California's stem-cell initiative on hold

Jeanne Loring is all dressed up in her lab coat and has - so to speak - nowhere to go.

As co-director of the stem-cell center for the Burnham Institute in La Jolla, Calif., Ms. Loring has spent the past 15 months acquiring incubators, biosafety hoods, and microscopes to tackle what she and colleagues feel is the most compelling medical development in decades. They hope stem-cell research can provide cures for diseases ranging from Alzheimer's to heart disease.

But Loring and her coterie of 30 researchers - and similar operations across the state - are being stopped in their tracks. A 2004 citizens initiative, which catapulted California to the forefront of the nation's nascent embryonic stem-cell research industry by approving $3 billion in state funds, is stuck in court. Although arguments were heard last week and a superior-court judge may rule in coming days - regarding proper state oversight - the appellate process may go on for well over a year, legal analysts say.

State legislators are also looking to address public concerns with a host of new controls spelling out auditing procedures, possible conflicts of interest, royalty agreements, and protection for human egg donors.

"We have stopped holding our breath and are not turning blue anymore," says Loring, whose staff is taking pay cuts to keep grad students and postdoctoral clinicians on payroll until state money is freed for the project. The Burnham center has already won a grant of $1.5 million over three years from the state agency created by voters. But until the court case is settled, no such money can be dispersed.

The lab currently is supported by a combination of private money, foundation grants, and National Institutes of Health subsidies. But it is not permitted to use federal dollars, the largest portion of its funds, to work on new embryonic stem-cell lines. "We are hot on the trail of the biggest, most important development in science since the human genome project, but can only work in fits and starts," Loring says.

Known as the Stem Cell Research and Cures Act, Proposition 71 was approved by 59 percent of California voters in November 2004. The measure allocated $300 million a year for a decade and created a state agency (called the California Institute for Regenerative Medicine, or CIRM), as well as a 29-member citizen oversight committee.

Controversy and criticism followed almost immediately - partly because of the scope and complexity of the idea, partly because no state had ever attempted such an idea separate from the federal government. The Bush administration prohibited federal funding for embryonic stem-cell research, except on a limited number of existing embryonic stem-cell lines.

Other challenges included new guidelines regarding peer review, ethical safeguards, and patient protections. There were also problems forging ahead into a new realm of research that had not previously existed.

By most accounts, the CIRM has made significant progress on practically every front. It has filled out its governing board with some of the top scientists in the country and has held over five dozen public meetings to air concerns. Chief among those concerns have been ethical questions concerning the coercion of egg donors, the distribution of commercial benefits from newly discovered procedures, and disclosure about conflict of interest by board members.

"The CIRM has been subjected to an extraordinary amount of attention from public, press, and legislators and has responded with extraordinary openness through the past year," says R. Alta Charo, a law and bioethics professor at the University of Wisconsin in Madison. She and others say the effect has been to create policies exceeding federal standards in some areas.

But plaintiffs in the lawsuit argued last week that lack of direct management by the state and control of taxpayer funds violates the state constitution. The plaintiffs are a Christian conservative group, the California Family Council, and a tax group, the National Tax Limitation Foundation, which is being supported by the Life Legal Defense Foundation in Napa.

"We think the state shouldn't have to pay for all this research and can't sustain it," says Dana Cody, executive director of Life Legal Defense. "That lack of sufficient oversight is what we are concerned about."

Defendants told the judge last week that the measure does meet state law about oversight, and they hold that the plaintiffs' motivation is not legal, but moral. "If you look at who is behind the suits, you will find they are fundamentally opposed to the research and are doing anything they can to stop it," says CIRM counsel James Harrison.

Besides the lawsuit, California's stem-cell foray has other serious critics, even among supporters.

"Unfortunately as drafted, Prop. 71 [goes] a little light in the area of public accountability.... The final product didn't have the safeguards it should have," said state Sen. Debra Ortiz last Friday in two symposiums. Ms. Ortiz has supported the measure from the outset but continues to express a laundry list of concerns she feels were not understood by the public when it approved the measure. She has been involved with a bill to codify reforms that is expected to be heard in the Assembly Health Committee next month.

In the meantime, several universities have been moving ahead with private donations. But national observers say the halt in research is enabling other states to close the gap on California's once-giant lead in stem-cell research.

Says Ms. Charo: "There has been a race among the states to copy California, and this could help the locus of activity to move away."