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AB 623
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Date of Hearing: April 21, 2015
ASSEMBLY COMMITTEE ON HEALTH
Rob Bonta, Chair
AB 623 (Wood) – As Amended March 26, 2015
SUBJECT: Abuse-deterrent opioid analgesic drug products.
SUMMARY: Prohibits a health care service plan (plan) or health insurer (insurer) from
requiring the use of opioid drug products that have no abuse-deterrent properties in order to
access abuse-deterrent opioid drug products; requires pharmacists to provide a patient receiving
an opioid drug product information about proper storage and disposal of the drug; and,
authorizes a provider to prescribe a less than 30-day supply of opioids analgesic drugs.
Specifically, this bill:
1) Prohibits, where an abuse-deterrent opioid analgesic drug product is available, a plan or
insurer from requiring the use of opioid analgesic drug products without abuse-deterrent
properties first before allowing access abuse-deterrent opioid analgesic drug products.
2) Provides that this bill shall not be construed to prevent a plan or insurer from applying prior
authorization requirements to abuse-deterrent opioid analgesic drug products, provided that
those same requirements are applied to versions of those opioid analgesic drug products
without the abuse-deterrent properties.
3) Defines "abuse-deterrent opioid analgesic drug product" as a brand or generic opioid
analgesic drug product approved by the federal Food and Drug Administration (FDA) with
abuse-deterrent labeling claims that indicate the drug product is expected to result in a
meaningful reduction in abuse.
4) Defines "opioid analgesic drug product" as a drug product in the opioid analgesic drug class
that is prescribed to treat moderate to severe pain, or other conditions, whether in immediate
release or extended release or long-acting form and whether or not combined with other drug
substances to form a single drug product or dosage form.
5) Authorizes a health care provider to prescribe a less than 30-day supply of an opioid
analgesic drug product, and requires a plan or insurer to cover a less-than 30-day supply if
otherwise covered.
6) Requires a pharmacist to inform a patient receiving an opioid analgesic drug product on
proper storage and disposal of the drug, and authorizes the information to be provided as part
of an oral consultation, as specified.
EXISTING LAW:
1) Establishes the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene Act), which
provides for the licensure and regulation of health care service plans by the Department of
Managed Health Care, and provides for the regulation of health insurers by the California
Department of Insurance (CDI).
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2) Pursuant to DMHC regulations, states that a plan may require step therapy and requires a
plan to have an expeditious process in place to authorize exceptions to step therapy when
medically necessary.
3) Requires plans and insurers to include information on cost-sharing tiers and utilization
controls, including prior authorization or step therapy requirements, for each covered drug.
4) Prohibits health plans that cover prescription drugs from limiting or excluding coverage for a
drug on the basis that the drug is prescribed for use different from that for which the drug has
been approved by the FDA, provided that specified conditions have been met, including that
the drug is prescribed by a participating licensed health care professional for the treatment of
a chronic and seriously debilitating condition, the drug is medically necessary to treat that
condition, and the drug is on the plan formulary.
5) Prohibits health plans that cover prescription drugs from limiting or excluding coverage for a
drug for an enrollee if the drug was previously approved for coverage by the plan for a
medical condition of the enrollee and the plan's prescribing provider continues to provide the
drug for the medical condition, provided that it is safe and effective for treatment.
6) Prohibits plans that cover prescription drugs from limiting or excluding coverage for a drug
on the basis that the drug is prescribed for a use different from the use for which the drug has
been approved by the federal FSA, provided that specified conditions have been met,
including that the drug is prescribed by a participating licensed health care professional for
the treatment of a chronic and seriously debilitating condition, the drug is medically
necessary to treat that condition, and the drug is on the plan formulary.
7) Provides for the licensure and regulation of pharmacists by the California Board of
Pharmacy.
8) Requires, under existing regulations, a pharmacist to provide oral consultation to a patient in
all care settings under the following circumstances:
a) Upon request by the patient;
b) Whenever the pharmacist deems a consultation is warranted in the exercise of his or her
professional judgment;
c) When the prescribed drug has not previously been dispensed to a patient; and,
d) When the prescription drug is dispensed that has not been previously dispensed to a
patient in the same dosage, strengths, or with the same directions.
FISCAL EFFECT: This bill has not yet been analyzed by a fiscal committee.
COMMENTS:
1) PURPOSE OF THIS BILL. According to the author, not enough is being done to curb the
growth of opioid abuse, and health care providers and parents need tools to help guard
against the abuse of opioid medication. The author cites education for patients on the proper
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storage and disposal of opioids, as well as the development and availability of abusedeterrent opioids, which are formulated to prevent manipulation of the drug for the purpose
of misuse, as strategies that should be encouraged to combat opioid abuse. The author states
that crushed or dissolved opioids account for 30% of opioid abuse, and this form of abuse is
what results in the majority of emergency room visits, hospitalizations, and deaths. The
author states that abuse-deterrent opioids are currently available on the market, that we
should allow health care providers to exercise their judgment in prescribing abuse-deterrent
opioids currently available on the market without worrying about cost-related hurdles. The
author concludes by stating that the more widespread abuse-deterrent opioids become, the
greater positive impact we can have on opioid abuse, and that increased availability of abusedeterrent opioids and competition in the drug market will lead to reduced cost.
2) BACKGROUND.
a) Opioids and opioid abuse. Opioids are a class of narcotic drugs that include medications
such as hydrocodone (e.g. Vicodine), oxycodone (e.g., OxyContin, Percocet), morphine
(e.g., Kadian, Avinza) codeine, and other related drugs. Taken as prescribed, opioids can
be used to manage pain safely and effectively. However, opioids may also produce other
effects, and according to the National Institute on Drug Abuse (NIDA), some individuals
experience a euphoric response to opioid medications since these drugs affect the regions
of the brain involving reward response.
NIDA states that those who abuse opioids may seek to intensify their experience by
taking the drug in ways other than those prescribed. For example, Oxycontin is an oral
medication used to treat moderate to severe pain through a slow, steady release of the
opioid. However, NIDA states that people who abuse the drug may crush or dissolve the
drug in order snort or inject it, thereby increasing their risk for serious medical
complications, including overdose. NIDA states that when abused, even a single large
dose of opioids can cause severe respiratory depression and death.
According to the California Department of Public Health (DPH), in the past, prescription
opioids were prescribed for relieving short-term, acute pain. However, today, they are
increasingly being used for long-term (chronic) pain management. As a result, sales of
opioid pain relievers quadrupled in the past 10 years. By 2010, enough opioid pain
relievers were sold to medicate every American adult (about 240 million people) every
four hours for an entire month. DPH states that in California, deaths involving opioid
prescription medications have increased 16.5% since 2006. In 2012, there were more than
1,800 deaths from all types of opioids – 72 percent involved prescription opioids.
b) Abuse-deterrent opioids. According to the FDA, opioid products can be abused in a
number of ways, including being swallowed whole; crushed in order to be swallowed,
snorted, smoked; and, dissolved and injected. Opioids formulated with abuse-deterrent
properties are designed to be more difficult to abuse, while retaining the same clinical
effectiveness. For example, abuse-deterrent opioids may be formulated in ways that
prevent chewing, crushing, grating, or grinding. Others may be formulated with agents
that can make the drug resistant to dissolving by turning the drug into a gel-like substance
when manipulated. Other formulations can reduce or defeat euphoria associated with the
drug, or result in an unpleasant effect if the drug is manipulated.
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The FDA released industry guidance on April 1, 2015 regarding the evaluation and
labeling of abuse-deterrent opioids, citing the development of abuse-deterrent opioids as
a potentially important step toward the goal of creating safer opioid analgesics, and
considers the development of abuse-deterrent opioids a high public health priority. The
FDA also noted that abuse-deterrent technologies developed to date have not yet proven
successful at deterring the most common form of abuse – swallowing a number of intact
capsules or tables to achieve a feeling of euphoria. Further, the FDA stated that the
science of abuse deterrence is relatively new, and both the formulation technologies and
the analytical, clinical, and statistical methods for evaluating the technologies are rapidly
evolving.
In order for a drug to be approved as having an abuse-deterrent formulation, a drug
manufacture must seek a label as such from the FDA. There are four general tiers of
labeling claims available to describe the potential abuse-deterrent properties of a drug:
i) Tier 1 – The drug is formulated with barriers to abuse.
ii) Tier 2 – The drug is expected to reduce or block the effect of the opioid when
manipulated.
iii) Tier 3 - The drug is expected to result in a meaningful reduction in abuse.
iv) Tier 4 – The drug has demonstrated reduced abuse in the community.
According to the author, four opioids have been approved for abuse-deterrent labeling,
each of which meet the requirements for Tier 3, and there are a number of generic and
brand opioid products with different types of abuse-deterrent technologies that seek
labeling. One of the four currently approved is OxyContin, which, in 2010, was
reformulated as an abuse-deterrent opioid. It was approved for ADF labeling in April
2013, indicating that the product has physical and chemical properties that are expected
to make abuse via injection difficult and to reduce abuse via snorting. OxyContin’s
manufacturer replaced the original OxyContin formulation in 2010 with its abusedeterrent formulation, and upon approval of the labeling in 2013, the FDA stopped
accepting applications for generics that rely upon the approval of original formulation of
OxyContin. Under this bill, plans would be required to cover abuse-deterrent opioids that
meet Tier 3.
In terms of the public health impact of abuse-deterrent opioids, the author cites research
published in 2014 in the journal “Pain Management” which estimated that abusedeterrent formulation of OxyContin reduced overall health care costs by $430 million
annually in the U.S., with an indirect cost savings of $605 million. The research study
determined that these savings represented 1.8% of $58.4 billion in overall societal costs
of prescription opioid abuse. The author also cites a study by Econostats that compared
the cost between generic opioids without abuse-deterrent properties, and brand name
abuse-deterrent opioids, finding that the price gap between the average patented cost of
the brand name opioid and the average generic opioid cost was $140.
Other research has been conducted on abuse-deterrent opioids, including a study
published in the New England Journal of Medicine in 2012 which found that abuse-
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deterrent formulations successfully reduced abuse of specific opioid, but resulted in
increased use of heroin as a replacement for the drug, which could reduce societal cost
savings.
c) Legislation in other states. At least 15 other bills regarding abuse-deterrent opioids have
been introduced this year in other states, including Colorado, Connecticut, Florida,
Kansas, Maryland, Mississippi, Oklahoma, Rhode Island, Tennessee, Vermont, and
Virginia. In 2014, legislation on this topic was introduced in New Jersey. The
requirements of the bills vary across states, with some bills containing similar
requirements as those proposed in this bill, but overall, the bills aim to expand coverage
and access to abuse-deterrent opioids.
d) Step Therapy. Step therapy is a utilization management technique sometimes applied to
prescription drugs by a health plan or insurer. Health plans and insurers employ
utilization management for a variety of reasons, including clinical considerations, and to
control the cost of prescription drugs, particularly in therapeutic classes where generic
version of the drugs exist. When implemented by a health plan or insurer, an enrollee
may be required to first try an alternative medication (often a generic alternative) prior to
receiving coverage for the final medication (often a brand-name medication).
3) SUPPORT. The Power of Pain Foundation (POPF), a co-sponsor of this bill, states that we
must find a balance between the pain patients who truly need opioid medication for daily
living, and those who are abusing the medication. POPF states that misuse and abuse of
opioids is a growing public health problem that is driving up health care, criminal justice, and
workplace costs, and that abuse-deterrent opioids represent a significant opportunity to
reduce misuse and abuse. The Partnership for Drug-Free Kids (Partnership) writes that one
in four teens reports having misused or abused a prescription drug, and nearly two-thirds of
teens who have abused pain relievers say they get them from family members and friends.
Partnership states that insurance coverage for abuse-deterrent opioids will lead to a larger
share of abuse-deterrent medications in medicine cabinets, and also encourage companies to
innovate in this direction.
The California Academy of Physician Assistants and the California Academy of Eye
Physicians and Surgeons state that this bill would prevent a plan or insurer from imposing
barriers to access to abuse-deterrent opioids, if such drugs are deemed the most appropriate
option by the prescriber. Law enforcement organizations state the abuse of prescription
drugs continues to increase, particularly among minors who use medicine meant for
therapeutic purposes for non-medical reasons. The organizations state that this bill
represents a significant step forward in the effort to end potentially deadly prescription drug
abuse by making meaningful changes to reduce opioid abuse through proper storage and
disposal, allowing prescriptions for small quantities, and reducing barriers for doctors to
prescribe opioids with abuse-deterrent formulations.
4) OPPOSITION. The California Association of Health Plans (CAHP) opposes this bill,
stating that it is a coverage mandate for one form of drug, abuse-deterrent opioids, of which
expensive brand drug manufacturers dominate the market. CAHP argues that the California
Health Benefits Review Program (CHBRP) should analyze this bill before it is considered,
and fiscal estimates of this proposal in other states have demonstrated increases in premiums.
CAHP contends that the value of abuse-deterrent drugs is still being evaluated by the FDA,
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and while the bill attempts to allow prior authorization for abuse-deterrent products, it only
does so if the same protocols apply to the non-abuse products which results in
micromanagement of the formulary and could lead the prescriber to default to the more
expensive abuse-deterrent option even though the effectiveness is still unproven and may be
unnecessary. CAHP concludes by stating that plans must retain their ability to design drug
benefits that are affordable and based on the evidence, particularly as drug costs continue to
increase, and that abuse-deterrent drugs are fairly new, costly, and have insufficient evidence
about their efficacy in deterrence.
The Pharmaceutical Care Management Association, a national association of pharmacy
benefit managers (PBM) states that this bill is part of a nationwide effort to force the use of
abuse-deterrent opioids by disallowing generic substitutions, but that abuse-deterrent
formulations are not a quick fix for opioid abuse and will raise costs. Express Scripts, a
pharmacy benefit manager, estimates that abuse-deterrent opioids cost about three times as
much as non-abuse-deterrent agents, and that the bill would restrict them from using step
therapy to promote the use of lower cost, equally effective generics before more expensive
brand medications.
5) RELATED LEGISLATION. AB 73 (Waldron) provides that drugs in specified therapeutic
drug classes that are prescribed by a Medi-Cal beneficiary's treating provider are covered
Medi-Cal benefits, and require that a Medi-Cal managed care plan cover the drug upon
demonstration by the provider that the drug is medically necessary and consistent with
federal rules and regulations for labeling and use. AB 73 is pending in the Assembly Health
Committee.
6) PREVIOUS LEGISLATION.
a) AB 1814 (Waldron) from 2014 would have established that a prescriber’s reasonable
professional judgment prevails over the policies and utilization controls of the Medi-Cal
program, including the utilization controls of a Medi-Cal managed care plan, in
prescribing a pharmaceutical from specified therapeutic drug classes. This bill was held
in the Assembly Appropriations Committee.
b) AB 831 (Bloom) from 2013 would have required, until January 1, 2016, the California
Health and Human Services Agency (CHHSA) to convene a temporary working group to
develop a state plan to reduce the rate of fatal drug overdoses and appropriates $500,000
from the General Fund (GF) to CHHSA to provide grants to local agencies to implement
drug overdose prevention and response programs. This bill was held in the Assembly
Appropriations Committee.
c) AB 889 (Frazier) of 2013 would have prohibited a plan and insurer that provides
coverage for medications pursuant to step therapy or fail first protocol from requiring an
enrollee or insured to try and fail more than two medications before allowing the enrollee
or insured access to the medication originally prescribed by their provider, and would
have required plans and insurers to have an expeditious process in place for step therapy
exceptions and that the duration of step therapy be consistent with up-to-date evidencebased outcomes and current published peer-reviewed medical and pharmaceutical
literature. This bill was held in the Senate Appropriations Committee.
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d) AB 369 (Huffman) of 2012 would have prohibited plans and insurers that restrict
medications for the treatment of pain from requiring a patient to try and fail on more than
two pain medications before allowing the patient access to the pain medication, or its
generic equivalent, prescribed by his or her physician. This bill was vetoed with the
Governor's veto message stating that a doctor's judgment and a health plan's clinical
protocols have a role in ensuring prudent prescribing of pain medications, and any
limitations on the practice of step therapy should better reflect a health plan or insurer's
legitimate role in determining the allowable steps.
e) AB 1826 (Huffman) of 2010 would have required a plan or insurer that covers
prescription drug benefits to provide coverage for a drug that has been prescribed for the
treatment of pain without first requiring the enrollee or insured to use an alternative drug
or product. This bill was held in the Senate Appropriations Committee.
f) AB 1144 (Price) of 2009 would have required plans and insurers to report to DMHC and
CDI specified information related to chronic pain medication management, including
when the plan or insurer requires an enroll to use of more than two formulary alternative
medications prior to providing access to a pain medication prescribed by a provider, or to
use pain medication other than what was prescribed for more than seven days prior to
providing access to the prescribed pain medication. This bill was held in the Assembly
Appropriations Committee.
7) POLICY COMMENTS.
a) Bill will be reviewed by CHBRP. The committee submitted a request to CHBRP, housed
within the University of California, to review this bill and perform an analysis of the
clinical efficacy, cost-effectiveness, and public health impact of its provisions. CHBRP
is established in state statute to assess legislation that proposes or repeals a mandated
benefit or service for public health, medical and financial impact. Committee rules
provide that the committee may not hear such bills until CHBRP's assessment is received
and has been reviewed by committee staff. Since this bill does not propose a mandate for
a new benefit, but rather would require plans and insurers to cover a different formulation
of a drug that is already covered, this bill may be heard by the committee without the
CHBRP analysis.
CHBRP’s independent analysis will likely provide valuable information about the
potential impact of this bill and inform the Legislature on key policy questions regarding
the bill. For example, as a part of its role in determining the cost-effectiveness and public
health impacts of the bill, the CHBRP analysis may estimate the cost implications of
requiring brand name abuse-deterrent opioids over generic opioids without abusedeterrent properties. Additionally, the bill would not require abuse-deterrent drugs to
actually demonstrate reduced abuse in the community before requiring plans to cover
them where available. As such, the CHBRP analysis may provide insight into the actual
or potential public health impact of abuse-deterrent opioids in the community through an
evaluation of a broader set of available evidence.
b) Bill would impact Medi-Cal managed care plans. Most Medi-Cal managed care plans
are Knox-Keene licensed, and, as such, will have to meet the requirements of this bill.
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c) Current law does not prohibit providers from prescribing a less than 30-day supply of
opioids. This bill would authorize a provider to prescribe a less than 30-day supply of
opioids. It does not appear that there are any provisions in statute that would prevent
providers from doing this today.
8) DOUBLE REFERRED. This bill is double referred. Upon passage by this Committee, it
will be referred to the Assembly Committee on Business and Professions.
REGISTERED SUPPORT / OPPOSITION:
Support
Power of Pain Foundation (sponsor)
U.S. Pain Foundation (sponsor)
Alliance for Patient Access
American GI Forum
Biocom
California Academy of Eye Physicians and Surgeons
California Academy of Physician Assistants
California Healthcare Institute
California Hepatitis C Task Force
California Pharmacists Association
California Police Chiefs Association
California State Sheriff's Association
Familia Unida
Neuropathy Action Foundation
Partnership for Drug Free Kids
Peace Officers Research Association of California
Opposition
California Association of Health Plans
California Chamber of Commerce
Express Scripts
Pharmaceutical Care Management Association
Analysis Prepared by: Kelly Green / HEALTH / (916) 319-2097