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AB-1468 Opioid Prevention and Rehabilitation Act.(2019-2020)

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Date Published: 09/06/2019 09:00 PM
AB1468:v95#DOCUMENT

Amended  IN  Assembly  September 06, 2019
Amended  IN  Assembly  May 08, 2019
Amended  IN  Assembly  April 30, 2019
Amended  IN  Assembly  April 11, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 1468


Introduced by Assembly Members McCarty and Gallagher McCarty, Arambula, Gallagher, and Gonzalez

February 22, 2019


An act to add and repeal Division 10.4 (commencing with Section 11730) of the Health and Safety Code, relating to opioids, and making an appropriation therefor, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 1468, as amended, McCarty. Opioid Prevention and Rehabilitation Act.
Existing law establishes the State Department of Public Health, which has authority over various programs promoting public health. Existing law requires the department, subject to an appropriation in the Budget Act of 2016, to award naloxone grant funding to local health departments, local government agencies, or other specified entities, in order to reduce the rate of fatal overdose from opioid drugs, including heroin and prescription opioids.
Under existing law, the department licenses and regulates manufacturers of drugs or devices in this state, and the California State Board of Pharmacy licenses and regulates wholesalers of dangerous drugs or devices, as specified.
This bill would, commencing with the 2021–22 fiscal year, require a manufacturer or wholesaler, as defined, that sells or distributes opioid drugs in this state to submit to the department a report, including specified information, that details all opioid drugs sold or distributed in this state during the preceding fiscal year. year, except as specified. The bill would, commencing with the 2021–22 fiscal year, require the department, in consultation with the board, to calculate the ratable share of a manufacturer or wholesaler, which is the individual portion of the collective sum of $50,000,000 or a lesser amount, as specified, to be paid by the manufacturers and wholesalers, based on the information reported, without double-counting the opioid drug if both a manufacturer and a wholesaler sold or distributed the drug in this state. The bill would subject the manufacturer and wholesaler to specified civil penalties for failing to comply with the reporting or payment requirements.
The bill would require the deposit of the payments and penalties, less refunds and the department’s administrative costs, into the continuously appropriated Opioid Prevention and Rehabilitation Program Fund, which the bill would create, thereby making an appropriation. The bill would require the department to distribute moneys in the fund to counties or local nonprofit community-based organizations for purposes of opioid prevention and rehabilitation programs. The bill would base the distribution of moneys on county needs, using only specified information relating to opioid overdose in the counties. The bill would require the department to report to the Legislature annually regarding recommendations for how the distributed moneys might be spent and how the distributed moneys were spent during the previous year.
This bill would make these provisions inoperative on July 1, 2027, and would repeal them as of January 1, 2028.
This bill would state that its provisions are severable.
This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 2/3 of the membership of each house of the Legislature.
This bill would take effect immediately as a tax levy.
Vote: 2/3   Appropriation: YES   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Division 10.4 (commencing with Section 11730) is added to the Health and Safety Code, to read:

DIVISION 10.4. OPIOID PREVENTION AND REHABILITATION ACT

PART 1. General Provisions

11730.
 (a) This division shall be known, and may be cited, as the Opioid Prevention and Rehabilitation Act.
(b) This division shall become inoperative on July 1, 2027, and, as of January 1, 2028, is repealed.

PART 2. Definitions

11731.
 For purposes of this division, the following definitions apply:
(a) “Department” means the State Department of Public Health.
(b) “Opioid stewardship payment” means the total amount to be paid into the Opioid Prevention and Rehabilitation Program Fund for each fiscal year, as described in Section 11734.
(c) “Ratable share” means the individual portion of the opioid stewardship payment to be paid by each manufacturer or wholesaler that is subject to this division.
(d) “Opioid” means an opiate or any synthetic or semisynthetic narcotic that has opiate-like activities but is not derived from opium and has effects similar to natural opium alkaloids, and any derivatives thereof.
(e) “Opiate” means the dried, condensed juice of a poppy, Papaver somniferum, that has a narcotic, soporific, analgesic, and astringent effect.
(f) “Distribute” or “distribution” means the delivery for sale of an opioid drug other than by administering or dispensing to the ultimate user, including intracompany transactions between any division, affiliate, subsidiary, parent, or other entity under complete common ownership and control.
(g) (1) Except as specified in paragraph (2), “wholesaler” has the same meaning as provided in Section 4043 of the Business and Professions Code.
(2) “Wholesaler” excludes a chain pharmacy warehouse that engages only in intracompany transfers, not involving a sale, between any division, affiliate, subsidiary, parent, or other entity under complete common ownership and control.

PART 3. Opioid Sale or Distribution Reporting

11732.
 Commencing with the 2021–22 fiscal year, and for each fiscal year thereafter, a manufacturer or wholesaler that sells or distributes opioid drugs in this state shall submit to the department a report that details all opioid drugs sold or distributed by the manufacturer or wholesaler in this state during the preceding fiscal year. To the extent permitted by federal law, the report shall include all of the following information:
(a) The name, address, telephone number, federal Drug Enforcement Agency (DEA) registration number, and license number of the manufacturer or wholesaler, as applicable.
(b) The name, address, and DEA registration number of the entity to which the opioid drug was sold or distributed.
(c) The date of the sale or distribution of the opioid drug.
(d) The gross receipt total, in dollars, of all opioid drugs sold or distributed.
(e) The name and National Drug Code (NDC) of the opioid drug sold or distributed.
(f) The number of containers and the strength and metric quantity of controlled substances in each container of the opioid drug sold or distributed.
(g) The total number of morphine milligram equivalents (MMEs) attributed to the opioid drugs sold or distributed. MMEs shall be determined pursuant to a formulation that is issued by the department and updated as the department deems necessary to determine the ratable share pursuant to Section 11733.
(h) Any other elements relating to the sale or distribution of the opioid drug, as the department deems necessary to determine the ratable share pursuant to Section 11733.

PART 4. Ratable Share Determination

11733.
 (a) Commencing with the 2021–22 fiscal year, and for each fiscal year thereafter, the department, in consultation with the California State Board of Pharmacy, shall calculate the ratable share of a manufacturer or wholesaler that is subject to Section 11732, according to all of the following steps:
(1) The total number of morphine milligram equivalents (MMEs) attributed to opioid drugs sold or distributed in this state by the manufacturer or wholesaler for the preceding fiscal year, as reported pursuant to Section 11732, shall be divided by the total number of MMEs attributed to opioid drugs sold or distributed in this state by all manufacturers and wholesalers subject to this division for the preceding fiscal year, in order to determine the payment percentage for the manufacturer or wholesaler.
(2) The payment percentage shall be multiplied by the opioid stewardship payment, as described in Section 11734.
(3) The product of the calculation described in paragraph (2) shall be the manufacturer’s or wholesaler’s ratable share.
(4) For purposes of the calculation of the ratable share, the total number of MMEs attributed to opioid drugs sold or distributed by a manufacturer or wholesaler shall not include either any of the following:
(A) The number of MMEs attributed to opioid drugs that are manufactured in this state but the final point of delivery or sale of which is outside this state.
(B) The number of MMEs attributed to buprenorphine, methadone, or morphine.
(C) The number of MMEs attributed to opioid drugs that would be prescribed for hospice care, palliative care, cancer treatment, or treatment for a terminal illness.
(5) For purposes of the calculation of the ratable share, opioid drugs sold or distributed in this state shall not be double-counted. For purposes of paragraph (1), the total number of MMEs attributed to opioid drugs sold or distributed by a wholesaler shall not include the number of MMEs attributed to opioid drugs that a manufacturer has sold or distributed in this state. Those opioid drugs shall be counted only for the calculation of the manufacturer’s ratable share.
(b) The department shall notify the manufacturer or wholesaler, in writing, of the value of the ratable share for that manufacturer or wholesaler.
(c) In any fiscal year for which the department determines that a manufacturer or wholesaler that is subject to Section 11732 failed to report information required pursuant to Section 11732, the department shall estimate, based on available data, the number of MMEs attributed to opioid drugs sold or distributed by that manufacturer or wholesaler, and the other manufacturers and wholesalers complying with this division shall receive a decreased assessment of their corresponding ratable share in the following fiscal year, with the decrease equaling the amount that was overpaid by that compliant manufacturer or wholesaler in the current fiscal year.
(d) (1) The manufacturer or wholesaler shall have the opportunity to appeal the ratable share determination by submitting information to the department explaining why the ratable share determined pursuant to this section is erroneous or otherwise not warranted.
(2) Upon receipt of the information described in paragraph (1), if the department determines that all or a portion of the ratable share is not warranted, the department may do one of the following:
(A) Adjust the ratable share if the payment has not yet been made.
(B) Adjust the assessment of the ratable share in the following fiscal year by decreasing the ratable share by the amount that was overpaid in the current fiscal year.
(C) Refund the amount that was overpaid.

PART 5. Ratable Share Payment

11734.
 (a) Commencing with the 2021–22 fiscal year, and for each fiscal year thereafter, a manufacturer or a wholesaler subject to this division shall make quarterly payments, to the department, of the manufacturer’s or wholesaler’s corresponding ratable share of the opioid stewardship payment.
(b) All ratable share payments described in subdivision (a), less refunds and the department’s administrative costs, shall be deposited quarterly into the Opioid Prevention and Rehabilitation Program Fund created pursuant to Section 11736.
(c) (1) (A) Except as described in subparagraph (B) and paragraph (2), the opioid stewardship payment shall be equal to fifty million dollars ($50,000,000) for each fiscal year, which shall be the amount used to calculate the ratable share for a manufacturer or wholesaler pursuant to Section 11733.
(B) Notwithstanding subparagraph (A), if the total number of morphine milligram equivalents (MMEs) attributed to opioid drugs sold or distributed in this state by all manufacturers and wholesalers subject to this division during the 2021–22 fiscal year, or any fiscal year thereafter, is smaller than the total number of MMEs attributed to opioid drugs sold or distributed in this state by all manufacturers and wholesalers subject to this division during the 2020–21 fiscal year, the opioid stewardship payment shall be reduced from fifty million dollars ($50,000,000) by a percentage equal to the percentage of that reduction in the total number of MMEs.
(2) Notwithstanding paragraph (1), the combined sum of ratable share payments by manufacturers and wholesalers may be less than the amount of the opioid stewardship payment in a fiscal year, if the department makes adjustments to the ratable share of a manufacturer or wholesaler pursuant to Section 11733.

PART 6. Penalties

11735.
 (a) A manufacturer or wholesaler that fails to comply with the reporting requirements described in Section 11732 shall be subject to a civil penalty not exceeding five hundred dollars ($500) per calendar day.
(b) A manufacturer or wholesaler that fails to make a ratable share quarterly payment pursuant to subdivision (a) of Section 11734 shall be subject to a civil penalty of not less than 10 percent of, and not greater than 300 percent of, the ratable share quarterly payment that is due.

11735.1.
 Any penalties collected pursuant to Section 11735 shall be deposited in the Opioid Prevention and Rehabilitation Program Fund created pursuant to Section 11736.

PART 7. Opioid Prevention and Rehabilitation Program Fund

11736.
 (a) There is hereby created in the State Treasury the Opioid Prevention and Rehabilitation Program Fund.
(b) Notwithstanding Section 13340 of the Government Code, all moneys in the fund are continuously appropriated to the department to carry out the purposes described in Section 11736.1.

11736.1.
 (a) The department shall distribute moneys in the Opioid Prevention and Rehabilitation Program Fund to counties or local nonprofit community-based organizations, including, but not limited to, community clinics, as defined in Section 1204, on an annual basis pursuant to subdivision (b) for purposes of opioid prevention and rehabilitation programs, based on applications submitted by those counties or organizations that elect to participate.
(b) Distribution of moneys in the fund to counties or local nonprofit community-based organizations shall be based on county needs, using the most recent data of only the following information, as provided by the department:
(1) The ratio of opioid overdose deaths per county population.
(2) The ratio of opioid overdose emergency department visits per county population.
(3) The ratio of opioid overdose hospitalizations per county population.
(c) The department shall submit to the Legislature, on an annual basis, both of the following:
(1) A proposed expenditure plan consisting of recommendations and suggested spending priorities for counties or local nonprofit community-based organizations that receive moneys distributed pursuant to subdivision (a). The plan shall be subject to review and approval by the Legislature.
(2) A report detailing how the moneys distributed pursuant to subdivision (a) were spent during the previous year and evaluating the impact of that spending on outcomes related to opioid prevention and rehabilitation.
(d)  A report to be submitted pursuant to subdivision (c) shall be submitted in compliance with Section 9795 of the Government Code.

SEC. 2.

 The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

SEC. 3.

 This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.