BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 2077|
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THIRD READING
Bill No: AB 2077
Author: Solorio (D)
Amended: 8/20/10 in Senate
Vote: 21
SENATE BUSINESS, PROF. & E.D. COMMITTEE : 4-2, 6/14/10
(FAIL)
AYES: Negrete McLeod, Aanestad, Florez, Walters
NOES: Calderon, Yee
NO VOTE RECORDED: Wyland, Correa, Oropeza
SENATE BUSINESS, PROF. & E.D. COMMITTEE : 7-0, 6/28/10
AYES: Negrete McLeod, Aanestad, Calderon, Corbett, Correa,
Florez, Yee
NO VOTE RECORDED: Wyland, Walters
SENATE APPROPRIATIONS COMMITTEE : 11-0, 8/12/10
AYES: Kehoe, Ashburn, Alquist, Corbett, Emmerson, Leno,
Price, Walters, Wolk, Wyland, Yee
ASSEMBLY FLOOR : 68-5, 5/13/10 - See last page for vote
SUBJECT : Pharmacy
SOURCE : California Hospital Association
California Society of Health-Systems
Pharmacists
DIGEST : This bill provides for centralized pharmacy
packaging in a hospital, allowing the pharmacy to be
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located outside of the hospital on either the same premises
or separate premises that is regulated under a hospital's
license. This bill 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.
Senate Floor Amendments of 8/20/10 require that if
compounding is done at a hospital pharmacy serving multiple
hospitals, the pharmacy must be located with a 100 mile
radius of the hospital.
ANALYSIS :
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
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.
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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.
6. 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
and an Abbreviated New Drug Application or a
Biologics License Application.
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: (a) Hospitals have
been encouraged to use automation and bar-coding to
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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, and (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
either another physical plant on the same premises or on
a separate premises, located within a 100 mile radius of
the hospital, 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 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.
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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.
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.
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 bill's sponsors assert,
"Recently, the FDA indicated that they are comfortable
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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".
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.
Prior/Related Legislation
AB 1370 (Solorio), 2009-10 Session, was virtually identical
to this bill as introduced. That bill was held in the
Assembly Committee on Business and Professions.
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SCR 49 (Speier), Resolution Chapter 123, Statutes of 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Hospital pharmacy Up to $455* Up to
$837 Up to $837 Special**
inspections Minor, absorbable costs***
Special****
* Department of Public Health estimate
** Department of Public Health Licensing and Certification
Fund (4265-3098)
*** Board of Pharmacy estimate
**** Pharmacy Board Contingent Fund
SUPPORT : (Verified 8/20/10)
California Hospital Association
California Society of Health System Pharmacists
Catholic Hospitals West
Sutter Hospitals
OPPOSITION : (Verified 8/20/10)
Department of Finance
Department of Public Health
ARGUMENTS IN SUPPORT : The California Hospital
Association and Catholic Healthcare West believe that this
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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 (CSHP)
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.
ARGUMENTS IN OPPOSITION : The Department of Finance is
opposed to this bill because it could result in
significant, unabsorbable costs to the Department of Public
Health that were not included in the Governor's latest
fiscal plan.
ASSEMBLY FLOOR :
AYES: Adams, Anderson, Arambula, Bass, Beall, Bill
Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield,
Bradford, Brownley, Buchanan, Charles Calderon, Carter,
Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon,
DeVore, Emmerson, Eng, Evans, Feuer, Fletcher, Fuller,
Furutani, Gaines, Galgiani, Garrick, Gilmore, Hall,
Harkey, Hayashi, Hernandez, Hill, Huber, Huffman,
Jeffries, Jones, Knight, Lieu, Logue, Bonnie Lowenthal,
Ma, Mendoza, Miller, Monning, Nestande, Niello, Nielsen,
Norby, V. Manuel Perez, Portantino, Saldana, Silva,
Smyth, Solorio, Audra Strickland, Torlakson, Torres,
Torrico, Tran, Villines, John A. Perez
NOES: Ammiano, Fuentes, Ruskin, Swanson, Yamada
NO VOTE RECORDED: Caballero, Fong, Hagman, Nava, Salas,
Skinner, Vacancy
JJA:mwk 8/20/10 Senate Floor Analyses
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SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
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