Justices Say They Had 'No Hesitation' in CIRM Case

Today's Court of Appeal ruling in favor of CIRM was no split decision, according to one attorney who read the 58-page judgment and described it as "very thorough."

All three justices ruled in favor of the stem cell agency, said Robert P. Feyer of the San Francisco law firm of Orrick, Herrington & Sutcliffe. Here are the final lines of the decision:

"After careful consideration of all of appellants' legal objections, we have no hesitation in concluding, in the exercise of our 'solemn duty to jealously guard the precious initiative power' [citation omitted], that Proposition 71 suffers from no constitutional or legal infirmity. Accordingly, we shall affirm the well-reasoned decision of the trial court upholding the validity of the initiative. The judgment is affirmed."

California's new state controller John Chiang, chair of the Financial Accountability Oversight committee for CIRM, moved quickly to herald the action. He said,

"I am pleased that the Court has upheld the will of the voters, and am encouraged that we are one step closer in ending litigation that has tied up the funding for California's historic investment in stem cell research."

'We Won!' Says CIRM; Appellate Court Rules for the Institute

A California appellate court this afternoon ruled in favor of the state's $3 billion stem cell agency, rejecting a bid by opponents to kill off the institute.

Word came from attorneys at 4:24 p.m. PST: "We won!"

The court ruled very quickly following its Feb. 14 hearing for oral arguments. The speed of the decision would presumably augur well for CIRM in the likely event that the ruling is appealed to the California Supreme Court. That would be the last venue for the case.

News reports out of the Feb. 14 hearing noted that the appellate court justices seemed skeptical of the arguments of the opponents, who contended that the agency is not under the control of the state and had illegal conflicts of interests. For more on their legal deficiencies see this blog's report from the trial that concluded almost exactly one year ago today.

Here is statement by Robert Klein, chairman of CIRM, on the decision:

"We are very pleased with today’s ruling from the California Court of Appeal. Once again, the judiciary has upheld the Constitutionality of California’s innovative stem cell research project – in its entirety, without equivocation, and with absolutely no room for further argument. We are grateful that the Court rendered this decision so quickly, as it speeds the day when the will of 7 million voters can be fully realized.

"We have been relentless in our pursuit of the voters’ mandate. Despite our inability to issue any of the $3 billion in general obligation bonds authorized by Proposition 71, and thanks to the leadership of Governor Arnold Schwarzenegger and private philanthropists throughout the state, we are moving forward aggressively. Ten days ago, we approved 72 grants totaling nearly $45 million for embryonic stem cell research. (Next month)we expect to approve up to $80 million more, to truly jump start stem cell research in California.

"Throughout this litigation, we have been ably represented by former Attorney General Bill Lockyer, Attorney General Jerry Brown, and Deputy Attorney General Tamar Pachter. The efforts of our outside counsel, James Harrison of Remcho, Johansen & Purcell, have also been invaluable. And, of course, we’ve enjoyed the strong support of the many scientists, research institutions, and patient advocate organizations who filed amicus briefs in both the Superior Court and Court of Appeal cases"

Performance Audit of CIRM Expected This Week

The spirit of Deborah Ortiz will be with the California stem cell agency this week when the California state auditor unveils its performance audit of the $3 billion enterprise.

It was Ortiz, former chair of the State Senate Health Committee, who sought the audit last year before she was forced out of office because of term limits.

The audit was intense. At times, four auditors over a period of four months prowled through the agency. That amounted to one auditor for every four CIRM employees, a ratio that probably was not surpassed in even such celebrated cases as Enron or Worldcom.

CIRM certainly does not remotely resemble either of those two infamous operations, but the state auditor is likely to come up with some critical findings. Such is almost invariably the case in its work, and no agency is perfect. In fact, CIRM has already made changes in travel and contracting policies that reflect issues that auditors identified. But critics of the agency are likely to find some grist for their mills.

The audit could be released as early as Tuesday.

How to Search the California Stem Cell Report

To help make searches easier on this Web site, we recently added "labels" to each item. Labels can also be considered keywords that help identify the general nature of the material in question. Sometimes they are also specific, such as the names of individuals. If you click on one of the labels, it should show you recent items involving the subject in the label. However, it will not show you all of them since the function was not available until about two months ago. We have not yet gone back and added labels to the nearly 1,000 items that we have posted. However, those can be searched through the search window at the top left hand corner of the blog, where it says, "search this blog." That function will only produce words that are used in the blog. For example, searching on "biographies" will not necessarily produce a biography on Zach Hall unless that word is used in an item. Zach Hall would be the best search term in that case. Searching on CSCR should produce other advisories such as this one.

Legislature Posts Text of CIRM Legislation -- SB771

The text of legislation aimed at ensuring a return to the state on cures developed as a result of research funded by the California stem cell agency was posted officially today on the Internet.

The measure did not contain any surprises. However, it did contain a necessary provision that has not been mentioned previously. That language declared that the proposal would enhance CIRM's ability to carry out the purposes of Prop. 71. The initiative stipulates that legislative changes in the act must enhance its purposes. That is on top of the unprecedented requirement for a super, supermajority vote (70 percent) to approve such bills.

The "enhancement" requirement was presumably inserted into Prop. 71 to provide another weapon to battle legislative changes under terms authorized by the initiative. Since this is the first such attempt, its effectiveness as an opposition tool is yet to be tested. Previous legislation concerning CIRM used different legal approaches.

The number of the bill, SB771, was also picked to resonate with Prop. 71, according to the office of Sen. Sheila Kuehl, D-Santa Monica, chair of the Health Committee, who authored the proposal along with Sen. George Runner of Antelope Valley, the leader of Senate Republicans.

Here are the key elements of the bill, which is not likely to be heard in committee for some time:

"The standards that the ICOC develops shall do all the
following:

"(A) Require every recipient of a grant or loan award for research
to provide to the state 25 percent of the net licensing revenues it
receives associated with any institute-funded patented invention
beyond a reasonable revenue threshold that the ICOC may establish.
Net licensing revenue shall include all forms of financial
consideration from licensing and shall be defined as gross licensing
revenues, less patent expenses and reasonable payments to inventors.

"(B) Require every recipient of a grant or loan award for research
to grant exclusive licenses involving institute-funded patented
inventions relevant to development of therapies, drugs, and
diagnostics only to organizations that have plans which the institute
determines will provide substantial access to the resultant
therapies, drugs, and diagnostics to uninsured Californians. In
addition, the licensees shall agree to provide to patients whose
therapies, drugs, and diagnostics will be purchased in California
with public funds, the therapies, drugs, and diagnostics at the
federal Medicaid price.

"(C) Require any recipient of a grant or loan award for research
that commercializes any product that it develops using institute
funds to agree, as a condition of accepting the funds, to make
royalty payments to the state equal to 2 to 5 percent of the revenues
over the life of the product, depending on the level of funds
provided and contribution of institute-funded patented inventions to
the development of the product."

CIRM IP Legislation Begins Its Journey to Mixed Reviews

The chair of the California State Senate Health Committee today formally unveiled her legislation aimed ensuring the state receives a return on its $3 billion investment in stem cell research. But the measure initially met with mixed reviews.

One potential ally wanted more and foes want less. CIRM itself said no comment would be forthcoming until it had seen the official text of the legislation (SB771), which is not available at the time of this writing.

The bipartisan bill, as presented in the press release by Sen. Sheila Kuehl, D-Santa Monica, seemed to measure up to earlier information (see "CIRM Regulation").

John M. Simpson, stem cell project director for the Santa Monica-based Foundation for Taxpayer and Consumer Rights, said,

"The bill does not go far enough to ensure that all Californians have affordable access to the cures and treatments that result from stem cell research they are funding.

"There needs to be a provision that allows the attorney general to intervene if these therapies, treatments or cures are priced unreasonably.

"It's good that the bill would require an an access plan for uninsured people and that it would require purchases funded with public funds be made at the Medicaid price. The problem is that it doesn't do enough for all Californians who are paying to develop these treatments with their hard-earned tax dollars."

Jesse Reynolds, project director on biotechnology accountability for the Oakland-based Center for Genetics and Society, welcomed the measure, declaring,

"If a biotech company is making billions of dollars of profit from state-financed research, the people should receive a fair return on their investment, as well as access to any therapies."

Reynolds said the leadership of the stem cell agency has tried to "back out" of Prop. 71 campaign promises of huge economic returns to the state. He said,

"This would have been a billion-dollar bait and switch. The bill will make significant steps toward fulfilling these promises."

The California Healthcare Institute, which represents the state's biomedical industry, did not have an immediate comment. But the group is already opposed to CIRM intellectual property policies, which Kuehl says are too weak.

CHI says on its stem cell research page that CIRM's IP rules

"threaten to discourage commercial collaboration, technology transfer and licensing by (a) increasing the administrative complexity of licensing agreements involving CIRM-funded technologies in comparison to the mainstream of academic-industry transactions, which derive from federally-funded research, and (b) increasing investors' financial risk by imposing state price regulation on downstream products."

We should note that not all companies involved in development of the CIRM IP rules share CHI's adamant opposition to CIRM's IP rules. (CHI's stem cell page contains several links to more of its documents filed concerning CIRM IP.)

Kuehl drummed up some media attention in advance, granting interviews to both the San Jose Mercury News (see "CIRM Regulation") and Terri Somers of the San Diego Union-Tribune. Somers quoted Kuehl as saying,

“Californians are putting billions of dollars into this research. They ought to be guaranteed to get a little bit back, because everyone else is going to be on the take."

For more on the legislation, including the difficult task Kuehl faces, see "Rationale Behind" and "Legislators Target."

CGS: Grant Process 'Deeply Flawed' and 'Embarrassing

The Center for Genetics and Society did not mince words about the California stem cell agency and its award last week of $45 million in research grants.
'
Writing today on the group's blog, Biopolitical Times, Jesse Reynolds,
project director on biotechnology accountability for the Oakland-based group, began by saying the process "was not without significant shortcomings."

Then he said it was "deeply flawed" and "embarrassing."

Flawed because, he wrote:

"The members of the grant review panel are still not required to publicly disclose their personal financial interests, leaving the door open for conflicts of interest. (The agency, however, did take the step of indicating which members of the review panel were recused from which application review.) This panel is supposedly advisory, because the program's governing board, the ICOC, is required to give final approval of the grants. But in fact, the ICOC voted on many of them in blocks and did little more than demarcate a funding line in the ordered rankings of the 'advisory' review board. This makes the grant review panel a de facto decision-making body, which by California law must disclose personal financial interests."

He continued:

"Finally, during the most high-profile meeting of the ICOC since the inception of the stem cell research program, the board struggled to maintain a quorum. It was not met at all on the first day of the two-day meeting, during which grants were approved by 'provisional votes.' These were confirmed en masse the next day, when there was barely a quorum. This is embarrassing. The ICOC needs to adopt attendance standards."

Kuehl to Lay Out CIRM Regulation

Details are scheduled to be disclosed on Friday concerning the latest California legislative foray involving the $3 billion California stem cell agency.

The bill will be carried by State Sen. Sheila Kuehl, D-Sacramento, chair of the Health Committee. Here is a legislative synopsis that was circulated on Thursday. It said the measure would:

"modify and strengthen current and proposed regulations that have been adopted by the ICOC by:

"Codifying requirements that grantees share 25 percent of net licensing revenues on inventions they develop, beyond a reasonable threshold that the CIRM may establish;

"Providing that grantees may only enter into exclusive licensing agreements with uentities that have plans the California Institute for Regenerative Medicine (CIRM) determines will provide significant access to resulting therapies, drugs, and diagnostics for uninsured Californians, rather than plans that merely meet 'industry standards.' 'Industry standards' could arguably include patient assistance plans currently utilized by most drug manufacturers, which have been shown to be inadequate in encouraging access to free or reduced price drugs by uninsured patients;

"Providing that grantees may only enter into exclusive licensing agreements with entities that agree to provide resulting therapies, drugs, and diagnostics to publicly funded health care programs in California at the best available prices, such as the federal Medicaid price;

"Ensuring that the state’s return from its grants to commercial entities for research or therapy development projects is commensurate with its level of investment and is not capped, as recently proposed by the ICOC. This is accomplished by requiring grantees to share 2 – 5 percent of revenues over the life of the product, depending on the level of state funds provided and the contribution made by state-funded patented inventions to the development of the product. An economic analysis commissioned during the campaign for Proposition 71 estimated that, based on the experience of universities and research institutions, the state could receive 2 – 4 percent of revenues on successful therapies and products developed with state funds, without any cap. Using these assumptions, the analysis concluded the state could receive $537 million to $1.1 billion in royalty revenues under Proposition 71.

"As you know, the ICOC has struggled since its inception with the development of standards to ensure a fair return to the state. A report commissioned by the ICOC in 2005 and completed in 2006 actually recommended that grantees not be required to share any revenues with the state. As a result of the introduction of legislation in 2006, the ICOC abandoned that recommendation."

Reporter Steve Johnson of the San Jose Mercury News prepared a story that said the measure by Kuehl and Sen.George Runner, R-Lancaster,

"would require firms that make products based on the institute's stem-cell grants to pay the state up to 5 percent of the product's lifetime revenues.
"Under a policy tentatively adopted on Dec. 7 by the institute, formally known as the California Institute for Regenerative Medicine, the most a company would pay the state would be 1 percent of its product's revenue, plus 9 times the amount of the grant.

"Another provision of the bill is intended to insure that poor Californians can afford treatments developed from the institute's stem-cell grants. It would require that uninsured Californians have 'significant access' to the treatments and that any treatments purchased with public money be provided at federal Medicaid prices, which are typically discounted.

"By contrast, the institute's current policy requires companies to provide their treatments to the state 'consistent with industry standards,' which Kuehl argued could allow companies to charge excessively for the treatments.

"Under Proposition 71, bills affecting the institute's operations can only be passed with a 70 percent majority, which could make it tough to get the measure enacted. Nonetheless, Kuehl said voters were promised the program would generate significant financial returns to the state when they passed Proposition 71 in 2004. The measure authorizes the institute to spend about $300 million a year for 10 years on stem-cell studies. Moreover, she noted that the institute last week awarded its first stem-cell research grants.

"'This is extremely important,' said Kuehl, who chairs the Senate Health Committee. 'We have to nail this down now, because the first grants have gone out the door.'

"'The voters believed they were going to get some royalty or benefit from their dollars,' added Runner's spokeswoman, Becky Warren. 'We just want to make sure that occurs.'

"Dale Carlson, spokesman for the stem-cell institute, declined to comment in detail about the bill until he has a chance to read its language. He also said the agency's policy governing the amount the state receives from companies that receive stem-cell grants is still being revised.

"But Carlson emphasized the institute wants to ensure Californians have reasonable access to therapies developed through its grants and added, 'we look forward to having a continuing conversation with the legislature about these and other issues.'"

Kuehl has scheduled a news conference on Friday to discuss her measure.

Governor's Cyberspace Splash on ESC Research

California Gov. Arnold Schwarzenegger put the state's stem cell issues at the top of his Web publicity agenda for several days earlier this week.

The governor's Internet site carried, on its main media page, video, audio and text on the $45 million in research grant awards by CIRM. A complete video of the news conference in Burlingame on Friday along with the governor's weekly radio address (Spanish and English) was and is still available. The site carried four still photos of the news conference. Claire Pomeroy, a member of the CIRM Oversight Committee and dean of the UC Davis medical school, is also featured in a video blog.

A few notes on matters not necessarily highlighted in the news coverage. It was abundantly clear that governor is committed to making another large loan to the agency if it remains bogged down in legal battles. A reporter questioned whether he was prepared to make another $150 million loan if needed. The governor's response was that he was committed "all the way."

Schwarzenegger also noted "the state teaches the federal government what to do." He said, "We don't wait." The California example, he noted, is rubbing off on other states. ESC research is a "people's issue." As for his role in the matter, he said, "I am a public servant."

Stem cell Chairman Robert Klein was ebullient during the news conference. But he also noted there will be "problems and failures" in the research. "We will learn from them," he said.

Also featured on the video was patient advocate Don Reed, who made heartfelt comments, along with his son, Roman Reed, who is paralyzed. The younger spoke as well, but was not near a microphone for the first segment of his comments.

Eggs: The 'Bigger Deal'

The “cheeky new women's blog” on Salon.com has weighed in the egg business in an item posted by writer Lynn Harris. Here is part of what she has to say on the “broadsheet.”

"Should we, indeed, be a little more freaked out by the egg market? To be sure, it is a much bigger deal than the sperm trade: more money, more commitment, more risk. Which leads to the valid concern about the degree to which brokers prey, say, on leggy blond volleyball players with excellent SAT scores and massive student loans. And which, in turn, makes me think it's important to accept, without judgment, that this is a business. As Harvard economist Debora L. Spar, author of 'Baby Business,' wrote: 'We need to acknowledge the market that reproductive technologies have created and then figure out how to channel this market toward our own best interests ... It's no use being coy about the baby market or cloaking it in fairy-tale prose. We are making babies now, for better or worse, in a very high-tech way ... We can moralize about these developments ... or we can plunge into the market that desire has created, imagining how we can shape our children and secure our children without destroying ourselves.'"

Three Big Ifs

The $45 million California round of ESC research grants has triggered additional interest in stem cell stocks on the Internet.

Writing on stockerblog, an anonymous retired professional in the financial industry issued a rundown entitled “Stem Cell Stocks: The Growth Industry of the Future?”

An excerpt that noted three major caveats:

"There are only a limited number of stocks which are pure plays or semi-pure plays in the stem cell industry. However, if governmental funding increases, if private research continues, and if there are any major breakthroughs, then this could be a very huge industry."

Stockblogger wrote a paragraph each on stem cell companies that are pure or semi-pure plays. The blog is carried also on the "Seeking Alpha" financial website.

Bringing Pizzas to An Appeal?

The Daily Kos, a political blog with huge national readership, carried an interesting piece by patient advocate Don Reed on last week's oral arguments in the California stem cell lawsuit.

Reed was present during the hearing, and, as usual, has a quite personal approach to the affair. Here is a sample of his thoughts as the three appellate judges seated themselves.

“It occurred to me how important the personal element was; I hoped all the judges had slept well, and had a good breakfast or lunch or brunch or whatever. I would have run out and gotten them a pizza if it would have helped. “But there was nothing to be done, no pizza bribes to offer, only to listen, and hope.”

Reed's posting on Kos was a truncated version of his Feb. 15 filing on his own web site, which carried this additional paragraph about a chat he had at the hearing:

“I had a conversation with Ms. (Terri) Somers (a reporter for the San Diego Union-Tribune) on the disastrous shrinkage of newspaper funding—it kills me that newspapers, the foundation of an informed citizenry, are losing ground in every direction—I got to put in my plug for a government bailout of the newspaper industry. If we can bail out the Savings and Loan Industry, why not newspapers, which provide such a vital service to democracy?”

A Prop. 71 for the newspaper business? Probably too risky since even venture capitalists do not seem willing to enter the “dead tree” business -- at least most of them.

Here is a link to Reed's Kos item: http://www.dailykos.com/story/2007/2/15/101926/443
Here is a link to the original column (see his Feb. 15 archives if it does not come up immediately): stemcellbattles.com.

Advisory to Readers

Please bear with us as we continue to work through computer problems
during the next few days. In addition, Google, the service that hosts
this web site, has some issues with its software that create
difficulties in posting items. We are using an alternative method of
filing items that may result in some different, perhaps even weird
formatting.

"New Action Heroes" Win Millions in ESC Research Grants

The word went out this weekend from China to Syracuse: California stands No. 1 in embryonic stem cell research in the United States and, and by at least one account, perhaps in the world.


The occasion, of course, was the approval of $45 million in research grants by the California stem cell agency.

The event generated enormous amounts of favorable publicity worldwide for CIRM and for the cause of ESC research. Gov. Arnold Schwarzenegger  stood before TV cameras and declared that ESC researchers are "the new action heroes."

His theme carried through on San Francisco television station KGO, which aired a more than two-minute-long report by David Louie with loads of sympathetic images of disabled persons and film of confidence-inspiring lab work. Smiles abounded, including some from Roman Reed, who is paralyzed as the result of an injury.

He told KGO viewers:

 

"We are on the road to cures. We are on the road to be able to solve the problems that plague mankind. Millions of people are suffering, and now we're on the road to cure them. This is wonderful."

Reed´s father, Don, stood at Schwarzenegger´s left as he vowed, on camera, continuing support for CIRM.

Reporter Terri Somers of the San Diego Union-Tribune wrote:

"The panel awarded the highest score to a researcher at UCSD (University of California, San Diego), Anirvan Gosh, for his proposed work on coaxing human embryonic stem cells to morph into neurons in the brain, particularly those in the forebrain. It is in that area that Alzheimer's is believed to do damage.

"Gosh's scientific background and the cutting-edge science he proposed impressed the committee, said Zach Hall, president of the stem cell institute."

A number of newspapers wrote that the $45 million in grants exceeded federal spending annually on ESC research. But  Carl Hall of the San Francisco Chronicle reported that the 72 grants covered a two-year period and were about equal to federal ESC spending for the same period. But Hall continued:

"Eighty million dollars in state grants are expected next month, more than enough to make California the world's No. 1 backer of biomedicine's most ethically contentious research."

Mary Engel of the Los Angeles Times reported:

"After more than 12 hours of deliberation Thursday night and Friday morning, the full board made selections from the proposals, which were numbered and had the names of institutions and people removed. The institute staff advised board members, many of whom work for universities or institutions with proposals, on when to recuse themselves because of a possible conflict of interest.

"The process drew some complaints from two government watchdog groups, which pointed out that Connecticut, which has a much smaller stem cell research effort, identified all the institutions and scientists it funded by name, including those rejected. The groups called on the board to publish the names of the California institutions that applied for grants but were denied.

"But even they praised the spirited discussions and lengthy deliberations that went into choosing the grantees.

"`Many of us had expressed concern that the board would act as a rubber stamp and not delve into this in a serious way,´ said John Simpson of Santa Monica-based Foundation for Taxpayer and Consumer Rights. `This is a very good process.´"

The California stem cell agency prepared a press release on awards, quoting stem cell Chairman Robert Klein as saying:

 

"Today marks another milestone in one of the most important public endeavors ever undertaken by California.  Patients and families around the globe will take heart that human embryonic stem cell research is finally beginning to receive the funding it needs and deserves."

As for Syracuse, below is a link to the story there. More than one appeared in China, but here is a link to the Xinhua news agency story.


San Francisco Chronicle: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/02/17/BAGPRO6J7P1.DTL&feed=rss.bayarea

San Diego Union Tribune: http://www.signonsandiego.com/uniontrib/20070217/news_1n17stem.html

Syracuse: http://www.wstm.com/Global/story.asp?S=6102625

 

Los Angeles Times: http://www.latimes.com/news/local/la-me-stem17feb17,1,4500053.story?track=rss&ctrack=1&cset=true

 

Xinhua: http://news.xinhuanet.com/english/2007-02/17/content_5750741.htm


 

Patient Advocate Don Reed on the CIRM Grants

Hi, Folks!

David Jensen was kind enough to allow me a small guest spot in his excellent column.

As you will see, it is not the balanced calm objectivity he always tries for.

I am a supporter of the California Institute for Regenerative Medicine. To me, it is the noblest institution which ever advanced the hopes and dreams of suffering humanity—because its sole function is work for cure, to ease suffering, end pain, and save lives.

Thank you for this opportunity to address you.

Don C. Reed

Oh, and if you would like to see Governor Schwarzenegger, Bob Klein, the Independent Citizens Oversight Committee, Karen Miner, Roman Reed and yours truly in action, go to



http://cbs5.com/video/?id=20865@kpix.dayport.com


---------------------------------------------------------


The California Institute for Regenerative Medicine, the CIRM, is the pride of our nation, the standard for science, and the envy of the world. It did not happen by itself.

Bob Klein dared to dream that California could become the center of the stem cell research universe. He worked tirelessly toward that end, and the Golden State said yes, voting to approve—and fund--the groundbreaking new research.

But lawsuits blocked us, delaying our hopes of cure. Research delayed is research denied. Right now, one hundred million Americans suffer disease and disabilities described as “incurable”, but which might be alleviated or healed with stem cell research. We needed help.

Arnold Schwarzenegger came through. His decision to authorize the $150 million loan was bold, forward-looking, compassionate.

I wish so much that another great champion, Christopher Reeve, could have been with us today. He would have been so proud. The man who, as my son said, was more like Superman in real life than in the movies, gave us a letter saying, “One day, Roman and I will stand up from our wheelchairs, and walk away from them forever.”

I believe in that great dream. And when it happens, when Roman Reed stands up from his wheelchair, we will remember this day.

Thank you, Governor Schwarzenegger. Thank you, Bob Klein. And thank you, California.

Back Online

We are back once again after suffering a terminal computer crash two days ago. We expect to file a report later today and more tomorrow.

CIRM President Hall Speaks to Conflict-of-Interest and SEED Grants

The California stem cell agency will not produce its conflict-of-interest list in advance of Thursday's session to award millions of dollars in public funds to a host of scientists.

CIRM President Zach Hall explains the reasons below in a statement that we received late Wednesday. It is a thoughtful response from a man who is dedicated to the agency's goals and the public good. Nonetheless we disagree with his position. Regular readers are familiar with our stand. Openness in the conduct of the public's business comes first unless compelling and legal reasons exist for confidentiality. When an agency gives away $3 billion in public funds, transparency is paramount.

As an introduction to Hall's statement, we should note that we asked last week for the CIRM conflict-of-interest list, which details which Oversight Committee members will be barred from voting on specific grants because of a legal conflict of interest. The complete list will be provided to the public only after the board makes its decisions, but before each grant is discussed, the names of individual committee members who will be recused will be announced. To understand the full context of this issue, see the previous items on this blog, “Openness,” "Money Machine" and “Shrouded” below. Here is Hall's statement, minus some salutations:

“Just as we were working all-out to prepare for the board meeting, your request arrived. It threw us for a bit of a loop because we had not contemplated such a request; indeed, we had not framed it in the way that you put it. As a result, we have had to think through what we do from a new perspective and to anticipate the ramifications of your request. The first point to make is that we are indeed making such a list – a big task as Dale (Carlson) pointed out – for staff use at the meeting; this work is not yet complete and we do not expect it to be completed until sometime in the morning. Second, we have not given a list like this to anyone outside of CIRM staff before – neither to board members or the public - nor had we contemplated doing so this time.

Two concerns drive our procedures: 1) that we monitor conflict-of-interest carefully and effectively to be sure that board members know when they have a COI and to be sure that they do not participate in the discussion, inadvertently or otherwise; 2) that we focus the discussion and the decision on scientific merit, independent of institution or applicant. At the meeting in September, 2005, when the training grants were approved, each board member received a sheet of paper listing the applications (by number) for which they had a conflict-of-interest. We then made sure that they did not participate in the discussion and their names were not called in a roll call vote. Thus board members did not have information about any recusals but their own.

The process is more daunting this time with 231 applications rather than 26. Each board member will again receive a sheet of paper listing the applications for which they have a COI. Because of the large number of applications and the difficulty of keeping up with the correct application number, we will also announce at the beginning of each discussion, exactly which board members have a conflict of interest. We will do this from a master list that we have made up (are making up), but, as we did before, had not planned to give this list either to board members or to the public. Thus, board members know their own recusals in advance of the discussion, but do not know who is recused from any other application until the discussion on that application begins. We think this is a good procedure.

When you made your request, our initial response was that, although we had not contemplated doing so, there was no reason for us to withhold the information from you when it was ready. On reflection, however, we have realized that if we give a master list to you beforehand, we also have to give to all others, including ICOC members. Passing out the list beforehand will only encourage “decoding” of the lists, as far as can be done, before the discussion to give institutional identifiers to many of the applications before they are reviewed. We believe this is undesirable.

In trying to balance all of these issues, we have decided to follow the procedure outlined above as originally planned, keeping the master list for our own use during the meeting. Those present will hear the announcement, as each application is discussed, of who is recused. After the approvals are completed, we will then make the master list available to you or to anyone else who wishes it.

You would undoubtedly prefer to have it before the meeting, but we believe this is in the best interests of a fair and unbiased proceedings. I apologize for the false start on our part about the procedures that we will follow. This is the first time through for such a large number of grants and we are all scrambling to do the best we can.

The CIRM Lawsuit Appeal: Not a Plus for Opponents

Reporter Paul Elias of The Associated Press used the word “skeptical” three times in his coverage of today's oral arguments in the appeal of the California stem cell lawsuit.

That is how he characterized the appellate court justices during the Valentine's Day hearing concerning attempts to overturn the judgment against opponents of the $3 billion stem cell agency. The hearing also generated rare televison coverage on San Francisco station KGO. The text of the report by Lyanne Melendez was straightforward and appeared favorable to CIRM. But images are what matters on TV, and those were not accessible to us.

The Los Angeles Times also carried a very brief report on its website late Wednesday.

CIRM issued a statement from stem cell Chairman Robert Klein. Among other things, he said,

“Despite the opponents’ efforts, $130 million in Proposition 71 stem cell research funding for scientists is scheduled to be in place by March 15th.”

The opponents, according to press reports, also did not say anything that advanced their arguments beyond those rejected by the trial court judge.

Conflicts, Grants and CIRM Overseers: Openness vs. Fairness

Eighteen months ago, when the California stem cell agency awarded its first grants, members of the Oversight Committee were provided a conflict-of-interest list prior to voting on the grants.

The transcript of the meeting does not make clear exactly what was on that list. Did each member of the committee have a list that showed each grant along with each member of the committee who was barred from voting on that grant? Unknown, based on the transcript.

Last week we asked CIRM for a copy of the conflict-of-interest list for this week's first-ever research grant awards. The information is an important part of understanding the discussion of the grants – who stands to benefit and who stands to lose. It is information that helps give the public and interested parties insight into the process. As we have pointed out, the Oversight Committee has built-in conflicts-of-interest, albeit ones that are legal as the result of voter approval of Prop. 71.

So far the agency has not produced publicly a conflict-of-interest list for Thursday's meeting, but says it will be available before the session. Dale Carlson, spokesman for CIRM, differed sharply with our suggestion in an email to him that CIRM was withholding the list. Here is his response to our continued questions concerning the availability of the list. Carlson's statement provides some insight into the thinking at the agency concerning openness vs. the integrity of the grant review process.

“To the best of our collective recollection, the ICOC members received (in 2005) a list of training grant applications for which they were recused. They did not see which applications their colleagues would be recused from discussing or voting on.

"We are working on a list of potential conflicts each ICOC member might face with each SEED grant application. With 29 members and 231 applications, I'm sure you can appreciate that it is neither a quick nor easy task to evaluate all the statements of economic interest, institutional affiliations, past and current collaborative efforts, etc. Indeed, it is enormously complex. An NIH study section doesn't review 200 applications over the course of a year. We're doing so in but a matter of hours.

"Contrary to your assertion, it is not being withheld. It is simply not finished. We are being extremely diligent. It would be a disservice to the public to provide a document that is incomplete and/or inaccurate. It will be made available when it is finished and in advance of the meeting.

"Given the efforts we have made to ensure each application is judged on its scientific merit, without regard to the affiliations of researchers, there is legitimate concern that disclosing the ICOC members' conflicts may lead some to attempt to ascertain the institutional source of each application. We do not wish to see institutional bias injected into the review process, tarnishing the integrity we have established. Nevertheless, in the interest of transparency, we will assume that risk.

"Finally, no agency in California has ever undertaken so ambitious a program for biomedical research. We are working without a model and without precedent. We have disclosed more information about grant applications and grant reviews than any other California or federal agency, and more than any non-profit grant-making entity.

"We are moving with all deliberate speed to put funds into the hands of scientists, clinicians, and other researchers who can turn stem cells into therapies and cures. We are moving to implement the mandate of seven million California voters. But we will not allow urgency to trump fundamental fairness or the obligation to do what is right. If those objectives require a little additional time, so be it.”

Big Pharma Is Watching

It was stem cells live – surgery and all – in San Diego Tuesday at the Stem Cells Summit.

Terri Somers wrote in the San Diego Union-Tribune about a disectomy broadcast live from Scripps Memorial Hospital as a demonstration of a stem cell therapy that is not years away. The operation involved a Blackstone Medical product called Trinity, a combination of bone and stem cells.

Somers reported that representatives from Big Pharma were at the conference looking for the next big thing. She said:

"Therapies from human embryonic stem cells, which are controversial and receive more media coverage, are much farther from market because the understanding of these cells is nascent, said Tom Baker, a spokesman for San Diego-based Cytori Therapeutics, a stem cell company that sponsored the summit. The summit is an attempt to help people differentiate between the progress in the two fields, and drum up more interest in often-ignored but more advanced adult stem cell research, said Baker, whose company is developing therapies that pull adult stem cells from fat for reconstructive surgery or cardiac problems."

It was stem cells live – surgery and all – in San Diego Tuesday at the Stem Cells Summit.

Terri Somers wrote in the San Diego Union-Tribune about a disectomy broadcast live from Scripps Memorial Hospital as a demonstration of a stem cell therapy that is not years away. The operation involved a Blackstone Medical product called Trinity, a combination of bone and stem cells.

Somers reported that representatives from Big Pharma were at the conference looking for the next big thing. She said:

“Therapies from human embryonic stem cells, which are controversial and receive more media coverage, are much farther from market because the understanding of these cells is nascent, said Tom Baker, a spokesman for San Diego-based Cytori Therapeutics, a stem cell company that sponsored the summit. The summit is an attempt to help people differentiate between the progress in the two fields, and drum up more interest in often-ignored but more advanced adult stem cell research, said Baker, whose company is developing therapies that pull adult stem cells from fat for reconstructive surgery or cardiac problems. “

http://www.signonsandiego.com/news/business/biotech/20070214-9999-1b14stems.html