Monday, March 14, 2005

Background From Legislative Hearing

The following material was supplied by the office of California State Sen. Deborah Ortiz as part of the hearings March 9 into the California stem cell agency.

“Implementation of Proposition 71, the California Stem Cell
Research and Cures Initiative”
Background Paper
Overview of Proposition 71

Proposition 71, the California Stem Cell Research and Cures Act approved by voters in November, 2004, provides $3 billion in general obligation bonds to provide funding for stem cell research and research facilities in California. This measure establishes the California Institute for Regenerative Medicine (Institute) to award grants and loans for stem cell research and research facilities.
The Institute is governed by a 29-member Independent Citizen's Oversight Committee (ICOC), comprised of representatives of specified University of California campuses, other public or private California universities, nonprofit academic and medical research institutions, companies with expertise in developing medical therapies, and disease research advocacy groups. The Governor, Lieutenant Governor, Treasurer, Controller, Speaker of the Assembly, President pro Tempore of the Senate, and certain University of California Chancellors all made appointments to the ICOC and the ICOC conducted its first meeting in December, 2004.
Proposition 71 authorizes the state to sell $3 billion in general obligation bonds, and limits bond sales to no more than $350 million per year. The measure states its intent that the bonds be sold during a ten-year period. The measure provides that for the first five years, repayment of the principal is postponed and interest on the debt is to be repaid using bond proceeds rather than the General Fund revenues. The funds authorized for the Institute are continuously appropriated without regard to fiscal year.
The Institute is eligible to receive a $3 million start-up loan from the state General Fund for initial administrative and implementation costs. The Institute must repay the General Fund loan using the proceeds from the sale of bonds authorized under this measure.
Priority for Research Funding

Priority for research grant funding under Proposition 71 is given to stem cell research that meets the Institute's criteria and is unlikely to receive federal funding. In certain cases, funding can also be provided for research that does not meet these criteria. The Institute may not fund research on human reproductive cloning.
Up to 10 percent of the funds available for grants and loans is available to be used to develop scientific and medical research facilities for nonprofit entities within the first five years of the implementation of the measure.

Benefits from Licenses, Patents and Royalties

The ICOC is required to establish standards requiring that all grants and loans be subject to agreements allowing the state to financially benefit from licenses, patents, and royalties and resulting from the research activities funded under the measure.

Right to Conduct Stem Cell Research

Consistent with current statute, this measure makes conducting stem cell research a state constitutional right.

Public Reporting and Accountability Measures

The initiative requires the ICOC to issue an annual report setting forth its activities, grants awarded, grants in progress, research accomplishments, and future program directions. The ICOC must also commission an annual independent financial audit of its activities from a certified pubic accounting firm, which shall be provided to the State Controller, who shall review the audit and annually issue a public report of that review. The Controller must establish a Citizen’s Financial Accountability Oversight Committee chaired by the State Controller to review the annual financial audit, the State Controller’s report and evaluation of that audit, and the financial practices of the Institute.

ICOC Working Groups

The initiative establishes three working groups to make recommendations to the ICOC:
The Scientific and Medical Research Funding Working Group, the purpose of which is to recommend to the ICOC criteria, standards, and requirements for reviewing research applications; review grant and loan applications and make recommendations to the ICOC for the award of research, therapy development, and clinical trials grants and loans. The initiative directs that the working group recommend its first grant awards within 60 days of the issuance of interim standards for funding applications by the ICOC.
The Scientific and Medical Accountability Standards Working Group, the purpose of which is to recommend to the ICOC scientific, medical, and ethical standards for medical research and clinical trials, including standards for safe and ethical procedures for obtaining materials and cells for research and for appropriate treatment of human subjects in medical research. The initiative also directs this working group to make recommendations to the ICOC for oversight of funded research.
The Scientific and Medical Research Facilities Working Group, which is to make recommendations to the ICOC on requirements and standards for applications for and awards of grants and loans for buildings, building leases, and capital equipment. The initiative requires that all funded facilities and equipment be located in California and further requires that all grantees be non-profit entities. Finally, the initiative requires that each grantee secure matching funds equal to at least 20 percent of the award.

Staffing of Institute and ICOC

Proposition 71 provides for the selection of a Chairperson and Vice Chairperson, whose duties are to lead the 29-member ICOC. At its first meeting in December, 2004, the appointed ICOC members selected Robert Klein, II, Chairperson of the Yes on 71 campaign, as its Chairperson, and Ed Penhoet, a biotechnology and foundation leader, as its Vice Chair.
According to Proposition 71, the duties of the Chair of the ICOC are to manage the ICOC agenda and work flow, and to supervise all annual reports and public accountability requirements, to interface with the California Legislature, Congress, and the public, to lead negotiations for intellectual property agreements, policies, and contract terms. The Chair also serves as a member of the Scientific and Medical Accountability Standards Working Group and the Scientific and Medical Research Facilities Working Group, and also as an ex-officio member of the Scientific and Medical Research Funding Working Group.
The duties of the Vice Chair are to support the Chair in all of his/her duties and to carry out the Chair’s duties in his/herabsence.
Proposition 71 also authorizes the ICOC to approve up to 50 full time staff positions for the Institute, including a President. According to the initiative, the President’s duties are to serve as the chief executive of the Institute, recruit scientific and medical staff, serve on the working groups, and to oversee necessary staff work to support the ICOC in evaluating and acting on recommendations from the working groups on grants, loans, facilities, and standards. The ICOC recently appointed Zach Hall, a veteran neuroscientist, medical school administrator, and biotechnology entrepreneur, as interim President of the Institute, and has commenced a formal search process to find a permanent President.
Proposition 71 provides that notwithstanding provisions of the Government Code, the ICOC shall set compensation for the Chairperson, Vice Chairperson, President, and staff of the Institute within the range of compensation levels for executive officers and scientific, medical, technical, and administrative staff of medical schools within the University of California system and non-profit academic and research institutions.

Proposition 71 Amendment Provisions

The initiative provides that it may be amended in furtherance of the purposes of the initiative by a bill introduced and passed no earlier than the third full calendar year following adoption of the initiative by 70 percent of the membership of both houses of the Legislature.

Fiscal Effects of Proposition 71

According to the Legislative Analyst, if the $3 billion in bonds authorized by this measure were repaid over a 30-year period at an average interest rate of 5.25 percent, the cost to the General Fund would be approximately $6 billion to pay off both the principal ($3 billion) and interest ($3 billion). The average payment for principal and interest will be approximately $200 million per year.
The initiative would allow the state to receive payments from licenses, patents, and royalties resulting from the research funded by the Institute. The amount of revenues the state would receive from those types of arrangements is unknown but could be significant. The amount of revenue from these sources would depend on the nature of the research funded by the Institute and the exact terms of any agreements for sharing of revenues resulting from that research. To the extent that the measure attracts additional federal or private funding of research or results in expansion of the state’s biomedical industries, it would also produce other economic benefits. To the extent that the measure results in reductions in the cost of health care, it would also result in economic benefits for the state.

Issues Raised Concerning Implementation of Proposition 71
Lawsuits Challenging Validity of Proposition 71

On February 22, 2005 two lawsuits were filed with the California Supreme Court seeking to halt the new stem cell research program. The first, filed by a group calling itself the Californians for Public Accountability and Ethical Science, contends that Proposition 71 violates the single subject rule for propositions by allowing funding for both embryonic and other types of stem cell research. It also claims the initiative violates conflict of interest laws by requiring members of the ICOC to come from universities, research institutions, disease advocacy groups, or biotechnology companies that could have an interest in the research being funded.
The second suit, filed by the groups People’s Advocate and the National Tax Limitation Foundation, claims that Proposition 71 violates the California Constitution by giving the ICOC power to spend state dollars without oversight from the Legislature or executive branch. Life Legal Defense Foundation, a legal organization that opposes embryonic stem cell research, is also supporting the legal challenge.

Criteria for Grants

A petition recently filed with the ICOC by Dr. Phillip Lee, a former US Assistant Secretary for Health and Human Services, and Charles Halpern, a public interest attorney, asks that the ICOC consider no grants or loans until grant guidelines are adopted by the ICOC, and potential applicants have been given an opportunity to prepare applications and to apply. According to the petition, such guidelines should specify selection criteria, the substantive scope of the grant program (e.g. whether all grants must be for embryonic stem cell research), the size of the grants being considered, matching requirements (if any), and the availability of grants for capital projects. In addition, no grants or loans will be considered until guidelines are in place which assure that the financial interest of the state and its taxpayers are specified and protected.
The Committees may wish to ask what formal criteria or guidelines the ICOC has adopted, or is likely to adopt, reflecting its priorities for research and facility funding, and when those criteria and guidelines are expected to be put in place.

Salaries of ICOC Officers and Institute Staff

Proposition 71 requires the ICOC to set compensation for the ICOC Chairperson and Vice Chairperson, Institute President and other officers, and the scientific, medical, technical, and administrative staff of the Institute within the range of compensation levels for executive officers and scientific, medical, technical, and administrative staff of medical schools with the University of California and nonprofit academic and research institutions.
The petition recently filed by Dr. Phillip Lee and Charles Halpern asks the ICOC to ensure that no employee or officer of the ICOC or the Institute shall receive a salary higher then the highest paid Institute Director at the National Institutes of Health (NIH) ($290,000), and that no employee, other than the Chair, Vice-Chair, and President, shall receive a salary higher than the Secretary of Health and Human Services of the state of California ($131,000). The petition further asks that all hiring shall be done through an open process, with jobs posted so as to attract candidates from minority groups, women, and disadvantaged communities.
The Committees may wish to ask whether pegging salaries for ICOC and Institute staff to the University of California and private research institutes is a reasonable guideline and whether the size and prestige of Proposition 71’s research program may enable the ICOC and Institute to attract top scientific and administrative talent without paying the highest salaries.

Open Meeting Issues

Proposition 71 applies the Bagley Keene Open Meeting Act to the meetings of the ICOC and requires the ICOC to award all grants, loans, and contracts in public meetings, as well as all governance, scientific, medical, and regulatory standards. The initiative allows the ICOC to conduct closed sessions as permitted by the Bagley Keene Act, as well as to consider:
Matters involving information relating to patients or medical subjects, disclosure of which would compromise personal privacy.
Matters involving confidential intellectual property or work products of various kinds.
Matters involving pre-publication, confidential scientific research or data.
Matters involving personnel matters.
The initiative provides that the California Public Records Act applies to all records of the ICOC, except as otherwise provided in the Act, and generally exempts the above items as well.
The initiative provides that the working groups are not subject to open meeting laws, but provides that records the working groups submit as part of their recommendations to the ICOC shall be subject to the Public Records Act.
The petition recently filed with the ICOC by Dr. Phillip Lee and Charles Halpern asks the ICOC to subject the medical standards and research facilities working groups to open meeting and public records laws, with exceptions as allowed by those laws. It further asks the ICOC to require the grants review working group to comply with the Bagley Keene Act and Public Records Act, with further exemptions as deemed appropriate by the ICOC in order to permit closed meetings when necessary to assure that scientific peer review, as that term is defined in NIH Sec. 5501.109(b)(7), is thorough and effective.
SB 18 (Ortiz) states the intent of the Legislature that all meetings of Proposition 71 working groups be subject to the Bagley-Keene Open Meeting Act.
The Committees may wish to ask why Proposition 71 exempts its working groups from open meeting laws and whether the ICOC intends to override those provisions of Proposition 71.
The Committees may also wish to ask, in cases where deliberations of the ICOC and its working groups are conducted in closed session, what record of decisionmaking will be accessible to the public to enable public participation in decisions of the ICOC and its working groups.

Conflict of Interest Issues

The initiative applies the Political Reform Act to the Institute staff and members of the ICOC, with certain clarifications. It specifically allows a member of the ICOC to participate in a decision to approve or award a grant, loan, or contract to a non-profit entity in the same field as his or her employer. It also allows an ICOC member to participate in awarding a grant, loan, or contract for purposes of research involving a disease from which the member or an immediate family member suffers from or which the member has an interest in as a representative of a disease advocacy organization.
The initiative also provides that service as a member of the ICOC shall not be deemed incompatible with service as a faculty member or administrator of the University of California, representative or employee of a disease advocacy organization, a nonprofit academic research institution, or a life science commercial entity.
Government Code Section 1090 prohibits various public officers and employees from making any contracts in their official capacity in which these individuals have a financial interest. Proposition 71 provides that Section 1090 does not apply to any grant, loan, or contract made by the ICOC unless the grant, loan, or contract directly relates to services to be provided by a member of the ICOC or financially benefits the member; and the member fails to recuse himself or herself from participating in the decision involving the grant, loan, or contract.
The initiative provides that because the working groups are purely advisory and have no final decisionmaking authority, their members are not subject to the Political Reform Act and do not have to file statements of economic interest under that Act (Form 700s). Instead, it makes working group members subject to conflict of interest rules to be adopted by the ICOC, which shall be based on standards applicable to members of scientific review committees of the NIH.
Existing NIH rules concerning conflicts of interest require reviewers of grant applications to sign a one-page form certifying that they have no conflicts of interest with the applications, to identify any applications with which they do have a conflict of interest, and to pledge to recuse themselves from their review. The rules require such reviewers to additionally certify after they have reviewed applications that they did not participate in the evaluation of any application or proposal in which they had a conflict of interest. The NIH rules state that a conflict of interest exists when a reviewer or a close relative or professional associate of the reviewer has a financial or other interest in an application that is likely to bias the reviewer’s evaluation of the application. The rules further state that a reviewer shall have a real conflict of interest if he or she or a close relative or associate has received or could receive a direct financial benefit of any amount deriving from the application; has received or could receive a financial benefit from the applicant institution or principal investigator that exceeds $10,000 per year, including honoraria, fees, stock, or other financial benefit; or has any other interest that is likely to bias the review of the application. The latter can include any professional or close personal relationship with the any member of the research team presenting the application.
The rules further provide that a reviewer who is a salaried employee or is negotiating employment with the applicant institution is deemed to have a conflict of interest with regard to any application from that institution, with exceptions.
Dr. Phillip Lee and Charles Halpern recently filed a petition with the ICOC proposing among other things that all paid executives and staff of the Institute and ICOC adhere to rules similar to those recently issued by the NIH. The petition additionally asks the ICOC to subject its three working groups to the Political Reform Act and asks that specific conflict of interest standards be adopted by the ICOC before any members are appointed.

Recently Adopted NIH Rules Concerning Conflicts of Interest

The Secretary of Health and Human Services recently promulgated interim final rules governing conflicts of interest by employees of federal agencies including the NIH. The rules generally cover relationships between employees and designated entities that are affected by NIH decisions in the areas of employment, financial holdings, and receipt of gifts. The rules do not apply to scientists who serve on NIH grant review panels or to outside researchers who apply for NIH grants. The rules came after congressional investigators found that more than 100 NIH employees had not disclosed relationships they had with pharmaceutical and biotechnology companies, in violation of government ethics rules.
For all NIH employees, compensated or uncompensated employment, including consulting and advisory or other board service, and compensated teaching, speaking, writing, or editing, is now prohibited with or for the following entities:
Substantially affected organizations (defined to include biotechnology.pharmaceutical, medical device companies, and others with similar interests).
Hospitals, clinics, health maintenance organizations, or other health care providers.
Health insurers.
Health, science, or health research-related trade organizations, professional associations, or consumer or advocacy groups.
Educational institutions or non-profit independent research institutes that are or recently were NIH funding applicants, grantees, or contractors.
Under the new rules, NIH employees who file public or confidential financial disclosure reports are prohibited from acquiring or holding financial interests, such as stock, in biotechnology, pharmaceutical, and medical device companies and other entities involved in the research, development, or manufacture of medical devices, equipment, preparations, treatments, or products. All other employees (i.e., those who do not file either of these reports) are subject to a $15,000 cap on holdings in such companies.
Senior employees may not receive gifts with an aggregate market value of more than $200 that are an award given because of their official position or from a prohibited source. Other employees having official responsibility for matters involving the donor (even if not personally involved) may not receive the gifts with an aggregate market value of more than $200 that are an award given from such a donor. Employees generally may receive awards from outside sources that are nothing more than plaques or trophies of little intrinsic value and free attendance and food at the event in which the employee is honored.
SB 18 (Ortiz) states the intent of the Legislature that the ICOC ensure that requirements for reporting of economic interests for ICOC members and Institute staff be commensurate with those required of public officials as defined under the Political Reform Act. SB 18 also states intent that requirements for disclosure of economic interests and public access to economic interest statements for Proposition 71 working groups meet or exceed those required of peer review groups convened by the National Academies of Science.
ACR 1 (Negrete-McLeod) urges the ICOC to develop, prior to the award of loans, grants, and contracts for stem cell research and facilities, robust conflict of interest standards for its members and its working group members and to report to the Legislature on or before April 1, 2005 on its implementation of the resolution.
In July, 2004, a US government ethics office demanded that federal agencies more fully comply with rules requiring experts who serve on advisory panels to declare potential conflicts of interest. In March, 2004, the US General Accounting Office found that two-thirds of scientists and other specialists who serve on advisory panels fail to complete financial conflict of interest forms and in some cases are given special titles to exempt them from requirements to declare conflicts of interest.
The Committees may wish to ask whether the ICOC should apply recently adopted NIH standards prohibiting ownership of biotechnology and pharmaceutical company by senior employees to employees of the ICOC and the Institute.
The Committees may also wish to ask whether statements of economic and other interests completed by Proposition 71 working group members should be accessible to the public, as are Form 700s under the Political Reform Act.

Patenting and Intellectual Property Issues

Proposition 71 contains a general statement directing the ICOC to establish standards that require all grants and loans to be subject to intellectual property agreements that balance the opportunity of the state to benefit from the licenses, patents, and royalties that result from basic research, therapy development, and clinical trials with the need to ensure that essential medical research is not unreasonably hindered by the intellectual property agreement.
An economic analysis commissioned by proponents of Proposition 71 before it was adopted suggested that royalties to the state from research funded under Proposition 71 could generate $537 million to $1.1 billion over the life of the program.
In 1980, in an effort to promote greater commercialization of federally funded research, Congress passed the Bayh-Dole Act. Under the Act, research recipients, for example, the University of California, are allowed to own inventions resulting from research grants they receive, and are encouraged to seek patents for the inventions and to enter into licensing arrangements with outside entities to develop and commercialize the inventions.
While the Act has been successful in moving inventions out of laboratories and into commerce, it has been faulted for leading to a fragmentation of patents and licenses and for not ensuring the affordability or accessibility of products or treatments resulting from publicly funded research, including to government programs serving lower income persons.
Handling of intellectual property created under state contracts was the subject of ACR 252 (Mullin), passed by the Legislature in 2004. The resolution requests the California Council on Science and Technology to create a special study group to develop recommendations to the Governor and Legislature on how the state should treat intellectual property created under state contracts, grants, and agreements.
SB 18 (Ortiz), introduced in December, 2004, states the intent of the Legislature that contracts, awards, grants, or loans entered into by any state entity that provides state funding for biomedical research ensure all of the following:
The contract, award, grant, loan, or other arrangement does not result in a gift of public funds.
Any clinical treatments, products, or services resulting from the biomedical research are made available at affordable costs to low-income residents, including health care and preventive health programs funded in whole or in part by the state and counties that serve low-income residents.
The terms of any loan, lease, or rental arrangement are consistent with market rates.
The state recoups its legal and administrative costs associated with patenting and licensing activities related to the biomedical research.
The state is provided a share of the royalties or revenues derived from the development of clinical treatments, products, or services resulting from the research that is commensurate with its role in the development of the clinical treatments, products, or services.
Any royalties or licensing revenues are used to repay any costs of issuing bonds associated with the biomedical research being funded.
The Committees may wish to ask what protections the ICOC intends to put in place to ensure that the state receives a return on its investment in research and that any resulting products or treatments are affordable and accessible to low-income residents.

Medical and Ethical Standards—Protection of Research Subjects and Donors

Proposition 71 states that in order to avoid duplication or conflicts with standards for scientific and medical research, the Institute shall develop its own scientific and medical standards. It further directs the ICOC to establish standards for informed consent of research donors, patients, or participants, and for review of research involving human subjects, which are generally based on the standards in place as of January 1, 2003 for research funded by the NIH, with modifications to adapt to the mission and objective of the Institute.
The initiative specifically prohibits compensation to research donors or participants, while permitting reimbursement of expenses. It also directs the ICOC to develop standards to assure compliance with state and federal patient privacy laws and to limit payments for the purchase of stem cells or stem cell lines to reasonable payment for the removal, processing, storage, transport, or implantation of the stem cells or cell lines.
Finally, the initiative sets a limit on the time during which stem cells may be extracted from blastocysts, which shall initially be 8 – 12 days after cell division begins.
A number of individuals and groups associated with the Pro Choice Alliance for Responsible Stem Cell Research have suggested that the ICOC adopt a policy of not funding therapeutic cloning projects that involve multiple egg extraction as a means of securing eggs for research and instead limit approval to extraction of eggs by means of ovariectomies or tubal ligations, as a safer and more ethical approach. The groups also advocate having the personal physicians of women who are considering providing eggs for research conduct the informed consent procedures. In addition, the groups advocate putting in place a mechanism for long-term follow-up regarding the health of women egg donors and requiring a neutral and independent oversight body review all data on the safety of hyperstimulation drugs to better assess the risks and benefits of the drugs.
The groups note that other countries, such as Canada, have imposed moratoria on somatic cell nuclear transfer research, at least in part due to concerns about impacts on women’s health.
According to an open letter submitted by Suzanne Parisian, MD, a former Chief Medical Officer of the Food and Drug Administration and physician, the long term health risks for a woman receiving Invitro Fertilization drugs for egg retrieval are unknown. According to trial data submitted to the Federal Drug Administration, severe ovarian hyperstimulation syndrome occurs in about three–eight percent of patients and can lead to a serious life-threatening condition days after completion of egg collection and is also associated with increased risk of clotting disorders, kidney damage, and ovarian twisting. In addition, ovarian stimulation has been associated with serious and life-threatening pulmonary conditions. Finally, studies to date have not ruled out a possible link between stimulation drugs and increased risk of ovarian cancer.
Proposition 71 states that in order to avoid duplication or conflicts with other standards for medical research, the ICOC is instructed to develop its own standards. The initiative specifically exempts Proposition 71 funded research from several provisions of SB 253 (Ortiz) of 2002, and SB 322 (Ortiz) of 2003, including the requirement that embryonic stem cell research projects be reviewed by an Institutional Review Board and that such projects be subject to guidelines being developed by the Department of Health Services with the assistance of a technical advisory committee, which are due to be published in early 2006.
A number of guidelines governing standards for protection of donors of eggs and embryos either exist or are in the process of being drafted. For example, the National Academy of Sciences is expected to release a long-awaited set of standards dealing with a variety of ethical issues presented by embryonic stem cell research and somatic cell nuclear transfer later this spring. In addition, the guidelines required by SB 322 noted above were due in January, 2005.
Finally, standards developed by the American Society for Reproductive Medicine governing women undergoing egg extraction and use of hyperstimulation drugs for purposes of donating eggs to infertile individuals and couples (for reproductive purposes) state that donors who provide informed consent may donate eggs for these purposes. The standards state that women should not be induced into donating eggs for these purposes through use of economic incentives, and establish dollar thresholds for payments to donors that are either presumptively permissible or not permissible.
SB 18 (Ortiz) states the intent of the Legislature that patients undergoing assisted oocyte production, whether for purposes of donating eggs for medical research or for reproductive purposes, be provided with a standardized written summary of all known and potential medical risks associated with assisted ooctye production. The measure also states intent that prior to providing assisted oocyte production, the treating provider obtain written consent from the patient. In addition, SB 18 requires providers of assisted oocyte production to provide patients with timely and appropriate information to allow the patient to make an informed choice regarding the disposition of any oocytes remaining following the procedure and to obtain written consent for any donation of oocytes for research.
SB 18 also states intent that no human oocyte or embryo shall be acquired or otherwise transferred for valuable consideration, defined as payments beyond those reasonably related to removal, processing, or storage of oocytes or embryos. Finally, the bill states intent that no payment in excess of what is necessary to reimburse expenses shall be made to any research subject to encourage her to produce human oocytes for purposes of medical research.
The Committees may wish to ask what process the ICOC has either established or plans to establish to develop standards for protection of research donors and subjects and whether it will be a deliberative process that allows all perspectives to be presented and considered by the ICOC.
The Committees may also wish to ask what steps the ICOC intends to take to ensure that women’s health issues involved in egg and embryo donation are fully vetted and considered.

Consideration of Disease Disparity and Diversity in Hiring, Contracting, and Appointments Issues

The Greenlining Institute has formally requested the ICOC, in a letter dated February 7, 2005 to Robert Klein, to commit to several goals concerning disease disparity issues and diversity issues. Among other things, the Institute has asked the ICOC to ensure that it secures full insight into the health issues of special concern to the state’s 20 million minority residents; ensure that its staff and contractors reflects the diversity of California; ensure that all contracts for services, construction, and development have a major minority supplier diversity component and goals; provide that universities and research institutes demonstrate that they are committed to diversity in their staffing and contracting as a condition of applying for Proposition 71 grants, loans, and contracts; and create a competitive environment in which the ICOC demonstrates that its research and achievements are not limited to areas or diseases of interest to non-minority Californians.
The Greenlining Institute has asked to appear before the ICOC to provide presentations from minority stem cell research and health experts to broaden the knowledge of the ICOC concerning these issues and to compensate in part for the lack of minority representation on the ICOC, and to raise the issue of diversity in contracts and hiring in the ICOC, Institute, and organizations applying for funding.
In its letter, the Institute notes that the 29-member ICOC has only four minority representatives and that only two of the first nine employees of the Institute are minorities. The letter also notes lack of diversity in the staffing and appointments within the University of California.
Finally, the letter notes that the California Public Utilities Commission has a formal supplier diversity program which has been in effect for 15 years and has withstood court scrutiny. The letter notes that under the program the typical public utility in California provided more than 15 percent of its contracts in 2004 to minority-owned businesses, and that it should be considered as a model by the ICOC.
A March 4, 2005 letter from the Greenlining Institute to the Committee makes specific recommendations for the ICOC to address disease disparity and diversity goals, among them:

Recommending that the ICOC and the Institute set 15–25 percent minority contracting goals and report annually on their achievements.

Requiring that contractors seeking contracts of $100,000 or more set forth their supplier diversity programs and achievements.

Informing potential contractors that supplier diversity will be a major factor the Institute and ICOC will consider in awarding contracts.

Securing from every University of California campus or other university that wishes to submit proposals for funding their supplier diversity data, broken down by race, ethnicity, and gender.

Recommending that the Chairperson and President create a major supplier diversity department.
The Committees may wish to ask what goals or processes the ICOC has adopted, or intends to adopt, to address disease disparity issues and to ensure diversity in hiring, appointments, and contracting related to Proposition 71.

Auditing and Public Accountability Issues

Although Proposition 71 requires the Institute to issue an annual report of its activities, commission an annual independent financial audit of its activities, and provides for review of those annual audits by the State Controller and an appointed Citizen’s Financial Accountability Oversight Committee, the auditing provisions appear to fall short of what would be contained in a “performance audit” that an auditing body such as the General Accounting Office or the State Auditor would apply. The State Controller’s Office in particular cites an Attorney General’s opinion stating that under the terms of Proposition 71 the annual audit commissioned by the Institute must be a financial audit, i.e. an audit that examines the flow and use of funds and assures that all funds are accounted for.
The State Controller recently presented to the ICOC suggestions for augmenting the audits that it commissions, including suggestions derived from examining the auditing that is currently done of similar scientific grant making organizations such as the NIH. These recommendations also appear to fall short of what would be contained in a performance audit. As defined by the General Accounting Office, a performance audit would include issues such as program effectiveness and results, cost effectiveness of activities, and compliance with legal or other requirements.
SB 18 (Ortiz) requires the State Auditor to conduct periodic audits of the Institute and the ICOC, with the initial audit required by March 31, 2006. The bill requires the State Auditor to provide to the Chairs of the Senate and Assembly Health Committees and to the Joint Legislative Audit Committee an analysis of the auditee’s implementation of its recommendations no later than December 31, 2006, and provides for further audits if the results of the analysis warrant further inquiry. The bill provides that the audits be performance audits and include all of the following:
A review of the strategic policies and plans developed by the Institute and committee.
A review of contracts and grants executed by the Institute and the ICOC.
A review of the policies and procedures put in place by the Institute and the ICOC regarding treatment of intellectual property rights associated with research funded or commissioned by the Institute.
A review of the decisionmaking procedures and policies adopted by the Institute and the ICOC, including procedures for open public meetings and disclosure of conflicts of interest on the part of the ICOC and working group members.
A review of medical and ethical policies and standards adopted by the Institute and the ICOC for research funded or commissioned by the Institute and the ICOC.
The Committees may wish to ask how the ICOC intends to implement the auditing requirements in Proposition 71 and how the Controller intends to review them.
The Committees may also wish to ask whether the more comprehensive auditing requirements contained in SB 18 would serve public accountability purposes by enabling the State Auditor to examine Institute contracts and agreements and the processes by which they are reviewed and decided
on by the Institute and ICOC.

Friday, March 11, 2005

Thorny Super-ovulation Question

Reporter Paul Elias of The Associated Press put together a follow on Wednesday's California Legislative hearing into the stem cell agency.

It begins: “Of all the questions about California's ambitious plans to publicly finance human cloning projects for medical research, one of the thorniest may be how scientists plan to gather the thousands of eggs they'll need from women.

“It's an ethical dilemma that has made unlikely allies of Christian groups — who believe cloning immorally creates and destroys life in the name of science — and women's rights activists who fear that poor women will be exploited by commercial interests willing to pay thousands of dollars for human eggs produced by fertility drugs.

“The issue is not abstract. A small, nonprofit lab outside Boston has been quietly paying a handful of women for the last four years to take hormone injections to "superovulate" several eggs at once and donate them for research.”

Thursday, March 10, 2005

Small Profit in Stiffing Lawmakers

Robert Klein made a mistake on Wednesday when he failed to appear before a California Legislative committee that had invited him to discuss the California stem cell agency.

Klein is the chairman of Oversight Committee of the California Institute for Regenerative Medicine and has been its most recognizable public voice -- the one heard most often defending the agency and himself against charges of conflict of interest, lack of accountability and more.

Klein was invited to appear in the Capitol some weeks ago, before the agency appointed its first interim president, Zach Hall. It was Hall who appeared instead of Klein at the unusual joint hearing of the State Senate and Assembly Health Committees.

One can understand that the hearing was a good time for Hall to surface and establish his presence. A joint appearance with Klein could have easily overshadowed Hall and given the impression that Hall is not in full control of the agency, which is probably the reality.

But the overriding consideration is what the legislature wants. Regardless of the potential problems with undercutting Hall, there is small profit in appearing to stiff lawmakers.

Klein should do everything in his power to assure that his allies, such as State Sen. Deborah Ortiz, remain his strong allies. While the CIRM has an unusually independent position among state agencies, lawmakers can play genuine hob with its activities if they have a mind to.

Bottom line: When two powerful state legislative committees ask a state employee, which Klein is despite his millionaire status, to testify before their panels, it is wise for him to do so.

(For the record, Klein sent a letter to Ortiz begging off the meeting, according to the San Francisco Chronicle, because "policy makers were concerned about the impact of his testimony on various issues affecting the institute.")

Here are links to the various stories on Wednesday's hearing: Carl Hall San Francisco Chronicle, Terri Somers San Diego Union Tribune, Clea Benson Sacramento Bee, Paul Elias The Associated Press. The Los Angeles Times did not carry a story, according to its Web site. The San Jose Mercury News used Elias' story.


Wednesday, March 09, 2005

Stem Cell Agency Rebuts Critics in Capitol

Legislative hearings opened this afternoon into California's new stem cell agency with an emphasis on questions unanswered during its creation and a look at whether public dollars are being well spent.

Making his first public appearance since being named interim president of the California Institute for Regenerative Medicine, Zach Hall took on the critics of the agency. In remarks prepared for delivery, he defended its positions on issues ranging from conflicts of interest to medical ethics.

“We have made a strong beginning, but we have a daunting task before us – to build a new Institute from the ground up. Nevertheless, we are confident that we will be able to begin our first grant-making activities in a few months,” he said.

“Decisions made by the Institute must be transparent and must be perceived to be fair and objective judgments based on scientific merit, free of bias and conflict of interest. To achieve this end, we welcome public comment and strongly desire to forge a positive working relationship with the California Legislature,” he told lawmakers, who will consider later this spring legislation to tighten oversight of the stem cell agency.

Absent from the hearing was Robert Klein, the chairman of the Oversight Committee of the stem cell agency and previously its most visible defender.

State Sen. Deborah Ortiz, chairperson of the Senate Health Committee and author of the stem cell regulation bill, said in a statement, “Voters overwhelmingly approved Prop. 71 because of the promise it holds for finding new medical breakthroughs for debilitating and life-threatening diseases that affect millions of Americans.

“In approving this important research, voters also ponied up $3 billion to $6 billion of their hard-earned tax dollars. It is critical that Californians remain confident that their public dollars are well spent and the state receives a fair financial return on its generous investment – both in royalties and affordable access to therapies that are developed.”

A statement from her office pointedly noted that the hearing is dealing with critical issues not addressed entirely in Prop. 71.

They include adoption of “conflict-of-interest and economic disclosure requirements to ensure members of the governing committee and working groups that award research grants are not tainted by financial holdings or affiliations with any university or disease advocacy group; determining how much of the work by the governing and working groups should be conducted in a public forum; ensuring the state receives a fair financial return on its investment through royalties and/or access to medical remedies and products developed; and adopting strict patient protection regulations and bans on financial gain for donating eggs.”

Also appearing before the hearing, co-chaired by Assemblywoman Wilma Chan, D-Oakland, chairperson of the Assembly Health Committee, were an array of critics and watchdog groups with statements prepared in advance.

The Pro-Choice Alliance for Responsible Research, Our Bodies Ourselves, the Center for Genetics and Society, and Suzanne Parisian, M.D., a former chief medical officer for the FDA, urged stronger medical and ethical controls on the use of eggs from women.

“If researchers begin experimenting ...on a large scale, they will need eggs from many thousands of women. Payment to these women for their eggs, even if it is considered reimbursement, would create an economic inducement for women to put themselves at risk. This would be especially true for poor and young women,” said Marcy Darnovsky, associate director of the Center for Genetics and Society.

Terry Francke, general counsel for Californians Aware, urged open meetings for working groups of the agency. He rebutted contentions that they are similar to advisory groups of the National Academy of Sciences.

Francke said the stem cell groups are akin to state legislative committees and that closed sessions would be “utterly alien to California law on meetings of official bodies.”

The Greenlining Institute said the agency should be sure that minority groups receive stem cell agency business. Jorge Carralejo, a Greenlining board member, said the agency should set “goals” of 15 to 25 percent of contracts for small, minority-owned businesses, including professional services.

“No contracts of $1 million or more be awarded unless the business or institution, including universities, has a supplier diversity program and discloses its results by race and ethnicity,” he said in remarks prepared for the legislative committee.

Hall's remarks touched on all of the areas mentioned by agency critics. He said the Working Groups will conduct their sessions in private because “no scientist will offer frank reviews in an open meeting in which his or her remarks could be seen as public criticism of a colleague and peer.”


Hall also said, “The Institute is committed to creating comprehensive medical and ethical standards through a deliberative process that incorporates recommendations from many sources. No research grants will be funded until ethical and medical standards are in place.”

On diversity, he said, “The Institute is committed to creating comprehensive medical and ethical standards through a deliberative process that incorporates recommendations from many sources. No research grants will be funded until ethical and medical standards are in place.”

See items below for more details.
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We welcome and will publish comments on the stem cell agency and the failings of this blog. Please send them to djensen@californiastemcellreport.blogspot.com.

Complete Texts for Legislative Hearing into Stem Cell Agency

Below are the complete texts of some of the remarks prepared for delivery to today's Legislative hearing into the California stem cell agency. Related material is provided as well, such as the media advisory from the Center for Genetics and Society. We are offering the material as a package to make it more accessible to our readers. All the comments that we received are displayed.

Zach Hall Remarks

Here are the prepared remarks of Zach Hall before the legislative hearing.

Good afternoon Senator Ortiz and Joint Health Committee members. My name is Dr. Zach Hall, Interim President of the California Institute for Regenerative Medicine, a job that I have held for exactly one week. I want to thank you, Senator Ortiz, for the opportunity to appear at this special hearing on implementation of the California Institute for Regenerative Medicine. I would like to begin by briefly introducing myself. I am trained as a basic neuroscientist and spent most of my career as a faculty member and department chair at the University of California, San Francisco. In 1994, I had the unusual opportunity of going to the National Institutes of Health (NIH) as the Director of the National Institute of Neurological Disorders and Stroke (NINDS), the leading agency world-wide in funding research on the brain. As Director, I was responsible for a research program that awarded more than $500 million a year in grants and contracts to investigators across the country. Since my time at NIH, I have been a research administrator, both at the University of California, San Francisco, where I was Executive Vice Chancellor, and at the University of Southern California, my most recent position.
As NINDS Director, I became acutely aware of the ravages of neurological diseases such as Alzheimer’s disease, Parkinson’s disease and multiple sclerosis, and of the large numbers of Americans who are afflicted by these disorders. Moreover, I faced every day the fact that for most neurological disorders we have no effective nor definitive treatments. The tragic dimensions of neurodegenerative disease and its burden for patients and families were brought home to me in a very personal way about ten years ago when my mother was diagnosed with Alzheimer’s disease, a disease that slowly and painfully stole her memory, her reason and her ability to recognize loved ones until her death two years ago.
Like many Americans, I followed the ground-breaking recent research on stem cells with hope and excitement, and, like many Americans, I was dismayed by the Executive Order of August 9th, 2001, severely limiting the number of stem cell lines eligible for federal government funding. These restrictions were discouraging to many scientists and have significantly slowed the pace of stem cell research in this country. The appearance of Proposition 71 offers
bold alternative to revitalize the stalled Federal effort and put California in the scientific and economic vanguard, pioneering new science and medicine for the benefit of mankind. My personal involvement with the Initiative began about two months ago when I met with ICOC Chairman Bob Klein for the first time to hear about the exciting plans for the Institute. To participate in this new historic venture as Interim President is for me a personal and professional opportunity of the highest order.
As you know, the California Institute of Regenerative Medicine was established in 2004 with the passage of Proposition 71, the California Stem Cell Research and Cures Initiative. The statewide ballot measure, which provides $3 billion in funding for stem cell research at California universities and research institutions, was approved by 59.1 percent of California voters. It called for the establishment of an entity, the California Institute for Regenerative Medicine, to make grants and provide loans for stem cell research, research facilities, and other vital research opportunities. More Californians voted on Proposition 71 than on any other ballot measure during the last election.
One reason for the success of Proposition 71 is the support it enjoyed from a broad coalition of patient advocacy groups, from the scientific community, including 35 Nobel Laureates and a “who’s who” of Californian scientific and research leaders, 30 medical groups from leaders in the faith community, business and labor and from community and advocacy groups. A copy of the organizations and individuals who endorsed Proposition 71 has been provided to you.
Following passage of the bill, an outstanding group of leaders in medicine, science, business, and disease advocacy was appointed to the 29 member Independent Citizens’ Oversight Committee (the “Board”) by the Governor, Lt Governor, Controller, Treasurer, President Pro Tem, and Speaker. I am proud to serve as Interim President under this distinguished Board. Its members include:
• Dr. David Baltimore, a Nobel Laureate and President of the California Institute of Technology;
• Dr. David Kessler, former Commissioner of the federal Food and Drug Administration and Dean of the School of Medicine at UCSF;
• Deans of the Schools of Medicine at UC San Diego, UCLA, UC Davis, Stanford and USC, and the Chancellor of UC Berkeley
• The presidents of the Salk Institute, the Burnham Institute, and the City of Hope
• Disease advocacy leaders like Sherry Lansing (Chairman of Paramount Pictures), Joan Samuelson (President of the Parkinson’s Action Network), and Jeff Sheehy (San Francisco’s “AIDS Czar”) and seven other leaders.
• Gayle Wilson, former first lady of California, and other representatives of the business community.
The charge of the Board is to create a new agency which will transform biomedical research. In the scant two and a half months of its existence, the Board has made excellent progress toward that goal.
Since January 1, the full Board has met three times (January, February, March) and has established five sub-committees which have, in aggregate, met seven times. Two of the committees, the Presidential Search Committee and the Site Committee, are responsible for recruiting a permanent president and for finding a permanent site for the Institute, respectively. The Presidential Search Committee has engaged a professional search firm (SpencerStuart) to identify and make a preliminary screen of outstanding candidates. The Site Committee has issued an RFP for site proposals, which are due on March 16th.
The three other sub-committees of the Board are responsible for setting up the three permanent Working Groups that will serve the Institute in its on-going work. These are:
1. The Scientific and Medical Research Funding Working Group (the “Grants” Working Group) which will be responsible for scientific evaluation of grant proposals to the Institute.
2. The Scientific and Medical Accountability Standards Working Group (the “Standards” Working Group) which will recommend scientific, medical and ethical standards for stem cell research and clinical trials and therapy delivery to patients.
3. The Scientific and Medical Facilities Working Group (the “Facilities” Working Group), which will make recommendations to the Board on grants and loans for facilities for stem cell research.
In its effort to recruit the best minds nationwide to the Working Groups, the subcommittees have met to determine search criteria, process and timelines. Over 500 potential candidates are currently being reviewed for membership on the Working Groups by committee members. We hope recommendations for membership of all of the subcommittees will be completed by the May Board meeting. Please note that all of the Working Group subcommittees, as well as the Board, meet in public in strict accordance with the Bagley-Keene Open Meeting law. Moreover, the names and resumes of all prospective appointments to the Working Groups will be made public before their consideration by the Board to allow comment.
The job of President, as defined in the Initiative, is to hire the scientific and administrative staff of the Institute and to direct its day-to-day operations. I am pleased to report to you that interim headquarters for the Institute have been established in Emeryville and that 11 staff members have been hired. One of those is Walter Barnes (a 39-year veteran of state service who is on loan from the State Controller’s Office to implement the financial systems of the Institute. We are just beginning, under my leadership, to hire scientific personnel. Just yesterday we posted a position for our first scientific staff member, the Director of Scientific and Review Programs, who will be hired through a competitive process.
Thus we have made a strong beginning, but we have a daunting task before us – to build a new Institute from the ground up. Nevertheless, we are confident that we will be able to begin our first grant-making activities in a few months.
Following this general introduction, I would like to address specific comments to the Agenda item of the Oversight Hearing. Let me say at the outset that the success of our venture will critically depend on the confidence of the people of California in our integrity and credibility. Decisions made by the Institute must be transparent and must be perceived to be fair and objective judgments based on scientific merit, free of bias and conflict of interest. To achieve this end, we welcome public comment and strongly desire to forge a positive working relationship with the California Legislature.
Open Meetings
The ICOC is deeply committed to the principles of transparency and public meetings in all cases other than those in which specific open meeting law exemptions apply. All Board meetings and all Board sub-committee meetings are held in strict accordance with the Bagley-Keene Open Meeting Act. Notification is given at least 10 days in advance of each meeting to all persons who have requested it, and agendas and other information are posted on the Institute website (www.cirm.ca.gov), including material not required by law. Public comment is welcomed at every Board meeting, and all meetings to date have benefited from robust citizen participation. The ICOC has taken the public’s comments into account in all of its work, and many of the individuals you have as witnesses today have spoken repeatedly at Board and subcommittee meetings. It is important to understand that absolutely no grant award shall be made and no medical or ethical standards established outside the public Board meetings. All grant awards and adoption of all standards shall be considered, discussed and approved only in open ICOC meetings.
In contrast, deliberations of the advisory Working Groups will be held in private as required in the Initiative. These groups are not responsible for decisions, but for evaluations to be considered at open ICOC meetings. Confidentiality in the Working Group meetings is essential to obtain valid evaluations from peer reviewers. The concept of “peer review”, which will be the primary method for evaluating grants, is widely recognized to be the best method of obtaining expert scientific opinion and is followed not only by the NIH but by virtually every disease advocacy organization that funds biomedical research. In each case, review is carried out under confidential conditions, which are necessary to obtain rigorous and candid scientific reviews of the merit of proposals, including candid evaluations of the scientific track record and capabilities of the scientists who will conduct the research. No scientist will offer frank reviews in an open meeting in which his or her remarks could be seen as public criticism of a colleague and peer.
A second reason for confidentiality is that researchers commonly include in their proposals significant detail about their planned research, such as detailed descriptions of novel ideas, and unpublished results. It is important that investigators be able to submit such information in a confidential environment, lest their ideas be at risk of being appropriated by others, and lest any propriety information they share be open to public disclosure.
The same principle applies for the Standards Working Group which will have the important job of making recommendations to the ICOC for development of policy on medical and ethical standards and then subsequently address compliance issues. Because sensitive subjects must be dealt with, including real-life examples that have presented problems, confidentiality is essential. Public discussion could have a negative impact on the practicing physicians and operating medical centers featured in a given example. Individuals’ concerns about the potential repercussions of public scrutiny could have a chilling effect on honest discussion.
Dr. Bruce Alberts, President of the National Academies, has addressed some of these issues in a letter to the Chair of the ICOC. (A copy is provided to you.) James Wright, General Counsel of the National Academies may address these issues further in his remarks.
Conflict of interest
Conflict of interest is an extremely important issue for the Institute. We are committed to having strong standards for all of those associated with the work of the ICOC and the Institute. Conflict of interest issues arise at several levels: for Board members, for Institute staff, for Working Group members and for grantees. I will address each of these in turn.
1) Each of the Board members have filed individual Form 700 statements of economic interests consistent with state law and Fair Political Practices Commission regulations. In addition, please note that the Initiative states that Board members cannot vote on requests for grants from his or her institution. A more comprehensive Conflict of Interest policy has already been reviewed by the Board at its March meeting and, following outside comment from the National Academies, will be returned for further consideration in April.
2) The Board of the Institute has adopted strong disclosure requirements and conflict of interest policy for employees of the Institute. At its meeting last week the Board adopted an Incompatible Activities Statement for employees. This statement is modeled on the comparable statement for other State of California employees.
3) For the working groups, the ICOC is developing policies for members that will be based on the federal NIH guidelines on conflict of interest for review group members. Our goal is to bring these to the Board at the May meeting, at the time the Working Group members are scheduled to be selected. Additionally, to avoid conflict of interest, the Standards Search has recommended to the Board that all peer reviewers of the Grants Working Group – the scientists and physicians who judge the scientific merit of proposals -- be from out of state. Please note that this standard exceeds that of the NIH.
4) For grantees, we will develop conflict of interest guidelines that are based on those of the NIH. Recommendations for these guidelines will be made by the Standards Working Group once it is established, and then brought to the ICOC for final discussion and approval.
Patents and Intellectual Property
It is our hope that the discoveries funded by the Institute that are made in the laboratory will lead to effective treatments in the clinic. To bring effective treatments to market, partnership between academic and commercial researchers will be essential, and we will need to engage commercial firms in our efforts. In anticipation of this partnership, Proposition 71 included four commercial life sciences seats on the ICOC.
Intellectual Property and patents are essential to the movement of discoveries form academia into the private sector. Proposition 71 requires that Intellectual Property agreements be included in every grant and loan award. These agreements will allow the State to share in the gains from any patents or other Intellectual Property developed with Initiative funding. Formulation of the principles that guide these agreements will be a major task for the Board. Because of the range of activities of the Institute, specific IP agreements will necessarily depend upon the type of grant, as well as the type of research funded. The overall policies, as well as each specific agreement, dealing with Intellectual Property rights arising from research funded by the Institute will be discussed and adopted in public ICOC meetings.
In formulating these policies, the Board will cooperate closely with the California Council on Science and Technology (CCST) to develop best practices for state-funded IP agreements. A CCST committee was created by Assembly Concurrent Resolution 252 sponsored by Assemblyman Gene Mullin with a charge of identifying best practices for Intellectual Property funded by the State. Two members of the Institute Board will serve on the committee, which is expected to meet shortly.
Medical and Ethical Standards for Research
The Institute is committed to creating comprehensive medical and ethical standards through a deliberative process that incorporates recommendations from many sources. No research grants will be funded until ethical and medical standards are in place.
Many of the medical standards, dealing with informed consent and scientific integrity, can be adopted from NIH standards. Others are specific to stem cell research. Many outstanding research institutions engaged in stem cell research, such as Harvard, University of Wisconsin, Stanford and the University of California San Francisco have formulated standards that we will consider in formulation of policy. In particular, we will look to the guidelines for stem cell research that are being developed by a blue-ribbon committee of the National Academy of Sciences and the Institute of Medicine. The publication of these guidelines is expected next month. This will be an important event as they will represent the first major consensus standards for stem cell research, promulgated by one of the nation’s premier science advisory bodies.
Proposition 71 itself deals with several of these issues. For example, the Initiative prohibits compensation to research donors or participants and permits only reimbursement of expenses. Surplus products of in vitro fertilization treatments may be donated only under appropriate informed consent procedures. Proposition 71 also reinforces existing California state law by prohibiting funding for reproductive cloning.
In addition to the specific standards mandated by Proposition 71, Institute-funded research will be subject to federal regulations for research involving human subjects for clinical trials. Institute -funded research is also subject to federal patient rights, safety and privacy protections.
In formulation of its policies, the Institute would like to cooperate with the Human Stem Cell Research Advisory Committee created under Senate Bill 322 by Senator Ortiz that is charged with developing medical and ethical guidelines for stem cell research funded in the state by private sources. The Institute looks forward to the convening of the SB 322 committee.
Disease Disparity and Diversity Issues
The California Institute for Regenerative Medicine is committed to a diverse workforce. To begin the operations of the Board and Institute we have used direct recruitments to hire 11 persons. These persons are involved in administrative work related to establishing the Board and Institute, including providing support to the ICOC and the various subcommittees that have been appointed to develop recommendations for grant and loan standards and procedures for the ICOC to consider and adopt.
The first formal recruitment was my own, for which there were three finalists. We have now initiated a competitive search, as described above, for a Director of Science Programs and Review. Both in my work at NIH, and at UCSF and USC, I have always been personally committed to diversity in the work force, as a very positive value. It is our intent that all future hires will result from extensive recruitments designed to attract as diverse a group of candidates as possible. In the meantime, any new workload needs are being addressed by temporary loans through interagency agreements and by short term contracts. Once the recruitments are completed and final candidates selected, these interagency agreements and short term contracts will cease to exist.
We have been contacted by several organizations interested in helping us to achieve our goal of a diverse employee population. We will consult with them and welcome any further suggestions from the committee for others we might meet with.
Auditing and Public Accountability Issues
Financial accountability provisions are built into Proposition 71. Proposition 71 requires the Institute to undergo an annual independent financial audit of its activities and creates an unprecedented Citizens’ Financial Accountability Oversight Committee, chaired by State Controller Steve Westly, with additional members appointed by the Treasurer, Speaker, Controller, President Pro Tem and the ICOC, which is expected to meet within the next 90 days. Once this committee has reached a decision on its financial program, the Institute would be pleased to report this information. This committee shall set guidelines for, review, and issue a public report on the annual audit.
The Initiative also states that general administrative costs of the Institute are limited to 3 percent of grant commitments, while less than an additional 3 percent is reserved for research administration costs.
To assure the highest standards of fiscal accountability, we are working closely with the State Controller’s office to implement sound financial and accounting systems, and for the direction in setting up audit processes and reviews of those systems. This program will include test audits to validate and refine the system, after it is established.
A Finance Committee, chaired by State Treasurer Phil Angelides, which will also include the Director of Finance and representatives of the Controller and ICOC, will guide Institute financing decisions, determining whether or not it is necessary or desirable to issue bonds authorized pursuant to Proposition 71 and, if so, the amount of bonds to be issued and sold.
Summary
In summary, the Institute must work closely with the State Legislature and the executive branch of State government if it is to be successful and to achieve the high standards of integrity and excellence to which we aspire. We look forward to working further with you and your colleagues to explore important issues involved with implementation and operations of the Institute.
Most of all, we look forward to collaborating with you to advance stem cell research – together we can make medical history in California.

Genetics and Society Media Advisory

Here is the media advisory from the Center for Genetics and Society.

UNREGULATED STEM CELL RESEARCH MAY PUT WOMEN’S HEALTH AT RISK
Pro-Choice Groups Will Raise Concerns about an Expanding Market for Women’s Eggs at March 9 Senate-Assembly Committee Hearing

Who: The Pro-Choice Alliance for Responsible Research, Our Bodies Ourselves, the Center for Genetics and Society, and Suzanne Parisian, M.D., a former chief medical officer for the FDA, have joined together to call attention to the need to regulate the harvesting of women’s eggs for stem cell research.

What/Where/When: Members of the pro-choice groups will testify about the need for regulation of egg extraction and other aspects of stem cell research at the hearing of the California Legislature’s Implementation of Proposition 71 Oversight Committee, chaired by State Senator Deborah Ortiz, on Wednesday, March 9, 2005 from 1:30-5 pm, State Capitol, Room 4203, Sacramento, California.

“I strongly urge that sound ethical and medical practices are adopted regarding the manner in which eggs are extracted from healthy women for research purposes,” said Suzanne Parisian, M.D., a former Chief Medical Officer of the U.S. Food and Drug Administration. “As a scientist, I understand why some have expressed enthusiasm for SCNT [somatic cell nuclear transfer; also referred to as embryo cloning, research cloning, or `therapeutic’ cloning]. But as a physician, I cannot condone SCNT at the potential expense of a woman’s health without giving her an opportunity for adequate informed consent and establishing a mechanism to ensure her safety.”

Dr. Parisian is a board-certified pathologist as well as a researcher in genetics and developmental biology. She details her concerns in an open memo for scientists, physicians, legislators, press, and public health advocates who have an interest in SCNT research, available at
http://www.genetics-and-society.org/ .

Both the drugs used to “shut down” women’s ovaries and those used to “hyperstimulate” the ovaries to produce multiple eggs are associated with serious adverse reactions, in some cases life-threatening. Deaths have been reported.

Concerns about the health risks of egg extraction are gaining new urgency because of the prospect of increased demand for women’s eggs for SCNT research, state funding for which was authorized by Proposition 71. Women’s health and rights leaders have long advocated that women have the right to make informed choices about procedures that will affect their bodies. Many question whether women can give truly informed consent to provide eggs when the risks have not been adequately studied.

“The long term risks of the hormonal drug treatments used for egg extraction have not been adequately studied,” said Judy Norsigian, co-founder of the Pro-Choice Alliance for Responsible Research and executive director of Our Bodies Ourselves. “We should wait until the Centers for Disease Control and others collect more complete data on risks for both these women and their offspring. We already do know about short term problems including ovarian hyperstimulation syndrome, which in relatively rare instances has caused severe problems, including death. Many of these drugs have never been approved by the FDA for the purposes of egg extraction.”

Public policy organizations believe further study is warranted.

“If researchers begin experimenting with SCNT on a large scale, they will need eggs from many thousands of women. Payment to these women for their eggs, even if it is considered reimbursement, would create an economic inducement for women to put themselves at risk. This would be especially true for poor and young women,” said Marcy Darnovsky, associate director of the Center for Genetics and Society.

“Unlike other types of medical research, where testing on human subjects occurs only much later in the process and after laboratory experiments have indicated that certain safety levels have been achieved, SCNT research requires that women be the first guinea pigs. Protecting women’s long term health must be our highest priority,” stated Susan Berke Fogel, co-founder of the Pro-Choice Alliance for Responsible Research.

At the March 9 hearing, the following recommendations will be made to the California state legislature:

California researchers should be required to adopt the safest and most ethical approaches to collecting eggs for SCNT or other research.

Extraction at the time of an ovariectomy or a tubal ligation would be far safer and more ethical than conventional multiple egg extraction procedures. Even single egg extraction with natural cycling (involving no hormonal manipulations of the ovary) would be safer than conventional methods.

Before undertaking multiple egg extraction from healthy women, all data on drugs used in such procedures should be reviewed by a neutral, knowledgeable, and independent oversight body whose sole purpose is to protect the safety and rights of women wishing to provide eggs. In order to accomplish this review, pharmaceutical firms must be required to disclose the FDA-approved indications and all available safety data on these drugs.

Before undertaking multiple egg extraction from healthy women, better quality data should be gathered that would make true informed consent possible for women considering providing eggs for research.

Every woman who provides eggs for research should have her own physician who is independent of the research and the research institution, and whose only job is to look out for the well-being of the woman.

Francke Statement

The following remarks were prepared by Terry Francke, general counsel for Californians Aware, to be presented at today's California Legislative hearing into the state stem cell agency.

“Thank you for sharing with me the March 1 letter from Bruce Alberts, president of the National Academy of Sciences (NAS) to Robert N. Klein II, Chairman of the Independent Citizens Oversight Committee (ICOC) of the California Institute for Regenerative Medicine (CIRM). “The letter explains the transparency rules governing NAS advisory committee meetings and records, and will, I gather, be presented as support for the ICOC’s apparent intention not to open to the public meetings of the Working Goups advising the ICOC. “There are several reasons why the NAS committee policies in this regard are not good models for those that should govern the Working Groups. “The NAS and the Federal Advisory Committee Act The NAS was incorporated by an act of Congress during the Civil War and charged, “whenever called upon by any department of the Government, (to) investigate, examine, experiment, and report upon any subject of science or art…” As noted on the NAS web site,
'Over the years, the National Academy of Sciences has broadened its services to the government. During World War I it became apparent that the limited membership -- then numbering only about 150 -- could not keep up with the volume of requests for advice regarding military preparedness. In 1916 the Academy established the National Research Council at the request of President Wilson to recruit specialists from the larger scientific and technological communities to participate in that work. 'Recognizing the value of scientific advice to the nation in times of peace as well as war, Wilson issued an executive order at the close of World War I asking the Academy of perpetuate the National Research Council. Subsequent executive orders, by President Eisenhower in 1956 and President Bush in 1993, have affirmed the importance of the National Research Council and further broadened its charter. 'Under the authority of its charter, the National Academy of Sciences established the National Academy of Engineering in 1964 and the Institute of Medicine in 1970. Much like the National Academy of Sciences, each of these organizations consists of members elected by peers in recognition of distinguished achievement in their respective fields. The National Academy of Sciences includes about 1,800 members, the National Academy of Engineering about 1,900, and the Institute of Medicine about 1,200. All three organizations also elect foreign associates.'
“The Federal Advisory Committee Act was passed in 1972 and for the next 25 years required that all meetings of a defined federal “advisory committee” be open to the public. The definition encompassed
'any committee, board, commission, council, conference, panel, task force, or other similar group, or any subcommittee or other subgroup thereof…which is – (A) established by statute or reorganization plan, or (B) established or utilized by the President, or (C) established or utilized by one or more agencies, in the interest of obtaining advice or recommendations for the President or one or more agencies or officers of the Federal Government except that such term excludes (i) the Advisory Commission on Intergovernmental Relations, (ii) the Commission on Government Procurement, and (iii) any committee which is composed wholly of full-time officers or employees of the Federal Government.'
'
“(5 U.S.C. App. §3) “In Animal Legal Defense Fund v. Shalala, 104 F.3d 424 (D.C. Cir.), cert. denied, 118 S. Ct. 367 (1997), the U.S. Court of Appeals for the District of Columbia Circuit held that under the “established or utilized by one or more agencies” criterion, an advisory committee of the NAS that developed standards for animal experimentation for various federal agencies was subject to the FACA open meeting requirement. Toward the end of that year, a bill was introduced in the House and, thanks to rule suspensions in that body and unanimous consent in the Senate, was on the President’s desk within 30 days, to be signed into law on December 17. “In other words, the exemption from the FACA’s open meeting requirements that NAS advisory committees were granted for their deliberative sessions was itself achieved without hearings or deliberation. Whatever merit such an exemption may have as a model for California is therefore still, needless to say, open to debate. The only clue I have been able to find to the justification that would have been openly offered to the Congress had there been hearings and debate is in the November 5 statement of G. Martin Wagner, Associate Administrator of the General Services Administration, to the Subcommittee on Government Management, Information and Technology of the House Committee on Government Reform and Oversight. His statement (full text at http://www.gsa.gov/Portal/gsa/ep/contentView.do?pageTypeId=8199&channelId=-13338&P=XAE&contentId=11771&contentType=GSA_BASIC) makes it apparent that the NAS quarrel with the Animal Legal Defense Fund holding was principally that it extended FACA to NAS committee work operating under contract with federal agencies, even though NAS was only “quasi-public” and was “not subject to actual management and control by such agencies…” A proposed amendment turning on that distinction was abandoned in favor of the actual bill, introduced just two days later, which instead specifically gave NAS its express exemption. “The Deliberative Process Privilege “What rationale there is for the exemption is stated in Dr. Alberts’ letter: “Committee meetings that are not data-gathering committee meetings are not open to the public in order to protect the committee deliberative process.” In California law, the integrity of the deliberative process of the executive has been recognized by the California Supreme Court as one consideration to be weighed in the balance in determining whether records of the Governor’s office showing with whom the Governor met must be disclosed under the California Public Records Act. The high court resolved this question against disclosure in Times Mirror Co. v. Superior Court of Sacramento County, 53 Cal. 3d 1325 (1991), and since then two cases from the Court of Appeal have done likewise concerning records showing who has applied to be named by the Governor to fill vacancies on county boards of supervisors (Wilson v. Superior Court, 51 Cal.App.4th 1136(1996); California First Amendment Coalition v. Superior Court of Sacramento County, 67 Cal.App.4th 159(1998)). Only one case has applied what has come to be called the “deliberative process privilege” to a multi-member deliberative body, i.e. a city council, and in that case the issue was access to records of phone numbers called by council members over the period of a year (Rogers v. Superior Court of Los Angeles County, 19 Cal. App. 4th 469 (1993)). “Otherwise, California law on access to meetings of decision-making and advisory bodies in the legislative and executive branches of state and local government is uniformly contrary to the notion of a deliberative process privilege justifying exclusion of the public. The constitutional provisions requiring open meetings of the Legislature’s houses and committees acknowledge no such exemption from openness, nor do the Bagley-Keene Open Meetings Act governing state bodies generally, the provisions of that act applicable to the Board of Regents of the University of California, the Romero Act applicable to meetings of California State University student organizations, and the most thoroughly amended, litigated and interpreted statute of them all, the Ralph M. Brown Act, applicable to boards, councils, commissions and the advisory bodies thereto in local government. “This rejection of secrecy in the deliberative process has been resoundingly reinforced in the November 2 voter approval, by an 83.4 percent margin, of Proposition 59, amending the California Constitution to give citizens a fundamental right of access to “the meetings of public bodies.” The ballot argument for Prop 59 states, in part:
'What will Proposition 59 do? It will create a new civil right: a constitutional right to know what the government is doing, why it is doing it, and how. It will ensure that public agencies, officials, and courts broadly apply laws that promote public knowledge. It will compel them to narrowly apply laws that limit openness in government—including discretionary privileges and exemptions that are routinely invoked even when there is no need for secrecy. It will create a high hurdle for restrictions on your right to information, requiring a clear demonstration of the need for any new limitation. It will permit the courts to limit or eliminate laws that don't clear that hurdle. It will allow the public to see and understand the deliberative process through which decisions are made. It will put the burden on the government to show there is a real and legitimate need for secrecy before it denies you information. (Emphasis added)'
“In summary: “The exemption from the open meeting requirements of the Federal Advisory Committee Act granted by the Congress to the National Academy of Sciences in 1997 was achieved in extraordinary haste without public hearings or debate. There is no record of legislative intent or rationale. “The purpose of the exemption as articulated by NAS President Bruce Alberts —“ to protect the committee deliberative process”—is utterly alien to California law on meetings of official bodies. “California voters have overwhelmingly endorsed a constitutional principle to the contrary—underscoring their right “to see and understand the deliberative process through which decisions are made.” “Finally, if any argument were needed as to why the ICOC’s Working Groups are especially needful of public monitoring, it is the fact that the CIRM is otherwise so extraordinarily insulated from Legislative control and correction. The only oversight of the CIRM in its foundational years is provided by the ICOC. Since the task of the Working Groups is to present the ICOC with recommended standards and policies, and enforcement actions supporting them, the Working Groups should be as transparent as any committees of the Legislature.”

Ortiz Media Advisory

Here is the media advisory from Sen. Ortiz.

SENATOR ORTIZ HOLDS FIRST LEGISLATIVE OVERSIGHT HEARING ON THE IMPLEMENTATION OF STEM CELL RESEARCH

SACRAMENTO – Senator Deborah Ortiz (D-Sacramento) on Wednesday will hold the first legislative oversight hearing on the implementation of Proposition 71, the Stem Cell Research and Cures Act. The joint hearing will be conducted by the Senate Health Committee and the Senate Subcommittee on Stem Cell Research Oversight, both chaired by Ortiz; and the Assembly Health Committee, chaired by Assemblywoman Wilma Chan (D-Oakland).
Legislators will be provided their first opportunity to hear first-hand how the California Institute for Regenerative Medicine and the Independent Citizens Oversight Committee, the 29-member panel charged with overseeing implementation of Proposition 71, are designing the nation’s premier stem-cell research program. They also will hear about steps planned to ensure patient protection and public accountability.
“Voters overwhelmingly approved Proposition 71 because of the promise it holds for finding new medical breakthroughs for debilitating and life-threatening diseases that affect millions of Americans,” Ortiz said. “In approving this important research, voters also ponied up $3 billion to $6 billion of their hard-earned tax dollars. It is critical that Californians remain confident that their public dollars are well spent and the state receives a fair financial return on its generous investment – both in royalties and affordable access to therapies that are developed.”
Most of the hearing will be devoted to testimony from experts regarding several critical issues that were not addressed in the initiative, including: adopting conflict-of-interest and economic disclosure requirements to ensure members of the governing committee and working groups that award research grants are not tainted by financial holdings or affiliations with any university or disease advocacy group; determining how much of the work by the governing and working groups should be conducted in a public forum; ensuring the state receives a fair financial return on its investment through royalties and/or access to medical remedies and products developed; and adopting strict patient protection regulations and bans on financial gain for donating eggs.
Senator Ortiz is the author of SB 18, which addresses each of those areas. The bill is scheduled to be heard in the Senate Health Committee in April.

Greenlining Statement

The following letter dealing with supplier diversity was submitted by Jorge Corralejo to Sen. Ortiz as part of the Greenlining Institute's presentation for the committee hearing on the stem cell agency.

“As a board member of the Latin Business Association and of the Greenlining Institute, I wish to express my concerns regarding the $3 billion in contracts that the Stem Cell Research Institute is likely to grant to white institutions. I have personally been involved in negotiations with a wide range of regulatory bodies and private institutions, including all of the major banks, on supplier diversity issues and have advised the Insurance Commissioner on this matter as part of my duties on the Insurance Department COIN Board.
“Our organization has been active before the California Public Utilities Commission (CPUC). As a result of actions by various minority organizations, AT&T awarded 17% of its contracts to minorities, SBC awarded 23% of its contracts to minorities, Edison awarded 16% and Verizon awarded 15%. In large measure, this is due to the CPUC having set 15% minority contract goals at our request.
“We are concerned that no such goals exist for stem cell research. We are also well aware of the University of California’s embarrassing record of failing to enroll, hire or do business with minority communities. Unfortunately, UC does not, as a deliberate policy in order to prevent criticism of its white-only policies, gather records generally relating to race and ethnicity of its almost $5 billion a year in contracts. However, according to recent data provided to the Greenlining Institute from the office of the General Counsel for the Regents of the U.C., data is available for U.C. Davis. It shows that just 5% of contracts were awarded to minority-owned businesses for the last year reported 2003.
“We urge you to take the following action:
“Request that the Oversight Committee set goals of fifteen to twenty-five percent of contracts for small, minority-owned businesses, including professional services, and that the Committee provide an annual report broken down by race and ethnicity on achievements.
“No contracts of $1 million or more be awarded unless the business or institution, including universities, has a supplier diversity program and discloses its results by race and ethnicity.
“Require the University of California, prior to its submitting any bids for any contracts or services, to submit detailed information by race and ethnicity of all of its contracts, much as the CPUC requires of the utilities.
“Californians, including an overwhelming number of Latinos and other minorities, voted in favor of Prop 71. We also deserve a fair share of all contracts.
“Please be assured that if you have other hearings on this matter, I will be pleased to attend and would be pleased to work with the stem cell research Oversight Committee in achieving equal opportunity for all businesses.”

Semi-Complete Coverage Coming Up on Ortiz Hearing

Later today, we will have semi-complete coverage of the California Legislative hearing into the new state stem cell agency. Look for information from State Sen. Deborah Ortiz, who is chairing the hearing, and Californians Aware, the Center for Genetics and Society, the Greenlining Institute and perhaps more. We expect to post about 3:30 p.m. PST

Tuesday, March 08, 2005

More Egg Regulation Sought

The Center for Genetics and Society has joined with the Pro-Choice Alliance for Responsible Research to call for increased regulation of the California stem cell agency in connection with the use of women's eggs for research.

The groups plan to testify at Wednesday's California State Senate hearing into the new agency.

One of their recommendations: “Before undertaking multiple egg extraction from healthy women, all data on drugs used in such procedures should be reviewed by a neutral, knowledgeable, and independent oversight body whose sole purpose is to protect the safety and rights of women wishing to provide eggs.”

“If researchers begin experimenting...on a large scale, they will need eggs from many thousands of women. Payment to these women for their eggs, even if it is considered reimbursement, would create an economic inducement for women to put themselves at risk. This would be especially true for poor and young women,” said Marcy Darnovsky , associate director of the Center for Genetics and Society .

You can see the press release here and the full text of a letter from Suzanne Parisian, M.D., a former chief medical officer for the FDA.

Sunday, March 06, 2005

Not Everyone Buying...

An insight into the dynamics of the new California stem cell agency was presented on Sunday in an editorial in The Sacramento Bee. The headline on the piece was "Cell Break." Here is an excerpt:

"During Tuesday's meeting at Stanford University, Klein asked the committee for sole authority to respond to the (Lee-Halpern) petition, with no discussion of its merits. It was a remarkable power grab, but not everyone was buying.

"The first dissenter was Dr. Francisco Prieto, a Sacramento physician appointed to the committee by state Treasurer Phil Angelides. Prieto said the petition had "substantive points" for discussion. He was joined by Dr. Michael Friedman, another Angelides appointee who heads City of Hope, a Southern California cancer research and treatment center.

"From that point on, Klein lost control of the proceedings. The committee wasted 30 minutes debating whether to write a perfunctory response to Halpern and Lee or - horrors! - actually meet with them. The most shameful performance was by David Serrano Sewell, who suggested the petitioners were plotting a "judicial intervention." (Note to Sewell: Lee is a distinguished health official who supports stem cell research. He deserves more respect than you granted him.)

"Later, Klein tried to vest authority in a subcommittee to devise $15 million to $25 million in grants to train scientists and create "centers of excellence" for stem cell research. Dr. Claire Pomeroy of UC Davis rightly questioned this delegation of authority, and the matter was put off to the next meeting.

"What we are witnessing is the natural tension between doing things fast, and doing things right. As we have stated earlier, California's landmark stem cell research program holds enormous promise for treating diseases. But by trying to strong-arm every decision, Klein may actually be slowing down the process - by infuriating colleagues and emboldening opponents."

New Frontiers: Stem Cells and the Web

Only about one out of every five million Californians was able to make it to this month's meeting of their state's new stem cell agency.

Yet, nearly half of all the families in California could potentially benefit from programs that the multibillion dollar agency is just starting.


It may be that the old saw about the making of sausages and laws also applies to the making of a new bureaucracy. It is an untidy business, perhaps best left unobserved by the overly fastidious.

The new institute, however, is also making history with forays into the frontier of medical science. Cures or vastly improved treatment for such ailments as diabetes, cancer, Parkinsons, Alzheimers, ALS, multiple sclerosis, spinal injuries and heart disease are all part of its goals.


Its leaders have promised the highest and best standards for its science. That promise should apply as well to the openness and accessibility on the Web of the California Institute for Regenerative Medicine.


It certainly would benefit the many Californians living with the diseases targeted by CIRM. Many are not able to travel to CIRM meetings but might find them of interest if the sessions were broadcast on Web. Webcasting would be of enormous utility to thousands in the scientific community, academic world, biotech businesses as well as legislative and governmental officials.

But Webcasting should only be a start. When the Web became a reality for most state agencies, they were living in a world that had only recently abandoned typewriters. Bringing information and public records online was an expensive and time-consuming process – not to mention a frightening one for the officials who preferred life in semi-obscurity.

Today's technology allows – virtually insists – that all of CIRM's public records be available online and easily searchable. The agency has moved in that direction already with its first efforts on the Web. Much more can be done.

CIRM can readily establish new performance levels for Internet access to government agencies, since it is not hobbled with the baggage of the past. Doing so would advance the institute far along the path of fulfilling its promise of maximum openness. As CIRM Chairman Robert Klein has said, what this agency ultimately generates must be shared with the world.


The value of open Web access involving grants and research (with the obvious usual limitations) would seem immeasurable. Web access would achieve other goals as well, such as reducing staff time involved in routine phone calls and conventional mail. Given the picayune size (50 persons) of the agency's staff, that would seem something worth doing.

We must admit the possibility of the opposite result. Years ago, the advent of computers was predicted to eliminate paper in offices. In fact, paper multiplied geometrically. It could be that unprecedented openness could lead to a wave of totally unexpectedly public interest in CIRM. Not that that would be so bad.

It is not often that government agencies can make fresh starts or have new beginnings. CIRM stands in an historic position. It may be the first time that government has embarked on such a massive effort on the frontiers of biology and theology, life and death, and, yes, even sex.

Opening a frontier in cyberspace may not double attendance at CIRM meetings to as high as, let's say, two out of every five million Californians. But it would be a shame to pass up an extraordinary opportunity to set a global benchmark for openness and public access.

Readers Write

Pete Shanks writes:

"I just re-checked the Cal. Sec of State campaign database and found new data on the 71 campaign.

"As of 03/04/05, these are the numbers: Support 71 -- raised $25.1 million -- spent $34.8 million

"Oppose 71 -- raised $635 thousand -- spent $625 thousand i.e. Yes on 71 is still almost $10 million in debt and the ratio of expenditure is, gulp, 55 -- almost 56 -- to one.

"The URL is http://dbsearch.ss.ca.gov/BallotSearch.aspx (and then navigate via drop-down menus).

"It certainly seems as though the Yes on 71 people overspent badly, since they got 59% of the vote and yet ended up so hugely in debt.

"I do not doubt the sincerity of the supporters, especially the patient advocates, but I do question their judgment. (There is an element of self-interest among some of the entrepreneurs but I suspect that even they think they will be "doing well by doing good.")

"My take is that there was a frenzied feeling that this HAD to be passed at virtually ANY cost, and I wonder if there will be a backlash when cures do not appear RIGHT NOW. In a sense, the leadership -- most visibly Klein but it's broader than just him -- put themselves into a bind with the language of the Proposition, dug themselves a deeper hole with their no-quarter approach to campaigning, and fumbled an opportunity to mollify their critics after the election.

"I suspect that the money overspent -- indeed, just the money raised -- is symptomatic of a "true believer" syndrome that certainly makes for bad governance and quite possibly bad science, too."

Pete Shanks is the author of Human Genetic Engineering: A Guide for Activists, Skeptics and the Very Perplexed, to be published by Nation Books in June.
------------
We welcome comments on CIRM or the failings of this blog. They will be published. Please send them to djensen@californiastemcellreport.blogspot.com.

Need Work?

Hiring is on the rise on the stem cell front.

Now that California's new stem cell agency has an interim president, he is expected to begin quickly filling a variety of positions. Not that there are a lot of jobs open, something in the neighborhood of 40. They range from general counsel to director of governmental relations.

CIRM has not yet posted the openings on the Web but one would expect to see the listings in the not-too-distant future. Job application forms are available
here.

The Center for Genetics and Society, which is monitoring CIRM, is also looking for new people, including a
director of communications, somebody with considerable experience and a track record. The nonprofit is also looking for a director of administration.

Friday, March 04, 2005

Fiber Optics and 300 Square Foot Offices

Imagine California's stem cell agency a year from now. What is its staff going to look like, its management? What sort of offices might they be working in?

Some indication can be had from documents linked to the RFP for the permanent headquarters. They show that CIRM plans to have 10 top executives with the chairman and president occupying 300 square foot offices.

The agency also wants its new permanent headquarters to contain two conference rooms (750 square feet each) that could accommodate up to 50 persons and four "quiet" rooms for small meetings (two at 150 square feet and two at 250 square feet). Plans call for an employee lunch room (250 square feet) with a dishwasher, full size refrigerator, stove, dishwasher and microwave oven.

The following executives of the agency are listed: chairman, president, vice chairman, deputy chairman, chief legal officer, chief administrative officer, chief scientific officer, chief communications officer, director of government relations and program director. The president and chairman are slated to work in 300 square foot offices. All the rest have 200 square foot rooms.

The plan calls for 37 scientific, medical, technical and administrative staff with 150 square foot offices. Administrative assistants are provided specifically for the president and chairman and one other AA is allocated generally. They are scheduled for 100 square foot open work areas. Out of the 37 staff, presumably at least eight or more would serve as secretaries or assistants to the top executives.

The offices will be well wired with fiber optic cable and a minimum of two voice and two data outlets (more in top executive offices) and cable TV outlets throughout.

The information is contained in documents here and here posted on the Web site of the state Department of General Services.

Wednesday, March 02, 2005

Readers Write

The following is from Terry Feuerborn in California:

"I was very pleased this morning to read that Zach Hall has been appointed head of the new stem cell agency. Prior to his appointment at USC, Zach was Vice Chancellor for Research at UCSF. At that time, I was head of the UC patenting and licensing office. Since patent issues bedevil the research program, I had a lot of interactions with Zach. He was also the campus representative to the system-wide Technology Transfer Advisory Committee, which was set up to monitor the work of my office--among other things.

"Without reservation, I can tell you that Zach's appointment is a very positive development for the stem cell program. Zach is personable, extremely competent, and absolutely straight arrow. I can remember dealing with him on some particularly difficult issues involving the desire of a well-known company to establish a research institute at UCSF. There were many millions of dollars on the table, but the company wanted intellectual property terms that were not acceptable to UC for a variety of reasons. Under very difficult circumstances, Zach supported the principles involved. When a lot of money is being dangled in front of a university, that is a very hard thing to do. I gave him a lot of credit for that.

"Zach should do very well as head of the new agency. I wish him the best."

We welcome comments on CIRM or the failings of this blog. They will be published. Please send them to djensen@californiastemcellreport.com.

Is $389,000 Too Much for "John the Baptist?"

Zach Hall demonstrated a felicitous quality this week after he was named interim head of the California stem cell agency: The ability to turn a phrase.

"I'm John the Baptist here to prepare the way, get things started," Hall was quoted as saying in newspapers in California.

"I will raid every place I can get to get the best possible people," Hall said.

When a public figure can crystallize issues, it goes a long way to ensure that his point of view is mentioned often and prominently in news stories. Good quotes are nuggets that reporters use to fashion stories. Skillful expression is also an important element of strong leadership and management, which is the task before Hall.

Little doubt exists that the stem cell agency has been hard pressed since its first meeting. Hall should boost the agency along, providing more guidance and hiring much needed staffers.

Hall's appointment dominated the news coverage of the agency's meeting on Tuesday. However, Carl Hall (no relation to Zach)of the San Francisco Chronicle focused his story on what appears to be the board's apparent failure to make research grants by May, its own self-imposed deadline.

Coverage of the Halpern-Lee petition, with its concerns about conflict of interest, openness and salaries, shared attention with the presidential appointment. That was to be expected, given the way news coverage works. Hall's salary, $389,000, provided a fresh peg on which to hang some discussion of the petition's concerns about salaries, which it contends are too high. Significantly reporter Paul Elias of The Associated Press, whose story was distributed on Web sites around the world, focused on that in his article.

The board did delegate the petition to Robert Klein, CIRM chairman, who should hand it off immediately to the new interim president. Based on the news accounts, Klein seemed to promise public hearings on the general subjects of the petition, but petition supporters said that was not good enough.

Here are the beginnings of the various news stories that appeared this morning with links:

Associated Press (reporter Elias):
"Even before neuroscientist Zach Hall was formally given the job Tuesday to run California's $3 billion stem-cell research institute, his salary had come under fire. Charles Halpern, a Berkeley writer who filed a legal petition with the California Institute for Regenerative Medicine protesting some of its activities, complained that Hall's $389,004 annual paycheck to serve as interim president was too lucrative."


Contra Costa Times (reporter Sandy Kleffman): "The group overseeing California's $3 billion stem cell research program should adopt tougher conflict-of-interest laws and open up more of its meetings to public scrutiny, critics said Tuesday. Critics pushed for the changes as the fledgling stem cell group held its third meeting and named Zach Hall, 67, as acting president of the California Institute for Regenerative Medicine."

Los Angeles Times (reporter Megan Garvey): "Zach W. Hall, a University of Southern California neuroscientist and former head of one of the National Institutes of Health, was named Tuesday as interim president of the state's new $3-billion stem cell agency. The 29-member board charged with creating the agency voted unanimously to hire Hall, 67. The board has met three times and still has substantial ground to cover before the new California Institute for Regenerative Medicine awards the first grants for stem cell research, something Chairman Bob Klein has said he would like to do by May."

Sacramento Bee (reporter Laura Mecoy): "The stem cell oversight committee hired an interim president Tuesday at a salary critics said was too high, and it sidestepped a petition seeking salary caps and more open meetings. The panel voted unanimously Tuesday to hire neuroscientist Zach Hall as an interim president of the state's new stem cell agency, the Institute for Regenerative Medicine. It set his salary at $389,004 a year."

San Diego Union-Tribune (reporter Teri Somers):
"Despite years of experience and a reputation as a hard-core scientist, Zach W. Hall stepped into controversy yesterday when he was hired as the interim president of California's fledgling stem cell institute. Several watchdog groups questioned the $389,004 salary Hall will receive for the one-year job, which deal has him taking a demotion to senior scientific adviser once a permanent president is found."


San Francisco Chronicle (reporter Hall): "California's $3 billion stem cell program appears all but guaranteed to miss its own informal deadline of issuing its first research grants by May -- a goal that many had doubted could be met. Robert N. Klein, chairman of the California Institute for Regenerative Medicine, said after a daylong meeting of institute policy-makers Tuesday that he still hopes to get some money out the institute's door before July -- but it won't be in the form of research grants."

The San Jose Mercury News used the AP story.

Tuesday, March 01, 2005

More Openness Effort

Supporters of efforts to create more accountability and openness on the part of the California stem cell agency are marshalling their efforts at today's Oversight Committee meeting.

The coalition now consists of the California Nurses Association, CalPIRG, Redefining Progress, Californians Aware, Center for Genetics and Society, the Pro-Choice Alliance for Responsible Research and the Greenlining Institute. The group notified the media that spokespersons will be available both during and after the CIRM meeting.

One measure of the success of the coalition efforts today will be coverage in the media. We will examine that tomorrow.

See the latest press release from the group
here.

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