The California stem cell agency has raised nearly $40 million, an amount that will allow funding of the first year of its training grants and more.
The California Stem Cell Report has confirmed a story first published in the San Francisco Examiner last week. Reporter Marisa Lagos said that stem cell chairman Robert Klein disclosed the general amount in a little-noticed speech in the Bay Area.
We have been told the money has been raised through bond anticipation notes, which Klein has called a type of bridge loan. They are sold at higher rates of interest than conventional state bonds. They are intended to be repaid only if the state wins the lawsuit challenging the existence of the stem cell agency. If it loses, the bond purchasers receive nothing.
Klein's plan was to sell the notes to charitable organizations – the theory being that they could just consider them gifts if the state loses the lawsuit.
One of the purchasers of $5 million in notes is Herb and Marian Sanders, co-chairs of the Golden West Financial Corp. of Oakland, the parent of World Savings Bank.
Monday, January 23, 2006
Revenue and Results Sharing Plus More March-In
The California stem cell agency Monday moved a step closer to adopting rules that will give the state of California a share of returns on revenue generated from inventions created by state-funded stem cell research.
The agency also moved towards requiring greater sharing of research than currently provided under much-criticized federal rules.
The actions were taken on a 7-0 vote by the agency's Intellectual Property Task Force. Basically the group adopted with some changes the draft of the policy prepared for today's meeting (see "25 percent" and the full text of the draft). The proposal covers only non-profit organizations.
The requirement on 25 percent revenue sharing would kick in only after revenues reach $500,000 (adjusted for inflation, a change added Monday). The revenue sharing applies only to the portion to be received by the grantee's organization. The individual grant recipient gets his cut first.
Regarding the sharing of research results, Ed Penhoet, chair of the task force, said the draft "pushes the envelope" compared to what is currently occurring nationally. He said the state could be "selectively disadvantaged" because other states will not have to share information while California would do so without requiring reciprocity.
But he did express hope that California's move towards sharing of research and non-exclusivity in terms of licensing inventions would spur a national movement in that direction.
The task force also made changes in the draft policy aimed at making therapies available at lower costs and to put muscle behind a requirement for plans to help uninsured persons.
One change would require that research licensees that develop therapies make them available at the lowest commercial prices to Medi-Cal or uninsured persons. Licensees could do that or come up with a plan for access to the therapies by Medi-Cal or the uninsured.
The task force then approved a rule to allow the state to "march in" – basically take back the rights of licensees when they fail to comply with their own plans. Federal law provides for "marches in" but none have ever occurred.
The language of the changes was loose and will more fully refined when the rules come up for adoption by the Oversight Committee on Feb. 10. Penhoet promised that the revisions will be posted online Feb. 5 on the CIRM, five days before the meeting.
Also on Monday, a key California state legislator released a statement on her position on intellectual property and accessibility of therapies. Sen. Deborah Ortiz, D-Sacramento, is carrying a proposed constitutional amendment that would force CIRM to change its IP approach.
Her position and the proposal approved on Monday appear to be creeping closer although they are still some distance apart.
Here is the text of the statement from Hallye Jordan, director of communications for Ortiz. It was not available elsewhere on the Web at the time of this writing:
The agency also moved towards requiring greater sharing of research than currently provided under much-criticized federal rules.
The actions were taken on a 7-0 vote by the agency's Intellectual Property Task Force. Basically the group adopted with some changes the draft of the policy prepared for today's meeting (see "25 percent" and the full text of the draft). The proposal covers only non-profit organizations.
The requirement on 25 percent revenue sharing would kick in only after revenues reach $500,000 (adjusted for inflation, a change added Monday). The revenue sharing applies only to the portion to be received by the grantee's organization. The individual grant recipient gets his cut first.
Regarding the sharing of research results, Ed Penhoet, chair of the task force, said the draft "pushes the envelope" compared to what is currently occurring nationally. He said the state could be "selectively disadvantaged" because other states will not have to share information while California would do so without requiring reciprocity.
But he did express hope that California's move towards sharing of research and non-exclusivity in terms of licensing inventions would spur a national movement in that direction.
The task force also made changes in the draft policy aimed at making therapies available at lower costs and to put muscle behind a requirement for plans to help uninsured persons.
One change would require that research licensees that develop therapies make them available at the lowest commercial prices to Medi-Cal or uninsured persons. Licensees could do that or come up with a plan for access to the therapies by Medi-Cal or the uninsured.
The task force then approved a rule to allow the state to "march in" – basically take back the rights of licensees when they fail to comply with their own plans. Federal law provides for "marches in" but none have ever occurred.
The language of the changes was loose and will more fully refined when the rules come up for adoption by the Oversight Committee on Feb. 10. Penhoet promised that the revisions will be posted online Feb. 5 on the CIRM, five days before the meeting.
Also on Monday, a key California state legislator released a statement on her position on intellectual property and accessibility of therapies. Sen. Deborah Ortiz, D-Sacramento, is carrying a proposed constitutional amendment that would force CIRM to change its IP approach.
Her position and the proposal approved on Monday appear to be creeping closer although they are still some distance apart.
Here is the text of the statement from Hallye Jordan, director of communications for Ortiz. It was not available elsewhere on the Web at the time of this writing:
"With the ICOC task force meeting today to consider intellectual property guidelines, as well as the recent proposals of the California Council on Science and Technology and the Foundation for Taxpayer and Consumer Rights, I thought it might be helpful to understand what Senator Ortiz is considering for legislation she intends to move this year.
"The senator supports the concept of requiring grantees to share with the state 25% to 50% of any revenues generated, with no direction that those funds by used for education and research. The senator believes the revenues should be available to help pay back the costs of the bonds. She also is considering allowing CIRM to direct the state’s share to a nonprofit organization if necessary to allow for the use of tax-exempt bonds. In addition, she is considering requiring the CIRM to provide a higher share of revenues to the state if possible without hindering research and the development of promising stem cell therapies.
"If CIRM is contemplating using taxable bonds, CIRM should be required to adjust the percentage upwards to so that the state can offset the use of more expensive taxable bonds with a higher level of royalties.
"If they are using tax exempt bonds, CIRM should be allowed to direct the state’s share of royalties to a nonprofit organization that is dedicated to enhancing access to clinical trials and therapies for low-income populations
"The Senator believes it is critical that licensees and grantees sell drugs, therapies or products developed with Proposition 71 funds to the state at the best price they are offered to anyone else.
"She also believes it is critical that CIRM be required to impose any and all licensing conditions that are necessary to ensure open dissemination of basic research tools and findings, including research exemptions, open source and nonexclusive licensing, retention of IP rights, and assignment or sharing of IP rights with entities designated by the ICOC to collectively manage IP rights associated with stem cell research."
Patenting, Access to Research Materials and Therapies: A Commentary
An experienced and knowledgeable veteran of the intellectual property world has prepared a preliminary critique of the draft IP policies of the California stem cell agency.
The commentary comes at our request from Terry Feuerborn, who was executive director of the Office of Technology Transfer within the Office of the President of the University of California from 1994 to 2000. He also was recipient of the 2000 Bayh-Dole Award from the Association of University Technology Managers.
As we noted in our previous item on the draft policies, the devil is in the details. Feurborn touches on some of those type of problems. Here is the full text of his comments.
"In general, the draft IP policy is headed in the right direction. There are rough edges, of course, but the overall thrust of the document is reasonable given the politics involved. Here are some features that could benefit from additional review:
"The introductory paragraph of Part II says that the IP terms and conditions will be adopted as a set of regulations with the force and effect of law. Given the very complex world of research, patenting, and licensing, and the many surprises that occur, will this provision become an inflexible strait-jacket? At the very least, there should be some provision for making exceptions when unusual circumstances are encountered.
"Grantees are required to submit different kinds of reports to CIRM. The wording in some places can be interpreted to suggest that information be included that would be highly confidential in nature--such as enabling invention information. Is this intended or just an oversight? It is assumed that reports submitted to CIRM will become publicly available. In addition, there is a requirement that research "data" be made available. Others should talk about the overall wisdom of this requirement. With respect to data related to human subjects, however, this would be objectionable for a host of compelling reasons.
"In some places, grantees are required to monitor the performance of licensees in ways that are likely to exceed what grantees are actually capable of doing without extraordinary resources. It is hard enough for licensors to monitor the extent to which licensees are paying royalties in a proper manner.
"The draft policy requires that research materials be made available to all requesters at no cost except for the recovery of expenses. This could be very troubling for grantees if the research materials are exotic in nature or are truly difficult to produce. It is not a matter of cost in all cases. It may be a matter of time and effort on the part of the most senior research personnel that could better be spent on research rather than responding to requests from all over the world. In addition, the request is to be satisfied within 60 days. Will that be technically possible in all cases? Since this will, according to the draft, be a legal requirement, what will be the consequences if it is impossible to meet a 60-day deadline?
"Under the requirements for licensing of CIRM-funded inventions, licensees must have 'plans for access to resultant therapies for Medi-Cal and uninsured California patient populations.' This plan is to be in place before a license can be granted. This may be an impossible task in some cases. For early stage technology, particularly, the nature of the resulting commercial product may not be known until years of investment and development have passed. Is it possible to have a meaningful plan when a license is issued in that context? How will start-up companies deal with this requirement since both their future products and their future resources will be unknown?
"The requirements for sharing royalty income with the State of California seem to be reasonable, given the wording of Proposition 71, but it would be more fair to grantees if the costs of patenting all CIRM-funded inventions could be deducted before the sharing provisions went into effect. A new formula may be required, but a policy of this nature would encourage the filing of more patent applications--thus helping to ensure that all promising technology developments would be protected by patents.
"The march-in rights are perhaps the most troubling aspect of the draft policy. It is one thing for the Federal government to impose such provisions in the Bayh-Dole Act, it may be quite another thing for CIRM to have such authority. In the case of CIRM, who will decide that a "grantee...or licensee has not made responsible efforts in a reasonable time....", or that they have not met "requirements for public use," or that "health and safety needs" have not been reasonably satisfied. How will decisions be made about such matters? What provisions are made for appeal? Can outside parties ask CIRM to exercise its march-in rights because the outside party is unhappy in some way? To what extent will uncertainties introduced by this provision discourage potential licensees, given the hundreds of millions of dollars required to develop new medical drugs and devices?
"The questions raised here are only some that need to be addressed."
The commentary comes at our request from Terry Feuerborn, who was executive director of the Office of Technology Transfer within the Office of the President of the University of California from 1994 to 2000. He also was recipient of the 2000 Bayh-Dole Award from the Association of University Technology Managers.
As we noted in our previous item on the draft policies, the devil is in the details. Feurborn touches on some of those type of problems. Here is the full text of his comments.
"In general, the draft IP policy is headed in the right direction. There are rough edges, of course, but the overall thrust of the document is reasonable given the politics involved. Here are some features that could benefit from additional review:
"The introductory paragraph of Part II says that the IP terms and conditions will be adopted as a set of regulations with the force and effect of law. Given the very complex world of research, patenting, and licensing, and the many surprises that occur, will this provision become an inflexible strait-jacket? At the very least, there should be some provision for making exceptions when unusual circumstances are encountered.
"Grantees are required to submit different kinds of reports to CIRM. The wording in some places can be interpreted to suggest that information be included that would be highly confidential in nature--such as enabling invention information. Is this intended or just an oversight? It is assumed that reports submitted to CIRM will become publicly available. In addition, there is a requirement that research "data" be made available. Others should talk about the overall wisdom of this requirement. With respect to data related to human subjects, however, this would be objectionable for a host of compelling reasons.
"In some places, grantees are required to monitor the performance of licensees in ways that are likely to exceed what grantees are actually capable of doing without extraordinary resources. It is hard enough for licensors to monitor the extent to which licensees are paying royalties in a proper manner.
"The draft policy requires that research materials be made available to all requesters at no cost except for the recovery of expenses. This could be very troubling for grantees if the research materials are exotic in nature or are truly difficult to produce. It is not a matter of cost in all cases. It may be a matter of time and effort on the part of the most senior research personnel that could better be spent on research rather than responding to requests from all over the world. In addition, the request is to be satisfied within 60 days. Will that be technically possible in all cases? Since this will, according to the draft, be a legal requirement, what will be the consequences if it is impossible to meet a 60-day deadline?
"Under the requirements for licensing of CIRM-funded inventions, licensees must have 'plans for access to resultant therapies for Medi-Cal and uninsured California patient populations.' This plan is to be in place before a license can be granted. This may be an impossible task in some cases. For early stage technology, particularly, the nature of the resulting commercial product may not be known until years of investment and development have passed. Is it possible to have a meaningful plan when a license is issued in that context? How will start-up companies deal with this requirement since both their future products and their future resources will be unknown?
"The requirements for sharing royalty income with the State of California seem to be reasonable, given the wording of Proposition 71, but it would be more fair to grantees if the costs of patenting all CIRM-funded inventions could be deducted before the sharing provisions went into effect. A new formula may be required, but a policy of this nature would encourage the filing of more patent applications--thus helping to ensure that all promising technology developments would be protected by patents.
"The march-in rights are perhaps the most troubling aspect of the draft policy. It is one thing for the Federal government to impose such provisions in the Bayh-Dole Act, it may be quite another thing for CIRM to have such authority. In the case of CIRM, who will decide that a "grantee...or licensee has not made responsible efforts in a reasonable time....", or that they have not met "requirements for public use," or that "health and safety needs" have not been reasonably satisfied. How will decisions be made about such matters? What provisions are made for appeal? Can outside parties ask CIRM to exercise its march-in rights because the outside party is unhappy in some way? To what extent will uncertainties introduced by this provision discourage potential licensees, given the hundreds of millions of dollars required to develop new medical drugs and devices?
"The questions raised here are only some that need to be addressed."
Rival IP Proposal From Watchdog Groups
No blank check for biotech – that's the rallying cry of the Foundation for Taxpayer and Consumer Rights and the California Nurses Association and their position on intellectual property issues involving the California stem cell agency.
Reporter Terri Somers of the San Diego Union Tribune wrote about the organizations' proposals this morning and noted that some are similar to what the agency is considering in its draft.
Here is a summary from the press release by the foundation and the nurses association. The full text can be found here. The stem cell agency will consider its IP policies at a meeting this afternoon at Stanford.
Reporter Terri Somers of the San Diego Union Tribune wrote about the organizations' proposals this morning and noted that some are similar to what the agency is considering in its draft.
Here is a summary from the press release by the foundation and the nurses association. The full text can be found here. The stem cell agency will consider its IP policies at a meeting this afternoon at Stanford.
"Research institutions that get CIRM funds should pay the state at least 25 percent of net royalties in excess of $100,000 received for any invention or discovery developed with Prop 71 funds.
"The state's share of any royalties would be used to help fund access to Prop. 71 therapies for people who cannot afford it.
"The licensees of discoveries developed with Prop. 71 funds must sell any resulting drugs, therapies or products to the state at their lowest price.
"The stem cell institute would create a patent pool that would include all patents resulting from research it funds. A three-person board including the California Attorney General would govern the pool.
"The institute would be able to tell an applicant that no patent is possible for a particular project if it determines that keeping the expected results in the public domain best promotes further research.
"Any California-based researcher would be able to use the results of Prop. 71-funded research for further research without paying a licensing fee.
"The California Attorney General would have march-in rights -- the ability to intervene -- if a drug or therapy were priced unreasonably or any other public benefit requirement is not met.
"The institute would have the responsibility to take control of new therapies for public health and safety reasons. For instance, meeting the public need of getting vaccines to market.
"All investors and researchers involved in commercial enterprises resulting from Prop. 71-funded research would be required to file disclosure forms. These would be public records."
Sunday, January 22, 2006
Lots of News on CIRM on Monday
Monday will be a busy news day for the California stem cell agency. Its task force on intellectual property is holding a hearing in the afternoon. The Foundation for Taxpayer and Consumer Rights is holding a news conference just prior that to unveil its own proposal for sharing the swag from stem cell inventions. And California State Sen. Deborah Ortiz is giving a speech on many of the same issues. She is the author of legislation to tighten oversight of CIRM and ensure financial returns to the state from the agency. We will have coverage and commentary throughout the day.
Chron Carries Bleak Story About CIRM
The San Francisco Chronicle carried a pessimistic overview of the California stem cell agency in a front page story on Sunday.
The piece covered much of the same ground that other papers have traveled in recent weeks, but in many ways the story by reporter Carl Hall painted a bleaker outlook.
Some of the language in the article about CIRM:
The article made no reference to the report last week in the San Francisco Examiner that the agency had received another $5 million donation. The Examiner also reported that stem cell chairman Robert Klein said in a speech that he has raised an additional $40 million.
We have queried CIRM about the fund-raising information, but agency has not responded – either to deny or to confirm.
The piece covered much of the same ground that other papers have traveled in recent weeks, but in many ways the story by reporter Carl Hall painted a bleaker outlook.
Some of the language in the article about CIRM:
"stuck in a seemingly endless legal morass"
"magnet for attacks"
"really a stressful time"
"reduced to begging for handouts"
The article made no reference to the report last week in the San Francisco Examiner that the agency had received another $5 million donation. The Examiner also reported that stem cell chairman Robert Klein said in a speech that he has raised an additional $40 million.
We have queried CIRM about the fund-raising information, but agency has not responded – either to deny or to confirm.
Friday, January 20, 2006
FTCR: CIRM Highhanded and Stonewalling
Citing the case of a Michigan researcher, a watchdog group says it demonstrates that the California stem cell agency has a "high handed preference for secrecy."
According to John Simpson, stem cell project director for the Foundation of Taxpayer and Consumer Rights,
The foundation's press release continued,
According to John Simpson, stem cell project director for the Foundation of Taxpayer and Consumer Rights,
"The stem cell institute just doesn't seem to understand that it's a state agency. They need to tell the public what's going on. Instead, when the facts are inconvenient, they stonewall or hope nobody will notice. Their behavior only undermines the institute's credibility and, sadly, the stem cell research projects they hope to sponsor."The foundation referred to the resignation of Jose Cibelli from the agency's standards group. See Cibelli item below.
The foundation's press release continued,
"As of Friday morning (1-20-06), the only indication of the situation on CIRM's website was a footnote on the posted list of working group members. It reads, 'Voluntarily withdrawn from active membership until further notice.'"
New York's Carlyle Hotel and California IP Hearing: Planning on Attending?
For those of you in the New York City area interested in the big money issues involved in intellectual property and the California stem cell agency, you are supposed to be able to hear the proceedings at the Carlyle hotel late Monday afternoon.
The luxury hotel prides itself on its privacy, but CIRM tells us that the proceedings will be able to be heard beginning at 4 p.m. EST. CIRM has promised to provide a room location at the Carlyle, but it has not been forthcoming. You may want to double-check before you make a special effort to be at the Carlyle.
If you do attend, please drop us a note on your impressions about the affair. Send it to djensen@californiastemcellreport.com. Or you can post it directly on the blog, by clicking on the word "comments" that follows each item.
The luxury hotel prides itself on its privacy, but CIRM tells us that the proceedings will be able to be heard beginning at 4 p.m. EST. CIRM has promised to provide a room location at the Carlyle, but it has not been forthcoming. You may want to double-check before you make a special effort to be at the Carlyle.
If you do attend, please drop us a note on your impressions about the affair. Send it to djensen@californiastemcellreport.com. Or you can post it directly on the blog, by clicking on the word "comments" that follows each item.
Researcher Cibelli Quits California Stem Cell Agency
Stem cell researcher Jose Cibelli, who co-authored a fraudulent paper in the Korean scandal, has resigned from his work with the California stem cell agency.
The Sacramento Bee reported his departure this morning in an editorial. Cibelli is under investigation at Michigan State University, a probe he requested himself.
The Bee wrote:
Among other things, the Standards Working Group deals with the ethics of stem cell research, which came up at a Dec. 1 meeting in which Cibelli participated (see Cibelli item Jan. 12). The discussion included the Korean scandal, but The Bee says it was given short shrift. That triggered a contrary response from the group's co-chair, Bernard Lo of UC San Francisco.
The Bee said,
The newspaper continued:
Perhaps coincidentally, the CIRM's Governance Subcommittee has scheduled a meeting one week from today that includes discussion of a policy for removal of working group members.
The Sacramento Bee reported his departure this morning in an editorial. Cibelli is under investigation at Michigan State University, a probe he requested himself.
The Bee wrote:
"'Until that issue is resolved, Cibelli has voluntarily withdrawn from his activities on the Standards Working Group, as of Tuesday of this week,' said institute spokeswoman Nicole Pagano."
Among other things, the Standards Working Group deals with the ethics of stem cell research, which came up at a Dec. 1 meeting in which Cibelli participated (see Cibelli item Jan. 12). The discussion included the Korean scandal, but The Bee says it was given short shrift. That triggered a contrary response from the group's co-chair, Bernard Lo of UC San Francisco.
The Bee said,
"For now, it is unclear if Cibelli knew about Hwang's fabrications or simply was duped. Either way, the incident doesn't speak well of his ability to set and enforce rigorous standards on scientists who hope to receive grants from the California institute."
The newspaper continued:
"In a Dec. 29 editorial, this page criticized the institute Standards Working Group for not delving into the South Korean scandal. The working group's chair, Bernard Lo, sent us a highly misleading letter (published Jan. 8) that suggested the working group had engaged in such a discussion at its Dec. 1 meeting, even though it hadn't.
"Much more has been disclosed about Hwang since that meeting. As a result, Lo has no excuse not to have a full discussion about the scandal on Jan. 30. That's when the Standards Working Group is scheduled to meet again - without Cibelli."
Perhaps coincidentally, the CIRM's Governance Subcommittee has scheduled a meeting one week from today that includes discussion of a policy for removal of working group members.
Thursday, January 19, 2006
CIRM IP Plans: The 25 Percent Solution for the Golden State
The California stem cell agency has come up with a proposal to generate cash for California from inventions developed as the result of state-funded research grants.
It was among a number of matters addressed in a working draft of intellectual property policies that will be considered Monday at a CIRM meeting at Stanford (click here to find offsite locations at UCLA, Sacramento area and New York City).
The revenue sharing proposal calls for the state to receive 25 percent of the grantee organization's share of money garnered under a license agreement of a CIRM-funded patented invention. That would be after the individual grant recipient gets his or her cut. And the sharing plan does not kick in until revenues exceed $500,000. CIRM would require that the 25 percent fee be used for research and education that will benefit California.
Other proposals in the working draft are aimed at consistency with the Bayh-Dole Act, which is the model for splitting up the goodies on federally funded research. However, the draft is also designed to avoid some of the negative consequences of Bayh-Dole.
Here are the other "core principles" of the proposed IP policy, in addition to the state revenue sharing plan.
The proposal additionally contains interesting efforts to set up databases, assure wide and no-cost dissemination of research results and an emphasis on speedy development of therapies. Whether the CIRM proposal will meet the demands of critics is yet to be determined. It is a detailed and complex proposal, and, to use a cliché, the devil is in the details. For example, how can CIRM guarantee that its 25 percent fee goes for research and education? If the money goes into the state general fund, it is up for grabs for just about anything. Locking the money into research and education probably requires legislation, which could mean horse-trading with lawmakers, a practice that CIRM publicly eschews. That doesn't even address the question of whether research and education are the appropriate uses. Why not use the funds to aid low income seniors with chronic health care problems? Or why not use it to provide health care for women egg donors who suffer serious adverse consequences as a result of their contributions to stem cell science?
That is not to mention, why 25 percent? Is that a reasonable figure? How did the IP Task Force arrive at it?
We should note that plan was unveiled with no public outreach. It was simply posted quietly to CIRM's web site, two – possibly three -- business days before Monday's meeting. As we remarked earlier, amazingly casual for something that could involve billions of dollars. And it allows almost no time for serious responses by all interested parties at Monday's hearing.
It was among a number of matters addressed in a working draft of intellectual property policies that will be considered Monday at a CIRM meeting at Stanford (click here to find offsite locations at UCLA, Sacramento area and New York City).
The revenue sharing proposal calls for the state to receive 25 percent of the grantee organization's share of money garnered under a license agreement of a CIRM-funded patented invention. That would be after the individual grant recipient gets his or her cut. And the sharing plan does not kick in until revenues exceed $500,000. CIRM would require that the 25 percent fee be used for research and education that will benefit California.
Other proposals in the working draft are aimed at consistency with the Bayh-Dole Act, which is the model for splitting up the goodies on federally funded research. However, the draft is also designed to avoid some of the negative consequences of Bayh-Dole.
Here are the other "core principles" of the proposed IP policy, in addition to the state revenue sharing plan.
"Ownership: CIRM grantee non-profit organizations will own intellectual property that arises from CIRM-funded research activities.
"Broad Sharing: Intellectual property, including but not limited to data, knowledge, scientific articles, biomedical materials and patented inventions, that are made in the performance of CIRM-funded research will be shared broadly and promptly with the scientific community. This CIRM sharing policy is structured to extend the sharing of CIRM-funded intellectual property beyond practices commonly in use by the scientific community in 2005.
"Research Exemption: Patented inventions that are made in the performance of CIRM-funded research are to be made available for research purposes (at no cost) in California research institutions.
"Licensing: For patented inventions that are made in the performance of CIRM-funded research, grantee organizations are expected to negotiate non-exclusive licensing agreements where possible except in those circumstances when exclusivity is required to encourage the successful commercial development of the invention into products and services that can benefit the public. Further, grantee organizations are expected to grant licenses to companies with defined plans for access to resultant therapies for Medi-Cal and uninsured Californian patient populations.
"March-in rights: CIRM will retain march-in rights to be exercised in the event that CIRM-funded inventions are not developed in a timely manner or in the event that public health and safety concerns arise."
The proposal additionally contains interesting efforts to set up databases, assure wide and no-cost dissemination of research results and an emphasis on speedy development of therapies. Whether the CIRM proposal will meet the demands of critics is yet to be determined. It is a detailed and complex proposal, and, to use a cliché, the devil is in the details. For example, how can CIRM guarantee that its 25 percent fee goes for research and education? If the money goes into the state general fund, it is up for grabs for just about anything. Locking the money into research and education probably requires legislation, which could mean horse-trading with lawmakers, a practice that CIRM publicly eschews. That doesn't even address the question of whether research and education are the appropriate uses. Why not use the funds to aid low income seniors with chronic health care problems? Or why not use it to provide health care for women egg donors who suffer serious adverse consequences as a result of their contributions to stem cell science?
That is not to mention, why 25 percent? Is that a reasonable figure? How did the IP Task Force arrive at it?
We should note that plan was unveiled with no public outreach. It was simply posted quietly to CIRM's web site, two – possibly three -- business days before Monday's meeting. As we remarked earlier, amazingly casual for something that could involve billions of dollars. And it allows almost no time for serious responses by all interested parties at Monday's hearing.
Correction
In the "Klein Should Quit" item Jan. 18, we misspelled the first name of an official of the Center for Genetics and Society. It should be Marcy -- not Marcia -- Darnovsky.
More on the Mystery of The Bonds
The San Franciso Examiner also carried a story this morning on the call for Robert Klein to resign. The piece by Marisa Lagos had a couple of interesting tidbits that we have not seen elsewhere.
One involved these two paragraphs:
"Daniel Perry, vice president of the national lobbying group the Coalition for Advancement of Medical Research, said the report 'poisons the atmosphere.'
"I think [the criticisms] are unfair and unwarranted, and certainly not respectful of a decision that a majority of California voters made,' he said."
The other came from Lagos' exclusive coverage of a speech Klein gave earlier this week in San Franciso. According to Lagos, he discussed the controversy about the question of whether the California stem cell bonds would be taxable to investors as opposed to nontaxable. Varying estimates place the cost to the state of the taxable bonds at more than $500-million over the cost of nontaxable bonds. The San Francisco Chronicle reported last year that Klein, during the campaign for Prop. 71, concealed the fact that taxable bonds were likely to be required. That deception was one of reasons for the call for Klein's resignation.
However, Lagos says that in his speech earlier this week, Klein argued that "even if all the bonds are taxable, they will still end up costing taxpayers less than $6 billion, the number sold to voters."
Klein has never fully laid out a response to the Chronicle story. His latest comments will keep the issue alive.
One involved these two paragraphs:
"Daniel Perry, vice president of the national lobbying group the Coalition for Advancement of Medical Research, said the report 'poisons the atmosphere.'
"I think [the criticisms] are unfair and unwarranted, and certainly not respectful of a decision that a majority of California voters made,' he said."
The other came from Lagos' exclusive coverage of a speech Klein gave earlier this week in San Franciso. According to Lagos, he discussed the controversy about the question of whether the California stem cell bonds would be taxable to investors as opposed to nontaxable. Varying estimates place the cost to the state of the taxable bonds at more than $500-million over the cost of nontaxable bonds. The San Francisco Chronicle reported last year that Klein, during the campaign for Prop. 71, concealed the fact that taxable bonds were likely to be required. That deception was one of reasons for the call for Klein's resignation.
However, Lagos says that in his speech earlier this week, Klein argued that "even if all the bonds are taxable, they will still end up costing taxpayers less than $6 billion, the number sold to voters."
Klein has never fully laid out a response to the Chronicle story. His latest comments will keep the issue alive.
CCST IP Report Smacked for Short-changing State
The intellectual property recommendations of the California Council on Science and Technology concerning stem cell research would short change the state, according to a consumer advocacy group.
The Foundation for Taxpayer and Consumer Rights of Santa Monica took issue with the council's final IP report and recommendations to follow what it called the "flawed" federal model. The release of the recommendations came only a few days before Monday's hearing by CIRM into who should benefit economically from inventions derived from state-funded research.
John Simpson, stem cell project director for the foundation, said:
The foundation also said:
The council's final report has attracted little media attention. Reporter Laura Mecoy of The Sacramento Bee may have been the only reporter to note its issuance.
The Foundation for Taxpayer and Consumer Rights of Santa Monica took issue with the council's final IP report and recommendations to follow what it called the "flawed" federal model. The release of the recommendations came only a few days before Monday's hearing by CIRM into who should benefit economically from inventions derived from state-funded research.
John Simpson, stem cell project director for the foundation, said:
"Too often the flawed federal rules only benefit drug and biotech companies underwriting their research, but providing no fair and easy access to the medical cures the public financed."
The foundation also said:
"A recent analysis of the effect of federal rules on the 50 top-selling drugs over a five-year period found that forty-five of them received millions of dollars of taxpayer money with virtually no payback to patients or taxpayers."It continued:
"The Council acknowledges that there are other models for managing the discoveries -- so-called intellectual property (IP) -- that result from publicly-funded research. These include public domain for science, patent pooling and experimentation with licensing that would require access to drugs and cures at an affordable prices."
The council's final report has attracted little media attention. Reporter Laura Mecoy of The Sacramento Bee may have been the only reporter to note its issuance.
Prop. 71 Inspiring "Awe" Elsewhere
"If you look at Prop. 71, it's like the income tax code. You
read our initiative, it's like a haiku."
So says Bernie Siegel, who is leading a $200 million embryonic stem cell research effort in Florida.
His comments came in an article in Capitol Weekly in Sacramento that examined efforts to fund stem cell research in other states. The piece by Malcolm Maclachlan demonstrated that there is some truth to the old saw that pioneers are the ones with the arrows in their backs.
Also quoted in the article was Fiona Hutton, former spokeswoman for CIRM and the Prop. 71 campaign. She is president of Red Gate Communications, which is helping with stem cell efforts in Missouri and Kansas. Those campaigns are aimed at protecting stem cell research rather than providing funding. She noted that many of the efforts in other states did not gain footing until Prop. 71 passed.
While Siegel pointed to the complexties of Prop. 71, he also said it validated the concept of state-funded stem cell research.
"I'm not a critic of Prop. 71. I'm in awe of Prop. 71," Siegel said.
read our initiative, it's like a haiku."
So says Bernie Siegel, who is leading a $200 million embryonic stem cell research effort in Florida.
His comments came in an article in Capitol Weekly in Sacramento that examined efforts to fund stem cell research in other states. The piece by Malcolm Maclachlan demonstrated that there is some truth to the old saw that pioneers are the ones with the arrows in their backs.
"'A key lesson so far has been that low profile efforts seem more effective,' said Aaron Levine, a PhD. candidate at Princeton University who has been studying stem cell campaigns in different states. 'Because Proposition 71 dealt with such large sums of money, it became a national, if not international, issue and attracted significant opposition,'" Maclachlan wrote..
Also quoted in the article was Fiona Hutton, former spokeswoman for CIRM and the Prop. 71 campaign. She is president of Red Gate Communications, which is helping with stem cell efforts in Missouri and Kansas. Those campaigns are aimed at protecting stem cell research rather than providing funding. She noted that many of the efforts in other states did not gain footing until Prop. 71 passed.
While Siegel pointed to the complexties of Prop. 71, he also said it validated the concept of state-funded stem cell research.
"I'm not a critic of Prop. 71. I'm in awe of Prop. 71," Siegel said.
Coverage of the Call for Klein's Resignation
The call for the resignation of California stem cell chairman Robert Klein received coverage in a number of California newspapers this morning, but not much out of state at this point.
Stories were carried in San Francisco Chronicle, San Diego Union Tribune, San Jose Mercury News, Sacramento Bee and the Oakland Tribune and allied papers. For example, the San Jose story also appeared in the Contra Costa Times. The Oakland story appears in other newspapers in the same ownership chain.
Missing from the coverage was the Los Angeles Times. Newsday in New York state had a reporter on the conference call yesterday for the report card news, but no story today. One may appear later.
For the most part, the stories were cast in a predictable fashion. But the San Jose story by Steve Johnson had this interesting line:
"David Magnus, director of Stanford University's Center for Biomedical Ethics, said the stem cell institute has had some problems. Nonetheless, he added, it has 'moved at light speed' at adopting its policies compared with the state Department of Health Services, which hasn't yet complied with a 2003 law ordering it to draft its own stem-cell research guidelines."
Stories were carried in San Francisco Chronicle, San Diego Union Tribune, San Jose Mercury News, Sacramento Bee and the Oakland Tribune and allied papers. For example, the San Jose story also appeared in the Contra Costa Times. The Oakland story appears in other newspapers in the same ownership chain.
Missing from the coverage was the Los Angeles Times. Newsday in New York state had a reporter on the conference call yesterday for the report card news, but no story today. One may appear later.
For the most part, the stories were cast in a predictable fashion. But the San Jose story by Steve Johnson had this interesting line:
"David Magnus, director of Stanford University's Center for Biomedical Ethics, said the stem cell institute has had some problems. Nonetheless, he added, it has 'moved at light speed' at adopting its policies compared with the state Department of Health Services, which hasn't yet complied with a 2003 law ordering it to draft its own stem-cell research guidelines."
Wednesday, January 18, 2006
Ortiz Calls for More CIRM Accountability
The most influential California state legislator on stem cell issues appeared to agree with much of the criticism of CIRM in today's report card, but stopped short of calling for the resignation of its chairman.
Here is the text of the statement by Sen. Deborah Ortiz, D-Sacramento, chair of the Senate Health Committee:
“It is critical for all of us who supported Proposition 71 and its promise of cures for debilitating and chronic diseases and conditions to have confidence that the grants are awarded fairly and productively, and that California’s $3 billion to $7 billion investment is protected.
“While the California Institute for Regenerative Medicine has taken steps toward addressing concerns about public accountability and open government, they are not enough. The CIRM must adopt stronger standards for disclosure of conflicts of interest, including prohibiting the institute’s president from waiving such disclosures at his discretion. CIRM also must narrow its exceptions from open meeting and public records laws to allow greater disclosure about grant applications that are funded or rejected.
“The CIRM also must adopt regulations to protect patients who donate embryos for research, and take strong steps to protect the pocketbooks of Californians by ensuring taxpayers receive a financial return on their investment in stem cell research that is consistent with the wording of the initiative and the promises that were made during the campaign.
“I am committed to reintroducing vetoed legislation to protect women who donate eggs for research by requiring full disclosure and written consent regarding possible adverse health risks associated with the procedures. I also am committed to moving legislation to further open up the deliberations of both the CIRM and the Independent Citizens Oversight Committee, guard against conflicts of interest and ensure Californians receive a fair return on their investment and that medical cures created through this taxpayer-funded research are made available to Californians at affordable prices."
Here is the text of the statement by Sen. Deborah Ortiz, D-Sacramento, chair of the Senate Health Committee:
“It is critical for all of us who supported Proposition 71 and its promise of cures for debilitating and chronic diseases and conditions to have confidence that the grants are awarded fairly and productively, and that California’s $3 billion to $7 billion investment is protected.
“While the California Institute for Regenerative Medicine has taken steps toward addressing concerns about public accountability and open government, they are not enough. The CIRM must adopt stronger standards for disclosure of conflicts of interest, including prohibiting the institute’s president from waiving such disclosures at his discretion. CIRM also must narrow its exceptions from open meeting and public records laws to allow greater disclosure about grant applications that are funded or rejected.
“The CIRM also must adopt regulations to protect patients who donate embryos for research, and take strong steps to protect the pocketbooks of Californians by ensuring taxpayers receive a financial return on their investment in stem cell research that is consistent with the wording of the initiative and the promises that were made during the campaign.
“I am committed to reintroducing vetoed legislation to protect women who donate eggs for research by requiring full disclosure and written consent regarding possible adverse health risks associated with the procedures. I also am committed to moving legislation to further open up the deliberations of both the CIRM and the Independent Citizens Oversight Committee, guard against conflicts of interest and ensure Californians receive a fair return on their investment and that medical cures created through this taxpayer-funded research are made available to Californians at affordable prices."
Quick Look at Coverage of Stem Cell Report Card
The Sacramento Bee moved quickly today to post a story on the call for the resignation of stem cell chairman Robert Klein. The story came about one hour after the end of the conference call with reporters from across the country.
Some of the media outlets represented during the call were the predictable California outlets. But Newsday, Reuters and the Bureau of National Affairs were represented as well. The Reuters report was not available via the Internet at the time of this writing.
We will carry an item Thursday on news coverage of the report card on CIRM. Meanwhile you can find the story by Bee reporter Laura Mecoy by clicking here. Her story should receive some national attention as well because it is budgeted as part of the Scripps Howard News Service.
Some of the media outlets represented during the call were the predictable California outlets. But Newsday, Reuters and the Bureau of National Affairs were represented as well. The Reuters report was not available via the Internet at the time of this writing.
We will carry an item Thursday on news coverage of the report card on CIRM. Meanwhile you can find the story by Bee reporter Laura Mecoy by clicking here. Her story should receive some national attention as well because it is budgeted as part of the Scripps Howard News Service.
CGS: CIRM Turns in Mediocre Performance; Klein Should Quit
The Center for Genetics and Society Wednesday gave the California stem cell agency a mediocre "C minus" grade and called for the resignation of its chairman, Robert Klein.
The 32-page report card by the Oakland-based watchdog group said, "CIRM's first year has been a great disappointment."
Her statement (the full text follows this item) said,
The center is a nonprofit group based in Oakland that supports embryonic stem cell research. Members of its staff have regularly attended meetings of the agency and its subcommittee during the past year, testifying about the center's concerns.
The center gave CIRM "D" grades in the following areas: "maximizing health equity," minimizing conflicts of interest, cooperating with the state legislature, providing responsible leadership. The agency received its best grades – "C plus" – for establishing ethical safeguards and research standards and protecting women who provide eggs for research and other research subjects.
Klein came in for considerable criticism by CGS:
Another CIRM critic commented on the call for Klein to resign. John Simpson, stem cell project director for the Foundation for Taxpayer and Consumer Rights of Santa Monica CA, said:
Today's CGS report card cited the built-in conflicts of interest at the agency and noted the coziness of such arrangements:
On the "health equity" issue, the report said,
It said CIRM "could require that any successful therapies developed with its money be made available to the state’s medical insurance programs at reduced or no cost. Or it could require grant recipients to set aside a portion of any IP revenue in an accessibility fund."
CGS said CIRM has put in pace stem cell research guidelines recommended by the National Academies, but those are inadequate in some areas.
During the conference call among reporters, CIRM officials noted that while CIRM can set standards for only the research it funds, there are no state or federal standards for stem cell research. They suggested that the state legislature and CIRM work together to develop consistent standards.
CGS also gave CIRM a "C plus" for protection of women, but noted that there are no provisions for helping women egg donors who suffer serious side effects from the egg donation process.
The center's report said that CIRM faces "regulatory challenges never previously confronted by any other public body in the United States."
The 32-page report card by the Oakland-based watchdog group said, "CIRM's first year has been a great disappointment."
"In terms of governance, the CIRM has often failed to operate as an accountable,responsible, and transparent state agency. In the area of politics, it has failed to establish a cooperative relationship with state legislators. And in the policy arena, the CIRM has fallen far short of the expectations raised during the initiative campaign that led to its creation: It has so far failed to adopt policies to ensure that any successful stem cell therapies will be affordable to most Californians, or to reassure Californians that they will see any share at all of financial returns that the research they are funding may generate," CGS said.In response to our inquiry, CIRM spokeswoman Nicole Pagano said the agency had a "great first year."
Her statement (the full text follows this item) said,
"This is the kind of criticism-based activism that seems designed more for publicity than any practicable purpose.
"They have been working against Proposition 71 since the beginning, despite the overwhelming support of voters in California who approved the measure well over one year ago.
"Their report rehashes old issues that they have already expressed to our board; which they have duly considered and addressed."
The center is a nonprofit group based in Oakland that supports embryonic stem cell research. Members of its staff have regularly attended meetings of the agency and its subcommittee during the past year, testifying about the center's concerns.
The center gave CIRM "D" grades in the following areas: "maximizing health equity," minimizing conflicts of interest, cooperating with the state legislature, providing responsible leadership. The agency received its best grades – "C plus" – for establishing ethical safeguards and research standards and protecting women who provide eggs for research and other research subjects.
Klein came in for considerable criticism by CGS:
"…(Klein) has misused his authority in ways that have significantly undermined trust and confidence. His missteps and arrogance have been widely noted. The editorial page of the Sacramento Bee, for example, has dubbed Klein the 'self-appointed czar' of the stem cell research program and a 'rogue operator.'"Marcia Darnovsky, associate executive director of the center, told reporters during a conference call that Klein had operated CIRM "more like a private enterprise than a public agency."
Another CIRM critic commented on the call for Klein to resign. John Simpson, stem cell project director for the Foundation for Taxpayer and Consumer Rights of Santa Monica CA, said:
"I certainly understand the public outrage that led to the call for Bob Klein to step down, but the stem cell institute's problems go beyond personalities. We'll just have a revolving door of Bob Kleins until the structure is fixed. Fixing the stem cell institute requires two things: First, it needs to follow all of California's good government laws and behave like any other state agency. Second, the institute needs to adopt rules controlling ownership of any Proposition 71-funded medical discoveries that are based on the foundation principles of affordability, accessibility and, accountability."
Today's CGS report card cited the built-in conflicts of interest at the agency and noted the coziness of such arrangements:
"The relationship between the ICOC (CIRM's board of directors) and the institutions it funds can be seen in the first round of training grants, announced on September 9, 2005. Of the 16 institutions that were awarded almost $40 million, 14 are represented on the ICOC. Viewed another way, all but two of the 17 ICOC members affiliated with an institution eligible for this round of funding saw their institutions receive grants."
On the "health equity" issue, the report said,
"To date, CIRM leadership has resisted the inclusion of affordability and accessibility of stem cell treatments as a key criterion in its policy considerations."
It said CIRM "could require that any successful therapies developed with its money be made available to the state’s medical insurance programs at reduced or no cost. Or it could require grant recipients to set aside a portion of any IP revenue in an accessibility fund."
CGS said CIRM has put in pace stem cell research guidelines recommended by the National Academies, but those are inadequate in some areas.
During the conference call among reporters, CIRM officials noted that while CIRM can set standards for only the research it funds, there are no state or federal standards for stem cell research. They suggested that the state legislature and CIRM work together to develop consistent standards.
CGS also gave CIRM a "C plus" for protection of women, but noted that there are no provisions for helping women egg donors who suffer serious side effects from the egg donation process.
The center's report said that CIRM faces "regulatory challenges never previously confronted by any other public body in the United States."
"While some of its difficulties may be 'start-up' problems that might be expected in any effort this large, the greater bulk are the result of numerous missteps and misjudgments, resistance to legislative and public oversight, and a tendency towards arrogance in the face of criticism."It continued:
"We believe it is incumbent upon the CIRM’s leadership, staff, and board to enter the institute’s second year with a new spirit, one that acknowledges—in deeds as well as words—the need for transparency, accountability and public oversight."
Text of CIRM Response to CGS
Here is the full statement from CIRM, which is not expected to be available on the Web, in response to the CGS report card.
"This is the kind of criticism-based activism that seems designed more for publicity than any practicable purpose.
"They have been working against Proposition 71 since the beginning,despite the overwhelming support of voters in California who approved the measure well over one year ago.
"Their report rehashes old issues that they have already expressed to our board; which they have duly considered and addressed.
"We feel we've had a great first year and here are the reasons why:
* 56 public meetings-all with opportunities for public response
* Appointment of ICOC and three working groups that include
nationally recognized leaders in the fields of grant review, stem cell research, and ethics
* Adopted NAS Guidelines for Human Embryonic Stem Cell Research
* First grant review and approval of the CIRM Training Grant
Program that will train nearly 200 fellows at 16 institutions statewide.
* Scientific Meeting in October that featured presentations by
stem cell researchers and clinicians from the United States as well as Australia, Canada, Israel, Sweden and the United Kingdom.
* Received $18 million in office space and incentives from the
city of San Francisco
"We have equal enthusiasm for 2006:
* At the end of January our Standards Working Group will finalize their draft to send to the ICOC. Building on the NAS Guidelines, this document will establish the medical, ethical, and scientific standards for CIRM funded research. This document is the first state or national regulation of its kind and it represents a scientific and ethical blueprint for how stem cell research ought to be conducted. With the ICOC's approval, they will undergo the APA process and become formal regulations with the force of law in California.
* Bond Anticipation Note funding our training grants and a smaller research grant
* Planning for a May Scientific Conference examining the risks of Egg Donation; to be co-sponsored by the Society for Gynecologic Investigation
* Strategic planning for the long range funding"
"This is the kind of criticism-based activism that seems designed more for publicity than any practicable purpose.
"They have been working against Proposition 71 since the beginning,despite the overwhelming support of voters in California who approved the measure well over one year ago.
"Their report rehashes old issues that they have already expressed to our board; which they have duly considered and addressed.
"We feel we've had a great first year and here are the reasons why:
* 56 public meetings-all with opportunities for public response
* Appointment of ICOC and three working groups that include
nationally recognized leaders in the fields of grant review, stem cell research, and ethics
* Adopted NAS Guidelines for Human Embryonic Stem Cell Research
* First grant review and approval of the CIRM Training Grant
Program that will train nearly 200 fellows at 16 institutions statewide.
* Scientific Meeting in October that featured presentations by
stem cell researchers and clinicians from the United States as well as Australia, Canada, Israel, Sweden and the United Kingdom.
* Received $18 million in office space and incentives from the
city of San Francisco
"We have equal enthusiasm for 2006:
* At the end of January our Standards Working Group will finalize their draft to send to the ICOC. Building on the NAS Guidelines, this document will establish the medical, ethical, and scientific standards for CIRM funded research. This document is the first state or national regulation of its kind and it represents a scientific and ethical blueprint for how stem cell research ought to be conducted. With the ICOC's approval, they will undergo the APA process and become formal regulations with the force of law in California.
* Bond Anticipation Note funding our training grants and a smaller research grant
* Planning for a May Scientific Conference examining the risks of Egg Donation; to be co-sponsored by the Society for Gynecologic Investigation
* Strategic planning for the long range funding"
Coming Up
The Center for Genetics and Society has issued a critical report card on the California stem cell agency. Its recommendations include a major personnel change at CIRM and stiffening conflict-of-interest standards. We will have an item on the recommendations shortly.
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