Bee Reports Tersely on CIRM Research Standards

The Sacramento Bee calls protection of women who donate eggs for stem cell research the "toughest ethical issue" facing the California stem cell agency.

Reporter Laura Mecoy wrote the story on Tuesday's approval of the proposed research standards by the agency's Standards Working Group. Her brief article also had this from Zach Hall, president of CIRM:

"We are going beyond existing standards. It becomes a much bigger issue with the South Korean debacle . . . Now the big need in the research field is to try to figure how to make this technology work in humans, and egg donation will be the key."

CIRM Readying Egg Donor Protections

The California stem cell agency said today it is moving ahead with rules to ensure that state-funded research does not use eggs from women who were paid to donate them. It also said it is intends to ensure that research institutions cover any medical care needed by donors as a result of complications in the egg donation process.

John M. Simpson, stem cell project director for the Foundation for Taxpayer and Consumer Rights, said that the agency was making it clear there would be no loophole for eggs that may have been paid for and procured overseas, which he and the Center for Genetics and Society had raised concerns about.

“This loophole is just the latest example of why public oversight and control of Prop. 71 research is so important.  This case is a good example that when the public speaks out, policymakers can listen," Simpson said in a press release.

CIRM issued a press release summarizing Monday's decisions by the Standards Working Group. The statement did not detail the mechanism to be used to ensure that payments were not being made for eggs.

Here are the key paragraphs from the release on the standards group recommendations to the Oversight Committee.

Adopt "a broad definition of 'covered stem cell lines' to ensure that human stem cells derived from any source are subject to strict ethical standards. Guidelines for Human Embryonic Stem Cell Research, published by the National Academies, only covered embryonic stem cell lines."

Create "a single 'gold' standard intended to ensure that all cell lines used by CIRM-funded researchers are derived according to the highest ethical standards. This revised standard has the practical implication of guaranteeing that all cell lines used by CIRM-funded researchers are derived without payment to egg donors."

Require that "research institutions ensure that oocyte donors do not have to pay for any immediate and short-term complications for oocyte retrieval. The National Academies’ guidelines make no mention of this issue."

"Strengthen existing regulations to make clear that it is not acceptable to provide payments for eggs (beyond reimbursement for expenses) used in CIRM-funded research under any circumstances."

"Reaffirm that the Draft CIRM Regulations go above and beyond state regulations and federal guidelines for assuring that potential eggs donors are fully informed of their decision and the research. Institutional review committees are required to approve a process for determining whether prospective donors have understood the essential aspects of the research, including but not limited to how eggs will be used and the medical risks associated with participation."

Standards Meeting Report from the Alliance for Stem Cell Research

More on the ethics of stem cell research, informed consent and the issue of cash-for-eggs today at a meeting of the Standards Working Group in Los Angeles from folks who were there.

Unfortunately we were not able to attend, and the CIRM event was not available at offsite locations or on the Web. So we asked some of the regular observers -- critics and supporters of CIRM -- if they were interested in sending us a report from the trenches. CIRM was invited as well. We promised to publish the reports verbatim.

The following is from Susan DeLaurentis, president and CEO of the Alliance for Stem Cell Research. Like Don Reed, who reported in an earlier item, she is an unabashed supporter of CIRM. Here are her comments.

Last week, I left the IP Task Force meeting (from a remote location-UCLA) feeling hopeful that a spirit of collaboration had finally begun to be realized. The public's input was listened to, respected and incorporated into the draft regulations. The concerns of Senator Deborah Ortiz, reflected in her proposed constitutional amendment, SCA 13, had been principally addressed. And the entire process felt open and inclusive.

Today's meeting of the CIRM Standards Working Group continued that same inclusive and collaborative spirit. It was made clear that the input of the public was a necessary component to crafting the best possible standards for stem cell research. And, again, the concerns of Senator Ortiz, reflected in her legislation, SB18, were principally addressed. There was extensive discussion about the informed consent process and the protections for women who donate eggs for research.

Finally, there is a true synergy with the CIRM, the public, and the legislature.

Our hope is that this spirit of partnership and respect continues. The full ICOC meeting at Stanford next week will be a great opportunity for all of us representing the public to see if this is the case. This is what we expected from the CIRM and the promise of open meetings. And, finally, this is what we are getting.

The Bee: Kudos to CIRM

The Sacramento Bee has been one of the toughest critics of the California stem cell agency, taking it to task for everything from salaries to ethics.

But this past weekend, the newspaper editorialized very favorably about the agency's proposed policy on how to divide up the booty from CIRM-financed inventions.

The Bee wrote:

"Not long ago, certain biotech leaders and university officials were urging California's $3 billion stem cell institute to renege on a promise to return royalties to the state. An outcry erupted from watchdog groups, Democratic state Sen. Deborah Ortiz of Sacramento and others.
Apparently, the institute listened."

The Bee continued:

"Some questions remain on how the state would enforce all of these policies. Even so, they represent a good-faith effort by the institute to listen and respond to public concerns. Kudos to Ed Penhoet, who led the task force and co-chairs the institute's oversight committee. Ortiz and others also deserve credit."

A Report from a Patient Advocate on Today's Ethics Meeting

The ethics of stem cell research, informed consent and the issue of cash-for-eggs were on the agenda today at a meeting of the Standards Working Group in Los Angeles – a session that will continue Tuesday.

Unfortunately we were not able to attend, and the CIRM event was not available at offsite locations or on the Web. So we asked some of the regular observers -- critics and supporters of CIRM -- if they were interested in sending us a report from the trenches. CIRM was invited as well. We promised to publish the reports verbatim.

The first comes from Don Reed, an unabashed fan of the stem cell agency. His account includes a report about discussion by the working group of the Korean scandal and an apparent decision to bar use of any eggs from either outside or inside California that were obtained through compensation. Reimbursement of expenses is apparently allowed. Here is Reed's account, including his headline.

CIRM BREAKS NEW GROUND IN SCIENTIFIC ACCOUNTABILITY

The California Institute for Regenerative Medicine wrestled with intellectual and ethical issues in an eight-hour meeting today, culminating in new standards for egg donor reimbursments and standards for stem cell lines.

It was pointed out that the scientists in the room had published more than one thousand peer-reviewed scientific papers. If brain power and heart were electricity, we could have powered a city!

“Are we talking eggs today?” one bystander questioned Dr. Ann Kiessling, director of the Bedford Stem Cell Research Foundation, and so it proved.

The meeting was called to order by Sherry Lansing, former President of Paramount Motion Pictures Studios.

“Seven months work by many people have been brought together today,” she said, “Today and tomorrow, we will make our recommendations, adding them to the many pages of written submissions and oral contributions by the public. This will be discussed and decided upon by the Independent Citizens’ Oversight Committee .”

An immediate controversy was raised by Ms. Lansing, referring to the voluntary leave of absence taken by Dr. Jose Cibelli. Dr. Cibelli was a writer on a paper by Hwang Wu Suk of South Korea, who has been involved in a major scandal. Dr. Cibelli has asked that his work be investigated by his home college, and that he be allowed a leave of absence until the matter is settled.

CIRM President Dr. Zach Hall stressed that the presumption of innocence applies here, as it does for every American.

One audience member asked how we could be sure fraud did not happen here in California?

Dr. Hall pointed out that Hwang’s misdeeds were pointed out by his fellow scientists.

False science will inevitably be brought to light when other scientists try to build on it. Truth stands; lies collapse. When another worker in the field attempts to replicate the experiment, and finds out it does not work, the falsity becomes clear.

Co-chair Bernie Lo, ethicist, pointed out the multiple layers of checks and counterchecks the California system is blessed with in the oversight area. In addition to groups like the Internal Review Boards (IRBs) and(Stem Cell Research Oversight committees (SCROs) which will keep track of the experiments, and the committee of out-of-state scientists who review the project’s feasibility before funding is even considered, the Independent Citizens’ Oversight Committee and the entire staff of CIRM have no more important assignment than maintaining the integrity of California’s stem cell research program.

Anyone who wonders how the California stem cell research program works should come to any of the many public meetings like today’s, one of 57 so far in the CIRM’s short existence.

For example, California has set a very high standard for the obtainment of stem cell lines, including no compensation for the egg donors who help in the making of the colonies of cells.

But can we expect poor women to donate eggs if they cannot afford time off from work?

Compensation no, reimbursement, yes; that was the answer which emerged after several hours of debate among scientists, ethicists, and the public.

Now, what about other countries which do pay donors? Can we use their stem cell lines, which do not follow our ethical guidelines?

I personally wanted the answer to be yes, because we need stem cell lines, and also because I think women should be paid handsomely for their gift to the world.

But the board decided that not only did we have to go by the highest standard, but also so did anyone whose stem cell lines we might want to use.

This slows us down.

But it is typical of the go-the-extra-mile attitude of everyone connected to the California stem cell program.

But don’t take my word for it.

Come to the next meeting and see for yourself.

Just go to www.CIRM.CA.gov and click on Upcoming meetings.

You are welcome.

Ortiz Praises Proposed IP Policies -- With Caveats

A key California legislator and the California stem cell agency seem to be edging closer to an agreement on how the state should benefit from inventions funded by CIRM.

The latest indication came in identical letters Monday from Sen. Deborah Ortiz, D-Sacramento, to Robert Klein and Ed Penhoet, chair and vice chair respectively of the agency. She praised the draft intellectual property policies that are expected to come before the Oversight Committee on Feb. 10. She said they would help ensure that CIRM-funded inventions "are freely available to researchers, that California taxpayers see a return on their investment, and that all Californians have access to the stem cell therapies made possible through Proposition 71."

Ortiz is chair of the Senate Health Committee and author of a proposed constitutional amendment dealing with stem cell IP issues, among other matters. She has indicated that the concerns motivating the measure could be satisfied without actually placing the measure on the ballot.

However, she said that the proposed IP policies should be regarded as a floor for IP agreements and that the Oversight Committee "should negotiate higher economic benefits for the state when feasible without impeding important research."

She said they should not preclude the state from requiring a larger share of royalties if taxable bonds are used to fund the research. She also said that the proposed policy to require sale of CIRM-based therapies at the lowest cost to the state should be extended to county health programs and community clinics.

A copy of the Ortiz letter follows below since it is not available on the Web at the time of this writing.

Text of Ortiz Letter to Klein, Penhoet

Here is a copy of the Jan. 30, 2006, letter from Ortiz to Klein and Penhoet.

I want to commend the Independent Citizen’s Oversight Committee (ICOC) working group on intellectual property for the progress it has made in developing a proposed policy for handling intellectual property for grants to nonprofit organizations from the California Institute for Regenerative Medicine (CIRM). The proposed policy will help ensure that findings and discoveries developed with Proposition 71 funds In particular, I support and urge the ICOC to adopt the proposed policies requiring grantees to negotiate nonexclusive licenses of CIRM-funded inventions wherever possible, make licensed inventions reasonably accessible for research purposes, and make CIRM-funded patented inventions available at no cost for further research. These policies will ensure that research findings and inventions developed with Proposition 71 funds are freely and openly disseminated among researchers.

I similarly support the proposed requirements that grantees share 25 percent of net royalties received with the state and that they license inventions to organizations that 1) agree to provide resulting therapies to Medi-Cal and other state health care programs at the lowest cost they provide them to other purchasers and 2) have plans for access to the therapies for uninsured patients.

Finally, I agree that CIRM must retain march-in rights in cases where grantees or licensees have not made reasonable efforts to achieve practical application of a CIRM-funded patented invention.

However, I believe it is important that the proposed policies be regarded as a floor for negotiation of intellectual property agreements. I believe the ICOC. I believe this is required by the balancing language of Proposition 71, which clearly states the “ICOC shall establish standards that require that all grants and loan awards be subject to intellectual property agreements that balance the opportunity of the State of California to benefit from the patents, royalties, and licenses that result from basic research, therapy development, and clinical trials with the need to assure that essential medical research is not unreasonably hindered by the intellectual property agreements.”

The policy also should not preclude the ICOC from requiring a larger share of royalties when necessary to offset the higher cost to the state of using taxable bonds and ensure a net return to the state, as suggested by Treasurer Phil Angelides in his letter to Dr. Hall, dated October 26, 2005.

Finally, I believe the provisions requiring licensees to sell resulting therapies to Medi-Cal and other state health care programs at the lowest cost should also apply to county health programs and community clinics since they operate health care safety net programs that serve low-income uninsured patients.

The intellectual property policy the ICOC is on the verge of adopting is very important and will set a precedent that will affect the state for years to come. I look forward to working with the ICOC to advance stem cell research while ensuring that California receives a fair return on its investment in stem cell research, consistent with the intent of Proposition 71 and the promises made during the campaign.

CIRM: Moon Shot or Cautionary Tale or Both?

California's stem cell agency took a whack on the opinion page of one newspaper last Friday, but received a mild endorsement from another.

The San Jose Mercury News editorial urged patience, declaring that finding stem cell cures is an even bigger job than sending a man to the moon. It also rejected calls for the resignation of stem cell chairman Robert Klein, although it said he has "been less adept" at running the agency than selling Prop. 71 to voters. The newspaper said, "Californians should expect more bumps along the stem-cell research road in the months and years to come."

Writing on the op-ed page of the San Diego Union-Tribune, Jesse Reynolds of the Center for Genetics and Society had a harsher view. He warned that something akin to the Korean scandal could occur in California, a situation he said the agency has not come to grips with.

Reynolds wrote:

"…California could be in a position to adopt standards, policies and regulatory mechanisms that could serve as a model for the rest of the country – rather than the situation we're in now, in which California's stem cell research is best understood as a cautionary tale.
"On issue after issue, the leadership of California's stem cell research program argue that strong polices standards might sound good, but they will slow the research. But the result is that the program has put moving rapidly over moving responsibly."

New Link Added: Stemcellbattles.com

We are adding another link to this site – this time to a CIRM-related blog by a patient advocate who has monitored the California stem cell agency from the start. The blog is called stemcellbattles.com. The publisher is Don C. Reed, father of Roman Reed, who was paralyzed in a college football accident. Don is a strong supporter of CIRM and vigorously pushed for enactment in 2000 of what came to be known as the Roman Reed Spinal Cord Injury Research Act, which provides California funding for paralysis research. We learned on Friday that the elder Reed used to literally swim with sharks and other lively sea life and has the scars to prove it. He authored or co-authored several youth-oriented books based on his experiences as a diver at Marine World in Northern California. You can still buy them for about a buck each, he noted, on Amazon.com. The titles include "Sevengill: The Shark and Me," "The Dolphins and Me," "Wild Lion of the Sea" and "Notes from an Underwater Zoo."

If you know of other sites dealing with California stem cell issues, please send a note to djensen@californiastemcellreport.com.

Correction

In two items concerning stem cell researcher Jose Cibelli and his role on CIRM's Standards Working Group, we incorrectly reported that he had resigned from the group. CIRM's website states, in a footnote, that he has "voluntarily withdrawn from active membership" with the group.

Policy for Removal of Stem Cell Advisers Advances

The California stem cell agency is moving forward with development of a policy on removal of members of its working groups – the panels that make key recommendations on facilities, grants and ethical and research standards.

Ordinarily consideration of such a policy would merit little notice, but it came up shortly after one working group member, stem cell researcher Jose Cibelli, became embroiled in the Korean stem cell scandal. Cibelli has resigned from his post at CIRM and has asked Michigan State University, where he is employed, to investigate his involvement in the Korean affair.

California stem cell chairman Robert Klein said today that the development of the removal policy was underway prior to the Cibelli matter.

According to the policy considered by the Governance Subcommittee, members of working groups may be removed for the following

"1. An intentional violation or violations of the Working Group conflict of interest policy applicable to the member;

"2. Two or more grossly negligent violations of the Working Group conflict of interest policy applicable to the member;

"3. Consistent failure to perform the assigned duties of the Working Group member or unexcused absence from three consecutive Working Group meetings;

"4. Violation of medical or ethical standards by the member in his or her professional capacity as determined by the appropriate research institution or the appropriate professional group;

"5. In the case of a member of the Medical Research Funding Working Group, employment by an institution located in the State of California;

"6. In the case of a member of the Medical Facilities Working Group, acceptance of a contract in his or her professional capacity that would create a conflict of interest under Proposition 71 and that cannot be avoided through the procedures and policies preventing actual conflict of interest at the Working Group;

"7. The conviction of a felony or act involving serious moral turpitude."

The full text of the policy can be found here. The Governance Subcommittee did not have a quorum and so could not vote on the policy. It will go to the full Oversight Committee for final consideration.

CIRM Hires Sacramento Lobbyist for Another Three Months

The California stem cell agency has re-engaged a top Sacramento lobbyist to watch over its interests in the Capitol, where legislation is being considered that would have a major impact on its operations.

The contract with Nielsen, Merksamer, Parrinello, Mueller & Naylor was reported to the agency's Governance Subcommittee at a meeting this morning. The firm will be paid $7,500 a month for three months – with a one month extension – beginning Jan. 23.

Last year's contract (first reported by this blog) with the same firm stirred something of a flap, partly for the way it was handled and partly because it is unusual for a state agency to hire a private lobbyist. Virtually all major state agencies have internal lobbyists, which are euphemistically called "legislative units" or some other term.

While one can argue about the cost of the private lobbyist, CIRM needs to have an effective voice in the Capitol, both to communicate with legislators but also to advise the agency about navigating the legislative corridors. If CIRM had an effective lobbyist in place 12 months ago, it would have saved itself a lot of anguish. And it probably would have led to better policy from the beginning.

CIRM would be better served, however, if it could handle its legislative relations without a private lobbyist, but that is not likely to happen until its financial situation improves.

During today's meeting, Oversight Committee member Claire Pomeroy, dean of the UC Davis Medical School, said that communication between CIRM and the legislature "needs to be a high priority." But she also asked, "How are we going to monitor what we are getting for our money."

Stem cell chairman Robert Klein said he would ask Nielsen Merksamer for regular reports on its activities.

CIRM staff also reported that it has requested proposals from five accounting firms for an audit of the agency, as required by law. The audit is budgeted for $50,000. The agency is paying another $45,000 to the State Department of Justice in connection with the litigation against CIRM. And more is expected to be needed.

Here is a link to the agenda item involving the contracts and a summary of all contracts.

CIRM Nearing Final Action on Ethics and Research Standards

The California stem cell agency next week will move forward on research and ethical standards that it says will lead the nation in several areas.

According to a press release from CIRM, it will be the first in the nation to:

"legally mandate specialized review by a Stem Cell Research Oversight(SCRO) committee;

"enhance state and federal policies in the areas of voluntary-informed consent;

"and ensure that women's reproductive needs are protected and
prioritized before the research."

The complex, 10-page draft of regulations is due to be considered at a Los Angeles meeting of the Standards Working Group on Monday and Tuesday. Its recommendations will go to the full Oversight Committee Feb. 10, a meeting that is already scheduled to take up another complex subject, intellectual property.

Whether the draft will satisfy its critics is yet to be determined. One, the Center for Genetics and Society, has raised concerns that the agency is considering a loophole that would allow use of eggs from other countries that have lower standards than California.

The draft rules contain language stating that CIRM-funded research is limited to cells obtained "under the oversight of an IRB (or, in the case of foreign sources, an IRB-equivalent)." It goes on to state that CIRM-funded research requires that "the donation of gametes, blastocysts, somatic cells or tissue occurred without payment beyond reasonable compensation for participation. A determination of reasonable compensation shall be performed in accordance with the policies governing the institution involved in derivation activities."

Prop. 71 forbids payments to egg donors in California, but it allows for reimbursement of expenses. Just how those expenses are defined has been debated extensively by the working group. The working draft contains the following definition: "necessary and reasonable costs directly incurred or expended as a result of donation or participation in research activities." A footnote on page 6 adds that expenses "is not used here to allow for differences…that may exist in outside (non-CIRM funded) institutions."

It was not clear from the draft whether the "necessary and reasonable expenses" rule would entitle a woman to be reimbursed for the hiring of a $500-an-hour lawyer/consultant to help her during many hours of wading through the complex informed consent documents and procedures. That hourly figure may sound high to some, but many lawyers, including those who work for CIRM, regularly charge such fees.

The draft does require development of procedures to ascertain whether a donor fully understands "the essential aspects of the research."

The standards group has held eight meetings around California to develop the documents scheduled to be discussed Monday. You can find links to all the proceedings here. Monday's agenda with several background documents is posted here.

The meeting cannot be heard at any offsite locations, but only at the Luxe Hotel in Los Angeles. That is unfortunate, given the important nature of its deliberations. It is the policy of CIRM not to make meetings of the Oversight Committee and its Working Groups, the most important entities within the agency, available to the public beyond their physical locations. Cost was cited as a reason by one official.

The Stem Cell Agenda of a State Senator

What does Deborah want? It is a question that floats around in the minds of some folks at California's stem cell agency.

Deborah is Sen. Deborah Ortiz, D-Sacramento, chair of the state Senate Health Committee and the legislative mover-and-shaker on stem cell issues. She is carrying a proposed constitutional amendment that would tighten oversight of CIRM and guarantee benefits to California from CIRM-funded research. She also plans to re-introduce a bill designed to protect women who donate their eggs for stem cell research.

She laid out her agenda clearly in a speech Monday that received no media attention. But her comments go to the heart of stem cell work in California. The principles behind them – accountability, transparency and disclosure -- additionally go to the heart of stem cell work anywhere in the world. Here in California, it is important to note that she says it is not necessary to make constitutional changes in CIRM; "binding regulations" would suffice.

In her speech she said Prop. 71 is "light" in the following areas:

"--meaningful conflict of interest standards for the appointees who review and make recommendations for funding,

"--open meeting and public records requirements to ensure that the public has information about projects that are recommended and not recommended for funding;

"--workable provisions to ensure that taxpayers get a return on their investment in stem cell research, consistent with the promises made to voters.

"--stringent standards to protect women who may consider donating eggs for stem cell research."

Her legislation would:

"--require members of the Prop. 71 working groups, without exceptions, to disclose their interests in research institutions, biotechnology, and pharmaceutical companies involved with stem cell research;

"--require meetings and deliberations of the Prop. 71 governing body and working groups to be conducted in public, with narrow exceptions for scientific peer review discussions, medical privacy, discussion of proprietary or scientific prepublication information, and personnel matters.

"--require Prop. 71 grantees to agree to share royalties on successful inventions with the state and to require licensees to sell any resulting products or treatments to the state at the best price they provide it to any purchaser.

"--require women considering donating their eggs for research to provide written informed consent and prohibit compensation of egg donors beyond the direct expenses entailed in undergoing egg extraction."

Ortiz said she believed the problems were "fixable" and hopes to engage in further dialogue with CIRM on solutions.

Light Coverage of Stem Cell IP Decisions

Three California newspapers carried stories this morning on key decisions involving who benefits economically from the state's $6 billion stem cell research program.

Two of the papers – The Sacramento Bee (reporter Jim Wasserman) and the San Diego Union Tribune (reporter Terri Somers) – led with the news about efforts to provide relatively lost cost therapies to low income and uninsured persons.

The Contra Costa Times (reporter Sandi Kleffman) began with the stem cell agency's plan to share something less than 25 percent of revenues from therapies with the state.

You will find minor differences in some of the details of what the stories reported. That is primarily caused by the loose language of the changes made during yesterday's meeting. Also two of the papers – The Bee and the Union Tribune – covered the session at Stanford remotely through a conference call, which makes it difficult to hear at times.

Speaking of conference calls and apropos of our earlier items on the Carlyle hotel, Sherry Lansing, a member of the CIRM IP task force, checked in from the swank and privacy-oriented Carlyle in New York City. But we don't know whether any members of the public were there. Lansing made a few comments during the meeting that began at 1 p.m. and checked out of the call by about 3 p.m.

No stories were seen on the Web from the San Francisco Chronicle, the hometown newspaper of the stem cell agency, and the Los Angeles Times, California's largest newspaper.

Here are links to The Bee story, Contra Costa Times and the San Diego Union Tribune.

Confirmed: $40 Million Raised for CIRM

The California stem cell agency has raised nearly $40 million, an amount that will allow funding of the first year of its training grants and more.

The California Stem Cell Report has confirmed a story first published in the San Francisco Examiner last week. Reporter Marisa Lagos said that stem cell chairman Robert Klein disclosed the general amount in a little-noticed speech in the Bay Area.

We have been told the money has been raised through bond anticipation notes, which Klein has called a type of bridge loan. They are sold at higher rates of interest than conventional state bonds. They are intended to be repaid only if the state wins the lawsuit challenging the existence of the stem cell agency. If it loses, the bond purchasers receive nothing.

Klein's plan was to sell the notes to charitable organizations – the theory being that they could just consider them gifts if the state loses the lawsuit.

One of the purchasers of $5 million in notes is Herb and Marian Sanders, co-chairs of the Golden West Financial Corp. of Oakland, the parent of World Savings Bank.

Revenue and Results Sharing Plus More March-In

The California stem cell agency Monday moved a step closer to adopting rules that will give the state of California a share of returns on revenue generated from inventions created by state-funded stem cell research.

The agency also moved towards requiring greater sharing of research than currently provided under much-criticized federal rules.

The actions were taken on a 7-0 vote by the agency's Intellectual Property Task Force. Basically the group adopted with some changes the draft of the policy prepared for today's meeting (see "25 percent" and the full text of the draft). The proposal covers only non-profit organizations.

The requirement on 25 percent revenue sharing would kick in only after revenues reach $500,000 (adjusted for inflation, a change added Monday). The revenue sharing applies only to the portion to be received by the grantee's organization. The individual grant recipient gets his cut first.

Regarding the sharing of research results, Ed Penhoet, chair of the task force, said the draft "pushes the envelope" compared to what is currently occurring nationally. He said the state could be "selectively disadvantaged" because other states will not have to share information while California would do so without requiring reciprocity.

But he did express hope that California's move towards sharing of research and non-exclusivity in terms of licensing inventions would spur a national movement in that direction.

The task force also made changes in the draft policy aimed at making therapies available at lower costs and to put muscle behind a requirement for plans to help uninsured persons.

One change would require that research licensees that develop therapies make them available at the lowest commercial prices to Medi-Cal or uninsured persons. Licensees could do that or come up with a plan for access to the therapies by Medi-Cal or the uninsured.

The task force then approved a rule to allow the state to "march in" – basically take back the rights of licensees when they fail to comply with their own plans. Federal law provides for "marches in" but none have ever occurred.

The language of the changes was loose and will more fully refined when the rules come up for adoption by the Oversight Committee on Feb. 10. Penhoet promised that the revisions will be posted online Feb. 5 on the CIRM, five days before the meeting.

Also on Monday, a key California state legislator released a statement on her position on intellectual property and accessibility of therapies. Sen. Deborah Ortiz, D-Sacramento, is carrying a proposed constitutional amendment that would force CIRM to change its IP approach.

Her position and the proposal approved on Monday appear to be creeping closer although they are still some distance apart.

Here is the text of the statement from Hallye Jordan, director of communications for Ortiz. It was not available elsewhere on the Web at the time of this writing:

"With the ICOC task force meeting today to consider intellectual property guidelines, as well as the recent proposals of the California Council on Science and Technology and the Foundation for Taxpayer and Consumer Rights, I thought it might be helpful to understand what Senator Ortiz is considering for legislation she intends to move this year.
"The senator supports the concept of requiring grantees to share with the state 25% to 50% of any revenues generated, with no direction that those funds by used for education and research. The senator believes the revenues should be available to help pay back the costs of the bonds. She also is considering allowing CIRM to direct the state’s share to a nonprofit organization if necessary to allow for the use of tax-exempt bonds. In addition, she is considering requiring the CIRM to provide a higher share of revenues to the state if possible without hindering research and the development of promising stem cell therapies.
"If CIRM is contemplating using taxable bonds, CIRM should be required to adjust the percentage upwards to so that the state can offset the use of more expensive taxable bonds with a higher level of royalties.
"If they are using tax exempt bonds, CIRM should be allowed to direct the state’s share of royalties to a nonprofit organization that is dedicated to enhancing access to clinical trials and therapies for low-income populations
"The Senator believes it is critical that licensees and grantees sell drugs, therapies or products developed with Proposition 71 funds to the state at the best price they are offered to anyone else.
"She also believes it is critical that CIRM be required to impose any and all licensing conditions that are necessary to ensure open dissemination of basic research tools and findings, including research exemptions, open source and nonexclusive licensing, retention of IP rights, and assignment or sharing of IP rights with entities designated by the ICOC to collectively manage IP rights associated with stem cell research."

Patenting, Access to Research Materials and Therapies: A Commentary

An experienced and knowledgeable veteran of the intellectual property world has prepared a preliminary critique of the draft IP policies of the California stem cell agency.

The commentary comes at our request from Terry Feuerborn, who was executive director of the Office of Technology Transfer within the Office of the President of the University of California from 1994 to 2000. He also was recipient of the 2000 Bayh-Dole Award from the Association of University Technology Managers.

As we noted in our previous item on the draft policies, the devil is in the details. Feurborn touches on some of those type of problems. Here is the full text of his comments.

"In general, the draft IP policy is headed in the right direction. There are rough edges, of course, but the overall thrust of the document is reasonable given the politics involved. Here are some features that could benefit from additional review:

"The introductory paragraph of Part II says that the IP terms and conditions will be adopted as a set of regulations with the force and effect of law. Given the very complex world of research, patenting, and licensing, and the many surprises that occur, will this provision become an inflexible strait-jacket? At the very least, there should be some provision for making exceptions when unusual circumstances are encountered.

"Grantees are required to submit different kinds of reports to CIRM. The wording in some places can be interpreted to suggest that information be included that would be highly confidential in nature--such as enabling invention information. Is this intended or just an oversight? It is assumed that reports submitted to CIRM will become publicly available. In addition, there is a requirement that research "data" be made available. Others should talk about the overall wisdom of this requirement. With respect to data related to human subjects, however, this would be objectionable for a host of compelling reasons.

"In some places, grantees are required to monitor the performance of licensees in ways that are likely to exceed what grantees are actually capable of doing without extraordinary resources. It is hard enough for licensors to monitor the extent to which licensees are paying royalties in a proper manner.

"The draft policy requires that research materials be made available to all requesters at no cost except for the recovery of expenses. This could be very troubling for grantees if the research materials are exotic in nature or are truly difficult to produce. It is not a matter of cost in all cases. It may be a matter of time and effort on the part of the most senior research personnel that could better be spent on research rather than responding to requests from all over the world. In addition, the request is to be satisfied within 60 days. Will that be technically possible in all cases? Since this will, according to the draft, be a legal requirement, what will be the consequences if it is impossible to meet a 60-day deadline?

"Under the requirements for licensing of CIRM-funded inventions, licensees must have 'plans for access to resultant therapies for Medi-Cal and uninsured California patient populations.' This plan is to be in place before a license can be granted. This may be an impossible task in some cases. For early stage technology, particularly, the nature of the resulting commercial product may not be known until years of investment and development have passed. Is it possible to have a meaningful plan when a license is issued in that context? How will start-up companies deal with this requirement since both their future products and their future resources will be unknown?

"The requirements for sharing royalty income with the State of California seem to be reasonable, given the wording of Proposition 71, but it would be more fair to grantees if the costs of patenting all CIRM-funded inventions could be deducted before the sharing provisions went into effect. A new formula may be required, but a policy of this nature would encourage the filing of more patent applications--thus helping to ensure that all promising technology developments would be protected by patents.

"The march-in rights are perhaps the most troubling aspect of the draft policy. It is one thing for the Federal government to impose such provisions in the Bayh-Dole Act, it may be quite another thing for CIRM to have such authority. In the case of CIRM, who will decide that a "grantee...or licensee has not made responsible efforts in a reasonable time....", or that they have not met "requirements for public use," or that "health and safety needs" have not been reasonably satisfied. How will decisions be made about such matters? What provisions are made for appeal? Can outside parties ask CIRM to exercise its march-in rights because the outside party is unhappy in some way? To what extent will uncertainties introduced by this provision discourage potential licensees, given the hundreds of millions of dollars required to develop new medical drugs and devices?

"The questions raised here are only some that need to be addressed."

Rival IP Proposal From Watchdog Groups

No blank check for biotech – that's the rallying cry of the Foundation for Taxpayer and Consumer Rights and the California Nurses Association and their position on intellectual property issues involving the California stem cell agency.

Reporter Terri Somers of the San Diego Union Tribune wrote about the organizations' proposals this morning and noted that some are similar to what the agency is considering in its draft.

Here is a summary from the press release by the foundation and the nurses association. The full text can be found here. The stem cell agency will consider its IP policies at a meeting this afternoon at Stanford.

"Research institutions that get CIRM funds should pay the state at least 25 percent of net royalties in excess of $100,000 received for any invention or discovery developed with Prop 71 funds.

"The state's share of any royalties would be used to help fund access to Prop. 71 therapies for people who cannot afford it.

"The licensees of discoveries developed with Prop. 71 funds must sell any resulting drugs, therapies or products to the state at their lowest price.

"The stem cell institute would create a patent pool that would include all patents resulting from research it funds. A three-person board including the California Attorney General would govern the pool.

"The institute would be able to tell an applicant that no patent is possible for a particular project if it determines that keeping the expected results in the public domain best promotes further research.

"Any California-based researcher would be able to use the results of Prop. 71-funded research for further research without paying a licensing fee.

"The California Attorney General would have march-in rights -- the ability to intervene -- if a drug or therapy were priced unreasonably or any other public benefit requirement is not met.

"The institute would have the responsibility to take control of new therapies for public health and safety reasons. For instance, meeting the public need of getting vaccines to market.

"All investors and researchers involved in commercial enterprises resulting from Prop. 71-funded research would be required to file disclosure forms. These would be public records."

Lots of News on CIRM on Monday

Monday will be a busy news day for the California stem cell agency. Its task force on intellectual property is holding a hearing in the afternoon. The Foundation for Taxpayer and Consumer Rights is holding a news conference just prior that to unveil its own proposal for sharing the swag from stem cell inventions. And California State Sen. Deborah Ortiz is giving a speech on many of the same issues. She is the author of legislation to tighten oversight of CIRM and ensure financial returns to the state from the agency. We will have coverage and commentary throughout the day.