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Article published Nov 27, 2004
California's New Stem-Cell Initiative Is Already Raising Concerns

By JOHN M. BRODER
New York Times

LOS ANGELES, Nov. 26 - As California moves to begin a lushly financed
program of embryonic stem cell research, medical ethicists and other
skeptics are concerned that the $3 billion that state voters approved for
the endeavor could become a bonanza for private profiteers.Critics say the
ballot measure that passed by a wide margin on Nov. 2 contains inadequate
safeguards to ensure public oversight of the financial allocations and
guarantee public benefit from any medical breakthroughs. They also worry
that the promise of stem cell studies has been oversold to the public and
say the money might better be directed to more mature medical
technologies.Even those who support human embryonic stem cell research voice
concern that the program will be captured by advocates for research into
certain diseases or narrow lines of inquiry, and that the public will have
little say in how the money is spent.Lt. Gov. Cruz Bustamante, a supporter
of the ballot proposition, recently said that he expected California to
become a magnet for stem cell researchers pushing the edge of medical
science."It's this century's gold rush," Mr. Bustamante said at a ceremony
at the University of California, Berkeley, on Nov. 16, as he appointed the
university's chancellor, Dr. Robert J. Birgeneau, to the 29-member panel
that will oversee the research project.That is exactly what some critics
fear."There's a lot more truth there than he intended," said Wayne C.
Johnson, who ran the unsuccessful campaign to defeat the ballot measure.
"Three billion dollars is a lot of money, and there's a potential for a lot
of people to get very, very wealthy without accomplishing any public
good."Sponsors of the measure respond that it was carefully drawn to
eliminate potential conflicts of interest, although they acknowledge that
many of the rules governing its conduct have not been written. The
initiative creates the California Institute for Regenerative Medicine, which
will dole out roughly $300 million a year for 10 years in grants and loans
to public and private entities pursuing stem cell studies. Final authority
rests with the oversight panel, which will include representatives from most
of the state's major medical schools, members of nonprofit research
institutes, executives of commercial biotechnology firms and public members
who are advocates for research in a range of diseases.The idea, said Robert
N. Klein II, the Palo Alto real estate magnate who organized the ballot
campaign, is to provide a variety of voices to prevent the fund from being
hijacked by private interests seeking a windfall of public money.Mr. Klein
said that no member of the oversight committee was allowed to vote on a
potential grant to his or her institution, and that those receiving grants
from the California institute must follow National Institutes of Health
rules for publishing and sharing data. He also said a group of outside
experts, with no financial stake in the program, would be formed to ensure
that grants were made equitably and ethically and based on the most
promising science."They will be dedicated to making sure that money is spent
wisely and accounted for thoroughly," Mr. Klein said.Critics note that as
research progresses the state may be confronted with conflicts over patent
rights for research techniques and potential treatments. Some patents in the
field are already held by the University of Wisconsin, a pioneer in stem
cell studies, and Geron, the leading private company involved in embryonic
stem cells.Mr. Klein acknowledged such potential problems, but he said he
hoped they would be resolved quickly and in the public's favor. He also said
that the greatest financial boon to California would not be in licensing
fees or royalties, but in savings on the state's huge health care
expenses.He said the $3 billion bond would pay for itself many times over if
research led to even marginal improvement in therapies for a few of the 70
diseases for which stem cell studies show promise.Embryonic stem cells are
formed during the first few days of the development of the human embryo and
give rise to the specialized cells of various body tissues, including heart,
kidney and brain cells. They are a valuable research tool for studying the
development of human tissues and may hold the key to developing medicines
and therapies to treat a variety of diseases and conditions, including
Alzheimer's, Parkinson's, diabetes and spinal cord injuries.Research in the
field is still in its infancy and is controversial because extraction of
stem cells involves the destruction of human embryos. President Bush, in one
of his first official acts in 2001, limited federal financing for embryonic
stem cell studies to a handful of existing colonies, or lines. Many
scientists and advocates for disease research contend that the restrictions
are stifling a promising avenue of science that could bring treatment or
cures to millions of Americans. Some of them united to place the stem cell
initiative on the California ballot, backed by more than $25 million from
venture capitalists, wealthy individuals and disease advocacy
groups.California voters approved the measure by 59 percent to 41 percent.
Opponents spent barely $400,000.Leaving aside the continuing controversy
over the morality of this research, matters of business and governmental
ethics remain.The syndicated columnist Charles Krauthammer, a member of the
President's Council on Bioethics, supports some types of stem cell research
but says the California initiative goes too far."This is an unbelievable
rip-off by people with an interest in the business of stem cells," said Mr.
Krauthammer, who suffered a crippling spinal cord injury when he was young.
"This is a huge grant from the people of California to a very specific
biotech business, and it's only because of stem cells' notoriety that it's
this and not something else. If taxpayers were to spend $3 billion, the
logical thing would be to devote the money to the most promising areas of
research, but that was never discussed because of the sexiness of stem
cells. The oversight provisions are abysmal and it's basically a slush
fund."Miriam Piven Cotler, a medical ethicist at California State
University, Northridge, says she supports the research but has concerns
about how the process will be conducted."We have committed an elaborate
public mechanism to this research," Dr. Cotler said. "Who safeguards it?
What interests will be represented, how public will their deliberations be
and how much power will they have?"The initiative goes only part of the way
to addressing her worries, Dr. Cotler said, adding: "I knew it was a
compromise when I voted for it. I hope it will play out correctly."Marye
Anne Fox, chancellor of the University of California, San Diego, which
stands to reap large benefits from the new program, said the large amount of
money unencumbered by federal restrictions presented a "grand challenge" for
California research institutions and medical science generally.Dr. Fox said
she expected the program to provide money for state-of-the-art research
facilities, at least one of which she hopes will be built in the San Diego
area to take advantage of the existing concentration of nonprofit research
institutes and private biotechnology companies there. The Burnham Institute
and the Salk Institute for Biological Studies are neighbors of her
university's campus, and both are represented on the 29-member panel
overseeing the state stem cell initiative.But Dr. Fox said it was important
that an outside review panel with no vested interest in the grant-making
process be empowered to assure that proposals were subject to scientific
peer review and awarded on the basis of merit, not insider connections."It's
a tremendous opportunity," she said. "We are going to see an investment of a
state that focuses on questions that are not funded at the federal level,
apparently for political reasons."

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