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Who will benefit more, consumers or drug firms? [California]

by Steve JohnsonSan Jose Mercury News
September 29th, 2005

INSTITUTIONS GETTING GRANTS HAVE LINKS TO INDUSTRY Given drug company ties to universities and other institutions likely to get grants under California's $3 billion stem-cell program, taxpayers need assurances they'll benefit from any products developed from the research, a consumer group urged Wednesday.

The stem-cell program, created by Proposition 71 last year, is not expected to begin issuing research money until next year. But based on grants the program handed out two weeks ago to train students in stem-cell fundamentals, the public has cause for concern, according to the Santa Monica-based Foundation for Taxpayer and Consumer Rights.

Of the 16 institutions that received those training grants, the group said, 13 have received money from drug companies, have board members who work for biomedical companies or have other industry links. The universities included UC-Berkeley, UC-San Francisco and Stanford.

That raises fears that the stem-cell effort could wind up benefiting private companies at taxpayers' expense. Unless the state requires that drugs developed by stem-cell researchers and their affiliated companies be affordable, ``the drug companies will charge whatever they want,'' warned Jerry Flanagan, the foundation's health care policy director.

But Nicole Pagano, spokeswoman for the stem-cell program -- formally known as the California Institute for Regenerative Medicine -- called the foundation's concerns premature.

She said it's no surprise many universities have ties with biomedical companies and added that it will be essential to enlist such businesses in the research effort. How that will be done hasn't been decided, she said, noting that the institute will hold a meeting next month to begin discussing who will benefit from the products it develops.

``We are seeing to this issue,'' she said. ``It's going to take some time. . . . This is a very complicated task.''

State Sen. Deborah Ortiz, D-Sacramento, who is pushing legislation to require that drugs developed by the stem-cell program be affordable, also has tentatively scheduled a legislative hearing for Oct. 31 to consider similar issues.

The idea is to help advise the stem-cell institute on ``how to ensure that California gets something back for its investment,'' said Ortiz's spokeswoman, Hallye Jordan.

One of the things Ortiz's hearing will consider is whether California should adopt the provisions of the 1980 Bayh-Dole Patent and Trademark Amendments Act, as was recommended in August by the California Council on Science and Technology.

That act allows universities to own the inventions they develop from federally financed research and to license that technology to private companies. But if California adopted that model, said the foundation's Flanagan, ``the companies could keep all the royalties'' and charge exorbitant prices for the drugs they develop.

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