BILL ANALYSIS
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|Hearing Date:June 21, 2010 |Bill No:AB |
| |2104 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Gloria Negrete McLeod, Chair
Bill No: AB 2104Author:Hayashi
As Amended:May 28, 2010 Fiscal: Yes
SUBJECT: California State Board of Pharmacy.
SUMMARY: Authorizes the Governor, rather than the Board of Pharmacy
(Board,) to appoint the Board's Executive Officer (EO) and determine
if the EO may or may not be a member of the Board. Requires the Board
to receive approval from the DCA of Consumer Affairs prior to
sponsoring, supporting or opposing any legislation.
Existing law, the California Constitution: Exempts from civil service
a deputy or employee selected by each board or commission either
appointed by the Governor or authorized by statute.
Existing law, the Business and Professions Code:
1) Establishes DCA of Consumer Affairs (DCA) within the State and
Consumer Services Agency (Agency), and provides that DCA is under
the control of the Director of Consumer Affairs (Director) who is
appointed by the Governor, subject to Senate confirmation.
2) Provides that the DCA consists of boards and bureaus that have been
created by law to license and regulate members of various
professions and vocations.
3) Provides that each of the boards comprising the DCA exists as a
separate unit and are made up of appointees of the Governor and the
Legislature who perform both licensing and regulatory functions.
These boards are separate from the control of the DCA.
4) Provides that functions of the boards includes the appointment of
an EO, setting standards, holding meetings, and setting dates
thereof, preparing and conducting examinations, passing upon
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applicants, conducting investigations of violations of laws under
its jurisdiction, issuing citations and holding hearings of
revocation of licenses, and the imposing of penalties following
these hearings, insofar as these powers are given by statute to
each respective board.
5) Provides that the boards in the DCA are established for the purpose
of ensuring that those private businesses and professions deemed to
engage in activities which have potential impact upon the public
health, safety, and welfare are adequately regulated in order to
protect the people of California. To this end, they establish
minimum qualifications and level of competency and license persons
desiring to engage in the occupations they regulate upon
determining that such persons possess the requisite skills and
qualifications necessary to provide safe and effective services to
the public, or register or otherwise certify persons in order to
identify practitioners and ensure performance according to set and
accepted professional standards. They provide a means for redress
of grievances by investigating allegations of unprofessional
conduct, incompetence, fraudulent action, or unlawful activity,
brought to their attention by member of the public and institute
disciplinary action against persons licensed or registered under
the provisions of this code when such action is warranted. In
addition, they conduct periodic checks of licensees, registrants,
or otherwise certified persons in order to ensure compliance with
the relevant section of this code.
6) Authorizes the Director to investigate the work of boards and
obtain a copy of all records and data in all official matters in
possession of the boards, board members, officers or employees
other than examination questions.
7) Provides that pursuant to subdivision (e) of Section 4 of Article
VII of the California Constitution, each board may appoint a person
exempt from civil service and may fix his or her salary, with the
approval of the Department of Personnel Administration as
specified, who shall be designated as an executive officer unless
the licensing act of the particular board designates the person as
a registrar.
8) Provides that employment of all other personnel by the each board
shall be in accord with Article XXIV of the Constitution, the law
and rules and regulations of the State Personnel Board. Requires
that each board shall select its employees from a list of eligibles
obtained by the appointing power from the State Personnel Board and
that any person selected by the board to fill any position or
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vacancy shall thereafter be reported by the board to the appointing
power.
9) Provides for the practice of pharmacy and the licensing and
regulation of pharmacies and pharmacists by the Board of Pharmacy
(Board).
10)Establishes 13 members of the Board, appointed as follows, for a
term of 4 years:
a) 7 pharmacists who reside in different parts of the state
appointed by the Governor.
b) 4 public members appointed by the Governor.
c) 1 public member appointed by the Senate Committee on Rules.
d) 1 public member appointed by the Speaker of the Assembly.
1) States that protection of the public shall be the highest priority
for the Board in exercising its licensing, regulatory and
disciplinary functions.
2) Authorizes the Board to appoint a person exempt from civil service
as EO. Clarifies that the EO shall exercise the powers and perform
the duties delegated by the Board and vested in him or her.
Authorizes the Board to determine if the EO may or may not be a
member of the Board.
3) Allows the Board to adopt rules and regulations, consistent with
current law, as may be necessary for the protection of the public.
4) Authorizes the following boards and commission to appoint an EO,
subject to Director approva l:
a) Acupuncture Board.
b) Athletic Commission.
c) Board on Barbering and Cosmetology.
d) Contractors' State Licensing Board.
e) Dental Board of California.
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This bill:
1) Authorizes the Governor, rather than the Board, to appoint a person
exempt from civil service as EO. Authorizes the Governor, rather
than the Board, to determine if the EO may or may not be a member
of the Board.
2) Requires the Board to receive DCA approval prior to sponsoring,
supporting, or opposing any legislation, including legislation
previously approved that underwent any substantive amendments.
FISCAL EFFECT: Unknown. According to the May 5, 2010 Assembly
Committee on Appropriations analysis, there are costs resulting from
increased feedback for legislative communication. That Committee
considered a different version of this bill with added requirements
pertaining to ex-parte communication, and much of the Special Fund
cost estimates of $175,000 to $200,000 related to that provision which
has since been removed.
COMMENTS:
1. Purpose. The Author is the Sponsor of this bill. According
to the Author, "Recently the Board sponsored several bills that
advantaged the pharmacy industry without benefit to consumers.
There have been concerns of undue industry influence in the
Board, which would present a conflict of interest with its
regulatory role and mission to protect the health and safety of
Californians. This bill would ensure a degree of professional
distance between the Board and its managing administrative
officer by allowing the Governor to appoint the EO. Further,
providing for DCA review of all legislation will afford a fresh
perspective on legislation impacting consumers."
2. Independent Board Governance Structure. The independent board
governance structure in California's executive branch of
government is seen as more accountable and transparent, and
offering the public more opportunity to participate than other
types of governance structures such as DCA bureaus. Under a
bureau, the Bureau Chief is responsible for conducting the
regulatory and licensing functions but still reports to the
Director. Many bureau decisions, it is argued, are made through
a closed - door administrative management structure.
Under an independent board governance structure, board members are
appointed and hold hearings in public, subject to the requirements
of the Bagley/Keene Open Meetings Act. As such, boards must
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provide notice for upcoming meetings, provide an opportunity for
public comment and conduct meetings in open session. The board
members also appoint an Executive Officer who manages the
operations of the board and reports to the board members in public.
Some boards have members that are subject to confirmation by the
Senate, which is a process that is open to the public and
encourages public participation. The Senate may take up to 365 days
to confirm board members who are subject to confirmation. Because
there can be up to one year between appointment and confirmation,
the appointee's "on the job" performance can be assessed during the
confirmation process. Interested members of the public have several
opportunities to voice support or opposition of the appointee by
submitting written or oral testimony in a public hearing of the
Senate Rules Committee followed by a floor vote of the full Senate.
The votes and the testimony given in public meetings are part of
the public record.
The boards place their meeting agendas online and distribute hard
copies at least 10 days before a meeting. The boards also send a
"subscriber alert" e-mail to interested parties who have signed up
to be notified about board activities through the board's e-mail
contact list. Additionally, meeting materials that are provided to
the board's members are also put online at the same time they are
distributed to the board, and the availability of the meeting
materials is announced via a subscriber alert.
Boards typically hold at least four full public board meetings. In
advance of any board meeting, the boards usually schedule committee
meetings, also open to the public, of its strategic committees so
an in-depth discussion of emerging issues is permitted.
As indicated under "Existing Law" in this analysis, the boards have
the responsibility to carry out many functions and address the
stated purposes for which they are established. To accomplish
these tasks, boards will recommend and propose to the Legislature
enactment of such legislation, or provide stated positions to
advance these purposes and to ultimately promote the interests of
consumers. Currently, there is no requirement that boards must
seek approval of their proposed, sponsored, or positions on
legislation by the DCA, Agency or the Governor. This would appear
to abrogate their authority to independently ensure "that those
private businesses and professions deemed to engage in activities
which have potential impact upon the public health, safety, and
welfare are adequately regulated in order to protect the people of
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California."
3. Role of Executive Officers of Boards. According to the DCA's
Board Member Procedures Manual, "the EO is appointed by and
serves at the pleasure of the board, and is exempt from civil
service. The EO shall exercise the powers and perform the duties
delegated by the board and vested in him or her. The EO is
responsible for the financial operations and integrity of the
board, and is the official custodian of records. Board members
should be concerned primarily with formulating decisions on board
policies rather than decisions concerning the means for carrying
out a specific course of action. It is inappropriate for board
members to become involved in the details of program delivery.
Strategies for the day-to-day management of programs and staff
shall be the responsibility of the executive officer."
4. The Pharmacy Board's Report on It's Legislative Program. The
Board of Pharmacy (Board) recently prepared a Report that
provides an overview of its legislative program for submission to
the Assembly Committee on Business, Professions and Consumer
Protection. In that Report, the Board clarifies that
"legislation advocated by the board, whether sponsored or
reviewed, must either benefit the public with respect to
pharmacist's care or advance the Board's ability to license and
enforce provisions that support pharmacist's care." The Board
further notes, "Legislation and promulgation of regulations are
necessary to keep Pharmacy Law current. Health care continues to
undergo dramatic changes as new technology and new medications
compete with costs to drive down the expenses related to health
care. Emerging technology that can provide enhanced health care
at lower overall expense to the health care system sometimes
cannot be used without changes in law. Emerging enforcement
matters and health care issues also are the impetus for
board-sponsored legislative proposals. Issues in public health or
board initiatives frequently necessitate a legislative or
regulation response. But the Board also responds to legislative
proposals of others, not by sponsoring the proposal but by
providing technical assistance to aid implementation or
supporting those proposals that advance or opposing those that
compromise the Board's consumer protection mandate."
The Board acknowledges that it typically sponsors one piece of
legislation per year stemming from either:
Issues before the Board or Administration.
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Comments addressed to the Board from members,
stakeholders and the public.
Investigations conducted by the Board.
Health care issues affecting patients and drug
distribution.
Board staff.
The Report also details the current relationship between the Board
and DCA. For legislation sponsored in 2009, the Board made its
decisions at the October 2008, Board meeting, and within one day of
the meeting, notified Agency as well as the legislative staff of
DCA about its proposals. For legislation sponsored in 2010, the
Board finalized its legislative agenda at the January 2010 board
meeting, and according to DCA's Legislative Affairs Office,
provided notification the next business day. According to the
Report, "throughout any legislative session, updates to the
Administration are provided in response to their inquiries before
bills are up in committee hearings as well as in monthly reports to
the DCA Director. Additionally, the Board's staff works closely
with DCA legislative and budget staff on all legislative matters as
the session progresses."
1. Pharmacy Board's Efforts to Promote Patient Safety.
a) Adoption of E-Pedigree Standards in California. In response
to a growing threat to the pharmaceutical supply chain from
counterfeit, misbranded, adulterated or diverted drugs, the Board
sponsored SB 1307 (Ridley-Thomas, Chapter 713, Statutes of 2008)
which made comprehensive changes to the drug distribution system
to protect the integrity of the pharmaceutical supply chain by
requiring all prescription drugs to have an electronic
"pedigree," or tracking device, from the manufacturer, through
distribution, all the way to the pharmacy. That legislation
enacted the nation's strongest pharmaceutical consumer protection
measure and included provisions pertaining to the licensure and
qualifications of wholesalers, restrictions on furnishing and the
requirement of an electronic pedigree to accompany and validate
drug distributions for the purpose of tracking each prescription
drug at the saleable unit (item) level through the distribution
system.
As this bill began to move through the Legislative process, DCA,
Agency and the Governor's Office began to disagree with the
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Board's position and sponsorship of this measure because of
opposition from the pharmaceutical industry. The Board, however,
did not waiver and continued to pursue this important piece of
legislation with the support and commitment of the Author. In
the end, agreement was reached with the industry by the Author,
even over the objections of the Administration, and SB 1307 was
signed into law. Without the perseverance of the Board, however,
which had worked on this important piece of legislation for over
five years, California would not be the lead state for requiring
e-pedigree standards on manufacturers and distributors of drugs.
It should be noted that subsequent to the signing of this measure,
the DCA and Agency began an effort to bring boards more under
their direct control by having them sign a "Professional
Achieving Consumer Trust" document which outlined board
responsibilities from their perspective , and requiring boards to
submit their legislative proposals or their sponsorship of bills
to the DCA for "discussion" and "approval" in advance of bill
introduction. They believed that there was "value to consumers
and their understanding of consumer protection issues if
consistency can be achieved between the DCA and its boards."
Both the Director and the Secretary of Consumer Services Agency
resigned shortly after this effort due to other circumstances.
b) Patient-Centered Standardized Label Implementation. The Board
is currently in the process of approving a regulation per the
requirements set forth in SB 472 (Corbett, Chapter 470, Statutes
of 2007) which created the patient-centered label standard. SB
472 sought to deal with the lack of uniformity in prescription
drug labels throughout the state and the resulting confusion and
medication errors that may arise.
The Board conducted outreach, hearings and information gathering
sessions throughout 2008, to collect data from the public on
prescription labels and standards for those labels. In 2009, the
Board began the drafting of regulations and held several
regulatory hearings to receive written and oral comments from the
public. The Board voted June 10, 2010 to approve the regulation,
requiring labels on drug containers dispensed to patients in
California to meet specified requirements to ensure they are
patient-centered.
2. Arguments in Support. The California Nurses Association and
National Nurses Organizing Committee write in support of this
bill which they believe will result in greater accountability and
transparency at the Board, stating, "At a time where there is a
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call for major reform in the healing arts boards and its
licensees who are responsible for the health and safety of
Californians, it is prudent to ensure additional oversight of the
Board, a board that has a similar mission in protecting the
public."
According to the California Labor Federation, AFL-CIO , "Board
members need to be as insulated as possible from outside influence
from the regulated community that could hinder the Board from
working on behalf of Californians."
3. Arguments in Opposition. The Board of Pharmacy (Board) writes
in opposition, arguing, "Consumer protection includes devising
and implementing prevention strategies and eliminating
unnecessary barriers to access vital health care resources." The
Board also notes that it is subject to the Bagley/Keene Open
Meetings Act and all Board discussions and deliberations are done
in public.
The Department of Consumer Affairs (DCA) believes that having to
approve each position taken by the Board on legislation would be
burdensome. The DCA also argues that it would prefer the Director,
rather than the Governor, approve the EO of each Board.
According to the California Retailers Association (CRA), the bill
will undermine and impact the Board's independence from DCA. CRA
argues, "This bill is a significant departure from the widely
accepted view that healing arts boards should be allowed to fulfill
their missions without interference from the political pressures
exerted by the Administration."
4. Policy Issue : Should this be the Only Board Under the DCA
Subject to these Requirements? Should one board be singled out
to restrict its ability to sponsor legislation or take positions
on legislation absent the influence or positions of the DCA,
Agency or the Administration? At least the DCA has responded in
the negative. If the purpose of this measure is to deal with a
board that is being unduly influenced by the pharmacy profession,
then there are other appropriate measures which the Legislature
has taken to assure that a board is more responsive to consumer
interests. Boards have been subject to sunset review, oversight
hearings, and when necessary, current board members have been
replaced with newly appointed members. This bill would set
precedent for curtailing the independence which this board has
maintained for many years and taking away from the board its
ability to determine its own internal management. If there have
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been problems with a board and its hiring of an Executive
Officer, then authority has generally been granted to the
Director to approve the ultimate hiring of the EO.
5. Legal Consideration : Allowing the Governor to Appoint the
Executive Officer May Be Unconstitutional. Article 7, Section 4
of the California Constitution exempts from civil service a
deputy or employee selected by the board. The Attorney General's
office has opined, "Thus, each board or commission ... is
entitled to one exempt deputy or employee selected by the board."
(67 Ops.Cal.Atty.Gen. 27 (1984)) The opinion goes on to say that
the Governor may appoint additional exempt employees. How these
exempt employees would relate to each other or which would be in
charge is not addressed. By limiting the ability of the Board to
appoint its EO, the bill may violate the Constitution which
allows a board to select its exempt employee.
6. Proposed Author's Amendments. The Author is proposing
amendments which do the following:
a) Authorize the Board, with the approval of the Department,
rather than the Governor, to appoint a person exempt from civil
service as EO.
b) Remove the requirement for the Governor to determine if the EO
may or may not be a member of the Board and instead reverts to
current law allowing the Board to make that determination.
c) Clarify that the Board must receive Department approval prior
to sponsoring , rather than sponsoring, supporting, or opposing
any legislation. The amendments would still require the Board to
receive subsequent approval from the Department on legislation
previously approved that underwent any substantive amendments.
SUPPORT AND OPPOSITION:
Support:
California Nurses Association
National Nurses Organizing Committee
California Labor Federation, AFL-CIO
Opposition:
Board of Pharmacy
California Retailers Association
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Department of Consumer Affairs
Consultant:Sarah Mason