Health & Medicine

February 1, 2013

Analyst: Stem cell agency reforms fall short

With little money and time left to repair its legacy, California's controversial stem cell agency is falling short in its response to a federal committee's recommendations for an overhaul, the committee's chair said Thursday.

With little money and time left to repair its legacy, California's controversial stem cell agency is falling short in its response to a federal committee's recommendations for an overhaul, the committee's chair said Thursday.

The stem cell agency's reform plan does not go far enough to fix all that has been chipping away at the agency's credibility, said Harold Shapiro, chair of the Institute of Medicine committee hired to evaluate the agency.

"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."

The committee presented sweeping recommendations in its December report, 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.

Time is of the essence, Shapiro said, noting that the stem cell agency risks running out of funding soon and, by 2017, must have in place a self-sustaining financial formula to replace its bond allocations.

The CIRM has just $859 million remaining from the pot of $3 billion voters approved by passing Proposition 71 in 2004. Californians embraced the idea of turning the Golden State into a hub for embryonic stem-cell research while the administration of George W. Bush was restricting the flow of federal funds.

But because of the way the initiative was drafted by Bob Klein, a real estate mogul from the Bay Area, the stem cell agency was vulnerable from the start to charges of conflict of interest. The law requires 23 of the 29 board members to represent California universities, research institutes or other entities – the same organizations funded by the CIRM.

The report by the Institute of Medicine – established in 1970 as an arm of the National Academy of the Sciences – attacked this problem directly, specifically proposing the elimination of a number of board positions reserved for grant-receiving institutions.

"Almost all members of the (board) are interested parties with a personal or financial stake in the allocation of CIRM fundings," the IOM report stated.

"Such a dynamic erodes confidence that the board is capable of making broader strategic decisions that go beyond awarding research dollars."

To change the makeup of the board, however, would take an act of the Legislature, or a return to the voters by ballot measure. To achieve clear reform, this was the route the stem cell agency should take, the IOM said.

But Jonathan Thomas, chairman of the stem cell agency, said Thursday that going back to the ballot box or through the Legislature was out of the question. The process would take years, he said. The first opportunity to get on the ballot, for instance, would be in the fall of 2014.

"I wanted to act decisively in a thoughtful, comprehensive and quick way," Thomas said. "I wanted it to be said that we acted swiftly to put all these (conflict-of- interest) issues to bed and refocus attention on the groundbreaking research."

So Thomas backed a plan to persuade 13 board members to voluntarily abstain from voting on grants for institutions. The plan will be reviewed in a year for its effectiveness, he said.

Thomas said the changes should go a long way toward improving the agency's image, though he rejected the notion that board members had favored their own institutions. "Public perception is important, and public trust is paramount to move the agency forward," he said.

The action fell far short of the comprehensive response Shapiro was expecting. After all, the CIRM had valued an IOM review enough to pay the committee $700,000 for a set of recommendations.

Shapiro said he is left partially satisfied by the CIRM's response.

"For the most part, they were responsive. In a number of areas, I think they made a reasonably thoughtful, good-faith effort to move in our direction," he said.

The report from the IOM does open with kudos for the stem cell agency for its "many notable results during its first seven years."

Still, it goes on to cite the CIRM's own research that showed 91 percent of its funding had gone to institutions with representatives on the board.

Pointedly, the IOM report also called for a new scientific advisory board – staffed largely with experts from outside California – to help steer the agency toward funding the best science.

Thomas insists he wants to "take even the perception of conflict of interest out of the picture" as well as "increase the transparency of the grant-making process."

Perhaps one of the most egregious examples of the appearance of alleged cronyism occurred last summer, according to media reports. The board granted millions of dollars to a for-profit firm – after its proposal was twice rejected by CIRM's own scientific reviewers.

Representing the for-profit firm that got the money was Klein, the board's first chairman and leader of the campaign for Proposition 71 at the ballot box.

In response to a questionnaire, one unidentified board member told the IOM "it was hard to tell" if there were conflicts of interest given that "so many decisions take place off camera in secret meetings," the report stated.

Other recommendations of the IOM include advice for the CIRM to streamline its intellectual property procedures to match those of the federal government.

The agency's board also needs to reconfigure its responsibilities so it isn't performing both day-to-day activities and the oversight of those activities.

And it should make changes to the review process that allows individuals to appeal directly to the board for reconsideration of unfunded grants deemed problematic by its review board.

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.

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