BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                       SB 1193|
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                                   THIRD READING 


          Bill No:  SB 1193
          Author:   Hill (D), et al.
          Amended:  5/31/16  
          Vote:     21 

           SENATE BUS., PROF. & ECON. DEV. COMMITTEE:  9-0, 4/18/16
           AYES:  Hill, Bates, Berryhill, Block, Galgiani, Hernandez,  
            Jackson, Mendoza, Wieckowski

           SENATE APPROPRIATIONS COMMITTEE:  7-0, 5/27/16
           AYES:  Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen

           SUBJECT:   Pharmacy:  outsourcing facilities


          SOURCE:    Author

          DIGEST:  This bill extends the operations of the Board of  
          Pharmacy (Board) and Pharmacy Law until 2021 and makes various  
          changes to the Pharmacy Law intended to improve Board oversight  
          of licensees involved in the acquisition, storage, distribution  
          and dispensing of dangerous drugs and dangerous devices,  
          including: oversight by the Board for outsourcing facilities;  
          registration with the Board for use of an automated delivery  
          device by a pharmacy; timeline requirements for the Board to  
          approve clinic licenses; and technical changes.

          ANALYSIS:  Existing law provides for the licensure and  
          regulation of pharmacies, pharmacists and wholesalers of  
          dangerous drugs or devices by the Board within the Department of  
          Consumer Affairs (DCA) until January 1, 2017.  (Business and  
          Professions Code § 4000 et seq.) 









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          This bill:

           1) Extends the operation of the Board and Board Executive  
             Officer until January 1, 2021.

           2) Requires outsourcing facilities [as defined under federal  
             law] to be licensed by the Board; prohibits an outsourcing  
             facility to be simultaneously licensed with the Board as a  
             sterile compounding pharmacy at the same location; prohibits  
             a licensed outsourcing facility from filling patient specific  
             prescriptions; requires an outsourcing facility to notify the  
             Board of any disciplinary or other action taken by another  
             state or the FDA or of any recall notices or any adverse  
             events potentially attributable to an outsourcing facility's  
             products; requires the Board to inspect the location of a  
             nonresident outsourcing facility to ensure that the facility  
             is in compliance with all laws and regulations before issuing  
             or renewing a nonresident outsourcing facility's license;  
             authorizes the Board to issue a cease and desist order to an  
             outsourcing facility if the Board has reasonable belief that  
             the products produced by the facility poses an immediate  
             threat to the public health or safety and; establishes a $780  
             fee for outsourcing facility licensure.

           3) Requires a pharmacy using an automated drug delivery system  
             (ADD) to register use of the ADD with the Board, including  
             the address at which the ADD is being used.

           4) Requires the Board to issue a license to, or incorporate  
             changes reported by, a clinic, within 30 days of receiving a  
             completed application and payment of any prescribed fees.

           5) Authorizes the Board to issue a cease and desist to an  
             entity practicing activities without a license if those  
             activities would require licensure by the Board.

           6) Includes pharmacists in the list of licensed professionals  
             authorized to establish a professional corporation.

           7) Requires license renewals to be consolidated for commonly  
             owned clinics.

           8) Requires notification to the Board of compounded drug  
             recalls.







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           9) Requires the Pharmacy Board Contingent Fund to be subject to  
             appropriation by the Legislature.

           10)Makes various technical changes.

          Background

          This bill is sponsored by the Author, and is one of five "sunset  
          bills" the Author is sponsoring this Session.  According to the  
          Author, this bill is necessary to make changes to the Pharmacy  
          Law in order to improve Board oversight of licensees involved in  
          the acquisition, storage, distribution and dispensing of  
          dangerous drugs and dangerous devices.

          Board of Pharmacy.  The Board is responsible for enforcing  
          federal and state laws pertaining to the acquisition, storage,  
          distribution and dispensing of dangerous drugs (including  
          controlled substances) and dangerous devices.  The Board has  
          over 140,000 licensees in 23 license categories that include  
          both personal and business licenses.  As an agency that  
          regulates the individuals and businesses that dispense,  
          compound, provide, store and distribute prescription drugs and  
          devices and pharmaceutical services to the public, or to other  
          health care practitioners in compliance with state and federal  
          law, the licensing of pharmacists, pharmacies, and pharmacy  
          technicians is the primary focus of Board activity, with  
          consumer protection at the core of the Board's operations.  The  
          Board's regulatory authority, as described in the Pharmacy Law,  
          extends over individuals and firms located both within and  
          outside California, if they provide services into California.  

          2015-16 Sunset Review.  Beginning in 2015, the Senate Business  
          and Professions Committee and the Assembly Business and  
          Professions Committee (Committees) conducted joint oversight  
          hearings to review 12 regulatory entities.  The Committees  
          conducted two hearings in March and joined with the Senate  
          Committee on Education and Assembly Committee on Higher  
          Education to review the Bureau for Private Postsecondary  
          Education.  This bill and the accompanying sunset bills are  
          intended to implement legislative changes as recommended by  
          staff of the Committees and which are reflected in the  
          Background Papers prepared by Committee staff for each agency  
          and program reviewed this year.







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          In response to issues stemming from the Pharmacy Law's lack of  
          formal recognition for outsourcing facilities and in order to  
          ensure that the state's hospitals and practitioners have access  
          to high quality, carefully compounded sterile medication, this  
          bill establishes a regulatory framework in California for  
          outsourcing facilities operating under provisions of the federal  
          Drug Quality and Security Act which created a voluntary  
          compliance regime in which large-scale compounding pharmacies  
          may voluntarily register as "outsourcing facilities" and be  
          subject to oversight by the FDA in much of the same way that  
          traditional pharmaceutical manufacturers are monitored.  

          In response to concerns that the Board is not currently able to  
          track how many ADDs are in use, where they are in use, or which  
          pharmacy is responsible for specific delivery devices, this bill  
          establishes a registration process to enable the Board to  
          identify which pharmacies operate these delivery devices and  
          where each is located.  

          In response to backlogs, this bill clarifies current law related  
          to processing timelines for applications filed by clinics  
          opening a new location, reporting a change to an existing  
          location or updating certain information like changes to  
          corporate officers to ensure a streamlined process for  
          commonly-owned clinics to use just one application which in turn  
          will speed up processing timelines. This bill also requires  
          license renewals to be consolidated for commonly owned clinics.

          In response to concerns that the Board does not currently have  
          the authority to issue a cease and desist order to businesses  
          involved in unlicensed activity and the fact that simply citing  
          and fining an unlicensed business is often an insufficient  
          consequence to stop unlicensed activity, as frequently the  
          business will continue to do the very action which violates the  
          law, this bill authorizes the Board to issue a cease and desist  
          to an entity practicing activities without a license if those  
          activities would require licensure by the Board.


          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   Yes









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          According to the Senate Committee on Appropriations analysis  
          dated May 27, 2016, this bill will result in ongoing costs of  
          $20 million per year for the continued operation of the Board  
          the Board's operations are fully supported by licensing fees.   
          The analysis also cites one-time costs of $335,000 and ongoing  
          costs of $320,000 per year for licensing and inspection  
          activities relating to outsourcing facilities.




          SUPPORT:   (Verified5/31/16)


          Planned Parenthood Affiliates of California


          OPPOSITION:   (Verified5/31/16)


          None received


          ARGUMENTS IN SUPPORT:     Planned Parenthood Planned Parenthood  
          Affiliates of California supports the provisions in this bill  
          related to processing efficiencies for clinic applications and  
          renewals.   



          Prepared by:Sarah Mason / B., P. & E.D. / (916) 651-4104
          5/31/16 20:45:41


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