What is it?

Prop 38 is an $8.4B state bond for research in immunology and immunotherapy. Half of the funds, about $4.2B, go to a single institute co-founded by the author of Prop 38, and the other half will be distributed as grants for specific projects at California public and nonprofit universities and nonprofit research institutions.

The grant half is not open to every California university. Only institutions with a seat on the council that awards the grants may apply, the council must confer with the institute before each award, and every grantee must offer the institute a role in the funded research.

At least $2.1B out of each half, or $4.2B of the $8.4B, must go to cancer, heart disease, and Alzheimer's.

Strings attached

Taking this money carries two obligations, no matter how small the grant:

1. A recipient owes the state 10% of whatever it earns from selling or licensing any patent or other intellectual property that comes out of the funded research. The state keeps that money until the bonds are repaid with interest, and after that it flows back into the research fund
2. Any drug developed with the money must be sold in California at least 20% below the national average price after its first year on the market.

Robert Kaplan, a UCLA health policy professor and former NIH associate director, argues that universities rarely bring drugs to market themselves, and that the price rule could push the companies that do to sell those products in other states first.

Past programs

Voters approved $3B in 2004 and $5.5B in 2020 for stem cell research through CIRM, the state's stem cell agency, for a total of $8.5B. The first therapy with CIRM funding to win FDA approval came in March 2026, about 21 years in: a gene therapy for an extremely rare, often fatal childhood immune disorder.

Read the full annotated legal text →

Why vote No?

Prop 38 was filed by billionaire Gary Michelson, and every dollar on the FPPC's list of top donors to the Yes campaign comes from him or from Meyer Luskin, both co-founders of the institute it would fund. The eligibility criteria for the $4.2B institute half describe the nonprofit institute at UCLA that Michelson co-founded and chairs, down to the two programs his gift created: a nonprofit existing by January 1, 2025, at least 200,000 square feet, $250M in pledges, and $50M each for vaccine and microbiome programs. A UCLA spokesperson confirmed that no other institution qualifies.

If Washington cuts research funding, the Legislature can fund scientific research in any year's budget and award it competitively. It does not take a bond. And California already ran this experiment with $8.5B for stem cell research in 2004 and 2020: the only FDA-approved treatment that arose arrived after 21 years, for an ultra-rare disease, while 92% of awards through 2012 went to institutions tied to the agency's board.

Immunotherapy is not a field short of money. One immunotherapy drug, Keytruda, sold $31.7B in 2025, and private investors chase every promising lead in this field. Public money is not needed where private money is abundant.

Prop 38 would cost $500M to $600M per year for about 20 years from a General Fund that the Legislative Analyst says is running a structural imbalance this year, with deficits projected every year after. Research is a good cause and it's great that the state and federal government fund it, and that is exactly why it deserves better than a bond one donor wrote around his own institute. Vote no.