Wednesday, December 21, 2016

'A Good Deal?' -- California Stem Cell Research, Rosy Expectations and Billions of Dollars

Highlights
$6 billion from the Golden State
$1.1 billion in royalties?
40 new clinical trials projected

"Are taxpayers getting a good deal?" That's the question that was raised nationally this week by the New York Times in connection with federally funded research dealing with life-saving treatments.

The same question can be raised concerning the roughly $6 billion, including interest, that California is spending -- unsuccessfully so far -- to generate a stem cell therapy that can be widely used.

In the case of the Times, the article by Matt Richtel and Andrew Pollack dealt with cancer immunotherapies and the soaring business and medical enthusiasm for the treatments. The two writers started their lengthy piece with the example of Kite Pharma, which they said "has struck gold." The company's stock has soared from $17 a share two years ago to about $50.

The Times wrote that excitement over the treatment speaks "volumes about the value of Kite's main scientific partner: the United States government."

California too is partnering with researchers and companies to develop blockbuster treatments, including immunotherapies. It has awarded more than $2 billion for research into possible treatments ranging from arthritis to extremely rare diseases that affect only a few thousand people.

The state is financing its research via the California Institute for Regenerative Medicine (CIRM), which is more informally known as the state stem cell agency. The agency has only $692 million left before its money for new awards runs out in 2020.

CIRM is funded by $3 billion that state borrows (bonds). The interest on the bonds roughly doubles the cost of the research compared to pay-as-you-go financing, which the federal government basically relies on. Like the federal government, CIRM depends on the private sector to actually bring potential therapies into widespread use.

The stem cell agency was created by voters in 2004 when they approved a ballot initiative. The campaign raised rosy expectations that cures were right around corner for afflictions that reached into nearly 50 percent of California families. And supporters also said that the state could expect as much as $1.1 billion in royalties. But royalties and commercial therapies have yet to appear.

The Times piece laid out arguments concerning federal research that apply equally to California's research effort, which is unprecedented in state history and which operates outside of the control of the governor and the legislature.  The Times piece said,
"Defenders say that the (public/private) partnership will likely bring a lifesaving treatment to patients, something the government cannot really do by itself, and that that is what matters most.
"Critics say that taxpayers will end up paying twice for the same drug — once to support its development and a second time to buy it — while the company reaps the financial benefit."
The Times article continued,
“If this was not a government-funded cancer treatment — if it was for a new solar technology, for example — it would be scandalous to think that some private investors are reaping massive profits off a taxpayer-funded invention,” said James Love, director of Knowledge Ecology International, an advocacy group concerned with access to medicines."
California's stem cell agency has yet to find a financial source to continue its work beyond 2020. Some talk has surfaced about another bond measure in 2018, but political observers give such an effort slight chance of success unless the agency can produce a therapy that will resonate with voters. If the Trump Administration, however, imposes restrictions on stem cell research, similar to those of the Bush Administration in 2004, that could create an impetus for passage of another measure.

Bob Klein, the first chairman of the stem cell agency, used to like to trot out the hundreds of scientific journal articles that were published by CIRM-funded researchers as a sign of success. "So what?" was the private comment to the California Stem Cell Report by one former CIRM staffer, alluding to the lack of impact of the journal articles. 

The agency's record, however, is picking up. Last week it cited 70 new projects, 10 new clinical trials plus a $30 million stem cell "pitching machine."  At at an emotional meeting, the agency's governing board also heard a mother thank the agency for saving the life of one of her children. Randy Mills, the president of the agency, is pushing hard and is looking for 40 additional clinical trials in the next several years. 

But the fundamental question remains: Will California taxpayers get their money's worth -- "a good deal" -- for the billions they are spending on stem cell research.   
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1 comment:

  1. What seems to be lacking in this discussion is the savings to both federal and state spending on chronic morbid disease states. Additionally, there is a real savings downstream to the families of these patients in out of pocket healthcare costs. So, it appears there are more factors in ROI to be considered beyond direct payback when one considers the potential beneficial impact of these cures on overal healthcare cost reduction.

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