Sacramento Bee
PALO ALTO, CA — A key state panel, switching gears after criticism from legislators and taxpayer advocates, voted Friday to give the state of California the same discount as the federal Medicaid plan on any stem cell therapies developed from taxpayer-funded research.
The governing board of the California Institute of Regenerative Medicine overruled a previous proposal to make companies charge “the lowest-available commercial U.S. price,” usually negotiated with private insurers such as Kaiser Permanente.
Those discounts are generally 20 to 40 percent, compared with the 40 percent for the federal government’s lowest Medicaid price.
The decision came the same day that The Bee reported mounting concern that any royalties the state would be paid from the research would quickly be eroded by the cost of providing high-priced stem-cell therapies to Medi-Cal patients.
In a November 2004 initiative, California voters authorized a $3 billion bond measure aimed at stimulating scientific and medical research on embryonic stem cells. A critical goal was ensuring that any breakthroughs would significantly reduce state health care costs and result in royalties or other fees for the state.
The 29 governors of the state Institute for Regenerative Medicine must balance rewarding California taxpayers for their investment and motivating the biotechnology sector to bring new findings to the commercial arena.
“Diagnostic therapies will only reach the patients if taken up by private industry,” said Ed Penhoet, vice chairman of a subcommittee that had initially suggested using lowest commercial price as the standard.
The federal-level discounts are expected to eventually save taxpayers millions of dollars to treat any Medi-Cal patients who suffer diseases from diabetes to cancer. But it will be years before embryonic stem cell therapies are available from companies licensing university discoveries.
Penhoet, formerly a top Chiron Corp. executive, said the discount was changed at the request of a trio of state lawmakers: Sen. Deborah Ortiz, D-Sacramento, Assemblyman Dave Jones, D-Sacramento, and Sen. Jackie Speier, D-Hillsborough.
The Santa Monica-based Foundation for Taxpayer and Consumer Rights had also suggested the lower federal price as a condition of licensing state research.
Penhoet, who said he believed the lowest commercial price would often equal the federal price, called the change a reasonable middle ground.
Joan Samuelson, president of the Parkinson’s Action Network, was among seven board members who voted against the federal discount. In 1987, Samuelson was diagnosed with Parkinson’s disease, which slowly robs victims of muscle control.
She is concerned that higher discounts might deter or delay development of stem cell therapies, explaining: “I believe in cheaper prices as much as Senator Ortiz and the others, but I think we should know what we’re doing.”
Board member Jeff Sheehy, spokesman for the AIDS Research Institute at the University of California, San Francisco, countered Samuelson: “We’re not dictating the exact dollar price they’re going to do. We’re just asking for some equity.”
The discount policy adopted Friday at Stanford University is one of many new interim guidelines that will address ethical and intellectual property issues related to what some call one of California’s boldes initiatives ever.
A companion policy allowing private companies to set their own discount policies for therapies for the uninsured working poor passed unopposed. The board also approved “march-in” rights to seize licenses from firms that fail to meet the conditions.
The guidelines serve as state law during a 270-day public comment period before they are made final late this year, provide a foundation for the state’s funding relationships with university research departments.
Aiming to speedily transfer knowledge to the private sector, the state stem cell institute is requiring researchers to quickly disclose their inventions, share discoveries with other researchers and write 500-word summaries for the general public.
Universities must also return 25 percent of any royalty revenue exceeding $500,000 to the state’s general fund to benefit taxpayers who will pay $6 billion for research grants and interest payments to make them possible.
With the stem cell measure, Californians hoped to jump-start research that the federal government has largely avoided due to ethical concerns.
“California has become sort of a surrogate for the U.S. effort on stem cell research,” CIRM President Zach Hall said Friday, announcing invitations to join two international forums.
Rules adopted Friday will regulate university researchers as they seek eggs from women to grow new stem cell lines for medical science. Interim guidelines attempt to prevent a lucrative market for egg donations from developing and limit compensation to donors. They also define disclosures that must be made to those who donate eggs for research.
The guidelines, written after a series of public hearings and committee meetings, are stricter than rules adopted by the National Academy of Sciences, said Dr. Bernard Lo, UCSF’s director of medical ethics.
“When there was a question, we wanted to err on the side of being a little bit strict instead of a little bit light,” he said.
In other developments Friday, CIRM Chairman Robert Klein announced that fundraisers are nearing $50 million in commitments to buy so-called bond-anticipation notes to keep the operation open while it resolves two lawsuits that have effectively blocked it from making research grants. The suits are expected to take 15 months to resolve.
WHAT EGG DONORS WILL BE TOLD
The California Institute for Regenerative Medicine adopted interim ethics rules Friday, saying women who donate eggs must be told:
- Their eggs will not be used for reproductive purposes.
- There are medical risks in donation of oocytes, including risks of ovarian hyperstimulation syndrome, bleeding and infection.
- Research will not directly benefit them or others at this point.
- Stem cell lines developed from their oocytes will be grown in the lab and shared with other researchers for future studies.
- If stem cells are transplanted into patients, researchers might contact the donor for more health information.
- Donors receive no payment beyond reimbursement for permissible expenses.
- Stem cell lines developed as a result of their donation may be patented or marketed commercially, but donors will receive no patent rights and no share of revenue from the patents.
Source: California Institute for Regenerative Medicine
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The Bee’s Jim Wasserman can be reached at (916) 321-1102 or [email protected]
