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Robert Klein, ICOC Chair, urges opposition to anti-human chimera legislation
San Francisco, October 2, 2005

an unanswered question

During the time allotted to interaction with the public at yesterday's meeting of the IP Task Force Subcommittee of the Independent Citizens' Oversight Committee (ICOC), a reporter from California Politics Today posed a question to ICOC Chair Robert Klein (present at this meeting as a "private citizen") and other members of the ICOC regarding the disparity between representations made to the voters during the campaign to pass Proposition 71 and what seemed to be emerging during the discussion at this meeting in terms of direct payments of royalty income to the State of California from Proposition 71-funded embryonic stem cell research. The question asked was:

"I'd like to ask Mr. Klein or any other members of the ICOC who'd like to respond, at this point in time considering everything that's just been discussed here, do you think that the picture of return on investment painted for voters in California prior to the passage of Prop. 71 Including specifically the possibility of up to $1.1 billion in direct payments to the State of California, was reasonable, the presentation, or do you think it was oversold?"

The response provided to this question by Edward Penhoet, Vice-Chair of the ICOC and Chair of the IP Task Force Subcommittee (and President of the Gordon and Betty Moore Foundation), was:

"I don't think that's an appropriate question for this discussion today. Perhaps after this meeting Mr. Klein will be happy to speak with you, but it's not a subject that we're addressing here in this IP policy discussion here today.

"You're welcome to call Bob Klein if you'd like after this meeting and he'll be happy to speak with you on this issue."

California Politics Today today received this e-mail from California Institute for Regenerative Medicine (CIRM) contact Nicole Pagano:

"Robert Klein (As Chairman of the Proposition 71 Campaign) asked that I send this message to you.

"1) The information supplied by the LAO [Legislative Analyst's Office] and presented in the voter pamphlet stated that the intellectual property (IP) royalty and licensing revenue is "unknown but could be significant." This is the only info that went to every voter in the state. No specific amount for these revenues was claimed.

"2) The estimated range for potential IP licensing revenue in the Stanford-led reported commissioned by the Proposition 71 campaign were future value (totaled 35 years in the future), not present value. This distinction is very important to note. Future value figures must be present valued for current equivalent values. If the California Council on Science and Technology projections are adjusted to include adult, fetal, and cord blood research funded by Proposition 71 and the patent revenue results are based upon the biomedical area alone not general patent activity in unrelated fields. The royalty and licensing revenues would be very comparable to the Proposition 71 numbers."

ANALYSIS BY THE LEGISLATIVE ANALYST--Proposition 71--Stem Cell Research. Funding. Bonds. Initiative Constitutional Amendment and Statute.", included in the official ballot pamphlet provided to all California voters before the election that passed Proposition 71, says:

"Benefits From Royalties and Patents. The ICOC would establish standards requiring that all grants and loans be subject to agreements allowing the state to financially benefit from patents, royalties, and licenses resulting from the research activities funded under the measure….

"State Revenues From Research. As noted earlier, this measure would allow [bolding added] the state to receive payments from patents, royalties, and licenses resulting from the research funded by the institute. The amount of revenues the state would receive [bolding added] from those types of arrangements is unknown but could be significant [bolding added]. The amount of revenue from this source would depend on the nature of the research funded by the institute and the exact terms of any agreements for sharing of revenues resulting from that research."

In the same official ballot pamphlet cited above and sent to all registered California voters prior to the November 2, 2004, statewide election in which Proposition 71 was approved, in the "REBUTTAL to Argument Against Proposition 71" signed by Leon Thal, M.D., Paul Berg, Ph.D., and Roger Guillemin, M.D., Ph.D. it says:

"Prop. 71 is a good investment. Studies led by a Stanford University economist project [bolding added] that 71 will generate millions in new state revenues from royalties [bolding added] and new jobs, and that new medical treatments and cures can REDUCE CALIFORNIANS' HEALTH CARE COSTS BY BILLIONS."

To access the "the Stanford-led report commissioned by the Proposition 71 campaign" mentioned in Mr. Klein's response and referred to by Proposition 71 supporters in their "REBUTTAL to Argument Against Proposition 71" in the official ballot pamphlet, click on its title, "Economic Impact Analysis-- Proposition 71: California Research and Cures Initiative."

Regarding the claim made in that ballot argument by Proposition 71 supporters in their "REBUTTAL to Argument Against Proposition 71" in the official ballot pamphlet that "new medical treatments and cures can REDUCE CALIFORNIANS' HEALTH CARE COSTS BY BILLIONS," consider the analysis presented by Geoff Joyce, Senior Economist, RAND Corporation, in an interview available at "Geoff Joyce, senior economist at RAND Corporation, says of bio-medical breakthroughs, including ones funded by Proposition 71, "generally…many of these technologies are wonderful but they are not cost-reducing."