California Stem Cell Chief Says He Was Unaware of Personal Attack on Lawmaker

Robert Klein, chairman of the $3 billion California stem cell agency, today said he was "completely unaware" of the personal attack on a California state lawmaker by his lobbying group, Americans for Cures.

Klein, who is president of Americans for Cures, said he had "great personal respect" for Sen. Sheila Kuehl, D-Santa Monica, the object of the attack. Kuehl, a respected California lawmaker and chair of the state Senate Health Committee, drew the ire of Americans for Cures because of her legislation aimed at ensuring affordable access to taxpayer-financed stem cell therapies.

In a statement to the California Stem Cell Report, Klein praised Kuehl's "intellectual strength" and leadership. Here is the text of what Klein sent the California Stem Cell Report:

"Dear David,

"Theoretically, I have been on vacation since Tuesday morning, July 8th, but I gave up my vacation last night and came back to CIRM to deal with misinformation regarding my personal position on SB 1565. As I stated at the Controller’s financial oversight committee meeting on Monday, July 7th, I have great personal respect for Senator Kuehl, including most recently her leadership on the effort to create universal healthcare coverage. On Monday, I made it clear that I have deep respect for her intellectual strength in the healthcare area, and that the ICOC’s position is a substantive policy disagreement. The ICOC has taken the position that the complexity of the stem cell therapy area may not permit simple pricing formulas and the agency needs discretion in adapting to the 70 areas of possible stem cell therapies for chronic disease and injury. I also emphasized on Monday that the ICOC is committed to the same goals as Senator Kuehl in obtaining the lowest possible price for state and local government public providers in California.

"The language in the bill addressing embryonic stem cell research, I think, is being interpreted very differently by the ICOC and Senator Kuehl. We are very concerned about the message this type of an amendment would send within California and nationally, and we do not believe that the message would be consistent with the best scientific and medical knowledge at this time.

"As always, I am happy to discuss this with you further. I wanted to make sure you knew right away that I was completely unaware of the blog entry. I have requested that the Daily Kos entry associated with Americans for Cures be deleted from the site because it did not receive clearance from senior members of the organization, and it did not properly reflect the organization’s views on Senator Kuehl.

"Bob Klein"

Klein's Lobbying Group Apologizes for Blistering Attack on Kuehl

The lobbying group controlled by Robert Klein, chairman of the California stem cell agency, today apologized to state Sen. Sheila Kuehl for the personal attack on her that it published on the influential national political blog, the Daily Kos.

The co-executive directors of Americans for Cures, Amy Daly and Constance McKee, said the language in the item, which included such terms as "dumb," "craven" and "ignorant," was inappropriate. Daly said the item had been removed from the Daily Kos.

Here is the text of their apology, which they asked the California Stem Cell Report to run.

"To all who have read the Americans for Cures diary posted on DailyKos regarding SB 1565:

"We write to offer a formal apology to Senator Kuehl and her supporters. This posting did not go through our normal review clearances. The choice of language was inappropriate and did not reflect the respect that senior members of the organization have for Senator Kuehl.

"We have always appreciated her efforts and were disappointed that her single payer plan was not implemented. She has historically been a great health care advocate for the people of California. This is why it has been so frustrating to us that she is working with Senator Runner – who is strongly anti-embryonic stem cell research – to implement a bill that could frustrate efforts to get stem cell therapies to patients.

"We were wrong in our characterization of her. We have been working hard to educate everyone about the perils of this bill. No one is questioning it precisely because Senator Kuehl has been such an effective advocate. Our frustrations prevented us from using good judgment in our post, and we apologize profusely for our insensitive and unwarranted remarks.

"It should be noted that Bob Klein was completely unaware of our actions on this. We have not spoken to him or met with him in well over two weeks. I’m certain that he is as disappointed in our judgment as you, and we, are.

"Please forgive us and please put the blame for this where it belongs – on Americans for Cures Foundation staff involved in this individual posting – not on Bob Klein. Americans for Cures Foundation has learned from this experience and will re-institute the tight control it has historically had over its postings.

"Sincerely,

"Amy Daly & Constance McKee"

Consumer Watchdog Says Klein Should Resign Because of Personal Attack on Lawmaker

The Consumer Watchdog organization today called for the resignation of Robert Klein as chairman of the $3 billion California stem cell agency after his private lobbying group called a respected state senator "dumb" and "craven."

John M. Simpson, stem cell project director for Consumer Watchdog, a nonprofit Santa Monica, Ca., organization, said the attack was an inappropriate "over-the-top, hysterical call to battle."

Writing on the group's blog, Simpson referred to the Internet posting Thursday by Americans for Cures, Klein's stem cell lobbying group, on the Daily Kos, a widely read and influential political blog.

Americans for Cures targeted Sen. Sheila Kuehl, D-Santa Monica, and her legislation – SB 1565 – which is designed to ensure affordable access to any therapies that result from taxpayer-financed stem therapies. Simpson wrote:

"One can oppose the bill without launching personal attacks and suggesting the sky is falling. For the most part, the board members and agency's staff have followed that policy. But Klein insists on wearing two hats: ICOC(CIRM's board of directors) chairman and president of his advocacy group.

"The positions are incompatible. Since Klein refuses to give up the advocacy role, he must step down from his public position as head of a state agency. Failure to do so undermines the stem cell agency's credibility and ability to do its vital work."

Simpson summarized the legislation:

"It puts in statute regulations CIRM itself developed governing access to drugs by the uninsured; it lowers the vote of the scientific working group necessary to recommend funding non-embryonic stem cell research from a two-thirds majority to a simple majority; and it asks the state's non-partisan Little Hoover Commission to study the governance structure of the agency."

Kuehl's aides have been working with CIRM staffers to deal with the agency's official objections. Earlier this week, Kuehl amended her measure to deal with CIRM concerns. But Klein's lobbying group says the bill is unacceptable in "any form."

We have asked CIRM and Kuehl's office if they have any comment on the posting by the Klein group. We have not received a response, but will carry their comments should they make any.

Klein's Group Says Kuehl is Ignorant or Mindless or Craven and Dumb

Using the influential national political blog, the "Daily Kos," the private lobbying group of the chairman of California's $3 billion stem cell agency today filed a sharp, personal attack on a Democratic state legislator who is seeking to ensure the affordability of stem cell therapies financed by taxpayers.

Americans for Cures, whose president is Robert Klein and who also serves as chairman of CIRM, wrote an item for Daily Kos which took on highly respected California state Sen. Sheila Kuehl(see photo), D-Santa Monica, co-author of SB 1565, the affordability legislation in question. The Daily Kos is one of the more widely read political blogs in the nation. According to its web counter, it had 899,000 page views today.

The Daily Kos piece, which did not identify the specific author of the article but only attributed it to Klein's group, said,

"Either Kuehl is ignorant on the science, or mindlessly buying into Republican and anti-cures messaging from the Catholic Church, or playing dumb in a craven attempt to get Republican votes to back her legacy as defender of the poor."

Kuehl heads the Senate Health Committee and has been a leader on a variety of issues, including universal health care. A graduate of the Harvard Law School, she has been cited by Capitol insiders as one of the more intelligent lawmakers in Sacramento.

Late last month, at a meeting chaired by Klein, CIRM directors formally opposed SB 1565 but indicated that they wanted to continue to work with Kuehl to resolve differences. Klein's lobbying group, however, was unbending. It referred to "legislative dirty tricks." It called Kuehl's legislation "a thinly veiled ploy to stop embryonic stem cell research in California." Klein's group said,

"California is an example of what we’re seeing all across America.  Anti-cures forces are stepping up state-based legislative dirty tricks to pass 'personhood' laws that would discourage or criminalize stem-cell research.  If this sounds like the pro-life strategy that successfully undercut federal support for reproductive rights, you’re connecting the dots.  Anti-cures legislation is popping up all over America right now, in anticipation of a loosening of restrictions on hESC in January 2009."

Klein's group said,

"We speak for advocates whom Kuehl claims to represent. Our focus is on cures, not legacy.  We understand that private capital will lead science to the marketplace."

Klein's group declared,

"SB 1565 should not be passed in any form."

Klein's Lobbying Group Waging Cyberspace, Patient-Advocate Battle Against SB 1565

The private stem cell lobbying group controlled by Robert Klein, who is also chairman of the state of California's $3 billion stem cell agency, has launched a major campaign to kill legislation aimed at ensuring affordable access to therapies financed by the agency.

The group is Americans for Cures, which denies that it engages in lobbying. Klein (see photo) is its president, a very unusual position for a top government official. Americans for Cures shares the same address as Klein's real estate investment banking firm in Palo Alto, Ca.

Via the Internet, the group is marshalling patient advocates and stem cell research backers to write, phone, email and personally appear in Sacramento to defeat the legislation. Sample scripts are provided along with names, phone numbers and email addresses of lawmakers.

Its email message to supporters says:

"We need you to take a few minutes to help save the California Institute for Regenerative Medicine and embryonic stem cell research in California.  This is under siege right now in the state legislature."

Americans for Cures is targeting SB 1565 by Sens. Sheila Kuehl, D-Santa Monica, and George Runner, R-Antelope Valley. It sailed easily through the Senate and comes before the Assembly Appropriations Committee on July 16. No state lawmaker has voted against it.

Assuming the bill clears the committee next week, it then faces Assembly floor action and would return to the Senate for concurrence in Assembly amendments before going to the governor for his signature, which is by no means assured.

Also linked to the Americans for Cures effort is patient advocate Don Reed of Hayward, Ca., who is vice president of the group. Reed has appeared personally in the Capitol to oppose the bill, but says he is doing so as a private individual. Reed is also one of the most regular attendees at CIRM's public meetings, testifying on almost every occasion.

Reed wrote recently on his blog, stemcellbattles.com, that passage of the bill is a retirement "gift" by lawmakers to Kuehl, who is barred from running again for legislative office because of term limits. Reed said that personally he regards passage of the measure as akin to "getting an arm chopped off in a sword battle."

Klein's private political activities and lobbying efforts fouled relations with the legislature as early as 2005. At one point, CIRM directors moved the agency's legislative unit out from under Klein's control. Relationships improved, but Klein now has a firm grasp on the agency's dealings with lawmakers.

Activities of Klein's group have also lead to public confusion about its relationship to the official state agency. At one point in 2007, Americans for Cures (then operating with a different name) called a news conference for CIRM. The agency staff did not learn about the news conference until it was disclosed on the California Stem Cell Report. This week, Wesley J. Smith, a lawyer, author and foe of hESC research, incorrectly attributed language from Americans for Cures to CIRM. He said CIRM is "is wailing and gnashing its teeth that the very existence of the CIRM is threatened." His error has been picked up by at least one other web site(a religiously oriented foe) and probably more.

CIRM has never officially commented substantively on Klein's lobbying group, and Klein does not see the activity as a conflict with his government duties. Nonetheless, the priorities of Americans for Cures are not necessarily the same as those of a government agency, whose first responsibility is to the public – not industry, not patient advocates and not researchers.

(The item below contains the text of the email being sent out to drum up opposition to Kuehl's bill. The copy was sent to us by an interested party who must remain anonymous.)

(Editor's note: An earlier version of this item indicated that Smith's opposition to hESC research is religiously based. He says he "does not argue from religion or get into it."

Text of Americans for Cures Email and Links to Its Position

Here is a partial text of the email message from the Americans for Cures campaign against SB 1565, minus much of its html coding.

Here also are links to Cures' one-page analysis of the bill and its full analysis, its home page pitch on SB 1565 and other material.

Subject: Action Alert: Last Chance to Stop Restrictions on Research

We need you to take a few minutes to help save the California Institute for Regenerative Medicine and embryonic stem cell research in California.  This is under siege right now in the state legislature.  A few weeks ago, we failed to stop Senate Bill 1565 (Kuehl-Runner).  The bill was passed by the Senate, and has now also passed through two Assembly Committees: Health and Judiciary. The final step before a floor vote is a hearing in the Assembly Appropriations Committee (contact information below). We need you to act now and ask for a NO vote on SB 1565. Here's how:
1.Please call the Appropriations Committee at (916) 319-2081 and fax the Committee at (916) 319-2181.
2.Please email us to add your name to our listof those who oppose SB 1565.
3.Please call/fax/write as many of the Committee Members as you can.
4.Please call/fax/write your own Assembly Member. (To find your Assembly Member or State Senator, please click here and enter your address.)
5.Please see below for a script/sample email.

The Appropriations Committee will hear the bill on July 16, and so we need your help right now. If you live near Sacramento, please consider joining us in person to stand up for this research. (Let us know if you can be there we'll keep you updated on time and place.)

Over seven million voters expressed a desire to fund embryonic stem cell research when they passed Proposition 71. SB 1565 would remove the built-in preference for embryonic stem cell research - directly contradicting the will of Californians.

We passionately support the goal of healthcare that is accessible and affordable to all Californians. However, this bill will discourage private industry from developing therapies and cures. Currently, the law allows the California Institute of Regenerative Medicine (CIRM) to provide companies with additional incentives to develop therapies for "orphan" diseases such as cystic fibrosis and Lou Gehrig's disease. SB 1565 will eliminate these incentives, making it financially unfeasible for companies to pursue therapies for rare diseases. SB 1565 abandons these patients and their families.  
  
If SB 1565 passes, entrepreneurs and private capital will likely remain on the sidelines in the fight for cures. That means a delay in developing cures and therapies; even worse, therapies for some conditions may never be developed.  
  
Opposing SB 1565 keeps therapy development on the fastest track for cures.  
Opposing SB 1565 is the best vote for taxpayers because new therapies can reduce direct and indirect economic costs.  
Opposing SB 1565 is the best vote for families and patients who suffer every day from devastating chronic conditions.  

We must accelerate investment in CIRM technologies for the benefit of everyone. And that is why we need you to call now.
 
1.Please call the Appropriations Committee at (916) 319-2081 and fax the Committee at (916) 319-2181.
2.Please email us to add your name to our list of those who oppose SB 1565.
3.Please call/fax/write as many of the Committee Members as you can.
4.Please call/fax/write your own Assembly Member. (To find your Assembly Member or State Senator,  please click here and enter your address.)
5.Ask your friends and family to do the same.
6.After you have done your best to stop SB1565, please let us know what you were able to accomplish. (inform@americansforcures.org)

Thank you for being on the frontlines in the fight for cures.
  

Warm regards,
Amy & Constance
  

For a full analysis of the bill and its negative impacts, please click here .
  

Sample Script/Email:
 

Hello, my name is ______________, and I live in ____, CA.  I am calling/writing to urge Assembly Member __________ to oppose Senate Bill 1565 in the Appropriations Committee and on the floor.  SB 1565 will remove CIRM's funding preference for embryonic stem cell research and will delay the development of emerging medical treatments that have the potential to help millions of Californians and people around the globe.  SB 1565 will price-fix technologies not yet in existence. It will discourage investment in vital stem cell research and cures.  We must stay on track to develop these lifesaving treatments, and for that, I am asking for your NO vote on SB 1565.  Thank you.  
  


Assembly Committee on Appropriations
      
  Committee Members   District   Phone   Fax   E-mail   
  
  Mark Leno - Chair     Dem-13   (916) 319-2013   (916) 319-2113     Assemblymember.leno@assembly.ca.gov   
  
  Mimi Walters - Vice Chair     Rep-73   916) 319-2073   (916) 319-2173     Assemblymember.walters@assembly.ca.gov   
  
  Anna M. Caballero     Dem-28   (916) 319-2028   (916) 319-2128     Assemblymember.Caballero@assembly.ca.gov   
  
  Mike Davis     Dem-48   (916) 319-2048   (916) 319-2148     Assemblymember.Davis@assembly.ca.gov    
  
  Mark DeSaulnier     Dem-11   (916) 319-2011   (916) 319-2111     Assemblymember.DeSaulnier@assembly.ca.gov   
  
  Bill Emmerson     Rep-63   (916) 319-2063   (916)319-2163   Assemblymember.emmerson@assembly.ca.gov   
  
  Warren T. Furutani     Dem-55   (916) 319-2055   (916) 319-2155     Assemblymember.Furutani@assembly.ca.gov   
  
  Jared Huffman     Dem-6   (916) 319-2006   (916) 319-2106     Assemblymember.Huffman@assembly.ca.gov   
  
  Betty Karnette     Dem-54   (916) 319-2054   (916) 319-2154   Assemblymember.Karnette@assembly.ca.gov   
  
  Paul Krekorian     Dem-43   (916) 319-2043   (916) 319-2143   Assemblymember.Krekorian@assembly.ca.gov   
  
  Doug La Malfa     Rep-2   (916) 319-2002   (916) 319-2102     Assemblymember.lamalfa@assembly.ca.gov   
  
  Ted W. Lieu     Dem-53   (916) 319-2053   (916) 319-2153     Assemblymember.Lieu@assembly.ca.gov   
  
  Fiona Ma     Dem-12   (916) 319-2012   (916) 319-2112   Assemblymember.Ma@assembly.ca.gov   
  
  Alan Nakanishi     Rep-10   (916) 319-2010   (916) 319-2110   Assemblymember.nakanishi@assembly.ca.gov   
  
  Pedro Nava     Dem-35   (916) 319-2035   (916) 319-2135     Assemblymember.nava@assembly.ca.gov   
  
  Sharon Runner     Rep-36   (916) 319-2036   (916) 319-2136     Assemblywoman.Runner@assembly.ca.gov   
  
  Jose Solorio     Dem-69   (916) 319-2069   (916) 319-2169   Assemblymember.solorio@assembly.ca.gov     


 
       
  Authors   District   Phone   Fax   E-mail   
  Senator Sheila Kuehl     Dem-23   (916) 651-4023   (916) 324-4823   senator.kuehl@sen.ca.gov   
  Senator George Runner     Rep-17   (916) 651-4017   (916) 445-4662   Via website: http://cssrc.us/web/17/contact_us.aspxhttp://cssrc.us/web/17/contact_us.aspx

Nosing Around for Stem Cell Millions

More camels are trying to crawl into the hundred-million-dollar, California stem cell supplier tent.

But just how many and which camels ultimately will end up enjoying the bounty of the Golden State is very much up in the air.

Both the state's $3 billion stem cell agency and the California Legislature have different approaches to defining California supplier for the purposes of research funded by CIRM. Prop. 71 requires CIRM grant recipients to give purchasing preference to California businesses. However, the measure failed to define exactly what a California supplier is.

So nearly four years after passage of Prop. 71, the state is trying to deal with the issue. The question drew a small platoon of business representatives to the two-day meeting last week of the board of directors of the agency. The meeting ran long and no resolution appeared imminent, so there was little public testimony but plenty of private discussions.

CIRM, the various interested parties and a representative from the office of Assemblyman Gene Mullin, D-San Mateo, basically said they need more time to negotiate the issue and talk with each other.

Mullin's supplier definition bill, AB 2381, is now before the Senate Appropriations Committee after easily winning Assembly approval. The measure was originally supported by Invitrogen, which has now backed away. Instead, it is supported by Becton, Dickinson and Co., ThermoFisher Scientific and the Advanced Medical Technology Association.

Here is the key wordage in the July 2 version of the measure. Following that language is the last available public language from CIRM. Be aware that these definitions could change with rapidity. If you want to have a hand in the debate, contact Mullin's office and CIRM soon.

"'California supplier' means any sole proprietorship, partnership, joint venture, corporation, or other business entity that meets any of the following criteria:
"(A) The owners or policymaking officers are domiciled in California and the permanent, principal office or place of business from which the supplier's trade is directed or managed is located in California.
"(B) A business or corporation, including those owned by, or under common control of, a corporation, that meets all of the following criteria:
"(i) Has owned and operated a manufacturing facility or research facility located in California that researches, develops, builds, or manufactures products for life sciences research, continuously during the five years prior to submitting a bid or proposal to provide supplies to a California Institute of Regenerative Medicine (CIRM) grantee.
"(ii) Has been licensed by the state on a continuous basis to conduct business within the state during the five years prior to submitting a bid or proposal to provide supplies to a CIRM grantee.
"(iii) Has continuously employed California residents for work within the state during the five years prior to submitting a bid or proposal to provide supplies to a CIRM grantee.
"(C) The entity produces, builds, or manufactures a product or products in California and for the specific product or products that are used by CIRM facilities grantees.
"(2) For purposes of qualifying as a California supplier, a distribution or sales management office or facility does not qualify as a manufacturing or research facility."

Here is the CIRM language from last week:

"'California supplier' means any sole proprietorship, partnership, joint venture, corporation, or other business entity:
"(1) whose permanent, principal office or place of business from which the supplier’s trade is directed or managed is located in California; or
"(2) that includes a business unit, division or subsidiary whose permanent principal office or place of business from which the unit, division or subsidiary’s trade is directed or managed is located in California, for the specific product or products that are sold by the unit, division or subsidiary to CIRM grantees; or
"(3) that employs at least one-third of its total employees in California; or
"(4) that produces, builds, or manufactures a product or products in California for the specific product or products that are sold to CIRM grantees; or
"(5) that sells a product or products in California, for the specific product or products that are sold to CIRM grantees, so long as the supplier certifies that at least 50% of the cost of the product is attributable to activity undertaken in California."

Kuehl on Klein Salary and CIRM Legislation Prospects

California state Sen. Sheila Kuehl says she doesn't mind if the chairman of the $3 billion California stem cell agency solicits private funds to pay his own salary, although she says the agency should be barred from accepting cash from applicants.

However, the question of private solicitation for salaries is probably moot. CIRM Chairman Robert Klein has told John M. Simpson, stem cell project director for the Consumer Watchdog group, that he has backed away from the solicitation plan. Simpson told the Etopia News Channel Wednesday that Klein now thinks his proposal is not a good idea.

Kuehl, D-Santa Monica, heads the state Senate Health Committee and is co-author of legislation, SB 1565, aimed at ensuring affordable access to CIRM-financed therapies. CIRM directors officially opposed the legislation last week.

She made her comments regarding Klein in an interview with Etopia News. She also said she is "very satisfied with the progress" of CIRM. On the federal level, she said that changing federal restrictions on funding for human embryonic stem cell research may not even be in the top 10 priorities of Barack Obama.

Kuehl said he has heard "no negatives" from the governor's office on her CIRM bill, which is now in the Assembly Appropriations Committee and close to final passage. Unless Big Pharma bends the governor's ear, she expects the measure to be signed into law.

The bill has had easy going in the legislature. No lawmaker has voted against it.

You can hear Kuehl's 19 minute interview here.

The Multi-Million Supplier Debate: CIRM's Current Definition

The California stem cell agency today posted its latest crack at defining which California businesses receive a preference in terms of purchases by recipients of the agency's roughly $3 billion in grants.

Discussion of the definition will come up at tomorrow's meeting of the CIRM board of directors but do not expect any final resolution. California lawmakers have their own thoughts about the matter. Their decision will take precedent over the wishes of CIRM if the legislators have enough votes.

Here is the key portion of the latest CIRM definition of California supplier, which says that it means

"...any sole proprietorship, partnership, joint venture, corporation, or other business entity::

(1) whose permanent, principal office or place of business from which the supplier’s trade is directed or managed is located in California; or
(2) that includes a business unit, division or subsidiary whose permanent principal office or place of business from which the unit, division or subsidiary’s trade is directed or managed is located in California, for the specific product or products that are sold by the unit, division or subsidiary to CIRM grantees; or (3) that employs at least one-third of its total employees in California; or
(4) that produces, builds, or manufactures a product or products in California for the specific product or products that are sold to CIRM grantees; or
(5)that sells a product or products in California, for the specific product or products that are sold to CIRM grantees, so long as the supplier certifies that at least 50% of the cost of the product is attributable to activity undertaken in California."

The material on the CIRM site also shows what language has been changed.

Klein's Lobbying Group Opposes Affordable Access Bill

The private stem cell lobbying group run by Robert Klein, who also serves as chairman of the $3 billion state stem cell agency, is formally opposing legislation aimed at ensuring that state-financed therapies are affordable and accessible to Californians.

The opposition of Americans for Cures was noted today in the legislative staff analysis of SB1565 by Sen. Sheila Kuehl, D-Santa Monica, and Sen. George Runner, R-Antelope Valley.

The legislation cleared the Assembly Judiciary Committee today on a unanimous vote. No lawmaker has voted against the proposal in either house. It now goes to the Assembly Appropriations Committee and from there to the Assembly floor. It has already passed the state Senate.

The staff analysis said that Klein's group, Americans for Cures,

"...believe that access and affordability are best addressed by creating larger pools of affordable healthcare insurance, and that policies should accelerate cures, rather than discourage them. It is important to note that the intellectual property provisions in this bill that the opposition contend will create disincentives to commercialize drugs and therapies are very similar to the current and proposed regulations promulgated by the ICOC."

Klein is president of Americans for Cures, which shares the same address as his real estate investment banking firm in Palo Alto, Ca. It is extremely unusual for the head of a state government agency to also lead an advocacy group whose interests are in the same arena as the agency's. Americans for Cures has denied that it is a lobbying group, although it attempts to influence legislation and government decision-makers.

Klein told the Legislative Subcommittee of CIRM's board of directors last week that patient advocacy groups nationwide would be lobbying California legislators on SB1565. It is our recollection that he did not mention the role of his own group, which has nationwide ties with advocacy groups.

The staff analysis also added more information about an independent state body, the Little Hoover Commission, that would be requested under the bill to examine CIRM with an eye to coming up with recommendations, particularly in relationship to the built-in conflicts of interest on its board. The analysis said,

"The Little Hoover Commission is uniquely positioned to review conflicts and make recommendations for improved governance.

"An independent state oversight agency established in 1962, the Little Hoover Commission's role differs in three distinct ways from other state and private-sector bodies that analyze state programs. Unlike fiscal or performance audits, the Little Hoover Commission's studies look beyond whether programs comply with existing requirements, instead exploring how programs could and should function in today's world. The Little Hoover Commission produces reports that serve as a factual basis for crafting effective reform legislation and follows through with legislation or administrative changes to implement its recommendations.

"In addition to the public hearings the Little Hoover Commission holds to develop findings and recommendations, hearings are held and progress reports are issued in the years following the initial report until the Little Hoover Commission's recommendations have been enacted or its concerns have been addressed. These processes uniquely position the Little Hoover Commission to review possible conflicts and make recommendations for improved governance of CIRM and the ICOC, thus helping ensure better accountability to Californians for their $6 billion investment."

At its meeting Thursday and Friday, the board of directors of CIRM is expected to formally oppose SB1565.

Defining Which Businesses Get an Edge in CIRM Research Purchases

The "five-year threshold" language in the California supplier bill dealing with CIRM-funded research is now available online.

For those of you who don't want to click through, here is the text in question:

"'California supplier' means any sole proprietorship, partnership, joint venture, corporation, or other business entity that meets any of the following criteria:
"(A) The owners or policymaking officers are domiciled in California and the permanent, principal office or place of business from which the supplier's trade is directed or managed is located in California.
"(B) A business or corporation, including those owned by, or under common control of, a corporation, that meets all of the following criteria:
"(i) Has owned and operated a manufacturing facility or research facility located in California that researches, develops, builds, or manufactures products for life sciences research, continuously during the five years prior to submitting a bid or proposal to provide supplies to a California Institute of Regenerative Medicine (CIRM) grantee.
"(ii) Has been licensed by the state on a continuous basis to conduct business within the state during the five years prior to submitting a bid or proposal to provide supplies to a CIRM grantee.
"(iii) Has continuously employed California residents for work within the state during the five years prior to submitting a bid or proposal to provide supplies to a CIRM grantee.
"(C) The entity produces, builds, or manufactures a product or products in California and for the specific product or products that are used by CIRM grantees.
"(2) For purposes of qualifying as a California supplier, a distribution or sales management office or facility does not qualify as a manufacturing or research facility."

For more on this see this item.

Will CIRM Directors Fulfill Prop. 71 Promises?

SAN FRANCISCO -- The California stem cell agency is maintaining a "watch" position on legislation aimed at pushing it into compliance with a state law that could mean hundreds of millions of dollars for California businesses.

At issue is a requirement in Prop. 71 – ballyhooed during the 2004 campaign – that CIRM set standards to ensure that the recipients of nearly $3 billion in grants purchase goods and services from California suppliers "to the extent reasonably possible."

Those standards still have not been set, nearly four years after creation of the stem cell agency. Because of the delay, some biotech companies and lawmakers pressured the agency earlier this year to move more rapidly. To make it clear that they were serious, legislation was introduced setting the standards in state law in the absence of CIRM setting its own standards through regulation.

That bill, AB 2381 by Assemblyman Gene Mullin, D-San Mateo, has easily passed the Assembly and is now before the Senate Health Committee on Wednesday, where it is virtually certain to pass.

On Friday, the Legislative Subcommittee of the CIRM board of directors discussed Mullin's bill, ultimately deciding to continue to watch its progress. The discussion was a bit muddled because Mullin proposed changes in the legislation only a few days before the Friday meeting. They involve a "five-year threshold" for suppliers, but no text of the proposed changes was available at the San Francisco CIRM headquarters. One Sacramento-area teleconference location, however, seemed to have a copy of the latest proposal. No members of the public had access to the Mullin changes.

CIRM Chairman Robert Klein said a five-year threshold for suppliers would discourage companies from moving to California as well as putting new companies at a disadvantage.

CIRM director Susan Bryant, from a teleconference location at UC Irvine, read other suggested "supplier" language from the University of California system. Again, no text was available at the meeting site at CIRM headquarters.

Meanwhile, it was disclosed during the meeting that James Harrison, outside attorney for CIRM, has begun work on separate standards for suppliers and grant recipients involved in the agency's $1.1 billion lab construction effort. Speed is critical in that effort because recipients are required to complete their lab buildings in two years or face penalties.

Later this week, CIRM directors will address the supplier questions during their meeting in Burlingame, Ca. No background information or text of what they are to consider is yet available to the public on the agenda for the meeting, which begins in two days.

CIRM Directors Nix Kuehl Legislation

SAN FRANCISCO -- The California stem cell agency is preparing to oppose legislation designed to ensure that Californians have affordable access to therapies developed with taxpayer funds.

Too restrictive and premature. That was the sentiment at today's meeting of the Legislative Subcommittee of the board of the directors.

They were talking about SB1565 by Sen. Sheila Kuehl, D-Santa Monica, and Sen. George Runner, R-Antelope Valley. The measure has passed the Senate and faces a hearing in the Assembly Judiciary Committee. No lawmaker has voted against the bill.

Directors pointed out that they already have an affordable access plan in place in their regulations for CIRM-financed therapies. They argued that the legislation would require each product to go before the legislature to determine a price.

Kuehl's measure is a response in part to widespread consumer unhappiness with the high cost of health care and industry pricing of therapies. But Claire Pomeroy, a CIRM director and dean of the UC Davis School of Medicine, said that CIRM's policy "cannot overcome the dysfunction" of the healthcare system. She said the legislature should give CIRM "the opportunity to do the right thing."

CIRM President Alan Trounson said that locking affordability provisions into state law would cripple CIRM's ability to negotiate prices and drive the industry away from developing therapies for diseases with small numbers of patients.

CIRM directors also reacted sharply to a provision in the Kuehl/Runner bill that would make it easier for CIRM to finance research that does not use human embryonic stem cells. The provision seems to play into the hESC vs. adult stem cell debate. CIRM Chairman Robert Klein said that Runner said the change was "very important" to Republican members of the state Senate.

Presumably, recent research developments that demonstrated that adult stem cells can be reprogrammed to take on the pluripotent characteristics of hESC lie behind the proposed change. However, directors said much more work needs to be done before that method can be shown to provide cells that truly match the characteristics and usefulness of embryonic stem cells.

Kuehl's bill also would request a study of CIRM by an independent body that would report back to the legislature next year at this time with recommendations for changes, including dealing with the built-in conflicts of interest at CIRM. One CIRM director is currently under investigation for violating the state's conflict of interest laws. And the board of directors is dominated by members from institutions that are benefiting to the tune of hundreds of millions of dollars in research grants.

Directors said that they understood that the state's Little Hoover Commission has already indicated it is going to perform the inquiry, regardless of the fate of the Kuehl bill.

Directors did not have a quorum at today's meeting and thus could not vote on a position on the legislation. However, their sentiments will come before the full board of directors next week, which is certain to oppose the Kuehl measure.

Here is the latest legislative staff analysis of the measure and the CIRM staff analysis, which we should note was well done.

We will have more later on other legislation discussed today by the Legislative Subcommittee.

Coming Up

Directors of the California stem cell agency later today will consider state legislation affecting CIRM. We will have a report on that meeting late this afternoon Pacific Daylight Time.

CIRM Legislation on Affordable Access Moves Forward

Legislation aimed at ensuring affordable access to California-financed stem cell therapies easily cleared the Assembly Health Committee on Tuesday and is headed for a hearing next week in the Assembly Judiciary Committee.

Meanwhile the California stem cell agency has posted its own analysis of the bill, SB 1565 by Sen. Sheila Kuehl, D-Santa Monica, and Sen. George Runner, R-Antelope Valley, setting the stage for CIRM directors to take a position on the proposal.

The vote Tuesday on the bill was 16-0. No lawmaker has voted against the bill as it has moved through the Senate and now in the Assembly. If it clears the next committee, it will go to the Assembly floor, but it will have to return to the Senate for concurrence in Assembly amendments.

The CIRM analysis of the measure did not make a recommendation on approval or support. But it said, among other things,

"SB 1565 appears to tie the price for any and all commercialized products to the lowest pricing based on the current benchmarks of the CalRx program in effect at this time. Any change to that price over time, given any new circumstances, need for flexibility in order to leverage commercialization on products for “orphan diseases” or even for time itself would require a change in statute with more than 70 percent vote of both houses of the Legislature as well as approval by the governor. Any change would further be delayed by a minimum of one year in order to enact authorizing statute."

The analysis also took note of another change in the bill since it cleared the Senate. That amendment would delete a Prop. 71 provision that requires a two-thirds vote of the CIRM grants working group to fund research that does not involve pluripotent or progenitor cells. The Prop. 71 provision is aimed at giving a priority to hESC research.

The bill has also been altered to request, instead of mandate, a study of CIRM by an independent commission with an eye to preparing recommendations for changes in its structure, including its built-in conflicts of interest on its board of directors (ICOC).

According to the Assembly staff analysis of the legislation, its authors believe that "given the ICOC/CIRM's unique formation as a public entity, the public's investment of $3 billion in bond funds, and the close-knit nature of the scientific community, the ICOC and CIRM warrant a high level of scrutiny by an independent body...to ensure public trust and confidence and protect the integrity of the ICOC and CIRM from real or perceived conflicts of interest."

The CIRM Legislative Subcommittee will discuss the bill at its meeting on Friday. Its analysis also discusses two other state measures and links to their text and analysis. However, the CIRM link to the analysis for SB1565 is for an older version of the bill. Here is the link to the latest analysis.

CIRM Directors To Take Crack at Budget and Stem Cell Legislation

Next week, the $3 billion California stem cell agency will air for the first time the proposed spending plan for its upcoming fiscal year, which begins only 11 days following the budget session.

A draft of the proposed budget has not yet been posted on the agency's website for next Thursday's meeting of the Finance Subcommittee of CIRM's directors. The panel has also scheduled an informational presentation on the proposed $500 million biotech loan program, including discussion of "portfolio policies" and use of consultants. Background information on that presentation is also not yet available.

In another meeting next week, the directors' Legislative Subcommittee is scheduled on Friday to consider state legislation aimed at ensuring affordable access to CIRM-financed therapies. That measure, SB1565 by Sen. Sheila Kuehl, D-Santa Monica, and Sen. George Runner, R-Apple Valley, has passed the state Senate and is now before the Assembly Health Committee.

The bill would also require an outside study of CIRM to completed by about this time next year, with recommendations for changes in the agency's structure and procedures.

CIRM has not yet taken a position on the bill, but has opposed similar legislation in the past.

Also up for consideration by CIRM directors is other state legislation (AB2381) aimed at compelling CIRM to follow through on a Prop. 71 requirement to give preferential treatment to California businesses. The bill by Assemblyman Gene Mullin, D-San Mateo, has passed the Assembly and is scheduled to be heard June 25 in the Senate Health Committee, chaired by Kuehl.

CIRM is moving on its own to deal with legislative concerns about failure to comply with Prop. 71, but CIRM's proposal seems to leave the door open to more competition from businesses from out-of-state than Mullin's measure.

Other legislation scheduled to be considered by CIRM directors is AB2663 by Assemblyman Mervyn Dymally, D-Compton, and AB2296, another Mullin bill. The Dymally measure, now in the Assembly Health Committee, would provide for Medi-Cal coverage of stem cell clinical trial expenses, under certain conditions. Mullin's 2296, which passed the Assembly 76-0 and is now before the Senate Judiciary Committee, seeks to deter what its backers believe is an alarming increase in attacks on scientists who use animals in research. The measure is sponsored by the University of California.

CIRM has not posted any proposed positions or analysis of any of the measures. But you can find the latest legislative staff analysis on the bills on the following links: SB1565, AB2381, AB2663, AB2296.

The CIRM committee has also scheduled a "consideration of status" of federal stem cell legislation, including the stem cell bill vetoed by President Bush nearly a year ago.

The main meeting locations of both CIRM committees is San Francisco, but remote teleconference locations are available. For the legislative group, they include Sacramento, Irvine and Elk Grove. For the finance group, they include Pleasanton, Irvine, Berkeley and Carlsbad. The specific addresses can be found via the agenda links in the second and third paragraphs of this item.

Chiang SB 1565 Text: Support for Stricter Oversight

Here is the text of the letter from California's top financial officer, Controller John Chiang, endorsing SB 1565, which is aimed an ensuring affordable access to CIRM-financed therapies. It would also require an independent study of the stem cell agency next year along with recommendations for changes in its operations. The Chiang letter was sent to state Sen. Sheila Kuehl, D-Santa Monica, author of the legislation, which has passed the Senate and is now before the Assembly.

"I write in support of Senate Bill 1565, legislation to help ensure that uninsured and low-income Californians have access to affordable therapies and medications resulting from the State's $6 billion investment in stem cell research. This bill will codify the intellectual property standards for stem cell grant recipients promulgated by the California Institute for Regenerative Medicine (CIRM), requiring each grantee to submit a plan that will afford uninsured Californians access to any drug that is, in whole or in part, the result of research funded by the CIRM.

"SB 1565 also requires the Little Hoover Commission to conduct a study of the governance structure of the California Stem Cell Research and Cures Act. As chair of the Citizens Financial Accountability and Oversight Committee (CFAOC), which was created by Proposition 71 to oversee the finances of the publicly funded stem cell research program, I welcome stricter accountability and oversight in order to ensure the public's confidence in the stem cell program.

"Thank you for introducing SB 1565, and I applaud your efforts to provide Californians with better access to potentially lifesaving research and cures."

CIRM Conflict Legislation Wins Support From Key State Official

California's top financial officer, John Chiang, is backing legislation aimed at dealing with conflicts-of-interest at the state's $3 billion stem cell agency.

Alex Philippidis, editor of the BioRegion News, reported on Monday that state Controller Chiang believes that the bill by Sen. Sheila Kuehl, D-Santa Monica, is the "best hope" for eliminating conflicts of interest at the agency. The legislation, SB 1565, has already cleared the state Senate on a 40-0 vote and is now before the Assembly.

Among other things, it would require the state's Little Hoover Commission to examine CIRM and make recommendations by July 2009 for changes in its structure and operations.

Philippidis quoted Chiang spokeswoman, Hallye Jordan, as saying,

"The controller believes that the public accountability is critical to ensure public confidence in the stem-cell program, that their dollars are being spent on finding cures through stem cell research, rather than benefiting individual biotech companies or institutions that are conducting the research. Transparency and accountability to the public about how their dollars are being spent is important."

Philippidis continued:

"'If the public is not confident that their investment is being adequately protected and that they’re not going to see any financial benefits from the research as promised, then the public is likely going to be less inclined to support funding future research,' Jordan said."

Chiang, a Democrat who was elected in a statewide vote, and John M. Simpson of Consumer Watchdog filed complaints with the state Fair Political Practices Commission last year concerning a violation of CIRM's conflict-of-interest policy. The still-pending case involves CIRM director John Reed of the Burnham Institute, who attempted to influence CIRM staff on behalf of a $638,000 grant to his institution. Reed's action came at the suggestion of CIRM Chairman Robert Klein.

Philippis also took a close look at the audit that CIRM commissioned on its financial activities. He wrote:

"In January, Macias Gini and O’Connell completed its audit of CIRM’s finances for the year ended June 30, 2007. According to that audit, available here, CIRM’s net asset deficit rose by 46 percent, or nearly $7 million, to $22.2 million, “primarily due [to] expenses exceeding revenues.”

"And while CIRM generated nearly 13 times, or $4.55 million, above its 2006 fiscal year revenue — almost all of it through higher investment earnings — expenses dropped by $6.1 million.

"That $6.1 million figure reflects the difference between a $13.6 million cut in research grant expenses and two expenses that rose in FY ’07: Operational expenses that zoomed up 47 percent or nearly $2 million; and interest expenses on its bonds that rocketed 25-fold over the previous year ($5.5 million, vs. $225,416). CIRM cut another $2.1 million in operations costs, however, by cutting back on travel and meetings.

"Not recorded in the audit: The $1 million 'fair' value of CIRM’s roughly 20,000 square feet of office space donated by the city of San Francisco to the stem-cell agency free for 10 years. CIRM moved into that space in November 2005."

Access to the BioRegion News article is available through free registration, we are told, despite what appears to be a requirement for a paid subscription.

(Editor's note: The Philippides piece contains an error concerning the initial story on Reed's lobbying effort, stating that Reed's action was discovered by Simpson. In fact, the lobbying by Reed was first reported by the California Stem Cell Report.)

Cashing in on California: Opportunities for Non-State Businesses

The California stem cell agency is offering another round of grants that is open to firms headquartered outside the state – a $20 million program aimed at developing tools and technology for stem cell research.

And this time, a non-California firm can submit up to four applications for grants.

The latest proposal comes as some in the California biotech industry and state lawmakers are attempting to compel CIRM to follow through on the Prop. 71 requirement to give preferential treatment to California businesses.

The grant program and the California supplier issue are operating on different tracks but both affect state businesses by either restricting or increasing competition from non-state firms.

First the new tools and tech proposal. It is open to both education and research institutions in California as well as businesses.

The key catch for businesses is that a research site must exist in California at the time the grant application is submitted, which may or may not be on application deadline July 10.

If CIRM holds to past practice, it will not check on whether the research site exists until after the grants are approved, in this case next December or even later. Nor does CIRM define what it means by research site. So there is plenty of time to pick up some likely property in California and prepare it for use.

The application does, however, require a short description of facilities in which the work will be done and the major equipment and resources available.

The grant proposal came up after CIRM was pressured in March to follow through on the Prop. 71 requirement to give preferential treatment to California firms.

Assemblyman Gene Mullin, D-San Mateo, is carrying a bill to define the term "California supplier" as it applies to CIRM. His legislation, AB 2381, has already passed the Assembly 75-0 and is now before the Senate Health Committee.

Under the push from legislators and industry, CIRM directors have moved ahead on their own regulatory definition of California supplier. It is more open than Mullin's proposed law to enterprises from out-of-state and declares that a California supplier is any that employs at least one-third of its employees, with a minimum of 100, in the state.

Or, a California supplier could also be one that "produces, builds, or manufactures a product or products in California for the specific product or products which are used by CIRM grantees."

At the CIRM directors meeting earlier this month, Duane Roth, one of the directors who helped draw up the language, said that the wording is intended to deal "with a product that's manufactured in California, but the headquarters of the company who owns them is not in California. That product would qualify as a, quote, California supplier, just that product, not the company, but the product."

Tony Lakavage of Beckman Dickinson, a global medical technology company with operations in San Jose, Ca., spoke on the supplier issue at the directors meeting. He said the firm has 1,500 employees in the state but 30,000 worldwide. He said that products made in California by his firm would apparently qualify for purchase but other global companies might have difficulty qualifying.

He urged a definition that relied on the economic impact of a company in California, according to the transcript of the meeting.

James Harrison, outside counsel to CIRM, presented the California supplier issue to the directors. Alan Trounson, who is in his fifth month as president of CIRM, told directors that neither he or the CIRM staff had seen the definition proposed by Harrison and that "there are issues we would have with this." CIRM Chairman Robert Klein apologized to Trounson for not bringing the matter to him.

CIRM directors indicated that more work needed to be done on the definition as it moves through the regulatory process.

While the application deadline for the tools and tech grants is July 10, potential applicants must file letters of intent by June 11. Otherwise, they will not be considered. Actual funding is scheduled for no sooner than March of next year.

The first round of grants open to out-of-state firms was a $25 million offering on new cell line proposals. Those grants are scheduled to be approved late in June.

CIRM Affordable Access Bill Easily Clears Senate

On a unanimous 40-0 vote, the California State Senate has passed legislation to ensure affordable access to CIRM-financed stem cell therapies and to require a study that could lead to reforms in the agency's complex and unique structure.

The measure (SB 1565) by Sen. Sheila Kuehl(see photo), D-Santa Monica, now goes to the Assembly for further action.

The bill was on a "special consent" calendar Thursday, indicating that no controversy existed concerning it. There is no indication that there was any debate on the measure. The California stem cell agency has taken no position on the legislation.

For more on the bill, see the "patient advocate" item below.