BILL ANALYSIS Ó SB 1193 Page 1 Date of Hearing: August 3, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair SB 1193 (Hill) - As Amended August 1, 2016 ----------------------------------------------------------------- |Policy |Business and Professions |Vote:|13 - 0 | |Committee: | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: YesReimbursable: No SUMMARY: This bill extends the operation of the Board of Pharmacy (BOP) until January 1, 2021, and makes various changes to the Pharmacy Law intended to improve BOP oversight, including the following: 1)Defines and licenses resident and nonresident outsourcing facilities, and establishes a licensure fee, requires a report by January 1, 2018 related to BOP's outsourcing facility regulation, and specifies the report must examine adequacy of fee revenue for funding oversight activities. SB 1193 Page 2 2)Requires registration of automated drug delivery systems in pharmacies. 3)Requires the BOP to issue a license within 30 days of receiving a completed application and payment of any fees. 4)Allows pharmacists to establish a professional corporation. 5)Authorizes the BOP to issue a cease and desist to an entity practicing activities without a license if those activities would require licensure by the BOP. It also extends the operation of the Veterinary Medical Board (VMB) until January 1, 2021, and makes various minor changes related to the VMB, including the following: 1)Requires the VMB to provide a separate licensure category for veterinarians practicing solely within the university setting. 2)Establishes authority for drug compounding in the practice of veterinary medicine. FISCAL EFFECT: BOP provisions (All costs are fee-supported - Pharmacy Board Contingent Fund): 1)Ongoing costs of $20.1 million per year for the continued operation of the BOP. SB 1193 Page 3 2)One-time costs of $335,000 and ongoing costs of $320,000 per year, for licensing and inspection activities relating to outsourcing facilities. The BOP also estimates $288,000 in revenue from an outsourcing facilities fee authorized by this bill in the first year, and $244,000 annually in the second year. Costs related to other provisions, including information technology costs, are expected to be minor and absorbable. VMB provisions (All costs are fee-supported-Veterinary Medical Board Contingent Fund): 1)Ongoing costs of about $5.0 million per year for the continued operation of the VMB. All costs to operate the VMB are funded with licensing fees. 2)Costs related to VMB-related provisions are anticipated to be minor and absorbable. COMMENTS: 1)Purpose. In March 2016, the Senate Business and Professions Committee and the Assembly Business and Professions Committee conducted joint oversight hearings to review 11 different regulatory entities. Sunset review bills, such as this one, are intended to implement any legislative changes identified as a result of the hearings and extend regulatory authority for entities reviewed at the hearings. This bill extends the sunset for the BOP and the VMB for four years and makes necessary changes. SB 1193 Page 4 2)Background. The BOP 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 BOP has over 140,000 licensees in 23 license categories that include both personnel, such as pharmacists, as well as business licenses, such as pharmacies. The most substantive change to the BOP statute relates to outsourcing facilities, generally large-scale production facilities licensed by federal law to compound large quantities of medications for use by other entities. In contrast, compounding pharmacies, which the BOP currently licenses, may compound a sterile medication pursuant to a patient-specific prescription or in limited quantities in anticipation of a patient-specific prescription. The BOP currently licenses those entities that are federally defined as outsourcing facilities, as compounding pharmacies. The BOP indicates licensing compounding pharmacies and outsourcing facilities separately aligns with federal requirements and is a more appropriate regulatory approach, due to differences between the facility types. The mission of the VMB is to protect consumers and animals through development and maintenance of professional standards, licensing of veterinarians, registered veterinary technicians (RVTs), and premises, and diligent enforcement of the California Veterinary Medicine Practice Act. The VMB licenses about 12,000 veterinarians, 6,500 RVTs, and 3,600 veterinary premises. SB 1193 Page 5 3)Related Legislation. AB 2190 through AB 2194 (Salas) and SB 1192 through 1196 (Hill) are all 2016 sunset review bills on various topics. 4)Prior Legislation. SB 619 (Morrell) of 2015 would have established licensure of outsourcing facilities as separate entities both within and outside California to ship into the state. This bill was held on the suspense file of the Senate Appropriations Committee. Analysis Prepared by:Lisa Murawski / APPR. / (916) 319-2081