BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session AB 1668 (Calderon) - Investigational drugs, biological products, and devices ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: March 7, 2016 |Policy Vote: HEALTH 9 - 0, B., | | | P. & E.D. 9 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: August 1, 2016 |Consultant: Brendan McCarthy | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. Bill Summary: AB 1668 would authorize the manufacturer of an investigational drug to make an investigational drug available to a patient, under certain circumstances. Fiscal Impact: One-time costs of $20,000 and ongoing costs of $10,000 per year to review plan filings by the Department of Insurance (Insurance Fund). One-time costs of $380,000 in 2015-16 to respond to requests for information about prior independent medical review decisions and ongoing costs of $210,000 per year to respond to consumer complaints and requests for independent medical review for access to investigational drugs by the Department of Managed Health Care (Managed Care Fund). AB 1668 (Calderon) Page 1 of ? Uncertain impact on state-funded CalPERS health care coverage (General Fund and special funds). (See below.) Background: Under federal law and regulation, drug manufacturers must apply to the federal Food and Drug Administration for permission to market drugs. The application process includes a series of clinical trials to demonstrate the safety and effectiveness of new drugs. The clinical trial process includes a variety of requirements regarding informed consent for participants and reporting requirements on manufacturers. Current federal law also includes a process whereby seriously ill patients can access investigational drugs before they have been approved for general use and without the patient needing to be a participant in a clinical trial. In recent years, concerns have been raised that the process for approving such requests is slow and cumbersome for physicians, discouraging them from seeking such access for their seriously ill patients. However, in June 2016 the Food and Drug Administration revised the process for physicians to apply to provide an investigational drug to a seriously ill patient who is not participating in a clinical trial. According to the Food and Drug Administration, the revised application process should take much less time for a physician to complete than the prior application process. Current state law generally prohibits the sale or giving away of new drugs unless the new drug has been approved by the state Department of Public Health or the drug has been approved for use by the federal Food and Drug Administration (including premarket approval). State law authorizes the experimental use of drugs and requires certain patient protections, such as oversight by a review committee and informed consent for the patient. Current state law authorizes patients to seek an independent medical review when a health plan or health insurer denies coverage for an experimental or investigational drug when the patient has a life-threatening or seriously debilitating condition, the patient's physician indicates that standard therapies have not been effective, and the patient's physician has recommended an experimental or investigational drug. If the independent medical review finds that the required conditions are met, the health plan or health insurer is required to provide coverage for the experimental or investigational drug. AB 1668 (Calderon) Page 2 of ? Statute governing the state's Medi-Cal program generally limits the coverage for experimental drugs and prohibits coverage of experimental drugs if the experimental drug costs more than conventional therapies. Proposed Law: AB 1668 would authorize the manufacturer of an investigational drug to make an investigational drug available to a patient, under certain circumstances. Specific provisions of the bill would: Authorize a manufacturer of an investigational drug, biological product, or device to make such product available to an eligible patient; Authorize a manufacturer to make an investigational product available to a patient without compensation or to require the patient to pay the costs of manufacturing the product; Specify that the bill does not require a health plan or state agency to provide coverage for the costs of an investigational product; Authorize a health plan to provide coverage for an investigational product; Prohibit a state regulatory board from taking disciplinary action against a physician based on the physician's recommendation that a patient use an investigational product; Prohibit a state agency from taking regulatory action against a health facility based on a facility's participation in treatment using an investigational product; Require a participating physician's institutional review board or an accredited institutional review board to provide information to the Department of Public Health, the Medical Board, and the Osteopathic Medical Board on the use of investigational drugs under the bill. Related Legislation: AB 159 (Calderon, 2015) was virtually identical to this bill. AB 1668 (Calderon) Page 3 of ? That bill was vetoed by Governor Brown. SB 149 (Stone, 2015) was substantially similar to this bill. That bill was held on the Assembly Appropriations Committee's Suspense File. SB 715 (Anderson, 2015) was substantially similar to this bill. That bill was not heard in a policy committee. Staff Comments: The bill would authorize a manufacturer to make investigational drugs available to patients under limited circumstances. The bill itself does not require a patient's health plan to provide coverage for the cost of the investigational drug. However, state law requires health plans to provide coverage for investigational drugs under certain circumstances. If a health plan denies coverage for an investigational drug, an enrollee can request an independent medical review of that decision. Based on the independent medical review, a health plan may be required to provide coverage for an investigational drug. It is possible that patients could use the independent medical review process to access coverage for investigational drugs provided by manufacturers under this bill. To the extent that patients enrolled in coverage provided by CalPERS do so, there could be additional costs to the state and/or local governments. -- END --