No Improper Influence: CIRM Defends 'No Actual Conflicts' Claim

Earlier this month the California Stem Cell Report  published an item that said:

“In the wake of recent considerable criticism concerning conflicts of interest at the $3 billion California stem cell agency, its leaders have taken to saying 'no actual conflicts' have been found at the agency.

“That assertion is simply not true.”

We asked the stem cell agency if it would like to respond and said that its response would be carried verbatim. The agency's comments are below. Our take on the response follows the CIRM comments, which were authored by Kevin McCormack, the agency's senior director for public communications and patient advocate outreach.

In David Jensen’s recent blog about the stem cell agency he claims to “debunk” claims that there have been no actual conflicts in CIRM’s funding decisions saying “the agency has a long history of problems involving conflicts of interest, 'actual' and otherwise.” In fact, in the cases cited by Mr. Jensen, show 'otherwise' is the appropriate word here because as we’ll show CIRM’s conflict procedures worked and the funding decisions were not affected by any improper influence.

Let’s take it case by case, looking at each instance of a “conflict” cited by Mr. Jensen.

John Reed

In 2007, John Reed, a member of the stem cell agency’s Governing Board, contacted staff in his capacity as the president of the Burnham Institute after the Board approved a SEED grant award to a Burnham investigator. Dr. Reed did not participate in the Board’s decision to approve the award and played no role in that decision. All he did was send a letter to CIRM staff after the Board meeting to provide factual information in response to technical questions raised by CIRM staff concerning the investigator’s eligibility for an award. Those questions ultimately led staff to reject the grant. Because the Board had already made the decision to award the grant, it did not occur to Dr. Reed that the conflict rules would prevent him from contacting staff to provide relevant information. And why would it? The decision was made so there was nothing to influence. After CIRM staff received Dr. Reed’s letter, they informed Dr. Reed that he must refrain from participating in any way in CIRM's consideration of the Burnham grant. In addition, CIRM staff did not consider the letter in conducting their administrative review of the Burnham grant and their determination that the investigator was not eligible did not change. The FPPC determined that, although Dr. Reed’s conduct raised ethical concerns, he had not violated conflict of interest laws because he attempted to influence a decision that had already been made. Furthermore, Dr. Reed’s conduct did not affect a CIRM funding decision because the grant was rejected by CIRM staff.

New Faculty Awards

When a candidate applies for a CIRM New Faculty Award it is standard practice for them to include a letter of support from the institution where they hope to be working. In December 2007, during a review of applications for New Faculty Awards, CIRM staff discovered that ten applications were accompanied by letters of institutional support signed by members of the Board. This was due to a miscommunication by staff, a poorly drafted memo to Board members leading them to think it was OK to sign the letters of institutional support. The error was discovered before the Board considered any of the applications. CIRM staff determined that the letters could be perceived to create a conflict of interest and so, to avoid even the appearance of a conflict, CIRM staff disqualified the ten applications. As a result, the applications were not presented to the Board for its consideration, thereby avoiding any potential for a conflict of interest in a funding decision.

John Sladek

In 2011, while preparing the public summary for Basic Biology III applications, CIRM staff discovered that Dr. John Sladek was one of several co-authors on scientific publications with a researcher who was listed as a consultant on a CIRM grant application. This is a technical violation of the Grants Working Group (“GWG”) conflict policy, which prohibits a member of the GWG from participating in the review of an application if the member has co-authored papers with a salaried investigator listed on a CIRM application within a three year window. It should be noted, however, that Dr. Sladek’s participation in the review of the application would not have constituted a conflict of interest under state conflict of interest laws because Dr. Sladek did not have a financial interest in the application. In addition, the amount of funding involved – approximately $3,000 of salary per year for three years, less than one percent of the total award – was not material, and Dr. Sladek did not stand to receive any financial benefit from the application. Finally, Dr. Sladek’s participation in the review did not affect the outcome because the application was not recommended, or approved, for funding.

The three instances cited by Mr. Jensen share two common features. First, CIRM staff identified the potential for a conflict before any funding decision was made. Second, CIRM’s funding decisions were not affected by any improper influence.

Ted Love

Mr. Jensen also cites the service of Dr. Ted Love, a member of the Board who volunteered his time to assist CIRM in offering his scientific and medical expertise, as evidence of a conflict of interest. Although Mr. Jensen insinuates that Dr. Love’s service constituted a conflict of interest, he does not cite any facts, except Dr. Love’s “deep connections to the biomedical industry.” But the fact that Dr. Love has experience in the biotech industry does not constitute a conflict of interest, and as a member of the Board and as a volunteer to CIRM, Dr. Love abided by CIRM’s conflict of interest policies.

In the past Mr. Jensen has criticized the stem cell agency for its lack of connections and engagement with industry. In this case he criticizes us precisely because of our connection and engagement with someone who has industry experience.

Venture Capital Firm

Mr. Jensen also suggests that a conflict of interest arose from the fact that “iPierian,Inc., whose major investors [a venture capital firm] contributed nearly $6 million to the ballot measure that created the stem cell agency, has received $7.1 million in awards from the agency.” While it is true that Proposition 71 involved a multi-million dollar campaign, the funding for the campaign came primarily from individuals who had a family member who suffered from a chronic disease or injury, including individuals associated with a venture capital firm. The firm itself did not contribute to the campaign, nor did the campaign accept contributions from biotechnology or pharmaceutical companies. Furthermore, the venture capital firm did not invest in a CIRM grantee; rather, it invested in a different company which subsequently merged with yet another company to form an entity that later applied for, and was awarded a CIRM grant.

Stem Cells, Inc.

Mr. Jensen cites CIRM’s award to Stem Cells, Inc. as another source of a conflict. In support of this claim, Mr. Jensen’s references Bob Klein’s support of the award, as well as the fact that Irv Weissman, PhD, appeared in an ad for Proposition 71 in 2004. However, neither Mr. Klein’s support for the award nor Dr. Weissman’s support for Proposition 71 constitutes a conflict of interest. First, Mr. Klein, like any member of the public, has the right to express his views to the Board. The state’s revolving door laws do not apply to a former member of the Board who, like Mr. Klein, is not compensated for making an appearance. As for Dr. Weissman’s support for Proposition 71, nothing in state law prohibits a member of the public from seeking CIRM funding even though he supported the measure during the campaign. In fact, it would be reasonable to expect that most stem cell scientists in California (and elsewhere) supported Proposition 71. Disqualifying individuals from receiving funding because they supported the law would leave few, if any, eligible applicants.

Allegation of Conflict at Board Meeting

As further evidence of an “actual conflict”, Mr. Jensen cites another instance in 2008 in which a representative of a for-profit applicant publicly complained at a Board meeting that a member of the GWG had a conflict of interest “from a business perspective.” As provided for by CIRM’s regulations, the applicant had filed an appeal, claiming that the reviewer had a conflict of interest because he had a financial relationship with another company that was not an applicant for CIRM funding. CIRM’s legal counsel reviewed the appeal and determined that there was no conflict of interest under CIRM’s policy.

Saira Ramasastry and Laurence Elias

Mr. Jensen cites two instances in which CIRM’s hired consultants in support of his claim that CIRM has “actual conflicts of interest.” In 2010, CIRM retained a partner at Life Sciences Advisory, LLC, Saira Ramasastry, to assist CIRM’s External Advisory Panel, which completed its work in December 2010. In 2012, Sangamo BioSciences, Inc., nominated Ms. Ramasastry to serve on its Board of Directors. Although Ms. Ramasastry continued to provide some consulting services to CIRM through fiscal year 2011-12, none of her work for CIRM involved Sangamo or any CIRM program in which it was involved. Ms. Ramasastry’s services on behalf of CIRM did not create any conflict of interest. The same is true of the second instance cited by Mr. Jensen. In 2010, CIRM hired Dr. Laurence Elias, a former Geron employee and an accomplished clinical development professional, to provide CIRM with technical and regulatory input to ensure that the clinical elements of an RFA were technically complete and accurate. The concept for RFA had already been approved and as such Dr. Elias was not in any position to influence the overall scope or structure, nor did he have any role in evaluating applications. CIRM staff and Dr. Elias complied with all conflict of interest requirements. Neither contract led to an “actual conflict of interest”.

Diane Winokur

Mr. Jensen’s laundry list of “conflicts” also includes a reference to the recent appointment of Diane Winokur to serve on CIRM’s Board. Mr. Jensen quotes a representative of the ALS Association who said that Ms. Winokur will be “a tremendous asset in moving the ALS research field forward through CIRM funding." Of all the insinuations made in his blog this is perhaps the cheapest shot, taking aim at a woman who has dedicated her life to fighting a deadly disease, one that claimed the lives of her two sons. Mr. Jensen knows very well that the ALS Association does not speak for Ms. Winokur or CIRM and while we expect that Ms. Winokur will bring her expertise as an advocate for people suffering from ALS to the Board, she, like all members of CIRM’s Board, represents all Californians, not just those suffering from a particular disease. Ms. Winokur’s appointment does not create a conflict of interest.

Press Releases

Finally, Mr. Jensen cites a Board debate from 2006 involving a requirement in CIRM’s intellectual property regulations regarding press releases. Under Health and Safety Code section 125290.30(g)(1)(C), the discussion of standards does not create a conflict of interest, and the Board’s debate was enriched by the participation of members who brought their expertise and experience to bear.

Mr. Jensen says that one of the reasons why the IOM did not report any instances of conflict of interest in its report is that it did not look for any conflicts of “inappropriate behavior,” But Mr. Jensen was present in the public hearing at UC Irvine in April of 2012 when the IOM panel asked Stuart Drown, Executive Director of the Little Hoover Commission that also looked into allegations of conflict of interest at CIRM, if he could cite any actual instances. Mr. Drown said he could not. Nor did Mr. Jensen offer any when it was his turn to talk.

The view from the California Stem Cell Report:

Generally speaking, CIRM's response about “actual” conflicts of interests is a reiteration of what the California Stem Cell Report carried at the time of each incident and does not add much new to the discussion of the issues. All of the agency's earlier responses could be found in the links in the “debunking” piece. Additionally the agency confuses what are clearly actual conflicts with other instances that could involve either actual or perceived conflicts, which the IOM noted can be as deadly as the real thing. However, in the most egregious cases involving Reed and later the five medical school deans, the agency would like the public to believe that these were not serious matters because the staff detected and caught the conflicts before the grants were made.

That is like saying a burglar who was caught in the act before he escaped with his booty committed no offense.

The acts were committed by members of the CIRM board, and they were violations of conflict of interest standards. In the case of the five deans, that is why the agency voided 10 applications totaling $31 million from their five institutions. If there had been no actual conflict of interest, that would not have been necessary.

As for blaming the staff for “miscommunications,” the applications that the five deans signed were quite clear and offered them the option of having another person at their institution sign the grant proposal. Other deans on the board did not sign applications in the same round. Those applications were then handled in the normal fashion. One might ask how in the world could the head of a medical school who was also serving on the CIRM board NOT recognize a conflict of interest when asked to sign a request for cash from the board on which he served?

Regarding John Reed and his conflict of interest violation, both he and then CIRM Chairman Robert Klein have acknowledged Reed's actions were wrong. Klein, an attorney who directed the writing of the 10,000-word measure that created CIRM, advised Reed to contact CIRM staff to lobby on behalf of a grant that was approved by the board but was about to be denied by staff.(See here, here and here.)

CIRM's response contends that Reed's 6 ½ page letter was nothing more than “factual” information dealing with technical matters. That is hardly the case. In fact, Reed explicitly “emphasized” (Reed's word) that failing to comply with his letter would damage the future of the stem cell agency. Denial of the grant, he said, “will surely discourage clinical researchers from participating in the CIRM mission to advance stem cell therapies.”   

Reed's action was inappropriate, and the California Fair Political Practices Commission warned Reed about his actions. The journal Nature reported,

“California’s Fair Political Practices Commission (FPCC) decided that Burnham Institute President violated conflict-of-interest rules by writing a letter to the California Institute of Regenerative Medicine appealing a decision that an affiliate of his institute was ineligible for funding.”

The California Stem Cell Report's “debunking” piece went beyond "actual" conflicts to describe other instances where conflicts emerged. Readers can go back to the original links for all the details, but the cases of StemCells, Inc., and iPierian, Inc., are worth reviewing again. Both cases involve fund-raising efforts that ran into millions of dollars for the ballot measure campaign that created CIRM. The campaign was run by Bob Klein who later became the agency's first chairman, serving for six years and becoming something of a hallowed figure in stem cell circles. One of the principal jobs of a campaign manager is to raise the millions needed to run a successful statewide election campaign in California. It is common for members of the public to believe that major campaign contributors are rewarded later for their contributions. Whether that was the case in these instances, the reader must decide for himself or herself. But the appearance is less than salubrious for an agency that claims to have never seen an actual conflict of interest as it has handed out $32,000 an hour, 24 hours a day, seven days a week during the last six years.

The facts are that about 90 percent of the $1.7 billion awarded by the CIRM board has gone to institutions tied to present and past members of its governing board. The agency, however, does work hard to be sure legal conflicts do not arise during board action on grant applications, using a voting procedure that is so convoluted that the actual vote on nearly all applications is not even announced at board meetings. Sometimes the procedure means that only a handful of governing board members can participate in debate or vote. In the case of the five medical school deans, as the board struggled to deal with the fallout in 2007, only eight of the 29 members of the board could participate in the discussion because the rest had conflicts.

As for CIRM's comments about “insinuations” and “cheap shots” by the California Stem Cell Report, we naturally differ with that characterization. The case in point involved what the chief scientist for a patient advocate group said she expected as the result of a recent appointment to the board. The scientist's remarks were offered as example of the type of expectation and entitlement that can arise when governing board members must be picked from specific constituencies, as is the case with all 29 CIRM board members.

And as for my testimony at the IOM hearing last April, here is a link to my statement, which includes a discussion of conflicts of interest.  

CIRM Board Member Prieto Critiques the IOM Stem Cell Report

Francisco Prieto, a member of the governing board of the $3 billion California stem cell agency, is expressing some additional dissatisfaction with the blue-ribbon Institute of Medicine (IOM) report for which the agency paid $700,000.

The report recommended sweeping changes at the agency, including creation of a new majority of independent members on the board. The IOM cited problems arising from the built-in conflicts of interest on the board that were created by Proposition 71, which created in the agency in 2004. Prieto's email refers to Bob Klein, who is a real estate investor and attorney. Klein oversaw the drafting of the 10,000-word ballot measure(writing much of it himself), ran its $35 million ballot campaign and became the first chairman of the agency. The qualifications for chairman were written into the proposition and seemed to uniquely apply to Klein.  Prieto is a Sacramento physician who was appointed to the board as patient advocate.

.Here is the text of Prieto's comments. His earlier comments can be found here.

“A few more words on independence, and the IOM.  I think Bob Klein drafted the proposition (and remember, all of this was spelled out there – readily available to the voters and whatever news sources they were depending on for information) deliberately to engage patient advocates. I think  he knew that those of us who have been active in disease advocacy have a passion around the issue of advancing research that someone without that background would be unlikely to have. I’m not sure exactly what the IOM had in mind when they called for more 'independent' members of the board, since they very unfortunately did not bother to interview the patient advocates on the ICOC(the governing board). I don’t know what their reason for this was, if there was one, but they only circulated a (in my view) frankly inadequate questionnaire, and interviewed a small handful of people. I think this was a major flaw in their process and gave them a very limited view of our role. It is hard for me to imagine who they might have in mind, if not people who had been involved with some existing advocacy organization. I think there are very few if any patient advocates who aren’t working with some group – the only ones I might imagine would be some independently wealthy person able to start a foundation or research institute on their own.  With all due respect to Bill Gates and the great work his foundation is doing with malaria and HIV, I have written before that I think it would be absolutely wrong and anti-democratic to create any public board or commission that only millionaires could sit on.”

An anonymous comment was also posted concerning the IOM report and conflicts of interest. It dealt briefly with the issue and difficulty of managing conflicts. The comment can be found at the end of this item.

Stem Cell Agency Board Member Defends Independence of Many on Board

A member of the governing board of the California stem cell agency is taking exception to a statement on the California Stem Cell Report that no independent members sit on that body.

Francisco Prieto, a Sacramento physician and a patient advocate member of the board, referred to the “ethical minefield” item Feb. 5, 2013. Here is the text of what Prieto wrote,

“I have to object to this line: 'None of the current members are independent. The ballot measure that created the agency required board members to be appointed from various constituencies.' 

“I think I am absolutely independent, and I think the same applies at the very least to most if not all of my fellow patient advocates, and probably to the biotech representatives as well – remember that they all must come from companies that are not involved in stem cell research.  Although I supported the proposition, I was not involved directly in the campaign in any way, and I did not meet Bob Klein (the first chairman of the stem cell board) or any of my fellow board members until the day I was sworn in at our first meeting.

“The Prop. 71 language I believe specifies that advocates must have a record of advocating for people with the disease or diseases they represent, and not that they belong to or work for any specific organization.  Checking my binder, it refers to 'groups' but does not specify those – for example, it refers to 'representative of a California regional, state or national HIV/AIDS disease advocacy group.' I’m not sure how you would define 'independent' but I certainly don’t think it means 'disinterested.'”

Our take: The Institute of Medicine(IOM) called for a new majority of what it described as independent members, obviously not finding sufficient, if any, independent members on the agency board. The IOM, the most prestigious organization of its kind in the country, said changes were needed because of damaging conflict of interest issues at the stem cell agency.

Prop. 71, which created the stem cell agency in 2004, was carefully crafted to avoid the use of the word “independent” when describing the necessary qualifications for a board member.

 Instead the measure required that, in some cases, they must come from very specific education institutions. (You can find the CIRM summary of all qualifications within this document.) In other cases, the speaker of the state Assembly appoints “one representative of a California regional, state, or national mental health disease advocacy group.” The leader of the state Senate appoints “one representative of a California regional, state, or national HIV/AIDS disease advocacy group. “ Four other statewide elected officials appoint an executive from a “California life science commercial entity.”

Prieto is correct when he says he believes he is “absolutely independent.” But he fills a category that represents a special constituency. What is missing from the board is anyone who does not come from one special constituency or another. The board was constructed in that manner to make sure it would win the broadest measure of support from all the various major constituencies by guaranteeing them a seat at the table where the money is handed out.  Ironically, the full formal name of the CIRM governing board is the "Independent Citizens Oversight Committee," a piece of political legerdemain to mask the actual nature of who would sit on the board. 

Riverside Newspaper: 'Ethical Minefield' Still Not Cleared at Stem Cell Agency

The California stem cell agency's attempts to deal with the conflict of interest problems at the $3 billion research program amount to a minor fix that is not a “serious solution,” the Riverside Press-Enterprise editorialized yesterday.

The editorial came as the agency launches a road trip campaign to convince newspaper editorial boards around the state that the agency is worthy of continued financial support. The agency will run out of money for new grants in less than four years.

The Riverside editorial pointed to the blue-ribbon Institute of Medicine report in December that called for creation of a new, independent majority on the 29-member board. None of the current members are independent. The ballot measure that created the agency required board members to be appointed from various constituencies.

The newspaper said,

“That arrangement is hardly a model of objective decision making. The agency so far has distributed about $1.7 billion in grants, with about 90 percent of that money going to institutions represented on the governing board. 

“Voluntary abstentions are not a serious solution to that ethical minefield. Nor would that approach eliminate potential conflicts, because the agency would still allow the abstaining members to take part in the discussions and debate about who should get the grants. 

“The Institute of Medicine instead recommended remaking the board with truly independent members who have no stake in grant awards. The stem-cell agency rejected that step because it would require changing Prop. 71, either through a super-majority in the Legislature or another ballot measure. That excuse should be a vivid warning to Californians about the dangers of passing complex, costly and inflexible initiatives. 

“Agencies handling billions of taxpayers’ dollars should not avoid good government practice or basic fiscal safeguards. The stem-cell institute offers minor fixes when it needs substantial changes — and legislators should not accept that cavalier approach.”

Debunking California Stem Cell Agency Claims of 'No Actual Conflicts'

In the wake of recent considerable criticism concerning conflicts of interest at the $3 billion California stem cell agency, its leaders have taken to saying “no actual conflicts” have been found at the agency.

That assertion is simply not true.

Nonetheless, the statement has been repeated in some news stories, published in at least one agency press release and peddled by stem cell advocates and some members of the governing board of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known.

The reason? Conflicts of interest were cited prominently as a major problem at CIRM by the blue-ribbon Institute of Medicine (IOM) report. In December, the IOM recommended that a new majority of independent members be created on the stem cell agency's governing board. The existing stem cell board has ignored that recommendation and wants to settle for something considerably less as it tries to find a way to build support for continued financing of its efforts.

The facts are that the agency has a long history of problems involving conflicts of interest, “actual” and otherwise. Here is a rundown on what has been reported on the California Stem Cell Report.

In 2009, board member John Reed, then CEO of the Sanford-Burnham Institute, was warned by the state's Fair Political Practices Commission about his violation of conflict of interest rules. Reed's intervention on behalf of a grant was made at the suggestion of then CIRM Chairman Robert Klein, an attorney who led the drafting of Proposition 71, the ballot initiative that created the stem cell agency in 2004.

In 2007, other violations involving five board members resulted in voiding applications from 10 researchers seeking $31 million. And then the agency shamefully scapegoated employees for the problem.

In 2011, the chairman of the CIRM grant review group resigned from his position as the result of another violation, which the agency felt necessary to report to the California legislature.

In 2009, then board member Ted Love, who has deep connections to the biomedical industry, served as the agency's interim chief scientific officer and helped to develop the agency's first, signature $225 million disease team round while also serving on the CIRM board. As chief scientific officer, Love presumably would have had access to proprietary information and trade secrets contained in grant applications. In 2009, in response to questions from the California Stem Cell Report, the agency said that Love would only serve as a part-time adviser to the agency president, not as chief scientific officer. Nonetheless, in 2012, the board passed a resolution with high praise for Love and his performance as the chief scientific officer.

Since 2010, a stem cell firm, iPierian,Inc., whose major investors contributed nearly $6 million to the ballot measure that created the stem cell agency, has received $7.1 million in awards from the agency. The contributions were 25 percent of the total in the campaign, which was headed by Klein.

Another firm, StemCells, Inc., last fall was awarded $40 million by the CIRM board despite having one of its $20 million applications rejected twice by grant reviewers. The action came after the board was vigorously lobbied by former Chairman Klein. Researcher Irv Weissman of Stanford, who founded StemCells, Inc., and is on its board, was featured in a TV campaign ad for Proposition 71 and helped to raise millions for the ballot campaign. 

In 2008, public complaints by one applicant from industry about conflicts of interest on the part of a reviewer were brushed off by Klein. He told the applicant the board needed to discuss naming CIRM-funded labs and then go to lunch. 

The agency has hired at least two industry consultants in positions that raise conflict of interest problems, in 2010 and again in 2012.

Sometimes groups expect to see increased funding as the result of the appointment of sympathetic individuals to the board. That occurred last fall when Diane Winokur was appointed. The chief scientist for The ALS Association, said Winokur will be “a tremendous asset in moving the ALS research field forward through CIRM funding."

The conflict issue even surfaces in picayune ways. In 2006, board members from various institutions spent considerable time debating a minor requirement involving press releases. They were concerned that the proposal would make their institutions subordinate to the interests of CIRM. At the end of the discussion, the institutional directors prevailed and kept their PR departments from having to notify CIRM about press releases dealing with the hundreds of millions of dollars in state grants that they receive.

All this, and yet on Jan. 24, 2013, CIRM Chairman Jonathan Thomas was quoted in a CIRM press release as saying “no one has found any actual conflicts” at the agency.

In the media, some of the recent news stories have reported that the IOM did not find any “actual” conflicts at the agency. The explanation for that is simple, but mainly omitted from the articles. The IOM did not look for any conflicts of “inappropriate behavior,” as its report clearly states. The California Stem Cell Report last weekend asked the chairman of the IOM panel, Harold Shapiro, why it did not look for conflicts. He replied,

“Our committee was given a set of defined tasks from the IOM(which was under a $700,000 contract with CIRM), and we followed them."

Nonetheless, the IOM report said “far too many” board members are linked to institutions that receive funds from CIRM. A compilation by the California Stem Cell Report shows that about 90 percent of the $1.7 billion that the board has awarded has gone to institutions linked to past and present board members.

The fundamental conflict problem with the CIRM board is that nearly all the California institutions that stood to benefit from the agency's largess were given seats at the table where the money is handed out, under the terms of Proposition 71.

Conflict problems are not unique to CIRM and government agencies. They are also a matter of concern at nonprofit, grant-making foundations, which in some ways CIRM resembles.

The Council on Foundations, a national nonprofit association of more than 1,700 grant-making organizations, takes pains on its web site to explain the importance of managing and avoiding conflicts of interests. In its advice to its members, the group makes it clear that the issue goes well beyond simple financial conflicts. It says,

“(Board) members must represent unconflicted loyalty to the interest of the foundation. This accountability supersedes any conflicting loyalty such as that to advocacy or interest groups, business interests, personal interests or paid or volunteer service to other organizations.”

In the case of the stem cell agency, the “unconflicted loyalty” is to the people of California. Perhaps the California stem cell agency can convince state leaders, both public and private, and its voters that no conflicts exist at the state agency. But it is a big bet and probably carries with it the entire future of what the board and many believe is an exceedingly promising scientific effort.

Perhaps it would be wise for the board to step back and say, “Yes, there are serious conflict problems at CIRM. We recognize that and are working on additional measures to create an independent board as recommended by the IOM.”

Sacramento Bee: Stem Cell Agency Falling Short on IOM Recommendations

It's exceedingly rare when the California stem cell agency makes the front page of any newspaper.

So it is worthy of note that The Sacramento Bee this morning carried a lengthy piece on its page one about the agency and its response to the blue-ribbon Institute of Medicine (IOM) report.

The headline said,

 “Analyst: Stem cell agency reforms fall short.”

The analyst is the Institute of Medicine, more specifically Harold Shapiro, chairman of the panel that studied California's $3 billion research effort for 17 months at a cost of $700,000 to the agency.

Bee reporter Cynthia Craft wrote that Shapiro said the stem cell agency is “falling short” in its response to the IOM recommendation.

Craft wrote,

"'There certainly is a gap between what we recommended and what they responded with,' said Shapiro, president emeritus at Princeton University. ' I wish they had moved closer to our recommendations.'"

Craft said the IOM made sweeping recommendations “emphasizing the need for new blood on a governing board that has been plagued by the appearance of conflicts of interest, cronyism and sluggishness in getting stem-cell products to market.”

Craft also interviewed Jonathan Thomas, chairman of the stem cell agency, who said some of the IOM recommendations would take legislative action. But Thomas said that was “out of the question.”

Craft wrote,

“The process would take years, he said. The first opportunity to get on the ballot, for instance, would be in the fall of 2014.”

The agency will run out of cash for new grants in less than four years.

Craft's story was the first major news article in years about the agency in the Bee, the only daily newspaper in the state's capital. She reviewed a bit of the history of the agency and concerns about conflicts of interest. She concluded,

“Shapiro said he stands firmly behind his committee's report. 

"'I think our recommendations sit together and interrelate to each other well – and should have been moved along as quickly as possible,' Shapiro said. 

"'It might have been helpful if they indicated to us what they were willing to do and what they weren't,' he said."

Hyping the Economic Impact of the California Stem Cell Agency

The $3 billion California stem cell agency today served up a warmed-over version of a study that would have the public believe that the research program has had a major economic impact on the state.

The latest study was prepared last August by a firm that was hired under an RFP in 2010 that said it must execute "a vibrant and aggressive strategy to support the goals and initiatives of CIRM.” 

The agency paid $300,000 for the original study but contends the report is “independent” of CIRM.

According to the CIRM press release today, the latest version of the study by Jose Alberro of the Berkeley Research Group claims creation of 38,000 “job years” and $286 million in “new tax revenue” from the award of $1.5 billion. Those awards actually cost something in the neighborhood of $3 billion, given that state taxpayers must pay interest the borrowed funds that finance the agency. 

The Institute of Medicine's recent blue-ribbon report on the stem cell agency carried remarkably different information than the economic figures reported today. The institute's study was also financed by CIRM but at a cost of $700,000. The report said,

“In the short term, CIRM’s expenditures are supporting approximately 3,400 jobs and their innovative efforts have also attracted substantial additional private and institutional resources to this research arena in California CIRM’s long-term impact on such critical aspects of the California economy as state tax revenues and health care costs beyond the shorter-term and temporary impact of its direct expenditures cannot be reliably estimated at this point in CIRM’s history."

Here is what the California Stem Cell Report wrote in 2011 when the first study was released:

“No doubt exists that the stem cell spending has had a beneficial economic impact. But whether it has had a 'significant' impact on the California economy is in the eye of the beholder. The state's economy runs to something like $1.7 trillion a year. If California were a nation, it would rank among one of the larger economies in the world. The workforce totals around 18 million, making 25,000 jobs statistically less than a hiccup. Keep in mind as well that CIRM, until 2009,  paid the interest on its borrowing with more borrowed funds, all of which adds to the total cost of the borrowing, which is about $3 billion on top of the $3 billion CIRM is handing out.”

By ballyhooing economic impact reports the stem cell agency would seem to be inviting assessment of its efforts as an industrial development enterprise, which involve criteria significantly different than that of a research enterprise. A few years ago, we asked the agency's then Chairman Robert Klein whether he wanted to have CIRM assessed as industrial development effort. His quick response was a very emphatic no. Klein nonetheless frequently touted the figures produced under the contract with the agency.

The latest figures are undoubtedly likely to be cited as the agency begins a road trip around the state to meet with newspaper editorial boards to trumpet CIRM's reponse to the Institute of Medicine study.

See below for a full copy of the report. We have asked CIRM for a copy of the contract with the group that prepared it. We will carry it when we receive it.

CIRM Economic Impact Report 2012 by

   

Los Angeles Times Columnist: Stem Cell Agency Still Saddled with Conflict of Interest Problems

The governing board of the $3 billion California stem cell agency will remain dominated by “special interests” even with the adoption of a plan last week responding to the far-reaching recommendations of a blue-ribbon Institute of Medicine (IOM) study, a columnist for the Los Angeles Times said today.

Michael Hiltzik, Pulitzer Prize winning writer and author, wrote that IOM study showed the agency “the path to cleansing itself of its aura of connivance and influence trading. That the board can't even bring itself to place the proposals before the voters or their elected representatives only shows how much money it's willing to waste to keep living in its own little world.”

Hiltzik's column in California'slargest circulation newspaper included fresh comments from both Harold Shapiro, who chaired 17-month IOM study, which was commissioned by CIRM, and Jonathan Thomas, the chairman of CIRM and who drew up the response.

Hiltzik wrote that the study “concluded that the CIRM board members were saddled with 'almost unavoidable conflicts of interest, whether actual or perceived.'” He continued,

“That's because by law, 23 of the 29 members must be representatives of California institutions eligible for CIRM grants or of disease advocacy groups with their own interest in steering money toward their particular concerns. 

“As a remedy, the panel proposed eliminating some board slots reserved for grant-receiving institutions by Proposition 71, the 2004 initiative that created the agency. The idea was to fill those slots with truly independent members free of any stake in CIRM funding, even indirectly.”

 Hiltzik wrote,

 "Thomas told me his proposal dealt with even perceived conflicts of interest on the board in such "definitive fashion" that it won't be necessary to bother the Legislature, much less the voters, with such big changes as remaking the board with a majority of independent members. He pointed out, not without some pride, that one board member called his proposed changes 'draconian.'"

Hiltzik had some praise for Thomas.

“Let's stipulate that Thomas has, in CIRM terms, moved a mountain by jostling the board even this far. Since its inception, the board has set records for arrogance. That's a direct legacy from Proposition 71, which exempted the stem cell program, uniquely among California government bodies, from any practical oversight by the Legislature or elected officials.”

The Times columnist continued,

“Shapiro told me from his Princeton office that Thomas' proposals were 'a significant step in the right direction, which at least indicates that they haven't ignored the report.' But he doesn't share Thomas' view that voluntary recusals solve the conflict of interest problem. That can be done, Shapiro said, only by replacing stake-holding board members with independents.

"'The more you can reduce the inherent conflicts, the better off everyone is going to be,' he said. The board will 'have to go further over time, in my view.'"

Hiltzik wrote,

“The Shapiro panel said it didn't find any instances of inappropriate behavior by board members or specific conflicts, but there are two reasons for that: It didn't search for any, and Proposition 71 defined certain conflicts out of existence. The measure states that it's no conflict for a board member to also be an officer of an academic institution or private corporation that might be applying for grants.

“One of the CIRM board's enduring self-delusions is that its conflicts of interest are purely a matter of 'perception.' But there have been documented instances of favoritism shown to well-connected grant or loan applicants, and at least one overt attempt by a board member to overturn a rejection of his institution's project. So much of the board's discussion takes place behind closed doors or informally that the opportunities for mutual back scratching are incalculable.

“Thomas' 'draconian' proposals won't change this state of affairs. Special interests will still dominate the board. Will barring 13 members from voting on grants while giving them full rein to participate in discussions really eradicate even the perception of conflicts? You'd have to be terminally naive to think so.”

Stem Cell Agency Plan Falls Far Short of Solving IOM Concerns

The governing board of the $3 billion California stem cell agency last week fell far short of complying with the recommendations of a blue-ribbon Institute of Medicine (IOM) study that the agency itself commissioned to improve its performance.

Many of the proposals by the IOM dealt with conflicts of interest at the eight-year-old agency, which board members reluctantly recognized on Wednesday as a perception problem. Under the plan approved last week, 13 of the 29 members of the board would not be allowed to vote on any awards. They are members tied to institutions that benefit from funding. Three other board members linked to those beneficiary institutions, however, would still be allowed to vote on grants other than those to their institutions. .

The board did nothing to deal with the structural issues involving conflicts of interest that are built into the board as the result of Prop. 71, the ballot measure that created the research effort in 2004. The 29-member board was constituted in such a way as to give nearly all institutions that could benefit a seat at the table where the money is handed out. It is as if the state's Public Utility Commission, which sets utility rates, were dominated by executives of the utility companies.

Under longstanding rules, individual members of the stem cell board are barred from voting on grants to their institutions. However, the board still determines the game and the rules. The board approves the specific areas of research for funding, approves plans for individual RFAS, sets the rules for the grants and loans and enforces compliance through CIRM staff.

The board last week limited itself to changes that it could enact on its own. Many of the IOM recommendations, including a new majority of independent members, would require legislative action, which opens the agency to a wider range of changes than even the IOM recommended. That is not a prospect the agency relishes. Nonetheless, how well the board complies with the IOM recommendations is likely to be critical to its plans to raise funds to continue its operations beyond 2017, when the taxpayer cash runs out for new grants.

Here is a look at the key IOM recommendations and the response so far from the stem cell agency(see here and here). More details may emerge between now the next CIRM board meeting in the San Francisco Bay Area March 19, when the board is schedule to finalize its IOM plan. 

IOM Recommendation

“Change the Composition and Structure of the Board and Working Groups.

“CIRM should put systems in place to restructure the board to have a majority of independent members, without increasing the size of the board. It should include representatives of the diverse constituencies with interests in stem cell research, but no institution or organization should be guaranteed a seat on the board. Consideration should be given to adding members from the business community....The chair and other ICOC members should be prohibited from serving on the working groups. During the reconstitution of the working groups, the current level of representation of disease advocates should be maintained, such board members being replaced with other disease advocates who are not board members.”

CIRM Response

The Thomas plan basically is a total rejection of this recommendation. The CIRM board does not support creation of a new majority of independent members, which would mean some current members would lose their seats if the board were not increased beyond 29 members. No members will be added from industry. Board members will continue to serve on the grant review panel and other groups, contrary to IOM recommendations. In the case of grant reviews, however, they would no longer vote in the closed door sessions. The board has no plans to add patient advocates who are not board members to working groups, including the grant review panel. The University of California will continue to have five guaranteed seats on the board. No independent members currently sit on the board.

IOM Recommendation

“Revise Conflict of Interest Definitions and Policies.

“CIRM should revise its definitions of conflict of interest to recognize conflicts arising from nonfinancial interests, such as the potential for conflict arising from an individual’s interest in a specific disease, and should reassess its policies for managing conflict of interest in light of this broader definition.”

CIRM Response

CIRM has no plans to move to prevent nonfinancial conflicts of interest. Several board members expressed strong opposition to such an effort. Sixteen persons who sit on the board have ties to institutions that receive CIRM funds. Currently individual board members cannot vote on applications from their institutions. To avoid the appearance of conflicts of interest, the Thomas plan would have the 13 members directly appointed from beneficiary institutions voluntarily abstain from voting on any grant applications. Apparently not affected under the Thomas plan would be three other board members who are appointed as patient advocates. Two of them are employed by beneficiary institutions. The third is chairwoman of the UC Board of Regents. All of the board members would continue to vote on plans for all rounds of grants, including determination of some of the specifics of the ensuing RFAs.

IOM Recommendation

“Restructure the Grant Review and Funding Process.

“CIRM should restructure the grant review and funding process to separate oversight and strategic planning from day-to-day operations. The ICOC (the agency's governing board) should remain responsible for oversight and articulation of an overall strategic plan. However, grant management, funding recommendations, and grant administration should be the responsibility of the CIRM scientific staff, reporting to the president. This restructuring would help mitigate concerns related to conflicts of interest and would also put the review and funding process in the hands of those best equipped to make those decisions.”

CIRM Response

CIRM patient advocate board members who serve on the grant review group would not vote on applications during the grant review sessions. They would be limited to voting at public board meetings. They would lead discussion of non-scientific considerations for approval of applications during the public sessions. Currently that occurs during the closed door review.

IOM Recommendation

Abolish the “extraordinary petition” mechanism for public appeals of negative grant reviews.

CIRM Response

Move all appeals to staff level and behind closed doors. Currently extraordinary petitions are handled in public board meetings, sometimes leading to lengthy, emotional sessions with presentations by patient advocates. The public in general, including grant applicants, continues to have the right under state law to address the board on grant applications or any other matter they wish.

IOM Recommendation

“Separate Operations from Oversight.

“The board should focus on strategic planning, oversee financial performance and legal compliance, assess the performance of the president and the board, and develop a plan for transitioning CIRM to sustainability. The board should oversee senior management but should not be involved in day-to-day

management. The chair and the board should delegate day-to-day management responsibilities to the president. Each of the three working groups should report to management rather than to the ICOC.”

CIRM Response

The Thomas plan does not appear to differ significantly from current operations, which reflect the troubling dual executive arrangement involving the chairman and president that was created by Prop. 71, the ballot measure that created CIRM. The existing arrangement is also a hangover from the days of the agency's first chairman, Robert Klein, and has been an obstacle in previous recruitment efforts for a president of the agency. The Thomas plan does eliminate a dual reporting arrangement for the chief financial officer, a position that has been vacant since last summer. Thomas indicated last fall that the position would not be filled. Both the chairman of the IOM study panel and the California state controller's office both say more needs to be done to separate operations from oversight.

IOM Recommendation

“Enhance Industry Representation in Key Aspects of CIRM Organization.

“Industry representation on the ICOC, the Scientific Advisory Board, the Standards Working Group, and the Grants Working Group should be enhanced to leverage industry’s expertise and resources in product development, manufacturing, and regulatory approval in support of the ultimate goal of bringing therapies to patients.”

CIRM Response

The Thomas plan would increase industry involvement “where appropriate.” However, industry has complained for years about this problem, and some board members as well. But little has been done to deal with the problem. Recently, the agency has taken some steps to engage industry, but the IOM was aware of those when it made its recommendation for closer cooperation.

IOM Recommendation

“Establish a Scientific Advisory Board.

“CIRM should establish a single Scientific Advisory Board comprising individuals with expertise in the scientific, clinical, ethical, industry, and regulatory aspects of stem cell biology and cell-based therapies.” Members of this board would be from out of state and replace existing advisory boards. They would be appointed by and report to president.

CIRM Response

CIRM says the structure and membership of the a new board is under discussion, but generally indicated it would go along this proposal. Not specifically addressed was abolition of other advisory groups.

Develop a “sustainability” platform in consultation with current and future partners, including sources of funding.

IOM Recommendation

Develop a “sustainability” platform in consultation with current and future partners, including sources of funding.

CIRM Response

Chairman Jonathan Thomas said he is working on details of a plan.

IOM Recommendations

“Incorporate Future Enforcement of Intellectual Property Policies in the Sustainability Platform.

“As part of the plan maximizing the continued impact of CIRM’s many achievements..., CIRM should propose regulations that specify who will have the power and authority to assert and enforce in the future rights retained by the state in CIRM-funded intellectual property.”

“Consider Harmonizing Intellectual Property Policies with Policies of Bayh-Dole Act.

“As other sources of funding for stem cell research become available and as the field of regenerative medicine advances from the laboratory to the clinic, the ICOC should reconsider whether its goal of developing cures would be better served by harmonizing CIRM’s IP policies wherever possible with the more familiar policies of the Bayh-Dole Act.”

CIRM Response

The governing board's IP Subcommittee will review the policies and make recommendations.

CIRM's Thomas: Conflicts 'Put to Bed' at Stem Cell Agency

The chairman of the $3 billion California stem cell agency, Jonathan Thomas, today hailed board action last week as putting “to bed once and for all” questions about financial conflicts of interest by members of the agency's governing board.

Writing on the agency's blog, Thomas pointed to board approval of a new policy that would bar 13 of the 29 members of the governing board from voting on any grants whatsoever. The 13 are the members who are “appointed from an institution that is eligible to receive money.” Three other board members have ties to institutions that receive money. Two are employees of the institutions and one is the chair of the University of California board of regents, Sherry Lansing. All three are appointed as patient advocate members of the board. Currently all 16 are barred individually from voting on grants to their institutions, but they can vote for awards to other institutions.

Thomas proposed the plan last week to the governing board, which approved it on a 23-0 vote with one abstention. Thomas advanced the proposal in response to the recommendations of a 17-month study by the Institute of Medicine(IOM). CIRM paid $700,000 for the blue-ribbon report, hoping that it would serve as the basis for continued financing of the agency beyond 2017, when funds for new grants run out.

The IOM's far-reaching recommendations included creation of a majority of independent members on the board, which would mean some current members of the board would lose their seats. No institutions would be guaranteed seats on the board. Currently five members are appointed from the University of California. The Thomas plan does not deal with those recommendations.

The IOM said “far too many” members of the board have ties to institutions that receive funds from CIRM. Compilations by the California Stem Cell Report show that about 90 percent of the $1.7 billion that the board has awarded has gone to institutions linked to directors.

Thomas said that the board last week “endorsed a framework of proposals that would dramatically change the way the board works, and directly addresses the concerns and recommendations of the IOM, in particular their feeling that the way our Board works could create a perception of conflict of interest.”

Concerning the change in voting for the 13 board members, Thomas wrote,

“It was not an easy change to propose and certainly not an easy one for our board members to approve. They all care deeply about our mission and devote a great deal of thought, time and energy to helping us do our work. So for 13 of them to agree to abstain from a key aspect of their work was difficult to say the least. And yet they did it because they felt it was important for the overall goal of the agency.”

Thomas continued,

“So why did we take this approach? It's simple. We want people to focus on the great work we do, on the groundbreaking research we fund, and the impact we are having on the field of regenerative medicine not just in California but throughout the U.S. and around the world. As long as there are perceptions of conflict of interest hanging over the Board, this will continue to be difficult.”

Thomas said,

“This puts the economic conflicts issue to bed once and for all.”

Loring on Patient Advocates and Their Role at the California Stem Cell Agency

The following statement by stem cell researcher Jeanne Loring was read at the January 23, 2013, meeting of the governing board of the California stem cell agency. Loring is director of the Center for Regenerative Medicine at the Scripps Research Institute in La Jolla, CA.

“I am sorry that I cannot attend this important meeting of the ICOC. I'm in Toronto reviewing stem cell grants for Japan and Canada. I've asked (patient advocate) Don Reed to read my statement.

“I am a California stem cell scientist whose research is funded by the NIH, private foundations, and CIRM. I am the director of one of CIRM's shared laboratories, which has provided formal training in research and ethics to hundreds of young stem cell scientists. My CIRM funding supports the stem cell genomics research that is the main focus of the lab. We have also been funded by CIRM to investigate stem cell therapies for Alzheimer disease and multiple sclerosis. I have leveraged CIRM grant support to obtain funding for studies of autism through the NIH, and for Parkinson's disease from a private foundation.

“The IOM report recommended a number of changes in CIRM's policies. One of these recommendations is of especially great concern to me: the suggestion that patient advocates should have much less influence in CIRM's decisions about what research should be funded.

“Patient advocates are extremely valuable to us researchers. Most of us stem cell researchers had never met a patient advocate- and perhaps not even a patient- before CIRM was founded. In my 20 years of being funded by the NIH, the funding agency never once suggested that I should talk to people who have the disease, or have relatives with a disease that I was receiving funding to study.

“With my first CIRM grant, I started meeting patient advocates, and now I can't imagine pursuing a disease-related research project without them. I've learned a great deal from the advocates on the ICOC, and I greatly enjoy talking with them. They are wonderful sources of knowledge: Jeff Sheehy taught me about HIV/AIDS and patient activism, I learned about Parkinson's disease from Joan Samuelson, autism from John Shestack, and David Serrano-Sewell, Diane Winoker have educated me about MS and ALS.

“Professional research scientists are competitive by nature- a conversation between scientists is often constrained by our secrecy- we need to publish, or perish. But advocates have no such constraints, which makes ICOC meetings more enjoyable and informative than many scientific meetings.

“Patient advocacy has made me a better scientist. Advocacy makes CIRM-funded research breathtakingly relevant and uniquely powerful to change the course of medicine.”

Patient Advocate Reed Defends Patient Advocates on Stem Cell Board

Patient advocate Don Reed, declaring that the Institute of Medicine's (IOM) 17-month study of the $3 billion California stem cell agency is "grossly misguided," this weekend nonetheless said the agency took "the high road" in its response to the study's recommendation.

Reed, of Fremont, Ca., was particularly incensed about the IOM's recommendations concerning patient advocates on the board. The IOM said that none of the board members, including patient advocates, should vote on grant applications secretly in grant review groups. The IOM said their votes should be recorded in public at full board meetings. Other patient advocates would still have seats on the grant review group, under the IOM recommendations. But they would not also be members of the governing board.

The IOM also said that CIRM should also revise its conflict of interest standards to regulate personal conflicts of interest, such as those involving particular diseases and patient advocates. Some members of the CIRM governing board bristled at the recommendation, and the board did not act on it last week.

Last Wednesday, the CIRM board acted to permit board members who are patient advocates to continue to participate in the closed door grant review sessions, but not vote on the grants at that stage. Previously patient advocates had two cuts at applications, one in the grant review group and one at the public board meeting.

Writing on the Daily Kos blog, Reed also said that no real conflicts of interest currently exist on the board, although 90 percent of the $1.7 billion that has awarded has gone to institutions tied to board members.

IOM's Shapiro Wants to See More Changes from California Stem Cell Agency

Additional mainstream media news coverage surfaced last Friday involving the California stem cell agency's response to the blue-ribbon report from the Institute of Medicine(IOM), whose concerns about the agency ranged from conflicts of interest to grant appeals by rejected researchers.

One of the more interesting pieces was done by Stephanie O'Neill of Los Angeles radio station KPCC. To her credit, she contacted the chairman of the IOM panel, Harold Shapiro, for his fresh take on what the stem cell agency's board did on Wednesday.

His comments were somewhat different than those read Wednesday at the CIRM board meeting. On Friday, Shapiro was quoted as saying the board action was “an important first step forward,” but he added a caveat. O'Neill wrote,

“'I’m encouraged by this,' Shapiro told KPCC. 'Presumably in the future they’ll take other steps. But these are steps they could take without any legislative approval and …I think it does respond in a pretty significant way to the spirit of the report.'
“But Shapiro expressed concern that the agency is making only 'small moves' to address a recommendation that CIRM separate operations from oversight. Currently, the ICOC functions 'both as an executor and as an overseer—competing duties that compromise the ICOC’s critical role of providing independent oversight and strategic direction,' according to the December IOM report.
“'But  I do understand… that would be a move that they would have to take over time so we’ll have to wait and see,' Shapiro said.
“Thomas agreed and said that while CIRMs recommendations more clearly define the roles of chairman and president, more refinements will be likely over time.”

From the Los Angeles Times, came a piece from Eryn Brown. Her article was brief and she referred her readers to the California Stem Cell Report for details. Her first paragraph said,

“Changes may be on the way at California’s stem cell funding agency.”

In coverage outside the mainstream media, the Burrill Report carried an article by Daniel Levine. The Burrill Report is produced by Burrill & Co., a San Francisco life sciences financial firm. Levine's straight-forward account was largely based on the CIRM press release and the IOM report.

Two bloggers surfaced with some coverage. UC Davis stem cell researcher Paul Knoepfler, who is a CIRM grantee, called the Thomas plan a “bold one-year experiment” and “biggest development for CIRM in many years.” Knoepfler said,

“I’m still not sure I’m a fan of all of the proposed changes, but I would say the plan is bold and creative.”

On livingbiology.com, an unidentified CIRM grantee carried a few brief items live from the meeting.

Stem Cell Agency Adds Fresh Details to IOM Response

The California stem cell agency today issued a press release touting “dramatic changes” at the agency in response to critical recommendations by the Institute of Medicine.

The press release contained a few more details about the changes than were released in the Power Point presentation yesterday. Here is the text of those details.

• “The 13 Board members appointed from institutions eligible for funding from the stem cell agency, such as those in the University of California system, would no longer vote on any grants brought before the Board but would instead abstain
• “All members of the Board would be able to participate in discussions on applications but only patient advocates and independent members of the Board would be able to vote on funding issues (members would continue to refrain from any discussion of specific applications from their institutions)
• “Patient Advocates would continue to be members of the Grants Working Groups but would not vote on individual applications
• “Programmatic review, aimed at balancing the agency’s portfolio, would take place at public Board meetings where members have a chance to make changes to recommendations from the Grants Working Group
• “Industry involvement would increase, where appropriate, on the Grants Working Group, and also feature in a newly constituted Scientific Advisory Board; the structure and membership of this group is still under discussion
• “Appeals on applications not recommended for funding will be handled by science staff who will evaluate them, determine if they merit further review by the Grants Working Group, and ultimately make recommendations to the Board. Staff will also be allowed to advocate for additional grants not recommended for funding by the Grants Working Group that they believe should be considered in programmatic review
• “The Chair and President would share a division of responsibilities with the President supervising all scientific operations and internal operational responsibilities. In addition the Chief Financial Officer would report to the President. The Chair would handle the ‘external affairs’ aspect of the agency, things such as financial sustainability to raise additional funds, state legislative relations, bond financing, public communications etc.
• “IOM recommendation on the creation of a Scientific Advisory Board to provide counsel on such issues as funding priorities and portfolio strategy will be implemented by staff
• “IOM recommendations on Intellectual Property will be referred to the agency’s IP subcommittee which will review and report back to the full board with options and recommendations
• “IOM recommendations on Sustainability: Chair, working with the President, will develop a plan to address this and present to the Board when ready

California Stem Cell Agency to Pitch Newspaper Editorial Boards

The California stem cell agency is planning an editorial road show with major California newspapers to explain its new plan to deal with the recommendations of the Institute of Medicine(IOM) for major changes at the agency.

In what might be called the kickoff to the campaign, the agency this afternoon issued a press release hailing the plan as making “dramatic changes.”

The agency could have a tough audience. The newspapers editorializing on the subject were unanimously in favor of the IOM recommendations. One said the agency needs to clean up its act. They warned of a loss of public trust along with losing the possibility of continued financial support. (For a sample, see here and here.)

CIRM Chairman J.T. Thomas said during today's meeting that a public relations foray was in the works following board action on his proposals yesterday. He said,

“The opportunity is ripe.”

His comments came after CIRM Director Jeff Sheehy, a UCSF communications manager, urged engaging the editorial boards.

Thomas' plan meets only a portion of the IOM recommendations and sidestepped a call for creating a new majority on the board of independent members. The IOM said “far too many” board members – at least 13 – are tied to institutions that receive money from CIRM. Thomas' plan would have the 13 voluntarily restrain from voting on any grants for any institution.

A compilation by the California Stem Cell Report shows that roughly 90 percent of the $1.7 billion awarded by directors has gone to institutions with links to the directors.  

Nature on the IOM and the California Stem Cell Agency

The journal Nature today said on its web site that the California stem cell agency plans to make a “few changes” in response to a critical report from the Institute of Medicine(IOM).

A short piece by Monya Baker on the agency's response yesterday summarized some of the IOM recommendations and the CIRM response. Baker wrote,

She said,

"Other IOM recommendations were only indirectly addressed by (CIRM Chairman J.T.) Thomas’ plan. The IOM report had stated that the board should restrict itself to an 'oversight' role rather than an 'operational' role. Thomas’s recommendations instead described ways to avoid overlapping duties. His own role as chair is to handle 'external affairs' whereas CIRM’s president will be to handle scientific and internal affairs."

Baker also carried the favorable comments from John M. Simpson of Consumer Watchdog.   

California Stem Cell Agency Overhauling Its Web Site

The governing board of the California stem cell agency adjourned its meeting today at 11:43 A.M. PST following a brief preview of its new web site. The changes are expected to be available online as early as tomorrow. Amy Adams, the agency's communications manager, said the changes are aimed at making the site more accessible and useful to all those interested in stem cell science.

Heart Disease Presentation at Stem Cell Board Meeting

The governing board of the California stem cell agency is hearing a presentation on pediatric heart disease by Deepak Srivastava of the Gladstone Institutes. The formal meeting is scheduled to resume following the presentation. However, there does not appear to be any major business remaining on the agenda.  Nonetheless, the California Stem Cell Report will continue to monitor the meeting for any developments worthy of note. 

Correction

Based on information provided by the California stem cell agency, two items on the California Stem Cell Report today and yesterday carried an incorrect tally, 21-0, on the vote on the plan to deal with recommendations of the Institute of Medicine. The correct figure is 23-0.

More Researchers Eligible for $100 Million Stem Cell Round

Directors of the California stem cell agency today expanded eligibility for the $100 million disease team round to include some earlier recipients in its early translational rounds.

Ellen Feigal, vice president for research and development, said some of those grantees are likely to be ready for more funding as they move closer to clinical trials. She said if they cannot apply in this round, they may have to wait for another year.

Directors agreed that it was important to avoid gaps in funding on successful programs. The RFA could be posted very soon.

Changes in $100 Million Disease Team Round

The disease team three item on the CIRM board's agenda is an alteration of  the original proposal approved in October. The round could total $100 million with awards of up to $20 million each. The agency has not yet posted information on exactly what is to be considered.

Stem Cell Board Begins Meeting

The governing board of the California stem cell agency just began what is expected to be a brief meeting. On the agenda is a proposal for a third disease team round. The agency has already committed $436 million for disease team efforts, which are aimed at translating research into cures.

CIRM Director Pomeroy to Head Lasker Foundation

Claire Pomeroy, one of the original members of the governing board of the California stem cell agency, announced yesterday she has been selected as president of the Lasker Foundation for medical research and will be leaving the board.

In November, Pomeroy said she was resigning from her post as vice chancellor and dean of the medical school at UC Davis to pursue other interests.

Pomeory will assume her new position this spring. Here are links to the Lasker press release and a story in The Sacramento Bee.

Another Big Disease Team Round at California Stem Cell Agency

The California Stem Cell Report will provide live coverage of today's meeting of the governing board of the California stem cell agency. The board is expected to approve another round of its signature disease team grants. So far the agency has approved $436 million, 38 percent of its total funding, for two disease team rounds. The agency has not disclosed on the board agenda any information about the latest round, which could exceed $100 million. Previous disease team rounds have seen awards as high as $20 million each.

Roll Call Vote on the Thomas Plan Dealing with IOM Recommendations

Here is the roll call vote yesterday on the plan to deal with the findings of the Institute of Medicine concerning the California stem cell agency. The vote was 23-0 with one abstention. The board has 29 seats. Not all board members were in attendance, and it is not entirely clear whether all the board members in attendance voted. Among other things, the plan calls for members with links to institutions that could benefit from CIRM awards to voluntarily refrain from voting on any applications for funding – not just those to their institutions. The roll call was provided by a spokesman for the agency.

Yes votes

David Brenner, dean of the UC San Diego medical school.

Anne Marie Duliege , vice president of Affymax

Michael Freidman, CEO City of Hope

Michael Goldberg, executive chairman of Nodality, Inc., and DNAnexus, appointed as executive officer of a commercial life science entity

Sam Hawgood, dean of the UC San Francisco medical school

Steve Juelsgaard, former executive vice president of Genentech, appointed as executive officer of a commercial life science entity

Sherry Lansing, chairwoman of the UC board of regents, appointed as patient advocate

Jacob Levin, assistant vice chancellor, research, UC Irvine, and alternate for Sue Bryant, interim provost at UC Irvine

Bert Lubin, CEO of Childrens Hospital, Oakland

Robert Price, associate vice chancellor for research, political science professor, alternate for the UC Berkeley chancellor

Francisco Prieto, Sacramento physician and patient advocate member of the board

Robert Quint, San Jose physician and patient advocate member

Duane Roth, San Diego businessman, appointed as executive officer of a commercial life science entity

Joan Samuelson, patient advocate member

Jeff Sheehy, patient advocate member

Jon Shestack, patient advocate member

Os Steward, patient advocate member and head of the Reeve-Irvine Research Center at UC Irvine

Jonathan Thomas, chairman of the board and Los Angeles bond financier

Art Torres, patient advocate member

Kristiina Vuori, interim CEO of Sanford Burnham Research Institute

Diane Winokur, patient advocate member
Claire Pomeroy, dean of the UC Davis medical school
Shlomo Melmed, senior vice president for academic affairs, Cedars Sinai

Abstaining

Michael Marletta, CEO of Scripps Research

(Editor's note: Based on information provided by CIRM, an earlier version of this item incorrectly reported that the vote was 21-0. It also contained errors on three names. All have been corrected. Thanks for the heads up on the misspellings from a board member who will remain unnamed.)

Meager, Meager Coverage of Yesterday's IOM-Stem Cell Meeting

The $3 billion California stem cell agency seemed all but invisible this morning in terms of mainstream media coverage.

Only one major outlet reported on the watershed events yesterday at the CIRM governing board meeting at the Claremont Hotel in Oakland – at least from what our Internet searches show.

The piece was written by Bradley Fikes in the San Diego U-T, the dominant daily newspaper in that area, which is a major biotech center. The major media in the San Francisco Bay area, home to the stem cell agency and also a biotech center, were absent from the coverage.

Fikes wrote a straight forward account of the meeting, saying that the governing board voted “ to accept in concept proposed changes to reduce conflicts of interest on the agency's governing committee.”

Fikes wrote the story based on the audiocast of the meeting. He probably would not have written his daily piece without the availability of the audiocast. 

Some of those connected with the stem cell agency often wonder about the lack of mainstream coverage of its doings, particularly the lack of favorable coverage.

Much of it has to do with the shriveled state of the media business, which is understaffed and overworked compared to 15 years ago. Specialized science reporters are all but an extinct species. Also, the mainstream media has traditionally ignored the affairs of most state agencies.

Speaking as a former editor at a major Northern California newspaper, I would not have sent a reporter to cover this week's two-day CIRM board meetings. It would have consumed too much valuable time with little likelihood of a major story, especially when weighed against other story possibilities. There was no guarantee that the board would have even acted. The events and their significance could be better handled in a roundup story later with more perspective, perhaps keying on the board's meeting in March, where details of yesterday's action will be fleshed out. The fact is that many, very important events occur within state government every day that never receive media attention. Some don't even see the light of day until a catastrophe occurs.

All of this may be deplorable in the eyes in stem cell agency backers and others, but it is the reality of today's news business.  

Reaction to IOM: California Stem Cell Directors Approve Plan on Conflicts of Interest and More

Directors of the $3 billion California stem cell agency today approved a far-reaching plan aimed at resolving long-standing conflict of interest issues involving the agency's governing board and also at helping to maintain credibility with the public.

Jonathan Thomas
CIRM photo

The framework of the proposal by CIRM Chairman J.T. Thomas moved forward on a 23-0 vote with one abstention. He laid out the plan in response to sweeping recommendations from a blue-ribbon study by the Institute of Medicine. Details will be worked out and come back to the board in March. 

Acknowledging that many board members were not pleased with the IOM criticism of the agency, Thomas said, 

“This is one of those times that we must move forward and compromise.” 

He said issues such conflicts of interest have “stolen focus” from the good scientific work that the agency has funded.

Thomas was reacting to the $700,000 IOM study commissioned by CIRM governing board. The IOM recommendations called for removing conflict of interest problems, cleaning up a troubling dual-executive arrangement and fundamentally changing the nature of the governing board. The IOM proposals would strip the board of its ability to approve individual grants, greatly strengthen the role of the agency's president, significantly alter the role of patient advocates on the governing board and engage the biotech industry more vigorously.

Thomas' plan, which would be put in place for up to a one-year trial period, would not do all that the IOM wanted, but would move strongly in that direction.

State Controller John Chiang, chairman of the only state entity with financial oversight over CIRM, endorsed most of the proposal, said deputy controller Ruth Holton-Hodson. She told CIRM directors that Thomas' plan was thoughtful and positive, although Chiang did not support continued involvement of the chairman in day-to-day operations.

The Thomas plan, which would not require legislative approval, would:

• Have 13 members of the 29-member board refrain from voting on specific grant applications. The 13 would be from institutions that could benefit from CIRM grants. They would be allowed to participate in discussions. Thomas said this would deal with financial conflict of interest questions. 
• Increase industry participation of industry in grant application review and step up business involvement internally at CIRM, including development of RFAs.
• Redirect all scientific appeals to staff to evaluate for possible re-review before they go to the full board.
• Move “programmatic” review of grants to public sessions of the full board instead of being held behind closed doors during grant review sessions. Patient advocate directors now sitting on the grant review group would no longer be allowed to vote during the closed-door review sessions, but they could participate in the discussion.

It appears, however, that the Thomas plan would do little to deal with the dual-executive problems identified by the IOM.

Consumer Watchdog's John M. Simpson, a long observer of the stem cell agency, welcomed the response by CIRM. Writing on his blog, Simpson said,

 "It looks like the message is finally getting through to California's stem cell agency board....
Part of what is driving the new approach is the realization that CIRM will need to find a new source of funding -- possibly going back to the voters -- if it is to continue.  As Thomas told the board today, 'If we don't have credibility, we won't have a chance of sustaining the agency.'"

During the lengthy debate this afternoon, one director after another said they did not agree with all that the IOM had to say, but said maintaining credibility and trust was the key to the sustainability of the organization.

CIRM will run out of money for new grants in less than four years. Thomas said he is working on a plan to continue the agency's effort into the future. Details of that will be disclosed later, he said.

(Editor's note: An earlier version of this item, based on incorrect information from CIRM, said the vote was 21-0. The correct figure is 23-0.)

California Stem Cell Agency Directors Approve Changes to Meet IOM Recommendations

The board of the California stem cell agency has adjourning following approval of the Thomas plan to deal with recommendations of the Institute of Medicine for changes at the agency. More details shortly.

Vote Nearing on Thomas Response to IOM Recommendations

The governing board of the California stem cell agency appears to be heading for a vote on the Thomas IOM plan, which he has agreed to place on a one-year test timetable. The plan is being described as a "framework" with details to be worked out. The proposal would be fleshed out and come back to the board in March for later action. Several board members have raised questions about the details. But Thomas and other supporters say those will have to be worked out.

Consumer Watchdog Welcomes Changes at Stem Cell Agency

Consumer Watchdog's John M. Simpson today welcomed the response by CIRM 

Chairman J.T. Thomas to address the recommendations for sweeping changes at the California stem cell agency. 

Writing on his blog, Simpson, a longtime observer of the agency, said, 

"It looks like the message is finally getting through to California's stem cell agency board....
"Part of what is driving the new approach is the realization that CIRM will need to find a new source of funding -- possibly going back to the voters -- if it is to continue.  As Thomas told the board today, "If we don't have credibility, we won't have a chance of sustaining the agency."

Thomas' IOM Plan Receiving Generally Positive Response

So far,  many of the directors of the $3 billion California stem cell agency today seem to be endorsing the plan proposed by Chairman J.T. Thomas to meet the sweeping recommendations by  the Institute of Medicine.

Several members stressed the need to remove the perception of conflicts of interest on the board, as identified by Institute of Medicine and other studies of the stem cell agency.  Concerns about conflicts of interest go back as far as the election in 2004 when the plan to create the stem cell agency was presented to the voters of California.

Director Sherry Lansing, who is chair of the UC Board of Regents, said "we can't fight" the perceptions any more. She said the board needed to move forward and control its own destiny instead of having to deal with possible legislative changes. Continued perception issues "will harm our work," she said.

However, a couple of other members expressed some dissent.

Among other things, Thomas' plan would require 13 members of the board not to vote on individual grants, although they could take part in debate on them. The 13 are members who are linked to institutions that are likely recipients of CIRM awards. All of the changes proposed by Thomas could be done without legislative action, he said. Thomas also said that chairman of the IOM study panel endorsed his plan, saying it would serve the best interests of the people of California.

According to compilations by the California Stem Cell Report, about 90 percent of the $1.7 billion awarded by CIRM has gone to institutions with ties to members of the CIRM board.

Here is a link to the Power Point presentation of Thomas' plan.

Thomas' Plan to Meet the the Recommendations of the IOM

Jonathan Thomas, chairman of the California stem cell agency, presented the following plan today to the governing board of the agency to deal with recommendations of the Institute of Medicine. 

  IOM proposal by the chairman of the California stem cell agency by  

Thomas Presents Plan On IOM Recommendations

Directors of the California stem cell are engaged in an intense discussion over a plan by CIRM Chairman Jonathan Thomas to deal with the recommendations from the Institute of Medicine. Thomas said the detailed proposal would require 13 board members to voluntarily not vote on grant applications. The agency says it will post Thomas' plans shortly on its web site. Most of the board members speaking so far have endorsed the plan.