Speak Up: Time to Help Shape California's $12 Billion Stem Cell Future

One of the excellent features of California's $12 billion stem cell program has little to do directly with science. The feature does not deal with petri dishes, genetic manipulation or microscopes.

It has a lot to do, however, with the stem cell agency's responsiveness to the public. It involves the persons behind the test tubes and even the Big Pharma companies that are the key to bringing stem cell therapies into widespread use. 

What we are talking about is fundamental to building trust in the California Institute of Regenerative Medicine (CIRM), as the stem cell agency is officially known, and whether CIRM can sustain itself beyond the date when its money runs out again in a decade or so. 

On the surface, it's a simple matter: the ability of the public, scientists and businesses to weigh in on how CIRM spends its next $5.5 billion -- the amount that the people of California are borrowing to pay for the agency's forays. 

Next Monday represents a first-rate opportunity for the public and the myriad interested parties to show up and speak up, both to the board that governs CIRM and its top executives. Some of the matters on the table at Monday's CIRM directors' meeting are, in one form or another:

• Should CIRM spend $100 million for clinical work over the next six months and only $22 million on basic research? 
• Should it change its diversity requirements to require more awards to a more diverse group of scientists?
• Should it require wider research data sharing to improve the quality of work across the field or should it cosset CIRM-financed findings to shield intellectual property?
• How should the state spend up to $155 million to improve stem cell treatment affordability and patient access to therapies and clinical trials? Does such an effort actually represent an unnecessary subsidy to the businesses involved?

Anybody who desires to do so can participate in the CIRM board meeting, which will be online. Questions can be asked. Suggestions can be made. Complaints can be aired. 

The session represents the first big step into CIRM's new world of Proposition 14, the ballot initiative the provided the new, $5.5 billion in bond funding. The measure  also set CIRM on a wider course that offers fresh opportunities that are not without challenges.  

Deciding how to spend $5.5 billion is not a minor matter. It is tiny, however, compared to the dense processes used by another government research organization -- the 27 branches of the National Institutes of Health and their multitude of advisory bodies. In contrast, California's stem cell program is wide open, transparent and accessible to the people most affected. 

What happens beginning Monday and over the next year will fundamentally shape the success or failure of California's stem cell program, the largest such state effort in the nation and the first in California's history. 

CIRM stands open to influence -- for better or worse -- by patients, the general public, researchers and companies that have received nearly $3 billion over the last 16 years. It is now up to all those folks and more to speak up and help CIRM in its efforts to bring to market the much-heralded stem cell therapies and to be a first-rate steward of the people's money. Plus, speaking out is in the best personal and professional interests of those involved.

The agenda for Monday's meeting contains instructions for participating in the online meeting. Written comments are always useful as well as oral presentations. Written material can provide needed backup for the briefer oral comments and are directly in front of CIRM directors and staff. Comments should be emailed to kmccormack@cirm.ca.gov.

The session starts at 9 a.m. PST Monday. Don't miss an opportunity to help shape the course of California's program to cure untreatable diseases and to lead the way globally on stem cell research. 

California's New Task: A $155 Million Drive to Make Stem Cell Therapies Affordable and Accessible

The enormous cost of stem cell therapies is 
a fresh target for CIRM. 

Proposition 14, California's $5.5 billion stem cell ballot initiative, is coming home to roost, so to speak. 

Next Monday, the governing board of the state stem cell agency is scheduled to begin to settle in under the new measure, which does much more than save the agency's financial life. 

One of the agency's biggest, new challenges involves the accessibility and affordability of the staggering expense of potential stem cell therapies. On the agenda is the creation of a legally mandated "working group" to deal with the treatment cost issues. 

Details of the proposed appointments to the group and its initial steps are not yet available from the California Institute of Regenerative Medicine (CIRM), as the agency is formally known. But the 17,000-word Proposition 14 has plenty to say about the new program. Here is a rundown drawn from my new book, "California's Great Stem Cell Experiment," which deals with the first 16 years of the agency's life, policies and financial times. 

"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.

"The affordability panel would be permitted to operate behind closed doors as it considers the problems and weighs the solutions.

"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.

"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 by 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 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."

The day-long meeting is open to the public, including scientists, who can also comment and ask questions. Comments are limited to three minutes. Lengthier comments should be emailed to the board via this address: kmccormack@cirm.ca.gov

Complete details on accessing the online meeting can be found on the agenda. 

(See here for a discussion of the $182 million awards program scheduled to be approved on Monday for the first six months of the next year.)

No. 1 Read: A 'Deep Dive' Into the Sweeping Changes Made in California's $12 Billion Stem Cell Program

Capitol Weekly's Twitter item on its most
read story of 2020

Capitol Weekly, the respected online news service devoted to state government and politics, this week reported that its most-read story of the year is an article headlined "Proposition 14: There’s much, much more than meets the eye."

The piece was written by yours truly and dealt with the successful ballot initiative that saved the state stem cell agency from financial oblivion with a $5.5 billion infusion of borrowed money. 

The 17,000-word measure, however, also involved a sweeping expansion of the scope of the agency and made a host of consequential changes. The freelance piece began: 

"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."

The Aug. 31 article was drawn from my new book, "California's Great Stem Cell Experiment: Inside a $3 Billion Search for Stem Cell Cures."  The book is a product of 15 years of coverage of the stem cell agency and posting of more than 5,000 items on its activities on the California Stem Cell Report.

Other stories in Capitol Weekly's top ten, most-read articles include the governor's plans for a stricter Covid lockdown, the tough sell facing California ballot measures and Capitol Weekly's list of the state's 100, top unelected political power players.

Capitol Weekly has been around for decades, originally as a print publication. It is now part of Open California, a nonprofit that helps to fill a gap left by diminishing coverage of state issues by the mainstream media. 

On its website, Open California says, 

"Our mission is to inform, enlighten and educate Californians about public policy and state governance, and to provide a platform for engagement with public officials, advocates and political interests.  To meet this goal, Open California publishes continuing, in-depth, nonpartisan coverage of current policy and political issues, and hosts regular forums for public discussion of policy and California politics."

Need Work? California's Stem Cell Agency Looking to Hire Ten

Looking for a job with an exciting and unique $12 billion stem cell research funding organization in the Golden State of California.?

The state stem cell agency, which is now into everything from "aging as a pathology" to mental health, is looking to hire 10 persons to fill posts ranging vice president of science to administrative assistant.

While the positions are yet to be officially posted online, here is the list of expected openings, according to the California Institute for Regenerative Medicine (CIRM), as the stem cell agency is officially known. 

(Update: On Jan. 2, applications for seven of these positions were available on the CIRM web site.)

• Senior Executive Assistant
• Senior Science Officer, Review
• Project Manager, Review
• Vice President of Science
• General Counsel
• Grants Management Specialist
• Administrative Assistant
• Director of Finance
• Business Services Officer
• Senior Science Officer

Here is a link to the pay schedule at CIRM. Here is a link to a document dealing with the agency's compensation program as of today.

Official postings for the positions could come as early as late this month. They will appear on this CIRM web page.

CIRM currently has 33 employees. Proposition 14 contains a nominal cap of 70 but also permits the number to grow substantially if the employees are compensated through cash that is not part of the agency's official state bond funding. 

CIRM is currently based in Oakland, Ca. 

California Stem Cell Agency Set to Fund $182 Million in Research in Next Six Months

Click on the above to see a recording of today's online meeting of the CIRM Science Committee

California's newly rejuvenated stem cell program today kicked off its fresh spending plans with a $182 million effort that focuses heavily on awards that could lead more quickly to actual treatments.

The plan was approved by the Science Committee of the governing board of the California Institute for Regenerative Medicine (CIRM), as the $12 billion agency is formally known. CIRM was running out of money until voters this fall approved Proposition 14 and rescued the agency from financial oblivion. 

The $182 million plan for the first half of next year represents CIRM's first major dip into its new, $5.5 billion bucket that was created by narrow voter approval of Proposition 14. The full board is expected to approve the new research budget at its Dec. 21 meeting. 

The program allots $100 million for possibly 10 clinical awards in the next six months. Translational research will receive $60 million (11 awards). "Quest" research is allotted $22 million for 15 awards. Quest awards involve early stage, basic research while translational research involves attempts to move basic research into the clinical level. 

Clinical trials are the last hurdle to clear before a treatment can be approved by the federal government for widespread use. No CIRM-financed stem cell treatments have yet received that approval since the agency began its work 16 years ago. CIRM, however, has helped to fund 68 ongoing clinical trials. 

The Science Committee has 10 members, at least six of whom are linked to institutions or businesses that could apply for CIRM funding.  While members of the 35-member CIRM board can vote on the overall research budget and also "concept" plans for such things as Quest and clinical research, they are barred from voting on specific applications from institutions that they are connected to.  

The Science Committee also approved changes aimed at increasing diversity in CIRM-related research and requiring greater data sharing by scientists. The committee strengthened the staff-proposed diversity language by also proposing scoring applications on how they beef up diversity among researchers. Details on that are yet to be worked out and will be presented to the full board on Dec. 21. 

A call for more diversity among researchers was aired last month at a meeting of the only state entity charged with reviewing CIRM's financial affairs. 

The data-sharing requirement triggered some concern about whether it would be a disincentive to some researchers who feared losing control over their intellectual property.  However, CIRM CEO Maria Millan said the agency was treading carefully to take those concerns into consideration. 

Researchers will be able to apply for the awards shortly after Jan. 1 when detailed program announcements will be released by CIRM. 

Here are links to the changes approved for the Quest program, the translational program and the clinical programs. 

Save the Goose: California's Stem Cell Story and the 'Army of 900'

Is the stork bringing stem cell billions?

More post-election coverage is trickling out regarding the activities of the $12 billion California stem cell agency, including a lengthy and compelling piece in the Los Angeles Times, the state's largest circulation newspaper. 

The hitch is that the Times piece does not mention the stem cell agency until the 21st paragraph, a fact that carries more weight than the 40 words in the paragraph itself. 

The article in the Times, written by columnist Sandy Banks, was not really about CIRM per se. But it was a story that might not have been told without a $13 million check from CIRM. 

The piece dealt with sickle cell disease. Banks' entry point was a patient named Evie Junior, whose harrowing experiences are certain to resonate with nearly all the paper's readers. 

Banks wrote,

"As a child, (Junior) grew accustomed to frequent hospital stays. But the disease got progressively worse as he moved through his teens; the bone pain was so disabling, he often had to be sedated with heavy-duty opioids."

Banks continued,

"At one point, the bones in both his legs were so damaged by the disease, doctors thought he might not ever walk normally again. Junior battled back."

Banks wrote,

“'I want to be cured of this disease,' he said. 'And I wish the world was more understanding about the people who are struggling with it.'”

Junior is a patient in a UCLA clinical trial led by Donald Kohn, whose research has been supported by a total of $52 million from the stem cell agency -- a figure not noted in the story. 

The stem cell agency comes into the story ever so briefly at paragraph 21. "The trial is funded by the California Institute for Regenerative Medicine (CIRM), the stem cell agency created by voters in 2004 and infused with $5.5 billion in new research money by voters who narrowly approved Proposition 14 this fall," the Times reported.

That is the first and last mention of California's stem cell program in the Times' story. However, that is better treatment of CIRM than is found in most stories in the media over the last few years -- the ones that deal with accomplishments tied to the agency's cash. (See here and also here.) The articles rarely mention where the money comes from. It could be flown in by stork, for all the readers know. 

Why is this important? The answer has to do with CIRM's reliance on tenuous, ballot-box financing and the sustainability of the California stem cell program.  The situation should be of interest to a little known state entity, which is the only state panel that has a legal charge to review the stem cell program.  

The panel is the Citizens Financial Accountability and Oversight Committee (CFAOC). It was created by the same ballot initiative that established the stem cell agency 16 years ago. Last month, at the CFAOC's once-a-year meeting, its members urged the agency to make itself better known. 

Proposition 14 saved the agency from financial extinction. But the measure was a squeaker, and it set the stage for another life-or-death ballot initiative. The money from Proposition 14 runs out in about 11 years. No other source of funding is provided. If CIRM goes to the ballot again in less than a decade or so, it will need a strong base of support from California voters, 8.2 million of whom voted last month to cut off funding for CIRM.

Building a solid base takes years. It also requires something of a change involving the scientific community and science journalism, which is a big ask. The tradition in scientific journals regarding funding is to relegate mention of the sources of money to a tiny footnote as if it were not the lifeblood of research.

Science writers -- the few that now exist in the mainstream media -- follow that ancient and tired public tradition of ignoring what makes research happen. They focus on "exciting" results from the bench and clinic -- not the "filthy lucre" that pays scientists, their institutions, the post-docs who labor behind the microscopes, the equipment suppliers and keeps the lights on.

Recipient institutions write the news releases -- the starting point for most journalists -- without mentioning the many, many billions that taxpayers (state and federal) have provided. Even the stem cell agency itself does not mention dollar amounts in its blog items dealing with significant results from CIRM research. (For an example, see this item from the agency's blog on the UCLA/Kohn sickle cell trial, which CIRM is funding with $13.1 million. That figure is not directly revealed in the blog item.)

Like most state agencies, CIRM is ignored by the media with only occasional exceptions. Its activities are not well known. That is not likely to change over the next decade despite the best efforts of CIRM's tiny staff. The exception would be a major or even minor scandal or development of a major breakthrough that would resonate with the people of California.

The folks in the media have a vast array of topics to cover, all of which CIRM competes with for attention. The news industry is, in fact, overwhelmed by matters that need public scrutiny: schooling for children, jobs for parents, affordability for housing, vaccines for Covid-19, homelessness, climate change, wildfires and much, much more. Meanwhile, the industry is struggling with its own sustainability issues, laying off thousands of reporters, closing outlets and desperately searching for new business models.

Breaking through this wall of issues to generate favorable, regular coverage of the stem cell agency's good works is a herculean task. And so far, the reality is that CIRM's good works are quite minor in terms of how they affect the lives of the vast majority of the people in California. 

The CIRM team, from top to bottom, has provided a prodigious amount of positive information that can resonate with the public. Building positive relationships with voters, however, is a long-term task that requires commitments that go well beyond CIRM's stalwart staffers, who currently weigh in at only 33 for a multibillion dollar program. 

CIRM has major budget and legal limitations, courtesy of Proposition 14. Its outreach team is small, again an outgrowth of ballot initiatives. Nonetheless, CIRM has a potential army of more than 900 available plus more in the future, given the agency's expansive, new responsibilities authorized by Proposition 14. And that doesn't count the patient advocates or their allied organizations.

The army of 900 consists of the researchers and institutions that have received cash from CIRM -- all potential missionaries who can carry the CIRM message from Yreka in the north to Calexico in the south. 

The institutions could highlight CIRM funding in their news releases, instead of burying or omitting it. Researchers could reach out regularly to the various affected communities to help keep the cash flowing. Grantees could pony up $2,000 each and send it off to a new, broad-based nonprofit that might be called something like "Friends of CIRM."

But more immediately, the army of 900 could -- one by one -- resolve to make six new contacts in 2021 with the public or media to tell the CIRM story. Doing so would serve science and CIRM not to mention themselves.

The next statewide election best suited for approval of another bond measure is fast approaching. It is only eight years away. That is much less time than it takes to complete the preclinical work and clinical trials needed for a federally approved stem cell treatment, which is, ultimately, the only thing that voters really want. 

If the army of 900 needs an inspirational motto, it could be something like "Save The Goose."  You know, the one that lays the Golden Eggs. It is better than relying on the stork. 

Post Election Media on What's Next for $12 Billion California Stem Cell Program

Passage of Proposition 14 has generated a handful of articles recently dealing with the direction of the California stem cell agency over the next decade or so, including pieces carried by Bond Buyer and Calmatters, a respected online news service dealing with state government and politics.

Barbara Feder Ostrov wrote a Nov. 24 article for Calmatters, which quoted  Jonathan Thomas, chair of the California Institute for Regenerative Medicine (CIRM), as saying,

“California has always had a frontier mentality and a love for the cutting edge, and the work that CIRM has done has put it on the very forefront of regenerative medicine.”

Proposition 14 saved CIRM from financial extinction by requiring the state to borrow an additional $5.5 billion for the 16-year-old program, which was originally funded with $3 billion in state bonds in 2004. Total cost of the program is expected to hit about $12 billion before the money runs out again in 10 to 15 years.

Ostrov also quoted Paul Knoepfler, a UC Davis stem cell researcher and blogger, on new areas of research for CIRM that are authorized by Proposition 14. He said,

“Stem cells are interesting and important, but there are going to be a lot of new therapies in the next 10 years that are not stem-cell centric."

In the article, CIRM board member Ysabel Duron addressed the need for improvement of diversity in terms of developing therapies for underserved segments of the population. She said,

“We need to keep researchers’ feet to the fire. They need to show us a plan and we need to reward them.”

Ostrov quoted this writer on some of the issues facing CIRM, including the question of what happens when the latest $5.5 billion is exhausted:

“The sustainability issue is important and it’s hard to address.… The money doesn’t last forever.”

Bond Buyer's Keeley Webster's article noted that the agency will be rewriting its budget now that Proposition 14 has passed. The measure alters CIRM's budgeting rules, shifting some significant costs around. 

Webster quoted state Controller Betty Yee on the agency's $5 million Covid round from last spring. Yee said,

“The $5 million didn’t buy a lot, but it did help get information out to underserved communities. And it put a model out there of how CIRM has been able to accelerate research projects.”

In a piece by Andrew Sheeler, The Sacramento Bee quoted Robert Klein, a Palo real estate developer and sponsor of Proposition 14. Klein poured millions of dollars into the ballot campaign. He said, 

“We had a big obstacle because we had to communicate to voters not only the potential to change the nature of treatments ... but we also had to inform voters of how the state could afford this....It was a citizen’s initiative in the truest sense.”

California's Stem Cell Research Program: How $3 Billion is Growing to $12 Billion

California's 16-year-old stem cell research program is a prodigious enterprise that is helping to finance 68 clinical trials and that has funded hundreds of California scientists for their work in an embryonic field, so to speak. 

The scope and importance of the program and its cost, however, are not necessarily apparent to most Californians. The program is not high on the radar of most people and certainly not the subject of breakfast table conversations in the overwhelming majority of the state's households. 

Over the past 16 years, the California Stem Cell Report has regularly described the stem cell agency, known officially as the California Institute for Regenerative Medicine (CIRM), as a $3 billion effort. But the use of that number did not make it clear that the cost ran significantly higher. 

When CIRM was created through a ballot initiative in 2004, the state Legislative Analyst estimated it could cost taxpayers $6 billion because of the interest on the money that the state borrowed to finance it. The figure has turned out to be closer to $4 billion because of unusually low-interest rates over the last decade or so. 

Under Proposition 14, the agency will receive an additional $5.5 billion from state bonds to spend on research and other new programs. The state legislative analyst has estimated the total cost will run about $7.8 billion because of -- once again -- interest costs. 

The Proposition 14 funding brings the total estimated cost of CIRM to nearly $12 billion.  And that is the figure that the California Stem Cell Report will use going forward to describe the program, unless someone can convince this writer otherwise. 

Referring to CIRM as a $12 billion enterprise immediately tells the reader that it is a significant effort. The number helps to draw readers into stories about CIRM. It is also more accurate than using a smaller figure, which would tend to minimize the cost and mislead taxpayers. Describing CIRM only as a $8.5 billion ($3 billion plus $5.5 billion) agency tends to conceal its true cost to the people of California. (In retrospect, this website should have used the 2004, $6 billion figure to describe CIRM over the last 16 years.)

CIRM is a rare bird among state agencies for a number of reasons. In this case, we know that its funding will cease at some point. Nearly all state departments do not live with that sort of financial guillotine.  

The 17,000-word ballot initiative, crafted by Robert Klein, a Palo Alto real estate developer, limits CIRM's annual CIRM bond sales to $540 million. Based on the experience under the previous initiative -- Proposition 71 of 2004, which created CIRM -- the agency is not likely to hit the $540 million cap each year. That could extend CIRM's possible life for another 15 years or so unless it becomes unusually tight-fisted.

As for the $12 billion figure, this writer is open to arguments for using another number, but I will have to be convinced. I am prepared to air those arguments (their full text) on this website. So if a reader thinks another figure is more appropriate, please let me know the reasons why either by filing a comment using the comment function at the end of this item or by sending me an email at djensen@californiastemcellreport.com.

Praise and Advice Given in Review of California's Stem Cell Research Program

The California stem cell agency today received both kudos and advice from the small state panel that is charged by law with reviewing its financial practices and is the only such state entity with that unique task. 

The panel is the Citizens Financial Accountability and Oversight Committee (CFAOC), which was created in 2004 as part of the ballot initiative that also created the California Institute for Regenerative Medicine (CIRM), as the agency is officially known. 

While it reviews the financial affairs of the agency, the CFAOC has no authority to require changes. CIRM's programs will cost state taxpayers an estimated $11.8 billion dollars before funds run out in 10 to 15 years. 

Betty Yee
Controller photo

State Controller Betty Yee is by law the chair of the CFAOC. It also has four other members, one of whom was sworn in just this morning. Yee and the others were liberal in their praise of the agency's work. In addition to the usual financial information, Maria Millan, CEO of the agency, presented the CIRM programs and their successes. 

Millan's presentation was greeted with praise by all the CFAOC members, including Yee. Towards the end of the meeting, Yee said that she and other members would like to be kept up-to-date regularly on CIRM matters since the CFAOC is required to meet only once a year. 

Yee said, "Numbers have lots of stories behind them. I think really to understand them fully, it is about exactly what we learned today."  She  said she hoped that part of the revision of CIRM's strategic plan next year will involve "how do we tell our story better."  Yee said she thought the agency was doing "great" but there was so much to be told. 

Catherine Sarkisian
UCLA photo

The new member of the CFAOC is Catherine Sarkisian, a UCLA physician who specializes in geriatric medicine, an area that Proposition 14 identified as a new target for CIRM.

Sarkisian raised a question about the need for diversity among recipients of  CIRM grants. CIRM officials pointed to existing training programs for high school and college students. Sarkisian said that those were important "pipelines" but that CIRM should consider creation of "on-ramps" to build up diversity among awardees. 

During the meeting, CIRM officials disclosed that the new strategic plan is expected to be approved next summer by the Independent Citizens Oversight Committee (ICOC), as the CIRM governing board is known. Work on it is already underway. Researchers and other members of the public can weigh in on what they would like to see funded over the next five years by emailing their comments to info@cirm.ca.gov.   

CIRM will be operating under a new, 17,000-word statute -- Proposition 14 -- that significantly expands the agency's scope and increases the ICOC size from 29 to 35. 

The new course of the agency is also likely to come up at a Dec. 21 meeting of the CIRM board. The public can address the board online or email comments. The agenda is legally required to be posted Dec. 11. It will contain instructions for online access to the meeting. 

Financial Review of California's Multi-billion Dollar Stem Cell Research Agency Slated for Friday

One of the more obscure entities in state government is scheduled to meet this Friday to review the financial affairs of California's stem cell agency, a matter that now runs to nearly $12 billion.

The panel is the Citizen's Financial Accountability Oversight Committee (CFAOC), which was created in 2004 along with the California Institute for Regenerative Medicine (CIRM), as the stem cell agency is formally known. The CFAOC is charged with reviewing the financial practices of the stem cell agency. The CFAOC is the only state panel legally charged with that function. The governor and the legislature have no authority to do so.

However, the CFAOC does not have authority to require changes by CIRM. It can only make recommendations.

Friday's agenda appears to be routine. However, some members of the committee may have comments on the approval of Proposition 14, which saved CIRM from financial extinction with $5.5 billion in money that the state will have to borrow.

Including Proposition 14, CIRM will cost taxpayers an estimated $11.8 billion by the time its funding runs out again in 10 to 15 years. Of that total, an estimated $3.3 billion will go for interest on the $8.5 billion in state funding for the agency, including the period since 2004. 

CIRM is likely to spend more than the $8.5 billion, however, because Proposition 14 provides for using private funds to hire additional personnel for the agency beyond a nominal cap of 70. CIRM has never had more than 62 employees and currently has about 33, two less than the 35 members of its governing board. 

On the CFAOC agenda are routine audits of the agency that have not identified any particular issues and presentations of previously reported budget plans. However, the meeting may include some discussion of CIRM's future, but don't look for a critical evaluation.

The last meeting of the CFAOC was in August 2019. State law requires an annual meeting. No meeting was held in 2018.

The chair of the panel is Betty Yee, the elected state controller. Other members include:

• Jim Lott, a psychologist and former health care industry executive specializing in health care organizations and strategic thinking. 
• Mark Fischer-Colbrie, CEO of Strateos,  Inc., of Menlo Park, Ca., and for chair of the international board of the Juvenile Diabetes Research Foundation, which is closely linked to Robert Klein, the sponsor of Proposition 14
• Michael Quick, a former provost at USC who left that post in 2019 to return to teaching. The Los Angeles Times wrote, "As the university’s top academic officer, Quick handled many of the complaints against former medical school Dean Carmen Puliafito, who The Times revealed used drugs and partied with criminals during his tenure. Quick reprimanded the dean and ultimately forced him to step down in 2016." 

Puliafito was once a member of the CIRM governing board. USC has received more than $114 million in CIRM awards.

Below is the text of state law concerning the CFAOC and the scope of its authority, which does not include an evaluation of its scientific performance. 

"There shall be a Citizen's Financial Accountability Oversight Committee chaired by the Controller. This committee shall review the annual financial audit, the Controller's report and evaluation of that audit, the financial practices of the institute. The Controller, the Treasurer, the President pro Tempore of the Senate, the Speaker of the Assembly, and the Chairperson of the ICOC shall each appoint a public member of the committee. Committee members shall have medical or patient advocacy backgrounds and knowledge of relevant financial matters. The committee shall provide recommendations on the institute's financial practices and performance. The Controller shall provide staff support. The committee shall hold a public meeting, with appropriate notice, and with a formal public comment
period. The committee shall evaluate public comments and include appropriate summaries in its annual report. The ICOC shall provide funds for all costs associated with the per diem expenses of the committee members and for publication of the annual report."

California's $5.5 Billion Stem Cell Boost: The Journal Nature Reports on "Split" Views, Conflicts and Priorities

The internationally respected journal Nature today took a look at the $5.5 billion refinancing of California's stem cell research program in an article that is not likely to please its supporters. The headline on the piece said:

"California's vote to revive controversial stem-cell institute sparks debate

"The California Institute for Regenerative Medicine will receive billions in state funding — but some scientists oppose the plan."

The first paragraph of the article said, "(S)cientists are split over whether the California Institute for Regenerative Medicine (CIRM) in Oakland is a worthwhile investment for the US state — or for the field of stem-cell research."

In significant ways, the article by senior reporter Nidhi Subbaraman echoed important elements of an examination of CIRM that Nature published in 2008. The journal, in fact, warned at the time of "cronyism" at the agency. (See Nature's editorial here and the article by Erika Check Hayden here.)

Today's latest article in Nature said,

"(C)ritics of CIRM are concerned about oversight at the state agency, which has faced complaints about potential conflicts of interest among its board members for years. They also point out that the field has grown and now receives federal support, making state funding hard to justify — especially amid a pandemic that has imperiled California’s economy."

Comments about priorities and the failure of the $5.5 billion measure (Proposition 14) to correct governance flaws at CIRM were also carried by Nature. Subbaraman wrote,

"'Unfortunately, Proposition 14 sets a bad example for the use of public money for the advancement of science,' says Zach Hall, a neurobiologist who led CIRM as its first president between 2005 and 2007."

Nature continued,

"'You could argue that California would do better, economically and scientifically, to have a CRISPR institute,' Hall says, arguing that the revolutionary precision gene-editing tool is better placed to benefit from such a huge infusion of cash."

 Subbaraman quoted another former top level scientist at CIRM.

"'As scientists, everybody always welcomes additional funding,' says Arlene Chiu, former director of scientific activities at CIRM. 'But as a Californian, one wonders if there are better ways to do this.'"

Nature mentioned a $700,000 study of the agency by the Institute of Medicine in 2012, which recommended a major restructuring of CIRM along with steps to deal with its conflicts of interest, which the IOM regarded as a serious problem. 

The California Stem Cell Report, which has followed the agency since 2005, has analyzed CIRM's awards and reported earlier this year that 79 percent ($2.1 billion) has gone to institutions with links to members of CIRM's governing board. Members of the board cannot vote on grants to their institutions, but they control the direction of the agency and approve plans for all award rounds.

Most of the recommendations by the IOM were not implemented by CIRM or Proposition 14. Nature interviewed one of the members, Cato Laurencin, of the IOM panel that spent months examining CIRM, which financed the study.

Subbaraman wrote,

"'It is very exciting that Prop. 14 passed and that CIRM will continue its funding,' says Cato Laurencin, a biomedical engineer at the University of Connecticut in Farmington, who is not funded by the institute. 'This field is at a bit of an inflection point in terms of our understanding of stem-cell science.'"

Subbaraman's piece included comments from Robert Klein, the real estate developer who sponsored Proposition 14 and poured millions into the campaign for it. Klein was also responsible for writing the 17,000-word measure.

The Nature article said,

"Responding to the criticisms, Klein says he crafted the proposal with the guidance of multiple groups of experts, and kept the mandate deliberately broad to allow for flexibility as the field grows. 'There's an intent here,' he says, 'to have the agency be responsive to the development of science.'"

$2.1 Billion in California Stem Cell Awards Goes to Institutions Linked to Directors of State Stem Cell Agency

Editor's note: The following article by yours truly was published as a freelance piece this week on Capitol Weekly, an online state government and politics news service. 

By David Jensen

Over the last 15 years, California’s stem cell agency has spent $2.7 billion on research ranging from arthritis and blindness to cancer and incontinence. The vast majority of the money has gone to enterprises that have ties to members of the agency’s governing board.

All of which is legal. All of which is not likely to change.

Eight out of every ten dollars that agency has handed out have been collected by 25 institutions such as Stanford University, multiple campuses of the University of California and scientific research organizations. Their combined total exceeds $2.1 billion.

All 25 have links — directly or indirectly — to past or present members of the board of the agency, according to an analysis by the California Stem Cell Report, which has covered the agency since 2005.

“They (the agency’s directors) make proposals to themselves, essentially, regarding what should be funded. They cannot exert independent oversight,” says Harold Shapiro, who led a 2012 study of the agency by the prestigious Institute of Medicine (IOM), which is now called the National Academy of Medicine. The study recommended a major restructuring of the agency’s board to help deal with the problem.

The longstanding, conflict-of-interest issues are not addressed in Proposition 14 on the Nov. 3 ballot. The measure would give the agency, officially known as the California Institute for Regenerative Medicine (CIRM), $5.5 billion more and expand its scope of activities and research. The ballot measure is likely to increase the problems by increasing the size of the agency’s governing board from 29 to 35.

Another ballot initiative, Proposition 71, created California’s stem cell program in 2004. Ever since, conflict of interest questions have dogged CIRM. Indeed, critics of the agency can today point to the top five recipients of CIRM largess as examples of conflict problems. Stanford University ranks as the No. 1 recipient with $388 million. UCLA is No. 2 with $307 million. It is followed by UC San Diego, $232 million; UC San Francisco, $199 million, and UC Davis, $143 million.

All have had a representative on the CIRM board since the inception of the program.

(Editor’s note CIRM’s totals may change slightly as the result of the agency’s internal accounting procedures.)

IOM and public confidence in CIRM
The IOM study, with its criticism of conflicts, was commissioned by CIRM at a cost of $700,000. Directors expected that it would provide a “gold standard” evaluation of the agency that would support a ballot measure for additional funding. The study’s scope went well beyond conflicts of interest. In fact, it said it did not search for evidence of specific conflicts because the task was not part of the agreement with CIRM. The IOM did say that “studies from psychology and behavioral economics show that conflict of interest leads to unconscious and unintentional ‘self-serving bias’ and to a ‘bias blind spot’ that prevents recognition of one’s own bias.” While all of the study’s findings were consequential, the matter of conflicts attracted the most public attention.

“Ties to stem cell board lucrative,” said a headline in the Orange County Register shortly after the IOM report was released.

“The agency has used more than half of its funding and one day will almost certainly want to ask taxpayers for more. It should remember that voters will look for evidence of public accountability as well as respected research,” said the Los Angeles Times in an editorial in December 2012.

The IOM report itself said, “Far too many board members represent organizations that receive CIRM funding or benefit from that funding. These competing personal and professional interests compromise the perceived independence of the ICOC (the CIRM governing board), introduce potential bias into the board’s decision making, and threaten to undermine confidence in the board.”

The IOM said the composition of the board makes it neither “independent” nor capable of “oversight,” although the board is legally dubbed the Citizens Independent Oversight Committee (ICOC).

Placing deans of medical schools and patient advocates on the board who are linked to specific diseases “raises questions about whether decisions delegated to the board—particularly decisions about the allocation of funds—will be made in the best interests of the public or will be unduly influenced by the special interests of board members and the institutions they represent. Such conflicts, real or perceived, are inevitable….”

The situation involves more than legalisms. “Properly understood,” the IOM said, “conflict of interest is not misconduct, but bias that skews the judgment of a board member in favor of interests that may be different from or narrower than the broader interests of the institution.”

The IOM study additionally surveyed board members about conflicts of interest and reported, “While a majority of respondents stated that personal interests did not play a role in their work on the ICOC, some responses were more equivocal. One respondent replied that it was ‘hard to tell’ given that so many decisions take place off camera in secret meetings,’ while another acknowledged that ICOC members are human, and, of course, their decisions are influenced by personal beliefs and interests.”

The ‘inherent’ conflicts
The conflicts were built in by Proposition 71, which dictated the composition of CIRM’s 29-member board. CIRM’s general counsel, James Harrison, once described the situation as “inherent conflicts of interest.”

Under Proposition 71, representatives from virtually all the California institutions that stood to benefit were given seats at the table where spending plans are approved and awards handed out. Directors are not allowed to vote on specific awards to their institution. But they control the direction of the agency and what CIRM calls “concept” plans, including specific elements and budgets for the award rounds. Some of those rounds run into hundreds of millions of dollars.

One of the “concept” plans created a $47 million program to help California institutions recruit star scientists to the Golden State. Another plan created the $50 million Alpha Clinic Network at five academic centers all connected to board members.

Following the IOM report, the CIRM board did remove most institutional directors from meetings where awards are ratified. Jonathan Thomas, chair of the board, declared then that financial conflict issues were “put to bed once and for all,” a position that the agency holds today. In May 2019, Thomas told directors that several “authoritative entities” have studied CIRM and produced written reports that dealt with conflict matters.

Thomas said, “Each had in it sort of quite vehement language about the conflict of interest issue, which has always been just perceived…..With respect to any given funding award, there’s never been an actual conflict.”

During the 2019 meeting, the board did not discuss issues involving board action on “concept” plans. They continue today to modify and approve “concept” plans.

Beyond the CIRM board
Conflicts of interest at CIRM go beyond the 29-member board. In 2014, the agency was shocked by a case involving a former president of the agency, Alan Trounson, and StemCells, Inc., a company that was awarded $40 million while he was serving as the top executive at CIRM. (The company later declined one of the awards.) Only seven days after his final day at CIRM, Trounson was named to the board of directors of StemCells, Inc.

He served on the company’s board for about two years and received $443,500 in total compensation, including stock options, according to StemCells, Inc., documents filed with the Securities and Exchange Commission.

Following the announcement of the Trounson appointment, CIRM looked into some of Trounson’s work at CIRM. In July of 2014, the agency said that its “severely” limited investigation found no evidence that its former president attempted to influence action on behalf of StemCells, Inc., during the previous month. The state’s political ethics agency, the Fair Political Practices Commission, said in a Feb. 6, 2015, letter to Trounson that there was “insufficient evidence to demonstrate” a legal violation.

Even before the agency was created, critics warned of conflict-of-interest problems. Writing in an opinion piece in October 2004 in the San Francisco Chronicle, David Winickoff, then a professor at UC Berkeley, said, “Contrary to what its name suggests, the ICOC is neither ‘independent’ of interest-group politics nor does it include any ‘citizen’ members. Hard- driving university scientists, disease group advocates and private industry executives who will make up the ICOC all have vested interests in how the money is to be used.”

A sampling of conflicts
The California Stem Cell Report, which calculated the percentage of awards linked to institutional directors, has chronicled the conflicts issues at CIRM over the past 15 years. In 2012, its analysis showed that 92 percent of awards had been collected by institutions tied to past and present directors. The figure dropped to 79 percent by this summer as the types of grantees have widened. Here is a sampling of conflict issues that have surfaced publicly over the years.

In 2007, violations involving five board members resulted in voiding applications from 10 researchers seeking $31 million. The applications included letters of support signed by deans of medical schools who also sat on the CIRM board of directors. Directors are barred from attempting to influence a decision regarding a grant. The agency blamed its employees for the problem.

In 2008, public complaints by one applicant from industry about conflicts of interest on the part of a reviewer were briefly aired at a public board meeting. The then chair of the CIRM board, Robert Klein, told the applicant the board needed instead to discuss naming CIRM-funded labs and then go to lunch. CIRM later refused to release the letter from the applicant detailing the problem.

In 2009, board member John Reed, then CEO of the Sanford-Burnham Institute, was warned by the state’s Fair Political Practices Commission about his violation of conflict of interest rules. Reed intervened with CIRM staff on behalf of a $638,000 grant to his organization. Reed took his action at the suggestion of then CIRM Chair Klein, an attorney who led the drafting of Proposition 71.

Also in 2009, then board member Ted Love, who had deep connections in the biomedical industry, served double duty for the agency. He was the interim chief scientific officer and helped to develop the agency’s first, signature $225 million disease team round while he was still serving on the board. As chief scientific officer, Love would have had access to proprietary information and trade secrets in grant applications.

When questioned, CIRM said that Love would serve only as a part-time advisor to the agency president, not as chief scientific officer. Nonetheless, in 2012, the board adopted a resolution with high praise for Love and his performance specifically as the chief scientific officer.

Beginning in 2010, a stem cell firm, iPierian,Inc., whose major investors contributed nearly $6 million to the ballot measure that created the stem cell agency, received $3.9 million in awards from the agency. The contributions were 25 percent of the total in the campaign, which was headed by Bob Klein. (See here and see here.)

In 2011, the chairman of the CIRM grant review group resigned from his position as the result of another violation, which the agency felt necessary to report to the California legislature. John Sladek, former president of Cal Lutheran University in Los Angeles, co-authored scientific publications with a researcher who was listed as a consultant on a CIRM grant application.

In 2012, StemCells, Inc., was awarded $40 million by the CIRM board despite having one of its $20 million applications rejected twice by grant reviewers. The action came after the board was vigorously lobbied by Klein, who had left his post as chair the previous year. Klein, who ran the Proposition 71 campaign, had campaign connections to researcher Irv Weissman of Stanford, who founded StemCells, Inc., and was on its board. Weissman was featured in a TV campaign ad for Proposition 71 and helped to raise millions for the 2004 ballot campaign.

The StemCells, Inc., awards were the first time that CIRM had approved that much money for one company, and the first time Klein lobbied his former board.

In 2012, an incident surfaced that illustrated how non-profit, disease-oriented organizations sometimes expect increased funding as the result of the appointment of sympathetic individuals to the board. That occurred when Diane Winokur was appointed to the board as a patient advocate. The chief scientist for The ALS Association, said Winokur will be “a tremendous asset in moving the ALS research field forward through CIRM funding.”

The IOM study identified as a problem the personal conflicts of interest involving the 10 patient advocates on the board. It said, “(P)ersonal conflicts of interest arising from one’s own or a family member’s affliction with a particular disease or advocacy on behalf of a particular disease also can create bias for board members.”

In 2013, internationally renowned scientist Lee Hood, winner of a National Medal of Science, violated the conflict of interest rules of the California stem cell agency when he was involved in reviewing applications in a $40 million round to create genomics centers in California. The conflict involved connections between Hood, Weissman and Trounson. It was not discovered by the agency during the closed-door review and was raised by another reviewer at the end of the review. The review had to be redone later in the year.

Hood never commented publicly, but CIRM said he acknowledged the conflict.

In January 2014, the genomics round surfaced again. The applications were by then before the CIRM board for public ratification of reviewers’ decisions. The reviewers’ actions are taken behind closed doors with no public disclosure of reviewers’ personal, professional or economic conflicts.

The genomics round riled some researchers who complained publicly in letters to the agency’s board about unfairness, apparent preferential treatment and manipulation of scores.

Only seven of the 29 members of the 29-member board could vote on the applications. Conflicts of interest and CIRM rules barred the rest from voting. The final vote on the award was 6-1 for a group led by Stanford. Two years earlier, however, when the “concept” plan was approved by the CIRM board, no directors were disqualified, even though some of their institutions were likely to benefit. The plan was approved on a show of hands. The transcript of the meeting does not indicate any negative votes or absentions.

The hidden review process
Under CIRM’s rules, the scientists who review the applications must come from out-of-state. They do not have to disclose publicly their economic, personal or professional conflicts despite the fact that they make the de facto decisions on the applications. The board rubber stamps nearly all of the reviewers’ actions to approve funding. A CIRM examination of the practice in 2013 showed that 98 percent of reviewers’ decisions were ratified by the board. Since then, the agency has not produced a similar report. Occasionally, however, the board will approve an application that was not recommended for funding.

The CIRM governing board has resisted requiring public disclosure of the interests of reviewers. The subject has come up several times, but board members have been concerned about losing reviewers who would not be pleased about disclosing their financial and other interests.

Nonetheless, public disclosure of economic interests among researchers is routine in scientific research articles. Many universities, including Stanford, also require public disclosure of financial interests of their researchers.

At the time of Hood-Weissman-Trounson flap, Stanford’s policy said, “No matter what the circumstances — if an independent observer might reasonably question whether the individual’s professional actions or decisions are determined by considerations of personal financial gain, the relationship should be disclosed to the public during presentations, in publications, teaching or other public venues.”

Proposition 71 placed the legal authority for grant approvals in the hands of the CIRM board. Traditionally in the world of science, other scientists (“ peer reviewers”), however, are deemed to be the most capable of making the scientific decisions about grant applications. The traditional practice calls for the reviewers to be anonymous and meet in private, which is also CIRM’s practice.

If the CIRM board concedes the decisions to the grant reviewers, state law is likely to require public disclosure of their financial interests, a move that the board has opposed for years. Former CIRM Chairman Klein repeatedly advised the board during its public grant approval processes that reviewers’ actions were only ”recommendations,” and that the board was actually making the decisions.

Proposition 14 implicitly recognizes, however, that a problem exists with directors approving “concept” plans for awards that could benefit their institutions.

To ease that problem legally, Klein inserted language in the new proposition that excludes adoption of “strategic plans, concept plans and research budgets” from being considered as matters involving conflicts of interest.

The measure does nothing to deal with matters involving the de facto, closed-door approval of awards by researchers who are unknown to the public and who do not have to publicly disclose their interests.

At the time the IOM report was released nearly eight years ago, some board members complained that its recommendations were unrealistic because of the likely, lengthy difficulties of altering a state law that had been created by the initiative. But since then, directors have not asked state lawmakers to change the structure of the board or to comply with the other $700,000 worth of IOM recommendations.

CIRM directors, however, missed an opportunity last year to seek conflict-easing changes through the $5.5 billion stem cell measure now on the ballot, Proposition 14.

Some board members have said they discussed the initiative privately with Bob Klein, who crafted the proposal last year.

Revision of CIRM’s conflict rules was discussed at a board meeting in May 2019. Several board members expressed concerns about the loss of valuable insights from board members who cannot vote on applications. Some also expressed concerns about whether loosening the rules would damage the possibility of voter approval of a ballot measure to refinance the agency. Several, including CIRM Chair Thomas, also said “there’s never been a conflict” involving a funding award and a board member. No action involving conflicts was taken at the meeting.
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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 thousands of items on California stem cell matters in the past 15 years. This story is an excerpt from his book, California’s Great Stem Cell Experiment: Inside a $3 Billion Search for Stem Cell Cures, which is available for pre-order on Amazon.