The release of the names of 12 institutions seeking $263 million in public money from the California stem cell agency doesn't measure up to the agency's self-professed goal of meeting the highest standards of openness and transparency.
Yes, it is a good first step, whatever its motivation. Yes, it seems to surpass the openness of the NIH. But as we have noted before CIRM is subject to far less oversight than the NIH and seems to have far greater conflicts of interests among its directors. But if the intention is to provide the basis for thoughtful comment from either the public or CIRM's important constituencies, the release of the information falls short.
All that is publicly available are names. The public, which is financing this effort, does not know how much money is being sought nor even rudimentary details of how the applicants propose to use the cash.
CIRM's position is that to release the information at this point could mean that losing institutions would be embarrassed. However, by releasing the names last week, CIRM has conceded that its position is nothing more than a sham. Presumably some of those named on Friday will lose out and be "embarrassed."
CIRM apparently decided that embarrassment was overshadowed by the need to help applicants raise matching funds for the grants before the end of the year.
It is time for CIRM to release not only the names of the institutions, but also the amounts they are seeking as well as the applications from the institutions(confidential information could be deleted).
The agency is still wrestling with the fallout from controversy about its conflicts-of-interest, which have possibly cost 10 researchers about $31 million. It is an issue that will be with CIRM for its entire existence because the conflicts are built into the agency, ironically, by law. More than a majority of the CIRM's directors have links to institutions that could benefit by this latest round of grants for lab construction. They have already set the rules and criteria for giving away the money. All of which naturally raises concerns about self-dealing or worse.
That situation is not likely to change. The only reasonable way to assure public credibility and allay suspicions is for CIRM to lay all the stem cell cards on the table. Especially since it has conceded that releasing the names is not really that embarrassing after all.
Monday, December 17, 2007
Shame, Shame, Shame
If you accept CIRM's arguments for withholding grant applicant information, the San Diego Stem Cell Consortium has taken an enormous risk that it could shame itself in public.
The consortium says it is seeking $50 million from CIRM for new lab construction, according to a report by Terri Somers of the San Diego Union-Tribune. The new building would give 110 scientists a place to work. It would be built on UC San Diego property with construction beginning in 2009. The San Diego Supercomputer Center and Craig Venter, the biologist who was a primary driver of the Human Genome Project, also plan to contribute to the project.
All of that is considered confidential information by California's stem cell agency, which plans to give away $263 million in public money next year for new lab construction. CIRM considers the information so sensitive that the release of it would severely embarrass the consortium if its request for funds is turned down.
Balderdash, is what we say.
The consortium says it is seeking $50 million from CIRM for new lab construction, according to a report by Terri Somers of the San Diego Union-Tribune. The new building would give 110 scientists a place to work. It would be built on UC San Diego property with construction beginning in 2009. The San Diego Supercomputer Center and Craig Venter, the biologist who was a primary driver of the Human Genome Project, also plan to contribute to the project.
All of that is considered confidential information by California's stem cell agency, which plans to give away $263 million in public money next year for new lab construction. CIRM considers the information so sensitive that the release of it would severely embarrass the consortium if its request for funds is turned down.
Balderdash, is what we say.
Gritty Stuff in Trounson Story
For those of you still wondering who Alan Trounson is – or for those who want to known more – reporter Deborah Smith has produced an interesting profile with some gritty details.
Writing in the Sydney Morning Herald, she described Trounson at one point while he was on a flight from Singapore as a "slightly crumpled, middle-aged traveler." She wrote that years ago someone painted "Trounson is a mass murderer" on the walls of his home. And she reported that private detectives have "trawled" through his financial dealings and quizzed his former wife.
Trounson's comment, "That was very strange. They were tough times."
Trounson begins work in the next couple of weeks as president of California's $3 billion stem cell agency agency, the world's largest source of funding for human embryonic stem cell research.
Writing in the Sydney Morning Herald, she described Trounson at one point while he was on a flight from Singapore as a "slightly crumpled, middle-aged traveler." She wrote that years ago someone painted "Trounson is a mass murderer" on the walls of his home. And she reported that private detectives have "trawled" through his financial dealings and quizzed his former wife.
Trounson's comment, "That was very strange. They were tough times."
Trounson begins work in the next couple of weeks as president of California's $3 billion stem cell agency agency, the world's largest source of funding for human embryonic stem cell research.
Saturday, December 15, 2007
Fresh Comments
"Ron" has posted a new comment on the first Kessler firing item below. John Simpson has posted a comment on the Kessler lesson item just below.
A Lesson for CIRM From Dr. Kessler
The coverage of the firing of David Kessler as the dean of the medical school at UC San Francisco provides an example of mishandled PR that has some application to the California stem cell agency.
The missteps in the release of the information had little to do with the skills of those in the UCSF communications department, but probably a great deal to do with miscalculations at the top – at least from our perspective.
Kessler, on the other hand, skillfully drove the media coverage. The result was news stories across the country, including the New York Times, the Washington Post, the San Francisco Chronicle and ours below, that were dominated by Kessler's version of the affair. The chancellor's perspective came late and lamely.
How does all this apply to CIRM? It has do with perception, fast public reaction and top executives who listen carefully to knowledgeable communications professionals who also have access at the very top on a regular basis. At this point, CIRM seems to be headed in a somewhat different different direction, relegating its top communications person to the third tier in an organization structure that only has five layers.
Here is what happened in the Kessler case.
On Thursday the chancellor at UC San Francisco fired Kessler. It was obviously an event that the chancellor had anticipated well in advance – not a spur-of-the-moment decision. Kessler had already refused to resign, according the media reports. It was clear he was not likely to leave quietly.
On Friday morning, he sent out an email to colleagues at UC San Francisco that said he was being dismissed because of his efforts to uncover financial irregularities. That email quickly went out across the country and to the news media.
Meanwhile, UC San Francisco did not have anything to say. Friday afternoon, after the first news surfaced, an innocuous statement was put out by the chancellor. It did not address the issues raised by Kessler. Late Friday afternoon, the chancellor put out a stronger statement, declaring that Kessler's allegations had been investigated earlier and had no merit.
But that response came too late to change the focus of the coverage, which was heavily tilted towards Kessler's view of the world.
How could it have been handled differently by the chancellor? We are assuming that he did not consult his PR folks in advance. Instead, he could have anticipated the obvious attention his decision would receive. With that in mind, he could have issued an already prepared statement promptly after the dismissal, perhaps as early as Thursday. He could have anticipated the move by Kessler and had a response ready to roll out immediately instead of hours later. But that would have required the early input of the PR folks at UC San Francisco – PRIOR to the actual firing.
Keep in mind that we are not talking about the merits of Kessler's firing or the allegations – only the public perception and news coverage. From UCSF's institutional perspective, it has been tarred unfairly by Kessler. From Kessler's perspective, he has turned a negative event into something that reflects considerably more positive on him.
Given the controversial nature of the research funded by CIRM and its built-in conflicts of interest, bad news is always a good possibility. It behooves the organization to think carefully about how it plans to deal with that eventuality.
The missteps in the release of the information had little to do with the skills of those in the UCSF communications department, but probably a great deal to do with miscalculations at the top – at least from our perspective.
Kessler, on the other hand, skillfully drove the media coverage. The result was news stories across the country, including the New York Times, the Washington Post, the San Francisco Chronicle and ours below, that were dominated by Kessler's version of the affair. The chancellor's perspective came late and lamely.
How does all this apply to CIRM? It has do with perception, fast public reaction and top executives who listen carefully to knowledgeable communications professionals who also have access at the very top on a regular basis. At this point, CIRM seems to be headed in a somewhat different different direction, relegating its top communications person to the third tier in an organization structure that only has five layers.
Here is what happened in the Kessler case.
On Thursday the chancellor at UC San Francisco fired Kessler. It was obviously an event that the chancellor had anticipated well in advance – not a spur-of-the-moment decision. Kessler had already refused to resign, according the media reports. It was clear he was not likely to leave quietly.
On Friday morning, he sent out an email to colleagues at UC San Francisco that said he was being dismissed because of his efforts to uncover financial irregularities. That email quickly went out across the country and to the news media.
Meanwhile, UC San Francisco did not have anything to say. Friday afternoon, after the first news surfaced, an innocuous statement was put out by the chancellor. It did not address the issues raised by Kessler. Late Friday afternoon, the chancellor put out a stronger statement, declaring that Kessler's allegations had been investigated earlier and had no merit.
But that response came too late to change the focus of the coverage, which was heavily tilted towards Kessler's view of the world.
How could it have been handled differently by the chancellor? We are assuming that he did not consult his PR folks in advance. Instead, he could have anticipated the obvious attention his decision would receive. With that in mind, he could have issued an already prepared statement promptly after the dismissal, perhaps as early as Thursday. He could have anticipated the move by Kessler and had a response ready to roll out immediately instead of hours later. But that would have required the early input of the PR folks at UC San Francisco – PRIOR to the actual firing.
Keep in mind that we are not talking about the merits of Kessler's firing or the allegations – only the public perception and news coverage. From UCSF's institutional perspective, it has been tarred unfairly by Kessler. From Kessler's perspective, he has turned a negative event into something that reflects considerably more positive on him.
Given the controversial nature of the research funded by CIRM and its built-in conflicts of interest, bad news is always a good possibility. It behooves the organization to think carefully about how it plans to deal with that eventuality.
Friday, December 14, 2007
Fresh Link to More on Lab Grants
Here is a link to the news release by the Foundation for Taxpayer and Consumer Rights on today's disclosure of the identities of 12 of the institutions seeking $262 million from CIRM.
We must renege on our earlier promise to publish more on this subject today. Other responsibilities have risen to a higher level.
We must renege on our earlier promise to publish more on this subject today. Other responsibilities have risen to a higher level.
Kessler Fired at UCSF, No Longer Can Serve at CIRM
David Kessler, one of the nation's leading public health advocates and a director of the California stem cell agency, has been fired as dean of the School of Medicine at the University of California, San Francisco.
In an email today to colleagues, Kessler indicated that his dismissal was linked to his efforts to deal with "financial irregularities."
The note said,
"Shortly after arriving at UCSF as Dean, I discovered a series of financial irregularities that predated my appointment. I reported these issues to appropriate university officials at the time, and have endeavored to work with the university ever since to solve these problems. The university characterized me as a whistleblower. During the summer, Chancellor (J. Michael) Bishop requested my resignation. I continued to try to solve these problems. Yesterday, Chancellor Bishop terminated my appointment as Dean, effective immediately."Bishop released a note to personnel at UCSF later in the day, saying,
"I write to inform you that Professor David Kessler has left office as Dean of the UCSF School of Medicine and Vice Chancellor for Medical Affairs. I thank him for his energetic service to the university and his substantial achievements on behalf of UCSF. Professor Sam Hawgood has graciously agreed to serve as Interim Dean, effective immediately. I ask that you give him your wholehearted support. An international search for a successor to Dean Kessler will be initiated promptly."Kessler holds his position on the CIRM Oversight Committee because he is an executive officer of a UC medical school. His termination means that he can no longer sit on the CIRM board.
Kessler served as FDA commissioner from 1990 to 1997. He was dean of the School of Medicine at Yale prior to joining UCSF in 2003.
A story written by this author on the Kessler firing also appeared on Wired.com earlier today.
Correction
The item below omitted Stanford University from the list of institutions advancing to the next round.
Names Disclosed of 12 Applicants for $260 Million in Lab Grants
The California stem cell agency today identified the 12 institutions recommended for consideration in the second round of competition for $260 million in grants to build new stem cell research labs.
They are the University of California campuses at Berkeley, Davis, Irvine, Los Angeles, Merced, Santa Barbara, Santa Cruz and San Francisco, the University of Southern California, Stanford, the Buck Institute and the San Diego Consortium for Regenerative Medicine, which includes UC San Diego, Burnham, Salk and Scripps.
The institutions were recommended for funding by the Grants Working Group, which conducted a scientific review of the proposals earlier this year. They will go to the Oversight Committee in January and, if successful, to the Facilities Working Group in the spring. Then the plans will come back to the Oversight for final action in April.
The California Stem Cell Report and the Foundation for Taxpayer and Consumer Rights have advocated release of the names for months.
John M. Simpson, stem cell project director for FTCR, said, today's announcement was "completely inadequate."
In response to a query, he said,
CIRM plans to look more favorably on applicants that have raised large sums to contribute to the building projects.
The agency did not release the names of the five institutions that were turned down. We will have more on the CIRM announcement later today.
(Editor's note: An earlier version of this omitted Stanford from the list of 12.)
They are the University of California campuses at Berkeley, Davis, Irvine, Los Angeles, Merced, Santa Barbara, Santa Cruz and San Francisco, the University of Southern California, Stanford, the Buck Institute and the San Diego Consortium for Regenerative Medicine, which includes UC San Diego, Burnham, Salk and Scripps.
The institutions were recommended for funding by the Grants Working Group, which conducted a scientific review of the proposals earlier this year. They will go to the Oversight Committee in January and, if successful, to the Facilities Working Group in the spring. Then the plans will come back to the Oversight for final action in April.
The California Stem Cell Report and the Foundation for Taxpayer and Consumer Rights have advocated release of the names for months.
John M. Simpson, stem cell project director for FTCR, said, today's announcement was "completely inadequate."
In response to a query, he said,
"We don't know what the universities asked for. We only know what the scientific reviewers in their closed, clubby, secret meeting decided to recommend.In response to a question, Ellen Rose, interim communications officer for CIRM, said the institution was releasing the names "because we want to give them as much time as possible to most effectively fund-raise for the project leverage portion that they will be raising for the new facilities."
"Even worse, we don't know the five institutions that were excluded from CIRM's club of chosen ones.
"This is no way to spend more than $250 million in public money. Frankly it looks like the only reason the names are being released is so the lucky institutions can go forward and hit private donors up for more money before the tax year ends."
CIRM plans to look more favorably on applicants that have raised large sums to contribute to the building projects.
The agency did not release the names of the five institutions that were turned down. We will have more on the CIRM announcement later today.
(Editor's note: An earlier version of this omitted Stanford from the list of 12.)
Murphy on CIRM: The Long Trek and Growing Pains
Earlier this week, Richard Murphy, the interim president of the California stem cell agency, told the group's directors things are better than they might seem in media reports about conflicts-of-interest at the institute.
We asked him for a copy of his remarks, which are carried below. We should note that Murphy (see photo) has been with the agency since the beginning, first as a director and then as president since August.
"Before I begin, Mr. Chairman, I would like to share with the ICOC my observations on the recent events that have occurred at CIRM.
"Over the past several weeks, we have been through some challenging issues that have involved CIRM and ICOC members, issues that been fully discussed by the press and by CIRM’s many critics. I know we benefit from constructive suggestions but in considering our critics, I am also reminded of the words of composer Jean Sibelius who once said: “Remember, a statue has never been set up to honor a critic.”
"In my view, our recent problems arose not because ICOC members were intentionally trying to compromise CIRM’s rules but rather from inadvertent and innocent mistakes or because of ambiguities in how CIRM’s guidelines interface with state regulations. We need to be especially mindful of Footnote 1 in the ICOC’s own Conflict of Interest guidelines which can easily be interpreted to support the actions of the Deans in wring support letters. We need to deal with the problems that have arisen and clarify the ambiguities that gave rise to them.
"In addition, it is important to emphasize that we are a new and precedent-setting organization for we are the first state agency in the history of this country to fund medical research at this high level.
"Certainly, we always need to learn, to improve and to be better at predicting where unexpected hurdles and ambiguities can arise. But let us not be deterred from our mission by honest mistakes and let us not forget that the issues we confronted pale in comparison to CIRM’s achievements.
"The ICOC should take great pride in knowing that in the three short years since the election of November of 2004, CIRM’s list of accomplishments is remarkable. CIRM has
"Defeated in court opponents who tried to derail the will of the people who voted for Proposition 71
"Created a first-rate funding agency for supporting scientific research.
"Assembled a grants working group composed of some of the country’s best scientists from leading research institutions to help us evaluate grant applications
"Established ethical guidelines for working with stem cells that have become world standards
"Created intellectual property policies that will ensure that the people of California will benefit medically and also financially from the investment they have made in stem cell research.
"We have also processed over 400 grant applications, and committed over $200 million dollars in grants for research, training, and facilities. Each of you have a copy of the list of awards which are described 2007 Awards and Applications Approved For Funding.
"By the summer of 2008, we are predicted to have committed approximately $500 million dollars in funds for the support of stem cell research, which will make us the world’s largest supporter of embryonic stem cell research, and the envy of the world in our ability to fund this type of research.
"And, in the competition you will vote on today, CIRM will fund what many have called the lost generation of medical scientists, outstanding young MD and PhD scientists who have been delayed in establishing independent research laboratories because of cutbacks in federal funding.
"And CIRM has achieved these milestones with a skeleton crew of staff most of whom are new to this field and learning on the job. Fortunately, our staff’s commitment, intelligence, and willingness to work long hours have paid off in allowing CIRM to move far more expeditiously than any of us might have expected.
"In summary, Mr. Chairman, we must always endeavor to correct short-comings, but let us not forget that CIRM has now begun the long trek towards realizing Proposition 71’s vision of developing stem cell therapies to relieve the suffering wrought by intractable diseases. The journey will be long, but when we look back, the difficulties we have experienced recently will be seen as inevitable growing pains while our achievements will be seen as major steps forward, with far-reaching health consequences for us all."
Thursday, December 13, 2007
Wired.com, CIRM Meetings and Coverage
Wired.com has posted a piece by yours truly on Wednesday's meeting of the Oversight Committee of the California stem cell agency.
Some of you may wonder why so much "old news" is contained in it. The reason is that Wired.com has not carried any stories on the subject for days, so much of what appears to be "old" to regular readers of this blog is deemed to be "new" to Wired.com readers.
The practice is common in the news business. Based on the premise that one should never assume that readers are familiar with a topic, news stories generally include a healthy dollop of background. In the case of a story with continuing new developments, they must be recounted when a reporter dips into the subject area after being away from it for awhile.
Some of you may wonder why so much "old news" is contained in it. The reason is that Wired.com has not carried any stories on the subject for days, so much of what appears to be "old" to regular readers of this blog is deemed to be "new" to Wired.com readers.
The practice is common in the news business. Based on the premise that one should never assume that readers are familiar with a topic, news stories generally include a healthy dollop of background. In the case of a story with continuing new developments, they must be recounted when a reporter dips into the subject area after being away from it for awhile.
'Great to be in California' Says Recipient of $2.2 Million Stem Cell Grant
News coverage of Wednesday's California stem cell agency meeting – with its $54 million in research grant awards and conflict-of-interest flap – was light today.
Only one newspaper reporter attended the meeting along with one TV and one radio reporter. However, other newspapers picked up the story remotely, including Terri Somers of the San Diego Union-Tribune.
She focused on the grants going to San Diego area area researchers, along with quotes from recipients. She wrote:
"Lei Wang(see photo), 35, an assistant professor in Salk's Chemical Biology and Proteomics Laboratory, will receive $2.6 million for his proposal to develop new technologies for the precise investigation of molecular events in stem cells.Wang's comment will resonate at CIRM, which wants to encourage research that will break out of the mainstream.
"Although his proposal was scored the highest of all 49 considered, Wang said it would not have been granted funding by the NIH. What the regenerative medicine institute's scientific reviewers found to be 'bold and exceptionally innovative' would be considered too risky by the NIH, he said.
"David Traver(see photo), 38, an assistant professor of biological sciences at UCSD, will receive about $2.2 million for research into how stem cells of the blood-forming system are generated.
"'It's great to be in California,' Traver said. "My colleagues in the field are envious of this amazing thing the taxpayers of California have done.'"
The only newspaper reporter at the meeting was Bradley Fikes of the North County Times of San Diego County. He wrote:
"Leaders of California's $3 billion stem cell program struggled with a rash of alleged conflict of interest problems Wednesday, even as they awarded $54.4 million in grants to 22 young scientists."Meanwhile, in a column in The Sacramento Bee on Tuesday, longtime political columnist Dan Walters mentioned the California stem cell agency in a discussion of "unseemly activities" at some of "semi-public, semi-private fiefdoms" that exist in state government.
He touched on the problems with the state's First 5 California Children and Families Commission and Rob Reiner and wrote:.
"A more current example is another agency also created by ballot measure and headed by the man who sponsored the campaign, the Institute for Regenerative Medicine, which has $3 billion in state bond funds to finance stem cell research.Walters's perspective is one that would be more common among reporters who might write about CIRM should the agency surface with a higher level controversy.
"From its onset three years ago, the agency has been managed by businessman Robert Klein as a secretive, quasi-private pot of money that would be disbursed by mysterious procedures. It's especially troublesome that many of those serving on the agency's board are heads of universities and other institutions seeking research grants. It's another scandal waiting to happen."
In addition to Los Angeles TV station KTLA, John Brooks of KFWB radio covered the CIRM meeting on Wednesday. Here are links to the stories by Jim Downing of The Sacramento Bee and Steve Johnson of the San Jose Mercury News.
Wednesday, December 12, 2007
CIRM Directors Mull Conflict Flap
The conflict of interest controversy involving the California stem cell agency came directly before its Oversight Committee today as it wrestled with the agency's response and its impact on what was once an $85 million grant program.
The research effort was scaled back to $54 million (see item below) in the wake of alleged conflict-of-interest violations by five directors(Oversight Committee members), who also serve as heads of medical schools or research institutions.
But the agency took no further immediate action to tighten its procedures in connection with its ethical policies. However, it announced it would rewrite some portions of the conflict of interest rules to eliminate ambiguities that it believes confused some medical school deans.
Much of the morning meeting in Los Angeles was devoted to a general defense of CIRM's performance over the last three years by its chairman, Robert Klein, and its interim president, Richard Murphy. They reiterated their position that the conflict of interest violations were "innocent mistakes."
Klein said the agency has been involved in an "extraordinary effort." Murphy said, "We need to keep our critics in perspective." He said the conflict of interest problems "pale in comparison to our achievements" which are "the envy of the world."
Oversight Committee member Jeff Sheehy said, however, the problems were a "really serious matter" that should not be downplayed. He said, "I would be happier if we had more transparency."
Another Oversight Committee member, Ted Love, said the matter has been taken seriously, adding that the "media does not always properly represent things." Murphy also said he was not minimizing the problem.
Members of the Oversight Committee were especially troubled by the impact on the 10 scientists who lost out on millions of dollars through no fault of their own. But even that discussion illustrated the structural conflicts of interests that are built into CIRM by Prop. 71.
Twenty-nine persons sit on the Oversight Committee. They set the rules and criteria for giving grants to the institutions that employ them. As the directors tried to find a way to be fair to the 10 innocent researchers, CIRM's legal counsel told the committee members that only eight of those present could even discuss the issue because all the rest had legal conflicts of interest.
Later in the day, only eight were allowed to vote on adding $35 million to the $227 million lab construction grant program scheduled for next year.
The Oversight Committee meeting came only hours after the Los Angeles Times, the state's largest newspaper, editorialized on CIRM's state of affairs. The newspaper said:
The Times continued: "...(T)he Legislature could help by reconfiguring the governing board, making it smaller and balancing it with a strong contingent of elected officials and consumer watchdogs. Any change will take a 70% vote, usually a political impossibility. But the problems are nagging enough, and the stakes high enough, that the Legislature must overcome party divisions to create a leaner, more accountable institution.
"The agency has entered the exciting phase of funding research that might one day lead to new treatments. Klein and his entrepreneurial style deserve full credit for this, but he must welcome fundamental fixes and put a higher priority on running a public agency as truly public."
A footnote to today's event: Only one newspaper reporter covered today's meeting, Bradley Fikes of the North County Times in San Diego County, as well as Los Angeles TV station KTLA. One media watcher said budgetary constraints involving travel along with holiday vacation plans limited the coverage by other newspapers.
The research effort was scaled back to $54 million (see item below) in the wake of alleged conflict-of-interest violations by five directors(Oversight Committee members), who also serve as heads of medical schools or research institutions.
But the agency took no further immediate action to tighten its procedures in connection with its ethical policies. However, it announced it would rewrite some portions of the conflict of interest rules to eliminate ambiguities that it believes confused some medical school deans.
Much of the morning meeting in Los Angeles was devoted to a general defense of CIRM's performance over the last three years by its chairman, Robert Klein, and its interim president, Richard Murphy. They reiterated their position that the conflict of interest violations were "innocent mistakes."
Klein said the agency has been involved in an "extraordinary effort." Murphy said, "We need to keep our critics in perspective." He said the conflict of interest problems "pale in comparison to our achievements" which are "the envy of the world."
Oversight Committee member Jeff Sheehy said, however, the problems were a "really serious matter" that should not be downplayed. He said, "I would be happier if we had more transparency."
Another Oversight Committee member, Ted Love, said the matter has been taken seriously, adding that the "media does not always properly represent things." Murphy also said he was not minimizing the problem.
Members of the Oversight Committee were especially troubled by the impact on the 10 scientists who lost out on millions of dollars through no fault of their own. But even that discussion illustrated the structural conflicts of interests that are built into CIRM by Prop. 71.
Twenty-nine persons sit on the Oversight Committee. They set the rules and criteria for giving grants to the institutions that employ them. As the directors tried to find a way to be fair to the 10 innocent researchers, CIRM's legal counsel told the committee members that only eight of those present could even discuss the issue because all the rest had legal conflicts of interest.
Later in the day, only eight were allowed to vote on adding $35 million to the $227 million lab construction grant program scheduled for next year.
The Oversight Committee meeting came only hours after the Los Angeles Times, the state's largest newspaper, editorialized on CIRM's state of affairs. The newspaper said:
"Anyone spending $3 billion in public money has to do it impeccably. When the governing board meets today, it should take this a step further by reprimanding those who flouted the rules -- and changing its policies so the public can know their identities."The agency did reveal today the identities of the five institutions but took no further action. Klein told the California Stem Cell Report that CIRM delayed the information because it was waiting for a letter from the University of California on the matter. (Here is a link to the letter that asserts there were no violations of CIRM's ethical policy.)
The Times continued: "...(T)he Legislature could help by reconfiguring the governing board, making it smaller and balancing it with a strong contingent of elected officials and consumer watchdogs. Any change will take a 70% vote, usually a political impossibility. But the problems are nagging enough, and the stakes high enough, that the Legislature must overcome party divisions to create a leaner, more accountable institution.
"The agency has entered the exciting phase of funding research that might one day lead to new treatments. Klein and his entrepreneurial style deserve full credit for this, but he must welcome fundamental fixes and put a higher priority on running a public agency as truly public."
A footnote to today's event: Only one newspaper reporter covered today's meeting, Bradley Fikes of the North County Times in San Diego County, as well as Los Angeles TV station KTLA. One media watcher said budgetary constraints involving travel along with holiday vacation plans limited the coverage by other newspapers.
Names of Faculty Award Recipients
Here is a link to the CIRM news release on the names and the institutions of the faculty award recipients. http://www.cirm.ca.gov/press/pdf/2007/12-12-07.pdf
CIRM Hands Out $54 Million to Researchers
Directors of the California stem cell agency today approved $54 million in grants to fund some of the brightest young researchers in the state.
The amount fell far short of the $85 million originally scheduled for the faculty award program. The amount was reduced largely because of violations of the agency's conflict of interest code by five of its directors.
Deans at four medical schools and one research institution wrote letters on behalf of the applications. CIRM then rejected the 10 applications that were affected. It appeared that seven of them would likely have been funded.
Directors also told CIRM staff to prepare another grant proposal for consideration in January that will give the 10 affected scientists another chance. CIRM Chairman Robert Klein said additional funds should be added to that round.
CIRM staff said such a round would be treated as completely new. Others rejected on Wednesday would have a chance to compete again. Applications could be revised. New scientific reviews will be conducted.
CIRM also released the names of the institutions that submitted "tainted" applications: UCLA, UCSF, USC, UCSD and the Burnham Institute. All except Burnham had been identified by sources earlier.
John M. Simpson, stem cell project director for the Foundation for Taxpayer and Consumer Rights, praised the release of the names, but said they should have come earlier. He said,
The amount fell far short of the $85 million originally scheduled for the faculty award program. The amount was reduced largely because of violations of the agency's conflict of interest code by five of its directors.
Deans at four medical schools and one research institution wrote letters on behalf of the applications. CIRM then rejected the 10 applications that were affected. It appeared that seven of them would likely have been funded.
Directors also told CIRM staff to prepare another grant proposal for consideration in January that will give the 10 affected scientists another chance. CIRM Chairman Robert Klein said additional funds should be added to that round.
CIRM staff said such a round would be treated as completely new. Others rejected on Wednesday would have a chance to compete again. Applications could be revised. New scientific reviews will be conducted.
CIRM also released the names of the institutions that submitted "tainted" applications: UCLA, UCSF, USC, UCSD and the Burnham Institute. All except Burnham had been identified by sources earlier.
John M. Simpson, stem cell project director for the Foundation for Taxpayer and Consumer Rights, praised the release of the names, but said they should have come earlier. He said,
"Holding back the details simply undermines the public’s trust in the stem cell agency. I don’t understand their propensity for secrecy. It serves neither the board nor the agency nor the public."Names of the institutions and researchers receiving the grants today had not been released by CIRM at the time of this writing.
Reed Recuses Himself from CIRM
The California stem cell agency late Tuesday said that John Reed, the director who lobbied the agency on behalf of a grant for his own institute, has stepped down temporarily as a member of the CIRM Oversight Committee.
Here is the full text of CIRM's announcement.
Here is the full text of CIRM's announcement.
CIRM Comment on Dr. John Reed’s Recusal Announcement
December 11, 2007 - CIRM has learned that Dr. John Reed will recuse himself from all Independent Citizens' Oversight Committee (ICOC) activities, pending resolution of the Fair Political Practices Commission review.
We thank Dr. Reed for his dedication and commitment to the mission of CIRM and his service on the ICOC. We are confident that the review will show that Dr. Reed’s actions were innocent and inadvertent while trying to follow the strict policies of the agency.
CIRM will cooperate fully with any review and looks forward to a prompt and objective resolution of this matter.
Tuesday, December 11, 2007
Conflict Flap Dogs California Stem Cell Directors
The directors of the world's largest source of funding for human embryonic stem cell research meet on Wednesday to give away $60 million and set up rules for sharing the stem cell wealth with businesses.
But what's not on the agenda may be what dominates the news out of the meeting. And that is the fallout from the flap over conflicts of interest among the directors of the California stem cell agency.
California's Fair Political Practices Commission has announced it will investigate the conduct of one director, John Reed of the Burnham Institute, who lobbied on behalf of a $638,000 grant to his institution. In a separate incident, four deans of medical schools, who are also directors of the agency, signed letters on behalf of grant applicants in violation of CIRM's ethics policy. All 10 researchers have been dumped from consideration.
The Sacramento Bee editorialized Tuesday:
Francisco Prieto, a Sacramento physician, said in an email:
Simpson also says that at the very least Reed and "his representative to the board in his absence, Jeannie Fontana, should be barred from taking part in any stem cell board deliberations while the FPPC probe continues."
As for the 10 rejected researchers, interim CIRM President Richard Murphy told the California Stem Cell Report he hopes CIRM directors will approve a new round of grant funding to give the 10 scientists a fresh shot at the $25 million or so that they are missing out on Wednesday.
The Oversight Committee, as the board of directors is known, will also consider adding as much as $35 million to the upcoming $227 million round of grants for stem cell lab construction. It is the largest single round for CIRM so far.
Although all the applicants are major educational or research institutions, CIRM refuses to disclose their identities on the grounds that losers might be embarrassed.
Prieto said,
But what's not on the agenda may be what dominates the news out of the meeting. And that is the fallout from the flap over conflicts of interest among the directors of the California stem cell agency.
California's Fair Political Practices Commission has announced it will investigate the conduct of one director, John Reed of the Burnham Institute, who lobbied on behalf of a $638,000 grant to his institution. In a separate incident, four deans of medical schools, who are also directors of the agency, signed letters on behalf of grant applicants in violation of CIRM's ethics policy. All 10 researchers have been dumped from consideration.
The Sacramento Bee editorialized Tuesday:
"The entire episode reveals much about this insular agency. Despite years of warnings about secrecy and insider dealings, the institute's overseers continue to break their own rules and then refuse to provide information about the apparent violators. They claim they are subject to 'unprecedented levels of oversight' – as stated in a letter to The Bee published Saturday – even though lawmakers can't touch this agency without a supermajority of votes.Two members of CIRM's Oversight Committee have called for the resignation of Reed. Others are disturbed as well.
"The consequences do not bode well for cutting-edge research.
"Ten scientists have now lost out on grants that could lead to research breakthroughs. Others will surely lose out in future scandals if California continues to allow vested interests to determine the expenditure of $3 billion in public money."
Francisco Prieto, a Sacramento physician, said in an email:
"I have not made up my mind yet as to whether he should resign (one strike and you're out?), but I would like to hear from him. My feeling is he should apologize for a very obvious mistake, accept whatever penalty is assessed and we could then move on."John M. Simpson of the Foundation for Taxpayer and Consumer Rights has called for Reed's resignation and that of CIRM Chairman Robert Klein, who advised Reed to write his lobbying letter.
Simpson also says that at the very least Reed and "his representative to the board in his absence, Jeannie Fontana, should be barred from taking part in any stem cell board deliberations while the FPPC probe continues."
As for the 10 rejected researchers, interim CIRM President Richard Murphy told the California Stem Cell Report he hopes CIRM directors will approve a new round of grant funding to give the 10 scientists a fresh shot at the $25 million or so that they are missing out on Wednesday.
The Oversight Committee, as the board of directors is known, will also consider adding as much as $35 million to the upcoming $227 million round of grants for stem cell lab construction. It is the largest single round for CIRM so far.
Although all the applicants are major educational or research institutions, CIRM refuses to disclose their identities on the grounds that losers might be embarrassed.
Prieto said,
"I will continue to argue for releasing the names of the institutions applying. I think it's just silly to think this can be kept secret for long in any case, and no harm is done whatsoever by releasing this info - it affects virtually nobody's personal reputation or feelings."
Lawmakers: CIRM Proposal for Affordable Access Not Good Enough
Thirteen California state lawmakers are calling on the California stem cell agency to tighten its proposed requirements for grants to business to ensure affordable access to state-financed therapies.
The lead authors on the letter are the influential chairs of the Health Committees in their respective chambers, Sen. Sheila Kuehl, D-Santa Monica, and Assemblyman Mervyn Dymally, D-Los Angeles. They criticized the intellectual property policy to be considered by CIRM directors Wednesday for having a "a weak and vague standard that is unlikely to result in any meaningful access for the uninsured to new stem cell drugs and therapies."
In a letter to CIRM Chairman Robert Klein, they urged that any access plans require CIRM approval and that CIRM regulations spell out specific access standards.
The lawmakers also said that the mechanism for affordable pricing should not be linked to a state law that can be repealed, "leaving no pricing requirement whatsoever in place."
The full text of the Dymally-Kuehl letter is below.
The lead authors on the letter are the influential chairs of the Health Committees in their respective chambers, Sen. Sheila Kuehl, D-Santa Monica, and Assemblyman Mervyn Dymally, D-Los Angeles. They criticized the intellectual property policy to be considered by CIRM directors Wednesday for having a "a weak and vague standard that is unlikely to result in any meaningful access for the uninsured to new stem cell drugs and therapies."
In a letter to CIRM Chairman Robert Klein, they urged that any access plans require CIRM approval and that CIRM regulations spell out specific access standards.
The lawmakers also said that the mechanism for affordable pricing should not be linked to a state law that can be repealed, "leaving no pricing requirement whatsoever in place."
The full text of the Dymally-Kuehl letter is below.
Text of Lawmakers Letter
Here is the full text of the letter from Sen. Sheila Kuehl and Assemblyman Mervyn Dymally and 11 other state lawmakers concerning affordable access to state-financed stem cell therapies.
Dear Mr. Klein:
Recent proposed regulations pertaining to intellectual property and revenue sharing requirements for for-profit grantees, dated November 24, 2007, contain some notable improvements over previous versions of the regulations but still have a number of troublesome provisions that we urge you to correct before these regulations are finalized.
We are pleased that the most recent regulations propose to require grantees to share 25 percent of the net licensing royalties they receive, the same percentage as is applied to grantees that are non-profit organizations. We are also pleased that the regulations have broadened the definition of “drugs,” for which grantees or their licensees would be required to meet benchmark pricing requirements, to include articles intended for use in the diagnosis, treatment, or prevention of disease or components thereof, including products such as blood, blood products, cells, and cell therapies. We are also encouraged that provisions dealing with blockbuster revenue sharing requirements for for-profit grantees have been made more flexible, to include cases where either prior or current CIRM funding and CIRM-funded patented inventions contribute to the creation of net commercial revenue in excess of $500 million.
We are disappointed, however, that the access requirements continue to require that access plans for uninsured Californians meet “industry standards at the time of commercialization.” This is a weak and vague standard that is unlikely to result in any meaningful access for the uninsured to new stem cell drugs and therapies. The proposed regulations actually take a step backwards from previous iterations, by allowing the access plans, themselves, to account for the “resources of the grantee or licensee”, an undefined phrase that will encourage grantees and licensees to limit access to these vital, but expensive new drugs and therapies.
Related to this, we see no provisions in the regulations requiring CIRM or the ICOC to actually approve the proposed access plans that are submitted, meaning that there would be no effective enforcement of the access requirements, vague and weak as they are. We think the regulations must spell out specific access standards, taking into account the best industry practices that currently exist, and to require CIRM and the ICOC to approve the access plans, with opportunity for public comment.
In addition, while we would prefer the benchmark pricing requirement for grantees and licensees to be the Medicaid price, we understand the desire of the CIRM and ICOC to link the pricing requirement to a California-based standard. While requiring that prices for stem cell drugs and therapies purchased with public funds must meet one of the three benchmark prices required by the California Discount Prescription Drug Program (Cal Rx) fulfills this, there is no guarantee that this particular program will exist in the future. As you know, the Governor blue-penciled start-up funding for the program in signing the 2007-08 budget. If the program were to be repealed, there would be no pricing requirement whatsoever in place. We strongly urge that the regulations deal with this potentiality by stating the benchmark prices will be those required by Cal Rx, or if it is no longer in effect, on the last day it was in effect.
We wish to commend you on the work the CIRM and ICOC have done to date on this important policy, and we strongly urge you to go further to ensure that the state, and the public, broadly, benefit from the patents, licenses, and royalties created as a result of the state’s funding, while at the same time promoting the development of stem cell therapies.
Sincerely,
SHEILA J. KUEHL
Chair, Senate Health Committee
MERVYN DYMALLY
Chair, Assembly Health Committee
Assemblymember Karen Bass
Senator Negrete McLeod
Assemblymember Patty Berg
Senator Darrell Steinberg
Assemblymember De La Torre
Senator Leland Yee
Assemblymember Noreen Evans
Assemblymember Mary Hayashi
Assemblymember Hernandez
Assemblymember Dave Jones
Assemblymember Sally Lieber
Biotech Loan Program Slated for March Approval
The biotech loan task force of the California stem cell agency began work Tuesday on a plan to loan perhaps as much as $750 million to struggling stem cell companies and possibly nonprofit institutions.
Duane Roth, chairman of the task force, said he expected to present the proposal to the directors of the $3 billion agency in March. Between now and then, Roth(see photo) and the other members of the task force identified a number of issues that needed to be explored. They included legal questions, concerns about staffing at CIRM, defaults in the lending effort and even the name of the program.
Roth suggested the program should be aimed at filling the financial gap between research grant funding and venture or financial angel capital – the so-called "valley of death" where promising research dies for lack of economic support.
Roth noted that the targeted participants in the loan program cannot find normal financing so credit-worthiness should not be an issue. "Banks don't make loans to these type of companies," he said.
Roth predicted that while default rates on loans could be above what a normal lending program would suffer, they should not be high.
Nonetheless, payback on the loans was a topic on which several members of the task force expressed a concern. But like other issues raised at the meeting, solutions await more work by the task force.
Roth also said, "Let's not create a bureaucratic nightmare for the staff." It was a sentiment echoed by others. CIRM Chairman Robert Klein suggested that outside firms would be needed to administer the program.
Roth said he will be seeking from outside firms to develop the loan program, including creating a financial model that would help determine risk levels. He said two meetings will be held to seek the thoughts of industry and the financial sector.
As for the name of the program, Roth suggested it should be called something like the "product development loan program." A decision on that was deferred after a brief discussion.
The meeting in Los Angeles with two teleconferencing sites in the San Francisco Bay area attracted some attention from business. Representatives from Geron, Advanced Cell Technology, PriceWaterHouseCoopers, Capricor and DNAmicroarray were present along with a business development official from the British Consulate in Los Angeles.
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