BILL ANALYSIS
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Sheila J. Kuehl, Chair
BILL NO: SB 1096
S
AUTHOR: Calderon
B
AMENDED: As introduced
HEARING DATE: April 9, 2008
1
FISCAL: No
0
REFERRAL: Health and Judiciary Committees
9
CONSULTANT:
6
Park/cjt
FOR VOTE ONLY
SUBJECT
Medical information
SUMMARY
Allows a pharmacy, or an entity authorized by the pharmacy,
to mail written communications to a patient, pertaining to
a prescribed course of treatment, without the patient's
authorization, under specified conditions.
CHANGES TO EXISTING LAW
Existing federal law and regulations:
Existing federal regulations, adopted pursuant to the
federal Health Insurance Portability and Accountability Act
(HIPAA), prohibit entities that use electronic means to
transmit or receive medical information (referred to as
"covered entities") from using or disclosing personal
health information for purposes other than medical
treatment or payment, or health care operations, as
defined, except pursuant to a written authorization signed
by the patient.
Existing regulations prohibit, with limited exceptions,
Continued---
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health care entities from disclosing personal health
information for the purposes of marketing without prior
authorization from the patient, and further require that
the authorization specify when the marketing involves
direct or indirect remuneration to the entity from a third
party. Under the regulations, "marketing" is defined to
include communication about a product or service that
encourages the recipient to purchase or use the product or
service.
Existing regulations exempt from the definition of
"marketing" communications that describe a health-related
product or service that is provided by, or included in, a
plan of benefits of the covered entity; communications made
for the treatment of the individual; and communications
made to facilitate case management or care coordination, or
to recommend alternative treatments, providers, or care
settings, to the individual.
Existing federal law also provides that a face-to-face
marketing communication from the entity to the individual
does not require authorization from the patient.
Existing law further states that, if a HIPAA privacy
provision conflicts with a provision of state law, the
provision that is most protective of patient privacy
prevails.
Public Law 104-180, enacted in 1996, establishes a national
goal of providing useful written prescription drug
information to consumers, with the specific goal of
providing written information to 75 percent of individuals
receiving new prescriptions by the year 2000 and to 95
percent by the year 2006.
Existing federal regulations additionally provide that
prescription drug advertising sponsored by a product's
manufacturer cannot be false or misleading, must present a
fair balance between the risks and benefits of the product,
must reveal material facts relevant to the product or its
use, and must disclose, or provide for the disclosure of,
all risks contained in the product's labeling.
Existing state law:
Existing law, the Confidentiality of Medical Information
Act or CMIA, prohibits a provider of health care, health
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care service plan, or health care contractor from
disclosing a person's medical information without first
obtaining that person's authorization, with exceptions, as
specified.
Existing law additionally prohibits a provider of health
care, a health care service plan, contractor, or
corporation, and its subsidiaries and affiliates from
intentionally sharing, selling, using for marketing, or
otherwise using any medical information, as defined, for
any purpose not necessary to provide health care services
to a patient, except as expressly authorized by the
patient, enrollee, or subscriber, or as otherwise required
or authorized by law.
Existing law defines "marketing" as a communication about a
product or service that encourages the recipient to
purchase or use the product or service, and provides that
marketing does not include any of the following:
Oral or written communications for which the communicator
does not receive direct or indirect remuneration.
Communications by a health plan to its enrollees
concerning plan providers and the services they provide,
and the availability of more cost-effective
pharmaceuticals.
Remunerated communications that are tailored to the
individual circumstances of a person made in order to
educate or advise the person about treatment options and
to maintain the person's adherence to a prescribed course
of medical treatment for a chronic condition, as defined,
if the person is notified that the provider or health
plan that is making the communication has been
remunerated and by whom, and the person is given the
opportunity to opt out of future communications.
This bill:
This bill would deem a written communication mailed to a
patient by a pharmacy to be necessary to provide health
care services to the patient, and provides that prior
authorization would not be required, if all of the
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following apply:
The written communication encourages the patient to
adhere to a prescribed course of medical treatment as
prescribed by a licensed health care professional and may
include information about the particular prescribed
pharmaceutical drug as authorized in this section.
The written communication pertains only to the prescribed
course of medical treatment, and does not describe or
mention any other pharmaceutical products.
The written communication contains only product-related
information that is consistent with the current federal
Food and Drug Administration (FDA) approved product
package insert, and provides fair and balanced
information regarding the product's benefits and risks in
accordance with the FDA requirements and policies.
A copy of each written communication version is submitted
to the FDA Center for Drug Evaluation and Research,
Division of Drug Marketing, Advertising and
Communications, prior to program implementation.
The written communication uses evidence-based or
consensus-based practice guidelines as the basis of any
information that is provided to patients in order to
improve their overall health, prevent clinical
exacerbations or complications, or promote patient
self-management strategies.
All personally identifiable medical information
collected, used, and disclosed is used solely to deliver
the written communication to the patient.
The entity that receives the information complies with
existing requirements concerning confidentiality and
security of information.
The pharmacy has a written agreement with the entity that
receives the information that requires the entity to
maintain the confidentiality of the information it
receives from the pharmacy and prohibits the entity from
disclosing or using the information for any purpose other
than to deliver to the patient the written communication
that is the subject of the written agreement.
If the written communication is paid for, in whole or in
part, by a manufacturer, distributor, or provider of a
health care product or service, the written communication
discloses whether the pharmacy receives direct or
indirect remuneration from a third party for making the
written communication and discloses, in a clear and
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conspicuous location, the source of any sponsorship.
The communication contains instructions describing how
the patient may opt out of future communications, and no
further sponsored message is made to the individual after
30 calendar days from the date the individual makes the
opt out request.
FISCAL IMPACT
This bill is keyed non-fiscal.
BACKGROUND AND DISCUSSION
The author cites a study released by the National Council
of Patient Information and Education (NCPIE) in August 2007
that estimates that only half of the people who are
prescribed prescription drugs by a physician actually take
them as prescribed or complete the treatment. The author
further notes that one of the priorities recommended in the
study was to remove road-blocks for adherence assistance
programs, including federal and state laws and policies
that have limited these programs, and to ensure that
federal and state laws related to patient privacy and the
use of prescription data are in balance such that they do
not unduly limit the ability of pharmacies to communicate
with patients about the importance of adhering to their
prescribed therapy.
The author states that since the enactment of AB 715
(Chan), Chapter 562, Statutes of 2003 (see below), several
entities have questioned whether prescription reminder and
adherence programs are considered marketing, and therefore
require the patient's permission for use of their medical
information. The author states that this measure will
clarify that a written communication received by a pharmacy
patient via mail, encouraging adherence to a physician
prescribed course of medical treatment, under specified
restrictions, is not interpreted as marketing under
California law.
Food and Drug Administration requirements pertaining to
accuracy of advertising
Current FDA regulations provide that prescription drug
advertisements sponsored by a product's manufacturer cannot
be false or misleading, must present a fair balance between
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the risks and benefits of the product, and must, depending
on the medium in which the advertisement appears, either
disclose all the risks contained in the product's approved
labeling, or make adequate provision for disseminating the
product's labeling to the audience. In addition,
representations in advertising that refer to a drug as the
"drug of choice," or make a claim that the drug is superior
to other drugs must be supported by "substantial evidence."
Advertisements designed to inform or alert consumers to
health conditions are not subject to these requirements.
These advertisements may discuss, among other things, the
symptoms of a given medical condition, the availability of
treatment, and the benefits of treatment, and may encourage
consumers to seek information from their health care
provider.
Prescription drug use and compliance
The NCPIE study referenced above further cites research
suggesting that non-adherence costs Americans about $100
billion annually, including roughly $47 billion for
drug-related hospitalizations, and is associated with
roughly 40 percent of nursing home admissions. Including
indirect costs, the estimate rises to $177 billion
annually.
In a 2007 Journal of American Pharmacy Association article,
a study showed that interventions do positively impact
medication adherence. The study showed that groups that
received intervention (phone calls, letters, or both) on
average obtained more units of medication; the impact of
the interventions was greater among the group who received
both letters and phone calls; and only the group that
received both letters and phone calls showed a significant
treatment effect.
A recent telephone survey, conducted jointly by USA Today,
Kaiser Family Foundation and the Harvard School of Public
Health, finds that 4 in 10 Americans (and half of those
regularly taking at least one medication) report
experiencing at least one of three cost-related concerns in
their family: 16 percent say it is a "serious" problem to
pay for prescription drugs; 29 percent say they have not
filled a prescription in the past two years because of the
cost; and 23 percent say they have cut pills in half or
skipped doses in order to make a medication last longer.
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People are most likely to report one of these three issues
if they lack drug coverage (52 percent), if they have low
incomes (54 percent) or if they take four or more drugs
regularly (59 percent).
Prior legislation
SB 843 (Calderon) of 2007 is an identical measure to this
bill. Referred to Senate Judiciary and Health Committees.
Not heard in committee.
AB 1587 (De La Torre) of 2007 would have exempted from the
AB 715 marketing prohibitions (see below) a written
communication from a pharmacist to a patient during the
"face-to-face" dispensing of a prescription drug, if the
communication assists the pharmacy in meeting the federal
goals of providing useful information regarding the
prescribed drug, the content of the communication is
limited to the prescribed therapy, or related competing
therapy, or related condition of the patient or drug used
by the patient in the preceding year, the pharmacist is
available upon request to answer the patient's questions
regarding the communication, and the communication
discloses in a clear and conspicuous location the source of
the payment used for any sponsored portion of the
communication. Failed in the Senate Judiciary Committee and
is pending reconsideration in that committee.
AB 2364 (De La Torre) of 2006 was nearly an identical
measure to AB 1587 of 2007. The bill was amended at the end
of the session and heard in the Senate Judiciary Committee
under Senate Rule 29.10 and moved with no recommendation to
the Senate Floor. Died on the Senate Floor without a vote.
SB 401 (Ortiz) of 2005, sponsored by Consumers Union,
CALPIRG, and other consumer groups, would have designated
written communications given by a pharmacist to a patient
as marketing when they are sponsored by a third party and
include the trade name or commercial slogan for a drug or
therapy other than the drug or therapy being dispensed.
The bill made exceptions for a sponsored message in which
another medication is referenced for the sole purpose of
identifying a potential adverse drug
interaction with the prescription being dispensed. SB 401
passed the Senate, but these provisions were amended out of
the bill in the Assembly.
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AB 746 (Matthews) of 2004 would have exempted from the AB
715 marketing prohibitions (see below) a written
communication from a pharmacist to a patient during the
"face-to-face" dispensing of a prescription drug, if the
communication assists the pharmacy in meeting the federal
goals of providing useful information regarding the
prescribed drug, the communication is, in its majority,
made up of health information relating to the disease or
health condition for which the dispensed drug was
indicated, the pharmacist is available upon request to
answer the patient's questions regarding the communication,
and the communication discloses in a clear and conspicuous
location the source of the payment used for any sponsored
portion of the communication. AB 746 faced opposition from
consumer groups including Consumers Union and the
California Public Interest Research Group (CALPIRG). Failed
on the Senate Floor.
AB 715 (Chan), Chapter 562, Statutes of 2003, protects
patients against the unauthorized use of their medical
information for marketing purposes. AB 715 requires health
care providers to obtain authorization from a patient
before using the patient's medical information for
marketing, and specifically prohibits, with limited
exceptions, health care providers from accepting direct or
indirect remuneration to communicate with a patient
regarding a product or service if the communication
encourages the patient to purchase or use that product or
service.
Arguments in support
The sponsor, Adheris, a medical information company that
provides the written communication referenced in this
measure under contract with pharmacies and pharmaceutical
companies, believes that the measure would provide
California residents a clear health care benefit by
providing valuable information. The company notes that
adherence to chronic therapies is poor and that lack of
adherence to therapies for hypertension, stroke prevention,
and diabetes, asthma not only results in poor patient
outcomes, but also costs Medicaid millions of dollars in
unnecessary hospitalizations and other medical procedures.
The company asserts that programs run by retail pharmacies,
which may include information on how to take the
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medication, potential side effects, as well as refill
reminders, are considered "treatment" under HIPAA
regulations, but that California law does not clearly
define such programs as part of "treatment" and are, thus,
denied this benefit. Other supporters, such as the
Community Life Improvement Program, believe that healthcare
information designed to encourage proper use of prescribed
medicines is vital to an effective treatment regimen. The
Mental Health Association in California writes that once
the doctor and patient have found the right medication, it
is important to keep patients compliant.
The Alliance for Better Medicine, which has a support if
amended position on the measure, believes that adherence
could be further increased if the printed messages include
a message informing patients of the option to call their
physician is they are experiencing difficulty in adhering
to their prescribed medication regimen or if they have
questions about their medication.
Arguments in opposition
The California Medication Association writes that this bill
would allow unfettered direct marketing to consumers of
pharmaceutical and health information using patients'
confidential medical information. CMA believes this concept
would interfere with the physician-patient relationship and
could lead to misinformation and confusion for patients as
well as increased health costs through the direct-mail
promotion of drugs. CMA also states that this bill places
the burden on the patient to opt-out of this communication
after the fact and believes patients should be in charge of
who uses their medical information and why, so they can
make informed decisions in consultation with their doctor.
Additionally, the Consumer Federation of California (CFC)
and the Privacy Rights Clearinghouse state that this bill
raises significant privacy concerns for patients. PRC
believes that it is a critical principle of privacy
protection that if a person's private information is to be
used or transferred, that they be asked first, and that any
program must contain an agreement by the patient that their
information will be used as part of a mailing program. CFC
emphasizes that the bill would allow a third party to send
reminder mailings that may be in direct contradiction to a
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physician's recommended course of treatment. CFC believes
that the measure intrudes on patient privacy and interferes
with the doctor-patient relationship.
World Privacy Forum states that a statutory determination
that a paid commercial advertisement, regardless of the
terms, is a necessary part of health care is an
unprecedented interference with the practice of health
care. WPF believes that such a program as the measure
provides must be opt-in only and points out the complexity
of operating an opt-out program, e.g., whether the opt-out
covers a single letter campaign, or all letters from a
particular pharmacy, or all pharmacy branches of a chain,
including out-of-state; or all letters sponsored by a
single drug manufacturer.
In addition to many of the points stated above, the
Foundation for Taxpayer and Consumer Rights (FTCR) writes
that this bill is a direct marketing tool for drug
companies, and points out that the sponsor, Adheris, is
likely to directly or indirectly encourage a patient to
stay on a branded medication, even if a cheaper generic is
available. FTCR also states that, as personal
information-medical, financial, and domestic--becomes an
increasingly available and valuable commodity for the
corporations that buy and sell it, consumers become more
vulnerable to unscrupulous marketers, identity thieves and
corrupt corporations.
COMMENTS AND QUESTIONS
1.Bill lacks validation or approval of information to be
provided to consumers. It is not clear what entity would
enforce the bill's requirements that written
communications given to consumers be consistent with FDA
requirements that the information provide fair and
balanced information, or that it be based on
"evidence-based or consensus-based guidelines." While
the bill requires a copy of each written communication to
be submitted to the FDA prior to its dissemination, FDA
approval of the communication would not be required prior
to dissemination.
2.Reconsideration and amendments to be taken in next
committee. On March 12, this measure failed in this
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committee (5 - 3) and was granted reconsideration. During
that hearing, the author committed to amendments to be
taken in the Senate Judiciary Committee, to which this
bill is double-referred. The author has provided a
mock-up of the amendments below, beginning on page 7:
(d) Except to the extent expressly authorized by
the patient or
enrollee or subscriber or as provided by
subdivisions (b) and (c),
no provider of health care, health care service
plan, contractor, or
corporation and its subsidiaries and affiliates
shall intentionally
share, sell, use for marketing, or otherwise use
any medical
information for any purpose not necessary to
provide health care
services to the patient. For purposes of this
section, a written
communication mailed to a patient by a pharmacy
shall be deemed
to be necessary to provide health care services
to the patient and
shall not require prior authorization, if all of
the following
conditions are met:
(1) The written communication encourages the
patient to adhere
to the prescribed course of medical treatment as
prescribed by a
licensed health care professional and may include
information about that particular pharmaceutical
drug as authorized in this section.
(2) The communication is written in the same
language as the prescription label produced by
the pharmacy when the medication was dispensed.
(3) The written communication instructs the
patient to contact the prescribing or dispensing
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healthcare professional if:
(a) the patient has questions about the
medication
(b) the patient is having difficulty adhering
to the medication
due to adverse effects, dosing
requirements, or other causes
[Additional numbering changes are omitted.]
Additionally, the author agreed to add language that
would include a penalty consistent with current law
for violating the privacy provision of the bill. This
language has not yet been drafted.
POSITIONS
Support: Adheris (sponsor)
Alliance for Better Medicine
American Russian Medical Association
California Council of Community Mental Health
Agencies
California Retailers Association
Community Life Improvement Program
Charles R. Drew University of Medicine & Science
Los Angeles Society of Allergy, Asthma & Clinical
Immunology
Mental Health Association in California
National Association of Cancer Patients
National Consumers League
National Association of Chain Drug Store
Rite Aid
Oppose: American Civil Liberties Union
California Alliance for Retired Americans
California Medical Association
Consumer Federation of California
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Consumers Union
Foundation for Taxpayer and Consumer Rights
Planned Parenthood Affiliates of California
Privacy Rights Clearinghouse
World Privacy Forum
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