BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 2750| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 2750 Author: Gomez (D) Amended: 6/13/16 in Senate Vote: 21 SENATE HEALTH COMMITTEE: 7-0, 6/8/16 AYES: Hernandez, Nguyen, Mitchell, Monning, Nielsen, Pan, Roth NO VOTE RECORDED: Hall, Wolk SENATE APPROPRIATIONS COMMITTEE: 6-0, 6/27/16 AYES: Bates, Beall, Hill, McGuire, Mendoza, Nielsen NO VOTE RECORDED: Lara ASSEMBLY FLOOR: 78-0, 5/12/16 (Consent) - See last page for vote SUBJECT: Tissue banks SOURCE: Author DIGEST: This bill exempts from tissue bank licensure the storage of allograft tissue by a person, as defined, if specified criteria are met. ANALYSIS: Existing law: 1)Requires every tissue bank operating in California to have a current and valid tissue bank license issued or renewed by the Department of Public Health (DPH) with the following exceptions: AB 2750 Page 2 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; 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 manufacturer's instructions and is used for the express purpose of implantation into a patient; and, h) The storage of a human cell, tissue, or cellular- or tissue-based product that is either a medical device approved by the federal Food and Drug Administration (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. 2)Defines "tissue" as a human cell, group of cells, including the cornea, sclera, or vitreous humor and other segments of, or the whole eye, bones, skin, arteries, sperm, blood, other fluids, and any other portion of a human body, but does not include an organ when recovered for transplantation or research purposes. 3)Defines "person" as an individual, corporation, business AB 2750 Page 3 trust, estate trust, partnership, association, state or local government, or subdivision or agency thereof, or any other legal entity. 4)Requires the 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. Requires DPH, on or before July 1, 2003, to report to the appropriate policy and fiscal committees of the Legislature regarding the status of the proposed regulations. This bill exempts from tissue bank licensure the storage of allograft tissue by a person, as defined in 3) of existing law above, if all of the following apply: 1)The person is a hospital or an outpatient setting regulated by the Medical Board of California, including an ambulatory surgical center; 2)The person maintains a log that includes the date on which the allograft tissue was received, the expiration date of the allograft tissue, the date on which each allograft tissue is used for clinical purposes, and the disposition of any allograft tissue samples that remain unused at the time the allograft tissue expires; and, 3)The allograft tissue meets all of the following: a) Was obtained from a tissue bank licensed by the state; b) Is individually boxed and labeled with a unique identification number and expiration date so that opening the shipping container will not disturb or otherwise alter any of the allograft tissue that is not being utilized; c) Is intended for the express purpose of implantation into or application on a patient; d) Is not intended for further distribution; and, e) Is registered with the FDA and designated to be maintained at ambient room temperature requiring no refrigeration. AB 2750 Page 4 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 Food, Drug, and Cosmetic Act. Human cells or tissue intended for implantation, transplantation, infusion, or transfer into a human recipient are regulated as human cell, tissue, and cellular- and tissue-based product. Examples of such tissue 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. In California, tissue banks are licensed by DPH for an annual license fee of $975. Comments 1)Author's statement. According to the author, due to the burdens of licensure, many hospitals and ambulatory surgical centers located in California are simply opting not to obtain a tissue bank license from the state. Rather, they make daily deliveries of the specified tissue grafts at the beginning of the calendar day, and then use a courier to return any unused tissue grafts at the end of the day. Courier fees have been known to cost one California licensed tissue supplier over $150,000 in one year. These fees are generally included in the overall cost of providing tissue grafts in California, further increasing the cost of health care. AB 2750 is intended to help mitigate courier costs by enabling hospitals and ambulatory surgery centers to store certain tissue products under certain protocols, without having a tissue bank license. 2)DPH regulations. Current law requires DPH to develop regulations regarding tissue banks engaged in the collection of human tissue, skin, and veins for transplantation into humans. According to DPH, regulations were drafted in 1998 but were not successfully promulgated because a subcommittee of the Clinical Laboratory Technology Advisory Committee (CLTAC) stated that it would take several years to develop a regulatory package of this complexity. CLTAC stated that AB 2750 Page 5 technical and administrative changes were advancing at such a rate that the regulations would be out of date before being promulgated. Instead, it was recommended that, by reference, the American Association of Tissue Bank (AATB) standards and the annual updates be adopted into law. To date, regulations have yet to be promulgated. DPH instead has developed a frequently asked questions (FAQ) document to provide guidance to entities as to whether or not they need to apply for a tissue bank license. The FAQ states that entities will need to apply for a tissue bank license if they perform any or all of four functions: collection, processing, storage, or distribution of human tissue for purposes of transplantation. The FAQ further states that a facility needs a tissue bank license whenever the facility stores any material without using it or does not return unused tissue on the same calendar day. AB 1822 (Bonta, of 2014), which was substantially similar to this bill, was vetoed by Governor Brown. Subsequently, DPH issued a document, "Important Notice Regarding Storage of Allograft Tissue," in which it announced that the FAQ was updated to state that a facility does not need a tissue bank license if it orders a frozen or cryopreserved allograft for a specific patient and holds it in the unopened, validated, temperature-controlled shipping container for no longer than the validation expiration date and time specified by the shipper before implanting, returning, or discarding the tissue. The updated FAQ does not allow for the temporary storage of room temperature allografts that do not require refrigeration. The FAQ also states that DPH's Tissue Bank Program of Laboratory Field Services is in the process of formulating regulations to interpret and clarify tissue bank statutes. However, no expected date for when the regulations would be promulgated is provided. Related/Prior Legislation AB 1822 (Bonta, 2014) was substantially similar to this bill. AB 1822 was vetoed by Governor Brown 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 DPH to continue working with interested parties to develop an approach that balances AB 2750 Page 6 appropriate oversight with cost savings for suppliers." AB 995 (Block, Chapter 497, Statutes of 2009) provided an exemption from tissue bank licensure for medical devices approved pursuant to Section 510 or 515 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. Sec. 360, 360e) or that is a biologic product approved under Section 351 of the federal Public Health Service Act (42 U.S.C. Sec. 262) by a licensed physician or podiatrist acting within the scope and authority of his or her license and practicing in a lawful practice setting. AB 1060 (Laird, Chapter 427, Statutes of 2008) established an exemption from existing tissue bank licensure requirements for licensed dentists who store freeze-dried bone and dermis, under specified conditions. SB 1135 (Polanco, Chapter 929, Statutes of 2002) required DPH, on or before July 1, 2004, 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 Standards for Tissue Banking. Required DPH, on or before July 1, 2003, to report to the appropriate policy and fiscal committees of the Legislature regarding the status of the proposed regulations. AB 2209 (Speier, Chapter 801, Statutes of 1991) required tissue banks to be licensed by the Department of Health Services (now DPH) with certain exceptions. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to the Senate Appropriations Committee, ongoing reduction in licensing workload and fee revenues, likely less than $100,000 per year (Tissue Bank License Fund). Currently, there are about 270 hospitals and ambulatory surgical centers that are licensed as tissue banks. Under the bill, some portion of those facilities could surrender their tissue bank license, to the extent that such entities have a tissue bank license only due to their storage of allograft tissue that meets the exemption requirement in the bill. The share of hospitals or ambulatory surgical centers that only have a tissue bank license due to their storage of such tissue is unknown. Because the AB 2750 Page 7 exemption provided for in this bill is only for tissue that is designated for storage at ambient room temperature, there are likely to be a significant number of hospitals and ambulatory surgical centers that will still need to maintain their tissue bank license, in order to continue to store other tissues. For example, if 40% of such facilities surrendered their license, the reduction in licensing workload and fee revenue would be about $100,000 per year. SUPPORT: (Verified6/28/16) MiMedx OPPOSITION: (Verified 6/28/16) None received ARGUMENTS IN SUPPORT: MiMedx states that Governor Brown, when vetoing AB 1822, directed DPH to work with tissue providers on new guidance to strike a balance between appropriate oversight and cost savings for suppliers. MiMedx states that DPH's FAQ still requires that each tissue sample be shipped individually, which is wasteful and unnecessary, especially when one considers that many of the products are approved to be stored at ambient temperatures for extended periods of time. MiMedx argues that this bill mitigates the need for additional oversight and reduces costs, and, as a result, will make more tissue readily available to hospitals and ambulatory surgery centers, and ultimately patients. ASSEMBLY FLOOR: 78-0, 5/12/16 AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, AB 2750 Page 8 Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon NO VOTE RECORDED: Burke, Jones-Sawyer Prepared by:Reyes Diaz / HEALTH / (916) 651-4111 6/30/16 9:04:15 **** END ****