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IOM Recommends Sweeping Changes at California Stem Cell Agency

by David JensenCalifornia Stem Cell Report
December 6th, 2012

Harold Shapiro, chairman of IOM-CIRM panel, Princeton University Photo

A blue-ribbon study of the $3 billion California stem cell agency today said the program has “achieved many notable results,” but recommended sweeping changes to remove conflict of interest problems, clean up a troubling dual-executive arrangement and fundamentally change the nature of the governing board.

The recommendations from the 17-month study by the Institute of Medicine (IOM) would strip the board of its ability to approve individual grants, greatly strengthen the role of the agency's president, significantly alter the role of patient advocates on the governing board and engage the biotech industry more vigorously.

Harold Shapiro, former president of Princeton University and chairman of the IOM study panel, said,
“Overall, CIRM (the California Institute for Regenerative Medicine) has done a remarkably good job” in giving the state a prominent position in regenerative medicine. But he said the stem cell field has “evolved”and CIRM needs to change with it.

As for turning research into cures, the report said,

“The challenge of moving its research programs closer to the clinic and California’s large biotechnology sector is certainly on CIRM’s agenda, but substantial achievements in this arena remain to be made.”
Asked for comment, J.T. Thomas, chairman of the CIRM governing board, said it was premature to offer an opinion on the report, which will be presented to directors Dec. 12 at their Los Angeles meeting. (See here for the full text of Thomas' remarks.)

The study was conducted at the behest of CIRM, which paid the IOM $700,000. The IOM is a prestigious non-profit organization that was created in 1970 to provide authoritative advice to policy makers and the public.

In 2010, when directors authorized the study, Robert Klein, then chairman of the CIRM board, and other board members said that they hoped the study would lead to another multibillion dollar state bond issue to support the agency(see here and here). Duane Roth, a San Diego businessman and co-vice chairman of the CIRM governing board, was the lone no vote on the study. He warned directors that that they could not “go in just sort of blind trust that (the IOM is) going to reach the conclusion you want them to reach.”

The agency will run out cash for new grants in four years. Currently California remains in the throes of state budgetary problems, and the agency has put on hold talk of another bond election. It has also broached the possibility of seeking private funding.

The IOM report said the agency should develop a full-blown “sustainability platform” and plans that would spell out its likely financial structure and future rules on grants and their administration, including intellectual property.

The study echoed concerns and complaints about CIRM's operation that were aired even before the agency was officially created by voters in 2004. One of those involves the built-in conflicts of interests on the CIRM governing board. As of September, 92 percent of the $1.7 billion handed out by the agency had gone to institutions linked to persons serving on the 29-member board.

The report said,
“Far too many board mem­bers represent organizations that receive CIRM funding or benefit from that funding. These com­peting personal and professional interests com­promise the perceived independence of the ICOC(the CIRM governing board), introduce potential bias into the board’s decision making, and threaten to undermine confidence in the board.”
The IOM cited an ongoing scandal in Texas dealing with that state's $3 billion cancer agency. The flap has led to mass resignations of the agency's grant reviewers. The IOM said,
“Recent controversy surrounding the Cancer Prevention and Research Institute of Texas grants process illustrates the importance of rigorous scientific review free from inherent or perceived conflict and the consequences when these boundaries appear to be breached.”
However, the IOM press release said,
“Because the committee was not charged with reviewing CIRM's past funding decisions, it did not identify any specific cases of conflict.”

The IOM surveyed members of the board (ICOC) about conflicts of interest. The report said,

"While a majority of respondents stated that personal interests did not play a role in their work on the ICOC, some responses were more equivocal. One respondent replied that it was 'hard to tell' given that 'so many decisions take place off camera in secret meetings,' while another acknowledged that ICOC members are human, and of course their decisions are influenced by personal beliefs and interests."

To help deal with conflicts of interest, the IOM recommended that the CIRM governing board not be allowed to approve individual grants. Instead, the board would be given a slate of applications that would be approved as a block. All CIRM board members would be removed from the grant review committee and the grant review process would be turned over to the president of the agency, currently Alan Trounson.

The IOM recommended that a majority of the board consist of “independent” members and said that the board should not be increased beyond its current 29 members, although it could be shrunk.

Conflict of interest rules should be revised to deal with personal conflicts, which could have a major impact on the 10 patient advocate members of the board but also other directors and possibly staff who have family members with health issues. The report said,

“California law focuses primarily on financial conflicts of interest, but the committee believes that personal conflicts of interest arising from one’s own or a family member’s affliction with a particular disease or advocacy on behalf of a particular disease also can create bias for board members. Studies in psychology and behavioral economics show that conflict of interest leads to unconscious and unintentional 'self-serving bias' and to a 'bias blind spot' that prevents recognition of one’s own bias. Bias distorts evaluation of evidence and assessment of what is fair.”

The IOM said that the board is much too involved in operational matters, including the chair and the two vice-chairs. The report said,

“The board should transfer management responsibilities to management so it can provide truly independent oversight and evaluation of management, strategic planning, and broad direction for resource allocation.”

The IOM repeatedly and favorably cited a 2009 study by California's Little Hoover Commission, the state's good government agency. It noted that CIRM rejected most of the commission's recommendations. The IOM also cited recommendations by the agency's own “external review” panel in 2010 and suggestions this year from the first performance audit of the agency, which cost CIRM $234,944.

Many of the IOM's recommendations would require either legislative approval or another ballot initiative. However, changes in the Prop. 71, the ballot initiative that created CIRM, require a politically difficult super, supermajority vote (70 percent) of the both houses of the legislature and the signature of the governor. The requirement was written into the 10,000-word initiative and has been used by CIRM to block legislation that it did not favor.

Here is brief rundown on some of the other IOM recommendations:

  • Greater engagement with industry to commercialize stem cell research. Noting that industry has received only 6 percent of the agency grants, the report said business representation on CIRM working groups and other committees “should be enhanced to leverage industry’s expertise and resources in product development, manufacturing, and regulatory approval in support of the ultimate goal of bringing therapies to patients.”
  • Elimination of the current process in which applicants rejected by reviewers appeal publicly to the governing board. Noting that 32 percent of “extraordinary petitions” have been successful, the report said they “undermine the credibility and independent work” of grant reviewers. Instead appeals would heard only by staff behind closed doors.
  • Creation of a new scientific advisory board, appointed by the CIRM president with a majority from outside of California, instead of multiple advisory groups. The report said,“Such an external board would be invaluable in vetting ideas for new RFAs, suggesting RFAs that otherwise would not have been considered, and helping CIRM maintain an appropriate balance in its research portfolio. Input from this board would help CIRM make fundamental decisions about dealing with challenges that cut across particular diseases, decide which discoveries should progress toward the clinic, and determine how best to engage industry partners in developing new therapies.”
  • Funding of programs on bioethics and regulatory problems. The report said,“It is difficult for researchers to find appropriate funding for stem cell-specific ethics and policy work, and filling this funding gap is well within CIRM’s budget.”

One final note: As mentioned earlier, Duane Roth, co-vice chairman of the agency, was the only no vote on the board when it authorized the IOM study in 2010. The IOM today said,

“The critical tasks performed by the vice chairs should be reassigned to management. In particular, the important tasks of government relations and corporate relations both should be carried out by staff reporting to the president rather than by the vice chairs of the board.”

For more excerpts from the report, see this item



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