BILL ANALYSIS �
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UNFINISHED BUSINESS
Bill No: SB 294
Author: Emmerson (R)
Amended: 9/3/13
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEV. COMM. : 10-0, 4/1/13
AYES: Price, Emmerson, Block, Corbett, Galgiani, Hernandez,
Hill, Padilla, Wyland, Yee
SENATE APPROPRIATIONS COMMITTEE : 7-0, 5/23/13
AYES: De Le�n, Walters, Gaines, Hill, Lara, Padilla, Steinberg
SENATE FLOOR : 39-0, 5/29/13
AYES: Anderson, Beall, Berryhill, Block, Calderon, Cannella,
Corbett, Correa, De Le�n, DeSaulnier, Emmerson, Evans, Fuller,
Gaines, Galgiani, Hancock, Hernandez, Hill, Hueso, Huff,
Jackson, Knight, Lara, Leno, Lieu, Liu, Monning, Nielsen,
Padilla, Pavley, Price, Roth, Steinberg, Torres, Walters,
Wolk, Wright, Wyland, Yee
NO VOTE RECORDED: Vacancy
ASSEMBLY FLOOR : 65-9, 9/9/13 - See last page for vote
SUBJECT : Pharmacy: sterile drug products
SOURCE : California Board of Pharmacy
DIGEST : This bill expands the types of sterile compounded
drugs for which a license is required, deletes the licensing
exemption for certain types of pharmacies, and requires
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inspection of nonresident sterile compounding pharmacies by the
Board of Pharmacy (BOP).
Assembly Amendments require the BOP to adopt regulations in
accordance with the Administrative Procedure Act to establish
policies, guidelines, and procedures to implement the provisions
of this bill; require the BOP to provide a report to the
Legislature, on or before January 1, 2018, regarding the
regulation of nonresident pharmacies; establishes a $780 fee for
the initial issuance and renewal of a nonresident sterile
license; deletes the sterile license exemption for specified
pharmacies; and makes other technical and conforming changes.
ANALYSIS :
Existing law:
1.Provides for the practice of pharmacy and the licensing and
regulation of pharmacies and pharmacists by the BOP within the
Department of Consumer Affairs.
2.Authorizes the BOP inspectors to inspect all pharmacies,
wholesalers, dispensaries, stores or places where drugs or
devices are compounded, prepared, furnished, dispensed or
stored.
3.Defines "manufacturer" as every person who prepares, derives,
produces, compounds or repackages any drug or device except a
pharmacy that manufactures on the immediate premises where the
drug or device is sold to the ultimate consumer.
4.Prohibits an out-of-state pharmacy from selling or
distributing dangerous drugs or devices in California through
any other method than a BOP-licensed wholesaler, unless the
out-of-state pharmacy is licensed by the BOP.
5.States that any pharmacy that contracts to compound a drug for
parenteral therapy, pursuant to a prescription, for delivery
to another pharmacy, must report that contractual arrangement
to the BOP within 30 days of commencing that compounding.
6.Requires the BOP to adopt regulations establishing standards
for compounding injectable sterile drug products (sterile
injectables) in a pharmacy. Clarifies that a pharmacy cannot
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compound sterile injectables unless the pharmacy is licensed
by the BOP. States that a license to compound sterile
injectables cannot be renewed without a BOP inspection.
Exempts pharmacies with accreditation by the Joint Commission
on Accreditation of Healthcare Organizations or other
accrediting agencies approved by the BOP from these
requirements.
7.Authorizes the BOP to issue a cease and desist order to a
pharmacy compounding sterile injectables whenever the BOP has
reasonable belief, based on information obtained through an
investigation or inspection, that there is an immediate threat
to public health or safety.
8.Allows a centralized hospital packaging pharmacy to prepare
medications for administration only to inpatients within its
own general acute care hospital, and one or more general acute
care hospitals, if the hospitals are under common ownership
and located within a 75-mile radius of each other. Requires a
centralized hospital packaging pharmacy to obtain a specialty
license from the BOP. Authorizes a centralized hospital
packaging pharmacy to prepare unit dose packages for single
administration to inpatients from bulk containers; prepare
compounded unit dose drugs for parenteral therapy for
administration to inpatients; and prepare compounded unit dose
drugs for administration to inpatients. Authorizes a
centralized hospital packaging pharmacy to prepare and store a
limited quantity of unit dose drugs prior to receiving a
patient-specific prescription according to certain
circumstances. Clarifies that all compounding functions shall
only be performed in the licensed centralized hospital
pharmacy.
9.Grants the BOP certain enforcement abilities against
out-of-state pharmacies, authorizes the BOP to report actions
against an out-of-state pharmacy and authorizes the BOP to
take any action against an out-of-state pharmacy that it would
against a pharmacy in this state if the grounds for action are
also grounds for action in the state in which the out-of-state
pharmacy is permanently located.
This bill:
1.Requires BOP to adopt emergency regulations to establish
policies, guidelines, and procedures to initially implement
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the provisions of this bill that go into effect on July 1,
2014, as specified.
2.States that the initial adoption, amendment, or repeal of a
regulation authorized by this bill is deemed to address an
emergency, as specified.
3.Permits BOP to request approval from the Office of
Administrative Law to readopt the regulation as an emergency
regulation, as specified, after the initial adoption,
amendment, or repeal of an emergency regulation pursuant to
this bill.
4.Sunsets the provisions of 1 through 3 above, on July 1, 2014.
5.Requires a pharmacy that compounds sterile drug products (SDP)
for injection, administration into the eye, or inhalation to
have a sterile compounding pharmacy license (sterile license).
6.Requires BOP to adopt regulations to establish policies,
guidelines and procedures to implement this bill.
7.Requires BOP to review any formal revision to General Chapter
797 of the United States Pharmacopeia and the National
Formulary, relating to the compounding of sterile
preparations, not later than 90 days after the revision
becomes official, to determine whether amendments are
necessary for the regulations adopted by BOP.
8.Recasts "injectable sterile drug products" as SDP to include
compounded sterile drug products for administration into the
eye and for inhalation.
9.Deletes the sterile license exemption for pharmacies operated
by entities licensed by either BOP or the State Department of
Public Health and which have current accreditation from the
Joint Commission on Accreditation of Healthcare Organizations
or other private accreditation agencies approved by BOP.
10.Requires BOP to review the following prior to issuing or
renewing a sterile license:
A. A current copy of the pharmacy's policies and procedures
for sterile compounding; and
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B. The pharmacy's self-assessment form, as specified.
1.Requires BOP to receive the following before issuing a sterile
drug license:
A. Copies of all inspection reports conducted of the
pharmacy's premises, and any reports from a private
accrediting agency conducted in the prior 12 months
documenting the pharmacy's operations; and
B. A list of all sterile medications compounded by the
pharmacy since the last license renewal.
1.Requires a pharmacy with a sterile license to do the
following:
A. Provide BOP a copy of any disciplinary or other action
taken by another state within 10 days of the action;
B. Notify BOP within 10 days of the suspension of any
accreditation held by the pharmacy;
C. Provide to BOP, within 12 hours, any recall notice
issued by the pharmacy for sterile drug products it has
compounded.
1.Requires that adverse effects reported and potentially
attributable to a pharmacy's sterile drug product to be
reported to BOP within 12 hours and immediately reported to
the MedWatch program of the federal Food and Drug
Administration (FDA).
2.Requires a nonresident pharmacy to obtain a sterile license
issued by BOP prior to compounding SDP for shipment into
California.
3.Deletes the provision exempting nonresident pharmacies from
needing a sterile license if the nonresident pharmacy is
operated by an entity licensed as a hospital, home health
agency, or a skilled nursing facility and has current
accreditation from the Joint Commission on Accreditation of
Healthcare Organizations, or other private accreditation
agencies approved by BOP.
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4.Requires a nonresident pharmacy to be inspected by BOP and
found in compliance with this bill and any related regulations
prior to receiving a sterile license.
5.Requires the nonresident pharmacy to reimburse BOP for all
actual and necessary costs incurred by BOP in conducting an
inspection of the pharmacy at least once annually, as
specified.
6.Requires BOP to review the nonresident pharmacy's completed
self-assessment form, as specified, prior to issuing a sterile
license.
7.Requires BOP to be provided with copies of all inspection
reports conducted of the nonresident pharmacy's premises in
the last 12 months documenting the pharmacy's operations.
8.Requires BOP to receive a list of all sterile drug products
compounded by the nonresident pharmacy in the prior 12 months.
9.Requires a nonresident pharmacy with a sterile license to do
the following:
A. Provide to BOP a copy of any disciplinary or other
action taken by its state of residence or another state
within 10 days of the action.
B. Notify BOP within 10 days of the suspension of any
accreditation held by the pharmacy.
C. Provide to BOP, within 12 hours, any recall notice
issued by the pharmacy for sterile drug products it has
compounded that have been shipped into, or dispensed in,
California.
D. Advise BOP of any complaint it receives from a provider,
pharmacy, or patient in California.
1.Requires any adverse effects reported or potentially
attributable to a nonresident pharmacy's SDP to be reported to
BOP within 24 hours and immediately reported to the MedWatch
program of the federal FDA.
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2.Requires BOP to provide a report to the Legislature regarding
the regulation of nonresident pharmacies by January 1, 2018,
that provides, at minimum, the following:
A. A detailed description of BOP activities related to the
inspection and licensure of nonresident pharmacies;
B. Whether fees and travel costs collected provide revenue
in an amount sufficient to support BOP's inspection and
licensure of nonresident pharmacies;
C. The status of proposed changes to federal law that are
serious consideration and that would govern compounding
pharmacies, including legislation pending before the United
States Congress, administrative rules, regulations, or
orders under consideration by the federal FDA or other
appropriate federal agency, and cases pending before the
courts;
D. If applicable, recommended modifications to BOP's
statutory duties related to nonresident pharmacies as a
result of changes to federal law or any additional
modifications necessary to protect the health and safety of
the public.
1.Establishes a fee of $780 for the initial issuance and renewal
of a nonresident sterile license.
2.Requires a nonresident pharmacy to pay, in addition to an
application or application renewal fee, a reasonable amount as
determined by BOP necessary to cover BOP's estimated cost of
performing a licensing inspection.
3.States that failure to submit the inspection deposit at the
time of application or renewal will cause the application to
be deemed incomplete.
4.Requires BOP to provide a written invoice to the applicant for
any difference between the inspection deposit and the actual
costs of inspection, and prohibits BOP from taking action on
the application or renewal until the full amount has been paid
to BOP.
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5.Requires BOP to remit the difference to the applicant if the
applicant paid more than the actual and necessary costs
incurred for the inspection.
6.Makes the provisions of this bill generally operative on July
1, 2014, and makes inoperative conflicting provisions of law
on July 1, 2014, and repeals those sections on January 1,
2015.
7.Makes technical and clarifying amendments.
Background
Current regulatory framework . Under the current regulatory
system, drug manufacturers are regulated by the FDA.
Compounding organizations are regulated by their respective
states of residence. Compounding organizations also make drugs,
but they are limited to producing small amounts in response to a
specific patient's prescription, or to create a small supply for
an identifiable patient population to ensure continuity of
treatment. The state-by-state approach to regulating
compounding organizations yields inconsistent standards and
varying levels of enforcement on an industry that ships
dangerous drugs across state lines.
New England Compounding Center: outbreak of fungal meningitis .
In October 2012, the New England Compounding Center (NECC),
based in Massachusetts, shipped contaminated product throughout
the country, including California that resulted in the death of
more than 40 people and 461 patients becoming ill from the
tainted steroid injections. NECC's compounding facility had
obvious ongoing safety violations, but continued to operate and
ship products despite employee whistleblower complaints to
management. The compounding facility failed to maintain its
clean room. The air intake for the clean room was contaminated
and shared with the neighboring furniture recycling facility,
and employees discovered mold on various work and storage
surfaces several times per year. Yet, NECC remained accredited
and was licensed to ship sterile compounded injectable products
into California.
Because California's BOP had to rely on third-party
accreditation, the BOP asserts that it did not have the
opportunity or authority to inspect NECC or prevent NECC from
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shipping products into California until patients in other states
had already been harmed.
NECC is not the only compounding pharmacy to have recently
caused significant patient harm. In June 2012, a sterile
injectable pharmacy located in Florida shipped contaminated
product into California which resulted in significant patient
harm, including blindness in some cases. According to the BOP,
it was again only able to take protective actions after patient
harm had already occurred.
The federal response to NECC and proposed federal regulation .
It is possible that regulation may occur at the federal level,
pre-empting state law on this issue. The FDA has been working
with Congress to craft legislation authorizing increased federal
oversight of compounding pharmacies. The FDA asserts that there
should be minimum federal standards for firms that compound
sterile drug products in advance of or without a prescription
and ship them interstate. The FDA also wants clear authority to
proactively inspect pharmacies to determine the scope and nature
of their operations.
Recent action by the BOP - compounding regulations . New
regulations governing compounding took effect last Summer.
According to the BOP, a workgroup on compounding was formed in
2004 comprised of board members, board staff and industry
representatives. The workgroup recognized that current pharmacy
regulations addressing compounding only govern the physical
circumstances, procedures and record keeping requirements for
general compounding and do not address quality, strength or
purity.
The BOP adopted regulations to implement provisions for
pharmacies that compound sterile injectable products as required
in statute. As there were no similar provisions in regulation
for general compounding, the BOP approved the addition of
language that will establish parameters and provide uniformity
for pharmacies that carry out compounding in general (including
sterile injectable). Pharmacies that compound sterile
injectable products must now go above and beyond the
requirements for compounding in general.
Subsequent to that workgroup activity, in response to patient
deaths and recalls due to contaminated compounded drugs, the BOP
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recently formed a Compounding Sub-Committee to address the
issues unique to effectively regulating compounding pharmacies
located in or shipping into this state. The Sub-Committee's
first meeting occurred on March 15, 2013. The Sub-Committee is
responsible for shaping the BOP's future changes to its
regulations on compounding pharmacies.
Comments
According to the author, "Because current law allows for
accreditation in lieu of licensure, the BOP lacks the ability to
appropriately regulate such entities and in the case of sterile
compounding pharmacies, even the ability to inspect such
facilities to ensure compliance with pharmacy law. Therefore,
SB 294 will require licensure by the BOP and will expressly
authorize the BOP to conduct inspections of facilities that are
licensed to dispense or ship compounded products into
California. By doing so, this will ensure consistent oversight
of these pharmacies and increase consumer protection."
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Assembly Appropriations Committee:
One-time costs of $50,000 to the BOP (Pharmacy Board
Contingent Fund) for regulations and development of
reimbursement protocols for out-of-state pharmacies.
Approximately $1.2 million in costs to BOP annually (Pharmacy
Board Contingent Fund) to inspect and license approximately
700 new in-state pharmacies and 250 total nonresident sterile
compounding pharmacies.
This estimate includes approximately 100 nonresident
pharmacies that are currently licensed by BOP but not
inspected. BOP currently relies on third-party accreditation
reports or licensing inspections from other states for
nonresident pharmacies. Additionally, the removal of
exemptions from licensure for pharmacies accredited by
third-party entities will require BOP to inspect and license a
much larger number of pharmacies than they do under existing
law.
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Annual revenues of $1.2 million (Pharmacy Board Contingent
Fund), including additional licensure fee revenues of
approximately $650,000 and $550,000 in reimbursements to BOP
for travel and inspection costs for nonresident pharmacies.
This estimate assumes travel and inspection costs are
reimbursed at an average of $3,500 per licensed nonresident
pharmacy. If actual reimbursements are lower than assumed,
revenues will be insufficient to fully cover the expected
workload.
SUPPORT : (Verified 5/28/13)
California State Board of Pharmacy (source)
California Optometric Association
California Pharmacists Association
Health Officers Association of California
ARGUMENTS IN SUPPORT : According to the bill's sponsor, the
California BOP of Pharmacy wants to strengthen state oversight
of pharmacies that compound sterile drugs, including
out-of-state pharmacies, to protect consumers from tainted
compounded substances. The BOP currently cannot inspect
out-of-state compounding pharmacies prior to issuing a license.
The BOP believes that requiring out-of-state pharmacies to
submit to and pay for a BOP inspection will allow the BOP to
ensure that every pharmacy that distributes sterile compounded
drugs into California meets the same uniform standards.
The California Pharmacists Association (CPA) states that in
light of the NECC tragedy, California should no longer rely on
other states or entities to inspect and accredit out-of-state
compounding pharmacies. According to CPA, California consumers
will be better protected by holding out-of-state pharmacies to
the same strict standards the BOP has held in-state compounding
pharmacies to for the past decade.
ASSEMBLY FLOOR : 65-9, 9/9/13
AYES: Achadjian, Alejo, Ammiano, Atkins, Bloom, Bocanegra,
Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon,
Campos, Chau, Ch�vez, Chesbro, Cooley, Daly, Dickinson,
Eggman, Fong, Frazier, Beth Gaines, Garcia, Gatto, Gomez,
Gonzalez, Gordon, Gorell, Gray, Hagman, Hall, Harkey, Roger
Hern�ndez, Holden, Jones-Sawyer, Levine, Linder, Logue,
Lowenthal, Mansoor, Medina, Mitchell, Mullin, Muratsuchi,
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Nazarian, Nestande, Olsen, Pan, Patterson, Perea, V. Manuel
P�rez, Quirk, Quirk-Silva, Rendon, Salas, Skinner, Stone,
Ting, Wagner, Weber, Wieckowski, Williams, Yamada, John A.
P�rez
NOES: Allen, Bigelow, Dahle, Donnelly, Grove, Jones,
Maienschein, Morrell, Wilk
NO VOTE RECORDED: Conway, Fox, Melendez, Waldron, Vacancy,
Vacancy
MW:ej 9/9/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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