Monday, June 11, 2007

Looming Compromise on CIRM Legislation?

The California stem cell agency seems to be heading towards something of a partial compromise concerning legislation aimed at ensuring a fair return to the state on its $3 billion stem cell research effort.

The bill – SB771 –is now in the Assembly after passing the Senate on a whopping 38-0 vote. Sen. Sheila Kuehl, D-Santa Monica, chair of the Health Committee, and Sen. George Runner of Antelope Valley, one of the Republican leaders, are co-authors.

The legislation came up for discussion at a meeting late last month of CIRM's Intellectual Property Task Force. Duane Roth, a San Diego pharmaceutical company executive and member of the CIRM Oversight Committee, suggested a modification in sharing net license revenues from CIRM-funded inventions.

According to one Senate analysis:
"The proposed commercial regulations by CIRM require that 17 percent of licensing fees in excess of $500,000 be paid to the state, that three times the grant amount be paid for patented products supported by CIRM, and that the state be entitled to 1% of all revenues in excess of $500,000 for the life of a patent if CIRM provided support over $5 million.

This bill would, instead, require the CIRM regulations provide the state 25% of net licensing revenues resulting from supported research; grant exclusive licenses to firms intending to provide access to resulting therapies to uninsured Californians."
Roth proposed changing CIRM's commercial regulations, which are still being drafted, to 25 percent as in the bill instead of the previous 17.

Roth told the IP task force, according to the transcript:
"I don't think it matters that much to industry that's going to take CIRM money, have an invention, and then license to a third party, whether they keep 83 percent of the revenue or 75 percent. And the reason I'm bringing it up's difficult to explain. It can be explained, but it's difficult. And I think the rationale behind it is the hardest part of the explanation."
Roth also said a change would indicate that CIRM is willing to meet Kuehl halfway on the bill.
A quorum was not present at the IP Task Force meeting, so the group did not take an official vote. But no opposition to the change was expressed. An official policy change would require a vote of the full Oversight Committee, which opposes SB771.

The IP meeting occurred before the measure passed the Senate on the 38-0 vote.

Also discussed at the Task Force meeting was another issue related to SB 771 – affordable access. CIRM has moved away from language linking access to Medicaid prices.

Scott Tocher, a CIRM attorney, outlined problems with the Medicaid price and the rationale for linking access to the California RX Discount program, whose regulations are being formulated by the California Department of Health Services.

Kuehl's bill would require licensees of CIRM-funded therapies to provide access at Medicaid prices to patients whose care is provided with public funds.

The Task Force transcript is expected to available online soon on the CIRM web site.

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