California Legislators Missed Opportunity To Protect Consumer Interests With Stem Cell Bill

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Santa Monica, CA — Sponsors of a stem cell ownership bill have decided not to press for passage of the measure this legislative session and have missed an opportunity to ensure affordable access to any stem cell discoveries financed by California taxpayers, the Foundation for Taxpayer and Consumer Rights (FTCR) said today.

“Sadly, both the proposed bill and regulations being developed by the stem cell institute fail to protect consumers from the possibility of unreasonable pricing of discoveries resulting from research they paid for,” said John M. Simpson, FTCR’s stem cell project director. “The bill was really about political muscle and how much influence the legislature should have over the stem cell institute, not the people’s interests.”

After the bill was introduced, the stem cell oversight committee agreed to modify its proposed rules covering for-profit grant recipients to bring them closer to the Senate bill.

The proposal, SB 771, was sponsored by Senators Sheila Kuehl and George Runner. It would have mandated regulations to control the ownership rights — so-called intellectual property (IP) rules — of any discoveries made resulting from research funded by California’s stem cell institute. A key provision was that the state would be paid 25 percent of any royalties on state funded-discoveries.

The California Institute for Regenerative Medicine is developing IP regulations through the state’s administrative law process and its oversight committee opposed the Senate bill saying it was “premature” and argued their process should be allowed to run its course.

A spokesman for the bill’s authors said that the bill would probably be amended and used for another purpose. “It sounds to me like it’s earmarked to be used in the legislative technique known as ‘gut-and-amend’,” said Simpson.

The spokesman said the measures will be re-introduced if the regulations developed by the stem cell institute are insufficient.

FTCR said the stem cell institute’s IP regulations — no matter if they originate from the Legislature or from the administrative law process — must include a provision that would allow the state’s top law enforcement official, the attorney general, to intervene if drugs, treatments or therapies that are discovered as a result of Proposition 71 funding are priced unreasonably.

“Without that provision,” said Simpson, “the rules are toothless. It allows Prop 71 to become a blank check for biotech.”

He called on the stem cell institute’s oversight committee to introduce such a pricing provision in its rules. If it fails to do so, he called on the Legislature to act in behalf of taxpayers and implement such a provision.

Passed in 2004, Proposition 71 created the stem cell institute in a $6 billion program to fund stem cell research in the state. So far about $210 million as been awarded for training, research and laboratory construction.

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The Foundation for Taxpayer and Consumer Rights is California’s leading non-profit and non-partisan consumer watchdog group. For more information visit us on the web at: and

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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