Senator ADAMS. Thank you very much, Doctor. I agree with your conclusion that we have an epidemic in the AIDS area that may overwhelm some of our major cities' hospitals and particularly their emergency and entry rooms.

As you know, last year we were able in this committee to save the Biological Research Support Grant Program. I regret to inform you that it has been zeroed out by the administration again. We will try again, and I think we will use your health shield comment. Maybe we can break through and get it, but I wanted you to know that that is a problem. We will try to get it back again, but it is gone for now.

Thank you very much for your testimony. We appreciated it very much.

Dr. VESELL. Thank you, Senator, for the opportunity.

STATEMENT OF DR. PAMELA J. BRIDGEN, EXECUTIVE DIRECTOR, ASSOCIATION OF BIOTECHNOLOGY COMPANIES

Senator ADAMS. Our next witness is Dr. Pamela J. Bridgen, executive director of the Association of Biotechnology Companies. Dr. Bridgen, welcome to the committee.

Dr. BRIDGEN. Thank you. I am Pamela Bridgen. I am executive director of the Association of Biotechnology Companies where a trade

Senator ADAMS. Did you have a prepared statement?

Dr. BRIDGEN. I believe we have already submitted that, and I would like to request that that be placed in the record.

Senator ADAMS. I do not seem to have a copy here, but without objection your full statement will appear in the record as though given.

I have found it now. Thank you. Please proceed. We will not count that against your time.

Dr. BRIDGEN. Thank you.

The Association of Biotechnology Companies is a not-for-profit trade association that represents over 250 companies and other organizations that are interested in the promotion and development of biotechnology worldwide. I thank you for the opportunity to testify here today on behalf of ABC, and I would like to thank you for your support of biomedical research over the past decade.

ABC urges your continued support in fiscal year 1992. Biotechnology is one of the few bright spots in the troubled economy of the United States in the early 1990's. For the first time last year we reached sales of almost $2 billion, and the Department of Commerce is predicting sales of around $40 billion by the turn of the century.

We have developed products like erythropoietin, human growth hormone, insulin, and interferon that have had a major impact on the health of some of the U.S. citizens among human health care. There are many, many more products in the pipeline, and these are all going to accrue to the benefit of the U.S. public. Most of these products have been derived as a result of basic research that is being funded by the National Institutes of Health.

In the last year alone, we have learned of the genetic bases of some major diseases such as cystic fibrosis and muscular dys

trophy, and we have seen the first gene therapy experiments for severe immunodeficiency syndrome and for melanoma.

PREPARED STATEMENT

In view of such advances, ABC respectfully requests the subcommittee support the recommendation of the ad hoc group for medical research for funding of $9.77 billion. Although this is $995 million above the President's budget request, we believe that it is important to maintain the long-term competitiveness of the U.S. biotechnology industry and the benefits in terms of health care products, in terms of new investment, and in terms of new jobs in the United States. We would like to urge you to support this funding for the benefit not only of the health of U.S. citizens but for the benefit of the health of the economy.

I would be happy to answer any questions you may have. [The statement follows:]

STATEMENT OF DR. PAMELA J. BRIDGEN

Thank you Mr. Chairman. My name is Pamela Bridgen and I am Executive Director of the Association of Biotechnology Companies (ABC). ABC is a not-for-profit trade association with over 250 members consisting of: biotechnology and pharmaceutical companies; academic and state biotechnology centers; not-for-profit and government-affiliated entities; and, other organizations interested in biotechnology. ABC was founded to represent the unique and diverse interests, both business and scientific, of small biotechnology companies. I would like to request that my written statement be placed in the record.

I thank the Chair and the Members of this Subcommittee for this opportunity to testify, as well as for your support of biomedical research programs over the past decade. ABC urges this Subcommittee to continue its record of support for biomedical research in FY 92. In our view, increased Federal support for the NIH research and training is one of the most worthwhile investments of Federal dollars that you could possibly make with its benefits ranging from discovery of new treatments for diseases, to creation of new jobs and businesses through its technology transfer programs.

Background

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Biotechnology represents one of the few bright areas in the troubled U.S. economy of the early 1990s both in terms of its benefits to the economy and its direct benefits for our citizens. In 1990, sales of biotechnology products reached $1 billion for the first time and are projected to reach $2 billion by 1992. By the mid-90s, product sales of biotechnology could reach $4 billion and will still be growing. Some estimates from the Department of Commerce suggest that U.S. biotechnology sales will reach $40 billion by the year 2000.

Furthermore, biotechnology products like recombinant human insulin, human growth hormone, tissue plasminogen activator, and erythropoietin are making a major impact on human health care in our cour.try and around the world. These landmark biotechnology products, and scores of their successors now in the product development pipeline, have largely been the result of American scientific ingenuity and American biotechnology innovation. In fact, most (all?) biotechnology developments have derived from basic medical research supported by NIH.

Within the last year alone, we have seen several exciting developments reported as a result of NIH-supported molecular genetics research. This year, scientists began the first efforts to provide gene therapy to human beings the first in a young child with severe combined immunodeficiency syndrome. A second group of experiments is underway to treat cancer patients with advanced melanoma. We also learned of the genetic basis for cystic fibrosis, Duchenne's muscular dystrophy, and neurofibromatosis. Finally, over 1000 drugs and biologics for cancer, AIDS, and other conditions produced using the techniques of biotechnology currently in clinical trials.

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are

NIH also plays a critical role in transferring science to the marketplace. Through its basic research and, subsequently, its technology transfer programs, the NIH identifies and widely disseminates novel scientific findings to the biotechnology community. The technology transfer policies of the NIH, developed under the Technology Transfer Act of 1986, encourage joint research and development among universities, the private sector, and public research institutions, including federally-owned and operated laboratories. As of March 27, 1991, NIH had 115 Cooperative Research and Development Agreements (CRADAs) in place and 40 were in the process of negotiation, a superior record of accomplishment with respect to the implementation of its technology transfer program. ABC urges this Subcommittee to recognize and encourage NIH's ongoing efforts in this vital area.

ABC respectfully requests that this Subcommittee support the recommendation of The Ad Hoc Group for Medical Research for an NIH appropriation of $9.770 billion. This request is $995 million above the 1992 President's Budget Request. We believe that it is critical to address the funding shortfalls in the Budget Request. Specifically, this level of funding would provide for the following:

Funding for 33% of the approved research project grants at study section recommended levels of funding to provide for sustainable growth.

is

Funding of additional research centers. We believe that an arbitrary cap on the number of centers scientifically unwise.

Funds to support 12,586 research trainees as recommended by the National Academy of Sciences.

the

These objectives are critical to maintaining the long-term health of the U.S. biomedical research infrastructure and competitiveness of the U.S. biotechnology industry.

According to the Report on National Biotechnology Policy released in February 1991 by the President's Council on Competitiveness, "Federal research programs should continue to have increased support for basic sciences as the top priority." The report also emphasizes the need for the Federal government to facilitate the training of scientists and engineers, including those in the biotechnology field, and endorses programs providing multi-disciplinary training, such as through biotechnology centers, and the training of women and minorities. ABC concurs with these recommendations and urges the Subcommittee to support our funding recommendation for NIH.

Funding at the level recommended by the Ad Hoc Group would allow the National Center for Human Genome Research (NCHGR) to expand its activities. Critical areas of research for the Center include physical mapping of the genome, genetic linkage mapping, DNA sequencing and technology development, mapping of model organisms, as well as important research and analysis of the ethical, legal, and social ramifications of the Human Genome Project. We are gratified by the Congress's recognition of the potential of human genetic research and we strongly support continued and expanded research in this area.

Conclusion

In conclusion, ABC would like to reiterate our thanks for this Subcommittee's longstanding support of medical research. However, we believe that it is important that you keep in mind several important facts about the current situation facing NIH and the medical research community today. First, due to recent scientific accomplishments in the areas of molecular biology and genetic engineering, the opportunities that currently exist in medical research are broader and more exciting than they have ever been.

In addition, ABC urges you to remember the potential of human genetic research and to recognize the promise that it holds for improving the lives of millions of Americans affected by disease or disability associated with genetic factors. These certainly include people affected by the recognized genetic diseases, like cystic fibrosis and sickle-cell anemia, but also for persons with genetic predispositions to conditions like diabetes and heart disease.

Finally, ABC requests that you recognize the important economic spin-offs of NIH-funded research. In addition to the health benefits that can be provided by new biotechnology products, basic NIH research can make other contributions to a healthy U.S. economy when new technologies spawn new investment and jobs in the biotechnology industry.

Thank you for your time. I would be pleased to answer any questions that you may have.

Senator ADAMS. Thank you very much for your testimony. Again, I do not want to be a wet blanket, but that is a 17-percent increase over last year, and we do not have it at the moment. We understand it, and we will do the very best we can with it.

Thank you for your testimony very much, Doctor, particularly the parts of your comments that indicate the degree to which the biotechnical industry is a major world factor now. We hope that we will continue to maintain our lead in it.

Thank you again for your testimony.

Dr. BRIDGEN. Thank you very much for your support.

STATEMENT OF ABBEY S. MEYERS, EXECUTIVE DIRECTOR, NATIONAL ORGANIZATION FOR RARE DISORDERS, INC.

Senator ADAMS. Our next witness is Dr. Jess Thoene, president, and Abbey S. Meyers, executive director of the National Organization for Rare Disorders, Inc.

Welcome to the committee. We will be pleased to hear your testimony.

Ms. MEYERS. Thank you, Senator.

Senator ADAMS. I understand that you are Abbey S. Meyers, and you will be presenting the testimony.

Ms. MEYERS. Yes; I am the executive director of the National Organization for Rare Disorders, which is an organization representing approximately 20 million people with 5,000 rare diseases, also known as orphan diseases. Dr. Thoene could not make it today.

I want to speak to you about two matters today. The first is the need for a central Office for Rare Diseases within the National Institutes of Health. The National Commission on Orphan Diseases had recommended that a special Office for Rare Disease Research to coordinate the Government's efforts on rare diseases should be set up in the Assistant Secretary of Health's office. Last year Senators Metzenbaum and Hatch included this office in its Orphan Drug Act amendments. However, President Bush vetoed the Orphan Drug Act amendments, and Secretary Sullivan and President Bush said that a central Office for Rare Diseases at NIH should suffice.

This year we have tried to track the funding for this central office. There is one person at NIH in charge of rare diseases. There is no staff. There is no budget. We understand that NIH initially put $2 million in NIH's budget, which was then sent to the Assistant Secretary's office, which we believe reduced it to $500,000. Secretary Sullivan's office reduced it to $200,000, and then ÓMB took out the entire line item.

We feel that the Government has broken faith with people with orphan diseases and has given us a promise and then taken it away. We desperately need that office. We only want $500,000 for it, which will set up the office as well as an essential clinical data base.

The second issue that I wanted to talk to you about is the problem of indirect costs at universities. I am going to submit a list of the top 52 funded universities and what their indirect costs are. About 25 of these 52 charge more than 50 percent in indirect costs. That means, for instance, at 70 percent when you award a