BILL ANALYSIS �
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 1277
AUTHOR: Hill
AMENDED: June 20, 2012
HEARING DATE: June 27, 2012
CONSULTANT: Marchand
SUBJECT : Sherman Food, Drug, and Cosmetic Law.
SUMMARY : Eliminates licensing inspections by the Department of
Public Health (DPH) for drug and medical device manufacturers,
as specified. Limits DPH's authority to make investigations or
inspections of manufacturers to situations where DPH has
determined the health and safety of the public is at serious
risk, or when the U.S. Food and Drug Administration (FDA) has
requested assistance for enforcement activities.
Existing law:
1.Establishes the federal Food, Drug, and Cosmetic Act, which
grants authority to the FDA to oversee the safety of food,
drugs, and cosmetics.
2.Establishes the Sherman Law, administered by DPH, which, among
other things, regulates the packaging, labeling, and
advertising of drugs and medical devices in California.
3.Prohibits, in the Sherman Law, the sale, delivery, or giving
away of any new drug or new device unless it is either:
a. A new drug, and a new drug application has been approved
for it by the FDA, pursuant to federal law, or it is a new
device for which a premarket approval application has been
approved, and that approval has not been withdrawn,
terminated, or suspended under the FDA; or
b. A new drug or new device for which DPH has approved a
new drug or device application, and has not withdrawn,
terminated, or suspended that approval.
4.Requires DPH to adopt regulations to establish the application
form and set the fee for licensure and renewal of a drug or
device license.
5.Requires DPH to inspect the place of business of each licensed
manufacturer of a drug or medical device prior to issuing a
license, to determine ownership, adequacy of facilities,
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personnel qualifications, and compliance with current law.
6.Requires DPH to perform subsequent inspections once every two
years, unless the FDA has inspected the place of business
within the previous two years. Requires DPH to use the
information in the FDA inspection's written documents, rather
than conducting its own inspection.
7.Allows DPH, if necessary, to conduct an inspection to obtain
information not included or not sufficiently clear in the FDA
written documentation, as specified.
8.Permits a DPH-authorized agent to enter and inspect specified
locations, as specified, to enforce the Sherman Law.
This bill:
1.Clarifies that biologic products are included in provisions of
existing law prohibiting anyone from selling, delivering, or
giving away any new drug or new device unless it has been
approved under specified provisions of federal law.
2.Repeals the requirement that DPH inspect each place of
business prior to issuing a new license to a drug or device
manufacturer, and instead requires DPH to receive from the
place of business documentation that evidences any of the
following:
a. The place of business is operating pursuant to a valid
biologics license issued by the United States Food and Drug
Administration (FDA), as specified, requiring the
documentation to include an attestation from the place of
business that a federal inspection was completed within the
past two years from the date of the attestation;
b. The place of business is operating with a valid federal
establishment registration, as specified;
c. The place of business is operating in compliance with
audits conducted pursuant to the International Standards
Organization standards, as specified; or
d. The place of business is operating pursuant to an
approved investigational new drug issued by the FDA, or
pursuant to an approved investigational device exemption
issued by the FDA, as specified.
3.Prohibits DPH from inspecting the place of business prior to
issuing a license if DPH receives documentation that satisfies
the requirements in 2) above; if this documentation is not
received, DPH is required to inspect the place of business
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prior to issuing a license.
4.Requires DPH to provide an official copy of the valid license
upon request of the place of business.
5.Repeals the requirement that DPH inspect a licensed drug or
device manufacturer once every two years following initial
licensure to determine ownership, adequacy of facilities, and
personnel qualifications.
6.Limits the ability of DPH to make investigations or
inspections of licensed drug or device manufacturers to only
when any of the following occur:
a. DPH makes a determination that the health and safety of
the public is at serious risk;
b. A complaint has been registered with DPH, and DPH makes
a determination that the public health and safety is at
serious risk;
c. A notification has been sent by the FDA to DPH that
requests assistance regarding certain recall actions; or
d. The FDA has requested assistance for enforcement
activities, including, but not limited to, embargoes,
seizures, or injunctions.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1.Reduced cost pressure to the Drug and Device Safety special
fund within DPH, associated with reduced frequency of
inspections.
2.It is unclear whether the reduction in inspection frequency
will result in decreased expenditures for drug and device
regulation, as there is an existing and ongoing backlog in
initial licensure inspections. DPH indicates initial licensure
of manufacturers requires significantly more time than renewal
inspections, and the number of new manufacturers continues to
exceed DPH projections
PRIOR VOTES :
Assembly Health: 17- 0
Assembly Business, Professions and Consumer Protection:9- 0
Assembly Appropriations: 16- 0
Assembly Floor: 78- 0
COMMENTS :
AB 1277 | Page 4
1.Author's statement. Under existing law, biotechnology and
medical device companies undergo inspections from the FDA
every two years and DPH's Food and Drug Branch (FDB) every two
years. This is in addition to inspections performed by the FDB
prior to clinical trials and potential follow-up inspections
the state performs within weeks following FDA inspections.
The state inspections are duplicative of federal inspections
since both use the same compliance standards contained in the
Current Good Manufacturing Practices (GMP), as spelled out in
Title 21 of the US Code of Regulations, which mandates
compliance on issues ranging from Organization/Personnel,
Equipment, Building Lighting, Plumbing, Sewage &Ventilation,
Product & Process Controls, Package & Labeling Controls and
Records & Reports, among other things.
AB 1277 reduces redundant inspections between the state and
federal government by clarifying that the FDA shall be
responsible for initial and biennial inspections and the state
FDB shall be responsible for taking action against companies
in instances where the public's health and safety may be at
risk. The state FDB would continue to conduct enforcement
activities including injunctions, embargoes & seizures and
conduct "for cause" inspections. Companies would still be
responsible for paying biennial fees to the state FDB.
2.DPH licensure of drug and device manufacturers. FDB in DPH is
responsible for licensing and inspecting all manufacturers of
pharmaceutical drug products and medical devices in
California, unless the manufacturer is specifically exempted.
DPH currently licenses and inspects 1,673 drug and medical
device manufacturing firms in California. FDB is required to
inspect the place of manufacture before issuing or denying a
license; firms cannot legally manufacture in California
without a valid license. In addition to issuing a license,
DPH has the authority to revoke or suspend a license for any
violation of the Sherman Law. Current law also requires FDB to
conduct license renewal inspections of these companies once
every two years, and permits additional follow-up inspections
to be conducted "for cause" (e.g., to investigate injuries and
deaths or following product recalls).
According to DPH, its inspections are aimed at preventing the
sale and distribution of drugs and medical devices that have
been improperly manufactured; are adulterated, misbranded or
falsely advertised; have not been shown to be safe or
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effective; or in the case of medical devices, fail to meet
design verification requirements. As these products are being
used to treat life-threatening diseases or are necessary for
life support, early regulation by DPH prevents product
contamination, misbranding, and a variety of formulation,
fabrication, and labeling problems.
3.FDA regulation of drug and device manufacturers. Before a new
drug even gets to the manufacturing stage, it must undergo
preclinical testing, followed by clinical testing. The FDA is
involved in each stage of testing, ensuring the tests conform
to FDA's Good Laboratory Practices. After three phases of
clinical trials, and if the FDA does not require additional
information about the drug's efficacy, safety and side
effects, the sponsor of the new drug may submit a New Drug
Application, which contains all relevant and necessary
information about how the drug will be manufactured. According
to the FDA, "Manufacturing issues are also among the reasons
that approval �of a New Drug Application] may be delayed or
denied. Drugs must be manufactured in accordance with
standards called good manufacturing practices, and the FDA
inspects manufacturing facilities before a drug can be
approved. If a facility isn't ready for inspection, approval
can be delayed. Any manufacturing deficiencies found would
need to be corrected before approval.
In addition to approval of each individual drug, federal law
requires every establishment in any state engaged in the
manufacture, preparation, propagation, compounding, or
processing of a drug to register the name of the business with
the FDA. Federal law goes on to require that every such
registered establishment be inspected by the FDA at least once
in the two-year period beginning with the date of registration
and at least once in every successive two-year period
thereafter.
4.Prior legislation. AB 764 (Davis), Chapter 516, Statutes of
1997, changed the regulatory process between FDA and DPH,
including changing the annual inspection frequency of drug and
device manufacturers to once every two years; repealing a
prohibition on drug and device advertising; and requiring, if
the FDA has conducted its own inspection within the previous
two years, that DPH use the information contained in the
written FDA documentation prior to conducting its own
inspection.
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5.Support. This bill is supported by the California Healthcare
Institute (CHI), which states that the duplicative regulation
of drug and medical device manufacturers is a perfect example
of onerous state regulations. According to CHI, California is
the only state that has duplicate regulations requiring
state-level permitting and inspection of drug and medical
device facilities. According to CHI, the FDA performs
stringent oversight of drug and device manufacturers, with
approvals required and inspections taking place throughout the
development process and on a regular basis thereafter. CHI
states that duplicative state oversight and inspection place
an increased financial burden on manufacturers in California.
CHI stated that in one example, a company spent more than
$200,000 and had more than 40 staff members involved in a FDB
inspection that took 8 days to complete. CHI states that this
was a routine inspection and did not find any health or safety
problems, and was conducted less than six months after a
comprehensive FDA inspection.
The Advanced Medical Technology Association also supports this
bill, stating that this bill would relieve companies of the
added financial burden from redundant inspections, as well as
relieve state staff resources. The Pharmaceutical Research
and Manufacturers of America states in support that
California's existing policy has the potential to create
unnecessary delays for patient access to medicines, and by
streamlining the approval process for medicines in California
that have already been approved by FDA will result in improved
access to medicines. BIOCOM states in support that although
the FDB serves a valuable and necessary role in the drug and
device safety chain, there is also some unnecessary and
duplicative overlap. BayBio states in support that everything
from the sterility of facilities to the quality of final
product to the font size used on packaging is scrutinized and
approved by the FDA, and that California should do everything
it can to remove barriers for its industry.
6.Policy comment. This bill limits DPH's ability to conduct
investigations or inspection of licensed drug or device
manufacturers to only certain instances, including when it
makes a determination that the health and safety of the public
is at serious risk. It is unclear what constitutes a risk
serious enough to warrant a DPH inspection. Given that the
primary thrust of this bill is to eliminate duplicative
licensure and periodic inspections, the Committee may wish to
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consider whether the ability of DPH to conduct an inspection
based on a determination of risk to the public should be
limited to only "serious" risks.
7.Technical amendment. As drafted, this bill requires a business
operating pursuant to a federal biologics license to include
an attestation that a federal inspection was completed within
the two years prior to DPH issuing a license as a drug
manufacturer. The author states that this is a drafting error,
and the intent was to require businesses operating pursuant to
a federal establishment registration to include the
attestation of a completed federal inspection in order to be
licensed by DPH. The author intends to offer technical
amendments in Committee to correct this drafting error.
SUPPORT AND OPPOSITION :
Support: Advanced Medical Technology Association
BayBio
BIOCOM
California Healthcare Institute
Pharmaceutical Research and Manufacturers of America
Silicon Valley Leadership Group
Oppose: None received.
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