039-2006 SB 401 Impacting Prop 71 Stem Cell Research Passes Assembly Committee

CDCAN
CALIFORNIA DISABILITY COMMUNITY ACTION NETWORK
DISABILITY RIGHTS NEWS REPORT
#039-2006 April 19, 2006 Wednesday
Advocacy Without Borders:
Connecting people with disabilities & seniors to rights and unified action
1225 8th Street Suite 480 - Sacramento, CA 95814 916/446-0013 Fax: 916/446-0026
Marty Omoto - director email: martyomoto@rcip.com    website: www.cdcan.us

California Legislature
* Stem Cell Bill (SB 401) Passes Assembly Health Committee
* Sen. Ortiz Says Bill Is Necessary To Keep Promise Made to Voters
* Some Advocates Oppose Bill As "Harmful Delay" In Implementing Prop 71

SACRAMENTO - Legislation that would place on the election ballot in November changes to how Proposition 71, the California Stem Cell Research and Cures Act is implemented, passed the Assembly Health Committee Wednesday (April 18). SB 401, authored by Sen. Deborah Ortiz (D-Sacramento) and Sen. George Runner (R-Lancaster) now heads to the Assembly Judiciary Committee, and if approved there, to the Assembly Appropriations Committee, and then to the Assembly floor for a vote by the full Assembly. Voters approved the historic landmark constitutional amendment and statute in November 2004 by a landslide vote of 59% (7,018,059) to 41% (4,867,090).

The Assembly Health Committee passed SB 401 with amendments or changes to the bill that included a section on how the bill would be placed on the November 2006 election ballot, and some other minor (or technical) changes. SB 401 would make changes to the part of Proposition 71 that is in State law (statute), and not to the provisions about stem cell research in the State Constitution under Article 35.

The legislation and Proposition 71 is of interest to many disability and senior advocates who look to stem cell research funding and implementation as a major step toward finding possible cures for many health conditions and injuries, including those that cause major disabilities. The issue has also drawn some controversy because of the opposition of many "right to life" groups and individuals who oppose use of stem cells for research. Newspaper reports over the past year have raised and reported concerns about Proposition 71 implementation.

Ortiz Says Bill Is Necessary To Keep Promise Made To People Voting for Prop 71
* Sen. Ortiz , who also chairs the Senate Health Committee, said she is authoring SB 401 to address what she viewed as gaps in the drafting and implementation of Proposition 71.
* She said that voters passed Proposition 71 with the hopes for cures and better medical treatments for dozens of chronic and debilitating diseases and conditions. Ortiz however maintains that despite the promise and intent of Proposition 71, it does not contain the safeguards to ensure that funding decisions are open and public and not influenced by conflicts of interest.
* While agreeing that the agencies overseeing implementation of Proposition 71 - the California Institute for Regenerative Medicine and the Independent Citizen's Oversight Committee have taken steps to address some of the problems, Ortiz feels that gaps in "public accountability" remain and that solutions to these issues need to be put into state law.
* Ortiz cites the support of several major California newspapers and also individual activists and advocates.
* Ortiz has another bill, a constitutional amendment, SCA 13, pending on the Senate floor, currently "inactive". SCA 13, titled "Biomedical Research" would add, or change or modify the provisions of Proposition 71 in the State Constitution, relating to reporting of economic interests, conflicts of interests, open meetings and public record laws.   The measure has not yet been heard or voted on in the Assembly. Like SB 401, SCA 13 is co-authored by a mix of conservative Republicans (Sens. Runner, Cox and Dutton and Assemblymembers Benoit, Garcia) and liberal Democrats (Assemblymember Jones, Laird, Leno and Yee)
* Sen. Ortiz over the past several years has authored several bills, several enacted into law, related to the issue of stem cells and research including a bill last year, SB 18 that was vetoed by the Governor. SB 18 was passed by the Legislature in 2005 and would have required the State Auditor to conduct a performance audit of the California Institute for Regenerative Medicine and the Independent Citizen's Oversight Committee. The bill was vetoed by Gov. Arnold Schwarzenegger, who said that it was in direct conflict with Proposition 71 as approved by voters.

Some Advocates Oppose SB 401 - Raise Concerns That It Will Delay Implementation
* Some disability and other advocates raised concerns and opposition to the measure saying that changes to the landmark proposition would cause "harmful delay" to people and their families who believe that stem cell research may provide their only hope for a cure to certain injuries, and disabling conditions.
* They worry that returning the issue to the ballot for yet another vote puts a further cost burden on the taxpayers on a issue which voters already approved overwhelmingly. Some rasied concerns about opponents of stem cell research who may be backing SB 401 to stall implementation of Proposition 71.
* One parent activist, Nicki Pecchenino, who strongly opposes SB 401, wrote to the committee that "I am the mother of a child with autism. There is no cure. There is no hope, unless stem cell research is allowed to move forward as outlined in Proposition 71...further delay to research may mean countless, unnecessary deaths and crushing financial pressures on families, the state, and our economy...It is frustrating enough to know that litigation has prevented vital research from moving forward...as the public expected when they entered the voting booth. "
* The measure is opposed by the California Healthcare Institute and the California Institute for Regenerative Medicine who said the bill is "premature and unnecessary" because many of the issues, they say regarding open meetings, conflicts of interest have been addressed.
* They claimed that if implemented, the bill may discourage industry participation because language directed towards increasing the share of revenues to be allocated to the state from Prop. 71's future successes may have the effect of discouraging applications for research grants.
* They also say that participation by important research groups and entities could be impacted by tying what they can charge for their costs, should a product (drugs, therapies, etc) be developed, to federal Medicaid pricing levels.

What SB 401 Proposes To Do
* The bill, if approved by the Legislature and signed by the Governor, would place on the ballot in November 2006, proposed changes in existing State law relating to Proposition 71 - though not changes to the State Constitution. Any change to Proposition 71 however requires approval of California voters.
* The bill changes or modifies provisions in specific state laws passed as part of Proposition 71 that deal with public hearings , public records, and conflict of interest regarding members of the Independent Citizen's Oversight Committee, the Citizen's Financial Accountability Oversight Committee, and the advisory and working groups established in the original initiative to assist these committees.
* Establishes minimum licensing standards for intellectual property (property that deals with creation of a product or work, such as creation of a an research report, etc) for research and facilities grants and loans.
* Requires that a therapy or other product developed by a commercial entity using Proposition 71 funds must be sold at a cost not to exceed the federal Medicaid price. The Federal Medicaid Drug Rebate law requires that all pharmaceutical (drug) manufacturers that supply products to Medicaid (Medi-Cal) recipients provide the Medicaid programs the benefit of the" best price" available for that product. Sen. Ortiz previously said that it was her intent to define federal Medicaid price as the Medicaid "net manufacturer price" which is on average 51% of Average Manufacturer price

What Proposition 71 Does
* Established the "California Institute for Regenerative Medicine" to regulate stem cell research and provide funding, through grants and loans, for such research and research facilities.
* Put into the State Constitution, the constitutional right to conduct stem cell research; but prohibits Institute's funding of human reproductive cloning research.
* Established the Independent Citizen's Oversight Committee, with 29 appointed members, to govern the Institute.
* Provided for State General Fund loan up to $3 million for Institute's initial administration and implementation costs.
* Authorizes issuance of general obligation bonds to finance Institute activities up to $3 billion subject to annual limit of $350 million.
* Appropriates money from the State General Fund to pay for bonds.
* Gives priority for research grant funding to stem cell research that meets the California Institute for Regenerative Medicine criteria and is unlikely to receive federal funding, though in certain instances the criteria can be waived.
* Sets aside up to 10% of Proposition 71 funds available for grants and loans to be made available to develop scientific and medical research facilities for nonprofit groups within the first five years of the implementation of the measure.
* Legislative Informational Hearings - On March and October 2005, the Senate Health Subcommittee on Stem Cell Research, the Senate Health Committee, the Assembly Health Committee and Assembly Judiciary Committee held joint informational hearings on the implementation of Proposition 71, that the issue of open meeting laws, conflict of interests, oversight of the California Institute for Regenerative Medicine, medical and ethical standards relating to Proposition 71, and the issue of who owns the research and any cures discovered (intellectual property).
* Grants Awarded - On April 10, 2006, California Institute for Regenerative Medicine awarded $12.1 million to 16 California non-profit institutions to train stem cell researchers. The grants will fund 169 research fellowships.
* Legal Action - After passage of Proposition 71, two lawsuits, filed by the California for Public Accountability and Ethical Science, People's Advocate and National Tax Limitation Foundation, were brought before the California Superior Court in Alameda County that claimed the initiative violates existing conflict of interest laws and lacks adequate state oversight.

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CDCAN Capitol News Reports and Alerts
These CDCAN Reports are partially funded by a small grant from the USC UCEDD, Grant #90DD0540 from the Administration on Developmental Disabilities. The opinions expressed or content in these reports do not necessarily reflect the views or opinions of the USC UCEDD.
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