BILL ANALYSIS SENATE FOOD and AGRICULTURE COMMITTEE Senator Dean Florez, Chairman BILL NO: AB 1709 HEARING: 6/15/10 AUTHOR: Conway FISCAL: Yes VERSION: 5/5/10 CONSULTANT: John Chandler Biologics: animal blood and blood component products: commercial blood banks for animals. BACKGROUND AND EXISTING LAW California Department of Food and Agriculture (CDFA) Veterinary Biologics Program (biologics program) was established in 1974 as a result of the 1971-72 Exotic Newcastle Disease outbreak in Southern California. The program was modeled after the United States Department of Agriculture's (USDA) Center for Veterinary Biologics Program. The program licensed biologics products used in California and ensured that all available veterinary biologics were safe, pure, potent, and efficacious. CDFA has one veterinarian and $120,000 of General Fund dedicated primarily to the biologics program. Biologic products are medications that activate an animal's immune system response to fight off a disease. Current law defines biologics as: "the following products which are used for the diagnosis and detection of and for the prevention or treatment of, disease in animals other than man: serum, blood, vaccines, live vaccines, killed vaccine, tissue vaccine, autogenous vaccine, live virus, killed virus, live bacterial culture, killed bacterial culture, bacterin, hormone, tissue extract, gland extract, gland preparation, insulin, and similar products made from human or animal tissues or microorganisms. In 1985, the federal government amended the Virus-Serum-Toxin Act authorizing USDA to regulate intrastate, as well as interstate, movement of biological products and broadened their authority to issue regulations. Regulations were implemented for an exemption from the federal licensure for products produced under an approved state program for exclusive use in the state. California obtained USDA approval for this exemption and is the only state currently holding this exemption for a state biologics program. Currently, there are three licensed biologic companies in California that are also licensed under USDA's Center for Veterinary Biologics Program. There are 10 biologic products AB 1709 - Page 2 that are licensed for use in California and could be approved for use by USDA under conditional restricted use in order for their continued use within California. SB 1342 (Kuehl), Chapter 822, Statutes of 2002, established additional protocols for commercial blood banks for animals that are licensed by the CDFA. PROPOSED LAW AB 1709 deletes the current veterinary biologics licensing law and replaces it with licensing requirements for animal blood banks. Specifically, this bill: Replaces the existing state veterinary biologics licensing program with licensing requirements for businesses handling animal blood and blood products. Prohibits a person from engaging in the production of biologics unless they have a valid permit or license from the United States Department of Agriculture (USDA). Requires the CDFA to submit to the Legislature by June 1, 2011, a report on the status of the transition of biologics licenses to the federal government. In addition, requires CDFA to report annually on the transition until all state licensed biologics businesses have transitioned to the federal license. States that this act will not become operative until all California registered biologics businesses as of December 31, 2010, obtain a conditional United States Veterinary Biological Product License from USDA. COMMENTS 1.CDFA is sponsoring AB 1709 to eliminate the current state biologics program without impacting the program for commercial blood banks for animals and transition California to the federal biologics program to address funding shortfalls in the current state program. Based on a recent USDA audit of the California biologics program, it is estimated that the cost to maintain a federally compliant program would be approximately $428,000 and three personnel years, further training or AB 1709 - Page 3 special recruitment at higher salaries than are currently allowable, and contracting with a private laboratory for regulatory testing of products. Without sufficient funding or AB 1709 CDFA would not be able to maintain sufficient oversight which could result in a potentially disruptive action by USDA to disallow the California exemption to the federal biologics program. 2.AB 1709 would maintain the requirements for licensing commercial blood banks for animals under the state program. One of the requirements for a licensed establishment is to produce animal blood and blood component products under the direct supervision of a qualified person in the field. There does not seen to be any clear definition of a qualified person or how a person would be deemed qualified in the field. The committee may wish to consider further explanation of a "person qualified in the field". 3.AB 1709 would maintain the state required registration for blood or blood component products that meet specified requirements. The first requirement is that the blood or blood component products are produced under "acceptable procedures." The committee may wish to consider if the bill should further define "acceptable procedures." PRIOR ACTIONS Assembly Floor 72-0 Assembly Appropriations16-0 Assembly Agriculture 8-0 SUPPORT Animal Blood Bank California Department of Food and Agriculture California Veterinary Medical Association OPPOSITION None received AB 1709 - Page 4