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National Panel Says California Stem Cell Agency Has Room for Improvement

Building a foundation. California's stem cell agency has funded new facilities, providing $50 million for the Lorry I. Lokey Stem Cell Research Building at Stanford University, for example.

All Rights Reserved by the California Institute for Regenerative Medicine, Mark Tuschman

A review released today by the Institute of Medicine (IOM) praises the California Institute for Regenerative Medicine (CIRM) as a "bold social innovation" that provided a creative new source of funding that has turned the state into an international hub of stem cell research. But the IOM panel authoring the report also concluded that the funding agency’s organization and governance is not optimal. The review suggests changes to help CIRM maximize its impact, ensure its long-term sustainability, and improve its credibility in the eyes of the public.

CIRM was created by a 2004 ballot initiative, Proposition 71, that committed the state to raise $3 billion for stem cell research through bond sales. So far, CIRM has spent or committed roughly $1.8 billion, including $271 million in seed money for new research facilities. The funding body has had many ups and downs in its first 8 years. Many scientists credit it with providing a safe harbor for embryonic stem cell research, which has often come under political attack, and boosting stem cell research more broadly. Yet, consumer watchdog groups and others in the state are impatient for the stem cell treatments that they feel they were promised during the Prop. 71 campaign and have misgivings about the amount of money being poured into research in years when California has endured a dire financial crisis.

The IOM panel, which CIRM requested and for which it paid IOM $700,000, was not asked to decide whether the money has been well spent. Rather, the panel was charged with evaluating CIRM’s organization and policies, and suggesting improvements.

One long-standing sore point among CIRM critics is that many members of its 29-member governing board, the Independent Citizens’ Oversight Committee (ICOC), represent institutions that have benefitted from CIRM funding, creating at least the appearance of a conflict of interest. The IOM panel took note of this as well and recommended that ICOC members should not be allowed to sit on the committees that review grants. CIRM’s credibility with the public would also be helped by including on ICOC and various working groups more scientists and patient advocates without ties to institutions funded by CIRM, and by taking other measures to address potential conflicts of interest, the panel said.

More generally, the panel found that the current governance structure of CIRM is problematic because ICOC is charged with oversight of the funding agency but also has a hand in running its day-to-day operations. These two roles should be separated, the panel recommended, by putting the CIRM president and other senior managers in charge of daily operations, including grant reviews, and ICOC in charge of strategic planning and oversight. "We think it is not possible to both provide independent oversight and yet be involved in daily management decisions at the same time," said panel chair Harold Shapiro, a professor of economics and public affairs and former president of Princeton University, in a conference call today with reporters.

CIRM leaders have said that the organization is now entering a second stage in which the focus of its funding will shift to translating basic stem cell science into therapies. That will require cooperation with biotech companies. CIRM’s relationship with industry has been rocky at times, however, and the panel suggested including trying to mend those ties by including more industry representatives on ICOC and as advisers.

"The IOM has done a really good job of identifying some matters of concern and recommended some ways of dealing with them that we will take very seriously," says ICOC chair Jonathan Thomas. One issue that the board will have to consider is the extent to which the panel’s recommendations are compatible with constraints on CIRM's leadership structure dictated by Prop. 71: Some of the suggested changes could require amending the legislation.

The panel also advised CIRM to develop a plan to ensure its viability after the initial $3 billion raised by bond sales has been spent, and Thomas says that will continue to be an active area of discussion. CIRM will likely award its final round of grants from its initial round of funding in 2017. Thomas has proposed keeping the money flowing by creating a venture philanthropy fund that would seek contributions from private donors. But he says another state bond initiative is not out of the question. "We're contemplating a lot of different options," he says. "At this stage in the game, we’re not ruling anything out."