Eve E. Slater, M.D., F.A.C.C. Assistant Secretary for Health Department of Health and Human Services Fostering Innovation in Medicine and Research 2002 Charles C. Leighton, M.D., Memorial Lecture University of Pennsylvania October 18, 2002

Thomas Jefferson’s Library United States Library of Congress Memory Reason Imagination

A Century of Innovation 1900-present A Century of Innovation Increased Life Expectancy Increased Cancer Survival Rate Decreased Cardiovascular Mortality Advent of Vaccines Human Genome Project and so much more

Receiving more in improved health than we pay in treatment costs implies that medical care is a more productive investment than the average use of our funds outside the medical sector. Investment in Medical Research and Care Cutler, McClellan, and Newhouse 1998 “ ”

Doubling of NIH budget in 5 years ( ) to $27 billion in Fiscal Year 2003 NIH budget in 1960: $182 million Clinical research funding: 32% of budget (Fiscal Year 2001) Federal Funding for National Institutes of Health (NIH)

PhRMA Member Companies’ R&D Expenditures and NIH Obligations

Bayh Dole Act (1980): removed barriers to patent ownership from federally supported research $40 billion/260,000 jobs (1999) Stevenson Wydler Act (1980): stimulated public-private partnerships Orphan Drug Act (1983): encouraged research and development for drugs for orphan diseases National Cooperative Research Act (1984): eased antitrust concerns Waxman Hatch Act (1984): protected intellectual property Federal Technology Transfer Act (1986): stimulated technology transfer Clinical Research Enhancement Act (2000): encouraged funding for clinical research Selected Federal Legislative Milestones

These new paradigms will require a reexamination of the structure of the U.S. medical research institutions and government to ensure that they reflect and accommodate new multidisciplinary research and development processes. “ ” Senator William H. Frist, M.D. Journal of the American Medical Association, May 2002

Medical Errors: approximately 45, ,000 per year Cost: approximately $17-$29 billion per year Hospital Drug Errors: approximately $2 billion per year Institute of Medicine Reports on Quality

The Administration supports your (U.S. House of Representatives) efforts to pass... and enact legislation to remove the liability barriers to improving quality and safety of health care. Secretary Tommy G. Thompson September 10, 2002 “ ”

2002 cost = $802 million 19% reduction in all phases length = $100 million saved 21.5% to 25.5% increase in clinical success rate = $100 million saved If phase III studies decrease by 1 year = $71.4 million saved If 33% decrease in development and regulatory review time = $1.7 million saved Drug Development Costs (source: Tufts CSDD)

Innovation and Cost Memory: Federal Funding and Key Legislation Reason: Translational Research Prioritization and Dialogue Imagination: Infrastructure for Quality Availability and Access