Cell and Gene Therapies: Text of Rules for California's Affordability and Access Program

The rules for the $155 million affordability effort by California’s stem cell agency are scattered throughout the 17,000-word Proposition 14 of 2020 and are complex and obtuse. 

They control the focus and financing of the agency’s new program. They define who is to be appointed to the new committee that will drive what California will do regarding million-dollar therapies, clinical trials and their cost. Not to mention the impact on profits for biomedical companies. 

The California Stem Cell Report has pulled together the legal language that both constrains and enables the new program. Our compilation below is unique to this newsletter and can not be found elsewhere on the Internet. 

(This article is a companion piece to a broader overview by yours truly of the affordability and accessibility program that is funded with up to $155 million. That article appeared this morning on Capitol Weekly, the respected website for state government and political news.)

The excerpts below from Proposition 14 cover not only the control, financing and direction of the program but include the possibility of adding 15 employees beyond the stem cell’s agency nominal cap of 70. The ballot measure also opened the door to private funding of compensation for additional staff beyond the 15.

The links at the end of each section below are to an annotated version of the initiative prepared by the agency’s former general counsel, James Harrison, who also was involved in drafting the measure while working for Robert Klein, the sponsor of Proposition 14 of 2020. Harrison also was involved in Proposition 71, which created the stem cell agency in 2004.  Klein also directed the formulation of Proposition 71.

Proposition 14 amended Proposition 71, adding 7,000 words to the law. Both were ballot initiatives, meaning that they bypassed the legislature and governor and were placed directly before voters through a signature-gathering process. 

If you have questions about the excerpts, please send them djensen@californiastemcellreport.com

Purpose

Under the purpose and intent section of the initiative, the measure states that, among other things, it is aimed at: 

“Promoting the accessibility and affordability of treatments and cures by ensuring that more Californians have the opportunity to participate in clinical trials for promising new treatments for chronic disease and injury, expanding the number and geographic reach of clinics where specialized treatments and cures can be provided, including centers of excellence like Alpha Stem Cell Clinics and Community Care Centers of Excellence, which support clinical trials and will serve as the foundation for the delivery of future treatments, and by helping California patients obtain treatments and cures that arise from institute-funded research and development.” (page 2 of this document)

Affordability/Accessibility Group: Structure and Functions 

“Section 125290.75 is added to the Health and Safety Code to read as follows: 

“125290.75. Treatments and Cures Accessibility and Affordability Workinq Group. 

(a) Membership

The Treatments and Cures Accessibility and Affordability Working Group shall have 17 members nominated by the Chair or Vice Chair (of the board) and approved by the Board as follows: 

(1) Five members of the ICOC (the "Governing Board"), with at least two of those members drawn from the appointments made pursuant to paragraphs (3), (4), (5) or (6) of subdivision (a) of Section 125290.20. (This section deals with members of the governing board.) 

(2) An individual who has private sector experience in innovative therapy medical coverage terms, qualifications, and the process for reimbursement, including, if possible, experience with coverage negotiations with private insurers, health management organizations, or corporate self-insurance health 

(3) An expert or a highly knowledgeable individual with experience in federal therapy coverage, qualifications, and process for reimbursement, including, if possible, experience with the Centers for Medicare and Medicaid Services.

(4) An expert or a highly knowledgeable individual with experience in California's public insurance program (Covered California), coverage, qualifications, and the process for reimbursement of innovative therapies. 

(5) Two representatives from hospitals in California that are participating in stem cell clinical trials or that are treating patients with Federal (sic) Drug Administration-approved stem cell or genetic therapies. 

(6) A representative from o philanthropic organization who has experience assisting patients with clinical trial access and affordability, or with access to, and the affordability of, innovative therapies. 

(7) Two representatives from patient advocacy organizations who have technical expertise or experience in coverage, qualifications, and the process for reimbursement of innovative therapies. 

(8) A health care economist, with experience in advising or negotiating with private insurers, government insurers, or corporate self-insurance programs on coverage for innovative therapies or human trials, including experience in assisting hospitals and clinics in covering financial gaps in coverage of the direct and indirect costs of innovative therapies. 

(9) A patient navigator with training and experience helping patients obtain financial support from private insurers, public support, or nonprofit support, and helping patients obtain social service support to facilitate their participation in Federal (sic) Drug Administration-approved human trials or their qualification for access and financial assistance for innovative therapies. 

(10) The chairperson and vice-chairperson of the Governing Board.

 (b) Functions 

The Treatments and Cures Accessibility and Affordability Workinq Group shall have the following  functions: 

(1) To examine, develop, and assist with the implementation of financial models to enhance the accessibility and affordability of treatments and cures arising from Institute-funded research for Californians, and to enhance access to clinical trials, including reimbursement alternatives for patient qualified costs to help achieve the objective that reimbursement covers patient expenses, including but not limited to, medical expenses, lodging, meals, and travel for research participants and their caregivers. 6 Amended 11.18.19 

(2) To recommend to the Governing Board policies and programs to help Californians obtain access to human clinical trials and to make treatments and cures arising from Institute-funded research available to California patients throughout California. 

(3) To recommend to the Governing Board policies and programs to help Californians afford to participate in human clinical trials and to make treatments and cures arising from Institute-funded research affordable to California patients, regardless of their financial means. 

(4) To work with the Alpha Stem Cell Clinics and Community Care Centers of Excellence and other California healthcare institutions, and healthcare payors, including private insurers, government programs, and foundations, to develop model programs and coverage models to promote the access and affordability of treatments and cures arising from Institute-funded research for California patients, regardless of their financial means, or the disease, injury, or health condition from which they suffer. 

(5) To advise the Governing Board regarding the coverage criteria and the process for reimbursement of innovative therapies and cures arising from Institute-funded research and made available to patients through publicly or privately-funded programs in California with the goal of expanding access and affordability. (page 5 of this document)

Voter Mandate to the Governing Board

“Develop and implement programs to enhance patient access to affordable stem cell and related treatments and cures through public hospitals and clinics and establish policies regarding intellectual property rights arising from research funded by the institute.” (page 18 of this document)

“Establish and oversee the development of policies and programs to help make treatments and cures arising from institute-funded research available and affordable for California patients, through engagement with healthcare providers, research and therapy development institutions, businesses, governmental agencies, philanthropists, foundations, and patient advocacy groups, and based on recommendations made by the Treatments and Cures Accessibility and Affordability Working Group.” (page 18 of this document)

Staff for Affordability Program

“The ICOC (agency governing board) shall from time to time determine the total number of authorized employees for the institute, which number shall not exceed 70 employees (full time equivalent), excluding members of the working groups and members of the ICOC who shall not be considered institute employees, and excluding up to 15 additional institute employees (full time equivalent) to support the development of policies and programs to help make treatments and cures arising from institute-funded research available and affordable for Californians. The cap on employees shall not apply to employees funded through sources other than bond proceeds or the General Fund.” (page 19 of this document)

Funding for Affordability 

 “To accomplish the goals of Section 125290.75, up to two percent (2%) of the amount available for grants may be used for research consulting in support of access to, and the affordability of, treatments and cures arising from institute-funded research and therapy development and delivery, as determined by the Governing Board of the institute based on the recommendations of the Treatments and Cures Accessibility and Affordability Working Group and the President.” (page 25 of this document)

 “Not more than one percent (1%) of the proceeds of the bonds authorized pursuant to Section 125291.110 may be used by the institute to pay for the costs of up to 15 full time employees over ten to 15 or more years, including but not limited to administrative support, facilities costs, salary, benefits, travel reimbursement, and meeting costs, to support the work of the institute to develop policies and programs to help Californians obtain access to human clinical trials, therapies, mitigating treatments, and cures arising from institute-funded research and to promote the accessibility and affordability of such human clinical trials, treatments, and cures for Californians.” (page 25 of this document)

“All royalty revenues received through the intellectual property agreements established pursuant to this subdivision shall be deposited into an interest-bearing account in the General Fund, and to the extent permitted by law, the amount so deposited and interest thereon shall be appropriated for the purpose of offsetting the costs of providing treatments and cures arising from Institute-funded research to California patients who have insufficient means to purchase such treatment or cure, including the reimbursement of patient-qualified costs for research participants. (page 14 of this document.)

Closed Door Proceedings,Public Records,Financial Disclosure

“Because the working groups are purely advisory and have no final decisionmaking authority, members of the working groups shall not be considered public officials, employees, or consultants for purposes of the Political Reform Act (Title 9 (commencing with Section 81000) of the Government Code) Sections 1090 and 19990 of the Government Code, and Sections 10516 and 10517 of the Public Contract Code. (page 22 of this document)

“Working Group Records 

“All records of the working groups submitted as part of the working groups’ recommendations to the ICOC for approval shall be subject to the Public Records Act. Except as provided in this subdivision, the working groups shall not be subject to the provisions of Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code, or Article 1 (commencing with Section 6250) of Chapter 3.5 of Division 7 of Title 1 of the Government Code.”  (The provisions refer to the state’s open meeting and open records laws.) (page 22 of this document)

Labels: affordability, Prop. 14, CIRM funding, openness

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