Editorial: Piecemeal reform won't do for stem cell institute

California's quasi-public stem cell research agency is holding a rare meeting in Sacramento on Wednesday, and questions about its internal conflicts and finances remain as urgent as ever.

Three months ago, the oversight board of this San Francisco-based institute was forced to toss out 10 of 58 research grant proposals after some of its board members were found to be lobbying behind the scenes for certain grants.

The incident again highlighted the potential for abuse when administrators for universities and medical centers – who make up half of the institute's oversight board – are in a position to influence public grants that could benefit their institutions.

If that wasn't reason enough to reform the California Institute for Regenerative Medicine, its leaders provided another reason last month with an attempt to elevate executive salaries.

Institute President Alan Trounson, who earns $490,000 a year, wanted the top pay range for other executives to be increased about $200,000 a year, to a ceiling of $405,000.

That was too much for the institute's governance subcommittee, which urged that the ceiling be lowered to $332,000. Trounson was not pleased. "If I can't make appointments of people who can do the job, you've essentially wasted my salary, which is a disaster," he harumphed.

Given that the state faces a multibillion-dollar budget deficit – and that $3 billion in bonds could be put to better use than lavish executive pay salaries – one might think that lawmakers would be ready for a full revamp of the stem cell agency.

Think again. Because of provisions that were written into law when voters approved Proposition 71 in 2004, lawmakers can't alter the institute's internal governance until they assemble a 70 percent supermajority of votes in both houses.

Thus, lawmakers are setting their sights on lower-hanging fruit. State Sen. Sheila Kuehl, D-Santa Monica, has introduced legislation (Senate Bill 1565) that aims to tighten the institute's standards on making new stem cell therapies affordable to Californians.

Kuehl fears a future in which private companies make millions of dollars in profits off state-funded cures for spinal cord injuries, diabetes and other diseases that are unaffordable to people without insurance.

Although Kuehl is rightly concerned about taxpayers being shut out from therapies for which they provided venture capital, her bill doesn't go far enough in ensuring an equitable outcome. What's needed is clear legal authority for future attorneys general to regulate the pricing of stem cell therapies when companies are making excessive profits after benefitting from the state's investment.

Kuehl's bill doesn't do this. Neither would it eliminate the potential conflicts, and excessive number of board members, that have long kept the institute's oversight committee from operating effectively and credibly. All her bill would require is a study of the institute's governance by the Little Hoover Commission by 2009. Too little, too late.

Although SB 1565 is better than nothing, it is a far cry from what California taxpayers and patients deserve for the $3 billion – $6 billion, including interest – they have agreed to invest in this field of science.