Budget Scrutiny and Background Checks: Big Changes for California Stem Cell Researchers

From cash payments to conflicts of interest, the $3 billion California stem cell agency this week is set to ratify a radical change in how it awards its largess and oversees the research it funds.

Coming up for approval today by a key panel of the agency’s directors are new rules governing how scientists apply for millions of dollars and how they will receive payments.

Instead of checks rolling in primarily on a calendar basis, for example, they will reach researchers only if they meet milestones approved by the agency, formally known as the California Institute for Regenerative Medicine (CIRM).

The proposals are part of CIRM 2.0, a label coined by UC Davis researcher Paul Knoepfler and adopted by Randy Mills, who has been president of the agency since last May.

With CIRM 2.0, Mills hopes to generate faster and better results than in the past. The main, direct impact will fall on the hundreds of California researchers who will have future agency funding. But if Mills is successful, it will also pay off for California citizens who are financing the agency with borrowed money at a total cost of $6 billion including interest.

The rules will apply immediately only to three clinical stage rounds, but Mills expects to extend them to all future rounds. Officially they are called interim and are subject to additional vetting through the state’s official rule-making process.

Here is a brief look at some of the key features of the new rules, based on a memo prepared by Mills and his team. The rules were first considered in January but final approval was put off until this month.

Payments: Made only on completion of successful milestones. A CIRM memo said, “Additionally, in many circumstances the grantee will be allowed to keep unspent CIRM funds upon successful completion of the project, to be spent on any other project of the grantee’s that is consistent with advancing CIRM’s mission. This new process will incentivize grantees to advance the project in the most efficient and shortest time possible, fulfilling CIRM’s goal to accelerate such projects.”

Background check: Applicants will “undergo a background check to ensure no prior or pending records of fraud or misuse of funds”

External budget review: As soon as an application is received, it will scrutinized by an external contractor “to identify where proposed costs diverge from established market rates and where opportunities for budget tightening may be found.” This is in addition to budget reviews by staff, the grant review group and the board.

Severe appeal restrictions:  Appeals by applicants will be restricted to “a demonstrable financial, professional, or personal conflict of interest, as defined in the (agency’s) conflict of interest policy, (that) had a negative impact on the review process and resulted in a flawed review. Differences of scientific opinion between or among PIs (principal investigators) and reviewers are not grounds for appeal.” State law, however, permits researchers to communicate directly with the CIRM board on any matter. It is almost impossible for applicants to identify conflicts of interests because the names of persons who review their applications are withheld by the agency. Plus reviewers’ professional and financial interests are withheld by the agency.

Clinical advisory panels (CAPs): These new panels “will provide real-time course correction and will focus more on acceleration opportunities than pure evaluation. CAPs will be tailored for the needs of each project and will consist of CIRM and external members, more nimbly sized than prior (advisory) panels. CAPs will meet on a quarterly basis (instead of annually…) and examine all relevant information regarding project progression, possible roadblocks and avenues for progression.”

Elimination of documentation: Instead of requiring awardees to produce many documents, the agency “will rely on certification of compliance by the applicant, with the ability for CIRM to request supporting documentation if cause to do so arises”

The proposed rules are expected to be approved today at the 2:30 p.m. PDT meeting of the Science Subcommittee of the CIRM board and ratified on Thursday by the full board at its meeting in Berkeley. The public can address the subcommittee at meeting locations in Washington, D.C., two in the Los Angeles area and one each in San Francisco, San Jose, Irvine, Oakland and La Jolla.  Specific addresses can be found on the agenda.