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Stem-cell board too close to industry, critics worry

San Jose Mercury News
May 19th, 2005

California's new stem-cell institute is poised to begin spending $3 billion in public money for research, but watchdogs are worried about whether the board can distribute the money free of industry influence.

Critics say some of those on the institute's governing board have ties or even personal investments in business or other organizations that could benefit from the money. In addition, the institute's newly approved conflict-of-interest rules are inconsistent and largely self-policing, according to the critics. For instance, board members applied stricter rules to the institute's staff than themselves.

As a result, a panel of state lawmakers today is expected to vote on a proposal that would toughen the institute's conflict-of-interest provisions. It would require the institute's board, employees and science advisers to divest their holdings in firms conducting stem-cell or other biomedical work.

Their bill, SCA 13, backed by a state Senate committee last month, is based on similar rules established by the National Institutes of Health. But the NIH policies themselves are under fire as too draconian and may be softened considerably.

The fact is, there is little agreement at the state or federal level about how to guarantee objectivity in the way taxpayer money is doled out for biomedical studies. Some people want any hint of bias eliminated. But others argue that anytime experts are enlisted in the process, as is the case with California's stem-cell institute, conflicts of interest are inevitable.

``Trying to bar potentially `conflicted' experts from panels where their expertise is needed can be counterproductive,'' said David Baltimore, president of the California Institute of Technology, who is one of the stem-cell institute's 29 board members.

Baltimore is on the board of the Southern California biotechnology giant, Amgen, and owns stock in the company, which does adult stem-cell research.

If California adopted the same rules as NIH for its stem-cell institute board members, they apparently would require Baltimore to end his financial and job ties with Amgen, an idea Baltimore found objectionable.

``The NIH regulations have gone much too far,'' he said, adding that the federal policy has prompted several prominent scientists to quit the NIH. ``It is the worst possible model for California.''

But stem-cell board member Brian Henderson, dean of the University of Southern California's Keck School of Medicine, has a different view.

He owns stock in Genentech, which uses some mouse stem cells in its research, and in Medtronic of Minneapolis, which uses adult stem cells. Henderson said he would be willing to get rid of both investments, adding that he hadn't realized the companies did stem-cell research.

``If they are doing that, then I must divest,'' he said. ``I have no real interest in the companies, as they are part of a small legacy from my parents. I prefer a long distance from any company that does stem-cell therapy.''

Under Proposition 71, which voters approved in November, the stem-cell institute will distribute $3 billion to California researchers over the next decade. Experts hope to program stem cells, which grow and differentiate into specialized body cells, to combat everything from Parkinson's disease and cancer to strokes and spinal cord injuries.

Most of the money will go for human embryonic stem-cell research -- the cells that show the most promise for treatments -- but it also can be used for studies of human adult stem cells, mouse stem cells or other things deemed ``a vital research opportunity.''

Because the measure's backers considered it essential for those overseeing the money to understand the biology of stem cells, its governing board includes biomedical experts from businesses, universities, non-profit research organizations and disease-advocacy groups.

The board recently adopted a conflict-of-interest policy for its own members. But to the dismay of some critics, it is weaker than the one the board approved for the institute's own staff.

The staff must divest or place in a blind trust their investments in companies that apply for institute grants or that do substantial stem-cell research. Board members, on the other hand, are merely barred from discussing or voting on matters in which they have a financial or other personal interest, and their rules are essentially self-policing.

Requiring board members to divest -- as the legislative proposal would do, in line with the proposed NIH guidelines -- might prompt some of them to quit the institute, which would mean losing their expertise, said the agency's chairman, Robert Klein.

Lacking a uniform standard troubles state Sen. Deborah Ortiz, D-Sacramento, one of the sponsors of the conflict-of-interest legislation. ``Some of us are concerned about it,'' she said.

As tough as it can be, however, establishing some conflict rules is vital, said Paul Kincade, president of the Federation of American Societies for Experimental Biology.

``There is nothing more precious to a scientist than credibility,'' he said. ``If you lose that, you lose everything.''

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