BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1565|
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THIRD READING
Bill No: SB 1565
Author: Kuehl (D), et al
Amended: 4/16/08
Vote: 28 (70 percent vote required)
SENATE HEALTH COMMITTEE : 11-0, 4/2/08
AYES: Kuehl, Aanestad, Alquist, Cedillo, Cox, Maldonado,
Negrete McLeod, Ridley-Thomas, Steinberg, Wyland, Yee
SENATE APPROPRIATIONS COMMITTEE : 14-0, 5/12/08
AYES: Torlakson, Cox, Aanestad, Ashburn, Cedillo, Corbett,
Dutton, Florez, Kuehl, Ridley-Thomas, Runner, Simitian,
Wyland, Yee
NO VOTE RECORDED: Oropeza
SUBJECT : California Stem Cell Research and Cures Act
SOURCE : Author
DIGEST : This bill requires the Independent Citizens
Oversight Committee (ICOC) of the California Institute for
Regenerative Medicine (CIRM) to include in its intellectual
property standards a requirement that each grantee and
licensee submit for CIRM's approval a plan that will afford
uninsured Californians access to any drug that is, in whole
or in part, the result of research funded by the CIRM,
requires these plans to include a requirement that grantees
and licensees sell drugs that result from CIRM funding and
are purchased with public funds at a price that does not
exceed any benchmark price in the California Discount
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Prescription Drug Program , and requires the Little Hoover
Commission to conduct a study of the governance structure
of the California Stem Cell Research and Cures Act by July
1, 2009.
ANALYSIS :
Existing law:
The California Stem Cell Research and Cures Act, enacted by
voters as Proposition 71 in November, 2004, establishes the
CIRM to make grants and loans for stem cell research and
research facilities. Existing law also establishes the
ICOC as the governing body for the CIRM. Existing law
authorizes the sale of $3 billion in general obligation
bonds over 10 years for stem cell research and facilities
in California, with a focus on research that does not
qualify for federal funding.
Existing law, from Proposition 71, requires the ICOC to
establish standards that require all grants and loan awards
to be subject to intellectual property agreements that
balance the opportunity of the state to benefit from the
patents, royalties, and licenses that result from research
and therapy development, and clinical trials with the need
to assure that essential medical research is not
unreasonably hindered by the intellectual property
agreements.
Existing law also provides that the Legislature may amend
the non-bond statutory provisions of the Act, to enhance
the ability of the California Institute for Regenerative
Medicine to further the purposes of the grant and loan
programs created by that Act, with a 70 percent vote of
each house and compliance with specified procedural
requirements.
Existing law establishes the California Discount
Prescription Drug Program (CalRx) within the Department of
Health Care Services, and requires the department to
attempt to negotiate, with each drug manufacturer,
discounts to offer single-source prescription drugs under
the program at a volume weighted average discount that is
equal to or below any one of the following benchmark
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prices: (1) eighty-five percent of the average
manufacturer price for a drug, as published by the Centers
for Medicare and Medicaid Services; (2) the lowest price
provided to any nonpublic entity in the state by a
manufacturer; or (3) the Medicaid best price, to the extent
that this price exists under federal law.
Existing law establishes the Milton Marks "Little Hoover"
Commission on California State Government Organization and
Economy, a multimember body appointed by the Governor and
the Legislature with various duties that include making
recommendations to the Governor and the Legislature to
promote efficiency in government operations.
This bill requires intellectual property standards
developed by the ICOC to include a requirement that each
grantee and licensee submit for CIRM's approval a plan that
will afford uninsured Californians access to any drug that
is, in whole or in part, the result of research funded by
the CIRM, and would require this submission prior to the
drug's commercialization. This bill would also require
that the aforementioned plans require the grantees and
licensees to sell the resulting drugs that are purchased
with public funds at a price that does not exceed any
benchmark price in CalRx as it exists on January 1, 2008.
The bill would not preclude any public agency from
obtaining prices that are lower than the benchmark prices
described in CalRx. The bill also defines "drug" as any
article recognized in the United States Pharmacopeia or the
National Formulary, or any article intended for the
diagnosis, cure, mitigation, or prevention of disease in
humans or animals, or any article intended for use as a
component of diagnosis, cure mitigation or prevention of
disease in humans or animals, and inclusive of therapeutic
products, including, but not limited to, blood, blood
products, cells, and cell therapies.
This bill requires the Little Hoover Commission to conduct
a study of the governance structure of the California Stem
Cell Research and Cures Act, and submit, by July 1, 2009, a
report to the Legislature on the results of the study and
recommendations of ways the governance structure of the
ICOC could better ensure public accountability and reduce
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conflicts of interest, consistent with the purposes of
Proposition 71.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2008-09 2009-10 2010-11
Fund
Little Hoover Commission $25 $130 $0
General*
ICOC staff/regulation costs $30 $150 $0
Bond**
*Legislative authority to direct Commission actions is
unclear
**Proposition 71 bond proceeds, 2004
SUPPORT : (Verified 5/13/08)
American Federation of State, County and Municipal
Employees
(AFSCME)
California Alliance for Retired Americans
California Nurses Association
Center for Genetics and Society
Foundation for Taxpayer and Consumer Rights
Gray Panthers
Greenlining Institute
Pro-Choice Alliance for Responsible Research
ARGUMENTS IN SUPPORT : The Foundation for Taxpayer and
Consumer Rights states that this measure will help ensure
that the taxpayers of California, who are paying $6 billion
for stem cell research, will have affordable access to the
fruits of the research they are funding, and will help make
CIRM and the ICOC more responsive and accountable to the
public. The California Nurses Association writes that
California residents should be the primary beneficiaries of
the research and therapies developed through the
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expenditure of state funds.
The Center for Genetics and Society adds that this bill
takes a much-needed first step to reforming the governing
structure of the CIRM, which under the current statute is
inherently conflicted. The Pro-Choice Alliance for
Responsible Research points out that at a recent ICOC
meeting, all but nine members of the board had to recuse
themselves because of conflicts of interest and believes
that structure does not serve the people of California
well.
CTW:nl 5/14/08 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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