BILL ANALYSIS
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|Hearing Date:June 28, 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:June 23, 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.
NOTE : This measure failed passage in this Committee on June 14, 2010,
by a vote of 4-2, and
was granted reconsideration. It is before this Committee today for
Reconsideration.
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
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California Department of Corrections or California Department of
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 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
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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)
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) Specifies that 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.
4) 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.
5) Specifies that a pharmacy compounding or repackaging for delivery
to another pharmacy or hospital under common ownership shall notify
the board in writing within 30 days of initiating this service, the
location where the compounding or repackaging is being performed.
Clarifies that any change in this information must be reported to
the board in writing within 30 days.
6) Provides that a hospital pharmacy may prepare and store a limited
quantity of unit-dose drugs in advance of receipt of a
patient-specific prescription only in such quantity as is necessary
to ensure continuity of care for an identified population of
inpatients of the hospital based on a documented history of
prescriptions for that patient population.
7) Clarifies that nothing in this section shall obviate a licensed
hospital pharmacy, hospital or pharmacist from complying with all
applicable state and federal laws and regulations.
FISCAL EFFECT: According to the May 5, 2010 Assembly Committee on
Appropriations analysis, this measure may result in minor absorbable
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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-Systems
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
medication 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
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.
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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). The Sponsor asserts,
"Recently, the FDA 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 in an email
pertaining to a Virginia hospital using a model as proposed in this
bill, "[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." While there has not been an official change
in FDA policy, it is clear in the FDA's Compliance Policy Guide
(460.200) as follows: "FDA will continue to defer to state
authorities regarding?pharmacy compounding of human drugs".
4. Update to Board Compounding Regulations. New regulations
governing compounding take effect on July 6 of this year.
According to the Board, a Workgroup on Compounding was formed in
2004 comprised of board members, board staff and industry
representatives. The workgroup recognized that current pharmacy
regulations addressing compounding only govern the physical
circumstances, procedures and record keeping requirements for
general compounding and do not address quality, strength or purity.
The Board adopted regulations in Article 7 of Division 17 of Title
16 of the California Code of Regulations (commencing with Section
1751) to implement provisions for pharmacies that compound sterile
injectable products as required in statute. As there were no
similar provisions in regulation for general compounding, the board
approved the addition of language that will establish parameters
and provide uniformity for pharmacies that carry out compounding in
general (including sterile injectable). Pharmacies that compound
sterile injectable products must go above and beyond the
requirements for compounding in general.
5. 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
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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.
6. Arguments in Support. The California Hospital Association (CHA)
and Catholic Healthcare West (CHW) believe 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. They also
note 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.
7. Recent Amendments to Address Concerns.
a. Requires Bar-coding. At the urging of this Committee, the
Author included language to require the implementation of new
technology like bar-coding when a hospital or health-system uses
a centralized pharmacy model. This requirement is intended to
increase efficiency and consumer health, potentially reduce
medication administration errors and improve potential
opportunities for hospitals, pharmacists and the Board to notify
patients and consumers in the event of a medication recall in a
timely manner.
b. Provides notification to the Board of centralized packaging
activities. At the urging of this Committee, the Author included
language to require notification to the Board, both in advance of
utilizing a centralized packaging pharmacy and upon the closure
or discontinued use of a facility. This requirement is intended
to maintain the Board's oversight of and accountability for its
licensee population and ensure patient and consumer protection;
for example, in the event of facility contamination leading to a
closure that directly affects recipients of medication packaged
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at the site.
c. Removes legislative findings. Based on negotiations with
Hospira, a manufacturer of specialty generic injectable
pharmaceuticals, the Author removed the finding that the FDA has
amended its position to allow hospitals to repackage without
being federally registered as a manufacturer. This language was
seen as greatly expanding exceptions to FDA regulations without
justification or support from that agency, and moving certain
practices too close to those of a FDA regulated manufacturer.
d. Clarifies compliance with compounding laws. To ensure that
centralized compounding practices are not expanded without cause,
the Author included language to clarify that hospital pharmacies,
hospitals and pharmacists must still comply with all applicable
state and federal laws and regulations.
e. Places current Board regulations regarding compounding into
statute. In response to concerns raised that patient safety may
be jeopardized by mass production of medications without proper
FDA oversight, the Author included current regulation language
(Title 16, Article 4.5, Section 1735.2 in the California Code of
Regulations) to specify compounding limitations and requirements.
Specifically, the bill now states that a hospital pharmacy may
prepare and store a limited quantity of unit-dose drugs, in
advance of receipt of a patient-specific prescription, but only
in such quantity as is necessary to ensure continuity of care for
an identified population of inpatients of the hospital based on a
documented history of prescriptions for that patient population.
SUPPORT AND OPPOSITION:
Support:
California Hospital Association (Co-Sponsor)
California Society of Health-System Pharmacists (Co-Sponsor)
Catholic Healthcare West
Numerous Health System Pharmacists
Opposition:
None received as of June 21, 2010
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Consultant: Sarah Mason