Fate of Life Sciences Fund Again in Limbo as Legislature Dithers

Xconomy Seattle — 

Washington state’s main public funding source for applied research and commercialization of new medical treatments could shut down in five weeks, with existing grants rescinded.

Or it could see its funding maintained, be in charge of a new state cancer program, and begin advising Washington marijuana regulators on licensing research into that substance.

Such is the uncertainty again facing the Life Sciences Discovery Fund (LSDF)—a key resource for the biotech industry in Washington, but relatively small beer in the context of a state operating budget that would spend more than $38 billion in the next two years.

“The ends of the continuum are far apart,” said LSDF executive director John DesRosier. “Either you’re going to be out of business or you’re going to be increasing your responsibilities.”

Lawmakers have made little noticeable progress in agreeing a budget for the 2015-17 biennium during their 30-day special session, which ends at midnight Thursday. A second special session will be needed, and lawmakers aim to complete their work before the U.S. Open golf tournament comes to the region in mid-June, filling hotel rooms and clogging traffic.

The Republican-controlled Senate budget proposal—revised Thursday morning—would axe funding for the LSDF, routing the money instead to the general fund. That would mean the 10-year-old organization, created to channel Washington’s national tobacco settlement money into life sciences research, would close its doors June 30, DesRosier said.

Some 47 active LSDF grants, worth about $13 million, would be terminated under the current Senate plan, he said. Current grantees are working on things like new vaccines for malaria and hepatitis B, a smartphone app for smoking cessation, and early diagnostics for diseases including cancer and Alzheimer’s.

We’ve seen this movie before. Last year, it took Democrat Gov. Jay Inslee’s veto to maintain funding for the LSDF. And while Inslee supports the fund, that might not be an option this time, because the governor cannot create funding with a veto absent action by the Legislature.

Inslee’s budget and the budget proposed by the Democrat-controlled House, would maintain the status quo by providing funding of about $10 million a year for the LSDF for the next two years. The LSDF says it has administered 111 grants worth $105 million since 2007, supporting more than 3,500 jobs, 40-plus startup companies, and helping attract $510 million in additional funding.

“The Senate continues to want to shut down LSDF and the governor does not support that approach,” said Inslee spokeswoman Jaime Smith via e-mail. “The governor used his veto pen last year to save this funding, and it continues to be a priority.”

But with several much larger issues unresolved—adequate funding for K-12 education and a major transportation package, to name two—it’s unclear just how much of a priority the LSDF will be. State Sen. Andy Hill, the head Republican budget writer, and Rep. Ross Hunter, his Democratic counterpart, did not respond to inquiries. (We’ll update this post if they do.)

Even as the Senate proposes shuttering the LSDF, lawmakers earlier this year gave it new responsibilities. The Legislature established a marijuana research license (PDF) and tapped the LSDF to advise the state Liquor Control Board (soon to be called the Liquor and Cannabis Board) on granting licenses. The license allows researchers to produce and possess marijuana for things like testing potency, conducting clinical trials of marijuana-derived treatments, and studying genomic or agricultural questions.

The bill passed the House unanimously and the Senate on a vote of 45-3. Inslee signed it April 24. It’s unclear how this research license program would proceed if the LSDF were dissolved. “That’s a little bit of an odd message,” DesRosier said.

Meanwhile, the Legislature is considering a handful of bills to create a dedicated funding stream for cancer research, following last year’s aborted attempt to do so by voter initiative. The funding sources range from a 50-cents-a-pack additional tax on cigarettes to a $100 monthly surcharge on state and school district employees who smoke. One of the proposals—House Bill 2194 and Senate Bill 6101—would have the LSDF administer the cancer fund. Other proposals would create a new state agency or tap an outside nonprofit organization.

DesRosier said the LSDF is prepared to take on additional responsibilities. He positions the LSDF, which has a staff of six and relies on expert review panels to evaluate grant proposals, as a platform that can support research across a range of fields.

“There’s nothing magical about what we do that can’t be translated to other areas, whether it’s ag or animal science or biofuels,” he said. “It all comes down to doing the due diligence, and having the right experts to do it.”

But for now, it all comes down to the legislative budget endgame.