BILL ANALYSIS                                                                                                                                                                                                    



                                                                     SB 115  


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          Date of Hearing:  July 8, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          SB 115  
          (Fuller) - As Amended April 20, 2015


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          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  








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          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.  








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             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  








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               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