BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 2369
                                                                  Page  1

          Date of Hearing:   May 9, 2012

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                AB 2369 (Valadao) - As Introduced:  February 24, 2012 

          Policy Committee:                             HealthVote:19-0
                       Business and Professions         Vote: 6-0

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              No

           SUMMARY  

          This bill changes an authorization that allows the Department of 
          Corrections and Rehabilitation (CDCR) to require the use of 
          generic medications in their pharmacy services program when 
          available (with certain exemptions), to a requirement.

           FISCAL EFFECT  

          Negligible state fiscal effect. 

           COMMENTS  

           1)Rationale  . According to the author, as management of prison 
            health care services transitions from the control of the 
            federal Receiver and back to the jurisdiction of CDCR, it is 
            critical that fiscal responsibility is maintained while 
            upholding quality patient care.  The author states that 
            generic medications are an excellent way to maintain fiscal 
            responsibility.

           2)Background  .  AB 1628 (Committee on Budget), 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, and authorized CDCR to 
            incorporate various elements into its comprehensive pharmacy 
            services program, 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, instead of just 
            authorizing CDCR to incorporate a requirement for the use of 
            generic medications when available, requires the pharmacy 








                                                                  AB 2369
                                                                  Page  2

            program to use generic medications.

           3)Current Practice . Existing policy of the California 
            Correctional Health Care Services (CCHCS) (federal Receiver) 
            mirrors the provisions of this bill. It states, "Equivalent 
            generic medication will be substituted for brand name 
            medications, unless otherwise specified by CCHCS pharmacy 
            policy. Requests for the use of brand name medication only 
            will be considered as formulary exceptions and should follow 
            the non-formulary approval process."  Thus, this bill is not 
            expected to have a measurable impact.  An LAO handout 
            assessing the Governor's 2012-13 budget proposal to augment 
            the budget for inmate pharmaceutical costs pinpoints great 
            variation in prescribing and exception approval practices 
            between prisons as a key cost driver for non-formulary drugs.  


           Analysis Prepared by  :    Lisa Murawski / APPR. / (916) 319-2081