Existing law establishes various grant and loan programs for research, including, among others, the California Institute for Regenerative Medicine, California Firefighter Cancer Prevention and Research Program, and the Public Interest Research, Development, and Demonstration Program.

This bill would establish the California Institute for Scientific Research within the Government Operations Agency. The bill would create the California Institute for Scientific Research Fund, upon appropriation by the Legislature, and require the moneys in the fund to be used by the Government Operations Agency to award grants and make loans to public or private research companies, universities, institutes, and organizations for scientific research and development, in specific areas of research, including, but not limited to, biomedical, behavioral, and climate research.

This bill would create the California Institute for Scientific Research Council, as specified. The bill would require the council to, among other things, develop the strategic objectives and priorities of the institute and determine the research projects that will be funded by the California Institute for Scientific Research Fund, as specified. The bill would require a majority vote by the appointed members for the council for the approval of funding for any research project or proposal presented for funding. The bill would authorize the council to establish one or more scientific peer review panels consisting of experts in specified fields of research for the purposes of reviewing and prioritizing proposals on the basis of the track record of the investigators, scientific merit of the proposal, and potential benefit to the health and well-being of the population, natural resources, and environment of the state.

This bill would require all research and development funded by the California Institute for Scientific Research Fund to be conducted under established standards of open scientific exchange, peer review, and public oversight. The bill would require the funds to be awarded on the basis of the research priorities established for the institute by the council and the scientific merit of the proposed research, as determined by an open, competitive, scientific peer review process that ensures objectivity, consistency, and high quality.

Existing law, the California Affordable Drug Manufacturing Act of 2020, requires the California Health and Human Services Agency (CHHSA) or its departments to enter into partnerships to, among other things, address shortages in the market for generic prescription drugs and increase patient access to affordable drugs. The act also requires CHHSA to enter into partnerships resulting in the production, procurement, or distribution of generic prescription drugs, in accordance with specified conditions and procedures. The state has launched the CalRx Initiative, a program that in part serves to implement the act.

This bill would require CHHSA, notwithstanding anything to the contrary in the above-described act, to enter into partnerships or contracts resulting in the development, production, procurement, or distribution of vaccines, by any entity that is authorized to do so under federal or state law, with the intent that these drugs be made widely available to public and private purchasers, providers, suppliers, and pharmacies. Under the bill, this requirement would be implemented through the CalRx Initiative and subject to an appropriation.

Existing law establishes the Joint Sunset Review Committee, a legislative committee comprised of 10 Members of the Legislature, to identify and eliminate waste, duplication, and inefficiency in government agencies and to conduct a comprehensive analysis of an eligible agency, as defined, for which a date for repeal has been established, to determine if the agency is still necessary and cost effective. Existing law requires the committee to meet not later than 30 days after the first day of the regular session to choose a chairperson and to establish the schedule for eligible agency review provided for in the statues governing the eligible agencies.

This bill would extend that deadline for meeting to 31 days after the first day of the regular session.

SENATE COMMITTEE ON

Senator Anna Caballero, Chair

2025 - 2026 Regular Session

SB 829 (Wiener) - California Institute for Scientific Research: CalRx Initiative: vaccines

Bill Summary:

SB 829 would establish the California Institute for Scientific Research within the Government Operations Agency and require the California Health and Human Services Agency (CHHS) to enter into partnerships or contracts resulting in the development, production, procurement, or distribution of vaccines, as specified.

Fiscal Impact:

• Unknown ongoing costs for the Government Operations Agency for state operations, likely hundreds of thousands to low millions; and unknown ongoing costs to provide funding for research grants and loans. Costs would depend on the level of funds appropriated for these purposes, but costs for grants and loans could be potentially very significant. While the bill creates the California Institute for Scientific Research Fund to support these activities, subject to appropriation, the bill does not specify a revenue source and could result in cost pressures to the General Fund.
• The Department of Health Care Access and Information (HCAI) estimates General Fund costs related to the CalRx Initiative to be approximately $606,000 in 2026-27 and significant, but unknown, ongoing General Fund costs to support the procurement, manufacturing, and expansion of vaccines. CalRx would need additional staffing support, including vaccine subject matter experts, to do the following: 1) identify which vaccines are needed for distribution; 2) submit requests for information (RFIs) to industry to identify partners for manufacturing and distribution; and 3) coordinate with the California Department of Public Health for vaccine distribution, with likely costs of tens of millions of dollars based on the current costs associated with the Vaccine Management System.

Background:

CalRx Initiative. Current law establishes the Affordable Drug Manufacturing Act, which requires the CHHS or its departments to enter into partnerships to increase competition, lower prices, and address shortages in the market for generic prescription drugs, to reduce the cost of prescription drugs for public and private purchasers, taxpayers, and consumers, and to increase patient access to affordable drugs. California established CalRx, consistent with these requirements, within the HCAI.

Under the CalRx Biosimilar Insulin Initiative, California has a contract with the nonprofit generic drug and pharmaceutical company, Civica Rx, to produce the three most commonly used long-acting and rapid-acting types of insulin in both vial and pen forms under the CalRx label. The insulin products will be available publicly after U.S. Food and Drug Administration (FDA) approval.

Under the CalRx Naloxone Access Initiative, Californians can buy the over-the-counter (OTC) naloxone nasal spray at a more affordable cost. Eligible entities may be able to obtain a CalRx OTC naloxone nasal spray for free through the Department of Health Care Services (DHCS) Naloxone Distribution Project.

California Institute for Regenerative Medicine (CIRM). Proposition 71, passed by voters in 2004, authorized $3 billion in general obligation bonds to establish the CIRM in order to fund stem cell research in California. Proposition 14, passed by voters in 2020, authorized an additional $5.5 billion in general obligation bonds to fund research grants. In addition to supporting stem cell research, Proposition 14 provided dedicated funding to research and therapy for Alzheimer’s disease, Parkinson’s disease, stroke, dementia, epilepsy, brain cancer, schizophrenia, autism, and other diseases and conditions of the brain.

Proposed Law:

Specific provisions of the bill would:

• Establish the California Institute for Scientific Research within the Government Operations Agency to facilitate scientific research by awarding grants and making loans to public or private research companies, universities, institutes, and organizations for scientific research and development, as specified.
• Provide that, upon appropriation by the Legislature, funds must be deposited into a newly created California Institute for Scientific Research Fund to be used by the Government Operations Agency to award grants and make loans, as specified.
• Establish the California Institute for Scientific Research Council, as specified, that must among other duties, determine which research projects will be funded by the California Institute for Scientific Research Fund.
• Require CHHS, through the CalRx Initiative, to enter into partnerships or contracts resulting in the development, production, procurement, or distribution of vaccines, by any entity that is authorized to do so under federal or state law, with the intent that these drugs be made widely available to public and private purchasers, providers, suppliers, and pharmacies; and make implementation subject to an appropriation made by the Legislature.

Staff Comments:

The costs of the bill would be dependent on the amount of the appropriations by the Legislature. For reference, below are the appropriations that have been made related to the implementation of CalRx:

• The 2021 Budget Act included one position to serve as Project Manager, and General Fund expenditure authority of $2.2 million in 2021-22, and $184,000 annually thereafter to establish CalRx.
• The 2022 Budget Act included one-time General Fund expenditure authority of $100 million to establish the Biosimilar Insulin Initiative. Of this amount, $50 million was allocated to enter into a partnership with a contract manufacturer to develop and bring to market interchangeable biosimilar insulin products in both vial and pen form. In addition to the partnership contract, the remaining $50 million was allocated for the construction of an insulin manufacturing facility based in California.
• The 2023 Budget Act included one position and expenditure authority from the Opioid Settlements Fund of $30 million in 2023-24 and $120,000 annually thereafter for CalRx to implement the Naloxone Access Initiative.

-- END --

SENATE COMMITTEE ON NATURAL RESOURCES AND WATER

Senator Monique Limón, Chair

2025 - 2026 Regular

Bill No: SB Hearing Date: April 22, 2025

Subject: California Institute for Scientific Research: CalRx Initiative: vaccines

SUMMARY

This bill would establish the California Institute for Scientific Research to facilitate scientific research by awarding grants and making loans to public or private research companies, universities, institutes, and organizations for scientific research and development.

BACKGROUND AND EXISTING LAW

Background on federal funding and risk of loss. According to information provided by the author, federal support for the University of California (UC) totaled $17.3 billion in the last fiscal year, representing a little more than 30% of the UC’s total budget. Most of this funding is for health care, research, and student support. Research funding is a significant part of the UC’s operations, and federal grants pay for faculty research, graduate student researcher and post-doc salaries. Federal research grants totaled $3.85 billion in 2023-24, which included $2.4 billion in National Institutes of Health research grants, $447 million in National Science Foundation research grants, $304 million in Department of Defense research grants, $73 million in National Aeronautics and Space Administration research grants, $133 million in Department of Energy research grants, and $470 million in research grants from other federal agencies.

The author states that the Trump administration has made statements indicating changes to, or full stop of, numerous federal programs. This includes reducing “facilities and administrative costs” associated with research grants to 15%, which is estimated to lead to a loss of at least $600 million for the University of California; stopping the provision of new federal research grants in most areas; and pulling back federal research grants focused on diversity, equity, and inclusion.

In February of this year, there were talks of massive layoffs for the National Ocean and Atmospheric Administration, an agency that provides climate and weather information across the U.S. economy.^[1] “NOAA’s products include the National Weather Service and the National Hurricane Center. It manages the nation’s fisheries. Its free streams of data are widely used by scientists, governments and businesses around the globe. NOAA is also one of the world’s leading climate science agencies … .”^[2]

On March 18, 2025, PBS News reported that the United States Environmental Protection Agency (U.S. EPA) planned to eliminate its scientific research office, which could include the termination of more than 1,000 scientists and other employees “who help provide the scientific foundation for rules safeguarding human health and ecosystems from environmental pollutants.”^[3] According to the article, the U.S. EPA Administrator Lee Zeldin has said that he wants to eliminate 65% of the agency’s budget. This, according to the article, is “a huge spending cut that would require major staffing reductions for jobs such as monitoring air and water quality, responding to natural disasters and lead abatement, among many other agency functions.”^[4] Although U.S. EPA representatives have stated that changes had not been finalized, many remain concerned.

On April 10, 2025, news broke of the federal administration’s plans to get rid of the U.S. Global Change Research Program (USGCRP), a 35-year old effort to track global climate change that was used to help shape regulations and policies across the government.^[5] Established in 1990, the program focuses on climate science, land productivity, water resources, fisheries, ecosystems, and the atmosphere. The program also produces the National Climate Assessment, a report that comes out every 4 years and is used to help prepare for the effects of climate change.

Existing law establishes the Government Operations Agency, which includes the Department of Technology, the Department of General Services, and the Office of Data and Innovation, among other departments, offices, and boards. (Government Code (GOV) §12803.2)

PROPOSED LAW

This bill would:

1. Establish the California Institute for Scientific Research (Institute) within the Government Operations Agency, and specifies that the Institute’s role is to facilitate scientific research by awarding grants and making loans to public or private research companies, universities, institutes, and organizations for scientific research and development, including, but not limited to, research in the following fields:
   
   1. Biomedical.
   2. Behavioral.
   3. Climate.
   4. Weather.
   5. Ocean.
   6. Coastal and marine ecosystems and resources.
   7. Detecting and responding to new and emerging health threats.
   8. Disease prevention.
   9. Promoting healthy and safe behaviors, communities, and environment.
   10. Safety, efficacy, and security of drugs, biological products, medical devices, our nation’s food supply, and cosmetics.
       
2. Establish the California Institute for Scientific Research Fund (Fund), and requires funds to be deposited in the Fund upon appropriation.
   
3. Requires moneys in the Fund to be used by the Government Operations Agency to award grants and make loans to public or private research companies, universities, institutes, and organizations for scientific research and development, including, but not limited to, the fields described above.
   
4. Requires all research and development funded by the Fund to be conducted under established standards of open scientific exchange, peer review, and public oversight.
   
   1. Requires all grants or loans provided under the bill be awarded or made available to researchers or projects located within the state, except that funding for research collaboratives between California and out-of-state researchers is permitted.
      
   2. Requires the Institute to prioritize funding research that replaces funding cuts by the federal government.
      
5. Establishes the California Institute for Scientific Research Council (Council) to develop the strategic objectives of the Institute; actively participate in the overall management of the Institute; and determine which research projects will be funded by the Fund based on research priorities and the technical merits of the proposals.
   
   1. Requires the Council to consist of 10 to 13 members appointed by the Secretary of the Governmental Operations Agency, with a majority of the members being scientists with research experience in the above-described fields and at least 2 members being members of the public.
      
   2. Authorizes individuals and organizations to submit nominations for membership to the Secretary of the Governmental Operations Agency and requires the Secretary of the Governmental Operations Agency to solicit nominations from relevant organizations and individuals.
      
   3. Requires the Council to contain the proportional representation of the above-described appointees when the Council approves the funding of research grants.
      
      1. Requires vacancies affecting the proportional representation to be filled before grants are approved and within 45 days of a vacancy.
         
   4. Requires a majority vote of appointed members for the approval of funding for any research project or proposal.
      
   5. Authorizes the Council to establish scientific peer review panels for the purposes of reviewing and prioritizing proposals on the basis of the track record of the investigators, scientific merit, and potential benefit to the health and well-being of the population, natural resources, and the environment of the state.
      
      1. Prohibits an expert on the scientific review panel from having a collaborative or commercial relationship with any applicant of a proposal that the expert is reviewing and prioritizing.
         
6. Requires the California Health and Human Services Agency to enter into partnerships or contracts resulting in the development, production, procurement, or distribution of vaccines, by any entity that is authorized to do so under federal or state law, with the intent that these drugs be made widely available to public and private purchasers, providers, suppliers, and pharmacies.

ARGUMENTS IN SUPPORT

According to the author, “SB 829 ensures scientific advancement will continue in California as the President and his allies dismantle our federal scientific institutions and our vaccine infrastructure. California’s economy is significantly driven by scientific research institutions, and the CDC, NIH, NSF, FDA, NOAA, and the NWS help drive that success. SB 829 helps fill the gap created by the President and DOGE’s slash and burn of federal science agencies by creating the California Institute for Scientific Research (CISR) to award grants scientific research and development. The bill also authorizes the CalRx program to procure, manufacture, and otherwise expand access to vaccines.”

ARGUMENTS IN OPPOSITION

None Received

COMMENTS

This bill is doubled-referred. This bill is double referred with the Senate Health Committee, with this committee being the committee of second referral. Elements of this bill under the jurisdiction of the Senate Health Committee are included here for context and completeness only. This bill passed out of the Senate Health Committee on April 9, 2025, with a vote of 8 - 2.

Health and climate change. Climate change poses many threats to our health and well-being. In April 2023, the U.S. EPA released the report Climate Change and Children’s Health and Well-Being in the United States, which investigated five climate-related environmental hazards associated with children’s health and well-being in the United States: extreme heat, poor air quality, changes in seasonality, flooding, and different types of infectious diseases. Some of the report’s key findings include: (1) temperature increases of 2^oC and 4^oC of global warming are associated with, on average, 4% and 7% reductions in academic achievement per child, respectively, relative to average learning gains; (2) new diagnoses of asthma associated with PM_2.5 and O₃ (ozone) exposure are estimated to increase by 35,500 per year at 2^oC of global warming up to 89,600 at 4^oC; and (3) in 21 Eastern states and the District of Columbia, an additional 2,600 new Lyme diseases cases per year are projected among children under 2^oC of global warming; at 4^oC global warming, the increase is projected to be an additional 23,400 cases per year.^[6]

In 2016, the USGCRP released its report The Impacts of Climate Change on Human Health in the United States: A Scientific Assessment. The assessment examined how climate change is affecting human health and the changes that may occur in the future. According to the assessment’s executive summary, “[e]very American is vulnerable to the health impacts associated with climate change. Increased exposure to multiple health threats, together with changes in sensitivity and the ability to adapt to those threats, increases a person’s vulnerability to climate-related health effects. The impacts of climate change on human health interact with underlying health, demographic, and socioeconomic factors. Through the combined influence of these factors, climate change exacerbates some existing health threats and creates new public health challenges.”^[7]

Given the strong connection between climate change and human health, the committee may wish to amend the bill to specifically give the Institute authority to award grants and make loans for research in climate change and its impact on human health. See Amendment 1.

SUGGESTED AMENDMENTS

AMENDMENT 1

Amend Government Code §11899(b)(3) as follows:

11899(b)(3) Climate, including climate change and its impact on human health.

SUPPORT

APLA Health

California Medical Association

Equality California

San Francisco Aids Foundation

OPPOSITION

None Received

-- END --

1. https://www.scientificamerican.com/article/trump-team-looks-to-drastically-cut-noaa-staff-and-budget/; last accessed April 10, 2025; https://www.npr.org/2025/02/15/nx-s1-5297183/noaa-national-weather-service-trump; last accessed April 11, 2025 ↑

2. Ibid. ↑

3. https://www.pbs.org/newshour/politics/epa-plans-to-cut-scientific-research-more-than-1000-employees-could-be-fired; last accessed April 11, 2025. ↑

4. Ibid. ↑

5. https://www.eenews.net/articles/why-trump-axed-the-global-change-research-program/; last accessed April 10, 2025. ↑

6. https://www.epa.gov/system/files/documents/2023-05/Climate_Change_and_Children%27s_Health_Report_Executive_Summary_.pdf ↑

7. https://health2016.globalchange.gov/; last accessed April 11, 2025 ↑

SENATE COMMITTEE ON HEALTH

Senator Caroline Menjivar, Chair

BILL NO: SB 829

SUBJECT: California Institute for Scientific Research: CalRx Initiative: vaccines

SUMMARY:

Establishes the California Institute for Scientific Research to facilitate scientific research by awarding grants and making loans to public or private research companies, universities, institutes, and organizations for scientific research and development. Requires the California Health and Human Services Agency to enter into partnerships or contracts resulting in the development, production, procurement, or distribution of vaccines, by any entity that is authorized to do so under federal or state law.

Existing law:

1. Establishes the Affordable Drug Manufacturing Act of 2020, which requires the California Health and Human Services Agency (CHHSA) or its departments to enter into partnerships to increase competition, lower prices, and address shortages in the market for generic prescription drugs, to reduce the cost of prescription drugs for public and private purchasers, taxpayers, and consumers, and to increase patient access to affordable drugs. Specifies that it is the Legislature’s intent that any manufacturing partnership is a partnership intended to create California-branded label for generic drugs. [HSC §127692]
2. Establishes the Government Operations Agency, which includes the Department of Technology, the Department of General Services, and the Office of Data and Innovation, among other departments, offices, and boards. [GOV §12803.2]
3. Establishes within the California Constitution, the California Institute for Regenerative Medicine to make grants and loans for stem cell research, for research facilities, and for other vital research opportunities to realize therapies, protocols, and/or medical procedures that will result in, as speedily as possible, the cure for, and/or substantial mitigation of, major diseases, injuries, and orphan diseases. [Cal. Const., article XXXV, §2]

This bill:

1. Establishes the California Institute for Scientific Research (Institute) within the Government Operations Agency, and specifies that the Institute’s role is to facilitate scientific research by awarding grants and making loans to public or private research companies, universities, institutes, and organizations for scientific research and development, including, but not limited to, research in any of the following fields:
   1. Biomedical;
   2. Behavioral;
   3. Climate;
   4. Weather;
   5. Ocean;
   6. Coastal and marine ecosystems and resources;
   7. Detecting and responding to new and emerging health threats;
   8. Disease prevention;
   9. Promoting healthy and safe behaviors, communities, and environment; and,
   10. Safety, efficacy, and security of drugs, biological products, medical devices, our nation’s food supply, and cosmetics.
2. Establishes the California Institute for Scientific Research Fund (Fund), and requires funds to be deposited in the Fund upon appropriation by the Legislature.
3. Requires moneys in the Fund to be used by the Government Operations Agency to award grants and make loans to public or private research companies, universities, institutes, and organizations for scientific research and development, including but not limited to, research in any of the fields described in 1) above.
4. Requires all research funded by the Fund to be conducted under established standards of open scientific exchange, peer review, and public oversight.
5. Requires all grants or loans provided under this bill to be awarded or made available to researchers or projects located within this state, except that funding for research collaboratives between California and out-of-state researchers is permitted.
6. Establishes the California Institute for Scientific Research Council (Council) consisting of 10 to 13 members appointed by the Secretary of the Governmental Operations Agency. Requires a majority of members of the Council to be scientists with current or past research experience in the fields described in 1) above, and requires at least two to be members of the public. Requires Council members to serve without compensation, but permits members to receive reimbursement for travel and necessary expenses actually incurred in the performance of their duties.
7. Requires the Council to develop the strategic objectives and priorities of the Institute, actively participate in the overall management of the Institute, and determine which research projects will be funded based on the research priorities and the technical merits of the proposals.
8. Requires a vote of a majority of the appointed members of the Council for approval of funding of any research project or proposal presented for funding.
9. Permits the Council to establish one or more scientific peer review panels consisting of experts for the purposes of reviewing and prioritizing proposals on the basis of the track record of the investigators, scientific merit of the proposal, and potential benefit to the health and well-being of the population, natural resources, and environment of the state. Prohibits an expert on a scientific review panel from having a collaborative or commercial relationship to any applicant of a proposal for funding that the expert is reviewing and prioritizing.
10. Requires all grants or loans provided under this bill to be awarded based on:
    1. The basis of the research priorities established for the Institute by the Council; and,
    2. The scientific merit of the proposed research, as determined by an open, competitive, scientific peer review process that ensures objectivity, consistency, and high quality.
11. Requires the Institute to prioritize funding research that replaces funding cuts by the federal government.
12. Requires all research projects submitted for potential funding, in order to be eligible, to be reviewed and approved by an institutional review board that meets the requirements of federal law and regulations.
13. Prohibits more than 5% of the moneys in the Fund to be used for administrative costs of the Government Operations Agency.
14. Requires all intellectual property assets developed using funds authorized for, or made available to, the Institute to be treated pursuant to state and federal law.
15. Requires the CHHSA to enter into partnerships or contracts resulting in the development, production, procurement, or distribution of vaccines, by any entity that is authorized to do so under federal or state law, with the intent that these drugs be made widely available to public and private purchasers, providers, suppliers, and pharmacies. Requires this provision to be implemented through the CalRx Initiative, subject to an appropriation made by the Legislature for this purpose.
16. Makes a number of legislative findings and declarations, including that the Trump Administration, spearheaded by Elon Musk’s Department of Government Efficiency, has slashed personnel and programs at all federal science agencies, threatening the continued leadership, and perhaps the existence of, these agencies, and that California must step up and fill the void left by federal cuts.

FISCAL EFFECT:

This bill has not been analyzed by a fiscal committee.

COMMENTS:

1. Author’s statement. According to the author, this bill ensures scientific advancement will continue in California as the President and his allies dismantle our federal scientific institutions and our vaccine infrastructure. California’s economy is significantly driven by scientific research institutions, and the Centers for Disease Control and Prevention (CDC), National Institutes of Health (NIH), National Science Foundation (NSF), Food and Drug Administration (FDA), National Oceanic and Atmospheric Administration (NOAA), and the National Weather Service (NWS) help drive that success. This bill helps fill the gap created by the President and DOGE’s slash and burn of federal science agencies by creating the California Institute for Scientific Research (CISR) to award grants for scientific research and development. The bill also authorizes the CalRx program to procure, manufacture, and otherwise expand access to vaccines.
2. Background on federal funding and risk of loss provided by author. According to information provided by the author, federal support for the University of California (UC) totaled $17.3 billion in the last fiscal year, which represents a little more than 30% of UC’s total budget. Most of this funding is for health care, research, and student support. Research funding is a significant part of the UC’s operations, and federal grants pay for faculty research, graduate student researcher and post-doc salaries. Federal research grants totaled $3.85 billion in 2023-24, which included $2.4 billion in NIH research grants, $447 million in NSF research grants, $304 million in Department of Defense research grants, $73 million in National Aeronautics and Space Administration research grants, $133 million in Department of Energy research grants, and $470 million in research grants from other federal agencies.
   
   The author states that the Trump Administration has made statements indicating changes to, or a full stop of, numerous federal programs. The current known risks include a cap of 15% on “facilities and administrative” costs associated with research grants. This change is estimated to lead to a loss of at least $600 million for UC, though the change is being challenged in the courts. The author states the Trump Administration is also threatening to stop providing new federal research grants in most areas, and since these research grants are on a three-to-five year cycle, this change could lead to an approximately 25% reduction in federal research dollars annually. Additionally, the Trump Administration has proposed to pull back federal research grants focused on Diversity, Equity and Inclusion, though this is also being challenged in the courts.
3. Recent federal reduction in public health funding of approximately $1 billion. On March 24^th, the California Department of Public Health (CDPH) received notice from the CDC that it intends to immediately end a significant amount of state and local public health funding. This funding was initially awarded during COVID-19, but now also supports, with prior federal approval, respiratory virus and vaccine preventable disease monitoring, testing and response, immunizations and vaccines for children, and health disparities efforts. This funding also supports the public health work and data systems improved during the pandemic. CDPH estimates that grant terminations will result in a loss of at least $840 million of federal funding. More than $330 million of these funds were targeted at support public health efforts at the local level. There are also local health departments that are directly funded by the federal government that would increase this statewide total amount risk. In addition, the Department of Health Care Services (DHCS) received termination letters from the federal Substance Abuse Mental Health Services Administration on the same date for supplemental COVID-19 awards to the Community Mental Health Services Block Grant and Substance Use Prevention, Treatment, and Recovery Services Block Grant. DHCS estimates these grant terminations will result in a loss of approximately $120 million in federal funding over the next several months that was intended to support mental health and substance use disorder efforts at the state and local levels, including initiatives to reduce overdose deaths, expand access to medications for opioid use disorder, and improve behavioral health service delivery.
   
   The staffing impact from this loss of funding is estimated by CDPH to affect 273 staff at the state level (77 state employees, plus 196 other employees from UC or Heluna Health). At the local level, county estimates are that 1,747 local health department staff are funded from these federal funds.
   
   On Thursday, April 3^rd, Attorney General Bonta announced that the U.S. District Court for the District of Rhode Island granted a temporary restraining order that immediately restores these cuts while the lawsuit, filed by a coalition of 23 states plus the District of Columbia, continues.
4. California Institute for Regenerative Medicine (CIRM). Following the Bush Administration’s 2001 Executive Order to ban the use of federal funds for embryonic stem cell research, Proposition 71 was placed on the 2004 ballot through the citizen’s initiative process, funded largely by stem-cell research advocate Robert Klein II. Proposition 71 authorized $3 billion in general obligation bonds to establish the CIRM in order to fund stem cell research in California over a ten-year period. While the Obama Administration rescinded the ban on federal stem cell research in 2009, Robert Klein helped to fund another initiative in 2020, known as Proposition 14, to authorize an additional $5.5 billion in state general obligation bonds to fund research grants. Proposition 14, which passed with 51% of the vote, dedicated $1.5 billion to research and therapy for Alzheimer’s disease, Parkinson’s disease, stroke, dementia, epilepsy, brain cancer, schizophrenia, autism, and other diseases and conditions of the brain, and otherwise expanded programs promoting stem cell and other medical research, therapy development and delivery, and student and physician training and fellowships.
5. CalRx Report to the Legislature. As required under the Affordable Drug Manufacturing Act of 2020, the Department of Health Care Access and Information (HCAI), which is implementing an effort to produce generic drugs under the label CalRx, submitted its report to the Legislature in February of 2025. According to the report’s executive summary, any form of State involvement in generic drug manufacturing has several benefits which include eliminating costs associated with the use of intermediaries, guaranteeing a more stable and reliable supply of drugs, and ensuring essential medications are more affordable for Californians. State-owned and operated manufacturing would grant California the most direct control in setting its own prices and increasing transparency in production costs. However, this endeavor requires a significant upfront investment, has a steep industry learning curve, and faces operational, legal, and regulatory challenges with a potentially lengthy timeframe for return on investment. Upfront costs for establishing a new generic drug manufacturing facility range from $100 million to $300 million initially with ongoing costs between $20 million to $50 million incurred annually. Alternatively, continuing to partner with existing drug manufacturers or entities leads to immediate industry expertise, shared responsibility for costs, and quicker market entry as demonstrated by CalRx’s Naloxone Access Initiative. Partnerships could include white labels and strategic investments. While public-private partnerships require the State to share decision-making in setting prices and rely on an industry partner, this more flexible model avoids holding full risk for investments. Such public-private partnerships merge the strengths of the private sector’s agility, expertise, and experience with the oversight, scale, and public welfare focus of the State. These partnerships still concentrate public investment to correct pharmaceutical market failures, but do not carry the same risks and upfront costs associated with direct manufacturing. Ultimately, pharmaceutical market distortions for specific medications tend to change quickly, and committing a large investment into an entirely State-owned facility reduces the State’s ability to be flexible in this fluid environment. The State should proceed with leveraging public-private partnerships with drug manufacturers as this approach leads to the best balance of flexibility and control so long as there is detailed planning and strategic collaboration.
6. CalRx effort to manufacture insulin. California has a $50 million contract with the nonprofit generic drug and pharmaceutical company, Civica Rx, to produce the three most commonly used long-acting and rapid-acting types of insulin in both vial and pen forms under the CalRx label. There are two major steps when making insulin: a) manufacturing the drug substance, which is the active ingredient used to make the drug product; and, b) finishing and filling it into vials or pens. Civica is working with GeneSys Biologics to co-develop the drug substance for the three CalRx biosimilar insulins. The filling and finishing of the three insulins will be done at Civica’s state-of- the-art 140,000 square-foot manufacturing plant, being built in Petersburg, Virginia. Federal approval from the FDA was expected in 2024 but that has not yet occurred. The products will be available publicly after FDA approval. Civica has announced that the manufacturer suggested prices will be: a) a 10mL vial will be made available for no more than $30 (normally $300); and, b) a box of 5 pre-filled 3mL pens will be made available for no more than $55 (normally more than $500). CalRx plans to make biosimilar insulins available for Glargine, Aspart, and Lispro (expected to be interchangeable with Lantus, Humalog, and Novolog respectively). For CalRx, no new prescription will be needed. Californians will be able to ask for the CalRx generic at their local pharmacy or via mail order pharmacies, so long as pharmacies agree to order and stock the product. CalRx insulin prices are estimated to be about 90% lower than list prices for branded products, saving patients between $2,000 and $4,000 annually.
7. Double referral. This bill is double referred. Should it pass out of this Committee, it will be referred to the Senate Committee on Natural Resources and Water.
8. Prior legislation. SB 852 (Pan, Chapter 207, Statute of 2020) enacted the Affordable Drug Manufacturing Act of 2020, which requires the California Health and Human Services Agency to enter into partnerships to increase competition, lower prices, and address shortages in the market for generic prescription drugs, to reduce the cost of prescription drugs for public and private purchasers, taxpayers, and consumers, and, to increase patient access to affordable drugs.

SUPPORT AND OPPOSITION:

Support: None received

Oppose: None received

-- END --