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Don’t weaken rules on stem cell licensing

Sacramento Bee

The following editorial was published in the Sacramento Bee on Thursday, July 13, 2006.

Lawsuits have stymied California’s stem cell research institute from dispensing any of the $3 billion voters authorized in 2004, but this endeavor isn’t in deep freeze. Far from it.

The California Institute for Regenerative Medicine (CIRM) is close to finalizing rules that will guide how nonprofit groups receiving CIRM grants can commercialize any stem-cell therapies they develop. This is tricky business. Rules too restrictive could scare off companies needed to commercialize important medical discoveries, yet the public interest must be protected. Voters agreed to invest $3 billion two years ago on the promise that the state would receive reasonable royalties and other benefits from companies that could profit from this investment.

In February, the institute enacted some interim rules that, as we noted then, “could make California a leader in commercializing medical inventions that come from public research dollars.” The rules encouraged sharing of research among universities. If a nonprofit research institution partnered with a for-profit company to bring a therapy to market, the state would then get a 25 percent royalty on all profits of more than $500,000.

The interim rules also gave the state “march-in rights” — the ability of California to take back a license from a company that hasn’t made adequate progress in commercializing a medical breakthrough.

Since that time, biotech companies and trade groups have mounted an effort to weaken those provisions. Some companies have said they will not seek to commercialize CIRM-funded therapies if these restrictions remain in place. “It’s just not a risk worth taking,” an executive for Genentech said in a March hearing.

Institute leaders shouldn’t be swayed by these claims. Assuming the institute prevails in court over lawsuits challenging its constitutionality, California will have $3 billion to dispense over 10 years. This is a huge pot of money for embryonic stem cell research — unequaled anywhere else — and private companies will be falling over themselves to license any promising medical treatments.

For that reason, the institute needs to stay true to the promise of Proposition 71, which voters approved by a wide margin. The text of the law is very clear on what the public should expect. Funding, the law said, would go to scientific and medical research “that will significantly reduce state health care costs in the future” and provide “an opportunity for the state to benefit from royalties, patents and licensing fees that result from the research.”

The institute’s task force on intellectual property is scheduled to meet tomorrow at the Sacramento Convention Center, Rooms 104 and 105, from 9 a.m. to 1 p.m. It will be taking public comments. More information is at: www.cirm.ca.gov/meetings.

Consumer Watchdog
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