California Stem Cell Report

Publisher/Editor, David Jensen californiastemcellreport.blogspot.com djensen@californiastemcellreport.com Statement to CIRM external review panel Oct. 15, 2010 Good morning, ladies and gentlemen, You are now in your third day of examining one of the more interesting endeavors in the nation, if not the world. I hope the experience has been illuminating and worthwhile. I would like to make a few final comments on what I have heard – which is not what you heard – and place the California stem cell agency in a broader California perspective. One of the reasons that the Golden State – or should I say not-so-golden state – is in its current financial mess is what is known as ballot-box budgeting. For decades, the initiative process has been used to lock up state cash and mandate a variety of spending, regardless of changing conditions and societal needs. And it has been done in a manner that is not suspecptible to change when necessary. Prop. 71 is one of those measures. Careful observers of state government – from both sides of the aisle – think it is time that the limits be placed on the initiative process. That is not to say that what CIRM is doing is unworthy or is not beneficial. But it is useful to consider the implications of ballot-box budgeting when thinking about the agency in a broad perspective. Another consideration involves the bottom line. Is this the best way for California to spend $6 billion right now? Should young people be priced out of the University of California while researchers continue to receive millions? Should medical care for poor children be cut while shiny new labs are constructed for scientists to do basic research? These are questions that are not going to be answered today. And they are not really part of your charge. But they will be addressed by the people of California in a couple of years or so when the stem cell agency asks for another $3 billion to $5 billion. The prospect of another ballot measure for CIRM places the agency squarely in a political context – and your report as well. Regardless of the view that Prop. 71 was aimed at taking politics out of stem cell research, CIRM is very much a creature of the political process. It was created through a $30 million election campaign.. Roughly one-quarter of the campaign funds were raised from one particular venture capital firm, which has invested heavily in a firm that is the recipient of a $1.5 million CIRM grant and which plans to ask for more. Another election campaign will require tens of millions of dollars. Backers of the effort will have to tap the industry that is likely to benefit, which, of course, raises some perception problems. The agency, as well, will be under heavy pressure to demonstrate concrete results that can be presented to the California people as a benefit with the promise of much more to come. In 2004, Prop. 71 was sold as hope – not science. That is not likely to change much in a couple of years. That's because people are not really interested in experiments with odd things that they cannot touch or see unless they believe they will relieve suffering – or make money. Yesterday we heard CIRM officials tout the economic benefits of the agency. There is no arguing with

with the fact CIRM does have a modest beneficial effect. Spending $3 billion can help out the economy. But contending that CIRM has a major impact on the the California economy is nonense. As I wrote in 2008, the biotech industry, which goes well beyond stem cells, is a tiny player in the California economy. It accounts for something over 100,000 jobs, a mere piffle compared to the total workforce of 18 million in an economy that runs at around a mammoth $1.7 trillion annually. As for the economic statistics that you have heard from CIRM, many of them come from a study commissioned by the campaign in 2004, which has been challenged more than once. The remainder appear to come from a yet-to-be released, $300,000 study commissioned by CIRM. The RFP for that contract stipulated that winner must “execute a vibrant and aggressive strategy to support the goals and initiatives of CIRM.” Political campaigns engender a certain amount of hyperbole, concealing the negative and obfuscating nuances. But overstating and overpromising can blow back on the agency, damaging its credibility as well as the credibility of the entire field. I support human embryonic stem cell research and the efforts of CIRM generally. I do what I do to help inform a tiny audience with hard-to-find information. I raise concerns when I see something that I believe is not in the best interests of CIRM or the people of California. Which is one of the reasons I write frequently about openness issues. CIRM can easily solve its transparency problems. The effort would be nearly painless. If it does not, the cost could be extremely high as it comes under the intense scrutiny that is involved in a political campaign. In the mid-1970s, when I worked for the governor of California, new appointees would sometimes come to me with questions about openness. My advice to them and to CIRM now is: “If it can't stand the light of day, don't do it.” Then there will be no unpleasantness should something come to light in an unexpected spasm of disclosure. And it will. As the old saying goes, there are no secrets in government. This is especially important as CIRM edges more closely to industry in efforts to develop marketable therapies. The biotech business is already less than happy with CIRM. It seems to have something of case, based on what some of the CIRM directors have said. As the agency tries to correct the situation, it could become a tad too intimate with industry. The agency's primary responsibility, however, is to the people of California. It should be cognizant of the fate of the many other California agencies that have been co-opted over the years by the businesses they are supposed to regulate and assist. And CIRM is a very much a regulator as well as cash machine. Finally, I want to thank you for coming to San Francisco to help ensure that California citizens receive good value for their money. I hope that during your closed-door sessions that you saw candor and flinty-eyed analysis. But that is hard to come by under the best of circumstances. I am looking forward to seeing your full report. I am sure that it will help CIRM to do better and will benefit the entire field of stem cell research, both nationally and internationally. #####################################

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