BILL ANALYSIS Ó AB 2750 Page 1 Date of Hearing: April 19, 2016 ASSEMBLY COMMITTEE ON HEALTH Jim Wood, Chair AB 2750 Gomez - As Amended April 7, 2016 SUBJECT: Tissue banks. SUMMARY: Creates an additional exemption from tissue bank licensing requirements for the storage of human cell, tissue or cellular- or tissue-based product (HCT/P). Specifically, this bill: 1)Allows a person licensed to provide health care services, acting within the scope of his or her license and practicing in a lawful practice to store HCT/P if all of the following apply: a) The person, as defined, is a hospital, or an outpatient setting regulated by the Medical Board of California, including an ambulatory surgical center; and, b) The HCT/P being stored meets all of the following requirements: i) Was obtained from a tissue bank licensed by the state; ii) Is stored in the original unopened enclosure for one finished unit of transplantable tissue and is stored in strict accordance with the package insert and any other AB 2750 Page 2 manufacturer instruction and guidelines; iii) Is intended for the express purpose of implantation into or application on a patient; iv) Is not intended for further distribution; and, v) Is regulated by the federal Food and Drug Administration (FDA), as specified. EXISTING LAW: 1)Requires the Department of Public Health (DPH) to adopt rules and regulations, on or before July 1, 2004, governing tissue banks engaged in the collection of human musculoskeletal tissue, skin, and veins for transplantation in humans, requires the regulations to be substantially based upon criteria used by tissue bank trade associations, and requires the regulations to include minimum standards for storing and using tissue. 2)Requires every tissue bank operating in California to have a current and valid tissue bank license issued or renewed by DPH with the following exceptions: a) Licensed blood banks; b) Entities collecting, processing, storing or distributing tissue for autopsy, biopsy, training, education, or for other medical or scientific research or investigation where transplantation of the tissue is not intended; c) A licensed physician and surgeon collecting tissue from his or her patient, or the implantation of tissue into his or her patient. This exemption does not apply to any processing or storage of the tissue, except for the processing and storage of semen collected from a semen donor or obtained from a licensed tissue bank; d) The collection, processing, storage, or distribution of fetal tissue or tissue derived from a human embryo or fetus; AB 2750 Page 3 e) The collection, processing, storage or distribution by an organ procurement organization; f) The storage of prepackaged, freeze-dried bone by a general acute care hospital; g) The storage of freeze-dried bone and dermis by a licensed dentist, provided that it has been obtained from a licensed tissue bank and stored in accordance to the manufacturers' instructions and is used for the express purpose of implantation into a patient. h) The storage of a HCT/P that is either a medical device approved by the FDA, or that is a biologic product approved under the federal Public Health Service Act by a licensed physician or podiatrist. The medical device or biologic product must have been obtained from a licensed tissue bank, been stored in accordance with the device's or product's package insert and any other manufacturer instruction and be used solely for the use of direct implantation into or application on the practitioner's own patient. 3)Establishes the Medical Board of California to regulate the practice of medicine and approve accrediting agencies that accredit outpatient settings in California. FISCAL EFFECT: This bill has not been analyzed by a fiscal committee. COMMENTS: 1)PURPOSE OF THIS BILL. According to the author, DPH guidance requires that an entity that simply stores tissue without implantation or without returning the unused tissue on the same calendar day of receipt to be licensed as a tissue bank. The author states that this does not take into account advancements in technology or other FDA and American AB 2750 Page 4 Association of Tissue Bank (AATB) standards. The author states this bill addresses this by providing an exemption when products are obtained from a licensed tissue bank, are stored in accordance with FDA regulations and guidance, and intended for implantation, not for distribution. The author concludes this will reduce costs and make more tissue readily available to hospitals and ambulatory surgery centers, and ultimately patients. 2)BACKGROUND. The Center for Biologics Evaluation and Research (CBER) within the FDA regulates biological products for human use under applicable federal laws, including the Public Health Service Act and the Federal Food, Drug and Cosmetic Act. Human cells or tissue intended for implantation, transplantation, infusion, or transfer into a human recipient are regulated as HCT/P. Examples of such tissues are bone, skin, corneas, ligaments, tendons, heart valves, oocytes, and semen. CBER does not regulate the transplantation of vascularized human organs such as the kidney, liver, heart, lung, or pancreas. Federal regulations require tissue banks to screen and test donors, to prepare and follow written procedures for the prevention of the spread of communicable disease and to maintain records. Current law requires DPH to develop regulations regarding tissue banks engaged in the collection of human tissue, skin, and veins for transplantation into humans. However, according to DPH these regulations were drafted but not successfully promulgated because a subcommittee of the Clinical Laboratory Technology Advisory Committee (Committee) stated that it would take several years to develop a regulatory package of this complexity because technical and administrative changes were advancing at such a fast rate that the regulations would be out-of-date before promulgation. Instead the Committee recommended that DPH adopt into law the AATB standards and the annual updates. AB 995 (Block) of 2009, attempted to do this, but was later amended to deal with a different subject matter. To date, regulations have yet to be promulgated. AB 2750 Page 5 3)SUPPORT. MiMedx supports this bill stating, while not defined in regulations, DPH guidance requires that an entity that simply stores tissue without implantation or without returning the unused tissue on the same calendar day of receipt be licensed as a tissue bank. MiMedx notes, due to the burdens of licensure, many hospitals and ambulatory surgery centers located in California are simply opting not to obtain a tissue bank license from the state, rather they enter into agreements with tissue bank suppliers to deliver tissues via costly courier services at the beginning of the calendar day and then obtain a courier to return any unused tissue at the end of the day. MiMedx concludes such courier fees have been known to cost one California licensed tissue supplier more than $150,000 in one year and these fees are generally included in the overall cost of providing tissue, further increasing the cost of health care in California. 4)PREVIOUS LEGISLATION. a) AB 1822 (Bonta) of 2014 was substantially similar to this bill. AB 1822 was vetoed by the Governor who stated, in part, "While I support eliminating overly burdensome regulation, I'm not convinced that the bill strikes the right balance between safety and economy. I will direct the Department of Public Health to continue working with interested parties to develop an approach that balances appropriate oversight with cost savings for suppliers." b) AB 1060 (Laird), Chapter 427, Statutes of 2008, establishes an exemption from existing tissue bank licensure requirements for licensed dentists who store freeze-dried bone and dermis, under specified conditions. c) SB 1135 (Polanco and Murray), Chapter 929, Statutes of 2002, requires DPH (then Department of Health Services), on or before July 1, 2003, to adopt rules and regulations governing tissue banks, and requires the rules and regulations to be substantially the same as the standards set forth in the most recent publication of the AATB AB 2750 Page 6 Standards for Tissue Banking. 5)POLICY COMMENTS. a) Underground regulations. To date, the Legislature has granted eight separate exemptions to tissue bank licensing requirements. DPH is required to develop regulations but as yet has not done so, failing to fulfill its regulatory obligation. According to health care practitioners and facilities, the lack of regulations creates uncertainty and a greater potential for committing a violation. DPH has attempted to address their concern by publishing a Frequently Asked Questions (FAQ) document. However, to the extent that the FAQs provide regulatory guidance, it could be construed as underground regulations and should be subject to the provisions of the Administrative Procedures Act, including public review and comment. b) Veto. This bill is similar to AB 1822 which was vetoed by the Governor. The Committee may wish to ask the author how he will address the Governor's veto message. REGISTERED SUPPORT / OPPOSITION: Support MiMedx Opposition AB 2750 Page 7 None on file. Analysis Prepared by:Lara Flynn / HEALTH / (916) 319-2097