Thursday, April 19, 2007

CIRM Facilities Rancor: Delay and Dollars

Contentious, personal, confrontational, sarcastic – all could accurately describe last Friday's session of a key group of the California stem cell agency.

But, based on the transcript, the descriptions miss what was fundamentally important about the meeting and also what was hardly said. And that is: The agency is not required to spend $300 million on bricks and mortar – the major labs so desired by California research institutions. It is merely authorized to do so. And delaying them could mean more money for other endeavors.

The meeting of the Facilities Working Group was cited by CIRM President Zach Hall in his letter announcing that he was stepping down early. (See "Edifice" below.) The nominal topic of the meeting involved the laying more of the groundwork for $222 million in grants for major research facilities at California universities and nonprofit institutions.

But by the end of the acrimonious session, the Facilities Group, dominated by patient advocates, had set the stage for a major debate within the CIRM Oversight Committee. Three days prior to the Facilities meeting, patient advocates had lost a straw vote within the 29-member Oversight Committee for a more modest proposal for a written survey instead of the public hearings approved by the Facilities group. A seeming routine matter that was freighted with major baggage, including who is in charge – the Oversight Committee or its advisory groups?

Other issues emerged as well. The Facilities meeting highlighted the difficulties that any organization faces when it tries to operate without a "permanent" CEO. Hall was already a lame duck at the time of the meeting, having announced his departure last December. The session also demonstrated persistent divergence about the role of the CIRM president. Oversight Committee Chairman Robert Klein insisted that Hall execute the wishes of the Facilities Group even though Hall believed they conflicted with the Oversight Committee.

Finally, there were questions of the balance between making grants with great speed and exercizing due diligence.

Prop. 71
, which altered the California Constitution and created CIRM, provided for spending as much as $300 million on laboratory facilities. If the agency does not spend all of the sum, the remainder could go for more direct development of cures and therapies, a high priority for patient advocates who sit on the board. At the same time, top executives from California universities sit on the Oversight Committee. Their view is that they do not have enough room for existing researchers, much less the ones that are being recruited to come to the Golden State to perform embryonic stem cell research financed by CIRM. Construction costs are spiraling upward, and any grants will buy less in 12 months than they do today.

Prolonging the grant process could, however, mean that more funds would be ultimately available for patient advocate-backed research. Unwilling to wait, institutions will find other funding sources. Needs will change. Grant criteria could become more strict, ruling out some institution's plan. Some projects may become prohibitively expensive because of rising construction and equipment costs.

No one on the Oversight Committee is talking publicly about such a delaying strategy but it is clearly viable. And it is one that is not likely to be regarded kindly by institutions represented on the panel.

At last Friday's meeting, Hall said that the Oversight Committee had indicated a need for speed in moving grants forward and that he was receiving the opposite instructions from the Facilities Group. He said his first responsibility was to the full Oversight Committee. Hall said,
"I feel it is very important that it be worked out at the highest governance level for this whole organization, which is the board. I think that is the key. This is a really important issue here, and there's a, I would even say, a cultural difference between those involved in the scientific culture who see the need, who understand the urgency, and who are trying to move this forward in order to get the whole project going, and those here whose point of view I have heard(at this meeting)."
Oversight Committee member Marcy Feit, CEO of Valley Healthcare Systems, said she did not detect the same urgency as Hall. She said,
"This is a public agency with taxpayer dollars. And we are foolhardy if we don't pay attention to our responsibility. But nowhere on that (April 10) board meeting did I hear any board member not encourage us to do our job. So I would beg to differ with you that there is a cultural difference. There is not a cultural difference. I think if there were the rest of the board members here today, they would agree with us."
James Harrison, CIRM's private counsel, said,
"Zach is correct, that the ICOC expressed its intent that gathering information through a survey or through some prenoticed letter was not necessary or desirable in light of the sense of urgency that was expressed."
Oversight Committee member David Serrano-Sewell, vice chair of the Facilities Group and author of the public hearings motion, said it would not mean a delay in approving grants. In response to a query, he said in an email,
"Will undertaking a deliberative approach cause a delay? No, it will not. The Facilities Working Group can do its thing and meet the deadline, but it will need the support of the president to make it happen. That's where things got a little tense (see item below)."
To resolve the $222 million worth of edifice issues plus the question of who will be in charge of CIRM beginning in May, the institute is attempting to set up a special meeting of the Oversight Committee as soon as possible. The meeting is likely to be in the form of a conference call.

The committee will be operating in an atmosphere damaged by the rancor of last Friday's Facilities meeting. For a closer look at the acrimony, see the item below.

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