Friday, November 08, 2019

Fresh Comment on CIRM's Abilitiy to File its Own Ballot Initiative

The vice chairman of the California stem cell agency board, Art Torres, today responded by email to a question about the possibility of the agency filing its own ballot initiative to provide billions in refunding for the agency. He was referring to an item posted earlier today headlined "Survival of the Financially Strapped California Stem Cell Agency? It Can Write Its Own Ballot Initiative."
Torres said,
"The agency could write its own initiative but no power to place it on the ballot or circulate it for signatures. I think the meeting on Friday is the best way to collect recommendations to pass on." 
As was noted in the item, a sponsor would have to be found to pick up whatever initiative that the agency might offer. Torres' comment has been added to the original item. 

Survival of the Financially Strapped California Stem Cell Agency? It Can Write Its Own Ballot Initiative

Directors of the California stem cell agency --- some of whom are not happy with a proposed $5.5 billion ballot initiative that would rescue the agency -- have a choice: They can write their own ballot measure. 

The agency, known formally as the California Institute for Regenerative Medicine (CIRM), is permitted under state law to draft its own ballot initiative, a provision that escaped notice at the governing board's meeting last week. 

It was during that session that the dissatisfaction among some CIRM directors  surfaced significantly. A number of board members expressed reservations about the proposed ballot initiative, which would make major changes in the agency's operations. "Not helpful," was one characterization. "Handcuffs" was another. 

Another meeting was called for a week from today (Nov. 15) to consider the $5.5 billion proposal, which has a deadline of Nov. 18 for making changes. Any alterations can only come from Robert Klein, the sponsor of the initiative and the first chairman of the 15-year-old agency. 

Not discussed last week's board meeting was a sentence in a legal memo prepared by James Harrison, the former general counsel of the agency. In addition to the memo, Harrison briefed directors with a slide presentation on the restrictions on the use of public funds to support a ballot initiative. The sentence said,
"However, a public agency may conduct research and draft a ballot measure because these activities are not aimed at persuading voters."
The California Stem Cell Report this week queried Jeff Sheehy, one of the less-than-pleased CIRM directorsfor a comment on the possibility of pursuing an alternative to the Klein initiative. He said in an email:
"I have to admit that I had no idea that CIRM could draft its own ballot measure. I am surprised that this option was not brought to the board earlier. I think CIRM drafting its own ballot measure is a great idea and we should start this process as soon as possible, assuming that the rest of the board supports doing so."
 (Update: In response to a question, Art Torres, vice chairman of the CIRM board, said following initial publication of this item today, 
("The agency could write its own initiative but no power to place it on the ballot or circulate it for signatures. I think the meeting on Friday is the best way to collect recommendations to pass on." )
Harrison made it clear last week that running a campaign is illegal for CIRM. Someone from outside the agency would have to step in to do that as well as raising the tens of millions of dollars needed to place it on the ballot and conduct the campaign.

CIRM, meanwhile, is running out of the $3 billion that voters provided it in 2004 and will have to start winding down next year unless voters provide it with more cash. The most obvious source has seemed to be the ballot measure offered up by Klein, a Palo real estate investment banker who also directed the writing of the initiative that created the agency in 2004.
Time is running out for initiatives for the November 2020 ballot. A lengthy signature gathering process is involved in addition to an array of statutory requirements. 

However, an initial draft of a measure -- sort of a placeholder -- could be submitted quickly after a sponsor stepped up. The measure could be fleshed out and refined during the 30-day comment period with revisions made after that period closes.

In another possible scenario, Klein could withdraw his current initiative if he needs time to consider changes desired by the board. A new proposal then could be drafted and submitted for fresh ballot certification. 

Supporters of the agency could also go to the state Legislature and ask lawmakers to place a funding measure on the ballot. That would involve some major political obstacles and negotiations. So far, CIRM directors have not been inclined to move in that direction.

Here is a link to additional legal discussion of how local California governmental agencies can engage in drafting a ballot initiative and placing it on the ballot. 

Thursday, November 07, 2019

What's Old is New Again: Multibillion-dollars in Stem Cell Spending and Conflicts of Interest

Controversy about conflicts of interest at California’s $3 billion stem cell agency arose once again last week -- this time involving a plan to basically hand over conflict regulation to a prestigious, national organization that is virtually unknown outside of the scientific world. 

That little known group is the National Academies of Sciences (NAS), which doesn't rank high in anybody's breakfast table talk. However, the NAS has already weighed in with recommendations for solving conflicts of interest at the California stem cell agency. And the agency's board has said "neyt" to the NAS proposals.

Instead, the directors of the agency, formally known as the California Institute for Regenerative Medicine (CIRM), enacted their own, less sweeping changes to try to reduce the perception of conflicts of interest among the 29 members of the board.

Events last Thursday at the CIRM board meeting captured the essence of the conflict concerns. Nine awards totalling $54 million were involved. All went to enterprises that had links to institutions represented by CIRM board members. None of the board members tied to the recipient institutions was allowed to vote on the applications. 

However, the entire CIRM board makes the decisions that create the agency's grant programs, ranging from clinical trials to basic research. And over the years, roughly 90 percent of the $2.7 billion in CIRM awards has been swept up by institutions with representation on the agency's governing board, according to calculations by the California Stem Cell Report. 

Seven years ago, the NAS looked at that situation and other CIRM activities at the agency's behest. CIRM paid the NAS $700,000 for the work, done through what was then called the Institute of Medicine (IOM)

Here is how the chairman of the 13-person study group, Harold Shapiro, a former president of Princeton University, described the problem to the Los Angeles Times in 2012. 
“They (the CIRM directors) make proposals to themselves, essentially, regarding what should be funded. They cannot exert independent oversight.”
The report said, 
“Far too many board mem­bers represent organizations that receive CIRM funding or benefit from that funding. These com­peting personal and professional interests com­promise the perceived independence of the ICOC(the CIRM governing board), introduce potential bias into the board’s decision making, and threaten to undermine confidence in the board.” 
Issues about conflicts surfaced even before the agency came into being when opponents used matter during the 2004 ballot campaign that created the agency. 

The electoral effort to establish the agency was directed by Robert Klein, who also directed the writing of the initiative and then became the agency's first chairman. Klein, a Palo Alto real estate investment banker, has now submitted to state officials a new ballot measure to give the agency $5.5 billion more.

It would make major changes in the agency, increasing its board size from 29 to 35. Some of the additional members would come from enterprises that would stand to benefit from the largess of the retooled agency.  

Klein's initiative would legally require CIRM to establish conflict of interest regulations that are "generally aligned with standards adopted by the National Academy of Sciences." That is new language that could provide a rationale for not creating tougher standards and take some of the heat off the agency and its directors. 

Jeff Sheehy, a longtime patient advocate member of the board and chair of its science committee, released to the California Stem Cell Report a 3,300-word critique of the Klein initiative. Sheehy said last week in his analysis, 
"Questions related to conflicts of interest regarding the distribution of $5.5 billion in state funds obtained via debt financing should NOT be handed to an entity that is not under the control of the State of California. In addition, the National Academy of Sciences has no public meeting requirements nor other measures around public accountability and transparency that are uniformly applied to all government bodies in California.
"Those sections removing conflicts of interest oversight from the purview of Californians should be removed. The way to address any concerns expressed around conflicts of interests by board members is to add new language changing the composition of the ICOC(the agency's governing board)."
For a look at one experience in California dealing with state stem cell issues and the NAS, see this item on the California Stem Cell Report. 

On Friday Nov. 15, the CIRM board will meet to consider Klein's new initiative, which requires more than 600,000 signatures to be placed on the November 2020 ballot. Klein is the only person who can make changes in it. He has until Monday Nov. 18 at 5 p.m. to do so, if he wishes. 

Klein has not yet commented on the upcoming CIRM board hearing. The California Stem Cell Report will carry his written response verbatim when it is received. 

Wednesday, November 06, 2019

Stem Cell Researcher on $5 Billion Retooling of California's Stem Cell Agency: Learn from Experience, 'Do This Better'

California stem cell scientist Jeanne Loring has endorsed an insider's critique of a proposed refinancing plan for the state's stem cell agency, calling the analysis "logical" and coming "from the heart."

Loring's statement this week to the California Stem Cell Report addresses the 3,300-word evaluation by Jeff Sheehy, who has served on the agency board since its inception in 2004. 

In her comments, she endorses his analysis as logical and detailed. Among other things, she supports a reduction in the size of the agency's board from 29 to seven or 11 and stronger leadership of the panel. 

Loring is an award-winning scientist who has received more than $20 million in grants from the agency, officially known as the California Institute for Regenerative Medicine (CIRM). She is a co-founder and chief scientific officer of Aspen Neuroscience of San Diego, Ca., and professor emeritus at Scripps Research in La Jolla.


The California Stem Cell Report more than welcomes additional comment on this important subject, both pro and con. You may comment at the end of this item. Or send your commentary to djensen@californiastemcellreport.com. It will be carried verbatim.

Here is the full text of Loring's comments: 

"I’m a stem cell researcher who has benefited greatly from California’s investment in human pluripotent stem cells. I’ve been attending the Independent Citizen’s Oversight Committee (ICOC) meetings since 2005; I’ve been to more than 50, which is more than many of the current ICOC members have attended. I am writing because my own observations support Jeff Sheehy’s insightful critique of the 2020 ballot measure. I know that it is likely that he will be criticized for raising his concerns, but there is no stronger supporter of CIRM’s regenerative medicine mission than Jeff Sheehy. With all due respect to the other 28 members of the ICOC, I’ve seen that Jeff has always been the best prepared for their meetings. 

"I urge the promoters of the new initiative to not confuse criticism with anti-CIRMism. Jeff’s assessment is logical, detailed, and comes from the heart; his goal is to de-politicize the agency and make it more accountable to the people of California.

"There is tremendous concern that the decisions of the ICOC, both on policy and in deciding what grant applications to fund, are politically and selfishly motivated. This concern is warranted, as manifest in some of the wasteful decisions the ICOC has made. This can be fixed. I would like to see stronger leadership of the ICOC, in the form of a fully committed chairman, and that the committee take its responsibilities more seriously. I agree with Jeff that the ICOC should have fewer members, 7 or 11 instead of 29 or more, so that no member can escape his or her responsibility.

"The ICOC is supposed to make judgements that assure that the funding provided by CIRM is consistent with CIRM’s mission for the people of California. Unfortunately, I have seen too many situations in which it is clear that the ICOC members too often defer to the grant reviewers, who are all from outside California, and have no stake in the outcome of their decisions. The ICOC has too often approved grants of tens of millions of dollars without spending any time investigating the applications and deciding whether the money will be used in the best interest of Californians.

"I fervently hope that Jeff’s specific suggestions about the ballot measure be considered by ICOC members, politicians, and voters. There is a chance now to learn from experience and do this better, and all that will take is to engage the critics who know what they are talking about.

"Anyone who has an untreatable condition should be aware of the practical value of regenerative medicine. We in California have an opportunity that the rest of the world can only wish for - to make lives fundamentally better for those who suffer now and will suffer in the future from diseases and injuries that only regenerative medicine can help."

Skeptical Look at $5.5 Billion Plan to Refinance California's Stem Cell Research Program

A longtime critic of California's $3 billion stem cell agency this week chalked up pluses and minuses of the research effort, which it said is "essentially broke," and sounded a skeptical note about a plan to refinance it with $5.5 billion more.

The Center for Genetics and Society (CGS) "essentially" agreed with what it described as a "scorching" critique of the proposed ballot initiative to provide the agency with additional billions. In addition to the cash, the initiative would make major changes in the California Institute for Regenerative Medicine (CIRM), as the agency is formally known.

In a post on the CGS blog, Pete Shanks, a consultant with the Berkeley organization, briefly recounted the history of CIRM and some of the past criticism of it. But he focused primarily on the critique last week by longtime CIRM board member Jeff Sheehy. Shanks said,

"Sheehy’s range of concerns is wide. He convincingly criticizes proposed changes in the board structure, in handling conflicts of interest, and in the way CIRM addresses ethical concerns. He objects to the measure’s failure to maximize financial returns to the State from any successful therapies. He is also apparently baffled by the strange requirement that CIRM must expand its (apparently successful) 'Alpha Stem Cell Clinical Program' — seemingly a clear example of fixing what ain’t broke."
Shanks also wrote,
"The original governance scheme of CIRM has been widely criticized, first at the time of its formation by a number of public interest organizations (including the Center for Genetics and Society) and subsequently by the Little Hoover Commission in 2009 and by the Institute of Medicine in 2012.”
He continued,
"One of the main criticisms of CIRM involved widespread conflicts of interest on its governing board and the lack of effective oversight from the legislature, both of which were built into the structure quite deliberately. The proposition amended the California Constitution by specifically adding the establishment of CIRM and the right to conduct stem cell research as Article XXXV . It also required waiting at least three years, obtaining votes from a 70 percent supermajority of both houses of the Legislature, and the Governor’s signature before any amendment could be made. And it exempted the research it authorizes from “other current or future state laws or regulation.” Unfortunately, the new language not only avoids making many needed reforms, but it may also actually make the structural issues worse."
Shanks noted the hype surrounding the 2004 initiative that created CIRM. He said,
“Advocates for the new initiative have already demonstrated that they plan to pin their case for billions of additional public dollars on a dubiously rosy prospect of medical breakthroughs and cures, as they did in 2004. They would no doubt be delighted if they could also do-over the political argument that animated their first campaign, though to date Donald Trump has shown no interest in the issue. How voters will judge the promises, and how much weight they will give to non-monetary issues — built-in conflicts of interest, lack of oversight, outsourcing decisions about ethical standards, and the like — remains to be seen.”
The CIRM governing board has scheduled a Nov. 15 meeting to consider the proposed ballot measure. Changes in it can be made by its sponsor by the end of work Nov. 18. 

Tuesday, November 05, 2019

Public Participation Locations for Consideration of $5.5 billion California Stem Cell Finance Measure

Here is the current list of public locations for the Nov. 15, 9 a.m. meeting of the governing board of the California stem cell agency to consider the proposed $5.5 billion ballot initiative that would refinance the agency. 

The measure will also make major changes in the operations of the enterprise. 
The meeting comes only three days before the deadline for making changes in the proposal.

The meeting will be available on the Internet, making it possible for the public to participate remotely. More details are available on the agenda. The list of locations may change. Check the agenda to be sure a location is available. 

The listed locations are generally sites from which a member of the board can participate remotely in the meeting. 

Main meeting site: headquarters of the California Institute for Regenerative Medicine, as the stem cell agency is formally known, 1999 Harrison Street Suite 1650, Oakland, CA 94612

Telephonic locations:
10901 N. Torrey Pines Road, La Jolla, CA 92037
1001 Health Sciences Rd., Irvine, CA 92697
291 Campus Drive, Stanford, CA 94305
8700 Beverly Blvd 2015, Los Angeles, CA 90048
583 Mrak Hall, 1 Shields Ave., Davis CA 95616
100 Kimball Way, South San Francisco, 94080
12-231 CHS, David Geffen School of Medicine, UCLA
4005 N Fresno St., Fresno, CA 93726
837 Health Science Road, Irvine, CA 92697600 16th Street, Genentech Hall, S272D, San Francisco, CA 94158

Monday, November 04, 2019

California Stem Cell Directors to Air $5.5 Billion Refinancing Measure: Some Less Than Pleased

Directors of California's 15-year-old stem cell research program, which is now down to its last few millions, next week will take up a $5.5 billion proposal to refinance the effort, and not all of them like it.

The proposed ballot initiative has been submitted to state election officials. But it still can be changed up to Monday Nov. 18 at 5 p.m. That is three days after the 29-member governing board has scheduled a discussion of the complex, 30-page measure. That meeting is scheduled for Friday Nov. 15 at 9 a.m.

The only person who can make changes in the measure is Robert Klein, the first chairman of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known. Klein is the official sponsor of the new initiative as he was on the initiative, Proposition 71, that created CIRM in 2004.  His current measure would go on the November 2020 ballot.

 Klein, a Palo Alto real estate investment banker, is also chairman and founder of Americans for Cures, a stem cell research advocacy group.

During a sometimes testy meeting last week, some CIRM directors said that Klein's new measure contained features that, in the words of one, were "not helpful." Directors did not go into details about the substance of the proposal, but debated mostly about whether it should be publicly reviewed by the board before the deadline for making changes.

Klein's original, 2004 measure financed CIRM with the issuance of state bonds, which are now running out. It did not provide other substantial sources of cash. Today the agency is down to roughly $27 million, which is earmarked for sickle cell research. CIRM directors gave away $54 million last Thursday for research into eye disease, Parkinson's and epilepsy, among other afflictions. 

Last Wednesday, CIRM Director Jeff Sheehy, who has served on the CIRM board since its inception, released to the California Stem Cell Report, a 3,300-word critique of Klein's new measure. On Thursday, Sheehy brought up Klein's measure at the board meeting during a discussion of CIRM planning in 2020. CIRM Chairman Jonathan Thomas ultimately said a number of directors had questions about the initiative and proposed a full board meeting before the deadline for changes.

The California Stem Cell Report has asked Klein via email whether he has closed the door to possible changes. Separately Klein has been asked for a written response to Sheehy's analysis, which the California Stem Cell Report will carry verbatim when it is forthcoming.

The Nov. 15 meeting is expected to be available online with public participation via the Internet. Telephonic sites are expected to be available in addition to CIRM's Oakland headquarters. Here is a link to the agenda with details.

(Editor's note: An earlier version did not carry a link to the agenda since it was not posted online at the time this item was written.)

California Stem Cell Agency Chalks Up its 60th Clinical Trial as Funds Dwindle

OAKLAND, Ca. -- The California stem cell agency last week awarded about $54 million for research into afflictions ranging  from eye disease to epilepsy as it edged increasingly closer to running out of cash.

Nine applications were approved including more clinical trials -- the last stage before therapies are approved for widespread use. The actions bring to 60 the number of clinical trials that the 15-year-old agency is helping to finance.

The California Institute for Regenerative Medicine (CIRM), as the agency is formally known,  has about $27 million left, plus any additional funds that the agency might recover when awards are cut short as research fails to meet required milestones. The $27 million, however, is earmarked for sickle cell research in a partnership with the federal government.

In some past years, CIRM handed out as much as $300 million a year.

The agency's sole source of significant funding has been $3 billion in state bonds. It is pinning its hopes for the future on voter approval of a $5.5 billion ballot initiative in November 2020.  Playing a role in that effort is likely to be a CIRM-financed, economic study from USC that bolsters the argument that the economic benefits of the agency more than justify renewing its funding.

Dana Goldman, a professor of public policy, pharmacy and economics at USC and who directed the study, said that the private sector is not going to make the types of investments that CIRM has made in developing new treatments. He told the board last week that it would take only small improvement in success rates in such areas as stroke therapy to more than cover the cost of CIRM's activities. (Here is a link to his slides for the presentation.)

CIRM was created in 2004 by voters but has yet to invest in research that has resulted in a widely available therapy.

Maria Millan, CEO of CIRM. said in a news release:
“Programs, such as those funded today, that were novel stem cell or gene therapy approaches addressing a small number of patients, often have difficulty attracting early investment and funding. CIRM’s role is to de-risk these novel regenerative medicine approaches that are based on rigorous science and have the potential to address unmet medical needs. By de-risking programs, CIRM has enabled our portfolio programs to gain significant downstream industry funding and partnership."
Below is a list of the awards with links to the official summaries of the review of the applications, which can be found by clicking on the application number. Letters by applicants to the board can be found by clicking on the applicant's name. Additional letters of support for the research can be found on the agenda for the meeting. 

Here is the UCLA news release on the awards to three UCLA researchers.

Application Number 
Amount 
(in millions)
Institution
PI
Target
$5.5
Stanford
IPEX
$6.6
UC Irvine/jCyte
Retinitis pigmentosa

$10.5 
Cedars-Sinai
Retinitis pigmentosa
$5.5
Brain Neurotherapy Bio
Parkinson’s Disease
$10.3
UCLA
Limbal stem cell deficiency 
$4.9
UCLA
Immune deficiency 
$3.2
UCLA
Myeloma
$2.9
City of Hope
Ovarian cancer
$4.8
Neurona Therapeutics
Nicholas Corey
(no letter posted)
Epilepsy

Looking for Work? Opening for Business Services/Accounting Specialist at California Stem Cell Agency

You might call this a ""show-must-go-on" stem cell item.

It has to do with hiring at the $3 billion California stem cell agency, which is running out of money. It is down to its last $27 million, a mere piffle compared to its earlier $300-million-a-year rate.

Nonetheless, the agency is looking for a business services/accounting specialist at a salary that could run as high as $110,000 a year.  The reason is that the agency needs to keep its doors open since many millions of dollars are still financing the work of California researchers and will for several more years.

However, the agency is hoping that one year from now California voters will provide another $5.5 billion a year, allowing it to continue financing new stem cell research work in the Golden State.

The agency is based in Oakland very close to BART service. Here is a link to more job information.

Friday, November 01, 2019

$5.5 Billion, Stem Cell 'Handcuffs' in California? CIRM Directors Have Questions on Ballot Proposal

OAKLAND, Ca. -- Some directors of the California stem cell agency are less than pleased with aspects of a proposed, $5.5 billion ballot measure to save the program from financial extinction, including one longtime board member who said it would "handcuff"  the research effort.

A sometimes testy discussion of the initiative arose late in the board's meeting yesterday with a number of board members expressing reservations about provisions in the measure that were "not helpful."

"These are handcuffs," said Jeff Sheehy, who has served on the board of the agency since its inception in 2004. "The board has a responsibility...to look at this measure while it still can be changed."

Jonathan Thomas, chairman of the stem cell agency board, said he is calling a meeting of the board sometime in the week beginning Nov. 11 to discuss the ballot initiative.  The deadline for public comments to go state election officials is Nov. 12. Changes can be made up to Nov. 17.  (See here for how the process works.) 

Changes can only be made by the sponsor of the initiative, who is Robert Klein, a real estate investment banker who was the first chairman of the agency, formally known as the California Institute for Regenerative Medicine (CIRM).  Klein is a real estate investment banker and the founder and chairman of Americans for Cures, a stem cell advocacy group.

CIRM has only $27 million left for new awards out of the $3 billion that voters provided for it in 2004. However, those funds are reserved for a federal-state sickle cell program. Efforts to raise significant private funds have been unsuccessful.
.
The proposed ballot measure goes well beyond simple re-funding of the 15-year-old program. It would alter the structure of the board, basically defer control of its conflict of interest rules to a national scientific organization, create new programs, expand the scope of its work and more.

CIRM Director Steve Juelsgaard said the proposal would make "significant changes" including some that "frankly I don't think are very helpful."

On Wednesday, prior to yesterday's meeting, Sheehy' released a 3,300-word critique of the measure that was published by the California Stem Cell Report. He raised his concerns again yesterday directly with CIRM's governing board after board chairman Thomas offered a schedule for revising the agency's strategic plan sometime next year.

The CIRM board's sometimes heated discussion did not go into all of the measure's specifics. It focused primarily on whether the board should have an additional meeting on the matter and take a formal position. Several members of the board said they wanted to know more about the proposal and expressed concern about unspecified aspects of the measure.

Sheehy told the 29-member board that it would be "an abdication of our responsibility" if the board fails to weigh in on the proposal when it still can be changed. He said the initiative was drawn up in private in a process that was not publicly disclosed.

Art Torres, vice chairman of the board and former state legislator, expressed reservations about bringing the proposal before CIRM directors in a public session. He said that the state had a formal process for filing comments that could be used by concerned board members.

Some members of the board said a formal position by the board could have considerable weight in generating needed changes.. Some, however, were concerned that board criticism of initiative at this point could be used by opponents in the ballot campaign next year even if the board ultimately endorsed measure.

CIRM is in the process of setting a date and time for its review of the ballot measure. It is scheduled to be a telephonic meeting that would have multiple public remote locations. It would also be available on the Internet with public participation access. The California Stem Cell Report will report the time and date of the meeting when it is available and is asking Klein for his comments as well.

Thursday, October 31, 2019

Slides from CIRM -- Review of the Stem Cell Agency's Work

OAKLAND, Ca. -- The president of the $3 billion California stem cell agency, Maria Millan, this morning is offering a review of its work over the past year or so. Here are the slides that she plans to use.

Wednesday, October 30, 2019

An Insider's Critique of California's Proposed $5.5 Billion Stem Cell Initiative: 'Too Little and Too Much'

Editor's Note: The following critique of the proposed $5.5 billion ballot initiative to re-fund the state stem cell agency was offered to the California Stem Cell Report by Jeff Sheehy, a longtime member of the governing board of the stem cell agency. Sheehy is also an HIV advocate and former member of the San Francisco County board of supervisors. His piece is verbatim, including the headline below. This web site more than welcomes additional comment on this important subject, both pro and con. You may comment at the end of this item. Or send your commentary to djensen@californiastemcellreport.com. It will be carried verbatim. See here for an initial summary of the measure.)



"Prop 71 Redux, Thoughts on the 'California Stem Cell Research, Treatments and Cures Initiative of 2020'”

By Jeff Sheehy

"I have been a member of the Independent Citizen’s Oversight Committee (ICOC), the governing board of the California Institute for Regenerative Medicine (CIRM), since its inception in 2004. The original measure, Proposition 71, passed in 2004 and authorized $3 billion in bond funding for stem cell research, almost all of which has been spent.

"A new ballot measure has been proposed
It adds an additional $5.5 billion in new State of California issued bond funding for CIRM, along with additional language that makes changes in the original ballot measure. 

"Notwithstanding any debates about the relative value to California from having spent the initial $3 billion and whether there is any need for additional funding, I would like to address some of the several changes to the original Proposition 71 that are included in the measure authorizing the new debt financing meant to support CIRM’s continued existence.

"Proposition 71, while workable, has been criticized for some of its features. My hope had been that the new measure, 'The California Stem Cell Research, Treatments, and Cures Initiative of 2020,' would address shortcomings in the original initiative.

"It does not. In some instances, it exacerbates existing defects, in others it fails to address problems, and it introduces new elements, some of which are confusing and unnecessary.

"Conflicts of interest amongst ICOC members have been one of the largest concerns in the original measure. Executives from academic research institutions are named as members of CIRM’s governing board, the ICOC, and under Proposition 71, participate in making decisions about funding. The bulk of CIRM’s funding has gone to these institutions and that has raised significant conflict of interest concerns. These members have always recused themselves from funding decisions related to their institutions and, in 2013, CIRM’s board decided to recuse these executives from involvement in any funding decisions, although no instances of impropriety had taken place.

"The new measure addresses this issue by removing decision making over conflicts of interest from CIRM’s board and handing it to the National Academies of Sciences, a non-profit in Washington DC funded in large part by the federal government (Section 125290.40 (q) ..develop conflict of interest rules..) and (Section 125290.30, ( l ), To assure…rigorous conflict of interest rules…every four years the ICOC shall update its standards relating to conflict of interest rules…to be generally aligned with standards adopted by the National Academy of Sciences…).

"Questions related to conflicts of interest regarding the distribution of $5.5 billion in State funds obtained via debt financing should NOT be handed to an entity that is not under the control of the State of California. In addition, the National Academy of Sciences has no public meeting requirements nor other measures around public accountability and transparency that are uniformly applied to all government bodies in California.

"Those sections removing conflicts of interest oversight from the purview of Californians should be removed. The way to address any concerns expressed around conflicts of interests by board members is to add new language changing the composition of the ICOC.

"Governance has been problematic. The original Proposition 71 created ambiguity around leadership of CIRM and conflict between the Chair of the ICOC and CIRM’s President has often taken place due to this ambiguity. Based on the language of Proposition 71, each officer could claim the role of chief executive officer (CEO). Plus, the ICOC, with 29 members, is too large. The size of the board has made it difficult for all of its members to get to know each other, to develop strong collaborative relationships with each other and CIRM’s President, and for all members to meaningfully exercise their oversight duties as a body.

"The Chair should not have executive responsibilities, and the job duties in the original Proposition 71 should be rewritten (Section 125290.45. ( b) (1) (A) ). Specifically, at a minimum, Chair responsibility for bond funding, government relations, and intellectual property should be deleted. The Chair should have an oversight role leading an active (and smaller) ICOC. The absurd $400,000 salary for the Chair and the language allowing it should be removed (Section 125290.45. ( b) (4) ). I defy anyone in California to examine the workload and output of the ICOC chair and justify the current salary, which is almost double that of Governor Newsom. I also would note that the current ICOC/Proposition 71 has no mechanism for removal of the Chair—that oversight should be corrected in the new measure. In addition, the President should be clearly defined as the Chief Executive Officer.

"The new measure makes board governance worse. It expands the ICOC to 35 members, which makes no sense (125290.20. ICOC Membership…) A board of that size will be unable to properly oversee the agency. Oversight has been a challenge under the current measure with the ICOC having a roster of 29 members. The sole rationale for a board of that size is to obtain political support from various stakeholders for the new measure by setting aside seats for their representatives. What those stakeholders fail to realize is that a seat on the board is meaningless if the representative is unable to engage the agency with sufficient impact. I can tell you from experience that it helps to be in the Bay Area (where CIRM is headquartered), and it also helps to have the ear of the Chair. Otherwise, it can be quite difficult to know what is going on and also to exert influence.

"The new measure should include new language to shrink the board to between 7 and 11 members, with the same ratios between scientific, patient advocate and biotech industry appointments (Section 125290.20). The chair and two vice chairs should selected from and by board membership, on a rotating basis with one each from scientific, patient advocate and biotech members. The chair and vice chairs should constitute an executive committee. ICOC membership should be defined in a way to address the conflict of interest concerns around ICOC members having executive leadership roles at institutions receiving funding. Members should be paid on the same scale as members of the California Public Utilities Commission with at least the same level of commitment and time.

"Conflict between the Chair and the President is potentially heightened by the creation of a Scientific Advisory Board with each appointing five members (Section 125290.76. Scientific Advisory Board…). The ICOC is weakened by being left out of this process and work that belongs to the ICOC around strategic planning is duplicated, and the ICOC’s overall role in overseeing the agency is undermined. Half the members are from outside of California, which shortchanges Californians. The ICOC and the President have always been able to solicit external scientific advice so there is no reason for this in the ballot measure, and it is likely to create conflict. In addition, unlike the ICOC, this body is not required to meet in public. The scientific planning for spending $5.5 billion in debt financed funds should not take place outside of public view. This section should be deleted—it is unnecessary.

"A major flaw in the new measure is that it redirects responsibility for ethical concerns around gene therapy to the National Academy of Sciences (Section 125290.35. Medical and Accountability Standards, (8) Standard for Genetic Medical Treatments and Research) and (Section 125290.30, ( l ), Additional Accountability Requirements). As I alluded to earlier, the National Academy does not meet in public nor follow any California open government/transparency rules. Ethical concerns around gene therapy with the very real potential to permanently alter the human genome and/or genetically enhance some individuals represents ethical concerns of the highest order. These decisions should be made openly, transparently and with the participation of all sectors of society. As an example, the identification of 'gay' genes in a recent study has already raised the possibility of editing those genes out to eliminate homosexuality—a concern so grave that some researchers at the Broad Institute, where the research took place, thought the study was unethical. This type of gene editing is no longer science fiction.

"This change is also confounded by CIRM’s experience. Several thorny ethical issues around embryonic stem cell research were raised early in the agency’s existence. Those issues were successfully handled via CIRM’s Medical and Ethical Standards Working Group, superbly chaired by patient advocate Sherry Lansing and esteemed bioethicist Bernard Lo. I would expand the activity of this body and specifically delegate to it the work around genome editing and other issues related to gene therapy. In the same manner as the issues around embryonic stem cell research were resolved, the entire process should take place in public with active participation from multiple stakeholders. Moving this to the National Academies takes away Californians’ ability to influence the ethics of research that will profoundly affect the future of Californians and is paid for by Californians.

"These sections delegating responsibility for ethics issues to the National Academies should be deleted.

"The new measure fails to address a huge deficit in the original measure around intellectual property and the financial return to the State (Section 125290.30.) Proponents of Proposition 71 promised billions in return to the State from the original $3 billion in funding. To date, only a few hundred thousand dollars have been received by the state in royalties. The elements codified via amendment by the State Legislature have helped, but I still strongly believe that the mechanisms to maximize the financial return to the State are weak. Plus, the agency has been hamstrung by a lack of staffing specifically dedicated to tracking and dealing with intellectual property—the 1% of the administrative budget that is dedicated to “Affordability” in the new measure should be reallocated here.

"In addition, CIRM has not been able to accept equity stakes in companies using CIRM generated intellectual property and/or funded by CIRM to conduct research. Billions are made by venture capitalists who invest in biomedical research and holding equity is an important mechanism for investing. Unfortunately, the ban on holding equity is stipulated in the California Constitution. I note with interest AB-1027, authored by Assemblymember Burke, allows for an undiluted ownership stake for the State in companies that accept certain financing from the State. I mention that as an example of creative thinking that could be brought to bear on this issue.

"I believe that opportunities to get a fair return exist and the new measure should identify means and processes that engage experts in intellectual property and finance along with the Governor’s, Treasurer’s and Controller’s offices to develop policies and staffing that ensure that the return to the State is maximized.

"Some elements added in the new measure are very difficult to understand. One element of the initiative, the “Alpha Stem Cell Clinical Program and Establish Community Centers of Excellence Program” (12590.72), is particularly hard to wrap one’s head around. Five Alpha Clinics have already been established and CIRM can set up more. CIRM recently convened experts publicly to analyze our work to date and offer suggestions moving forward. Expanding the Alpha Clinic network was not identified as a pressing need. However, expanding cell therapy manufacturing capacity, especially large scale capacity beyond what we have at academic research centers, was clearly identified as an urgent need and a critical element in scaling regenerative medicine/cell therapies.

"The Alpha Clinic network should be expanded due to evidence-based need -- not political expediency — that’s the definition of government waste. With an additional $5.5 billion, CIRM and the ICOC are more than capable of expanding the network if the need is identified.

"Alpha Clinics are expressly designed for institutions that have existing cell therapy manufacturing capacity, along with existing clinical trial infrastructure that includes state of the art medical centers.

"The requirement to establish Community Care Centers of Excellence in the new measure is extremely confusing and at a minimum, too prescriptive. Increasing access to clinical trials can be positive, but I worry about sending a signal to individuals considering participating in early stage clinical trials that there is some hope they will be cured by early stage products. The ethics of early stage clinical trials are clear—these trials determine whether a product is safe and carry significant risks and promising efficacy is unethical.

"The real gap for patients is getting access to late stage clinical trial products that have been proven safe and are being tested to see if they really work to treat or cure disease. Frequently the sickest patients are not allowed into these trials because they are the hardest to treat successfully and inclusion will unfavorably skew the data necessary to secure product approval. A compassionate access program that allows patients desperate for therapies to get late stage products and exempts the trial sponsor from having to include their outcomes in their data sets is a way to get these therapies to patients.
"I do see an emerging problem in making sure approved regenerative medicine/cell therapies are available to everyone in California. For instance, the FDA has approved CAR-T cell therapies for cancer (eg, Kymriah and Yescarta). These therapies cure some cancers, mostly blood related, in some patients. A patient’s own disease fighting immune cells are removed and then genetically modified to target and kill cancer cells. The complexity of the processes around cell manipulation requires special expertise and equipment. These therapies are only available at select specialized comprehensive cancer centers, usually at major academic research hospitals. Creating capacity in underserved parts of California for these and other regenerative medicine/cell products would be beneficial in ensuring access to these emerging therapies for all Californians. While the new measure requires that the Community Centers of Excellence conduct clinical trials and deliver CIRM funded products, creating this capacity should not be dependent on clinical trial work or CIRM funded products (btw, none have been approved so far). The focus should be on ensuring access to all regenerative medicine/cell therapies to patients, wherever they may be in California.

"Additionally, setting up these clinics requires working with existing healthcare provider networks—whether Kaiser or Sutter Health or County Departments of Public Health—and should also involve payers such as major insurers and MediCal. These new therapies will need to be integrated into existing care delivery systems. To implement a program like this, different sets of processes at CIRM will need to be developed—this is not a research program but a healthcare delivery program and should not be funded nor managed like a research proposal.
"I would suggest that Section 125290.72 be deleted and new language added to accomplish clear goals such as ensuring compassionate access for patients in need and creating capacity to deliver regenerative medicine/cell therapy throughout California if that is the intent of this initiative. It’s not clear what, if any, goals will be achieved by the current language in the new measure.

"Likewise, the Treatments and Cures Accessibility and Affordability Working Group (125290.75) is confusing. Affordability is a huge issue, especially for the therapies being developed by CIRM. I am not alone in believing our healthcare system is irrational. Systematic approaches like those bandied about in the run up to the 2020 Presidential election are the real solution.

"The response proposed in the new measure is both too little and too much. Creating a working group that works out some of the issues around reimbursement for expensive regenerative medicine/cell therapies is duplicative. Policy researchers, health economists and companies producing these products are all investing heavily in figuring out payment/reimbursement schemes. Setting aside 1% of administrative funds for this working group serves political purposes by pretending to address affordability and access—the equivalent of setting up a blue ribbon commission to study an issue you know you cannot solve.

"Section 125290.75 should be deleted. Instead, I would propose expanding the duties of the Medical and Ethics Working Group to include access and affordability issues.

"The best way for California to address the affordability issue and improve access would be to take substantial funds, perhaps via this measure, and establish a California non-profit generics manufacturing company. If generics, 90% of all prescription drugs, were priced at the cost of production, the amount of money available within the healthcare system for higher priced innovative new products, i.e. products of CIRM’s research, would be significantly increased. I would love to see a new section in the new measure specifically allocating funding for that purpose.

"There are other elements in the new ballot measure that I find overly prescriptive. For example the measure specifically requires funding the “Shared Research Laboratory Program,” an initiative originally funded by CIRM to address problems around the need to segregate embryonic stem research from any and all federally funded research. The new measure also requires funding the “Medical Training Program,” which requires CIRM to reinstitute training programs that already exist or once existed. Programs similar to these are likely to be part of a new portfolio if CIRM is refunded, and it is micromanagement to put them in this measure.

"These sections, 125290.73 and 125290.74, should be removed.

"This list of issues is not comprehensive, but only encompasses those that immediately raise concerns. I acknowledge that the potential fixes merely represent my own opinion, but they are based on real experience over a span of 15 years on the ICOC. I would welcome robust public processes that include engagement with the proponents and other interested parties in order to produce the best possible measure.

"The measure before us was constructed in private with input from a Scientific Advisory Board consisting of a select group of individuals who have received funding from CIRM. I am deeply troubled by this process for extending the life of a public agency that has existed for almost 16 years. I am extremely troubled by the lack of formal, public input from the Legislature or statewide elected officials including, but not limited to, Governor Gavin Newsom, Treasurer Fiona Ma and Controller Betty Yee.

"The original measure was created in response to the federal government’s limits on embryonic stem cell research. Those impediments were removed under President Obama, and the Trump administration has not taken up the issue. This is due in no small part to the identification of a new source of pluripotent stems cells (cells that have the ability to become any cell type found in one’s body). When Proposition 71 was passed, the only source of pluripotent stem cells, which could have transformative uses in treating and curing diseases, was from embryonic stem cells. The source for embryonic stem cells is surplus embryos created during the in vitro fertilization process. This source was highly controversial.

"Since the passage of Proposition 71, a new source for pluripotent stem cells was developed—induced pluripotent stem cells (IPS). These IPS cells are derived from a donor’s tissue—for example, from a tiny piece of skin tissue. IPS cells are also believed to pose low risk of rejection by the immune systems of patients from whom they are taken. IPS cell technology has raised no ethical concerns and many research projects that anticipated using embryonic stem cells now employ IPS cells.

"Much of the structure of the original Proposition 71 was conceived in order to insulate CIRM from any interference from ideological opponents to embryonic stem cell research. That is why board appointments are spread among multiple statewide officeholders and a 70% vote threshold by the Legislature for amending Proposition 71 was deemed necessary (this feature should also be changed in the new measure to allow the Legislature to weigh in more easily). Times have changed and now is the time to make CIRM responsive and directly accountable to the State of California and its residents."


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