Tobacco Settlement Agreement Fund Oversight Committee





<MeetMDY1> October 3, 2007


The<MeetNo2> Tobacco Settlement Agreement Fund Oversight Committee met on<Day> Wednesday,<MeetMDY2> October 3, 2007, at<MeetTime> 10:00 AM, at the University of Louisville in the University Club building. Senator Carroll Gibson, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Carroll Gibson, Co-Chair; Senators David E. Boswell, Representatives James R. Comer Jr, Tom McKee.


Guests:  Keith Inman, Vice President for University Advancement, University of Louisville; Robert T. Means, Jr. M.D., Interim Director, Markey Cancer Center; Donald Miller, M.D., Ph.D., Director, James Graham Brown Cancer Center; Keith Rogers, Executive Director, Governor's Office of Agricultural Policy.


LRC Staff:  Lowell Atchley and Lindsey Murphy, Committee Assistant.


Following roll call, the presiding chair, Senator Gibson, informed the Committee on the health status of two members, Representative Mike Denham, the House Co-chair, and Representative Royce Adams. Because of the lack of a quorum, minutes of the September 2007 meeting were not approved.


Appearing before the Committee first was Mr. Keith Inman, Vice President for University Advancement, University of Louisville. Mr. Inman updated the Committee on some of the academic developments at the university and thanked the General Assembly for its financial commitments to the institution.


After individual Committee members introduced themselves at Co-chair Gibson’s suggestion, the legislative panel heard from two witnesses – Robert T. Means, Jr., M.D., Interim Director of the Markey Cancer Center, University of Kentucky, and Donald Miller, M.D., Ph.D, Director of the James Graham Brown Cancer Center at the University of Louisville.


Addressing the Committee first, Dr. Means spoke specifically about Markey Cancer Center’s work as a part of the Kentucky Lung Cancer Research Program. Dr. Means focused on four main areas in his remarks: what was being done in the area of early detection; current activities related to a clinical trials network; the push to obtain National Cancer Institute designation; and funding usage.


He described several partnerships with 5th Congressional District hospitals in lung cancer screening and biomarker research. Dr. Means described the clinical trials network, which involved several hospitals throughout the state. As for the NCI designation, the physician told the Committee that Markey had acquired over $12 million in NCI yearly “direct” support, an increase of $2.1 million since the 2006 report.


Responding to Co-chair Gibson, Dr. Means indicated that the National Cancer Institute did take into account the threshold of funding that Kentucky contributed to cancer research, specifically tobacco settlement funds and tobacco tax revenues. He said they also looked at how the universities leverage the funds to obtain additional moneys.


As discussion continued, Dr. Means responded to Representative McKee about the success achieved because of the tobacco funds. The time line for success in cancer research was relatively long, Dr. Means said, perhaps lasting 10-20 years. He mentioned one drug that had been licensed and was in clinical trials. Dr. Means also mentioned their ability to use the funds to make credible applications for grants.


Next, the Committee heard from Dr. Miller, who first discussed the Kentucky Lung Cancer Research Program. He told the Committee that scientists he met at conferences were envious of the Kentucky program. Dr. Miller said the program had “worked hand in glove” with the state’s “Bucks for Brains” program.


Thanks to the funds, Dr. Miller said U of L went from having no scientists doing work in lung cancer research in 2000 to a total of 30 at present. Funding, he said, had risen from about $500,000 to $20 million.


Dr. Miller gave examples of how funds had been used, including the development of a new drug that had cured a form of cancer, the development of 27 new treatments and drugs, three of which were in clinical trials, research work related to berries as a cancer preventative, and non-embryonic stem cell research.


Dr. Miller said he believed the lung cancer research program had had a significant impact in Kentucky, allowing the universities to work together and extend their alliances and collaborations.


Responding to Representative McKee, Dr. Miller said 11 patients had been treated with the cancer curing drug, which was in clinical trials. Representative McKee called their work “very impressive.”


Dr. Miller gave Representative Comer some examples of the program’s public-private partnerships, including the collaboration with Owensboro Medical Health System (OMHS) in a joint venture to develop cancer therapies using plants, particularly tobacco. He later discussed the partnership in greater detail.


Senator Boswell mentioned the collaboration in subsequent remarks. He complimented U of L for stepping in and helping create the joint venture. Senator Boswell said there were other plants in Kentucky that could be used in drug research.


Dr. Miller turned to the U of L/OMHS joint venture. According to his discussion, one of the first projects was the development of a cervical cancer vaccine. Dr. Miller described the project to develop a much cheaper cervical cancer vaccine, which could be beneficial to Third World counties, in addition to the U.S.


He discussed how a protein for the drug would be grown in tobacco plants.


Dr. Miller said they were just beginning to enter the Food and Drug Administration approval process. The physician described a recent trip to India in which residents of that country expressed excitement about the potential drug.


Responding to Representative McKee, Dr. Miller said they hoped to keep the costs of the drug down. On a second question, he said tobacco farmers in Daviess County would produce the tobacco plants as a part of the project. He said “several” farmers would be involved.


In response to Senator Boswell, Dr. Miller said the intellectual property for the vaccine would be owned by U of L, and the university would negotiate a license fee with a pharmaceutical company later. The licensing would mean a revenue stream coming back to the university.


Following Drs. Means and Miller’s presentation, Co-chair Gibson asked Mr. Keith Rogers, Executive Director of the Governor’s Office of Agricultural Policy to report on the projects considered at the previous Agricultural Development Board (ADB) meeting. Mr. Tim Hughes, Deputy Director, accompanied Mr. Rogers.


As an outgrowth of the Hart County Fair Association project, publicly owned multipurpose facilities that support marketing opportunities and events will be able to receive tobacco settlement funding in the future, a change from previous policy, Mr. Rogers informed the Committee.


Following the review of projects, Mr. Rogers turned to the ADB’s approval of changes to model programs to make them more flexible to producers across the state impacted by the lingering drought. The changes affected several model programs and were generally geared to assist livestock producers. The board also adopted some recommendations to support education programs to assist producers.


According to Mr. Rogers, GOAP staff would be researching the legality of advancing county councils some of their 2008 tobacco settlement funds, should they request them to assist in the drought relief effort. The ADB was expected to take up the issue in its October meeting.


Responding to Representative McKee, Mr. Rogers said no county had sought additional funds. He said counties collectively had about $8.2 million in uncommitted funds. In contrast, 20-22 counties had less than $5,000 in uncommitted moneys in their accounts, he said. In addition, Mr. Rogers indicated that some counties were carrying balances of $200,000-plus.


In continuing discussion, Mr. Rogers said that, under the Master Settlement Agreement statutes, the state board could provide state funds to counties, but there was no mechanism to recoup those funds. According to Mr. Rogers, county councils had certain responsibilities, but they were not legal entities. Representative McKee said he believed a bill could be filed early in the next session to correct that, if necessary.


Responding further to Representative McKee, Mr. Rogers said, counting MSA funds expected next April, the ADB would have about $20 million available. He said there were some additional funds existing to cover ADB contracts that were not fully executed.


As discussion continued, Representative McKee encouraged Mr. Rogers, the ADB, and the Department of Agriculture, to explore ways to assist farmers. “This drought is very, very serious as we all know,” he said, indicating there was not enough feed available for livestock. He mentioned his continued support of Representative Comer’s idea of assisting farmers with drought-related transportation.


Responding once again to Representative McKee, Mr. Rogers said a working group consisting of his office staff, employees of the Department of Agriculture, the University of Kentucky College of Agriculture, and other agency representatives were meeting every Wednesday afternoon to discuss drought strategies. He said they all were working together to make as much information available as possible.


Mr. Rogers said further that they believed there was enough feed in Kentucky, including rolled hay stalks, grain, and the like. He mentioned producers taking advantage of distillers grain produced by a Hopkinsville ethanol plant. Mr. Rogers said the plant was currently shipping several tons a week outside of the U.S. With education and a push to move producers to using commodities, he said, producers could make it through the winter.


Representative McKee said it was important that the state did everything it could to assist producers who wanted to keep their livestock.


Senator Boswell asked why the distillers grain was being shipped out of Kentucky. Mr. Rogers responded that “it’s simply the marketplace.” According to Mr. Rogers, experienced producers were taking advantage of commodities such as distillers grain but others were not. He reiterated that education would be vital to getting information disseminated to producers.


Documents distributed during the Committee meeting are available with meeting materials in the LRC Library. The meeting ended at approximately noon.