08-04-2001

HEALTH: Patents, Profits, and the Stem-Cell Debate

Whether President Bush and Congress decide to allow or to ban the use of
federal money for research on stem cells taken from human embryos, the
decision will have an enormous impact on the business climate for
researchers, universities, and companies engaged in what is fast becoming
known as "regenerative medicine."


Because stem cells are so powerful and versatile, researchers hope they
will be able to extract these cells and, in a few more years, tell those
cells exactly what to do-regenerate damaged nerve cells in patients with
Parkinson's disease, for example, or regrow brain cells damaged by
Alzheimer's.


But before researchers can perform these medical miracles, they have to
have a ready supply of stem cells, and especially access to the technology
that extracts them from embryos. That means that for now, researchers and
biotechnology companies have to go, hat in hand, to the three private
organizations that hold the main patents on the extraction process, and
the rights to many future commercial uses of stem cells. To gain their
permission, the competing researchers and companies may have to pay one or
more of the three a handsome fee, or some share of future profits, in
return for a license to use the technology. And the competing researchers
and companies would rather not have to do that.


So, if the federal government, through the National Institutes of Health,
began using public money to do research on stem cells from embryos, the
work could lead to new methods of extracting and growing stem cells. These
methods would, in essence, be in the public domain, and competing
researchers and companies, as a result, would not have to pay the private
organizations nice fat fees.


The issue came up elliptically during July 18 hearings in the Senate,
where Sen. Bill Frist, R-Tenn., was pressed to drop his opposition to the
extraction (sometimes called "derivation"), by federally funded
scientists, of stem cells from human embryos. Both the chairman and the
ranking member of the Appropriations subcommittee on health-Sens. Tom
Harkin, D-Iowa, and Arlen Specter, R-Pa.-urged Frist to drop his
opposition to federal funding and to support a bill that would let federal
scientists try to find new ways to extract stem cells from embryos. The
Harkin-Specter proposal would supplant guidelines issued by the Clinton
Administration, which had opposed the use of federal money for the
extraction of embryo stem cells.


"It is indispensable for NIH to be able to use federal funds to
extract stem cells from the embryos," said Specter. "Where are
you going to get the stem cells otherwise?"


Without federally funded extraction, scientists from Alaska to Florida
must now negotiate patent-license contracts with the current patent
holders: the Wisconsin Alumni Research Foundation in Madison and the Johns
Hopkins University in Baltimore. Placing the technology further out of
reach, both the foundation and Johns Hopkins have already awarded broad
and exclusive rights to Geron Corp., based in Menlo Park, Calif., to
commercialize the core elements of the technology.


Those existing patents and licenses put other companies and research
centers at a disadvantage in the race to develop commercial benefits. For
example, Rockefeller University in New York City tried to license some of
the technology from Geron, but "we were offered such egregious terms
that we said no," said Kathleen A. Denis, director of technology
transfer at the university. "They were asking for ownership of
everything subsequently developed" by Rockefeller's scientists, said
Denis, whose office licenses the university's own patents to other
researchers and companies.


To get a license to work on stem cells from embryos, "you have to
sign an agreement [with the patent holders, and] that's not good for the
science," said David Baltimore, president of the California Institute
of Technology in Pasadena, Calif. "You want as broad a group of
scientists as possible working on these" stem cells, said Baltimore,
whose university research center licenses about 50 of its patents every
year to companies and to other research centers.


Officials at Johns Hopkins refused to describe their licensing deal with
Geron. A Geron spokeswoman said the company would work with outside
researchers, but she refused to detail under what terms. Officials at the
Wisconsin foundation said they had already granted 30 researchers rights
to explore their technology for $5,000 each and would eventually allow
them to commercialize their stem-cell products for an additional, minimal,
fee. The foundation, however, has exclusively awarded some of the most
valuable commercialization rights to Geron, and that company might not be
so magnanimous. And some observers fear that the foundation may demand a
high price when researchers seek to commercialize products developed from
any patented stem cells.


If NIH received authority from Congress or the White House to extract stem
cells, other researchers could get federal grants to develop a new patent
for extracting stem cells from embryos. Under customary NIH rules, the
newly patented method would be published and shared with all U.S.
researchers without any significant payments. NIH grants are awarded under
"the assumption that anything one publishes is available to everyone
else in the field," Baltimore said.


Even without an NIH patent or new legislation allowing public money to
support embryo stem-cell research, there may be other ways around this
patent-contract problem, said Baltimore and other scientists. Researchers
using private funds could develop new ways to extract stem cells from
embryos that would diminish the monopolies of the three current patent
holders. Or, some scientists speculate, cells taken from adult humans
could be persuaded to revert back to an embryo-like state.


Another option for stem-cell supply is the 1993 NIH Revitalization Act,
which gave federal researchers authority to extract stem cells from
aborted fetuses, said Frist, in an interview with National Journal. But
the stem-cell patent filed by Johns Hopkins already covers such fetal stem
cells, which may prove as adaptable as the stem cells taken from embryos.
Also, anti-abortion groups have long opposed federal funding for research
that relies upon organs and tissues taken from aborted fetuses, and they
have charged that researchers use unethical and illegal practices to
collect the organs and tissues.


Harkin suggests that scientists be given more leeway to seek new sources
of stem cells. Currently, such cells are taken from frozen embryos stored
at clinics that perform in vitro fertilization. Some scientists say that
better results could be obtained from "fresh embryos" created
especially for research, as was recently done by a fertility clinic in
Virginia. But that suggestion, too, arouses the ire of anti-abortion
groups. "If there is any movement toward fresh embryos, that will
create a lot more discussion and debate, and obviously, [federal]
guidelines," said Harkin.


Other scientists doubt, however, that there is a short-term way to extract
stem cells from embryos without colliding with the existing
patents.


Another option is to use stem cells taken from adults. With adult cells,
private and federal researchers have greater freedom from patent
restrictions, partly because more ways exist to find and extract the
cells, ensuring more research opportunities and more marketplace
competition between patent holders.


Other potential sources of stem cells, researchers say, include cadavers,
placentas, and umbilical cords, although such stem cells, compared with
those taken from embryos, are harder to find, slower to replicate, and
less versatile in their functions.


A related issue that could have profound effects on the commercialization
of regenerative medicine is the debate over the number of "cell
lines" that might be approved for use by NIH researchers. Cell lines
are the replicating successions of cells that split off from the first few
stem cells extracted from embryos, adults, or other sources. Lines from a
stem cell taken from an adult are fairly specific in function; they may
be, for example, blood stem cells, brain stem cells, or skin stem cells.
Cell lines from embryos, however, contain cells that have yet to change
into their specialized roles, and they can reproduce rapidly and uniformly
when nurtured in the right bath of chemicals. The problem is that
scientists may have to destroy many embryos before successfully growing
one cell line, and that troubles many medical ethicists. Some have called
for limits on the number of cell lines approved for research.


Patent holders Geron, Johns Hopkins, and the Wisconsin foundation,
however, have rights to many of the most valuable embryo stem-cell lines,
so any legislated curb on the number of cell lines NIH researchers can use
might again force federal researchers to sign agreements with these three,
if no new patent is developed by an NIH-funded researcher.


In the July 18 hearing, Frist said that funding should be provided to
develop no more than seven new cell lines. But Specter and Harkin said
that scientists should be allowed to decide how many cell lines are
needed. Scientists' estimates of the number of cell lines needed for
research have grown over the past two years, starting from a few, then to
a few dozen, and now to perhaps 1,000.


"We've got to have an ongoing scientific and ethical review"
before deciding the number of cell lines, Frist said. The scientists
should not dictate the answer, he said.


Finally, Frist, Harkin, and Specter are engaged in another debate that
unites the controversies over cloning and stem cells, one that could
affect the business prospects of regenerative medicine. Frist wants a
complete ban on human cloning, regardless of whether the clone is produced
by researchers using federal money or private money, and regardless of
whether the clone is intended for full-term pregnancy and birth or for
research purposes in its early stages. This issue is important for
stem-cell research because a cloned embryo can be a source of stem cells,
and some researchers and companies say they might want to clone embryos
from adult patients in order to make new cell lines for transplantation
into those patients. By cloning the patient, scientists might avoid
tissue-rejection problems. Geron also owns the patent for cloning.


Harkin and Specter say they agree with Frist on the need to ban cloning,
and they have supported bills that ban federal funding for the cloning of
embryos and that ban the birth of a cloned human. Harkin and Specter,
however, have not proposed legislation that would restrict the use of
private money to make and use clones for laboratory use. "That may be
a subject we need to explore further," said Specter. "My general
position has been to oppose cloning, but we might have to take another
look at it, if the scientists say they have a reason" to pursue it.
Cloning, he noted, is "very dangerous ground politically." For
now, he said, cloning is less important than the fight over stem
cells.


There is time yet for Senators to alter their views on stem cells and the
related topic of cloning, Frist predicted. "There is a current lack
of understanding about the financial interests, [and] very few people here
have really spent more than a day or two studying this issue," he
said. "My challenge is to make people look at this in a new way-that
this is different from abortion, from the strict pro-life/pro-choice
political debate that is customary" in Washington.


Neil Munro

National Journal