Can The Sacramento Bee drive public attendance at tomorrow's meeting of the California stem cell agency?
The Bee editorialized this morning about the meeting, suggesting readers might like to attend. The session will contain “drama” and might be “extremely telling,” the newspaper said.
Rivalries could be exposed that “sit beneath the surface of the institute's oversight board, which includes hypercompetitive university officials, biotech industrialists and advocates for various patient groups,” The Bee said. “Those rivalries got a bit ugly in May, when the institute held a beauty contest to decide its headquarters. San Francisco became the queen - and a lovely one, to be sure - but some said the contest was rigged.
“There are also some side dramas to watch. Months ago, institute chairman Robert Klein II prepared an organizational chart that gave him his own exclusive staff, including the institute's general counsel. Board members objected; the chart was shelved. Now, interim president Zach Hall is preparing to unveil a new organizational chart that gives the president more control over his employees.”
As far as we can recall, this is the first time that a newspaper has urged the public to attend a meeting of the California Institute for Regenerative Medicine. But despite the comic opera of Arnold Vs. The Legislative Ants, life is generally slow in the Big Tomato.
Thursday, September 08, 2005
Bowdlerization and Sleazy Speculation
The grant-making exercise this week of the California stem cell agency exposes something of its faux secrecy as well as one weakness of its conflict of interest standards.
The agency has released a bowdlerized version of its funding recommendations. Names are blacked out in the documents but enough details remain, in at least some cases, that the institutions could be identified by stem cell insiders. Only the shareholders in the agency – the California public – are left out.
All to avoid what one newspaper calls the “public humiliation” of some being identified as losers.
Susan Fogel, coordinator of the Pro-Choice Alliance for Responsible Research, said the absence of applicants' names prevents Oversight Committee members from making good decisions.
"How can they vote on whether this applicant is an appropriate one who is capable of delivering if they don't know who the applicant is? I have never seen a foundation give out a grant to 'anonymous,' " she told reporter Laura Mecoy of The Sacramento Bee.
As for potential embarrassment, Fogel said, “I think they have to be big boys and girls here."
Mecoy's article noted that “at Friday's meeting in Sacramento, savvy observers also can glean some information by watching which committee members leave the room for which votes. This is part of the 'recusal' process required by conflict-of-interest laws.
“Several members of the committee represent universities and nonprofit institutions that have applied, so their absence could signal their employer is being considered.”
We assume that Oversight Committee members will see the grant applications with the names included, as opposed to Fogel's speculation. Otherwise how would they know when there might be a conflict of interest. However, committee members may be simply be told by staff not to vote. It is impossible to know, however, what the agency's procedures are in this case because it has not made them public.
Given the limited amount of money theoretically available, another more subtle conflict arises. That involves negative voting or changes in the size of grants. For instance, if one grant is denied or decreased, that makes more money available for another grant. An Oversight Committee member could vote to slice funding on one application with the intent of making it available for another grant. Then that member abstains from the vote on the other grant. Is she or he involved in a conflict of interest?
Obviously, carried to an extreme, this kind of reasoning or possible regulation could paralyze the agency. But it does illustrate the weakness of the agency's existing rules. In the absence of maximum disclosure of all economic interests and the names of institutions seeking training grants, such speculation about hidden conflicts is bound to occur. And it is not in CIRM's best interests to feed gossip – well-founded or otherwise – about possible sleazy dealings within its grant-making process.
The agency has released a bowdlerized version of its funding recommendations. Names are blacked out in the documents but enough details remain, in at least some cases, that the institutions could be identified by stem cell insiders. Only the shareholders in the agency – the California public – are left out.
All to avoid what one newspaper calls the “public humiliation” of some being identified as losers.
Susan Fogel, coordinator of the Pro-Choice Alliance for Responsible Research, said the absence of applicants' names prevents Oversight Committee members from making good decisions.
"How can they vote on whether this applicant is an appropriate one who is capable of delivering if they don't know who the applicant is? I have never seen a foundation give out a grant to 'anonymous,' " she told reporter Laura Mecoy of The Sacramento Bee.
As for potential embarrassment, Fogel said, “I think they have to be big boys and girls here."
Mecoy's article noted that “at Friday's meeting in Sacramento, savvy observers also can glean some information by watching which committee members leave the room for which votes. This is part of the 'recusal' process required by conflict-of-interest laws.
“Several members of the committee represent universities and nonprofit institutions that have applied, so their absence could signal their employer is being considered.”
We assume that Oversight Committee members will see the grant applications with the names included, as opposed to Fogel's speculation. Otherwise how would they know when there might be a conflict of interest. However, committee members may be simply be told by staff not to vote. It is impossible to know, however, what the agency's procedures are in this case because it has not made them public.
Given the limited amount of money theoretically available, another more subtle conflict arises. That involves negative voting or changes in the size of grants. For instance, if one grant is denied or decreased, that makes more money available for another grant. An Oversight Committee member could vote to slice funding on one application with the intent of making it available for another grant. Then that member abstains from the vote on the other grant. Is she or he involved in a conflict of interest?
Obviously, carried to an extreme, this kind of reasoning or possible regulation could paralyze the agency. But it does illustrate the weakness of the agency's existing rules. In the absence of maximum disclosure of all economic interests and the names of institutions seeking training grants, such speculation about hidden conflicts is bound to occur. And it is not in CIRM's best interests to feed gossip – well-founded or otherwise – about possible sleazy dealings within its grant-making process.
Coming Up
Later today we will have a more on objections to the stem cell agency's grant process and also a look at secrecy issues at CIRM.
Dressing Up The Dog
Leaders of the California stem cell agency are attempting to put the “best face” on their decision to award $45 million in training grants without the money to pay for them, The Sacramento Bee reported today.
Reporter Laura Mecoy quoted CIRM interim president Zach Hall as saying, “We are going to come out of (tomorrow's) meeting and say we have a fabulous training program here, and that we are going to provide a work force for the country. We're going to play that up."
She also wrote, “The committee's chairman, Robert Klein II, said the agency needs to show it's creating the 'finest training program in the history of the country' to help attract money to pay for the grants.
“With that attention, he said, he's "very positive" he'll be able to raise the money to pay for the first year of the three-year grants.
“Klein won't name the potential investors and contributors. But he said he could have the money in hand as early as October.”
The agency's plan to move ahead with the grant process has met with criticism and is expected to meet with more.
Mecoy said one critic recommended delaying the grant awards so it can work on other matters.
"What purpose is served by announcing winners before you have the money?" asked Jesse Reynolds, Center for Genetics and Society program director. "I can't think of anything beyond public relations."
Mecoy also talked to Susan Fogel, Pro-Choice Alliance for Responsible Research coordinator, who said the “committee is creating 'a mistaken impression' that science is moving forward by awarding grants without money to fund them.
“She said she was 'disappointed' by the stem cell panel's 'focus on spin and public relations that doesn't have anything to do with the science.'"
Mecoy additionally reported that UC Davis officials confirmed their application was among the finalists. She said, however, that the recommended funding supported 12 trainees, rather than the 16 requested, and provided $2.68 million instead of the $3.43 million UC Davis sought.
Reporter Laura Mecoy quoted CIRM interim president Zach Hall as saying, “We are going to come out of (tomorrow's) meeting and say we have a fabulous training program here, and that we are going to provide a work force for the country. We're going to play that up."
She also wrote, “The committee's chairman, Robert Klein II, said the agency needs to show it's creating the 'finest training program in the history of the country' to help attract money to pay for the grants.
“With that attention, he said, he's "very positive" he'll be able to raise the money to pay for the first year of the three-year grants.
“Klein won't name the potential investors and contributors. But he said he could have the money in hand as early as October.”
The agency's plan to move ahead with the grant process has met with criticism and is expected to meet with more.
Mecoy said one critic recommended delaying the grant awards so it can work on other matters.
"What purpose is served by announcing winners before you have the money?" asked Jesse Reynolds, Center for Genetics and Society program director. "I can't think of anything beyond public relations."
Mecoy also talked to Susan Fogel, Pro-Choice Alliance for Responsible Research coordinator, who said the “committee is creating 'a mistaken impression' that science is moving forward by awarding grants without money to fund them.
“She said she was 'disappointed' by the stem cell panel's 'focus on spin and public relations that doesn't have anything to do with the science.'"
Mecoy additionally reported that UC Davis officials confirmed their application was among the finalists. She said, however, that the recommended funding supported 12 trainees, rather than the 16 requested, and provided $2.68 million instead of the $3.43 million UC Davis sought.
Wednesday, September 07, 2005
No Money for Training Grants
The proposed budget for the California stem cell agency has been posted online, and it shows no funds for training grants until at least January 2006.
The spending plan appears to be identical to the one presented last month to the governance subcommittee, which recommended a conservative approach with no grant funding.
Presumably that means that the Oversight Committee will take some sort of action on the grants Friday and delay funding until sometime in the future.
.
The spending plan appears to be identical to the one presented last month to the governance subcommittee, which recommended a conservative approach with no grant funding.
Presumably that means that the Oversight Committee will take some sort of action on the grants Friday and delay funding until sometime in the future.
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Tuesday, September 06, 2005
Time for a Little More Explanation
The California stem cell agency meets this Friday to vote on its first grants, but what is missing from its proposed agenda appears to be public discussion of how the agency intends to pay for them.
The agency's budget was up for review at an agency subcommittee meeting in late August, but oddly the financial plan is not on the agenda of the full Oversight Committee.
The staff report presented in August recommended adoption by the Oversight Committee of a conservative spending plan that would not provide any grants during 2005-2006. No such spending recommendation appears to be up for specific consideration at the Sacramento meeting, although the budget might be cloaked in item 13. (For more on the budget, see "Inside Spending Plans" item Aug. 31.)
The Oversight Committee agenda also contains some background material on several other matters, particularly on the important subject of guidelines for embryonic stem cell research. The proposed rules are available for download by the public. What is missing, however, is a “translation” and summary of the issues at hand – along the lines of the analysis provided by the California Legislative Analyst on bills before state lawmakers.
Admittedly that is not an easy task, but without a translation from scientific jargon, the important policy questions are only open to the scientific stem cell community – not the public. Providing such an analysis would seem to be an excellent task that could be performed by the Edelman PR firm, which is being paid nearly $30,000 a month for public information services for the agency.
The agency's budget was up for review at an agency subcommittee meeting in late August, but oddly the financial plan is not on the agenda of the full Oversight Committee.
The staff report presented in August recommended adoption by the Oversight Committee of a conservative spending plan that would not provide any grants during 2005-2006. No such spending recommendation appears to be up for specific consideration at the Sacramento meeting, although the budget might be cloaked in item 13. (For more on the budget, see "Inside Spending Plans" item Aug. 31.)
The Oversight Committee agenda also contains some background material on several other matters, particularly on the important subject of guidelines for embryonic stem cell research. The proposed rules are available for download by the public. What is missing, however, is a “translation” and summary of the issues at hand – along the lines of the analysis provided by the California Legislative Analyst on bills before state lawmakers.
Admittedly that is not an easy task, but without a translation from scientific jargon, the important policy questions are only open to the scientific stem cell community – not the public. Providing such an analysis would seem to be an excellent task that could be performed by the Edelman PR firm, which is being paid nearly $30,000 a month for public information services for the agency.
Friday, September 02, 2005
Identifying (sort of) Winners and Losers in the First Stem Cell Grants
The California stem cell agency is slowly, slowly opening the envelope that will reveal the winners of the first grants to be given by the agency.
Twenty-six applicants are discussed as part of an online background document for the Sept. 9 Oversight Committee meeting. But their names are blacked out. We suspect, however, that persons involved in stem cell research could identify the institutions based on the descriptions in the documents.
The information gives a summary of the proposed program, a scientific score and something of a critique of the program and suggestions for improvements, at least in some cases. Also included are recommendations on whether to fund the application. The amount requested is reported along with the recommendations for grant amounts, which are in some cases less than requested.
Here is an example of the summary assessment of strengths and weaknesses of one proposed program, which was not recommended for funding.
“This application presents strengths in its proposal to develop a textbook in stem cell biology, to serve disadvantaged and minority students, and fill a needed gap in the mathematical approaches to stem cell biology. As a focus for the new institution, it will have considerable institutional commitment and attention. However, the limited number of faculty available and the lack of depth and accomplishment in stem cell biology weigh against these positive attributes.”
One quick guess is that application came from the University of California, Merced, based on the references to its newness and limited faculty, but we could be wrong. We do know that all the UC campuses reportedly made applications.
Given the likelihood that stem cell insiders will be able to identify the grant applicants, the only folks who won't know are members of the public, the shareholders who are paying for this stuff.
Unexplained by CIRM is what is exactly to be done with these applications. Based on its budget, the agency does not have money to fund the proposed programs. What may occur is a vote on the applications with funding deferred until money becomes available.
Twenty-six applicants are discussed as part of an online background document for the Sept. 9 Oversight Committee meeting. But their names are blacked out. We suspect, however, that persons involved in stem cell research could identify the institutions based on the descriptions in the documents.
The information gives a summary of the proposed program, a scientific score and something of a critique of the program and suggestions for improvements, at least in some cases. Also included are recommendations on whether to fund the application. The amount requested is reported along with the recommendations for grant amounts, which are in some cases less than requested.
Here is an example of the summary assessment of strengths and weaknesses of one proposed program, which was not recommended for funding.
“This application presents strengths in its proposal to develop a textbook in stem cell biology, to serve disadvantaged and minority students, and fill a needed gap in the mathematical approaches to stem cell biology. As a focus for the new institution, it will have considerable institutional commitment and attention. However, the limited number of faculty available and the lack of depth and accomplishment in stem cell biology weigh against these positive attributes.”
One quick guess is that application came from the University of California, Merced, based on the references to its newness and limited faculty, but we could be wrong. We do know that all the UC campuses reportedly made applications.
Given the likelihood that stem cell insiders will be able to identify the grant applicants, the only folks who won't know are members of the public, the shareholders who are paying for this stuff.
Unexplained by CIRM is what is exactly to be done with these applications. Based on its budget, the agency does not have money to fund the proposed programs. What may occur is a vote on the applications with funding deferred until money becomes available.
Thursday, September 01, 2005
Columnist says CCST Royalty Position OK
Los Angeles Times business columnist Michael Hiltzik chastized Prop. 71 backers once again this morning, but said efforts to generate bigger bags of swag from California stem cell research are unrealistic.
Hiltzik was reacting to the recent report by the California Council on Science and Technology that recommended following federal models for royalties for research funded by the California stem cell agency.
He said criticism that the council was biased were not justified.
"The council's study group comprised 17 members, of whom seven represent (arguably) private industry. An additional seven came from academia, including four from the University of California or its constituent campuses; two from federally funded research institutions (Lawrence Livermore National Laboratory and NASA's Ames Research Center); and one from state government," Hiltzik wrote.
"What these people have in common, says Susan Hackwood, executive director of the nonpartisan and nonprofit science and technology council, is their experience in handling intellectual property.
"They're also knowledgeable about what's required to move basic research into the commercial world: patience and lots more money, most of which will have to come from industry."
Hiltzik noted that the CCST report blamed the unrealistic revenue expectations "partially on an economic impact analysis, paid for by the Prop. 71 promoters, that had all but advised voters to start counting the money now."
One lesson to be learned from Prop. 71, Hiltzik said, is "that initiative campaigns, with their wild promises and unverifiable assertions, have become poor tools for making policy. We voters would be wise to remember that, as more lies and misrepresentations fill our TVs in the run-up to the November election."
Hiltzik was reacting to the recent report by the California Council on Science and Technology that recommended following federal models for royalties for research funded by the California stem cell agency.
He said criticism that the council was biased were not justified.
"The council's study group comprised 17 members, of whom seven represent (arguably) private industry. An additional seven came from academia, including four from the University of California or its constituent campuses; two from federally funded research institutions (Lawrence Livermore National Laboratory and NASA's Ames Research Center); and one from state government," Hiltzik wrote.
"What these people have in common, says Susan Hackwood, executive director of the nonpartisan and nonprofit science and technology council, is their experience in handling intellectual property.
"They're also knowledgeable about what's required to move basic research into the commercial world: patience and lots more money, most of which will have to come from industry."
Hiltzik noted that the CCST report blamed the unrealistic revenue expectations "partially on an economic impact analysis, paid for by the Prop. 71 promoters, that had all but advised voters to start counting the money now."
One lesson to be learned from Prop. 71, Hiltzik said, is "that initiative campaigns, with their wild promises and unverifiable assertions, have become poor tools for making policy. We voters would be wise to remember that, as more lies and misrepresentations fill our TVs in the run-up to the November election."
Wednesday, August 31, 2005
Inside the Stem Cell Agency's Spending Plans
The public is finally getting a good look at the budget of California’s $6 billion stem cell agency, about nine months after it began work.
The information, however, was posted online only a few days ago for a CIRM meeting that begins at 3 p.m. today in downtown Los Angeles. That makes it virtually impossible for the thousands of patient advocates, scientists, legislators, biotech firms, research organizations and other interested parties to make an informed comment on the agency’s spending plans for today’s hearing.
We assume that is not the intent of the agency. Its chairman, Robert Klein, has repeatedly promised the highest standards of openness and transparency, even touting them as recently as last week in The Sacramento Bee. What the agency has actually done is far different, which creates concerns about reality gaps in the agency’s other affairs.
But to the matter at hand – the budget of the California Institute for Regenerative Medicine, which is scheduled to hand out $3 billion in stem cell research grants (financed by another $3 billion in interest on state bonds) over the next 10 years.
CIRM is in a bit of a pickle because lawsuits have effectively blocked the issuance of its bonds, meaning it has no major source of revenue to pay its 17 employees or to pay for its Internet access, among other things. Instead the California state agency is relying largely on a $5 million grant from the Dolby Foundation and a $3 million loan from the state. In other words, CIRM may be the first California governmental agency on the dole.
The agency’s spending plan for the fiscal year that began July 1 has three scenarios. The budget totals range from about $6 million to about $8 million. CIRM reported it spent $2.6 million during 2004-2005, although it did not effectively begin operations until about January.
The staff report on the budget recommended that CIRM directors approve the most conservative scenario, which assumes no issuance of bonds and no additional funds beyond the state loan and the Dolby money. Under that plan, no stem cell grants would be made during 2005-2006. If no additional money becomes available, the staff report said “CIRM will take action” to continue operations. No explanation was given for what that means.
The second budget alternative assumes sale of nearly $22 million in bond anticipation notes and would provide for $15.6 million in training grants. The third alternative assumes $100 million in bond proceeds and major grant dispersal.
The barebones budget projects 20 employees by Oct. 1 but no more. It provides $215,000 for CIRM’s two-day international stem cell conference in San Francisco. Working groups would be funded with $331,000. The biggest single contract -- $480,000 -- is for legal advice from the Remcho, Johansen & Purcell law firm of San Leandro, Ca. It is followed by the Edelman PR firm’s $283,000. The amounts are for the current fiscal year. Their total contracts are for $520,000 and $378,000 respectively, which includes both the past and current fiscal years.
The other two budget scenarios assume as many as 35 employees as well as $250,000 for a contract to acquire services to help CIRM develop a “strategic plan.” No details were provided on the nature of those services. Under its most generous scenario, CIRM also would stage another scientific conference at a cost of $125,000.
Today’s budget hearing is before CIRM’s Governance Subcommittee. Its recommendations are expected to go before the Oversight Committee on Sept. 9.
The information, however, was posted online only a few days ago for a CIRM meeting that begins at 3 p.m. today in downtown Los Angeles. That makes it virtually impossible for the thousands of patient advocates, scientists, legislators, biotech firms, research organizations and other interested parties to make an informed comment on the agency’s spending plans for today’s hearing.
We assume that is not the intent of the agency. Its chairman, Robert Klein, has repeatedly promised the highest standards of openness and transparency, even touting them as recently as last week in The Sacramento Bee. What the agency has actually done is far different, which creates concerns about reality gaps in the agency’s other affairs.
But to the matter at hand – the budget of the California Institute for Regenerative Medicine, which is scheduled to hand out $3 billion in stem cell research grants (financed by another $3 billion in interest on state bonds) over the next 10 years.
CIRM is in a bit of a pickle because lawsuits have effectively blocked the issuance of its bonds, meaning it has no major source of revenue to pay its 17 employees or to pay for its Internet access, among other things. Instead the California state agency is relying largely on a $5 million grant from the Dolby Foundation and a $3 million loan from the state. In other words, CIRM may be the first California governmental agency on the dole.
The agency’s spending plan for the fiscal year that began July 1 has three scenarios. The budget totals range from about $6 million to about $8 million. CIRM reported it spent $2.6 million during 2004-2005, although it did not effectively begin operations until about January.
The staff report on the budget recommended that CIRM directors approve the most conservative scenario, which assumes no issuance of bonds and no additional funds beyond the state loan and the Dolby money. Under that plan, no stem cell grants would be made during 2005-2006. If no additional money becomes available, the staff report said “CIRM will take action” to continue operations. No explanation was given for what that means.
The second budget alternative assumes sale of nearly $22 million in bond anticipation notes and would provide for $15.6 million in training grants. The third alternative assumes $100 million in bond proceeds and major grant dispersal.
The barebones budget projects 20 employees by Oct. 1 but no more. It provides $215,000 for CIRM’s two-day international stem cell conference in San Francisco. Working groups would be funded with $331,000. The biggest single contract -- $480,000 -- is for legal advice from the Remcho, Johansen & Purcell law firm of San Leandro, Ca. It is followed by the Edelman PR firm’s $283,000. The amounts are for the current fiscal year. Their total contracts are for $520,000 and $378,000 respectively, which includes both the past and current fiscal years.
The other two budget scenarios assume as many as 35 employees as well as $250,000 for a contract to acquire services to help CIRM develop a “strategic plan.” No details were provided on the nature of those services. Under its most generous scenario, CIRM also would stage another scientific conference at a cost of $125,000.
Today’s budget hearing is before CIRM’s Governance Subcommittee. Its recommendations are expected to go before the Oversight Committee on Sept. 9.
Monday, August 29, 2005
The Bee: Golden State Deserves More from Stem Cell Research
California lawmakers should step in to assure that taxpayers reap the benefits of the $3 billion in stem cell research they are financing, The Sacramento Bee said Monday.
And state Treasurer Phil Angelides, a candidate for governor, should cough up documents that he has relating to the issue, according to The Bee’s editorial, which recommended that legislators press him to do so.
The Bee was reacting to the report by the California Council on Science and Technology last week that said the state should not expect a bonanza from CIRM, at least not any time in the next 10 years.
“Prop. 71 supporters are doing a flip-flop. Biotech firms and university officials are saying that royalties and discounted care would discourage ‘innovation’ and diminish the potential for medical breakthroughs. To drive home this point, they are now throwing cold water on the idea that stem cell research will be very profitable,” The Bee editorialized.
“The CCST report is significant for several reasons. First, the council is composed of leading biotech executives and university bigwigs, a group that hasn't previously acknowledged that Prop. 71 was oversold to voters. Second, it represents an attempt by biotech leaders to have it both ways. Back in 2004, they campaigned for an initiative that will provide their industry with $3 billion in taxpayer-funded venture capital. Now that it is law, they issue an official-sounding report that recommends California give up on royalties - negating some of the arguments that helped get Proposition 71 passed.”
The Bee also pointed to a little-noticed letter earlier this year to Angelides from the state’s “bond counsel (that) warned that patents and royalties resulting from state grants might be construed as taxable ‘assets,’ making them ineligible for financing by tax-exempt bonds.
“Apparently, Angelides and leaders of the stem-cell institute have known about these challenges for some time, but haven't said anything. To flush out this issue, this page (The Bee’s editorial page) filed an open records request for all memos written by the treasurer's bond counsel on Proposition 71 prior to its passage. Angelides rejected those requests, citing attorney-client privilege.”
Lawmakers should sniff out the documents and create a new panel to look at the intellectual property issues involving CIRM, The Bee said.
And state Treasurer Phil Angelides, a candidate for governor, should cough up documents that he has relating to the issue, according to The Bee’s editorial, which recommended that legislators press him to do so.
The Bee was reacting to the report by the California Council on Science and Technology last week that said the state should not expect a bonanza from CIRM, at least not any time in the next 10 years.
“Prop. 71 supporters are doing a flip-flop. Biotech firms and university officials are saying that royalties and discounted care would discourage ‘innovation’ and diminish the potential for medical breakthroughs. To drive home this point, they are now throwing cold water on the idea that stem cell research will be very profitable,” The Bee editorialized.
“The CCST report is significant for several reasons. First, the council is composed of leading biotech executives and university bigwigs, a group that hasn't previously acknowledged that Prop. 71 was oversold to voters. Second, it represents an attempt by biotech leaders to have it both ways. Back in 2004, they campaigned for an initiative that will provide their industry with $3 billion in taxpayer-funded venture capital. Now that it is law, they issue an official-sounding report that recommends California give up on royalties - negating some of the arguments that helped get Proposition 71 passed.”
The Bee also pointed to a little-noticed letter earlier this year to Angelides from the state’s “bond counsel (that) warned that patents and royalties resulting from state grants might be construed as taxable ‘assets,’ making them ineligible for financing by tax-exempt bonds.
“Apparently, Angelides and leaders of the stem-cell institute have known about these challenges for some time, but haven't said anything. To flush out this issue, this page (The Bee’s editorial page) filed an open records request for all memos written by the treasurer's bond counsel on Proposition 71 prior to its passage. Angelides rejected those requests, citing attorney-client privilege.”
Lawmakers should sniff out the documents and create a new panel to look at the intellectual property issues involving CIRM, The Bee said.
Klein Twits The Sacramento Bee
California stem cell chairman Robert Klein has fired back rather mildly at The Sacramento Bee, one of his stronger critics, declaring that its most recent editorial was inconsistent with its previous positions.
The comment was published in The Bee in response to an Aug. 13 editorial that said the agency was in a state of denial.
Klein said The Bee's editorial "implies that the CIRM should slow down in its
forward movement, yet in past editorials you have criticized us for moving too
slowly: " He cited a May 22 piece.
Klein also took issue with The Bee's position that CIRM should not seek funding from non-profit organizations. He pointed to two state programs that have non-profit funding. But he did not address The Bee's main point, which was that heavy reliance on non-profits could lead to untoward influence of those organizations on CIRM.
Klein's response was the first such to a Bee editorial. The article in question was moderate compared to others The Bee has published.
Klein's comments also have the earmarks of the work by the Edelman PR firm, which is being paid $27,500 a month to peddle the agency's position. Edelman has been criticized by members of the Oversight Committee for not demonstrating much "product." The Klein letter to The Bee is another demonstration that Edelman may be beginning to produce. But the sad fact is that one of the problems of the agency all year is its weak PR and dismal public information efforts. Perhaps that is beginning to change, but CIRM has a long way to go.
The agency could start with long needed improvement in the agendas for its meetings, which should have full backup material online. We have pointed out repeatedly that even lowly school districts do a better job in distributing information to the public in advance of meetings. Members of the Oversight Committee have complained as well that they do not get material for the meetings in sufficient time.
.
The comment was published in The Bee in response to an Aug. 13 editorial that said the agency was in a state of denial.
Klein said The Bee's editorial "implies that the CIRM should slow down in its
forward movement, yet in past editorials you have criticized us for moving too
slowly: " He cited a May 22 piece.
Klein also took issue with The Bee's position that CIRM should not seek funding from non-profit organizations. He pointed to two state programs that have non-profit funding. But he did not address The Bee's main point, which was that heavy reliance on non-profits could lead to untoward influence of those organizations on CIRM.
Klein's response was the first such to a Bee editorial. The article in question was moderate compared to others The Bee has published.
Klein's comments also have the earmarks of the work by the Edelman PR firm, which is being paid $27,500 a month to peddle the agency's position. Edelman has been criticized by members of the Oversight Committee for not demonstrating much "product." The Klein letter to The Bee is another demonstration that Edelman may be beginning to produce. But the sad fact is that one of the problems of the agency all year is its weak PR and dismal public information efforts. Perhaps that is beginning to change, but CIRM has a long way to go.
The agency could start with long needed improvement in the agendas for its meetings, which should have full backup material online. We have pointed out repeatedly that even lowly school districts do a better job in distributing information to the public in advance of meetings. Members of the Oversight Committee have complained as well that they do not get material for the meetings in sufficient time.
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Thursday, August 25, 2005
The California Stem Cell Gorilla
Who really needs President Bush? That's the question posed by Ronald Bailey, author and science correspondent for the libertarian magazine, Reason.
Writing on the Reason web site, he provides an up-to-date overview of stem cell funding in the wake of Bush's restrictions on stem cell research. Bailey notes that the Golden State will be outspending entire countries, including the South Korean effort that has received so much notice.
"So far four states have put taxpayer dollars behind human embryonic stem-cell research," Bailey reports. "The 800 pound gorilla in the stem cell funding arena is California. Last November, California voters passed $3 billion initiative that created the new California Institute of Regenerative Medicine that aims to fund stem-cell research at $300 million annually for the next ten years. That is more than 12 times higher than current federal funding. California will not only be outspending the U.S. Federal government; it will be trouncing whole countries on stem-cell research funding. For example, the United Kingdom has plans to spend $175 million per year on stem-cell research. In 2002, the Australian government awarded the Australia Stem Cell Centre with $43.55 million over four years. And the research of South Korean scientists who have recently been making breakthroughs in cloning human embryonic stem cells has been supported by about $11 million in government grants."
Bailey runs down the list of states considering or funding stem cell research, moving on to private efforts.
"For example, the Starr Foundation is providing $50 million over three years for human embryonic stem-cell research at three New York City medical institutions, including the Sloan-Kettering Memorial Cancer Center. The Harvard University Stem Cell Institute is seeking $100 million in private funding. The University of California, Los Angeles announced the establishment of its Institute for Stem Cell Biology and Medicine with $20 million in funding over the next 5 years. Stanford University announced the creation of $120 million Institute for Cancer/Stem Cell Biology and Medicine in 2002. Former Intel CEO Andy Grove gave the University of California in San Francisco a matching grant of $5 million to start its Developmental and Stem Cell Biology Program. In 2001, an anonymous donor gave Johns Hopkins University in Baltimore a $58.5 million gift to launch an Institute for Cell Engineering. The University of Minnesota has set up a Stem Cell Institute with a $15 million capital grant. In 2004, an a grateful patient pledged $25 million over the next ten years to finance stem-cell research at the University of Texas Health Science Center in Houston."
"Given all of these sources of funding for stem-cell research, it's a real question whether or not researchers need the Feds at this point. And one more deliciously ironic thought: It's just possible that, by imposing his funding restrictions and spurring so many independent initiatives, President Bush has actually caused the creation of more embryonic stem cell lines than would have been produced with federal funding."
Bailey is more cautious than I would be in describing the impact of Bush's move. He elevated awareness of the issue with his ideological decision and galvanized the stem cell community. Without Bush's help, California stem cell chairman Robert Klein would not be sitting today in his red brick offices in Emeryville, CA.
(Bailey's book, "Liberation Biology: The Scientific and Moral Case for the Biotech Revolution" is available from Prometheus Books.)
Writing on the Reason web site, he provides an up-to-date overview of stem cell funding in the wake of Bush's restrictions on stem cell research. Bailey notes that the Golden State will be outspending entire countries, including the South Korean effort that has received so much notice.
"So far four states have put taxpayer dollars behind human embryonic stem-cell research," Bailey reports. "The 800 pound gorilla in the stem cell funding arena is California. Last November, California voters passed $3 billion initiative that created the new California Institute of Regenerative Medicine that aims to fund stem-cell research at $300 million annually for the next ten years. That is more than 12 times higher than current federal funding. California will not only be outspending the U.S. Federal government; it will be trouncing whole countries on stem-cell research funding. For example, the United Kingdom has plans to spend $175 million per year on stem-cell research. In 2002, the Australian government awarded the Australia Stem Cell Centre with $43.55 million over four years. And the research of South Korean scientists who have recently been making breakthroughs in cloning human embryonic stem cells has been supported by about $11 million in government grants."
Bailey runs down the list of states considering or funding stem cell research, moving on to private efforts.
"For example, the Starr Foundation is providing $50 million over three years for human embryonic stem-cell research at three New York City medical institutions, including the Sloan-Kettering Memorial Cancer Center. The Harvard University Stem Cell Institute is seeking $100 million in private funding. The University of California, Los Angeles announced the establishment of its Institute for Stem Cell Biology and Medicine with $20 million in funding over the next 5 years. Stanford University announced the creation of $120 million Institute for Cancer/Stem Cell Biology and Medicine in 2002. Former Intel CEO Andy Grove gave the University of California in San Francisco a matching grant of $5 million to start its Developmental and Stem Cell Biology Program. In 2001, an anonymous donor gave Johns Hopkins University in Baltimore a $58.5 million gift to launch an Institute for Cell Engineering. The University of Minnesota has set up a Stem Cell Institute with a $15 million capital grant. In 2004, an a grateful patient pledged $25 million over the next ten years to finance stem-cell research at the University of Texas Health Science Center in Houston."
"Given all of these sources of funding for stem-cell research, it's a real question whether or not researchers need the Feds at this point. And one more deliciously ironic thought: It's just possible that, by imposing his funding restrictions and spurring so many independent initiatives, President Bush has actually caused the creation of more embryonic stem cell lines than would have been produced with federal funding."
Bailey is more cautious than I would be in describing the impact of Bush's move. He elevated awareness of the issue with his ideological decision and galvanized the stem cell community. Without Bush's help, California stem cell chairman Robert Klein would not be sitting today in his red brick offices in Emeryville, CA.
(Bailey's book, "Liberation Biology: The Scientific and Moral Case for the Biotech Revolution" is available from Prometheus Books.)
Lean Coverage of Big Bucks Issue
News coverage was sparse of this week's important recommendations about who gets the profit from California's publicly funded stem cell research.
Six billion dollars are immediately at stake. That is the cost of the seed money that California is going to provide for the research.
We could be wrong, but it appears that only three newspapers in California carried stories on the subject, which obviously is not a hot topic around water coolers. The trouble is those two deadly words – intellectual property. Deadly at least to editors and reporters. The folks who stand to profit are watching very closely.
But lack of news coverage also signals waning interest in the mainstream media about the doings of the California stem cell agency, which is no longer as novel as it was eight months ago. Newsrooms are in the throes of summer vacations, as well, which means that staffing issues can affect coverage decisions.
Offering stories in Wednesday's papers were reporters Steve Johnson of the San Jose Mercury News and Bernadette Tansey of the San Francisco Chronicle, both of which have important readerships involving biotech and venture capitalists. Reporter Terri Somers of the San Diego Union Tribune wrote a piece this morning. Her readers also include a substantial stem cell community.
Somers wrote that the IP plan California adopts for stem cell research is likely to serve as a model for other states rushing into the field.
She said, "In promoting Prop. 71, supporters pointed to a financial analysis they commissioned that said California could recoup $537 million to $1.1 billion if it were to get a cut of the licenses and royalties that companies would pay to use any Prop. 71-funded discovery in research or drug production.
"But this assumed either that private investors or companies would agree to pay additional money on top of what they traditionally pay researchinstitutes to license technologies or that the research institutes wouldbe willing to take less.
"The council's report said that is unrealistic."
In the San Jose paper, Johnson quoted H. Ralph Snodgrass, chief executive of VistaGen, who said, "What if the agency says we're going to tax 3 percent of the revenues -- or 12 percent -- of any product developed with this? It could have a stifling effect on the commercialization of the technology."
Tansey quoted Assemblyman Gene Mullin, D-South San Francisco, as saying, "I think there needs to be a greater emphasis on, 'What does the state get out of this deal?' You and I are paying $3 billion."
Six billion dollars are immediately at stake. That is the cost of the seed money that California is going to provide for the research.
We could be wrong, but it appears that only three newspapers in California carried stories on the subject, which obviously is not a hot topic around water coolers. The trouble is those two deadly words – intellectual property. Deadly at least to editors and reporters. The folks who stand to profit are watching very closely.
But lack of news coverage also signals waning interest in the mainstream media about the doings of the California stem cell agency, which is no longer as novel as it was eight months ago. Newsrooms are in the throes of summer vacations, as well, which means that staffing issues can affect coverage decisions.
Offering stories in Wednesday's papers were reporters Steve Johnson of the San Jose Mercury News and Bernadette Tansey of the San Francisco Chronicle, both of which have important readerships involving biotech and venture capitalists. Reporter Terri Somers of the San Diego Union Tribune wrote a piece this morning. Her readers also include a substantial stem cell community.
Somers wrote that the IP plan California adopts for stem cell research is likely to serve as a model for other states rushing into the field.
She said, "In promoting Prop. 71, supporters pointed to a financial analysis they commissioned that said California could recoup $537 million to $1.1 billion if it were to get a cut of the licenses and royalties that companies would pay to use any Prop. 71-funded discovery in research or drug production.
"But this assumed either that private investors or companies would agree to pay additional money on top of what they traditionally pay researchinstitutes to license technologies or that the research institutes wouldbe willing to take less.
"The council's report said that is unrealistic."
In the San Jose paper, Johnson quoted H. Ralph Snodgrass, chief executive of VistaGen, who said, "What if the agency says we're going to tax 3 percent of the revenues -- or 12 percent -- of any product developed with this? It could have a stifling effect on the commercialization of the technology."
Tansey quoted Assemblyman Gene Mullin, D-South San Francisco, as saying, "I think there needs to be a greater emphasis on, 'What does the state get out of this deal?' You and I are paying $3 billion."
Wednesday, August 24, 2005
Who Benefits from Stem Cell IP?
One of the critics of the California stem cell agency says the just-released recommendations on intellectual property do not protect the interests of the people of California.
“Californians did not vote for Prop. 71 in order to favor corporate interests at the expense of the state and its taxpayers. Voters were promised during the Prop. 71 campaign that the state would get a share of any profits, and that any successfully developed treatments would benefit all Californians. This report by a stacked committee doesn’t seem to take those promises seriously,” said Marcy Darnovsky, associate executive director of the Center for Genetics and Society in Oakland, CA.
IP issues are not the hottest topic around most dinner tables, but the center identified why they are fundamentally important, especially at this stage.
"They will determine who benefits from our tax dollars. Will pharmaceutical corporations receive big profits, as Californians pay twice – once for the research, and again for the profit margin? Or will the taxpayers and voters have reasonable access to the products that they subsidized?” Darnovsky said.
The committee of the California Council on Science and Technology that prepared the IP recommendations "lacks representation of the public interest or even the state. The leadership of the CIRM shouldn’t accept this report’s recommendations. At a minimum, it must listen to more diverse voices.” said Jesse Reynolds, director of the project on biotechnology accountability at the center.
The center's statement can be found here.
“Californians did not vote for Prop. 71 in order to favor corporate interests at the expense of the state and its taxpayers. Voters were promised during the Prop. 71 campaign that the state would get a share of any profits, and that any successfully developed treatments would benefit all Californians. This report by a stacked committee doesn’t seem to take those promises seriously,” said Marcy Darnovsky, associate executive director of the Center for Genetics and Society in Oakland, CA.
IP issues are not the hottest topic around most dinner tables, but the center identified why they are fundamentally important, especially at this stage.
"They will determine who benefits from our tax dollars. Will pharmaceutical corporations receive big profits, as Californians pay twice – once for the research, and again for the profit margin? Or will the taxpayers and voters have reasonable access to the products that they subsidized?” Darnovsky said.
The committee of the California Council on Science and Technology that prepared the IP recommendations "lacks representation of the public interest or even the state. The leadership of the CIRM shouldn’t accept this report’s recommendations. At a minimum, it must listen to more diverse voices.” said Jesse Reynolds, director of the project on biotechnology accountability at the center.
The center's statement can be found here.
Readers Write
We received the following note on the IP report from Terry Feuerborn, formerly Executive Director of Research Administration and Technology Transfer within the Office of the President at the University of California. He currently serves as the Technology Transfer Ombudsman for the Lawrence Livermore National Laboratory and the Lawrence Berkeley National Laboratory.
"From the beginning, there was reason for concern about the intellectual property management aspects of the stem cell initiative. The wording in the initiative was confusing and hinted at an approach that would have been counterproductive.
"Intellectual property issues are complex and often seem counterintuitive at first glance. Adoption of the federal rules embodied in the Bayh-Dole Act by CIRM would be a welcome development. Those rules were hammered out over a long period of time by representatives of both higher education and the government. In large measure, the rules were a response to the 'competitiveness' issue that was current at the time.
"The results of the Bayh-Dole Act have been truly impressive. The act played an important role, for instance, in the rise of the biotechnology industry. In addition, the Bayh-Dole Act has been very effective in bringing new technologies to the marketplace. The adoption of similar rules by the CIRM would ensure that intellectual property resulting from stem cell research would be managed in a way that has proved to be in the public interest."
Feuerborn also recommends further reading on the subject of the Bayh-Dole act, a brochure by Council on Governmental Relations.
"For the sake of disclosure," he reports, "I should mention that I am the author of this brochure."
"From the beginning, there was reason for concern about the intellectual property management aspects of the stem cell initiative. The wording in the initiative was confusing and hinted at an approach that would have been counterproductive.
"Intellectual property issues are complex and often seem counterintuitive at first glance. Adoption of the federal rules embodied in the Bayh-Dole Act by CIRM would be a welcome development. Those rules were hammered out over a long period of time by representatives of both higher education and the government. In large measure, the rules were a response to the 'competitiveness' issue that was current at the time.
"The results of the Bayh-Dole Act have been truly impressive. The act played an important role, for instance, in the rise of the biotechnology industry. In addition, the Bayh-Dole Act has been very effective in bringing new technologies to the marketplace. The adoption of similar rules by the CIRM would ensure that intellectual property resulting from stem cell research would be managed in a way that has proved to be in the public interest."
Feuerborn also recommends further reading on the subject of the Bayh-Dole act, a brochure by Council on Governmental Relations.
"For the sake of disclosure," he reports, "I should mention that I am the author of this brochure."
Tuesday, August 23, 2005
Stem Cell IP Report Negative on Royalty Sharing, Favorable Pricing
A prestigious California advisory group today looked askance at proposals for royalty revenue sharing involving the California stem cell agency and was less than excited about "favorable pricing" for any therapies that might be developed.
Sharing revenues could be a disincentive to recipients of grants, both from the private and non-profit sector. Federal experience "strongly suggests" that efforts to control pricing "would actually hinder the availability of medical advances, rather than make them more widely available," the panel said.
The interim report by the Intellectual Property Study Group of the California Council on Science and Technology immediately came under criticism from the state's most influential legislator on stem cell issues, Sen. Deborah Ortiz, D-Sacramento.
She said the conclusions were "premature" and the group too narrowly based with a membership consisting of biotech and university representatives. The council is a nonprofit organization created by state legislation to recommend solutions on science-related issues.
Ortiz urged the council to begin an "objective, comprehensive study of other models that promote affordability and access to new therapies and medicines derived from research." (See below for full text of her comments as well as excerpts from the report.)
CIRM had no immediate comment on the study.
The CCST report repeatedly warned that expectations of quick profits and quick cures were "unrealistic" and verging on "hyberbole." Ten- and 20-year time frames are much more likely, it said.
Overall, the report said CIRM should be consistent with federal IP standards (Bayh-Dole Act). Specifically, ownership of IP should reside with the grantee, who would be "required to diligently develop IP for the public. In addition, the balance of any net royalties
must be used to support research and education activities."
CIRM should also:
"Permit grantees to own IP rights from CIRM-funded research."
"Require that grantees (institutions, individuals, or both) provide a plan describing how IP will be managed for the advancement of science and California public benefit."
"Grant basic research funds without requiring that grantees commit to providing revenue stream to the state. If, however, a revenue stream develops over time, revenues will be reinvested in research and education."
"Generally, make CIRM-developed research tools widely available to other researchers."
"Retain within CIRM Bayh-Dole-like rights to step in if the owner of IP is not undertaking appropriate steps to transfer technology to benefit the public."
"Leave license particulars to the owner who is in the best position to judge how best to ensure that discoveries are made widely available through commercialization or
otherwise."
"Reserve the right to use IP by or on behalf of CIRM."
"Establish and maintain a CIRM database to track all IP generated through CIRM funding."
Sharing revenues could be a disincentive to recipients of grants, both from the private and non-profit sector. Federal experience "strongly suggests" that efforts to control pricing "would actually hinder the availability of medical advances, rather than make them more widely available," the panel said.
The interim report by the Intellectual Property Study Group of the California Council on Science and Technology immediately came under criticism from the state's most influential legislator on stem cell issues, Sen. Deborah Ortiz, D-Sacramento.
She said the conclusions were "premature" and the group too narrowly based with a membership consisting of biotech and university representatives. The council is a nonprofit organization created by state legislation to recommend solutions on science-related issues.
Ortiz urged the council to begin an "objective, comprehensive study of other models that promote affordability and access to new therapies and medicines derived from research." (See below for full text of her comments as well as excerpts from the report.)
CIRM had no immediate comment on the study.
The CCST report repeatedly warned that expectations of quick profits and quick cures were "unrealistic" and verging on "hyberbole." Ten- and 20-year time frames are much more likely, it said.
Overall, the report said CIRM should be consistent with federal IP standards (Bayh-Dole Act). Specifically, ownership of IP should reside with the grantee, who would be "required to diligently develop IP for the public. In addition, the balance of any net royalties
must be used to support research and education activities."
CIRM should also:
"Permit grantees to own IP rights from CIRM-funded research."
"Require that grantees (institutions, individuals, or both) provide a plan describing how IP will be managed for the advancement of science and California public benefit."
"Grant basic research funds without requiring that grantees commit to providing revenue stream to the state. If, however, a revenue stream develops over time, revenues will be reinvested in research and education."
"Generally, make CIRM-developed research tools widely available to other researchers."
"Retain within CIRM Bayh-Dole-like rights to step in if the owner of IP is not undertaking appropriate steps to transfer technology to benefit the public."
"Leave license particulars to the owner who is in the best position to judge how best to ensure that discoveries are made widely available through commercialization or
otherwise."
"Reserve the right to use IP by or on behalf of CIRM."
"Establish and maintain a CIRM database to track all IP generated through CIRM funding."
Snippets from the CCST Report
Here are excerpts from the CCST stem cell IP report:
Lower Your Expectations -- "We conclude that some Californians have unrealistically optimistic expectations about the likely financial returns to the state from its investment in stem cell research, especially in the short run. Some statements about these returns verge on hyperbole."
Think Long Term -- "In the near term, benefits will accrue to the state from its investment in the Stem Cell Initiative through retention and recruitment of high-quality research personnel to the state and through enhanced business activity in support of California research institutions and programs. In the longer term, the state will realize the majority of its economic return on investment from the creation of new high-tech jobs and businesses, stimulation of the economy, and the tax revenues derived from commercialization of the research results into new products and therapeutic treatments for a wide variety of debilitating illnesses. Although these impacts are not likely to accrue quickly in the near term, they have the potential to be substantial."
Assist Venture Capitalists -- "Encourage private investors to invest in further research and development of new technologies resulting from CIRM-funded research. Venture capital investment plays a critical role in the development of IP after initial research and before late-stage R&D which is more generally funded by private industry."
Widely Available Databases -- "CIRM should encourage grantees to make CIRM-funded databases as widely available as possible. However, if a proprietary database is necessary to move a grantee’s stem cell research forward faster, proprietary databases may be developed for and used in that research. The success of CIRM will depend greatly upon researchers’ ability to access data and information, often for multiple purposes. Scientific and research progress in stem cell research, like other research, will depend on researchers’ ability to access and use information in the public domain and to combine public and proprietary data into new databases, as well as to re-evaluate and reuse existing data."
The Disincentive of Royalty Revenue Sharing -- "Royalty revenue sharing may have negative impacts on both non-profit and for-profit grantees. Revenue sharing imposed by CIRM on its non-profit grantees may act as a disincentive to invest the effort and cost necessary to secure patent protection, find an appropriate licensee, and ultimately transfer a promising technology to the commercial sector for the development of treatments and drugs that prove beneficial to the general public. In addition, for non-profit grantees, a royalty sharing requirement could, depending on how it is administered, prevent them from maximizing the impact of CIRM funding by using it to leverage federal funds, since federal funding rules require them to use net royalties for education and research purposes. Royalty revenue sharing imposed on for-profit grantees could discourage their participation in CIRM funding altogether."
Favorable Pricing -- "The linkage of such an important healthcare financing policy with IP policy, and the subsequent management of IP, may have unfortunate and unintended consequences. Experience at the federal level strongly suggests that it would actually hinder the availability of medical advances, rather than make them more widely available....The example of the NIH experience suggests that an explicit requirement for reasonable pricing will probably drive away industry, which will be the critical partner in bringing treatments from concept to reality, and will effectively erect an insurmountable barrier to the commercialization of the products of CIRM-funded research....We recommend that a more detailed examination begin in the near future that engages the full range of non-IP technical expertise required to lay out the key issues involved in reasonable or favorable pricing."
Political Necessity – The report recommended a requiring grant recipients to prepare a "plan describing how IP will be managed for the advancement of science and California public benefit. Although such a plan is not customary for research grants, the public interest in this initiative and the calls for accountability suggest that developing a plan is a political necessity."
Patentable Inventions -- "In all cases, grantees should be obliged to disclose to CIRM the patentable inventions and other intellectual creations that result from CIRM-funded research; if they believe that the creations would be most effectively disseminated and most effectively foster significant ongoing scientific progress through dedication to the public domain or open source licensing, CIRM should respect this decision. Most important, CIRM grantees should be expected to reserve the right to use the technology for their own research and education purposes and to allow other non-profit institutions to do so as well, even in cases where an exclusive commercial license is granted for the commercial development of a product."
Lower Your Expectations -- "We conclude that some Californians have unrealistically optimistic expectations about the likely financial returns to the state from its investment in stem cell research, especially in the short run. Some statements about these returns verge on hyperbole."
Think Long Term -- "In the near term, benefits will accrue to the state from its investment in the Stem Cell Initiative through retention and recruitment of high-quality research personnel to the state and through enhanced business activity in support of California research institutions and programs. In the longer term, the state will realize the majority of its economic return on investment from the creation of new high-tech jobs and businesses, stimulation of the economy, and the tax revenues derived from commercialization of the research results into new products and therapeutic treatments for a wide variety of debilitating illnesses. Although these impacts are not likely to accrue quickly in the near term, they have the potential to be substantial."
Assist Venture Capitalists -- "Encourage private investors to invest in further research and development of new technologies resulting from CIRM-funded research. Venture capital investment plays a critical role in the development of IP after initial research and before late-stage R&D which is more generally funded by private industry."
Widely Available Databases -- "CIRM should encourage grantees to make CIRM-funded databases as widely available as possible. However, if a proprietary database is necessary to move a grantee’s stem cell research forward faster, proprietary databases may be developed for and used in that research. The success of CIRM will depend greatly upon researchers’ ability to access data and information, often for multiple purposes. Scientific and research progress in stem cell research, like other research, will depend on researchers’ ability to access and use information in the public domain and to combine public and proprietary data into new databases, as well as to re-evaluate and reuse existing data."
The Disincentive of Royalty Revenue Sharing -- "Royalty revenue sharing may have negative impacts on both non-profit and for-profit grantees. Revenue sharing imposed by CIRM on its non-profit grantees may act as a disincentive to invest the effort and cost necessary to secure patent protection, find an appropriate licensee, and ultimately transfer a promising technology to the commercial sector for the development of treatments and drugs that prove beneficial to the general public. In addition, for non-profit grantees, a royalty sharing requirement could, depending on how it is administered, prevent them from maximizing the impact of CIRM funding by using it to leverage federal funds, since federal funding rules require them to use net royalties for education and research purposes. Royalty revenue sharing imposed on for-profit grantees could discourage their participation in CIRM funding altogether."
Favorable Pricing -- "The linkage of such an important healthcare financing policy with IP policy, and the subsequent management of IP, may have unfortunate and unintended consequences. Experience at the federal level strongly suggests that it would actually hinder the availability of medical advances, rather than make them more widely available....The example of the NIH experience suggests that an explicit requirement for reasonable pricing will probably drive away industry, which will be the critical partner in bringing treatments from concept to reality, and will effectively erect an insurmountable barrier to the commercialization of the products of CIRM-funded research....We recommend that a more detailed examination begin in the near future that engages the full range of non-IP technical expertise required to lay out the key issues involved in reasonable or favorable pricing."
Political Necessity – The report recommended a requiring grant recipients to prepare a "plan describing how IP will be managed for the advancement of science and California public benefit. Although such a plan is not customary for research grants, the public interest in this initiative and the calls for accountability suggest that developing a plan is a political necessity."
Patentable Inventions -- "In all cases, grantees should be obliged to disclose to CIRM the patentable inventions and other intellectual creations that result from CIRM-funded research; if they believe that the creations would be most effectively disseminated and most effectively foster significant ongoing scientific progress through dedication to the public domain or open source licensing, CIRM should respect this decision. Most important, CIRM grantees should be expected to reserve the right to use the technology for their own research and education purposes and to allow other non-profit institutions to do so as well, even in cases where an exclusive commercial license is granted for the commercial development of a product."
Text of Ortiz Comments
Here is the text of Sen. Ortiz' press release, which is not currently available on the Web, on the CCST report.
SENATOR ORTIZ RESPONDS TO INTERIM REPORT BY
CALIFORNIA COUNCIL ON SCIENCE AND TECHNOLOGY
SACRAMENTO – Senator Deborah Ortiz (D-Sacramento) today issued the following statement regarding the interim report on intellectual property issued by the California Council on Science and Technology:
“This interim report is but a first step in an ongoing process to determine the best way to ensure California shares in the therapies and medicines we hope to develop through Proposition 71, which provides more than $3 billion in publicly-funded stem cell research grants.
“The report is premature. The legislative resolution asking the council to explore intellectual property policies for stem cell research, ACR 24 by Assemblyman Gene Mullin, D-San Francisco, has yet to be voted on by the Senate. The resolution also asks the council to broaden its membership beyond its current bio-tech and university representatives and study policies that would ensure California sees a financial return on its generous investment. That was the promise made to voters in November 2004, and that’s the promise that must be kept to ensure voters’ confidence in their huge investment in cutting-edge research.”
“As the council notes, there is an expectation that intellectual property policies need to direct a revenue stream to the state. The council also acknowledges that federal tax laws prevent Proposition 71, as written, from delivering on its promise to provide royalties or revenue streams back to the state while using tax-exempt bonds.
“Senate Constitutional Amendment 13, however, would establish a method for providing benefits to the state without jeopardizing the use of tax-exempt bonds. SCA 13 would require that the state’s public health programs have access at affordable, below-market costs to the products, medicines and therapies that eventually will be developed under Proposition 71. California should not have to pay twice for medical therapies that can assist our citizens who suffer from debilitating and life-threatening chronic conditions.
“I urge the council to expand its study group as requested under ACR 24 to add representatives of consumer and public interest groups, foundations, and bond and legislative counsel to its current panel so the council can provide a broad perspective into how our state can benefit from the public’s investment.
“I also urge the council to conduct an objective, comprehensive study of other models that promote affordability and access to new therapies and medicines derived from research. The International Aids Vaccine Initiative requires all of its grantees to make their resulting therapies and products accessible and affordable to low-income populations; the Melinda and Bill Gates Foundation and the Foundation for the National Institutes of Health require “global access” to the therapies and medicines that result from their research grants.
“As the venture capitalist in this bold experiment, California has the ability and the responsibility to use its leverage to ensure its citizens have affordable access to the products and therapies eventually developed. We must provide leadership in developing standards that make it clear the public will benefit from the public’s investments.”
# # #
SENATOR ORTIZ RESPONDS TO INTERIM REPORT BY
CALIFORNIA COUNCIL ON SCIENCE AND TECHNOLOGY
SACRAMENTO – Senator Deborah Ortiz (D-Sacramento) today issued the following statement regarding the interim report on intellectual property issued by the California Council on Science and Technology:
“This interim report is but a first step in an ongoing process to determine the best way to ensure California shares in the therapies and medicines we hope to develop through Proposition 71, which provides more than $3 billion in publicly-funded stem cell research grants.
“The report is premature. The legislative resolution asking the council to explore intellectual property policies for stem cell research, ACR 24 by Assemblyman Gene Mullin, D-San Francisco, has yet to be voted on by the Senate. The resolution also asks the council to broaden its membership beyond its current bio-tech and university representatives and study policies that would ensure California sees a financial return on its generous investment. That was the promise made to voters in November 2004, and that’s the promise that must be kept to ensure voters’ confidence in their huge investment in cutting-edge research.”
“As the council notes, there is an expectation that intellectual property policies need to direct a revenue stream to the state. The council also acknowledges that federal tax laws prevent Proposition 71, as written, from delivering on its promise to provide royalties or revenue streams back to the state while using tax-exempt bonds.
“Senate Constitutional Amendment 13, however, would establish a method for providing benefits to the state without jeopardizing the use of tax-exempt bonds. SCA 13 would require that the state’s public health programs have access at affordable, below-market costs to the products, medicines and therapies that eventually will be developed under Proposition 71. California should not have to pay twice for medical therapies that can assist our citizens who suffer from debilitating and life-threatening chronic conditions.
“I urge the council to expand its study group as requested under ACR 24 to add representatives of consumer and public interest groups, foundations, and bond and legislative counsel to its current panel so the council can provide a broad perspective into how our state can benefit from the public’s investment.
“I also urge the council to conduct an objective, comprehensive study of other models that promote affordability and access to new therapies and medicines derived from research. The International Aids Vaccine Initiative requires all of its grantees to make their resulting therapies and products accessible and affordable to low-income populations; the Melinda and Bill Gates Foundation and the Foundation for the National Institutes of Health require “global access” to the therapies and medicines that result from their research grants.
“As the venture capitalist in this bold experiment, California has the ability and the responsibility to use its leverage to ensure its citizens have affordable access to the products and therapies eventually developed. We must provide leadership in developing standards that make it clear the public will benefit from the public’s investments.”
# # #
IP Report Released for California Stem Cell Agency
Later this afternoon we will have a longer look but here is the first cut on the just-released report on intellectual property and the California stem cell agency.
The California Council on Science and Technology said that CIRM should "develop a set of policies consistent with the federal Bayh-Dole Act to manage patents and other intellectual property (IP) resulting from California's burgeoning stem cell research program."
It also warned that the state and patients should lower their expectations either for quick bucks or quick cures. Therapies from stem cell research could be 10 or 20 years out.
"The study group urged CIRM and the state to proceed with caution and not set overly prescriptive policies for IP," the CCST press release said.
"The report emphasized balancing the state's interest in receiving benefits from its investment in research with the need to bring actual therapies to market through workable IP agreements. The study group encouraged timely publication of research results to maximize public benefit from the project. Making research tools developed with CIRM funding largely available to other scientists is critical, the study concluded.
"'Progress in stem cell research, like other research, will depend on researchers' ability to access and use information in the public domain and to combine public and proprietary data into new databases as well as to re-evaluate and reuse existing data,'" the CCST press release said.
Here are links to the press release and the full report.
The California Council on Science and Technology said that CIRM should "develop a set of policies consistent with the federal Bayh-Dole Act to manage patents and other intellectual property (IP) resulting from California's burgeoning stem cell research program."
It also warned that the state and patients should lower their expectations either for quick bucks or quick cures. Therapies from stem cell research could be 10 or 20 years out.
"The study group urged CIRM and the state to proceed with caution and not set overly prescriptive policies for IP," the CCST press release said.
"The report emphasized balancing the state's interest in receiving benefits from its investment in research with the need to bring actual therapies to market through workable IP agreements. The study group encouraged timely publication of research results to maximize public benefit from the project. Making research tools developed with CIRM funding largely available to other scientists is critical, the study concluded.
"'Progress in stem cell research, like other research, will depend on researchers' ability to access and use information in the public domain and to combine public and proprietary data into new databases as well as to re-evaluate and reuse existing data,'" the CCST press release said.
Here are links to the press release and the full report.
Sunday, August 21, 2005
Young Klein: "I'm going to stay away from government work."
Some describe California stem cell chairman Robert Klein as a "czar." Then there are others who say he is "a tireless worker who believes nothing is impossible, but add that his financial packages tend to be complicated and optimistic."
While the latter description dates back to the 1980s in a Fresno Bee article, it could well describe him today. So could the description "czar," at least by some perspectives. Fortune magazine recently characterized Klein as a top-notch salesman as well as "manic" and "relentless."
Klein is the driving force behind the stem cell agency, but we have yet to see a first-rate profile of the man that includes warts as well as the usual complimentary material from his friends and supporters. Such profiles are difficult and time consuming and don't often appear in the mainstream media. For example, they would have to include a look at his business arrangements over the last 20 or so years and any lawsuits involving them.
But who Klein is and his track record are fundamental to understanding CIRM.
Some of his history can be found in this article from the 1980s in the Fresno Bee, published in the city where Klein's father was city manager. One quote from it: "Bob has relationships with everybody. I mean, he's on every side of every transaction. Every time I've bumped into him he's got a number of levels of involvement.-- Preston R. Miller, partner, Goldman Sachs & Co., underwriter for Fresno County bond."
Another quote from the story (the last two paragraphs): "Klein acknowledged that lobbying on behalf of the borrowers created a conflict of interest, but stressed, 'It was a fully disclosed conflict.'
'In the future,' he said, 'I'm going to stay away from government work.'"
The piece is murky and convoluted but is worth slogging through if you want one reporter's perspective on Klein's business dealings. In this ancient affair, he seemed to be pushing the envelope on conflicts of interest, based on the Fresno Bee's reporting.
The Fresno Bee article was made available courtesy of the Etopia Media News Networks, which has done substantial reporting on the California stem cell agency.
While the latter description dates back to the 1980s in a Fresno Bee article, it could well describe him today. So could the description "czar," at least by some perspectives. Fortune magazine recently characterized Klein as a top-notch salesman as well as "manic" and "relentless."
Klein is the driving force behind the stem cell agency, but we have yet to see a first-rate profile of the man that includes warts as well as the usual complimentary material from his friends and supporters. Such profiles are difficult and time consuming and don't often appear in the mainstream media. For example, they would have to include a look at his business arrangements over the last 20 or so years and any lawsuits involving them.
But who Klein is and his track record are fundamental to understanding CIRM.
Some of his history can be found in this article from the 1980s in the Fresno Bee, published in the city where Klein's father was city manager. One quote from it: "Bob has relationships with everybody. I mean, he's on every side of every transaction. Every time I've bumped into him he's got a number of levels of involvement.-- Preston R. Miller, partner, Goldman Sachs & Co., underwriter for Fresno County bond."
Another quote from the story (the last two paragraphs): "Klein acknowledged that lobbying on behalf of the borrowers created a conflict of interest, but stressed, 'It was a fully disclosed conflict.'
'In the future,' he said, 'I'm going to stay away from government work.'"
The piece is murky and convoluted but is worth slogging through if you want one reporter's perspective on Klein's business dealings. In this ancient affair, he seemed to be pushing the envelope on conflicts of interest, based on the Fresno Bee's reporting.
The Fresno Bee article was made available courtesy of the Etopia Media News Networks, which has done substantial reporting on the California stem cell agency.
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