Date of Hearing: May 8, 2019

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 1016

Author:(Maienschein) – As Amended Ver:March 25, 2019

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill establishes within the California Health and Human Services Agency (CHHSA) the Rare Disease Advisory Council (RDAC) to, among various functions, advise state policymakers, coordinate state efforts, identify best practices and make policy recommendations related to rare diseases.

FISCAL EFFECT:

Ongoing GF costs to CHHSA of about $120,000 to staff the council and provide reimbursement to public members.

COMMENTS:

Purpose and Background. According to the author, nearly 4 million Californians, more than half of whom are children, are living with one of the estimated 7,000 identified rare diseases, which include sickle cell anemia, muscular dystrophy, cystic fibrosis and many other well-known debilitating conditions. The author states rare disease patients often face a host of obstacles not encountered by other patients, including prolonged diagnostic odysseys, uncoordinated interactions with the healthcare system, a lack of access to necessary special expertise, a lack of availability of effective treatment and struggles with cost and coverage barriers.

The author envisions a council that could make important progress towards addressing the issues faced by rare disease patients through recommendations on disease surveillance, specialist physician directories, understanding financial impacts to patients and the state, and communicating what private and public resources may be available to patients and their families across the state. This bill is supported by the California Life Sciences Association and Vertex Pharmaceuticals Incorporated and has no opposition.

Analysis Prepared by: Lisa Murawski / APPR. / (916) 319-2081

Date of Hearing: April 23, 2019

ASSEMBLY COMMITTEE ON HEALTH

Jim Wood, Chair

ABPCA Bill Id:AB 1016

Author:(Maienschein) – As Amended Ver:March 25, 2019

SUBJECT: Rare Disease Advisory Council.

SUMMARY: Establishes within the California Health and Human Services Agency (CHHSA), the Rare Disease Advisory Council (RDAC) to, among various functions, coordinate state efforts and conduct research on rare diseases. Specifically, this bill:

1. Establishes within CHHSA, the RDAC, to consist of the following members:
   
   1. Directors, or ex officio members, within CHHSA and other state agencies concerned with the provision of care to persons with rare diseases, to be appointed by the Secretary of CHHSA;
      
   2. Public members, to be appointed by the State Public Health Officer, to include all of the following:
      1. Two physicians and surgeons licensed to practice in this state who have expertise in treating patients with rare diseases, one of whom shall be a pediatrician who provides care to children with rare diseases;
      2. A registered professional nurse licensed to practice in this state who has expertise in providing care to patients with rare diseases;
      3. Two representatives of hospitals in this state;
      4. A representative of the health care coverage industry;
      5. A representative of the biopharmaceutical industry;
      6. A representative of the scientific community who is engaged in rare disease research;
      7. Two parents of a child with a rare disease;
      8. Two persons with a rare disease; and,
      9. Two patient advocacy organizations that operate within this state.
         
2. Permits, on or after the date on which the RDAC is first convened, the RDAC to advise the CHHSA on additional at-large appointments to the RDAC that may be necessary to carry out its duties. Permits at-large appointments to serve on an ad hoc basis.
   
3. Requires members of the RDAC to serve without compensation. Permits public members specified in 1) b) above to be reimbursed for travel and other miscellaneous expenses necessary to perform their duties within the limits of funds made available to the RDAC for its purposes.
   
4. Requires the RDAC to organize as soon as practicable after the appointment of its members and to select a chairperson and vice chairperson from among its members. Requires the chairperson to appoint a secretary who need not be a member of the RDAC.
   
5. Requires the RDAC to meet periodically, but at least three times annually. Permits the RDAC to call to its assistance, and avail itself of the services of, the employees of any state, county, or municipal department, board, bureau, commission, or agency as it may require and as may be available to it for its purposes, if those employees elect to participate.
6. Specifies the term of each member of the RDAC to be three years, to be staggered so that approximately one-third of the appointments expire each year. Requires vacancies in the membership of the RDAC to be filled in the same manner as provided for in the original appointments.
   
7. States the purposes of the RDAC, as follows:
   
   1. Coordinating statewide efforts for the study of the incidence of rare diseases within this state and the status of the rare disease community;
   2. Acting as the advisory body on rare diseases to the Legislature, and state departments, agencies, commissions, and authorities, and private agencies, that provide services to, or that are charged with the care of, persons with rare diseases;
   3. Coordinating the performance of the RDAC’s duties with any other state entities acting as advisory bodies on rare diseases, community-based organizations, and other public or private organizations, for the purpose of ensuring greater cooperation between state and federal activities regarding the research, diagnosis, and treatment of rare diseases. Permits the RDAC to coordinate with federal agencies, including but not limited to the National Institutes of Health and the United States Food and Drug Administration.
      
8. Requires the coordination described in 7) c) above to require, when appropriate, both of the following:
   1. Disseminating the RDAC’s research, identified best practices, and policy recommendations; and,
   2. Utilizing common research collection and dissemination procedures.
      
9. Specifies the duties of the RDAC, as follows:
   
   1. Research and determine the most appropriate method to collect data on rare diseases, and information concerning patients, as the RDAC deems necessary and appropriate by conducting thorough and complete surveys of rare diseases diagnosed in this state, subject to all applicable privacy laws and protections. Requires the RDAC to ensure these duties are carried out in a manner that is coordinated and interoperable with similar research being conducted at the state and federal levels;
      
   2. Research and identify priorities relating to the quality and cost-effectiveness of, and access to, treatment and services provided to persons with rare diseases in this state, and develop policy recommendations on those issues;
      
   3. Identify best practices for rare disease care from other states and at the national level that will improve rare disease care in this state; and,
      
   4. Develop effective strategies to raise public awareness of rare diseases in this state.
      
10. Requires the CHHSA, before any appointments to the RDAC are made, to research and report to the Legislature on existing sources of funding that may be used to finance the formation and operation of the RDAC.
    
11. Requires the RDAC to apply for, and accept, any grant of funds from the federal government, private foundations, or other sources, that may be available for programs related to rare diseases.
    
12. Requires the RDAC to report to the CHHSA, and to the Legislature, every two years on the activities of the RDAC and its findings and recommendations on issues relating to the quality and cost-effectiveness of, and access to, treatment and services provided to persons with rare diseases in this state. Requires the report to comply with existing requirements.
    
13. Makes findings and declarations on rare diseases.
    

EXISTING LAW: Establishes CHHSA which oversees twelve departments and five offices that provide a range of health care services, social services, mental health services, alcohol and drug services, income assistance, and public health services to Californians. Establishes the Department of Public Health, overseen by the State Public Health Officer to, among various functions, protect and improve the health of communities through education, promotion of healthy lifestyles, and research for disease and injury prevention.

FISCAL EFFECT: This bill has not yet been analyzed by a fiscal committee.

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, nearly 4 million Californians, more than half of whom are children, are living with one of the estimated 7,000 identified rare diseases, which include sickle cell anemia, muscular dystrophy, cystic fibrosis, and many other well-known debilitating conditions. Roughly half of these rare disease patients are children, with 30% of those children not living to see their 5th birthday, and rare diseases accounting for 35% of deaths occurring in the first year of a child’s life. Rare disease patients often face a host of obstacles not encountered by other patients, including prolonged diagnostic odysseys, uncoordinated interactions with the healthcare system, a lack of access to necessary special expertise, a lack of availability of effective treatment, and struggles with cost and coverage barriers. For instance, the average rare disease patient faces a delay in diagnosis of several years and will visit an average of 7.3 physicians before receiving that diagnosis. Such obstacles result in significant adverse consequences for patients, and unnecessary additional costs and expended resources for California’s healthcare system, including public payers.
   
   The RDAC envisioned in this bill could make important progress towards addressing the issues faced by rare disease patients through recommendations on disease surveillance, specialist physician directories, understanding financial impacts to patients and the state, and communicating what private and public resources may be available to patients and their families across the state. A RDAC, as has been adopted in states like Pennsylvania, North Carolina, and Connecticut, can use a diverse group of experts to craft recommendations for the state on how best to address these issues faced by the nearly four million Californians with rare diseases and their caregivers. This bill is a modest step that could mean a great deal to these patients, their families, and California going forward.
2. BACKGROUND. This bill establishes the RDAC within CHHSA to, among various functions, coordinate state efforts, conduct research and serve as advisory body on rare diseases. A rare disease or condition means: a) any disease or condition which affects less than 200,000 persons in the United States; or, b) affects more than 200,000 in the U.S. and for which there is no reasonable expectation that the cost of developing and making available in the U.S. a drug for such disease or condition will be recovered from sales in the U.S. of such drug. According to the Genetic and Rare Diseases Info Center (part of National Institutes of Health (NIH)) there may be as many as 7,000 rare diseases. The total number of Americans living with a rare disease is estimated at between 25 to 30 million. There are many different causes of rare diseases, and the majority are thought to be genetic, directly caused by changes in genes or chromosomes. In some cases, genetic changes that cause disease are passed from one generation to the next. In other cases, they occur randomly in a person who is the first in a family to be diagnosed. Many rare diseases, including infections, some rare cancers, and some autoimmune diseases, are not inherited. While researchers are learning more each year, the exact cause of many rare diseases is still unknown.
   1. Orphan Drug Act. The Orphan Drug Act of 1983 (ODA), administered by the Food and Drug Administration (FDA) was established to encourage the development of drugs for rare diseases. Under the ODA, for each orphan-drug designation request, the FDA determines whether a given medical condition constitutes a distinct disease or condition based on a number of factors assessed cumulatively, including: pathogenesis of the disease or condition; course of the disease or condition; prognosis of the disease or condition; and, resistance to treatment. These factors are analyzed in the context of the specific drug for which designation is requested.
      
      The ODA did not establish a separate process for orphan drugs, thus they follow the same development pathway as any drug product. However, an orphan drug designation qualifies the sponsor for certain benefits including expedited regulatory reviews; market exclusivity of seven years, which limits competition by prohibiting the FDA from approving another version of the same orphan drug for the same indication unless the new drug s clinically superior; waiver of user fees; and a 50% tax credit of the qualifying clinical testing expenses in a given year. Because of these advantages, according to a perspective published in a peer-reviewed medical journal PLOS Medicine, orphan drugs are now amongst the most expensive and profitable drugs on the market in the world. According to the FDA, since 1983, there has been over 600 drugs and biologic products for rare diseases.
      
      The ODA also created the Office of Orphan Products Development (OOPD) to designate products for the treatment of rare diseases or conditions and to administer a grant program for the development of these products. The grant program under OOPD has enabled the development and marketing of drugs, biologics, and medical devices for rare diseases since 1983. Between 1973 and 1983, fewer than 10 treatments for rare diseases were approved, but since 1983, the OOPD program has helped develop and bring to market more than 400 drugs and biologic products for rare diseases. 
      
      On June 29, 2017, the Orphan Drug Modernization Plan (plan) was established to eliminate the FDA’s existing orphan designation backlog and ensure continued timely response to all new requests for designation with firm deadlines. Under this plan, the FDA committed to eliminating the backlog within 90 days and respond to all new applications within 90 days of receipt.
   2. Rare Diseases Act (RDA). In 2002, the RDA was passed which established within NIH the Office of Rare Diseases to recommend an agenda for conducting and supporting research on rare diseases through the national research institutes and centers. Under this Act, the NIH may enter into cooperative agreements with and make grants for regional centers of excellence on rare diseases.
      
      In order to increase collaboration and critical resources related to diagnosing and treating rare diseases, the National Institutes of Health (NIH) created the Rare Diseases Clinical Research Network (Network) in November 2003 to address the unique challenges of research on rare diseases. Currently, the Network consists of 19 Rare Diseases Clinical Research Consortia in addition to a Data Management Coordinating Center (DMCC). The Network studies approximately 90 rare diseases at over 97 academic institutions with several hundred investigators in the United States and in other countries; and enables the collaboration of scientists from multiple disciplines and provides shared access to geographically distributed research resources and patient populations. Each consortium studies a group of related rare and sometimes fatal diseases. In addition, the DMCC develops and introduces novel technologies for data collection, information sharing, and performance of studies.
3. SUPPORT. According to the California Life Sciences, Association, with this bill, California would join a number of other states that have created RDACs to give patients a voice in state government and provide educational resources for elected leaders on critical issues related to access, coverage, and the diseases themselves. The RDAC would advise the State on and coordinate the State’s activities around rare diseases, which includes coordination with other public and private stakeholders. The RDAC would also conduct research to increase the State’s understanding of rare diseases and to improve both access to and quality of care for rare disease patients in California.

REGISTERED SUPPORT / OPPOSITION:

Support

California Life Sciences Association
Vertex Pharmaceuticals Incorporated

Opposition

None on file

Analysis Prepared by: Rosielyn Pulmano / HEALTH / (916) 319-2097