[Congressional Record Volume 145, Number 131 (Friday, October 1, 1999)]
[Extensions of Remarks]
[Pages E2002-E2004]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DR. ARTHUR LEVINSON, PRESIDENT OF GENENTECH, DISCUSSES THE HUMAN IMPACT
OF BIOTECHNOLOGY AT HEARING OF THE JOINT ECONOMIC COMMITTEE
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HON. TOM LANTOS
of california
in the house of representatives
Thursday, September 30, 1999
Mr. LANTOS. Mr. Speaker, biotechnology is leading our world into a
new century of improved health and happier and productive
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lives through revolutionary science. Today at a hearing of the Joint
Economic Committee, my distinguished friend Arthur Levinson, the
President and CEO of Genentech, testified about the life-saving results
and remarkable growth of the biotechnology industry. That hearing was
chaired by our colleague from the Senate and the Chairman of the Joint
Economic Committee, Senator Connie Mack of Florida.
Mr. Speaker, I am proud that Genentech has deep roots in my
Congressional District. It was in South San Francisco that Genentech
originally pioneered the research and therapies that generated the
biotechnology industry.
Genentech's President, my friend Dr. Levinson, has been a key force
behind the firm's humanitarian mission to save lives. He earned his
doctorate from Princeton University and was a post doctoral fellow in
the department of microbiology at the University of California at San
Francisco. He has served on the editorial boards of the journals
Molecular Biology and Medicine, Molecular and Cellular Biology, and
Virology. An outstanding active leader of the biochemistry community,
there is no one more qualified than Arthur Levinson to discuss the
merits and the mission of biotechnology.
Mr. Speaker, Arthur Levinson delivered an excellent statement to the
Joint Economic Committee, highlighting the importance of continued
federal involvement in the industry in order for biotechnology to
continue its progress in saving and improving the quality of our lives.
Mr. Speaker, I submit the full text of Dr. Arthur Levinson's
testimony to the Joint Economic Committee to be placed in the Record,
and I urge my colleagues to give his testimony thoughtful
consideration.
Putting a Human Face on Biotechnology
Mr. Chairman and distinguished members of the Committee.
Thank you for the opportunity to testify today regarding the
most important topic of biotechnology and its impact on
people like you and me. It is truly an honor to testify
before you today. Your leadership on issues related to
innovation, and medical research and development has been
critical to the on-going development of new life-saving drugs
and breakthrough technologies.
Without your commitment to such important policy
initiatives as funding for the National Institutes of Health
(NIH) and permanent extension of the research &
experimentation tax credit (commonly known as the research
and development tax credit), many remarkable products would
not be made available to those in need.
The subject of today's hearing cuts to the core of what the
biotech industry is all about. As Carolyn Boyer and Lance
Armstrong's testimony demonstrates--the human face of
biotechnology is very real. All the cutting-edge science and
innovative technology of our industry is valuable only when
it ultimately results in the alleviation of human suffering
and the overall enhancement of human life.
Our mission at Genentech is to be the leading biotechnology
company, using information and human genetic engineering to
develop, manufacture and market pharmaceuticals that address
significant unmet medical needs. We are committed to working
with patients, families, providers and payers to improve
patient care.
At Genentech we say that we are ``In business for life''.
Our commitment to this is reflected in our history--a history
that marks the genesis of the biotechnology industry.
Genentech's founders, Herb Boyer and Bob Swanson, were the
first to conceptualize the process of cloning human proteins
for the purpose of manufacturing life-saving therapies. In
1976, Genentech was founded as the pioneering biotechnology
firm with research and development, manufacturing and sales
capabilities. By the early 1980s, Genentech had developed and
licensed the first two products of biotechnology--recombinant
insulin and alpha interferon.
As a testament to our commitment to saving lives, Genentech
is among the most research intensive companies in the world.
In 1996, we invested $471 million, or 49% of our income, on
research and development. We reduced that amount to $396
million in 1998, or 34% of income, partially because
investors are hesitant to support one-half of income going to
research. But research is our lifeblood. It gives life to the
ideas we test to treat serious, unmet medical needs. Our
strong portfolio of products is a direct reflection of the
ideas our scientists have brought from the lab to the
patient. And, as evidenced by our robust pipeline, I firmly
believe the best of our science is yet to come.
In an effort to further our commitment to our patients,
Genentech devised a ``Single Point of Contact'' (SPOC)
program to assist patients and their physicians in gaining
reimbursement for their care. In addition Genentech
instituted our own ``Uninsured Patient Program'' in 1986 when
we marketed our first product, Protropin. The program
provides free drugs to patients ensuring that a lack of
financial resources will not prevent anyone from gaining
access to our products.
With this brief background in mind, there are a few issues
on which I wish to focus today, particularly: federal support
for research and development, permanent extension of the R&D
tax credit, and the Medical Innovation Tax Credit (MITC).
Federal Support for Biomedical Research and Innovation is
Crucial. The scientific underpinnings of the industry
itself--namely, the discovery of recombinant DNA
technologies--was developed in the 1970s at Stanford
University and the University of San Francisco with the help
of federal funding.
As the industry has matured and grown, the ability of the
federal government to either constructively nurture or
inadvertently harm the industry has increased commensurately.
The Joint Economic Committee (JEC)--particularly in hosting
the national high technology summit earlier this summer--has
played an enormously important role in highlighting some of
the critical ways the federal government can advance our
country by creating a more supportive environment for high-
technology.
Permanent Extension of the R&D Tax Credit. Except for small
increases in the past three years, direct federal support for
overall research has, for the most part, been declining for
over a decade. While a long-term commitment to increasing
funds available to the federal government for basic research
is important, maximizing private industry R&D through a
permanent R&D tax credit is a necessity. Numerous studies
have shown that a permanent R&D credit is a cost-effective
means of ensuring that high levels of private-sector
investment will continue to take place.
A short-term extension of the credit is clearly preferable
to allowing the credit to lapse, however the lack of
permanence severely compromises the effectiveness of the
credit for the biotechnology industry. With biotechnology
R&D programs often planned five to ten years in the
future, uncertainty regarding the credit can prove
detrimental. The industry is required to work under the
assumption that the credit may not be in effect for the
entire life of the research project, which in turn means
less revenue can be committed to R&D. And, this translates
into fewer scientific discoveries--fewer therapies like
Herceptin.
Returning to our theme of ``Putting a Human Face on
Biotechnology'', this uncertainty regarding the credit has
profound implications for the patients since our industry
spends much of its revenue on R&D. This uncertainty may
necessitate a small firm furloughing scientists engaged in
promising research. For a large firm it may mean making the
hard choice to terminate or curtail a significant project.
Either way, patients lose. I dare say that without the R&D
tax credit, Herceptin simply would not be a reality. Mr.
Chairman, you have long been the champion of this cause and I
know that others on the Committee have been long time
supporters of the credit. It is our desire to work with you
to make the credit permanent.
Medical Innovation Tax Credit (MITC). Over the years, the
federal government has invested billions of dollars to create
a biomedical establishment of medical schools and teaching
hospitals deemed the finest in the world. The growth of
managed care, coupled with cuts in Medicare payments,
threatens the ability of these medical schools and teaching
hospitals to carry out their vital social mission of
research, training of health professionals, and the provision
of indigent care.
The Medical Innovation Tax Credit would establish an
incremental 20 percent tax credit for clinical trials
performed at medical schools, teaching hospitals that are
under common ownership or affiliated with an institution of
higher learning, or non-profit research hospitals that are
designated as cancer centers by the National Cancer Institute
(NCI). This credit would partially offset the roughly 30 to
50 percent greater cost of doing clinical trials at these
institutions. It would encourage biomedical firms to do
clinical trials here in the United States while providing a
revenue source for medical schools, teaching hospitals, and
NCI-designated cancer centers. Clinical trials at these crown
jewels of our health care system have dropped from 82% of
clinical trials in 1985 to an estimate of 27% in 1996.
This narrow credit is designed to complement the R&D tax
credit and has been scored by the Joint Committee on Taxation
as having negligible cost so long as the R&D credit is in
effect. The legislation--H.R. 1039 in the House and S. 1010
in the Senate--has attracted strong bipartisan sponsorship
and support. Mr. Chairman, thank you for your vital
leadership on this important issue. I know others on the
Committee are co-sponsors of this legislation, and we
appreciate their support and efforts as well.
The Future of Biotechnology. The first quarter century of
biotechnology has been a period of astounding advance. The
next quarter century promises revelation and quantum leaps
forward. The industry is on the cusp of major breakthroughs,
breakthroughs that would have been the stuff of science
fiction--not science--a few short years ago.
One example of where Genentech is headed in the future is
our use of computers and the new technologies of
bioinformatics to search large databases of information to
advance our own research and medical science. Genentech's
Secreted Protein Discovery Initiative (SPDI) builds on our
world-class expertise in cloning and expressing genes from
the human genome that encode proteins. SPDI focuses--through
the brilliance of computer technology--on identifying the
minority of proteins that are most likely to be of
therapeutic interest. And because SPDI is
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just that--``speedy,'' it has dramatically enhanced our
scientific capabilities and is leading to new candidates for
research. For example, SPDI has already helped identify
proteins that may be useful as cancer therapies through a
process called ``apoptosis,'' which means the genetic
programming of the death of cells or, in the case of cancer,
tumor cells. This technology would not have been possible 5
years ago. Both the Human Genome Project and the increases in
computational capability through smaller, more powerful
computers make bioinformatics work. Both the Human Genome
Project and the advances in computer capability rely on
federal research as the platform for future breakthroughs.
Our pipeline is very exciting and robust. In addition to
apoptosis, we are making headway on an advanced form of our
original product, tPA, which is effective in the treatment of
heart attack and stroke victims. We are also moving forward
with research on a product designed to block the cascade of
health problems associated with asthma and other allergies,
and are in the process of testing Herceptin on other forms of
non-breast cancers as well as on earlier stages of breast
cancer.
As I hope I have illustrated for you today, the biotech
industry holds tremendous promise for the future and lives of
so many patients facing serious illnesses. Our resolve to
better their lives is unwavering, even in the context of an
unpredictable financial and regulatory environment.
However, two things are predictable as we look toward the
future of biotechnology. As in the industry's first 25 years,
the next 25 years will require federal policies that are
supportive of biomedical research and innovation. And
finally, the industry as a whole will only succeed if we
continue to keep the patient--the human face in
biotechnology--first and foremost in all our decisions.
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