$100 Billion Stem/Genomics Plan: Borrowing on an International Scale

Bob Klein at UC San Diego last week
Bradley Fikes/San Diego U-T photo

More details are emerging on the $100 billion, international stem cell/genomics research proposal being offered up by Bob Klein, the first chairman of California’s stem cell agency.

Klein’s plan was discussed in a piece by Bradley Fikes of the San Diego U-T, the only daily newspaper in California’s second largest city. The article yesterday also carried videos of Klein pitching his plan.

Klein, a real estate investment banker, cited California’s $3 billion stem cell agency as an example to be emulated internationally. It operates on money that the state borrows (bonds), which roughly doubles the cost of the research because of the interest expense.

He said an international research organization could be supported by bonds which are backed by pledges from 15 countries, including the United States.

Fikes quoted Klein, who left the California agency three years ago, as saying,

"Because the borrowing is so much cheaper than anything a country can do, from the surplus funds we raise, which are about 35 percent to 40 percent more than most countries can raise from the same amount of money, we can have an international pool, where we can collaborate and compete through peer review." 

Fikes continued,

“Klein pointed to the International Finance Facility for Immunization as an international public-private partnership as a financial model. Using long-term government pledges as collateral, the agency can raise capital as needed from the bond markets.” 

Neither the Fikes piece nor an earlier article from the San Diego Daily Transcript carried any indication that Klein’s proposal had the support of major research organizations or governmental agencies.  

Neither article also carried any reference to Klein’s earlier proposal for another $5 billion bond issue to continue the operations of the California stem cell agency, which will run out of money in 2020 based on current spending rates.

Klein and U.S. Rep. Scott Peters, D-San Diego, shared an appearance at a cancer conference last week at UC San Diego. Both extolled the power of using patient advocates as the leading edge of lobbying for research funds.

Fikes wrote,

“Peters…said scientists must broaden their political base beyond their traditional bastions if they wish to become more influential. Patient advocates are key.

"'When we're fighting for NIH funding, a lot of the voices for that come from people who are in universities and in areas of science, and a fairly narrow political spectrum,’ Peters said. ‘Frankly, they tend to be people from Boston, and San Francisco and San Diego, who don't always vote the same way that people from West Texas, or Kansas or rural Wisconsin vote. So patient advocates provide a huge imput for folks from all across the country."

“Klein recounted an example of how that coalition succeeded in keeping diabetes research money flowing in 2002 when that funding was threatened with interruption. He said the bill, which required unanimous consent, got through the House with the support of then-House Speaker Denny Hastert, an Illinois Republican, who had a staff member with Type 1 diabetes."

Fikes continued,

"'Oklahoma is not a hotbed of scientific support, but through a weekend effort, JDRF (Juvenile Diabetes Research Foundation) was able to get 25,000 emails generated,' Klein said. ‘But more importantly, the patient advocates working as informed advocates with the scientists from the Type 1 research and clinical areas got to enough chairmen of the boards and board members and CEOS of major corporations in Oklahoma that they shut down the switchboards of Sen. Nickles' offices in Oklahoma and Washington D.C. with calls.’"

“Nickles released his hold on the bill.

"'We had unanimous consent of the U.S. Senate, two hours before the end of the special session, because scientists informed and teamed up with patient advocates ... ' Klein said."