By Don C. Reed

On November 3rd, California voters will head to the polls and make a potentially life-changing decision:

Can we afford to continue advancing life-saving and life-changing medical research by dedicating $5.5 billion dollars — to renew funding for our stem cell medical research and treatment institute? (1)

In 2004, voters said “YES!” to Proposition 71, the California Stem Cells for Research and Cures Act. By an almost 60% favorable vote (59.05%) , they created the California Institute for Regenerative Medicine (CIRM). (2)

The results? A quiet triumph.

In addition to saving the lives of 50 children who had the previously fatal autoimmune disorder known as Severe Combined Immuno-deficiency (SCID, also referred to as “Bubble Baby” disease) — funding from the 2004 proposition brought treatments and cures which restored upper body function to paralytics, developed two FDA-approved treatments for fatal blood cancers, and provided a measurable return of vision to a blind woman — who had never seen her twin children before. (3)

These successes are examples of the medical advancements from more than 80 FDA-approved clinical trials — on cancer, diabetes, stroke, Parkinson’s, and more — as a result of CIRM funding. (4)

However, if California voters decided not to continue California’s stem cell research program, many of these clinical trials will be canceled, delayed, or stalled in the process. Before that decision is made, let’s consider the real cost involved.

Last year, America spent nearly three TRILLION dollars on chronic disease — ($2.976 trillion). (5)

How much is that? Three trillion dollar bills (in singles, laid end to end) would make a money chain long enough to reach the moon. (6)

In more practical terms, three trillion dollars is almost as much as America’s federal income tax for individuals ($1.7 trillion) — and Social Security and Medicare taxes ($1.2 trillion) — totaling $2.9 trillion. (7)

Illness healed is money saved, in the best of all possible ways.

When parents are told: “that disease which threatened your child’s life? It is now gone, eradicated”, that brings not only joy, but tremendous financial relief as well.

Example: balance the complete cost of renewing the program, $5.5 billion — against just one year’s expense of a chronic disease, diabetes.

According to the American Diabetes Association (ADA), diabetes last year cost America $327 billion dollars. (8)

$5 billion for the program, $327 billion for one disease. Which is more affordable?

CIRM has helped support a number of breakthroughs in fighting both Type I & II diabetes: one possible therapy is a diabetes “pacemaker”. Placed under the skin, it is designed to contribute stem cell-derived insulin as needed, almost like a new pancreas. (9)

What diabetic would not want to just forget the time-consuming and painful pinpricks, or wearing insulin pumps , and being endlessly cautious about every mouthful of food, struggling to avoid the danger of improper blood sugar levels?

Here are some annual costs of four other diseases:

Cancer — $173 billion. (10)

Obesity — $147 billion (11)

Arthritis — $140 billion — (12)

Alzheimer’s disease — $159 billion — (13)

Compared to such annual costs, (repeated every year!) the one-time expense of the program is couch change.

Did you know that medical emergency is the number one cause of bankruptcy? As President Barack Obama said in his inaugural address:

“…the crushing cost of healthcare…now causes a bankruptcy in America every 30 seconds. By the end of this year, it could cause 1.5 million Americans to lose their homes.” (14)

Even so, can we afford to maintain and renew the California stem cell program?

Let’s look deeper.

The costs of repaying the bond sales (which funds the research) are scheduled to be exactly nothing for the first five years. I repeat, no cost to the state until 2026. This was done for reasons of fairness, allowing time for cures to develop. As clinical trials advance, the list of breakthrough discoveries and treatments it delivers will doubtless continue to grow; therefore, less payments in the beginning, when benefits are just starting to become available.

As an added advantage, the state of California will benefit greatly from the economic stimulus, desperately needed during these challenging economic times — and without taking away from the state’s ability to fund other critical programs, addressing issues like education, housing, maintaining emergency services, and COVID-19.

Why won’t funding CIRM jeopardize California’s other spending needs?

On the contrary, funding CIRM provides more funding through additional revenues from the stimulus effect it will have — also, the total amount which can be spent by CIRM is limited to less than 0.5% (one half of one per cent) of the 2019 bond capacity of California, leaving 99.5% of the bond capacity for other needs.

In fact, the program is revenue positive for the first 8–9 years. That means that until the year 2029, more state revenues will be generated by CIRM than the amount to fund this critical program! These figures also do not include the amount the state could be saving yearly from new treatments and cures created by this research. The state will actually have more money to address other important issues, by funding lifesaving medical research and therapy development.

And now for something truly amazing. The California stem cell program has already brought in more money to the state than it actually cost.

How is that possible?

Look back in time for a prime example: a California law named after my paralyzed son: the Roman Reed Spinal Cord Injury Research Act of 1999. When California first started this program, it was small, just $1.5 million a year for ten years, totaling $15 million. (15)

But when a scientist succeeds, it is much easier to get more grant money. The RR Act spent $15 million in California money — but the scientists did well and their work attracted $87 million in add-ons and matching grants — whereby a $15 million program grew to roughly $102 million.

To chart CIRM’S financial effects, a study was done by Dan Wei and Adam Rose of the University of Southern California (USC)’s Schaeffer Center for Health Policy and Economics. (16)

In the measured years of 2004–2018, the study found numerous benefits for both California and the nation. (The first three years of CIRM’s existence, from 2004 to 2007, were blocked by ideological lawsuits, frivolous litigation; although all these were defeated, they delayed CIRM, which was not fully open until 2007.)

For California, from 2004 to 2018, an economic stimulus of $10.7 billion is estimated from “gross output” or sales revenue: “the income received by a company from its sales of goods or the provision of services.” Essentially, more sales revenue equals increased market / economic activity. (17)

Additionally, more income from taxes ($641.3 million) was brought in from the new biomed businesses and the scientists’ grants. Jobs? More than 50,000 (56,549) new Full Time Equivalent (FTE) jobs came on line because of CIRM. These were good jobs, paying well and in many areas, from construction to lab technician.

And for the rest of America? The USC report details how California’s stem cell program benefits not only California, but the nation as well. In economic stimulus, $4.7 billion; in federal tax revenues, $208.6 million — and 25,816 new FTE jobs.

With the funding originally entrusted to it, the California Institute for Regenerative Medicine has performed well. It is an exceptional and respected organization, which has earned the right for voters to renew its funding, so it may continue to provide treatments and cures, for the millions of Californians who need them.

CIRM is a shining sword. We dare not let it lie and rust. We must pick it up, and fight spinal cord injury, cancer, diabetes, stroke, and every other chronic disease that citizens in this state and country deal with daily.

CIRM has even funded several promising research projects to fight COVID19 and other infectious diseases.

Can California afford to continue this terrific stimulus program?

We can’t afford NOT to renew the California Institute for Regenerative Medicine.

Look for it on your California ballot, and vote YES!

And if you live out of the state? Be sure and tell your California friends about CIRM and the initiative to renew its funding! We need everyone’s support.

Don C. Reed has written three books about the California stem cell program, most recently “REVOLUTIONARY THERAPIES: How the California Stem Cell Program Saved Lives, Eased Suffering, and Changed the Face of Medicine Forever”, from World Scientific, Inc.. Available from the publisher, Amazon, or ask for it at your local library, when it opens up again.





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17. Sales Revenue – Definition, Overview, and Examples

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