"Science in the National Interest: A Shared Commitment” - MIT Symposium (Session 2/3) 2/7/1995

[MUSIC PLAYING]

MODERATOR: Since we're running about 10 minutes late, I'd like to start the afternoon session. After a exciting morning in which we laid out the general principles, we're now going to this afternoon-- move more into the particulars. And the afternoon session is divided into two parts, the first part of which we'll begin now, which is basic research and industry, perspectives on the life, physical, and information sciences.

And it's a great pleasure to introduce as the chairman of the first of the afternoon sessions. I was going to say my counterpart at Harvard that is Jeremy Knowles, except-- first of all, of course-- actually, I'm going to suppress sarcastic comments about Harvard. Secondly, he has not just the sciences, but the arts, which I understand are also a component of education at Harvard, although I'm never sure.

[LAUGHTER]

Jeremy has had a distinguished career. His undergraduate and graduate work and early part of his professional career were all at Oxford at Balliol and Wadham College. For the former and the latter, he then, however, made occasional trips to the United States.

He was a visiting faculty member at Harvard-- or pardon me-- at Yale in '69 and '71 and a visiting professor at Harvard in '73. Obviously, there was something on this side of the ocean that was drawing him here. And then, finally, in '74, he made the transition and joined the Harvard faculty permanently as professor of chemistry.

His research is on the borderline between chemistry and biochemistry. He is, in fact, made truly distinguished contributions in biochemistry, and specifically on enzyme catalyzed reactions, and on the evolution of enzyme function. In 1971, he took on the daunting task of being dean of the faculty of Arts and Sciences at Harvard.

He, like all of our other speakers today, has received an extraordinarily large number of honors, including being a fellow of the Royal Society. As a Canadian, the one I like best is that he was appointed commander of the British empire, which I guess means he's my commander, is what-- my counterpart. And the Queen's Birthdays Honours of 1993-- Jeremy Knowles.

[APPLAUSE]

KNOWLES: This morning, Bob, by being excessively gracious to his provost, tried to raise his salary. Why he's being nice to me-- I can't imagine, except I suppose for the possibility that he has some college-aged children wishing to go to a really distinguished institution.

[LAUGHTER]

How?

MODERATOR: Actually, it's true-- not yet admitted.

KNOWLES: Everything comes to she who waits. After a reasonably stirring morning, I hope we're going to have a very stirring afternoon. What I hope will happen this afternoon is that we shall be able to discuss the shifting flow of ideas, of people, and information, and actually dollars, amongst the three places represented here today, namely government, industry, and academia.

And this concern about the flow of people, and of information, and knowledge, and ideas, and perhaps equally importantly, dollars is something that we must surely all attend to. I'm glad to say that essentially every one of our six speakers this afternoon are what I might call happy hybrids in the sense that they essentially have-- not mutant.

Hybrids-- that they have-- I'm causing a great stir in the front row, I'm afraid. But having touched in their lives government, industry, and academia. And our first speaker is Dr. Leon Rosenberg who is the only MD-- in case any of you are feeling unwell-- on our program, receiving the MD in 1957 from the University of Wisconsin. He then went more or less to government.

That is to say to the NIH as an investigator in the National Cancer Institute for six years. Yale seduced him away. And he stayed in that institution in a number of posts, founding the Department of Human Genetics and ending there as the dean of Yale School of Medicine. And as you all know, in 1991, he succumbed again to a different temptation and became president of Bristol-Meyers Squibb Pharmaceutical Research Institute, the post he now holds. Leon?

ROSENBERG: Good afternoon, everyone. For a former longtime member of academia like myself, it's always a great pleasure to return to the campuses of institutions like MIT, even if only for a few hours and even, I might add, on an uncommonly cold day in New England.

Whatever that temperature is here today, I have a feeling that if we correct for the wind chill factor of the Republican response to the president's budget methods, it is colder in Washington than it is in Boston. In fact, the idea that so many of us have chosen to brave perhaps Boston's coldest winter day this year is testimony to the importance of what we're here to talk about-- science in the national interest.

Or put another way, the need for a national rededication to basic research. I use the word rededicate, because events of the past several years raise serious questions in my mind about our national dedication to science in general and to basic science in particular.

I am and I remain deeply concerned that our national research effort is slowly being undermined, slowly enough, in fact, to go unnoticed for too long, slowly enough that only now are the threats becoming apparent, threats to our great university centers of basic research, and threats to the future competitiveness, economic vitality, and scientific preeminence of the pharmaceutical and other American industries, which depend and have depended for so long on fundamental discoveries made here and at the other research intensive universities that together should constitute for all of us a national treasure.

Because we are meeting today at an institution renowned for its mathematical prowess, it is perhaps appropriate that I offer some numbers to begin my remarks, specifically numbers which I believe indicate the unstable and uncertain status of basic research in this country.

And I suspect these numbers are well-known to most all of you. In 1993, the last year for which we have reliable data, total US support of non-defense research and development was about 1.9% of the GDP, an amount well below those in both Germany and Japan.

Even more sobering, the amount of federal funding, which supports basic research, the engine that drives our nation's industrial enterprise totaled only 0.2% of GDP. These figures alone should be a clarion call for anyone truly concerned about sustaining a strong basic research effort.

If we believe basic research to be the venture capital of America, we must ensure that funding levels are meaningful. This investment in the future must increase if we are serious about maintaining the nation's economic prosperity.

And most importantly, this investment must increase if the American people are to continue having the benefits of improved health and quality of life that our past investment in basic research has provided the people of this country, indeed of all countries. Improving health and the quality of life. The pharmaceutical industry has accomplished much toward the universal hope of all people to live longer and healthier lives.

The American pharmaceutical industry is the world's unquestioned leader in the discovery and development of life-saving medicines and over the last 50 years has generated a flow of new drug treatments, which have prolonged life, reduced suffering, and dramatically improved the standard of health for the world's people-- antibiotics, antivirals, anti-depressants, anti-hypertensives.

Yet, everyone here knows that the pharmaceutical industry alone is not responsible for these accomplishments. Rather, it has stood on the shoulders of this country's world-class basic scientists and academia. The US medical research enterprise is comprised of a unique collaboration of government, academia, industry, not-for-profit institutes, foundations, and voluntary health agencies.

No one major participant leads the enterprise. Rather, it is characterized increasingly by partnership and interdependence. Throughout the 50 years in which the national effort has developed, government and academia's relationships have taken many forms-- unrestricted grants, research contracts, strategic alliances.

The vast bulk of federal research funds appropriated to NIH and NSF have been granted to academic investigators who have, in turn, produced both a steady stream of exciting new information and the next generation of medical scientists. Over 50% of PhD students in the life sciences in our country are supported by NIH research grants.

These doctorate-level scientists, in turn, have trained a generation of research technicians and assistants. The pharmaceutical industry where I now work has benefited enormously from the discoveries these basic researchers have made and from their laboratories serving as training grounds for young scientists.

Ideas and people flow increasingly bidirectionally between universities and corporations. And the supply of qualified scientists who gain their training within the academic research community remains absolutely critical to America maintaining its scientific and industrial preeminence in the future.

Today, the pharmaceutical industry involves itself with academia in much the same way that government does through grants, contracts and alliances. More recently, interactions between government and industry have increased through cooperative research and development agreements known as CRADAs and other technology transfer instruments.

Thus, each of the major three participants in the medical research enterprise has a remarkably large stake in what happens to the others. The pharmaceutical industry has benefited from the discoveries in academic laboratories, which have transformed our understanding of living organisms.

Industry, for its part, has used this information to explore disease mechanisms and translate these discoveries into new strategies to diagnose, treat, and even cure disease. Taxol, one of my company's newest anti-cancer products, illustrates, I believe, the distinct role played by each partner within the medical enterprise and the interaction so critical to their individual and collective success.

Taxol, as some of you may know, was finally introduced to the marketplace in 1992 for the treatment of refractory ovarian cancer and was hailed quickly as the most important anti-cancer drug in 20 years. Bristol-Myers Squibb spent hundreds of millions of dollars developing Taxol, most importantly learning how to formulate, administer, and manufacture the Taxol molecule.

No small feat, I assure you. You may recall that the active ingredient in Taxol is derived from the bark of the yew tree. And concerns over depleting yew trees in the Pacific region for Taxol supplies initially caused a great deal of concern and controversy, controversy that was put to rest by the company's ability to extract Taxol from twigs and needles rather than from tree bark.

But what is important for this discussion is to remind ourselves that the work that led to our company developing Taxol began 20 years earlier at the Einstein School of Medicine in the early '70s through grants from NIH. Subsequently, Taxol's preliminary evidence of being clinically efficacious was demonstrated by NCI sponsored trials in academic centers.

Further, Bristol-Myers Squibb finally obtained access to Taxol through a government sponsored CRADA. Taxol today is approved to treat ovarian and breast cancer. And many other studies are underway to define its value in cancers of the lung, head and neck, stomach and pancreas. We still don't know, nor will we know for a number of years the full extent of Taxol's benefits.

But thousands of cancer patients around the world have been treated successfully, because government, academia, and industry have worked in partnership to see that Taxol's promise was fulfilled. Taxol's development followed a long, uncertain, arduous path from basic science laboratory to the bedside.

The NCI sent botanists together, plant specimens that might have medicinal uses. And chemistry work revealed how this taxane prevented cells from dividing. That work led the way to studies that demonstrated Taxol's potential and ultimately to its success in clinical trials.

Our national commitment to basic research must continue to cherish such unfettered research that often yields exceptional, yet unexpected advancements like the story of Taxol. And I have another brief story to tell you. It is about hydroxyurea, a drug recently in the headlines, which epitomizes the unpredictable value of basic research.

Hydroxyurea was first marketed by my company in 1968 for the treatment of leukemia, skin cancer, and other types of malignancies. We knew that it bound to DNA. And although considered a significant new treatment, it has surely never been a major commercial success. Nothing to be called a blockbuster or anything like it.

Today, 25 years later, this compound with no longer proprietary rights was shown in studies funded by the National Heart, Lung, and Blood Institute just two weeks ago to be the first important breakthrough in treating sickle cell anemia, a common, inherited, and often debilitating blood disorder afflicting people of African descent.

The story of hydrea and sickle cell anemia is to me a wonderful example of what Peter Eisenberger of Princeton University calls, quote, "the unanticipated developments of unrestricted research, which create new opportunities that could not be previously identified," end quote. Recently, the Battelle Memorial Institute announced the results of its annual survey on US scientific research and new product development.

The survey reports that industry R&D spending will continue moving toward product development and away from basic research. And that even the most basic research conducted in industry will have an application towards satisfying specific corporate product and process needs as companies attempt to make R&D spending pay off more quickly.

I have learned in the past two years how rapidly companies make changes in their R&D budgets when the bottom line demands that they do so, something that I recommend as an informative exercise for all of you who do science.

If this trend continues, this trend of R&D spending and industry needing to have a return on investment-- and I believe it will-- the need for more basic research sponsored by publicly supported government funds and conducted by academic investigators devoid of any dedicated national objective other than new knowledge will become increasingly imperative.

Such fundamental work must continue if we are to discover the next hydroxyurea, or the next Taxol, or the next AZT, or the next cephalosporin effective against resistant Staphylococci. Today's meeting was called in part to gain input from the industrial sectors, which rely heavily on the fruits of basic research.

As the head of a pharmaceutical company's research Institute, my job is to oversee the translation of exciting new science into safe, efficacious, and cost-effective medicines. Neither my colleagues holding similar positions in other companies, nor I, can accomplish this objective without a national commitment to sustaining basic research.

Our collective responsibilities here today, all of us, are equally difficult, determining how best to foster and sustain basic research at such levels that it will thrive and continue to provide the insights that lead to important developments in industrial sectors, pharmaceutical, and others. Let me offer some initial recommendations that relate specifically to medical research.

They come largely from Research!America's 1994 consensus statement in support of medical research. First, incorporate the promotion of medical research as an integral element of any health care reform measure. Second, increase the capacity of NIH, NSF, the VA, and the CDC to support medical research by growing the budgets for these organizations.

I applaud President Clinton's 1996 budget requests for NIH and NSF and his stated goal of increasing the national capability for basic medical research. I only wish that he had boldly demanded more. Fourth, encourage the discovery and development of innovative and effective pharmaceuticals, devices, and other agents by private industry.

Fifth, ensure a stable revenue stream to academic health centers for medical research and education of medical scientists. Provide these centers with incentives for heightened interaction with industry, voluntary health agencies, and other private sector sources of medical research support.

Events of the past year suggest to me that no matter how precarious the stream of funding is at places like MIT, it is far more precarious at the major academic health centers of universities like Harvard, and Yale, and Columbia, and Duke, and Stanford, and others.

As an incurable optimist, a valuable profile, I might add, for somebody heading pharmaceutical R&D, I'm encouraged by the recent signals emanating from Washington and by what appears to be the framework for bipartisan support of science between the administration and Congress. But we must see to it that these encouraging words translate into deeds.

Setting broad national goals, which has been suggested by the administration, may be one step toward that end. But goals won't be realized if policies and mechanisms do not exist which sustain our basic science engine and promote translation of fundamental science to the clinic in the marketplace.

This process requires healthy institutions and practical, coherent federal policies, which balance short and long-term research expectations. In considering any actions today, we must bear in mind the impact they will have on the future.

Medical science truly is on the brink of discovering new insights into the fundamental workings of the human genome, and the immune system, and the fundamental mechanisms responsible for major diseases, such as cancer, Alzheimer's, AIDS, diabetes, and many other afflictions of the aged.

The promise of medical science vastly exceeds its progress to date, a statement that I and many other of my colleagues have made many times. And I will say it again. The promise of medical science vastly exceeds its progress to date.

That is not a slogan. It is not hyperbole. It is not a cliché. It is the deeply held belief that has been educated and tempered by 35 years of direct involvement with a marvelous thing called the American medical research enterprise. Thank you.

[APPLAUSE]

KNOWLES: Thank you very much. We're going to move to the other half of life, as it were, of our live segment, before we have any discussion of Dr. Rosenberg's paper. So let me introduce with great pleasure, Phil Sharp. We come to a bunch-- a sequence in the program of chemists, or that is to say, ex chemists.

Professor Sharp got his PhD in chemistry and his AB, for that matter-- his PhD from the University of Illinois in Urbana. He then began a mild transformation by going to Caltech and then to Cold Spring Harbor before coming here in 1974 as a biologist, a not uncommon root for chemists to follow, in fact.

Since 1991, he's been head of biology at MIT. As you all know, he discovered independently in 1977 that you can hire genes that split. And there began an immense effort on RNA splicing for which he was awarded the Nobel Prize two years ago. That's his academic credential. What about-- because I wanted to see legs for him.

He is the co-founder and has been for many, many years the chairman of the scientific board of Biogen, a not undistinguished local company. And most recently, for his third leg, he is now appointed a member of the President's Advisory Council on Science and Technology. Phil?

SHARP: Thank you, Jeremy. It's a pleasure to follow Lee in this program. And I was particularly pleased by his passionate defense of research and basic research. And what I'll try to do in the next few moments is just expand on some of the opportunities in basic research related to life science and then add a little detail to those points.

But before I begin, I want to make a point about life science and basic research. The issue is the following. It is very difficult to define what is basic research in life sciences. For example, is the discovery of the first oncogene a discovery in basic research or a discovery in applied research?

It certainly was motivated by a basic problem trying to understand the genetics of human cancer. And its discovery will have direct implication and has had direct impact on the treatment and diagnosis of human cancer. So in that regard, it is applied in a sense.

But similarly, the discovery of the first oncogene, which is a mutant form of a natural gene that causes tumor cells to grow, was a fundamental advance in our understanding of the regulation of cell growth and division. So in a biological sense, it certainly is a basic discovery and would be defined as basic research.

Now, to my dean who's a physicist, all of this is applied research. Because we're not advancing the understanding of the physical laws of nature. And to a clinician who is interested in treatment and care of patients, clearly the isolation of an oncogene in a laboratory related to cell growth is basic research.

Because tomorrow, it does not help that clinician cure the sick or treat the patient. Thus, when we talk about life sciences and we discuss this issue, a basic and applied research, I prefer to call it research. Because it is terribly difficult to know when one in this science is moving from one agenda to another.

Now, the case for supporting research is terribly strong, particularly in life sciences. And Leon has commented on that before me. But I'll broaden what Leon's comments are, beyond that of medical science. If you look at the great challenges facing this country, one is providing a good health for its citizens at a reasonable cost.

Another is in generation of a growing economy. And the third is maintaining an attractive and clean environment. And if you think about each of these three, all three are directly related to issues of life sciences. Thus, building the science and technology base in life sciences is critical for the future of this country in terms of both public health, economy, and the environment.

Now, I'll come back to some opportunities in life science and applications of basic research. But before I do that-- or research-- I want to comment on just how little we know now in terms of life sciences. We have seriously studied the fundamental nature of biological systems for a little more than 40 years.

I date the beginning at the discovery of the structure of DNA, which was done in 1953. It wasn't until the recombinant DNA era, which is only about 20 years ago, that we were able to isolate and manipulate genes, particularly those genes from human cells.

So until this resolution, the revolution, the recombinant DNA era, the biochemical realm of human cells was largely unexplored. Today, we're in the process of discovering new genes and new protein structures almost at a daily pace.

However, we know very little about how these cellular components interact and how they execute their chemical functions. This integration step of integrating our knowledge of the structure of genes and protein structure back into how a system works is something that we're still struggling with in terms of advances in research.

There are many fundamental questions that one can phrase that illustrates our lack of knowledge now. For example, we don't know how a protein folds into its native structure, even though we've known for decades now that that structure is critical for its activity.

We do not know how many genes are important for the formation and maintenance of man. Do we have 30,000 genes in our chromosome? 50,000 genes? 100,000 genes? We don't know yet. Finally, we know very little about how the brain works and how memory is recorded in our brain.

These are questions that lie before us as well as many others. So we can easily get overwhelmed with the flow of information and advances in life science research, but we have many things to learn yet. The development of a recombinant DNA actually brought forward the biotechnology industry.

And many novel therapies and treatments have emerged from that industry. And at this moment, about 100,000 people across the country in some way or another or employed in this sector. It is still a growing area of technology, which is becoming more diverse with new discoveries and new societal needs almost daily.

In fact, the rate of change of technology and science in the realm of biotechnology is staggering. Who would have suspected a few decades ago that the nation would be focused on a DNA fingerprinting evidence in a murder case, or struggling with the issue of an epidemic of a new virus, the AIDS virus in this society, or planning the sequencing of the total human genome?

Biotechnology is an activity that depends on advances in research and is one that is still rich with discoveries and new applications. Now, one of the societal concerns I mentioned before was the improvement of public health as well as the containment of cost of providing that public health.

There are two opportunities to simultaneously improve health as well as contain cost. The first of these are prevention. In most cases, preventing a disease is clearly cheaper than carrying a disease. However, many diseases-- and at this stage, the largest number of them cannot probably be cured.

They're probably related to natural processes that are inherent to us as biological organisms. A second opportunity is the development of more effective treatments. And this depends critically on advances in research. Better treatments primarily arise from the development of better drugs that reduce damage due to disease or drugs that cure disease.

More importantly, better treatments and diagnostic methods is the only hope of improving the quality of health care in the future as well as maintaining the cost of health care. The quality of health in an environment of constrained costs, then, depends critically upon research and innovation.

For example, the most successful biotechnology product produced today is Epogen, a drug developed by Amgen, which stimulates the production of red blood cells. This protein and similar blood factors are now making it possible to do bone marrow transplants on an outpatient basis without having patients hospitalized for weeks to months in terms of a regeneration of the bone marrow system.

This will allow more effective and intense treatment of cancer patients, which will be more effective in curing them, as well as reducing the total cost of such clinical protocols by reducing hospitalization costs. Now, at the moment, that's terribly expensive.

But 10 years from now and 20 years from now, it'll be routine. And it'll be something that's within the realm of all medical centers. The process of developing new pharmaceutical agents is beginning to rapidly change. And I think Leon referred to this.

At one time, large pharmaceutical companies almost exclusively developed new drugs by screening natural products. And I would comment that Taxol is an example of this. This worked reasonably well, but it did not provide a learning curve to make the development of future drugs easier.

The era of modern biological scientists is beginning to change this tradition in terms of drug discovery. The inner workings of a human cell, the nature of mutations that cause disease, the ability to design animal models that emulate specific human diseases is revolutionarily changing how the pharmaceutical companies and discoveries work.

We are only at the beginning of this revolution. These advances in cell biology are complementary to advances, both in chemistry in terms of combinatorial libraries that allow the sampling of large numbers, billions of different chemical structures and in structural biology, where one can determine the atomic structure of very complicated macromolecules with ease and with some rapidity.

All of these technologies will merge in the production of a new pharmaceutical industry producing new drugs with better treatment and better quality health care. There is no area of life science that offers more opportunity for research to advance public health than that of neuroscience in my opinion.

It is commonly agreed that about half of all health care costs are related to mental disease in some form. With a large, aging population, these costs will only increase. Dementias such as Alzheimer disease are not yet understood.

And therefore, there is no effective treatment to either delay the onset or effectively treat the symptoms. This can be said for almost all medical health problems. The science of the brain and the processes can now be approached with vast new arrays of technologies.

These include powerful methods to identify human genetic diseases and the genes that are responsible for them related to mental diseases. It includes the ability to manipulate mice as a model system to understand the workings of the brain. And it also includes advances in our understanding of the cell biology of neuronal cells, which the brain is composed of.

And all of these come together now to offer rich opportunities in the area of neuroscience for advances that will impact on public health. In my comments, I have tried to stress the riches of opportunities that lie before us in research in life sciences.

This research is in a national interest as it directly provides a basis for improving the quality of health care and for future uses of biological systems to produce materials, and agricultural products, and other useful applications. In addition to these opportunities in new products, the environment impacted by our technology, as I mentioned before, is largely a biological driven issue.

Thus, biological scientists have a lot to offer. And the relationship between industry and MIT, or industry and the basic science community is one that has enriched the transfer and development of the science that I have discussed into more practical and more worldly uses. Thank you.

[APPLAUSE]

KNOWLES: If Dr. Rosenberg could come and sit down, our two life scientists are available for your questions or comments. Please. Yes?

AUDIENCE: I wanted to ask both Phil and Lee a question. You talk about the importance. And obviously, I think that this particular audience-- no one would dispute the importance of the basic life science base for the future. In the case of medical sciences, we've got a corollary professional school structure-- the medical school structure and the medical profession.

When you talk about the need to have more life sciences entering into things like environmentally [INAUDIBLE] et cetera, would you-- is there anything you'd like to say about how one might think about providing the incentives in undergraduate education that would lay the groundwork for drawing students into those areas?

What I'm trying to say here is that the match between the disciplinary base, and the way we train graduate students, and the need that we may have in that area is not good. It's easy in the medical case, because we've got the medical schools and medical problems.

But certainly, that's been a great concern in the environmental technologies area and in the [INAUDIBLE] environment and natural resources to talk. This has been a stumbling block. Where do these people come from, who have the expertise to integrate that material and provide them in the basis for the future?

SHARP: In this, I think MIT has been innovative. And the reason that I say that is the following. MIT-- about five years ago-- and then affected about two years ago-- made the decision that all students who obtain a degree at an undergraduate level at this institution must take a course in biological science.

And the impact of that primarily is going to be in broadening the technology and science base of those students who go into civil engineering, and mechanical engineering, and even into physics and economics in terms of how biological systems work and what we know and don't know about them.

And what we're seeing across the campus now is something I call the greening of MIT in that we're seeing increased interest in relationships between biological sciences and engineering, both in chemical, and mechanical, and in civil, and in other areas of technology.

So I think at an undergraduate level, a breadth of education, particularly in terms of science and technology, provides a student for the opportunity, then, to-- or the background to move into environmental and more interdisciplinary activities.

KNOWLES: Frank Rhodes raised this question of scientific literacy this morning. Do you want to say anything from your Yale days, Leon, about this problem?

ROSENBERG: Well, I was going to just pick up on Marcy's question in that regard. Because I think would say, Marcy, that if we are going to find exciting people examining questions about environmental science, they are going to have to understand that environmental science is, after all, science.

And therefore, it comes back to the issue of whether our people do, in fact, have an appreciation of the principles of science. And I think that's an enormous challenge for everyone who cares about science in this country. We have not done a very good job of extending scientific literacy to the population.

All you have to do is be a person who, like I do from time to time, go around and try to talk about the importance of medical research to lay audiences. And you will find out just exactly how few people understand even the words that you use.

I think it has been estimated that only 5% of people in the United States know what the initials NIH stand for. In my company, they stand for not invented here. But somewhere else, they ought to stand for the National Institutes of Health.

And I think it is amazing how far we have to go in education in the elementary schools. I used to say to doctors that I used to lecture to, about genetics that my 13-year-old son at that time knew more genetics than I was sure all of the members of my audience did.

And that was not a put-down of the practicing physicians. It was simply a statement of what Phil said earlier, that the world of genetics began after most of the people who were practicing medicine up until very recently had completed their education.

That's something dramatic that we all have to understand, the evolution of the life sciences and the rapidity. When I was a first-year medical student, DNA was dismissed in my biochemistry lecture in 1953, just months before Watson and Crick's paper as a macromolecule of undefined structure and function.

[LAUGHTER]

SHARP: Two sentences.

KNOWLES: We must be careful not with these questions to take from the next session on which, after all, is education and suddenly becoming sensitive. More questions, please.

AUDIENCE: [INAUDIBLE] the economics of bioscience and technology with respect to ownership of intellectual property, and the cost of research, and the benefits from government support and so forth.

SHARP: Repeat the question. This is a good one for you.

[LAUGHTER]

ROSENBERG: Well--

KNOWLES: It's your kind of question.

ROSENBERG: --it sounded like one that might have been directed either to somebody from Biogen or somebody from Bristol-Meyers Squibb. But I take the question to mean, what is this biomedical enterprise as it relates to proprietary rights, as it relates to cost of research?

I can only say this much. The quest for new treatments or new diagnostic agents simply demands an industry a possibility of obtaining a return on investment. I carry around with me some of these awful numbers, like the average cost of developing a market and pharmaceutical is $250 million.

For every compound that comes to market, there are 5,000 chemicals that begin study in a discovery laboratory in academia or industry, that even those compounds that come into development in a company like ours, one in seven that find their way into animal studies make it to the marketplace.

Even those that make it into clinical study-- one in five in early clinical studies make it all the way through. And even in the latest clinical phases, that is those in which you are doing randomized double blind studies, so-called phase 3, only 50% of those things that make it to phase 3 make it to the marketplace. This is a high stakes gamble. There has to be a return on those things that make it.

Because if there isn't, then companies simply will not put the billion dollar investments, which characterize a company like mine, or Merck, or Pfizer, or a lot of the large pharmaceutical companies, or the Amgens, and Kyrons, and Biogens of the world. Because there simply will not be any way to justify it to shareholders-- the amount of money that you put in.

SHARP: I want to add just one little touch to that, and that's the following. One of the things that I have learned in my years of interacting with Bristol-Myers Squibb, or Biogen, or other companies is that this type of drug development cannot be done in the academic sector. It's just a scale of focus and commitment that you cannot mount in a public sector.

It has to be private sector activity. So if the country wants new drugs to improve the quality of life, then in some mechanism, they're going to have to fund it. And at this stage-- and I agree it's the best way-- is funded through proprietary patents and proprietary positions, which then allow the development of new drugs.

And it's almost a method of generating resources for further investment in society for further development. And it has historically, over the last 50 years, given us a vastly improved quality of health and one that I think we all appreciate.

KNOWLES: If the question was more deeply uneasy about intellectual property, which I thought it might be, I'm sure that should go on interestingly in the break. Other questions? There was no unease. Well, thank you both very much.

[APPLAUSE]

We are being reasonably obedient and good about time, so that there will be a break. And there will be time, I trust, to discuss some of these more interesting-- still interesting items. Let me move on now from the life sciences to the physical sciences. And our first speaker in the physical sciences is a PhD chemist from Brown. John McTague got his PhD in 1965.

And first, on a slight detour-- on an interesting first job, not a detour at all, of course, went to the North American Rockwell Science Center in Los Angeles. In 1970, he came-- he joined the chemistry faculty of UCLA. But by 1983, he'd become deputy director of the Office of Science and Technology Policy.

Of course, in Washington, he was acting science advisor to President Reagan in the mid-'80s and a member of President Bush's Advisory Council on Science and Technology. Now, we come to his third unambiguous third leg. Because in 1990 and since 1990, he has been the vice president for technical affairs for the Ford Motor Company, a splendidly eclectic set of activities in his career. Dr. McTague?

[APPLAUSE]

MCTAGUE: Thank you. I got a letter a little while ago from Chuck Vest with an assignment for today. And the assignment was to discuss, quote, "the evolving nature of physical science in industry and concomitant changes in industry-university relationships.

He didn't ask for this in 25 words or less. He asked for it in 20 minutes or less. However, that gives you two options. One of them is to have a extremely shallow overview or talk very fast. Maybe three options then. Or as the mathematician responded when he was asked to describe a cow, consider a one-dimensional cow.

That's the tact I'm going to take. I'm going to give a simplified version of a limited set of aspects in a subset of industries. In other words, I choose a lower dimensional cow. It's pretty clear from what we've heard already that science-based industries have a very long history. We heard earlier from Joe Miller about the fact that DuPont is almost 200 years old.

And certainly for at least 3/4 of that time, the chemical industry has had a very strong science base going back to the days of synthetic dyes. And then in this century, the science base that has strongly driven the development of polymers and very close relationships with the universities over that whole time.

As Jeremy mentioned to you, I was a graduate student slightly south of here at Brown University in the early '60s. And I can remember once wandering through the stacks of the library there and discovering a catalog from the early 1920s in which the name of the chemistry department, in fact, was the department of wool chemistry.

So early on, well before the days of government funding, there was a very close relationship between the academic establishment and the chemical industries, both in the United States and in Europe. We've seen developments of science-based industries in other fields, too.

An obvious example was the evolution from-- let me call it truly Edisonian days in the electrical industry to the more science-base days of the early days of the research labs at General Electric with Langmuir, among others, and of Westinghouse to today's microelectronics industry, which is extremely, strongly science based and has had very close ties to particularly materials developments that have occurred in universities.

Now, I want to get to what I really want to talk about, which is my own industry, which in contrast, perhaps, to the biotechnology life sciences industries, is in most people's minds, most accurately described as a Neanderthal industry.

Or if you want to be charitable, a Rust Belt industry. Off the top of your head, you wouldn't tend to think of an industry like this as having much science base. And over much of its history, that's probably true. The automotive industry for practical purposes is about half the age of DuPont.

It started off around the turn of the century, really, with a bunch of tinkerers, truly Edisonian tinkers, mostly people with no or little formal education, but with a great enthusiasm to experiment and to make vehicles literally in their garages. The big transformation of the industry occurred in the early part of this century with the introduction of mass manufacturing.

And indeed, ever since then, the great strength of the automotive industry and transforming life around the globe has been the genius of being able to make extremely complex consumer products extremely rapidly and at an extremely low cost.

But there was very little true technical innovation that occurred in this industry between roughly 1915 or so, after carburetors had been invented. And actually, even the first aluminum engine was built before that, until the period following World War II.

Even after World War II, the industry was sort of in a drift, I would say. So then for almost 50 years, essentially nothing happened in this industry. During that time period, the involvement of scientists or indeed of formally educated engineers in the industry was minimal.

Up until the period after World War II, there were essentially no formally educated engineers in the automotive industry. Product engineers rose from being draftsman. And manufacturing engineers basically served apprenticeships on the floor and just took over larger and larger components of manufacturing.

Right after World War II, though, formally trained product engineers started moving into the business. And about 20 years ago, manufacturing engineers started having formal educations. But it's only been probably in the last 10 years that more than 75% of the manufacturing engineers even had a degree.

All this occurred during a period of enormous prosperity for this industry, just going along, going along, raking in the money, not having to do anything else. It must have been a very pleasant life. I wish I had been there. But then in the late '60s and the early '70s, an absolute revolution occurred driven by external forces.

The first force probably was environmental awareness when people found out the causes of smog in the Los Angeles base-- and scientists did. And the general populace understanding the fragility of the environment basically going back to Rachel Carson.

And then in the early '70s, the oil shock, which made people aware of the fact that their vehicles we're actually burning gasoline, and that gasoline was not free anymore, and not necessarily freely available. These two shocks completely threw the industry off its pedestal.

And it had to respond extremely rapidly. How did it respond extremely rapidly? Well, fortunately, what had occurred about 10 years before that was something that occurred in many industries in the United States not unconnected with Vannevar Bush's report.

And that was setting up research laboratories. In those days, just about every respectable or even not respectable industry, so long as it was large, set up a, quote, "fundamental research laboratory." Just sort of had it there, just like most large industries supported the symphony orchestra.

Fortunately, when the shock of the oil problems and of the environment came about in the automotive industry, there were these people who understood science. And all of a sudden, they became relevant to their corporations, understanding combustion and controlling it, understanding emissions.

Being able to make engines that had very high fuel economy became extremely important. Bases behind these were sciences related to catalysis, for example. Surface science. A lot of work necessary on lightweight materials to make vehicles more efficient.

The necessity for computer controls for the first time in order, both to control emissions and fuel economy. The need to have science-based sensors to be able to measure on the fly the amount of oxygen going into cylinders, the amount coming out-- carbon dioxide.

The ability, then, as safety became important to be able to sense for torque, for example, for traction control. Accelerometers to control airbags, et cetera. So various aspects of science started becoming important to this industry, but not in the same way as it did, let's say, to the chemical industry.

Because the chemical industry had or developed along with it an academic discipline. There is no real academic discipline of the automobile, because like the airplane, it involves basically the integration into a system of a large number of sciences and technologies, yet it is becoming more and more a science-based industry.

Two things have happened as a result of that. One of them is that we realized that we can't do it all. Over the past several decades as both the demands-- the environmental, the fuel economy, and the competitive demands have increased, we have very substantially increased our R&D.

It's growing at roughly twice the rate of industrial R&D in the United States. But even with that growth-- I mean, for example, at Ford now, the R&D budget last year was a bit over $5 billion, which is a substantial amount of money.

That's roughly $1 in every $16 that's spent by industry on research in just one corporation. We obviously can't do it all, since we are basically systems integrators of just about any kind of technology that you can think of, be it electronics, or materials, or chemical.

So there've been a lot of experiments going on over the past decades, trying to figure out how we can work best with suppliers, how we can work best with universities, how we can work best with national laboratories, and even how we can work best with our toughest competitors.