Pursuant to the authority provided by Section 7 of SCRAPEA, ACE hereby promulgates the following rules using the informal rulemaking procedures specified in Section 553 (c) of the APA.

Rule 1. Prohibited Activities. Stem cell research or production that involves the mingling of human tissue with tissue from any other species is prohibited.

Rule 2. Licenses. Stem cell research or production that is not prohibited by Rule 1 may be undertaken or conducted only upon application to ACE and order by ACE after a formal adjudication hearing conducted by an ACE Administrative Law Judge.

Rule 3. Enforcement. The ACE Chair may order the cessation of any activity that is undertaken or conducted in violation of these rules. The ACE Chair has the unreviewable discretion to issue such an order ex-pane, with no notice or opportunity to be heard, upon application by the ACE staff.

Statement of Basis and Purpose

SCRAPEA LEGISLATIVE HISTORY

Growing cells for organs

By Thomas H. Maugh II
LOS ANGELES TIMES

In a stunning first step toward producing donor tissue and organs for transplants on demand, two groups of researchers have grown human cells with the potential to become virtually any kind of body tissue.

These "stem cells" are the parent cells from which all organs in the body are produced. The ability to grow them in large quantities in the laboratory opens the door to new treatments for a broad variety of diseases.  These include heart disease, cancer, diabetes and degenerative brain disorders.

The researchers already have demonstrated that the stem cells can be converted into other types of cells, including bone, muscle, neural and gut cells. However, they have not yet deciphered the programming required to order the cultured cells to become, for example, a kidney or even a mass of brain or pancreatic cells.

But the discoveries, reported today in Science and next week in the Proceedings of the National Academy of Sciences, will make it much easier to explore such approaches.

The cells also will provide new tools for screening potential drugs and for examining the early stages of embryo development, which are still highly mysterious in humans. The cells do not, however, have the ability to grow into fetuses.

"This finding is really quite remarkable," said Lana Skirboll director of the Office of Science Policy at the National Institutes of Health. "This is the first time we have had a replicating human stem cell line."

Experts cautioned, however, that it may be a decade or longer before cells suitable for transplantation are available, and longer before complete organs can be grown.

"Although a great deal of basic research needs to be done before these cells can lead to human therapies, I believe that, in the long run, they will revolutionize many aspects of transplantation medicine," said biologist James A. Thomson of the University of Wisconsin, who led one of the teams.

One major barrier to rapid exploitation is that researchers who rely on federal funding may not be able to use the tissues because they are derived from a human embryo.

Thomson and his colleagues isolated stem cells from 10-day-old embryos-left over from attempts at artificial fertilization. The crux of their research was devising the proper mix of nutrients and environmental conditions to allow the cells to proliferate in the lab - a feat researchers have been striving to achieve far nearly two decades.

NIH lawyers will gather soon to study both the cells and the law forbidding the use of federal funds to study embryo cells - updated just last month in the new budget bill and determine whether federally funded researchers can experiment on the cells, Skirboll said. "I have no idea how this will play out," she added.

The new research was all privately funded to avoid such restrictions, with the bulk of the money coming from the Geron Corp. of Menlo Park, which retains the right to exploit the discovery. Geron is supporting at least two other teams of researchers who are also close to growing human stem cells.

"Our hope is that these cells will be grown in the laboratory and then used to regenerate failing tissue," said biologist Thomas Okarma, Geron's vice president for research and development. "Because these cells do not age, they could be used to generate virtually a limitless supply of cells and tissues for transplantation."

Among the diseases that could potentially be treated are:

· Huntington's and Parkinson's diseases. Researchers have already shown in humans that transplanting fetal brain cells into such patients can lead to marked improvement. The new cell lines could provide a much larger source of cells.

· Heart disease. Research in mice has shown improvement in function when immature heart muscle cells are implanted into diseased heart tissue.

· Diabetes. Implants of pancreatic islet cells can cure diabetes, but the cells are in short supply. The cultured cells could provide a source of islet tissue.

· Cancer. Bone marrow transplants have proved valuable in treating many types of cancer and the research could provide a new source of such marrow cells.

Before any of this can happen, experts cautioned, researchers have to learn how to control the genetically based process by which the stem cells develop into various types of tissues and organs. Biologists will also have to learn how to engineer the cells before they are implanted so that they will not be rejected by the recipient's immune system. Both of those are major tasks.

The first uses of the cells, therefore, might be for screening new drags. A batch of stem cells might be converted into heart cells, for example, and used to study both the beneficial and adverse effects of potential heart drugs.

This "could have a major impact on pharmaceutical research and development," Okarma said.

Growing the cells "is a major technological achievement with great importance in human biology," said geneticist John Gearhart of the Johns Hopkins University School of Medicine in a commentary in Science.

Gearhart and his colleagues have grown their own line of stem cells, but they took a different approach from Thomson . They searched through small samples of tissue from aborted fetuses to isolate cells called primordial germ cells, which would have eventually become either eggs or sperm.

They then put these primordial germ cells through a process similar to that used by Thomson, producing genuine stem cells. Geron officials say they are sensitive to public concerns about the use of fetal or embryonic cells in research and the company has its own panel of ethical advisers, headed by Karen Lebacqz of the Pacific School of Religion in Berkeley.

The panel approved the projects on the basis that Geron was making beneficial we of fetal tissue and fertilized eggs that would otherwise have been discarded or permanently frozen.

Biotech firm tests ethical waters in cell study
Replacement body tissues eventually may be gown, but the technique creates a hybrid cell that's part human and part bovine

By Nicholas Wade
NEW YORK TIMES

Venturing into uncharted realms of ethics and medicine, a small biotechnology company said Wednesday that its scientists had for the first time made human cells revert to the primordial, embryonic state from which all other cells develop, by fusing them with cow eggs and creating a hybrid cell.

The research comes from biologists who are well-known in their field but has yet to be confirmed or even published in a scientific journal.

Their company, Advanced Cell Technology of Worcester; Mass., said the method eventually could be used to grow replacement body tissues of any kind from a patient's own cells, sidestepping the increasing scarcity of organs available for transplant and the problems of immune system rejection.

The technique is likely to concern and perplex ethicists because it involves the creation of an embryonic cell that is part human and part cow, consisting of a human cell's nucleus inside a cow egg whose own nucleus has been removed.

The company said the hybrid cell quickly became more humanlike as the human nucleus took control and displaced cow proteins with human proteins.

Creation of the embryonic cells is an important component of a strategy that in principle offers high medical benefits if it can overcome a doubtless high barrier to public acceptance.

The technique involves creating an embryo of uncertain moral status, and one that crosses the barrier between humans and other species.

Even though the hybrid is in the form of cells, not a whole organism, the concept of half-human creatures arouses deep anxiety, as is evident from the unfriendly powers ascribed to werewolves, centaurs, mermaids, minotaurs and other characters of myth and folklore.

"Many people are going to be horrified by this scenario, others will say, 'So what?' " said Thomas Moray, director of the center for biomedical ethics at Case Western Reserve University in Cleveland and a member of the National Bioethics Advisory Commission.

"This is the sort of thing that makes me very uncomfortable. I think we are likely to get a very powerful reaction to it, and I would like for all of us to have a breathing space here to articulate our moral concerns."

Another serious uncertainty is the preliminary nature of the company's work

No article has yet been submitted for peer review and publication in a scientific journal, an essential touchstone of credibility.

Scientists asked about the company's work said they would require much more proof before believing that human embryonic stemlike cells had been created as claimed, and some were skeptical the technique would work at all.

The company said it had achieved the feat announced Wednesday with one cell three years ago. Michael West, Advanced Cell Technology's chief executive officer, said he was announcing the work done to date in order to test its public acceptability.

He said the company, which is privately held, was not planning to go public or raise money at this time but needed to decide whether to commit investment to development of the technique.

Some scientists praised West's decision to make his work public, but others are critical, saying he has invited an emotional public debate on a slender basis of fact.

West is the founder of Geron, the Peninsula biotech firm that has had two spectacular successes this year in its research on aging.

In January, the company developed a method for "immortalizing. human cells grown in the laboratory by making them leap the supposedly immutable barrier at which cells usually lapse into senescence.

Last week, two university teams financed by Geron said they had isolated and cultivated human embryonic stem cells, the all-purpose cells from which the fetus develops.

West lay the foundations for these developments by financing leading scientists in the two fields.

Advanced Cell Technology, which West joined in October, has focused on cloning and genetically improving cows, a technology developed by James Robl and colleagues at the University of Massachusetts in Amherst.

West said he hoped to use the technology to further the founding concept of Geron: delving into the mystery of human aging and sidestepping some of its processes.

The company said work with human cells was performed in 1996 by Jose Cibelli, a colleague of Robl at the University of Massachusetts.

Using 52 of his own cells, same of them white blood cells and others scraped from the inside of his cheek, Cibelli fused each one with a cow egg whose own nucleus and DNA had first been removed, the company said.

Most failed to thrive, but one embryo grew and divided five times, generating cells resembling embryonic stem cells. Cibelli and West say the method can be made more efficient with present technology.

Considering this work was sufficient to describe an invention, Robl and Cibelli filed a patent application and then set the research aside to focus on the more immediately practical field of cow cloning.

Only two others besides himself and Robl knew what had been done, Cibelli said.

The patent has not yet been issued, but West said he was confident of receiving "important intellectual property" in the field.

He said he is making the hybrid cell technique public now "because I want to be very open and level with everyone. We need to get the ethicists to talk about it so as to encourage a rational response to these new technologies."

Cibelli said he regarded any embryos obtained in this way as "not a separate individual, just a de-differentiated cell from a patient."

Differentiation is the process whereby the all-purpose cells of the very early embryo, known as human embryonic stem cells, become committed to their roles as the various specialized tissues of the body.

The process is irreversible in nature, but egg cells apparently have the ability to de-differentiate, or reset to default mode, the settings in a specialized cell's nucleus.

This is presumably what happened in the experiment reported in July when mice were cloned by transferring the nucleus of an adult mouse cell into another mouse's egg cell.

Cibelli, who trained as a veterinary doctor in Argentina, said he believed he and his colleagues "were the first to dedifferentiate a human cell by nuclear transfer."

West and Cibelli said they had no intention of transferring the embryos to a uterus, a step they consider unethical and unsafe for it. The embryos would be created solely for the purpose of tissue culture.

Human-cow cell creation raises Clinton's concern
· The president asks a bioethics committee to assess research of embryonic stem cells

By Nicholas Wade
NEW YORK TIMES

WASHINGTON - Saying he is "deeply troubled" by the creation of part-human, part-cow embryonic stem cells, President Clinton has directed the National Bioethics Advisory Commission to consider the implications of the research at its meeting Tuesday in Miami and to report back to him "as soon as possible'.

In a letter sent Saturday to the chairman of the commission, Harold Shapiro of Princeton University, Clinton. ton also asked for a review of embryonic stem-cell research in general, including the all-human embryonic stem cells whose isolation was reported earner this month.

These cells-the primordial, all purpose cells from which all tissues of the body develop-were derived from early embryos or blastocysts and from tissues of aborted fetuses.

While the president signaled concern about the "mingling of human and nonhuman species," he was more positive about the all-human embryonic stem cell research, noting that it "may have real potential for treating such devastating illnesses as cancer, heart disease, diabetes and Parkinson's disease."

But he also stressed the ethical concerns raised by the research, telling the commission that he wanted a "thorough review, balancing all ethical and medical considerations."

The letter was sent after the president had consulted with the White House Domestic Policy Council and the president's science adviser, Neal Lane, "because he wanted the broadest views possible-the policy people, medical ethicists, as well as the scientists," an administration official said.

A political issue that lies in the background of the commission's deliberations is the ban on federal financing of fetal research.

A group of scientists and ethicists known as the Human Embryo Research Panel said in 1994 that research on human embryonic stem cells should be federally financed, provided that the cells were derived from excess preimplantation embryos created for infertility treatments.

This was the source of some of the human embryonic stem cells isolated earlier this month.

In response to the panel's report, Clinton said m December 1994, "1 do not believe that federal funds should be used to support the creation of human embryos for research purposes."

The statement did not role out research on excess embryos created in infertility clinics, but subsequent action by Congress banned all research in which a human embryo is destroyed.

Referring to this history, the president said in his letter Saturday that the ethical issues of human embryonic stem cell research had not diminished since his statement of 1994 but that the benefits had become less hypothetical.

Lane said the implications of human embryonic stem-cell research had been under review, but news of the human-cow hybrid cells, reported last week, "clearly raised urgent ethical, medical and legal issues that the president wants addressed and that's why he asked for the commission to give it immediate attention."

Human embryonic stem cells can develop into any of the body's 210 types of cells, a process that happens naturally during fetal development.

Biologists at Geron, the company that supported the research, hope to grow the cells in the laboratory and guide them to develop into heart cells, blood cells and other tissues.

The cells then would be injected into the patient to integrate with tissues under the control of local body signals.

In principle, the method could address a range of otherwise untreatable degenerative diseases, as well as relieving the severe shortage of organs available for conventional transplants.

Many serious technical problems remain to be resolved, including finding ways to guide the stem cells down desired paths of development and ways to prevent immune rejection.

The ethical problems are also important because of the source of the embryonic stem cells.

In one case, the cells came from excess preimplantation embryos created in infertility treatments, and in the other from aborted fetal tissue.

Both sources were legal, but research using the first would have been ineligible for federal money.

The human-cow hybrid cell also complied with all laws, said Michael West, chief executive of Advanced Cell Technology of Worcester, Mass., the company that supported the research.

In the hybrid cell, the cow cell's nucleus is first removed and the cow proteins are expected to be rapidly replaced with human proteins as the human nucleus takes over the cell.

Although the mingling of species raises many questions, scientists at Advanced Cell Technology regard the operation as one in which the cow egg is used simply to make the human cell's nucleus revert to its embryonic state.

As the human cells can be provided by the patient himself, from blood or skin, there is no immune rejection when developed cells grown from his embryonic state cells are injected back into the body.

Advanced Cell Technology performed its cow-human hybrid experiment only once, three years ago, and took the study only to a preliminary stage. Other scientists say more evidence is needed to verify whether embryonic stemlike cells were created.

West said he was announcing the research now to test its public acceptability before making further investments in the technique.

ESSAY QUESTIONS

Question 1 (15 points). Geron Corp. (Geron) and Advanced Cell Technology (ACT) challenge SCRAPEA on its face in United States District Court on the grounds that it violates the separation of powers and non-delegation doctrines of the U.S. Constitution. Analyze the challenge, discussing the issues, the relevant constitutional provisions, the arguments to be made by the challengers and the government, the alternative analytical viewpoints, your reasoning, and the probable results.

Question 2 (35 points). The facial constitutional challenge to SCRAPEA is rejected, SCRAPEA goes into effect, and the ACE rules are promulgated. Geron and ACT, both of which participated in the rulemaking by publicly commenting, but were unsuccessful m thereby stopping the issuance of the ACE rules, file a petition for judicial review of the ACE rules which requests that the United States Court of Appeals hold the rules and each of them unlawful and set them aside pursuant to APA Sections 706(2)(B), 706(2)(D), 706(2)(C), and 706(2)(A). Analyze the challenge, discussing the specific arguments to be made by the challengers and the government, the applicable law, your reasoning, and the probable results.

Question 3 (10 points). The United States Court of Appeals finds the ACE rules valid, and the United States Supreme Court denies certiorari. Nevertheless, both Geron and ACT continue their activities as set forth in the legislative history of SCRAPEA, without applying to ACE for permission to do so. The ACE staff applies to the ACE Chair for an order that Geron and ACT cease their activities. The ACE Chair grants the application and issues an ex-pane order that Geron and ACT cease their activities, with no notice or opportunity for Geron or ACT to be heard. Geron and ACT file a petition for judicial review of that order in the United States Court of Appeals challenging it on the ground that is unconstitutional because of the lack of a pre-deprivation hearing. Discuss the availability of judicial review and the merits of this challenge.

Question 4 (10 points). The challenge to the cease and desist order was rejected, and both Geron and ACT ceased their stem cell activities. Geron applied to ACE for a license to resume its stem cell activities. At the ALI hearing Geron presented expert testimony by its scientists as to the scientific processes involved in and the potential benefits of the production of replicating human stem cells. The ACE staff presented expert testimony by a professor of religious studies regarding the ethical dilemmas of stem cell research and production, including the destruction of human embryos caused thereby. The ALI issued an initial decision granting the license, relying upon the scientific testimony. The ACE staff sought administrative appellate review by ACE as a whole. ACE reversed the ALJ, in an opinion written by ACE member Thomas Murray, relying upon the religious testimony and the feeling of discomfort with human stem cell research shared by the majority of the ACE members. Geron filed a petition for judicial review with the United States Court of Appeals. Discuss.