Erica P. Johnson

A global effort is underway to determine whether embryonic stem cells can be used to treat a variety of conditions, including diabetes, cardiovascular disease, and Parkinson disease. Against a backdrop of scientific advance, countries around the world are taking divergent positions on the moral, legal, and business aspects of stem cell use. The pace of stem-cell technological development may be slowed as governments worldwide grapple with these politically charged issues.

The US government has taken an ambivalent approach in this regard. There is no federal prohibition against embryonic stem cell research (ESCR), for instance, while a patchwork of state regulations either permit or restrict ESCR. There is presidential support for federal funding of ESCR, but only research using those stem cell lines developed before August, 2001. By contrast, the United Kingdom and various Asian nations, such as Korea, China and Japan, provide a more uniform and generally...


A diverse body of legislation has evolved internationally in the face of technological advances affecting regenerative medicine. For example, the United Kingdom passed the Human Fertilization and Embryology Act in 1990, vesting the power to grant and maintain embryonic research licenses to a 17-member group, with a required lay majority. The act permits therapeutic cloning but precludes the use of embryos that reach the primitive streak developmental stage. In addition, the use of embryos from in vitro fertilization (IVF) is allowed only with the "effective consent of each person whose gametes were used [in]... creation of the embryo."

On the other hand, Germany's Stem Cell Act of 2002 reflects values underlying that country's Embryo Protection Act of 1990, which assigned the same legal rights to human embryos and fully developed humans. While the earlier law implemented a de facto ban on importation of embryonic stem cell lines, the Stem Cell Act permits such importation, in principle, for lines that were derived before January 1, 2002, from embryos created pursuant to strict IVF guidelines.

It will soon be revealed whether this nominal relaxation in German ESCR policy marks a trend. The Research and Education Ministry is preparing a national stem cell strategy paper, said to include legal guidelines for German scientists who wish to collaborate with overseas colleagues in ESCR. Currently, such relationships can lead to criminal prosecution in Germany.

As noted, South Korea has a liberal attitude toward regenerative medicine, particularly ESCR. It is likely no coincidence, therefore, that Seoul National University recently announced achieving SCNT using patient tissue, possibly opening the door for "personalized" stem-cell therapeutics.1 There is hardly a tested business model to accommodate this prospect, which contrasts sharply with the approach of some companies to develop and commercialize non-personalized stem cell formulations in the manner of a traditional pharmaceutical company.


Since President Bush's 2001 order limiting federal funding to certain stem cell lines, over three dozen stem-cell related bills have been introduced in the US Congress, including Senate bill S. 303 from last Congress, which prohibits reproductive cloning but permits therapeutic cloning, and House bill H.R. 810 from this Congress, which permits the use of "surplus" IVF embryos. In May of 2005, the House passed H.R. 810 by a vote of 238-194, evoking far fewer than the 290 votes needed to override a promised presidential veto. The Senate may vote later this summer on a companion bill, 5.471, but its content and prospects for a veto-proof approval margin remain much in doubt.


Courtesy of Foley & Lardner LLP

Stephen A. Bent

Accordingly, federal policy on ESCR funding is unlikely to change any time soon. Three US states, New Jersey, California, and Massachusetts, have launched their own stem cell-targeted spending programs, and other states may follow suit. For example, both houses of the Connecticut legislature recently passed a bill that authorizes $100 million over 10 years for ESCR, and the Governor has agreed to sign the bill into law.

One of only two states to authorize therapeutic cloning, California passed Proposition 71 in November, 2004, establishing the California Institute for Regenerative Medicine (CIRM) and mandating a ten-year, $3 billion plan for supporting stem cell research. But a CIRM initiative to begin awarding grants has been stalled by legal challenges to the constitutionality of Proposition 71 and by efforts, including a proposed voter referendum, to address conflict-of-interest requirements and other social concerns. If the Californian experience is any guide, it is far from clear that state programs can fill the gap engendered by constraints on federal funding in this area.

The interplay between federal and state authorities also is evident in the approach to regulatory issues in the United States. State governments are the primary regulators of medical practice, which includes professional licensure, hospital credentialing, and other aspects, but the laws are not generally applicable to the stem cell field. At the federal level, the Food and Drug Administration (FDA) wields its power under the Food, Drug, and Cosmetic Act (FDCA) and the Public Health Service Act, neither of which addresses ethical concerns, per se. The National Institutes of Health have an impact through funding decisions alone, although these can take ethical considerations into account. The mandate of the Centers for Disease Control and Prevention is limited to guidelines issued in relation to hematopoietic stem cell transplant activities.


With so disseminated a US regulatory structure, it may be surprising that regulatory developments affecting stem cells are largely following traditional paths. Under the FDCA, for example, the FDA will treat a stem cell therapeutic as a drug, which would have to meet the standards for new chemical entities.2 These include the filing of an investigational new drug application, documenting a minimal effective dosage, using good manufacturing practices, and the reporting of adverse events.

The FDA has announced final regulations on donor eligibility for stem cell formulations, as a category of cellular and tissue-based products.3 The new rules, which took effect in May, require cell donors to be screened for risk factors and clinical evidence of communicable diseases.

Patent protection is another key variable in the commercial equation for stem cell technology. Here, too, the field seems to be developing along lines similar to those of the preceding recombinant DNA/biotechnology revolution. In a similar fashion, the global perspective is divided between competing views on the ethics of patenting of products obtained through cellular manipulations.

For example, the European Patent Office (EPO) and the UK national patent office are divided on whether human embryonic stem cell lines can be patented. The EPO interprets the EU Biotechnology Directive, which excludes the patenting of "human embryos" and "parts of the human body," as barring patents on stem cell lines, along with any use of human embryos for industrial purposes. More recently, the EPO announced an indefinite suspension on its issuance of any patents to embryonic stem-cell technology. Reaching precisely the opposite conclusion, the UK patent office has granted a number of patent claims to human stem cell lines.

There are no such exclusions in US patent law, and the US Patent and Trademark Office (USPTO) has drawn the line only at any patent "including within its scope a human being." Thus, the USPTO has applied the substantive legal requirements for practical utility, adequate description, and inventiveness to issue a number of stem cell-related patents.

The US patents granted to date cover, for instance, the repair of connective tissue damage with human marrow-derived mesenchymal stem cells, the differentiation of various types of stem cells along prescribed paths, and the transplantation of neural stem cells into a host. With a few exceptions, such as the "purified preparation of pluripotent human embryonic stem cells" claimed in a 2001 patent to James A. Thomson, of the University of Wisconsin, the patented subject matter relates to general methodologies rather than to products or techniques illustrative of near-term clinical applications.

Even as regulatory and patent developments follow relatively predictable trajectories, restraints on public funding undercut the route from lab to marketplace and put the United States at a disadvantage internationally. Further, an overselling in other biomedical venues, such as gene therapy, has discouraged risk-capital investment, which is hampered as well by the absence of a trusted business model for stem cell enterprise.

Along with the rest of the world, the US struggles to accommodate the scientific, ethical, business, and political considerations that will determine when or whether stem cell research will realizes its promise. It is unwise to compound the difficulties endemic to this field by foregoing both federal money and federal control. Rather, the US government should adopt national ESCR standards, tracking those promulgated by the National Academy of Sciences,4 and restore access to federal funding, a bulwark of US basic research for decades.

Stephen A. Bent is a partner with the law firm of Foley & Lardner LLP, where he founded and presently co-chairs the firm's interdepartmental Life Sciences Industry Team. For 25 years he has counseled clients on legal and business issues affecting biotechnology, pharmaceuticals, and biomedicine, including regenerative medicine. Bent has an international reputation in intellectual property law.

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