[Congressional Record Volume 141, Number 130 (Saturday, August 5, 1995)]
[Extensions of Remarks]
[Pages E1672-E1674]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


      THE FUTURE OF AMERICA'S RESEARCH AND DEVELOPMENT INDUSTRIES

                                 ______


                       HON. SHERWOOD L. BOEHLERT

                              of new york

                    in the house of representatives

                         Friday, August 4, 1995
  Mr. BOEHLERT. Mr. Speaker, I want to bring to my colleagues' 
attention a report issued July 24 by the Institution for the Future. 
Titled ``The Future of America's Research-Intensive Industries,'' the 
report offers important advice on federal science and technology 
policy. What follows are statements from the news conference issuing 
the report:
  This report is a much needed restatement of some principles that 
those of us who deal with R&D policy view as axiomatic: that R&D is the 
key to our nation's economic future; that innovation is more crucial 
than ever; that the federal government has a clear and irreplaceable 
role in the R&D enterprise; that R&D partnerships are the wave of the 
future. This report can be a critically important primer to those who 
are new to Congress--a blueprint for those who are inclined to support 
R&D a caution signal for those who are not.
  I think that so far, this Congress has generally built policy along 
the lines of this blueprint. Basic research has emerged from the 
appropriations process remarkably unscathed--thanks, in large part, to 
the efforts of Chairman Walker. That's not to say that university 
researchers won't feel like these are seven lean years. But in the 
context of this budget, the appropriations demonstrate a continuing 
commitment to basic research.
  The Congress has also shown a willingness to ensure that federal 
policy encourages industrial research--a keystone of the American 
research enterprise. The tax, liability and regulatory systems are 
being reformed.
  My concern continues to be that ``regulatory reform'' does not become 
a euphemism for backsliding. We need to ensure that regulations are 
more flexible, less administratively burdensome and more sensitive to 
cost. We do not need to repeal the basic regulatory protections that 
have been so effectively constructed over the past two decades.
  This report also endorses what it calls ``cooperative funding''--an 
innocuous-sounding term for an increasingly controversial policy. I 
count myself among the supporters of this cooperative approach. I hope 
the companies that have sponsored this report will follow up and do 
more to convince others of the value of this approach.
  In short, this report makes the right points at a critical time. That 
they are points we have heard before makes them no less valuable.
  I'm reminded of an interview years ago with Tommy Tune. The 
interviewer asked him to talk about the best advice he had ever 
received about dancing. He said the best advice was when Gene Kelly 
pulled him aside after a rehearsal and said, ``Tommy, dance better.'' 
This report basically tells Congress to follow the steps it knows, but 
to do them better. It's good advice.

[[Page E1673]]


         The Future of America's Research-Intensive Industries

  (Summary of a presentation by Richard J. Kogan, President and Chief 
            Operating Officer, Schering-Plough Corporation)

       Members of the Administration and Congress, distinguished 
     scientists and professors, laddies and gentlemen:
       Good morning. As the Institute's researchers have noted, 
     pharmaceuticals and biotechnology are one of this nation's 
     ``top eight'' R&D-based industries examined for their ability 
     to continue their innovation track record.
       Certainly, major challenges lie ahead for our industry. 
     With biopharmaceutical industry R&D costs rising, it's 
     increasingly difficult to repeat our previous innovation 
     achievements that have made America the worldwide 
     technological leader in medicine. Just as we cannot return to 
     yesterday's markets, we cannot replicate our former R&D 
     expenditures. Growth in industry R&D spending today is less 
     than half the level of the early 1980s.
       Schering-Plough in the 15-year period 1979-1994 spent 
     almost $500 million to develop our recombinant alpha 
     interferon, plunging ahead even when it initially appeared 
     the drug would help only a handful of cancer patients. It 
     took nearly 14 years of work before we saw a penny of return 
     on that investment. Today, such an effort might not be made--
     nor our subsequent discovery that the drug can treat 16 
     cancer and viral diseases.
       For pharmaceutical and biotech firms, the burning issue now 
     is not only whether we can continue bringing products to 
     patients that treat unconquered diseases, but whether we can 
     continue covering the expenditure for leading-edge research. 
     Our industry is currently responsible for more than 90 
     percent of all new U.S. drug discoveries.
       Today's diseases--Alzheimer's, AIDS, heart and kidney 
     disease, prostate cancer and arthritis--are far more complex 
     than those successfully treated in the past. Moreover, many 
     of today's most prevalent diseases--primarily chronic and 
     degenerative conditions--are at the high-cost stage in the 
     innovation cycle. If we cut investment in medical progress 
     today, the consequence may be irrevocable and society may rue 
     that decision for years to come.
       The annual medical costs of only seven major uncured 
     diseases account for about half of today's health care bill. 
     However, many of those diseases are within reach of effective 
     pharmaceutical control or cure. As biomedical technology 
     progresses to that point, the total cost of treating these 
     major ailments should drop sharply. If the cycle of 
     innovation is disrupted, we run the risk of being trapped 
     with today's higher-cost, less-effective options.
       Today's rapidly changing health care market signals the 
     continuing sense of urgency for optimal patient care and cost 
     containment. By the same token, we must constantly remind 
     ourselves that medical innovation is the most viable, long-
     term solution for cost-effective quality care--as the 
     findings of the Institute study attest.
       In 1995, an urgent task before U.S. policymakers should be 
     to assure that the path of innovation remains open, 
     unobstructed and attractive to investors. And, that statement 
     applies across the board--from our industry that has cured 
     polio, turberculosis, measles and diphtheria to our fellow 
     industries that have brought the world the laser, fiber 
     optics, lightweight alloys, integrated circuits, the CAT 
     scanner, and that have taken us into outer space.
       Thank you.
                                  ____

         The Future of America's Research-Intensive Industries

(Summary of a presentation by Phillip A. Griffiths, Director, Institute 
                   for Advanced Study, Princeton, NJ

       Good morning. I don't think I have to remind this audience 
     that scientific research is fundamental to modern culture. It 
     has helped to make our lives safer, longer, easier, and more 
     productive. The more we invest in research and development, 
     the more likely we are to find new non-polluting forms of 
     energy and transportation, to simplify and enrich our lives 
     through new electronics, to develop cures for diseases such 
     as Alzheimer's, coronary heart disease, arthritis, and 
     osteoporosis. Our relative standard of living depends on the 
     health of our research-intensive industries.
       Most of you also know that the climate for basic research 
     has become less favorable in recent years. A combination of 
     international competition and the end of the Cold War has 
     made it more difficult for institutions to justify--
     especially research that is long-term and risky, that offers 
     no certain return on investment.
       For example, in industry the effort to restructure 
     corporations and shorten product cycles is reducing the 
     amount of basic research done by traditional corporate 
     laboratories. In universities, too many research scientists 
     are competing for available funds. Government agencies are 
     asked to do more with less, delivering short-term, 
     predictable results, and limiting inquiries not directly 
     relevant to agency missions.
       In light of these new realities, how long will long-term 
     R&D be accomplished in the future, and who will do it?
       I have said that almost all basic research has been 
     performed in three segments of society: industry, government, 
     and the universities. By and large, each segment has operated 
     independently. There has been some collaboration, but it has 
     not been sustained or comprehensive. In the new era we have 
     entered, more and more individual institutions will find the 
     performance of long-term basic research prohibitively 
     expensive. One way to reduce costs, and to increase the 
     availability of research results for those who need to use 
     them, is through collaboration.
       What is the best way to do this? Historically, there have 
     been some earnest experiments to reach across sector 
     boundaries and to make fruits of research more quickly 
     available to the marketplace, but few such experiments have 
     been successful enough to inspire imitation.
       Fortunately, several models new to this country are 
     available. One is the Fraunhofer organization of Germany, 
     which has now set up its first American Institute in 
     Michigan. The purpose of Fraunhofer is to promote cooperation 
     between researchers from universities and industry. In 
     Germany, the research costs are shared among the federal 
     government, the universities, and the industries that want 
     the research. Investment areas are determined by the 
     Fraunhofer Board, independent of the government agencies. 
     Typical programs have involved lasers, robots, environmental 
     protection, electronics, materials, optics, and other 
     technologies. The Fraunhofer brings together those who work 
     on the frontiers of science and those who carry the fruits of 
     that work to the marketplace. The driving theory is that 
     research and development are best done in close proximity and 
     that R&D, including R&D performed by the private sector, is 
     best done publicly, so that new ideas are exposed to 
     feedback.
       A second interesting model is that of the NEC Research 
     Institute in Princeton, New Jersey. This is a research 
     outpost established by NEC, the Japanese computer company, to 
     explore computer and communication technologies. Its purpose 
     is to establish a new kind of parent company, such as high-
     level parallel programming systems, biological information 
     systems, natural language communication, and computer vision 
     and robotics. NEC scientists have extensive interaction with 
     scientists at universities and at our own Institute for 
     Advanced Study. When there is a fundamental breakthrough in 
     the fields of interest to NEC scientists, the NEC Corporation 
     will be well-positioned to take advantage of it.
       All this isn't intended to say that the Fraunhofer or the 
     NEC are the right models for everyone. Diverse solutions must 
     arise to meet particular needs. But I would leave you with 
     two points today. The first, so well documented in the report 
     you have before you, is that it is time to rethink the ways 
     our institutions support the longer-term research and 
     development so vital to our national objectives. The second 
     point is that there are good models for collaboration that 
     can help us in this rethinking. I would like to applaud the 
     Institute for the Future and the companies sponsoring this 
     report for their initiative and foresight in helping us 
     rethink the framework in which we fund and perform the R&D so 
     vital to our nation's future.
       Thank you very much.
                                  ____

         The Future of America's Research-Intensive Industries

 (Summary of a presentation by Leon Lederman, Director Emeritus, Fermi 
                    National Accelerator Laboratory)

       Investment in research is America's investment in its 
     future. Our times are characterized by an ever-increasing 
     pace of change, and science-based technology is the driving 
     engine for this change. The Cold War era of military 
     competition superpowers is over, replaced by a competition of 
     industries. There will be winners and losers: economic 
     growth, job creation, standard of living, and international 
     leadership are the spoils.
       There is an estimated trillion dollars of economic activity 
     in the list of emerging technologies that many agencies, in 
     many nations, develop. The robustness of the science that we 
     nurture today will determine what fraction of this we will 
     capture over the next decades.
       The need for science goes much deeper than this. It goes to 
     the major crises facing society in the next five decades--the 
     crisis of population and its coupling to environmental 
     quality.
       World conferences in Rio (1992) and Cairo (1994) point to 
     the connected problems of environment and population. We do 
     not have the fundamental knowledge in a variety of scientific 
     disciplines to sustain a population of ten billion people 
     (2030) without environmental catastrophe. It is the energy-
     environment problem. These and other global threats to the 
     future of the nation deserve the same attention, the same 
     priority, the same need to defend against as the military 
     threat provided by the Cold War.
       The history of basic science is a rich set of stories of 
     curiosity-driven research activities connecting together in 
     surprising ways to produce human advance and profit. A 
     curiosity about the magnetic properties of atomic nuclei; the 
     invention of more powerful particle accelerators designed for 
     quark hunting . . . these connected, and today we have a 
     powerful medical diagnostic, a six billion dollar-a-year 
     industry--magnetic resonance imaging. This pays $1.5 billion 
     dollars in taxes annually and has saved countless thousands 
     of lives.
       Einstein's analysis of the emission of light by atoms and 
     Townes' insight into molecular 

[[Page E1674]]

     coherence lead to the laser with incredible applications from 
     surveying to metal fabrication to eye surgery to CD players--
     a $16 billion dollar-a-year industry that contributed four 
     billion dollars annually to treasury receipts.
       The need to replace the energy radiated by electrons in the 
     process of building more powerful electron accelerators 
     connected with the need for more intense x-rays to lead to 
     the creation of synchrotron light sources (x-ray light, 
     brighter than a million suns)--devices that serve biologists, 
     pharmaceutical researchers, materials scientists, chemists 
     and physicians to see viruses in action, to design molecules, 
     to watch how chemicals react and hundreds of other applied 
     science programs.
       These stories, on and on, have been aggregated to indicate 
     a payback of investment in research of 20 to 50 percent 
     annually. To insure this record, science must be accorded the 
     kind of freedom that, from long experience, is so crucial to 
     its success.
       The future of American science depends upon an 
     understanding of what makes America a great nation. ``America 
     will be great in those areas in which it desires greatness, 
     perceives greatness and rewards and esteems greatness.'' 
     Science is the source of continuing the frontiers and of the 
     creation of new wealth. To rescue our declining scientific 
     greatness we must recognize the two columns upon which 
     science rests. One column is the extension of human knowledge 
     for no obviously discernible purpose, perhaps only for the 
     joy of discovery. The other column represents the immediate 
     service to society through research which has economic, 
     medical, environmental consequences. Incidentally, social 
     sciences appear in both columns. Both columns serve society 
     in the longer term and support one another. This is the 
     scientific enterprise.
       Science is increasingly being squeezed into the 
     universities and national laboratories. The stress on our 
     scientific infrastructure has been increasing over the past 
     decade. Progress in science is necessarily more difficult and 
     more expensive with time as easier problems are solved. (That 
     is why a GDP scale is necessary). This stress becomes known 
     down to high schools, making it far more difficult to repair 
     the dismal science education of our future scientists, 
     engineers, and citizens. Already, Americans are not following 
     science careers and, if it were not for foreigners, our 
     graduate schools would be half empty.
       A noted scholar made my summary easy: ``In the conditions 
     of modern life, the rule is absolute; the nation which does 
     not value trained intelligence is doomed . . . Today we 
     maintain ourselves. Tomorrow, science will have moved forward 
     yet one more step; and there will be no appeal from the 
     judgment which will be pronounced . . . on the uneducated.''
     

                          ____________________