Many of the proposals by the IOM dealt
with conflicts of interest at the eight-year-old agency, which board members
reluctantly recognized on Wednesday as a perception problem. Under the plan approved last week, 13 of the 29 members of the board would not be allowed to vote on any awards. They are members tied to institutions that benefit from funding. Three other board members linked to those beneficiary
institutions, however, would still be allowed to vote on grants other than
those to their institutions. .

The board did nothing to deal with the
structural issues involving conflicts of interest that are built into
the board as the result of Prop. 71, the ballot measure that created the research
effort in 2004. The 29-member board was constituted in such a way as
to give nearly all institutions that could benefit a seat at the
table where the money is handed out. It is as if the state's Public
Utility Commission, which sets utility rates, were dominated by
executives of the utility companies.

Under longstanding rules, individual members of the stem
cell board are barred from voting on grants to their institutions. However, the board still determines the game and the rules. The board approves the
specific areas of research for funding, approves plans for individual
RFAS, sets the rules for the grants and loans and enforces compliance
through CIRM staff.

The board last week limited itself to
changes that it could enact on its own. Many of the IOM
recommendations, including a new majority of independent members,
would require legislative action, which opens the agency to a wider
range of changes than even the IOM recommended. That is not a prospect the agency relishes. Nonetheless,
how well the board complies with the IOM recommendations is likely to
be critical to its plans to raise funds to continue its operations
beyond 2017, when the taxpayer cash runs out for new grants.

Here is a look at the key IOM recommendations and the response so far from the stem cell agency(see here and here).
More details may emerge between now the next CIRM board meeting in
the San Francisco Bay Area March 19, when the board is schedule to finalize its IOM plan. 

“Change the Composition and Structure
of the Board and Working Groups.

“CIRM should put systems in place to
restructure the board to have a majority of independent members,
without increasing the size of the board. It should include
representatives of the diverse constituencies with interests in stem
cell research, but no institution or organization should be
guaranteed a seat on the board. Consideration should be given to
adding members from the business community....The chair and other
ICOC members should be prohibited from serving on the working groups.
During the reconstitution of the working groups, the current level of
representation of disease advocates should be maintained, such board
members being replaced with other disease advocates who are not board
members.”

The Thomas plan basically is a total
rejection of this recommendation. The CIRM board does not support
creation of a new majority of independent members, which would mean
some current members would lose their seats if the board were not
increased beyond 29 members. No members will be added from industry.
Board members will continue to serve on the grant review panel and
other groups, contrary to IOM recommendations. In the case of grant
reviews, however, they would no longer vote in the closed door
sessions. The board has no plans to add patient advocates who are not
board members to working groups, including the grant review panel.
The University of California will continue to have five guaranteed
seats on the board. No independent members currently sit on the
board.

“Revise Conflict of Interest
Definitions and Policies.

“CIRM should revise its definitions
of conflict of interest to recognize conflicts arising from
nonfinancial interests, such as the potential for conflict arising
from an individual’s interest in a specific disease, and should
reassess its policies for managing conflict of interest in light of
this broader definition.”

CIRM has no plans to move to prevent
nonfinancial conflicts of interest. Several board members expressed
strong opposition to such an effort. Sixteen persons who sit on the
board have ties to institutions that receive CIRM funds. Currently
individual board members cannot vote on applications from their
institutions. To avoid the appearance of conflicts of interest, the
Thomas plan would have the 13 members directly appointed from
beneficiary institutions voluntarily abstain from voting on any grant
applications. Apparently not affected under the Thomas plan would be
three other board members who are appointed as patient advocates. Two
of them are employed by beneficiary institutions. The third is
chairwoman of the UC Board of Regents. All of the board members would
continue to vote on plans for all rounds of grants, including
determination of some of the specifics of the ensuing RFAs.

“Restructure the Grant Review and
Funding Process.

“CIRM should restructure the grant
review and funding process to separate oversight and strategic
planning from day-to-day operations. The ICOC (the agency's governing
board) should remain responsible for oversight and articulation of an
overall strategic plan. However, grant management, funding
recommendations, and grant administration should be the
responsibility of the CIRM scientific staff, reporting to the
president. This restructuring would help mitigate concerns related to
conflicts of interest and would also put the review and funding
process in the hands of those best equipped to make those decisions.”

CIRM patient advocate board members who
serve on the grant review group would not vote on applications during
the grant review sessions. They would be limited to voting at public
board meetings. They would lead discussion of non-scientific
considerations for approval of applications during the public
sessions. Currently that occurs during the closed door review.

Abolish the “extraordinary petition”
mechanism for public appeals of negative grant reviews.

Move all appeals to staff level and
behind closed doors. Currently extraordinary petitions are handled in
public board meetings, sometimes leading to lengthy, emotional
sessions with presentations by patient advocates. The public in
general, including grant applicants, continues to have the right
under state law to address the board on grant applications or any
other matter they wish.

“Separate Operations from Oversight.

“The board should focus on strategic
planning, oversee financial performance and legal compliance, assess
the performance of the president and the board, and develop a plan
for transitioning CIRM to sustainability. The board should oversee
senior management but should not be involved in day-to-day

management. The chair and the board
should delegate day-to-day management responsibilities to the
president. Each of the three working groups should report to
management rather than to the ICOC.”

The Thomas plan does not appear to
differ significantly from current operations, which reflect the
troubling dual executive arrangement involving the chairman and
president that was created by Prop. 71, the ballot measure that
created CIRM. The existing arrangement is also a hangover from the
days of the agency's first chairman, Robert Klein, and has been an
obstacle in previous recruitment efforts for a president of the
agency. The Thomas plan does eliminate a dual reporting arrangement
for the chief financial officer, a position that has been vacant
since last summer. Thomas indicated last fall that the position would
not be filled. Both the chairman of the IOM study panel and the
California state controller's office both say more needs to be done
to separate operations from oversight.

“Enhance Industry Representation in
Key Aspects of CIRM Organization.

“Industry representation on the ICOC,
the Scientific Advisory Board, the Standards Working Group, and the
Grants Working Group 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.”

The Thomas plan would increase industry
involvement “where appropriate.” However, industry has complained
for years about this problem, and some board members as well. But
little has been done to deal with the problem. Recently, the agency
has taken some steps to engage industry, but the IOM was aware of
those when it made its recommendation for closer cooperation.

“Establish a Scientific Advisory
Board.

“CIRM should establish a single
Scientific Advisory Board comprising individuals with expertise in
the scientific, clinical, ethical, industry, and regulatory aspects
of stem cell biology and cell-based therapies.” Members of this
board would be from out of state and replace existing advisory
boards. They would be appointed by and report to president.

CIRM says the structure and membership
of the a new board is under discussion, but generally indicated it
would go along this proposal. Not specifically addressed was
abolition of other advisory groups.

Develop a “sustainability” platform
in consultation with current and future partners, including sources
of funding.

Develop a “sustainability” platform
in consultation with current and future partners, including sources
of funding.

Chairman Jonathan Thomas said he is
working on details of a plan.

“Incorporate Future Enforcement of
Intellectual Property Policies in the Sustainability Platform.

“As part of the plan maximizing the
continued impact of CIRM’s many achievements..., CIRM should
propose regulations that specify who will have the power and
authority to assert and enforce in the future rights retained by the
state in CIRM-funded intellectual property.”

“Consider Harmonizing Intellectual
Property Policies with Policies of Bayh-Dole Act.

“As other sources of funding for stem
cell research become available and as the field of regenerative
medicine advances from the laboratory to the clinic, the ICOC should
reconsider whether its goal of developing cures would be better
served by harmonizing CIRM’s IP policies wherever possible with the
more familiar policies of the Bayh-Dole Act.”

The governing board's IP Subcommittee
will review the policies and make recommendations.