BILL ANALYSIS
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|Hearing Date:June 14, 2010 |Bill No:AB |
| |2077 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Gloria Negrete McLeod, Chair
Bill No: AB 2077Author:Solorio
As Amended:May 10, 2010 Fiscal: Yes
SUBJECT: Pharmacy.
SUMMARY: Provides for centralized pharmacy packaging in a hospital,
allowing the pharmacy to be located outside of the hospital on either
the same premises or separate premises that is regulated under a
hospital's license. Modifies the definition of "manufacturer" so that
the compounding that is done at a pharmacy serving multiple hospitals
does not inappropriately transform the same compounding activities
that are now lawful at a hospital pharmacy into manufacturing
activities.
Existing law:
1) Provides for the practice of pharmacy and the licensing and
regulation of pharmacies and pharmacists by the Board of Pharmacy
(Board) within the Department of Consumer Affairs (DCA).
2) Defines "hospital pharmacy" as a pharmacy licensed by the Board,
located within any licensed hospital, institution or establishment
that maintains and operates organized facilities for the diagnosis,
care, and treatment of human illnesses to which persons may be
admitted for overnight stay.
3) Provides that "hospital pharmacy" also includes a pharmacy that may
be located outside of the hospital, in another physical plant that
is regulated under a hospital's consolidated license issued by the
California Department of Corrections or California Department of
the Youth Authority. Specifies that the pharmacy in another
physical plant shall provide pharmaceutical services only to
registered hospital patients who are on the premises of the same
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physical plant in which the hospital is located. Specifies that
the pharmacy services provided shall be directly related to the
services or treatment plan administered in the physical plant.
4) Defines "manufacturer" as every person who prepares, derives,
produces, compounds or repackages any drug or device except a
pharmacy that manufactures on the immediate premises where the drug
or device is sold to the ultimate consumer.
5) Specifies that "manufacturer" does not mean :
a) A pharmacy compounding a drug for parenteral therapy, pursuant
to a prescription.
b) A pharmacy that, at a patient's request, repackages a drug
previously dispensed to a patient, or to the patient's agent,
pursuant to a prescription.
1) Specifies that "manufacturer" means :
a) A person who prepares, derives, manufactures, produces or
repackages a dangerous drug, as defined.
b) A holder of or holders of a New Drug Application (NDA) and an
Abbreviated New Drug Application (ANDA) or a Biologics License
Application (BLA).
c) A manufacturer's third-party logistics provider.
d) A private label distributor for whom the private label
distributor's prescription drugs are originally manufactured and
labeled for the distributor and have not been repackaged.
e) The distributor agent for the manufacturer, contract
manufacturer, or private label distributor, whether the
establishment is a member of the manufacturer's affiliated group
or is a contract distributor site.
This bill:
1) Sets forth findings and declarations detailing the usefulness of
allowing hospitals to package drugs in reducing medical errors as
follows: (1) Hospitals have been encouraged to use automation and
bar-coding to improve efficiency of drug distribution; (2) Drugs do
not come bar-coded from the manufacturer; (3) Definitions in
current law restrict current practice and innovation; (4) The FDA
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has amended its position to allow hospitals to repackage without
being federally registered as a manufacturer; (5) Centralized
packaging ensures patient-safety oversight of the Board.
2) Clarifies that "hospital pharmacy" also includes a licensed
pharmacy located outside of the hospital, in another physical plant
on the same premises or on a separate premises that is regulated
under a hospital's license. States that this provision is not
intended to restrict or expand services that a hospital pharmacy
may provide.
3) Clarifies that "manufacturer" does not mean a pharmacy compounding
or repackaging a drug for parenteral therapy or oral therapy in a
hospital for delivery to another pharmacy or hospital under common
ownership, pursuant to a prescription.
FISCAL EFFECT: According to the May 5, 2010 Assembly Committee on
Appropriations analysis, this measure may result in minor absorbable
workload to the California Board of Pharmacy to continue oversight of
hospital-based pharmacies.
COMMENTS:
1. Purpose. This measure is sponsored by the California Hospital
Association and the California Society of Health-System
Pharmacists . According to the Author, "technology is now capable
of providing hospitals with a method to deliver bar-coded unit
doses to in-patients' bedsides. However, the cost of this
technology renders it virtually impossible for hospitals to do
within the strictures of the current hospital pharmacy law. In
addition, because the new central pharmacy would serve multiple
hospitals (though the hospitals are under common ownership),
currently lawful hospital pharmacy activities might run afoul of
the manufacturing law." The Author notes that the potential to
finally and effectively address in-patient medication errors is
greatly expanded by this proposal.
2. Background. Current law requires medications for a hospital's
patients to be prepared by a licensed pharmacy located on the
hospital's premises. Automated processes implemented by a hospital
or health system have the potential to provide additional patient
protection through a reduction in medication errors. Many
medications errors in hospitals have resulted from inadequate and
inconsistent labeling and a lack of proper mechanisms to track
medication through the distribution process to the patient. Recent
reports show that technology like bar-coding facilitates more
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efficient medication administration and decreases medication
errors. According to a study published in the New England Journal
of Medicine, "Effect of Bar-Code Technology on the Safety of
Medication Administration", use of the bar-code substantially
decreased the rate of errors as well as potential adverse drug
events. The report also concluded that the bar-code electronic
medication administration is an important intervention to improve
patient safety.
There are many different manufacturers of technology throughout the
state, nation and world whose aim is improving medication
administration. While there is an inherent public health benefit
that arises from use of bar-coding and other technologies, this
bill does not mandate the use of any specific technology or vendor.
The measure allows hospitals and health systems which do invest in
new technology that may reduce medication errors to legally
implement the technology in one location without violating federal
definitions of manufacturer.
3. FDA Position. 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). Recently, the FDA changed its
position and has now indicated that they are comfortable allowing
for repackaging or distribution by hospitals under common control
and operating within a state, without federally registering as a
manufacturer for such products. The FDA states "[the proposed
health facility pharmacy] system does not need to register as a
repacker/relabeler 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 hospital
facilities."
4. Related Legislation. AB 1370 (Solario, 2009) was virtually
identical to this measure as introduced. That bill was held in the
Assembly Committee on Business and Professions.
SCR 49 (Speier, 2005) created a panel to study the causes of
medication errors and recommend changes in the health care system
that reduces errors associated with the delivery of prescription
and over the counter medication to consumers.
SB 1875 (Speier, Chapter 816, Statutes of 2000) required hospitals
to adopt a formal plan to eliminate or substantially reduce
medication-related errors.
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5. Arguments in Support. The California Hospital Association (CHA)
believes that this bill will provide a solution to reducing medical
errors and facilitate the change in position by the FDA to allow
hospitals to repackage without being federally registered as a
manufacturer. CHA also notes that licensing under the license of a
hospital, rather than as a manufacturer, assures patient oversight
of the pharmacy and other hospital and accreditation bodies.
The California Society of Health-System Pharmacists writes that
this bill is intended to "enhance the preparation and delivery of
medications by facilitating the implementation of barcode-enabled
point-of-care systems." CSHP adds that implementing new technology
to improve medication distribution is cost prohibitive under
current law but the changes set forth in this bill can safely allow
bar-coding and improve patient care.
6. Policy Issues and Suggested Amendments.
a) Bar-coding should be required. While language in the bill
details the efficiency and consumer health benefit of automated
practices, there is no requirement that centralized pharmacies
actually use the technology intended to reduce medication errors.
Automated practices such as bar-coding also have the potential
to improve opportunities for hospitals, pharmacists and the Board
to notify patients and consumers in the event of a medication
recall in a timely manner. The consumer protection component of
implementing new technology like bar-coding may not be fully
realized without clarification that hospitals and health systems
operating a centralized packaging pharmacy actually use
bar-coding.
Suggested Amendment : On page 4, line 1, insert: "4029 (c) Any
unit dose medication produced by a hospital pharmacy licensed by
the board, that may be located outside of the hospital, in
another physical plant on the same premises or on a separate
premises that is regulated under a hospital's license, under
common ownership, shall be bar-coded to be readable at the
patient's bedside."
b) The Board should be notified of centralized packaging
activities. The Board is charged with enforcement of the state's
Pharmacy Law through its 13 major regulatory programs that
regulate both the individuals and firms that procure, ship, store
and dispense prescription drugs and devices to the state's
health care providers and patients, both from within and outside
California. As such, the Board collects data on and performs
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inspections of its licensees. Notification to the Board of
hospital pharmacy activities will ensure patient and consumer
protection; for example, in the event of facility contamination
leading to a closure that directly affects recipients of
medication packaged at the site. Providing notification to the
Board, both in advance of utilizing a centralized packaging
pharmacy and upon the closure or discontinued use of a facility,
helps maintain the Board's oversight of and accountability for
its licensee population.
Suggested Amendment: On page 4, line 35, insert: "4033 (c) A
pharmacy compounding or repackaging for delivery to another
pharmacy or hospital under common ownership as referenced in
Section 4033(a)(2) shall notify the board in writing within 30
days of initiating this service, the location where the
compounding or repackaging is being performed. Any change in
this information must be reported to the board in writing within
30 days."
SUPPORT AND OPPOSITION:
Support:
California Hospital Association (Co-Sponsor)
California Society of Health-System Pharmacists (Co-Sponsor)
Opposition:
Hospira, Inc.
Consultant: Sarah Mason