State stem-cell programs revisited

OK, time for a quick “I told you so” moment. Readers will recall that as long ago as November 2007 I questioned whether — with the end of the Bush-era restrictions then quite obviously in view — it made sense for states to be investing their own money in embryonic stem-cell research capacity, especially on economic-development grounds.

Now, with President Obama’s reversal of the Bush policy, The New York Times is out with a story that quite correctly wonders whether the president’s decision “has removed the original raison d’être for the California program and others like it.”

The article focuses mainly on whether scientists still need the support. Of course they do! But that doesn’t mean it is in the interest of the states to provide it, in the belief that somehow they will be advantaged in a race for cures or economic benefits. Questions of scale are relevant. While the California stem-cell program was always much larger than any other state’s initiative, even it will pale in comparison with the resources that will now be unleashed from the National Institutes of Health. Can providing state support on the margin improve a state’s standing in any economically significant way?

The answer will depend in part on additional Congressional action on funding and the terms of the regulations NIH has yet to write. It seems likely that the federal government will now support at least the indirect costs of stem-cell research that does not violate whatever new ethical guidelines are issued and possibly direct costs as well. So states that had been investing in research infrastructure — precisely because they could not otherwise finance laboratory space that could be used by stem-cell scientists from indirect-cost recovery (F&A charges) — may have spent in vain.

As long as F&A recovery will now be legal, and universities won’t have to segregate assets used in embryonic stem research from those that aren’t, you don’t need an entirely new laboratory building to attract basic NIH grant support to faculty working on embryonic stem cells. Moreover, since the stimulus package includes substantial new resources for equipment and instrumentation programs in both the NIH and the NSF budgets, every state that didn’t invest its own resources in recruiting and equipping embryonic stem-cell researchers now has an excellent chance of catching up rapidly, on the federal nickel.

It may yet prove there has been some early-mover advantage to California, at least in terms of being an attractive place for stem-cell scientists formerly based elsewhere to move their labs, but to be honest California has long had that advantage for many reasons, and wasn’t likely to lose it in a short dry spell of no-stem-cell rules. And the state program itself did nothing I could see to make its universities any friendlier than they already are (or are not) to technology transfer/commercialization partnerships.

Now is the time for states to re-examine how they will be helping in-state faculty investigators pursue the lines of federal funding newly opened up, and how they will tie public support to desired economic outcomes including, where needed, “cultural changes” at the participating universities. More to follow as the rules get fleshed out.


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