Study Finds Amendment 2 Will Benefit Hundreds of Thousands of Patients, Reduce Health Care Costs and Boost Economy

Published: September 13, 2006  |  Source: missouricures.com
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ST. LOUIS, Sept. 14 /PRNewswire/ — A newly released study co-authored by a Missouri economist and a public policy expert found that voter approval of Amendment 2, the Missouri Stem Cell Research and Cures Initiative, will protect access to future stem cell treatments that could provide cures for diseases and injuries that affect more than 860,000 Missouri patients and family members. The study also concluded that passage of Amendment 2 would benefit the state’s economy and could reduce Missouri’s health care costs by millions of dollars.

The study, titled “The Missouri Stem Cell Research and Cures Initiative: An Economic and Health Care Analysis,” was conducted by Joseph H. Haslag and Brian K. Long. Haslag has a doctorate in economics from Southern Methodist University and is a professor of economics at University of Missouri in Columbia. Long has a doctorate in public affairs from Maxwell School of Citizenship and Public Affairs at Syracuse University and is a former Budget Director for the State of Missouri. Haslag and Long conducted the analysis on behalf of the Missouri Coalition for Lifesaving Cures, the coalition of more than 100 patient, medical, faith and civic organizations that is sponsoring the Stem Cell Initiative.

“The Stem Cell Initiative does not require any state funding for stem cell research,” said Professor Haslag, “but its approval by voters will protect research and treatments that could not only benefit hundreds of thousands of Missouri patients, but also reduce health care costs and benefit our state’s economy.”

Among the key findings of the study:

— Five of the medical conditions that researchers consider to be likely
candidates for early, or embryonic, stem cell therapies and cures are
Parkinson’s disease, stroke, heart attack, spinal cord injury and
Type 1 diabetes. Approximately 285,000 Missourians currently suffer
from these five conditions.

— Family members share the financial and emotional burden of diseases and
injuries. Thus, an estimated 860,000 Missouri family members are
ultimately touched by Parkinson’s disease, stroke, heart attack, spinal
cord injury and Type 1 diabetes. These five conditions alone impact one
of every 6.5 citizens in the state.

— Currently, Missourians spend about $2.8 billion per year to treat
Parkinson’s disease, stroke, heart attack, spinal cord injury and
Type 1 diabetes. Missouri state government is estimated to pay about
$299 million of this amount each year, primarily through Medicaid. If
successful early stem cell treatments are developed for one or more of
these five conditions, the health care cost savings to Missourians
would be significant.

— Under the most conservative projections, if an early stem cell
treatment becomes available 15 years from now and reduces the total
health care costs associated with Parkinson’s disease, stroke, heart
attack, spinal cord injury and Type 1 diabetes by just one percent,
Missourians’ health care costs would be reduced by more than
$150 million over the following 10 years.

— If early stem cell treatments become available 10 years from now and
reduce the health care costs associated with those five conditions by
10 percent, Missourians would save more than $2.4 billion in the
following 15 years.

— The planned “Phase II” expansion of the Stowers Institute for Medical
Research in Kansas City will only go forward in Missouri if Amendment
2 passes and ensures that the Institute will be able to conduct any
stem cell research allowed under federal law. This privately funded
project will include $300 million in construction that will employ
about 350 construction workers and ultimately result in the hiring of
500 new permanent employees at the Institute.

— If the Stowers Phase II plan goes forward, it will add about
$1.25 billion to Missouri’s Gross State Product (GSP) and provide about
$47 million in tax revenues to the state government over the next
25 years.

— The vote on the Stem Cell Initiative is also likely to have a
“spillover” effect on other future investments in Biotechnology
research in Missouri, by affecting whether Missouri is seen as a
positive or hostile climate for such investments. If Amendment 2 is
defeated and if, as a result, overall investments in biotech research
in Missouri were reduced by just 5 percent, the Gross State Product
would be reduced by $1.65 billion over the next 25 years.

A complete copy of the study by Haslag and Long and more information about the Stem Cell Initiative are available on the website http://www.missouricures.com/site/PageServer .

This voter information authorized and paid for by Missouri Coalition for Lifesaving Cures, Sandra Aust, Treasurer.
THE MISSOURI STEM CELL RESEARCH
AND CURES INITIATIVE:

AN ECONOMIC AND HEALTH
CARE ANALYSIS

August, 2006

Joseph H. Haslag, Ph. D.
and
Brian K. Long, Ph. D.*

Executive Summary

The Missouri Stem Cell Research and Cures Initiative is a proposed state constitutional amendment slated to appear on the November 2006 statewide ballot. The measure was proposed by a coalition of patient and medical organizations in response to repeated efforts by some state legislators to ban early, or embryonic, stem cell research and treatments in Missouri. The Stem Cell Initiative would prevent any such ban by ensuring that any stem cell research and treatments allowed under federal law will continue to be allowed in Missouri. The purpose of this study is to quantify the potential health care and economic impacts associated with the voters’ decision on this measure.

Current federal law allows research and medical treatments using the two basic types of stem cells: adult stem cells and early stem cells. Adult type stem cells are found in body tissues, such as bone marrow and umbilical cords. The two basic sources of early stem cells are leftover fertility clinic embryos that would otherwise be discarded and a laboratory process called Somatic Cell Nuclear Transfer (SCNT). SCNT provides a way to make early stem cells in a lab dish by inserting DNA from a patient’s cell into an unfertilized human egg.

Unlike adult stem cells, early stem cells can become virtually any type of cell or tissue in the body. As a result, medical researchers believe that early stem cell research could lead to therapies and cures for many diseases and injuries that have not been cured, and are unlikely to be cured, with adult stem cells.

The Stem Cell Initiative will ensure that Missouri patients have access to any future federally-approved adult or early stem cell treatments that are developed. Thus, one impact associated with the voters’ decision on the Initiative is the potential impact on the future health of Missouri patients.

The vote on the Stem Cell Initiative also has significant implications for future health care costs in Missouri and the state’s economy. The health care cost effects are derived from potential savings that would result from the availability of early stem cell treatments. The availability of those treatments would also affect the state economy due to increased worker productivity. In addition, the vote on the Stem Cell Initiative will impact the state’s economy by significantly affecting planned and future investments in biomedical research in Missouri.

The Stem Cell Initiative does not require any state funding for stem cell research. But its approval or rejection by voters will determine whether or not major private research investments are made in Missouri, such as planned construction and research investments at the Stowers Institute for Medical Research in Kansas City. It will also determine whether Missouri medical institutions will continue to have access to federal funds made available for early stem cell research.

Below are the key findings on how the vote on the Stem Cell Initiative could impact Missouri patients, Missouri health care costs and the state’s economy.

KEY FINDINGS

Implications for Missouri Patients:

— Medical researchers believe that early stem cells could eventually
provide effective therapies and potential cures for dozens of different
diseases and injuries, including diabetes, Parkinson’s disease, cancer,
heart disease, ALS, MS and spinal cord injury. It is estimated that a
child, parent or grandparent in more than half of all families suffers
from a disease or injury that could potentially benefit from early stem
cell research.

— For purposes of this study, we focused on five relatively common
medical conditions that researchers consider to be likely candidates
for early stem cell therapies and cures: Parkinson’s disease, stroke,
heart attack, spinal cord injury and Type 1 diabetes. Approximately
285,000 Missourians currently suffer from one or more of these five
conditions.

— The debilitating effects of such diseases and injuries affect a greater
population than just those directly afflicted. Family members share
the financial and emotional burden.

– We conservatively estimate that over 860,000 Missouri family
members are touched by Parkinson’s disease, stroke, heart
attack, spinal cord injury and Type 1 diabetes. Thus, these
five conditions alone impact one of every 6.5 citizens in the
state.

Implications for Missouri Health Care Costs:

— Currently, Missourians spend about $2.8 billion per year to treat
Parkinson’s disease, stroke, heart attack, spinal cord injury and
Type 1 diabetes. Missouri state government is estimated to pay about
$299 million of this amount each year, primarily through Medicaid. If
successful early stem cell treatments are developed for one or more of
these five conditions, the health care cost savings to Missourians
would be significant.

— This study looked a range of potential cost saving scenarios over the
next 25 years based on reasonable and conservative assumptions. (See
Table 3.)

– Under the most conservative projections, if an early stem cell
treatment becomes available 15 years from now and reduces the
total health care costs associated with Parkinson’s disease,
stroke, heart attack, spinal cord injury and Type 1 diabetes by
just one percent, Missourians’ health care costs would be
reduced by more than $150 million over the following 10 years.

– If early stem cell treatments become available 10 years from now
and reduce the health care costs associated with those five
conditions by 10%, Missourians would save more than $2.4 billion
in the following 15 years.

– If early stem cell treatments become available in 10 years and
reduce costs associated with those five conditions by 30%, the
total cumulative health care cost savings for Missourians would
exceed $7.3 billion by the year 2031.

— Using these same scenarios, early stem cell treatments for one or more
of the five identified medical conditions would reduce Medicaid costs
and other health care costs paid by the state government by at least
$16 million and by as much as $780 million by the year 2031.

Implications for Missouri’s Economy and State Revenues:

— If an effective early stem cell treatment becomes available for
Parkinson’s disease, stroke, heart attack, spinal cord injury or Type 1
diabetes, some percentage of Missouri residents afflicted with those
conditions would be able to return to work or increase their
productivity. This would have additional economic benefits beyond
health care cost savings. Again, our study considered various
scenarios that we consider reasonable and conservative.

– For example, if 15 years from now early stem cell treatments
enabled a mere 5% of those afflicted with the five identified
conditions to enter the labor force, Missouri’s employment would
increase by 46,000 workers and the present value of Gross State
Product (GSP) would correspondingly increase by $11 billion
during the following 10 years. Under this scenario, state
general revenues would increase by $400 million over the same
time period.

— As reported in various news articles, the planned “Phase II” expansion
of the Stowers Institute for Medical Research in Kansas City will be
directly affected by the outcome of the vote on the Stem Cell
Initiative. This expansion will only go forward in Missouri if it is
clear that the Institute will be able to conduct any stem cell research
that is allowed under federal law and conducted at research facilities
in other states. The Stowers Phase II expansion will be funded
entirely with private funds from the Institute’s $2 billion endowment
and will include:

– Construction of a new 600,000 square foot addition to the
Institute’s facilities that will cost about $300 million to
build and employ about 350 construction workers per day over a
32-month construction period.

– Hiring of 500 new permanent employees to work at the Institute.

— If the Stowers Phase II plan goes forward in Missouri, it will add
about $1.25 billion to Missouri’s Gross State Product (GSP) over the
next 25 years as a result of the construction investments, wages and
taxes it will generate. This economic activity would provide about
$47 million in tax revenues to the state government over 25 years.

— Conversely, if the Stem Cell Initiative is defeated and the Stowers II
facility is not built in Missouri, our state would essentially “lose”
$1.25 billion in economic activity, including $47 million in state tax
revenues, over the next 25 years.

— The vote on the Stem Cell Initiative is also likely to have a
“spillover” effect on other future investments in biotechnology
research in Missouri, by affecting whether Missouri is seen as a
positive or hostile climate for such investments. Biotechnology is a
major and growing sector of the Missouri economy. Thus, if the Stem
Cell Initiative is defeated and that outcome has even a small impact on
future biotechnology investments in the state, it would have major
economic impacts above and beyond the impacts of the Stowers II
facility. For example, if overall investments in biotech research in
Missouri were reduced by just 5%, the Gross State Product would be
reduced by $1.65 billion over the next 25 years.

* Joseph Haslag has a doctorate in economics from Southern Methodist
University and is a professor of economics at the University of Missouri
in Columbia. Brian Long has a doctorate from the Maxwell School of
Citizenship and Public Affairs at Syracuse University and is the former
Budget Director for the State of Missouri.

Contact:
Connie Farrow
(314) 968-2600

SOURCE Missouri Coalition for Lifesaving Cures