While a slow-down in financing, the tax incentives in place for innovation, and workforce preparedness were the main issues highlighted in the survey, CEOs also voiced concern over the duplication of state and federal regulations. Businesses complain that the California Food and Drug Branch (CFDB), like FDA, carries out inspections every two years, uses the same GMP compliance standards as FDA, differs little with the federal agency on what is inspected, and does not coordinate inspections with FDA.
State Assembly member Jerry Hill (D-San Mateo) thus introduced Assembly Bill 1277, which would preclude CFDB from requiring inspections for drug and medical device manufacturers that meet FDA requirements. The measure passed the Assembly and is pending in the state Senate Committee on Health.
Additionally, CHI and biopharma leaders are supporting a bill being drafted by U.S. Rep. Brian Bilbray (R-San Diego) that would essentially block state food and drug agencies from carrying out the functions of a federal counterpart. Under the bill, states and state agencies would retain authority to conduct facility inspections when they determine that a drug or device manufactured there presents threat of serious adverse health consequences or death, when the federal government orders a recall of a product manufactured or processed at a facility in the state, or upon request of or authorization by Washington.
Legislative solutions is one avenue biopharma firms will pursue to cut through red tape. Washington should take up Bilbray’s bill, though a Senate Democratic sponsor would have to move it past the Republican-majority House of Representatives. This being an election year in Washington and Sacramento (for legislative seats), bills will be tough to advance, but that shouldn’t stop industry and its allies from starting work.
To address the capital crunch, Washington and Sacramento may be too cash-strapped, but industry should challenge both to help in other ways: California should lift its suspension of the net-operating-loss carry forward and resist efforts to make the single sales factor apportionment mandatory.