Saturday, January 08, 2005

California wrestles with taxpayer issues in stem cell initiative

In November 2004, voters in the state of California decided to spend $300 million per year for 10 years on stem cell research. Now, in getting down to nuts and bolts, questions are being asked about return to the taxpayers, an issue that also comes up in policy questions about the federal Bayh-Dole Act.

As the committee on funding met for the second time, one of the key messages from the public and some of the committee members was to start by establishing standards for complicated and weighty issues such as how to REIMBURSE taxpayers for their investment.

from an article by Terri Somers in the San Diego Union-Tribune:

-->The stem cell initiative that voters approved in November was set up to sidestep the slow crawl of bureaucracy and quickly get money to scientists looking for cures to diseases such as Parkinson's and Lou Gehrig's.

The committee's goal is to write the first check by the end of May, said Robert Klein, chairman of the oversight committee and an author of the stem cell initiative.

But critics have said the committee should first consider such important issues as what conflict-of-interest standards should apply to members, and how much business should be conducted in public.

For example, some committee members are not versed in the intricacies of the Bayh-Dole Act, a law governing how research institutions can sell their discoveries. The committee plans to hold workshops and tutorial sessions to explain this and other complex issues.

Critics who have questioned the plan for spending $300 million annually for the next decade agreed with Joan Samuelson.

"All eyes in America are not just on California, but also on this committee," said Jesse Reynolds of the Center for Genetics and Society. "It's critical that at the earliest stages the committee adopt clear, effective and enforceable standards of accountability and transparency."

Committee Vice Chairman Ed Penhoet said implementing the initiative is a balancing act. But, he said, it does not require reinventing the wheel, because other grant-making organizations such as the National Institutes of Health already have proven practices that California can adopt – at least initially.

The initiative allows for its policies to be updated within nine months, giving the committee time to gather suggestions for improving practices and policies, Klein said.

At yesterday's five-hour meeting at the University of Southern California, the committee began tackling many of the tedious chores necessary to start the novel funding initiative from scratch.

Agenda items included establishing committees to find a location for the group's headquarters, to hire a president and to create a process for choosing members of the working groups that will recommend who should get grants.

The oversight committee also scheduled its next meeting for Feb. 3 in San Diego, at a location to be determined.

Klein said several cities, including San Jose, San Francisco and Los Angeles, are working on deals to make headquarters space available to the oversight committee.

Committee member Dr. John Reed, president of the Burnham Institute in La Jolla, said San Diego real estate executive Malin Burnham also has talked to the committee about offering space for the headquarters. Reed said he planned to call Burnham last night on the drive home from Los Angeles to prod him to make an offer quickly.

Reed is one of the members of the subcommittee that will search for a site to lease. The subcommittee also includes members from Los Angeles and the Bay Area, both areas with well-regarded research institutions, medical facilities and biotechnology companies.

Another subcommittee was formed to search for a president. It also was authorized to consider a plan for hiring an interim president until a thorough search can be completed.

Klein will serve as interim president for the immediate future.

More than an hour of the meeting was spent on discussing what business the committee plans to conduct in public and on conflict-of-interest policies.

The agenda for the committee's first meeting last month was drastically curtailed after public watchdog groups complained that adequate notice was not given under the state's open-public-meetings law. Those watchdogs continued to criticize the committee in advance of yesterday's meeting.

Klein said the committee plans to conduct as much business as possible in the public view.

Previously, he vowed not to hold any interest in a biomedical company that could profit from the stem cell research. Yesterday he went further by saying he and his real estate development company would not benefit from any real estate transaction the committee could make.

In a letter addressed to the 29-member committee, Klein wrote that the working groups, which will make recommendations on who should receive grants, would also be held to the highest ethical standards regarding conflicts of interest.

Marcy Darnovsky of the Oakland-based Center for Genetics and Society said Klein was taking a good first step. But she and other public watchdogs would like all oversight committee members to make the same commitments Klein has made to avoid conflicts of interest.

For more information on the committee, its meetings and business, go to the California Institute for Regenerative Medicine's Web site at <--

In a Bayh-Dole context, the federal taxpayer effectively subsidizes research & development for new ideas. If the technology is of short half-life (such that the innovation is of no value twenty years from the filing date of the corresponding patent application), then the only "benefit" the taxpayer gets is (possibly) obtaining the invention sooner than might otherwise be the case. And the taxpayer still has to pay patent royalties on the invention the taxpayer funded. In the California context, it appears that some people are asking for a return on their investment.


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