and desist order shall state that the owner, within
1115 days of receipt of the notice, may request a hearing before the
12president of the board to contest the cease and desist order.
13Consideration of the owner’s contest of the cease and desist order
14shall comply with the requirements of Section 11425.10 of the
15Government Code. The hearing shall be held no later than five
16days after the date the request of the owner is received by the
17board. The president shall render a written decision within five
18days after the hearing. In the absence of the president of the board,
19the vice president of the board may conduct the hearing permitted
20by this subdivision. Review of the decision may be sought by the
21owner or person in possession or control of the outsourcing facility
22pursuant to Section 1094.5 of the Code of Civil Procedure.

23(d) Failure to comply with a cease and desist order issued
24pursuant to this section shall be unprofessional conduct.

25

4129.5.  

Notwithstanding any other law, a violation of this
26article, or regulation adopted pursuant thereto, may subject the
27person or entity that committed the violation to a fine of up to five
28thousand dollars ($5,000) per occurrence pursuant to a citation
29issued by the board.

30

4129.6.  

For purposes of this article, “sterile compounded
31products” means compounded preparations for injection,
32administration into the eye, or inhalation.

33

4129.8.  

The board, at its discretion, may issue a temporary
34license to an outsourcing facility when the ownership of the
35outsourcing facility is transferred from one person to another, upon
36the conditions and for any periods of time as the board determines
37to be in the public interest. A temporary license fee shall be
38required as specified in subdivision (w) of Section 4400. When
39needed to protect public safety, a temporary license may be issued
40for a period not to exceed 180 days, and may be issued subject to
P19   1terms and conditions the board deems necessary. If the board
2determines a temporary license was issued by mistake or denies
3the application for a permanent license, the temporary license shall
4terminate upon the earlier of personal service of the notice of
5termination upon the licenseholder or service by certified mail
6with return receipt requested at the licenseholder’s address of
7record with the board. The temporary licenseholder shall not be
8deemed to have a vested property right or interest in the license
9for purposes of retaining a temporary license or for purposes of
10any disciplinary or license denial proceeding before the board.

11

4129.9.  

(a) An outsourcing facility licensed pursuant to Section
124129.1 or 4129.2 that issues a recall notice for a sterile drug or
13nonsterile drug compounded by the outsourcing facility, in addition
14to any other duties, shall contact the recipient pharmacy, prescriber,
15or patient of the recalled drug and the board as soon as possible
16within 24 hours of the recall notice if both of the following apply:

17(1) Use of or exposure to the recalled drug may cause serious
18adverse health consequences or death.

19(2) The recalled drug was dispensed, or is intended for use, in
20this state.

21(b) A recall notice issued pursuant to subdivision (a) shall be
22made as follows:

23(1) If the recalled drug was dispensed directly to the prescriber,
24the notice shall be made to the prescriber and the prescriber shall
25ensure the patient is notified.

26(2) If the recalled drug was dispensed directly to a pharmacy,
27the notice shall be made to the pharmacy and that pharmacy shall
28notify the prescriber or patient, as appropriate. If the pharmacy
29notifies the prescriber, the prescriber shall ensure the patient is
30notified.

31begin insert

begin insertSEC. 15.end insert  

end insert

begin insertSection 4161 of the end insertbegin insertBusiness and Professions Codeend insert
32
begin insert is amended to read:end insert

33

4161.  

(a) A person located outside this state that (1) ships,
34sells, mails, warehouses, distributes, or delivers dangerous drugs
35or dangerous devices into this state or (2) sells, brokers,
36warehouses, or distributes dangerous drugs or devices within this
37state shall be considered a nonresident wholesaler or a nonresident
38third-party logistics provider.

39(b) A nonresident wholesaler or nonresident third-party logistics
40provider shall be licensed by the board prior to shipping, selling,
P20   1mailing, warehousing, distributing, or delivering dangerous drugs
2or dangerous devices to a site located in this state or selling,
3brokering, warehousing, or distributing dangerous drugs or devices
4within this state.

5(c) (1) A separate license shall be required for each place of
6business owned or operated by a nonresident wholesaler or
7nonresident third-party logistics provider from or through which
8dangerous drugs or dangerous devices are shipped, sold, mailed,
9warehoused, distributed, or delivered to a site located in this state
10or sold, brokered, warehoused, or distributed within this state.
11Each place of business may only be issued a single license by the
12board, except as provided in paragraph (2). A license shall be
13renewed annually and shall not be transferable.

14(2) A nonresident wholesaler and a nonresident third-party
15logistics provider under common ownership may be licensed at
16the same place of business provided that all of the following
17requirements are satisfied:

18(A) The wholesaler and the third-party logistics provider each
19separately maintain the records required under Section 4081.

20(B) Dangerous drugs and dangerous devices owned by the
21wholesaler are not commingled with the dangerous drugs and
22dangerous devices handled by the third-party logistics provider.

23(C) Any individual acting as a designated representative for the
24wholesaler is not concurrently acting as a designated
25representative-3PL on behalf of the third-party logistics provider.
26Nothing in this subparagraph shall be construed to prohibit an
27individual from concurrently holding a license to act as a
28designated representative and to act as a designated
29representative-3PL.

30(D) The wholesaler has its own designated
31representative-in-charge responsible for the operations of the
32wholesaler and the third-party logistics provider has its own
33responsible manager responsible for the operations of the
34 third-party logistics provider. The same individual shall not
35concurrently serve as the responsible manager and the designated
36representative-in-charge for a wholesaler and a third-party logistics
37provider licensed at the same place of business.

38(E) The third-party logistics provider does not handle the
39prescription drugs or prescription devices owned by a prescriber.

P21   1(F) The third-party logistics provider is not a reverse third-party
2logistics provider.

3(G) The wholesaler is not acting as a reverse distributor.

4(d) The following information shall be reported, in writing, to
5the board at the time of initial application for licensure by a
6nonresident wholesaler or a nonresident third-party logistics
7provider, on renewal of a nonresident wholesaler or nonresident
8third-party logistics provider license, or within 30 days of a change
9in that information:

10(1) Its agent for service of process in this state.

11(2) Its principal corporate officers, as specified by the board, if
12any.

13(3) Its general partners, as specified by the board, if any.

14(4) Its owners if the applicant is not a corporation or partnership.

15(e) A report containing the information in subdivision (d) shall
16be made within 30 days of any change of ownership, office,
17corporate officer, or partner.

18(f) A nonresident wholesaler or nonresident third-party logistics
19provider shall comply with all directions and requests for
20information from the regulatory or licensing agency of the state
21in which it is licensed, as well as with all requests for information
22made by the board.

23(g) A nonresident wholesaler or nonresident third-party logistics
24provider shall maintain records of dangerous drugs and dangerous
25devices sold, traded, transferred, warehoused, or distributed to
26persons in this state or within this state, so that the records are in
27a readily retrievable form.

28(h) A nonresident wholesaler or nonresident third-party logistics
29provider shall at all times maintain a valid, unexpired license,
30permit, or registration to conduct the business of the wholesaler
31or nonresident third-party logistics provider in compliance with
32the laws of the state in which it is a resident. An application for a
33nonresident wholesaler or nonresident third-party logistics provider
34license in this state shall include a license verification from the
35licensing authority in the applicant’s state of residence.

36(i) (1) The board shall not issue or renew a nonresident
37wholesaler license until the nonresident wholesaler identifies a
38designated representative-in-charge and notifies the board in
39writing of the identity and license number of the designated
40representative-in-charge.

P22   1(2) The board shall not issue or renew a nonresident third-party
2logistics provider license until the nonresident third-party logistics
3provider identifies a responsible manager and notifies the board
4in writing of the identity and license number of the designated
5representative-3PL who will be the responsible manager.

6(j) The designated representative-in-charge shall be responsible
7for the compliance of the nonresident wholesaler with state and
8federal laws governing wholesalers. The responsible manager shall
9be responsible for the compliance of the nonresident third-party
10logistics provider’s place of business with state and federal laws
11governing third-party logistics providers. A nonresident wholesaler
12or nonresident third-party logistics provider shall identify and
13notify the board of a new designated representative-in-charge or
14responsible manager within 30 days of the date that the prior
15designated representative-in-charge or responsible manager ceases
16to be the designated representative-in-charge or responsible
17manager.

18(k) The board may issue a temporary license, upon conditions
19and for periods of time as the board determines to be in the public
20interest. A temporary license fee shall be five hundred fifty dollars
21($550) or another amount established by the board not to exceed
22the annual fee for renewal of a license to compoundbegin delete injectableend delete
23 sterile drug products. When needed to protect public safety, a
24temporary license may be issued for a period not to exceed 180
25days, subject to terms and conditions that the board deems
26necessary. If the board determines that a temporary license was
27issued by mistake or denies the application for a permanent license,
28the temporary license shall terminate upon either personal service
29of the notice of termination upon the licenseholder or service by
30certified mail, return receipt requested, at the licenseholder’s
31address of record with the board, whichever occurs first. Neither
32for purposes of retaining a temporary license, nor for purposes of
33any disciplinary or license denial proceeding before the board,
34shall the temporary licenseholder be deemed to have a vested
35property right or interest in the license.

36(l) The registration fee shall be the fee specified in subdivision
37(f) of Section 4400.

38begin insert

begin insertSEC. 16.end insert  

end insert

begin insertSection 4180 of the end insertbegin insertBusiness and Professions Codeend insert
39
begin insert is amended to read:end insert

P23   1

4180.  

(a) (1) Notwithstanding any provision of this chapter,
2any of the following clinics may purchase drugs at wholesale for
3administration or dispensing, under the direction of a physician
4and surgeon, to patients registered for care at the clinic:

5(A) A licensed nonprofit community clinic or free clinic as
6defined in paragraph (1) of subdivision (a) of Section 1204 of the
7Health and Safety Code.

8(B) A primary care clinic owned or operated by a county as
9referred to in subdivision (b) of Section 1206 of the Health and
10Safety Code.

11(C) A clinic operated by a federally recognized Indian tribe or
12tribal organization as referred to in subdivision (c) of Section 1206
13of the Health and Safety Code.

14(D) A clinic operated by a primary care community or free
15clinic, operated on separate premises from a licensed clinic, and
16that is open no more than 20 hours per week as referred to in
17subdivision (h) of Section 1206 of the Health and Safety Code.

18(E) A student health center clinic operated by a public institution
19of higher education as referred to in subdivision (j) of Section 1206
20of the Health and Safety Code.

21(F) A nonprofit multispecialty clinic as referred to in subdivision
22(l) of Section 1206 of the Health and Safety Code.

23(2) The clinic shall keep records of the kind and amounts of
24drugs purchased, administered, and dispensed, and the records
25shall be available and maintained for a minimum of three years
26for inspection by all properly authorized personnel.

27(b) No clinic shall be entitled to the benefits of this section until
28it has obtained a license from the board. A separate license shall
29be required for each clinic location. A clinic shall notify the board
30of any change in the clinic’s address on a form furnished by the
31board.

begin insert

32
(c) The board shall synchronize license renewal dates and
33aggregate fees for multiple clinics under common nonprofit
34ownership at the request of the parent organization.

end insert
35

begin deleteSEC. 6.end delete
36
begin insertSEC. 17.end insert  

Section 4203.5 is added to the Business and
37Professions Code
, to read:

38

4203.5.  

(a) Notwithstanding any other law, when a clinic
39applicant submits either type of application described in subdivision
40(b), the board shall issue a license or incorporate the reported
P24   1changes, as appropriate, within 30 days of receipt of a completed
2application and payment of any prescribed fees.

3(b) This section applies to the following types of applications:

4(1) A new clinic license application filed under Section 4180.

5(2) Applications to report changes to an existing site licensed
6under Section 4180, including, but not limited to, changes in
7professional director, clinic administrator, corporate officers,
8 change of location, or change of address.

9(c) This section shall not be construed to limit the board’s
10authority to conduct an investigation to determine whether
11applicants and the premises for which an application is made
12qualify for a license.

13

begin deleteSEC. 7.end delete
14
begin insertSEC. 18.end insert  

Section 4316 is added to the Business and Professions
15Code
, to read:

16

4316.  

(a) The board is authorized to issue a cease and desist
17order for operating any facility under this chapter that requires
18licensure or for practicing any activity under this chapter that
19requires licensure.

20(b) Whenever the board issues a cease and desist order pursuant
21to subdivision (a), the board shall immediately issue the facility a
22notice setting forth the acts or omissions with which it is charged,
23specifying the pertinent code section or sections and any
24regulations.

25(c) The order shall provide that the facility, within 15 days of
26receipt of the notice, may request a hearing before the president
27of the board to contest the cease and desist order. Consideration
28of the facility’s contest of the cease and desist order shall comply
29with the requirements of Section 11425.10 of the Government
30Code. The hearing shall be held no later than five days from the
31date the request of the owner is received by the board. The
32president shall render a written decision within five days of the
33hearing. In the absence of the president of the board, the vice
34president of the board may conduct the hearing permitted by this
35subdivision. Review of the decision of the president of the board
36may be sought by the owner or person in possession or control of
37the pharmacy pursuant to Section 1094.5 of the Code of Civil
38Procedure.

P25   1

begin deleteSEC. 8.end delete
2
begin insertSEC. 19.end insert  

Section 4400 of the Business and Professions Code
3 is amended to read:

4

4400.  

The amount of fees and penalties prescribed by this
5chapter, except as otherwise provided, is that fixed by the board
6according to the following schedule:

7(a) The fee for a nongovernmental pharmacy license shall be
8four hundred dollars ($400) and may be increased to five hundred
9twenty dollars ($520). The fee for the issuance of a temporary
10nongovernmental pharmacy permit shall be two hundred fifty
11dollars ($250) and may be increased to three hundred twenty-five
12dollars ($325).

13(b) The fee for a nongovernmental pharmacy license annual
14renewal shall be two hundred fifty dollars ($250) and may be
15increased to three hundred twenty-five dollars ($325).

16(c) The fee for the pharmacist application and examination shall
17be two hundred dollars ($200) and may be increased to two
18hundred sixty dollars ($260).

19(d) The fee for regrading an examination shall be ninety dollars
20($90) and may be increased to one hundred fifteen dollars ($115).
21If an error in grading is found and the applicant passes the
22examination, the regrading fee shall be refunded.

23(e) The fee for a pharmacist license and biennial renewal shall
24be one hundred fifty dollars ($150) and may be increased to one
25hundred ninety-five dollars ($195).

26(f) The fee for a nongovernmental wholesaler or third-party
27logistics provider license and annual renewal shall be seven
28hundred eighty dollars ($780) and may be decreased to no less
29than six hundred dollars ($600). The application fee for any
30additional location after licensure of the first 20 locations shall be
31three hundred dollars ($300) and may be decreased to no less than
32two hundred twenty-five dollars ($225). A temporary license fee
33shall be seven hundred fifteen dollars ($715) and may be decreased
34to no less than five hundred fifty dollars ($550).

35(g) The fee for a hypodermic license and renewal shall be one
36hundred twenty-five dollars ($125) and may be increased to one
37hundred sixty-five dollars ($165).

38(h) (1) The fee for application, investigation, and issuance of
39a license as a designated representative pursuant to Section 4053,
40or as a designated representative-3PL pursuant to Section 4053.1,
P26   1shall be three hundred thirty dollars ($330) and may be decreased
2to no less than two hundred fifty-five dollars ($255).

3(2) The fee for the annual renewal of a license as a designated
4representative or designated representative-3PL shall be one
5hundred ninety-five dollars ($195) and may be decreased to no
6less than one hundred fifty dollars ($150).

7(i) (1) The fee for the application, investigation, and issuance
8of a license as a designated representative for a veterinary
9food-animal drug retailer pursuant to Section 4053 shall be three
10hundred thirty dollars ($330) and may be decreased to no less than
11two hundred fifty-five dollars ($255).

12(2) The fee for the annual renewal of a license as a designated
13representative for a veterinary food-animal drug retailer shall be
14one hundred ninety-five dollars ($195) and may be decreased to
15no less than one hundred fifty dollars ($150).

16(j) (1) The application fee for a nonresident wholesaler or
17third-party logistics provider license issued pursuant to Section
184161 shall be seven hundred eighty dollars ($780) and may be
19decreased to no less than six hundred dollars ($600).

20(2) For nonresident wholesalers or third-party logistics providers
21that have 21 or more facilities operating nationwide the application
22fees for the first 20 locations shall be seven hundred eighty dollars
23($780) and may be decreased to no less than six hundred dollars
24($600). The application fee for any additional location after
25licensure of the first 20 locations shall be three hundred dollars
26($300) and may be decreased to no less than two hundred
27twenty-five dollars ($225). A temporary license fee shall be seven
28hundred fifteen dollars ($715) and may be decreased to no less
29than five hundred fifty dollars ($550).

30(3) The annual renewal fee for a nonresident wholesaler license
31or third-party logistics provider license issued pursuant to Section
324161 shall be seven hundred eighty dollars ($780) and may be
33decreased to no less than six hundred dollars ($600).

34(k) The fee for evaluation of continuing education courses for
35accreditation shall be set by the board at an amount not to exceed
36forty dollars ($40) per course hour.

37(l) The fee for an intern pharmacist license shall be ninety dollars
38($90) and may be increased to one hundred fifteen dollars ($115).
39The fee for transfer of intern hours or verification of licensure to
P27   1another state shall be twenty-five dollars ($25) and may be
2increased to thirty dollars ($30).

3(m) The board may waive or refund the additional fee for the
4issuance of a license where the license is issued less than 45 days
5before the next regular renewal date.

6(n) The fee for the reissuance of any license, or renewal thereof,
7that has been lost or destroyed or reissued due to a name change
8shall be thirty-five dollars ($35) and may be increased to forty-five
9dollars ($45).

10(o) The fee for the reissuance of any license, or renewal thereof,
11that must be reissued because of a change in the information, shall
12be one hundred dollars ($100) and may be increased to one hundred
13thirty dollars ($130).

14(p) It is the intent of the Legislature that, in setting fees pursuant
15to this section, the board shall seek to maintain a reserve in the
16Pharmacy Board Contingent Fund equal to approximately one
17year’s operating expenditures.

18(q) The fee for any applicant for a nongovernmental clinic
19license shall be four hundred dollars ($400) and may be increased
20to five hundred twenty dollars ($520) for each license. The annual
21fee for renewal of the license shall be two hundred fifty dollars
22($250) and may be increased to three hundred twenty-five dollars
23($325) for each license.

24(r) The fee for the issuance of a pharmacy technician license
25shall be eighty dollars ($80) and may be increased to one hundred
26five dollars ($105). The fee for renewal of a pharmacy technician
27license shall be one hundred dollars ($100) and may be increased
28to one hundred thirty dollars ($130).

29(s) The fee for a veterinary food-animal drug retailer license
30shall be four hundred five dollars ($405) and may be increased to
31four hundred twenty-five dollars ($425). The annual renewal fee
32for a veterinary food-animal drug retailer license shall be two
33hundred fifty dollars ($250) and may be increased to three hundred
34twenty-five dollars ($325).

35(t) The fee for issuance of a retired license pursuant to Section
364200.5 shall be thirty-five dollars ($35) and may be increased to
37forty-five dollars ($45).

38(u) The fee for issuance or renewal of a nongovernmental sterile
39compounding pharmacy license shall be six hundred dollars ($600)
40and may be increased to seven hundred eighty dollars ($780). The
P28   1fee for a temporary license shall be five hundred fifty dollars ($550)
2and may be increased to seven hundred fifteen dollars ($715).

3(v) The fee for the issuance or renewal of a nonresident sterile
4compounding pharmacy license shall be seven hundred eighty
5dollars ($780). In addition to paying that application fee, the
6nonresident sterile compounding pharmacy shall deposit, when
7submitting the application, a reasonable amount, as determined by
8the board, necessary to cover the board’s estimated cost of
9performing the inspection required by Section 4127.2. If the
10required deposit is not submitted with the application, the
11application shall be deemed to be incomplete. If the actual cost of
12the inspection exceeds the amount deposited, the board shall
13provide to the applicant a written invoice for the remaining amount
14and shall not take action on the application until the full amount
15has been paid to the board. If the amount deposited exceeds the
16amount of actual and necessary costs incurred, the board shall
17remit the difference to the applicant.

18(w) The fee for the issuance or renewal of an outsourcing facility
19license shall be seven hundred eighty dollars ($780). The fee for
20a temporary outsourcing facility license shall be seven hundred
21fifteen dollars ($715).

22(x) The fee for the issuance or renewal of a nonresident
23outsourcing facility license shall be seven hundred eighty dollars
24($780). In addition to paying that application fee, the nonresident
25outsourcing facility shall deposit, when submitting the application,
26a reasonable amount, as determined by the board, necessary to
27cover the board’s estimated cost of performing the inspection
28required by Section 4129.2. If the required deposit is not submitted
29with the application, the application shall be deemed to be
30incomplete. If the actual cost of the inspection exceeds the amount
31deposited, the board shall provide to the applicant a written invoice
32for the remaining amount and shall not take action on the
33application until the full amount has been paid to the board. If the
34amount deposited exceeds the amount of actual and necessary
35costs incurred, the board shall remit the difference to the applicant.

36begin insert

begin insertSEC. 20.end insert  

end insert

begin insertSection 4406 of the end insertbegin insertBusiness and Professions Codeend insert
37
begin insert is amended to read:end insert

38

4406.  

All fees collected on behalf of the board and all receipts
39of every kind and nature shall be reported each month for the month
40preceding to the State Controller and at the same time the entire
P29   1amount shall be paid into the State Treasury and shall be credited
2to the Pharmacy Board Contingent Fund which is hereby created.
3This contingent fund shall bebegin insert available, upon appropriation of the
4Legislature,end insert
for the use of thebegin delete board and out of it and not otherwise
5shall be paid all expenses of theend delete
board.

6

begin deleteSEC. 9.end delete
7
begin insertSEC. 21.end insert  

Section 13401.5 of the Corporations Code is amended
8to read:

9

13401.5.  

Notwithstanding subdivision (d) of Section 13401
10and any other provision of law, the following licensed persons
11may be shareholders, officers, directors, or professional employees
12of the professional corporations designated in this section so long
13as the sum of all shares owned by those licensed persons does not
14exceed 49 percent of the total number of shares of the professional
15corporation so designated herein, and so long as the number of
16those licensed persons owning shares in the professional
17corporation so designated herein does not exceed the number of
18persons licensed by the governmental agency regulating the
19designated professional corporation. This section does not limit
20employment by a professional corporation designated in this section
21to only those licensed professionals listed under each subdivision.
22Any person duly licensed under Division 2 (commencing with
23Section 500) of the Business and Professions Code, the
24Chiropractic Act, or the Osteopathic Act may be employed to
25render professional services by a professional corporation
26designated in this section.

27(a) Medical corporation.

28(1) Licensed doctors of podiatric medicine.

29(2) Licensed psychologists.

30(3) Registered nurses.

31(4) Licensed optometrists.

32(5) Licensed marriage and family therapists.

33(6) Licensed clinical social workers.

34(7) Licensed physician assistants.

35(8) Licensed chiropractors.

36(9) Licensed acupuncturists.

37(10) Naturopathic doctors.

38(11) Licensed professional clinical counselors.

39(12) Licensed physical therapists.

40(13) Licensed pharmacists.

P30   1(b) Podiatric medical corporation.

2(1) Licensed physicians and surgeons.

3(2) Licensed psychologists.

4(3) Registered nurses.

5(4) Licensed optometrists.

6(5) Licensed chiropractors.

7(6) Licensed acupuncturists.

8(7) Naturopathic doctors.

9(8) Licensed physical therapists.

10(c) Psychological corporation.

11(1) Licensed physicians and surgeons.

12(2) Licensed doctors of podiatric medicine.

13(3) Registered nurses.

14(4) Licensed optometrists.

15(5) Licensed marriage and family therapists.

16(6) Licensed clinical social workers.

17(7) Licensed chiropractors.

18(8) Licensed acupuncturists.

19(9) Naturopathic doctors.

20(10) Licensed professional clinical counselors.

21(d) Speech-language pathology corporation.

22(1) Licensed audiologists.

23(e) Audiology corporation.

24(1) Licensed speech-language pathologists.

25(f) Nursing corporation.

26(1) Licensed physicians and surgeons.

27(2) Licensed doctors of podiatric medicine.

28(3) Licensed psychologists.

29(4) Licensed optometrists.

30(5) Licensed marriage and family therapists.

31(6) Licensed clinical social workers.

32(7) Licensed physician assistants.

33(8) Licensed chiropractors.

34(9) Licensed acupuncturists.

35(10) Naturopathic doctors.

36(11) Licensed professional clinical counselors.

37(g) Marriage and family therapist corporation.

38(1) Licensed physicians and surgeons.

39(2) Licensed psychologists.

40(3) Licensed clinical social workers.

P31   1(4) Registered nurses.

2(5) Licensed chiropractors.

3(6) Licensed acupuncturists.

4(7) Naturopathic doctors.

5(8) Licensed professional clinical counselors.

6(h) Licensed clinical social worker corporation.

7(1) Licensed physicians and surgeons.

8(2) Licensed psychologists.

9(3) Licensed marriage and family therapists.

10(4) Registered nurses.

11(5) Licensed chiropractors.

12(6) Licensed acupuncturists.

13(7) Naturopathic doctors.

14(8) Licensed professional clinical counselors.

15(i) Physician assistants corporation.

16(1) Licensed physicians and surgeons.

17(2) Registered nurses.

18(3) Licensed acupuncturists.

19(4) Naturopathic doctors.

20(j) Optometric corporation.

21(1) Licensed physicians and surgeons.

22(2) Licensed doctors of podiatric medicine.

23(3) Licensed psychologists.

24(4) Registered nurses.

25(5) Licensed chiropractors.

26(6) Licensed acupuncturists.

27(7) Naturopathic doctors.

28(k) Chiropractic corporation.

29(1) Licensed physicians and surgeons.

30(2) Licensed doctors of podiatric medicine.

31(3) Licensed psychologists.

32(4) Registered nurses.

33(5) Licensed optometrists.

34(6) Licensed marriage and family therapists.

35(7) Licensed clinical social workers.

36(8) Licensed acupuncturists.

37(9) Naturopathic doctors.

38(10) Licensed professional clinical counselors.

39(l) Acupuncture corporation.

40(1) Licensed physicians and surgeons.

P32   1(2) Licensed doctors of podiatric medicine.

2(3) Licensed psychologists.

3(4) Registered nurses.

4(5) Licensed optometrists.

5(6) Licensed marriage and family therapists.

6(7) Licensed clinical social workers.

7(8) Licensed physician assistants.

8(9) Licensed chiropractors.

9(10) Naturopathic doctors.

10(11) Licensed professional clinical counselors.

11(m) Naturopathic doctor corporation.

12(1) Licensed physicians and surgeons.

13(2) Licensed psychologists.

14(3) Registered nurses.

15(4) Licensed physician assistants.

16(5) Licensed chiropractors.

17(6) Licensed acupuncturists.

18(7) Licensed physical therapists.

19(8) Licensed doctors of podiatric medicine.

20(9) Licensed marriage and family therapists.

21(10) Licensed clinical social workers.

22(11) Licensed optometrists.

23(12) Licensed professional clinical counselors.

24(n) Dental corporation.

25(1) Licensed physicians and surgeons.

26(2) Dental assistants.

27(3) Registered dental assistants.

28(4) Registered dental assistants in extended functions.

29(5) Registered dental hygienists.

30(6) Registered dental hygienists in extended functions.

31(7) Registered dental hygienists in alternative practice.

32(o) Professional clinical counselor corporation.

33(1) Licensed physicians and surgeons.

34(2) Licensed psychologists.

35(3) Licensed clinical social workers.

36(4) Licensed marriage and family therapists.

37(5) Registered nurses.

38(6) Licensed chiropractors.

39(7) Licensed acupuncturists.

40(8) Naturopathic doctors.

P33   1(p) Physical therapy corporation.

2(1) Licensed physicians and surgeons.

3(2) Licensed doctors of podiatric medicine.

4(3) Licensed acupuncturists.

5(4) Naturopathic doctors.

6(5) Licensed occupational therapists.

7(6) Licensed speech-language therapists.

8(7) Licensed audiologists.

9(8) Registered nurses.

10(9) Licensed psychologists.

11(10) Licensed physician assistants.

12(q) Registered dental hygienist in alternative practice
13corporation.

14(1) Registered dental assistants.

15(2) Licensed dentists.

16(3) Registered dental hygienists.

17(4) Registered dental hygienists in extended functions.

18begin insert

begin insertSEC. 22.end insert  

end insert

begin insertSection 1261.6 of the end insertbegin insertHealth and Safety Codeend insertbegin insert is
19amended to read:end insert

20

1261.6.  

(a) (1) For purposes of this section and Section 1261.5,
21an “automated drug delivery system” means a mechanical system
22that performs operations or activities, other than compounding or
23administration, relative to the storage, dispensing, or distribution
24of drugs. An automated drug delivery system shall collect, control,
25and maintain all transaction information to accurately track the
26movement of drugs into and out of the system for security,
27accuracy, and accountability.

28(2) For purposes of this section, “facility” means a health facility
29licensed pursuant to subdivision (c), (d), or (k), of Section 1250
30that has an automated drug delivery system provided by a
31pharmacy.

32(3) For purposes of this section, “pharmacy services” means
33the provision of both routine and emergency drugs and biologicals
34to meet the needs of the patient, as prescribed by a physician.

35(b) Transaction information shall be made readily available in
36a written format for review and inspection by individuals
37authorized by law. These records shall be maintained in the facility
38for a minimum of three years.

P34   1(c) Individualized and specific access to automated drug delivery
2systems shall be limited to facility and contract personnel
3authorized by law to administer drugs.

4(d) (1) The facility and the pharmacy shall develop and
5implement written policies and procedures to ensure safety,
6accuracy, accountability, security, patient confidentiality, and
7maintenance of the quality, potency, and purity of stored drugs.
8Policies and procedures shall define access to the automated drug
9delivery system and limits to access to equipment and drugs.

10(2) All policies and procedures shall be maintained at the
11pharmacy operating the automated drug delivery system and the
12location where the automated drug delivery system is being used.

13(e) When used as an emergency pharmaceutical supplies
14container, drugs removed from the automated drug delivery system
15shall be limited to the following:

16(1) A new drug order given by a prescriber for a patient of the
17facility for administration prior to the next scheduled delivery from
18the pharmacy, or 72 hours, whichever is less. The drugs shall be
19retrieved only upon authorization by a pharmacist and after the
20pharmacist has reviewed the prescriber’s order and the patient’s
21profile for potential contraindications and adverse drug reactions.

22(2) Drugs that a prescriber has ordered for a patient on an
23as-needed basis, if the utilization and retrieval of those drugs are
24subject to ongoing review by a pharmacist.

25(3) Drugs designed by the patient care policy committee or
26pharmaceutical service committee of the facility as emergency
27drugs or acute onset drugs. These drugs may be retrieved from an
28automated drug delivery system pursuant to the order of a
29prescriber for emergency or immediate administration to a patient
30of the facility. Within 48 hours after retrieval under this paragraph,
31the case shall be reviewed by a pharmacist.

32(f) When used to provide pharmacy services pursuant to Section
334119.1 of the Business and Professions Code, the automated drug
34delivery system shall be subject to all of the following
35requirements:

36(1) Drugs removed from the automated drug delivery system
37for administration to a patient shall be in properly labeled units of
38administration containers or packages.

39(2) A pharmacist shall review and approve all orders prior to a
40drug being removed from the automated drug delivery system for
P35   1administration to a patient. The pharmacist shall review the
2prescriber’s order and the patient’s profile for potential
3contraindications and adverse drug reactions.

4(3) The pharmacy providing services to the facility pursuant to
5Section 4119.1 of the Business and Professions Code shall control
6access to the drugs stored in the automated drug delivery system.

7(4) Access to the automated drug delivery system shall be
8controlled and tracked using an identification or password system
9or biosensor.

10(5) The automated drug delivery system shall make a complete
11and accurate record of all transactions that will include all users
12accessing the system and all drugs added to, or removed from, the
13system.

14(6) After the pharmacist reviews the prescriber’s order, access
15by licensed personnel to the automated drug delivery system shall
16be limited only to drugs ordered by the prescriber and reviewed
17by the pharmacist and that are specific to the patient. When the
18prescriber’s order requires a dosage variation of the same drug,
19licensed personnel shall have access to the drug ordered for that
20scheduled time of administration.

21(7) (A) Systems that allow licensed personnel to have access
22to multiple drugs and are not patient specific in their design, shall
23be allowed under this subdivision if those systems have electronic
24and mechanical safeguards in place to ensure that the drugs
25delivered to the patient are specific to that patient. Each facility
26using such an automated drug system shall notify the department
27in writing prior to the utilization of the system. The notification
28submitted to the department pursuant to this paragraph shall
29include, but is not limited to, information regarding system design,
30personnel with system access, and policies and procedures covering
31staff training, storage, and security, and the facility’s administration
32of these types of systems.

33(B) As part of its routine oversight of these facilities, the
34department shall review a facility’s medication training, storage,
35and security, and its administration procedures related to its use
36of an automated drug delivery system to ensure that adequate staff
37training and safeguards are in place to make sure that the drugs
38delivered are appropriate for the patient. If the department
39determines that a facility is not in compliance with this section,
P36   1the department may revoke its authorization to use automated drug
2delivery systems granted under subparagraph (A).

begin delete

3(C) This paragraph shall remain in effect only until January 1,
42012, unless a later enacted statute is enacted on or before January
51, 2012, deletes or extends that date.

end delete

6(g) The stocking of an automated drug delivery system shall be
7performed by a pharmacist. If the automated drug delivery system
8utilizes removable pockets, cards, drawers, or similar technology,
9the stocking system may be done outside of the facility and be
10 delivered to the facility if all of the following conditions are met:

11(1) The task of placing drugs into the removable pockets, cards,
12or drawers is performed by a pharmacist or by an intern pharmacist
13or a pharmacy technician working under the direct supervision of
14a pharmacist.

15(2) The removable pockets, cards, or drawers are transported
16between the pharmacy and the facility in a secure tamper-evident
17container.

18(3) The facility, in conjunction with the pharmacy, has
19developed policies and procedures to ensure that the pockets, cards,
20or drawers are properly placed into the automated drug delivery
21system.

22(h) Review of the drugs contained within, and the operation and
23maintenance of, the automated drug delivery system shall be done
24in accordance with law and shall be the responsibility of the
25pharmacy. The review shall be conducted on a monthly basis by
26a pharmacist and shall include a physical inspection of the drugs
27in the automated drug delivery system, an inspection of the
28automated drug delivery system machine for cleanliness, and a
29review of all transaction records in order to verify the security and
30accountability of the system.

31(i) Drugs dispensed from an automated drug delivery system
32that meets the requirements of this section shall not be subject to
33the labeling requirements of Section 4076 of the Business and
34Professions Code or Section 111480 of this code if the drugs to
35be placed into the automated drug delivery system are in unit dose
36packaging or unit of use and if the information required by Section
374076 of the Business and Professions Code and Section 111480
38of this code is readily available at the time of drug administration.
39For purposes of this section, unit dose packaging includes blister
40pack cards.

P37   1begin insert

begin insertSEC. 23.end insert  

end insert

begin insertSection 11164.5 of the end insertbegin insertHealth and Safety Codeend insertbegin insert is
2amended to read:end insert

begin delete
3

11164.5.  

(a)  Notwithstanding Section 11164, with the approval
4of the California State Board of Pharmacy and the Department of
5Justice, a pharmacy or hospital may receive electronic data
6transmission prescriptions or computer entry prescriptions or orders
7as specified in Section 4071.1 of the Business and Professions
8Code, for controlled substances in Schedule II, III, IV, or V if
9authorized by federal law and in accordance with regulations
10promulgated by the Drug Enforcement Administration. The
11California State Board of Pharmacy shall maintain a list of all
12requests and approvals granted pursuant to this subdivision.

13(b)  Notwithstanding Section 11164, if approved pursuant to
14subdivision (a), a pharmacy or hospital receiving an electronic
15transmission prescription or a computer entry prescription or order
16for a controlled substance classified in Schedule II, III, IV, or V
17shall not be required to reduce that prescription or order to writing
18or to hard copy form, if for three years from the last day of
19dispensing that prescription, the pharmacy or hospital is able, upon
20request of the board or the Department of Justice, to immediately
21produce a hard copy report that includes for each date of dispensing
22of a controlled substance in Schedules II, III, IV, and V pursuant
23to the prescription all of the information described in subparagraphs
24(A) to (E), inclusive, of paragraph (1) of subdivision (a) of Section
254040 of the Business and Professions Code and the name or
26identifier of the pharmacist who dispensed the controlled substance.

27(c)

end delete
28begin insert

begin insert11164.5.end insert  

end insert

begin insert(a)end insert Notwithstanding Section 11164, if only recorded
29and stored electronically, on magnetic media, or in any other
30computerized form, the pharmacy’s or hospital’s computer system
31shall not permit the received information or the controlled
32substance dispensing information required by this section to be
33changed, obliterated, destroyed, or disposed of, for the record
34maintenance period required by law, once the information has been
35received by the pharmacy or the hospital and once the controlled
36substance has been dispensed, respectively. Once the controlled
37substance has been dispensed, if the previously created record is
38determined to be incorrect, a correcting addition may be made
39only by or with the approval of a pharmacist. After a pharmacist
40enters the change or enters his or her approval of the change into
P38   1the computer, the resulting record shall include the correcting
2addition and the date it was made to the record, the identity of the
3person or pharmacist making the correction, and the identity of
4the pharmacist approving the correction.

begin delete

5(d)

end delete

6begin insert(b)end insert Nothing in this section shall be construed to exempt any
7pharmacy or hospital dispensing Schedule II controlled substances
8pursuant to electronic transmission prescriptions from existing
9 reporting requirements.

10

begin deleteSEC. 10.end delete
11
begin insertSEC. 24.end insert  

No reimbursement is required by this act pursuant to
12Section 6 of Article XIII B of the California Constitution because
13the only costs that may be incurred by a local agency or school
14district will be incurred because this act creates a new crime or
15infraction, eliminates a crime or infraction, or changes the penalty
16for a crime or infraction, within the meaning of Section 17556 of
17the Government Code, or changes the definition of a crime within
18the meaning of Section 6 of Article XIII B of the California
19Constitution.



O

    97