BILL ANALYSIS �
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UNFINISHED BUSINESS
Bill No: SB 600
Author: Lieu (D)
Amended: 8/22/14
Vote: 21
PRIOR VOTES NOT RELEVANT
ASSEMBLY FLOOR : 77-0, 8/26/14 - See last page for vote
SUBJECT : Drugs
SOURCE : Author
DIGEST : This bill repeals provisions of existing Pharmacy Law
to conform to the federal Drug Quality and Security Act (DQSA);
declares any that foreign dangerous drug that is not approved by
the United States Food and Drug Administration (FDA) or that is
obtained outside the state-licensed supply chain is misbranded;
and provides that anyone who purchases that drug is guilty of a
misdemeanor and subject to a fine of not more than $10,000.
Assembly Amendments delete the Senate version of the bill
relating to alternative fuel conversions and insert the current
language.
ANALYSIS :
Existing federal law:
1.Establishes the FDA to protect the public health by assuring
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the safety, effectiveness, quality, and security of human and
veterinary drugs, vaccines and other biological products, and
medical devices through the Food, Drug, and Cosmetic Act (FD&C
Act). The FD&C Act regulates, among other matters, the
manufacture, distribution, and sale of prescription drugs in
interstate commerce and is administered by the FDA.
2.Establishes the Drug Supply Chain Security Act (Act), as part
of the DQSA, which outlines steps to build an electronic,
interoperable system to identify and trace certain
prescription drugs as they are distributed in the United
States.
Existing state law:
3.Provides, under the Pharmacy Law, for the licensure and
regulation of the practice of pharmacy and the sale of
dangerous drugs or dangerous devices, as defined, by the Board
of Pharmacy (BOP); prohibits, commencing July 1, 2016, a
wholesaler or repackager from selling, trading, or
transferring a dangerous drug at wholesale without providing a
pedigree, as defined, and from acquiring a dangerous drug
without receiving a pedigree; imposes parallel requirements
with respect to pharmacies commencing July 1, 2017; and makes
these pedigree requirements inoperative upon the effective
date of federal law addressing pedigree or serialization
measures for dangerous drugs, or as otherwise specified in the
event of a conflict with federal law.
4.Establishes the Sherman Food, Drug, and Cosmetic Law to
regulate the packaging, labeling, and advertising of drugs and
devices and is administered by the Department of Public Health
(DPH); makes it unlawful to manufacture, sell, deliver, hold,
or offer for sale, any drug that is misbranded, and provides
that a drug or device is misbranded if its labeling is false
or misleading in any particular; and states that any person
who violates any provision of the Law, if convicted, is
subject to imprisonment for not more than one year in the
county jail or a fine of not more than $1,000, or both the
imprisonment and fine.
This bill:
1.Repeals provisions of existing Pharmacy Law to conform to the
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federal DQSA.
2.Declares any foreign dangerous drug that is not approved by
the FDA or that is obtained outside of the licensed supply
chain regulated by the FDA, BOP, or DPH to be misbranded.
3.Declares it a misdemeanor for any person to purchase a foreign
dangerous drug or medical device, illegitimate product, or
suspect product, as specified, that is not approved by the FDA
or that is obtained outside of the licensed supply chain
regulated by the FDA, BOP, or DPH. States that a person who
makes such a purchase is subject to imprisonment for not more
than one year in county jail, a fine of not more than $10,000
per occurrence, or both the imprisonment and fine.
4.States that drugs imported lawfully under the FD&C Act or
pursuant to an official announcement by the FDA for certain
purposes, including clinical research, drug shortages and
pandemic influenza response, are not misbranded, as specified.
5.States that certain penalty provisions are not applicable to
individuals who the FDA has determined as having acted in
compliance with the FD&C Act regarding illegitimate or suspect
products.
6.Clarifies that this bill does not preclude punishment under
any other law that provides for a greater punishment.
7.Makes other technical or clarifying changes.
Background
California's "e-pedigree" law and DQSA . 'E-pedigree' was
California's statutory program to prevent counterfeit medicine
from entering the legitimate supply chain. The program was
created by SB 1307 (Figueroa, Chapter 857, Statutes of 2004) and
began implementation the following year, with full operability
anticipated by 2015.
The "pedigree" was a chain of custody record in electronic form
containing information regarding each transaction resulting in a
change of ownership of a prescription drug. The goal of the
program was for any owner or possessor of a prescription drug
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located at a licensed wholesaler, repackager, reverse
distributor, or pharmacy in California to be able to show the
lineage of the drug from the manufacturer through the drug
distribution channel. The e-pedigree was required to contain
specific information required by the statute, and had to be made
and passed through an electronic track and trace system based on
unique identification numbers affixed at the point of
manufacture.
In 2013, Congress passed and President Obama signed H.R. 3034,
the DQSA. Among other provisions, the bill created a national
set of standards to track pharmaceuticals through the
distribution chain, aimed at curbing illegal importation and
patient harm caused by counterfeit drugs and devices. The new
law requires the FDA to implement an electronic system to trace
pharmaceuticals throughout the supply chain at the unit level
and, as a result, preempts California's e-pedigree law
established in 2005. The bill was prompted by the 2012 fungal
meningitis outbreak linked to unsanitary conditions at a
Massachusetts compounding pharmacy, as well as concerns
regarding increases in counterfeit, falsified, substandard and
dangerous prescription medications. DQSA contained two parts -
the Compounding Quality Act and the Drug Supply Chain Security
Act.
The Compounding Quality Act created a voluntary compliance
regime where compounding pharmacies that voluntarily register as
"outsourcing facilities" will be subject to oversight by the FDA
in much of the same way that traditional pharmaceutical
manufacturers are monitored.
The Drug Supply Chain Security Act (Act) built upon California's
e-pedigree efforts to create a national electronic track and
trace system for prescription drugs. The Act will replace the
patchwork system adopted by individual states and create a
unified national program. In doing this, the Act explicitly
preempted any state's requirements for tracing products through
the distribution system that are inconsistent with, more
stringent than, or in addition to any of the requirements under
the Act. Thus, California's e-pedigree system is currently
invalid by operation of law. This bill repeals those invalid
sections.
Counterfeit drugs . Counterfeit and unapproved drugs pose a
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serious threat to consumers. Efforts to combat the use of
counterfeit and unapproved drugs have become increasingly
challenging, as supply chains have become more complex and
global. According to the FDA, nearly 40% of the drugs Americans
take are made elsewhere, and about 80% of manufacturing sites of
active pharmaceutical ingredients used in drugs manufactured
inside the United States are located in more than 150 countries.
Counterfeit drugs falsely represent a product's identity through
unauthorized representation of a legitimate trademark, trade
name, or other likenesses. Counterfeiting can happen to both
branded and generic products, and counterfeit drugs may fail to
meet the quality and safety standards established by national
and state regulatory authorities, and may contain dangerous
substances, incorrect dosages, or no active ingredient.
According to a 2013 report from the Brookings Institution, most
of the nationwide efforts to combat counterfeit and unapproved
products have focused on the major players in the drug supply
chain, such as drug manufacturers and distributors. However,
there have been fewer inroads in targeting the purchasing of
drugs by patients and health care professionals, who may be
lured by significantly lower prices from drugs available outside
the nationwide supply.
This bill targets this practice by clarifying in state law that
a drug that is not approved by the FDA or obtained outside of
the federal and state licensed supply chain is a "misbranded
drug," and that purchasing a misbranded drug is a misdemeanor.
This bill also increases the fine for violations from $1,000 to
$10,000.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Assembly Appropriations Committee:
Negligible costs to BOP. Existing law invalidates
California's e-pedigree requirements if superseded by a
federal requirement. This bill simply updates statute and
should not result in additional costs.
Unknown, potentially higher penalty revenue for misbranded
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drugs, depending on enforcement.
SUPPORT : (Verified 8/26/14)
Healthcare Distribution Management Association
Los Angeles County District Attorney's Office
ARGUMENTS IN SUPPORT : According to the author's office, this
bill conforms to DQSA by repealing California's e-pedigree law,
strengthening definitions for misbranded drugs and devices under
the Sherman, Food, Drug and Cosmetic Law and ensuring
appropriate penalties for purchasing a foreign dangerous drug or
medical device, illegitimate product, or suspect product.
ASSEMBLY FLOOR : 77-0, 8/26/14
AYES: Achadjian, Alejo, Allen, Ammiano, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Ch�vez, Chesbro, Conway, Cooley,
Dababneh, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,
Gorell, Gray, Grove, Hagman, Hall, Harkey, Roger Hern�ndez,
Holden, Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal,
Maienschein, Mansoor, Medina, Mullin, Muratsuchi, Nazarian,
Nestande, Olsen, Pan, Perea, John A. P�rez, V. Manuel P�rez,
Quirk, Quirk-Silva, Rendon, Ridley-Thomas, Rodriguez, Salas,
Skinner, Stone, Ting, Wagner, Waldron, Weber, Wieckowski,
Wilk, Williams, Yamada, Atkins
NO VOTE RECORDED: Melendez, Patterson, Vacancy
MW:md 8/27/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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