SB 671
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Date of Hearing: July 7, 2015
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Susan Bonilla, Chair
SB 671(Hill) – As Amended June 23, 2015
SENATE VOTE: 31-5
NOTE: This bill is double referred, and if passed by this Committee, it will be referred to the
Assembly Committee on Health.
SUBJECT: Pharmacy: biological product.
SUMMARY: This bill authorizes a pharmacist to substitute an alternative biological product
when filling a prescription for a prescribed biological product under specified circumstances and
requires the Board of Pharmacy (Board) to maintain a link on its website to the list of
interchangeable biological products recognized as interchangeable by the federal Food and Drug
Administration (FDA).
EXISTING LAW:
Federal Law:
1) Under the Food, Drug and Cosmetics Act (FDCA), requires drug manufacturers to obtain
approval of new drugs from the federal Food and Drug Administration (FDA).
(21 U.S.C. Sec. 355)
2) Prohibits a person from delivering for introduction into interstate commerce any biological
product unless a license is issued pursuant to the Public Health Service Act (PHSA). (42
U.S.C. Sec. 262)
3) Creates an abbreviated pathway for biological products that are similar to or interchangeable
with licensed biological products, known as the Biologics Price Competition and Innovation
Act of 2009 (BPCIA). (42 U.S.C. Sec. 262(k))
4) Requires that, for a biological product to be considered biosimilar to a reference product,
data must be derived from analytical, animal and clinical studies as specified. (42 U.S.C.
Sec. 262(k)(2))
5) Clarifies that a product is biosimilar to a reference product under the BPCIA if the proposed
biosimilar product is highly similar to the reference product, notwithstanding minor
differences in clinically inactive components, and that no clinically meaningful differences
exist between the proposed biosimilar product and the reference product in terms of safety,
purity and potency. (42 U.S.C. Sec. 262(i)(2)(A) and (B))
6) States that new drugs cannot be introduced into interstate commerce unless an approval of
an application is filed by either:
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a) Full report of investigations to be filed with an application to the Secretary of the FDA
and which have been made to show:
i) Whether or not the drug is safe and effective for use.
ii) A full list of the components and composition of the drug.
iii) A full description of the methods used in, and the facilities and controls used for the
manufacturing, processing, and packing of the drug.
iv) Samples of the drug and of the articles used as components, as the Secretary may
require.
v) Specimens of the labelling proposed to be used for the drug.
vi) Any assessments required under Section 355c. (21 U.S.C Section 355(b))
b) Abbreviated application of a new drug to be filed with the Secretary and which must
contain:
i) Information to show that the conditions of use prescribed, recommended or suggested
in the labeling proposed for the new drug have been previously approved.
ii) Information to show that the new drug has the same active ingredient(s) as the listed
drug referred to.
iii) Information to show that the route of administration, the dosage form, and the
strength of the new drug are the same as those of the listed drug referred to.
iv) Information to show that the new drug is biologically equivalent the listed drug,
except as specified.
v) Information to show that the labeling proposed for the new drug is the same as the
labeling approved for the listed drug referred to unless the new drug and listed drug
are produced or distributed by different manufacturers. (21 U.S.C Section 355(j))
7) Defines a biological product as a virus, therapeutic serum, toxin, antitoxin, vaccine, blood,
blood component or derivative, allergenic product, protein (except for any chemically
synthesized polypeptide), or analogous product. (42 U.S.C. Section 262(i)(1))
8) Classifies insulin as a hormone and therefore regulates these endocrine system derived drugs
under the FDCA and not as biological products under the PHSA.
9) States that a drug intended for use is limited to use under the professional supervision of a
practitioner licensed by law to administer the drug. (21 U.S.C. Section 353(b)
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California Law:
1) Establishes the Food and Drug Branch (FDB) within the California Department of Public
Health (CDPH) to assure that foods, drugs, medical devices, cosmetics and certain other
consumer products are safe and are not adulterated, misbranded nor falsely advertised; and
that drugs and medical devices are effective.
2) Defines biologics as human whole blood, human whole blood derivatives specified by
regulations, serum, vaccine, live vaccine, killed vaccine, tissue vaccine, autogenous vaccine,
live virus, killed virus, live bacterial culture, killed bacterial culture, bacterin, hormone,
tissue extract, gland extract, gland preparation, insulin, and similar products made from
human or animal tissues or micro-organisms. (Health and Safety Code § 1600.1)
3) Under the Pharmacy Law, provides for the licensure and regulation of pharmacies,
pharmacists and wholesalers of dangerous drugs or devices by the Board within the
Department of Consumer Affairs (DCA). (Business and Professions Code (BPC) § 4000 et
seq.)
4) Specifies certain requirements regarding the dispensing and furnishing of dangerous drugs
and devices, and prohibits a person from furnishing any dangerous drug or device except
upon the prescription of a physician, dentist, podiatrist, optometrist, veterinarian or
naturopathic doctor. (BPC § 4059)
5) Authorizes pharmacists filling prescription orders for drug products prescribed by their trade
or brand names to substitute generic drugs for orders if the generic contains the same active
chemical ingredients of equivalent strength and duration of therapy, subject to a patient
notification and bottle labeling requirement, unless the prescriber specifies that a pharmacist
may not substitute another drug product by either indicating on the form submitted for the
filling of the prescription drug orders “Do not substitute” or words of similar meaning or
selecting a box on the form marked “Do not substitute.” (BPC § 4073)
6) Authorizes pharmacists filling prescription orders for drug products prescribed by their trade
or brand names to substitute a drug product with a different form of medication with the
same active chemical ingredients of equivalent strength and duration of therapy as the
prescribed drug product when the change will improve the ability of the patient to comply
with the prescribed drug therapy, subject to a patient notification and bottle labeling
requirement, unless the prescriber specifies that a pharmacist may not substitute another drug
product by either indicating on the form submitted for the filling of the prescription drug
orders “Do not substitute” or words of similar meaning or selecting a box on the form
marked “Do not substitute.”
(BPC § 4052.5)
THIS BILL:
1) Defines “biological product” according to the definition within the federal PHSA.
2) Defines “interchangeable” as a biological product that the FDA has determined meets the
standards set forth in the BPCIA or has been deemed therapeutically equivalent by the FDA
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as set forth in the latest addition or supplement of the Approved Drug Products with
Therapeutic Equivalence Evaluations (known as the Orange Book).
3) Defines “prescription”, with respect to a biological product, as a prescription for a product
compounded in an outsourcing facility can qualify for exemptions from the FDA approval
requirements, under Section 503B of the FDCA.
4) Updates permitted functions for pharmacists to allow a pharmacist to substitute an alternative
biological product only for a prescribed biological product only if:
a) The alternative biological product is interchangeable.
b) The prescriber has not personally indicated, either orally or in his or her own handwriting
“Do not substitute” or words of similar meaning. Clarifies that a prescriber may still
check a box on the prescription marked “Do not substitute” if the prescriber personally
initials the box or checkmark. Clarifies that for electronic data transmission
prescriptions, a prescriber may indicate “Do not substitute” or words of similar meaning,
or may check a box on the prescription marked “Do not substitute” but is not required to
manually initial this indication.
5) Within five days following the dispensing of a biological product, a dispensing pharmacist or
the pharmacist’s designee shall make an entry of the specific biological product provided to
the patient, including the name of the biological product and the manufacturer. Provides that
the communication shall be conveyed by making an entry that can be electronically accessed
by the prescriber through:
a) An interoperable electronic medical records system;
b) An electronic prescribing technology;
c) A pharmacy benefit management system; or,
d) A pharmacy record.
6) Entry into an electronic records system is presumed to provide notice to the prescriber. If the
pharmacy does not have access to one or more of the aforementioned entry systems, the
pharmacist of the pharmacist’s designee shall communicate the name of the biological
product dispensed to the prescriber using facsimile, telephone, electronic transmission, or
other prevailing means.
5) Specifies that communication is not required to be made to a prescriber when either there is
no FDA-approved interchangeable biological product or a refill prescription is not changed
from the product dispensed on the prior filing of the prescription.
6) Provides that selection of an alternative biological product is within the discretion of the
pharmacist except when a prescriber indicates “Do not substitute.”
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7) States that a pharmacist who selects the biological product according to the provisions of this
bill assumes the same responsibility for substituting an alternative biological product as
would be incurred in filling a prescription for a biological product prescribed by name.
8) Removes liability of a prescriber for an act or omission by a pharmacist in selecting,
preparing or dispensing an alternative biological product.
9) Prohibits a pharmacist from selecting an alternative biological product unless the cost to the
patient is the same or less than the cost of the prescribed biological product, including any
professional fee that may be charged by the pharmacist.
10) Applies these provisions to all prescriptions, including those presented by or on behalf of
persons receiving assistance from the federal government or pursuant to the Medi-Cal Act
(Welfare and Institutions Code Section 14000 et. seq.).
11) Requires a communication be made to the patient when an alternative biological product is
substituted for a biological product.
12) Requires the Board to maintain a link to the current list, if available, of biological products
determined by the FDA to be interchangeable, on its website.
13) Clarifies that a pharmacist may still give immunizations pursuant to a protocol with a
prescriber.
14) Clarifies that a disability insurer or health care service plan is not prohibited from requiring
prior authorization or imposing other appropriate utilization controls in approving coverage
for any biological product.
15) Adds all of the above provisions to the section of Pharmacy Law specifying actions for
substitution of a generic drug.
FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate
Rule 28.8, this bill will result in negligible state costs.
COMMENTS:
Purpose. This bill is sponsored by the author. According to the author, “SB 671 updates
California law so when the federal Food and Drug Administration approves interchangeable
biosimilars, California pharmacists can substitute those lower cost biosimilars for brand name
biologics. In order for biosimilars to be substituted for a biologic, California must update its
Pharmacy Practice Act. The Business and Professions Code does not define biosimilars and
existing generic pill definitions do not apply. On March 6th, the FDA approved the first
biosimilar (Zarxio) and there are at least four more applications in the approval pipeline.
Therefore, it is essential that a bill be passed this year making clear the procedures for
substitution so California consumers can save money.”
Background. A "biologic" drug is one that is created by biological rather than chemical
processes. Biologics have been available for more than 20 years and include enzymes, human
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growth hormones, human insulins, interleukins, and vaccines. Many biologics are among the
most costly medicines available, ranging from $1,000 to $50,000 per treatment.
Biologic drugs represent a fast-growing segment of the pharmaceutical market, constituting 32%
of products in the development pipeline and accounting for around 10% of pharmaceutical
expenditures (as of 2011). The biologic market is expected to grow more than 20% per year.
Biologic drugs are currently prescribed to treat blood conditions, cancers, immune disorders such
as Rheumatoid Arthritis, Psoriasis and Crohn’s Disease and neurological disorders like Multiple
Sclerosis and are almost exclusively administered in physician’s offices, oncology clinics,
specialty pharmacies, hospitals or dialysis centers.
A "biosimilar" is a biologic drug that is designed to be comparable to a particular existing
biologic drug, known as the biologic "reference" drug. It is not generic, the same or identical. In
fact, regulatory agencies including the World Health Organization, the FDA and the European
Medicines Agency have deemed that biologics cannot scientifically have “generic or identical
versions” and instead can only have “similar” versions. Some manufacturers will seek
"interchangeable" status for their biosimilar, a designation granted by the FDA that means those
biosimilar drugs may be substituted for the biologic reference drug without any expected change
in clinical outcomes.
Current Law Relating to Substitutions. In practice, this bill would allow a pharmacist to
substitute an interchangeable biosimilar for a prescribed biologic to save money, in the same way
a pharmacist may currently substitute a generic for a brand name drug.
Currently, a pharmacist filling a prescription order for a drug prescribed by its brand name may
substitute a generic drug instead, unless the prescriber personally indicates verbally or in writing
not to substitute. The prescriber is not liable for the pharmacist selecting, preparing, or
dispensing a generic drug, and a pharmacist may not substitute a generic drug unless it results in
cost savings for the patient.
These existing provisions of law would apply to the substitution of interchangeable biosimilars
as well, except that a biosimilar may be substituted which costs the patient the same or less than
the prescribed biological product.
Biologics Price Competition and Innovation Act. The Biologics Price Competition and
Innovation Act (Act) was enacted as part of the federal Affordable Care Act on March 23, 2010.
The Act created an abbreviated licensure pathway for biosimilars.
The Act defines "biosimilarity" to mean that "the biological product is highly similar to the
reference product notwithstanding minor differences in clinically inactive components" and that
"there are no clinically meaningful differences between the biological product in terms of the
safety, purity, and potency of the product."
The FDA sets an even higher standard for biosimilar drugs that a manufacturer wants to deem
"interchangeable" with a biologic reference drug. To attain interchangeability, according to the
FDA, "a [manufacturer] must provide sufficient information to demonstrate biosimilarity, and
also to demonstrate that the [interchangeable biosimilar] can be expected to produce the same
clinical result as the reference product in any given patient and, if the [interchangeable
biosimilar] product is administered more than once to an individual, the risk in terms of safety or
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diminished efficacy of alternating or switching between the use of the biological product and the
reference product is not greater than the risk of using the reference product without such
alteration or switch."
In other words, a patient should not experience a difference between an interchangeable
biosimilar and its reference biologic. The Act expressly states that a pharmacist or other
dispenser may substitute an interchangeable biological product for the reference product without
consulting the prescribing doctor.
Impact on Pharmacies. Only seriously ill patients are prescribed biologic medicines which are
almost exclusively prescriber administered. In California, biologics represent a small fraction of
prescriptions dispensed at the retail level. According to a July 2014 MarketScan report for the
period January 2013 to December 2013, retail pharmacies in California dispensed an average
of 3.85 biologic prescriptions per week per location. Walgreens pharmacies in California
currently perform over 4.5 million physician notifications per month for traditional prescriptions.
In the event of a biosimiliar substitution, this bill requires that within five days the substitution
information be made available to the prescriber.
Prescriber Notification. This bill would require a pharmacist to inform the prescriber of the
interchangeable biosimilar substitution within five business days of the selection. According to
the author, with biologic medicines, adverse reactions, which occur when a patient’s body
recognizes a biologic medicine as a foreign matter, may not manifest until 9 to 12 months after
the administration of the drug. In order to ensure consumer safety, health records should be
updated in the event of any contraindications in patients receiving substituted biosimilars. The
purpose of prescriber communication is to provide a record of the substitution, in the event of an
adverse reaction, or other clinical responses to the biologic.
Insulin. Biological products are approved by the FDA under two different federal statutes: the
Public Health Service Act (PHSA) or the Food, Drug, and Cosmetic Act (FDCA) (insulins,
growth hormones and a few others). Biologics have been classified under one statute versus the
other solely for historical reasons — not scientific differences. Accordingly, the two categories
of biologics will ultimately be “merged” by federal law on March 23, 2020. According to the
author, until then, it is necessary to include the FDCA products in SB 671 so they can be
automatically substituted when an interchangeable biosimilar is approved. Currently, there are
no insulins that have been determined by the FDA to be therapeutically equivalent therefore they
are not currently allowed to be automatically substituted.
Prior Related Legislation. SB 538 (Hill) of 2013, was substantially similar to this measure.
NOTE: The bill was vetoed by the Governor because the FDA had not determined standards for
biosimilars to meet the higher threshold for interchangeability.”
ARGUMENTS IN SUPPORT:
AMGEN supports the bill. In their letter they write, “The pursuit of science-based medicines
that restore health or even save lives is fundamental to our values. Amgen’s leading position in
biotechnology, long-standing commitment to patient safety and leadership in manufacturing high
quality biologic medicines mean that Amgen is equipped to develop and produce safe and
effective biosimilars. In fact, we have nine biosimilar molecules in our pipeline.”
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The Arthritis Foundation supports the bill and writes, “When therapeutic innovations come to
market, patient safety must remain the number one priority in any discussion; even if a drug is
less expensive, these advantages mean nothing if the drug does not successfully treat the patient.
It is important to remember that these are complex medications, and that interchangeable
biological products are not the same as generics. Because of this, the Arthritis Foundation is
committed to ensuring that concerns of people who take these medications, and the specialist
physicians who treat them, are kept at the forefront. By doing so, the patient and physician can
continue a dialogue ensuring they receive the optimal care with these game-changing
medications.”
The Biotechnology Industry Organization, BIOCOM, and California Life Sciences Association
all support the bill. They write in their joint letter, “This legislation ensures patients and their
physicians remain in control of their medical treatment options as the market for complex
biologics evolves.”
Boehringer-Ingelheim Pharmaceutical Company also supports the bill and writes, “The leading
companies developing and marketing biologic products, including biosimilars and
interchangeable biologics, have been engaged in discussions on the various state legislative
proposals. Through the legislative process, it has become clear that physicians, and patients, see
value in transparent communication on all biologic medicines dispensed in order to maintain a
consistent and complete medical record.”
Genentech supports the bill and writes, “SB 671 requires pharmacists to communicate the
substitution of an interchangeable biosimilar to a patient’s prescriber. This safeguard is critical
in the event of an adverse reaction or change in a patient’s chronic condition. It is important that
physicians have access to a patient’s health record to best interpret any health changes or
negative clinical responses and respond appropriately.”
The Medical Oncology Association of Southern California, Inc. writes, “SB 671 is a common
sense bill that ensures patients may have access to life-saving, lower cost, FDA-approved
biosimilars. On behalf of our patients who depend upon safe, affordable, effective medications
for their health and well-being, we urge passage of SB 671.”
The Pharmaceutical Research and Manufacturers of America supports the bill and writes,
“Ensuring patient safety is essential in the implementation of the Biologic Price Competitions
and Innovation Act of 2009 and the amendment of state substitution laws to permit the
substitution of interchangeable biosimilars. SB 671 amends California law to put patient
protections in place that recognize the unique attributes of biosimilar products.”
UCB Inc. supports the bill and writes, “ If and when the U.S. Food and Drug Administration
determines that certain “biosimilars” are interchangeable, it is important to have state
substitution laws in place to address issues that are critical for patient safety.”
ARGUMENTS IN OPPOSITION:
The Academy of Managed Care Pharmacy writes in opposition, “The restrictive notification
requirements in this legislation will discourage substitution of more affordable interchangeable
biologic products and will potentially increase medication costs to patients and payers and,
thereby, threaten patient access to these products. It will also discourage drug manufacturers
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from developing those products because of the administrative burdens in Senate Bill 671 that
clearly favor the dispensing of more expensive biologic products.”
The Association of California Life & Health Insurance Companies writes in their letter of
opposition, “Recognizing that the FDA is the only U.S. regulatory body with the scientific
expertise to determine when and how biosimilars and interchangeable biologics may be
substituted for branded biologics, this legislation is especially concerning as it has the potential
to generate doubt about the safety and effectiveness of interchangeable biologics in today’s
market. For this reason we strongly believe that California should proceed cautiously and allow
the FDA the opportunity to do their job and fully and effectively evaluate these products.”
The California Association of Health Plans opposes the bill and writes, “SB 671 creates doubt
about the safety of biosimilar drugs by placing notification requirements on drugs that have been
available in international markets for over a decade. These before-the-fact administrative
burdens will do little if anything to ensure public safety and they will increase the cost of access
to these life-saving drugs.”
Molina Healthcare also opposed the bill. In their letter they state, “Earlier this year, the U.S.
Centers for Medicare and Medicaid Services released guidance relating to these new
medications, calling on state Medicaid programs to see the approval of new biologics “as a
unique opportunity to achieve measureable cost savings and greater beneficiary access to
expensive therapeutic treatments for chronic conditions” and to “encourage and maximize their
use.” SB 671 would instead hinder their use through unnecessary notice burdens.
The Pharmaceutical Care Management Association opposes the bill and writes, “PCMA believes
that the notification requirements in SB 671 are unnecessary and will only prevent the cost
savings to patients and employers that can be achieved with use of interchangeable biosimilar
medication.”
REGISTERED SUPPORT:
AMGEN
Arthritis Foundation
Biotechnology Industry Organization
Biocom
Boehringer-Ingelheim Pharmaceutical Company
California Life Sciences Association
ExpressScripts
Genentech
Medical Oncology Association of Southern California, Inc.
Novartis Pharmaceuticals
Pharmaceutical Research and Manufacturers of America
UCB Inc.
REGISTERED OPPOSITION:
Academy of Managed Care Pharmacy
Association of California Life & Health Insurance Companies
California Association of Health Plans
Kaiser Permanente
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Molina Healthcare
Analysis Prepared by: Le Ondra Clark Harvey, Ph.D. / B. & P. / (916) 319-3301