BILL ANALYSIS
AB 2077
Page 1
Date of Hearing: April 20, 2010
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
AB 2077 (Solorio) - As Amended: April 13, 2010
SUBJECT : Pharmacy.
SUMMARY : Permits a hospital pharmacy to compound and repackage
drugs for other hospitals and pharmacies under common ownership.
Specifically, this bill :
1)Expands the definition of hospital pharmacy to include a
pharmacy not on the premises of a hospital, but regulated
under that hospital's license.
2)Creates an exemption from the definition of "manufacturer" for
a pharmacy compounding and repackaging a drug for parenteral
therapy or oral therapy in a hospital for delivery to another
pharmacy or hospital for the purpose of dispensing or
administering the drug, pursuant to a prescription or order,
to the patient or patients named in the prescription or order.
3)Makes legislative findings and declarations.
EXISTING LAW :
1)Provides for the licensure and regulation of pharmacies,
including hospital pharmacies, by the Board of Pharmacy (BOP).
2)Prohibits the operation of a pharmacy without a license, and
requires a separate license for each pharmacy location.
3)Restricts a hospital pharmacy to providing pharmaceutical
services to registered hospital patients on the premises of
the same physical plant in which the pharmacy is located.
4)Provides that a knowing violation of the Pharmacy Law is a
crime.
FISCAL EFFECT : Unknown
AB 2077
Page 2
COMMENTS :
Purpose of this bill . According to the author's office,
"Current law attempts to separate the regulation of pharmacies,
on the one hand, from drug manufacturers or repackagers, on the
other. The regulation of manufacturers and repackagers is based
on the premise of broad-scale commercial operations.
Pharmacies, in particular, hospitals pharmacies, are regulated
on the basis of the safe delivery of medication to inpatients.
However, the laws governing hospital pharmacies mandate that the
pharmacy be on the physical site of the hospital. In order to
do the same activity that can be performed by a hospital
pharmacy now, but in a location off the hospital campus, the
laws governing manufacturing and repackaging are impacted.
"Hospitals attempting to automate and use cutting edge
technology require an economy of scale in order to improve
patient safety and reduce medication errors. By allowing
hospitals under common ownership to use a centralized pharmacy
regulated like a pharmacy enables these hospitals to afford the
technology that will enhance patient safety by reducing errors."
Background .
Current law restricts a hospital pharmacy to providing
"pharmaceutical services only to registered hospital patients
who are on the premises of the same physical plant in which the
pharmacy is located." This bill would allow a single hospital
pharmacy to prepare compounded drugs, repackage and prepare unit
dose packages and compounded unit dose drugs for single
administration to patient populations of multiple hospitals
under common ownership.
Repackaging, distribution, and compounding in advance of a
patient prescription are activities currently available only to
licensed manufacturers, which are regulated by the United States
Food and Drug Administration (FDA). This bill seeks an
exemption from federal regulation on account of the relatively
small scale of production. Communications from FDA indicate
they are comfortable allowing the state to regulate this level
of manufacturing. The FDA states "[the proposed health facility
pharmacy] system does not need to register as a
repacker/relabler as long as they are servicing their own
hospitals within the state of California and repackaged drugs
are not commercially distributed and used only within your
AB 2077
Page 3
hospital facilities."
These hospital pharmacies would be regulated by the BOP and
subject to all applicable pharmacy laws and regulations, and
compounding and pedigree requirements.
Author's amendment .
The author is proposing this amendment to clarify that the
statutory language in the bill is consistent with the author's
stated intent:
"manufacturer" shall not mean a pharmacy compounding and
repackaging a drug for parenteral therapy or oral therapy in a
hospital for delivery to another pharmacy or hospital under
common ownership for the purpose of dispensing or administering
the drug, pursuant to a prescription or order, to the patient
or patients named in the prescription or order.
Arguments in support . Scripps Health writes, "We feel that [AB
2077] will enhance patient safety in acute care hospitals by
allowing centralized compounding and packaging?. In addition,
being able to centralize compounding and packaging needs within
healthcare systems will enable the use of high speed, accurate
automated equipment with less capital costs. This will allow
many more sites to improve the safety of drug distribution and
mover forward with [barcode technology] to reduce medication
errors."
Arguments in opposition . Laborers' International Union of North
America, Locals 777 and 792 write, "A move towards centralized
pharmacies potentially means that there will be fewer pharmacist
available at hospitals for consultation, and that additional
workload will be required to be borne by pharmacy technicians."
REGISTERED SUPPORT / OPPOSITION :
Support
California Society of Health-System Pharmacists (co-sponsor)
California Hospital Association (co-sponsor)
Catholic Healthcare West
Scripps Health
Sharp Healthcare
AB 2077
Page 4
Opposition
California Nurses Association
Laborers' International Union of North America, Locals 777 and
792
Analysis Prepared by : Sarah Weaver / B.,P. & C.P. / (916)
319-3301