Biomedical research in the universities is just as sensitive to Federal funding as that of a research institution like the Salk Institute. University budgets devoted primarily to teaching simply cannot afford the purchase of the new equipment of developing technology, and please be assured that in the community of scientists there is a great willingness to share this expensive type of equipment. This sort of collaboration goes on all the time within institutions and between institutions.

Another point of concern to all of us in medical research, are the attempts which I understand are being made at changing what has been the traditional role of each of the institutes of NIH's in determining and defining what specific areas of research they are interested in supporting-within the constituency of each institute (Cancer, Arthritis and Metabolic Diseases, Eye Institute, Heart and Lung, et cetera). Each insitute has traditionally selected the research, basic or clinical that it will support, through the peer review system. While that system is far from perfect, it is still the best that we know of to appraise the quality of proposals. That sort of nonautocratic, nongovernment ordered or controlled choice for the most judicious spending of public funds must be respected at all costs.

One thing I also want to mention is the overall significance of stability and continuity in funding in reseach. Ups and downs on budget on a yearly or even a 2- or 3year basis create absolute havoc in reseach programs. Training of young people and laboratory technicians takes years and losing them because of budget instability or reduction is eventually far more expensive than the actual loss of the people involved. STATEMENT OF THEODORE COOPER, M.D., VICE CHAIRMAN OF THE BOARD, THE UPJOHN CO.

Senator WEICKER. Dr. Cooper.

Dr. COOPER. Thank you, Mr. Chairman.

I, too, would like to submit my remarks as written and just make some highlights, and bring a different perspective this time around to the discussion now that I am in industry.

I think that one of the points that is often overlooked is the stake that industry has in the stability and growth of the National Institutes of Health, and in the Nation's Biomedical Research Program as it is basically funded through public funds.

It has been pointed out many times already this morning the importance of the stability of the university programs. Indeed, I would add to that the Government's own laboratories, the intramural laboratories at NIH. I would point out again that at the moment, the Nation's total effort is a synergistic effort between those two groups and industry.

Dr. Guillemin has pointed out that one of the so-called payoffs from the investment is the ability to produce important therapeutic agents and diagnostic agents at lesser and lesser cost, to take care of more and more people.

The American industry in pharmaceutics is greatly dependent upon the stability of the National Institutes of Health's programs. It has often been suggested in recent years during this debate that industry should replace the reductions that are proposed in research funding by the Government, such as in the President's budget.

I would like to point out that while the industry is increasing its commitment to research, and becoming more research intensive by about 15 percent per year, that it no way could replace the total commitment that is so important to the stability of the programs in academia.

In our own company, for the past 5 years, we have increased our program by 15 percent. We are now investing or reinvesting over 15 percent of our worldwide pharmaceutical sales in research. I would point out in passing that that is 50 percent more than our net profit, and that is a reflection of how important the total research effort is to the competitiveness of this industry, the American industry worldwide, and its ability to bring these exciting new developments to total fruition.

Our company is representative of many of the others. I think Mr. Massinghoff with the PMA has recently reported similar figures for the American industry as a whole, the total investment being about a little over $4 billion at the present time.

We need that access to basic knowledge and basic information produced by the NIH funds. We need the young people to come into our laboratories and complete the development of these leads that they find and that we are able to capitalize on. We need the collaboration with their programs.

We have often been asked, why can't we just subsidize with more collaboration and academic industrial associations have been very much talked about in the last 5 years. They have increased, maybe perhaps doubled, but they, too, have a limit on them. The importance here is that it is mandatory that the academic laboratories not become captives of the industry. They need to maintain their independence, and they need that funding from the traditional sources of endowment, as well as from the National Institutes of Health.

Lou Thomas, a noted and distinguished physician and author, once characterized the National Institutes of Health as one of the greatest social inventions in the history of democracy. We certainly agree with that characterization.

I agree that it is eroding in its potential. We think that our position, worldwide as an industry, is eroding, even though we are still one of the net exporters for American trade. Opportunities lost are not easily regained. Discontinued and interrupted programs can rarely be reestablished.

We, too, would urge you to reject the President's proposal for the National Institutes of Health, and to restore those current levels and stability to the programs, to insure flexibility in their management, as has been described by my colleagues here, and to the extent possible, to foster continued growth during a period of exceptional scientific opportunity.

PREPARED STATEMENT

Thank you very much.

Senator WEICKER. Dr. Cooper, thank you very much. [The statement follows:]

STATEMENT OF DR. THEODORE COOPER

MY NAME IS DR. THEODORE COOPER, AND I AM VICE CHAIRMAN OF THE BOARD OF DIRECTORS OF THE UPJOHN COMPANY. I WELCOME THE OPPORTUNITY TO COMMENT ON OUR CONCERNS ABOUT THE NATIONAL BIOMEDICAL RESEARCH EFFORT. AS THE RESUME ATTACHED TO MY WRITTEN TESTIMONY SHOWS, I HAVE GIVEN SIMILAR TESTIMONY AS DIRECTOR OF THE NATIONAL HEART, LUNG AND BLOOD INSTITUTE, AS ASSISTANT SECRETARY FOR HEALTH AND AS AN ADMINISTRATOR OF AN ACADEMIC INSTITUTION.

FROM MY CURRENT INDUSTRIAL PERSPECTIVE, I AM CONVINCED MORE THAN EVER THAT THERE MUST BE A STRONG AND STABLE PUBLICLY FUNDED BIOMEDICAL RESEARCH PROGRAM IN THE UNITED STATES, SUPPORTED IN THE MAIN BY INSTITUTIONS SUCH AS THE NATIONAL INSTITUTES OF HEALTH AND THE NATIONAL SCIENCE FOUNDATION AND THE CENTERS FOR DISEASE CONTROL. THE COUNTRY'S INVESTMENT OF PUBLIC FUNDS IN BIOMEDICAL RESEARCH IS AN IRREPLACEABLE FOUNDATION FOR IMPROVEMENTS IN THE PRACTICE OF MEDICINE AND FOR THE GROWTH AND VITALITY OF THE PHARMACEUTICAL INDUSTRY.

PUBLICLY FUNDED RESEARCH GIVES US A RESOURCE FROM WHICH INFORMATION CAN BE DRAWN PROMPTLY AND FROM WHICH NEW LEADS CAN BE TRANSLATED INTO NEW THERAPEUTIC AGENTS.

THIS IS NOT TO SAY THAT INVESTMENT BY THE PHARMACEUTICAL INDUSTRY IN RESEARCH IS INCONSEQUENTIAL. MY OWN COMPANY IS INVESTING INCREASING AMOUNTS OF MONEY IN RESEARCH AND DEVELOPMENT, AND SO ARE THE OTHER RESEARCH-INTENSIVE COMPANIES. ROUGHLY 15 CENTS OF EVERY PHARMACEUTICAL SALES DOLLAR AT THE UPJOHN COMPANY GOES BACK INTO RESEARCH AND DEVELOPMENT. OUR INVESTMENT AS A PERCENT OF SALES HAS BEEN INCREASING AT 15 PERCENT ANNUALLY OVER THE PAST FIVE YEARS.

WE AND OTHERS IN THE INDUSTRY ARE MAKING COMMITMENTS OF THESE PROPORTIONS FOR THREE REASONS. FIRST, STAYING COMPETITIVE REQUIRES INNNOVATION IN PRODUCT DEVELOPMENT. SECOND, WE HAVE BURGEONING SCIENTIFIC OPPORTUNITIES BECAUSE OF THE SO-CALLED REVOLUTION IN BIOLOGY--A REVOLUTION STARTED AND FUELED BY PUBLICLY FUNDED RESEARCH AND GIVEN MOMEMENTUM BY INDUSTRY. THE NEW OPPORTUNITIES HAVE MEANT RESTRUCTURING THE TECHNOLOGY BASE IN MANY COMPANIES. THIRD, THERE IS THE SIMPLE REASON THAT RESEARCH BECOMES MORE EXPENSIVE AS IT BECOMES MORE SOPHISTICATED. THIS LAST FACT IS OF CRUCIAL IMPORTANCE TO THOSE OF YOU IN CONGRESS BECAUSE PUBLICLY SUPPORTED BIOMEDICAL RESEARCH INSTITUTIONS ARE NOT IMMUNE TO THE INCREASED COST OF TODAY'S RESEARCH.

EVEN THOUGH OUR INDUSTRY'S INVESTMENT IN RESEARCH IS LARGE AND GROWING, THAT DOES NOT MEAN IT CAN REPLACE PUBLICLY-FUNDED RESEARCH. WE HAVE BENEFITED FROM THE GREAT EXPANSION OF SCIENTIFIC OPPORTUNITIES IN LARGE PART BECAUSE OF THE PERFORMANCE OF FEDERALLY FUNDED SCIENTIFIC RESEARCH AND CLINICAL INVESTIGATION. THERE IS SIMPLY NO WAY THAT PRIVATE INDUSTRY CAN REPLACE OR EVEN APPROXIMATE THE VALUE AND THE SUBSTANCE OF INFORMATION THAT EMERGES FROM THE PUBLICLY SUPPORTED BIOMEDICAL RESEARCH.

DURING ITS RECENT EXPANSION, THE PHARMACEUTICAL INDUSTRY

HAS HIRED A NUMBER OF YOUNG SCIENTISTS WHO WERE TRAINED IN GOVERNMENT AND ACADEMIC LABORATORIES. OBVIOUSLY, THE KEY TO A SUCCESSFUL RESEARCH PROGRAM IS TO HIRE THE BEST PEOPLE YOU CAN FIND. TRAINING THOSE GOOD PEOPLE IS A MAJOR FUNCTION OF PUBLICLY SUPPORTED RESEARCH. CONVERSELY, THE INDUSTRY GIVES MANY OF THESE YOUNG SCIENTISTS A PLACE TO APPLY THEIR TRAINING TO THE DEVELOPMENT OF NEW DRUGS AND INCREASED UNDERSTANDING OF DISEASE PROCESSES.

COMMERCIAL SUCCESS HAS BEEN ANOTHER BYPRODUCT OF THE REMARKABLE AND UNIQUE RELATIONSHIPS OF BIOMEDICAL RESEARCH PROGRAMS IN THIS COUNTRY. DRUGS TO CONTROL HYPERTENSION, PREVENT POLIO, TREAT HODGKIN'S DISEASE AND CONTROL THE

COMPLICATIONS OF DIABETES ARE JUST A FEW EXAMPLES OF DRUGS THAT
HAVE DRAMATICALLY IMPROVED PEOPLE'S LIVES WHILE AT THE SAME

TIME PROVIDING A REASONABLE RATE OF RETURN TO DRUG
MANUFACTURERS. I WOULD ALSO ADD THAT WE HAVE SEEN GREAT

PROGRESS IN DEVELOPING DRUGS FOR RARE DISEASES. THESE SO-
CALLED "ORPHAN DRUGS" ARE ANOTHER EXPRESSION OF THE INTERACTIVE
STRENGTH IN OUR BIOMEDICAL RESEARCH SYSTEM.

MUCH HAS BEEN MADE IN RECENT YEARS OF COLLABORATIONS BETWEEN INDUSTRY AND ACADEMIA WHERE THE ACADEMIC INSTITUTION RECEIVES FUNDING FOR WORK TO WHICH THE PRIVATE COMPANY HAS A VARIETY OF RIGHTS. I THINK THE FEARS THAT SUCH ARRANGEMENTS WOULD QUELL ACADEMIC FREEDOM AND SLOW DOWN THE EXCHANGE OF INFORMATION HAVE LARGELY BEEN DISPELLED.

HOWEVER, I WOULD LIKE TO ADD THAT IT'S A MISTAKE TO RELY TOO MUCH ON COMMERCIAL FUNDING FOR ACADEMIC OR GOVERNMENT RESEARCH. UP TO A POINT, COMMERCIAL FUNDING HAS HELPED FACILITATE PRODUCTIVE COLLABORATIONS, BUT MUCH BETTER RESULTS ARE ACHIEVED WHEN A COLLABORATION IS ENTERED INTO TO ANSWER A SCIENTIFIC QUESTION OR MEET A MEDICAL NEED. AN INDEPENDENT FINANCING BASE IS OF GREAT VALUE IN THESE COLLABORATIONS, AND THAT IS WHY ENDOWMENTS AND THE FEDERAL GOVERNMENT SHOULD CONTINUE TO PAY FOR MOST RESEARCH AT ACADEMIC INSTITUTIONS.

IN CLOSING, THEN, AS THE CONGRESS STRUGGLES TO MEET THE GOAL OF A BALANCED FEDERAL BUDGET, I WOULD HOPE THAT IN SETTING THE NATIONAL PRIORITIES THE CONGRESS WILL SEEK TO ENSURE