(a) The Department of Corrections and Rehabilitation is authorized to maintain and operate a comprehensive pharmacy services program for those facilities under the jurisdiction of the department that is both cost effective and efficient, and shall incorporate the following:

1. (1) A statewide pharmacy administration system with direct authority and responsibility for program administration and oversight.
2. (2) Medically necessary pharmacy services using professionally and legally qualified pharmacists, consistent with the size and the scope of medical services provided.
3. (3) Written procedures and operational practices pertaining to the delivery of pharmaceutical services.

4. (4) A multidisciplinary, statewide Pharmacy and Therapeutics Committee responsible for all of the following:

   1. (A) Developing and managing a department formulary.
   2. (B) Standardizing the strengths and dosage forms for medications used in department facilities.
   3. (C) Maintaining and monitoring a system for the review and evaluation of corrective actions related to errors in prescribing, dispensing, and administering medications.
   4. (D) Conducting regular therapeutic category reviews for medications listed in the department formulary.
   5. (E) Evaluating medication therapies and providing input to the development of disease management guidelines used in the department.
5. (5) A requirement for the use of generic medications, when available, unless an exception is reviewed and approved in accordance with an established nonformulary approval process. The nonformulary approval process shall include a process whereby a prescriber may indicate on the face of the prescription “dispense as written” or other appropriate form for electronic prescriptions.
6. (6) Use of an enterprise-based pharmacy operating system that provides management with information on prescription workloads, medication utilization, prescribing data, and other key pharmacy information.

(b) The department is authorized to operate and maintain a centralized pharmacy distribution center to provide advantages of scale and efficiencies related to medication purchasing, inventory control, volume production, drug distribution, workforce utilization, and increased patient safety. It is the intent of the Legislature that the centralized pharmacy distribution center and institutional pharmacies be licensed as pharmacies by the California State Board of Pharmacy meeting all applicable regulations applying to a pharmacy.

1. (1) To the extent it is cost effective and efficient, the centralized pharmacy distribution center should include systems to do the following:

   1. (A) Order and package bulk pharmaceuticals and prescription and stock orders for all department correctional facilities.
   2. (B) Label medications as required to meet state and federal prescription requirements.
   3. (C) Provide barcode validation matching the drug to the specific prescription or floor stock order.
   4. (D) Sort completed orders for shipping and delivery to department facilities.

2. (2) Notwithstanding any other requirements, the department centralized pharmacy distribution center is authorized to do the following:

   1. (A) Package bulk pharmaceuticals into both floor stock and patient-specific packs.
   2. (B) Reclaim, for reissue, unused and unexpired medications.
   3. (C) Distribute the packaged products to department facilities for use within the state corrections system.
3. (3) The centralized pharmacy distribution center should maintain a system of quality control checks on each process used to package, label, and distribute medications. The quality control system may include a regular process of random checks by a licensed pharmacist.

(e) On March 1, 2012, and each March 1 thereafter, the department shall report all of the following to the Joint Legislative Budget Committee, the Senate Committee on Appropriations, the Senate Committee on Budget and Fiscal Review, the Senate Committee on Health, the Senate Committee on Public Safety, the Assembly Committee on Appropriations, the Assembly Committee on Budget, the Assembly Committee on Health, and the Assembly Committee on Public Safety:

1. (1) The extent to which the Pharmacy and Therapeutics Committee has been established and achieved the objectives set forth in this section, as well as the most significant reasons for achieving or not achieving those objectives.
2. (2) The extent to which the department is achieving the objective of operating a fully functioning and centralized pharmacy distribution center, as set forth in this section, that distributes pharmaceuticals to every adult prison under the jurisdiction of the department, as well as the most significant reasons for achieving or not achieving that objective.
3. (3) The extent to which the centralized pharmacy distribution center is achieving cost savings through improved efficiency and distribution of unit dose medications.
4. (4) A description of planned or implemented initiatives to accomplish the next 12 months’ objectives for achieving the goals set forth in this section, including a fully functioning and centralized pharmacy distribution center that distributes pharmaceuticals to every adult facility under the jurisdiction of the department.
5. (5) The costs for prescription pharmaceuticals for the previous fiscal year, both statewide and at each adult prison under the jurisdiction of the department, and a comparison of these costs with those of the prior fiscal year.