Assembly Select Committee on Select Committee on Biotechnology

Well, good afternoon, everyone. I am very excited to invite you, and welcome to Room 447. This is the first hearing of the Assembly Select Committee on Biotechnology for the 2023-24 legislative session. Very excited to have been appointed the chair of this Select Committee, and we've got a full membership of 11. Many are juggling other meetings right now, and I will know we'll be in and out of this hearing. As you all know, California is home to numerous biotechnology companies, educational institutions, research facilities, and development.

These are great jobs. These are life saving breakthroughs, and we're very proud of the work that we've been able to incentivize and be able to support here. Many of our biotechnology organizations provide the technologies that are going to help society and an individual's health and well being. For example, our companies have been on the frontier of ending the coronavirus pandemic and finding a cure for some of our most devastating diseases. It's imperative that our Legislature understands and supports some of the crucial work of this industry.

And so the goal of today's hearing is really just to hear from industry officials on some of the current state and the future of biotechnologies industry. This is a broad setting conversation. This is going to be a Select Committee that, under my chairmanship, intends to be very active both inside the Capitol and out in many of the different cluster areas across the state over the next year and a half.

We have a lot to explore, but it's important that we do so because it's going to inform much of the policy and budget that the Legislature does through its standing committees. And we want to make sure that this Select Committee is actively synthesizing a lot of that information and being able to feed that up to make informed decisions, because, of course, this is a competitive market. We really compete globally and with other areas of the country as well.

And we want to keep California at the forefront of a lot of the work we do. So we are going to be commencing. We do want to really keep ourselves to the time today of about 90 minutes for this first hearing, but not lose any of the important discussion that our panelists are going to bring and that our Committee Members are going to be able to have a chance to comment on. With that. As part of our welcome remarks, I did want to turn it over to our Committee Members who are here. I'll begin with the Senate Member Boerner for any opening thoughts.

Yes, I want to thank everybody for being here, and thank you to the chair for convening this hearing. It's always difficult to find a time to do a Select Committee when both you can have panelists that come and Members who can attend as well, and obviously representing a large portion of the San Diego coast. Biotechnology is not only important to our economy, but it's important to the health and well being of all Californians and all Americans and all people in the world.

And I think one thing we've seen with the pandemic is how well the biotechnology and life sciences industry can work together to really help solve a crisis. And as we come out of this pandemic, it's really important that we don't forget that lesson. And so I'm really looking forward to today's panelists. I, unfortunately, have Health Committees, so I will have to bounce between different places, but really appreciate the chair for pulling us all together here today.

Assemblywoman Papan?

Zero, I'll just say ditto, and let's get on with the show. As you know, Biotech's big in my district. Thank you for convening us, and I'm ready to listen. You have very important work that you do, so come on forward.

Thank you. And with that, we will come on forward. I'd like to invite our first three panelists. We have Greg Theyel, the Director of the Biomedical Manufacturing Network, Abigail Lore, the Director of policy and research with PhRMA, and Veronica Sandoval. Dr. Sandoval, the principal for patient inclusion and health equity, which in Genentech. The purpose of this first panel is to really provide an overview of the life sciences industry and some of the opportunities and threats that we see today and on the horizon.

And again, this conversation here today is meant to be very broad setting and will inform a lot of our subsequent meetings that we have in the Select Committee, both in and out of the Capitol, on workforce development, on the issues that we think about when it comes to our manufacturing tax credit. We're going to cover a lot of ground, but appreciate you being here. And, Mr. Theyel, I'm going to begin with you.

Great. Thank you. And thank you for inviting us today. I just want to share three points about the industry that'll give an overview for the State of California. And my organization, the Biomedical Manufacturing Network, is a little different than the other organizations in the state. They have some great reports that show billions of dollars and millions of jobs. My organization tracks the individual companies.

And so for the past 10 years, we've identified where all the companies are located, their CEOs, their headcounts, where they are in clinical trials. So the next slide, please. And so what you see here is over 5000 pins on a map. And I'm an engineer by day but a geographer by night. And so I've found it fascinating to track all of these. Next slide please. And so what I'll show you is I'm going to show you the three main regions where this industry is concentrated.

And like I said, over 5000 pins. And our grant money has come from the US Department of Commerce. And they said go out and help companies. And so we've helped over 1000 companies in the past 10 years. And so I got really good advice in the beginning and they said find the companies, know where they are. Everyone has macro and aggregate data, but no one has individual company data.

And so I invite you and this is public information, I'll share this with your Committee going forward if you want to know where the companies are and what they're doing in each of the companies. So that's point number one. Point number two, this is Los Angeles. And I wanted to make a second point and that is when many people think about biotech or biomedical, they often think about just one individual sector.

And so the second point I want to make is that I track eight different sectors and they're all quite different as far as workforce, as far as the way they innovate, as far as the money they raise. And so we look at Biotech, which is life materials formed into Agtech or medicine or materials. We look at Pharma, we look at medical devices and equipment, we look at some real emerging ones like genomics and digital healthcare. And we look at contract research organizations and contract manufacturers.

And so eight different sectors. And I make these presentations to different types of groups. And whenever I make them to school groups, either undergrads or grad students or high school students, I say know the sector because they're quite different. So medical device and equipment, you're assembling things, you're putting things, small things together in a clean room. Biotech is very lab based. Like we see digital healthcare and genomics, might as well be a tech except that it's focused on life science. And so quite different sectors.

So that's point number two. The states made up of different sectors. Next slide please. And then the next one as well. So in these three regions, about 85% of the companies are located. All right? And I track something a little different than other companies too, other organizations. They track CVSs and suppliers of lab supplies and things like that. These are specifically the companies making products and developing the research.

So that's why the numbers may seem lower than some of the numbers you may have seen, but these are the actual companies doing the science. All right? And Biotech makes up about 40%. Medical devices and equipment make up another 40%. And then that remaining 20% is digital healthcare and genomics and contract research and research organizations. And so it's really varied across this. AnD so let me dig into the third point, and this was the really interesting point. Next slide.

So what we did was we calculated what called location quotients. And what this looks at is it looks at certain geographies within the state that have a concentration of biomedical companies. So we're looking for whether this industry is spread evenly across the state or whether there's some specific hotspots. And so a heat map is perfect for this. And so we calculate these location quotations, and as a result, then we came up with nine regions within the state. Right. You can go to the next one.

Next one right here. Okay, so I'll go quickly through these nine regions. I've dubbed the term microclimates. We all use microclimates here for weather, but these are microclimates of innovation, and each one's quite different. So this is Berkeley. There's about 165 companies there. They're about a quarter of the size of average, and over half of them are getting some type of government nondilutive funding. And they also turn over at about twice the rate of companies in the rest of the state.

So this is lots of new ideas, lots of trial and error, lots of failure, but also some learning from that failure as well. Small companies really located around UC Berkeley and the labs there. So that's a real kind of microclimate of research and development. Next slide, please. Then move on to Silicon Valley. Silicon Valley is a different personality. So each one of these microclimates has a personality. Again, back to when I present to students, I say, know your personality.

Do you want to be part of this innovative early stage, lots of turnover type environment, or. Silicon Valley is a place where, believe it or not, there are over 300 companies in Silicon Valley. Harvard Business Review, back in 2012 said, you know what? The biotech industry needs its own Silicon Valley. Well, surprise. They have their own Silicon Valley, and it's Silicon Valley. And the reason that they have it is because there are all of these other cutting edge technologies that are located nearby.

And so we're an innovative company. You need to be close to sensors and close to software and close to electronics, because you're integrating these other aspects, as well as with cutting edge finance, as well with the venture capital community. Nearby. So this microclimate is a fascinating kind of value chain integration. Next is Irvine. Irvine has amazing supply networks. They've got machinists, they've got contract manufacturers, they've got engineering firms, and they're very strong in medical devices and equipment.

Knowing these geographies are really important because it's medical device and equipment that hire people for middle skill jobs. The biotech companies in South San Francisco love South San Francisco, but it's very different in a different workforce profile. So places like Irvine, places like Fremont, places like Carlsbad, they employ folks in these middle skill jobs that you only need a high school degree or a two year degree. That's an important kind of geography and economic development to know. Next one, please. Los Angeles.

This talent pool right here is amazing. UCLA, Caltech, City of Hope, all that kind of this crescent that goes from Santa Monica all the way up through Pasadena is a fascinating display of mainly biotech and pharma companies. Early stage again, lots of spinouts, but really feeding on the talent pool there. Again, another microclimate with a different personality of sorts. Next one, please. Like I said, Fremont scale up when companies need to scale up. And you can slip to the next one too, as well. Thank you.

Carlsbad and Fremont are fascinating because this is where companies go to grow up, especially medical and device equipment, but also biopharma companies selling gene therapies. You're going to hear about cell and gene therapies later. Companies move from South San Francisco to places like Newark, Fremont, Hayward, when it's time to start building and scaling up and having more space and also being close by to suppliers and contract manufacturers and contract research organizations. So it's a bit of a foundry almost.

So as companies evolve and grow up, they find new geographies to move to and actually expand. So it's an important. That's one of the things that really distinguishes California from the rest of the world, actually, is because we have these different microclimates that fit different parts of the evolution of a company. And so companies can stay here through their entire life cycle in the life science industry. Next, please. South San Francisco. Yes, this is the birthplace of the biotech industry, way over 300 companies there.

But I coined a term called proximity pipeline because about 20 years ago, the big companies said it's really expensive to internalize all our R&D. Let's get a lot of small companies nearby in incubators and let's have some investment deals with some of them and let's watch them carefully. And when things go well, we acquire them or take a bigger stake in them. And so South San Francisco is a great example of this proximity pipeline concept.

And it's almost exclusively biotech and pharma in South San Francisco. Next, please. And San Francisco, who knew? I recently presented to the mayor and she had no idea that there are over 300 biomedical companies in San Francisco. Poor San Francisco gets beat up a lot. How about a new story I told her? How about a story about emerging digital healthcare and genomics companies in San Francisco? Close to 300 of them there. Yes, they seem like tech companies.

Yes, they fit into big, tall buildings and they have three or four employees only sometimes. But this is really a boom and an unpublicized story that San Francisco is really a biomedical hub as well. Next, please. And, of course, San Diego. Can't miss San Diego. San Diego is a Biopharma powerhouse. There are almost a thousand companies just in San Diego in this industry. Yes, it's a big geography, but it's a fantastic location that rivals Cambridge, Boston, specifically in Biopharma. Just by themselves, the state demolishes Massachusetts.

Okay, no question about that. And the rest of the world. But San Diego alone can take on Cambridge, Boston, particularly in biopharma. Pretty focused on biopharma, some genomics, some digital healthcare. Not the hardware and devices and equipment that you find in Irvine and up in the Bay Area, but again, another microclimate. So last slide, please. So, number one, lots of pins. I'm happy to share the pins with you and the database behind all the pins. Number one.

Number two, lots of diversity when people say biomedical or life science, lots and lots of diversity of the types of companies and the sectors within that, and each one has a personality. And then the third point, obviously, is that the geographies, the microclimates, each of the geographies around the state, these nine that I've singled out have different personalities, different needs, but also different benefits for the state as well. So thank you very much.

Great. Thank you, Dr. Theyel. Really fascinating overview.

Definitely.

Probably a lot of requests will be coming in for a lot more information that is integrated in those slides. We're going to go ahead to our other two panelists as well, and then maybe have questions for the entire panel. Next, I'd like to invite Abigail Lore, the Director of Policy of Research. Policy and research with PhRMA.

Thank you. Good afternoon. My name is Abigail Lore, and I want to thank the Select Committee for having me here today to talk about the impacts of policy, particularly this new federal policy, the Inflation Reduction Act. IRA, and demonstrate the negative consequences that this policy can have on innovation and patients. It provides a useful lens through which to examine how price control policies can impact innovation. The economy, and I appreciate being able to explore this with you today.

PhRMA represents the country's leading biopharmaceutical research companies who are devoted to discovering and developing new medicines to help patients live longer, healthier, and more productive lives. The biopharmaceutical sector is one of the most research intensive industries in the US. Since 2000, PhRMA Member companies have invested more than half $1.0 trillion in the search for new treatments and cures. And in 2021, the industry's R&D investments totaled $102.3 billion, the highest investment on record.

And cumulative medical advances are leading to better health outcomes for patients, demonstrating that this policy environment that we have and policy initiatives that have long supported the R&D ecosystem, have been working to incentivize innovation. In 2022, the US Food and Drug Administration approved 45 new medicines where over 50% of those medicines were first in class, meaning that they employed a new mechanism of action different than existing therapies.

Further, new therapies are transforming our approach to treat cancer, for example, and driving dramatic reductions in mortality and increasing survival. Between 2000 and 2016 alone, new cancer drug approvals were associated with 1.3 million prevented cancer deaths and many more. Advances like this are in development. All the innovation you'll hear about today, the things talked about in the second panel or seen later on the facility tour, is at risk under policies like price controls.

There are currently 8000 medicines in development globally to help meet the needs of patients that don't currently have a treatment option. Unfortunately, all of this progress is at risk because of policies like national and state price controls. We went old school today, so in one of your packets, you will have a slide that demonstrates our drug development system. It's a lengthy, costly, it's uncertain, and it requires a policy environment that incentivizes innovation to succeed. As you'll see from this exhibit, there's multiple stages of drug development.

It can take 10 to 15 years to develop and an average of $2.6 billion. And only 12% of these investigational medicines that reach clinical trials receive approval from the FDA. Now, after FDA approval, on the far left hand side, you'll see this phase of a development. Phase four Post approval research this phase of drug development is vital to the development of new uses for existing medicines, especially in cancer.

New research shows that of drugs that receive FDA approval between the beginning of 2006 and the end of 2013 over 60% of those small molecule cancer medicines received at least one post approval indication, and 20% received three or more post approval indications, demonstrating the importance of continued research on already approved medicines. Price control policies specifically disrupt this system of postapproval research that these patients depend on.

In the United States, there have historically been legal and regulatory frameworks that recognize the need to maintain incentives for bringing new treatments to patients, while also encouraging the introduction of biosimilar and generic versions of branded medicines. This is one of the reasons our competitive market based system has succeeded in holding down prescription medicine prices and spending, all while enabling the US to maintain global leadership in biopharmaceutical innovation.

Generics and biosimilars have successfully offset spending on new brand medicines in the United States to date, allowing for prescription medicines to account for just 14% of total healthcare spending over the last decade, even while many breakthrough treatments have continued to enter the market to help patients. But the imposition of policies that harm innovation, like government set prices, severely disrupts this balanced framework, undermining the ability to incentivize both competition and controlled costs and innovations.

Now, when countries have policies that let the government act as a gatekeeper between patients and new treatments, it's the patients who suffer. Recent research shows that a record number of new medicines have launched globally, but due to gaps in local coverage plans, patients in most countries, including many developed countries, can access only a small share of these new medicines.

For example, on average, patients in OECD countries can have access to only 29% of new medicines through a government health plan, some of which Institute restrictions on the price. But in the US, they launch first, and they launch fastest. Patients can have access to 85% of new medicines at launch. In addition, patients in other countries often wait on average 41 months longer than patients in the US for their government health insurance to cover new medicines.

Now, price controls are often directed at a limited number of high priced drugs or drugs that are highly utilized. Government price controls essentially allow the government to choose which drugs will be incentivized and which drugs will not, exemplified in the federal law, the Ira the secretary selects certain drugs that are deemed to not have any competition from a list of the top 100 Medicare spend drugs to set the price of the government.

Set price becomes the new basis for Medicare reimbursement and patient cost sharing in the Medicare Parts B and D programs. Companies that do not comply with this price will face penalties, and this year, the initial 10 drugs for price setting will be selected, and then the number of drugs selected will increase up to 80 drugs by 2030. In addition to the requirement that drugs for selection are those without a marketed competitor, this federal law creates arbitrary timelines for when this government set price goes into effect.

Under Ira small molecule drugs, which are your pills and capsules, they can be selected for government price setting just seven years after FDA approval, with their government set price going into effect two years after that. Biologic medicines, which are often your physician administered medicines, can be selected for their government set price at 11 years after approval, and their price will also go into effect two years after this.

Shorter timeline for pills and capsules is therefore creating this penalty against small molecule medicines or a pill penalty that will discourage the investment and development of these kinds of medicines. But these are the exact types of medicines that are often easier and more convenient to take aid in adherence, and are often preferred by patients. And the other thing with price control policies is that they don't account for the factors that reflect the value of the medicine or the value that it brings to patients and caregivergivers.

Price controls ignore the factors that account for medicines that may only be for a few patients, such as those with rare diseases, or it's an orphan drug, or the duration of the treatment timeline. A price control won't value if it's a cure versus an ongoing treatment. For example, in your second exhibit with the scales, you can see the types of information that the Ira is going to require for the Secretary to consider when establishing this government set price.

And what we know about the intended approach by the government so far is that it will tip the scales against patients and punish innovation. And it undermines any past efforts that incentivize research and development. And even more problematic is the arbitrary nature of determining what is a fair price and who will make that decision. In many instances, the individuals making these decisions aren't healthcare providers or experts who understand the value that these prescription drugs can bring to patients as well as the overall healthcare system.

Too often, they're bureaucrats with no scientific or medical understanding to make the decisions in the best interests of patients. In fact, under price setting policies such as the Ira, the government has signaled that it will set the price at the cost of manufacturing and distributing the medicine with a very small margin to continue to accumulate a return on investment. Pharma is concerned that prices set this Low will have a profoundly negative impact on continued investment in new uses for already FDA approved medicines and future innovation.

In addition, recent experiences with drug shortages across the US have highlighted the extremely negative impacts of price setting policies like the Ira on supply chain resiliency drugs such as sterile injectable drugs are particularly susceptible to shortages when the margin is too Low, according to former FDA Commissioner Scott Gottlieb. Quote. But when it comes to an injectable drug, you need to leave a margin in so people can reinvest in manufacturing facilities, make sure that they're high quality, he added.

They haven't done that under current government programs, and things go wrong and it will result in shortages, unquote. To fully understand how price controls impact innovation, it's helpful to understand a bit more about this balance we have between innovation and competition from generics and biosimilars. So you can see in your packets on exhibit three a standard lifecycle of a medicine.

The time between the launch of a drug and the launch of a first generic or biosimilar competitor is known as the effective patent life of a new branded drug. The most recently calculated effective patent life for a new small molecule medicine that experienced initial generic entry between 2017 and 2019 was about 13 to 14 years. So now let's turn our attention to the next exhibit and see what happens under government price setting.

Unfortunately, under laws like the IRA, the price is set for small molecules and biologics without a generic competitor at nine years and 13 years after FDA approval, respectively, which is far earlier than the average time of their effective patent life. We can see that the price controls cut short the time that companies have to invest in and continue researching and developing after initial approval.

Because of this reduced time to earn potential profits, 95% of pharma Members say that they expect to develop fewer new medicines on already approved FDA medicines. In addition, when asked if they shift R&D investment focus away from small molecules because of this pill penalty, 63% of those who responded said yes. This pill penalty throws uncertainty into a previously stable, predictable and robust generics market, and with fewer innovative medicines being developed, we're inadvertently leaving patients with fewer Low cost treatment options in the future.

You have one more minute?

Yeah, absolutely. The price setting policies are unraveling a uniquely American innovation ecosystem and at risk future innovation for patients. Under price controls, companies are forced to make tough decisions about R&D and investment, and the Shorter time on the market to earn a return is forced by price controls and has a ripple effect that may result in fewer products in the robust pipeline, resulting in slower access to potentially fewer treatments and cures for patients.

In addition to the impact on innovation, we know that new drug price setting policies expected to have a negative $645,000,000,000 impact on the industry over the next 10 years, not only will the law reduce resources available to invest in the next generation of treatments and cures, but also lead to significant job loss. One analysis estimates that more than 600,000 American jobs could be lost as a result of this law.

Moreover, the jobs that are at risk are precisely the kinds of jobs that policymakers aim to grow, the high value jobs that deliver disproportionate benefits to our U. S. Economy. Unfortunately, state and national price setting policies threaten to undermine America's competitive position as a leader in biopharmaceutical innovation. Rather than eroding the medical and economic contributions of the industry and its global leadership, we need to support a policy and regulatory environment that recognizes the value of science.

I hope that you can see through the lens of this very specific federal law the significant harms of government price setting policy. Thank you, and I'm happy to take any of your questions at the end.

Thank you, Ms. Lore. And finally, we have Dr. Veronica Sandoval, the principal for patient inclusion and health equity, which in NTEC.

Prior to my role as Principal in the Patient Inclusion and Health Equity Team at the Chief Diversity Office, I was a medical science liaison in the California Hawaii ecosystem, supporting the respiratory portfolio. Through my role in Genentech's Chief Diversity Office, I support the development and execution of our advancing inclusive research and health equity strategy. I also lead external and internal engagements and opportunities for collaboration with key stakeholders partnering with us to dismantle health inequities and diversify clinical research.

Much of the information I will be discussing this afternoon is in the Gentics 2022 Diversity and Inclusion Report, which was provided to the Committee in advance. Next slide please. Our goal at Genentech is to deliver scientific innovations that drive better outcomes for our people, patients, business and communities by advancing and championing diversity, equity and inclusion. Our diversity and inclusion strategy is truly integrated into genetics culture business.

Beyond just hiring and retaining talent, this is a holistic approach to diversity and inclusion and it is centered around three core pillars of our 2025 commitments. Next slide please. If you could click three times please.

Our first pillar is fostering belonging where we are creating a culture of belonging for our employees and commit that by 2025 we'll double Black and Latino representation of Directors and officers, Mirror Asian representation of directors and officers to that of individual contributors and managers, and commit to address gender representation opportunity zones. The middle pillar is advancing inclusive research and health equity for all of our patients and this is not what I will be addressing today.

The last pillar is transforming society where we're investing and partnering with our communities. In this pillar, we are annually committing $1 billion of our external spend to diverse suppliers. We are requiring diversity and inclusion commitments from all of our suppliers with request proposals of $500,000 and we are championing kindergarten to career programs. I would like to share with you some notable areas of progress in 2022. I'm starting with our fostering belonging commitments.

In 2022, we reached the highest representation of Black and Latino employees in Genentech's history. We launched an Asian Leadership academy to accelerate the growth of Asian leaders at Genentech in cooperation with Mackenzie and Company. The focus of the Executive leadership and management Acceleration efforts is to tap to Genentech's own ranks to mirror Asian representation in earlier level jobs.

Another program that we launch in 2022 is a genetic leadership for Executive advancement and development known as a G-Lead program in collaboration with Columbia Business School Executive Education, the G-Lead program is designed to strengthen and advance the leadership skills and capabilities of senior, Black and Latino talent at Genentech, where the G-Lead participants are challenged through in person modules to help enhance skills in a leadership toolkit they can leverage for continued professional career growth.

I'm proud to share that in 2022, we welcome a diverse group of interns and Fellows, 20.2% of interns and 16.8% of postdoctoral fellows identified as Black or Latino, representing 7% and 9% increase, respectively, since the launch of our 2025 commitments. Now turning to our transforming society Pillar I want to share with you. This is something that we're very proud of. Genentech. As of 2022, we committed $805,000,000 of external spend to diverse suppliers. This represents a 70.5 million increase in external spend with diverse suppliers since 2020.

We launched the Diverse Supplier Mentoring program and mentored eight diverse suppliers from minority business employee enterprises, women owned, disabilityowned and LGBTQ plus owned businesses, as well as invested over $40 million in health equity and diversity and STEM related charitable giving. I would like to highlight Genentic's Signature Kindergarten to 12th grade STEM program, which we launched in 2017 and have invested $60 million in more than 65,000 employee volunteer hours to dismantle systemic barriers to STEM education and careers for historically marginalized and underrepresented groups.

Future Lab is a science education partnership with South San Francisco schools where we've reached more than 8000 predominantly Latino and first generation students annually and inspire their curiosity about science and medicine. Of note is that 93% of the participants reported more interest in pursuing STEM after the program. Given the success of the Future Lab program in South San Francisco in 2022, we introduced Future Lab Plus, a 10 million national expansion of Genentech's local Future lab program.

The program offers a two year, open access biotech curriculum for high school students that is accessible, engaging and equity centered. It also has a professional learning community that supports teachers with professional development stipends, equipment and supplies to engage students in career awareness, exploration and industry aligned skill development.

The outcome of the Future Lab program is that more than 98% of the Genetic foundation scholars complete their undergraduate education in four years, compared to college completion rates of less than 22% for first generation college students, students of color and students from Low income backgrounds. Another example of how genetic is working to increase diversity in the next generation of scientists is our partnership with San Francisco State University.

In 2019, Genetic awarded San Francisco State a historic $10.5 million grant over five years to support 100 underrepresented and Low income undergraduate and master's students per year in their transition into master's or PhD programs. In addition to supporting 100 underrepresented students a year, the San Francisco State University Partnership also includes three year innovations. The first one is a pilot that focuses on freshmen and sophomore students, and the second is a computational data sciences initiative promoting inclusivity in computing program.

By providing financial and academic support, as well as additional resources such as mentoring and reach experiences, this program enables students to complete their degrees faster and better positioned for success in PhD programs in their careers. At the graduate level, 58 of the 61 underrepresented students supported by the program have gone to PhD programs.

While we are proud of the progress we've made and the hard work undertaken by individuals and teams across Genentech that has moved us closer to achieving our commitments, we also acknowledge that there's still more work to do through 2025 and beyond. We intend to hold ourselves accountable and remain focused on fostering belonging, advancing inclusive research and health equity, and transforming society that we can make good on our promise to do what patients need next.

Thank you again for the opportunity to speak with you today and for the work that all of you are doing here in Sacramento and in your districts to support diversity, equity and inclusion. I am happy to answer any questions or follow up individually with the chair or the Members on any specific matters.

Thank you very much. And I want to welcome as well Assemblywoman Davies. We had opening comments before and if you would like, feel free to maybe take a second. Happy to receive or if you have any questions for our panel.

Thank you. First of all, I have to start by saying your enthusiasm in the early afternoon is unbelievable. It was like having a cup of coffee listening to you. So I actually say thank you. It's great to see. And again with the speakers. Very informative, greatly appreciate it. And I guess one of the questions I do have is they said we are seeing concerns with shortage in medicine. I know I've got friends that Adderall with their kids and things like that.

Is that because of the price increase and just not being able to actually produce it in order to actually, like, we have to make a profit? Every business has to make a profit in order to actually go further with it. So I'm curious if that's what you're seeing right now. And is there anything in the future that we're going to see? Is it changing? Are we going to be able to be able to have prescriptions filled normally?

Yes. Thank you for your question. I can't speak to any specific products, but supply chain resiliency is something that the industry is increasingly focused on. I think it is too early to tell if price controls are fully having the impact versus residual impacts because of the COVID-19 pandemic or just General supply chain interruptions. There's a lot going on at the federal level to ensure there are safeguards against this.

So both, along with policies to incentivize investments in new drugs, it'll definitely be policies as well, will directly impact our supply chain security. Thank you for your question.

Thank you. And Ms. Pappin, if you had any questions in mind at the moment. Well, if this generates any other questions, I had several. Thank you again for all the presentations. A really helpful overview in some areas on workforce development, some of the policy considerations that we want to be able to thinking about going forward, and a broad overview of the industry.

And I'm wondering, how do you see if you're aware the trends that we're seeing here in California for new companies or job positions over the last couple of years, and in particular, maybe in comparison to other areas, other clusters in the country or in the world? I understand things can be cyclical, can also be affected by worldwide events. So has California been growing proportionally or have we stagnated? Where are we at?

Great. Excellent question. And not only do I have California data, but I have national and international data. And so I'm happy to report that California has performed better than the rest of the country and the world. And for a couple of reasons. One is it's gotten more expensive to develop new drugs and medical equipment, and the source of the money has been here. And so the majority of the funding has originated here in California and continues to drive the industry forward.

And number two, and this is probably most important, we have such a diverse economy that when new drugs and new devices are developed, they're reliant on the other sectors, so they're reliant on software, as I said earlier, and electronics and sensors and robotics. So many of these cutting edge innovations in other sectors are driving and supporting our industry. So that's probably the thing that's really singled us out the most as a state.

Thank you. And on the cost conversations. And of course, all this is intersected with the cost of development, but also the cost that's passed on to consumers and to patients.

And we get into equity conversations, right, especially if there's a new medicine, particularly for a rare disease, and somebody who is of lower income means or maybe having a little bit more trouble finding the ability to be able to pay for that, the offsets that we need to think about through policy or any other way is to be able to provide equity to medicines for everybody.

And you talked a lot about price controls, but you ended your presentation as well, talking about the need for government to be able to focus on the policy and the regulatory environment that supports industry. And so price controls are, I get the impact of that very clear through your presentation.

On balance, with everything else that we're trying to achieve for the access to new therapeutics at a cost that individuals can afford, what are some other maybe countervailing things that we should be thinking about in the policy or the regulatory frameworks that would help inform us for alternatives to considerations like price controls?

Thank you for your question. Yes, it's a good question, because our innovative medicines are only as useful as the patients who can access them. So there are other ways and other policies that can help enable access without harming innovation. Some of those include making sure that any rebates are passed on to patients directly at the point of sale. And it's also addressing the middlemen in the system, such as pharmacy benefit managers.

As we know that the top three PBMs own almost 80% of the market, as well as patients are facing really high out of pocket costs at the point of sale. 60% of commercially insured patients is what they're paying is based on the full price and not the net price. So there's a lot of patients that are not getting the discounts that these pharmacy benefit managers are. So I think it is looking at the point of sale and looking at middlemen throughout the healthcare system that could help with this.

I think that could be the subject of its own hearing as well, that we definitely would want to dive into a little more on diversity and equity. I'm wondering. That is wonderful that we are thinking a lot more throughout of our companies about growing that workforce. But I've also heard, often anecdotally, that for leadership and for entrepreneurs, the access to venture capital, that this is maybe not something that many Members of the community have been able to find that level of access. So where are you seeing with DEI outreach when it comes to actually leading a new startup or leading on becoming a leader within a company?

That's a great question. Right? And I do not have that information. I could make sure that that information makes it to your office. But even one thing, if I want to bring you back to the information that I can speak to as an example, and I did mention the supplier, you know, you're going to say Veronica, but that's venture capital versus supplier diversity.

But I think if you hear me out, it shows the example of being willing to have those mentorship programs right, being willing to do best, practice sharing. And that is something that, at genentic, we're trying to do, and we're doing that with the diverse suppliers. Where we are asking those diverse suppliers, are you thinking of diversity, equity and inclusion? And most of the diverse suppliers are not.

And because we are having this mentorship program where we are helping our suppliers think about how do you even put a diversity and inclusion plan together? More than 80% of the suppliers that we work with have a diversity, equity and inclusion plan. It's not an afterthought so that is something that Genentech and other industry Members can start doing. How do we have those conversations and ensure that diversity, equity and inclusion is embedded in everyone's business, even when you are starting as a venture capitalist state?

Thank you. Yeah, I look forward to any further thoughts as well. It's obviously something we want to think about as we're promoting all, I think, levels of industry and some of these opportunities, if there is any other someone.

So I just have a question as it relates to manufacturing, because as I understand it, in the pharma world, we're doing a whole lot more manufacturing locally and in the state than we used to. And I'd like to know how much have we grown by? Because isn't it true that we have certain molecules that can act as hosts and we do a whole lot more now of just constructing on that same host, so it sort of streamlined the process. Am I on the right wavelength here?

Yeah, a couple of things are happening, and that's why the diversity of the industry is so important to grasp, because the medical device and equipment companies realized that their supply chains were constricted, and they've seen that over the past five years, in part because of trade policies with other parts of the world, but also just shortages of cutting edge devices and components. So more and more of the companies I work with have been looking to supply things locally and to source things locally.

So that's number one. Number two, we've seen a shift, and you're going to hear more about this in the second panel. We've seen a shift to cell and gene therapy. And cell and gene therapy by its nature is local and localized. And so I think that's been an important move, especially here in California.

And then the third point, and this goes to some of the things my other panel Members have said, and that is we have a tremendous demand side here in the state with Kaiser and UCSF and Stanford and all of the other systems in the state. And those places are using the cutting edge therapies and drugs. And so that's enabling us to develop more and more things here within the state, too. So I think those three drivers constricted supply chains that people have been addressing. Number one, a shift to cell and gene therapy, and number three is that great local demand we have in our health systems.

If I may follow up, have you seen that you're more streamlined now so that the pipeline has become a bit shorter? Can I be that optimistic?

Yeah, especially, I know your roots are South San Francisco. And so what we're seeing is we're seeing better returns on the investment because of. We'll call it more shots on goal by smaller and medium sized companies that are in proximity to some of the larger companies. I don't think I answered your first Christ's question well enough. Let me address that a little more. We've definitely seen an increase in employment in manufacturing for devices, equipment, and even in new drug development.

I guess it sort of begs a question, if you can streamline, does it affect the price at some point to bring it down and perhaps more newer drugs are more accessible to folks?

It's a good point. I think that right now we can think of our system as pricing to the value that it brings and not necessarily the cost of just the production and cost inputs. And I think that is what the system can retain and sustain itself on. You can see this Federal Government trying to go more towards, okay, just the cost of the input, but that's not necessarily a system that rewards innovation and continues to incentivize the new and next and better thing.

Fair enough.

Well, thank you again very much. A lot more that we could tease. But we are going to go ahead and invite up our second panel and look forward to working with you out in the community on any follow up questions that we might have at this time. We're going to talk a little bit about looking forward some of the innovation pipeline ahead of us.

We'd like to welcome Julianne McCall, the Director of the California Initiative Advance Precision Medicine, and Dr. Joe Alvarnas, the Vice President of government affairs with the City of Hope. And when you're situated, you might begin your presentation.

Thank you so much, chair Ward and Members of the Committee. It's a true privilege to be here four years after I had the pleasure of presenting for your other precision medicine informational hearing. So lovely to meet you all as chair Ward introduced. I'm Julianne McCall. I'm the Director of Precision Medicine for the Governor's Office of Planning and Research. It's the governor's entity for long range planning and we represent the health portfolio. Next slide, please.

If you're not familiar with precision medicine, or maybe you are, we use precision medicine as an umbrelLA term synonymous with personalized medicine, individualized medicine, precision population health and precision public health. And every iteration it can essentially be boiled down to the right treatment at the right time for the right patient, and you can extend that out to in the right place by the right health or social care provider, with the right method, with the right cultural competency, et cetera, et cetera, et cetera. Next slide, please.

So you can think of this as moving from a one size fits all healthcare system. Instead of having a clinical trial of 10,000 patients, where the treatment that works for 30% of patients is the one that is then prescribed to all patients with that diagnosis, let's actually use the technological windows that we have into what makes patients different and stratify them into the groups to know, via what's called pharmacogenomics or otherwise, which patients those treatments are likely to serve. If you could click next three times.

This is not just limited to genetics, it's not just limited to omics, whether it's proteomics or connectomics or you name the omics, but also the environment in which we live. If you have a patient living next to a freeway, they are much more likely to have some kind of respiratory disease than someone living out in the countryside breathing fresh air every day. Similarly, those who are exercising versus those of us like myself, who barely get themselves to work every day, as well as nutrition.

If you are eating red meat exclusively, that will make you much more vulnerable to a whole host of conditions. Next slide, please. So you can kind of think of the precision medicine spectrum as moving from next slide. Sequencing a tumor to really personalize our understanding of that person's tumor. Cancer is, after all, a genetic disease. A genetic mutation led to uncontrolled growth of cells that led to a tumor. But you can also think of precision medicine. Next slide. As, zero, I'm so sorry, back one slide.

Thank you. Right. As avoiding prescribing a medication that needs to be refrigerated to someone who is unhoused, understanding the whole person and not just the biological makeup, because we are humbled over and over and over again by the predictive power of social determinants of health. On our current health status, 85% approximately, compared to 15% predictive when you know your entire genomic sequence. Next slide, please. Why is this difficult? Because health is complicated.

We are just now starting to develop what are called knowledge networks that actually, like Google Maps, layers on the environment in which you live, your genetic sequence, whether the genes are turned on or turned off. Right. What's called the proteomics of your system, your microbiomics. Right. The gut microbes that are connecting to your brain and every other organ in your body to determine how that nutrition is processed, as well as a whole host of others.

In addition to health behaviors and the type of medical care, what public health policies are in place to prevent exposure to one form of issue or another. Next slide, please. And why now? Why do we see this expansive growth of precision medicine? Well, take a look. Next slide, please. The genomic sequencing has plummeted in cost, right from what was originally $100 million for a single genome to now flirting with $1,000 per genome. Next slide, please.

We also have a much better understanding and ability to actually track the social determinants of health that we're not putting all the burden on our physicians to keep track and standardize the terms in their clinic. And so keeping that in mind, keeping the whole person in mind as we're trying to help guide this kind of next generation, this next step in healthcare. Next slide, please. So what's California doing to help guide this next generation of healthcare?

Well, in parallel to the countless exceptional county, state, federal programs advancing healthcare, we take a step upstream and look at the research. Where is research, developing additional tools, additional options that we have in order to deploy for any given condition, for any given setting. Next slide. Let's say six presses of the button, please. So, we were established in 2015. We have so far received $65 million of state investment that has led to over $36 million of non state funds and leveraged resources.

So these are companies giving of their time and or services and products. This is the projects going out and receiving follow on funding to really amplify the impact of the work our bread and butter is grant making. We try to understand this landscape of health disparities and again step upstream to understand where are the gaps that lead to health disparities. Who is not being included in clinical trials that lead to disparate impacts of the healthcare implementation. We pride ourselves on cross sector and interagency partnerships. Right.

We like to think of ourselves at OPR, the Governor's Office of Planning Research, as the glue between departments and agencies and offices when there are issues, cross disciplinary or cross sector. And I'll get more into that in a few slides. Our overarching mission is to reduce health disparities. Next slide, please. So, as I mentioned, our grant making is prolific. We have funded 18 projects in our eight years so far and growing. Those include projects in infectious diseases.

In fact, Dr. Charles Chu, who received one of our first grants in 2015, developed an algorithm and a disease agnostic sequencing platform that could sequence bacterium, so bacteria, viruses, fungi, all in a single sample. And when it came time for the pandemic, it was Dr. Chu's state funded research impacts that actually allowed us to track the mutations in real time throughout the state. Not that that was a glorious moment because of the State of the world.

But you cannot dream of a better outcome as a research funder to have that level of impact so soon after funding the research. As you've heard, it often takes between 15 and sometimes 25 years to develop to see the impacts of research in the real world. Next slide, please. So this is one such project that we are currently funding of the 10 ongoing projects led by UCSF Professor Dr. Nita Tucker.

She's a pediatric pulmonologist focusing on adverse childhood experiences, understanding that different children will have different impacts to the same stimulus following a childhood of trauma, some will have mental health conditions, others will get an infection every month. So how do we tease apart and actually treat the part of one's physiology that is specific to them? Again, moving away from that one size fits all, because nobody, literally nobody, is the average patient. There is no such thing as the average person. It's a statistical term.

Next slide, please. We recognize that partnerships which we require between researchers and community or patient groups to help anchor the research outcomes in community needs and community priorities, that's not something they've ever been asked or been required to do. And so we've developed a California precision medicine asset inventory. It so far includes over 600 assets. These are universities, research institutes, venture capital firms, even just databases, right? Publicly available databases in addition to the community organizations that have expressed interest in being part of research programs, right?

If you're a community group and you see a problem, you can go onto the California Precision Medicine Acid Inventory. Next slide, please. And we've made it very user friendly. I know that this is flashing before your eyes very quickly, but we have toggled variables that you can specify your search. If you're only interested in cancer, if you're only interested in genetic research, if you're only interested in research institutes, you can make sure that that query is efficient. Next slide, please. So I mentioned the interagency coordination.

When it came time for the Surgeon General's office to publish their first California Surgeon General's report, I was one of the three core authors of that work. I was Dr. Nadine Burke Harris' right hand neuroscientist. Now, Deanna Ramos, we continue to work with her on the maternal health and adverse childhood experiences projects, in addition to serving on a number of different task forces and advisory committees. Next slide, please. When it came time for the pandemic, who was stepping up?

It was the biomedical scientist within the governor's office realm. So I was helping to facilitate the governor's COVID-19 testing Task Force, which was upheld as a national model for having moved so quickly. Next slide, please. So new this year, we've brought on new staff.

Many of them are in the audience right now to lead a depression research program to invest $10 million of state funds, anticipating the follow on funding and the leveraged resources from institutions to support up to five projects over the next three years to again fill those gaps and try to narrow the disparity between those who have access to resources and for those treatments and prevention strategies that were developed for individuals and those without. Next slide, please.

Also new in 2023 is a partnership with the National Institutes of Health. The Precision Medicine Initiative developed under Barack Obama is called all of us. We are the first state level partnership with the federal agency to bring more folks from underrepresented communities which lead to, again, outcomes like one of the most effective asthma medications. Works great in white children and Asian American children, does not work as great in Latinx and black American and African American children.

And you look back at who is involved in clinical trials, less than 1% from each of those groups. Take one step further. Who is involved asking for tissue donations less. I mean, you're flirting with 0% from both of those. So this is a five year project that we've just launched this year. Next slide, please. What's really exciting is that our impact is expanding well beyond California's borders. Thank you.

So the new DARPA Modeled Health Agency, Health Research and Development Agency at the federal level, called ARPA H for Health Research is underway. Next slide, please. And under President Biden's vision, it's investing in high risk, high reward projects only. Next slide, please. Actually, a couple more slides. Really focusing on equitable outcomes. One more slide. And one more slide. So in order to reach all Americans. And finally, one more slide. I'm more than happy to provide these slides. And one more slide.

We have partnered with over 7000 locations across the United States. Next slide, please. To develop a health innovation network via regional conveners that really bring forward local expertise. Nobody else stepped up for this to lead this effort in California. It was our office of precision medicine. We're so extraordinarily proud to be leading this effort and happy to take questions following the panel.

Thank you so much, Mr. Call. And then Dr. Alvarnas, did I get that name right?

Yes, you did. Perfect.

Appreciate it.

Assembly Member Ward and Members of the Committee, thank you so much for the opportunity to speak with you today. I'm Joe Alvernas. I'm a Professor of Hematology at the City of Hope down in Southern California. And I work principally as a hematologist caring for people with blood cancers, and also as a bone marrow transplant physician caring for patients with advanced cancers for whom treatment with chemotherapy and other modalities are inadequate to meet their needs.

Part of what I'd like to do today is lend some human context to the importance of what you're doing. On this Committee, we've talked about the workforce implications of biotechnology, and we've talked about the kinds of considerations that go into tackling issues of such enormity and complexity. But the ultimate impact of this isn't realized broadly or in a generic way. It's realized in the ability of one human being to benefit from the things that are being brought forth today.

When I trained in medical school and subsequently went to residency and fellowship, people who faced a cancer diagnosis like multiple myeloma or acute leukemia faced something truly grim. People with multiple myeloma had a median survival of two years or less. And unfortunately, I pronounced people in their 20s dead of myeloma less than one year after diagnosis. And for people diagnosed with acute leukemia in the best of circumstances, when I was graduating, 20% or 30% could survive more than a year.

That wasn't for a lack of caring. It was for a lack of appropriate technologies of care to change the trajectory of what that diagnosis meant for that person and for that reason. Innovation and what it can bring to patients. New possibilities for restoration to wholeness, new opportunities to survive. A diagnosis that a year ago or Two years ago would have resulted in death is what we're talking about in this Committee today.

The idea of making this real for the people of California is the power that you're exploring in this venue and in the conversations that you hold afterwards. Now, I trained in what I would characterize as the early Mesozoic era of healthcare. And the idea was, when you were looking at treating cancer, we were looking for the bigger hammer.

Many of the clinical trials at the time, when I was a resident or even a fellow, were focused on how we could give more intensive chemotherapy, more intensive radiation therapy, or explore more radical ways of treating people with surgery. And that did very little.

In fact, one of the most humility inducing studies that was published in about the mid 90s was a study that showed all these new forms of treatment for lymphoma that got stronger and stronger and, frankly, got toxic as hell for patients, were no better than less intensive forms of chemotherapy. And in that moment of humility, we learned if we wanted to do better by patients and families, we would have to think in radically different ways.

Hence this birth of gene and cell therapies and the knowledge base, which has given rise to a slew of technologies which would have been heretofore unimaginable back when we were simply thinking about bigger hammers and more intensive therapeutics. Now, the Human Genome project that the Doctor here mentioned just a little while ago unearthed an enormous fountain of knowledge. There are 23,000 plus genes that frame out the instruction set for how to make a human being. And in that, there's more than 3GB of data.

In those 3GB of data is the knowledge of how to cure cancer, how to train and change the trajectory of inborn, inherited, lethal genetic diseases. And the way to do that is by getting smarter. One of the first types of cellular therapy was bone and marrow transplantation. That's where I've done much of my work. And through that, we could take the immune system of a donor and direct it against the leukemia or lymphoma that had proven refractory to chemotherapy for a patient.

And by transplanting that person with that immune system, you could take a cure rate of less than 20% at one year and translate it into cure rates of 60 plus percent at 15 years. That is the first form of cellular therapy. And this year, around the world, more than 50,000 of these procedures will be performed, about half of them in the United States.

That just gives you a sample of how gene and cell therapies and the portfolio of gene modified cell therapies can change patient life and life expectancy. I look at patients with relapsed and refractory lymphomas, where many of them have very few good therapeutic choices that can produce a cure or restore them to wholeness and health.

And when you look at our ability to modify an immune system cell taken from that patient with new genetic information and target that cell at that person's cancer, you've come up with something transformative beyond the power of chemotherapy or radiation therapy or the most radical surgery imaginable. You've created a living, breathing therapeutic that can go through that person's body and in 50% of patients, render them disease free from a refractory lymphoma.

More than two years after that treatment, as of now, the FDA has approved 27 different cell and gene therapeutics. Six CAR T cells, which are these redirected CAR T cells that can treat patients with lymphoma, multiple myeloma, and other forms of cancer in ways that are far more effective than imaginable. But this is just the beginning. And this is why this hearing is so important.

Because the future of oncology is predicated upon continued levels of innovation like these, and making sure that these levels of innovation are brought forth to all of those in need. I have to say the daunting prospect here is that this year, based upon CR data, US government data, and data from the California Cancer Registry, we estimate that 192,000 people in California will be diagnosed with cancer, and about a third of them will succumb to that illness for lack of options in care.

So if we're moving forward, we think about what does the future look like for those people? It isn't in more radical surgery and chemotherapy, it's in our ability to bring new innovations to them. And cellular therapeutics, as well as gene modified therapeutics are what that future will look like. When we think five years from now or 10 years from now, what cancer care looks like.

It's really within this ability to harness the power of the gene, modify it, reimplant it into a cell, and either redirect that cell to be a hunter killer of cancers, or deliver it to the body in the form of a virus created in the lab. Not a dangerous virus, but one instead, that elevates that person's health with the restoration of wholeness. It may mean for that person that the cancer cells will basically come apart when they encounter that virus.

Or for someone who has an inherited disorder, one that might compromise their immune system, or one that might culminate in a premature, painful death, that that modified type of drug, for lack of a good word, can completely change the arc trajectory of that person's life.

And as we look forward at City of Hope, we are engaged in research for adjusting and changing the immune system to attack brain tumors that as of this time, are incurable to treat people with serially refractory breast cancer who might have metastases to the brain, or with refractory prostate cancer that has failed existing treatments, or acute leukemias for which there is no satisfying path forward. So the need for innovation is really something that is realized in deeply human terms.

So what we can do here, in terms of helping this industry to grow, and also helping patients to get equitable access to these treatments, is the lifeblood of many, many more lives to be saved. Between the time I started my residency in 19, 92,022, cancer mortality rates decreased by 31%. So for all those patients who succumbed to myeloma in the early days of my residency, I now have a clinic with people who've lived with myeloma, high quality lives for 14 or more years.

I have patients in my clinic who, in the early days of the AIDS epidemic, would have died within 30 days of advanced HIV related Lymphomas, who I've been caring for for more than 15 years and are cured of those Lymphomas as a result of advances in cellular therapeutics, as well as gene modified therapeutics and other important technological breakthroughs, aren't just hypothetical, but they are becoming available.

Treatment for people with beta thalassemia who suffer very difficult lives getting repetitively transfused, or those with sickle cell anemia, who bear a disproportionate burden of suffering, neglect, and sometimes contempt. In emergency rooms throughout the state, there is a path towards a cure for sickle cell disease achieved through gene modified therapeutics and through gene therapies. So, as we think about what the future looks like, it will be realized through the depth of innovation that we've just touched upon here in a very cursory fashion.

And through the policies that you navigate in this body, you'll be challenged to find opportunities to grow out this industry and also challenged to find ways through which we can ensure equitable access to these therapeutics. The life dividend of getting this right is enormous when we look at that decrement of 31% during my work, not as a result of anything I've done, but that of great scientists doing great work throughout this country.

Two to 3 million people are alive today who would not be if it weren't for these therapeutics. Those are real lives, real families that have been touched for the better in profound ways. As the future moves forward, that body of survivors and those whose lives have been benefited by these types of therapeutics that have yet to be envisioned and yet to be realized in centers in California and beyond, those are lives that your policies will affect in moving forward.

So, as you do so, I want to thank you for your diligence in listening to these issues, but also challenge you as these things move forward. We want to make sure that the poorest and most vulnerable Members of our society can benefit from this, and that we don't undervalue these things by looking at them as expensive.

In the context of human life, the ability to change a life, avert suffering, and achieve that restoration to wholeness for both a person and a family, has extraordinary impact upon our society. So, again, thank you for the opportunity to speak with you today, and I'd be happy to answer any questions.

Thank you very much for that testimony. And agree. Gosh, thinking about that number, not just lives family such, but also people who continue to contribute to California and that opportunity that otherwise would have been lost for their contributions. It definitely sits very strongly with us. I'm going to open it to Committee if we have any questions for the panel. If not, I might have just a couple of my own. You mentioned, Ms. McCall, thank you for giving an overview of the work that the initiative does.

How are we tracking outcomes, maybe specifically with Californians that are helped? You mentioned a range of different treatments in the different areas that the grant making has been able to afford. But beyond that, what is the return on some of that investment in the form of numbers of lives, Hutched? Or how has that $50 million over the last six years been helpful?

We anticipated your question for the impact assessment, which we started about a year ago. That's ongoing, but after every. It's actually in our statute, we're required to conduct an evaluation following. And we took it upon ourselves to implement best practices. So we engage out of state evaluators themselves, experts in each of these fields that we are supporting. And that evaluation report is available on our website, freely downloadable, and we attempted to write it for a General audience. I've learned something in four years since we published.

Yeah, certainly. Lives impactEd. For example, Dr. Charles Chu at UCSF was saving lives based on the ICU trajectory. By understanding, instead of conducting 10,000 different individual tests to understand which 10,000 of those pathogens were causing those conditions, causing those symptoms, he was able to get the results within 24 hours, which is pure magic. Down at Cedar Sinai, Dr. Brennan Spiegel, he has confirmed that you can sample blood outside of the walls of a clinic.

So that has just further amplified the opportunity, particularly during the pandemic, for folks to maintain healthcare through remote sampling. I could go on.

Thank you. And you mentioned the investments that you had, and I'm trying to remember, but I didn't write down by memory the direct state investments that we made, the $50 million. But then I saw you said that has been able to help to qualify or capture another 35 million or so in outside funding. I regret for me that feels a little bit Low. Is there more that we could be doing to find leveraged opportunities?

I guess that's great that we had that additional support that came in. It's also great through your presentation that we are the first state that is doing that kind of partnership with federal counterparts as well. But there's been, I think, a lot more capacity from federal or maybe even philanthropic investments as well. Are we missing anything in our ability.

To leverage so let me clarify that those are real dollars rather than economic impact of improving the quality of life and all that. So compared to the NIH, it's almost double what the NIH sees from their research investments.

No kidding.

So we can be so much more nimble with our State Dollars and actually work. We supervise those research projects. Right. We want to be good stewards of taxpayer dollars in that research investment, recognizing just what a privilege it is to have state dollars invested in research to fill those gaps that the NIH has yet to recognize our priorities or the style of research similar to the ARPA H. Right. Just polar opposite of what NIH does in its incremental steps forward.

Thank you. And I would note that from my vantage point, believe the Federal Government has a lot more capacity to maybe prioritize some of this support as well. But it's great that we're doing what we can and certainly leading the way from state investments. And I had thought about this question for the previous panel, but I think it applies well here, given that we're talking about looking forward. Right.

Precision medicine, maybe a focus on, as it applies to cancer, how do you feel the state is positioned? I did ask the question before about a look back where we are today. The answer was positive. California has made investments. We're in a very strong position as we're thinking forward about the technologies, the innovations over the next 20 years.

What do we need to do to maybe stay competitive there, to keep California competitive in that workforce pipeline, or in supporting the public private partnerships that are going to make those realizations actually happen here in California?

I can start out, I think that the state is well positioned with eight NCICS throughout the state that have worked very effectively in public private partnerships to collaborate in terms of growing ideas that otherwise would have been more difficult to do without that kind of relationship.

In addition, the California Institute for Regenerative Medicine, its development of the Alpha clinics, really provided a good model of how you could take public dollars and partner with a number of organizations throughout the state to ensure high patient impact in the development of really innovative clinical trials, bringing not only cell and gene therapies, but other kinds of therapeutics to patients who otherwise would not have access to them.

So I think you're building upon a very strong core of capacities within the state, and I would have to defer for other issues of how to grow that further.

Yes, we are not just trying to add volume to the research innovation pipeline. We're actually trying to innovate on the innovation pipeline, to truncate it. This field of research policy. How do you optimize the public benefits of these state funded research projects investments? By bringing folks to the table from that entire pipeline. So not just researchers working with other researchers and venture capital firms, only working with other venture capital firms or at that stage of deploying those research outcomes or those healthcare systems.

And the payers, we want to make sure not to mention the end user. Right. The patients and the healthcare providers want to bring them along from day one to ensure that the pathway that that research is taking will actually be useful. This is something that Dr. Francis Collins, the NIH Director across three presidencies, lamented he regretted not investing more in implementation science, having seen through the pandemic that folks were, we had this marvelous vaccine developed in record time, and yet some people said, no thanks.

We hadn't brought them along. We hadn't made sure that that cultural competency was there, and the implementation science firmed up. So engaging the entire pipeline of stakeholders from research, Healthcare providers, Healthcare payers, and the end user, not to mention the venture capital firms, which we're doing through the ARPA H project.

Thank you, Ms. Davies.

Thank you. And thank you both for your expertise. I appreciate. Mean, obviously, I think to get great policies when we need to be able to work together, how is Administration working with the industry to be able to advance these health needs that we have right now? What is the relationship like?

Zero, you just teed me up so well to brag about this new depression research program. Based on the expertise, the guidance of our Advisory Council, which is composed of industry Members, venture capital firms, academics, community Members, and healthcare providers, not to mention the Surgeon General and Assistant Secretary of Health and Human Services here in California. We will require industry partnership to again truncate that innovation pipeline and bring together all of the disparate groups that normally don't work together. We're going to make them work together.

We have to realize that. We have to show them how to work together. Right. This doesn't come naturally, especially to researchers, having spent 16 years in neuroscience research labs myself. So finding a way forward to make sure that we meet the needs of every step of that research pipeline.

So right now, they're really not working together. But this is something that you're going to require in the future so that they can get together all be on the same page. And obviously, we learn so much from everyone, and I think that's, again, how we make the best policy and best decision. So is that something that we're looking into, like this coming year?

That's right. We already have the wheels in motion. In fact, we met with the Executive Director of the Mental Health Commission here in California, and we'll conduct three listening sessions across the state to broaden awareness. Great.

If you can keep us updated, I think that's fantastic.

It'd be an honor. Appreciate it.

Thank you. Mrs. Well, I want to thank you both for your testimony here today. While high level, very informative, and I think really base setting for the continued work that this Committee wants to do in partnership with the Administration. Look forward to seeing you out in the community soon. And with that, we've reached the end of our agenda. We do have public comment opportunities as well.

In the interest of time, if anybody in the room would like to give testimony to the Select Committee, we welcome that. I see a lot of shy participants, but also many that are probably absorbing the information as well. With that, we'll go ahead and close our public comment period. And again, thank you all for attending this first Select Committee hearing. We will be meeting again soon, likely outside the Capitol community in one of our cluster areas in the state, at a date to be announced. So at this time, we are adjourned.