BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1307|
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THIRD READING
Bill No: SB 1307
Author: Figueroa (D)
Amended: 4/14/04
Vote: 21
SENATE BUSINESS & PROFESSIONS COMMITTEE : 4-1, 4/19/04
AYES: Cedillo, Machado, Murray, Figueroa
NOES: Aanestad
NO VOTE RECORDED: Brulte, Vincent
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Wholesalers and manufacturers of dangerous
drugs and
devices
SOURCE : California Board of Pharmacy
DIGEST : This bill revises the California Pharmacy Law
to, among other things, require all non-resident
prescription drug wholesalers to be licensed by the Board
of Pharmacy, require all prescription drugs to have a
pedigree by January 1, 2007 that will document the
transaction history of the distribution of those drugs, and
also revises restrictions on distribution of prescription
drugs, and imposes and increases penalties for violation of
these provisions of the law.
ANALYSIS :
Existing Law (the Pharmacy Law)
CONTINUED
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1.Provides for the licensing and regulation of pharmacies,
and pharmacists and wholesalers of dangerous drugs or
devices (Rx drugs/devices) by the California State Board
of Pharmacy (Board) in the State Department of Consumer
Affairs.
2.Requires that Rx drugs/devices be dispensed only by
licensed pharmacists and only to certain persons or
entities. Provides certain exemptions for manufacturers,
veterinary food-animal drug retailers, and wholesalers,
including those that employ sufficient qualified
supervision by a person who possesses a certificate of
exemption (an "exemptee") from the Board.
3.Requires the Board to take action against a licensee who
is guilty of "unprofessional conduct," as defined.
4.Prohibits a person from acting as a wholesaler of Rx
drugs/devices without being licensed by the Board.
5.Imposes certain licensing and registration requirements
on out-of-state manufacturers and wholesalers doing
business in California, and their principals.
6.Requires any manufacturer who sells or transfers a Rx
drug/device into California, or who receives a Rx
drug/device from a person in California to, upon request,
furnish an authorized law enforcement officer with all
records or other documentation of that sale or transfer,
and makes a manufacturer who fails or refuses to comply
with that request subject to a citation and a fine, an
order of abatement, or both.
This bill:
1. Defines "closed door pharmacy."
2. Requires the Board of Pharmacy to provide separate
designation for closed door pharmacies.
3. Defines "designated representative" as a person
licensed pursuant to Section 4053.
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4. Defines "designated representative-in-charge" as a
person licensed pursuant to Section 4053 who supervises
or manages a wholesaler.
5. Defines "pedigree" to include a history of all
transactions of a particular dangerous drug from the
manufacturer to the pharmacy.
6. Requires a pedigree to contain the following
information:
A. The name, license number and address of the
source of the dangerous drug.
B. The quantity of the dangerous drug, its dosage
form and strength, the date of the transaction, the
sales invoice number, the container size, the number
of containers, the expiration dates, and the lot
numbers of the dangerous drug.
C. The business name, address, and if appropriate,
the state license number of each owner of the
dangerous drug, and the dangerous drug shipping
information, including the name and address of each
person certifying delivery or receipt of the
dangerous drug.
D. A certification under penalty of perjury from a
responsible party of the source of the dangerous
drug that the information contained in the pedigree
is true and accurate.
7. Adds non-resident wholesaler to the definition of
"wholesaler."
8. Changes "exemptee" to "designated representative"
throughout the Pharmacy Law.
9. Modifies the existing requirement that an individual
seeking a license as designated representative must
have of one-year paid work experience to require that
the experience must have been in the prior three years.
10. Clarifies the existing requirement that a designated
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representative must have knowledge of California law
relating to the distribution of dangerous drugs and
controlled substances.
11. Exempts pharmaceutical manufacturers from the laws
governing the wholesale distribution of dangerous
drugs.
12. Specifies that certificates of exemption issued prior
to January 1, 2005 are valid until the earlier of their
date of expiration or January 1, 2006.
13. Specifies that existing holders of certificates of
exemption shall receive a license as a designated
representative upon satisfaction of the renewal
requirements for that license.
14. Requires any pharmacy that meets the definition of a
closed door pharmacy to notify the board of that status
prior to the issuance or renewal of a pharmacy license.
15. Restricts the furnishing of dangerous drugs by a
pharmacy to the following circumstances:
A. The wholesaler or manufacturer from whom the
dangerous drug was acquired.
B. A licensed reverse distributor.
C. Another pharmacy or wholesaler to alleviate a
temporary shortage of a dangerous drug that could
result in the denial of health care. A pharmacy
furnishing dangerous drugs pursuant to this
paragraph may only furnish a quantity sufficient to
alleviate the temporary shortage.
D. A patient pursuant to a prescription or as
otherwise authorized by law.
E. A health care provider that is not a pharmacy
but that is authorized to purchase dangerous drugs.
16. Permits the Board of Pharmacy to issue citations and
fines for violations related to counterfeiting,
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specified wholesale violations or violations related to
a closed door pharmacy on a per occurrence basis and
permits the State Franchise Tax Board to collect those
fines referred by the Board of Pharmacy.
17. Permits the Board of Pharmacy to issue a temporary
license to a wholesaler or to a non-resident
wholesaler.
18. Requires all non-resident wholesalers to be licensed by
the Board of Pharmacy.
19. Requires both wholesalers and non-resident wholesalers
to provide a surety bond of $100,000 to secure payment
of administrative fines and penalties imposed by the
Board of Pharmacy.
20. Requires that dangerous drugs and dangerous devices be
purchased only from an appropriately licensed person.
21. Requires the transmission of a pedigree from seller to
buyer of any dangerous drug after January 1, 2007.
22. Permits the Board of Pharmacy to extend the effective
date of the pedigree requirement by up to one year if
additional time is needed to implement an electronic
pedigree system.
23. Requires wholesalers to report excessive purchases of
dangerous drugs by a closed door pharmacy.
24. Requires wholesalers to have a system to identify
significant changes in the purchasing patterns of a
closed door pharmacy.
25. Requires wholesalers to provide the Board of Pharmacy
with purchase information related to a closed door
pharmacy upon request.
26. Prohibits a local government from issuing a business
license to a wholesaler without a wholesaler license
issued by the Board of Pharmacy.
27. Defines the excessive furnishing of dangerous drugs to
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a closed door pharmacy as unprofessional conduct.
28. Makes numerous technical and clarifying changes to the
Pharmacy Law.
Comments
This bill is sponsored by the California Board of Pharmacy
to substantially decrease the threat of counterfeit drugs
and drug diversion. Much of the bill draws from recently
adopted laws in Nevada and Florida and from recent draft
revisions to model laws published by the National
Association of Boards of Pharmacy. The proposal is
designed to address challenges presented by the existing
distribution system for prescription drugs.
NOTE: See the Senate Business and Professions Committee
analysis for background information.
Recent Legislation
AB 2682 (McLeod), in the Assembly Appropriations Committee,
will require all out-of-state wholesaler shipping Rx
drugs/devices into California to be licensed by the Board,
and requires the Board to adopt regulations governing the
wholesale distribution of Rx drugs and devices by anyone
who is not a manufacturer or the "authorized distributor"
of that Rx drug/device.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 4/30/04)
California Board of Pharmacy (source)
California Association of Health-System Pharmacists
ARGUMENTS IN SUPPORT : According to the sponsor, the Food
and Drug Administration has seen a quadrupling of
counterfeit drug cases in recent years. Recent articles
published in the Washington Post and the Los Angeles Times
also highlight the threat of drug counterfeiting and point
out that the drug distribution system has proven to be an
easy mark for savvy counterfeiters. The Board states that
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the bill's provisions will substantially decrease the
threat of counterfeit drugs and drug diversion and
modernize our drug distribution system, thereby increasing
the safety and efficacy of prescription drugs taken by
patients. The bill is designed to overcome some of the
weaknesses in the existing wholesale Rx drug/device
distribution system that enable counterfeit drugs to get
into it. The bill will provide a means for being able to
ascertain the movements and transactions involving a
prescription drug from its manufacturer to pharmacy and the
ultimate consumer. In addition to reducing the
introduction of counterfeit drugs, the bill will also
increase protection from situations where drugs are
improperly stored or shipped, leading to their
deterioration and danger to the patient who ultimately
takes the drug.
CP:cm 5/4/04 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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