BILL ANALYSIS Ó
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 1193|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
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.)
SB 1193
Page 2
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.
SB 1193
Page 3
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.
SB 1193
Page 4
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
SB 1193
Page 5
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
**** END ****