Attention stem cell scientists: Want to know who is going to
be scrutinizing your budget in your next application for financing from the $3
billion California stem cell agency?
The California Institute for Regenerative Medicine (CIRM),
the formal name for the agency, is hiring outside firms to examine the budgets currently being submitted in a $50 million clinical stage award round.
The two firms that are being considered have a host of other clients, some of whom might be competitors with California scientists applying for state funding. CIRM plans to require the experts to self-report any
conflicts of interest, basically excusing themselves if such a situation occurs
during their work.
It is all part of CIRM 2.0, a radical and ambitious plan to
speed funds to researchers and improve quality of applications. The budget review is a new and critical step
for researchers. If their financial plans, including a new financing contingency
requirement, do not pass muster, the applications will not even be sent to
the agency’s blue-ribbon reviewers.
Here is what the agency says about the budget review,
“An external team of budget professionals will review the proposed budget to provide information to CIRM regarding how the proposed costs compare with established market rates for similar activities (or how well the costs are justified when market rates are not established).
“When a proposed budget differs significantly from market rates, adjustments to the budget will be required by CIRM prior to further review of the application. Applicants will be notified of the specific discrepancies and applications will not be forwarded for scientific review until an amended budget has been submitted and approved by CIRM.”
Last month the agency posted a 37-page request for proposals
on its Web site. It contained details of how the work is to be performed,
budget templates and much more material that offers insights into the agency’s
new, CIRM 2.0 thinking.
The firms that responded to the RFP are
Amarex Clinical Research of Germantown, Md., and Integrium Clinical Research of
Tustin, Ca.
Integrium said in its proposal,
“Integrium does not have experience in providing the type of service required in the RFP. However, we have many years of experience in which we have internally reviewed budgets that we prepared for our clients.”
Amarex said,
“Amarex has experience in conducting budget negotiations for services across all types of clinical sites, and knows what appropriate market rates are. Our clients are both privately funded, and government funded, so we are also aware of the difference in budgeting requirements for both types of clients.”
The Amarex proposal appears to have a cost of $703 for each budget, with expenses such as travel billed to CIRM plus a 10 percent fee.
The agency’s RFP said,
“CIRM anticipates selecting multiple budget review firms pursuant to this RFP and will alternate work among them based on relative expertise in specific areas, timelines, and the avoidance of potential conflicts of interest.”
Both of the firms are well-established organizations and
have a considerable history of work with a variety of clinical trials. Their
clients are not identified but could be competitors with the organizations that
apply for California funding.
The RFP does not speak directly to those sorts of conflicts
although it is more specific about financial ties with CIRM employees. Regarding the budget review consultants, the
proposed CIRM contract said,
“The (budget review) firm must be free from actual conflicts of interest not only at the time of selection, but also throughout the term of the contract.”
The agency has a substantial number of outside contractors.
On at least one occasion, a conflict has arisen in public. The case was first reported by the California
Stem Cell Report in 2012 and involved a “special advisor” to CIRM who was
elected to the board of directors of Sangamo, Inc. At the time, Sangamo was
the recipient of $5.4 million from the agency as a co-participant on an award. In
2013, the Richmond, Ca., firm received another $6.4 million directly from CIRM. (See here and here for details.) In January 2014, the firm’s president told CIRM,
“We wouldn't be where we are today without you.”
The RFP requires that the firms sign a contract that states,
“The consultant affirms that to the best of his/her knowledge there exists no actual or potential conflict between the consultant's family, business or financial interest and the services provided under this Agreement, and in the event of change in either private interests or service under this Agreement, any question regarding possible conflict of interest which may arise as a result of such change will be raised with CIRM.”
The RFP also states that the firms may be required to “execute”
a form 700, a state document that is aimed at disclosing financial conflicts of interest. However, the form is most commonly filed by individuals -- not
commercial interests -- and has major limitations in providing full disclosure.
The RFP does not make it clear whether the form 700s would
be publicly disclosed or simply held privately by CIRM. However, the agency has never disclosed any reports involving conflicts of interests of its consultants.
Here are the proposals, which are public records, from the
two companies.
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