BILL NUMBER: AB 2112	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Monning

                        FEBRUARY 18, 2010

   An act to add Part 2.7 (commencing with Section 60) to Division 1
of the Civil Code, relating to privacy.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2112, as introduced, Monning. Prescription Record Privacy Act.
   The Confidentiality of Medical Information Act 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, unless a specified exception
applies.
   This bill would enact the Prescription Record Privacy Act,
prohibiting a person from knowingly disclosing or using regulated
records that include prescription information containing individual
identifying information for marketing a prescribed product, as
provided. The act would not prohibit conduct involving the
collection, use, transfer, or sale of regulated records for marketing
purposes if the data is aggregated, does not contain individually
identifying information, and the data cannot reasonably be used to
obtain individually identifying information. This bill would also
require that any person who knowingly fails to comply with these
provisions be subject to an administrative penalty of at least
$10,000.
   This bill would authorize the Secretary of California Health and
Human Services to adopt regulations to implement these provisions.
This bill would also require the office of the Attorney General to
enforce payment of penalties for violations of these provisions, as
provided.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Part 2.7 (commencing with Section 60) is added to
Division 1 of the Civil Code, to read:

      PART 2.7.  Prescription Record Privacy Act


   60.  This part may be cited as the Prescription Record Privacy
Act.
   60.5.  It is the intent of the legislature to safeguard the
confidentiality of prescribing information, protect the integrity of
the doctor-patient relationship, maintain the integrity and public
trust of the medical profession, combat vexatious and harassing sales
practices, restrain undue influence exerted by pharmaceutical
industry marketing representatives over prescribing decisions, and
further the state's interest in improving the quality and lowering
the cost of health care. The legislature intends to regulate the
monitoring of prescribing practices only for commercial marketing
purposes by companies selling prescribed products. The intent is not
to regulate monitoring for other uses, such as quality control,
research unrelated to marketing, or use by governments or other
entities not in the business of selling health care products.
   61.  For purposes of this part:
   (a) "Bona fide clinical trial" means any research project that
prospectively assigns human subjects to intervention and comparison
groups to study the cause and effect relationship between a medical
intervention and a health outcome, has received approval from an
appropriate institutional review board, and has been registered at
http://ClinicalTrials.gov prior to commencement.
   (b) "Individual identifying information" means information that
directly or indirectly identifies a prescriber or a patient in this
state, indicates where the information is derived from, or relates to
a prescription for any prescribed product.
   (c) "Marketing" means any activity by a company making or selling
prescribed products, or by that company's agent, intended to
influence prescribing or purchasing choices of its products,
including, but not limited to:
   (1) Advertising, publicizing, promoting or sharing information
about a product.
   (2) Identifying individuals to receive a message promoting use of
a particular product, including, but not limited to, an
advertisement, brochure, or contact by a sales representative.
   (3) Planning the substance of a sales representative visit or
communication or the substance of an advertisement or other
promotional message or document.
   (4) Evaluating or compensating sales representatives.
   (5) Identifying individuals to receive any form of gift, product
sample, consultancy, or any other item, service, compensation or
employment of value.
   (6) Advertising or promoting prescribed products directly to
patients.
   (d) "Person" means a business, individual, corporation, union,
association, firm, partnership, committee, or other organization or
group of persons.
   (e) "Pharmacy" means any individual or entity licensed under state
law to dispense prescribed products.
   (f) "Prescribed product" includes a biological product as defined
in Section 262 of Title 42 of the United States Code and a device or
a drug as defined in Section 321 of Title 21 of the United States
Code.
   (g) "Regulated record" means information or documentation from a
prescription written by a prescriber doing business in this state or
a prescription dispensed in this state.
   62.  (a) No person shall knowingly disclose or use regulated
records that include prescription information containing individual
identifying information for marketing a prescribed product.
   (b) A regulated record containing individual identifying
information may be transferred to another entity, including to
another branch or subsidiary of the same firm, only if it carries
satisfactory assurance that the recipient will safeguard the records
from being disclosed or used for a marketing purpose prohibited under
this section.
   (c) Regulated records containing individual identifying
information may be disclosed, sold, transferred, exchanged, or used
for nonmarketing purposes.
   (d) This section does not prohibit conduct involving the
collection, use, transfer, or sale of regulated records for marketing
purposes if:
   (1) The data is aggregated.
   (2) The data does not contain individually identifying
information.
   (3) There is no reasonable basis to believe that the data can be
used to obtain individually identifying information.
   (e) This section shall not prevent any person from disclosing
regulated records to the identified individual as long as the
information does not include protected information pertaining to any
other person.
   63.  The Secretary of California Health and Human Services may
adopt regulations as necessary to implement this part.
   64.  Any person who knowingly fails to comply with the
requirements of this part or regulations adopted pursuant to this
part by using or disclosing regulated records in a manner not
authorized by this part or its regulations, shall be subject to an
administrative penalty of at least ten thousand dollars ($10,000) per
violation and not more than fifty thousand dollars ($50,000) per
violation, as assessed by the California Health and Human Services
Agency. Each disclosure of a regulated record shall constitute a
violation. The office of the Attorney General shall take necessary
action to enforce payment of penalties assessed under this section.
Minimum statutory penalties shall be set at ten thousand dollars
($10,000) per violation, notwithstanding Section 125.9 of the
Business and Professions Code.
   64.5.  In addition to any other remedy provided by law, a
violation of this chapter shall be an unfair or deceptive act in
trade or commerce and an unfair method of competition and may be
enforced as an unfair business practice pursuant to Chapter 5 of Part
2 of Division 7 of the Business and Professions Code.
   65.  (a) The intent of this section is to ensure the
confidentiality of data held by a state agency or its agent, which
could be used to directly or indirectly identify a patient or a
health care professional licensed to prescribe drugs, biological
products, or medical devices.
   (b) For the purposes of this section:
   (1) "Individual identifying information" shall have the same
meaning as in Section 61.
   (2) "Prescribed product" includes a biological product as defined
in Section 262 of Title 42 of the United States Code and a device or
a drug as defined in Section 321 of Title 21 of the United States
Code.
   (3) "State health care program" means a program for which the
state purchases prescribed products, including, but not limited to, a
state pharmaceutical assistance program, or a program for state
employees and their dependants, individuals under the supervision of
corrections, or state retirees and their dependants with the
exception of the state medical assistance program (Medi-Cal).
   (c) Records held by an agency administering a state health care
program that include prescription information containing individual
identifying information shall only be disclosed for the purposes
allowed in Section 62.
   (d) Any person who knowingly fails to comply with the requirements
of this chapter or rules adopted pursuant to this part by using or
disclosing regulated records in a manner not authorized by this part
or its rules shall be subject to an administrative penalty of not
more than fifty thousand dollars ($50,000) per violation, as assessed
by the California Health and Human Services Agency. Each disclosure
of a regulated record shall constitute a violation. The office of the
Attorney General shall take necessary action to enforce payment of
penalties assessed under this section.
   65.5.  (a) The intent of this section is to ensure compliance with
federal Medicaid law and regulations prohibiting the disclosure and
use of Medicaid data, except to administer the Medicaid program, and
to ensure that data held by the state agency or its agents that could
directly or indirectly identify patients or health care
professionals licensed to prescribe products be kept confidential.
   (b) The State Department of Health Care Services, which
administers the state medical assistance program (Medi-Cal) under
subchapter C of Chapter 4 of Title 42 of the Code of Federal
Regulations (Medicaid) or a Medicaid waiver approved by the Centers
for Medicare and Medicaid Services, shall disclose records that
include prescription information only as provided for under Section
431 of Title 42 of the Code of Federal Regulations and the Privacy
Act of 1974. The department shall ensure that any agent or
contractors with the department are informed of the limitations on
redisclosure or use of the data provided for under applicable federal
regulations and shall have policies and procedures for insuring
compliance with this statute and federal regulations.
   (c) Any person who knowingly fails to comply with the requirements
of this part or rules adopted pursuant to this part by using or
disclosing regulated records in a manner not authorized by this part
or its rules shall be subject to an administrative penalty of not
more than fifty thousand dollars ($50,000) per violation, as assessed
by the California Health and Human Services Agency. Each disclosure
of a regulated record shall constitute a violation. The office of the
Attorney General shall take necessary action to enforce payment of
penalties assessed under this section.
   66.  If any provision of this act or its application to any person
or circumstance is held invalid, the remainder of the act or the
application of the provision to other persons or circumstances is not
affected.
   67.  Nothing in this act shall be interpreted to regulate conduct
that takes place entirely outside of the state.
   67.5.  Nothing in this act shall be interpreted to regulate the
content, time, place or manner of any discussion between a prescriber
and their patient, or a prescriber and any person representing a
prescription drug manufacturer.