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Genetic Crossroads
September 29th, 2005

Who gets the profits? The leadership of the California Institute for Regenerative Medicine (CIRM) is rapidly backpedaling on promises made during the campaign to pass Proposition 71, which created the CIRM to distribute $3 billion of public money to fund human stem cell research. Last fall, the campaign's economic analysis and official talking points asserted that the measure would pay for itself in several ways - one of which would be a share of royalties or license fees. These returns to the state could amount to $1.1 billion, the campaign repeatedly asserted.

But once California Senator Deborah Ortiz (D-Sacramento) proposed a set of reforms that included requiring returns to the state, Robert Klein-who chaired the campaign and now chairs CIRM's governing board (the ICOC)-quickly produced a legal opinion explaining why the promises could not be fulfilled.

The problem, according to CIRM's leadership, is that any bonds issued for activities that will generate returns to the state would be subject to federal tax and carry a higher interest rate. This fact was not publicized during the campaign.

This issue of intellectual property rights recently moved to the forefront when a special committee of the California Council on Science and Technology issued an interim report on intellectual property rights and the CIRM. The report asserted that expectations of significant returns to the state were unjustified, and recommended that the state forego any claims to returns.

This is not surprising, considering that the committee was dominated by representatives of private corporations and university technology transfer offices-groups that would be expected to oppose returns to the state. Furthermore, the report was largely funded by the California Healthcare Institute, a biomedical industry advocacy group.

In response, the Center for Genetics and Society sent a letter to the ICOC, urging them to think creatively and reject the recommendations of the CCST committee. Sen. Ortiz plans to hold hearings on the topic later this fall.

See "Stem cell's shell game?" Capitol Weekly (September 22)

First grants announced, despite no funds. The CIRM continues to operate on a limited budget and is unable to issue bonds, as lawsuits filed by conservative groups have challenged the constitutionality of Proposition 71. Klein has described his continued work on a "bridge financing" plan, in which organizations that support stem cell research would make below-market loans to the CIRM that would be forgiven if the lawsuits should succeed. Despite the lack of funds, the ICOC announced the recipients of the first round of what it calls "training grants" at its September 9 meeting. Reacting to the lack of funds and other irregularities in CIRM's granting process, the Sacramento Bee editorialized that it is "hard to imagine a system that is more convoluted and opaque."

Research standards: opportunities for input. The Research Standards Working Group of the CIRM is soliciting public comments on its draft interim standards for human embryonic stem cell research. You can submit comments to [email protected] CGS outlined its comments at a public session held in Los Angeles on August 31.

Reform bill passes. Part of the reform package introduced by Sen. Ortiz has passed both houses of the state legislature (39 to 0 in the Senate, 74 to 2 in the Assembly) and awaits the governor's signature. SB18 would mandate a performance audit of the CIRM and strengthen the informed consent provisions for women who are considering providing eggs for research. CGS, along with the Pro-Choice Alliance for Responsible Research, has proposed additional protections for women undergoing egg extraction for research.

Proposition 73 would define embryos as "unborn children." An initiative on California's November ballot would amend the state's constitution to require that health care providers notify the parents of young women under the age of 18 before providing abortion services. A coalition of medical experts, teachers, nurses, parents, counselors, and supporters of reproductive rights, including CGS, oppose Proposition 73 because parental notification initiatives threaten teen safety and fail to increase communication between parents and teens about abortion.

A little-noticed statement in the initiative goes much further than parental notification, however. The initiative defines abortion as causing the "death of the unborn child, a child conceived but not yet born." This clause amounts to an effort to smuggle an assertion that embryos are "unborn children" into the California constitution. Depending on how it is interpreted, it could threaten the legal standing of both abortion and research on stem cells derived from human embryos. CGS supports embryonic stem cell research with meaningful regulatory oversight and safeguards, and opposes research restrictions based on efforts to extend "personhood" to embryos.


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