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Daley’s Dilemma

Children’s Hospital is near a Boston neighborhood historically full of doctors that is referred to, predictably, as Pill Hill. Children’s has almost a dozen buildings on its main campus and more than 4,000 doctors, nurses, and staff members overall. One of its buildings houses the world’s biggest pediatric research lab.

In an upper-floor wing of another, smaller building is Lensch’s new stem cell lab. To the casual visitor, it looks much like any other biomedical research center. There are long lines of lab benches punctuated by computer screens and white and gray machines. Shelves are crammed with bottles and jars bearing cryptic, hand-scrawled labels. The only slight oddity is that several small rooms in this otherwise tightly packed space are empty of everything but a few boxes and pieces of what looks like discarded equipment. In these unused spaces, Children’s Hospital hopes to experiment with embryonic stem cells.

The separate rooms are a consequence, in part, of George Daley’s conclusion that pushing stem cell research forward would require shifting from federally supported “presidential” cell lines to “nonpresidential” lines – ones that had not been isolated before Bush’s 2001 speech. Daley, who directs Lensch’s research, first arrived at Children’s in November 2003, lured by its offer of a brand-new facility and some startup money. (Until then, he had worked at MIT’s Whitehead Institute for Biomedical Research.) A prominent blood researcher, Daley wanted to unlock the mechanisms of bone marrow diseases like leukemia and aplastic anemia. He quickly saw the potential of embryonic stem cells and won one of the first NIH grants to study them.

As Daley discovered when planning the stem cell facility, “going nonpresidential” meant that he had to ensure that it was not supported by federal money. The rules created endless bureaucratic tangles and drove up costs enormously. Says Erik Halvorsen of Harvard’s Office of Technology Development, which handles licensing on the stem cell lines developed by Harvard researcher Douglas Melton, at first “nobody understood what it meant when you couldn’t use federal funds. Did that mean [the government couldn’t pay for] anything in the lab space? Did that include things down to the level of the individual pipette? What if federally approved and nonfederally approved research were in two adjoining rooms? Did that mean the government could pay up to a certain percentage for things like heating?”

To be “on the safe side,” he says, Harvard created a completely separate facility with brand-new equipment for Melton’s team. Children’s took another route, sequestering its stem cell work in special, isolated rooms – setting up a second laboratory, more or less, inside the first. The tools used by a research group – such as electron microscopes, DNA synthesizers, and centrifuges – can together cost up to a million dollars per scientist. Laboratories typically reduce those costs by sharing equipment among research teams.

But as a practical matter, that won’t work for stem cell research, because most scientific equipment at major research institutions is at least partly funded by the federal government. Inadvertently, Daley says, the president’s decision made embryonic-stem-cell research much more expensive.

But equipment and facilities weren’t the only added costs. To ensure that it was complying with federal guidelines, Taylor says, “Children’s gathered together the senior management from each of the affected areas – finance, intellectual property, sponsored research, compliance, clinical research, research ethics, and administration, together with legal and accounting staff.”

The managers conducted Talmudic studies of the 106 sections of the U.S. Office of Management and Budget’s Circular A-21 that establish the “cost accounting standards” for distinguishing unallowable “facilities and administration costs,” which for Children’s included the heating and janitorial expenses for the stem cell rooms. In the process, Daley says, they ended up “creating an entire parallel oversight system, which sounds easy but, if you’ve ever tried it, is time consuming and expensive.”

As an example, Daley cites the internal registration sheet, common to almost all research facilities, which scientists periodically fill out “to let their institutions know who is doing what.” According to Daley, the lab administrators charged with designing the relevant form for the Children’s stem cell program wanted it to ask scientists to certify that their experiments “were being reviewed by Finance to ensure they were privately funded, had institutional review-board clearance, had clinical-studies application, had obtained their lines through a proper materials transfer agreement, and so on.”

At the top of the form, researchers are asked to describe the purposes of their research. “We’ve had an enormous back-and-forth about how much information to provide,” Daley says. Scientists want maximum flexibility to take advantage of serendipitous discoveries on the lab bench, whereas lawyers want the thickest paper trail possible. With animal experiments, Daley says, standards have been worked out. “Since nobody has worked in embryonic stem cells, we’ve had to set that balance all over again. That’s okay, but now we have no guidance from the federal government. Everybody’s off on their own, wondering if they are doing the right thing.” Designing the registration sheet, he says, consumed hundreds of hours of time.

Despite all the effort invested in untangling the federal restrictions, Lensch says, some questions are still unanswered. “If you have a stem cell line, it’s alive,” Lensch says. “If you break the cells open and extract their RNA, that’s not alive. But it’s a derivative [of the live cell lines], so you still can’t work with it. Now, the data you generate from that RNA – can they be included in an NIH-approved experiment?” If researchers experiment on nonpresidential embryonic stem cells “in a building floating in space over international waters and publish the results, is it complicit for a federally funded researcher to read it? Can an editor or publisher at a federally funded institution publish it? Believe me, we have been wondering that.” Nobody in the group, he says, “wants to end up making license plates.”

Even as regulations upped costs, they shrank the financing pool. Not only has the ban on federal funding closed the coffers of NIH and NSF and created inhospitable conditions for industry, but it has also scared off much private philanthropy. Among those saying no to embryonic-stem-cell research are the American Heart Association and the American Cancer Society.

With many funding sources shut off, researchers must seek support from wealthy individuals and smaller groups, such as the Juvenile Diabetes Research Foundation. In the future, researchers in stem-cell-friendly places like California, Massachusetts, and Wisconsin may be able to draw on special earmarked funds created by state legislatures, though state funding is already raising a new set of legal and logistical questions.

Researchers can cobble together funding from these and other sources, but many at Children’s still bemoan the federal government’s lack of involvement. NIH usually awards long-term, relatively open grants. Unsurprisingly, smaller outfits tend to be more narrowly focused; they typically give short-term grants with specific benchmarks. But in brand-new fields like stem cells, researchers are bound to need more latitude.

More important, Daley says, the federal government sets the rules in the research world. For decades, NIH and NSF have gradually established a set of procedures that all institutions must follow if they are to receive federal research funding. The rules range from the need to obtain informed consent from research subjects to requirements for transparency in record-keeping. When the government suddenly absents itself, Daley says, nobody knows whether the rules still apply and whether they will be enforced.

“If things get worse, the best scientists may simply drop out,” Taylor says. “That would be a tragedy. Who will be left then – the people who want to make headlines cloning babies?”

Made in Korea
“We’ll get through this,” Daley says. “But it’s terribly frustrating having to move at a crawl when the science is so exciting – and when other nations are flying ahead.” In May, Daley learned with a pang that Korean scientists had discovered how to create patient-specific embryonic stem cells – exactly the kind of breakthrough work that he and Lensch want to do in trying to understand genetic blood diseases. “No disrespect to them,” Lensch says, “but I couldn’t help thinking that we could have done that.” He sighs. “I really do think that we could’ve done that if we’d had the chance.”

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