Letter Says Attorney General Should Have Right to Intervene

Santa Monica, CA — Ownership rules adopted by California’s stem cell oversight committee don’t do enough to ensure that all Californians will have affordable access to any Proposition 71-funded medical breakthroughs, consumer advocates said Tuesday.

In a letter Tuesday to ICOC chairman Robert Klein the Foundation for Taxpayer and Consumer Rights (FTCR) called on the Independent Citizens’ Oversight Committee (ICOC) to add regulations allowing the Attorney General to intervene if any Proposition 71-funded cure or drug is priced unreasonably.

“California’s taxpayers are paying for this stem cell research,” said John M. Simpson, FTCR’s Stem Cell Project Director. “It’s only fair that they pay reasonable prices for any drugs or cures that result from research they funded.”

Proposition 71, overwhelmingly approved by the voters, provides $3 billion for stem cell research over 10 years. Including bond financing, $6 billion in taxpayer money is at stake. Last week, the ICOC approved interim regulations for universities and non-profit research institutions that would govern who owns and controls any discoveries resulting from Prop 71 research.

These intellectual property (IP) rules say that a grantee must pay the state 25 percent of any revenue more than $500,000 from Prop 71 discoveries. They require that publicly funded programs would be able to buy any drugs at the federal Medicaid price and that companies have plans to make drugs or therapies available to uninsured people.

“It’s important the state be paid back when there is revenue,” Simpson said. “But the committee set threshold too high. It should be $100,000.”

The proposed rules had provided publicly funded programs pay the “best available commercial price.” However, at its meeting the ICOC responded to objections from legislators and consumer advocates and adopted the significantly lower federal Medicaid price standard.

FTCR noted that the IP rules require grantees to negotiate non-exclusive licenses for Prop 71-funded inventions whenever possible and to make inventions available for research purposes at cost. This will help ensure Prop 71-funded research is widely disseminated and enhance the prospects of breakthrough discoveries.

To further promote sharing and dissemination of information, FTCR urged the
ICOC to support the creation of a stem cell patent pool.

At a meeting in March, the IP Taskforce will begin drafting IP rules for commercial organizations. FTCR will continue to monitor the process and insist the rules be based on three principles: affordability, accessibility and accountability.

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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: http://www.ConsumerWatchdog.org
Our Stem Cell Project page is at: http://www.stemcellwatch.org