Proposition 14: Pros and Cons of Stem Cell Research in California 2020

Editor's note: The author of this piece is Ben Kaplan of Palo Alto, who appeared in a TV ad for the 2004 ballot measure that created the California stem cell agency. I talked with him recently by phone and invited him to submit his thoughts on the latest stem cell ballot measure, Proposition 14. Here is his article. 

 

By Ben Kaplan

Ben Kaplan

My story begins when my twin brother Ollie and I were born ten weeks prematurely. Despite his early birth and low birth weight, Ollie never had any lasting health problems, but I did. Just five days after my birth, I had a brain hemorrhage, or stroke, which caused cerebral palsy, specifically “left hemiplegia,” or weakness and paralysis on the left side of my body. I have been a supporter of stem cell research and regenerative medicine for over 20 years, with the hope it may lead to new treatment for my condition. During this time, I have seen research make great strides, from initially being conducted mostly in laboratory studies, to its application in human clinical trials.

California has been a trailblazer in state ballot initiatives for over 40 years. These have set national trends for issues and are often copied or emulated by other states: Prop 13 (property taxation), Prop 187 (Immigration), 209 (Affirmative Action) 215 (medical cannabis), 227 (bilingual education), etc. Proposition 71 in 2004 did this for stem cell research by establishing the California Institute for Regenerative Medicine (CIRM). Since then, several other states have passed their own ballot initiatives or legislation to fund stem cell research. This has created new momentum for increased federal funding.

Another benefit of CIRM funding is the development of private and philanthropic partnerships. The demonstration of a commitment by California to fund and support research and laboratory construction has led private foundations and other donors to contribute funds, dramatically accelerating the pace of stem cell research. The investment in research following the passage of Prop 71 also attracted researchers, scientists and private companies to California, providing financial incentives to open offices and laboratories in the state. In addition, CIRM created a research infrastructure for California by developing a system to award grants and share research data and results, giving it a major advantage over other states, and some countries. These partnerships are important because embryonic stem cell research cannot always be conducted in facilities built using federal funds due to pro-life and taxpayer groups, who have raised ethical and fiscal concerns about using public funding for research on embryonic tissue. CIRM research centers are a way around this roadblock by increasing scientific freedom, promoting research collaboration and hastening the development of new therapies and treatments.

In addition, CIRM has created economic expansion, providing a major boost to the burgeoning field of regenerative medicine. Progress in research funded by CIRM has led to a growing body of scientific evidence that treatments from stem cells may be available to people with debilitating and life-threatening conditions in the near future.

Stem cell research funding is on the ballot in California in 2020 as Proposition 14. This proposition has both potential benefits and drawbacks. One argument in favor is that it will continue and enhance California’s leadership position in support of stem cell research. It can also boost the state’s economy. Treatments may lower healthcare costs and improve health, which may lead to increased employment, worker productivity and economic growth. While the long-term outcome of stem cell research remains uncertain, new discoveries are producing evidence that is leading to clinical trials, allowing treatments to move closer to realization.

However, the COVID19 outbreak has also made Proposition 14’s fate uncertain. While stem cell research may lead to new treatments, it has placed unanticipated stress on California’s budget. However, new research is demonstrating the potential application of stem cells as a possible treatment for the virus. Given this pandemic, how will Proposition 14 fare? While the ultimate outcome is yet to be determined, it may depend on a delicate balance between potential treatment outcomes in the future versus expenses for the COVID19 pandemic in the present.

Recently, physicians at Stanford University, in a clinical trial partially funded by CIRM, have found that neural stem cells injected in rats with a condition similar to CP will travel to the damaged part of the brain and repair it. A clinical trial is also currently in progress at the Mayo Clinic using neural stem cells derived from bone marrow to treat hemorrhagic stroke. Private companies are pursuing similar research, with an eye to developing new therapies and treatments.

As stem cell science progresses and it becomes possible to implant stem cells into the brain, it is possible that I could have improved mobility in my left hand and foot, balance and coordination. This would enable me to do so many things that are now challenging, if not impossible, and would greatly improve and enhance my quality of life and that of many others.

Today's Marching Orders from the California Campaign for $5.5 Billion for Stem Cell Research

 

A clip from an email pitch by the campaign for Proposition 14

Backers of the $5.5 billion ballot measure to save the California stem cell agency from its financial demise
are working hard to keep their troops on track to build support for Proposition 14.

Today the campaign sent out a pitch (see above) as part of its social media drive to win approval of Proposition 14 in the Nov. 3 election. And it couldn't be more timely. Twenty-million voters are already beginning to receive their mail-in ballots.

The directions are explicit and amount to a daily list of tasks for patient advocates and others who have signed up for information from the campaign. The sign-up request is on the home page of the campaign website and impossible to miss. 

"Join now. Be part of the movement," declares the website. 

Social media is a bit of a loose term, but it includes such things as Twitter, Facebook and blogging. Research shows that about two-thirds of U.S. adults get news from social media sites. "One-in-five get news there often," says the Pew Research Center. 

"Facebook is still far and away the site Americans most commonly use for news, with little change since 2017. About four-in-ten Americans (43%) get news on Facebook. The next most commonly used site for news is YouTube, with 21% getting news there, followed by Twitter at 12%. Smaller portions of Americans (8% or fewer) get news from other social networks like Instagram, LinkedIn or Snapchat," says Pew.

News consumption is only part of the picture for a campaign. What may be more important is the personal connection that supporters can bring via social media. It is a question of trust and who do you listen to. Someone that you are connected to via social media and know even slightly may appear more trustworthy than the professional purveyors of information. 

So far the mainstream media is covering Proposition 14 lightly, a trend that is likely to continue. The presidential campaign consumes most of the traditional news space. State issues are receiving only minor attention, and Proposition 14 even less. That could be good for its chances of passage, but it is hard to tell in this very unusual political year. Under any circumstance, it remains imperative for the campaign to turn out its supporters in large numbers, which is a key goal for the social media effort. 

Los Angeles Times Opposes $5.5 Billion Stem Cell Ballot Measure, Says State Has Higher Priorities

California's largest circulation newspaper, the Los Angeles Times, this morning editorialized against Proposition 14, the $5.5 billion stem cell measure on this fall's ballot, declaring that the state has "other, more urgent spending priorities."

The Times said,

"Now is not the time for a huge new investment in specialized medical research. First, it makes sense to wait until after the election; if Democrats do well, there should be growing support for embryonic stem-cell research at the federal level, which is where such funding should take place. 

"The future of California’s pandemic-battered economy and budget remains to be seen. Waiting also would give voters a chance to find out how well the state’s stem-cell research projects continue without state dollars, and whether some of the promising advances lead to breakthrough therapies and a return on California’s investment."

The Times claims a daily readership of 1.3 million and a combined print and online local weekly audience of 4.6 million.

The Times is the fifth daily newspaper to oppose Proposition 14. The initiative would save the California Institute of Regenerative Medicine (CIRM), as the agency is formally known, from financial extinction. It is running out of the $3 billion it was provided with in 2004 and will begin closing its doors this winter without a major infusion of cash.  

The Times editorial discussed Proposition 14 and the history of the agency in some detail and the role of its sponsor, Robert Klein, a Palo Alto real estate developer. 

Klein sponsored and was responsible for the drafting of Proposition 14 and the ballot initiative that created the stem cell agency in 2004, He ran the campaign then and is doing so again this year. He was the first chairman of the CIRM governing board and served for 6 1/2 years. He also contributed millions of dollars to both ballot measure campaigns. 

The Times wrote, 

"Klein’s role and the bloated structure of CIRM’s super-sized governing board have given rise to some serious ethical mishaps, including a board member who improperly intervened to try to get funding for his organization. (He is no longer on the board.) After this and several other examples of impropriety, rules were tightened. Board members must recuse themselves from votes when there is a conflict of interest, but with 29 members who all want certain projects to receive funding, there is too much potential for mutual back-scratching. Instead of repairing this problem, the new proposition would expand CIRM’s board to 35 members and retain its troubling independence from oversight by the governor and Legislature, leaving it open to further conflicts of interest.

"Proposition 71 hasn’t yet yielded a significant financial return on investment for the state — or the cures that were ballyhooed at the time. Though no one ever promised quick medical miracles, campaign ads strongly implied they were around the corner if only the funding came through. Proponents oversold the initiatives and voters can’t be blamed if they view this new proposal with skepticism."

The Times noted a number of lingering issues involving the agency, including the size of its 29-member board and the fact that members "generally have ties to the advocacy organizations and research institutions that have received most of the money." (For more on that subject, see here.)

The Times credited CIRM with giving "rise to a burst of scientific discovery." It said that CIRM has supported "promising advances in the treatment of diabetes,  'bubble boy' immune deficiency and vision-robbing retinitis pigmentosa, but other efforts have fallen short in clinical trials." The editorial also said CIRM made "the state the 'it' place for stem-cell research."

Unlike other newspaper editorials, the Times suggested that backers of the agency could come back in a couple of years with a revised, scaled-down proposal that would address issues with the agency.  The agency will still be operating during that period on a minimal level, administering multi-year grants with a skeleton staff.

The Times wrote, 

"There would be an opportunity to rethink and rewrite any future proposals, which should include a far more modest ask of taxpayers as well as fixes to the structure and inflated size of the CIRM board. The institute should also be placed under the same state oversight as other agencies reporting to the governor.

"If CIRM needs money for a basic operating budget over the next couple of years, that could be covered by the state’s general fund. The agency still needs to administer already-funded projects and could use that time to discuss a more affordable path forward. Right now, the state has other, more urgent spending priorities." 

For more on the life and times of the stem cell agency, Klein and issues involving the agency, see David Jensen's new book, "California's Great Stem Cell Experiment: Inside a $3 Billion Search for Stem Cell Cures."  Jensen has covered the agency since 2005 and written more than 5,000 items on the subject plus a number of freelance articles for Capitol Weekly, The Sacramento Bee, and other publications.

(Editor's note: Our count of newspaper editorials pro and con shows six with five against and one in support. They include the Times, Chronicle, Bakersfield Californian, San Jose Mercury, Santa Rosa Press Democrat and the Bay Area Reporter. If you know of others, pro and con, please email djensen@californiastemcellreport.com.) 

California Stem Cell Backers Fire Up Major Social Media Effort for $5.5 Billion Proposition 14

Backers of the $5.5 billion measure to save California's stem cell research program launched a major social media effort this week, declaring that they could not afford to compete with "the big money campaigns for significant airtime."

The campaign organization behind Proposition 14, the stem cell ballot initiative, sent out an email pitch recruiting sympathizers to help out via Facebook, Twitter, email, and other Internet avenues. The campaign email went to those on the mailing list of the campaign organization, which likely contains thousands of names.  The numbers could be much, much larger if the campaign is purchasing email lists. 

The campaign email (see below) said, 

"There are only 35 days left before election day, and mail-in ballots are already out in many California counties. We need your help to get the word out about Prop 14 and the fight to save stem cell research, treatments and cures in California! With a crowded election we will need to work hard break through the noise and urge Californians to vote “YES” on Prop 14.

"Leading up to the election, we’ll be sending you sample social media posts, newsletter articles and email blasts – and all we need you to do is share what we send with your channels! We are a patient advocate driven movement, so we don’t have the resources to compete with the big money campaigns for significant airtime, and our path to victory relies on the help of other passionate patient advocates like you. Your efforts will make all the difference, and with mail-in ballots already out it is absolutely critical that this work starts today."

The pitch included canned texts for use in emails to general audiences and non-profit organizations. Canned messages to be used on Facebook and Twitter were provided along with appropriate hashtags for Twitter. A "sample email blast" emphasized that "the federal government  WILL NOT save most of the promising research and therapies in development that would be abandoned if Prop. 14 fails."

Social media campaigns are increasingly important in political and ballot measure campaigns, regardless of whether a campaign can afford traditional TV advertising. Such advertising is less useful in generating support for a number of reasons, including segmentation of media consumption. 

So far, no significant, major opposition has surfaced against Proposition 14.

The campaign for the measure is led by Robert Klein, who sponsored Proposition 14 and is responsible for the writing of the 17,000-word measure. Klein also wrote the 10,000-word, 2004 ballot measure that created the California Institute for Regenerative Medicine (CIRM), as the agency is officially known. Klein is a Palo Alto, Ca., real estate developer.

Klein hired FionaHutton &Associates of Studio City, Ca., to handle the bulk of the campaign work.  

2020-09-29 Proposition 14 California Social Media Email by California Stem Cell Report on Scribd

How Does $5.5 Billion Become Only Five Bucks? A Question Yet to be Answered

Call it California's five-buck, stem cell mystery. It could be a case of Proposition 14  campaign voodoo or just simply a boring calculation, but no one knows -- at least anyone who is willing to talk. 

As readers may recall, Proposition 14 is a $5.5 billion bond measure (plus a lot of other things) aiming at saving the state stem cell agency from financial extinction. The folks behind the ballot initiative, including Robert Klein, the sponsor of the proposal, are telling California voters to never mind that billion-dollar stuff. 

"Proposition 14 will cost the state an average of less than $5 per person, per year – about the cost of a bottle of aspirin," Klein said way back in July.

He may be right. 

However, Klein, who has already put up millions for the measure and heads the campaign, has not explained how he or his team devised the bottle-of-aspirin figure. The California Stem Cell Report has asked the campaign more than once to explain the figure, most recently just last Wednesday. But so far no explanation has been forthcoming. 

Arriving at such a per capita cost involves a number of assumptions, including population projections over the next 20 to 30 years and interest rates over the same period. Of course, it also should be noted that the five-buck figure is per capita not per taxpayer. That means that taxpayers -- because they now number only about 18 million compared to the total population of about 33 million -- will be paying perhaps twice what the campaign claims. 

Some might say this is no big deal, and they may be right. But a substantial number of persons could believe that this black-box, five-buck number is real because it has been repeated so often, even though it is unsubstantiated. Certainly, the campaign hopes that it will be effective and move a fair amount of voters into the "yes" column.

At this point, the five bucks is no more than campaign voodoo. But, as the California Stem Cell Report wrote in July, such is to be expected in any ballot campaign. The object is to win. Campaigns can be expected to embellish, push the envelope and release information that may not stand up to real scrutiny. 

As mentioned earlier, the California Stem Cell Report has not received a breakdown from the campaign about how it devised its five-buck figure.  If an explanation comes in, we will carry it verbatim. Meantime, the five-buck countdown stands at 27 days since the first inquiry was made. Readers should stay tuned. 

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​Read all about California's stem cell agency, including Proposition 14,  in David Jensen's new book. Buy it on Amazon:  California's Great Stem Cell Experiment: Inside a $3 Billion Search for Stem Cell Cures. Click here for more information on the author.

CIRM Board Member Calls Proposition 14 'Fatally Flawed' and 'Unaffordable"

The San Diego Union-Tribune this morning carried an op-ed piece by a long-time director of the California stem cell agency that said this fall's $5.5 billion ballot stem cell ballot measure is "unaffordable, unnecessary and fatally flawed." 

The article was written by Jeff Sheehy, an HIV/AIDS patient advocate member of the agency's board and who was also chair of the board's Science Subcommittee. He has served on the board since the agency was created in 2004 and funded with $3 billion that is now nearly gone. 

The ballot measure, Proposition 14, would save the agency from financial extinction. 

Sheehy's column began:

"It must seem odd that someone who has spent countless hours over the last 15 years as a member of the governing board of the California Institute for Regenerative Medicine (CIRM) would oppose Proposition 14, which seeks to provide $5.5 billion in new funding for the stem-cell agency. While I value CIRM and its work to date, Proposition 14 commits California to spending money it does not have — $7.8 billion including interest for research that is already well-funded. Plus, CIRM’s pre-existing flaws are actually exacerbated by new provisions in the measure."

(The stem cell agency is officially known as the California Institute for Regenerative Medicine.) 

Sheehy's views are not entirely unknown, but the newspaper piece reaches a significantly different and larger audience. Plus San Diego is a hotbed of biotech. Its institutions and businesses have benefited mightily from funding by the agency.

UC San Diego has received $232 million, Salk Institute $53 million, Scripps Research Institute $51 million, the Sanford Consortium $43 million and Viacyte, Inc., $72 million. Among businesses supported by CIRM, Viacyte is No. 1. 

Sheehy said,

"And after spending all of that money, not a single U.S. Federal and Drug Administration-approved product has materialized on which CIRM’s funding played an important role." 

 Sheehy cited the financial costs of the agency as one major reason for his opposition to Proposition 14.  Combined with the $3 billion in state bonds provided in 2004, Sheehy said, 

"Proposition 14 will add at least another $260 million a year in annual repayments. That means California taxpayers will be on the hook for $587 million a year for stem-cell research. Remember state imperatives such as education, health care and housing are not only chronically under-resourced, but with a looming deficit, will be starved for funding because bonds must be repaid first. Cuts have already happened and more are likely on the way. Critical needs will go unfunded."

Sheehy also said that Proposition 14 fails to fix "severe flaws" in the measure that created CIRM. including the "absurd requirement" for a super, super-majority of the legislature to make even tiniest corrections in the existing law. 

He said the state is not receiving an adequate financial return on CIRM-funded inventions. He said "in practice" the provisions of Proposition 14 would undermine existing CIRM rules about "access and fair pricing." He said,

"It would require that any returns from the state’s investment in new therapies are given back to pharmaceutical and biotech companies, thus freeing them from any price restraints since CIRM will be making up the difference. This change is a blatant giveaway to those companies."

Sheehy concluded, 

"Unaffordable, unnecessary and fatally flawed, Proposition 14 is unsupportable. If California is going to continue to spend billions to fund stem-cell research, the Legislature should draft a new measure that does it the right way."

Sheehy said the San Diego newspaper solicited the article. Sheehy was the lone dissenting vote in June when the CIRM board voted to endorse Proposition 14.  His views on the proposition have been aired at some length on the California Stem Cell Report.  The text of his comments last October can be found here. The remarks in June can be found here.

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​Read all about California's stem cell agency, including Proposition 14,  in David Jensen's new book. Buy it on Amazon:  California's Great Stem Cell Experiment: Inside a $3 Billion Search for Stem Cell Cures. Click here for more information on the author.

Proposition 14: Newsom Endorses California's $5.5 Billion Stem Cell Measure

Newsom pushed a $17 million bid for the CIRM HQ

California Gov. Gavin Newsom, long a supporter of the California stem cell agency, today endorsed Proposition 14, the November ballot measure to give the agency $5.5 billion more and save it from financial extinction. 

Known officially as the California Institute for Regenerative Medicine (CIRM), the agency is running out of the $3 billion voters provided in 2004. It will begin shutting its doors this winter without a major infusion of cash. 

Newsom's endorsement was buried in a news release announcing his stand on a number of ballot measures. It also came on one of the worst days of the week in terms of securing news coverage, not to mention that California news is dominated today by wildfire coverage, among other things. 

The news release could not be found on the Internet at the time of this writing. It was forwarded to the California Stem Cell Report by the campaign. The full text of the Newsom announcement concerning the stem cell measure said, 

"YES on Proposition 14 to continue funding stem cell research, as well as research and therapy development for Alzheimer’s, Parkinson’s and other neurodegenerative conditions.  As Mayor of San Francisco, Newsom was an outspoken champion of Proposition 71 (2004), which created the California Institute for Regenerative Medicine (CIRM) and made California a global leader in the field." 

In 2004, Newsom played a major role in raising a $17 million, successful bid to lure the headquarters of the agency to San Francisco. After its free rent expired a few years ago, CIRM moved to Oakland because of the high cost of space in San Francisco. 

Below is the release thanks to the folks at the campaign. 

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​Read all about California's stem cell agency, including Proposition 14,  in David Jensen's new book. Buy it on Amazon:  California's Great Stem Cell Experiment: Inside a $3 Billion Search for Stem Cell Cures. Click here for more information on the author.

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FOR IMMEDIATE RELEASE: September 11, 2020

 

NEWSOM TAKES ADDITIONAL POSITIONS ON NOVEMBER BALLOT MEASURES 

Governor supports Props 14, 15, 18 & 19, opposes Prop 21

 

SACRAMENTO – Governor Gavin Newsom today announced his positions on remaining measures appearing on California’s statewide ballot in November.

 

Newsom SUPPORTS Proposition 15, which would reclaim billions of dollars for California’s public schools, community colleges and essential local services by changing the tax assessment of the most expensive commercial and industrial (non-residential) real property to current market value.

 

Newsom has long endorsed the concept of this balanced “split roll” property tax reform as a matter of fairness, as long as residential property owners and small businesses are protected.

 

“California, like every state in America, is currently experiencing the severe financial aftershocks of global pandemic,” Newsom said.  “As a result, we’ve seen numerous proposals floated to stabilize our state’s long-term fiscal outlook, to protect our most vulnerable and local communities, and to fund critical programs with new revenue.”

 

“In a global, mobile economy, now is not the time for the kind of state tax increases on income we saw proposed at the end of this legislative session and I will not sign such proposals into law,” he said.                                                                                                             

 

“I do however support Prop 15 because: it’s a fair, phased-in and long-overdue reform to state tax policy, it’s consistent with California’s progressive fiscal values, it will exempt small businesses and residential property owners, it will fund essential services such as public schools and public safety, and, most importantly, it will be decided by a vote of the people,” he said.  

 

Newsom OPPOSES Proposition 21, which, with some modifications, is similar to the failed Proposition 10 he also opposed in 2018.

 

“In the past year, California has passed a historic version of statewide rent control – the nation’s strongest rent caps and renter protections in the nation – as well as short-term eviction relief,” he said.  “But Proposition 21, like Proposition 10 before it, runs the all-too-real risk of discouraging availability of affordable housing in our state.”  

 

In addition, Newsom is taking positions on the following measures:

 

• YES on Proposition 14 to continue funding stem cell research, as well as research and therapy development for Alzheimer’s, Parkinson’s and other neurodegenerative conditions.  As Mayor of San Francisco, Newsom was an outspoken champion of Proposition 71 (2004), which created the California Institute for Regenerative Medicine (CIRM) and made California a global leader in the field.  
• YES on Proposition 18, which would allow Californians 17 years of age to participate, register and vote in primary elections if they turn 18 by the time of the general election that same year.
• YES on Proposition 19, extending financial protections to homeowners 55 or older who purchase a new home or lose their home to wildfire.  It also closes a property tax loophole and allocates those savings to local firefighting programs. 

 

Previously, Newsom had taken an early position on important criminal justice and civil rights measures appearing on the November ballot, including:  

 

• YES on Proposition 16 to restore affirmative action by repealing 1996’s Prop 209.
• YES on Proposition 17 to restore voting rights for Californians on parole after completing their prison term.
• NO on Proposition 20, which attempts to roll back criminal justice reforms enacted by California voters.
• YES on Proposition 25 to ban cash bail, by upholding the 2018 law signed by Governor Jerry Brown.

 

Election Day is Tuesday, November 3, 2020.  The deadline to register online to vote is Monday, October 19, 2020, although Californians can register in person to vote up until Election Day.

 

In June, Newsom signed a law requiring election officials to automatically send a mail-in ballot to every registered voter in the state.  The law also requires election officials to count all ballots received within 17 days of the election. 

 

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Fourth California Newspaper Opposes $5.5 Billion Stem Cell Proposal

The Santa Rosa Press Democrat yesterday editorialized against Proposition 14, the $5.5 billion measure to save the California stem cell agency from financial extinction. 

The headline on the editorial said:

"No on 14: It’s time for stem cell agency to stand on its own"

Including the Press Democrat, four California newspapers have now opposed the measure. One is for it. 

The newspaper said it does not oppose stem cell research per se.

"Our objection (in 2004 to the measure that created the agency) was to ballot-box budgeting. That’s an even more acute concern today, with millions of Californians out of work and the state struggling to fulfill its most basic obligations in the face of historic budget deficits caused by the coronavirus pandemic.

"Is stem-cell research more important than education? Transportation? Safety net programs?

"There isn’t an easy answer, and that’s the problem with budgeting by ballot initiative. Voters must say 'yes' or 'no' without an opportunity to weigh the relative value of competing priorities, with no ability to adjust to unexpected situations such as the pandemic and, in the case of the Institute for Regenerative Medicine, limited legislative oversight for a quasi-public agency that has been the subject of conflict-of-interest concerns."

The editorial continued,

"After 16 years, the California Institute for Regenerative Medicine is well established, and its successes should allow it to secure other sources of funding, including federal funding as the Bush-era restrictions have been lifted. The state, meanwhile, is struggling to balance its books, and it wouldn’t be wise to take on more debt at this time. The Press Democrat recommends a no vote on Proposition 14."

Read the California Stem Cell Report regularly for the latest and most in-depth coverage of the effort to save the California stem cell agency from financial extinction.  

How Does $5.5 Billion Turn Into $5.00 a Person? It's a Stem Cell Mystery So Far

Backers of this fall's $5.5 billion ballot measure to support the state stem cell research agency say that it will cost each resident of California only $5 a year. 

The calculation may be correct. It also could be campaign hype of the sort that arose in 2004 involving the initiative that created the California Institute for Regenerative Medicine (CIRM), as the state stem cell agency is officially known.  

But it is impossible to tell as the date of this writing. The campaign has not responded to requests from the California Stem Cell Report for information on how it came up with the $5.00 figure. 

Whether it is $5.5 billion or only $5.00 a person, it involves money borrowed by the state. Proposition 14, the ballot measure in question, directs the state to borrow the cash over a 10-year period. Paying interest to investors would cost an additional estimated $2.3 billion over several decades, bringing the total estimated cost to $7.8 billion, according to the state legislative analyst. 

Calculating the annual cost per person over decades involves a number of assumptions including population predictions, future interest rates, timing of bond sales and so forth.  

The only language that could be found on the campaign website concerning the figure says, 

"When you consider that chronic disease is the leading cause of death and the leading driver of annual health care spending, this initiative is a small price to pay to potentially save millions of lives and billions of dollars in health care costs in the coming decades – less than $5 per person per year." 

It should be noted that the campaign web site does not seem to include a search engine, although that is common practice on most web sites. 

As for CIRM's cost today, it began with $3 billion in 2004. Estimates then of the interest costs were about $3 billion, making a total estimated cost of $6 billion. The actual cost as of this summer was $4 billion, largely because of the low interest rates since the Recession of 2008. 

CIRM is now running out of money and will begin closing its doors this winter unless Proposition 14 passes. 

If the campaign supplies information on the $5.00 figure, the California Stem Cell Report will carry it when it comes in.

$5.5 Billion California Stem Cell Campaign Intensifies, Voting Begins in One Month

California's 21 million voters soon will be receiving mail that tells them a $5.5 billion stem cell ballot measure is "outrageous," unaffordable and will perpetuate long-standing problems with the state's stem cell research program. 

The assertions are contained in the official state voter guide. It also says the state stem cell agency, which is running out of money, has made "significant progress" in developing therapies during its 15-year life. 

Supporters say in the pamphlet that Proposition 14 will "dramatically expand access to clinical trials and new therapies, make treatments and cures more affordable for Californians, and provide patients, their families, and caregivers with financial assistance."

The ballot measure is intended to re-finance the agency, formally known as the California Institute for Regenerative Medicine (CIRM), which will begin closing its doors this winter unless the proposition is approved. CIRM's original $3 billion is nearly gone. The ballot measure that created it in 2004 provided no funding beyond the state bonds that were approved then. 

Because the money is borrowed, the actual cost to taxpayers rises. In the case of Proposition 14's $5.5 billion, the cost climbs to an estimated $7.3 billion, according to the state legislative analyst. The original $3 billion actually will cost about $4 billion, according to CIRM, and will not be paid off for many years.

The voters' guide is aimed at very briefly allowing supporters and opponents of ballot measures to make their cases. The guide has been issued by the state for many decades prior to actual voting, which begins in about a month -- not Nov. 3, which is the last day to vote either by mail or in person. 

Absentee voting has long been practiced in California. During the presidential primary election earlier this year, 72 percent of the ballots were cast by mail. The percentage is likely to be higher this fall because of Covid-19 and the intense interest in the presidential race. 

The mail-in voting pressures campaign organizations to make their cases very early and to assure that the turn-out of their supporters begins as soon as possible. Voters can expect to see more pitches for Proposition 14 in coming weeks. The opposition is not well organized and unlikely to mount a large media effort. 

In addition to the pro and con arguments, the guide includes the full text of the roughly 10,000-word measure, which is written in legalese and less than transparent. The legislative analyst's summary does a good job as far as it goes. 

However, important aspects of the measure are missing from the summary, including how CIRM's scope would be greatly expanded to include such things as funding research for "aging as a pathology" and "therapy delivery."  You can read about those here on the California Stem Cell Report.

The $5.5 Billion Stem Cell Proposition: A "Christmas Tree" Measure Loaded With More Than Cash

 Editor's note: The following item was written by the producer of the California Stem Cell Report and was the most-read article carried by the Capitol Weekly online news service in 2020, where it first appeared. 

By David Jensen

Proposition 14, the fall ballot measure to save California’s stem cell agency from financial extinction, contains much, much more than the $5.5 billion that it is seeking from the state’s voters.

Added to the agency’s charter would be research involving mental health, “therapy delivery,” personalized medicine and “aging as a pathology.“ That is not to mention a greater emphasis on supporting “vital research opportunities” that are not stem cell-related.

The measure would enlarge the board from 29 to 35 members. Even at 29, the board has been much criticized for its large size, which creates more possibilities for conflicts of interest, a long-standing issue for the agency.

Proposition 14 would ban royalties generated by state-backed stem cell inventions from being used for such things as prisons and schools, isolating the funds from tinkering by lawmakers.

It creates a building program for treatment centers that could total about $82.5 million. They would be located in areas not now well-served. And the measure locks up $1.5 billion for “diseases and conditions of the brain and central nervous system,” such as autism and schizophrenia. 

Approved by voters in 2004, the agency is already a prodigiously ambitious effort, seeking stem cell cures and treatment for afflictions that backers say burden half the families in California. However, the original $3 billion that voters provided is dribbling to an end. Unless voters provide $5.5 billion more, the agency — known officially as the California Institute for Regenerative Medicine (CIRM) — will begin shutting its doors this winter. 

While Proposition 14 is the cure for what financially ails the agency, the measure also sends CIRM into arenas that some would argue muddle its focus and distract from its original goals.

(Click here to see the Legislative Analyst’s description of the measure, which is going to nearly 21 million California voters )

Details of the changes in CIRM’s mission are tucked away in the complex and murky, 10,000-word initiative sponsored by Robert Klein, a Palo Alto real estate developer and attorney. He oversaw the writing of the initiative as well as the 2004 stem cell measure that created the agency. Klein was the first chairman of the agency and is now leading the current campaign.

The new playing field for CIRM encompasses particularly critical areas of costs to patients and profits for companies. Stem cell therapies are expected to be enormously expensive — $1 million or more in many cases. That’s a figure that makes health insurance companies balk and Medicare blanch.

Proposition 14  would launch a hefty effort to make stem cell therapies more affordable and accessible. The cash behind that drive could run as high as $155 million. And that’s not necessarily going for patients.

The intent is to create and build support for financial models for health insurance companies. CIRM would also be charged with helping to implement them. Such models would justify the cost of the theoretically one-time cures by demonstrating that they would actually save money — ending the need to treat patients in what currently seems to be an endless and expensive cycle.

Proposition 14 speaks of covering patients and, importantly,  their caregivers for medical expenses, lodging, meals and travel. That would help provide access to clinical trials that are located in prohibitively expensive urban areas, which poses financial barriers for persons who live some distance away. The added coverage would additionally help researchers and companies recruit enough trial participants, which can be a problem in some disease areas.

Proposition 14 creates a 17-member, CIRM affordability committee to drive all this. It would work with industry and the federal government to win their support.  The committee would be backed with as many as 15 CIRM staffers. The ballot allows as much as $55 million for their compensation over 10 or so years. 

But if 15 is not enough, more employees could be hired beyond the nominal cap on CIRM employees of 70 if they are compensated through the use of private cash.

The extraordinary cost of stem cell treatments involves something called “reimbursement,” a biomedical industry euphemism for how companies cover the high costs of the research and still make a profit. If money is not to be made, businesses are not likely to be motivated to turn CIRM research into cures.

The measure additionally allows the new affordability panel to hire consultants, capping that expense at about $105 million.

The affordability effort involves important public policy, industry and research issues that concern patient groups and industry. However, the affordability panel would be permitted to operate behind closed doors as it considers the problems and weighs the solutions.

Votes by the committee, however, would have to be taken in public.

Members of the panel would not be required to disclose publicly their economic or professional interests. The committee would be exempt from the state public records act except for material specifically submitted to the CIRM board.

Proposition 14 locks up $1.5 billion for “diseases and conditions of the brain and central nervous system, such as Alzheimer’s disease, Parkinson’s disease, stroke, dementia, epilepsy, depression, brain cancer, schizophrenia (and) autism.”  The $1.5 billion would not be available for research into the No. 1 killer in the United States, heart disease, or other excluded conditions. 

Beyond the affordability program, Proposition 14 gives CIRM new authority to finance research in several additional fields. The authorization is scattered throughout the initiative document. Mental health research first appears on page nine. Depression appears on page 26. Therapy delivery, which is not defined in the measure, crops up in 10 locations. Personalized medicine and “aging as a pathology” surface on page 34.

On a much smaller scale, but important to researchers, the proposition includes up to $27.5 million for a shared labs program that was scrubbed a few years back when CIRM turned more towards clinical trials. And the initiative opens the door to even more programs that are not specifically mentioned. It gives a high priority to supporting pluripotent stem cell research that is unlikely to receive federal funding or where funding is “not timely or sufficient.”

Perhaps the biggest, but not entirely new opportunity for CIRM to expand beyond stem cell research involves “vital research opportunities.”  CIRM calls them VROs. And they are a loophole that allows CIRM to finance almost any kind of research if there are enough votes on the board to do so.

In both the original and current initiative, a  VRO is defined as “scientific and medical research and technologies” that provide “a substantially superior research opportunity, vital to advance medical science.”

Proposition 14 makes it easier for the CIRM board to declare a VRO. Currently, it takes a two-thirds vote of a quorum of the group that reviews applications. Under this year’s ballot measure, CIRM does not need to meet those criteria. The governing board could invoke a VRO on its own. In some cases, it could require only 12 votes or less of the 35-member board, depending on the quorum and the number of board members present.

Proposition 14 specifically added the fields of  “genetics, personalized medicine, and aging as a patholoqy” to VROs. In the 2004 initiative, the phrase “vital research opportunities”  appeared only seven times. In this year’s initiative, it appears 17 times as the possibility of its use has expanded. Significantly, experience involving vital research opportunities is now listed as part of the qualifications for the chair, two board members and 15 members of the group that reviews grant applications.

CIRM has invoked the original VRO clause only twice. A third attempt was rejected last May after directors expressed concern about mission creep. However, Klein’s new emphasis on it points to the likelihood of increased use, especially if he once again becomes chairman of CIRM.

Under existing law, CIRM’s royalties go into the state’s general fund, the source of state expenditures for prisons, schools and health services. Under Proposition 14, the royalties would still go into the general fund, but they would be locked up for use in dealing with affordability. In 2004, the stem cell campaign financed studies that envisioned royalties of as much as $1.1 billion. To date, they have totaled only $462,433. However, it can take years for a scientific discovery to work its way into an actual product. And a particular discovery may well amount to only a tiny contribution to a product, which would reduce the likelihood of major royalties.

In another major move, Proposition 14 would benefit some of the less-than-urban areas of the state in a new “geographic diversity” program. Rural or semi-rural areas suffer from a lack of physicians as well as the high tech facilities needed to make stem cell treatments available for participation in clinical trials. The measure earmarks as much as $82.5 million for new “community centers of excellence.” They would “support clinical trials and…serve as the foundation for the delivery of future treatments,” the proposition states, giving priority to “geographic distribution.”

One of them could well be in Fresno where the University of California, San Francisco (UCSF), has established an outpost. One of the new members on the CIRM board would be from the UCSF operation in Fresno, making it the only institution that has two representatives on the board. Another new member of the board would be from UC Riverside, whose medical school is only seven years old. UC Riverside also serves a community that incorporates large rural and semi-rural areas.

The increase in the size of the board to 35 flies in the face of recommendations by the prestigious Institute of Medicine (IOM). Among other things, it said in 2012 that the current 29 board members are more than sufficient for the agency. CIRM paid $700,000 for the IOM study, which it hoped would help generate voter support for more funding.

If Proposition 14 passes, the measure creates a relatively quick way to begin to overhaul the board. Under the measure, a number of current members of the board could lose their seats if they have served at least half of their terms.

It is not clear whether the CIRM governing board understood the removal provisions when they endorsed Proposition 14 June 26 on a 21-1 vote. The discussion lasted only 30 minutes. “It’s a no-brainer,” said George Blumenthal, chancellor of the UC Santa Cruz campus and a member of the CIRM board..

Proposition 14 is something of a “Christmas Tree” measure — a term used to describe legislation that has something for everyone. Many ballot initiatives are like that. They must run the gauntlet of a ballot campaign, luring millions of voters into voting for them. Backers of initiatives need to satisfy potential donors and potential beneficiaries, all the while not alienating anybody enough to generate well-funded, powerful opposition.   

The 2004 measure fulfilled those needs nicely. Nearly every institution that stood to benefit from CIRM funding gained a seat at the table where the decisions were made — for better or worse. 

Proposition 14 carries on in that tradition and expands it. Plus the initiative attempts to deal with the tough challenges of costs and profits in what many expect to be a revolution in medicine. Voters will begin casting their ballots in early October. Backers of the initiative have only five weeks to catch the early birds in that particular flock.
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Editor’s Note: David Jensen is a retired newsman who has followed the affairs of the $3 billion California stem cell agency since 2005 via his blog, the California Stem Cell Report. He has published more than 5,000 items on California stem cell matters.

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​Read all about California's stem cell agency, including Proposition 14,  in David Jensen's new book. Buy it on Amazon:  California's Great Stem Cell Experiment: Inside a $3 Billion Search for Stem Cell Cures. Click here for more information on the author.

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