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