BILL ANALYSIS
AB 830
Page 1
Date of Hearing: April 14, 2009
ASSEMBLY COMMITTEE ON HEALTH
Dave Jones, Chair
AB 830 (Cook) - As Amended: April 1, 2009
SUBJECT : Drugs and devices.
SUMMARY : Revises various provisions in existing law governing
drugs and devices to delete references to specific drug guides,
or compendia, and include, instead, a compendium approved by the
federal Centers for Medicare and Medicaid (CMS). Specifically,
this bill :
1)Revises the licensure requirements for a designated
representative supervisor in a wholesaler or veterinary
food-animal drug retailer and for a qualified supervisor of a
home medical device retail facility to include that the
individual has completed an approved training program that
addresses, among other things, knowledge and understanding of
the standards relating to the safe storage and handling of
drugs in a CMS approved compendium.
2)Specifies that the Board of Pharmacy may institute any action
it deems necessary to prevent the sale of pharmaceutical
preparations and drugs that do not conform to the quality and
strength testing standards provided in the latest edition of a
CMS approved compendium, as specified.
3)Revises provisions governing health plan and health insurance
policy coverage of an off-label drug to require that the drug
has been recognized for treatment of the patient's condition
by either a CMS approved compendium or two articles from major
peer reviewed journals, as specified.
4)Specifies that, for purposes of the independent medical review
(IMR) process established in existing law, "medical and
scientific evidence" includes a CMS approved compendium.
5)Clarifies that, with regard to a drug or drug ingredient that
does not have a designated name but is recognized in a CMS
approved compendium, the "established name" is the official
title in the compendium.
6)Specifies that a drug that is labeled and sold as a
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homeopathic drug is subject to the requirements of the
Homeopathic Pharmacopoeia of the United States and not to
those of CMS approved compendia.
7)Revises provisions governing county-operated drug repository
and distribution programs to clarify that medication donated
to the programs and specified county protocols pertaining to
the packaging and storage of medication are required to comply
with standards set by CMS approved compendia.
8)Clarifies that a person is guilty of a misdemeanor, fine,
and/or imprisonment, as specified, for the sale of an
adulterated or tainted drug if the drug is sold under or by a
name recognized in CMS approved compendia and differs
materially from the standard of strength, quality, or purity
specified in the compendia.
9)Clarifies that a drug or biologic used in the treatment of
AIDS or AIDS-related conditions, or in cancer chemotherapy
treatment, which has been found to have a medically accepted
indication, and has been approved by the federal Food and Drug
Administration (FDA), or recognized for that indication in
either a CMS approved compendium or two articles from peer
reviewed medical journals, is deemed approved for addition to
the Medi-Cal List of Contract Drugs, as specified.
10)Revises the definitions of "materia medica," "drug," and
"device" to mean those substances or articles recognized in a
CMS approved compendium or supplement thereof.
EXISTING LAW :
1)Establishes licensure requirements for a qualified supervisor
of specified drug and device facilities, including the
requirement that the individual completes training that
addresses knowledge and safe handling of drugs in the United
States Pharmacopoeia-Drug Information (USP-DI) or any other
similar drug compendium, as determined annually by the
Department of Health Care Services (DHCS).
2)Provides for the regulation of health plans by the Department
of Managed Health Care (DMHC) and health insurers by the
California Department of Insurance (CDI).
3)Prohibits health plans and health insurance policies that
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cover prescription drug benefits from limiting or excluding
coverage for a drug that is prescribed for an off-label use,
provided that specified conditions are met, including that the
drug has been recognized for treatment of that condition by
either the American Medical Association-Drug Evaluations
(AMA-DE), the American Hospital Formulary Service-Drug
Information (AHFS-DI), and the USP-DI, or any other similar
drug compendium, as determined annually by DHCS.
4)Establishes the IMR process within DMHC and CDI to review
appeals of enrollees or insureds, respectively, involving a
disputed health care service that has been denied or modified
by a health plan or health insurer based on medical necessity
of a treatment, an experimental or investigational therapy for
certain medical conditions, or a claims denial for emergency
or urgent medical services.
5)Requires the IMR process to meet specified criteria including
a determination based on relevant medical and scientific
evidence from specified sources including AMA-DE, AHFS-DI, and
USP-DI, or any other similar drug compendium, as determined
annually by DHCS.
6)Specifies that, when a drug or drug ingredient is recognized
in the USP-DI and in the Homeopathic Pharmacopoeia of the
United States under different official titles, the official
title in the USP-DI is required to apply unless it is labeled
and sold as a homeopathic drug. In that case, the official
title in the Homeopathic Pharmacopoeia applies.
7)Establishes voluntary, county-option drug repository and
distribution programs to distribute surplus medications to
individuals in need and prohibits donated medication from
being adulterated, misbranded, or stored under conditions
contrary to standards set by USP-DI or in any other similar
drug compendium, as determined annually by DHCS.
8)Makes the sale of adulterated or tainted food, beverage, drug,
or medicine subject to a misdemeanor, fine, and/or
imprisonment if, in the case of drugs, the drug is sold under
or by a name recognized in the USP-DI and differs materially
from the standard of strength, quality, or purity specified in
the USP-DI.
9)Establishes the Medi-Cal program, administered by DHCS, which
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provides health benefits to low-income children, their
parents, or caretaker relatives, pregnant women, elderly,
blind or disabled persons, and other individuals who meet
specified eligibility criteria.
FISCAL EFFECT : This bill has not yet been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the sponsors of this bill,
the Association of Northern California Oncologists (ANCO) and
the Medical Oncology Association of Southern California
(MOASC), compendia play a significant role in oncology
practice because these reference guides help to ensure that
patients have access to the newest, most effective registered
drugs when evidence becomes available to support specific
off-label indications, i.e. uses that are not specifically
approved by FDA. They note that if an off-label drug used to
treat cancer is listed in one of the compendium reference
guides recognized by CMS, then various payers, including
Medi-Cal, Medicare, and health plans and insurers are required
to pay for it as a treatment. The sponsors state that the
problem is that there are many compendium reference guides
listed individually in statute and state law is required to be
updated as frequently as CMS changes its approved list, or a
payer could refuse payment for a treatment because California
law does not reflect CMS' latest revision. This bill is
intended to ensure California's statutes remain consistent
with federal policy without the need for continuous conforming
legislation.
2)BACKGROUND . A compendium is a listing of FDA-approved drugs
and biologics. Some compendia specialize in a particular
subset of drugs, such as those used to treat cancer. A
compendium includes a summary of how each drug works in the
body and information for health care practitioners about
proper dosing and whether the drug is recommended or endorsed
for use in treating a specific disease. Before approving
coverage for a drug, payers look at whether the drug is
FDA-approved for use in treating the beneficiary's disease
based on the beneficiary's specific clinical circumstances.
In some cases, the medical community may have scientific
evidence that supports using a drug to treat a disease even if
the drug's FDA-approved label does not include that clinical
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condition. For example, Avastin is a blockbuster drug
approved for the treatment of colon cancer. However, after
further clinical studies, the FDA approved it for the
treatment of breast and lung cancer. Therefore, it is listed
as an off-label drug approved for treating breast and lung
cancer in compendia recognized by CMS.
3)CMS COMPENDIA REVIEW PROCESS . In 1993, the U.S. Congress
directed CMS to consider three existing published compendia,
USP-DI, AHFS-DI, and AMA-DE, when deciding whether or not the
use of a drug is medically accepted for the treatment of
cancer. Under this authority, Medicare pays a reimbursement
claim if any of the three designated compendia cite the drug's
indication and denies payment if the indication is not cited.
However, AMA-DE ceased publication in 1995 and USP-DI was
discontinued in 2007. In response to the need for more than
one active, recognized compendium, CMS published final rules
in November 2007 establishing an annual process for
considering requests for revisions to the list of recognized
compendia. The rules require CMS to receive, on an annual
basis, requests for compendia additions and/or deletions for
30 days beginning January 15th, to post the completed requests
for public comment by March 15th, to allow for a public
comment period starting 30 days from the date the request is
posted, and to render a decision within 90 days following the
close of the public comment period. Although the receipt and
review of requests is scheduled annually, CMS reserves the
right to initiate a review at any time. For each of five
requests reviewed in 2008, CMS opted to remove AMA-DE and add
three new guides to the list: the National Comprehensive
Cancer Network Drugs and Biologics Compendium, Thomson
Micromedex DRUGDEX, and Clinical Pharmacology, thereby
expanding the current list from one to four.
4)RECENT STUDY . CMS commissioned a study in 2006, which was
completed in 2008, to evaluate the procedures and performance
of its designated compendia and determine to what extent the
compendia provide comprehensive, research-based, and timely
information. The results of the study, published in the March
2009 issue of Annals of Internal Medicine, found little
agreement between the results of the researchers' own
systematic review of 14 off-label uses of six cancer drugs and
the evidence cited for those uses in the compendia. According
to the study, cited evidence was lacking in quantity,
inconsistent across compendia, and out-of-date. For one
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indication, compendia citations did not increase between 2006
and 2008 despite researchers finding an additional 25 articles
of published evidence. Furthermore, the study noted that all
compendia lacked explicit, systematic procedures for
determining inclusion of off-label indications and, if
indications were excluded, rarely provided the rationale for
exclusion. The researchers concluded that the findings from
the study raised questions about the processes by which
evidence is identified and selected to generate
recommendations, the potential biases or conflicts of interest
among the panels of experts, many of whom have financial ties
to the drug industry, that the compendia publishers rely on
for decisions about whether or not to include an indication,
and the comprehensiveness and quality of the evidence included
in the compendia.
5)MEDICARE COVERAGE ADVISORY COMMITTEE . In addition to the
recently published study, CMS convened the Medicare Coverage
Advisory Committee (MCAC) in 2006 to advise CMS on the
desirable characteristics it should consider when deciding
which compendia to approve. Several of the MCAC
recommendations for the desirable characteristics of a
compendium that merits approval address public transparency
and conflict of interest issues, including that the compendium
provides detailed description of the evidence reviewed for
every individual listing; uses specified criteria for weighing
evidence; uses a prescribed published process for making
recommendations; describes a publicly transparent process for
evaluating therapies; and, sets forth a process for publicly
disclosing potential conflicts of interest of the compendia's
reviewers, contributors, and expert panel members, coupled
with an established procedure for responding to recognized
conflicts. The MCAC recommendations serve as a framework to
guide CMS' newly established annual compendia review process.
According to CMS, the 2008 Medicare Improvements for Patients
and Providers Act also includes a provision explicitly
prohibiting the inclusion of a compendium, on and after
January 1, 2010, that does not have a publicly transparent
process for evaluating therapies and identifying possible
conflicts of interest.
6)SUPPORT . The sponsors of this bill, ANCO and MOASC, note in
support that medical oncologists rely on compendia to provide
critical access to the latest supporting evidence for the use
of off-label drugs to treat cancer patients. They note that
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each and every time CMS approves a new compendium, legislation
needs to be introduced in California to recognize the
newly-approved compendium in state law and, during that time,
medical oncologists risk non-reimbursement from payers for
these off-label drugs because state law has not been updated.
They believe this bill prevents this problem by making
California codes more efficient and keeping them current with
CMS action. The California Medical Association adds that this
bill provides flexibility to cancer-treating physicians in the
use of drug compendia by eliminating statutory references to
specific compendia and instead authorizing the use of any
compendia approved by CMS.
7)SUGGESTED TECHNICAL AMENDMENT . This bill updates several code
sections with "a compendia approved by CMS." The term
"compendia" refers to more than one compendium. This bill
should be amended to refer to any compendium approved by CMS.
REGISTERED SUPPORT / OPPOSITION :
Support
Association of Northern California Oncologists (sponsor)
Medical Oncology Association of Southern California (sponsor)
California Medical Association
Opposition
None on file.
Analysis Prepared by : Cassie Rafanan / HEALTH / (916)
319-2097