Stem Cell Research: An NPR Special Report
A 'Virtual Roundtable' on Federal Funding

Arti K. Rai

Arti K. Rai, assistant professor, University of Pennsylvania Law School:

In the debate over public funding for human embryonic stem cell research, the fact that such research is currently taking place -- and will continue to take place -- in the private sector is often ignored. This gap in the debate is unfortunate. If embryonic stem cell research can yield benefits not provided by adult stem cell research -- a question that itself can only be answered definitively through further research -- relegating embryonic research to the private sector will have very significant, and adverse, public policy consequences.

To the limited extent that commentators have focused on the consequences of relegating embryonic research to the private sector, they have noted that, absent public funding, such research may proceed without the requisite ethical safeguards. The proposed NIH guidelines for embryonic research carefully regulate the informed consent procedure by which "surplus" embryos - that is, embryos that would likely be discarded -- are obtained from couples who have already achieved their reproductive goals. By contrast, private sector research is not regulated in any significant fashion.

The argument that private sector research may lead to ethical abuses is, however, not dispositive. If reports of private sector abuses began to surface, Congress could presumably enact comprehensive regulation.

A more worrisome consequence of the current moratorium on public funding is the impact it has had on patent rights in stem cell research. Because of the moratorium on public funding, the researchers at the University of Wisconsin who first isolated human embryonic stem cells were forced to turn to a private company, Geron, for research funding. In exchange for providing funding, Geron sought, and received, very significant rights with respect to the patent that Wisconsin now has on embryonic stem cells. Specifically, Geron appears to have rights to most of the significant therapeutic and diagnostic uses of existing embryonic stem cell lines.

Control of a basic research platform like embryonic stem cells by a single private company is problematic. The history of innovation in many industries that were based on a basic research platform, including the aircraft and semiconductor industries, indicates that control of that platform by a single company was disadvantageous to innovation. By contrast, these industries flourished after government regulators forced licensing of the platform to competitors.

There is reason to believe that competition is also important in biotechnology. Many analysts attribute the success of recombinant DNA technology to the decision by the University of California-San Francisco and Stanford, who held the patents on the basic techniques, to license widely at reasonable rates. UCSF and Stanford could choose to license widely because the research in question had been publicly funded. Similarly, if the University of Wisconsin research had been publicly funded, Wisconsin would have much greater control over its patent. It could be licensing its stem cell lines to many different commercial developers.

At bottom, the moratorium on public funding has not prevented surplus embryos from being used to create stem cell lines. Lack of public funding has simply meant that these stem cell lines are controlled by a single company and thus are not likely to produce all the health benefits that they might otherwise have produced.

What about the future? Perhaps the most important reason for starting federal funding of embryonic stem cell research now is the reason that we have federal funding for basic research more generally. Because basic research is often far removed from commercial application, private companies that need to satisfy shareholders with short-term commercial results are not likely to pursue such research at the levels that would produce the greatest long term social benefit. In fact, much of the most important research that remains to be done with embryonic stem cells is quite far removed from commercial application. For example, embryonic stem cells offer a new window on human developmental biology that might be important, albeit only in the long term, for understanding the biology of cancer and other diseases. If public funding is not available, these uses of existing stem cell lines might never be explored.

Finally, control of embryonic stem cell research by the private sector may have significant justice-related consequences. As a general matter, the private sector focuses on medical research that is likely to recoup its costs in the marketplace. It does not necessarily focus on the severity of the disease in question. In the context of stem cell research, exclusively private funding is likely to mean that individuals who have severe diseases but not much in the way of market power will not have research directed towards them.

Arti K. Rai is an assistant professor at the University of Pennsylvania Law School.

Other voices:
• Douglas Johnson, legislative director, National Right to Life Committee
• Ihor Lemischka, associate professor, Department of Molecular Biology, Princeton University
• Micheline Mathews-Roth, MD, associate professor of medicine, Harvard Medical School
• Daniel Perry, executive director, Alliance for Aging Research
• David A. Prentice, founding member, Do No Harm: The Coalition of Americans for Research Ethics