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Sacramento, CA — Many Californians will not be able to afford new medical treatments developed with $3 billion in taxpayer grants under Prop 71 if the stem cell institute adopts a flawed policy to allow grant recipients to own new medical treatments, according to the Foundation for Taxpayer and Consumer Rights (FTCR).

Today a key working group of the Prop 71 stem cell institute will consider a flawed federal “intellectual property” rights policy as a model for California. That law, called the Bayh-Dole Act, has failed to keep prescription drugs and other medical advancements developed with public funds affordable.

“Many Californians support stem cell research but are unwilling to provide a blank check to biotech and drug companies to develop it. Allowing private companies to own and control new medical treatments developed with taxpayer money is a violation of the public trust,” said Jerry Flanagan of FTCR. “Voters were told they would benefit from stem cell research, but if the drug companies own new medical treatments they will likely price them out of reach of average Californians. For most Californians, affordability is the key to access.”

For example, under federal guidelines, the rights to the blockbuster glaucoma drug Xalatan, developed with $4 million of taxpayer grants at Columbia University, were sold to Pharmacia Corp. for less than $150,000. Pharmacia made $507 million on Xalatan in 1999 alone, charging U.S. patients $50 a bottle for ingredients that cost only pennies to produce.

The recommendation to adopt the flawed federal policy was made by a group with deep conflicts of interest with private companies that stand to profit if the policy is adopted. 21 of the group’s 28 members have ties to grant recipients, pharma/biotech companies, and the stem cell institute, according to an analysis by FTCR.

Taxpayer money accounts for approximately 44% of all health-related research and development nationally. Despite this huge investment of taxpayer money, the federal government has never used a provision of the federal Bayh-Dole Act allowing regulators to require affordable prices for prescription drugs and other products developed with public funds. As a result, taxpayers who have already paid for research provided by government grants are often required to pay huge prices for new prescriptions at a doctor’s office or pharmacy.

Read a recent Op-Ed on the subject of public ownership of California stem cell research by FTCR’s Jerry Flanagan and Deborah Burger, President of the California Nurses Association.

The California Council on Science and Technology (CCST) recommended that the stem cell institute adopt the federal Bayh-Dole standards. CCST will present their report at the meeting today. At the CCST:

* Twenty-one of the twenty-eight members of the California Council on Science and Technology have ties to grant recipients, pharma/biotech companies, or the stem cell institute oversight committee;
* Nine of the fourteen CCST Board of Directors have ties to grant recipients, pharma/biotech companies, or the stem cell institute oversight committee.

“The public health value of stem cell research could be significantly compromised by deep conflicts between the overseers of public funds, drug companies, and grant recipients,” said Flanagan of the Foundation for Taxpayer and Consumer Rights. “The concern is that research grants will be given on the basis of personal relationships and profit, not in the best interest of California patients.”

The first round of research grants were awarded to private research institutes and universities that have links to biotech and pharmaceutical companies. Federal policies in place under the Bayh-Dole Act allow universities and institutions to license inventions developed with taxpayer funds to private companies, who are allowed to keep the large majority of royalties and profits. 13 of the16 recipients of the initial grants have ties to biotech and pharmaceutical companies or to the stem cell institute oversight committee. Click here to read an analysis of the 13 grant recipients.

Payment of the grants has been blocked by lawsuits alleging that the stem cell institute is currently violating the California Constitution by awarding taxpayer money while operating outside the control of the state.

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The Foundation for Taxpayer and Consumer Rights (FTCR) is California’s leading nonpartisan consumer advocacy organization. For more information about stem research in California, go to: http://www.consumerwatchdog.org/healthcare/StemCell/