Runner, Kuehl preparing stem-cell legislation

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Capitol Weekly (California)

Senator George Runner, R-Antelope Valley, and Sheila Kuehl, D-Santa Monica, are preparing bipartisan legislation that would affect the stem-cell agency created by Proposition 71 in 2004.

Kuehl confirmed that they had submitted two bills to Legislative Counsel by last week’s drafting deadline. The deadline to submit actual legislation is February 23.

She said one of the bills would change the makeup of the Independent Citizen’s Oversight Committee, which oversees the work of the state stem-cell research agency, the California Institute of Regenerative Medicine. The second bill sets standards for royalty returns on the state’s $3 billion stem-cell investment and ensures access to any treatments that were developed.

As currently drafted, the first bill would add two additional “public interest” members the ICOC. It would keep total membership at 29 by mandating that the chairperson and vice chairperson be elected directly from the existing board. These public-interest members would gain the ability to assign a proxy to attend meetings.
The bill also would phase in a reduction of board terms to four years; currently, 12 slots are occupied under six-year terms, with the remainder serving eight years. These changes would be intended to improve public oversight on the ICOC and would reduce conflicts of interests.

The second bill would make several changes in royalties and access. It would allow the ICOC to negotiate royalties of 2 percent to 5 percent on any treatments developed via grants to for-profit entities; there would be no cap on the royalties the state could receive.

The bill would also force for-profit entities to offer these treatments to the state at the Medicaid prices, rather than the current requirement that they be offered in line with weaker standards under the California Prescription Drug Discount Program. Finally, it would widen the definitions of what state agencies would be eligible for the discounts. Current CIRM regulations limit this to the state discount drug program, while the legislation would open it to any state agency, including prisons and county indigent health-care programs.

“We won’t have any comment until we have an opportunity to review legislative language,” said CIRM spokesman Dale Carlson. “The issues involving financial returns and access to treatments are very important and very complex, and the regulations we are proposing to address are still in development. We have benefited greatly from the Legislature’s advice and counsel in years past, and we look forward to a continuing cooperative partnership. We are interested in any and all ideas that can bring stem-cell treatments and therapies to fruition.”

So how is it that two legislators on opposite sides of the ideological divide are collaborating around one of the most sharply divisive issues around? The need for bipartisan support was written directly into the initiative voters passed in November of 2004. The final paragraph of the nine-page initiative places significant limits on the ability of the Legislature to change the “statutory provisions” or Proposition 71. These include a 70-percent vote requirement, meaning that any bill must have significant bipartisan support.

“We don’t know if it’s even worth introducing if the other side of the aisle said it was DOA,” Kuehl said.

“There is interests on both senators parts to look into this,” said Becky Warren, press secretary to Runner.

There are two other significant limits also written into the final paragraph of Proposition 71. Any legislation affecting CIRM and the ICOC also must be made public for 14 days prior to passage, effectively limiting the use of last-minute gut-and-amend tactics. Assembly Chief Clerk Dotson Wilson included a reminder a January 26 memo clarifying several rules adopted by the Legislature’s Joint Rules Committee on January 5.

“We just wanted to make sure no missed it,” Wilson said.

The reason such a reminder is necessary is that legislators now are getting their first real crack at Proposition 71. The initiative was written with a three-year moratorium on any such legislation. Bills affecting the CIRM may pass this year, but cannot actually go into effect until 2008.

“I think there has been an increased tendency to put that sort of bulletproofing into initiatives,” said John Simpson, the stem-cell project director for the Foundation for Taxpayer & Consumer Rights. “This one probably went further than most.”

A representative of another watchdog group, Jesse Reynolds of the Center for Genetics and Society, went a step further.

“It is another example of how the fine print of Proposition 71 isolates it from accountability,” Reynolds said. “The actions of the leadership of the stem-cell agency have reinforced that attitude.”

One of the principle stem-cell critics in last year’s Legislature, termed-out Senator Deborah Ortiz, tried to get around the three-year moratorium by pushing a constitutional amendment. Because it also would have had to go through voters, SCR 13 would not have been subject to the limit. It would have imposed strict new financial-disclosure and conflict-of-interest requirements on members that monitor the actions of CIRM.

Reynolds and other critics have charged that there is too close of relationship between CIRM and the ICOC.

SCR 13 died on the inactive file. But Ortiz’s co-sponsor was Runner, who is still around as one of the senior Senate Republicans. Kuehl, newly appointed as chairperson the Senate Health Committee, is taking the lead for Democrats. Capitol sources say that some Assembly members who signed on as co-authors, such as Dave Jones, D-Sacramento, also have been involved in the talks.

Of course, Republicans generally have been less comfortable with embryonic stem-cell research, and many have opposed it outright. Democrats generally are supportive; Ortiz proposed multiple pieces of legislation to try to push forward stem-cell research prior to Proposition 71.

However, both parties generally have been supportive of increasing oversight and guaranteeing royalties and drug access.

“The votes in the past have showed that there is bipartisan support for such action,” Reynolds said.
Kuehl said that her and Runner’s staffs have been talking, and also have been communicating with CIRM. Once the basics of the legislation are worked out, she and Runner may negotiate some of the specifics. “That will probably be a conversation for February,” Kuehl said.

The royalty and access issue has been particularly controversial, with critics such a Reynolds claiming that Proposition 71 was sold on false promises of $1 billion or more in investment returns for the state. A report by UC Berkeley economist Richard Gilbert last summer found that any royalty returns likely would be a mere fraction of that number. Gilbert noted that big financial payouts to universities and other public institutions have been rare, and that private companies often have shied away from research that has financial strings attached.

Assemblyman Jones likely will take a lead role for Democrats in the other chamber. Last week he sent a letter to the ICOC detailing his concerns ove royalty and access issues.
Contact the author Malcolm Maclachlan at: [email protected]

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