Thursday, February 01, 2007

Rationale Behind Kuehl's Stem Cell Legislation

The new chair of the California State Senate Health Committee will "push the CIRM to live up to its promises," including insuring that all Californians will have access to any therapies developed as the result of state-funded stem cell research.

So says the January newsletter put out by Sen. Sheila Kuehl, D-Santa Monica. The newsletter carried a piece by Peter Hansel, staff director of the Senate Health Committee, that discussed the California stem cell agency at some length, including needed changes. Hansel, it should be noted, also served as a Health Committee analyst when it was chaired by Sen. Deborah Ortiz, who is now out of office.

Hansel wrote that Kuehl disagrees with arguments that CIRM should should go easy in terms of royalty requirements and affordable access to cures and therapies. He noted that CIRM has adopted some IP rules that respond to legislative concerns. Hansel continued:
"However, regulations governing the pricing of stem cell therapies in California run counter to assurances given to the Legislature. While at first proposing that grantees and licensees sell such therapies to publicly funded programs at the federal Medicaid price, the CIRM has recently reduced that to a requirement to sell at the same prices they offer them to the state’s new California Prescription Drug Discount Program, a significantly less favorable price. Similarly, the regulations for grants and loans to commercial entities propose to cap the amount of revenues coming back to the state associated with most products developed with Prop. 71 funds, as opposed to giving the state an open-ended return commensurate with its investment. By contrast, New Jersey, which also allows commercial entities to receive grants under its stem cell research program, requires such grantees to share a percentage of revenues—one percent—on an open-ended basis from licensing or commercialization of inventions (two other states that fund stem cell research, Illinois and Connecticut, do not allow for-profit entities to receive funding while another two, Maryland and Illinois have yet to develop policies for grants to for-profits). Capping returns from joint research ventures also appears to run counter to the practices of most universities who co-fund research with commercial entities and the venture capital industry.

"In addition, recent changes require grantees to grant exclusive licenses for inventions they develop to entities that agree to have plans at the time of commercialization to provide access to resultant therapies and diagnostics for uninsured patients, consistent with 'industry standards,' The current industry standard, the patient assistance programs that have been developed by the major drug companies, have been shown to be woefully inadequate in encouraging access to free or reduced price drugs for uninsured persons. Thus, it is incumbent on the CIRM to develop a more meaningful standard than this."

calif legislation, IP, affordability, access, skuehl, phansel

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