THE JOURNAL OF BIOLAW & BUSINESS
International
Stem Cell Research in
Canada: Business Opportunities for U.S. Companies
Cheryl Reicin and Eileen McMahon
has limited federal support for such
research.
Until recently, Canada’s regulatory
scheme was also in a state of uncertainty.1 A newly enacted law applying
to assisted human reproduction and
related research greatly reduces this
uncertainty and makes Canada a more
appealing place to conduct certain
types of stem cell research. U.S.based researchers and investors are
now looking north of the border to pursue stem cell research opportunities.
CURRENT REGULATION IN THE
UNITED STATES
ABSTRACT
The ban on the use of United States (U.S.) federal funds to support new embryonic stem cell
research has had a chilling effect on such research in the U.S. In Canada, significant research
opportunities are available for conducting stem cell research. The opportunities include using
embryos that were originally produced for reproductive purposes, and using stem cells derived
from adults and animals. Stem cell research in Canada is made even more attractive in view
of the availability and quality of research facilities, the lower cost of conducting research in
Canada than in the U.S., and the government tax credits.
INTRODUCTION
W
ith the death of actor
Christopher Reeves, stem
cell research has once again
come to the forefront of public attention. Mr. Reeves, a quadriplegic, was
an outspoken supporter and financial backer of stem cell research as a
means of developing therapies for
the injury that afflicted him for over
10 years.
Stem cells are “undifferentiated”
cells that are capable of maturing
into any of the specialized cell types
in the human body. They are found at
different stages of development—
embryonic,
fetal
and
adult.
Proponents of stem cell research
believe that this field of inquiry holds
immense potential for curing diseases such as quadriplegia and
Alzheimer’s, which result from
irreparable damage to tissues. There
is convincing evidence that stem
cells are able to self-renew and differentiate, qualities necessary for the
regeneration of damaged tissues.
Despite its potential therapeutic
benefits, stem cell research is not
without opponents. The use of
human embryos has mired the field
in controversy, with strong opposition
to certain forms of such research.
The existence of diametrically
opposed views on stem cell research
has yielded a regulatory landscape in
the U.S. that is highly volatile and
In the U.S., federal support for stem
cell research follows the letter and
spirit of the so-called Dickey
Amendment, which, in summary,
prohibits the use of federal funds for
the creation or destruction of a
human embryo for research purposes.2 In 2001, President Bush
announced that federal funding for
embryonic stem cell research would
be restricted to research on the more
than 60 existing stem cell lines.
Currently, only about 19 of those
lines are available to researchers, and
difficulties have been cited in
accessing that limited number of
cells on the National Institutes of
Health registry.3 Moreover, since the
cell lines were prepared using mouse
cells, there is concern that they may
be contaminated and may pose a risk
for therapeutic uses for humans.4
To compensate for the ban on the
use of federal funding for such
research, privately funded research
centers have begun to emerge in the
U.S.—for example, the Harvard Stem
Cell Institute. Since no federally
Cheryl Reicin is a partner in the Toronto office of Torys LLP and practice leader of the firm’s Technology and Life Sciences Group. Her
COPYRIGHT© 2005 BY
T H E J O U R N A L O F B I O L AW & B U S I N E S S
practice focuses on biotechnology, medical devices, medical centers and universities, as well as representation of private equity/venture capital funds and investment banks that fund such companies.
Eileen McMahon, a partner in Torys’ Toronto office, focuses on intellectual property, and food and drug
regulatory law.
The authors thank Sorel Bosan and Michelle Kisluk, associates in the Toronto office of Torys, for their
valuable assistance in preparing this article.
WWW.BIOL AWBUSINESS.COM
Cite as: Cheryl Reicin and Eileen McMahon, Stem Cell Research in Canada: Business Opportunities for
U.S. Companies. J. BIOLAW & BUS., Vol. 8, No. 1, 2005.
W W W. B I O L AW B U S I N E S S . C O M
VOLUME
8,
NUMBER
1
2005
61
JB
&B
THE JOURNAL OF BIOLAW & BUSINESS
funded equipment or supplies may
be used in such embryonic stem cell
research, complications may arise
even in privately funded research
because facilities in which this
research takes place may not have
federally funded components. The
ban on the use of federal funds to
support new embryonic stem cell
research obviously has a chilling
effect on such research in the U.S.5
The regulation of privately funded
stem cell research in the U.S. has
been referred to as a “wild west regulatory environment,”6 and the
future regulation of this area is
therefore somewhat uncertain. While
there is little current federal regulation of privately funded research,
bills are often introduced calling for
outright bans on human cloning and
embryonic stem cell research.7 The
bills related to this highly politicized
issue are moved by political posturing and hyperbolic language, which
obfuscates the bills’ actual legal
substance.8 At the state level, some
states have already banned therapeutic cloning and research on in
vitro embryos.9 Even in states such
as California, where Proposition 71,
the California Stem Cell Research
and Cures Act Initiative, was recently approved by voters, state funding
by grant or loan for stem cell
research through the issue of bonds
is limited and may be used in
research and facilities only in the
state of California. Further, even with
state funding, complications may
still arise regarding the use of federally funded facilities for stem cell
research. At the federal level, the
results of the 2004 presidential
election indicate that the federal
funding restrictions for stem cell
research are not likely to change. As
such, the current climate is leaving
the United States behind other
countries in stem cell research.
CURRENT REGULATION
IN CANADA
Regulation of health research in
Canada generally falls under the
supervision of the Canadian federal
62
VOLUME
8,
NUMBER
1
2005
government. The government has
recently enacted the Assisted Human
Reproduction Act10 (the AHR Act),
which clarifies the scope of permitted stem cell research in Canada.
The AHR Act, “establishes clear
boundaries, where none existed
before, as to what constitutes acceptable research and under what conditions this research can be undertaken.”11 The AHR Act also creates the
Assisted Human Reproduction
Agency of Canada (AHRAC) to oversee assisted human reproduction
(AHR) and related research.
Recognizing the necessity of
acknowledging the ethical issues
raised by this type of research, the
AHRAC has the following objectives:
"Until recently, Canada's
regulatory scheme was also
in a state of uncertainty. A
newly enacted law applying
to assisted human reproduction and related research
greatly reduces this uncertainty and makes Canada a
more appealing place to conduct certain types of stem
cell research."
1. to protect and promote the
health and safety, and the
human dignity and human
rights, of Canadians in relation
to AHR; and
2. to foster the application of ethical principles in relation to
AHR.12
The AHR Act governs research
involving human embryos, and thus its
coverage extends to stem cell
research, which it generally permits.
The use of stem cells derived from
adult sources or animals are essentially left unregulated in the new Act. This
research remains subject to other regulations and guidelines governing animal and medical research in general.
However, the AHR Act creates a set of
requirements that must be met in
order to use stem cells sourced from
human embryos.
Researchers working with embryonic stem cells are required to obtain a
license from AHRAC for each of their
research proposals. To use human in
vitro embryos to derive stem cells,
researchers must demonstrate that
no other source would be adequate
for the purposes of their research.13
Embryos that are no longer needed
for reproductive purposes may be
used,14 but only with the informed
consent of the donors.15 In addition,
the embryo must not have been purchased, sold or advertised for sale.16
The AHR Act does not restrict
research using pre-existing embryonic stem cell lines, but such research
could still be subject to oversight by
funding agencies such as the
Canadian Institutes of Health
Research (CIHR), a Canadian federal
funding agency for health research, if
funding is being sought.17
The most restrictive aspect of the
AHR Act involves the use of cells
derived from therapeutic cloning, a
technique involving the transfer of
the nucleus of a cell from an individual into an egg from which the
nucleus has been removed. The
object of therapeutic cloning is to
produce an embryo with stem cells
that are genetically compatible with
the individual requiring such cells.
These stem cells could then be used
to provide replacement tissue to
repair damage caused by degenerative diseases. Creating these cells is,
however, not permitted under the
AHR Act. The Act states that “[n]o
person shall knowingly create an in
vitro embryo for any purpose other
than creating a human being or
improving or providing instruction in
assisted reproduction procedures.”18
This means that an embryo also may
not be created specifically for
research purposes.
FURTHER PROPOSED
REGULATION IN CANADA
Another set of regulations are currently being developed by the Biologics
W W W. B I O L AW B U S I N E S S . C O M
STEM CELL RESEARCH IN CANADA: BUSINESS OPPORTUNITIES FOR U.S. COMPANIES
and Genetic Therapies Directorate,
which exists under the auspices of
Health Canada. These regulations will
relate to the final therapeutic uses of
stem cells rather than to their sources,
and will deal with safety in the manufacture and use of cells for transplantation. The regulations will be based
on the National Safety Standards,
which were developed by the
Canadian Standards Association in
collaboration with experts in the field,
government representatives and other
stakeholders.
The regulations will be implemented in two stages. In the first stage, a
registration scheme will be introduced for institutions that process
and distribute cells or tissue for
transplantation. Once this step is
completed, all such institutions will
have to register with Health Canada
in order to continue with their activities.19 In the second stage, a comprehensive compliance and enforcement strategy will be developed. The
regulations introduce some extra
procedural steps to the therapeutic
use of stem cells; however, they
should not represent any significant
obstacle to stem cell research and
general use.
OPPORTUNITIES FOR
RESEARCH AND
INVESTMENT IN CANADA
Although the AHR Act introduces
some barriers to developing cell
lines from human embryos (since
cell lines may not be developed by
using therapeutic cloning techniques), the development of cell
lines is still permitted if the cells are
obtained from embryos that have not
been specifically created for
research purposes. There are, therefore, still significant research opportunities available for using embryos
that were originally produced for
reproductive purposes. Moreover,
stem cells derived from adults and
animals are not subject to any special regulations in Canada beyond
the usual regulations governing
medical research. Research involv-
W W W. B I O L AW B U S I N E S S . C O M
ing these lines of cells can therefore
be carried out with the same confidence and certainty as any other
medical research, removing these
cell lines from the turmoil that has
surrounded stem cell research in
general. For example, Toronto
Western Hospital now hosts one of
the only four groups in the world
that are searching for a cure for
paralysis by harvesting stem cells
from the spinal cords of adult rats.
Restrictions placed on such
research by AHRAC’s licensing
requirements will not likely be onerous enough to make such research
impractical. These requirements, for
the most part, have been adopted
from guidelines used by the CIHR in
"In Canada, significant
research opportunities are
available for conducting
stem cell research. The
opportunities include using
embryos that were originally
produced for reproductive
purposes, and using stem
cells derived from adults
and animals."
funding embryonic stem cell
research for years prior to the passage of the AHR Act.20
The existence of an Act of this
nature offers researchers and
investors a clear framework within
which to base their research initiatives. Although the new regulations
do include restrictions, general reaction to the Act suggests that it is
unlikely that any further limits will be
introduced. In this way, the stabilizing effect of the Act can give
researchers and investors comfort
that their research and clinical trials
are less likely to be interrupted or
adversely affected by changes in regulation and policy.
Stem cell research in Canada is
made even more attractive in view of
the availability and quality of
research facilities, the lower cost of
conducting research in Canada than
in the U.S., and the government tax
credits. As a result, Canada has been
home to some highly prominent laboratories in the field, which have flourished from the numerous sources of
funding available over the years. A
Special Focus on Stem Cells by the
ISI Essential Science Indicator
ranked Canada second in embryonic
stem cell research, on the basis of
the number of papers published
between 1991 and 2001 and the
number of times those papers have
been cited in other works.21 The
University of Toronto ranked second
in embryonic stem cell research institutions, behind only Harvard; and
Mount Sinai Hospital, a research
center affiliated with the University
of Toronto, ranked fourth. Canada is
home to the authors of classic publications, including transplantation
pioneers Drs. James Till and Ernest
McCulloch, and other leading
researchers, including alumni of the
Ontario Cancer Institute, Lou
Siminovitch, Andrew Becker, Alan
Wu and Ronald Worton. The
Edmonton Protocol, an innovative
diabetes therapy involving the insertion of insulin-producing cells into
the main blood vessel of the liver, is
the result of Canadian research
efforts.22 Stem cell research in
Canada is also supported by a wellorganized network of stem cell
researchers, including the Stem Cell
Network, an association of nearly 80
leading scientists, clinicians, engineers and ethicists, and serves as the
central organization bringing together
the research activities of numerous
centers located in hospitals and universities across Canada.23
CONCLUSION
The clarity brought by Canada’s new
Act and the oversight by the AHRAC
offer comfort to stem cell researchers and investors by providing
a stable and supportive regulatory
environment (and one that is less
politicized than that south of the
border) in which to conduct research
VOLUME
8,
NUMBER
1
2005
63
JB
&B
THE JOURNAL OF BIOLAW & BUSINESS
and clinical trials. Canada has taken
a significant step by enacting this
legislation and helping to create an
environment in which the knowledge, skill and funding required for
the advancement of this important
area of research can be invested with
confidence.
ENDNOTES
1.
See, e.g., comments made in 2002 by the Canadian Institute of Health Research
on the need for clear guidelines in this area at that time, www.cihrirsc.gc.ca/e/1487.html.
10. S.C. 2004, c. 2.
11. Health Canada, www.hc-sc.gc.ca/english/media/releases/2004/2004_10bk3.htm.
12. Health Canada, www.hc-sc.gc.ca/english/media/releases/2004/2004_10bk1.htm.
2.
Consolidated Appropriations Act, 2004, Pub. L. No. 108-199, 118 Stat. 3.
3.
“Need Stem Cells? We Got ’Em”: Wired News, www.wired.com/news/medtech/
0,1286,62513,00.html.
14. Ibid. at ss. 5(1)(b) and 10(2).
4.
“Facts on Stem Cells,” WashingtonPost.com, www.washingtonpost.com/wpdyn/articles/A25071-2004Aug22.html.
15. Ibid. at s. 8. At the time of writing, s. 8 of the ACR Act had not yet come into
force.
5.
See, e.g., “New Stem Cell Lines Available”: USA Today, www.usatoday.com/
news/science/2004-03-03-stemcell-usat_x.htm; “From the Laboratory to the
Patient,” Harvard University Gazette, www.news.harvard.edu/gazette/2004/
04.22/99-StemOver.html
16. Ibid. at s. 7(2).
6.
7.
“Canadian Parliament Approves the “Assisted Human Reproduction Act,” a
Model of Responsible Policy,” Center for Genetics and Society, www.geneticsand-society.org/policies/other/canada.html.
Andrews, Lori B., J.D., “Legislators as Lobbyists: Proposed State Regulation of
Embryonic Stem Cell Research, Therapeutic Cloning and Reproductive
Cloning,” commissioned for the President’s Council on Bioethics
www.bioethics.gov/reports/stemcell/appendix_e.html. See, e.g., the Human
Cloning Ban and Stem Cell Research Protection Act of 2003, which has now
been referred to the Committee on the Judiciary.
8.
Ibid.
9.
Ibid.
64
VOLUME
13. Supra note 10, at s. 40(2).
17. Health Canada, Biologics and Genetic Therapies Directorate, www.hc-sc.gc.ca/
hpfb-dgpsa/bgtd-dpbtg/index_e.html.
18. Supra note 10 at s. 5(1)(b).
19. “Notice to Stakeholders – Regulatory Framework for the Safety of Cells, Tissues
and Organs for Transplantation,” August 18, 2004, Health Canada, www.hc-sc.
gc.ca/hpfb-dgpsa/bgtd-dpbtg/cto_letter_to_stakeholders_e.html.
20. Note that CIHR guidelines apply only to public institutions and are not applicable to privately funded research. For the complete text of the guidelines, see
www.cihr-irsc.gc.ca/e/1487.html
21. Stem Cell Network, www.stemcellnetwork.ca/guide/focus.php?id=191.
22. “Canada a “Great Environment” for Science,” Stem Cell Network, www.stemcell
network.ca/news/articles.php?id=544.
23. See Stem Cell Network, at www.stemcellnetwork.ca/index_en.php.
8,
NUMBER
1
2005
W W W. B I O L AW B U S I N E S S . C O M