Transcripts For CSPAN Forum The Middle Class Investment 20240622

He sailed between london and port royal jamaica which was known as the wickedest city on earth. For years he did that responsibly and nobly. But then one day in 1684, for reasons no one can quite determine, Joseph Bannister stole the golden fleece, recruited a pirate crew and turned pirate. Tonight at eight about eastern and pacific on cspans q a. Up next, a forum on strengthening federal investments and Scientific Research as a way to help grow the economy and create jobs. We will hear from former House Speaker Newt Gingrich as well as a panel of researchers and academics. It is part of what is called the middle class prosperity project launched by senator Elizabeth Warren and congressman elijah cummings. Start the middle class prosperity project for them. Why is the middle class prosperity project holding a hearing on the importance of federal funding for research . The reasons are three, and they are all deeply interrelated and related to the future of americas middle class. Investments in research produced good jobs right here in america. Breakthroughs in research are our best chance to keep from bankrupting our country and from bankrupting the entire middle class. Keeping us from going broke overall timers, diabetes, and all of the other costs of medical care. And, research will give us a chance to live better lives. American innovation has changed the world. Scientific advances like supercomputers, the internet, sequencing the human genome, and treatments for polio, cancer and hiv have saved lives and created good jobs for middleclass americans. Economists agree that advances in science and technology have been the predominant driver of gdp growth over the past halfcentury. Today, 2. 7 million to 2. 7 million americans working jobs focused on Scientific Research and many more are employed by the Country Companies built right new innovations. Companies like google and facebook. For every dollar invested in the National Institute of health for example, we get about two dollars 2. 20 back. Private industry is great at developing new inventions and scientific developments that have a clear application, but basic research, the kind where applications are not clear yet dont get as much investment and that is where we need government. Government provides patient capital, the kind that can wait for longterm results. An american president once said although basic research does not begin with a particular practical goal, when you look at the results over the years it turns up being one of the most practical things governments does. That president was ronald reagan, a fiscal conservative who understood the value of investing in american innovation. For decades, investments in science have been a bipartisanpriority, but today washington has lost sight of that priority. Everyone, republicans and democrats, say that investing in science and innovation is a good idea. But talk is cheap. We need action. And we have not had any in a very long time. One proposal moving through congress is the 21st century cures act which requires about 1. 2 billion a year for five years, in new funding for nih. Thats held a good start, and it is. But it is not nearly enough. Todays nih budget, adjusted for inflation, is 12. 5 billion less than it was in 2003. That is a 25 reduction in our federal investment in nih alone. Even worse the bill does not include a maintenance of effort provision, which means theres nothing to stop congress from cutting the nihs base budget at the same time that it adds new money on top. If that happens, instead of expanding, our investment in the nih under this bill could actually shrink. Earlier this year i introduced this medical innovation act which would help rebuild the nih budget. It could boost nih funding by about 20 , is it achieves that increase without raising taxes without getting vital programs, and without adding to the deficit. Dozens of dr. Organizations patient groups, and scientific associations have supported it. Every republican, every democrat, and every independent in congress could support it too. Members of congress are responsible first deciding whether we make these investments in our future or whether we just talk talk talk about them. The American People deserve better. That is why we are holding this forum. To have a real discussion about what we can and should do to get more money. Im very pleased that we House Speaker gingrich here to talk about his studies, and to talk about what it takes to make real effective bipartisan progress. There are many things that the speaker and i disagree on, but we agree that research is a fundamental responsibly of our leaders and it is long past time to meet the response ability. We also have a respectable panel of leaders. We all agree that government should do a better job of supporting investment in science. I am very glad that you are here. Congressman cummings, would you like to make a few remarks . Thank you very much. Its an honor to join this, the sixth floor and we have convened. Today we did examine how our Nations Research and development have charted a path of progress. Over seven decades since the end of world war ii, creating millions of middle class jobs in the process. American ingenuity is unmatched in the history of the world. We help new discoveries leap from the lab to the marketplace in a way that is the envy of countries all over the globe. According to as a result of funding appropriated by congress they awarded tens of thousands of Research Grant per year. Federal funding through progress like this Small Business Innovation Research has been critical to help researchers and on partners and entrepreneurs find new product and technology that improve the lives of millions of people while creating entirely new industries and the jobs that come with them. In 1961 president kennedy called on america to make a National Commitment to scientific and technical manpower and facilities. The United States became the first and only nation to put astronauts on the move mood. Similarly the effort to decode the human genome has led to new treatment for some of our most devastating diseases. This has also created a norm is benefits. According to batal memorial institute, our Government Investment in the human genome project helped generate an Economic Impact of 796 billion between 1998 and 2010. This is a massive return on investment of 14 to 1,. The question before our nation now is what story will right in the 21st century . Would be one of new a kabul schmidt, scientific progress, and continued Economic Growth . Or will it be one where we decide we can no longer afford the next big discovery . Will you remain the world leader in Scientific Research and develop its . Or will we succumb to a culture of mediocrity and watch as other nations outpace our investments or discovery, and our progress. In 20 in 2009 the economy recovery act contributed more than 20 billion. In 2013, sequestration and cuts that began solely after the recovery act was passed. According to the American Association for the advancement of science, our nations federal research and Development Budget declined by more than 26 billion from 2010 to 2015. That is a drop of 16 . The uncertainty our Research Institutions face has had devastating impact on research initiatives. These cuts are shrinking the pipeline from which discoveries and inventions will emerge 10 or even 20 years from now. The decisions we are making from a shortterm perspective of the annual budget cycle are shaping the nation and the economy we will leave to our children. We needed to make sure that they inherit a country that continues to lead in scientific innovation , that creates a better world and a stronger economy, and that promotes a broad and pop prosperous middle class. I am pleased to join senator warren in welcoming speaker gingrich to todays for them i service regarding marriage during my first terms in congress, and i thank him for his leadership. I also welcome our distinguished members of the second panel. We have an Extraordinary Group of experts assembled today. It is an honor to have this opportunity to hear from each of you. I yield back. Thank you congressman. We are honored to welcome the former speaker of the house of representatives, nook Newt Gingrich, to todays forum. These come down. Congressman gingrich. [applause] good to see you here. Congressman gingrich represented georgias sixth Congressional District from 1979 to 1999, from 1995 to 1999 he was the 58 speaker of the house of representatives. I just want to make one note. I join senator warren in welcoming speaker gingrich to todays forum. Not only did i service regarding grudge bigger gingrich, but i failed to say that he gave my parents one of the greatest thrills of their lives. With both of my guys having less than a sixth grade education having been warmer sharecroppers from south carolina, use for me in you swore me and, and you took a moment after the swearingin to speak my parents. And i will forever be grateful. Thank you and welcome. Would you like to start . Know he is going to start. Speaker gingrich. Let me thank both of you, and let me say, congressman cummings, i am delighted to have had the opportunity, and i appreciate your bringing your parents. Its one of those Magic Moments the first time you get sworn in. The whole family is there. Thank you senator warren, thank you for rushing back. I can appreciate how hectic your schedule is. When you first called me i was frankly both surprised and delighted. I am glad to be her. Im really delighted to be here to discuss the role funding for research and development, a topic that has the potential to transform the lives of millions of americans of all backgrounds and critically to bring together liberal democrats and conservative republicans. Before i offer a few general principles for how to think about federal Research Funding let we start with an example that is close to my heart, and that is finding cures for the most common and Serious Health problems. This is a challenge that is important, it is urgent, and now there is great hope that it is doable. It is important because every one of us has been touched on the devastating effects of problems like alzheimers disease, dementia, cancer kidney disease, and parkinsons. We know how debilitating they can be how they observe the energies of Family Members and caretakers. How they strain the finances of even welloff families. From a fiscal, as well as a human perspective funding finding cures for these diseases is urgent. I chaired the Alzheimers Group for over three years. We learned that over the next decade americans will spend 20 trillion on alzheimers and other dementias. That is more than a full years gross semester product. Imagine all the money in the country for an entire year would go just to this. The taxpayers are on the hook for much of it, including an estimated 420 increase in costs to medicare, and 330 increase in cost to medicaid. These of course are just too out of many programs. The federal funding for research to cure all timers is only a tiny fraction of the money the government is already spending to treat alzheimers every year. The nih spent 731 million on Dementia Research this year less than one half of 1 of the 154 billion medicaid and medicare are spending to treat it. Part of the reason for the imbalance is that National Health funding has been cut more than 20 in real terms since 2003, the end of the fiveyear doubling of the nih budget which we achieved on a bipartisan aces in the 1990s. Given the costs we know are coming, boosting Research Funding may be the most fiscally responsible step we can take. I want to emphasize this, this is probably one of the places where i bring a unique background. We balanced the federal budget for four straight years. The only time in your lifetime and the federal budget has been balance for four years. We did it well doubling the nih budget. But i want to make a deeper point about the future. With the baby boomers aging, if we do not find a researchbased solution we will never balance the federal budget, because we will never impose the regulatory pain that it would take to balance the budget. This really means people not getting treated. People being in miserable circumstances. Remember that would alzheimers caretakers are quite twice as likely to quit. You also have the caretaker population, both at risk. The good news is, curing alzheimers and other major diseases appears more doable today than any time in history. Thanks in no small part to basic research and development funded by the federal government. We have created extraordinary breakthroughs in biology genetics, computation, and materials. We have shown Real Initiative with the brain initiative. Today the nih is. Pioneering the development of immunotherapies which attacked diseases like cancer, rather than relying on surgery, chemotherapy, radiation. To allow Research Funding to languish at a time of historic opportunity when we could be saving lives and saving money takes a special type of stupidity that is reserved i should notice in an exception the great work of chairman upton and their colleagues in the house. At the 21st Century Cares Initiative is one of the most important and bipartisan efforts in congress in recent years. I know that in addition to senator warrens initiative senator rod johnson is working very hard in the same direction. In addition to the drastic increases to Research Funding, i call to double the nih budget. I would also call for an increase in the National Science foundation, which i think was the one mistake we made in Research Funding. We should have tripled it, which is much smaller, when we doubled nih. Let me quickly put out to bold big ideas about Research Funding. The first is research bonds. For large, very expensive product projects with the potential to demonstrate huge savings if they work, it is worth expiring issuing bonds to finance research which would then pay out a fraction of the savings. This would have the benefit of taking important projects off budget and raising much larger sums of money than the federal government is likely to. We currently are developing this idea for Brain Research bonds. Congressman Michael Brooke and sandy harris in the house have proposed a version of this idea with the mind act, all Cyber Research bonds. Similar models could apply to large intercessor investments. As governor mitch daniels, John Kasich Arnold Schwarzenegger have all demonstrated with Innovative Strategies for financing major roadways in their states. If we simply rationalize the bureaucratic review process, we could create 3 million more jobs with the same appropriation. Finally, for research and development, i am a big supporter of prizes. Prizes are good for a couple of reasons. Worse, taxpayers dont pay a thing until the goal is actually achieved, and they never pay more than the president. Second, you get lots of competing strategies for solving the problem when you have all of the groups working independently to get the prize. This competition means you get better results that are far more efficient in cost and contracting. And you and up with several working designs. I would radically rewrite and many of our efforts in space and transportation procurement around prizes to accelerate the competition and development. With that that sweeping overview, i look forward to your questions. Speaker gingrich, i want to thank you for your insightful presentation. You argued, and i quote, that it is irresponsible and shortsighted, not prudent, to let financing for basic research dwindle. What do you think are the main reasons we have left financing for basic research dwindle . I think there are probably two or three big reasons. One is that the past has lobbyists, and the future has publicists. In this country and the city lobbyists often beat publicists. Second i think that there are those fiscal conservatives who are sort of antigovernment and wait it makes no sense. Its a little bit like the woman who once said, to stop trying to go to the moon. Say home and watch television the way god intended. People have no notion of the power of the government. That airplane you ride in as a passenger, or the computer you are using or the internet, or thousands different things. Government investment in this country, from the very beginning. We are the only country in the world and created a Patent Office in our constitution. We were founded by people who believe in the future. Third, i think we have allowed welfare state spending and other bureaucratic spending to crowd out investment. If you go back and look at the percentage and the size of the government that we were spending on investment in research, investment in infrastructure, 30 or 40 years ago, it was dramatically bigger than. All of this has to be changed. One of the reasons ive recently like all the response is i dont think we are going to win the fight. We will make some critical progress, but compared to the size of the title wave of illness that is coming down the road as people age, we are not going to get ahead of it within the traditional incremental appropriations process. That is why i vote for some way to break out. I suggest taking it off budget and issuing bonds that would be retired as we gain the savings of people not getting sick. I was to come back to all cyber than a minute, but didnt some of the things you just stated exist back then, when you are able to double the budget with regard to research jacke . Was it just to some significant thing that changed . I think something sort of magic happened when we were in the first stages of trying to balance the federal budget, and john kasich had the lead in that project. It was a huge project. Congress and john porter who had spent his entire career on nih problems, and senator connie mack, who had a very familybased concern with cancer , throughout his entire family history, both came to see us and they brought with them every Vice President for research of every pharmaceutical in the country. We had a meeting of about 70 people. They said this is a function of jobs, as senator warren said. You want really high value of american jobs . You invest in basic research. You want to have the most competitive economy on the planet . You invest in basic research. You wants to the best National Security in the world . You invest in basic research. Those things have carried us for 150 years and it is a. Perio ofd utter full it foolishness to walk away from it. I have to win the argument with other conservatives about the centrality of Government Investment. I like without people, the Transcontinental Railroad was built with a huge government incentive. It did not happen randomly. Even adams smith in the wealth of nations argues that there are times and places for National Security reasons when government should be basically shaping the market. I would argue that the airy as you and i are talking about are a key part. I give john porter and connie mack a great deal of credit for having made it possible rust to build the momentum to double nihs budget. As federal funding has dwindled, has private sector funding increased to fill the gap . Sometimes you hear that argument, that private sector should be doing more. There are some aeries of private sector some areas of private sector activity that you can see. But there are two things that operate against that. The first is that wall street is very one quarter at a time i did. The analysts dont look at a 20 Year Investment strategy and give you a very good mark. Most ceos are really driven by the finance system, towards shortterm optimization in a way which undermines the kind of investments. There is a second part of this. Most economists agree with this. I dont think there is much doubt. When you are talking about fundamental breakthroughs everybody has an incentive to hope some of the else will pay for it. That is just an objective reality. Frankly, if it was a big breakthrough the jet engine is probably a good example. Jet engines are really collocated and really expand mental in 1939 up to 9045. You werent going to get that creative without Government Investment. Once we had built those engines for the b 47 and the b52, it was very easy to build knowing 707. That without the air force investment and that kind of engine capability, you could not have had the transfer to commercial activities. I think you have to be honest about what will the private sector really invested. When you are talking about very longterm things and by the way we have a wonderful history of philanthropy. Im a big fan of in American Museum of natural history, which was founded by five private citizens, funded by private citizens. Thats terrific. But yes you are talking about the scale of science that we need, particularly in National Security and in dealing with health, you are not going to get that either from philanthropy or from forprofit companies. Just one more question. I was stunned to read in the m. I. T. Report that over the past two years the fda has approved 19 cancer drugs, but over the past decade and i quote, not a single new drug for alzheimers has been approved. I guess, based on what you just said, i guess it would be also possible for the private sector to make that breakthrough with regard to all farmers without a lot of government help. Would you agree . Thats partially true. The other thing i would say, to about to go out on a limb, i think we really need to rethink how the fda works. If you are dealing with a lifetime condition you cant afford to test a drug that takes 20 years to figure out whether or not you are going to legalize it. You will never raise the capital to invest in a drug that has a 20 or 30 years time horizon of getting approved. When you get into Brain Science the fda is not today scientifically prepared to deal with the complexities. This is also true for regenerative medicine. There are whole zones that are happening in science that we are not bureaucratically prepared to understand. I would say it is a dual thing. The government has to make the investment. But candidly, we could dramatically accelerate investment in new drugs, or we could dramatically accelerate for example, all cyber related things. Many of which are going to have to be conditional. Youre dealing with a 20 or 30 or process, you have to say, we dont see any immediate safety problems. Those of you that want to have informed consent do it. Because the truth is we are not going to know for a generation winner works. Thank you very much. Senator warren . Thank you very much speaker gingrich for being here. Thank you for your remarks. I am delighted to hear you talking about tripling the nsf budget. I strongly agree with you on that. I watched about this for a moment on the National Institute of health. This is the crown jewel of medical research. Supporting the work of more than one 300 thousand researchers, including a hundred 45 nobel prize winners, at more than 2500 institutions. This work expands our understanding of biomedical science, new drugs, new technology. It saves money and it saves lives. For decades, congress increased the nih budget years of year after year. And then in the 1990s both parties Work Together to double that budget. You were the architect of a historic achievement. I think you should be a legend for todays congress. A lot of people think that we are far too partisan to get anything done, that i dont think anyone would describe the late 1990s as the golden age of nonpartisanship. Despite that, you successfully build i partisan coalitions to support nih funding. You got it done. That is what i want to ask about. Despite deep divide, why wasnt the members of both parties decided that nih funding was so important in the late 1990s . I think there were three things involved. I am partially digging through its a very good question. The first is, as Hillary Clinton said on the campaign trail, her husband and i had a technique where we would fight all morning and negotiate all evening. Its important in a sense not the best to a nonpartisan perfect world, but you have to place the country above whatever your fights are. You have to say ok. Reagan and oneill did this brilliantly. You have to say ok, now that we both got that out of our system, what can we do . Lets not talk about what we cant do. What can we do . The president and i had a bias in favor of finding solutions. Second, we did have remarkably strong corporate support, and that allows us to support overcome a lot of the conservative bias against government, because you had people who were Vice President s. You can imagine today, if you took the biological companies in the san diego. , and the biological companies around m. I. T. At harvard, and all of them showed up here you have so many hundreds of ceos, old all that with phds are mds, saying look, you want us to have good jobs and you want us to be a little problem stucco have to do this. We were able to bring a privatesector energy to getting more money for the Public Sector. I think the third thing was, we were able to engage a lot of the constituency groups who have a direct immediate interest in other people. Ira for when bob carey and i had spent three years on a bipartisan basis on the alltime is study group. We were here in the senate. We had 15 or 18 senators come to a hearing, and i think all but two of them had a personal relationship with alzheimers. Suddenly you had people going, let me get this straight. Its going to create jobs. Its the right thing to do for disease. And its the only possible strategy to balance the federal budget. And somehow the conversation broke through. I have frankly trying to figure out how we get it into the president ial Campaign Next year. I would love to have a candidate answer the question, are you going to try to balance the budget by bureaucratically depriving people of goods and services . Or are you going to try to invest in research that lets us break free . Because the truth is, if you postpone alzheimers onset by five years, you cut the production in half. Thats 10 trillion. Does not many places you can turn and say, i think i will take 10 trillion out of the spending stream in a positive way by giving you healthier. Let me just follow up on this. You are a conservative and as a result may have a little more credibility than i do in some circles on the question of the role of government. Why isnt it enough to count on private industry to do this . Why do we have to have a substantial investment from the federal governments . Is a question about american history. Im currently developing an entire project on why George Washington matters. People dont often know this but the Founding Fathers wrote into the constitution a Patent Office, because they so deeply believed in the future. They made investments. At the First Federal highway was built during washingtons lifetime. They believed in improving things. They talked about them as improvements. Jefferson launches and expiration to the west, which by the way they have done a Childrens Book on this, called from sea to shining sea things never quite change. But the idea in jeffersons era, of taking a group of people and sending them all the way to the pacific, is comparable to going to mars today. Good jefferson understood we needed the knowledge, most of which is still stored up at the accountable net academy of National Sciences in philadelphia. I think we have had a very long history of investment. Congress passed the money to allow the first cap telegraph to be built between the capital and baltimore. That was congressional investment. I think we have to recognize. Lincoln, by the way, was the only president to hold a patent. He was totally fascinated with technology and brought a lot of it into the civil war, to the benefit of the union. I think there is a long history of america being a country of technological advancement. Being willing to invest in a better future. And recognizing that the government has a significant role to play on that. Let me ask with just a little more shortness to the point on health care in particular. The taxpayers are on the hook for medicare for the veterans administration, for other health care costs. If we fail to make the investment in nih and discover the cures that we need, who is ultimately going to pay for this . Well, let me try to paint a picture for a second. It is worse than your question. Anybody who goes out and talks to cuttingedge scientists note that we are right at the edge of breakthroughs that are so extraordinary. I have several friends who have unique, difficult problems. When i can help them find the best two or three people in the country their lives are suddenly transformed, because the best two or three people in the country are 20 years ahead and are doing things in laboratories, and doing things in hospitals, that are like magic. We are having breakthroughs that everything level of health. To know that that exists that we are this close in regenerative medicine, that within a generation we should be able to have to help you regrow your same liver, rather than have a transplant. To help you regrow your kidney so you dont have to have insulin injected for the rest of your life. To help you regrow, if you are a car wreck, to be able to regrow your nervous system. You see these things in the lab and then you look at what is happening to a Wounded Warrior because the science we are applying is 20 years behind the science that is in the laboratory. You look at the failure to fund this, and frankly it is probably the thing which comes closest to driving me nuts. I say this to all my fiscal conservative friends. Youve got trillions of dollars of guaranteed expense sitting on the table. You are never going to get away from it. You will never have enough urography. I will say to my liberal friends, you will never create enough bureaucracy to rationally spend this money. In the end you are going to have to cut off services. That is what happened. If you dont want to cut off services to people who have very long problems like alzheimers, or carpenters, or autism, for a lifetime. You want the breakthroughs, you have got this to be solving this. I think being creative and being honest about it i can get us to a federal balanced budget that is almost in pepper to perpetuity to help racers. There is no other strategy, with the baby boomers aging, that will get you to a sustainable, balanced budget. One more thing which you can do that. And by the way, while we are doing that, to save ourselves trillions of dollars, we will create hundreds of thousands of eerie highpaying american jobs and we will dramatically strengthen our payments. Is congress boosted nih funding again, if we could come together and get an agreement to do that, how would you recommend that we structure the spending . First of all without putting him absurdly on the spot, i would try to get Francis Collins to really reflect on the lessons from the human genome project. I am not a big fan of the peerreviewed small grant model. I think it reads to incrementalism. I think it leads to extraordinary caution. I think it actually has not made progress on the scale this is one of the challenges we have in selling nih to people. When you sell it you want to say what the excitement . Similar to nasa. Boredom is not a gated but not a good a good device to getting people involved. I would really look carefully at three arius. Areas. To what degree to can we design much larger grant projects that are driven towards large gold, like the human genome products . The second is, can what to what degree can a modest amount of money be put towards research and a variety of forms . It is amazing how much activity with stimulated by very modest prizes. Lindbergh flew the atlantic for 2500. Lots of people were trying a simultaneously. Third i would say we need to find a way to guarantee that a significant part of that money goes to younger researchers, so that they have a chance to become principal researchers not just surf serfs. I hesitate to do this because you are you represent the state that probably is the best funded, but i would love to have 70 question the scale of money we give universities to research this stuff. Look at the scale that harvard gets, John Johns Hopkins gets. Im looking at both of you here. I would love to see someone say cant more of that go into research . But on the funding part of this, should we be doing this should we be doing capital budgeting as a way to increase the funding for nih . In order to fund nih do we have to cut shortterm spending and other areas . I think the longterm title wave that is coming is so enormous that the most prudent thing you could do is find a way to undercut that wave the research. Im happy to defend that notion anywhere in the country. There is no other alternative. Second i do think if you look at how the navy built their carriers they technically cant but the money and because of the nature of the federal appropriations project. The you cant buy the whole carrier. But they cant sign a contract which makes it prohibitive to not complete the care the carrier. It is a very interesting sleightofhand. I do think that we ought to find ways to fund fairly large products over at least a four, or five, or six year. Again, i am a constitutional conservative. I actually believe congress used should have real control over things. The Transcontinental Railroad should never could never have been built on an annual budget. They had to design a plan that it that allowed them to get capital over a multiyear. I would challenge though and this put some of my Close Friends in a bind i would challenge nih to come back and say, give us a project so large and so exciting that they justify a capital budget, and then lets go fight for the capital budget. Thank you very much. Mr. Speaker, i feel like i am sitting here pitching slower and slower over the plate, but i am very pleased to hear your answers. We have a gaping hole in the nh budget. Right now it is 12. 5 billion. We need a serious plan to fix it. If we really wants to dream big about what we can create we need to get out here and fight for more funding for nih. Ive proposed a bill called the medical innovation act, which would increase nih funding by 20 without raising taxes. Without cutting critical programs. It does not even have to go off budget. If there are others of other ideas, then folks to put them on the table. It is time to get this done. I think it goes without saying that you are have fundamental disagreement and some areas, but it is clear that one thing we agree on is what Congress Must do, and i hope that we will be able to follow your example. Double the funding for nih as you did in the 1990s, and bring home some of the products of medical research in this country right now. Thank you. Just one comment. Speaker gingrich, i want to again thank you. Going back to the comments we were making before, i am hoping that you will use your influence to help us achieve the things we have to achieve. I dont want somebody to go unnoticed. You talked about key people who played significant roles in making sure that we had appropriate funding for research , particularly medical research. I often say that from our passion comes our purpose. I think of the people that you talked about obviously have pain that they experienced in their families, and they were able to take it to the halls of congress and make a difference. Not only for their families, but also for many others all around the world. Then i thought about what you said about how important senator warren talked about how important this issue is. I have a Family Member i had a family never 10 years ago. She had terminal cancer. But because of work at nih, she is now fine. Those are the things that we dont necessarily talk about when we are looking at dollars andcents cents and austerity. But they mean so much to 70 people. I am hoping that you will join us on our crusade to lift up all americans so that they can live the very best lives that they can. Thank you. Let me just think both of you for your leadership in doing this. These are the kind of conversations in a free society, allow it to talk to itself and to find dramatically higher value solutions. You have my commitment, anything i can do to help the product help this project, you can call on me. Thank you. This could be the start of a new world. Thank you speaker gingrich. [applause] i would like at to ask our hosts is to set up for our second panel. We would like to ask our guests to take their places. Our first panelist is dr. Charles wilson, professor of electrical and Computer Engineering at the university of maryland. Dr. Clark received her phd from the Massachusetts Institute of technology. The next is speech dr. Wilson is a member of the medical Advisory Board at the National Institute of health. She is also the founder of a company that is commercializing for use in cell phones a Software Technology that separate speech from background noise, that was created through the research. Welcome. And i am very proud to have a chance to introduce our witness for massachusetts an associate professor of medicine at Harvard Medical School and a faculty member in the tradition of pha rmaco epidemiology where he directs the program on regulation therapeutics. He earned his bachelors degree from harvard university, has medical and law degrees from the university of pennsylvania. He also earned his masters in Public Health from the Harvard School of Public Health. He is certified in internal medicine, and he serves as a primary care physician at the Phyllis Jen Center for primary care womens hospital. Welcome, we are very pleased to have you today. Thank you for lending your expertise to this panel. And also, i am honored to welcome dr. Marianna mazocato who is the chair in the economics of innovation at the Science Policy Research unit at the university of suffolk. She completed her phd in economics at the new school for social research in new york. She is the author of the entrepreneurial state, debunking public versus private sector miss myths. Which was included in the 2013 book of the year list by the financial times. Thank you to view for being here. If you could need provided some opening remarks and then we will get started with some questions. Thank you for the opportunity. Good afternoon. Thank you for the opportunity to be with you i have been able to sustain a Research Program that originated from this Research Program. That effort has been funded through Small Business innovative Research Grants from the National Science foundation and a Small Business Technology Transfer from the National Institute of health. It would be helpful to start this hearing by describing that the academic career track will start for some as a postdoc and then on to assistant professor after five or six years onto an associate professor after a while. After five more years, one may become a full professor. At a research university, a major part of your time as a professor is conducting research which includes training graduate students as independent researchers, the training of undergraduates this is becoming more important as we want to create a pipeline of students who are excited about research and want to go to Research Graduate school, specifically in the stem field. And how to address problems outside of your university that may span several dispensed. The combination of teaching is important in this area. Investors are able to share their research in the classroom to help students understand how what they are learning can be applied to do analysis or solve useful problems and to motivate them to seek a research career. Conducting basic Research Helps us build an understanding of all matters, helps us solve problems and develop useful technologies that can be transformative. All the while training the next generation of scientists and engineers. The funding of basic research should be the highest priority. Basic Research Provides a foundation of advances that will benefit our children and grandchildren and is supported almost exquisitely by the federal government. Both basic and applied research are valuable, but there are alternative funding for applied research. Without basic research, there is no applied research and innovation. Federal cutbacks have been huge. Basic research is not being funded. At the nih, the funding percentile for scoring proposals is as low as 9 . In 2001, it was as high as 29 . This reduction in the number of proposals that are funded has had a significant negative impact on the morale of investigators, not just the ones who are applying for the grants but their peers who are seeing their proposals not being funded. It also has a significant negative impact on the training of students and the degree to which fundamental Research Gets done. Young scientists and engineers are making other choices career choices. These are the very people we should encourage the most to do research because they are the next generation of drivers of innovation. For some particularly computer scientists and engineers, they can find interesting jobs, Even Research jobs and industry. However, many young scientists are headed into underemployment. Also, Program Offices are cutting budget significantly because they are trying to spread the wealth, but at causes considerable disruption in the research and training of students. Particularly, the first thing you will cut is the travel budget. That does not allow you to send students to conferences so that they can develop job prospects that they need. Cutting back and funding is also having a negative impact and making agencies more conservative in the research they will support. As a result, there is no Financial Support of postdocs for out of the box thinking. In real terms, while Government Supported Research is shrieking in the u. S. , it is growing and most of europe and asia. We are seeing this a lot based on the sorts of research being presented at conferences. This trend begs the question where will be the big break use and future discoveries . Finally, i am sure you are aware of the existing problem of too few u. S. Students going into stem programs. Federal cutbacks would only make this problem worse. I feel confident saying that in most research universities, it is already the case that graduate student populations particularly at the phd level and stem areas, consist mainly of foreign students. Not americans. We need to look for ways to turn this deficit around. Investments in research and education have a huge return, but only over a long time span. These are investments we make not for ourselves in the shortterm, but for our children and grandchildren. It is sometimes not easy to think that far ahead, but is imperative that we do so. Now i would like to address the translation of research from the lab to a startup or commercialization. The Research Says that the translation at on the speech omnispeech, my company was part of my research at the university of maryland. I did not conduct this research with an eye for commercialization. After exposing algorithms to a Patent Office and positive Research Review days, i got a lot of feedback and encouragement to do a company. That began my foray into entrepreneurship. In addition to the fact that the university of maryland at college park has an active Entrepreneurship Incubation program, it was of the upmost importance to me that the Small Business Innovative Research and Small Business Technology Transfer program existed. At omnispeech that brent was the critical catalyst in transforming original Research Code into a commercially viable solution. It enabled me to hire our first bsd engineers and to reach out to partners for evaluation. Moreover as a tiny startup it was critical for establishing credibility. Finally, the promise of additional matching funds through the phase 2b program was pivotal in securing thirdparty investment that allowed us to further expand the team and prepare for commercialization. The government must continue to provide incentives to spur innovation and the development of new technologies, as these efforts and turned expanded employment, the growth of the middle last, and quality of our way of life. Fortunately, some programs are doing well. In the past couple years, the funding amounts of been 750,000. This is significant and will help startups considerably especially since emerging commercial technologies can take a lot of resources, effort, and time. In my case, given it was Research Code we were starting with, that code was robbie tatian only very expensive. Computationally very expensive. We had to optimize it many times to make it run. It took us a lot longer to do this test than we ever imagined because we never had to commercialize code before. I also want to point out that the nsf has developed the i corps program. The purpose of this program is to foster entrepreneurship and engineers and scientists to extend her focus beyond the laboratory to the commercialization of technology that has been supported please the by nsf funded research. This organization has been proven to make a significant difference in the samesex and the success of these companies. They are fostering an ecosystem where they are surrounding these companies mentors, investors, Venture Capitalists, and marrying the scientists and engineers with ceos, people with lots of business acumen and can help them get to the next level in our company. Some of these companies this program has only existed for three years and some of them have already seen success where they are seeing lots of technology, or companies have been bought out by google or facebook. , i ask you to wrap up so that we can get everybody . This is very great. Works that was the last part. On the entrepreneurship side, we are doing well. Remember that you need to start the basic research to get to that point. Thank you. Go ahead. It is my pleasure today to talk about the sources of transformative medicines. The holy grail of research and develop and is transformative medicine, innovative drugs that have a groundbreaking effect on patient care. Physicians and patients have worried about the reduction of new products despite increasingly cost intensive Drug Development problems processes. It is important to direct policy toward the sources of these. There is controversy over the interpreters of developing therapeutics. The pharmaceuticals contend that its research leads to the development of most new medicines, while nih supports innovation distinctive from Drug Development. While the contribution to industry is vital, i want to emphasize the vital but underrecognized role of public investment. To inform this discussion, i led National Leaders over a series of discussions over what they thought were the most notable drugs approved by the fda in the last 25 years. The experts came to a list of 26 drugs and drug classes and analyze the history of each of these drugs. A full result of these investigations are available in journals such as Health Affairs among others. One of the major recurrent themes is publicly funded or academic scientists conceptualizing a therapeutic approach based on disease mechanisms, and even going so far as demonstrating content. For example, the redbudor was first purified at the university of chicago in 1971, who also proved its therapeutic effect. With his help as a consultant, they cloned the gene over a decade later and produce large quantities of anemia fighting product. And a treatment for every type of leukemia was the first for a target of cancer there be. He set out to prove that the inhibitors could inhibit the functioning enzyme. In a laboratory model, he and his colleagues developed, he identified this as an active agent. He was the first to demonstrate hiv. In 1984 with the rising threat of hiv at mci, he solicited from Drug Companies. His voters and his colleagues documented activity against the virus far higher than any other compound. Clinical triers begin Clinical Trials began probably at Duke University and others. It was fda approved three years later. One variation on the scene for some drugs seminal Scientific Concepts arose in scientific settings University Signs and later arose in industrial settings. At the university in sweden investigating serotonins role in depression, they synthesized ssri and its effect on the serotonin neurons and its efficacy in treating depression. Around this time, other researchers develop an ssri fda approved drug. One seller one similarity emerges among these transformative product. The centrality of governmentfunded innovators. Governments provide a vital source for this innovations. Academic collaborators will move forward on seminal discoveries. Our findings do not find the form of pharmaceutical industry as the single most important source of informative drugs. Another recent transformative drug the first direct anti viral treatment for hepatitis c. After decades of investment the federal government has made with grants for neurology labs biology labs virology labs, experts developed nucleoside drugs to treat hepatitis c. As for the efficacy, many of the insights underlying our survey arose in academic, governmentsponsored settings. These are not patentable, since ownership under patent laws involve developing a product. This often occurs in the pharmaceutical remedy. This leads to misperceptions of the relative importance of the contribution to these products. One of the outcomes of the misperception of the origin of conservative informative drugs is that the incentives are often provided for drug producers for by extending patents. As an example, you can see the that half of the cheers legislation passed by the house. It has threatened funding to sources we have found are the most important sources of transformative innovation. I firmly believe that investing more will provide more transformative drugs in the future. This may lead to why the new therapies that could raise concern over whether this could lead to the socialization of risk and privatization of profit and drug developer. We should think of other ways the public and gain, such as referring a small returning a small amount of the profit back into the public. By creating transformative drugs over the past 25 years, publicly funded Research Hold great promise for transformative drug developed. Thank you. Thank you very much. Thank you for inviting me here. It is a real honor. It is especially wonderful because this is one of the only topics that economists agree about. It is more or less commonly agreed that spending on r d has a very important effect on longrun Economic Growth. The real issue, and this is where we get back into debates between economists is, how do we actually talked about this . What is the role of the Public Sector when it interacts with business, the private sector in nurturing the innovation of economy . There we have a real problem. I want to focus on how, in a limited way, it has limited the way policymakers have enabled to increase the budget of the nih or even nasa. It is not a coincidence that i work at eight signs policy Research Unit unit in the university of sussex. It was one of the only places that had on confronted the notion that economists have that the role of the Public Sector in finance innovation is simply to fix market failures. We have heard a lot here about basic research. The Public Sector has been absolutely fundamental for finance innovation across the whole innovation chain. I was happy to hear speaker gingrich talk about market shaving. If you look at what nih, nasa, and others have enabled in the u. S. , it has been market creation and market shaving through a decentralized network of active, strategic, and Mission Oriented public agencies. In economics we dont even have the words to talk about market shaving and market creating. We talk about public goods and of course, basic research is a public good. It is a public good because the spillovers are so high it is hard for a private firm to appropriate the returns from that. Hence, you get underinvestment from private companies and basic research, so the government has to step in. If you look at Silicon Valley what you have seen is different types of actors across the whole innovation chain investing in basic research applied research, and as we have been hearing before, the patient finance that Early Stage Companies require. If you know anything about Venture Capital, you know they are exit driven. They want their returns in three or five years. That exit tends to happen through a buyout or an ipo. That is fine for some gadgets, but it will not get you the biotech revolution, the nano tech revolution, the internet revolution, or todays cleantech revolution that so many people are hoping for. I want to focus on those points and how the inability to talk about this we have a discursive problem that has hurt policymaking in this area. Lots of these agencies have not been there to fix market failures, they have been Mission Oriented. The most obvious mission was going to the moon. They clearly have a mission to nurture out of the box thinking around Renewable Energy innovation. If you look at the nih website it is absolutely Mission Oriented. How do we include missions and economic models . We dont. Beware of those econometric tests. If you look at the three big problems that we have today which is the cuts that we are witnessing and research altogether. The latest figure is that federal spending in r d as a percentage of total r d was taking around 67 in the 60s and has dropped to 20 in the 2000s. Recently, it has gone back up to 30 , which is great. However, this is a massive fall. It is increasingly focused on basic research. While it is wonderful that we are talking of a research and the importance of it, we have to remember that the lake successes in the past are in nurturing these fundamental dynamic linkages between fundamental and applied research. It has been increasingly around applied research the private sector used to spend Something Like 35 of total basic research spending. Now it has fallen to 25 . It is increasingly narrow in scope. This has cola alongside a real dysfunctionality we have today and unfortunately many countries, but especially in the u. S. , which is an increasingly increasing finance civilization financial is asian of buyback on r d. When you had an active private sector, you have to ask yourself, why were they doing that . Bell labs, which we often hear about as being fundamental, it came from a deal with government. At t was a big monopoly. The government said you can retain your monopoly status as long as you reinvest your drop its back into big innovation. They did, and bell labs was the answer to that provocation. We do not have a kind of deal making today between private and public actors. This is partly because we have allowed this narrative to be so pervasive. This is the only thing the Public Sector has to do is facilitate, d risk, create conditions for innovation. All of the cool stuff will happen within business. The problem is that that is historically incorrect. We have always required a dynamic, strategic Public Sector alongside business. I hope we get to talking about that. As long as we talk about basic research, we kind of miss that whole wider story. Thank you very much. Let me start with the question about where innovation comes from. If we want to improve medical innovation then we need first to understand where the discoveries come from. One analysis found that two thirds of the 21 drugs with the highest their punic impact approved between 1965 and 1992 stemmed from discoveries from public the funded research. You found in a recent study that most of our truly transformative drugs are based on insights gained through publicly funded research, something that you have summarized in your testimony today. In 2001, a study found that 91 of drug patents are owned by the private sector. The industry says this is evidence that innovation comes straight from the Drug Companies. I want you doubt us understand the discrepancy in these two descriptions of where innovation comes from. I think there are a number of expeditions as to why it is that the Health Affairs study may have found that. As i said in my comments, a lot of the key insights such as the use of tumor necrosis factor doctors blockers that has inspired a whole field of therapeutics are not necessarily patentable insights but nonetheless arise from decades in the case of the inhibitors decades of and funded research governmentfunded research. Those kinds of key insights that then catalyze the subsequent developments of products are known patentable, although the products then are. Pharmaceutical companies to an job of trying to build a patent thicket of building around their inventions and then subsequently patents incremental changes in innovation. One study showed over 200 patents around one particular drug. On the one hand, it is the case that a lot of the key innovations from public money are not patentable. Pharmaceutical we did a study looking at all of these patents held in the Health Care Sector and found that a small sliver of titans held by small sliver of patents held by academic institutions and government were actually more important in terms of being cited more in subsequent patents and had more impact on the field in terms of their generalizability and value than the patents held by the pharmaceutical sector. Cracks the federal government invests a lot of money in research. Drug companies then use that research to develop new drugs. When those drugs and money sometimes billions of dollars, the taxpayers dont necessarily reap the reward. That is how i am hearing you describe this chain. Some Drug Companies argue that the government recoups its investment in basic research because the Drug Companies pay corporate taxes on their profits. Do you believe taxpayers are being adequately compensated for their investment in the Drug Companies . I think we could do a lot more to try to invest the positive profits and outcomes that come from these problems into these products into the biomedical enterprise. When you look at pharmaceutical manufacturers and you look at how much money they devote to research and development only 20 of pharmaceutical manufacturers sales are devoted to research and development. The amount they spend on administration and advertising is far more. The amount they spend on Innovative Research and development is on the level of 5 . What we need to be doing is considering ways of taking some of the enormous profits that emerge from the pharmaceutical industry and filing them back into the biomedical enterprise that, in many cases, provided the underlying discoveries that allow those profits to be made. In fact, i think there is much conversation about going in the opposite direction with drug company profits. There is a lot of talk now about cutting corporate taxes for companies that can trace the profit active patents back to patents or intellectual properties. I want to know what you think about these types of tax cuts. What it spur innovation or increase federal investments in research are go do you have a point of view about this . I think it is important to remember what a patent is. A patent is a monopoly for 20 years. As a policymaker, the goal should not be to increase the profits of companies, it should be to increase the research that leads to those patents. This is what policymakers are trying to do all around the world. The evidence that these patent box policies are not good at that because what they are targeting is the income generated from the patents rather than the research that leads to them. This is true of lots of r d tax credits which end up being designed very poorly. In holland they just designed one which is quite intelligent because it is targeting the research that leads to the r d. The labor hired, rather than the income generated. We should also remember the act that allowed publicly funded research to be patented. If you read that act it is interesting. They say we better make sure the taxpayer does not pay twice. The nih spent around 31 billion in research, both basic and applied. The problem is what happens to the prices of these drugs . Do they reflect that sort of input . I have been writing a lot about this how we could get some file back measures. The pricing mechanism itself could be one way the taxpayer is rewarded. The government has never felt the confidence to exercise the right to cap the prices of drugs because of this wrong narrative i was talking about before that you are meddling in the market when actually you created that market. You have given us so much evidence where this kind of financing has actually shaped the Health Care Industry the actual drugs purchased. As soon as we talk about government having a say on the price or the obamacare vision we hear about the government meddling in the Health Care Industry. This is why we need a new narrative. What i am hearing you say, to boil this down a little bit, is that we get more innovation if we plow more into basic research. If we do more federal research for not if we make giveaways for big Drug Companies. There is no evidence that the patent box which has been tried and tested in places like the u. K. There is no evidence that that increases investment and innovation. It may increase the time people golf. Back to be tested. What drives investment of innovation by the private sector is their perception of where the future Market Opportunities are. Warren buffett is very good on this. What we are talking about is what actually drives those future opportunities. That is what we should be talking about. That is what policymakers should be thinking about financing those opportunities. One more question and i will hand it over to the congressman. About the impact of the medical innovation act which could boost the nih budget by 20 without adding new taxes or adding to the deficit by asking Drug Companies to put more of their profits into nih. No surprise, the army of lobbyists at work for the Drug Companies dont like this bill. Could i ask you how the medical innovation act could affect the pipeline of new products and affect the drug industry itself . The medical innovation act is a good idea because it provides a very substantial sum to the nih for its work in catalyzing informative Drug Development and to the fda for supporting regulatory science to make sure drugs are evaluated and approved so that we know that they work and are safe. The unfortunate the amount of money that pharmaceutical companies have made over false advertising and other problems that they have had that has led to a substantial amount of money that they could be contributing back into the Development Economy through this medical innovation think you very much. It is clear from the testimony today that new drugs are built on a foundation of taxpayer supported investments in basic research. It does not make sense to me that Congress Says it once more innovation and then turns around and cuts the budget for nih nsf, for basic research. It is time for lawmakers to put money where their mouth is. I think the medical innovation act is one way we can get back on the right track. Thank you all. Congressman cummings. The journey from left to market involves many steps and is a perilous one that many technologies and discoveries even the most promising ones, have not succeeded in making. Is that right . Some of them do not make it. For that reason, it is my understanding the space between the lab and market is often called the valley of death. Are you in the process of taking a Software Technology that you developed through your research out of the lab and into the commercial market a few questions. You have received several Small Business innovation Research Grants from the nih from the National Science foundation. How have those enabled omnispe ech to cross the valley of death . Works i hope we have trusted. We are well underway if we have not. It was critical. I would have not started the company in the first place with others grants. Being a professor, i know how to write proposals. It is something that we do all the time. Having that there made it a lot easier. I will also add that the university of maryland has been very supportive to support professors students forming companies. It has developed a lot of programs. One Crucial Program for me was a program called the venture accelerator that i joined where you have people with a lot of business acumen who have been entrepreneurs several times there to advise you to write a business plan, to develop a financial model, to help you think like a business person. That is different from thinking like a professor. And other words that goes to the effectiveness and efficiency of what you are doing, is that right . Sometimes i think you have people that go out there and try to reinvent the wheel. They do not know how to do it. The next thing you know, they fall in the ditches and never get back out. They become discouraged. They are on the sidelines. That is also the goal of the eye program we developed. They came after i started so i was not able to take advantage of that. One thing entrepreneurs need to do is test the market, to go out and talk to potential customers and Strategic Partners and understand what is the market need. Often times we developed technology that we think is great only to find there is nobody that wants that technology. You want to make sure you do not waste the time. That has been able to reduce the possibility of that happening significant. If you are able to generate revenue very early, you may not need Venture Capital funding. If you can get enough revenue coming in early. It is going to take a considerable amount of time to get that kind of traction where you are generating millions of dollars that can really support all of your employees and growth. Then you need Venture Capital. You said something that i dont want to go unnoticed. You talked about how younger people cannot grant grants get grants to go into research. You said they often become underemployed. Senator warren and i have been looking at this whole middleclass prosperity situation. The idea that we have one hearing where he talked about people being saddled with debt students coming out of school with debt. We have a situation here where if they dont have opportunities then they dont have a job to even pay the debt. I have not even gotten to the feeling of hopelessness and wasted possibilities. I dont want us to pass by that. We have a lot of young people who want to go there and do great things. And thus we open the doors senator warren talks about this a lot, about how all of this allows us to create jobs that is very significant. Do you see that . You are a professor. Do you see young people falling by the wayside and becoming discouraged . Very much so. Especially the young scientists who are trained and able to apply for proposals through nih. There is research that shows it is the young investigators that are hurt the most because they do not have the track record that more established scientists have. Unfortunately, when youre sitting in a pure review panel peer review panel, you know the established scientists get favored over the young investors without proven track records. Next we are also cutting off the pipeline. Exactly, we are doing that. They try to make efforts at the nih to give special attention to young investigators. There is still a lot of them who end up without support. In your book the entrepreneurial states, the mocking public versus private sector myth debunking the u. S. Has one of the most interventionist governments when it comes to innovation. s or any other force other than the United States capable of making what president kennedy called the National Commitment of scientific and technical menthol manpower with capabilities and talents to solve our Biggest Challenges . No. The point is not do we need just the states or not the private sector or not the public, it has always been an important dynamic privatepublic interaction fundamental to creating the kinds of innovations that have been on the mental to u. S. Economic growth. The problem today is we have crisis on both sides. We dont have the Mission Oriented we have less confidence for many agencies to even talk about their missions. They have to show their economic value. They are becoming shortterm like the private sector. When we think about these sbr a dass sbi ares funds where they in the past were able to act like other funds. This is not about carmen communism. The problem is by not allowing them to talk about themselves in a particular way, we have not actually allow them to do what any normal Venture Capitalists will do which is to welcome failure. When you try to innovate you will fail and fail, and fell again. Michael jordan has one of the best quotes on that. What the private Venture Capitalists say is they have the ability to reap the upside and cover the downside investment. This lack of ability to admit that we actually are like public and are capitalists is not allowed sbrir and especially nih to concretely create a revolving fund. You see this with the recent guaranteed loans given to Companies Like tesla. Everyone knows the solyndra story because it failed. It was a good story for anyone who wanted to bash the government. Government should not be picking companies, they should do background leveling the playing field. We know the background the iphone was fixed, gps, internet they were all picked by different government institutions. If we admit that. For each internet you get 20 concordes, each tesla you get 20 solyndras, we should think much more concretely not just about how these agencies should be confident about their missions, but precisely in order to do these investments again and again and not have these oneshot deals. Any need to get more realistic about whether the tax system by its own is actually bringing act and of money to do these experiments again and again. Let me ask about china. The global r d forecast reported china was continuing to make doubledigit increases in its annual r d budget. They projected if this rate of growth continues, by the end of the decade china could surpass china the u. S. In total r d by 2022. His china trying to emulate the r d model that we utilized in the u. S. In trying to entice researchers and new technologies to leave the United States and come to china . China has an incredible ability to adopt and learn the right lessons when it looks around the world. They learned this mission about the Mission Oriented investments. They spent 1. 7 trillion on these new sectors. It is broadly defined. It is Mission Oriented, mainly around green by the way. They are also increasing massively there are indeed expenditures rnd expenditures. The countries around the world are able to see that as an opportunity instead of a threat. Denmark, a small company, is the number one provider of hightech services to chinas green economy. They are pushing its weight in terms of investment and innovation on the manufacturing side that because they have themselves in a Mission Oriented way been able to engage with china and an interesting way that sees these chinese investments as an opportunity. Well will be transformational for the u. S. Is to stop seeing china as a threat in terms of increasing their rnd investments more than we are doing this stuff and the other, and asking themselves how they can benefit from this massive increase in spending. They are also potentially providing a demandside poll not just a supplyside push. That is an important point that i should Say Something quickly on. All of the Technological Innovations in the u. S. Required a demandside policy. Mass production, technological revolutions were not have had the effect that they did in terms of trans1 productivity without big thinking demandside policies like suburbanization. One way to china as thinking about that today is using green as a new direction for the i. T. Revolution. You dont just spend on hightech areas, but you think about the dye fusion and deployment diffusion and deployment of those technologies across the economy. Green is an interesting direction to think about how even in this country, we can think about how i. T. Can get deployed. Senator warren. I think the data makes it clear that to create real innovation we need more investment in basic research. Right now instead, congress is focused on lowering the fdas standards for approval so that companies can get their products on the market faster. The industry argues that patients just arent getting new drugs fast enough and it is too hard for them to get drugs approved. This is a dangerous game. I want to ask a question about this. Can you tell us about the authority the fda already has two speed Innovative New drugs to market and if the fda is using that authority . There are a number of pathways the fda has to provide patients with access to important new drugs treating serious or lifethreatening conditions. There are at least five different pathways that have the intent of trying to speed new cures to market. Last year, approximately two thirds of all of the drugs approved by the fda were approved by a one of these accelerated pathways. Not only do they have these pathways in place but they are using them liberally. If you look at the statistics, a lot of new drugs are being approved on the basis of studies in treating aisle markers biomarkers. Most new drugs are approved on the basis of studies in six months or less despite the fact they are intended for chronic disease and used for a lifetime. The actual statistics and data on support the industrys assertion that there is a long and arduous process for testing and approving new drugs once it is known those drugs work. It is quite the opposite. That is very helpful. Lowering fda standards may make Drug Companies more profitable but it will not make the more innovative. Let me ask you another question. Some of the proposals put back but passed in congress for off label uses of drugs that only have small evidence that they work like a case study or small trial as an expert, can you explain how innovation and safety would be effective if these proposals were passed into law . These proposals are dangerous for patients and Public Health. What they do is allow companies to get drugs approved on the basis of an extremely narrow indication and then promote them widely for conditions where they may not be effective and unsafe because it has not been any testing done in them. Patients want transformative innovations. They want him in further conditions. They want treatments that work and are safe. If you dont provide companies with requirements to do those tests by virtue of having the fda approve those conditions, then companies historically as we have seen throughout history, companies will not do them. You will not get that kind of testing that we need in order to guide physicians trying to prescribe these drugs, to guide patients looking for these drugs. We dont know how to use them or whether they are working. Meanwhile, because these drugs are expensive, we would be dumping tons of resources into these treatments that are not well known while what we could be doing is testing the first to make sure that they work and then using them appropriately. You make a very powerful point. The fda is the Gold Standard around the world because it has protected the safety of americans and it has ensured that the drugs approved are in fact effective. We could dismantle the fda, but lower standards would not produce any new cures and were not keep us any safer. If we are serious about finding new cures, congress should better fund the fda said that the fda can do its work. When you to make a real commitment of real dollars. Thank you very much. Congressman . Clinton medicare and Medicare Medicaid data, in june, at least 1200 drugs doubled in price. Are you aware of this . Yes. There is one generic drug that can reverse the effects of opioid or heroin overdose in a few minutes. It has become finally important for vitally important for First Responders and health care workers. Heroin overdose has quadrupled over the last decade. The company that makes this drug in the nasal form most commonly used by First Responders increased its prices across the company by more than 50 over the past year. In baltimore, where i live, the cost more than doubled in less than one year. Are you aware of these price hikes . Works yes. The only expedition for these price increases seems to be that this company sees the increase in demand for it and sees a lack of competition. It is increasing its prices to make additional profits. This year i introduced a medicaid reduce price fairness act. This would require generic drug manufacturers to pay rebates to state Medicaid Programs when drug prices increase faster than inflation. Under the current law, brandname drugs already pay these rebates. My bill would simply extend the same requirements to generic drugs so that they are treated equally. The Budget Office estimates this change would save taxpayers 1 billion over 10 years. Do you think this makes sense . Absolutely. I think it is great we are talking about generic drugs in a meeting about innovation. One of the key principles of drug innovation is that we need a period of Market Exclusivity in which a company can make back its invested revenue. What drives innovation is one that ends and generic drugs are on the market and there is a vibrant market to compete with the brand name companies. That forces them to innovate the next thing. In this case it seems there is a market failure in the ability to provide these generic drugs for reasonable prices. We need substantial attention paid to this particular case as well as many other cases i know you have looked into and others have looked into about generic drugs that have been increasing in price. I think your bill is a good step in the right direction. I think there is a lot of other things that can be done to make sure there is a vibrant drug generic market to promote innovation in both brandname and generic drugs. A lot of people do not realize it, according to the American Hospital association over 90 of all hospitals are suffering from drug shortages. A lot of this is that folks are hoarding drugs and jacking up the price and selling it over and over again in creating situations where a lot of hospitals cannot get firstrate drugs. Are you aware of that . Im. It is waste will. A lot of these are old drugs. There is no intellectual property covering them. This is a problem of a lack of attention that society has spent on making sure there is a vibrant generic drug market. Policies that can help ensure that these kinds of shortages are addressed in a timely fashion i think the fda has taken steps internally and it, but they could use more attention and resources like the kind you are bringing to it. We will continue to shine a spotlight on his. On this. Going back to the project senator warren and i are involved in, we are trying to figure out how the middle class and others keep one of their paychecks. They are paying more and more for the basics of life and producing more, yet they are not getting paid more. They see the paycheck they are getting shrinking. They are trying to figure out how to make ends meet and they cannot make a future for their children. That is a future for their children were they do better than what they did. It is amazing how all of this comes together. However he aspects every aspect is hitting the middle class over and over again. People are tired. They are throwing up their hands thinking what can we do to make our lives better . This is an effort in that regard. I want to thank you all for being here today. Good luck making it through on the project. Thank you for bringing your research here and talking with us about. Thank you for reminding us that we need the right language to discuss and expand our vision of what Research Really means and what it means to support research. How it changes our economy and our country. The key message here today has been that innovation is built on federally funded research. Speaker gingrich, we were delighted to have him here to talk about how in the 90s he was successful and doubling the nih budget. I was glad to hear him say today that he thought his only mistake was that he did not triple the budget for the nsf. I say three cheers for speaker gingrich on that. Since then we have gone in the wrong direction. We have cut and cut and cut support for basic research. This is a matter of the ultimate success of the american middle class. We need to support that research because we need to support jobs in america. We need to support the research because we need to make sure america does not trying to go bankrupt does not go bankrupt trying to deal with its future medical problems. Thank you for coming. It is interesting one president obama when president obama was in kenya, i sat up at 5 00 in the morning and watched his speech. He said one of my favorite quotes. We did not inherit what we have from our environment and our opportunities from our ancestors. We borrow them from our children. We borrow them. The question is what are we going to provide for our children . When you look at research making sure that people have the best medical care, making sure that we take advantage of innovation, making sure we take we open the door for good jobs in the United States that have an impact all over the world it is all connected. It is connected to what we are doing here today. You have all contributed greatly to the discussion. We are going to take what you have said and use it in every way that we can. We will probably be calling on you again, seeking your advice. We want the best minds. Without them sitting in front of us. We want to thank speaker gingrich for his contributions. Thank you again as we march forward trying to make a difference. My mom used to say in my time and in myspace, i will make a difference with gods grace. Thank you very much. [inaudible] next, live your calls and comments on washington journal. After that newsmakers, then a senate on the Iran Nuclear Agreement with john kerry. The republican president ial candidates are in New Hampshire for the voters first president ial form. Cspans wrote to the white house is providing live coverage on cspan radio and cspan. Org. The union leader as long along with media leaders are sponsoring this forum. You can provide your input by joining our callin program or adding your comments on facebook and twitter. Roach to the white house 2016 on cspan, cspan radio, and cspan. Org. This morning, a political roundtable in the latest 2016 president ial campaign with pollsters democrats and republican. Later, Michael Reilly talks about Cyber Security and computer hacking. As always, we will take your calls, and you can join us on facebook and twitter. Washington journal is next. Host there could be a new democratic candidate entering the 2016 race. The New York Times reports that advisors for joe biden are talking to potential donors. No formal announcement has been made. Tomorrow, the Obama Administration plans to announce a plan on climate change. The main focus of the plan is coal production. It is august second. In our first