The Great Stem Cell Race

Scientists around the world are scrambling to unlock the potential of stem cells. Governments trying to balance research and ethics have quickly learned that they have little control. Competition for top researchers and private capital is pushing the pace -- and punishing those who stumble.

By the time U.S. President George W. Bush's administration announced its policy on stem cell research in the summer of 2001, Roger Pedersen was already fed up. A top embryo scientist celebrated for deriving many of the human stem cell lines then available to researchers around the world, Pedersen had been struggling with inadequate federal funding for five years. Finally, he decided to abandon his post at the University of California, San Francisco, for the chance to head up a new institute at the University of Cambridge in England. The British government was ready to offer funding and a better regulatory environment. Said Pedersen, "I chose to move to a country that was willing to provide support, broad support, for this research."

By the time U.S. President George W. Bush’s administration announced its policy on stem cell research in the summer of 2001, Roger Pedersen was already fed up. A top embryo scientist celebrated for deriving many of the human stem cell lines then available to researchers around the world, Pedersen had been struggling with inadequate federal funding for five years. Finally, he decided to abandon his post at the University of California, San Francisco, for the chance to head up a new institute at the University of Cambridge in England. The British government was ready to offer funding and a better regulatory environment. Said Pedersen, "I chose to move to a country that was willing to provide support, broad support, for this research."

He was not alone in fearing that federal restrictions would cripple U.S. labs in the race to tap the enormous potential of stem cell research. For a while, the United States had advanced quickly. In November 1998, two separate American research teams, one at Johns Hopkins University and the other at the University of Wisconsin, were the first to isolate and culture human embryonic stem cells in vitro. This medical revolution allows scientists to understand how a single undifferentiated cell — the fertilized egg — can develop into all the different tissues and organs of the human body. Embryos created through a process called "therapeutic cloning" might eventually yield stem cells to grow tissues and organs genetically identical to those of a patient, making possible a rejection-free therapy for spinal cord injuries, diabetes, Parkinson’s disease, Alzheimer’s, or heart disease. Unlike reproductive cloning, which creates a new human being, therapeutic cloning is used only to replace certain human tissues.

The 1998 breakthroughs were immediately controversial, however, because the isolated stem cells were derived from aborted fetuses in one instance and viable embryos left over from an in vitro fertilization (IVF) clinic in the other. Stem cells are harvested from microscopic embryos just several days old in a procedure that destroys the embryo itself. It is a practice many religious and conservative organizations do not want supported with public money. In August 2001, Bush decided to restrict federal money to only the few stem cell lines already in existence at that time.

Events following that announcement seemed to justify Pedersen’s move. U.S. researchers learned that fewer stem cell lines were available for federal government funding than the president claimed. In theory, more than 60 stem cell lines were to be eligible, but intellectual property restrictions and problems with viability left only 15–18 lines available. Frustrated U.S. researchers then learned, in February 2004, that a team in South Korea had successfully harvested and cultured stem cells from a human embryo cloned using nuclear-transfer technology (the method first used in Scotland in 1996 to clone Dolly the sheep). Dr. Michael West, the president of Massachusetts-based Advanced Cell Technology, a company that had earlier attempted this experiment using private money, complained, "The [Korean] work should have been done in the U.S." Another top researcher, Dr. Irving Weissman of Stanford University, warned, "You are going to start picking up Nature and Science and all the great [scientific research] journals, and you are going to read about how South Koreans and Chinese and Singaporeans are making advances that the rest of us can’t even study."

Now it appears that, even hobbled by federal funding restrictions, the United States is still leading the world in the stem cell research race. America’s Christian right garners a tremendous amount of attention at home for its opposition to stem cell research, yet major portions of Europe have adopted policies far more restrictive than those in the United States. And, despite some impressive breakthroughs in Asia, limited access to private funds and global research networks keeps that region from sprinting ahead of the field. The United States may be the leader in this biomedical research race, but for that it has the rest of the world to thank.

Continental Drift
There has been no great exodus of U.S. stem cell scientists to Europe — and for good reason. The political and regulatory climate for embryo research is far worse there than in the United States. Not content with funding bans, several major European governments have criminalized stem cell harvesting and human cloning, even if done with private money and for therapeutic purposes. Germany’s 1990 Embryo Protection Act effectively bans all harvesting of cell lines from human embryos, and, in January 2002, a new law was enacted to prohibit imports of all stem cell lines not in existence at that time. The German Federal Ministry of Education and Research recently confirmed that a German scientist would be committing a criminal act if he so much as advised a colleague in another country engaged in the harvesting of new stem cells.

Opposition in Germany — and in much of Europe — comes not just from religious and conservative groups but also from some members of the Socialist and Green parties. Germans in particular consciously separate themselves from what they call the "Anglo-American" approach to bioethics, which they consider to be dangerously utilitarian, and perhaps even a slippery slope toward a reintroduction of fascism. Anti-abortion religious groups, anti-science Greens, and many women’s groups have joined forces to label embryo research as "continuations of Nazi eugenics." According to one Green Party statement, "We Germans, in light of experiences during the years 1933 through 1945, should be sensitive, even supersensitive [to the possible abuse of embryo research]." Even some advocates for the sick and disabled oppose stem cell research in Germany, contending that the pain of disease ought to be reduced through improved social conditions and greater tolerance rather than through expensive new medical research.

In some cases, Europe’s lockdown on laboratory research has come on suddenly, more as a result of recent political shifts than long-standing concerns. New restrictions in Italy, for example, altered an earlier policy of loosely regulated research. An Italian scientist working at the University of Bologna created the first human embryos through IVF in 1961, a full 17 years before the birth of the world’s first "test-tube baby." Unrestricted reproduction science continued in Italy and led to the birth of a healthy baby (using a donated egg and artificial hormones) to a 63-year-old woman in 1994. Severino Antinori, the embryologist who performed the treatment, later stated he planned to clone a human.

Then came the backlash. The 2001 election of Italian Prime Minister Silvio Berlusconi and a more conservative parliament ushered in a more restrictive regulatory environment. In February 2004, the Italian parliament voted to ban almost every form of assisted reproduction, including artificial insemination using donated sperm, embryo freezing, egg donation, surrogate motherhood, pre-implantation genetic diagnosis, and fertility treatments for women beyond childbearing age. The law effectively blocked stem cell research as well. Paul Devroey, clinical director of the Center for Reproductive Medicine in Belgium, commented, "The Italian law is the end of any progress. It is the world’s worst law ever seen, except for Costa Rica, where the constitution forbids IVF."

Even European states that liberalize their rules have had trouble creating a conducive environment for cutting-edge stem cell research. In France, prior to the enactment of a revised bioethics law in July 2004, scientists found it difficult to import stem cell lines. One research team in Montpellier hoped to collaborate with an American lab but had to wait two years for permission from the French government to import cells. The team was on the verge of relocating its activities to the United States when the new measure passed. This law allows wider options for conducting stem cell research legally, but nonetheless bans all human cloning, for both therapeutic and reproductive purposes. The new Socialist government in Spain has also loosened its stem cell research restrictions, but the revised rules remain strict: IVF human embryos can only be used if frozen for more than five years, and only if the couple involved explicitly authorizes their use for research purposes. In November 2004, voters in Switzerland backed a new law allowing the harvesting of stem cells, yet antiabortion groups and the Green Party insisted that the new law ban all forms of human cloning. There is currently only one team of embryonic stem cell researchers at work in Switzerland, and they depend on cell lines imported from the United States.

Britain, and to a lesser extent Sweden and Belgium, has departed from the continental trend by actively encouraging stem cell research. The British government not only encourages advanced research into human biology but since 2001 has explicitly permitted — and funded — cell harvesting from IVF embryos and therapeutic cloning. Britain’s Human Fertilisation and Embryology Authority issued its first cloning license in August 2004. Public funds support this work through the Research Councils UK, the main public investor for scientific research in Britain. In the spring of 2004, the Research Councils announced a new stem cell initiative that totaled $30 million for a research center at Cambridge (to be headed by Roger Pedersen) and the opening of a stem cell bank to share lines.

These efforts have succeeded in attracting some researchers from continental Europe. Britain’s first cloning license in 2004 went to a team that included a Yugoslav-born scientist who abandoned his career in Germany because of research restrictions. Yet, it has been reported that since Pedersen’s 2001 departure, no leading U.S. stem cell scientist has moved to Britain. This is partly because Britain’s public-sector model for promoting stem cell research has its own drawbacks, including uncertain public licensing, slow-moving funding cycles, and bureaucratic delays. When the Medical Research Council and the Biotechnology and Biological Sciences Research Council attempted to jointly fund state-of-the-art facilities for a British stem cell bank, red tape held up the first deposits for six months. Equally important, there is nothing in Britain or continental Europe to rival the U.S. system for mobilizing resources through partnerships between private universities, companies, venture capitalists, and philanthropic foundations.

Without a more dynamic private sector, biomedical scientists in both continental Europe and Britain will continue to see their job options shrink and their research output suffer. A 2002 European Commission study concluded that biotechnology companies in Europe were falling behind their peers in the United States: "[T]he U.S. biotechnology industry started earlier, produces more than three times the revenues of the European industry, employs many more people (162,000 against around 60,000), is much more strongly capitalised and, in particular, has many more products in the pipeline." Europe still trains large numbers of highly skilled scientists, yet thousands come to the United States every year to seek advanced study or employment, and more than 70 percent never return. Indeed, about 40 percent of scientists now working in the United States were born in Europe.

As a remedy, the European Commission called for special measures to encourage participation in genomics and biotechnology by small- and medium-sized enterprises. These inducements include complementary financing from the European Investment Bank and grants to business incubators through the European Investment Fund. Yet, when this strategy was officially reviewed in April 2004, progress was found to be slow. The European Association for Bioindustries commented, "Sadly, this year’s progress report is not reporting much progress."

Europe’s problem is lagging private investment in the sector — a condition that has worsened. As recently as 1990, global pharmaceutical companies spent 50 percent more on research in Europe than in the United States. By 2001, those same companies were spending 40 percent more on research in the United States. The European Commission attributes this state of affairs in part to the failure of eight member governments in Europe to implement a 1998 patent law directive, but many private companies view the problem as the commission itself, which they call "the dead hand of Brussels." Investors in Europe would like to see fewer slow-moving Eurocrats and more clear-thinking research scientists involved in funding decisions, plus a deregulated market environment; in other words, something closer to the U.S. system. Tim Wells, senior executive vice president for research at the Swiss biotechnology firm Serono, observes, "The European research system is much too fragmented, the regulatory system is too cumbersome, and often the incentives for setting up a company are not as well developed as they are in the U.S."

The American Bypass Operation
In October 2003, a leading British team announced the creation of three new stem cell lines, derived from a total of 58 embryos. This was an important step forward — but one quickly upstaged by events in the United States. Privately funded U.S. researchers were moving ahead even faster.

In March 2004, a new collaborative research project, the Harvard Stem Cell Institute at Harvard University, announced it had developed 17 new embryonic stem cell lines that it was ready to share with other privately funded researchers. Then, in June 2004, scientists at a private U.S. fertility clinic in Chicago produced an additional 12 cell lines, including the first cell lines ever to be derived from embryos with specific genetic diseases, such as muscular dystrophy. In December 2004, the California-based Geron Corporation, which has invested more than $90 million in stem cell research since 1996, patented a new stem cell therapy for Parkinson’s and began preparing to test a stem cell-based therapy for acute spinal cord injury.

State governments are now getting into the act as well. When the Bush administration blocked federal funding for work on new cell lines, a coalition of disease foundations, science advocates, and Hollywood celebrities turned to the voters of California, who in November 2004 gave 59 percent approval to Proposition 71, a bond issue that allows the state to make available as much as $3 billion in grants for embryonic stem cell research over the next decade. There will be plenty of qualified takers for this new research money in California, which is already home to 2,600 biomedical companies and 87 university and private research institutions with $32.3 billion in worldwide revenue and $15.5 billion in annual research outlays. Following the California vote, the governor of Wisconsin proposed spending $750 million through a public-private partnership in stem cell research and biotechnology to keep labs in his state nationally and internationally competitive. The governor of New Jersey also signed legislation last year to establish a stem cell research facility based at Rutgers University that will receive an initial $6.5 million in state funding, to be matched by $3.5 million in private funding. Illinois, Maryland, Massachusetts, and Texas are now also promising to put research money on the table in a bid to prevent their stem cell scientists from moving — not to Britain, but to California.

Asia’s Cellular Bid
If a strong challenger to the United States emerges in the stem cell race, it will come not from Europe but from Asia. The Korean cloning breakthrough of 2004 that unnerved many U.S. scientists is part of a larger pattern of aggressive stem cell science in East Asia. One of the region’s biggest advantages is the much lower cost of employing research talent. Biotechnology research scientists in China are employable at one fifth to one tenth the cost of comparable American talent, and China now has a growing pool of capable researchers, many with U.S. training. Asia’s scientists also benefit from strong state support. Even free-market oriented Singapore has spent $500 million on its "Biopolis Asia," a 2 million-square foot biomedical campus that opened in 2003. Singapore has also adopted a British-style regulatory system, hoping to attract international companies and encourage local start-ups. In South Korea, stem cell research has received significant state funding — $27 million from 2002 to 2004 — in part because of the strong personal interest of President Roh Moo Hyun.

Nor do Asian scientists face as much cultural resistance to their work as their colleagues in the West. In Confucian and Buddhist societies, there are fewer religious inhibitions to the destruction of microscopic embryos. Throughout Roman Catholic Europe and in much of Christian America, religious authorities teach that a fertilized egg is already a person. In Confucian tradition, the defining moment of life is birth, not conception, and Buddhists view life not as beginning with conception but as a cycle of reincarnations. The South Korean scientist who led the 2004 cloning team said at the time, "Cloning is a different way of thinking about the recycling of life.… It’s a Buddhist way of thinking."

Stem cell researchers in Asia remain disadvantaged, however, by their limited connections to global research networks. The International Society for Stem Cell Research has 654 members in the United States and 56 in Britain, but only 34 in South Korea, 29 in Japan, 16 in Singapore, and 5 in China. Private investment has also lagged. Singapore’s Biopolis notwithstanding, the city-state currently has only one company researching embryonic stem cells, and none engaged in therapeutic cloning. In China, private investors remain nervous about weak protections for intellectual property, insufficient exit options for venture capital, second-rate managerial skills, and a muddled regulatory environment. Although legalized in 2004, stem cell work had already been under way for several years without central government authorization, leaving individual institutes essentially free to operate according to their own (sometimes bizarre) preferences. In 2003, a Chinese team at Shanghai Second Medical University reported using human skin cells with rabbit eggs to produce early-stage embryos, which in turn yielded stem cells. This kind of "cowboy science" attracts newspaper headlines — as did Italy’s IVF pioneers several decades ago — but private investors know it is not the best foundation for developing reliable clinical applications. This step requires networked access to top scientists from a wide variety of disciplines (from molecular, cellular, and developmental biology, to immunology and genetics, transplantation biology, and clinical medicine), something easier to arrange in San Francisco than in Shanghai.

Indeed, South Korea’s 2004 research breakthrough was based as much on persistence as precision. The Korean cloning and harvesting team succeeded in part because it had 10 times as many researchers and unregulated access to 12 times as many eggs as the U.S. team that was attempting the same experiment. As the Korean scientists neared success, international scrutiny obliged Seoul to put in place a tighter set of restrictions on future embryo science, including a series of laws passed in January 2004 that banned human cloning for reproductive purposes, required scientists to receive prior approval for their projects, and prevented women from selling their eggs. One health ministry official commented, "We’re getting to the point where I think Korea might be more restrictive about this kind of research than the United States." It was an exaggeration. Still, South Korea’s recent experience suggests that even Asia may not be immune to an eventual regulatory backlash.

Growth Industries
Winning the stem cell research race has significance beyond national pride. In today’s economy, scientific leadership means more of the best and highest paying jobs. The world-leading biomedical industry in California pays out $14 billion in wages and salaries every year, and the 230,000 Californians employed in the sector earn nearly 60 percent more than the average salary in other sectors. The value of biomedical exports from California alone grew to $7.1 billion in 2003. With such social and commercial benefits on the line, and having earlier lost the information technology race to the United States, it is understandable that Europe does not want the same thing to happen now in biotechnology. But it may be too late.

In the 2004 U.S. presidential campaign, Democratic challenger John Kerry warned repeatedly that the future of American stem cell research would be at risk if the restrictive policies of the Bush administration were not changed. This view underestimated the capacity of U.S. scientists to work around a simple federal funding ban. The ban has slowed the pace of some research, and it has forced scientists to segregate their labs according to funding sources, but it has not prevented companies and labs with private funds from going where the science leads. Indeed, conservatives might eventually come to regret Bush’s decision to push American stem cell and cloning science so completely into the arms of the private sector and the states. Whereas governments in Europe have gone to the extreme of blocking all research with tight controls, the United States allows research that is not federally funded to race ahead with little or no federal control. As cloning and stem cell research move closer to clinical applications in the United States, commercial demand and private funding will strengthen, further weakening Washington’s ability to shape the future of the field.

Divergent national policies on stem cell research are unlikely to converge any time soon. In 2004, the Bush administration tried and failed to promote a comprehensive global ban on human cloning at the United Nations. The measure failed internationally for the same reason it had earlier fallen short in the U.S. Senate: Support for therapeutic cloning is strong enough to make a comprehensive cloning ban unacceptable. The formal harmonization of national policy has been impossible even within the European Union, where the commission has recognized that regulations on ethical matters are best left to each country.

Nonetheless, political and market forces may eventually drive some countries to a common point on regulating future research. As the clinical promise of stem cells emerges, more European states may decide to liberalize their policies, as recently occurred in Spain, France, and Switzerland. At the same time, the underregulated states in Asia may begin to follow the path of Singapore, and now South Korea, in accepting tighter regulation to preserve their international respectability. The United States, at least until the next presidential election, will likely continue to chart its own curious course, restricting federal money but imposing little federal control. Most other countries will reject this approach and converge instead around the regulatory standards of Britain — where generous public support for research is coupled with government monitoring and licensing. Although it may be unable to prevail in the research race, Britain may at least show the world the best way to run it.

Robert L. Paarlberg is professor of political science at Wellesley College and author of The Politics of Precaution: Genetically Modified Crops in Developing Countries (Baltimore: Johns Hopkins University Press, 2001).

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