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NATURE | VOL 397 | 21 JANUARY 1999 | www.nature.com 185

[WASHINGTON] The US Department of Healthand Human Services (DHHS) has issued alegal opinion saying that research on humanembryonic stem cells does not fall under theban on federal funding for human embryoresearch. The department says this is becausesuch cells do not constitute an ‘organism’ asdescribed in the legislation.

The decision was due to be announced byHarold Varmus, the director of the NationalInstitutes of Health (NIH), at a meeting ofthe National Bioethics Advisory Commis-sion on Tuesday (19 January). It marks thenext move in a delicate political course theNIH is trying to steer in the face of an uncer-tain degree of conservative opposition.

The decision could be codified by a billlikely to be introduced this week by SenatorArlen Specter (Republican, Pennsylvania),chair of the appropriations subcommitteethat funds NIH. The bill allows federal sup-port for scientists doing research on stemcells, and may go further, allowing fundingfor those who derive stem cells from embryos.

Last November, two teams of scientistsannounced the isolation of the cells, generat-ing hopes for their use in cell and tissue trans-plants, drug development and basic develop-mental biology (see Nature 396, 104; 1998).But the uncertain moral status of such cells,given their close link to human embryos, ledopponents of human embryo research tourge that federal dollars should not be used tosupport their use in research.

Bolstered by the DHHS decision, the NIHplans to draw up guidelines for investigatorsapplying for NIH money to do stem-cellresearch, and to form an oversight group toensure that applicants follow the guidelines.

“This opinion allows us to proceed care-fully and thoughtfully with a line of researchthat has enormous potential for the treat-ment of almost every disease and condition,”says an NIH official.

But the official added that NIH-fundedscientists should wait until the guidelines arein place before launching human stem-cellresearch. NIH officials hope that, by demon-strating careful guidance of the stem-cellfield, they will win public respect for it. Theyhad no such opportunity with humanembryo research because of the funding ban.

Varmus “knows the public wants to hear”about the work, says the NIH official, andplans to report publicly on how manyresearchers are being funded with how manydollars, as well as describing the nature oftheir work and their findings.

The DHHS decision interprets an exist-ing law that bars federal funding for human

The NIH explained the rationale for thedecision in the context of the work of JamesThomson of the University of Wisconsin,who derived embryonic stem-cell lines usingblastocysts left over from fertility treatments.

Thomson derived his cells from the innercell mass of the blastocyst, which consists ofcells that, although retaining the ability todifferentiate into many kinds of cells, areunable to give rise to an embryo if implantedin a uterus. So, according to a paraphrase ofthe DHHS decision provided by NIH, “evenif the cells are derived from a human embryo,they are not themselves a human embryo”.

Rabb advised, however, that work toderive the cells does fall under the ban, whichhas been attached by Congress to the annualNIH spending bills since 1995. She con-firmed that the existing law allows, withincertain constraints, federal funding forderiving stem cells from tissue of abortedfetuses.

This achievement by John Gearhart, adevelopmental geneticist at Johns HopkinsUniversity School of Medicine in Baltimore,Maryland, was also announced in Novem-ber. Gearhart and Thomson were funded by

embryo research in a way that allows supportfor research on stem cells, but not for theirextraction from human embryos. Varmusreceived the legal opinion from HarrietRabb, the general counsel at the DHHS, ofwhich NIH is a part.

Rabb noted that the ban on governmentfunding for embryo research describes ahuman embryo as an “organism” — definedscientifically as an individual constituted tocarry out all the functions of its species. Rabbdecided that, because stem cells are notorganisms, they are not covered by the ban.

Embryonic stem-cell researchexempt from ban, NIH is told

Varmus: planning guidelines for grant applicants.

[SAN FRANCISCO] Officials of theUS Securities and ExchangeCommission (SEC) havebegun to look closely atbioscience stocks for illegaltrading.

Over the past two years,the agency has filed sixcases against scientists andconsultants suspected ofhaving used insideknowledge about researchresults to trade stock or tosuggest investments tofamily and friends.

“The agency isincreasingly focused onbiotechnology as an areawhere insider trading is asevere problem,” says JamesR. Ferguson, a Chicagosecurities attorney.

Ferguson says thescientific practice of broadlydisseminating confidentialresearch results that couldbe important to a company’sfuture helps to create thepotential for misbehaviour.

Peer reviewers, researchersin clinical trials, journalistsand company consultantsoften have early access tosensitive data.

Such a situation isespecially dangerous inyoung biosciencescompanies because apositive or negative clinicaltrial result can have a hugeimpact on the fate of acompany’s stock, saysFerguson. And, becausescientific developments inthe field are more widelyreported in the popular pressthan in other technologyareas, they have a greatereffect on the stock price.

Questions have beenraised, for example, by thefrenetic trading in GeronCorp. the day before a reportin Science last Novemberthat company-fundedresearchers had been ableto grow human embryonicstem cells successfully in the

laboratory (see above).On the day on which the

article appeared, the value ofGeron stock nearly tripled,although such timing can bepurely coincidental. (It is SECpolicy to decline to commenton whether investigators arereviewing trading activity in aparticular company.)

One industry analyst saysthat insider trading rules canbe especially tricky in thebiosciences. “The majority ofbiotechnology companiesdon’t have revenues orprofits, so [investmentdecisions] revolve arounddeal rumours, or what youcan find out about what’sgoing on experimentally withthese drugs,” he says.

Some companies,recognizing the potential forproblems, issue a summaryof clinical results as soon aspossible, even beforepublication in a peer-reviewedjournal. Sally Lehrman

Insider trading alert over bioscience companies

AP

© 1999 Macmillan Magazines Ltd

Geron, a biotechnology company in MenloPark, California.

An early draft of Specter’s bill that was cir-culating last week declares that “the Secre-tary [of Health and Human Services] mayconduct, support or fund research on, or uti-lizing, human embryonic stem cells”. It alsosays that federal funding could support thederivation of embryonic stem cells from left-over embryos resulting from in vitro fertil-ization, providing consent was given by thecouple. But it was not clear that this provi-sion would remain in the bill.

Specter indicated at a Senate hearing lastweek that he intended to try to lift the humanembryo research ban as it applies to stem-cellresearch “at a very early stage” because of thepotential for it to deal with serious diseases.

At the hearing, witnesses who imploredSpecter to exempt stem-cell research fromthe federal ban included a young man diag-nosed with Parkinson’s disease at the age of27 and Doug Melton, chairman of thedepartment of molecular and cellular biolo-gy at Harvard University, who has a seven-year-old son with juvenile diabetes. Both

diseases are among those for which stem-cellresearch is thought to hold most promise.

The biomedical community applaudedthe DHHS decision. “We are delighted,” saysWilliam Brinkley, president of the Federa-tion of American Societies for ExperimentalBiology. “This makes it possible for manymore investigators in this country to haveaccess to this technology.” Ron Eastman,chief executive officer of Geron, calls it “goodnews for science and medicine”.

But Richard Doerflinger, a spokesman forthe National Conference of Catholic Bish-ops, protested that the decision means thatthe government will be providing incentivesfor embryo destruction. “The reward fordestroying them is an NIH grant to work onthe stem cells thus produced,” he said. “Itdoesn’t matter what you did to obtain thestem cells as long as whatever destruction isneeded was done without federal funds.”

Doerflinger noted that the law governingthe use of fetal tissue in federally fundedresearch prohibits carrying out abortions inorder to get the tissue. A woman must havechosen an abortion for unrelated reasons,

and have no contact with the researcher. Hesays that destroying an embryo to obtain stemcells is morally equivalent to an abortion, andthe new policy therefore contravenes the spir-it of the existing law on the use of fetal tissue.

Conservative Republicans in Congresscould challenge the DHHS decision bybroadening the existing ban to explicitlyinclude stem-cell research. Meredith Wadman

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186 NATURE | VOL 397 | 21 JANUARY 1999 | www.nature.com

Specter: bill would allow funding for research on human embryonic stem cells.

[WASHINGTON ] Space-station managers atthe US space agency NASA are braced for a30 per cent reduction in funds next year forresearch on the station. The lower-than-expected allocation is to enable the agency toguard against a possible Russian default ondelivering key elements of the station.

Although NASA’s budget for the fiscalyear 2000 will not be finalized until 1February, the agency has been told by theWhite House Office of Management andBudget (OMB) to expect less than half themoney it requested to cover such a situation.

OMB’s refusal of the full request forcontingency planning would result in a“considerable reduction in funding to the[space station] research programmes,” saysMichael Suffredini, manager of the space-station payloads office at NASA’s JohnsonSpace Center in Houston.

A memorandum sent by Suffredini toagency research managers on 8 January wasleaked last week to NASA Watch, anindependent website that tracks space policyissues. As a result of OMB’s constraints, thespace-station programme faces a $200million shortfall over the next five years,plus an additional burden of $70 million topay for the development of new technology.

The easiest place to find the moneywithout jeopardizing the space station’s tightconstruction schedule is the research‘utilization’ budget, which pays for NASA-funded scientists to develop hardware andexperiments for the station. Agency sciencemanagers have therefore been asked to drawup plans to scale down their research

programmes.Top priority will be given to maintaining

the launch schedule for large ‘facility class’instruments, which will be used by manydifferent researchers on the station. Prioritywill also be given to building hardware forindividual experiments that have alreadypassed key design reviews.

The cuts are targeted for the period whenthe station is being built, with researchfunding expected to rise again in 2003.NASA officials have promised that pastreductions to the research budget would berestored by the time the orbiting laboratoryis fully operational in 2004.

Suffredini’s memo calls for the number ofprincipal investigators preparing flightexperiments to be held “at current levels”.NASA had hoped to enlarge the pool ofscientists, but the number is now anticipated

to fall by 30 per cent. Contractors are alsolikely to be laid off “in selected areas”.

The number of scientists involved hasbeen a “highly visible metric with Congressand the research community”, wroteSuffredini. With the proposed cuts, “NASA’scommitment to research on [the station]appears questionable”.

The idea of raiding the station’s researchbudget, even temporarily, to counterproblems caused by the partnership withRussia is sure to raise hackles in Congress.Members of the House Science Committee,which oversees NASA’s budget, haverepeatedly warned the agency not to short-change science, which has been a leadingjustification for the project.

Congressional appropriators last yearordered responsibility for the stationresearch budget to be shifted from thehuman spaceflight office — which operatesthe space shuttle and is building the station— to the agency’s Office of Life andMicrogravity Sciences and Applications. Butthe change has yet to take place.

The reaction on Capitol Hill to a 30 percent cut, says one congressional source, islikely to be “universally negative”. Congressmay add more money when it takes upNASA’s budget request in the coming year.

Meanwhile, scientists working in thefields of microgravity and life sciences saythey are only too accustomed to delays anddwindling budgets for space-stationresearch. When told of the latest fundingthreat, one NASA-funded scientist quipped:“Ho hum, what else is new?” Tony Reichhardt

Space station faces research cuts to cover risk of Russian default

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