Wednesday, August 27, 2014
Inquirer Daily News

State to appeal ruling that slashed health research funding

HARRISBURG - Last fall, the director of the University of Pennsylvania's Abramson Cancer Center briefed the legislative cancer caucus on the center's groundbreaking research on a variety of potentially deadly forms of the disease.

In one case detailed by Chi Dang, doctors with Penn and Children's Hospital of Philadelphia used a novel cell-engineering treatment on a young leukemia patient as part of a clinical trial involving acute forms of leukemia.

That was two years ago. The little girl remains cancer-free.

But a week after his presentation, Dang learned that his funding, and that of projects across the state are on hold - in many cases, their existence threatened - after a blow dealt by an arbitration panel charged with hearing cases involving the 1998 national tobacco settlement.

On Friday, the commonwealth will make its case to restore the funding before a Philadelphia Common Pleas Court judge.

"The rug was pulled out from under us," Dang said. "They cut us dry, and now I'm out there trying to get donors."

The Abramson Center has for more than a decade received more than $1 million a year as part of what is known as the master tobacco settlement, which Pennsylvania and dozens of other states made with the four major tobacco companies in 1998 to resolve tobacco-related lawsuits.

But the arbitration panel ruled that Pennsylvania had not properly enforced the agreement as it related to nonparticipating tobacco producers. The immediate result was that facilities were forced to cut jobs, let vacant positions go unfilled, and suspend years-long research projects.

The state will see future annual payments drop to $180 million - about 60 percent of the nearly $320 million the state had been getting every year.

"The position of the commonwealth is that the arbitration panel's decision is unsupported by the record in every respect, that it is irrational and must be overturned," said Adrian King, chief of staff for Attorney General Kathleen Kane.


Research flexibility

Under the 1998 settlement, 46 states and the District of Columbia were to receive an estimated $206 billion over 25 years based on tobacco sales.

Unlike other states, Pennsylvania mandated that funds be used exclusively for health care.

As a result, hundreds of millions of dollars have been distributed to scores of health-research facilities, including many hospitals in Philadelphia, engaged in long-term research on lung and other cancers, heart disease, HIV/AIDS, and smoking cessation.

The arbitration panel determined that Pennsylvania failed to properly enforce escrow settlement provisions involving "nonparticipating manufacturers" - that it did not properly tax loose-leaf tobacco, used in "roll your own" cigarettes.

In her appeal, Kane argued the state enforced the agreement and that the companies miscalculated the percentage of sales of roll-your-own tobacco.

717-783-2584 @inkyamy

Amy Worden Inquirer Harrisburg Bureau
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