BILL ANALYSIS                                                                                                                                                                                                    Ó

                                                                     SB 115

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          Date of Hearing:  June 23, 2015

                            ASSEMBLY COMMITTEE ON HEALTH

                                  Rob Bonta, Chair

          115 (Fuller) - As Amended April 20, 2015

          SENATE VOTE:  39-0

          SUBJECT:  Valley fever.

          SUMMARY:  Appropriates $1 million from the General Fund (GF) to  
          the California Department of Public Health (DPH) for the 2015-16  
          fiscal year (FY), for purposes of valley fever vaccine research.  
           Requires $100,000 to be allocated to DPH in the 2015-16 FY for  
          purposes of costs associated with the administration of existing  
          law above.  

          EXISTING LAW: 

          1)Requires funds appropriated to DPH for the purpose of valley  
            fever (coccidioidomycosis) vaccine research to be used to  
            continue and expand the current research effort being  
            conducted by the Valley Fever Vaccine Project (VFVP).

          2)Permits DPH to contract on a sole source basis with a  


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            nonprofit organization that has provided funding for vaccine  
            research on valley fever.  Requires the contract to require  
            the organization to distribute research grants to support  
            research efforts that are likely to advance the effort to  
            develop a vaccine.

          3)Requires the contractor in 2) above to establish an advisory  
            group consisting of persons with relevant expertise in the  
            fields of mycology and vaccine development and a  
            representative from DPH.  Requires the advisory group to  
            approve grants for those whose research is likely to advance  
            the effort to develop a safe and effective vaccine and to seek  
            advice from the appropriate agencies in the National  
            Institutes of Health (NIH) and other federal agencies with  
            experience in supporting vaccine research when reviewing the  
            research of those receiving funds.

          4)Requires the contractor in 2) above to provide DPH with  
            periodic status reports on the progress of the researchers  
            receiving funds. Requires DPH to review progress reports from  
            the contractor describing the research progress and plans for  
            future funding.

          5)Requires the contract to require that funding is provided on  
            the condition that, if a valley fever vaccine is developed and  
            successfully marketed, the state be reimbursed for the cost of  
            grants made in proportion to the state's contribution to the  
            research and development effort.  

          FISCAL EFFECT:  According to the Senate Appropriations  
          Committee, $1 million from the GF for the 2015-16 FY.  


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          1)PURPOSE OF THIS BILL.  According to the author, California has  
            seen an increase of valley fever case counts from 719 to 5,697  
            over the last 13-year period.  Valley fever is caused by air  
            or soil disturbance of the Coccidioides fungus, which lives  
            and breeds in the soil.  When the dust containing the  
            Coccidioides spores is inhaled, the fungus attacks the  
            respiratory system, causing infection that can lead to  
            symptoms that resemble a cold, influenza, or pneumonia.   
            Within California, cases of valley fever have been reported  
            from most counties.

          Over 75% of cases have been reported in portions of the  
            Sacramento Valley, all of the San Joaquin Valley, desert  
            regions, and portions of Southern California.  Valley fever  
            can be costly and debilitating, with nearly 75% of patients  
            missing work or school because of their illness, and more than  
            40% requiring hospitalization.  There is also an influx of  
            cases among prison inmates and employees.  Anyone can get  
            valley fever, even young and healthy people.  The author  
            states that although there is currently no cure for valley  
            fever, researchers are close to developing a vaccine that will  
            help combat this devastating disease.  Experts say the lack of  
            funding and serious attention to valley fever has stalled  
            efforts to combat the disease.
          2)BACKGROUND.  According to the Centers for Disease Control and  
            Prevention (CDC), Coccidioides lives in soil in the  
            southwestern U.S. and parts of Mexico, Central America, and  
            South America.  Inhaling the airborne fungal spores can cause  
            infection, but is not spread from person to person.  Most  
            people who are exposed to the fungus do not get sick, but some  
            people develop flu-like symptoms that may last for weeks to  
            months.  In a very small proportion of people who get valley  
            fever, the infection can spread from the lungs to the rest of  


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            the body and cause more severe conditions, such as meningitis  
            or even death.

          A March 2013 CDC report notes that more than 20,000 cases of  
            valley fever are reported each year in the U.S., but many more  
            cases likely go undiagnosed.  Some researchers estimate that  
            each year the fungus infects more than 150,000 people, many of  
            whom are sick without knowing the cause or have cases so mild  
            they are not detected.  It is difficult to avoid exposure to  
            the fungus that causes valley fever, and there is no vaccine  
            to prevent the infection.
          3)INCIDENCE IN CALIFORNIA.  In California, providers and labs  
            are required to report valley fever to DPH.  According to an  
            article in the Spring 2013 Medical Board of California  
            Newsletter written by DPH Infectious Diseases Branch staff,  
            there has been a substantial increase in the numbers of  
            reported cases and hospitalizations of valley fever. From 2000  
            to 2011, the annual number of reported cases increased greater  
            than six-fold, from 816 to 5,366 cases per year.  These  
            increases represent a substantial and growing burden to  
            California residents, providers, and the government, but the  
            reason for the increase is unclear. Researchers believe that  
            contributing factors may include changes in climate and  
            rainfall patterns, soil-disturbing construction activities, an  
            increase in susceptible persons moving to disease-endemic  
            areas, and heightened awareness and diagnosis.

          While anyone in an endemic area is at risk, those working in  
            occupations involving dirt and dust exposure may be at  
            increased risk of infection.  Several groups of people are at  
            higher risk for developing the severe forms of valley fever,  
            including African Americans, Asians, women in their 3rd  
            trimester of pregnancy, people with weak immune systems,  
            including those with an organ transplant or who have HIV/AIDS.  
             In California, highly endemic counties (more than 20 cases  


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            per 100,000 population per year), are Kern, Kings, Fresno,  
            Merced, Madera, Tulare, and San Luis Obispo.
            According to an article published in The Atlantic in August  
            2014, a valley fever epidemic hit the southern San Joaquin  
            Valley in 2001 and is continuing.  It led to the deaths of  
            more than three dozen inmates since 2006 at two nearby state  
            prisons, Avenal and Pleasant Valley. Because the prisons house  
            high concentrations of black and Filipino inmates, valley  
            fever infection rates are higher than the state average: 1,000  
            times higher at Pleasant Valley, where more than 1,000 inmates  
            have contracted valley fever over the past five years, and 189  
            times higher at Avenal. Following a federal mandate to  
            transfer more than 2,500 at-risk inmates out of Kern County in  
            2013, the NIH and the CDC announced plans to start a clinical  
            trial in Bakersfield. 

          4)ORPHAN DISEASES.  An orphan disease is defined as a condition  
            that affects fewer than 200,000 people nationwide.  Some  
            diseases have patient populations of fewer than a hundred.  
            Collectively, however, they affect as many as 25 million  
            Americans, according to NIH.  Historically, pharmaceutical  
            companies and research institutions have not focused on  
            research for orphan product development due to inability to  
            recoup research and development costs with a large enough  
            market.  The Orphan Drug Act of 1983 created financial  
            incentives for drug and biologics manufacturers, including tax  
            credits for costs of clinical research, government grant  
            funding, assistance for clinical research, and a seven-year  
            period of exclusive marketing given to the first sponsor of an  
            orphan-designated product who obtains market approval from the  
            Food and Drug Administration (FDA) for the same indication.   
            At the same time, federal programs at the FDA and the NIH  
            began encouraging product development, as well as clinical  
            research for products targeting rare diseases.  
          5)EFFORTS TO DEVELOP A VACCINE.  Valley fever research has been  
            going on since the 1930s and 40s, with not much progress  
            towards a vaccine.  According to a 2012 published report by  


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            the Reporting On Health collaborative, when a valley fever  
            vaccine was evaluated in the late 1970s and early 1980s, and  
            proved to be effective in mice and monkeys, hundreds of people  
            signed up for the human clinical (Phase III) trials.  However,  
            patients complained of very sore arms and swelling at the  
            injection site even at low doses.  The shot was so painful  
            people dropped out of the trial and ultimately the vaccine did  
            not show conclusive protection. 

          6)Valley Fever Vaccine Project.  The Valley Fever Vaccine  
            Project (VFVP) is an inter-institutional cooperative which  
            seeks to discover a vaccine for valley fever.  The California  
            State University, Bakersfield Foundation is the primary  
            contractor and has overseen the distribution of grants to  
            researchers at the University of California (UC) San  
            Francisco, UC Davis, UC San Diego Veterans Medical Center, the  
            University of Arizona, and the Medical College of Ohio.   
            Through a combination of funds from the State of California,  
            the California HealthCare Foundation (CHCF), and other donors,  
            the VFVP funded research projects for developing and  
            conducting trials on potential valley fever vaccines.  The  
            project was launched with a $1.5 million grant from CHCF,  
            $700,000 in state GF, and a contribution of more than $100,000  
            from rotary clubs.

          With further contributions over the next decade from CHCF, the  
            federal government, the state, the County of Kern, and  
            nonprofit groups, total funding reached about $16 million.  In  
            2009, the Budget Act included an ongoing appropriation of $1  
            million to continue research activities earmarked toward the  
            development of a vaccine.

          7)State Funding for VFVP.  State funding for the VFVP began with  
            a budget augmentation request by then-Assemblymember Ashburn  
            for $700,000 in FY 1997-98.  GF monies allocated to the VFVP  


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            by fiscal year are as follows:

                  |Fiscal   |Amount    |
                  |Year     |          |
                  |         |          |
                  |         |          |
                  | 1997-98 |$0.7      |
                  |         |million   |
                  |         |          |
                  |         |          |
                  | 1998-99 |$1.7      |
                  |         |million   |
                  |         |          |
                  |         |          |
                  | 1999-00 |$1.7      |
                  |         |million   |
                  |         |          |
                  |         |          |
                  | 2000-01 |$1.7      |
                  |         |million   |
                  |         |          |
                  |         |          |
                  | 2001-02 |$1.2      |
                  |         |million   |
                  |         |          |
                  |         |          |
                  | 2002-03 |$0.7      |
                  |         |million   |


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                  |         |          |
                  |         |          |
                  | 2006-07 |$1        |
                  |         |million   |
                  |         |          |
                  |         |          |
                  | 2009-10 |$1        |
                  |         |million   |
                  |         |          |
                  |         |          |

            In 2009, the Budget Act included an ongoing appropriation of  
            $1 million to continue research activities earmarked toward  
            the development of a vaccine.  Funding was subsequently  
            discontinued in 2010.  Since that time, funding dried up and  
            the research stalled.

            In June of 2014, the FDA also announced plans to include cocci  
            on its Generating Antibiotic Incentives Now program, a federal  
            system intended to encourage the development of new  
            antibacterial or antifungal drugs to treat what the government  
            deems serious or life-threatening infections.

            Adding cocci to the list extends the period that valley fever  
            antibiotics or vaccines can be sold without any generic-brand  
            competition on the market by five years, which is expected to  
            act as an incentive for a pharmaceutical company to jump on  
            board and manufacture a vaccine.  According to an August 2014  


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            announcement from UC Merced, the university's Health Sciences  
            Research Institute received approval and funding to conduct  
            patient studies at Children's Hospital Central California in  
            Madera.  Researchers will study the blood of 30 pediatric  
            patients with valley fever to understand the immune system's  
            response to the disease, with a long-term goal of developing a  
          8)SUPPORT.  Valley Fever Solutions, a small biotech company  
            working to develop a new antifungal treatment for valley  
            fever, writes that drug development is frightfully expensive,  
            and vaccine development is even more expensive.  Valley fever  
            is considered an orphan disease, which means it is devilishly  
            hard to find investors until drug development is significantly  
            advanced, to the point scientists can demonstrate the drug is  
            going to work.  Valley Fever Solutions states that government  
            support for combating this rare disease is important and  
            precious and is often the make or break component without  
            which motivated researchers simply have to turn away and work  
            on other projects that have better support.

          9)PREVIOUS LEGISLATION.  SB 1044 (Fuller) of 2014 would have  
            appropriated $1 million from the GF for FY 2014 15, for  
            purposes of extending the VFVP.  SB 1044 was referred to  
            Banking and Finance but never acted upon. 

          10)POLICY COMMENTS.  

             a)   Vaccine development is a multi-year, multi-million  
               dollar effort.  News reports state that CHCF stopped  
               supporting the vaccine project because the foundation is  
               not set up to thoroughly evaluate such scientific research.  
                Significant state, federal, and private money was  
               previously invested in this project; yet there is no way of  
               knowing how much more would be needed to bring this  
               important vaccine to market.  Without commitments from  


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               outside groups for matching funds or a long-term funding  
               commitment from the state, it is unclear how much of a  
               meaningful impact on the effort the one-time appropriation  
               contained in this bill would accomplish. 

             b)   DPH notes that state funding for the vaccine ended about  
               six years ago and DPH does not currently have expertise or  
               experience with Valley Fever vaccine development.  The  
               project was not under the jurisdiction of DPH other than as  
               a function of pass through of funds.  This project was  
               conducted by California State University, Bakersfield  
               Foundation with whom CDPH does not have a current  
               relationship.  Committee staff has been unable to confirm  
               whether the VFVP public-private cooperative is still in  
               operation. The committee may wish to ask the author about  
               the status of the VFVP cooperative and their capability and  
               timing for using the funds appropriated in this bill.



          American Federation of State, County, and Municipal Employees,  

          California Life Science Association

          California Prison Moratorium Project

          Center on Race, Poverty & the Environment 


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          Central California Environmental Justice Network 

          Coalition for Clean Air 

          Comité Si Se Puede 

          Committee for a Better Arvin 

          Committee for a Better Shafter 

          Global Community Monitor 

          Greenfield Walking Group 

          Leadership Council for Justice and Accountability 

          Padres Socios de Lamont 

          Physicians for Social Responsibility - Los Angeles 

          Residentes Organizados al Servicio de un Ambiente Sano (ROSAS) 

          Tri-Valley CARES 

          Valley Fever Solutions


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          None of file. 

          Analysis Prepared by:Dharia McGrew / HEALTH / (916)