BILL ANALYSIS �
AB 2369
Page 1
Date of Hearing: April 24, 2012
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
AB 2369 (Valadao) - As Introduced: February 24, 2012
SUBJECT : Prisoners: pharmacy services.
SUMMARY : Requires the California Department of Corrections and
Rehabilitation's (CDCR) pharmacy program to require the use of
generic medications, when available, unless an exception is
reviewed and approved in accordance with an established
non-formulary approval process.
EXISTING LAW
1)Authorizes the CDCR to maintain and operate a comprehensive
pharmacy services program for those facilities under the
jurisdiction of the department that is both cost effective and
efficient.
2)Allows the CDCR pharmacy program to incorporate a number of
components, including a requirement for the use of generic
medications, when available, unless an exception is reviewed
and approved in accordance with an established nonformulary
approval process.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author, "As management
of prison health care services transitions out of the control of
the federal Receiver (Receiver) and back to the jurisdiction of
CDCR, it is critical that fiscal responsibility is maintained
while upholding quality patient care. Generic medications are
an excellent way to maintain fiscal responsibility as they have
the equivalent active ingredient as the brand name versions and
must work under the same safety and effectiveness standards as
approved by the Food and Drug Administration, yet the cost is
significantly less. However, there is no current requirement to
use generic medications within the penal code."
Background . CDCR provides for the custody and care of
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approximately 167,000 inmates, which includes pharmacy services
at each of the 33 adult prisons. Between 2000 and 2005, CDCR's
management of its pharmacies was the focus of several audits and
reviews, all of which identified major issues that impeded
pharmacy operations and drove up costs.
Delivery of medical services - including pharmacy services - for
prisoners in California has been under the control of the
Receiver for nearly four years, as a result of a 2006 federal
court case that determined inadequate medical care in
California's prisons violated the Eighth Amendment of the U.S.
Constitution forbidding cruel and unusual punishment. The court
found CDCR prison pharmacy operations, in particular, to be
"unbelievably poor."
The Receiver is charged with taking over the operations of the
state's prison medical care system and bringing it up to
constitutional levels. The California Prison Health Care
Services (CPHCS) is comprised of civil service employees,
formerly from CDCR, who work at the direction of the Receiver.
In January 2007, the Receiver entered into an agreement with
Maxor National Pharmacy Services (Maxor) to assist in
implementing an action plan it had created to improve CDCR's
pharmacy operations. The Receiver retains overall
responsibility for pharmacy operations and Maxor is responsible
for providing guidance to facility level pharmacy staff in order
to implement the objectives contained in the agreement.
According to a 2010 report on CDCR's pharmacy system by the
Office of the Inspector General, "For the fiscal year 2009-2010
Governor's budget, CDCR proposed to spend close to $2 billion to
provide medical, dental and mental health care services to
California's inmates. Almost 10% of that amount, $190 million,
is allocated for pharmaceuticals.
"In comparing California with other large correctional
operations for fiscal years 2006/2007 and 2007/2008, we find
that the daily pharmaceutical cost per inmate is significantly
higher at CDCR, (which) spends more than two times the amount
that the Federal Bureau of Prisons spends per inmate per day on
medications, and more than three times the amount spent by the
Texas Department of Corrections.
"In reviewing data for approximately 111,000 inmates in July,
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August and September of 2009, we found that 65% or 73,000
inmates received 403,000 prescribed medications. These 73,000
inmates averaged 5.5 prescriptions per inmate. Given the amount
of money and the number of prescriptions involved, the potential
for waste is significant."
According to the Receiver, 80% of prescription drugs were filled
using generic medications in 2009, which achieved more than $20
million in cost avoidance.
AB 1628 (Assembly Budget Committee), Chapter 729, Statutes of
2010, was a budget trailer bill that, among other things,
authorized CDCR to maintain a comprehensive pharmacy services
program for state prisons. The bill, now current law, included
a provision that the pharmacy program may include a number of
components, including a requirement for the use of generic
medications, when available, unless an exception is reviewed and
approved in accordance with an established non-formulary
approval process.
This bill requires, rather than allows, the CDCR pharmacy
program to require the use of generic medications, when
available, unless an exception is reviewed and approved in
accordance with an established non-formulary approval process.
According to the Receiver's most recent tri-annual report
published January 13, 2012, a drug formulary for the most common
medications has been developed and a central fill pharmacy has
been established, among other accomplishments. CPHCS reported
spending $103.04 per inmate on medications in March 2012, which
was a decrease of $1.50 per inmate over the 2010-11 fiscal year,
and wrote 3.6 prescriptions per inmate during the same period.
Current policy at CDCR requires that pharmacists substitute
generic medication for patented name-brand medication, unless
otherwise specified.
In January of this year, Judge Thelton Henderson, who appointed
the Receiver, stated, " Given the Receivership's progress to
date, the end of the Receivership appears to be in sight, and
the Court seeks to get the parties' and the Receiver's views on
when the Receivership should be terminated and how this case
should progress after the Receivership has ended." The judge
instructed the Receiver, CDCR and attorneys who represent
inmates to meet and file a report by April 30 of this year to
determine how progress will be monitored and sustained, as well
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as to decide when the Receivership should end and if it should
maintain any oversight responsibility. CDCR Secretary Matthew
Cate has indicated he would like the Receivership to stop this
summer.
Opposition . Mental Health America of California states, "AB
2369 will impair the recovery of inmates with mental illness.
Many people will not respond to generic medications and need a
brand name product for which there is no generic equivalent.
Dollars saved in medication costs will be outweighed by
additional mental health and physical health costs for
hospitalizations and physician visits when people are not on the
most effective medication. This bill will also lead to greater
failure of recovery and more recidivism."
Previous legislation .
AB 1628 (Assembly Budget Committee), Chapter 729, Statutes of
2010, authorizes, among other things, CDCR to maintain a
comprehensive pharmacy services program for state prisons that
is cost-effective and efficient, and authorizes the creation of
a centralized pharmacy distribution center (CPDC) to provide
more cost-efficient purchasing, inventory control, and
distribution of medications.
AB 2747 (Bonnie Lowenthal ) of 2010 requires CDCR to maintain
and operate a comprehensive pharmacy services program, ensure
that there is a program providing for the regular inspection of
all department pharmacies and documentation of compliance, and
report specified information regarding pharmaceutical services
to specified legislative committees. The bill also and
authorizes CDCR to operate and maintain a CPDC and investigate
and initiate potential systematic improvements within CDCR's
statewide pharmacy administration system. This bill was vetoed
by the Governor, who stated, "CDCR is currently under federal
Receivership for its health care services. The Receiver has the
authority to conduct the provisions of AB 2747 and is currently
in the process of implementing the CPDC. It would be premature
for me to sign a bill when the successfulness of the CPDC has
yet to be determined."
SB 868 (Budget and Fiscal Review Committee) of 2010 provides,
among other things, that the CDCR may establish a formulary to
sustain the use of generics and manage medication usage within
the prison system, and authorizes the establishment of a CPDC,
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as specified. This bill was held on the Assembly Floor.
Double referred . This bill is double-referred to Assembly
Health Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
Peace Officers Research Association of California
Opposition
BayBio
Mental Health America of California
Analysis Prepared by : Angela Mapp / B.,P. & C.P. / (916)
319-3301