Stanford Experts Outline Possible Criteria for Assessing Economic Benefits of State Stem Cell Funding

If every person with juvenile diabetes lived five extra years because of a new stem-cell treatment, would that make California’s $3 billion investment in stem cell research worthwhile? What if heart attacks caused less damage to the heart, or Alzheimer’s disease struck at age 75 instead of 70?

It’s too soon to know which, if any, of these potential benefits might come out of California’s vote in 2004 to pass Proposition 71, which established the California Institute for Regenerative Medicine to fund stem cell research in the state. But three researchers at the Stanford University School of Medicine think there’s no time like the present to start putting a dollar value to possible future therapies.

“There was a promise and a hope that great things would be possible by funding stem cell research,” said Michael Longaker, MD, MBA, the Deane P. and Louise Mitchell Professor in the School of Medicine. “What we’ve attempted to do is show that there are multiple levels of impact that need to be accounted for in any analysis of the economic benefit.”

Longaker and two colleagues published a paper in the May issue of Nature Biotechnology using a hypothetical model of a future treatment for diabetes as a way of examining the potential economic benefits of funding stem cell research. They realized that the scope of the question is large enough that they should start thinking about the issue now, so that future groups have an easier time assessing the value of actual results of CIRM funding.

Longaker worked with Laurence Baker, PhD, associate professor of health research and policy, and Henry Greely, JD, professor of law, to think about all the ways that Californians could benefit from the results of stem cell research. Although the scenario they examined - a reduction in the severity of the disease - may not be the cure that voters hoped for when they voted yes, the benefits of even partial cures or postponing the onset of disease could be profound, according to the group.

In their hypothetical example, the researchers assumed a stem cell-based treatment for juvenile diabetes that reduced the “disease burden” by half. That means the people with the disease would be half as sick, have half the long-term repercussions of the disease such as blindness or kidney failure, and be essentially twice as healthy as people living with the disease today.

Their analysis suggested it’s not just the people with the disease who could reap the rewards of a new treatment. The parents of kids with diabetes could lose less time from work and their health-care insurance premiums could be lower. The kids could lose fewer days of school and, as adults, they could have more productive years contributing taxes to the state.

The research group also took into account the monetary value of added years of life for people with diabetes. Add to that the tax-paying companies that employ Californians to bring these therapies to market, and you have a large swath of people who all cash in on the therapies.

“This example shows the sheer magnitude of health benefits that are possible, whether it be from a better and longer life, more productivity, lower health costs or just happiness,” said Greely.

Although the group found large potential benefits, Baker notes that if a new stem cell therapy were very costly, it would offset the net benefits from the treatment. However, with large potential benefits, there is a chance for society to come out ahead even if a successful therapy is expensive.

Longaker, Baker and Greely began their analysis in late 2004, just after Californians voted to approve Proposition 71, which allows the state to sell bonds that will generate up to $300 million a year for 10 years to fund stem cell research. These funds get around restrictions on federal funding for embryonic stem cell research that were imposed by President Bush in 2001. Longaker noticed a section of the proposition indicating that the organization would periodically analyze whether taxpayers were getting a good return on their investment.

Baker, an expert in analyzing the economic impact of health policy, had prepared a report for the proposition detailing how to assess the economic impact of research funding. When Longaker saw that report, he pulled together Baker and Greely, who has expertise in the legal and ethical aspects of stem cell research, to begin thinking about how to address the question of whether Californians are getting a good return on their $3 billion investment in stem cell research.

Although the proposition passed in 2004, the slow pace of research means it will be many years before researchers can assess whether the therapies that result from the state funding are cost effective. From the time researchers first get funding, it will be at least 10 years before even the most successful treatments find their way to market.

“I thought if CIRM was going to look at these issues eventually, we should start now thinking about what questions to ask,” Longaker said. He hopes this theoretical work will help other researchers, or CIRM scientists, when they analyze the economic impact of actual results from the state’s stem cell spending.