Monday, June 29, 2020
Sunday, June 28, 2020
-- Lucy Jones, seismologist, in Los Angeles Times
Friday, June 26, 2020
Directors of the California Stem Cell Agency Back $5.5 Billion Stem Cell Ballot Measure -- With One Exception
Endorsement came on 21-1 vote after about a 30-minute discussion. Jeff Sheehy, a patient advocate member of the board since its inception in 2004, voted no. He did not speak out during the meeting, which heard no dissent from other board members or the public.
The board has 29 slots. Only 22 members were present for the morning. online vote. Two seats are vacant.
Sheehy released a statement to the California Stem Cell Report in which he cited a wide range of reasons for his negative vote. They included,
"(The) state assuming additional debt at the onset of a recession of indeterminate length (that could become a depression) AND the absence of the original purpose for CIRM (the no longer existing federal restrictions on embryonic stem cell research funding) plus the abundant Federal and private sector funding for identical research, the failure to maximize return on investment plus a blatant giveaway to Pharma AND the handcuffs placed on the legislature."Sheehy also said,
"(A)fter spending all of this money ($3 billion), CIRM has yet to produce a single FDA approved product and the State has not achieved any healthcare cost savings from therapies developed by CIRM."(See the full text of his lengthy statement here.)
The initiative would cost California taxpayers an estimated $7.8 billion, according to official state figures. The total could be lower or higher depending on interest rates because the $5.5 billion is borrowed money. The initiative also significantly expands the scope of the agency, including a heavy emphasis on making any stem cell therapies affordable and accessible.
CIRM, however, has not helped to finance any stem cell therapies that are widely available to the public.
(Here is a link to the description of the measure by the state's legislative analyst, including its $7.8 billion cost. Here is the actual text of the more than 10,000-word proposal)
Endorsement of the proposal by the stem cell agency board was a foregone conclusion. Sheehy's dissent was not, although he expressed some concerns earlier about the measure. Directors previously had indicated support informally. Without voter approval of the proposition on Nov. 3, CIRM will begin closing its doors next fall as it runs out of its original $3 billion.
Today's meeting also included a contingency budget to wind down CIRM, which currently has only 33 employees. Over the last 15 years, the number of employees has never numbered higher than in the mid 50s.
CIRM directors were laudatory of the measure and Robert Klein, sponsor of the proposal. Klein is leading the campaign as he did in 2004. He was also the first chairman of the agency. Speaking to the board, Klein touted economic benefits of the measure and minimized its interest costs. He said it would not detract from other state priorities, a matter of significant concern to Sheehy.
Klein said the measure is aimed at "reducing human suffering and saving the lives of those we love." (The text of his comments is being sought from the campaign.)
David Higgins, a board member/patient advocate for Parkinson's disease and who has Parkinson's, said his family includes many persons who have had the affliction. Higgins, who choked with emotion at one point, said the efforts of CIRM are "very personal" for him.
The agency is barred by law from using state funds to support the ballot campaign, but it is permitted to provide the endorsement as it did today.
I do not support the new ballot measure authorizing $7.8 billion in new funding for CIRM for the following reasons. In referencing the new measure, I note the true cost of the bonds including interest, as opposed to the headline figure of $5.5 billion. I hope that Governor Gavin Newsom, whom I served as HIV/AIDS Adviser when he was Mayor of San Francisco, other State policymakers and voters will consider these points when deciding whether they will support this measure.
First, I'm concerned about the cost to the State at a time of fiscal crisis. CIRM has spent $3 billion over the last 15 years. The Legislative Analyst calculates a repayment period of 25 years and currently CIRM is costing the State $327 million a year to pay back the bonds for the first tranche of funding authorized by voters in 2004 via Proposition 71. I think CIRM has provided value. But after spending all of this money, CIRM has yet to produce a single FDA approved product and the State has not achieved any healthcare cost savings from therapies developed by CIRM.
I look at the current fiscal crisis the State faces and I know we will see cuts in education, healthcare, and housing not only this year, but for several years into the future. Issuing bonds does not mean they are “free money”. They have to be paid back, and the $327 million California is paying annually is $327 million the State does not have for other needs.
The Legislative Analyst estimates that the new measure will add at a minimum another $310 million a year in annual repayments from the General Fund. That means California taxpayers will be paying close to $650 million a year for stem cell research—research that is currently well funded by the federal government and the private sector. To reiterate, State imperatives such as education, healthcare, and housing that are funded by the General Fund are not only chronically under-resourced, but in moments such as our current situation with a deficit, will actually be second in line behind repaying bonds for stem cell research. Bonds have to be repaid first leaving more important priorities to be cut. We must be honest and acknowledge that paying for stem cell research means that other needs will not receive funding. Adding debt in what may be the biggest fiscal crisis California has experienced since the Great Depression is a terrible idea.
Second, CIRM was created because the Federal government restricted human embryonic stem cell research. This is not longer true and the rationale for the State of California going into debt to fund this research no longer exists. The Federal Government will spend $306 million this year and $321 million next year on human embryonic stem cell research — more than CIRM has spent in any single year of its existence. The Federal government will spend another $593 billion on human induced pluripotent stem cell research and $605 million on non embryonic stem cell research this fiscal year. In total, the Federal government will spend $2,129 billion on stem cell research this year. This spending dwarfs what California will spend.
In addition, the Alliance for Regenerative Medicine estimates the private sector spent almost $10 billion in 2019 on regenerative medicine. Growth in private sector investment in regenerative medicine is on a steep upward curve.
Third, the new measure fails in several ways to fix flaws in the original Proposition 71. This new measure does nothing to change the absurd requirement that any changes to it requires a 70% vote of the legislature. This agency should not be outside oversight by the elected representatives of the people. Originally this was justified by opposition to human embryonic stem cell research and the perceived need to insulate the research from political considerations. Now that the Federal restrictions have been lifted and this research can be freely funded, this requirement makes no sense. An agency that will end up costing the State $650 million a year should be fully accountable to elected officeholders.
In addition, the new measure should ensure that CIRM fulfill a key promise made in Proposition 71 that CIRM funding will “benefit the California budget by… providing an opportunity for the state to benefit from royalties, patents, and licensing fees that result from the research.” According the Legislative Analyst, “since 2004, grant recipients have contributed $352,560 in total invention-related income to the State.”
I would note that CIRM has helped produce a therapy that holds significant promise. This product, an anti-CD47 monoclonal antibody for cancer, has
been acquired by a major pharmaceutical company and will lead to substantial revenue. CIRM has spent roughly $38 million on developing the monoclonal antibody and should receive upwards of $30 million (perhaps as much as double this number) in return. While the Board has worked hard to put in place policies to obtain a return for the State, that return, which could have been enormous, is constrained because the State cannot hold equity in the product. The California Constitution prevents the State from holding equity. CIRM should have asked the legislature to amend the constitution in this ballot measure to allow CIRM to hold equity. Equity provides the opportunity to fully vest in the products supported by CIRM funding and would recognize CIRM’s role as a source of venture capital. Failing to maximize the return on the State’s investment, especially when it is paid for with debt financing, is fiduciary malpractice. From my perspective, millions are gifted to pharmaceutical companies under the current law.
More troubling, the new initiative introduces changes that will lead to the State receiving NOTHING for the General Fund from future returns. Per the Legislative Analyst, the new measure “would require the State to use any income from CIRM agreements to improve the affordability of stem cell treatments.”
Thus, CIRM/State of California will fund development of products if this new measure is approved. The return from investing in those products will then be given back to companies to pay for the products CIRM invested in. This is literally the worst possible giveaway, robbing the State of a return on investment and freeing companies from any price restraints on products since CIRM will make up the difference. We could actually see the company (famous for aggressively pricing Hepatitis C cures and HIV preventive medications) that acquired the anti-C47 monoclonal antibody return funds to the State and see the State forced to use those funds to buy the drug for patients. It would have been far better if the new measure had been written with provisions that ensure a fair return to the State’s General Fund via the ability to hold equity and that require fair pricing for products funded by CIRM. The original intellectual property policies adopted by CIRM did include a provision that required grantees to offer public entities in the State of California the lowest available price.
I note that the new measure does include “accessibility and affordability” provisions, but the focus is on insurance coverage. Fair pricing and improving the State’s return on its investment are not included, presumably to avoid offending Big Pharma.
I continue to have serious concerns around Board member conflicts of interest, with the majority of the Board coming from institutions that have received the bulk of CIRM’s spending. Rather than being addressed in the new measure, conflicts of interest are exacerbated with the new measure adding Board members from institutions that receive funding.
I also have concerns about governance with a 35 member Board—too big to function, and surreally, a Board member for every 2 CIRM employees—and the chief executive role awkwardly split between the Board chair and CIRM’s president.
For these reasons—the State assuming additional debt at the onset of a recession of indeterminate length (that could become a depression) AND the absence of the original purpose for CIRM (the no longer existing Federal restrictions on embryonic stem cell research funding) plus the abundant Federal and private sector funding for identical research, the failure to maximize return on investment plus a blatant giveaway to Pharma AND the handcuffs placed on the legislature—I cannot support the new $5.5 billion measure.
CIRM Governing Board Member
Appointed 2004 by State Senate President Pro Tem John Burton
Re-appointed 2012 by State Senate President Pro Tem Darrell Steinberg
Thursday, June 25, 2020
Well, as someone famously has said -- sort of -- there is a plan for that. And its essence will be presented tomorrow morning online for the entire world to see and discuss.
Nov. 4 is the day after the election in which voters will say yea or nay to the initiative to refinance the California Institute for Regenerative Medicine (CIRM), which needs lots of money to keep its doors open in Oakland.
Maria Millan, CEO of CIRM, and its lean team of 33 have been working hard on what might be called CIRM 3.0 -- CIRM 2.0 being its current state. She has prepared 16 pages of presentations that are now available for viewing on the CIRM website.
Millan will formally offer them up tomorrow morning at a public meeting of the CIRM governing board that will be on YouTube and audiocast beginning at 9 a.m. PDT. Instructions for participating are on the agenda, including how to speak directly to all those logged on, how to raise questions and make suggestions.
As usual the slides are an outline -- not a fully fleshed-out proposal -- which CIRM's 29 directors may change or reject. But it is likely that the essential elements of the proposal will move forward . The concept plan is also likely to affect the professional lives of the few thousand folks folks working in stem cell research in California.
What is more important is the measure of the success of the proposal, which basically is a development effort aimed at aggressively pushing stem cell therapies into the marketplace. The agency currently lists 63 clinical trials that it is assisting, an area that is likely to become more important if the initiative passes.
At the beginning of the presentation, Millan asks the question, "Where do we want to be?"
Her three-point response is:
Californians will hear more tomorrow about how CIRM might use $5.5 billion over the next 10 to 15 years. Then CIRM will once again have to start looking for more cash. The new initiative provides no funding beyond that time frame.
- "Accelerate the development of near term and future innovative regenerative medicine approaches to deliver effective cures and treatments
- "Expand therapeutic delivery and equitable access to patients with unmet medical needs
- "Partner with key stakeholders and structure internal operations to accomplish the above"
The bottom line is to win -- in the case of the stem cell measure -- by Nov. 3. If the proposition fails, the California stem cell agency dies.
Many commentators argue that often the first casualties of such "wars with deadlines" are "facts" and "truth." And then there are matters that are arguable, at least in the eyes of some.
Consider the monetary description of the initiative. The proposal is dubbed a $5.5 billion measure. That is the amount of state bonds that would be issued. But bonds are simply borrowing by the state. There is interest that needs to be paid by California citizens -- an estimated $2.3 billion.
So is it a $5.5 billion or $7.8 billion measure? Which is correct? Which figure should the mainstream media use? Which figure should the California Stem Cell Report use? Is it a "lie" to indicate that the measure amounts to only $5.5 billion? We are deeply interested in how this is perceived. It will affect how we write about the measure over the next four months. Please send your responses to firstname.lastname@example.org.
In all fairness, we have used a $5.5 billion figure almost entirely, and a $3 billion figure for the last 15 years for a quick shorthand reference to indicate the size of the effort since 2004. We have had qualms about using the figures and have laid out the interest costs from time to time.
Another possible casualty of the "war with a deadline" involves what seems to be simple: the number of clinical trials that have been backed by the California Institute for Regenerative Medicine (CIRM), as the stem cell agency is formally known.
The campaign issued a news release on Monday that reported 80 trials. The CIRM website says only 63. What gives?
We asked the campaign about the matter yesterday. It responded quickly with an explanation that basically said it was counting all clinical trials anywhere that somehow involved results generated from CIRM-financed work.
Is that a "factual" way to describe to voters how many clinical trials the state of California/CIRM is participating in or has participated in? Or is it exaggeration/hype that will ultimately discredit the campaign or the stem cell agency? Especially when it becomes part of a host of claims that seem to push the envelope.
Again, I invite readers to weigh in at email@example.com. Or you can respond by using the comment function at the end of this item.
Here is what the campaign sent the California Stem Cell Report yesterday on the clinical trial question. Our thanks to them for a quick and straight-forward reply.
Clinical Trial ID
Myelofibrosis, Polycythemia vera
Polycythemia Vera and Essential Thrombocythemia
Polycythemia, Essential Thrombocythemia
Spinal Cord Injury
Hematologic Malignancies (CAMELLIA)
Acute Myeloid Leukemia
Tuesday, June 23, 2020
Editor's note: This is an extended version of a piece by yours truly regarding the landscape of the ballot campaign for the initiative to refinance California's $3 billion stem cell agency. A shorter version appeared yesterday on Capitol Weekly, the well-regarded, online news service that deals with California governmental and political news. This version includes more on such things as campaign fundraising, justification for the agency and the overall political environment.
A $5.5 billion stem cell bond measure qualified yesterday for the November ballot, but the campaign to win voter approval is facing an array of hurdles that its supporters never envisioned last summer when they were formulating the initiative.
Call it the Covid-19 crunch. The pressures include a $54 billion hole in the state budget, looming cuts involving schools and medical assistance for the poor, unemployment now standing at more than three million and predictions by the Federal Reserve that things could get worse. Even California’s famed Rosebowl is facing losses of up to $20 million.
That is not to mention that the wealthy folks who support such things as stem cell research are also feeling a squeeze from Covid. These are the donors who are usually called upon to help finance what is predicted to be a $50 million campaign on behalf of the measure.
All in all, it is not an environment that would seem to support what some will argue is unnecessary spending.
The initiative is largely aimed at saving the state stem cell agency from financial extinction. Formally known as the California Institute for Regenerative Medicine (CIRM), voters provided it with $3 billion in state bonds in 2004 to finance research and development of stem cell therapies. Today that cash flow is dribbling to an end. CIRM will begin shutting its doors next fall without a major financial infusion.
Little noticed so far, however, is how the initiative will also expand the scope of the agency and allow CIRM to venture into arenas that some will argue are a bit remote from scientific research.
Not unexpectedly, the campaign, Californians for Stem Cell Research, Treatment and Cures,” was pleased with placement of the initiative on the fall ballot. The campaign issued a news release quoting Robert Klein, a Palo Alto real estate developer and chairman of the campaign, as saying, “During the past decade, California has made incredibly thoughtful investments and significant progress along our journey to developing therapies and cures, for diseases and conditions like diabetes, age-related blindness, cancer, epilepsy, Parkinson’s, Alzheimer’s, and heart disease.
He continued, “It is critical to California families that this vital therapy development pipeline continue to be funded. Our state has always been a leader in medical and scientific research and therapy development, ranking second in the world when evaluated as a nation. Continuing to fund that mission is essential to the health of our families while stimulating the economic recovery for California, with good paying jobs, created by this program.”
The news release also quoted Sandra Dillion, a clinical trial participant and cancer patient advocate. She said, “Since I was diagnosed with a rare form of blood cancer in 2006, there has been a tremendous amount of advancement in research and discovery that has allowed me to be here today, sharing my story, in large part due to the California Institute for Regenerative Medicine supporting the science that saved my life.
“Without California’s investment in advancing stem cell research and cures, I would not have the same energized, healthy life that I have been able to once again experience.”
The Center for Genetics and Society in Berkeley, Ca., which opposed the 2004 initiative that created CIRM, offered a different perspective. In response to a query, Marcy Darnovsky, executive director of the group, told Capitol Weekly that the initiative “does little to ease the serious concerns about CIRM that have been voiced for years by the Center for Genetics and Society, other public interest advocates, and researchers, and echoed by several policy bodies.
“It does nothing to address CIRM's built-in conflicts of interest, or its lack of legislative oversight -- despite it being an agency supported wholly by public funds. The new proposition makes some things worse; for example, it outsources critically important decisions about ethical standards to an unaccountable national committee.
“While stem cell research is valuable, there are no longer federal limits on its funding, which was the justification in 2004 for asking California voters to allocate the first multi-billion-dollar pot of money. In the meantime, that campaign's shameless over-promising and hype set the stage for the hundreds of under-regulated commercial stem cell clinics now offering unapproved ‘treatments’ that have caused tumors and blindness.
She continued, “Today, California faces an enormous budget deficit and proposals to slash high-priority social programs that benefit all of us. It remains to be seen whether voters will approve a new multi-billion-dollar measure for CIRM, instead of investing in healthcare, housing, jobs, education, and other pressing needs.”
CIRM declined to comment on the announcement that the measure had qualified for the ballot. The agency’s governing board is scheduled to discuss the initiative at a meeting Friday and approve a contingency plan if it fails to pass.
California is still only beginning to reckon with the economic impact of Covid crisis on services ranging from schools to health care for the poor. Gov. Gavin Newsom has already announced a $54 billion shortfall in the budget. Lawmakers this week sent him a budget for the next 12 months that papers over the worst problems and assumes the federal government is likely to help out later this year, perhaps during the fall election season.
If federal funding fails to surface, the fate of the ballot measure could become entangled in voter concern over public priorities. Some voters are likely to ask: Should scientists at well-endowed Stanford University, which is the No. 1 recipient of CIRM funding ($388 million in all), receive more millions while poor people throughout the state are squeezed still further on health care?
One CIRM director, Jeff Sheehy, who has served on its governing board since day one, recently raised scientific and public policy questions. In a May email to the California Stem Cell Report, he said, “I'm not sure that the board has a clear, coherent view of the scope of CIRM's research. And I am not sure the board has a clear idea of what the scientific mission of CIRM should be in the event that new funding comes from the voters.
"I would note as an aside that CIRM has never submitted its scientific program, including all grants made and their impact, to a rigorous, independent scientific review. In short, I don't think we really know at CIRM where we've been and where we want to go. We have anecdotes…."(The ellipses are Sheehy’s.)
The multibillion dollar size of the measure -- $7.8 billion with interest payments on the bonds -- is only one financial issue for the initiative’s backers. In 2017, Klein estimated the cost of the campaign at about $50 million, but has more recently declined to update that figure. The 2004 campaign cost about $34 million.
Paying for all the accoutrements of a campaign seeking the favor of 20 million voters -- TV ads, website, direct mail, etc. -- will require major campaign contributions at fa time when even the wealthy are feeling the Covid crunch. The financial markets, where much of the wealth of the well-to-do resides, are erratic and more than usually unpredictable. Even prior to Covid, an effort by CIRM to raise $200 million in private funding was unsuccessful.
At the same time, biomedical companies are increasingly interested in stem cell product development, which they shied away from in 2004. Just this spring, Gilead Sciences, Inc., of Foster City, Ca., bought a firm backed directly and indirectly by CIRM with $45 million. The purchase price was $4.9 billion, a deal that would have been unheard of in 2004.
The agency saw the deal as a validation of its judgment and work, a reason for Californians to vote to sustain CIRM’s operations. But others see the rising private sector investment as easing the need for additional funding from California taxpayers.
The changing nature of the political scene on a national level could also come into play in the fall. In 2004, also a presidential election year, conservative and fundamentalist forces that might have launched a strong anti-stem cell campaign were more focused on re-electing George Bush. This year a strong California turn-out against President Trump could mean more support for the stem cell agency. Gone too are the Bush administration restrictions on federal funding of human embryonic stem cell research, a rallying cry in the 2004 campaign.
Klein has said he has a poll that shows that 70 percent of Californians support stem cell research. But he has declined to provide a copy of the poll or provide the name of the firm that performed the work.
One of the products that CIRM has supported successfully over the years is hope. Indeed, its new slogan in 2018 was “Something Better Than Hope.” It was emblazoned on the CIRM annual reports in 2018 and continues to appear on CIRM documents.
The agency has a flock of videos of patients appearing at its meetings over the last 15 years and asking for more research. It gives them hope, they say, during the sometimes tearful, emotional appeals. They are powerful presentations that are available on the Internet and are likely to generate support from many voters.
To date, the agency is helping to support 63 clinical trials, a number that Klein and CIRM supporters would have scoffed at in the early days. The total cost of trials is high and even the $3 billion goes only so far. Clinical trials are the last and key stage before the Food and Drug Administration approves a stem cell treatment for widespread use. The 2004 campaign raised expectations that such treatments were just around the corner. So far, that has not proven to be the case. Nor has the agency yet generated a stem cell treatment that can be used widely.
Society’s experience with Covid-19, however, could generate a positive sentiment for more research aimed at treating the full array of afflictions that bedevil us. The campaign makes it clear on its home page that is the goal and promise of the stem cell initiative -- “to accelerate development of treatments and cures for life-threatening diseases and conditions that affect someone in nearly half of all families.
It is a “motherhood-and-apple pie” argument that is hard to disagree with. November 3 will tell us whether the voters of California do.