Legislature is reduced to small measures as need for fundamental change grows

California’s quasi-public stem cell research agency is holding a
rare meeting in Sacramento on Wednesday, and questions about its
internal conflicts and finances remain as urgent as ever.

Three months ago, the oversight board of this San
Francisco-based institute was forced to toss out 10 of 58 research
grant proposals after some of its board members were found to be
lobbying behind the scenes for certain grants.

The incident again highlighted the potential for abuse when
administrators for universities and medical centers — who make up half
of the institute’s oversight board — are in a position to influence
public grants that could benefit their institutions.

If that wasn’t reason enough to reform the California Institute
for Regenerative Medicine, its leaders provided another reason last
month with an attempt to elevate executive salaries.

Institute President Alan Trounson, who earns $490,000 a year,
wanted the top pay range for other executives to be increased about
$200,000 a year, to a ceiling of $405,000.

That was too much for the institute’s governance subcommittee,
which urged that the ceiling be lowered to $332,000. Trounson was not
pleased. "If I can’t make appointments of people who can do the job,
you’ve essentially wasted my salary, which is a disaster," he
harumphed.

Given that the state faces a multi-billion-dollar budget
deficit — and that $3 billion in bonds could be put to better use than
lavish executive pay salaries — one might think that lawmakers would
be ready for a full revamp of the stem cell agency.

Think again. Because of provisions that were written into law
when voters approved Proposition 71 in 2004, lawmakers can’t alter the
institute’s internal governance until they assemble a 70 percent
supermajority of votes in both houses.

Thus, lawmakers are setting their sights on lower-hanging
fruit. State Sen. Sheila Kuehl, D-Santa Monica, has introduced
legislation (Senate Bill 1565) that aims to tighten the institute’s
standards on making new stem cell therapies affordable to Californians.

Kuehl fears a future in which private companies make millions
of dollars in profits off state-funded cures for spinal cord injuries,
diabetes and other diseases that are unaffordable to people without
insurance.

Although Kuehl is rightly concerned about taxpayers being shut
out from therapies for which they provided venture capital, her bill
doesn’t go far enough in ensuring an equitable outcome. What’s needed
is clear legal authority for future attorneys general to regulate the
pricing of stem cell therapies when companies are making excessive
profits after benefitting from the state’s investment.

Kuehl’s bill doesn’t do this. Neither would it eliminate the
potential conflicts, and excessive number of board members, that have
long kept the institute’s oversight committee from operating
effectively and credibly. All her bill would require is a study of the
institute’s governance by the Little Hoover Commission by 2009. Too
little, too late.

Although SB 1565 is better than nothing, it is a far cry from
what California taxpayers and patients deserve for the $3 billion to $6
billion, including interest — they have agreed to invest in this field
of science.