BILL ANALYSIS �
AB 467
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 467 (Stone)
As Amended March 11, 2014
2/3 vote. Urgency
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|ASSEMBLY: | |(May 28, 2013) |SENATE: |32-0 |(March 13, |
| | | | | |2014) |
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(vote not relevant)
Original Committee Reference: E.S. & T.M
SUMMARY : Establishes a license and regulatory framework for a
"surplus medication collection and distribution intermediary"
(SMCDI) to facilitate the donation of surplus medications in
California.
The Senate amendments delete the Assembly version of this bill,
and instead:
1)Define a "SMCDI" as a firm, association, partnership,
corporation, limited liability company (LLC), state
governmental agency, or political subdivision that performs
the functions specified in this bill for the purpose of an
authorized surplus prescription drug collection and
distribution program (Program).
2)Require a SMCDI to be licensed annually and regulated by the
Board of Pharmacy (BOP). The license application shall state
the name, address, usual occupation, and professional
qualifications, if any, of the applicant. 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.
3)Define the term "person beneficially interested" to mean and
include:
a) If the applicant is a partnership or other
unincorporated association, each partner or member;
b) If the applicant is a corporation, each of its officers,
directors, and stockholders, provided that no natural
person shall be deemed to be beneficially interested in a
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nonprofit corporation; and,
c) If the applicant is a LLC, each officer, manager, or
member.
4)Require any applicant that is a 501(c)(3) charitable
organization to furnish BOP with the organization's articles
of incorporation and names of the controlling members.
5)Require any applicant that is a partnership or other
unincorporated association, a LLC or a corporation that has
more than five partners, members, or stockholders to state
that fact on the application and provide additional
information on each of the five partners, members, or
stockholders who own the five largest interests in the
applicant's entity. Upon request by BOP's executive officer
(EO), the applicant shall provide specified information on
partners, members, or stockholders not named in the
application, or shall refer BOP to an appropriate source of
that information.
6)Require the application to contain a statement to the effect
that the applicant or persons beneficially interested have not
been convicted of a felony and have not violated state law, as
specified. If the applicant cannot make this statement, the
application shall contain a statement of the violation, if
any, or reasons which will prevent the applicant from being
able to comply with the requirements with respect to the
statement.
7)Require the BOP EO to issue or renew a license to operate as a
SMCDI upon approval of the application, compliance with
specified state laws, and payment of $300.
8)Require fees received for the SMCDI license to be deposited
into the Pharmacy Board Contingent Fund.
9)Exempt government-owned or 501(c)(3) non-profit applicants
from the fee requirement.
10)Exempt SMCDI licensees from licensure as a wholesaler.
11)Require a licensed SMCDI to keep and maintain for three years
complete records for which the intermediary facilitated the
donation of medications to, or transfer of, medications
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between participating entities.
12)Define a "donor organization" as those health and care
facilities already authorized under existing law to donate
centrally stored unused medications under a Program, as
specified.
13)Exclude a SMCDI from criminal or civil liability for injury
caused when facilitating the donation of medications to, or
transfer of, medications in compliance with Program laws.
14)Require a SMCDI to comply with the following:
a) It shall not take possession, custody, or control of
dangerous drugs and devices;
b) It shall ensure that notification is provided to
participating entities that a package has been shipped when
the SMCDI has knowledge of the shipment and provided
logistical support to facilitate a shipment directly from a
donor organization to a participating entity; and,
c) It shall not select, or direct a donor organization to
select, a specific participating entity to receive surplus
medications.
15)Authorize a SMCDI to do the following:
a) Charge membership, administrative, or overhead fees
sufficient to cover the reasonable costs of the support and
services provided; and,
b) Contract directly with a county to facilitate the
donation of medications to or transfer of medications
between participating entities and provide general support
in a county's implementation of a Program.
16)Prohibit a participating entity from receiving donated
medication directly from a SMCDI.
17)State that no reimbursement is required by this act because
the only costs that may be incurred by a local agency or
school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction,
changes the penalty for a crime or infraction, or changes the
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definition of a crime.
18)Declare this bill to be an urgency statute necessary for the
immediate preservation of the public peace, health, or safety
within the meaning of Article IV of the Constitution and shall
go into immediate effect in order to "ensure that California's
medication donation program is allowed to continue to operate
to facilitate the distribution of medications to the indigent
population which would not otherwise have access to these
medications".
19)Make other technical and clarifying changes.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS :
1)Purpose of this bill . This bill authorizes a third party,
licensed and regulated by BOP, to facilitate the donation and
transfer of surplus medications under an established state
surplus medication donation program. This bill is author
sponsored.
2)Author's statement . 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 licenses that reflects those services.
3)Background . The Program was created by SB 798 (Simitian),
Chapter 444, Statutes of 2005, and SB 1329 (Simitian), Chapter
709, Statutes of 2012, which authorized counties to establish
a system to facilitate the collection and distribution of
surplus unused medications to medically indigent persons.
The enabling legislation did not anticipate a third party
facilitating the transfer and donation of drugs, however.
Current law requires any entity that brokers or negotiates
drugs for distribution to obtain a wholesaler license and be
subject to numerous regulations, including posting a surety
bond, designating a representative in charge, and extensive
reporting requirements.
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This bill establishes a specific license for the sole purpose
of the Program, and establishes what a SMCDI may and may not
do within the terms of licensure.
To date, two counties in California (Santa Clara and San
Mateo) have established a Program through local ordinance,
although the Santa Clara Program is the only current
operational program.
Analysis Prepared by : Sarah Huchel / B., P. & C.P. / (916)
310-3301
FN: 0003069