BILL ANALYSIS �
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|Hearing Date:January 13, 2014 |Bill No:AB |
| |467 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Ted W. Lieu, Chair
Bill No: AB 467Author:Stone
As Amended:January 7, 2014 Fiscal: Yes
SUBJECT: Prescription drugs: collection and distribution program.
SUMMARY: An urgency measure which establishes a licensure category
for a surplus medication collection and distribution intermediary
established for the purpose of facilitating the donation of
medications to, or transfer of medications between, participating
entities under a county's unused medication repository and
distribution program.
Existing law, the Business and Professions Code (BPC):
1)Establishes the practice of pharmacy and provides for the licensing
and regulation of pharmacies and pharmacists by the Board of
Pharmacy (Board) within the Department of Consumer Affairs (DCA).
2) Defines "dangerous drug" or "dangerous device" as any drug or
device unsafe for self-use in humans or animals, and includes the
following:
a) Any drug that bears the legend: "Caution: federal law
prohibits dispensing without prescription," "Rx only," or words
of similar import.
b) Any device that bears the statement: "Caution: federal law
restricts this device to sale by or on the order of a ____," "Rx
only," or words of similar import, the blank to be filled in with
the designation of the practitioner licensed to use or order use
of the device.
c) Any other drug or device that by federal or state law can be
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lawfully dispensed only on prescription or furnished. (Business
and Professions Code (BPC) � 4022)
1) Defines "wholesaler" as a person who acts as a wholesale merchant,
broker, jobber, customs broker, reverse distributor, agent, or a
nonresident wholesaler, who sells for resale, or negotiates for
distribution, or takes possession of, any drug or device. Provides
that unless otherwise authorized by law, a wholesaler may not
store, warehouse, or authorize the storage or warehousing of drugs
with any person or at any location not licensed by the Board. (BPC
� 4043)
2)Specifies certain requirements regarding the dispensing and
furnishing of dangerous drugs and devices, and prohibits a person
from furnishing any dangerous drug or device except upon the
prescription of a physician, dentist, podiatrist, optometrist,
veterinarian or naturopathic doctor, as specified. (BPC � 4059)
3) Provides that no person shall act as a wholesaler of any dangerous
drug or dangerous device unless he or she has obtained a license
from the Board. Requires a separate license for each place of
business owned or operated by a wholesaler. (BPC � 4160)
4) Prohibits a person or entity from: (BPC � 4169)
a) Purchasing, trading, selling or transferring dangerous drugs
or dangerous devices at wholesale with a person or entity that is
not licensed with the Board as a wholesaler or pharmacy.
b) Purchasing, trading, selling, or transfer dangerous drugs that
the person knew or reasonably should have known were adulterated.
c) Purchasing, trading, selling, or transfer dangerous drugs that
the person knew or reasonably should have known were misbranded.
d) Purchasing, trading, selling, or transfer dangerous drugs or
dangerous devices after the beyond use date on the label.
1) Requires records of the acquisition or disposition of dangerous
drugs or dangerous devices to be maintained for at least three
years. (Id)
2) Authorizes a primary care clinic to purchase drugs at wholesale for
the administration and dispensing under the direction of a
physician and surgeon to patients registered at the clinic. (BPC �
4180).
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Existing law, the Health and Safety Code (HSC):
1)Establishes a voluntary drug repository and distribution program
(Program) for the purpose of distributing surplus medications to
persons in need of financial assistance to ensure access to
necessary pharmaceutical therapies. (Health and Safety Code (HSC) �
150200-150207)
2)Makes the following definitions:
a) "Eligible entity" means a licensed pharmacy that is county
owned or that contracts with the county pursuant to this division
and is not on probation with the Board, a licensed pharmacy that
is owned and operated by a primary care clinic that is licensed
by the State Department of Public Health (DPH) and is not on
probation with the Board, a primary care clinic that is licensed
by DPH and licensed to administer and dispense drugs and is not
on probation with Board.
b) "Medication" or "medications" means a dangerous drug, as
defined in BPC � 4022 above.
c) "Participating entity" means an eligible entity that has
received written or electronic documentation from the county
health department and that operates a Program.
(HSC � 150202)
1)Authorizes a county to establish a Program, by an action of the
county board of supervisors or by an action of the public health
officer of the county, as directed by the county board of
supervisors. Requires the county to notify the Board within 30 days
from the date it establishes a Program. (HSC � 150204)
2)Provides that a participating entity shall disclose to the county
health department on a quarterly basis the name and location of the
source of all donated medication it receives. Provides that a
participating primary care clinic shall disclose to the county
health department the name of the licensed physician who shall be
accountable to the Board for the clinic's Program operations. (Id)
3) Provides for the following related to medication donated to the
Program: (Id)
a) The medication shall not be a controlled substance.
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b) The medication shall not have been adulterated, misbranded, or
stored under conditions contrary to standards set by the United
States Pharmacopoeia (USP) or the product manufacturer.
c) The medication shall not have been in the possession of a
patient or any individual member of the public, and in the case
of medications donated by a health or care facility, shall have
been under the control of a staff member of the health or care
facility who is licensed in California as a health care
professional or has completed, at a minimum, certain training
requirements.
d) Only medication that is donated in unopened, tamper-evident
packaging or modified unit dose containers that meet USP
standards is eligible for donation to the Program, provided lot
numbers and expiration dates are affixed. Medication donated in
opened containers shall not be dispensed by the Program and once
identified, shall be quarantined immediately and handled and
disposed of in accordance with the Medical Waste Management Act.
e) A pharmacist or physician at a participating entity shall use
his or her professional judgment in determining whether donated
medication meets certain standards before accepting or dispensing
any medication under the Program.
f) A pharmacist or physician shall adhere to standard pharmacy
practices, as required by state and federal law, when dispensing
all medications.
g) Medication that is donated to the Program shall either be
dispensed to an eligible patient, destroyed, returned to a
reverse distributor or licensed waste hauler or transferred to
another participating entity within the county to be dispensed to
eligible patients. Medication that is donated shall not be
transferred by any participating entity more than once, and after
it has been transferred, shall be dispensed to an eligible
patient, destroyed, or returned to a reverse distributor or
licensed waste hauler. Medication transferred pursuant to this
paragraph shall be transferred with documentation that identifies
the drug name, strength, and quantity of the medication, and the
donation facility from where the medication originated shall be
identified on medication packaging or in accompanying
documentation.
h) Medication that is donated to the Program that does not meet
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the above requirements shall not be distributed or transferred
under this program and shall be either destroyed or returned to a
reverse distributor.
i) Medication donated to the Program shall be maintained in the
donated packaging units until dispensed to an eligible patient
under this program, who presents a valid prescription. When
dispensed to an eligible patient under the Program, the
medication shall be in a new and properly labeled container,
specific to the eligible patient and ensuring the privacy of the
individuals for whom the medication was initially dispensed.
Expired medication shall not be dispensed.
j) Medication donated to the Program shall be segregated from the
participating entity's other drug stock by physical means, for
purposes including, but not limited to, inventory, accounting,
and inspection.
aa) A participating entity shall keep complete records of the
acquisition and disposition of medication donated to, and
transferred, dispensed, and destroyed under the Program. These
records shall be kept separate from the participating entity's
other acquisition and disposition records and be readily
retrievable.
bb) Local and county protocols established conform to the Pharmacy
Law regarding packaging, transporting, storing, and dispensing
all medications.
cc) County protocols established for packaging, transporting,
storing, and dispensing medications that require refrigeration,
including, but not limited to, any biological product as defined
in Section 351 of the Public Health Service Act (42 U.S.C. Sec.
262), an intravenously injected drug, or an infused drug, shall
include specific procedures to ensure that these medications are
packaged, transported, stored, and dispensed at appropriate
temperatures and in accordance with USP standards and the
Pharmacy Law.
dd) A participating entity shall follow the same procedural drug
pedigree requirements for donated drugs as it would follow for
drugs purchased from a wholesaler or directly from a drug
manufacturer.
1)Provides that a prescription drug manufacturer, wholesaler,
governmental entity, participating entity, pharmacist or physician
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who accepts or dispenses prescription drugs and a licensed health or
care facility or a pharmacy are not subject to criminal or civil
liability for injury caused when donating, accepting or dispensing
prescription drugs under a Program. (HSC � 150205)
This bill:
1) Establishes a licensure category under the authority of the Board
for a "surplus medication collection and distribution intermediary"
(Intermediary) operating for the purpose of facilitating the
donation of medications to, or transfer of medications between,
participating entities under a county's unused medication
repository and distribution program (Program).
2) Requires an Intermediary to provide the Board information on a form
as part of its application for licensure, including the name,
address, usual occupation, and professional qualifications, if any,
of the applicant. Provides that if the applicant is an entity
other than a natural person, the application shall state the
information as to each person beneficially interested in that
entity. Provides that the Intermediary license shall be renewed
annually.
3) Provides that in any case where the Intermediary licensure
applicant is a charitable organization described in Section 501 (c)
(3) of the Internal Revenue Code, the applicant shall furnish the
Board with the organization's Articles of Incorporation and the
names of the controlling members.
4) Establishes an Intermediary licensure and renewal fee of $300.
Exempts an Intermediary that is government owned or nonprofit
organization from the fee requirement.
5) Exempts an Intermediary licensee from licensure as a wholesaler.
6) Requires an Intermediary to keep and maintain for three years
complete records for which it facilitated the donation of
medications to, or transfer of medications between, participating
entities under the Program.
7) Defines "donor organization" as any of the following health and
care facilities that may donate centrally stored unused medications
under the Program:
a) A licensed general acute care hospital.
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b) A licensed acute psychiatric hospital.
c) A licensed skilled nursing facility, including a skilled
nursing facility designated as an institution for mental disease.
d) A licensed intermediate care facility.
e) A licensed intermediate care facility/developmentally
disabled-rehabilitative facility.
f) A licensed intermediate care facility/developmentally
disabled-nursing facility.
g) A licensed correctional treatment center.
h) A licensed psychiatric health facility.
i) A licensed chemical dependency recovery hospital.
j) A licensed residential care facility for the elderly with 16
or more residents.
aa) An approved mental health rehabilitation center.
8)Adds an Intermediary to the list of existing persons and entities
persons which shall not be subject to criminal or civil liability
for injury caused when donating, accepting, or dispensing
prescription drugs in compliance with the Program.
9)Prohibits an Intermediary from taking possession, custody, or
control of dangerous drugs and devices.
10)Requires an Intermediary to ensure that notification is provided to
participating entities that a package has been shipped, when the
surplus medication collection and distribution intermediary has
knowledge of the shipment and provided logistical support to
facilitate a shipment directly from a donor organization.
11)Prohibits an Intermediary from directing a donor organization to
select a specific participating entity to receive surplus
medications.
12)Authorizes an Intermediary to charge membership, administrative, or
overhead fees sufficient to cover the reasonable costs of the
support and services provided in facilitating the donation of
medications to, or transfer of medications between, participating
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entities.
13)Authorizes an Intermediary to contract directly with a county to
facilitate the donation of medications to, or transfer of
medications between, participating entities and provide general
support in the Program.
FISCAL EFFECT: Unknown. This bill is keyed "fiscal" by Legislative
Counsel.
COMMENTS:
1. Purpose. The Author is the Sponsor of this measure. According to
the Author, current law accounts for wholesale activities and the
appropriate licensing for those activities, but does not account
for third party intermediaries. Third party intermediaries provide
significantly different services than a wholesaler, and therefore
need licensing that reflects those services.
2. Background. The issue of rising prescription drug costs, coupled
with concerns about methods for disposal of unused or expired
medication has led to efforts throughout the nation to reuse or
recycle medication from certain, controlled health care settings
and in turn make that medication available to indigent patients.
Estimates of American prescription drug spending have reached as
far as the hundreds of billions of dollars annually. According to
the 2009 California Health Interview Survey conducted by the
University of California Los Angeles, 5.4 million Californians, or
14.5 percent of the state's population, were uninsured. Of the
insured in California, 7 percent or 2.2 million people did not have
coverage for prescription drugs.
For many years, a common practice at many health care facilities
has been to dispose of unused pharmaceuticals by flushing them down
the toilet or pouring them down the drain, which in turn impacts
water quality and water supply. According to a report by the
Environmental Protection Agency (EPA), Unused Pharmaceuticals in
the Health Care Industry, this practice stems from certain
regulations governing acceptable methods for destroying unused
drugs, as well as factors like size, ease and access of disposal
and cost. Certain federal regulations constrain how some
medications are destroyed or disposed, including the Controlled
Substances Act (which includes disposal down the drain as an
acceptable destruction option), Resource Conservation and Recovery
Act (which requires certain types of medication and other hazardous
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wastes to be transported in approved containers to permitted
hazardous waste disposal facilities by a hazardous waste
transporter, a costly effort for many health facilities) and the
Health Insurance Portability and Accountability Act (which requires
long-term care facilities to destroy all pharmaceutical labels that
contain personal information). The report states that some
facilities are flushing to sewers as a primary means of disposal
because it is easy and accessible, and in the past, public health
agencies and health-related organizations advised the public to
destroy unused medications this way as well.
3. California's Efforts to Donate Unused Medication. SB 798
(Simitian, Chapter 444, Statutes of 2005) took effect in 2006,
authorizing California counties to establish a "surplus
prescription drug collection and distribution program" (Program)
for the distribution of unused, unexpired medication to medically
indigent patients. Under the Program, counties could adopt an
ordinance to establish such a Program, under which skilled nursing
facilities (SNFs), and SNFs that are institutions for mental
disease, drug wholesalers, and drug manufacturers could donate
unused medications to county-owned pharmacies, or pharmacies that
contract with the county for dispensing to medically indigent
patients free of charge. Prior to the enactment of SB 798, SNFs
were required to either destroy the drugs in the presence of a
pharmacist or nurse, or return the drugs to the issuing pharmacy
(if unopened and in a sealed container) for disposition.
SB 1329 (Simitian, Chapter 709, Statutes of 2012) made a number of
changes to the way a Program could be authorized and the entities
eligible to donate medications under a Program. The bill
authorized a county public health officer, as delegated by a county
board of supervisors, to implement a Program, in addition to
Program implementation via county ordinance as authorized in SB
798. SB 1329 also added several categories of licensed health care
facilities that may donate medications. The bill also allowed both
primary care clinic pharmacies and primary care clinics that have
Board licensees, to administer and dispense medication, provided
these Board licensees are in good standing with the Board. SB 1329
established procedures relating to county and Board approval of
participating entities, as well as authority for a county and the
Board to prohibit a certain entity from participating in a Program.
To date, two counties in California (Santa Clara and San Mateo)
have established a Program through ordinance, although the Santa
Clara Program is the only current operational program. As a result
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of changes in SB 1329, medication can be donated from a number of
organizations, facilities and entities throughout the state, but
the only recipients of donated medications must be located within
Santa Clara County:
Program efforts in Santa Clara County are coordinated by Supporting
Initiatives to Redistribute Unused Medication (SIRUM) and are
estimated to have resulted in significant impact and savings since
2009:
" 772,000 units of medicine have been
redistributed;
" $2 million of medicine have been donated;
" Thousands of estimated uninsured patients have
been assisted;
" 150 medicine donors are participating.
1. Similar Programs in Other States. According to the National
Conference of State Legislatures (NCSL), as of September 2012, at
least 38 states and Guam have enacted similar laws and programs
which are similar to the Program a county may establish under
current California law. While not all authorized programs are
operational, California is unique in that a Program is established
at the county level, while many other state programs exist at the
state level or as part of a statewide effort.
The majority of laws throughout the nation authorizing the creation
of a Program have the following characteristics:
Authorize the return of prescription drugs in single use
or sealed packaging from state programs, nursing homes and
other medical facilities.
Provisions in place for the financial terms of the
donations or regulating sales.
Restrictions are in place aimed at assuring purity,
safety and freshness of the products.
According to NCSL, all Programs provide that:
Donated drugs must not be expired and must have a
verified future expiration date.
Controlled substances defined by the DEA must be
excluded.
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A state-licensed pharmacist or pharmacy must be part of
the verification and distribution process.
Each patient receiving a drug must have a valid
prescription form.
Examples of similar programs to California's:
Connecticut (HB 6002, 2000) allows long-term care
facilities to donate prescription drug products to vendor
pharmacies or the state Department of Social Services for drug
repackaging and reimbursement. The drugs are then donated to
eligible patients. The drugs must be sealed in individually
packaged units, returned to the vendor pharmacy within the
recommended shelf, inspected by a licensed pharmacist, and
cannot be a controlled substance.
Ohio (HB 221, 2003) allows any person, drug
manufacturer, or healthcare facility to donate prescription
drugs to any pharmacy, hospital, or nonprofit clinic that has
elected to participate in the program and meets certain
eligibility requirements established in rules adopted by their
Pharmacy Board. The drugs can then be donated to individuals
with a prescription. The drugs must be in their original
sealed tamper-evident unit dose packaging.
Arkansas (HB 1031, 2005) allows a nearby nursing
facility to donate drugs to charitable clinic pharmacies. The
drugs are then donated to qualified indigent patients who are
not eligible for Medicaid and cannot afford private health
insurance. The charitable pharmacy can only accept drugs in
their original sealed and tamper-evidence packaging, and it
cannot accept controlled substances.
Iowa (HF 724, 2005) allows any person to donate
prescription drugs and supplies to participating medical
facilities or pharmacies. The drugs are donated to individuals
or other eligible facilities or pharmacies for use. The drugs
must be inspected and in their original sealed and tamper
evidence packaging. The program is operated by the Iowa
Prescription Drug Corporation, a non-profit organization that
contracts with the State Department of Public Health.
Oklahoma (SB 1640, 2006) which inspired SB 798, allows
pharmaceutical manufacturers and certain medical and skilled
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care facilities to donate unused prescription drugs to state,
county, and city pharmacies and charitable clinics for the
purpose of distributing the medications. The drugs are then
donated to Oklahoma residents who are medically indigent.
Controlled substances are not accepted.
Guam established medicine banks in 2004 which distribute
donated drugs to indigent individuals.
Colorado , Florida , Kentucky , Minnesota , and Nebraska have also
enacted programs but only for cancer drugs.
Michigan , New Mexico , Alabama and I ndiana programs allow donations
between correctional facilities.
New Hampshire only allows manufacturer's samples to be donated.
New York allows donations back to the specific pharmacy that
initially distributed it.
North Carolina , Oregon , South Carolina , and West Virginia have
state medication repurposing policies but do not allow
repositories.
1. Prior Legislation. SB 1329 (Simitian, Chapter 709, Statutes of
2012) revised and recasted provisions authorizing a county to
establish a drug repository and distribution program, to authorize
a program to be established by an action of the county board of
supervisors, or by the county public health officer, as specified
and expanded the types of entities that are eligible to participate
in a program.
SB 798 (Simitian, Chapter 444, Statutes of 2005) authorized the
establishment of a voluntary prescription drug collection and
distribution program for the purpose of distributing surplus
prescription drugs to medically indigent patients free of charge.
6.Board of Pharmacy Position. At its October meeting, the Board of
Pharmacy adopted a "Support If Amended" position on this bill. The
Board's position reflects a prior version of the measure which did
not specify the term and renewal requirements of the new
Intermediary license. The January 7 version of the bill authorizes
the Board to issue an annual Intermediary license which shall be
renewed annually.
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SUPPORT AND OPPOSITION:
Support:
Bethesda Home
California Association of Health Facilities
Californians Against Waste
Lincoln Glen Manor and Nursing Facility
Santa Clara County Board of Supervisors
Supporting Initiatives to Redistribute Unused Medication (SIRUM)
Support if Amended:
Board of Pharmacy
Opposition:
None received as of January 8, 2014
Consultant:Sarah Mason and Vincent Chee