Drug Marketing and Chemical Regulation Measures Awaiting Assembly Action
As the May 30 deadline for legislative proposals to pass out of their house of origin approaches, CHI is closely following the progress of two bills.  AB 2690, authored by Assemblyman Paul Krekorian (D-Burbank), has passed out of the Judiciary Committee and is currently awaiting discussion on the Assembly floor.  The legislation would declare that if a product is advertised directly to consumers, a manufacturer of a prescription pharmaceutical product shall not be relieved of a duty to warn consumers of the risks and side effects of that product solely because the product was prescribed by a physician.  CHI continues to actively oppose this legislation, highlighting the importance of protecting a patient's ability to rely on their physician's judgment when choosing an appropriate course of therapy.  The bill, by removing the judicial “learned intermediary” doctrine, would shift the burden to patients, who would have to review complex, highly technical warnings from manufacturers on the risk of their medications.

AB 1879, authored by Assemblyman Mike Feuer (D-Los Angeles), is currently being held in the Appropriations Committee and could see action next week.  The legislation would authorize the Department of Toxic Substances Control (DTSC) to regulate or restrict the sale of products containing or manufactured with specified chemicals as outlined in the bill.  CHI opposes this legislation because of the work currently being done at the DTSC on its “Green Chemistry Initiative,” and believes it is premature to advance statutory changes in this arena before the process concludes.  CHI is also concerned about the effect such restrictions would have on patient access due to the stringent and lengthy product approval process that the biomedical industry must adhere to.  For more information on these or other legislative proposals, contact Sandra Pizarro, CHI vice-president of state government affairs (916-233-3497 or pizarro@chi.org).

Governor Releases Revised Budget Proposal
In his latest budget proposal, Gov. Schwarzenegger will rely once again on California voters.  Central to his revision is a plan to expand the California Lottery and borrow against future profits to help plug a $15.2 billion hole in the state budget.  Should voters choose not to accept his lottery concept on a November ballot measure the state will raise the sales tax by one-cent.  The governor also wants to include a “budget stabilization” measure on the ballot that would give future governors expanded powers to cut programs when faced with budget gaps and create a rainy-day fund to hold money from more steady years for use in challenging budget cycles.  In order to close the deficit, Schwarzenegger maintained most of his 10 percent across the board cuts that he outlined in January.  However, after significant pressure, he backed off deep cuts to schools, abandoned plans to release nonviolent prisoners, and discarded a proposal to shut numerous state parks.  Of specific interest to the biomedical community:

• Healthcare – The budget would reduce health and human services by $3.4 billion, including a $1.1 billion cut to Medi-Cal.  As part of this, doctors and hospitals would be subject to substantial cuts in reimbursement rates, forcing them into difficult decisions about whom to treat and what products to administer.
• K through 12 education – By backing off his original intentions, the guaranteed funding for schools under Prop. 98 would remain intact but would be insufficient to make up the current $4 billion shortfall.  Although fewer teachers would lose their jobs, schools and programs would still be subject to substantial cuts.  The proposal would also give districts added flexibility in managing their own budgets, giving them access to funds currently locked up in mandated reserves.
• Higher education – The budget would restore $98 million each to the University of California and California State University that was originally outlined in the January budget.  However, the funding compacts that were signed with the universities in 2005 would not be upheld, resulting in a $332 million loss for the UC and a $313 million loss for CSU.  This week both systems announced they would be raising tuition – UC by 10 percent and CSU by 7.4 percent.  Community colleges would see a $236 million increase this year.

Members from both legislative parties reacted strongly to the proposal.  Democrats accused the governor of relying on false hopes of lottery profits and chastised him for cutting social services to balance the budget.  Republicans assailed the plan for borrowing money and said his sales-tax proposal, even as a contingency, is dead on arrival.

State Makes History as New Assembly Speaker Takes Office
On Tuesday, May 13, Assemblywoman Karen Bass (D-Los Angeles) became the first African American woman in the nation’s history to lead a legislative house when she was sworn in as the new Assembly Speaker.  Bass took the oath of office from outgoing Speaker Fabian Núñez  (D-Los Angeles) in a 90-minute ceremony attended by scores of politicians and spectators.  Bass will be thrown into what is expected to be a bitter budget battle, which began with the release of the governor’s revised budget proposal on Wednesday.  In her acceptance speech, Bass referred to the state as a massive but ailing economic giant and called on legislators to dispel partisanship in order to address the current economic crisis.  Bass also announced her intention to create a bipartisan commission to evaluate whether the state’s tax system, created in the 1930s, needs restructuring.