BILL ANALYSIS �
AB 467
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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)
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|COMMITTEE VOTE: |14-0 |(March 25, 2014) |RECOMMENDATION: |concur |
|(B., P. & C.P.) | | | | |
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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;
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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 nonprofit
corporation; and,
c) If the applicant is an 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, an 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
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donation of medications to, or transfer of, medications 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
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for a crime or infraction, or changes the 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 reflect 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 the need for 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. SMCDIs are unlike wholesalers, however, because
they never take possession, custody, or control of dangerous
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drugs and devices, nor do they exercise judgment in the selection
of a recipient to receive surplus medications.
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)
319-3301 FN: 0003091