Stem Cell Hype Is Hard to Combat
The California Council on Science and Technology, a group of highly experienced and well-informed professionals, has discovered a painful fact of life: Nobody likes a spoilsport.
Last week, the council issued a report explaining why the state shouldn’t count on a quick shower of wealth from the $6-billion Proposition 71 investment in embryonic stem cell research. The report observed that an attempt by the Legislature to mandate a specific financial return from all commercial stem cell treatments derived from state grants would, in fact, discourage the commercialization of such treatments. It observed that useful research in biotech and other fields developed at a snail’s pace until the federal government abandoned a similar mandate in 1980.
The report further noted that Californians have “unrealistically optimistic expectations” about financial gains from the stem cell program. Its authors blamed these expectations partially on an economic impact analysis, paid for by the Proposition 71 promoters, that had all but advised voters to start counting the money now.
Despite its effort to deliver practical advice about what to expect from a research effort that is in its earliest stages, the council was ridiculed and insulted.
State Sen. Deborah Ortiz (D-Sacramento), who is a critic of the stem cell program now but was on board when Proposition 71 got marketed to voters as a shower of gold, dismissed the council members as “biotech and university representatives.” Marcy Darnovsky associate executive director of the Center for Genetics and Society called the authors a “stacked committee” that was “dominated by private industry.”
Sorry, but this won’t do. The council’s study group comprised 17 members, of whom seven represent (arguably) private industry. An additional seven came from academia, including four from the University of California or its constituent campuses; two from federally funded research institutions (Lawrence Livermore National Laboratory and NASA’s Ames Research Center); and one from state government.
What these people have in common, says Susan Hackwood, executive director of the nonpartisan and nonprofit science and technology council, is their experience in handling intellectual property.
They’re also knowledgeable about what’s required to move basic research into the commercial world: patience and lots more money, most of which will have to come from industry.
Although the state’s commitment of $300 million a year for 10 years looks big -- and is big in terms of the state budget -- it’s dwarfed by the $45 billion spent annually by industry on research and development and the $14 billion in federal grants made annually to California research institutions.
Therefore, the council report argues, nothing can be gained from insisting on a specific return for the state from stem cell discoveries. Any such requirement would risk driving other investors away. Moreover, if the state insisted on owning the fruits of research it funded, it would have to create a bureaucracy to manage its intellectual property. Neither the state nor the stem cell agency, the California Institute for Regenerative Medicine, is currently competent to do so.
As the council reports, the federal government faced similar intellectual property issues in the 1970s and 1980s, including who should own the fruits of grant-financed research, and what should be reasonably expected from royalties and license fees.
Until 1980, the report states, federal grantees had to negotiate intellectual property agreements individually with each grant-making agency. This hindered the commercialization of valuable discoveries because no one knew who could claim the profits. Of the 28,000 patents owned by the federal government, only about 5% were licensed for commercial development.
The solution was the Bayh-Dole Act, which gave grant recipients the right to patent inventions paid for by federal grants and license them to other firms. This has led directly to a 25-year boom in commercial development of university research, much of it federally funded. Cancer treatments, genetic therapies and computer and networking advances are among the resulting achievements.
The idea that intellectual property should be owned by the grantee, not the grantor, thus isn’t new. But this history was willfully ignored by the politicians who jumped on the Proposition 71 bandwagon and by the promoters who drove it. They promised that billions would flow into the state treasury from patent royalties and overstated the prospects for any patentable discoveries at all. And now that experts in transferring research from the lab into the marketplace have called them on it, they curse them as mere industry shills.
The council’s report simply exposes the contradictions inherent in the stem cell program. It was established to advance the cause of embryonic stem cell research and to fill the state treasury, but if the state insists on the second outcome it may well fail to achieve the first.
This suggests a couple of lessons. One is that state governments, which tend to be preoccupied with economic development above most other concerns, are perhaps the wrong entities to fund basic research programs whose fruits may not mature for decades, as is the case with stem cell science. (Although the White House is a major roadblock to embryonic stem cell research, even Republicans are beginning to question its policy, and in any case Bush won’t be in office forever.)
Another is that initiative campaigns, with their wild promises and unverifiable assertions, have become poor tools for making policy. We voters would be wise to remember that, as more lies and misrepresentations fill our TVs in the run-up to the November election.
