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The economics of stem cell research

Lab assistant Dave Ferguson holds-up stem cell cultures in a lab at the Reeve-Irvine Research Center at the University of California Irvine.
Lab assistant Dave Ferguson holds-up stem cell cultures in a lab at the Reeve-Irvine Research Center at the University of California Irvine.
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Stem cell research is expensive. But advocates say it will one day yield cures that could save Americans billions in long-term healthcare costs. California is now a world leader in stem cell research. Backers of the science believe this field will not only save lives but possibly save the state's economy as well.

Sabrina Cohen supports stem cell research for personal reasons.

Cohen is wheelchair-bound; paralyzed from the neck down. She was a 14-year-old high school sophomore in 1996 when she and a friend climbed into another teen's car, thinking they were getting a ride to a Halloween party.

"Within two minutes, they took off drag racing down Miami Beaches most dangerous curvy roads, 90 miles per hour in a 30 mph zone," Cohen remembered.

"One car lost control, hit the car I was in, we slammed into another car and then head on into a tree and instantly became a quadriplegic."

Cohen now raises money for stem cell scientists through her non-profit Sabrina Cohen Foundation for Stem Cell Research. In three years she's drummed up $75,000.

"What attracted me to this cause was the theory behind stem cell research: replacing damaged cells with healthy cells could help over 70 medical conditions. And I was completely inspired by that," she said.

So, too, were Californians who in 2004 voted — through Proposition 71 — to invest $3 billion in stem cell research at universities and private institutions in California. It's an investment that supporters say, even without the first treatments or cures yet discovered, is already paying off.

"We've created thousands of jobs," said Jonathan Thomas, chairman of the California Institute of Regenerative Medicine, the state agency created by Prop 71.

"We have shown that we are going to be, by 2014, generating a little over 200 million net revenues to the state. But more than that it's all about what I view as a sort of second coming of Silicon Valley for the State of California, which is the stem cell industry and bio tech in general."

Dr. Bruce Conklin is a senior investigator with the nonprofit Gladstone Institute of Cardiovascular Disease at UC San Francisco. He said the advances made in the field of stem cell research so far are impressive.

"It's greatly outperformed even my expectations, which were initially somewhat skeptical," said Conklin. He said the state agency — also known as CIRM — is helping reverse California's "brain drain."

"CIRM has played an amazing role for us in terms of recruiting people. We've been able to really go around the country and recruit from the best and the brightest scientists."

And those scientists bring to California any federal funding they may have and help attract big philanthropic dollars to the state's stem cell research. That in turn, Conklin said, brings biotech companies and related industries to the state.

But the research is expensive and the payoff takes time. One bio-tech company, Geron Corporation, couldn't wait. The Menlo Park biotech firm had been the leader in private stem cell research. But they recently pulled out of the field to concentrate on cancer drugs that could reach the market sooner.

Marcy Darnovsky with the Berkley-based Center for Genetics and Society said Geron's move didn't surprise her.

"I think it was really an example of hype and exaggeration catching up with the whole stem cell field," said Darnovsky.

But the stem cell research faithful, led by CIRM's Jonathan Thomas, maintain that the public and academic investment will payoff big someday soon. Thomas said, "to the extent that you're starting to actually see therapies or cures, the economic impact of that on the economic system will dwarf everything else."

Right now the US spends about $2.7 trillion health care annually, a figure that's expected to soar with an aging and increasingly obese population.

"Traditional approaches, whether it's through the use of pharmaceuticals or traditional types of biologics or devices or surgical intervention, really are not going to be able to effectively deal with the challenges we face," said Gil Van Bokkelen, chairman of the non-profit Alliance for Regenerative Medicine in Washington DC and CEO of the Ohio-based biotech firm, Athersys.

"What I think is going to happen over the course of the next several years is we're going to see the first clinical evidence that shows how big of an impact these types of therapies can really have. Which means we can overcome some of the rising tide of pressure that we're trying to fight against with an aging population that's more susceptible to a lot of different, very expensive disease conditions."

Right now, The California Institute of Regenerative Medicine is funding studies looking for treatments and cures to 26 common diseases and conditions. Curing just one of them could mean billions of dollars in savings for the economy.

For more on the numbers behind the rising cost of healthcare, check out the DeBord Report blog.