BILL ANALYSIS
SB 1565
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Date of Hearing: July 16, 2007
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mark Leno, Chair
SB 1565 (Kuehl) - As Amended: July 14, 2008
Policy Committee: Health
Vote: 16-0
Judiciary 10-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill modifies several provisions of Proposition 71, which
created the California Institute for Regenerative Medicine
(CIRM) to provide funding for stem cell research. Specifically,
this bill:
1)Codifies proposed CIRM regulations to add to intellectual
property (IP) standards requiring grantees to submit plans to
provide low-income Californians access to drugs that are
entirely or partly a result of CIRM-supported research.
2)Requires grantees subject to #1, above, to provide drugs to
publicly funded programs in California at one of three
benchmark prices in the California Discount Drug Prescription
Program. Authorizes CIRM to waive this pricing requirement
under specified circumstances, including when a drug is
related to rare diseases recognized by the federal Food and
Drug Administration (FDA).
3)Reduces the vote threshold for funding of research proposals
supported by federal funding (generally non-embryonic-related
projects) from 2/3 to a simple majority vote.
4)Requests the Little Hoover Commission to evaluate the
governance structure of CIRM.
FISCAL EFFECT
1)No direct public fiscal impact to codify pending CIRM
regulations.
2)No direct fiscal impact to the Little Hoover Commission, as
SB 1565
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this bill is permissive with respect to the Commission. The
Commission will vote on whether this request will be filled
within the current budget provided to the Commission.
COMMENTS
1)Rationale . This bill codifies IP regulations that have been
proposed with respect to making sure publicly funded programs
serving low-income Californians are able to access medications
that may be discovered through CIRM-supported research. Recent
amendments further clarify these pricing provisions. The
California Discount Drug Program was created by AB 2911
(Nunez), Chapter 619, Statutes of 2006. In addition, this bill
reduces a voting threshold from 2/3 to a simple majority for
proposals that qualify for federal funding.
2)Proposition 71 was approved by voters in November 2004 to
authorize the state to sell $3 billion in general obligation
bonds to provide funding for stem cell research in California.
The issue was put before the voters to address federal
restrictions on the use of human embryonic stem cells. CIRM,
which is governed by the Independent Citizen's Oversight
Committee (ICOC), is required to award grants and loans and to
adopt governance, scientific, medical and regulatory standards
in public meetings. Proposition 71 requires the ICOC to
establish standards for IP agreements that balance public
benefit with the assurance that medical research and private
investment is not hindered by IP agreements.
3)Federal Funding Issues . Current federal funding for human
embryonic stem cell research is restricted to research
involving stem cell lines created prior to 2001. Part of the
genesis and voter support of Proposition 71 was for California
to establish a high priority for embryonic stem cell research
that otherwise fails to garner federal funding.
The current and higher CIRM voting threshold of 2/3 for
federally supported projects ensures that the emphasis remains
on embryonic-related projects, which many believe hold greater
immediate scientific promise. This bill changes the two-thirds
voting threshold to a simple majority. The author indicates
the change in the voting requirement is intended to make
certain the most promising research is funded, regardless of
whether embryonic or non-embryonic stem cells are used.
According to CIRM, the current two-thirds threshold has not
prevented it from funding a research proposal to date.
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4)Concerns from Health Consumers and Scientific Community . A
number of consumer and scientific groups have expressed
concerns about the IP and voting provisions of this bill. The
University of California indicates that codification of
proposed IP regulations is premature and the bill requires IP
strategies to be implemented that have not been tested on the
state or national level. Premature action in this area, as
well as proposed pricing changes that would result may risk
reducing industry participation. The Californians for Cures,
a public policy group supporting cutting-edge research in this
area, is concerned about the change in the voting threshold.
The group indicates the change defies the will of the voters
who created Proposition 71.
Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081