Thursday, October 16, 2008

Coming Next Spring: A $350,000 Paean to CIRM's Value

Is the California stem cell agency performing work that is beneficial to the economy of the state of California?

Any fair-minded person has to respond affirmatively to that question, and perhaps even some who are not so fair-minded.

But does CIRM have to spend $350,000 of taxpayer funds to prove its economic value? Will such an effort convince any skeptics that the $3 billion ($6 billion including interest) stem cell research program is economically worthwhile? The answer to both those questions is no.

If CIRM pays for an economic study, it will be forever clouded by the reasonable assumption that the agency received the findings that it already knows it wants. And those findings would amount to a paean that holds up CIRM as critical to the economic survival of the Golden State.

That conclusion is even more likely given the language in the recent CIRM RFP for a consultant to prepare the economic propaganda piece for the agency.

The RFP makes no bones about what CIRM wants and what the consultant better provide for $300,000. Certainly not an independent, detached assessment of CIRM's economic worth. Instead, the RFP states that the consultant must "execute a vibrant and aggressive strategy to support the goals and initiatives of CIRM."

To be sure the consultant fulfills expectations, he will work with a high-powered CIRM panel consisting not only of the chairman and president of CIRM, but also the vice chair, the vice president for operations, the general counsel, the legal counsel and unspecified "others." Lots of "minders" there to be sure no heresy comes forth.

CIRM has already spent $50,000 this year for what was supposed to be a new economic study. That report was originally scheduled to be released in January. After the California Stem Cell Report asked about it on Oct. 7 in connection with the $300,000 RFP, the document was publicly released a day later on the CIRM web site.

The $50,000 report was prepared by the Analysis Group of Palo Alto, Ca., which is likely to have the inside track on this latest contract. (For more details on the report, see the item below.)

Analysis Group also received $200,000 from the Prop. 71 campaign, which was directed by now CIRM Chairman Robert Klein, for a document that predicted health care savings of as much as $12.6 billion over 30 years and a net state government profit of at least $1 billion.

That report, however, was held up as an example of stem cell hype. "Hopelessly optimistic" was how one reasonably detached writer, David Hamilton, described the campaign analysis in a "biotech bubble" story for

The latest RFP also indicates that CIRM grant recipients will be burdened with additional paper work in the future. It implies that grant applicants will need a nose for dollars and must be able to demonstrate how CIRM cash, if they receive it, will benefit the California economy.

The RFP states that the consultant must create "a standard and routinized methodology for data collection from CIRM grantees and loan recipients and other sources to enable future measurements of economic impact."

Compliance with that methodology is likely to become part of the terms of any grant or loan in the future. We would hope that all the data gathered would be available to the public so that other economists and health policy experts would be able to draw their own independent conclusions.

Interested economic consultants must submit their proposals by Oct. 24. The contract could be awarded shortly thereafter. Look for the economic report in March 2009, if the RFP is to be believed, with the lucky consultant also embarking on a bit of a road show, according to the RFP's terms.

Unsaid in the RFP is the near certainty that the consultant will have an ongoing, lucrative relationship with CIRM for years to come as he updates the report with fresh information annually.


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