A Critical Look at CIRM's Stem Cell Globe-Trotting

The Consumer Watchdog group is taking a dim view of the travel plans of the top executives of the California stem cell agency, describing as "bafflegab" the justification for spending much of the $558,000 in what CIRM describes as its "other travel" budget.

John M. Simpson, stem cell project director for the non-profit advocacy group, made his comments on his organization's blog. They were based on previously undisclosed documents that he requested from CIRM.

Among other things, the CIRM documents showed that its chairman, Bob Klein(pictured), is scheduled to be outside of California for 88 days at state expense in 2008-09. That does not include his travel within California, such as his trip today to Santa Barbara.

Chief Science Office Marie Csete will be out of California 75 days, CIRM President Alan Trounson 68 days, Chief Communications Officer Don Gibbons 32 days. All of which amounts to a 287 percent increase (in terms of dollars) in "other travel" by CIRM officials.

China, Japan, the United Arab Emirates, Israel, the United Kingdom, Sweden, The Netherlands, France, Korea, Australia, Italy, South Africa and Canada are among the destinations.

To a CIRM travel justification that said in part that some of the trips were necessary "in order to have an integrated picture of state of the art and forward-looking research agendas," Simpson retorted, "bafflegab."

He continued,

"After crunching the numbers I checked with some scientists.  All agreed there is a need for the hard-working science staff to attend some conferences to stay abreast of the latest developments. Perhaps one or two a year, suggested one.

"Another scientist reported traveling 4-5 days a month to to give seminars, attend meetings and review grants and then said about CIRM's travel plans:

"'Is the travel necessary? No.  Useful for CIRM? Probably not very much.  Good for Bob and Alan?  Absolutely.'

"Voters passed Proposition 71 because they wanted to pay for vital stem cell research in California that the federal government would not fund.  They did not intend to send Bob Klein around the world as a stem cell research advocate."

Still undisclosed, as far as we can tell, are travel expenses that are not classified as "other travel."

Simpson has posted the documents in question on his website. Links to them are contained in his blog.

CIRM Reviews the Business of Human Eggs

One week from today, the California stem cell agency is going to dig into the hot topic of human eggs – how many can scientists can get and their cost.

To its credit, the agency has posted background material on the subject well in advance of the July 25 meeting of its Standards Working Group in Los Angeles. Providing the material early is a refreshing change from CIRM's recent dilatory practices. The agency is to be commended.

The egg meeting comes in the wake of complaints earlier this year by researchers and CIRM President Alan Trounson that human eggs were not to be had in sufficient quantities for research. Kevin Eggan(pictured) of Harvard, a member of the Standards group, said that he and his colleagues had spent $100,000 advertising for human egg donors with little success.

The problem is that California and other states bar compensation for eggs for research. But handsome payments -- $15,000 and even more -- are made by IVF clinics for the same egg donation process. So most women take the cash.

Eggan made his comments last February. The ensuing discussion set in motion a review of CIRM policies dealing with compensation of donors. The issue also came up briefly last month at the meeting of the CIRM board of directors.

Trounson said scientists are having a "terrible time" securing eggs. He declared,

"It's all because there's no partnershipping arrangements or because they're using very few oocyte material. They're now trying to use cattle eggs, other species. They're floundering."

CIRM has prepared a draft briefing paper dealing with the egg issue. The agency has not completed all of its work on the subject, but it is surveying funding institutions, interviewing scientists and others and determining whether specific cell lines are not being used by CIRM grantees.

The briefing paper lists the following policy questions.

"Should CIRM funded researchers be able to use 'outside' hESC lines if they are derived from IVF-embryos created with paid gametes?

"Should CIRM funded researchers be able to utilize hESC lines derived from IVF-embryos created with paid gametes under an 'authorized authority'?

"Should CIRM funded researchers be be able to utilize IVF-embryos created with
paid gametes to derive new lines?"

Also prepared for next week's meeting is a briefing paper on uses of cell lines derived prior to CIRM regulations.

WARF Whacked Again

The latest chapter in the WARF stem cell patent saga opened today with the filing of an appeal by two consumer groups and a statement from California researcher Jeanne Loring of the Scripps Institute. She said,

"It's not just scientists that are affected by the patents. Patients and their families know that WARF’s iron-fisted control of stem cells is slowing life-saving research."

Consumer Watchdog of Santa Monica, Ca., and the Public Patent Foundation in New York City announced the filing of the appeal. The issue is not likely to be resolved for years, although John M. Simpson of Consumer Watchdog said WARF has already relaxed its licensing requirements in the wake of the patent challenge.

Simpson said,

"WARF executives were acting like arrogant bullies blinded by dollar signs. Our challenge has engendered a more co-operative stance towards the stem cell research community on their part."

Kindling the Flame in Goleta: Thomson, Klein Part of Gaucho Show

California's Robert Klein will share the stage with Wisconsin's Jamie Thomson Friday at the University of California, Santa Barbara, which has lured the renown researcher to its seaside campus with a $1 million package, including a new lab.

Klein, of course, is both the chairman of California's $3 billion stem cell agency and still officially president of his own private stem cell lobbying group, Americans for Cures. (No announcement has been forthcoming from the group confirming his reported resignation in the wake of its vitriolic attack on an influential state legislator.)

Klein and Thomson (pictured) will appear as part of a town hall event to discuss the state of stem cell research. The roundtable will also feature Congresswoman Lois Capps, a former nursing instructor, Gaucho (as UCSB denizens are known) alum and Wisconsin native.

CIRM has had a huge impact in California stem cell circles in the last 3 ½ years, but UC Santa Barbara might well be a poster child for what the agency has achieved.

Human embryonic stem cell research hardly existed on the campus (pictured) prior to 2005, the first full year for the California's research effort. But with a strong push from professor Dennis Clegg, now co-director of the UCSB Center for Stem Cell Biology and Engineering, the school scored in the first round of grants approved by CIRM. Today it has $6.7 million in stem cell research and lab construction funds from the California stem cell agency and another $3 million from one of the founders of Amgen. And it succeeded in drawing Thomson into the state on a part-time basis.

Thomson, whose lab is located in the UCSB California NanoSystems Institute, says,

"I am attracted by UCSB's strengths in materials science, instrumentation, and by the availability of marine model organisms for comparative studies."

Of course, UCSB's $6.7 million in CIRM funding is eclipsed by the $91 million given by CIRM to Stanford and the $69 million to UC San Francisco. But those campuses can generate buckets of money even without the state cash.

The Santa Barbara university has this to say about its fledgling stem cell effort:

"UCSB is well positioned to make unique, significant contributions in stem cell research, with extraordinary enabling technologies in biomaterials, systems biology, nanotechnology, micro-processing and bioengineering, all of which are synergistic with fundamental biomedical research efforts. Our approaches are uniquely distinct from those at California medical schools, with our emphasis on basic biological questions and engineering challenges related to stem cell research."

What CIRM has done is kindle a flame in Goleta (the actual location of UCSB). The hope is that the UCSB effort will grow and prosper, bringing new initiatives and insights into development of possible stem therapies.

Stem Cell Affordability Bill Marches Towards Schwarzenegger

Legislation aimed at ensuring affordable access to any therapies developed as the result of California's $3 billion stem cell research program today easily cleared its final committee hurdle and appears likely to wind up on the desk of Gov. Arnold Schwarzenegger.

The measure (SB 1565) by Sens. Sheila Kuehl, D-Santa Monica, and George Runner, R-Antelope Valley, was sent to the Assembly floor by the Assembly Appropriations Committee. Presuming it wins Assembly approval, it will go back to the Senate for concurrence in Assembly amendments. No lawmaker has voted against the bill, nor did any today although the final official vote is not yet available.

The bill has faced sometimes vitriolic opposition, particularly from the private lobbying group of the chairman of the state's stem cell research effort, Robert Klein. Americans for Cures lambasted Kuehl as "ignorant" and "craven" in a posting on the Daily Kos, a political blog with about 1 million page views a day.

Americans for Cures, which operates out of the same address as Klein's real estate investment banking firm, later apologized and asked that the offending item be removed. Klein said he did not know about the item. He is reportedly resigning as president of Americans for Cures, but it is not clear whether he will sever all ties or whether the organization will move from his offices.

Klein's connection to the lobbying group, which is an offshoot of the Prop. 71 campaign organization, has long triggered criticism because of concerns about conflicting interests.

One commentator, who must remain anonymous, told the California Stem Cell Report today:

"I would say it's an inherent conflict to be an officer of any kind of 'Cures,' while being on the ICOC (the board of directors of the stem cell agency). It would be like a physician who is a high level officer in the California Medical Association being on the (state) Medical Board. One would never know whether their official actions represented their own views or the views of the CMA."

Americans for Cures has not yet confirmed that Klein is resigning. (Shortly after this item was posted, we saw a report on the Niche stem cell blog of Nature magazine saying that Americans said Klein has resigned but will remain on the lobbying group's board, which probably means that it will continue to be housed at Klein's offices.)

The next lobbying target for CIRM and the stem cell activists is the governor, who can veto the legislation and who has been more than receptive towards the stem cell agency's efforts.

Here is a link to the latest legislative staff analysis of the bill.

CGS Says CIRM Legislation is 'Gentle'

The Center for Genetics and Society says the stem cell measure now before the California legislature would only "gently alter" affairs at the state's $3 billion stem cell research effort.

The group's comments came as as more activity surfaced concerning the measure, SB 1565, which comes before the Assembly Appropriations Committee today. It has sailed through the legislature without a dissenting vote despite fierce – sometimes scathing – opposition from stem cell advocates.

Commenting on the center's blog, Biopolitical Times, Jesse Reynolds said that CIRM's board of directors is engaging in "histrionics" and opposes the measure even though it would give them more flexibility.

Reynolds, who wrote presciently nearly four years ago about some of the problems that have surfaced at CIRM, commented Tuesday that the agency

"... can fund any biomedical research if a two-thirds supermajority of its grants review working group approves. The current Senate bill would lower that bar to a simple majority.

"This would not restrict the CIRM in any way. If anything, the bill simply gives the CIRM more flexibility. Considering that the grants working group generally operates by consensus, that the governing board must approve all grants, and that the CIRM currently generously supports non-embryonic stem cell research, the amendment would have zero practical impact.

"Nevertheless, the board worked itself into histrionics over any concession to the development of alternatives."

Reynolds' "gently alter" remark appeared in a related posting that said that Klein's apparent resignation as president of his lobbying group, Americans for Cures, was long overdue. A CIRM spokesman said on Monday that Klein had resigned, but deferred any further comment to Americans for Cures. That group has not responded to repeated requests for confirmation of the Klein resignation.

Reynolds' postings came as patient advocate Don Reed, vice president of Americans for Cures (the private lobbying group of CIRM Chairman Robert Klein), wrote on the influential Daily Kos political blog about the measure. He urged readers to lobby against the bill and send "hard copy" letters to the governor, asking him to veto the proposal.

Also, James Kovach, president of the Buck Institute in Novato, Ca., sent a letter to a member of the Assembly Appropriations Committee, declaring the organization's opposition to the Kuehl bill. He said it would disrupt embryonic stem cell research. The full text of the letter follows in a separate item below.

Text of Buck Institute Letter on SB 1565

Here is the text of a July 15 letter to Assemblyman Jared Huffman, a member of the Assembly Appropriations Committee, from the Buck Institute, opposing legislation aimed at ensuring affordable access to state-financed stem cell therapies.

Dear Assemblyman Huffman,
 
Thank you for the opportunity to comment on SB 1565.  We understand that SB 1565 will be heard before the Appropriations Committee on Wednesday, July 16th, at the Sacramento Capitol. As this will be the last full committee hearing on SB 1565, before it goes to the Assembly floor, on behalf of the Buck Institute I would like to provide you with our view of this proposed bill.
 
We strongly oppose SB 1565.  Our reading of the proposed changes led us to conclude that the changes are unnecessary and, if adopted, would likely have several negative consequences.  Our primary objections are set forth below:
 
The scientific review committees are represented by specialists in stem cell research.   They are already tasked with reviewing many excellent applications for funding of research in the stem cell arena.  It is important work done on often grueling schedules and any requests to evaluate “vitally important research” not associated with stem cell and/or stem cell related work will distract their attention from the work they were specifically chosen to perform.  We believe the purpose of Proposition 71 will be altered by the amendment and moreover, alter the mission of the scientific review committees.
 We believe the proposed amendment will disrupt the conduct of human embryonic stem cell research as set forth in Proposition 71, the Constitution of the State of California and the will of a majority of the voters in California.  If passed, the proposed amendment would alter the will of the people without their consent. 
The potential change in the direction of stem cell research funding would come at a crucial juncture in the development of the CIRM.  The development of the CIRM has been guided by the principles embodied in Proposition 71 and is just beginning to apply its full attention to stem cell research funding rather than the startup activities and infrastructure development of the largest and singularly unique enterprise of its kind.
The CIRM has been under virtually constant scrutiny from its inception.  Our experiences with the CIRM and its staff have not always turned out as we had hoped but we have never had reason to question the CIRM’s dedication to fulfillment of the intentions of Proposition 71.  We see no benefit in adding more layers of scrutiny to an already transparent organization. 
The fair pricing sections proposed by SB 1565 are redundant to administrative procedures that we have seen first hand to be working to ensure that all Californians benefit from therapies developed by Proposition 71.
 
With the above in our thoughts, we ask that you oppose the passage of SB 1565.
 
For the sake of completeness, I have attached a cogent editorial written by a colleague, Don Reed.   http://www.dailykos.com/story/2008/7/15/111757/794?new=true
 
Please feel free to contact me with any questions or desire any clarification of our position on SB1565.
 
Jim
 
Jim Kovach, M.D., J.D.
President & COO
Buck Institute for Age Research

The Media Mustard and Meaning of Klein-Kuehl Flap

The Klein-Kos-Kuehl Affair has drawn no attention in the mainstream media and almost none on the Internet – surprising to some deeply involved in the California stem cell scene.

Especially given the history of high profile verbal snafus that have publicly plagued scores and scores of public figures. In a totally different context than stem cell research, the Klein flap recalls presidential aspirants who have been given serious media fits as the result of misguided rhetoric, either from themselves or associates. One only has to look at the Obama-Clinton race to see major political figures wrestling with verbal gaffes.

But the reality is that the comments from Robert Klein's lobbying group, Americans for Cures, concerning an influential state lawmaker's intelligence, knowledge and political fortitude are not even close to making the front page of any newspaper. They may be outrageous, an incredible display of bad judgment and reflect poorly on California's $3 billion stem cell research program, but they do not cut the media mustard.

We cannot find even a single story on the comments in any newspaper in California, much less a current story dealing with the underlying conflicts of interest posed by Klein's dual roles as head of a stem cell lobbying organization and chairman of the leading source worldwide of funding for human embryonic stem cell research. Only two Internet sites that we know of have picked up on the matter, The Niche stem cell blog of Nature magazine and Larry Ebert's IPBiz blog. Monya Baker of Niche largely provided a neutral summary of the events. Ebert made reference to what he called ongoing bungling at CIRM.

We asked one mainstream media reporter about the reasons for the lack of coverage, promising anonymity to guarantee candor. The response:

"It was an easy call that it was not as important as the many other stories on my plate. You know how it goes: Mainstream media has to deal with many more topics than most blogs, including the California Stem Cell Report. For instance, Dave Jensen doesn't have to worry about sharing space on his blog with stories on the price of oil, or failing banks, or city council meetings and murder trials. Blogs also are not expected to meet the same journalistic standards as newspapers, which means they can run items with one source and lots of opinion. And they can touch on the same topic in many different posts, giving incremental developments.

"Meanwhile, newspapers try get several sources and views into one story. We are also dealing with budgetary, staffing and news hole cuts. That means reporters in mainstream media are covering much, much more than just CIRM and stem cells. (CIRM is just one small piece of my very broad and complicated beat.) All that means that I must be much more selective in what I write about."

We also asked John M. Simpson, stem cell project director of Consumer Watchdog, for his views on the media coverage. Simpson had a long career as a newspaper editor prior to holding his current position. He said,

"The news business is in a terrible state. Newsroom staffs have been slashed. Every news organization is trying to do more with less and that's simply impossible.

"Complex ongoing stories, like CIRM and its governance structure, get short shrift in the face of the current crisis in journalism.

"Until somebody figures out a new viable financial model to support quality journalism, we going to see less and less coverage of issues like this. I don't want to sound hysterical, but I think good democratic government is seriously threatened by the sorry state of the mainstream media."

With 30 years experience in journalism, we do not disagree with either our anonymous reporter or Simpson. But we can also add that coverage of state agencies has traditionally been given short shrift in California. It is easier to cover the governor, political activities and only the highest profile legislative issues.

CIRM is off the current agenda for the mainstream media. Does that mean that the issues or specifics involved in the Klein-Kos-Kuehl affair are not important? Far from it. The posting by Americans for Cures was destructive of CIRM's goals. Ironically, the action increased the likelihood that the bill will pass. The vitriol demonstrated indirectly that CIRM is not to be trusted in sensitive dealings. It showcased once again flaws in Klein's leadership that surfaced as long ago as 2005. And it highlighted one of the conflicts that pervade CIRM's board of directors.

The California stem cell experiment is a remarkable endeavor. It has achieved much. But much more remains to be done. CIRM directors should look to finding ways to foster cooperation – not only with the international stem cell community – but here in California, where the home fires are now in need of some renewed and careful tending.

Fresh Comments

Jesse Reynolds of the Center for Genetics and Society, who has followed California stem cell affairs since prior to the passage of Prop. 71, has posted comments on the "Klein Resigns" and "CIRM Letter" items.

Latest Version of SB 1565

Here is a link to the full text of the latest, amended version of legislation, SB 1565, which is aimed at ensuring affordable access to therapies financed by California's $3 billion stem cell agency.

It is the measure that triggered flap that has led to the resignation of Robert Klein, chairman of the agency, as president of his own stem cell lobbying group.

The bill comes before the Assembly Appropriations Committee Wednesday.

Klein Resigns as Head of Stem Cell Lobbying Group

In the wake of a flap over a personal attack on a leading California lawmaker, Robert Klein, chairman of the California stem cell agency, has resigned as president of the stem cell lobbying group that posted the offending item on the Internet.

John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., today reported Klein's resignation on the Watchdog group's blog. Klein's action came after Simpson called for Klein (see photo) to resign either as president of Americans for Cures, Klein's lobbying group, or as chairman of the $3 billion state agency.

Simpson wrote,

"Don Gibbons, communications director for the California Institute for Regenerative Medicine, called this afternoon to tell me that Klein had stepped down from Americans for Cures. His phone call came after my posting the view today that holding both the state position and the advocacy position was untenable and the situation was a train wreck waiting to happen.

"In fact, Gibbons said, Klein quit the presidency on Friday, but didn't issue any public statement about it until he personally told Sen. Kuehl what he had done."

Sen. Sheila Kuehl, D-Santa Monica, is the lead author of legislation aimed at ensuring affordable access to any therapies developed as the result of CIRM-financed research.

Kuehl's office told the California Stem Cell Report that the senator and Klein were scheduled to talk on Tuesday. Americans for Cures has not responded to inquiries concerning Klein's resignation.

Coming Stem Cell Train Wreck?

The combination of Robert Klein as head of a state agency giving away $3 billion for stem cell research and presiding as well over a personal, stem cell lobbying group is a "train wreck waiting to happen," according to the Consumer Watchdog group.

John M. Simpson, stem cell project director for the Santa Monica, Ca., organization, said he welcomed Klein's apology for the "unseemly" attack on state Sen. Sheila Kuehl, lead author of legislation opposed by both the stem cell agency and Klein's group.

Simpson wrote on his organization's blog:

"The apologies are welcome.  However, so long as Klein remains chairman of the state stem cell agency, the California Institute for Regenerative Medicine, and president of the advocacy group, Americans for Cures, the situation remains a train wreck waiting to happen."

Simpson continued:

"Insisting on wearing both hats in untenable.  It damages the credibility of both CIRM and Americans for Cures. Klein needs to realize his dual roles seriously undermine the dedicated staff of both organizations."

Patient Advocate Reed Praises Kuehl, Says Sometimes People Go Too Far

Patient advocate Don Reed, who has probably attended more meetings of the California stem cell agency than any of its directors or even its staffers, reacted this weekend to the blistering attack on the author of legislation he fervently opposes.

Reed (see photo) is vice president of Americans for Cures, which fired off the personal comments on the national and influential political blog, Daily Kos. While Reed said that he is proud of the group, he added:

"Sometimes in the heat of battle, people go too far with hurtful words."

Here is the text of what he sent the California Stem Cell Report.

"A negatively slanted editorial on Senate Bill 1565 (Kuehl, Runner) was recently printed in the weblog Daily Kos. It was written by some of the staff at Americans for Cures, a group with which I am proud to be associated. They are my friends and co-workers.

"But I want it clearly understood I had no part in the writing of that particular article.

"I have not yet been able to read the entire piece, just bits and pieces of it. But as the co-directors of our group have publicly apologized for it, apparently it went over the edge. Sometimes in the heat of battle, people go too far with hurtful words. I have stuck my own foot in my mouth too many times to criticize anyone.

"I do strongly oppose SB 1565. Anyone wanting my opinions need only go to my website, www.stemcellbattles.com, or just Google me. My writing is signed, either with my name, Don C. Reed, or as Diverdonreed, for blogs which require a pseudonym.

"But my differences with Senator Sheila Kuehl are professional, not personal. She has earned the right to be treated with affection and respect.

"Ironically, last week I had a very positive conversation with Senator Sheila Kuehl’s legislative aides, Lark Park and Peter Hansel. We argued about the bill, of course. To me the bill is a serious mistake: a threat to the California stem cell program.

"I had two reasons for the visit.

"One reason was of course to see if there were any loopholes possible, especially in the price-control part of the bill. Ms. Park and Peter Hansel said the Senator had offered to make a change. The stem cell board may or may not agree that the answer is enough to gain their support, but it was a genuine attempt, a serious proposal. (Other serious objections remain, and I am still in opposition to the bill.)

"But there was a second reason for the visit, a personal one, something I had hoped to tell the Senator herself, but that was a long shot at budget crisis time.The Senator is “termed out”, that California mistake of a law that says lobbyists may remain in Sacramento forever, but the people’s representatives can only stay a while.

"But her efforts on behalf of all Californians will live on after her term in office. It is to be hoped she will continue her work to bring decent and affordable healthcare to everyone, perhaps on a national or international level. I would love to see her be U.N. Ambassador for international health programs, or a similar position.

"Sheila Kuehl is an exemplary human being. She makes the world a brighter place."

(After Reed sent us this item, we sent him a copy of the piece on Daily Kos, which has removed the item. If you would like to receive a copy of it, please email a request to us at djensen@californiastemcellreport.com)

Stem Cell Affordability Legislation Changed to Meet CIRM Objections

The California lawmakers behind legislation to ensure affordable access to taxpayer-financed stem cell therapies moved last week to ease the concerns of the state's $3 billion stem cell research agency.

The changes were made prior to a scathing, national Internet attack on the bill's lead author by the private lobbying group run by Robert Klein, who also serves as chairman of the state stem cell agency. One consumer advocate has called for Klein's resignation in the wake of the assault by Americans for Cures, the Klein organization. The group used such terms as "ignorant," "dumb" and "craven" in connection with Sen. Sheila Kuehl, D-Santa Monica.

Late Friday, Klein's group apologized. Klein told the California Stem Cell Report he was unaware of the Internet attack by his group and said he had "great personal respect" for Kuehl. Our understanding is that he intends to personally apologize to Kuehl.

CIRM last month officially opposed Kuehl's bill, SB 1565, on the grounds that it would discourage biotech firms from developing therapies and limit the agency's flexibility to negotiate affordability issues, among other things.

In response, Sens. Kuehl and George Runner, R-Antelope Valley, made changes that appear to go a long ways in dealing with the objections. But in a letter Thursday to Kuehl, Klein expressed the agency's continued opposition. The letter, dated the same day as the Internet attack on Kuehl, was also signed by CIRM President Alan Trounson and Ed Penhoet, vice chairman of the CIRM board of directors.

Below are key sections of the latest amendments to the measure, as provided by Kuehl's office. The actual bill, however, will not be available online via the Legislature’s website until Tuesday. The measure comes up for a hearing in the Assembly Appropriations Committee on Wednesday. The full text of CIRM's letter to Kuehl follows in a separate item.

Here are the amendments in SB 1565.

"Any plan subject to subdivision (a) shall include a requirement that each grantee and any licensee of the grantee that sells drugs that are, in whole or in part, the result of research funded by CIRM shall provide those drugs to publicly funded programs in California at one of the three benchmark prices in the California Discount Prescription Drug Program."

"Notwithstanding subdivision (c), the ICOC may waive the requirement that grantees and licensees of the grantee provide drugs that are, in whole or in part, the result of research funded by CIRM at one of the three benchmark prices in the California Discount Prescription Drug Program (Division 112 (commencing with Section 130500)), as it exists on January 1, 2008, only when the following conditions are met:
"(1) Either of the following conditions is met:
"(A) The drug shall be used for the diagnosis, cure, mitigation, or prevention of a rare disease or condition, as recognized by the federal Food and Drug Administration under Section 360bb of Title 21 of the United States Code, by individuals who would not otherwise have access to the drug through private insurance or public programs, the number of individuals who will have increased access to the drug represent a significant proportion of the individuals in California who have that rare disease or condition, and the ICOC has made a determination that, in the absence of the waiver, development of the drug will be impeded.
"(B) The grantee commits, in writing, to provide expanded access to a drug under its access plan to a class of patients who would not otherwise receive access to the drug, including working uninsured individuals who do not qualify for any public program or private health plan or policy that provides coverage of the drug, and the ICOC has made a determination, before granting a waiver and based on the number of individuals who will have access to the drug and the likely costs of the drug, that the waiver will provide significant benefits that equal or exceed the benefits that would otherwise accrue to the state through the pricing requirements set forth in subdivision (c).
"(2) The ICOC has conducted a public hearing prior to adopting any waiver pursuant to this subdivision. The ICOC shall provide findings and declarations and documentation to the Legislature substantiating the need for, and benefits of, a waiver adopted pursuant to this subdivision at least 30 days prior to the public hearing and shall post these documents on its Internet Web site at the time of submission to the Legislature and provide notice to the public that these documents have been posted."

CIRM Letter Opposing Kuehl Legislation

Here is the text of the CIRM letter stating the agency's continued opposition to SB 1565.


SB 1565: OPPOSE UNLESS AMENDED

July 10, 2008

Dear Senator Kuehl:

Thank you for the opportunity to comment upon the potential amendments to Senate Bill No. 1565. While the Independent Citizens’ Oversight Committee (the “ICOC”), the governing board of the California Institute for Regenerative Medicine (“CIRM”), has taken a position in opposition to the bill on the grounds that is it premature and unnecessary, we appreciate your willingness to engage in a dialogue regarding the potential amendments.

Section 1 of the bill, which would remove the two-thirds vote requirement for funding “vital research opportunities” was added in early June and it has caused a powerful reaction of unanimous opposition from CIRM’s governing board. Proposed subparagraph (E) makes clear that the goal of Section 1 is to eliminate the priority that Proposition 71 places on human embryonic stem cell research. As long as Section 1 remains in the bill, we must strongly oppose SB 1565.

At a time when opponents of stem cell research are arguing that recent developments obviate the need for human embryonic stem cell research, a position we believe to be incorrect, the proposed amendment to Proposition 71 would send the wrong message to Californians and to the nation at large. It would also thwart the will of the more than seven million Californians who voted for Proposition 71 in order to address the federal funding gap for human embryonic stem cell research, a gap that continues to exist to this day. By removing the two-thirds vote requirement, the amendment would undermine the very purpose of Proposition 71 – to provide a priority for funding human embryonic stem cell research. Finally, eliminating the two-thirds vote requirement would be inconsistent with the requirement that Proposition 71 may only be amended to further its purposes. For all of these reasons, which are discussed in greater detail in the attached addendum, we are strongly opposed to the removal of the two-thirds vote requirement.

With respect to Section 2 of SB 1565, we share your view that California state and local government purchasers should have access, at the lowest possible price, to the therapies and drugs derived from CIRM-funded research. Indeed, our regulations include provisions very similar to those set forth in SB1565. Given the complexities of our healthcare system and the uncertainty regarding the types of therapies and drugs that will be developed as a result of CIRM-funded research, we must retain the flexibility to address issues specific to particular diseases and particular therapies. We appreciate your offer of alternative language, including a waiver process. However, we offer our suggestions below in an effort to reduce the risk of unintended consequences. If you are willing to remove the amendment to the two-thirds vote requirement and to accept our proposed amendments, we would be willing to consider taking a “neutral” position on the bill.

Proposed Addition of Subdivision (e)

We believe it would be preferable to give CIRM greater discretion to establish a waiver mechanism pursuant to the Administrative Procedure Act. The addendum to this letter addresses this issue in more depth. This would permit CIRM to assess changes in medical technology and in the health care sector prior to defining the scope and contours of the waiver and it would provide an opportunity for the Legislature and the public to comment upon the proposed waiver mechanism before it is adopted. Therefore, rather than trying to anticipate the circumstances pursuant to which a waiver may be justified, we recommend replacing subdivision (e) with the following language:

(e) Notwithstanding subdivision (c), CIRM may waive the requirement for grantees, and licensees of the grantee, to sell drugs that are, in whole or in part, the result of research funded by CIRM, at one of the three benchmark prices in CalRx, based on a finding that a waiver is necessary to protect the health of Californians whose lives or quality of life is at risk. CIRM shall adopt a regulation or regulations pursuant to the Administrative Procedure Act to implement the waiver provided in this subdivision after notifying the Legislature and conducting a public hearing.

Proposed Amendments to Subdivision (c)(1)

Your proposed amendments to subdivision (c)(1) clarify what we understand to be the original intent of SB 1565. We believe that further refinements, however, may sharpen the expression of the Legislature’s intent. For example, we understand that you intend SB 1565 to apply only to therapies or drugs purchased in California by California state or local government funded programs. The current language, however, would appear also to apply to federally funded programs, including programs funded and administered entirely by the federal government without regard to need. Similarly, we are concerned by the provision that specifies that CalRx, as it exists on January 1, 2008, shall apply regardless of any subsequent changes in the law. While we share your concern about the unintended consequences that could flow from designating a successor program, we believe these concerns could be addressed by incorporating a successor program only if it covers CIRM stem cell-derived therapies or drugs. We therefore propose the following changes to subdivision (c)(1):

(c)(1) Any plan subject to subdivision (a) shall include a requirement that each grantee and any licensee of the grantee that sells drugs that are, in whole or in part, the result of research funded by CIRM shall sell those drugs in California to publicly California state and local government funded programs in California at one of the three benchmark prices in the California Discount Prescription Drug Program (Division 112 (commencing with Section 130500)), as it exists on January 1, 2008, or a successor program to the extent that the program applies to California Institute for Regenerative stem cellderived therapies and drugs.

Conclusion
CIRM is committed to working with the Legislature to address the important issues raised by SB 1565 and to ensure that Californians have access to therapies and drugs derived from CIRM-funded research. Placing these provisions in statute, however, may hinder our efforts rather than help, because we cannot anticipate all of the challenges we will face in the future.

We recognize that the Legislature could amend the law in the future through urgency legislation, but we are concerned about the potential political opposition to changes that may be required to ensure that Californians have access to a therapy derived from human embryonic stem cells. Given the 70 percent vote requirement in Proposition 71, such opposition could prevent the Legislature from passing an amendment that is essential to ensure access. CIRM’s ability to amend its regulations pursuant to the Administrative Procedure Act, on an emergency basis if necessary, does not pose the same risk.

While well-intentioned, SB 1565 is premature and unnecessary. Nonetheless, if you are willing to amend the bill to remove Section 1 and provide for a waiver directive regarding the public pricing policy as described above, we are prepared to recommend a neutral position to the ICOC.

We appreciate your support of CIRM and your willingness to work with us to address these critical issues.

Sincerely,
Robert N. Klein, Chairman, ICOC
Alan O. Trounson, President
Edward E. Penhoet
Vice –Chairman, ICOC

California Stem Cell Chief Says He Was Unaware of Personal Attack on Lawmaker

Robert Klein, chairman of the $3 billion California stem cell agency, today said he was "completely unaware" of the personal attack on a California state lawmaker by his lobbying group, Americans for Cures.

Klein, who is president of Americans for Cures, said he had "great personal respect" for Sen. Sheila Kuehl, D-Santa Monica, the object of the attack. Kuehl, a respected California lawmaker and chair of the state Senate Health Committee, drew the ire of Americans for Cures because of her legislation aimed at ensuring affordable access to taxpayer-financed stem cell therapies.

In a statement to the California Stem Cell Report, Klein praised Kuehl's "intellectual strength" and leadership. Here is the text of what Klein sent the California Stem Cell Report:

"Dear David,

"Theoretically, I have been on vacation since Tuesday morning, July 8th, but I gave up my vacation last night and came back to CIRM to deal with misinformation regarding my personal position on SB 1565. As I stated at the Controller’s financial oversight committee meeting on Monday, July 7th, I have great personal respect for Senator Kuehl, including most recently her leadership on the effort to create universal healthcare coverage. On Monday, I made it clear that I have deep respect for her intellectual strength in the healthcare area, and that the ICOC’s position is a substantive policy disagreement. The ICOC has taken the position that the complexity of the stem cell therapy area may not permit simple pricing formulas and the agency needs discretion in adapting to the 70 areas of possible stem cell therapies for chronic disease and injury. I also emphasized on Monday that the ICOC is committed to the same goals as Senator Kuehl in obtaining the lowest possible price for state and local government public providers in California.

"The language in the bill addressing embryonic stem cell research, I think, is being interpreted very differently by the ICOC and Senator Kuehl. We are very concerned about the message this type of an amendment would send within California and nationally, and we do not believe that the message would be consistent with the best scientific and medical knowledge at this time.

"As always, I am happy to discuss this with you further. I wanted to make sure you knew right away that I was completely unaware of the blog entry. I have requested that the Daily Kos entry associated with Americans for Cures be deleted from the site because it did not receive clearance from senior members of the organization, and it did not properly reflect the organization’s views on Senator Kuehl.

"Bob Klein"

Consumer Watchdog: Despite Apology, Klein Still Should Still Resign

The Consumer Watchdog group today said it is not withdrawing its call for the resignation of Robert Klein as chairman of California's $3 billion stem cell agency, despite an apology from his lobbying group for its personal attack on a Democratic state legislator.

John M. Simpson, stem cell project director of Consumer Watchdog of Santa Monica, Ca., said the co-executive directors of Klein's lobbying organization, Americans for Cures, "are taking the blame" for the posting on an influential national political blog, Daily Kos. Simpson said on his group's blog,

"What this incident underscores is how inappropriate it is for Klein to hold  positions as chairman of the California stem cell agency and president of a stem cell advocacy group simultaneously.  If he wants to be an advocate -- and he can indeed be effective as the passage of Proposition 71 demonstrates -- he must step down from his position as chairman of the stem cell board.

"The welcomed staff apology does not change the fundamental confict Klein faces by insisting on holding both positions."

Stalled

Our promised items on changes to SB 1565 have been stalled because of events related to Americans for Cures and their posting on Sheila Kuehl. We will carry the amendments and the CIRM opposition letter during the weekend.

Klein's Lobbying Group Apologizes for Blistering Attack on Kuehl

The lobbying group controlled by Robert Klein, chairman of the California stem cell agency, today apologized to state Sen. Sheila Kuehl for the personal attack on her that it published on the influential national political blog, the Daily Kos.

The co-executive directors of Americans for Cures, Amy Daly and Constance McKee, said the language in the item, which included such terms as "dumb," "craven" and "ignorant," was inappropriate. Daly said the item had been removed from the Daily Kos.

Here is the text of their apology, which they asked the California Stem Cell Report to run.

"To all who have read the Americans for Cures diary posted on DailyKos regarding SB 1565:

"We write to offer a formal apology to Senator Kuehl and her supporters. This posting did not go through our normal review clearances. The choice of language was inappropriate and did not reflect the respect that senior members of the organization have for Senator Kuehl.

"We have always appreciated her efforts and were disappointed that her single payer plan was not implemented. She has historically been a great health care advocate for the people of California. This is why it has been so frustrating to us that she is working with Senator Runner – who is strongly anti-embryonic stem cell research – to implement a bill that could frustrate efforts to get stem cell therapies to patients.

"We were wrong in our characterization of her. We have been working hard to educate everyone about the perils of this bill. No one is questioning it precisely because Senator Kuehl has been such an effective advocate. Our frustrations prevented us from using good judgment in our post, and we apologize profusely for our insensitive and unwarranted remarks.

"It should be noted that Bob Klein was completely unaware of our actions on this. We have not spoken to him or met with him in well over two weeks. I’m certain that he is as disappointed in our judgment as you, and we, are.

"Please forgive us and please put the blame for this where it belongs – on Americans for Cures Foundation staff involved in this individual posting – not on Bob Klein. Americans for Cures Foundation has learned from this experience and will re-institute the tight control it has historically had over its postings.

"Sincerely,

"Amy Daly & Constance McKee"

Consumer Watchdog Says Klein Should Resign Because of Personal Attack on Lawmaker

The Consumer Watchdog organization today called for the resignation of Robert Klein as chairman of the $3 billion California stem cell agency after his private lobbying group called a respected state senator "dumb" and "craven."

John M. Simpson, stem cell project director for Consumer Watchdog, a nonprofit Santa Monica, Ca., organization, said the attack was an inappropriate "over-the-top, hysterical call to battle."

Writing on the group's blog, Simpson referred to the Internet posting Thursday by Americans for Cures, Klein's stem cell lobbying group, on the Daily Kos, a widely read and influential political blog.

Americans for Cures targeted Sen. Sheila Kuehl, D-Santa Monica, and her legislation – SB 1565 – which is designed to ensure affordable access to any therapies that result from taxpayer-financed stem therapies. Simpson wrote:

"One can oppose the bill without launching personal attacks and suggesting the sky is falling. For the most part, the board members and agency's staff have followed that policy. But Klein insists on wearing two hats: ICOC(CIRM's board of directors) chairman and president of his advocacy group.

"The positions are incompatible. Since Klein refuses to give up the advocacy role, he must step down from his public position as head of a state agency. Failure to do so undermines the stem cell agency's credibility and ability to do its vital work."

Simpson summarized the legislation:

"It puts in statute regulations CIRM itself developed governing access to drugs by the uninsured; it lowers the vote of the scientific working group necessary to recommend funding non-embryonic stem cell research from a two-thirds majority to a simple majority; and it asks the state's non-partisan Little Hoover Commission to study the governance structure of the agency."

Kuehl's aides have been working with CIRM staffers to deal with the agency's official objections. Earlier this week, Kuehl amended her measure to deal with CIRM concerns. But Klein's lobbying group says the bill is unacceptable in "any form."

We have asked CIRM and Kuehl's office if they have any comment on the posting by the Klein group. We have not received a response, but will carry their comments should they make any.