Wednesday, November 13, 2019

From Royalties to 'Vital' Research Opportunities: A Summary of California's $5.5 Billion Stem Cell Measure

The proposed 2020 stem cell initiative for the California stem cell agency is much more than the $5.5 billion it provides to continue the operations of the state's stem cell enterprise. 

It would also make sweeping changes in the California Institute for Regenerative Medicine (CIRM), which is down to its last $27 million. They range from expanding the scope of the agency to restructuring its governance.

This article is an initial attempt to summarize the measure’s more important changes. It does not capture all of the implications and alterations that could affect CIRM. Readers may see other sections of the initiative that are of interest. If so, please email the California Stem Cell Report at 

The deadline for the sponsor of the measure to make changes in the proposal is Monday at 5 p.m. Only the sponsor, who is Robert Klein, the first chairman of the agency, can make changes. 

Bond Financing and Interest Costs
The $5.5 billion would be provided through bonds (state borrowing) sold over a 10-year period. The interest on the bonds increases the cost to taxpayers as opposed to an annual appropriation. 

Expansion of Scope of Work 
The initiative’s purpose is “to support stem cell research to mitigate and/or cure chronic disease and injury” and also to finance “other vital research (opportunities) to develop treatments and cures for serious diseases and conditions like diabetes, cancer, HIV/AIDs, heart disease, paralysis, blindness, kidney disease, respiratory illnesses, and many more.” It also would “promote” accessibility and affordability of treatments by ensuring that more Californians have the opportunity to participate in clinical trials. (p.2)

“Other vital research opportunities” mean “scientific and medical research and technologies, includinq but not limited to qenetics, personalized medicine, and aqinq as a patholoqy, and/or any stem cell research not actually funded by the institute under paragraph (3) of subdivision (c) of Section 125290.60 which provides a substantially superior research opportunity, vital to advance medical science as determined by at least a two-thirds vote of a quorum of the members of the Scientific and Medical Research Funding Working Group and recommended as such by that working group to the ICOC (CIRM governing board), or as determined by the vote of a maiority of a quorum of members of the ICOC.” (p. 29) 

The measure would also: 
  • Expand the agency’s Alpha Clinic program and create “centers of excellence” to expand clinical trial locations based on geographic diversity.(p. 3) The measure prescribes specific criteria for decisions by the board. 
  • Require the board to establish and oversee affordability programs for CIRM-funded treatments. 
  • Create a new, 17-member affordability group (p. 5, p. 6, p. 20) to deal with a wide-range of affordability issues including development of financial models and funding of patient and caregiver expenses 
  • Require the agency to create new training and fellowship programs to help create a stem cell work force, including programs at the community and state college levels. (p. 4) 
  • Re-establish the “shared research laboratory” program to provide more training and equipment and to create lab access for neighboring institutions. (p. 5)  
Conflicts of Interest 
Conflict of interest provisions would be be guided by the National Academies of Science (NAS), an out-of-state organization with no requirement for open meetings. (p.18)

The NAS is a widely respected and 156-year-old, non-profit based in Washington, D.C. 

The initiative language says that standards must “be qenerally aliqned with those adopted by the National Academy of Sciences to the extent that such standards are consistent with constitutional and statutory requirements applicable to the institute.” (p. 15)

No conflict standards would be required in connection with discussion or enactment of strategic and concept plans and “research budgets.” (p. 13)

Grant Reviews and Selection of Reviewers 
The measure alters the composition of the grant review group that makes the de facto decisions on awards. The measure would continue the current practice under which reviewers are not required to disclose publicly their economic or professional conflicts of interest.   (p.22)

Reimbursement of expenses of research participants and caregivers would be permitted. (p. 16) 

New Scientific Advisory Board 
Creates a 10-member scientific advisory board with 50 percent from out of state. Five of the total would be appointed by the chair of the agency and five by the president. (p.7) 

Expansion of Board from 29 to 35 
In addition to adding six members to the governing board, the chancellor of UC San Francisco would get one additional appointment. Two nurses also would be added to the board. Representatives from the state college system would be eligible for appointment. (p.7, p. 9)

The proposal additionally:
  • Adds as criteria for selection of some board members “other vital research opportunities, therapy development, or therapy delivery,” “nursing” and “mental health” patient advocacy. Criteria for the board chairman would be expanded to include a “documented history” in “other vital research opportunity (sic) in therapy development and/or therapy delivery advocacy.” 
  • Allows for ouster of some board members with a half of a term left at the time of the passage of the measure when a new appointment is made. (p. 10) 
Public Openness and Transparency 
The proposal: 
  • Makes more information confidential including “progress reports” currently filed publicly by applicants. (p. 12)
  • Includes “applications” as confidential, although that is current practice. Currently the agency is excluded from some transparency requirements that apply to other state agencies. (p. 12)
Royalties and License Revenues 
Royalties, including interest on them, shall be, to “the extent permitted by law...appropriated for the purpose of offsettinq the costs of providinq treatments and cures arisinq from institute-funded research to California patients who have insufficient means to purchase the treatment or cure, includinq the reimbursement of patient-qualified costs for research participants.” Currently the royalties flow to the state's general fund. (p. 14)

Number of CIRM Employees/Budgeting 
The measure would allocate at least $1.5 billion, with conditions, for awards dealing brain diseases, including Alzheimer’s disease, Parkinson's disease, stroke, dementia, epilepsy, schizophrenia, depression, traumatic brain injury, brain cancer and autism. (p.2)

Costs of CIRM “working” and advisory groups, application reviews, consultants and research conferences would be designated as “research funding,” meaning that they would not come out of the agency’s administrative budget, which is capped at 6.5 percent of $5.5 billion. (p. 23, p. 28)

The proposal also:
  • Caps the number of employees nominally at 70 but allows the addition of 15 agency employees to deal with affordability issues. Also allows the addition of “employees funded throuqh sources other than bond proceeds or the (state) General Fund." (p. 19)
  • Enacts formulas that restrict the use of bond funds in various categories, including new clinical programs, affordability, buildings and research equipment. (p.23)
  • Establishes new rules and limits on indirect, administrative costs in grant awards, an important consideration for recipient institutions. (p.24, p.27)

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