BILL ANALYSIS
SB 2046
Page 1
Date of Hearing: June 27, 2000
ASSEMBLY COMMITTEE ON HEALTH
Martin Gallegos, Chair
SB 2046 (Speier) - As Amended: June 20, 2000
SENATE VOTE : 27-6
SUBJECT : Health care: prescription drug coverage.
SUMMARY : Expands a prohibition against health care service
plans (health plans) and disability insurers which limits or
excludes coverage for a drug that is prescribed for off-label
use, by including drugs prescribed to treat chronic and
disabling conditions, as specified, in addition to
life-threatening conditions. Specifically, this bill :
1)Prohibits health plans and disability insurers that cover
prescription drugs from limiting or excluding coverage for a
drug on the basis that the drug is prescribed for a use that
is different from the use for which that drug has been
approved for marketing (known as off-label) by the federal
Food and Drug Administration (FDA), when the drug is
prescribed for the treatment of a chronic and disabling
condition and is medically necessary to treat that condition.
2)Specifies that drugs prescribed for off-label use, in the case
of health plans, must be on the health plan's formulary to be
protected by this bill, and applies a provision of law
requiring health plans to maintain an expeditious process by
which prescribing providers may obtain authorization for
medically necessary nonformulary drugs, to these off-label
drug prescriptions for chronic and disabling or
life-threatening conditions.
3)Defines "chronic and disabling," for purposes of this bill, as
either or both of the following:
a) Diseases or conditions where the likelihood of
interference over an extended period of time with one or
more of the activities of daily living is high if left
untreated; or
b) Diseases or conditions that require ongoing treatment to
maintain remission or prevent deterioration in the ability
to engage in one or more of the activities of daily living.
SB 2046
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4)Permits health plans and disability insurers to use a
formulary, copayment, technology assessment panel, or similar
mechanism, as a means for appropriately controlling the
utilization of an off-label drug.
5)Specifies that if a health plan or insurer denies coverage for
off-label drug prescriptions for chronic and disabling or life
threatening conditions on the basis that its use is
experimental or investigational, the decision is subject to
review under the Independent Medical Review System, as
specified.
EXISTING LAW :
1)Regulates health plans under the Department of Corporations
until June 30, 2000, and under the Department of Managed Care
commencing July 1, 2000. Regulates disability insurers under
the Department of Insurance.
2)Prohibits health plans and disability insurers from limiting
or excluding coverage for a drug on the basis that the drug is
prescribed for off-label use, provided that all of the
following conditions are met:
a) The drug is approved by FDA;
b) The drug is prescribed by a participating licensed
health care professional for the treatment of a
life-threatening condition; and
c) The drug has been recognized for treatment of that
condition by the American Medical Association Drug
Evaluations, the American Hospital Formulary Service Drug
Information, the United States Pharmacopoeia Dispensing
Information, or two articles from major peer reviewed
medical journals that present data supporting the proposed
off-label use.
3)Defines "life-threatening," for off label prescription
purposes, as diseases or conditions where the likelihood of
death is high unless the course of the disease is interrupted,
or diseases or conditions with potentially fatal outcomes
where the end point of clinical intervention is survival.
SB 2046
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4)Permits health plans and disability insurers to use reasonable
deductible or copayment provisions for off-label drug
prescriptions.
FISCAL EFFECT : Unknown
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, this bill will
expand current law that permits the use of prescription drugs
for off-label use for the treatment of a life-threatening
condition by extending the same coverage to individuals with
disabling or chronic diseases. The author asserts that
expanding off-label drug use is essential because it allows
patients access to treatment therapies currently not afforded
them. This bill is sponsored by Genentech, Inc., which states
that with the tremendous medical advancements experienced in
the last decade, in large part through biotechnology, there
are a host of medications that are being used to treat
diseases and conditions that were not initially contemplated
when the drugs were approved. Genentech states that these
off-label uses are not only saving lives but improving the
quality of life. Genentech further asserts that diseases that
were once life-threatening, such as HIV, some forms of cancer
and cystic fibrosis, are now being controlled with medication
to the degree that they no longer meet the definition of
life-threatening. Genentech argues that because of this, some
health plans deny access to the very drugs that prevent the
condition from being life-threatening.
2)OFF-LABEL DRUG USE . When drugs are approved for use by FDA,
they are approved to be marketed for a specific use, often
called a "labeled" use. To meet the high statistical and
methodological standards required by FDA for drug approval,
drug manufacturers narrowly tailor clinical trials to a
specific condition. While it is not uncommon for
manufacturers to be aware that a drug has potential for other
uses, the time and expense of obtaining FDA approval often
precludes, or at least delays, manufacturers from getting FDA
approval for other uses. However, it is legal for a physician
to prescribe a drug for a use other than what the FDA has
specifically approved, when the drug is prescribed in
accordance with the standards of medical practice.
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3)SUPPORT . The American Cancer Society (ACS) states that it was
the co-sponsor of the original legislation regarding off-label
drug use for life-threatening conditions, and supports the
broadening of this law to include chronic and disabling. ACS
states that it continues to believe that limiting access to
"off-label" uses of drugs by refusing to provide financial
reimbursement represents an undue financial and emotional
strain on patients and may result in unnecessary suffering.
The California Medical Association (CMA) supports this bill,
stating that the effect of this bill will provide patients
with access to off-label drugs for medically necessary
conditions under the guidance of a physician when the
off-label uses are supported by clinical research. The CMA
asserts that under these circumstances, prompt access to drugs
approved by the FDA has both a measure of safety through the
specificity of conditions under which the drug can be
prescribed off-label, while affording compassionate care and
good medicine to those most in need. The California
Professional Firefighters, the Congress of California Seniors
and the Gray Panthers of Northern California also support this
bill, to protect patients access to those medications
necessary to the control of chronic and disabling conditions.
4)OPPOSITION TO PRIOR VERSION . The California Association of
Health Plans (CAHP) and PacifiCare of California both opposed
an earlier version of this bill. CAHP states that health
plans attempt, through formularies and prior approval
processes for certain drugs, to prevent inappropriate uses of
potentially dangerous medications. CAHP states that not all
drugs are subject to prior authorization, but drugs that are
prescribed for off-label uses that may not be safe or
appropriate are subject to this process so that medical review
can be conducted. Given the dangers, CAHP argues that
coverage for off-label drug prescriptions should not be
mandated unless the drug is necessary for a life-threatening
condition.
The author and sponsor state that the most recent amendments,
which ensured that health plans could continue to use
formularies, copayments, technology assessment panels or
similar mechanisms to appropriately control the utilization of
off-label drug use, were intended to address opposition
concerns. It is unclear whether these amendments have removed
the opposition to this bill.
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REGISTERED SUPPORT / OPPOSITION :
Support
Genentech, Inc. (sponsor)
California Professional Firefighters
Congress of California Seniors
Gray Panthers of Northern California
Opposition
California Association of Health Plans (prior version)
PacifiCare of California (prior version)
Analysis Prepared by : Vince Marchand / HEALTH / (916) 319-2097