The measure did not contain any surprises. However, it did contain a necessary provision that has not been mentioned previously. That language declared that the proposal would enhance CIRM's ability to carry out the purposes of Prop. 71. The initiative stipulates that legislative changes in the act must enhance its purposes. That is on top of the unprecedented requirement for a super, supermajority vote (70 percent) to approve such bills.
The "enhancement" requirement was presumably inserted into Prop. 71 to provide another weapon to battle legislative changes under terms authorized by the initiative. Since this is the first such attempt, its effectiveness as an opposition tool is yet to be tested. Previous legislation concerning CIRM used different legal approaches.
The number of the bill, SB771, was also picked to resonate with Prop. 71, according to the office of Sen. Sheila Kuehl, D-Santa Monica, chair of the Health Committee, who authored the proposal along with Sen. George Runner of Antelope Valley, the leader of Senate Republicans.
Here are the key elements of the bill, which is not likely to be heard in committee for some time:
"The standards that the ICOC develops shall do all the
"(A) Require every recipient of a grant or loan award for research
to provide to the state 25 percent of the net licensing revenues it
receives associated with any institute-funded patented invention
beyond a reasonable revenue threshold that the ICOC may establish.
Net licensing revenue shall include all forms of financial
consideration from licensing and shall be defined as gross licensing
revenues, less patent expenses and reasonable payments to inventors.
"(B) Require every recipient of a grant or loan award for research
to grant exclusive licenses involving institute-funded patented
inventions relevant to development of therapies, drugs, and
diagnostics only to organizations that have plans which the institute
determines will provide substantial access to the resultant
therapies, drugs, and diagnostics to uninsured Californians. In
addition, the licensees shall agree to provide to patients whose
therapies, drugs, and diagnostics will be purchased in California
with public funds, the therapies, drugs, and diagnostics at the
federal Medicaid price.
"(C) Require any recipient of a grant or loan award for research
that commercializes any product that it develops using institute
funds to agree, as a condition of accepting the funds, to make
royalty payments to the state equal to 2 to 5 percent of the revenues
over the life of the product, depending on the level of funds
provided and contribution of institute-funded patented inventions to
the development of the product."