The Economics of Stem Cell Research

Phill Oostdyk
Final Project
Dr. Adam Johns


Stem cell research is a topic argued everywhere from politics, to religion, and around the water cooler. It is topic that almost everyone in this world has a strong opinion about. In general, people only focus on the ethical part of the subject. There are other sides of this debate that should be discussed besides just the moral composition of it. One of these is how stem cell research will affect the economy. Once stem cell research gets to a point where it can be used commercially, such as prescription drugs, it would only help the economy.
In this day of a weakened economy and high unemployment rates, not just in the U.S., but the world, everyone seems to be looking for any way to help boost the economy. Stem cell research, and eventually commercialization, will help stimulate the floundering economy. I am not suggesting that this will be a complete bail out and the economy will be immediately better. I am saying that with this research, a small dent could be put in the economic crisis. In order for stem cell research to have any impact on the economy, either good or bad, laws have to be loosened in this country, and it is slowly working that way.
The fight for stem cell research has been a long and hard one, due to the strict laws against stem cell research. The back and forth argument has been going on in Washington DC since the late 1980s. Before this, in 1973, a moratorium was placed on funding for stem cell research. Congress voted to lift this moratorium in 1990. Ultimately it was vetoed by President George H.W. Bush. President Clinton tried to lift the ban during his terms, but later had to recant due to public outcry. He later allowed research from aborted fetuses, but President George W. Bush banned research to only allow existing human cells. With the election of Barack Obama, the scientific community is finally allowed to do the research. President Obama rescinded the bans that were placed upon the stem cell research. To show support the government has for stem cell research in this new regime, President Obama’s stimulus package included $10 billion in funding to the National Institute of Health (NIH). The NIH is a part of the U.S. Department of Health and Human Services and many research trials are funded from this government entity. Of this $10 billion, $8.5 billion is going towards research (Genomeweb).
Just days after President Obama took office, the Food and Drug Administration allowed a research trial conducted by Geron Corporation of embryonic stem cell treatments in humans with spinal cord injuries (Scientific American). This study will test up to 10 patients to see if it is safe to inject nerve cells from embryos into a spinal injury. "This marks the beginning of what is potentially a new chapter in medical therapeutics—one that reaches beyond pills to a new level of healing: the restoration of organ and tissue function achieved by the injection of healthy replacement cells,” Thomas Okarma, Geron's president and CEO (Science American).
One possible precursor to the Geron Corporation’s trial was a study published in September 2008 by Dr. Stephen Davies, Associate Professor of Neurosurgery at the University Of Colorado Denver School of Medicine and researchers at the University of Rochester. They were working on a way to inject stem cells into people with spinal cord injuries to help repair the spinal column, maybe even cure paralysis. When these cells were injected, they found that some patients experienced pain symptoms. According to Scienceblog.com, a website dedicated to scientific news, this study showed that by manipulating the cells before injecting them, “it may lead to cell based therapies for victims of paralysis to recover the use of their bodies without the risk of transplant induced pain syndromes (Science News).” This could be the start of cure of paralysis. Imagine being confined to wheelchair for years and going to the doctor for a procedure to get a shot of stem cells in your spine. This results in the ability to walk, after some physical therapy to strengthen the muscles.
One of the first thoughts that people have when they hear about stem cell research, besides the moral and ethical ones, is about the cost. In November of 2004, California passed an issue pledging $3 billion to support stem cell research. The passage of the measure — designed to get around the Bush administration’s restrictions on the funding of such research — will likely put California at the forefront of the field and is bigger than all current stem-cell projects in the United States, privately or publicly financed (MSNBC). Big money tycoons like Microsoft’s Bill Gates and Google’s John Doerr, along with celebrities Michael J. Fox and Christopher Reeves, heavily supported the bill. The reason for this support is that they realized this research can help millions of people, including the late Reeves, a paraplegic, and Fox, who has Parkinson’s disease.
In these times, the public will see the $3 billion and wonder why we are wasting that money for stem cell research when we could use it to fix the economy. What they do not see is this type of funding, whether it is publicly or privately funded, is an investment. As the old saying goes, ‘you have to spend money to make money.’ This research is not cheap, but it is necessary to cheapen things in the future.
The easiest way to explain this is to think of a car. A person has an old beater that they have had for years. The car has some problems and needs to be fixed. The repairs will cost a large sum of money, and there is no guarantee that it will not have to be fixed again in six months. The most economic way of fixing this problem will be to pay a little more money than it will cost for repairs and get a new car. By doing this, there will be no reason to worry about having a major repair cost in the near future.
This logic can be applied to medical expenses too. If a person has cancer, it will cost thousands upon thousands of dollars to get them healthy again. Even with treatments such as chemotherapy and radiation treatments, the patient would not fully guaranteed to be rid of the cancer. Now, if a stem cell injection designed to cure cancer was available, this could potentially save the patient money. The injection could possibly cost the patient a little more money up front, but it would save on countless trips to the hospital for chemotherapy or radiation. On top of this, the injection would also save the patient from untold pain and suffering of having to deal with these procedures. The stem cell injection could also provide a guarantee of getting rid of the cancer, and not just putting into remission and hoping it does not come back. This logic works not only for cancer, but also to countless other ailments such as Parkinson’s and paralysis.
In October of 2007, Rutgers professor Dr. Joseph J. Seneca published a paper for the New Jersey Senate titled “The Economic Benefits of the New Jersey Stem Cell Capitol Projects and Research Bond Acts.” In this paper, Dr. Seneca explains the benefits that will come from stem cell research in New Jersey. He touches on reduction in health care costs; savings in work time lost, and tax benefits. The latter is probably the most important to any level of government. Dr. Seneca bases his paper on the expenditure of $270 million to building facilities dedicated to stem cell research and eventual therapy centers. The expenditure of $720 million on facilities and research will directly create jobs and generate related economic activity and, in turn, as subsequent rounds of expenditure follow from the initial outlays, there will be further complex, indirect, economic impacts throughout the state’s economy and beyond (Seneca iii).


Another positive impact that stem cell research would have is in the work force. According to Dr. Seneca, New Jersey would see an increase of 22,062 direct and indirect job-years, where job years are equal to “one job lasting one year” (Seneca 5). There would be the obvious increase in need for doctors and nurses, but other jobs would be created too. During the research phases, additional research assistants, coordinators, and research nurses would be needed. The research and fruition of therapies will also lead to a bevy of indirect jobs. More clinics would have to be built in for the demand of the procedure. This would increase the need for construction worker, electricians, plumbers, and landscapers. The actual buildings would need not only the doctors and nurses, but for administrative, janitorial, and cleaning help. The success of stem cell therapy might lead to more interest in the field, which would lead to an increase in students wanting to enter the field, thus increasing the demand for college professors and instructors. The overall result in the research could lead to a snowball affect of jobs that are not just directly related to the subject.
Dr. Seneca not only focuses on the jobs that would be created, but also the money that the government would take in. The first thing he mentions is the increase in the Gross Domestic Product (GDP), the produced goods and services. He estimates that with $270 million expenditure, New Jersey would take in $186.5 million in new GDP. Dr. Seneca also explains the positive impact of tax revenue. “It is estimated that the $270 million in capital expenditures will generate state tax revenues of $6.6 million” (Seneca 6). This is just state taxes that include income, sales, and business taxes. He also adds that an additional $6.6 million would be brought in local taxes.
New Jersey is not the only state realizing the economic impact of stem cell research. Politicians in New York are seeing how much stem cell research could mean to the state. Jon Cohen, chief policy adviser to Gov. David A. Paterson, said the NIH funding could create more than 5,000 new jobs. "It's an economic driver," Cohen said. "We have the infrastructure in place, so we're teed up to do this” (Newsday). Eight other states have already funded stem cell research, and more are to follow suit when the economic impact is realized.
To get to a point where stem cell therapy is commercial and readily available will cost millions and millions of dollars. Pundits of this will come out and say there are too many problems to worry about before money is to be spent on stem cell research. Currently, this country, and the world, is in one of the worst recessions in history. The pundits only see the short term and want the economy fixed now. When President Obama lifted to ban on stem cell research, opponents accused him of distracting the public from the economy. "Why are we going and distracting ourselves from the economy? This is job No. 1. Let's focus on what needs to be done," says Republican Representative Eric Cantor of Virginia (CNN).
People have always contested that stem cell research should not be done because of the “killing” of the embryo. In January of 2008, a study was released that embryonic stem cells could be extracted without harming the embryo. This turns out to be a big blow to opponents of stem cell research. Still, some ethical advocates might not go for the research, though, according to Evan Snyder of the Burnham Institute for Medical Research. “Can one prove that the biopsied embryos, if implanted, would yield normal individuals?" he asks. "Opponents might claim even sillier arguments: that the embryos are donating cells without 'informed consent'," Snyder adds (New Scientist). If this barrier between the two sides can be broken down, and stem cells are consistently extracted without harming the embryo, than there is no reason for this research not to be done. The economic benefits that will come from this are too huge to ignore.
In the end, this debate probably will never end, similar to the abortion debate. There will always be people on both sides of the issue. The fact that stem cell research would have a positive impact on our economy should not be ignored though. If a professor from Rutgers can figure out that millions and millions of dollars will stream into our economy from only one state, then just think of how much of an impact could be made all over the country. Thousands of jobs would be created, both directly and indirectly. Billions of dollars would be generated, both for the government and commercial use. If the moral debate could find common ground, then there would be no reason not to do this. Everyone agrees that the economy needs help; jobs need to be created. Stem cell research would help this crisis.



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