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Fostering Innovation in Medicine and Research Eve E. Slater, M.D., F.A.C.C. Assistant Secretary for Health Department of Health and Human Services 2002 Charles C. Leighton, M.D., Memorial Lecture University of Pennsylvania October 18, 2002 Thomas Jefferson’s Library United States Library of Congress Memory Reason Imagination 1900-present A Century of Innovation • Increased Life Expectancy • Increased Cancer Survival Rate • Decreased Cardiovascular Mortality • Advent of Vaccines • Human Genome Project . . . . . . . . . . . . . . . . . . . . .and so much more Investment in Medical Research and Care more in improved health than “weReceiving pay in treatment costs implies that medical care is a more productive investment than the average use of our funds outside the medical sector. ” Cutler, McClellan, and Newhouse 1998 Federal Funding for National Institutes of Health (NIH) • Doubling of NIH budget in 5 years (1998-2003) to $27 billion in Fiscal Year 2003 • NIH budget in 1960: $182 million • Clinical research funding: 32% of budget (Fiscal Year 2001) PhRMA Member Companies’ R&D Expenditures and NIH Obligations PhRMA Domestic R&D PhRMA R&D Abroad PhRMA Total R&D NIH OBLIGATIONS $30 ($ Billions) $25 $20 $15 $10 $5 $0 1970 1974 1978 1982 1986 1990 1994 1998 Selected Federal Legislative Milestones • Bayh Dole Act (1980): removed barriers to patent ownership from federally supported research $40 billion/260,000 jobs (1999) • Stevenson Wydler Act (1980): stimulated public-private partnerships • Orphan Drug Act (1983): encouraged research and development for drugs for orphan diseases • National Cooperative Research Act (1984): eased antitrust concerns • Waxman Hatch Act (1984): protected intellectual property • Federal Technology Transfer Act (1986): stimulated technology transfer • Clinical Research Enhancement Act (2000): encouraged funding for clinical research “ These new paradigms will require a reexamination of the structure of the U.S. medical research institutions and government to ensure that they reflect and accommodate new multidisciplinary research and development processes. ” Senator William H. Frist, M.D. Journal of the American Medical Association, May 2002 Institute of Medicine Reports on Quality • Medical Errors: approximately 45,000-100,000 per year • Cost: approximately $17-$29 billion per year • Hospital Drug Errors: approximately $2 billion per year “ The Administration supports your (U.S. House of Representatives) efforts to pass ... and enact legislation to remove the liability barriers to improving quality and safety of health care. ” Secretary Tommy G. Thompson September 10, 2002 Drug Development Costs (source: Tufts CSDD) 2002 cost = $802 million • 19% reduction in all phases length = $100 million saved • 21.5% to 25.5% increase in clinical success rate = $100 million saved • If phase III studies decrease by 1 year = $71.4 million saved • If 33% decrease in development and regulatory review time = $1.7 million saved Innovation and Cost Memory: Federal Funding and Key Legislation Reason: Translational Research Prioritization and Dialogue Imagination: Infrastructure for Quality Availability and Access