BILL ANALYSIS Ó SB 115 Page 1 Date of Hearing: July 8, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair SB 115 (Fuller) - As Amended April 20, 2015 ----------------------------------------------------------------- |Policy |Health |Vote:|19 - 0 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill appropriates $1 million from the GF to the California Department of Public Health (CDPH) for the 2015-16 fiscal year (FY), for purposes of valley fever vaccine research in accordance with current law describing the vaccine research SB 115 Page 2 program, and requires $100,000 to be allocated to DPH in the 2015-16 FY for administrative costs. FISCAL EFFECT: $1 million from the GF to CDPH for the specified purposes, $100,000 of which would be used for CDPH administrative cost. The balance would be used to contract for distribution of research grants. Current law specifies that funding is provided on the condition that, if a valley fever vaccine is developed and successfully marketed, the state shall be reimbursed for the research grants made, in proportion to the state's contribution to the research and development effort. Although it does not seem likely that a vaccine will be developed soon, if this occurred, the state could benefit financially based on this statute in proportion to its overall investment of approximately $10 million over the last two decades. COMMENTS: 1)Purpose. This bill aims to provide state funding to renew interest in finding a valley fever vaccine; previous research efforts stalled due to lack of funding. 2)Background. Research on treatment and a possible vaccine for valley fever, a respiratory disease caused by inhaling dust containing certain disease-causing fungal spores, is floundering. Valley fever is considered an orphan disease, meaning it affects fewer than 200,000 people worldwide. The spores are endemic to the southwest United States and California's southern Central Valley is particularly affected. SB 115 Page 3 The Valley Fever Vaccine Project (VFVP) was funded by the state from 1997 through 2003, and received two more years of funding state funding in 2006-07 and 2009-10. Through a combination of funds from the state, the California HealthCare Foundation (CHCF), and other donors, the VFVP funded research projects for developing and conducting trials on potential valley fever vaccines. Total funding reached about $16 million. The program has not been funded since 2009-10. 3)Prior legislation. a) AB 1955 (Ashburn) of 2002, SB 1027 (Ashburn) of 2003 and SB 492 (Ashburn) of 2005 were substantially similar to this bill. AB 1955, SB 1027 and SB 492 were held on the Assembly Appropriations Committee suspense file. b) SB 1044 (Fuller) of 2014 appropriated $1 million from the GF for FY 2014 15, for purposes of extending the VFVP. SB 1044 was referred to the Budget and Fiscal Review Committee but never acted upon. 4)Staff Comments. a) Past efforts to develop a valley fever vaccine have run into significant hurdles. Drug development is inherently risky, and it seems safe to assume vaccine development would be at least a multi-year, multimillion dollar effort. Thus, it is unclear to what extent this proposed appropriation would further the development of a vaccine in practical terms. The committee may wish to consider how this funding fits in to an overall plan to further the development of a vaccine for valley fever. At the least, the committee may wish to consider whether any funding SB 115 Page 4 offered by the state could require matching non-state public or private funds in order to gain the maximum benefit from the appropriation. b) As noted above, existing law requires if a vaccine is developed, the state to be reimbursed for the cost of grants made, in proportion to the state's contribution to the research and development effort. Given the funding has not been allocated since 2010, this requirement may be outdated and may have the potential to discourage investment in vaccine by posing a risk that the vaccine developer would have to reimburse the state, threatening any already meager profits that may be gained by producing a vaccine. In addition, it is unclear how this provision would be operationalized. The committee may wish to consider whether this provision is still appropriate given the challenging financial incentives that apply to vaccine development. Analysis Prepared by:Lisa Murawski / APPR. / (916) 319-2081