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Calif. State Senator Vows to Push Life-Sci Bill Without More Stem-Cell Amendments

The California state Senator who authored a governance and drug-access bill opposed by the state’s stem-cell agency told BioRegion News last week she didn’t see the need for further amendments beyond those that have enabled the measure to clear a key Assembly committee and advance to the full Assembly.
State Sen. Sheila Kuehl (D-Santa Monica) said the amended bill would survive what she said were attempts by the California Institute for Regenerative Medicine to amend Senate Bill 1565 to death. Last week the stem-cell agency and a patients’ rights group told BRN they would continue to fight the legislation because the changes didn’t go as far as they had hoped, and because they fear it will discourage the funding of human embryonic stem cell research in the state.
In an interview, Kuehl said she would continue up to a point the dialogue with CIRM and its chairman, Robert Klein, that resulted in the amendments.
“I always talk to people who want to talk to me, but it doesn’t mean that we’re going to continue to amend, and amend, and amend, because the truth is, I don’t know why they think they’re any different from any other opponents that we’ve ever come across in 14 years,” Kuehl told BRN.
“They don’t intend to remove their opposition. They simply want more, and more, and more amendments, because they want the bill to go away. But the bill is not going away,” Kuehl added.
Instead, the bill is headed for debate and a vote by the full Assembly, then a state Senate “concurrence” vote on the current amended bill — the chamber passed the original bill earlier this year — before the measure goes to Gov. Arnold Schwarzenegger.
On July 16, the California Assembly Appropriations Committee passed SB 1565 by a 16-0 vote, with one member absent, following several amendments intended to reflect concerns raised by CIRM and supporters of embryonic stem-cell research.
Don Gibbons, a CIRM spokesman, said his agency will keep fighting the bill because of an amendment that the agency and patient advocates fear will discourage the funding of human embryonic stem cell research in California. That could happen, they warned, even if, as expected, the federal prohibition on hESC funding is lifted by the winner of November’s presidential election.
Proposition 71 — the $3 billion, 10-year embryonic stem cell research measure approved by voters in 2004 that created CIRM — also created a 23-member Scientific and Medical Research Funding Working Group. Its duties include advising CIRM’s governing body, the Independent Citizens Oversight Commission, on which researchers, universities, and other institutions merit funding from the agency.
The working group’s 15 scientist members must base their recommendations on funding criteria that include a preference for hESC research: “In order to ensure that institute funding does not duplicate or supplant existing funding, a high priority shall be placed on funding pluripotent stem cell and progenitor cell research that cannot, or is unlikely to, receive timely or sufficient federal funding, unencumbered by limitations that would impede the research.”
But under SB 1565, the working group could recommend the financing of “other scientific and medical research and technologies and/or any stem cell research proposal not actually funded by the institute.” The amended bill lowers the margin of working group support needed for recommendations on funding to the governing board or Independent Citizens Oversight Commission — from two-thirds to a simple majority — if the group believes an application reflects a “vital research opportunity.”
CIRM and other critics fear the bill would negate the state’s priority on hESC funding. Because the amendment was added by the bill’s other author, state Sen. George Runner (R-Lancaster) — the state Senate’s second-most powerful Republican and an opponent of hESC research — critics have argued the bill would torpedo California’s top-tier stem-cell effort by restricting future ICOC funding approvals to research based on adult stem cells.
“We think that is a very bad message at this point. Embryonic stem cells are still necessary, and we would not be able to support the bill with that language in it,” Gibbons told BRN.
Kuehl denied that the amended bill reflects an anti-hESC agenda: “We put in a paragraph indicating the priority was still highest for embryonic stem-cell research,” he said. “I don’t think the amendment changes that at all.”
Siding with Kuehl and the existing SB 1565 is the Center for Genetics and Society, an Oakland, Calif., policy research group focused on the social implications of new and emerging human biotechnologies.
“Embryonic stem-cell research is a means, not an end. The goal is to develop therapies, and all potential methods of doing so should compete on a level playing field,” Jesse Reynolds, director of the center’s project on biotechnology in the public interest, said in a July 15 letter to members of the Assembly appropriations committee.
But CIRM’s argument is echoed by Americans for Cures Foundation, a nonprofit advocacy group that supports funding all forms of stem cell research, and its California offshoot.
“Anything which will diminish California’s attention on embryonic stem-cell research, the reason California passed Prop 71 in the first place, must not be messed with,” Don C. Reed, co-chair of Californians for Cures and director of policy outreach for AFCF, told BRN. “California does not want this great hope of cures to be messed with.”
Proposition 71 prohibits amendments unless voters approve them in another referendum, or at least 70 percent of members of both legislative houses pass a bill at least two full calendar years after the original referendum. Even then, Prop 71 may only be amended “to enhance the ability of the institute to further the purposes of the grant and loan programs created by the measure,” according to the text of the law, available here.
Reed and other SB 1565 opponents say the bill doesn’t meet that criterion, and defies the majority that approved Prop 71, and thus should not become law.
“The bill itself is a mistake, and it’s going to come back to haunt us in a lot of difficult ways that aren’t being dealt with,” added Reed, a retired schoolteacher who spearheaded the passage of a law directing the state to spend $1.5 million annually on research to fight paralysis. Reed’s son, who is paralyzed following a 1994 football injury, is the namesake for California’s Roman Reed Spinal Cord Injury Research Act of 1999.

“Anything which will diminish California’s attention on embryonic stem-cell research … must not be messed with.”

Reed said he and other patient advocates also object to a section of the bill committing the state Legislature to request a study of CIRM by a state-created government watchdog agency. The Milton Marks, or “Little Hoover,” Commission on California State Government Organization and Economy, would examine CIRM’s governance and its vulnerability to conflicts of interest.
The issue of CIRM’s governance sparked an audit by Controller John Chiang completed in May. The audit largely gave the agency a clean bill of health by concluding that CIRM followed all but one of its own policies intended to minimize conflicts of board members between their duties as overseers of the agency, and their duties to their employer institutions.
Chiang found fault with CIRM over a single issue: the institute’s failure to require specialists used by the agency’s Grants Working Group to sign statements after their meetings declaring they would not disclose financial and other confidential information of grant applicants, and that their dealings with applicants did not result in conflicts of interest. CIRM required the specialists to sign similar statements before their calls.
Soon after releasing the audit, Chiang told BRN through a spokeswoman that he supported SB 1565 [BRN, May 19].
Chiang’s audit and the bill came to life in August 2007 after John Reed, president of the Burnham Institute in La Jolla, Calif., and, at the time, an ICOC board member, asked a CIRM administrator to reverse a decision rejecting a $638,000 grant request by Burnham — an apparent conflict of interest. Reed, who sits on the board as a private citizen, recused himself from ICOC activity while Chiang’s audit was in progress. [BRN, Dec. 17, 2007].
“We had one misstep, maybe, which had been investigated. The person who made the misstep is now off the board,” Reed said.
Reed said subjecting CIRM to another study would hamper the agency and delay cures for crippling diseases by slowing down its funding of research and other activity, and lessening the agency’s value in helping research institutions leverage private donations.
A study by Little Hoover aimed at rooting out conflicts of interest, he added, would drive away the scientific, academic, and industry leaders whom state voters, by approving Prop 71, decided were best qualified to decide funding for grants and answer broader policy questions.
“This is not a conflict of interest; it’s a convergence of expertise. It’s a committee of experts,” Reed said. “The question is: Should there be a complete, wholesale reconsideration and reconstruction of the entire program? And that’s possible, and that would be a disaster, because we’ve got something wonderful. It’s working. It’s not broke; don’t fix it.”
On the web site Stem Cell Battles, Reed went further, urging opponents of SB 1565 to prepare for a legal battle if Schwarzenegger signs the bill into law; he has not publicly taken a position.
“California may need to sue to protect the research so dearly won,” Reed wrote in a July 18 posting on Stem Cell Battles: “This is a power struggle, pure and simple. Who is going to control the state stem-cell program? Will it be run as the voters intended, by a committee of experts, people who understand the issues intimately because it is their life work, and who were chosen (by elected officials) precisely because they are at the very top of their field? Or will it be run by politicians, who may have to start from scratch learning the issues?”
‘Beacon of Hope’
AFCF is one of about 80 patients’ advocacy and medical groups that are fighting SB 1565 through the umbrella group Coalition for the Advancement of Medical Research, or CAMR, which consists of more than 80 medical, scientific, and educational groups.
AFCF reinforces its effort against Kuehl’s bill on the home page of its web site, which includes a box “OPPOSE SB 1565.” The box opens to a page that concludes: “We all strongly support access to lifesaving treatment for those who need and want it. But we cannot fix the problem of access by tying the hands of the California stem-cell program, which is the beacon of hope for developing these treatments.”
Earlier this month, AFCF sought to drum up opposition to SB 1565 through an anonymous post on the Daily Kos, the Democratic political analysis web site.
But the post, and its attempt at stoking sentiment against Kuehl’s bill, backfired. The post attacked the senator as either “ignorant on the science, or mindlessly buying into Republican and anti-cures messaging from the Catholic Church, or playing dumb in a craven attempt to get Republican votes to back her legacy as defender of the poor.
“Oversight is not really what SB 1565 is about. Sen. Kuehl is termed out. Apparently she wants to leave a legacy. Unfortunately for those who place hope in California’s massive investment in embryonic stem cell research, this legacy will be one of cures delayed or denied,” the post stated.
Reed would not disclose who wrote the post when asked by BRN — but emphasized that the group, and he, had apologized to Kuehl.
Complicating the issue was the fact that AFCF’s board president at the time of the Daily Kos post, Robert Klein, is also chairman of the ICOC, which governs CIRM. That touched off a public call for Klein to resign one of the two positions, from a longtime critic of CIRM’s governance, John Simpson, director of the Stem Cell Oversight and Accountability Project for the Santa Monica, Calif., group Consumer Watchdog.
Klein appeared to do so early last week, after Simpson reported on his group’s blog that Gibbons told him the ICOC chairman had resigned as AFCF’s president as a result of the Daily Kos flap.
While Klein has never confirmed his resignation, AFCF told The Niche, the stem cell blog of Nature magazine, that Klein gave up the foundation’s chairmanship, but would remain on its board.
Klein did not return messages left at his offices at CIRM and his real estate investment business, Klein Financial Corp.
“This was a train wreck waiting to happen if he remained both chairman of the stem-cell agency and the president of an advocacy organization. It was an untenable situation, and he had to make a choice,” Simpson said in an interview last week.
The strident tone of the post, Simpson said, reflected an attitude that has divided advocates for greater stem cell funding.
“I do think [AFCF] overplayed their hand,” Simpson told BRN. “Part of the problem with this whole thing has been an ongoing attitude of, ‘You’re with us or you’re against us and you’re against stem-cell research.’ That’s just nonsense. It ought to be the case that you can have constructive criticism of things that a state agency does without people shouting back at you that you’re against stem-cell research.”
But AFCF has found an ally in the Buck Institute for Age Research, a Novato, Calif., research center that studies aging and age-related disease.
James Kovach, the Buck Institute’s president and chief operating officer, said in a letter to an Assembly appropriations committee member that the bill would disrupt hESC research and distract the professionals charged with funding it by expanding on the types of research deemed acceptable for funding.
It is important work done on often grueling schedules, and any requests to evaluate ‘vitally important research’ not associated with stem-cell and/or stem cell-related work will distract their attention from the work they were specifically chosen to perform,” Kovach wrote in his July 15 letter to Assembly member Jared Huffman (D-San Rafael). “We believe the purpose of Proposition 71 will be altered by the amendment and moreover, alter the mission of the scientific review committees.”
Kovach also said in his letter that a Little Hoover review of CIRM was unwarranted.
“Our experiences with the CIRM and its staff have not always turned out as we had hoped but we have never had reason to question the CIRM’s dedication to fulfillment of the intentions of Proposition 71,” he wrote. “We see no benefit in adding more layers of scrutiny to an already transparent organization.”
Kovach’s letter did not elaborate on the experiences that didn’t meet the Buck Institute’s expectations, and he did not return e-mail and phone messages seeking additional comment.
ICOC formally declared itself opposed to the Little Hoover study at its meeting last month, days after Klein expressed the same sentiment to BRN in an interview at the Biotechnology Industry Organization’s 2008 International Convention [BRN, June 30].
CIRM spokesman Gibbons said the agency views more favorably another amendment to SB 1565 that followed dialogue between Kuehl and CIRM and its allies.
The bill requires drug makers, research centers, and other recipients of CIRM funding to ensure that the drugs they develop are accessible to uninsured state residents — through Medi-Cal, California’s Medicaid program, and the state’s other publicly funded drug programs — at prices equal to or below any of the three benchmarks set by the state’s as-yet-unimplemented California Discount Drug Prescription Program.
The program, also known as CalRx, was signed into law by Schwarzenegger in 2006. But the program’s fate is in limbo: A state Senate subcommittee overseeing the health budget earlier this year voted to eliminate $5.8 million to fully roll out the program. State lawmakers are scrambling to plug a $15.2 billion budget shortfall as they continue crafting a spending plan for the fiscal year that began July 1.

CalRx requires prescription drugs to be made available at prices equal to or below any of three benchmarks: 85 percent of the average manufacturer price for a drug, as published by the Centers for Medicare and Medicaid Services; the lowest price provided to any nonpublic entity in the state by a manufacturer; or the Medicaid “best” price, to the extent that this price exists under federal law.  

But SB 1565 allows drug makers to seek waivers from that rule if they either seek funding for a “diagnosis, cure, mitigation, or prevention of a rare disease or condition,” or commit in writing to ensure their treatment will be accessible “to a class of patients who would not otherwise receive access to the drug.”
Those are changes from the original bill, which required that the drugs be sold at the lowest price produced by the three benchmarks.
CIRM and other supporters of hESC research funding argued successfully that the bill’s original version would have discouraged drug development within California, the agency argued, by shrinking the profitability of new medicines. This would be especially problematic, they contended, for “orphan” drugs designed to fight diseases contracted by patient populations of fewer than 200,000 people.
“Many of us think that indeed the problem here is that you need the law to enshrine something that can be done away with, with excessive pressure from the drug industry,” Simpson said.
However, Reed said, the California and national cure groups believe even the amendments to SB 1565 would still discourage development of orphan and other drugs, by reducing CIRM’s ability to negotiate pricing and other terms case by case with drug makers.
Not so, Kuehl countered, adding that AFCF “just wants the drugs to be developed, and I frankly think they’re very short-sighted in worrying about whether these provisions in [SB] 1565 are somehow going to stifle research.
“Let’s say the research goes on. The drugs are developed, they’re very expensive, and what good has it done you if you can’t access them?” Kuehl said. “We wanted to meet some of the concerns that CIRM had, that we felt were reasonable.
Those concerns, Kuehl said, included ensuring public access to orphan drugs, “and that those individuals who will have increased access to the drug [are] a significant proportion of the individuals in California who have the disease.”
“I thought it was a big ‘give,’” Kuehl said. “As soon as you meet a reasonable objection with an amendment, they [AFCF] say, ‘Oh but we have three more problems.’ My job as an author, frankly, is simply to say, ‘This could be a problem that I recognize. It’s not related to your objections or non-objections. And we’ll try to do something about it.’ ”
Kuehl added.
In the case of drug access, Gibbons said, the lawmakers succeeded: “Certainly she (Kuehl) has understood us and has moved in the right direction.”

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