Bill Text: CA SB619 | 2015-2016 | Regular Session | Amended
Bill Title: Pharmacy: outsourcing facilities: licensure.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Failed) 2016-02-01 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB619 Detail]
Download: California-2015-SB619-Amended.html
BILL NUMBER: SB 619 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 6, 2015
INTRODUCED BY Senator Morrell
(Coauthor: Senator Stone)
FEBRUARY 27, 2015
An act to amend Section 14105.455 of the Welfare and
Institutions Code, relating to Medi-Cal. An act to
amend Section 4400 of, to add Section 4034 to, and to add Article 7.7
(commencing with Section 4129) to Chapter 9 of Division 2 of, the
Business and Professions Code, relating to pharmacy, and making an
appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
SB 619, as amended, Morrell. Medi-Cal.
Pharmacy: outsourcing facilities: licensure.
Existing law, the Pharmacy Law, provides for the licensure and
regulation of pharmacists and pharmacy corporations in this state by
the California State Board of Pharmacy. The law prohibits a pharmacy
from compounding sterile drug products unless the pharmacy has
obtained a sterile compounding pharmacy license from the board, and
prohibits the board from issuing or renewing that license until the
board has, among other things, reviewed a current copy of the
pharmacy's procedures and policies for sterile compounding. Existing
law provides that fees collected on behalf of the board are credited
to the Pharmacy Board Contingent Fund, a continuously appropriated
fund.
This bill would require the board to license an outsourcing
facility, as defined, and would prohibit an outsourcing facility to
be concurrently licensed with the board as a sterile compounding
pharmacy at the same location. The bill would require an outsourcing
facility to be licensed with the board before doing business within
or into the state, and would require an outsourcing facility to,
among other things, notify the board of any disciplinary or other
action taken by another state or the federal Food and Drug
Administration within 10 days of the action. The bill would require
the board to, among other things, inspect the location of an
outsourcing facility to ensure that the outsourcing facility is in
compliance with all laws and regulations before issuing or renewing
an outsourcing facility's license. The bill would make a violation of
any of these provisions or regulations adopted thereto punishable by
a fine of up to $5,000 per occurrence. The bill would, on or after
January 1, 2018, require the board to provide a report, as specified,
to the Legislature regarding the regulation of nonresident
outsourcing facilities. The bill would also authorize the board to
collect a fee of $780 for the issuance and renewal of an outsourcing
license and a fee of $715 for a temporary license, as specified. By
increasing the amount of money deposited into a continuously
appropriated fund, the bill would make an appropriation.
Existing law provides for the Medi-Cal program, which is
administered by the State Department of Health Care Services, under
which qualified low-income individuals receive health care services,
including pharmacy services and drugs. Existing law requires pharmacy
providers to submit their usual and customary charge when billing
the Medi-Cal program for prescribed drugs.
This bill would make a technical, nonsubstantive change to that
provision.
Vote: majority. Appropriation: no yes
. Fiscal committee: no yes .
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 4034 is added to the
Business and Professions Code , to read:
4034. "Outsourcing facility" means a facility that meets all of
the following:
(a) Is located within the United States of America at one address
that is engaged in the compounding of sterile drugs and nonsterile
drugs.
(b) Has registered as an outsourcing facility with the federal
Food and Drug Administration under Section 503B of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. Sec. 353b).
(c) Is doing business within or into California.
(d) Is licensed with the board as an outsourcing facility.
SEC. 2. Article 7.7 (commencing with Section 4129)
is added to Chapter 9 of Division 2 of the Business and
Professions Code , to read:
Article 7.7. Outsourcing Facilities
4129. (a) An entity licensed as an outsourcing facility with the
federal Food and Drug Administration (FDA) shall be concurrently
licensed with the board as an outsourcing facility if it compounds
sterile medication or nonsterile medication for patients or
practitioners within or into California. A product compounded by an
outsourcing facility shall be distributed without a patient-specific
prescription.
(b) A facility premises licensed with the board as a sterile
compounding pharmacy shall not be concurrently licensed with the
board as an outsourcing facility at the same location. A sterile
compounding pharmacy compounds and dispenses pursuant to a
prescription.
(c) The board may adopt regulations in accordance with the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code) to
establish policies, guidelines, and procedures to implement this
article.
(d) The board shall review any formal requirements or guidance
documents developed by the FDA regarding outsourcing facilities
within 90 days after the release in order to determine whether
revisions are necessary for any regulations.
(e) An outsourcing facility licensed by the board shall not
perform the duties of a pharmacy, such as filling individual
prescriptions for individual patients, within the outsourcing
facility. Patient-specific compounding shall be performed only by a
licensed pharmacy. An outsourcing facility shall not be located in
the same licensed premises as a pharmacy.
4129.1. (a) An outsourcing facility that is licensed with the FDA
and with an address in this state shall also be licensed by the
board as an outsourcing facility before doing business within or into
this state. The license shall be renewed annually and is not
transferable.
(b) An outsourcing facility shall compound all sterile products
and nonsterile products in compliance with current federal good
manufacturing practices.
(c) An outsourcing facility license shall not be issued or renewed
until the location is inspected by the board and found in compliance
with this article and regulations adopted by the board.
(d) An outsourcing facility license shall not be issued or renewed
until the board does all of the following:
(1) Reviews a current copy of the outsourcing facility's policies
and procedures for sterile compounding and nonsterile compounding.
(2) Is provided with copies of all inspection reports of the
outsourcing facility's premises conducted in the prior 12 months.
(3) Receives a list of all sterile drugs and nonsterile drugs
compounded by the outsourcing facility as reported to the FDA in the
last 12 months.
(e) An outsourcing facility licensed pursuant to this section
shall provide the board with all of the following:
(1) A copy of any disciplinary or other action taken by another
state or the FDA within 10 days of the action.
(2) Notice within 24 hours of any recall notice issued by the
outsourcing facility.
(3) Notice within 24 hours after learning of adverse effects
reported or potentially attributable to an outsourcing facility's
products.
4129.2. (a) An outsourcing facility that is licensed with the FDA
as an outsourcing facility and has an address outside of this state
but in the United States of America is a nonresident outsourcing
facility. A nonresident outsourcing facility shall not compound
sterile drug products or nonsterile drug products for shipment into
this state without an outsourcing license issued by the board
pursuant to this section. The license shall be renewed annually and
shall not be transferable.
(b) A nonresident outsourcing facility shall compound all sterile
products and nonsterile products in compliance with current federal
good manufacturing practices.
(c) A license for a nonresident outsourcing facility shall not be
issued or renewed until the location is inspected by the board and
found in compliance with this article and any regulations adopted by
the board. The nonresident outsourcing facility shall reimburse the
board for all actual and necessary costs incurred by the board in
conducting an inspection of the nonresident outsourcing facility at
least once annually pursuant to subdivision (x) of Section 4400.
(d) A license for a nonresident outsourcing facility shall not be
issued or renewed until the board:
(1) Reviews a current copy of the nonresident outsourcing facility'
s policies and procedures for sterile compounding and nonsterile
compounding.
(2) Is provided with copies of all inspection reports of the
nonresident outsourcing facility's premises conducted in the prior 12
months.
(3) Receives a list of all sterile drug products and nonsterile
drug products compounded by the pharmacy as reported to the FDA
within the prior 12 months.
(e) A nonresident outsourcing facility licensed pursuant to this
section shall do all of the following:
(1) Provide the board with a copy of any disciplinary or other
action taken by another state or the FDA within 10 days of the
action.
(2) Provide the board notice within 24 hours of any recall notice
issued by the nonresident outsourcing facility.
(3) Advise the board of any complaint it receives from a provider,
pharmacy, or patient in California.
(f) A nonresident outsourcing facility shall provide to the board
notice within 24 hours after learning of adverse effects reported or
potentially attributable to a nonresident outsourcing facility's
products.
4129.3. (a) On or before January 1, 2018, the board shall provide
a report to the Legislature regarding the regulation of nonresident
outsourcing facilities. The report shall be submitted to the
Legislature in the manner required pursuant to Section 9795 of the
Government Code. At a minimum, the report shall address all of the
following:
(1) A detailed description of board activities related to the
inspection and licensure of nonresident outsourcing facilities.
(2) Whether fee revenue collected pursuant to subdivision (x) of
Section 4400 and travel cost reimbursements collected pursuant to
subdivision (c) of Section 4129.2 provide revenue in an amount
sufficient to support the board's activities related to the
inspection and licensure of nonresident outsourcing facilities.
(3) The status of proposed changes to federal law that are under
serious consideration and that would govern outsourcing facilities
and compounding pharmacies, including, but not limited to,
legislation pending before Congress, administrative rules,
regulations, or orders under consideration by the FDA or other
appropriate federal agency, and cases pending before the courts.
(4) If applicable, recommended modifications to the board's
statutory duties related to nonresident outsourcing facilities as a
result of changes to federal law or any additional modifications
necessary to protect the health and safety of the public.
(b) The requirement for submitting a report imposed under
subdivision (a) is inoperative on January 1, 2022, pursuant to
Section 10231.5 of the Government Code.
4129.4. (a) Whenever the board has a reasonable belief, based on
information obtained during an inspection or investigation by the
board, that an outsourcing facility compounding sterile drug products
or nonsterile drug products poses an immediate threat to the public
health or safety, the executive officer of the board may issue an
order to the outsourcing facility to immediately cease and desist
compounding sterile drug products or nonsterile drug products. The
cease and desist order shall remain in effect for no more than 30
days or the date of a hearing seeking an interim suspension order,
whichever is earlier.
(b) Whenever the board issues a cease and desist order pursuant to
subdivision (a), the board shall immediately issue a notice to the
owner setting forth the acts or omissions with which the owner is
charged, specifying the pertinent code section or sections.
(c) The cease and desist order shall state that the owner, within
15 days of receipt of the notice, may request a hearing before the
president of the board to contest the cease and desist order.
Consideration of the owner's contest of the cease and desist order
shall comply with the requirements of Section 11425.10 of the
Government Code. The hearing shall be held no later than five days
after the date the request of the owner is received by the board. The
president shall render a written decision within five days after the
hearing. In the absence of the president of the board, the vice
president of the board may conduct the hearing permitted by this
subdivision. Review of the decision may be sought by the owner or
person in possession or control of the outsourcing facility pursuant
to Section 1094.5 of the Code of Civil Procedure.
(d) Failure to comply with a cease and desist order issued
pursuant to this section is unprofessional conduct.
4129.5. Notwithstanding any other law, a violation of this
article, or regulation adopted pursuant thereto, may subject the
person or entity that committed the violation to a fine of up to five
thousand dollars ($5,000) per occurrence pursuant to a citation
issued by the board.
4129.6. For purposes of this article, "sterile compounded
products" means compounded preparations for injection administration
into the eye, or inhalation.
4129.8. The board, at its discretion, may issue a temporary
license to an outsourcing facility when the ownership of the
outsourcing facility is transferred from one person to another, upon
the conditions and for any periods of time as the board determines to
be in the public interest. A temporary license fee shall be required
as specified in subdivision (w) of Section 4400. When needed to
protect public safety, a temporary license may be issued for a period
not to exceed 180 days, and may be issued subject to terms and
conditions the board deems necessary. If the board determines a
temporary license was issued by mistake or denies the application for
a permanent license, the temporary license shall terminate upon the
earlier of personal service of the notice of termination upon the
licenseholder or service by certified mail with return receipt
requested at the licenseholder's address of record with the board.
The temporary licenseholder shall not be deemed to have a vested
property right or interest in the license for purposes of retaining a
temporary license or for purposes of any disciplinary or license
denial proceeding before the board.
4129.9. (a) An outsourcing facility licensed pursuant to Section
4129.1 or 4129.2 that issues a recall notice for a sterile drug or
nonsterile drug compounded by the outsourcing facility, in addition
to any other duties, shall contact the recipient pharmacy,
prescriber, or patient of the recalled drug and the board as soon as
possible within 24 hours of the recall notice if both of the
following apply:
(1) Use of or exposure to the recalled drug may cause serious
adverse health consequences or death.
(2) The recalled drug was dispensed, or is intended for use, in
this state.
(b) A recall notice issued pursuant to subdivision (a) shall be
made as follows:
(1) If the recalled drug was dispensed directly to the prescriber,
the notice shall be made to the prescriber and the prescriber shall
ensure the patient is notified.
(2) If the recalled drug was dispensed directly to a pharmacy, the
notice shall be made to the pharmacy and that pharmacy shall notify
the prescriber or patient, as appropriate. If the pharmacy notifies
the prescriber, the prescriber shall ensure the patient is notified.
SEC. 3. Section 4400 of the Business
and Professions Code is amended to read:
4400. The amount of fees and penalties prescribed by this
chapter, except as otherwise provided, is that fixed by the board
according to the following schedule:
(a) The fee for a nongovernmental pharmacy license shall be four
hundred dollars ($400) and may be increased to five hundred twenty
dollars ($520). The fee for the issuance of a temporary
nongovernmental pharmacy permit shall be two hundred fifty dollars
($250) and may be increased to three hundred twenty-five dollars
($325).
(b) The fee for a nongovernmental pharmacy license annual renewal
shall be two hundred fifty dollars ($250) and may be increased to
three hundred twenty-five dollars ($325).
(c) The fee for the pharmacist application and examination shall
be two hundred dollars ($200) and may be increased to two hundred
sixty dollars ($260).
(d) The fee for regrading an examination shall be ninety dollars
($90) and may be increased to one hundred fifteen dollars ($115). If
an error in grading is found and the applicant passes the
examination, the regrading fee shall be refunded.
(e) The fee for a pharmacist license and biennial renewal shall be
one hundred fifty dollars ($150) and may be increased to one hundred
ninety-five dollars ($195).
(f) The fee for a nongovernmental wholesaler or third-party
logistics provider license and annual renewal shall be seven hundred
eighty dollars ($780) and may be decreased to no less than six
hundred dollars ($600). The application fee for any additional
location after licensure of the first 20 locations shall be three
hundred dollars ($300) and may be decreased to no less than two
hundred twenty-five dollars ($225). A temporary license fee shall be
seven hundred fifteen dollars ($715) and may be decreased to no less
than five hundred fifty dollars ($550).
(g) The fee for a hypodermic license and renewal shall be one
hundred twenty-five dollars ($125) and may be increased to one
hundred sixty-five dollars ($165).
(h) (1) The fee for application, investigation, and issuance of a
license as a designated representative pursuant to Section 4053, or
as a designated representative-3PL pursuant to Section 4053.1, shall
be three hundred thirty dollars ($330) and may be decreased to no
less than two hundred fifty-five dollars ($255).
(2) The fee for the annual renewal of a license as a designated
representative or designated representative-3PL shall be one hundred
ninety-five dollars ($195) and may be decreased to no less than one
hundred fifty dollars ($150).
(i) (1) The fee for the application, investigation, and issuance
of a license as a designated representative for a veterinary
food-animal drug retailer pursuant to Section 4053 shall be three
hundred thirty dollars ($330) and may be decreased to no less than
two hundred fifty-five dollars ($255).
(2) The fee for the annual renewal of a license as a designated
representative for a veterinary food-animal drug retailer shall be
one hundred ninety-five dollars ($195) and may be decreased to no
less than one hundred fifty dollars ($150).
(j) (1) The application fee for a nonresident wholesaler or
third-party logistics provider license issued pursuant to Section
4161 shall be seven hundred eighty dollars ($780) and may be
decreased to no less than six hundred dollars ($600).
(2) For nonresident wholesalers or third-party logistics providers
that have 21 or more facilities operating nationwide the application
fees for the first 20 locations shall be seven hundred eighty
dollars ($780) and may be decreased to no less than six hundred
dollars ($600). The application fee for any additional location after
licensure of the first 20 locations shall be three hundred dollars
($300) and may be decreased to no less than two hundred twenty-five
dollars ($225). A temporary license fee shall be seven hundred
fifteen dollars ($715) and may be decreased to no less than five
hundred fifty dollars ($550).
(3) The annual renewal fee for a nonresident wholesaler license or
third-party logistics provider license issued pursuant to Section
4161 shall be seven hundred eighty dollars ($780) and may be
decreased to no less than six hundred dollars ($600).
(k) The fee for evaluation of continuing education courses for
accreditation shall be set by the board at an amount not to exceed
forty dollars ($40) per course hour.
( l ) The fee for an intern pharmacist license shall be
ninety dollars ($90) and may be increased to one hundred fifteen
dollars ($115). The fee for transfer of intern hours or verification
of licensure to another state shall be twenty-five dollars ($25) and
may be increased to thirty dollars ($30).
(m) The board may waive or refund the additional fee for the
issuance of a license where the license is issued less than 45 days
before the next regular renewal date.
(n) The fee for the reissuance of any license, or renewal thereof,
that has been lost or destroyed or reissued due to a name change
shall be thirty-five dollars ($35) and may be increased to forty-five
dollars ($45).
(o) The fee for the reissuance of any license, or renewal thereof,
that must be reissued because of a change in the information, shall
be one hundred dollars ($100) and may be increased to one hundred
thirty dollars ($130).
(p) It is the intent of the Legislature that, in setting fees
pursuant to this section, the board shall seek to maintain a reserve
in the Pharmacy Board Contingent Fund equal to approximately one year'
s operating expenditures.
(q) The fee for any applicant for a nongovernmental clinic license
shall be four hundred dollars ($400) and may be increased to five
hundred twenty dollars ($520) for each license. The annual fee for
renewal of the license shall be two hundred fifty dollars ($250) and
may be increased to three hundred twenty-five dollars ($325) for each
license.
(r) The fee for the issuance of a pharmacy technician license
shall be eighty dollars ($80) and may be increased to one hundred
five dollars ($105). The fee for renewal of a pharmacy technician
license shall be one hundred dollars ($100) and may be increased to
one hundred thirty dollars ($130).
(s) The fee for a veterinary food-animal drug retailer license
shall be four hundred five dollars ($405) and may be increased to
four hundred twenty-five dollars ($425). The annual renewal fee for a
veterinary food-animal drug retailer license shall be two hundred
fifty dollars ($250) and may be increased to three hundred
twenty-five dollars ($325).
(t) The fee for issuance of a retired license pursuant to Section
4200.5 shall be thirty-five dollars ($35) and may be increased to
forty-five dollars ($45).
(u) The fee for issuance or renewal of a nongovernmental sterile
compounding pharmacy license shall be six hundred dollars ($600) and
may be increased to seven hundred eighty dollars ($780). The fee for
a temporary license shall be five hundred fifty dollars ($550) and
may be increased to seven hundred fifteen dollars ($715).
(v) The fee for the issuance or renewal of a nonresident sterile
compounding pharmacy license shall be seven hundred eighty dollars
($780). In addition to paying that application fee, the nonresident
sterile compounding pharmacy shall deposit, when submitting the
application, a reasonable amount, as determined by the board,
necessary to cover the board's estimated cost of performing the
inspection required by Section 4127.2. If the required deposit is not
submitted with the application, the application shall be deemed to
be incomplete. If the actual cost of the inspection exceeds the
amount deposited, the board shall provide to the applicant a written
invoice for the remaining amount and shall not take action on the
application until the full amount has been paid to the board. If the
amount deposited exceeds the amount of actual and necessary costs
incurred, the board shall remit the difference to the applicant.
(w) This section shall become operative on July 1, 2014.
(w) The fee for issuance or renewal of a nongovernmental
outsourcing facility license shall be seven hundred eighty dollars
($780). The fee for a temporary outsourcing facility license shall be
seven hundred fifteen dollars ($715).
(x) The fee for the issuance or renewal of a nonresident
outsourcing facility license shall be seven hundred eighty dollars
($780). In addition to paying that application fee, the nonresident
outsourcing facility shall deposit, when submitting the application,
a reasonable amount, as determined by the board, necessary to cover
the board's estimated cost of performing the inspection required by
Section 4129.2. If the required deposit is not submitted with the
application, the application shall be deemed to be incomplete. If the
actual cost of the inspection exceeds the amount deposited, the
board shall provide to the applicant a written invoice for the
remaining amount and shall not take action on the application until
the full amount has been paid to the board. If the amount deposited
exceeds the amount of actual and necessary costs incurred, the board
shall remit the difference to the applicant.
SECTION 1. Section 14105.455 of the Welfare and
Institutions Code is amended to read:
14105.455. (a) Pharmacy providers shall submit their usual and
customary charge when billing the Medi-Cal program for prescribed
drugs.
(b) "Usual and customary charge" means the lower of either of the
following:
(1) The lowest price reimbursed to the pharmacy by other
third-party payers in California, excluding Medi-Cal managed care
plans and Medicare Part D prescription drug plans.
(2) The lowest price routinely offered to any segment of the
general public.
(c) Donations or discounts provided to a charitable organization
are not considered usual and customary charges.
(d) Pharmacy providers shall keep and maintain records of their
usual and customary charges for a period of three years from the date
the service was rendered.
(e) Payment to pharmacy providers shall be the lower of the
pharmacy's usual and customary charge or the reimbursement rate
pursuant to subdivision (b) of Section 14105.45.
(f) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department may implement, interpret, or make specific this section by
means of a provider bulletin or notice, policy letter, or other
similar instructions, without taking regulatory action.
