10:40:37:00 Mary Woolley: I'm Mary Woolley and it's my great pleasure on behalf of the Research!America Board of Directors to welcome you to our 2005 National Forum "Research: The Risks, the Rewards and the Returns." Now we recognize that these are both very exciting but also very challenging times for our nation's research enterprise.

10:41:03:25 As an advocacy organization committed to taking action to make research a higher national priority, we are proud to bring you a discussion among action-oriented leaders and as our keynote and panelists on today's program. I hope when you leave here today, you will be stimulated to take action for research.

10:41:31:13 Before we begin, I want to thank our general sponsors of our 2005 National Forum. Beginning with our host sponsor, Dr. Alan Leshner. Alan, I know you're here. There he is. Stand up, please. Thanks to Alan and his colleagues, we have enjoyed a really strong, and I think beneficial for science, partnership with the AAAS for several years now. Thank you, Alan.

10:42:03:02 We want to thank our other sponsors of today's forum. We thank Abbott Laboratories, represented this morning by Dr. John Leonard-and he's here-Cindy Schwab and Adele Witenstein. We thank the AARP, represented by William Novelli. We thank Amgen and the Association of Academic Health Centers.

10:42:26:07 I think Dr. Roger Bulger is here; Burrill & Company; Ethicon EndoSurgery; Infocast; Omeris, O-m-e-r-i-s, Ohio's Biosience Development Organization, represented today by Matthew Schutte; PARADE magazine; and Pfizer, represented by Dr. Joe Feczko, Susan Berger, Dolly Judge and Talbott Smith.

10:42:56:07 The Ohio state University Medical Center and the Ohio state University Office of Research, represented today by Dr. Thomas Rosol and Carolyn Whitaker. The University of Cincinnati Medical Center; the United Health Foundation and the Universities Research Association, Inc., represented by Dr. Ezra Heitowit.

10:43:18:11 Thank you all for making this Forum possible and for making our work at Research!America possible. Well, it is now my honor and pleasure to introduce our keynote speaker this morning, the Lt. Gov. of Ohio, Bruce Johnson. Appointed Lt. Gov. by Gov. Bob Taft in January of this year, Bruce Johnson is leading the effort to promote Ohio as the premiere business location in the nation.

10:43:47:23 He does this not only from his role as Lieutenant Governor but also as director of the Ohio Department of Development, a position he has held since September of 2001. In addition to this, Lt. Gov. Johnson serves his chair of Ohio's Third Frontier project, the state's $1.1 billion dollar commitment to expanding Ohio's research and technology capabilities and promoting innovation and company formation that will create high paying jobs for generations to come.

10:44:21:22 To encourage investment in Ohio's knowledge-based economy, Lt. Gov. Johnson has led the efforts to help ensure that research and technology organizations have access to venture capital that is critical to their success. A recent study by one of the nation's leading economic think tank shows that between 2001 and 2003, Ohio led the nation in the relative growth of total venture capital invested in biotechnology. Congratulations on that accomplishment!

10:44:54:21 Prior to becoming development director, The Honorable Bruce Johnson served as a member of the Ohio Senate from April 1994 to September 2001. He was the youngest in age as well as in history of the Ohio Senate to be appointed chairman of the Senate Judiciary Committee. Later he was appointed chair of the powerful Ways and Means Committee.

10:45:17:27 He was also elected president pro tem, the second ranking member of the Senate. The Lieutenant Governor's private sector experience includes an extensive legal background. Until his appointment as development director, he was a member of counsel to the Chester, Willcox and Saxbe law firm in Columbus where he provided small- and medium-size businesses with guidance regarding corporate structure employment policy and risks management.

10:45:45:09 Please join me in welcoming Ohio Lt. Gov. Bruce Johnson.

10:45:59:21 Bruce Johnson: Thank you, Mary. We've had quite a morning. We took off from Columbus in one of the governor's fine aircraft. I think we purchased it in 1978 and we turned around and came back because there was a problem with one of the devices. And so we came over in a small, five-seater. I've had a very enjoyable morning, but my feet are still frozen. It was quite a flight.

10:46:26:27 We are, however, persistent in Ohio and so we wanted to make sure that we made this trip. I'm pleased in what we're doing and we believe what we're doing is providing a boost to Ohio's high-tech economy. I'm very pleased that what we're doing has captured your attention and so I'm honored to have the opportunity to share some of our strategy with you and some of our ideas.

10:46:51:23 I'm also humbled to be mentioned alongside with many of our distinguished panelists this morning. So thank you all for participating with us. I'd like to recognize The Honorable Paul Rogers, a longtime friend of the health care community and Research!America.

10:47:07:25 As a former member of the Board at Cleveland Clinic, he knows something about Ohio's reputation in the medical field. Also congratulations to The Honorable John Porter for his selection as the next chair of Research!America. I must also recognize some Ohio sponsors at today's event: the University of Cincinnati's Medical Center, Ohio state's Medical Center and their research office, Ethicon Endo-Surgery, and Omeris.

10:47:37:24 My remarks should hit home to these folks because they are all partners in our efforts to grow technology job creation in the state of Ohio and to focus on research and development for the purpose of commercializing new products. In fact, Ethicon Endo-Surgery was a recipient of our 2004 Thomas Edison Award, the state's highest technology honor.

10:47:58:26 It is awarded annually to one organization that demonstrates global leadership in fostering or implementing innovation. The theme for this year's forum is "Research: The Risks, the Rewards and the Returns." We know a little bit about this.

10:48:18:20 We have been focused on it since the day I arrived at the Ohio Department of Development. We asked for a study that was conducted by the Battelle Memorial Institute. It later culminated in a campaign to raise $500 million statewide the voters were going to have to approve, and we did not succeed.

10:48:39:09 And so there are risks and there are rewards. We still have a $1.2 billion initiative and we're going back to the voters this fall for an additional $500 million. You see, our willingness to talk about the changing landscape of economic development in our country, and in our state particularly, was not beaten back by our loss at the polls.

10:49:06:04 We lost by fewer votes than George Bush won in Ohio and you all know something or have been paying attention at all, that we have both economic challenges in Ohio and that election was enormously close, and therefore so was our election on the ballot for the Third Frontier project.

10:49:24:22 So we're going back because we believe that the state has an obligation for odd leadership and investment in the area of leadership and development for the purpose of economic prosperity. In addition, let me just say that since Sir Isaac Newton first got knocked in the head with an apple, science has been fraught with risk.

10:49:47:04 Risk is simply unavoidable when you're dealing with the unknown. It is in many regards the very essence of science. It is the risk that often causes heartburn when the research community and the public sector come together. There is just something disconcerting about having the words "risk" and "taxpayer dollar" in the same sentence.

10:50:07:05 I think at the state and local level, it is even more challenging because the Washington environment, I think the electorate assumes that there's a certain amount of risk-taking and investment that they're not intimately familiar with that goes on in Washington.

10:50:23:03 But at the local level, they always want to know what is the rate of return next week, next quarter, next year, not 10 years down the road when you're able to develop new products. While logically the mind can rationalize that risk is necessary to reap rewards, it is an emotionally and politically difficult leap to accept; that when it comes to publicly funded efforts, there will be some failure.

10:50:49:12 In fact, you can imagine the looks I get when I tell someone that we in government are too afraid of failure and that we must be more risky in order to succeed. They always want an automatic return on investment. They want to know exactly what they're getting in terms of the new project.

10:51:08:21 Our state projects tend to look more like roads and bridges than science projects. The guy responsible for trying to jumpstart Ohio's economy just said that the key to long-term success is in our willingness to accept some short-term failures.

10:51:28:02 We just can't afford to be afraid of not having an automatic return on investment. In Ohio, and in fact in America, we no longer have the luxury of being cautious. The world's economy is changing and if we do not adapt, we'll find ourselves in crisis.

10:51:43:19 A recent report by the Council on Competitiveness, which discusses the changing nature of innovation, sums it up beautifully. They say innovate or abdicate. I won't go into the report's details as the Council's president, Deborah Wince-Smith, is with our today.

10:52:00:13 However, its observations are not that dissimilar to what we are experiencing on a daily basis in Ohio. Innovation itself is changing. There are more innovators, more places in the world where innovation is occurring and has access more quickly to markets.

10:52:18:24 Innovation is becoming more cross-disciplinary. In the face of this, we have a choice. It's to innovate or to abdicate. For those of you who are not familiar with Ohio, the Buckeye state has a very long history of innovation. We're world-class innovators ourselves.

10:52:36:18 Folks like Thomas Edison, Charles Kettering, the Wright Brothers, all called Ohio home. Ohio is the birthplace of the airplane, the cash register, vocal (inaud.) rubber industry, on and on; our innovation contributions to society may well be unparalleled.

10:52:54:05 But unfortunately, as they say, that was then and this is now. In Ohio, we are faced with the task of reclaiming that culture of innovation in the midst of a changing and very challenging economy. And that's where the Third Frontier project that was introduced to you comes in.

10:53:11:03 For the first hundred years of our statehood, Ohio's economy was rooted in agriculture. Our fertile lands and access to waterways ensured that agriculture was king. And it was good to be king. Our population grew, our wealth grew, our infrastructure grew, and we were the gateway to the West long before St. Louis laid claim to that moniker.

10:53:34:18 Agriculture was Ohio's first frontier. Then came the turn of the 20th century and the industrialized economy. The age of machinery was upon us. The infrastructure that had served the agriculture era now served the explosion of industry.

10:53:51:07 We had access to raw materials. We had innovators to create quality products and processes, the skilled work force to do the work and the infrastructure to move products through North America. Manufacturing was king and it was good to be king.

10:54:05:12 We grew to be the nation's third largest manufacturing state and our gross state product grew to more than $380 million at that time; it's now $450 billion, making us the seventh largest economy in the nation. Manufacturing was and is king, but it was our second frontier.

10:54:27:22 There's just one little hitch in all this good news about manufacturing strength. For all its strength in manufacturing, Ohio continues to lose manufacturing jobs, even though we produce more goods today than we ever have in our history.

10:54:42:21 Manufacturing is still the king. It comprises more than 21% of the gross state product in our state. We have 17,600 manufacturing firms employing 850,000 people. We lead the nation in value-added production of primary metals, plastics and rubber.

10:55:02:28 We are the number two supply in fabricated metals and automobiles. We remain the nation's third largest manufacturing economy. The question is why isn't our population, our growth in employment in manufacturing, increasing with all this explosive growth in production, like I said before.

10:55:21:10 We have more production today than we ever had. More when the rust spell was really the rust spell. More when the manufacturing enterprises were really on top of the entire age. The answer is productivity, and it's not a bad thing. The only way that your standard of living is going to increase really is through increased productivity.

10:55:43:24 It's not a new phenomenon. Every endeavor man has ever undertaken, he has usually gotten better at. Since 1950, manufacturing production in the United States has increased six-fold and yet employment has remained relatively unchanged. Phenomenon isn't even particular to manufacturing.

10:56:03:13 Productivity affected agriculture. The agricultural industry between 1967 and 1983, the number of farms when from 135,000 in Ohio to 78,000, while our production increased from about 78 bushels per acre to 138 bushels per acre. What technology and science did for agriculture 100 years ago, is being repeated today.

10:56:29:03 Manufacturing with computers and automation. Employment and primary metals fell by nearly half during that same time period, going from about 155,000 to 76,000, and, in Ohio, this increase in productivity has meant a decrease in the percentage of overall employment attributed to manufacturing.

10:56:49:20 It's gone from 20% in 1993 to about 15% in 2003. You know, this is not unique to Ohio. It is causing quite a bit of economic trouble. There are folks who believed for generation after generation that all they had to do was walk down to the corner, get a job at the plant and they would be secure for a very long time.

10:57:16:22 That is history. That is not today's reality. It is happening all over the world, though. However, in the United States, which reported employment at about 17% in manufacturing in 1990 has dropped below 14% now. It's also true in the United Kingdom, where the shift was 23% in 1990, 16% now.

10:57:38:07 It's happening in China. Now how many people would have guessed that? Am I suggesting something that is new? Well, supposedly all these manufacturers are going to either Mexico first and then China or India, the actual percentage of employment dropping from 28% in manufacturing in 1990 to 10%.

10:58:04:14 Why? Because the manufacturing enterprises in China have gone from government-based to private-sector based. They have applied lean manufacturing techniques and they've become very, very productive. The bottom line is that corporate success in the second frontier has been dependent upon making quality goods in a more efficient and less costly manner.

10:58:22:14 As the technology to do this increases, the largest cost becomes labor, which must be reduced or found more cheaply in order to maintain the bottom line and generate a profit. We call this generally over time, commoditization and so where does that leave our economy?

10:58:42:11 Innovate or abdicate. If you want to have a job that pays $2 an hour, compete with somebody who is efficiently producing something and getting paid $2 an hour. The question is how can we invest and make sure that we maintain our competitive edge? And the answer has to be, in a system that is constantly innovating and creating new products, not just in manufacturing in hard goods, but also in health care and in other aspects of the economy.

10:59:19:12 The Third Frontier is based on the premise that the ongoing success of our economy is dependent upon our ability to continually develop high value-added products, those that are not easily commoditized. Enter the Third Frontier project.

10:59:34:22 The Third Frontier project is a 10 year, $1.1 billion, we think soon to become $1.7 billion effort to promote research, development and commercialization of new technology made up of a number of programs that promote collaboration among the public, the private and higher education sectors of our economy and help companies make the jump from a great idea to a marketable product.

10:59:59:17 The project is thissstate's largest ever commitment to expanding the high- tech research capabilities of our state in promoting innovation and new company formation and we believe that it was create high paying jobs for generations to come.

11:00:15:06 Our strategy is to build world-class research capacity, accelerate the formation of the attraction of technology-based businesses and to promote and support new product innovation and then to aggressively market Ohio's competitiveness.

11:00:32:11 The same scientist that bumped his head proved that there are risks associated with science. He said, "If I had seen further, it is by standing on the shoulders of giants." Likewise, the Third Frontier project realizes that our success will only be achieved by standing on our past success.

11:00:53:25 We do this by identifying where our industry strengths intersect with our research strengths. This tells us from our perspective, from a strategic perspective where to build for future strengths. In fact, one of the first things we did, like I mentioned before, was to get a study conducted by the Ohio-based Battelle Memorial Institute, a member of Research!America, to determine Ohio's existing core competencies.

11:01:21:02 With limited resources, we felt that it was absolutely critical to our success to know how to best to direct those resources and to leverage them with interested private sector partners. But we have discovered were fivers areas of excellence: power and propulsion, advanced materials, information technology, instruments, controls and electronic and the biosciences, around which we have built the Third frontier project.

11:01:49:23 These five core competencies are the root of each of the 10 of so components of the Third Frontier project. Each component then addresses a slightly different need as you move from research to commercialization. The right centers of innovation are a large scale, world-class research and technology development platforms designed to accelerate the pace of commercialization.

11:02:12:17 The Ohio Fuel Cell Initiative is supporting projects to prove technical feasibility and reduce the costs of fuel cells. The Third Frontier network is the nation's most advanced fiber optic network dedicated to education, research and economic development.

11:02:30:13 The Validation and Seed Fund Program has been particularly successful. Since 2000, the state of Ohio has awarded $18 million in the Seed Fund and Validation Fund, leveraging more than $150 million in private sector start-ups. Sixty Ohio start-up companies are helping to create already 400 jobs and you would expect that number to rise ten-fold as those companies begin to grow.

11:02:58:29 Unfortunately, I do not have time, nor would you have the patience, to list all of our programs in detail or to recount each one of their successes. You can visit the thirdfrontier.com if you like for a full overview. I do think that there are a couple of examples that you should be aware of that will help you in choosing the path for innovation over the abdication of such.

11:03:24:25 If the core competencies are the cornerstone of the Third Frontier project, our right centers are its foundation. Their focus is on our area of competency. So far, the centers have established in the areas of power and propulsion, advanced data management, fuel cells, computational medicine, stem cell and regenerative medicine and molecular imaging.

11:03:47:01 One such center is the Biomedical Structural, Functional and Molecular Imaging Enterprise at the Ohio State University with collaboration from Philips Medical Systems and Rexson Enterprises developing an ultrahigh field MRI scanner, the most powerful in the world.

11:04:07:14 The development of this enterprise is a great example how the multiplying affect of the Third Frontier project is changing the landscape. The real success of the Third Frontier project is not that we have spent $235 million on growing technology in the last couple of years. The real success is found in the partnerships that have been formed, the additional dollars that have been leveraged and the new technologies that are being commercialized.

11:04:33:15 Ohio State's molecular imaging enterprise, just over one year old now, displays all three. They've partnered with Philips Medical Systems, one of the best imaging companies in the world. They have been able to leverage millions of dollars, including $6 million from the National Institutes of Health. Thank you.

11:04:53:27 And Philips has added employees expanding its Cleveland facility where it has thousands of employees who are manufacturing MRIs today. In fact, we are manufacturing the next generation, 7-Tesla MRI system, and it is being developed in partnership with this center.

11:05:12:01 The other benefits of these types of arrangements is that they help us in the creation of economic development clusters, an area that develops a reputation for excellence in a particular field or industry is obvious more likely to attract other companies in that field, Silicon Valley would be one, Research Triangle Park would be another.

11:05:33:18 In the case of molecular imaging enterprises, we are further feeding an image Ohio already has as a strong leader in the area of medical device manufacturing. But in another area, we are starting from scratch. We are taking steps to establish ourselves as the number one place in the world for the development in commercialization of fuel cells.

11:05:56:23 We must dare to dream big. We must take risks that are reasonably based upon science but there is no guarantee of return. There are certain risks in pursuing such a young technology but we believe its risks will result in big rewards down the line.

11:06:17:22 We have the Ohio Fuel Cell Coalition, a group of industry academic and government leaders working collectively to strengthen Ohio's fuel cell industry and to accelerate the transformation of industry to global leadership in the fuel cell technology.

11:06:34:10 We've established a right center for fuel cells. The right fuel cell group located at Cleveland Case Western Reserve University, nearly two dozen companies, universities and research organizations collaborating on this project, which will support and research development and commercialization of fuel cells.

11:06:52:27 We've developed the Ohio Fuel Cell Road Map, a strategy to position us as a leader in the technology. In addition, we're funding numerous private fuel cell projects. We've also established the nation's first fuel cell prototyping center at a community college in (inaud.) state or Northeast Ohio so that when the industry takes off, which inevitably will in the next decade, we will be one of the only places in the world in which to find qualified technicians for this industry.

11:07:25:10 We also will be able to develop four companies, the mass production of their relatively small-scale operations today. We believe our strategy is working. Last fall when we, what we believe is the nation's first utility scale fuel cell power plant went online in Ohio.

11:07:47:03 It is providing enough electricity to power 180 homes in a relatively small community in Ohio but soon we believe that there will be many more throughout our state. We are creating an image of excellence and has companies looking into Ohio.

11:08:02:17 In a different technology area, Alien Technology, a California company that specializes in radio frequency identification is seeking and has decided to locate a $10 million operation and a 100 job expansion project in Ohio. They like the collaborative environment that we have invested in, an existing base of companies that have talent that already existed in the Dayton area.

11:08:27:23 Not only did they choose Ohio but they immediately became involved in a collaborative Third Frontier project, the Radio Frequency Identification Application and Education Center. We've also seen stories of commercial success, like the Third Frontier recipients, Alfa Micron, which is adapting its military application liquid crystal technology for use in consumer markets.

11:08:52:03 The resulting high-tech specs protects skiers' eyes from changes in brightness on a ski hill and were selected by Popular Science magazine as the best of what's new in 2004 by Forbes in its coolest ski gear article this last January. So, we've made some investments in pure science and we've made some investments in commercializing new products.

11:09:18:06 Last fall, the Ohio State University credited a $2 million Third Frontier grant with its ability to secure $12.9 million from the National Science Foundation. As a result, they're creating a nanoscience and engineering center. Perhaps most importantly to the people of the state of Ohio, we've seen stories on a personal triumph like that of Annette Coker of Toledo, the victim of a terrible car accident that left her quadriplegic.

11:09:51:22 But thanks to a Cleveland functional electrical stimulation center, a recipient of $8 million in Third Frontier grants, Ms. Coker is beginning to regain her independence. A surgically implanted neuro-prosthetic has restored some movement to her left arm, allowing her to handle everyday items, like a pen, toothbrush and a fork.

11:10:14:24 We believe that there is a great future on the horizon for this technology and the Cleveland Clinic is at the cutting edge in development and utilization of it. While the Third Frontier project is shaping up to be a powerful economic development tool, it is also a powerful personal tool, improving the lives of working Ohioans.

11:10:35:19 I must, however, tell you that it is only one tool. And it cannot obviously transform our economy overnight. It's a long-term project that must work with other tools. It's working because it builds success on other programs we have in this state, like Edison Technology Centers and Incubators to help small businesses grow and develop.

11:10:56:00 We've also reformed our civil justice system, protecting doctors and hospitals from medical malpractice cases. We're reformed our worker's compensation system and we're reforming our tax system as well. Most importantly, we are partnering with the higher education system.

11:11:15:11 In fact, the Chancellor of the Board of Regents is one of the three people who sat on the commission with me, the Third Frontier Commission that determines how to allocate funds. We have an enormous private sector partnership with the Third Frontier Advisory Board and we do take their advice and the higher education system is a key partner.

11:11:33:28 It's critical that they be a key partner. Statistics on the U.S. position in higher education are not very encouraging and they are not overly encouraging in Ohio either. The Task Force on the future of American Innovation recently issued a report warning that the U.S. is in danger of losing its leadership position in science and innovation.

11:11:58:25 Much of its claim is predicated on education in regard to science and engineering. More than half of all workers with science and engineering degrees are over 40. And new blood is not entering the work force fast enough. From 1994 to 2001 graduate enrollment in science and engineering decreased 10% amongst U.S. citizens.

11:12:22:15 These are issues that require much more time than we have today but they are issues, which must be addressed. We cannot become complacent. America cannot afford to let our history of world leadership and intellectual capital be outsourced.

11:12:39:05 The United States can be the world's bread basket but not without research in innovation, making agriculture more efficient and our food supply safer. The United States can be a platform for manufacturing but not without research and innovation to increase productivity and provide cutting-edge new product development.

11:13:00:00 The United States must be the world leader in innovation infrastructure. Our economy and prosperity depend upon it. We in Ohio stand with you and call upon our national leaders to make additional investments in higher education systems, particularly in the basic sciences and engineering, for more focus on risks taking and entrepreneurship and for policy structures to support innovators, intellectual property protection and industry and academic collaboration

11:13:33:24 We think the Third Frontier will help us in Ohio. The majority of its elements rely on and benefit the university structure. This structure is still home to good majority of research and it's still a good place to foster new ideas. The Third Frontier project recognizes this fact.

11:13:53:05 It accepts the premise that the risk of loss is always a possibility. But the Third Frontier project also understands that when it comes to insuring a bright future for our children and theirs, we cannot afford to abdicate. Risky or not, we must choose instead to innovate, to invest, to encourage bright minds to a greater future.

11:14:17:03 Thank you and I look forward to discussing these issues in more detail on the panel. Thank you very much.

11:14:58:04 John Porter: Would our panelists please come up and take their places? I'm John Porter, the chair-elect of Research!America, and I realize the huge shoes I have to fill when Paul lays down the chairmanship this afternoon. It's my pleasure this morning and I deem it a real privilege to introduce our moderator for this morning's panel discussion, veteran broadcast journalist and my fellow Research!America board member and she's just been re-elected, Judy Woodruff.

11:16:19:15 Judy joined CNN in 1993 and currently anchors "Judy Woodruff's Inside Politics." Last year, she headed CNN's "America Votes 2004," the network's coverage of the presidential race. Through "Inside Politics," Judy delivers the latest political news, interviews key players and travels to current political hotspots.

11:16:47:19 Judy also helps anchor breaking news and developing stories including the network's coverage of the war in Iraq. Following the September 11th terrorists attacks on the World Trade Center and the Pentagon, she provided award-winning continuous coverage from Washington, D.C.

11:17:07:23 Before joining CNN in 1993, Judy was chief Washington correspondent for the "McNeil Lehrer NewsHour." From 1984 to 1990, she anchored public televisions award-winning weekly documentary series "Frontline with Judy Woodruff." Prior to joining the "NewsHour," Judy was chief Washington correspondent for NBC's "Today" and she also served as NBC News White House correspondent from 1977 to 1982, covering both the Carter and Reagan administrations.

11:17:42:19 Judy joined NBC News as a general assignment reporter based in Atlanta in 1975. She has received numerous prestigious national awards, recognizing her outstanding work as a journalist. In addition, Judy and her journalist husband, Al Hunt, have been recognized for their outstanding fundraising and advocacy work to fight spina bifida.

11:18:10:28 A graduate of Duke University, Judy is founding co-chair of the International Women's Media Foundation, an organization dedicated to promoting and encouraging women in communication industries worldwide. We are delighted to have to you here, Judy, to moderate this distinguished panel. Ladies and Gentlemen, Judy Woodruff.

11:18:42:19 Judy Woodruff: Thank you, John Porter, for your longtime commitment to science and medical research. You are an inspiration to all of us and may I just say after everything he read in my biography or bio that I'm just glad there's some interest in something these days other than Martha Stewart and Michael Jackson.

11:19:09:22 We seem to be spending a lot of time on those subjects as well. I am honored to be asked to be with you today to help facilitate this discussion, we have with us an extraordinary group of individuals who are going to be participating in this panel and my job is really simply to facilitate them and to get this discussion going and in a way that allows them to share with us what their thoughts are.

11:19:38:27 So without any further discussion, I want to get right to the panel. I'm going to introduce them one by one and as I introduce them, I'm going to ask each one of them to make a brief opening statement, which is part of the plan. And we're going to start on my left, on your left, with Dr. Elias Zerhouni, who is, as you well know, the director of the National Institutes of Health.

11:20:07:08 Dr. Zerhouni was confirmed to that position in 2002. He leads the NIH and 27 institutes and centers with more than 17,000 employees and a fiscal 2004 budget of $28 billion. At the NIH, Dr. Zerhouni has initiated a process called the NIH Roadmap, designed to define priorities to accelerate progress across the National Institutes of Health.

11:20:33:27 So please join me in welcoming Dr. Elias Zerhouni for the first statement as our panel considers the risks and rewards of research. Dr. Zerhouni.

11:20:46:00 Elias Zerhouni: Thank you, Judy. I'm really pleased to be here this morning and I'll make brief comments to allow more time for questions. But it was really interesting to hear the Lieutenant Governor speak of his vision. I think you reminded me of a story that I was told by a Chinese colleague from the National Academy of China.

11:21:06:13 And he said that during the Mao Tze Tung era, they had to maintain employment and they needed jobs so they purposefully said that they were going to be building dams with big axes and trebles and he asked why. He said, "Well, because that gives more jobs instead of buying machines that increase productivity."

11:21:27:08 So the response of this gentleman was, "Why don't you have them work with tablespoons and forks, there would be [even] more jobs." And I think that's the challenge about innovation ... that in the 21st century as we look forward to the need for us to innovate in the changing societal environment, it is important to recognize that we can't do this, even as federal agencies, on our own.

11:21:51:16 And one of the things that is important here is to recognize the importance of organizations like Research!America. And I'd like to publicly thank you, Councilman Rogers and Mary as well as Congressman Porter. The impact you've had on my life is very straightforward, with your effort by doubling the NIH budget, you've made my work twice as complicated.

11:22:18:09 But at the same time, it really opened up opportunities that were unprecedented. And this is really the challenge. The challenge for us as a society is to really look at what you said, Lt. Gov. Johnson, and that is that you're making an investment today, but the returns in science are never predictable.

11:22:40:19 In fact, the scientific enterprise is characterized by frequent failure and rare success. It is the process, however, of scientific exploration that enriches our society. So I'll just summarize my comment about how do we maintain innovation by connecting it to the two things that you need to do, I believe.

11:23:02:07 One is first of all, defend innovation and the second is to promote innovation. And defending innovation is a complicated task as you well know. The first obstacle to innovation is what I call transaction costs. Societal costs that increase, either they're not just monetary costs.

11:23:22:04 They are political costs, special interests groups and what not. And you have policy costs. You have regulatory costs. And the typical effect of these costs is that they stifle the ability for new innovators to come in and undo what was done over the many hundreds of years that we've developed and then enter a new era.

11:23:45:17 So the first goal, I think, from the NIH standpoint as we've looked at our challenge was to have an open debate about where was science and what are the challenges that science faces today, relative to society and how do we lower transactional costs and promote innovation.

11:24:02:10 So one of the things we did in the road map was for example, to break disciplinary barriers. What happens in science is that you define science as good and that's what you want to achieve. But to achieve that, you need to have disciplines that go into imaging or nano-technology or molecular biology.

11:24:20:29 And what happens is you then create a burden of transaction costs because the discipline then becomes an end in itself, rather than a means to good science. So one of the things that I believe we need to do as policy makers is to create and stimulate the ability to change structures almost dynamically.

11:24:41:02 The second is to promote innovation. You have to be responsive to fundamental societal needs. And I'll give you an example of what I said at the hearings last week on our Appropriations Committee meeting. I said, you know, the decision we have to make as leaders, like you do, is we have a set of resources and you have to decide where and when to invest them.

11:25:03:00 And the principles there are very simple. In life sciences, I believe that the greatest challenge is going to be for us to accelerate the pace of our discoveries to make an impact on the burden of health care costs. And actually the tagline for the alliance is great.

11:25:20:03 It's an alliance with discoveries in health. You have it right under the Research!America logo and I think it's the most appropriate goal that we should have. So when I look at it, as I testified, NIH's budget as large as it is, $28 billion, is $96 per American, per year.

11:25:37:13 It's $16 for the National Cancer Institute, $10 for the National Heart, Lung and Blood Institute and others. And I'm telling everyone, you have to look at that investment as the leveraging effect on what we as a society pay to maintain our health, $5,500 a year, per American, per year.

11:26:00:29 When you look at this and you look at the evolution of that, it's going to take an increasing amount of the GDP of the country, in 10 years time, it will be a $3 trillion about 20-22% of GDP. And what I tell people, I say this is the greatest opportunity and the greatest challenge.

11:26:20:12 If it keeps growing, it will snuff out innovation. It will take away the risk capital that you are talking about that we need to invest. On the other hand, if we're successful as you are trying to be, and all of us are trying to be, a .01 percent, .01 percent change in the productivity of our medical system in our ability to innovation and discoveries to not just let disease happen and strike and then treat it but to prevent it from happening.

11:26:51:14 A .01 percent is a $3 billion opportunity. If each state in the union had one breakthrough of his nature, you would create $150 billion industry and you would preserve the ability of our country to innovate. This is why I think we need to really generate a new class of pioneers.

11:27:12:09 We have, for example, opened a new award at NIH, called the Pioneer Award to in fact stimulate, anchor, encourage, break down the barriers through a proactive process, which I think should promote innovation in life sciences because I think time is of the essence in the life sciences. Thank you.

11:27:33:08 Judy Woodruff: Thank you. Thank you, Dr. Zerhouni and I too want to add my applause to Research!America and Mary Woolley as I am so honored to be a member of that board and just, I think all of us are frankly in awe of the work that she and her colleagues have done over the years to promote the cause of science in the advancement of science.

11:27:59:06 The next speaker on the panel is Dr. Julie Gerberding. She is director, again, as all of you know in this room, at the Centers for Disease Control and Prevention. She was confirmed in that role in the year 2002. Before that, she was the acting deputy director at the National Center for Infectious Diseases and she played a major role in leading the CDC's response to the 2001 anthrax bioterrorism events.

11:28:28:04 She joined the CDC in 1998 as the director of the Division of Healthcare Quality and Promotion. Please join me in welcoming Dr. Julie Gerberding.

11:28:42:09 Julie Gerberding: Thank you. I'm just smiling because it seems like a long time ago that we were dealing with anthrax and yet I was up most of the night dealing with anthrax. So it seems like what goes around comes around. I'm very honored to be part of this panel and I really look forward to hearing all of my colleagues' perspectives on this.

11:29:00:14 This is a wonderful opportunity each year to come together and really step back away from the processes of what we're doing and think about the big picture. So I thank Research!America and all of you for being here to provide your perspectives and guidance.

11:29:15:06 This is really, for us actually, a consultation where we get new ideas and new opportunities. CDC is really the nation's health protection agency and we have a unique role, I think, in government to really not just restore health but to keep people healthy.

11:29:36:01 And for those who are at risk for diseases or disabilities to try and do whatever we can do to provide them the tools and the innovations that they need to return to its state of less risks or better health. And that seems like a very simple mission, say for a healthier people.

11:29:50:25 But it turns out it's fraught with all kinds of very difficult challenges particularly in this complex world that we're living in right now. And I just want to highlight three of them that I think are very germane to today's agenda.

11:30:03:00 The first is defining success. As a nation, we have no clear vision of what health really is. And, in fact, I think if you're sitting there, just ask yourself, what is health? What does it really mean to have health? We are used to defining it in terms of the absence of a disease or a disability or an injury.

11:30:25:02 But we haven't come to grips collectively or often individually with what are we aspiring to? What are the goals? How will we know when we're successful. And if we don't know what we are trying to accomplish, then it's very difficult to determine what knowledge gaps do we have or what do we need to do to be able to get there.

11:30:42:09 I think it's a paradox in our country where our life expectancy continues to increase that people's satisfaction with their health continues to decline. So there is a disconnect between the objective measures of health that we as scientists are so interested in and how individual citizens in our society really perceive their day-to-day health status or the health status of their family.

11:31:09:02 This paradox for us at CDC is a mandate that we have to engage the public in the decisions about our research and the decisions about our organizational goals and the decisions about how we engage all of our partners across the various sectors of the health system.

11:31:27:06 The second challenge that comes to mind in this context is the challenge of investment. I think Dr. Zerhouni said $96 per American on biomedical research ... at CDC we're spending, I think, by that calculus about $24 per American on protecting health.

11:31:43:22 That's a pretty big agenda for the level of investment as the Institute of Medicine was quick to point out in its treatise on protecting the nation's health that 95% of our total investment is based on restoring health and less than 5% of our investment is placed into protecting health in the first place.

11:32:06:29 So I think that speaks to our research agenda. It speaks to our first challenge, the challenge of how do we define success and what really are our goals and then it speaks, I think, to the opportunities that can come from being able to leverage our investments as effectively as possible on involving Research!America, for us at CDC, the federal agencies, the states.

11:32:28:24 I was very fascinated with the concept of bringing research from our governmental perspective into the state governmental perspective or the local government perspective in the way that you define. And we have to also be thinking about the global opportunities to leverage what we're doing.

11:32:46:16 Because as we know, the world is very small these days and our connectivity requires us to be thinking much more than about the domestic research agenda as it pertains to health. I think the last challenge is one that is something that I have implied about as much in preparing for this meeting.

11:33:09:07 We did have some discussions about how do you make prevention profitable. It is easy to see how disease care can lead to innovations and technologies and drugs and opportunities for investment in a corporate benefit or government benefit.

11:33:30:01 But it is a little less obvious to really connect health protection or disease prevention to the profit sector and I think this is just a challenge and an opportunity for us to come together in new ways and really think about how can we do a better job of engaging innovators and [the] business sector in focusing on health protection, not just as a the right thing to do but as something that truly does fuel our economy and lead to the kinds of innovations and economic development opportunities that we would all like to enjoy.

11:34:01:23 So again, thank you very much and I look forward to hearing from my colleagues.

11:34:10:21 Judy Woodruff: Thank you, Dr. Gerberding. Our next panelist is Dr. Joseph Feczko. He's the president, Worldwide Development and chief medical officer for Pfizer, Inc. Dr. Feczkco serves as Pfizer's chief medical officer, a board certified internist and infectious disease specialist.

11:34:30:20 His Pfizer career has included positions in international medical marketing, clinical research and clinical project. He has held top leadership positions for Pfizer's U.S. pharmaceutical's clinical development, outcome's research and medical planning developments and medical and regulatory operations.

11:34:48:12 Please welcome Dr. Joseph Feczko.

11:34:55:27 Joseph Feczko: Thank you, Judy and thank you to Mary Woolley, The Honorable Paul Rogers and The Honorable John Porter and all the staff at Research!America for hosting this conference, not only hosting for all the great work you do in promoting the research agenda in America and as we see from today, more globally, hopefully advancing it more globally.

11:35:16:15 I'd also like to thank Lt. Gov. Johnson for his reminder that investment comes in many forms and for pointing out another public-private academic type of partnership that is critical, I think, to continuing the innovation we have in this country.

11:35:30:19 My role at Pfizer as a scientist and physician is to really ensure that Pfizer's medicines are fully tested and fully understood so that we understand not only their benefits but also the risks that are associated with them as well. We do this because it's imperative that physicians who prescribe and patients who take our medicines have the best knowledge about what is best for them and what is best for treating their illnesses.

11:35:59:02 I do agree with Dr. Gerberding that our focus has been and it continues to be in the industry the area of disease treatment. And we have not been able to understand yet where our role is really in the area of disease prevention. I think it's a critical question to put on the table and see what we can do.

11:36:15:22 We are fully supported in our research agenda from looking at ways of improving health care systems and improving access to health care. We have in community research in those areas to try to look at health care systems both in the U.S. and outside the U.S. to try to find innovative ways to bring these to the forefront of people's minds.

11:36:39:12 So I think when we look at research, there's a variety of areas we can get into that may impact on the area of prevention through health access and health care delivery. One of our main focuses has been in the area of aging research.

11:36:55:27 And we always like to say it's not a matter of just adding years to life but life to years. And in doing that, it's important that we look at not only treatment of disease but also what aspects of prevention can help maintain a healthy and productive life as we all get older.

11:37:12:29 So I'm anxious to hear other people's comments and to participate in the discussion and debate that we're going to have about where we take the research agenda forward and how we can work together again in this public, private and academic partnership that I think is critical to advancing the nation. Thank you.

11:37:32:22 Judy Woodruff: Thank you, Dr. Feczko. Thank you very much. All right the next panelist we're going to hear from is The Honorable Deborah Wince-Smith. She is president of the Council on Competitiveness. She was named to this position in 2001, is an internationally recognized expert on science and technology policy, innovation strategy and global competition.

11:37:56:07 She served as the first assistant secretary for technology policy in the Department of Commerce Technology Administration from 1989 to 1993. She was appointed by the Secretary of Energy to be a member of the Secretary's Task Force on the Future of Science Programs.

11:38:14:06 Please welcome Deborah Wince-Smith.

11:38:17:21 Deborah Wince-Smith: Thank you. Thank you, Judy. Well, I'm delighted to also join this group of panelists. And let me say that Research!America really is, I think, one of our most successful models of how the public and private sectors can come together to really affect change.

11:38:37:17 And all that you've accomplished is something that we at the Council on Competitiveness are looking forward to learning from and joining with you as we build out our "Innovate America" agenda that was released at our national summit here in Washington, back in December.

11:38:52:17 And I would like to also recognize Lt. Gov. Johnson because the Council on Competitiveness, the group that I lead of CEOs and university presidents and labor leaders, we've done a lot of work all over the country regionally and we're very proud of our partnership with Ohio, and I'd like to say, Governor, that not only do you as we say, get it, but you're building the innovation eco system and we certainly can say that Ohio's probably one of our innovation hot spots.

11:39:22:09 And so congratulations on everything that you've done. And I want to just briefly say and the Governor really captured this, why is innovation important? Well, quite frankly, it's the only way we're going to have a standard of living and prosperity and maintain our security as well.

11:39:40:13 The United States, we're not going to compete on low wage. We don't want to compete on low wage. We're not going to compete and prosper on commoditized products, exploitation of resources. The only way we are going to prosper is to attract high-value investment and perform high-value economic activity here in the United States.

11:40:00:27 And the way to do that is through creating new value, new product services that compete and succeed globally. And really the United States is at an inflection point in terms of our innovation future and, you know, we all know many of the reasons for this, most importantly, we're operating in a very complex global environment in which we have for the first time the emergence of low costs, high-value innovators all over the world.

11:40:31:08 We also have a global competition for talent. We're seeing that in the outcomes of the recent debate and reality of outsourcing and we're also seeing an environment in which our model of innovation is being replicated by countries all over the world who want to create optimal business environments.

11:40:55:22 And that's all very good. And the other exciting and challenging reality we have to deal with is that the process of innovation is absolutely changed as well. And, you know, for those of us who've worked in the kind of trade arena over the years, it's very interesting to realize now that it's really a changed environment in which the producer and the supplier are no longer king.

11:41:20:14 It's the customer and the consumer and I think, Julie, you commented on that in terms of the public support for health care and what we need to do on that. So we've moved from a system from the producer calling the shots to what we would like to call at the council, co-creation, user-driven innovation.

11:41:40:01 It's complex, it's multidisciplinary and very importantly, it requires the integration of many, many different skill sets in an open system of collaboration, but one that also has some challenges on proprietary value creation. So with these changes of innovation, the global challenges themselves, the Council on Competitiveness really strongly believes in our report that represented the work of over 400 leaders, lead by the CEO of IBM ...

11:41:48:12 ... the integration of many, many different skill sets in an open system of collaboration, but one that also has some challenges on proprietary value creation. So with these changes of innovation, the global challenges themselves, the Council on Competitiveness really strongly believes in our report that represented the work of over 400 leaders, lead by the CEO of IBM and the President of Georgia Tech and cutting across all sectors is that our society has to completely optimize itself now around innovation.

11:42:22:19 And that really has to be our mantra. And we looked at the innovation ecosystem and very quickly just let me mention that there were three powerful platforms that we focused on: talent, investment and infrastructure, and looked at this risk-reward continuum across those platforms.

11:42:42:11 And on the talent side, let me just quickly mention a couple points. We need to encourage more Americans to go into math, science and engineering. And we need to do that in a bold way, not an incremental way. We need to ensure that our workers have the skills to compete in this global economy, in this innovation-driven economy.

11:43:02:28 And that is an area where the United States, quite frankly has a lot to do. We're spending over $20-something billion in work force training and unfortunately, most of that money is going to train people for jobs that will no longer exist in this country.

11:43:16:25 We have to ensure that we continue to attract the best and brightest to come and work in our enterprise. We have immigration laws that actually do the opposite. Turning to the investment, I was very pleased that Dr. Zerhouni mentioned the Pioneer Awards at NIH because actually, our recommendation in our report that all federal agencies devote 3% of their budgets to innovation acceleration awards was really based on your pioneer program.

11:43:45:01 So again, you were the role model for what we espoused for the rest of the federal R&D enterprise. How do we strengthen our entrepreneurial economy? This is one of our greatest strengths and to build on that, I think, with what's going on at the regional state level is absolutely imperative.

11:44:04:13 And I want to also mention on investment this whole conundrum of how Wall Street invests and rewards, and the time horizon for innovation-based investments is very, very significant. We were really pleased with the Council that the CEO of Morgan Stanley spent a lot of time with us to really come up with the new framework of how we want to move forward to understand intangibles.

11:44:27:10 Right now our markets don't understand intangibles and they don't have a way to value that. And that's going to be an area of Greenfield research that we're going to engage on. And finally in the area of infrastructure, there's a huge manufacturing renaissance underway and I'm just delighted to hear about, you know, your vision again in Ohio and the fuel cells with the use of high-performance computing and all these tools, we think that the United States will continue to be a major manufacturer in this new value proposition.

11:44:56:23 And finally on the health care, I was pleased that the comments were made about the lack of productivity in this sector and that is really why we recommended that in our national innovation initiative, we create a pilot around innovation and health care.

11:45:12:27 Because it really is not only a huge importance to our economy and we know for instance that many major U.S. companies are moving operations overseas just because of the costs of health care. But that is an area where we can do a lot of the innovation and have a lot of very powerful outcomes.

11:45:31:05 So with that, I look forward to sharing with you some of the other thoughts of what we are doing to build out our agenda. I will just close by saying that the council is very proud that Senators Ensign and Lieberman are in the process of introducing omnibus legislation to take these thoughts and recommendations and really build out a powerful legislative agenda for competitiveness and innovation.

11:45:55:06 Judy Woodruff: Thank you very much. And Ms. Wince-Smith, may I just assume when you say you're encouraging more Americans to go into math, science and engineering, that does include women, right?

11:46:09:06 Deborah Wince-Smith: Oh, absolutely.

11:46:11:23 Judy Woodruff: Sorry, that was just a side note there.

11:46:20:01 Deboarh Wince-Smith: I have to jump into that because I'm the mother of two boys and I'm standing up for boys these days too, so.

11:46:27:09 Judy Woodruff: I think it includes both genders. All right. Our next panelist is John Leonard, Dr. John Leonard. He is the vice president for global pharmaceutical development with Abbott. Dr. Leonard was appointed vice president of global pharmaceutical development at Abbott Labs in 1999, having joined the company in 1992 as head of the antiviral venture in the Pharmaceutical Products Division where he lead the development and introduction of HIV protease inhibitors, which served as we know as the basis of effective treatment for HIV. Dr. Leonard, thank you very much for being with us.

11:47:05:23 John Leonard: Thank you. It's good to be here and what I'd like to do is just maybe build on some of the themes that the others have raised and focus primarily on the people who do the innovations. I think there are many dimensions to what we're talking about.

11:47:26:03 But in the end, we're going to need the people to actually make these innovations. So stepping back and taking a long view, I believe that if we hope to prevent and cure illness as well as improve the health of humans, that we must understand nature. I mean that is the essence of science.

11:47:43:22 This understanding comes from two very rich traditions: the quest for basic knowledge and the application of that knowledge. Each of these approaches are sustained by the other. There are myriad examples where basic and applied research are intertwined and mutually sustaining.

11:47:59:11 And wherever we look, we see a symbiosis between a basic fundamental science and then its application. Each of these forms of science is necessary and each holds great promise for improving the health of the nation. So then how do we realize the benefits of both basic and applied science?

11:48:17:06 Well funding is always an issue, we've heard of some ways to go about that, certainly there's some interesting ideas here in Ohio, but the fundamental fact is that there cannot be good science without good scientists. And we must stimulate young people to see science again both basic and applied as the exciting adventure that it is and one that can serve the public good.

11:48:40:12 In our culture of celebrity, I suspect many Americans would struggle to name a leading scientist. And I suppose now that more children aspire to playing a scientist on TV, to actually being one in real life. Statistics bear that out. Fewer American children pursue a career in science than before.

11:48:57:18 Less in the U.S. in 2004 now rank 17th and the proportion of college-age students who earn natural science and engineering degrees. This is a trend that must be understood and it must be reversed. Perhaps some of the wonder in the sense of satisfaction that comes with solving difficult problems is lost early in our students.

11:49:20:07 That weaning emotional pull is compounded by not aggressively linking the nation's health and prosperity to the science that undergirds it. This may be a deficiency of how we educate ourselves but may also result from failing to stimulate imagination and curiosity.

11:49:35:05 Taking seemingly simple things for granted, like clean water and functioning sewage systems is the first step down a path that leads to assuming that antibiotics always existed and that medical breakthroughs will endlessly flow.

11:49:49:26 These are very dangerous assumptions. When a medical breakthrough does emerge, it seems that many believe that it was inevitable and it will be definitive. We sometimes portray these advances as automatic, the latest model emerging from an assembly line of innovation.

11:50:07:06 And when the unavoidable shortcomings become clear, such as the realization new medications can have side effects, we're quick to call the whole process into question. The breakthroughs come only with great perseverance, massive, personal and frequently financial investment and they're rarely perfect.

11:50:25:13 The consequences of a lack of well-trained scientists are far-reaching. In the health industry, a shortage of clinical laboratory scientists affects not only patients but also the war on terror since scientists are essential in detecting and responding to the attacks involving biological and chemical weapons.

11:50:43:20 And the shortage of scientists undermines public health measures, arguably the greatest contributors to the strides we've made improving life expectancy in America.

11:51:12:25 So here in the United States, it's crucial for all of us and certainly for the government to act now to meet future needs in science, engineering and technology with scholarships, financial assistance and other incentives, plus a national effort to build a base of knowledge encompassing international science and engineering work force dynamics.

11:51:32:08 Without such action, our country puts itself at a disadvantage for access to life-saving advances and it hinders our defense against bioterrorism and other growing threats while not prevailing over old foes like cancer and AIDS. These challenges can be overcome but only if there are trained scientists to lead the way. Thank you.

11:51:52:10 Judy Woodruff: Thank you very much. I guess that was a reminder that we really are dependent on technology. Right? All right, the final member of our panel that we're going to introduce right now is Wendy Chaite. Am I pronouncing it correctly, Chaite?

11:52:12:18 Wendy Chaite is a trained attorney who, in 1998, left her legal career to found the Lymphatic Research Foundation. Like many advocates, she had a very personal experience driving her motivation. She has a child who was born with systemic lymphatic disease and lymphedema.

11:52:32:05 Under Wendy's leadership, the Lymphatic Research Foundation has been instrumental in advancing the field of lymphatic research. Please welcome Wendy Chaite.

11:52:48:15 Wendy Chaite: Thank you. It is an honor for me to serve on this panel of distinguished health care leaders and represent the patient voice in addressing the issue of research, the risks, the rewards and the returns. When most people conceptualize research, they think in terms of scientific methods applied to a process of investigation with a zeal for new discovery.

11:53:12:25 But for patients and their loved ones, research equates with hope. It is that sense of hope that provides courage and motivation for the millions struggling with diseases, each fighting his or her private battle to confront daily challenges.

11:53:33:03 Despite the great promise research has to offer, I don't doubt that most, if not all of us here, whether we are providers or beneficiaries, have been in one way or another discouraged or disenchanted by the health care system and research enterprise.

11:53:48:16 Speaking for myself as a parent of a child with systemic visceral and peripheral lymphatic disease and lymphedema, the system has failed our family. For example, lymphatics have been for the most part, a neglected field of research. They are barely addressed during medical school.

11:54:07:27 I can count on one hand the number of physicians who can claim to know even a little bit about lymphatic diseases and lymphedema, and if one considers treatment opportunities, these are primitive, often lacking scientific validation, pharmacological support and are in large part not covered by insurance.

11:54:28:23 These shortcomings are not unique to medical problems faced by the patients I represent. Countless other disease entities can be represented on this panel and would undoubtedly underscore similar inadequacies of the system. Hence, it is the collective voice of patient advocates that I represent today.

11:54:48:23 Despite the great progress of science (inaud.), the system has inadvertently abandoned the patient community and the public at large from access and quality of care issues to trust and transparency to unsafe drugs in the marketplace. I would not be so arrogant as to propose a solution.

11:55:08:13 The issues are complex. Politics, self-serving interests, territorial and competitive issues often interfere with making significant, meaningful and lasting improvements. So perhaps the most meaningful message I can reinforce today as we look to innovation and building alliances is to underscore the urgent need to reprioritize components of this complex research and health care system.

11:55:39:15 It is imperative to consider methods and processes that will be responsive to human disease and preserve human health. This applies to both public and private endeavors. Human health is about people, yet somehow within the evolution of our research and health care system, the patient has been placed on the sideline.

11:56:02:17 Most times, we are not part of the process, not part of the conversation and, at times, entirely disregarded. Not all is bleak. In some arenas, we're witnessing early indications of a movement of patient inclusion. As represented in the roadmap and COPR, nevertheless to enact meaningful change, the current mechanisms that shape and control our research enterprise and health care delivery system must regroup, reorganize and establish new paradigms that incorporate a genuine responsiveness to the patient voice.

11:56:40:23 The rewards and the returns of such effort are self evident. Recent history highlights the risks. The collective failures that have been illuminated over the last decade are far too-costly in time, money, energy and, most importantly, lives.

11:56:57:26 On behalf of all patients, please help us maintain a spirit of hope and may the concept of innovation be a great opportunity to include the patient.

11:57:18:13 Judy Woodruff: Thank you very much, Ms. Chaite, and as the mother, a parent ,of someone who was born with spina bifida, and later experienced a brain injury, may I associate myself with your remarks as with the patient community. I also want to recognize again, Lt. Gov. Bruce Johnson, of the state of Ohio.

11:57:38:16 We're fortunate that you're going to be here joining us for the panel, in addition to the remarks that we hear from you earlier. I wanted to start with the question about resources but I think given what we just hear from Ms. Cahite, I thought I would, without putting anybody on the spot, I thought I would first ask Dr. Zerhouni and Dr. Gerberding to respond to what we just heard from her as an advocate for patients. Dr. Zerhouni.

11:58:01:29 Elias Zerhouni: First of all, I think that it is very important to not just talk about involvement of patients in the research process, but institutionalize it. And this is where, I think, Wendy was mentioning the road mathematical research, and we have identified this as an issue that actually was brought up to us by scientists themselves.

11:58:25:18 It turns out that unless you have in today's world the ability to interact with communities of patients and then include them in the communities of research that you need, you can't conduct your research. It's that simple. And the reason is obvious for all of us to see.

11:58:43:16 And that is, over the past 30 or 35 years, the landscape of disease has changed. We've gone from a world where diseases tended to be short-term [and] lethal to a world where we have, we can now survive and live with chronic diseases, cancer for example, the survivorship rates in cancer has doubled.

11:59:07:04 And in conditions like the one you're mentioning for your child, it's the same issue. The issue is you can't really conduct research without now involving aggressively the patient communities for them to participate in the research.

11:59:23:02 Now as we look at that, it is also obvious that public trust is going to be critical. And we can't maintain public trust without transparency and the obvious comments that we heard are, this is work in progress, we need to continue to do that.

11:59:41:09 So that's my response. I think, as scientists, we absolutely understand that there will be no translation of fundamental discoveries without involvement of patients in communities of research. It's a new concept really, which I believe personally needs to be encouraged and stimulated by making sure that the ivory towers of academic health centers, which used to care for patients who would come for staying for weeks on end in academic centers, is no longer the paradigm of today.

12:00:11:00 Patients come for a very short time, then go back to their communities and therefore we need to adapt to that.

12:00:17:11 Judy Woodruff: Dr. Gerberding.

12:00:17:11 Julie Gerberding: Thank you. I was just thinking about I started my medical career at San Francisco General when the first AIDS patients were being recognized and admitted to the hospital and they were my best teachers. I really think that growing up in that particular environment professionally and learning about the power of the patient and the wisdom of the patient and the ability of patients collectively to not just advocate for specific kinds of treatment or specific kinds of respect, but to really teach us about how critical the patient really is in the context of medical decision making and how vital it is to the successful outcome.

12:00:59:27 That's just something that's been part of my professional development in coming to CDC, which is a public health agency and really recognizing that the public is not necessarily a collection of patients but a collection of people.

12:01:11:25 We can't do our job if we don't really engage people in the process of determining our priorities and certainly our research priorities. We have a little bit of practice with this. I think the community base participatory research model that we've used, which requires investigators and academic centers to engage the affected population in the design and development in formulation of the research and also to participate in the whole process of conducting the research and evaluating when it's over, has been extraordinarily successful.

12:01:44:15 And I wish someday I could tell you some of the wonderful things that have happened through application of that model in a variety of communities. But it's just the first step. But I agree with Dr. Zerhouni. This is learning, and not everyone within CDC or even within the public health community thinks this is the right thing to do.

12:02:02:17 There are still a lot of people who believe that "we know best" and that we'll tell you what is the right thing to do. So I'm learning and relearning and experimenting with new ways. It is a process that takes time and patience but also leadership.

12:02:19:07 And I think around this table, we're very committed to that at least in concept.

12:02:22:00 Judy Woodruff: Anybody else want to comment? Ms. Chaite?

12:02:23:27 Wendy Chaite: I just want to say I happen to be a member of the NH Directors' Council Public Representatives, COPR. And I encourage each and everyone of you on the way out, there's a sheet of paper there from the COPR Web site, various reports that were very meaningful and thought-provoking on the issues of public input in transparency and the like.

12:02:49:29 And I think that taking the time to read those reports and hearing from the public the views, we're really out in the trenches. We live it. And I think taking the wisdom that we can share will help you effectuate a better tomorrow for all of us.

12:03:09:11 John Leonard: Yeah, if I could just add. Speaking from a company's perspective, which is a very different agenda I suppose than from publicly funded research, for us it doesn't always start with patients coming to us. We look at it from a perspective of problems that we can solve.

12:03:31:04 I mean, this is a very, again, going back to the comments I said, applied approach. We think of where's the science permissive? What can we do to actual solve a problem? Once we have an understanding of how we think we can proceed, we attempt to engage patients.

12:03:47:10 And I know, again back to the AIDS history, we've had patients sit down and help design the very trials that we're going to do because they are ones who are going to be subjects in those trials.

12:03:59:19 Wendy Chaite: May I just make one comment. We all talk about translational research from bench-to-bedside and perhaps especially for industry, looking at it actually from bedside-to-bench-to-bedside, might be a good way to start.

12:04:15:10 Judy Woodruff: OK. I want to get back, thank you very much. I want to get back to something that Dr. Zerhouni, a couple of things that he said about the big challenge to accelerate the pace of discovery. He went on to say right now we're spending what, about $5,500 per year, per American on health care.

12:04:34:03 He talked about it taking an increase in the percentage or the amount of the gross domestic product and he said, but we're simply a .01 percent change in productivity of our medical system; that's $3 billion opportunity. I want to come to both Deborah Wince-Smith and Lt. Gov. Johnson to ask if that's realistic or is that pie in the sky? What do you think, Gov. Johnson?

12:04:59:09 Bruce Johnson: One, I'm not an expert in the field. I do know that the cost of health care is a challenge for everybody. We happen to be a massive employer in our state and so the increase in cost of health care are a challenge there. But we have started a partnership between various of the health care institutions in our state and the government on a focused area in the computational medicine that the folks, particularly at Ohio State believe can over time reduce the costs of health care when the research is fully utilized.

12:05:33:02 And so perhaps there can be focused research dollars on health care costs and health care delivery and reducing unnecessary steps in improving the productivity of the health care system as we move along. This challenge in state government budgeting for example, if we could put a reasonable amount of resources on this issue of improving health care delivery, but at the same time, being more productive, then we could balance the budget in the meantime.

12:06:09:25 Because clearly the animal that is eating our state's budget is the Medicaid system.

12:06:16:17 Judy Woodruff: Dr. Zerhouni.

12:06:16:29 Elias Zerhouni: I'd like to comment, if you don't mind. There are two approaches to this and I'm referring to one of them. There's, I mean, obviously improving productivity with what we know today. The question that you ask, Judy, is this really pie in the sky about us being able to control these costs over time?

12:06:37:29 I would agree that if we do not innovate, it is pie in the sky. And the reason is very simple. And that is health care delivery is very people dependent. And therefore it's very hard to improve productivity without new discoveries and new innovations.

12:06:50:15 So when I say .01 percent increase, I really imply understanding at the fundamental level the path of biology of disease years before it strikes. It's a little bit what my colleague, Julie Gerberding, was saying. If you intervene at that point and time and you prevented the $1 million transplant or the $100,000 by-pass surgery, you could really make an impact.

12:07:17:14 And that's what I'm talking about, fundamental, new discoveries that will enlighten us about the disease process years before it strikes. Best example is diabetes. I mean, we've known that diabetes is due to a lack of insulin for 75 years.

12:07:31:05 The question is what, in the complex protein networks that act 20 years before diabetes sets in, what is it that you could intervene in to prevent that from happening. And we're seeing that already. I mean, with statins, we are seeing a marked reduction in heart disease and coronary heart disease.

12:07:51:17 So it's not pie in the sky, but it will be dependent on practicing medicine in 25 years in a way that is completely different than we practice it today.

12:08:02:19 Judy Woodruff: Dr. Feczko.

12:08:04:05 Joseph Feczko: Yeah. I was just going to echo some of what Dr. Zerhouni and Dr. Gerberding were saying, is this gets us into the prevention area again. So there is a certain amount of efficiencies you can always get out of any system. And the health care system has never been viewed as a terribly efficient one just because of the nature of the way it's been done.

12:08:17:19 There's a lot we can do probably with better IT systems and linked medical records and things like that. But having said that, prevention is the key. I mean, everyone knows that preventing a disease is much, much cheaper than treating a disease.

12:08:27:27 And if we can keep people healthier and whether that's through better understanding, better diagnosis, earlier diagnosis, work we can do to maintain better health, body weight, what have you, we can go a long way to actually spreading the costs of health care much more broadly.

12:08:45:11 As we see, the costs goes up as we age. And a critical issue here is to keep people healthier as they age so they can be more productive in life, so they're not so consuming of the health care system.

12:08:56:23 Judy Woodruff: We heard Dr. Gerberding say it's just 5%. You've got 95% of the health care dollar going into care and treatment, 5% into prevention. It's extraordinary, isn't it? Or, prevention is so important.

12:09:12:07 Elias Zerhouni: Sorry, if I may.

12:09:14:03 Judy Woodruff: Sure.

12:09:15:10 Elias Zerhouni: If you knew everything there was to do about prevention today, then I would say absolutely. The fact is that if when I go to assemblies of scientists and public members and I say how much do you think we know of what we need to know to be effective, you know, mechanically effective so that Dr. Leonard and Feczko can develop and apply?

12:09:40:00 You know the answer I get is that we know about 10% of what we need to know. We have no clue right now on why a dopamine neuron loses the ability to produce dopamine. We have 11 different theories but boy, if we knew what happened at age 40 or 41, we could intervene.

12:09:55:00 So in many ways, the imbalance is reflective of our ignorance. That's the point. And the fact that we're so ignorant forces policy choices to be directed to spending at the end of the disease process.

12:10:10:01 Judy Woodruff: Well, how much of that ignorance is a function of the priority the way dollars have been spent, that they haven't been put into basic research?

12:10:18:27 Julie Gerberding: You know, I would just say a couple of weeks ago, there was a wonderful press conference here in Washington on the success of the tobacco campaign. We have the lowest ever tobacco utilization rates among teenagers in our country and in fact, even among adults.

12:10:33:15 We're continuing to see some fairly steady declines at least in the states that are using their tobacco dollars for these purposes. And it was fascinating to me because you can attribute about 26% of the decline in adolescent tobacco use directly to this campaign and in a dose-dependent way.

12:10:51:05 So the campaign works. But, you compare what's being invested in the campaign to what the tobacco industry is investing in tobacco promotion, and it isn't even close. And so that's where we have the struggle. Yes, the knowledge and the innovation and prevention needs to be stimulated, but there are things we know right now that are working and we're still not investing in them.

12:11:17:20 Deborah Wince-Smith: I'd like to comment on the aspect that nobody's really mentioned yet about this whole health care system is a business. And the fact that it does have very, very low productivity. And the fact of it is the only reason why the United States has done so well in the last 10 years compared to the rest of the world is we have the highest productivity across virtually all of our industries, with the exception of health care and education, that are very low [inaud.] ...

12:12:04:22 ... [In] America we're outsourcing and, you know, manufacturing movement overseas is what happens to that health care. So to accelerate portability of health care and pensions are two huge issues that are part of this innovation challenge. The other area that I think needs to be mentioned is the pivotal importance of tort reform.

12:12:26:23 Share some statistics. Right now the United States, and this is a conservative number, we spend close to 2.3% of GDP on tort payout. No other country in the world has that burden imposed on us. It's a chilling effect on research. It's a chilling effect on what companies do.

12:12:47:14 And there has to be some rationality brought into that. So there are a whole set of business parameters, you know, the third pay... I'm not an expert on health care business by any means, but I do know that some people who are have told us that, yes, IT systems will improve.

12:13:02:13 They'll bring business efficiency into it. But we're not going to solve the health care system with IT alone. And so I think one of the challenges here is how you treat this as a very important competitive business, but at the same time bring the human element and the patient element because, again, I was-I was very interested in Wendy's comments because I made that little reference in how innovation has changed, that it's user driven, and yet you mentioned that for the most part the patient, the user, the end customer is really not up front.

12:13:36:28 And that's a different situation that almost in any-every other activity...

12:13:43:08 John Leonard: Can I just build on the $5,500 number? It's an instructive number, but I'm sure that's arrived at by adding up a bunch of things from many different columns and coming up with a total and dividing it.

12:13:55:01 Elias Zerhouni: No, that's the G-O study.

12:13:56:12 John Leonard: No, no. I'm not saying it's a wrong number ... Well, my point exactly then. Okay. But I think one of the limitations is that no one really is responsible for that number. So there are many different pigs that feed at that trough if you want to put it in those terms where we don't optimize what we get for that $5,500.

12:14:21:27 So I don't know what the right number should be for prevention. I mean, a question is, "Well, what could we prevent and do we maximally prevent it?" I mean, you're obviously saying that we don't solve a very basic problem like tobacco use.

12:14:35:29 But I think we have so many different sources of information and people who are responsible for small slices of the pie that if we attempt to optimize within those individual slices, we don't optimize across the entire health care dollar.

12:14:51:29 Judy Woodruff: One question I have from some of the literature that I've looked at. It seems to me the public is in favor of increased research. They seem to favor... They understand that medical research, science-basic research, as much as they understand, it is important. And, yet, that willingness to support that isn't always translated from the-from what is at least in the perception of the public to the policy makers.

12:15:16:29 Why is that? What are we not doing here? What should we be doing? You know, how are decisions getting made about these things?

12:15:26:28 And what's right with it and what's wrong with it?

12:15:29:00 John Leonard: OK, could I say one thing? I don't know about what research means to most people, but where I live and what I do, which is clinical research, you know, we go and develop drugs. What we see is, generally speaking, a decline in the willingness of patients to participate in clinical trials.

12:15:47:08 What we're seeing increasingly in our industry is people moving clinical trials offshore to lower cost providers. That's one ... You know, it's an economic reason, but also it's the availability of patients who are willing to participate in the clinical trial process.

12:16:05:22 I think going back to this notion of social responsibility and looking at health investments, whether it's time, volunteering or dollars as a social good, I think it's always easy to ask another person to participate in the clinical trial and to decline participating yourself unless you have some very significant pathology for which participating in that trial is synonymous with getting care.

12:16:34:08 Other than that, we find that a lot of people turn away and don't participate.

12:16:40:15 Judy Woodruff: Anybody want to pick up on that? Dr. Zerhouni.

12:16:42:21 Elias Zerhouni: You asked the question about what's the disconnect between research and policymakers, and I thought that there's no proportionality between the importance that we hear or see in terms of ability to innovate and improve productivity with not just doing better what we know today, because at the end that's limited when you're dealing with a people-intensive activity.

12:17:05:28 And when you look at policy makers ... I have a provocative statement to make and I'll make it to the Lieutenant Governor. Every political race that is run in the country is determined by "Have you created jobs? Have you created an economic environment?" I haven't yet seen a race where the health of the people in that district, where an indicator to the same extent, you know, housing markets and economic growth and job creation were.

12:17:41:16 If we could develop ... And I think Dr. Gerberding is doing that. I mean, she has a terrific new surveillance system. Looking county by county about what the health of that population is and if the representatives understood that lacking an objective improvement in either education, by the way, I mean, I think that's an important parameter, or health.

12:18:05:07 If we could somehow change the culture so that accountability of the political level, policy maker level, was connected to indicators that are different than whether the stock market goes up and the job market is... Something like this is, in my view, something that we need to talk about.

12:18:22:00 I don't have the solution, but disconnect might be there.

12:18:28:06 Bruce Johnson: Let me... I agree with much of what you said. Trust me, Politicians can get frustrated with the basis upon which the public and the private sector and individuals make decisions in themselves. But what many of others have done is instead of trying to fight that trend...

12:18:44:26 It's very difficult to change what people perceive as the most important thing in their life. So if they perceive that the threat to their economic stability is the most important thing in their life, my view is go with it, but also suggest how improvement in health care, improving research impacts.

12:19:06:00 And that's what we've tried to do with this Third Frontier initiative. For example, trying to suggest that improvements in research and improvement in the quality of life actually has a positive impact on your employability over time. So you can utilize your research initiatives and the improvement of the quality of health care as an advantage to the other things that people care about.

12:19:30:14 How their children are going to grow up, where they're going to be educated, when they're going to be educated, what they're going to utilize those tools for in terms of the job market are all part of the health care system. And so I think it can be utilized in that way as opposed to trying to change what their own priorities are.

12:19:48:20 Deborah Wince-Smith: That's a-that's a great, interesting, interesting idea. And there's already some activity where it's showing the value, what you said, Dr. Zerhouni. In some of our regional innovation work we've been able to document in surveys that parts of this country that are attracting some of the best and brightest entrepreneurs and developing very dynamic innovation clusters, the whole health care infrastructure in those communities are either an attractive magnet for people or the cost, the unavailability of what they deem to be first-tier health care keeps them away.

12:20:25:10 So right now that's a metric for where people want to live, raise families, do work. And then the other interesting piece of this is that some new research is being begun and we're working with some economists to actually develop a metric to look at health care, not as an outcome of economic growth, but as a productivity enabler.

12:20:48:01 And that's sort of Greenfield research and it completely changes the debate again about how the investments will be made. But this is not something you get after you've had a certain standard of living. But it drives all of that.

12:21:00:22 Wendy Chaite: I think Research! America, I'm on their board, that's really one of the messages with the economic impact, with... And I think it's something to reinforce. And I'd like just to highlight that just as Research! America's tagline is "An Alliance for Discoveries", I think there's great opportunity for alliances beyond just within Research! America.

12:21:23:03 I mean, there needs to be alliances even within HHS. There needs to be alliances between government and industry. We all really need to find that very big sandbox and work together to solve the problem because we're talking about preventing disease, and well-being. And until the infrastructure invites that and supports that, I think so much of what we do is based on Band-Aid responses and sort of picking up the pieces.

12:21:57:10 And, you know, as a former attorney, you know, the whole tort reform, it's everybody sort of vying for their piece. So I think that through the concept of innovation there's tremendous opportunity to create a new paradigm. And I know it's very difficult because, look, just even in the academic institution, an individual researcher's promotion is based on self-preservation of publishing singularly.

12:22:25:00 And so he, obviously, or she, has to raise a family, you know, put their kids through college, so they're going to sort of think about themselves. And, yet, as we can see, collaboration and working together and creating alliances is really the answer. And, yet, our system does not lend itself.

12:22:45:21 So unless we really examine the system, whether it's in the academic institution or whether it's even industry and how industry works and the motivating factors, and if we all can just sort of put our egos aside, our agendas aside and work together, I think we can come up with some very wonderful solutions.

12:23:08:05 Judy Woodruff: This may not be the best town to talk about putting ego aside. I'm sure it's true everywhere. I want to... Before we take questions from the audience, and we do want to do that, I want to raise something that's, of course, been in the news recently about the-what we know to be risks with pharmaceutical discoveries.

12:23:26:15 Let's talk for a minute about how do we talk to the public about the very real risks with medical research? One of you said this very, very eloquently. That it's not always a straight line. I mean, there are zigs and zags along the road to finding the right answer.

12:23:48:23 So let's talk about, you know, the risks of research at times, the risk benefit ratio of-in connection with that of speeding up or slowing down the Food and Drug Administration approval process. We're going to be hearing from the Acting Head of the FDA at lunch, but who wants to begin that conversation? Yes.

12:24:07:19 Joe Feczko: Well, since I've been intimately involved in this for the last several months. You can look at risks from a couple different ways on this. There's the risk of the research. And, as Dr. Zerhouni said earlier, that, you know, there's no guarantee that when you go down a path that you'll actually come to something that's productive at the end of it, there's a lot of false starts and false stops and that you end up having more failures than successes.

12:24:38:06 But even when you have those successes in the area of pharmaceuticals, for instance, and it can be... I think we can extrapolate this even to medical interventions, either surgical or what have you. There are certain things you can know early on. And this issue of risk-benefit is something that we're losing track of a bit.

12:24:56:08 And maybe we just haven't done a good enough job of really talking about it and educating the public. That there is no such thing as a risk-free medicine. If a drug is pharmacologically active, it's going to have side effects. If it doesn't have side effects, it's probably not going to be pharmacologically active.

12:25:10:00 And we don't get that message across. Now how do we track that and how do we understand that and how do we not only find out what is going on with those drugs but how do we communicate to the public? And I do agree that there has been some good discussion lately about the need to enhance the drug surveillances.

12:25:26:01 I don't think it's a matter of slowing down the process at the FDA. I don't think that's necessarily a good thing for anybody cause it doesn't bring innovation out. And at the end of the day, no matter how many patients you study pre-approval, rare side effects and usual side effects are still never going to be found.

12:25:38:15 It doesn't make any difference whether there's 10,000 patients, 20,000 patients, 30,000. You really don't find what could be potentially a problem and put that into context of the benefit until the drug's actually being used. But the thing is how do we track that?

12:25:52:08 We have a terrible system right now around the world actually and in the U.S. for tracking that. We rely very heavily on spontaneous event reporting that may or may not have anything to do with the drug that's being given. It's reasonable for detecting signals but not for really analyzing what's going on.

12:26:07:08 And I think-I'm hopeful that some of the discussions that are going on with the FDA right now... And actually, to be honest with you, it started a couple of years ago with the (inaud.) legislation. There was money put aside and there was thinking behind that a risk-benefit analysis, after drugs are on the market, risk management epidemiological studies, that should be really done much more proactively in a much more structured way so we can analyze what's going on rather than...

12:26:31:15 Judy Woodruff: One thing I'm curious about is how do you keep expectations realistic? You can hardly turn on the television now and not see an advertisement for a pharmaceutical product with, in many cases, very grand promises, and anytime day or night when you turn on... So how do you-how do all of us, you know, gear that down a little bit and, you know, make it a more realistic dialogue that's going on and set of understandings? Dr. Leonard, do you want to jump in?

12:27:03:03 John Leonard: Well, I don't know the answer to the DTC thing that you're raising, direct-to-consumer advertising. I think, in many respects, it's overdone and overstated. And I think that that needs to be coupled with exactly the point you're making here which is an ongoing assessment of the risk benefit analysis for individual patients.

12:27:24:10 We can't let people, patients, you know, come in with a false sense of expectations, realizing that-thinking that there's no downside to taking a drug. It's just not true. You know, there is a very basic problem tied to innovation. I mean, if it's true innovation, it's making something that's new.

12:27:46:04 It may never have existed before. And when a new drug comes out, typically that will be explored in a few thousand people, 5,000-6,000 I think in the case of Viox, not to pick on that particularly... But it's an illustrative example. I think in the original new drug application there were 5,000 people exposed.

12:28:05:08 That's a fairly good-sized, new drug application. In the United States ultimately over 20 million people were exposed to that particular drug. And if you think about it, there's this ongoing continual expansion in what we know about this new thing that originally was exposed to only 5,000 people.

12:28:27:10 And to believe that what we learned from those 5,000 people will illustrate and exemplify everything that will ultimately occur in the 20 million people who ultimately take it is absurd. And so you have to come back to this notion of shared responsibility. The company which, in this case, innovated it, whether it's Abbott or Pfizer or Merck or whatever, we can only know what we see directly in experiments that we do.

12:28:59:11 And then once it's released to, call them, "free range" patients and "free range" doctors who may operate with the guidance of a label, they too have a responsibility, which is when they see something, to report it. And then we-and we hope to shore up how and where we get this information so that this continual learning that takes place will let us reset the bar between the risk-benefit analysis.

12:29:25:22 It is never done. And I think that one of the problems we face is that we have this, and I say "we", we Americans have this desire to make it sound all so simple and so neat and formulaic. It's not. It is a continual process. And that's what comes with innovation.

12:29:47:28 Judy Woodruff: Well, certainly the media has a role. Anybody want to comment on that any further before we take questions from the audience?

12:29:53:21 Deborah Wince-Smith: I have one comment and this is just an interesting model. When all the publicity came out about the downsidesof hormone replacement therapy, many different articles and-it was interesting to see how individual women's and women groups came together around that.

12:30:10:23 And it's interesting that none of those medicines have been pulled from the market, but what has occurred is that women are making their own risk assessments. And I recently asked my doctor and he said 80% of his patients who went off those medications are now all back on them because they have personally decided that knowing the risks, this is what they want to do and are tailoring it to themselves.

12:30:33:28 And so it's an interesting sort of example of how that education process was dealt with. And, again, building on what you said, the patient took responsibility. They got the knowledge, they got the information, they worked with their doctor and they decided what they were going to do.

12:30:50:25 Elias Zerhouni: I think it relates to what I said before as well. And the-and that is that the pattern of use of medications in this case or whatever procedures would come up with is changing. It has changed. Seventy-five percent of our expenditures are related to chronic diseases.

12:31:06:12 So what you see a lot is long-term utilization. Like hormone replacement therapy is one example, hypertensive drugs is another example, Cox (ph.) 2 inhibitors and... So what you're seeing is a change in the pattern that has never occurred before.

12:31:23:14 Historically, we had treatments for cancer, for example, and you made it or you didn't make it, and heart disease you intervened ... Antibiotics was the paradigm. You know, you found one molecule that really controlled an infection, you were back to health. That paradigm is not-no longer operating.

12:31:40:20 And I think Dr. Leonard is saying it well in the sense that we do not really have a good, core surveillance system in the country that looks at the denominator. So, yes, we report complications, but you really have no idea of how many patients really took that drug.

12:31:58:16 And it's something that we need to tackle. I know the FDA is leading an effort in that regard. But as a society, I think, we need to also realize that we have also become better scientifically at identifying risks. See, the effect of all these news that are co-the news that you-the media also sometimes amplify is related to better methodologies for us to find biomarkers that are indicative of a particular risk than we did before.

12:32:28:09 So for 30 years the dogma was that hormone replacement therapy was good until NIH did a women's health initiative. And $600 million later we're finding all of the issues that were dogma before... The same thing is true in they all had trial that was done by the National Heart and Lung Institute in terms of using hypertensive drugs.

12:32:49:04 But it is not possible, I believe, to impose the costs of doing this one at a time. We need to come up with a smarter system probably with a surveillance mechanism and better information technology to do that.

12:33:06:08 Judy Woodruff: All right. Thank you. Now we want to take some questions from the audience. I'm going to ask you to stand. Do we have a microphone? I think we've got a couple of microphones. If you could stand and give us your name and a question. We haven't from Dr. Gerberding in a few minutes so we're especially interested in questions for her.

12:33:18:29 But that's all right, if you don't have one for her, you can start with someone else. Yes, sir.

12:33:24:20 Audience Member: A question about globalization. A major issue in this country, when it comes to globalization, is outsourcing. And up until now we've been thinking about outsourcing in terms of manufacturing in certain service functions like call centers and clinical trials.

12:33:45:16 Now we're being told that a trend is emerging in this country of outsourcing research. This week's issue of Business Week there's a cover story saying that more and more American firms are outsourcing their research activities. And my question is to both the government and the industry representatives here, what are the long-term implications, if this is, in fact, a trend, on things like the employment of American Ph.D.s in America if this happens?

12:34:21:28 Judy Woodruff: All right. It's a pretty direct question. Who wants to start? Dr. Feczko.

12:34:25:17 Joseph Feczko: Well, if it really does move to the point of aggressive outsourcing of basic research, it could have a very significant impact. You see this already in places in New York where major research centers have moved out of Switzerland and Germany and have located, actually, to the U.S. for the most part.

12:34:45:24 So it could if it's really happening. To be honest with you, I don't really see that happening. I'm not too sure of the statistics on the basic research or Ph.D. type work going off-shore. We, as a company, are a global company.

12:34:59:20 We actually do research in Asia. We do research in China. We do have centers set up there. We have centers set up in India. But it would be foolish for us to think that we are-even though we're an American company operating globally th