CHI’s Opposition Helps Stall Product Liability Measure
Significant opposition by CHI and other members of California’s biopharmaceutical community resulted in AB 2690, authored by Assemblyman Paul Krekorian (D-Burbank), dying on the Assembly Floor yesterday.  The legislation would have declared that a manufacturer of a prescription pharmaceutical product 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, if that product is advertised directly to consumers.  CHI raised significant concerns with the legislation, highlighting the doctor-patient relationship and the belief that patients should rely on their physicians’ judgment in choosing an appropriate course of therapy.  Without the judicial “learned intermediary” doctrine, which would have been removed under the bill, patients would have to review complex, highly technical warnings from manufacturers who would be required to communicate with patients directly on the risk of using their products.

Biomedical Industry Removed from Requirements of Chemical Bill
AB 1879, authored by Assemblyman Mike Feuer (D-Los Angeles), passed out of the Assembly yesterday after the author agreed to an amendment that would remove the biopharmaceutical, medical device and diagnostics industries from the requirements of the bill.  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.  CHI actively pursued this amendment strategy with the author and his staff because of the effect that such restrictions would have had on patient access.  Because of the unique product approval model that the biomedical industry must adhere to at the U.S. Food and Drug Administration (FDA), manufacturers are unable to alter chemicals used in their products or processes without a costly and timely re-evaluation.  CHI removed opposition following agreement with the author that an additional amendment will be included when the bill moves to the Senate to include packaging materials in the carve-out.

Electronic Pedigree Measure Passes in Senate Despite Lawmakers Concerns
Legislation that would make modifications to the state’s existing electronic pedigree law, SB 1307, authored by Senator Mark Ridley-Thomas (D-Los Angeles), was approved by the Senate on a 21-14 vote.  The bill was recently amended to remove the California Board of Pharmacy’s authority to extend the compliance date, replacing that with a model requiring manufacturers to utilize a phase-in approach based on a percentage of the total drugs they manufacturer.  At the floor vote, several Senators abstained from the vote after expressing concern to the bill’s author that he had not met his commitment to Senator Gil Cedillo (D-Los Angeles), who had a competing electronic pedigree measure, to work together on language.  As the legislation now moves to the Assembly, CHI will continue discussions with appropriate stakeholders and public officials to ensure that the industry’s concerns are addressed.

Legislative Analyst Questions Governor’s Revised Budget; Tax Reform Discussions Gaining Traction
In response to the governor’s revised budget, Legislative Analyst Elizabeth Hill outlined her concerns on Monday, May 19.  Hill believes that the governor used overly optimistic assumptions about the potential growth in lottery sales in his proposal, a move that could end up shortchanging the public education system by billions of dollars.  The analyst put forth a more modest scheme to raise $5.6 billion, instead of $15.2 billion, by borrowing against the lottery.  In addition to the lottery, Hill also questioned the logic of Schwarzenegger’s plans for a “rainy-day” account and remained critical of the 10 percent across-the-board cuts.  Hill remains committed to her proposal released after the governor’s initial budget, consisting of program cuts and revenue increases to alleviate the state’s financial woes.

As discussions continue on how best to attack the state’s budget crisis, one overarching theme is beginning to percolate among California’s politicians and civic leadership—the state’s outdated and convoluted tax system is a major contributor to the current crisis.  During economic surplus, the system generates too much money that entices politicians to overspend.  However, in a mild economic downturn revenues drop sharply creating chronic deficits.  Both the governor and Assembly Speaker Karen Bass (D-Los Angeles) have announced they want to form a bipartisan commission tasked with creating a modernized system that better serves the needs of 21st century California.  Even though tax reform has garnered increased attention, history has shown little progress due to fundamental disagreements on what is meant by reform.  Despite being heavily invested in California’s vibrant and innovative life sciences community, many of CHI’s members face difficult growth and expansion decisions as other states and countries offer more enticing corporate tax options.

Public Policy Poll Highlights Public Concerns on Budget
In a recent poll released on Thursday, May 22, by the Public Policy Institute of California, 67 percent of Californians believe that the current budget situation is a big problem, 83 percent believe the governor cannot be trusted to make the tough choices needed, and 65 percent feel the state is heading in the wrong direction.  Residents are deeply divided about whether they would rather pay higher taxes and get more services or pay lower taxes and receive fewer services.  Despite the split over the prospect of raising taxes, Californians are overwhelmingly concerned that policy makers have not put forth a compelling argument for a tax increase due to their inability to properly manage the state’s money.  The public is very favorable toward raising taxes on corporations and the rich, numbers that decrease sharply when the burden would be shifted to lower or middle class residents.  Nearly 80 percent of respondents are concerned with spending cuts to health and human services, with Democrats, Latinos and women being most worried.  However, when asked which area of the budget they most wanted to see spared from cuts health and human services received 17 percent, a distant second to K through 12 education (61 percent).