Examining the Economic Hype of Embryonic Stem Cells

February 8, 2007

The Medical Examiner column at Slate.com this week explains why stem-cell research won’t make states rich.

The public has been told repeatedly that funding stem cell research—or more specifically embryonic stem cell research—represents an investment in biotechnology that will return great dividends to states that jump on the funding bandwagon.

From the Medical Examiner:

This sort of claim appears to have originated with a study [PDF] produced in the run-up to the 2004 vote on California’s initiative. The authors, Stanford University health economist Laurence Baker and Bruce Deal of the Analysis Group, concluded that stem-cell research would generate state revenues and health-care savings of $6.4 to $12.6 billion over the 30 years it will take to pay off the state bonds used to fund it. California’s $3 billion investment would not only pay for itself and another $2.4 billion in bond interest payments, it would also turn the state a profit of at least $1 billion.

Problem is, the study authors take a number of bad assumptions (new treatments will replace existing treatments rather than simply being added onto existing treatments, new treatments will cost less than existing treatments, new treatments will emerge in the near future) and press them to their most optimistic extreme.

But why, you may ask. So does the Medical Examiner:

Why did Baker and Deal see dollar signs? The $200,000 stem-cell supporters paid to Deal’s firm, the Analysis Group, for campaign consulting might have something to do with it. In an interview, Baker said he didn’t think of the report as advocacy but added that “we knew we were working for people who wanted to pass this thing.” And while he still believes the economic benefits of stem-cell research could be “quite large,” Baker also describes the report as merely “one possible version of how things might happen.”

The Medical Examiner’s critique of the economic hype surrounding embryonic stem cells is a great service. He also tries and mostly succeeds at representing accurately the current restrictions on federal funding of embryonic stem cell research,* a feat all too rare in the MSM (Slate.com is owned by the Washington Post Company).

I am, however, disappointed that he does not go on to critique the other claims regarding embryonic stem cells. In particular, he should compare the hype surrounding embryonic stem cells to the current successes (PDF) and recent discoveries with non-embryonic or adult stem cells. His conclusion—that additional government funding of embryo-destructive research is needed—is unsupported, as he does not show how the Bush policy is actually hindering the goal that we all ultimately want: cures.
 
 
 
 
*The article states “a 2001 executive order from President Bush prevents federally funded scientists—that is, the bulk of academic biomedical researchers in the United States—from creating new embryonic stem-cell lines or even studying new lines developed elsewhere.” It would be more accurate to say that the executive order “prevents scientists from using federal funds . . .” rather than saying it prevents “federally funded scientists from . . .” Scientists who receive federal funding (that is federally funded scientists) can make use of other funds for other research. But the other research has to be kept completely separate. I don’t want to knit-pick, though.