▶ 0:16:04Chair Crapo: Like all the finance subcommittee on health care to water. I would like to thank chairman crapo and ranking member wyden for their help in allowing us to move forward with this hearing today. I also want to acknowledge senator hassan for her partnership and her leadership to make today' is hearing possible. And a big shout out to members of the staff, who worked very hard on both sides of the aisle to make this happen.
▶ 0:16:32Chair Crapo: Over the past decade biotechnology has emerged as a pivotal technology. It is a pivotal technology of the 21st century. This technology has the potential to cure diseases like cancer and alzheimer's, to protect us from pandemics, and fuel our economy.
▶ 0:16:58Chair Crapo: In indiana loaned the life sciences industry employs around 70,000 hoosiers, providing good paying jobs in local communities while producing critical innovation and health treatments. Indiana also leads the united states in I am manufacturing, serving as the nation's number one life-sciences exporter in 2024.
▶ 0:17:22Chair Crapo: However, china's rise in biotechnology and the growing risks of antimicrobial resistance present new challenges to the united states. For more than a decade beijing has poured enormous resources into their biotech sick your in a deliberate bid for global dominance.
▶ 0:17:43Chair Crapo: China's rise puts the united states in a perilous position, because leadership in this space provides america national and economic security. Moreover, advancements in biotech helped keep america healthy by treating and curing diseases.
▶ 0:17:59Chair Crapo: So, if wec so, if we -- cede biotech to china high skilled jobs migrate abroad, first-class therapies do not reach american patients first, and pharmaceutical supply chains are strategically weaponize. Just as we face the threat of china's rise in biotechnology, antimicrobial resistance has become a growing public health crisis in recent years.
▶ 0:18:31Chair Crapo: In the united states alone more than 2.8 million antibiotic resistant infections occur each year. Resulting in over 35,000 deaths. As antimicrobial resistance has spread market failures have resulted in a lack of needed research and development for new therapies. Many of the cutting edge biopharmaceutical companies working to develop antimicrobials have filed for bankruptcy and stopped producing these antibiotics completely.
▶ 0:19:02Chair Crapo: While these two threats to the united states vary in substance, the solution to address both is simple. Innovation. America has a rich history of innovation, of course. It is what we are best at him and as policymakers it is our responsibility to empower our innovators, whether through r&d incentives, partnering with allies to strengthen supply chains, or cutting red tape.
▶ 0:19:31Chair Crapo: Without an industrious and self-sustaining biotechnology sector the united states will remain at risk. Both of relying on china for new , life-saving therapies and basic drugs, in-depth being unprepared for the next public health crisis. It is my hope this hearing will explore ways we can ensure the united states remains the global leader in biotechnology. And I now recognize ranking member hassan to deliver her opening statement.
▶ 0:20:00Sen. Hassan: Thank you, chair young, for not only your statement, but for the work you have done with me to hold today's hearing and for your staff, who have worked so well along with mind to make sure this hearing could come together. I also want to thank the witnesses here for testifying before the committee and sharing your perspectives on health care and biotechnology.
▶ 0:20:27Sen. Hassan: As the chair has noted, one major emerging threat is the surge of so-called superbugs, which are bacteria that no longer respond to the treatments we currently have. Nearly 3 million americans get sick each year with a infection that cannot be treated with the routine antibiotics we have today. Doctors treating patients with resistant infections have to try multiple antibiotics and in some cases no treatment options exist.
▶ 0:20:57Sen. Hassan: Despite this growing crisis, research and development for new antibiotics is lagging and only a handful of new antibiotics have been discovered in the past 50 years. We need to examine this issue and find ways to invest in the development of new antibiotics in order to give doctors and patients the tools they need. This is a priority not just for the health of our people, but also for our national security.
▶ 0:21:23Sen. Hassan: Because, as we face the challenge of superbugs and defending against other outbreaks, our foreign adversaries are growing sophisticated in their own biotechnology. In the development of medications and treatments china has grown its capacity and is now one of the fastest drug development pipelines in the world.
▶ 0:21:43Sen. Hassan: If the united states does not keep up with the science and innovation coming from countries like china we risk falling behind and becoming reliant on critical new medications that are only available abroad. Furthermore, much of our supply chain for medications and medical devices made in the U.S. depends on ingredients and materials that come from abroad.
▶ 0:22:05Sen. Hassan: As we look ahead to the future of biotechnology in the united states, it is critical we consider ways to diversify, secure, and onshore supply chains. As we grow this important work at home we need to protect against the possibility that our adversaries will steal this research and leapfrog ahead of us. You know that foreign entities from russia and china are already targeting american biotechnology and american research through targeted cyber attacks.
▶ 0:22:36Sen. Hassan: This compromises our national security and sensitive patient data, potentially allowing foreign governments to weaponize biological information. We need to treat biotechnology as critical infrastructure in order to protect americans' biological information from these outside threats. So, it is clear we have work to do to strengthen our health care system and our national security by addressing these threats.
▶ 0:23:04Sen. Hassan: And I am looking forward to today's hearing so we can take a step forward in doing that. I will now turn it over to the chair.
▶ 0:23:11Chair Young: Thank you, senator hassan. Make sure the ic make sure the imic is working there. Our first witness is alan palkowitz, president and ceo of the indiana biosciences research institute.
▶ 0:23:33Chair Young: He has extensive experience in the biotechnology industry, including 20 years at eli lilly, where he served as vice president of discovery, chemistry research, and technologies. Our second witness, Dr. michelle rozo, is vice chair of the national security commission on biotechnology, and before joining the commission Dr. rozo served as director of technology and national security at the U.S. national security council.
▶ 0:24:04Chair Young: I'm going to turn to ranking member hassan to introduce the third witness.
▶ 0:24:09Sen. Hassan: Thank you. I am pleased to introduce Dr. vera luther, the section chief of infectious disease and international health at dartmouth hitchcock medical center. Dr. luther is a nationally-recognized physician and leader in infection control and the treatment -- on the treatment of infectious diseases. I look forward to your testimony. Back to you, Mr. chair.
▶ 0:24:32Chair Young: For our final witness, it is Mr. kevin outterson, professor of law and executive director of combating antibiotic resistant bacteria accelerator at boston university. Mr. outterson has published more than 100 articles and book chapters on health care law, with a focus on incentive problems related to pharmaceutical products, including pushy and full incentives for antimicrobials.
▶ 0:25:04Chair Young: Welcome, all. We are now going to turn to Dr. palkowitz. You are recognized for five minutes, sir. >> thank you for the opportunity to testify today. On an issue central to indiana's growing life-sciences economy.
▶ 0:25:33Chair Young: My name is alan palkowitz, president and ceo of the indiana biosciences research institute, and nonprofit institute which accelerates the discovery of therapeutics. After more than 30 years leading drug discovery in the biopharmaceutical industry I reached one conclusion. America does not have an innovation deficit, it has a translation deficit. Our scientists are succeeding.
▶ 0:26:01Chair Young: However, our innovation system is not translating their discoveries into medicines, new companies, manufacturing, and jobs. The gap is what many call the valley of death, promising discoveries that are too advanced for academic funding and too risky for private capital. When federally-funded discoveries install taxpayers lose twice. Patients lose access to therapies and america loses a return on billions of dollars already invested. This is not a temporary problem.
▶ 0:26:32Chair Young: For more than a decade private investors have followed the same pattern. They wait on the sidelines until a molecule has cleared the valley of debt and shown commercial potential, and only then invest. That pattern shows no sign of changing on its own. If anything, today's investors' appetite for artificial intelligence and adjacent technologies is pulling capital away from early-stage biotechnology.
▶ 0:26:57Chair Young: Bridging that gap is why the indiana biosciences research institute exists. Over the past decade indiana has shown that translational success comes not from any single institution, but from a connected ecosystem. Universities, science companies, health systems, entrepreneurs, philanthropy investors, and government working together to reduce the barriers between discovery and commercialization. That is the blueprint for the national strategy I'm recommending.
▶ 0:27:26Chair Young: This committee, biotechnology is one of the highest-return investments the federal government can make. Innovative therapies improve lives while reducing long-term medicare and medicaid costs. Innovation policy is fiscal policy. It is also health security policy and national security policy. China is pursuing an aggressive national strategy to globally dominate biotechnology.
▶ 0:27:57Chair Young: China is competing ecosystem against ecosystem. This congress has recently taken an important step on security that is necessary, but it is defense. What america needs is offense. The strategy to build our own translational capacity as deliberately as china is building its own. That is why I recommend establishing a national translational biotechnology initiative. Let me be clear about what it is not.
▶ 0:28:24Chair Young: It is not a substitute for the nih or other agencies that fund america's basic science. Those investments are the foundation of everything I am describing. The initiative picks up where that research leads off, supplementing federal funding helping the discoveries they support survived the journey from science to a therapeutic.
▶ 0:28:47Chair Young: Rather than another research program the initiative is a framework that aligns the role investments with state initiatives, regional partnerships, industry philanthropy, and private capital. Tilting translational research infrastructure, creating a national network of regional biotechnology translation hubs, building the biotechnology workforce of the future, expanding domestic bio manufacturing capacity and supply chain resilience, expanding federal incentives
▶ 0:29:17Chair Young: That discharge technical risks, and accelerate commercialization, and measuring success through definitive outcomes, not publications or patents alone. I describe each in detail in my written testimony. Let me leave you with one final thought. Maintaining america's leadership is not inevitable. It is a policy choice. If we bridge america's translation gap we achieve three outcomes. Healthy americans, a stronger american economy, and a more resilient america.
▶ 0:29:48Chair Young: Thank you for the opportunity to testify. I look forward to your questions.
▶ 0:29:51Chair Young: Thank you for your opening statement. Dr. rozo, you are recognized for five minutes. >> thank you for the opportunity to testify. It is an honor to appear before you on behalf of the national security commission on emerging biotechnology to discuss why biotech is a matter of national security. Chairman young, and has been a pleasure to serve alongside you.
▶ 0:30:20Chair Young: Your leadership helped produce recommendations that will strengthen america's biotechnology future. I have two messages for the committee today. First, china is no longer merely catching up to us in biotechnology in key domains, particularly areas of biopharmaceutical innovation, they are surpassing us. Second, biotechnology is about more than medicine.
▶ 0:30:42Chair Young: Leadership will shape agriculture, defense, economic competitiveness, and national power for decades. China's rise in biotechnology is no accident. For two decades the chinese government has pursued a national strategy for biotechnology leadership to dominate the sector using both legal and illegal means. We can see the results most clearly in pharmaceutical biotech.
▶ 0:31:10Chair Young: Multinational pharmaceutical companies are increasingly going to china to acquire cutting-edge innovation. Last year alone companies entered into more than 150 licensing deals, with chinese biotech firms worth over $135 billion. That was nearly triple the previous year's record, and this year it is on pace to shatter that total. That may spend a minute on why this matters from a national security perspective. I come to this issue as a scientist and national security professional.
▶ 0:31:42Chair Young: I am a biologist and have served across the department of war and national security council and now work with the intelligence community on emerging technologies. People often ask me, if china develops a breakthrough cancer therapy isn't that a good thing? Wouldn't more innovation and cures benefit patients across the world? These are fair questions. We all want lifesaving medicines to reach patients faster, but it is not just about who invents the technology.
▶ 0:32:11Chair Young: It is about who controls it and whether we can rely on them in a crisis. Just like we saw with telecommunications, america's growing dependence on chinese biopharmaceutical supply chains is a strategic vulnerability. But we should be asking is, if china has restricted access to critical minerals, why would we assume it will continue supplying lifesaving medicines during a conflict? Imagine american doctors forced to ration treatments because supply chains have been weaponize.
▶ 0:32:42Chair Young: Imagine policymakers forced to choose between national security parodies and the health of the american people. Those are choices we should never have to face, but that is where we are heading. China's biotech capacity increases its options while our dependence risks constraining hours. The commission laid out a plan to change this trajectory. 49 recommendations to both strengthen the U.S. biotechnology ecosystem and also address the risks created by china's non-market system.
▶ 0:33:12Chair Young: With the help of members of this committee congress is asking -- acting on this plan. Legislative action has been taken on 40 of the 49 recommendations, with 26 provisions signed into law. One of our recommendations was to restore the expensing of r&d costs, and I'm grateful to senator young and senator hassan further leadership on the american innovation and jobs act.
▶ 0:33:40Chair Young: Ensuring biotechnology is can deduct these r&d expenses are essential to maintaining U.S. competitiveness, but more work remains. The country that leads in biotech will gain economic and national security advantages him and the chinese communist party has made that that delivery -- deliberately. The question is whether the united states will act with the same urgency. This committee has a critical role to play.
▶ 0:34:08Chair Young: The policies under your jurisdiction are essential to enabling U.S. biotech leadership and addressing china's non-market practices. Our commission ends at the end of this year, but our -- and ensure american biotechnology leadership long after we close our doors. Thank you.
▶ 0:34:25Chair Young: Thank you, Dr. rozo, and thank you for your extensive and very professional work on the commission as well. Dr. luther, you are recognized for a five opening statement.
▶ 0:34:39Dr. Luther: Thank you. Thank you for holding today's hearing and inviting me to testify. My name is vera luther, an infectious diseases position at dartmouth health. Strengthening biotechnology innovation is critical to addressing threats such as antimicrobial resistance.
▶ 0:35:07Dr. Luther: Amr is killing americans, driving up health-care costs, and eroding our ability to perform routine surgeries, organ transplants, and neonatal care. To say patients' lives and protect medical care we need three things. We need novel antimicrobial drugs, stewardship programs tooling -- and infectious disease physicians to treat patients with infections and lead health systems' programs.
▶ 0:35:39Dr. Luther: Unfortunately, our pipelines of both antimicrobial drugs and id physicians are in crisis. Amr if they -- is a pathogen's ability to resist antimicrobial drugs, making these ineffective. In the U.S. amr is linked to 170,000 deaths annually, and infections contribute to half of cancer deaths and are the second-leading cause of maternal mortality.
▶ 0:36:04Dr. Luther: Health care costs from the six biggest amr threats are more than $4.6 billion annually, but more than -- new antimicrobial drugs could reduce hospitalizations and kidney damage. Consider a few examples that my colleagues and I regularly face. A mom in her 30's was hospitalized with severe lupus and given immunosuppressive drugs. She developed pneumonia.
▶ 0:36:31Dr. Luther: Despite antibiotics, the infection got worse and entered her bloodstream. We tried several different combination is of antibiotics, however, she died from her infection. In marathon runner in his 50's underwent a knee replacement surgery. He developed an infection that was resistant to antibiotics. He underwent additional surgeries, mounts of antibiotic therapy, and had to spend nearly a year away from work. A woman in her 60's was admitted with a urinary tract infection.
▶ 0:37:00Dr. Luther: The hospital had no id position and test results took three days. Initial treatments were ineffective. She progressed to sepsis and faced three weeks in the icu. I want to thank senators bennett and young for authoring the bipartisan pastore act, which would pay for value rather than volume, rewarding only truly innovative drugs that benefit patients with federal contracts.
▶ 0:37:31Dr. Luther: We must also ensure that antimicrobial drugs are used appropriately. Antimicrobial stewardship programs improve patient outcomes, reduced and appropriate antibiotic use, and lower health care costs. However, many hospitals lack the resources, staff, and diagnostics necessary to fully implement stewardship and guide antimicrobial decisions.
▶ 0:37:54Dr. Luther: At a rural hospital I supported through telehealth a physician described the instinct to shoot broad with antibiotics because there is no id consultant on site and the stakes of under treating are so high. This is understandable, but precisely the pattern that accelerates resistance. Nationally, nearly half of small and rural hospitals have no id specialist on staff, though they routinely see patients with resistant infections.
▶ 0:38:25Dr. Luther: Pastore would provide resources to such civilities. We also need investments in the id workforce. Nearly 80% of U.S. counties have no id position. Because id is the third lowest-paid specialty, we feel with fewer than half of our id training programs annually. This means many patients cannot reach us or must travel far and delayed care.
▶ 0:38:52Dr. Luther: Id physicians don't do procedures, so we bill any of the same codes as primary care. We need to work with you on legislative solutions. For example, payment incentives and exemptions for non-procedural healthcare services, from cuts, to practice reimbursement, quality measures for id, and a mechanism to reward id physicians for the cost savings that our work generates.
▶ 0:39:22Dr. Luther: Congress has already authorized one important tool, but it remains unfunded. The buyer preparedness workforce pilot program would offer loan repayment to id professionals. I urge congress to appropriate the $5 million necessary. Thank you for the opportunity to testify today.
▶ 0:39:40Chair Young: Thank you, Dr. luther. Mr. outterson, you are recognized for five minutes.
▶ 0:39:46Mr. Outterson: Chairman, nice to see you again, and other members of the committee. Thank you for inviting me today. I am kevin outterson, a professor of law at boston university. Carb-x is a tool created to drive innovation in the antimicrobial space.
▶ 0:40:07Mr. Outterson: A recent study found that carb-x supported projects are moving into human clinical trials and being translated with great success, and I'm grateful for the opportunity to be here today and talk with you. Americans and their health systems rely on effective antibiotics. He depend on these amazing drugs in astonishing ways. Every hospital in your state, every soldier in the U.S.
▶ 0:40:34Mr. Outterson: Military, every mother who gets a c-section -- even people my age who might be looking at me replacement, all of us depend on these amazing drugs as a safety net to prevent the infection which could end their lives. Resistance, however, eats away at these amazing drugs. It is like a rust eating away at a bridge. In the united states right now 2.8 million people get these infections. 35,000 americans die each year.
▶ 0:41:04Mr. Outterson: It sickens many more people who survive it. Treating infections caused by the six most-resistant pathogens in the U.S., costs our health care system at least $4.6 billion a year. In the past few years the cdc reported a fivefold increase in infections caused by these nightmare bacteria across 29 states. The other states are probably just -- we don't have enough surveillance to have seen what is happening there.
▶ 0:41:33Mr. Outterson: These pathogens threaten the resilience of our health care systems. They are resistant to many of the newest antibiotics. They are associated with high rates of ability on mortality and can spread throughout our system. Now is the time for us to be investing in these things for the future. Antibiotics are valuable, but the economic market is really undeniably broken. Fda approval should be a celebration for these companies.
▶ 0:42:01Mr. Outterson: But the payday never comes for antibiotics, because of resistance. Doctors, like Dr. luther and other doctors, do the right thing. They are very careful with these drugs. That is the correct thing to do. But they then sit on the shelf like a fire extinguisher behind a glass wall, and the company doesn't get paid. For the fire extinguisher company, they get paid the day the fire extinguisher goes on the wall.
▶ 0:42:30Mr. Outterson: They get paid when the preparedness starts. For antibiotics, they don't get paid until we use them. By that time many of these companies have gone bust. We have had 11 small companies bring in a new fda-improved antibiotic to the market in the last decade. Two of them are relatively new. The other nine have been on the market for a couple of years and all nine of them have either gone into bankruptcy or the economic equivalent.
▶ 0:42:59Mr. Outterson: R&d investors are completely wiped out. That is 100% of the small companies with fda approvals for antibiotics in the last decade. We need a better pipeline of these critical products. We need to move them onto the market and it needs to be a market success, because otherwise we lose what underpins modern medicine. There has been more than a dozen reports that agreed the market is broken. Cancer drugs make money, and therefore we have lots of cancer drugs in the pipeline. It is a great time to respond to this national security crisis.
▶ 0:43:29Mr. Outterson: Need to change the way we pay for antibiotics, bring on success. Barda had -- has played a critical role. Together with the nih there has been a lot of work we have done collaboratively that I think is making a difference.
▶ 0:43:48Mr. Outterson: In addition to all of this work other g-7 governments are coming together to create antibiotic centers, such as contracts, paying for value instead of the volume of sales. If congress does this sort of a contracting program, such as the pastore act, americans can get the new antibiotics we want from a resilient supply chain instead of something we doubt whether we are going to have it or not.
▶ 0:44:16Mr. Outterson: You need to have that fire extinguisher for each of these bacteria ready to go. This would be a remarkably great value for the U.S. taxpayers. A study found a 28-1 return. A study I published says that if we only spent what we spend on branded antibiotics less than a decade ago that would be enough to restore the market. So, to real infections are bad today. They are getting worse.
▶ 0:44:43Mr. Outterson: Now is an amazingly-wonderful time to invest in the future of antibiotics he can. Thank you. -- antibiotics again. Thank you.
▶ 0:44:51Chair Young: Thank you for your words and work. You will now begin with member questions. I will begin with Dr. palkowitz. While serving as chair of the national security commission on emerging biotechnology, the commission explored ways to address the valley of death that small to midsized biotechnology companies are faced with. It is a challenge you alluded to. I know you have wrestled with it.
▶ 0:45:19Chair Young: Given your experience and your thoughts on this issue, tell us, how should policymakers think about addressing this modern valley of death?
▶ 0:45:30Dr. Palkowitz: Thank you, senator, for the question. I think it is a number of factors that have to be considered. One is, we need to make sure the science is ready to move forward . That is where the infrastructure of the universities, the funded programs have really matured science to the point where we can begin to think about that next step and can -- connecting science to patient impact.
▶ 0:45:59Dr. Palkowitz: We also need to make sure the right resources are available. The right expertise. Need to make sure the translational expertise -- which is different than you may find in an academic environment -- groups that have the know-how of how to take a hypothesis and converted into a molecule that can be part of a clinical trial and be the source of ip and value creation requires an infrastructure. That requires expertise and investment.
▶ 0:46:26Dr. Palkowitz: So, we have to make sure that we can de-risk some of these ideas to the point where we pull investors in, we leverage private capital more effectively to be able to drive these ideas forward and position ourselves for experimentation to take the scientific hypothesis to its full conclusion. So, it does require -- what is that? Nope.
▶ 0:46:52Dr. Palkowitz: [laughter] it does require all of those factors coming together as part of an ecosystem, in my view, to make that happen. Many resources exist, but they are fragmented and we need to bring them together more effectively.
▶ 0:47:06Chair Young: Thank you, doctor. Thank you, senator. I will move from innovation to the issue of national security. We will turn right to it. Our commission highlighted U.S. risks of losing him petition to china in a way that disturbingly -- and I will underscore this point -- might cause us to never be able to recover, right?
▶ 0:47:36Chair Young: And so, the commission's recent side-by-side analysis I would commend to those who are watching these proceedings, it shows china is already enacting the kind of policies that the commission, that our congressionally-funded commission, recommended for the U.S. government. So, Dr. rozo, could you highlight any of the recommendations from our report that china seems to have enacted that congress should be aware of?
▶ 0:48:06Dr. Rozo: Thank you for that question. China is using a mix of licit and illicit means to strengthen their biotech ecosystem. As you point out, there are a number of measures we recommend that they have gone on tampa men. One of which is strategic investment. He recently launched a series of guidance funds focused on national security technologies that look a lot like the independent investment funds we recommend the U.S. government support.
▶ 0:48:35Dr. Rozo: Another avenue they are now doubling down on is industrial bio manufacturing and the infrastructure associated with that. This is an area we emphasize in our report, as a critical component of where biotech can be used to on shore critical chemicals we now rely on for -- foreign sources or adversaries. The third area I'm going to highlight for this committee is regulatory reform.
▶ 0:48:59Dr. Rozo: This began before we released our report, but china continues to clear the pathway to market, making it easier for products to move forward in their regulatory system, which is something we recommend in our findings.
▶ 0:49:13Chair Young: Thank you. Disturbing. Sort of flips on its head something I heard around the chips on science act passage, which is we don't want to be like china. Well, though we did not rent this report in chinese characters, they may have some interest in adopting our policies. Dr.
▶ 0:49:33Chair Young: Rozo, what threats do you -- do we face if we see biotech leadership to the ccp? -- cede biotech leadership to the ccp? They might withhold medicines, but unpack this a little bit for 30 seconds, please.
▶ 0:50:00Dr. Rozo: I think it comes down to three things. First is leverage. Their ability to use critical sectors against us would embolden their strategic independence, and expand that to every sector that biotech touches. The second is jobs in manufacturing. I said in my opener that 135 billion dollars worth of deals have been inked with chinese firms last year. That is investment into r&d and jobs associated with it that are not going into the U.S.
▶ 0:50:31Dr. Rozo: Ecosystem. The third is standards. Whoever leads right the rules of the road. Biotech does far has been written on american values. We may not like a version of it that does not.
▶ 0:50:41Chair Young: We have not gotten into, which we don't need to now, but the fact that the very biotech that is used to produce life-improving treatments is also the biotech that can be leveraged into bio industrial applications useful to war fighters. With that, senator hassan, you are recognized.
▶ 0:51:04Sen. Hassan: Thanks, Mr. chair. I want to start, Dr. luther, with a question to you. When a patient has an infection and the antibiotics we have used for decades no longer work doctors are left with limited treatment options. Can you walk us through some of the challenges you face when treating a patient who is infected by a superbug?
▶ 0:51:28Yes -- Dr. Rozo: Yes. When we encounter a patient who has an infection with a superbug it really means treatment for conditions that should be straightforward are extremely difficult. For example, a patient who develops a sore on their foot from where their shoe was rubbing.
▶ 0:51:50Yes -- Dr. Rozo: If that wound becomes infected with a superbug, there is a good chance it will go into the deeper tissues, into the bone, and antibiotics alone will not treat it. That person is at high risk for an amputation as the only treatment. What it could mean is that we have a child who has leukemia and we are able to cure the leukemia, but we cannot save that child's life, because they die of a serious infection.
▶ 0:52:20Yes -- Dr. Rozo: So, it sets us back decades from the progress we have made with modern medical care. So, some of these incredible advances we have in the field are all taken away when we are facing superbug's that we have no treatment options four.
▶ 0:52:37Sen. Hassan: Especially if you have somebody who because of the advanced treatment has a suppressed immune system, and therefore more likely to get the infection. What are the most pressing areas for innovation in biotechnology that you need in order to improve clinical care?
▶ 0:52:55Dr. Luther: So, the most pressing areas really center around three main topics. One, novel and -- antimicrobial drugs. Right now we really don't have the arsenal we need to be able to treat these superbugs. So, that is critically important. We also need developments with regard to diagnostics.
▶ 0:53:20Dr. Luther: So, rapid diagnostics for surveillance to look at the environment, to give us a head start about where there may be an outbreak, but also diagnostics at the bedside and making sure people have access to those diagnostics, including in rural and critical access hospitals. The third area is around manufacturing. Unfortunately, in medicine we face shortages on a regular basis.
▶ 0:53:47Dr. Luther: Shortages in terms of antibiotics, shortages in terms of the diagnostics. So, we really need to leverage biotechnology to ensure that our manufacturing of these antimicrobials and critical materials remains secure.
▶ 0:54:05Sen. Hassan: Thank you. Dr. palkowitz, small biotechnology companies face significant obstacles when developing new antibiotics. Antibiotic research involves costly early-stage scientific research, as well as clinical trials that are more complex and other types of trials, because of the life-threatening nature of infections.
▶ 0:54:28Sen. Hassan: I have been working on draft legislation that would give biotechnology companies bigger tax incentives to develop new antibiotics and help patients who get superbug infections. How can targeted tax incentives help the small biotechnology companies that you work with pursue research on antibiotics?
▶ 0:54:46Dr. Palkowitz: Thank you for the question. One of the toughest challenges in the biotech bases is raising capital for challenging research. So, any kind of incentive that would actually upset -- offset some of that financial risk, but create an unfavorable environment -- a favorable environment for investors would be valuable.
▶ 0:55:11Dr. Palkowitz: This could be a great catalyst for getting more companies off the ground, recognizing that the science is there. The right environment has to be available for resources to converge on these important problems and it has to be done at scale. One drug is not going to solve the challenge. We need to have a young pipeline -- an emerging pipeline that is not only strong, but also diverse in approaches. This could be an important catalyst to achieve that.
▶ 0:55:39Sen. Hassan: Thank you. Quick question for Dr. rozo. The national security commission on emerging biotechnology found that much of our biotechnology infrastructure is not adequately protected. In the commission's report you recommended congress take acts -- action to ensure that biotechnology and data are covered under the definition of critical infrastructure.
▶ 0:56:05Sen. Hassan: How would it increase security for the U.S. to designate biotechnology and data as critical infrastructure?
▶ 0:56:12Dr. Rozo: Right now dhs recognizes sectors that biotech cuts across. Health, agriculture, and energy. But I'll take is not explicitly protected comprehensively. The designation of biotech as a critical sector by dhs would enable thread information sharing, a federal response in a crisis, and mobilize the resources needed to protect facilities and critical data.
▶ 0:56:40Sen. Hassan: Thank you very much.
▶ 0:56:42Chair Young: Dr. cassidy, you are now recognized.
▶ 0:56:46Sen. Cassidy: Dr. palkowitz, you speak about -- I may get the quote almost right -- for small biotech their biggest challenge is raising critical capital. Now, the ira, which is going to begin to include small biotech in 2028, they tell me, is a real hindrance to raising capital, because they see that they are drugs that are raising the money may be subject to the ira.
▶ 0:57:17Sen. Cassidy: What do you think? Again, small biotech has been the first tile field with this innovation has occurred. Not so much big pharma. Small biotech. Should have a vested interest in how we can preserve small biotech. Do you agree with their concerns? That the small biotech exemption expiring in 2028 is going to make it either more difficult for them to raise the critical capital?
▶ 0:57:47Dr. Palkowitz: Thank you, senator, for the question. If I understand, you know, the context here, I'm not fully versed in all of the details of the ira as it relates to this, but when I think about some of the provisions of the ira that has been around and some of the challenges on patent terms for small molecule biologics are not sure what that is -- if that is what you are referring to.
▶ 0:58:13Sen. Cassidy: Well, let me go on to another question. As regards -- I had somebody that had a superior product for detecting colon cancer. They got to the fda. They could not get a cpt code. There was an 18-month delay. You speak about how we could bring better products to market, but if you cannot get paid for your innovation it is going to be a damper on innovating.
▶ 0:58:40Sen. Cassidy: An 18-month delay between getting fda approval and getting a cpt code could be life or death for a company trying to make it. Any comments on that and the importance on a shorter time frame between fda approval and getting a cpt code?
▶ 0:58:59Dr. Palkowitz: I think that is a very good point and I think everything we are talking about, of compressing timelines, you know, from a scientific concept all the way to reaching patients and delivering the value of the science, has to be were effectively shortened and coordinated. Otherwise a lot of effort will be wasted and patients will not benefit.
▶ 0:59:22Dr. Palkowitz: I think reform on all dimensions to really bring a tighter, integrated process that goes from concept to patient impact, is critically needed across the board.
▶ 0:59:33Sen. Cassidy: That is under our jurisdiction. Dr. rozo and Dr. luther, are you also -- the antibiotic-resistant -- addressing antibiotic-resistant strains requires you to come up with a new antibody you never use. Unless it is for somebody who has an antibiotic resistant strain. When I was in residency I would push to have the new greatest drug often because that is how you pay for the development.
▶ 1:00:04Sen. Cassidy: Clearly we have to have a better business model. One thing I thought about, both for that and attempting to reassure drugs -- what if medicare would pay an extra bit of money to those companies investing in producing drugs within the united states if currently they are not?
▶ 1:00:28Sen. Cassidy: Or, if you have a subscription model that medicare would subsidize, then you have an antibiotic you never want to use unless you want to use it, but that every hospital would be required to pay a little bit to access it and whenever they needed it is like going to the library and putting out the book but you never have to return it? I guess, two things there. First about the payment for drugs we wish to reassure her. Secondly, on the subscription model for antibiotic-resistant organisms -- whomever.
▶ 1:01:01Dr. Luther: Thank you for that question. The subscription model is an excellent point, and that is something that is so exciting about the pasteur act. Being able to have these drugs available, and for companies to be paid for the value they provide rather than the volume of that drug that is consumed. I think that is a very important consideration.
▶ 1:01:30Dr. Luther: And the other piece I believe your question spoke to is about, how do we ensure these new drugs are used appropriately? That is so important and, so, thinking about antimicrobial stewardship programs to have the oversight on a local level to see how are these drugs used, how hot they be used?
▶ 1:01:54Dr. Luther: And make sure we are providing that support to the front line and providers so they are really using these drugs as best they can.
▶ 1:02:02Sen. Cassidy: Yes sir?
▶ 1:02:04Dr. Palkowitz: Dr. cassidy, great questions. On subscription, I support changing the way we pay for antibiotics. On the supply chain, you know, the companies are responding to the fact that we always look for the cheapest generic antibiotics, or any of the other drugs that are in shortage. The companies have responded by off shoring that production.
▶ 1:02:29Dr. Palkowitz: Right now for antibiotics under many of the api -- the pharmaceutical ingredients -- key components behind them -- there is only a couple places in the world -- mostly china -- in which these drugs are the key ingredients behind the drugs are made.
▶ 1:02:46Dr. Palkowitz: So, you know, if we wanted that we are going to have to pay some sort of small premium so that the api manufacturing, chemistry, and manufacturing are done either onshore in the united states or near short network and allied country. They are responding to the incentives at the lowest possible prices by pushing it offshore. It is a serious issue.
▶ 1:03:11Chair Young: Senator cortez masto.
▶ 1:03:15Sen. Cortez Masto: Thank you for being here, and I have to think the chairman and ranking member, and thank you for putting this at the forefront of area we need to focus on. I also appreciated, coming from nevada and washing the critical mineral fight in this country with china and how china cornered the market in the 1980's and we were not paying attention.
▶ 1:03:40Sen. Cortez Masto: They are doing with biotechnology now, and if we are not careful we are going to cede that to them. So, I appreciate this conversation. Dr. luther, let me ask you mama because I always love to listen to Dr. cassidy, because he brings a wealth of knowledge.
▶ 1:04:03Sen. Cortez Masto: As we are talking about the novel antimicrobial drugs and how we can ensure that they continue to innovate and do the research here, was it your testimony that the pasteur act you think that satisfies that concern by shifting federal payments for the drugs from the book -- from the volume of drugs? You think that is part of the answer here?
▶ 1:04:31Dr. Luther: Thank you for your question. I think that aspect of the pasteur act is very promising. So that we can identify drugs based on what they are bringing to the table for individual patient care, how safe they are. Also, how they are protecting against resistance and offering us a novel, or innovative, tool.
▶ 1:04:58Dr. Luther: The pasteur act was describing a scoring system so we could objectively look at the value that a drug may bring to the market. That is a very important piece. The other exciting thing about the pasteur act is the antimicrobial storage program, so once we have these tools we really ensure they are used well and we will be able to preserve their efficacy for the future.
▶ 1:05:28Sen. Cortez Masto: Who also recommended building out the infectious diseases workforce. Talk to me a little bit about that. Are you aware of any legislation? What can we do at a federal level to address this?
▶ 1:05:43Dr. Luther: Yes, so, building out the workforce is critically important. It is, of course, essential that we have new drugs, we have diagnostics. But we need skilled physicians who were able to interpret those diagnostics and make sound recommendations, both on a public health level as well as individual patient level. So, that workforce is really critical.
▶ 1:06:12Dr. Luther: So, building up the pipeline and thinking about how id physicians are reimbursed is important. You know from research there is a good deal of interest in the field of infectious disease, so medical students find it a very interesting field but often don't go into it because they are med school debt is so high and the field does not get paid as well.
▶ 1:06:37Dr. Luther: So, looking at incentives for quality measures for id, for example. And then also funding the fire preparedness program to relieve some of that educational depth, would really be essential.
▶ 1:06:53Sen. Cortez Masto: Thank you. Dr. rozo, I appreciate the work you are doing. Earlier this year authorities found an illegal bio lab in las vegas. It was in a las vegas home, pertaining potentially dangerous substances.
▶ 1:07:12Sen. Cortez Masto: Several people reportedly became ill after being exposed to it, including first responders parent the lab was linked to a chinese national who had previously been convicted of operating a similar lab in california. It is real. It is happening here. I was curious and concerned about your statement that -- I think it was our chairman that said china had implemented some of our recommendations from our own commission's report.
▶ 1:07:41Sen. Cortez Masto: How do we manage the information is going to be public, and it should be? How do we manage to ensure that we are taking the appropriate safeguards and implementing the recommendations? Are there any other recommendations or a new report we should also be prepared for in this space?
▶ 1:07:59Dr. Rozo: Thank you so much for that question, and I can imagine that incident was alarming for your constituents and you as well. We laid out an agenda to both make sure that the U.S. could run faster in biotechnology, as well as stop we see as anticompetitive national security issues stemming from chinese biotech. Our action plan aimed to do both of those. To your point, we need to do both.
▶ 1:08:31Dr. Rozo: We need to both stimulate our ecosystem and ensure it cannot miss used against us.
▶ 1:08:35Sen. Cortez Masto: Thank you, again. Appreciate it.
▶ 1:08:38Chair Young: Senator marshall.
▶ 1:08:41Sen. Marshall: The theme of my questions are, I'm looking for innovative solutions. I'm going to start with antimicrobial resistance. Dr. luther, the question is for you. It is an easy business model for a glp-1 drug that is going to treat tens of millions of people. But patience you are treating, we are asking someone to invest in building a new prescription drug. It may be used a dozen times, 20, 30 times the entire year.
▶ 1:09:13Sen. Marshall: As a person who has had to manage a hospital, we could not afford to keep all of these medicines in stock either. Just very briefly, why is it important? Were -- or, do you have any solutions? And how do we handle the backside of that at the hospital level, keeping these in stock? Taking care of the sickest of the sick patients?
▶ 1:09:41Sen. Marshall: Any innovative solutions out there?
▶ 1:09:44Dr. Luther: Think you very much for that question. It is a very astute observation that when we are talking about antimicrobials, these are drugs that are typically given for a short period of time, and if they are the real novel antimicrobial drugs hopefully will be used rarely. We really need different models for how to support the companies that bring these drugs to market.
▶ 1:10:13Dr. Luther: So, things like the subscription-type of model are promising in that regard. They don't rely on the volume of antibiotics consumed in order for the company to have some financial support for that.
▶ 1:10:28Sen. Marshall: Thanks. I think it is important before we start solving a problem we need to know what the problem is, first of all. I started a couple of years ago on an active pharmaceutical ingredients that that was the problem. Really, the biggest problem are key starting materials. It is important for staff and as we try to address this we understand there are these steps in developing medication. It starts off with primary sources.
▶ 1:10:58Sen. Marshall: Oil, natural gas, minerals, plants. I am shocked how much comes from oil and natural gas. Next, we have to take that oil and gas and turn it into raw materials. Think about your basic science chemistry lab. The acids, all of those things in a basic chemistry lab. It was done by chemical factories, but china industrialized that and then on an industrial scale that could never be done in america again.
▶ 1:11:27Sen. Marshall: Then we get the key starting materials, taking those chemicals and turning them into starting blocks. That is what china has totally dominated. We finally get to aby. They are using raw materials, of course from china, as well. I'm looking for, what kind of targeted incentives or procurement tools could we have simply besides the U.S. government federalize inc.
▶ 1:11:56Sen. Marshall: This challenge? Maybe we will start in reverse order? I've got what he or 45 seconds. Give it your best shot.
▶ 1:12:08Sen. Marshall: When there was an explosion of the chinese factory [indiscernible] because it was the only place in the world that made the starting material.
▶ 1:12:17Sen. Marshall: So, I know the problem. You don't have to convince me of the problem. I'm looking for solutions. Sorry.
▶ 1:12:24Mr. Outterson: We need to add additional payments for the companies that cost the extra 5%, 10%, 20% more?
▶ 1:12:32Sen. Marshall: Just give the companies new money?
▶ 1:12:34Mr. Outterson: We require them to do it and reimburse them for the extra costs.
▶ 1:12:39Sen. Marshall: Any solutions?
▶ 1:12:40Dr. Luther: This is a key area for research and development, so there are novel technologies that can help, potentially, with some of the manufacturing problems, both more research is needed in that area.
▶ 1:12:58Sen. Marshall: I agree that advanced -- Dr. rozo, go ahead.
▶ 1:13:05Dr. Rozo: We recommend agreements to set a price point that drives companies to innovate.
▶ 1:13:11Sen. Marshall: That makes sense that we had drug companies that said we are going to offload, we will give you a contract. That makes sense. Dr. palkowitz, go ahead.
▶ 1:13:22Dr. Palkowitz: Bringing that technology back, we are the innovators in this space. We have the basic science that we have developed. We have the insights of how to create an environment that can leapfrog ahead and build the pipelines for advanced chemistry.
▶ 1:13:42Dr. Palkowitz: We need to create the incentives that actually allow the whole cross-section of universities, companies to join together to really make that a dominant priority. We have seen one initiative called catalyze indiana. A real shining example of bringing constituencies together to really plant the flag and say, we are going to lead the next generation of advanced chemistry and bring this onshore and make it a dominant asset for our country.
▶ 1:14:09Sen. Marshall: Certainly protecting intellectual property is really important. As I think about these steps going forward, what is the common denominator driving the cost up and doing business in the united states? Number one is a regulatory environment. Environment, and next is the cost of production, and the challenge before us is, look, I want to leave this world cleaner, healthier, and safer that I found it -- than I found it, but we still need to have energy independence.
▶ 1:14:40Sen. Marshall: We need to be out there making electricity that is clean and affordable as we can. Try to thread that needle. Thank you.
▶ 1:14:49Chair Young: Senator lankford.
▶ 1:14:51Sen. Lankford: Mr. chairman, thank you, both of you, for pulling this hearing together. Can I pick up where senator marshall left off? That is a key area I want to press on as well. Dr. marshall mentioned some incentives, financial incentives. You referenced we have the innovation, the technology to be able to do it.
▶ 1:15:16Sen. Lankford: Several folks have sent to me part of the challenge is the byproducts produced are pretty toxic, nasty stuff. It is easier to have china do that than it is to do that somewhere else. Quite frankly, our regulations in the united states based on the byproducts from that production will not allow us to do that. What I want to know is, do you agree with that comment several people said to me, and what can we do to innovate?
▶ 1:15:42Sen. Lankford: Because quite frankly, last I checked, we all live on the same planet, and for us to say it will be nasty byproducts, we will have them do it over there, we are still in the same place. Is it true, false on the key starting materials, the byproducts, is that part of the challenge of producing it here?
▶ 1:16:02Dr. Palkowitz: Yes, thank you, senator, for the question. It is a challenge. As we think about reassuring manufacturing cap ability, -- capability, we cannot just take those processes and bring them here. We have to be able to fund the research around advanced chemistry, around new technologies that allows us to make these products safer, safer for the environment but also fundamentally to bring down the cost.
▶ 1:16:31Dr. Palkowitz: If we can do those things together, it reestablishes the dominance of american industry for that purpose, but also for the long-term hopefully contribute to the overall cost of new therapies.
▶ 1:16:41Sen. Lankford: So what is needed at this point? Just american regulatory law to be able to incentivize a company to do the innovation that it takes to be able to produce this in a clean way and be able to handle the byproducts and also that there is a buyer at the end of it? Have ideas and thoughts on that?
▶ 1:17:06Dr. Rozo: As I mentioned previously, the agreements coupled with incentives on the innovation both push and pull mechanisms could create the ecosystem necessary to drive both the innovation and then the price point at the end of that process. I will note, picking up on senator marshall's intro of the chemistry that is required to make some of these molecules, we could also innovate new ways to make them through by a manufacturing.
▶ 1:17:35Dr. Rozo: So think of the way we brew beer. We can brew chemicals the same way so we can remake some of these supply chains, as Dr. palkowitz was making, with innovative means of manufacturing that changes the calculus.
▶ 1:17:50Mr. Outterson: Senator, the united kingdom for anabiotic's came up with some standards and worked with an industry to make sure they can make antibiotics again in europe without poisoning the water or whatnot, and they successfully developed a set of standards that industry and the government in the u.k. Have agreed upon. On the advanced market commitments, I agree this is a good idea.
▶ 1:18:17Mr. Outterson: But from the company perspective, they need something beyond just a promise of a year or two or three if they will build a factory in indiana. They need some assurances the regulatory environment and the reimbursement are going to be sufficient for a timescale that they understand when they put money into a plan.
▶ 1:18:36Sen. Lankford: They build a plant and,, it will get a greater return -- a plant in oklahoma, it will get a greater return. [laughter]
▶ 1:18:49Chair Young: Notice the laughter.
▶ 1:18:51Sen. Lankford: Some of the issues we have is on tiering. To bring new generics to the market, they will work with the pbm's behind the scenes when a brand is about to go off the patent and a new generic comes out. The new generic comes out, and the pbm puts it on the higher tier, so the co-pay is the same for the brand and the generic. We have seen this over and over and over again. We have seen it now over a decade.
▶ 1:19:23Sen. Lankford: It does not incentivize the generic to come on board because people just choose the brand rather than the -- we are also experiencing this on the part d as well where new generics are coming on board with the higher priced branded tier. Dr. palkowitz, you mentioned some things about medicare and medicaid part d earlier. Have you had time to think about that issue?
▶ 1:19:48Sen. Lankford: Because if we think about bringing new generics to the market, as you mentioned before and was mentioned earlier about small molecules and the disincentive that is out there to create small molecule drugs at all now with the ira, now the challenge becomes, do we disincentive eyes generics decadence incentivize -- disincentive eyes -- disincentivize generics as
▶ 1:20:18Sen. Lankford: Well?
▶ 1:20:18Chair Young: It is a little --
▶ 1:20:21Dr. Palkowitz: It is a little beyond my expertise. But to be able to bring down the cost of drugs and also create the opportunity for new innovation to come forward, and so I think there are some inherent challenges that need to be addressed and read to make sure we do not disincentive eyes -- disincentivize generics because they help manage the
▶ 1:20:53Dr. Palkowitz: Cost of health care and we can stimulate the advancement of new technology and new medicine behind them.
▶ 1:20:58Sen. Lankford: Thank you.
▶ 1:20:59Chair Young: Thank you, senator lankford. Senator wyden.
▶ 1:21:03Sen. Wyden: Thank you, Mr. chairman, and I would say to our guests you have drawn an equal number of democrats and republicans, which bodes well for the future, and I thank my colleagues for their good work. As the point person for the democrats on health care, we are collecting information now about ideas and suggestions. Mr. chairman, I would just ask unanimous consent to have one of our publications in the record.
▶ 1:21:30Chair Young: Without objection, so ordered.
▶ 1:21:33Sen. Wyden: Thank you. Now, central to everything we are hearing so far is the american people want to make sure that innovation and affordability, they are not mutually exclusive. That we are doing both. That you can make drugs that people can actually afford to get, and you can have breakthrough innovation. And I thought senator hassan asked important questions for example about infection, a perfect example.
▶ 1:22:00Sen. Wyden: My understanding, and I don't know everything about this -- back when I was the director of the gray panthers, we talked about public and private partnerships. That was medicine at its best. I understand that now there is a new development that generally gets labeled an accelerator, an approach that is based on trying to find good ideas in terms of basic research and then trying to mobilize resources over in that direction.
▶ 1:22:31Sen. Wyden: Mr. outterson, I gather you are one of the pros in the accelerator department. Why don't I use my time to have you flesh this out? Where do you go for example even for the right resources on these accelerators? I think it is a promising idea and something I have really been interested in, public-private development of new approaches. So why not start it off?
▶ 1:22:58Mr. Outterson: Thank you, senator, for the question. Public-private partnerships are a way to translate ideas from the university to actual companies that are going to bring it to patients. The organization I lead provided by barda nine years ago, and we now support really the world's pipeline for antibacterial drugs
▶ 1:23:29Mr. Outterson: Prevention and diagnostics. About a third of our funding comes from the U.S. government today, and the balance from the g-7 government and large foundations. The key is to de-risk the technology so it can get into human critical trials and new can get across the valley of death, whatnot. To do that in a way that is looking for the most innovative, interesting technology other.
▶ 1:23:55Sen. Wyden: What would be an example of one of those technologies?
▶ 1:23:59Mr. Outterson: Mr. outterson: right now, we have had four --
▶ 1:24:03Mr. Outterson: Right now, we have had four trials looking at a virus that eats bacteria, literally. We have microbiota research and two projects now approved by the fda. We have looked at 35 small molecule chemical classes. All of them never before approved for fda products. Lots of new, entirely new things that are coming to the pipeline.
▶ 1:24:29Mr. Outterson: Because we were instructed to swing for the fences, not to do sort of yet another type of derivative, but something quite remarkably different. Public-private partnerships are designed to help the technology get to the point in which a private company is ready to move forward.
▶ 1:24:50Sen. Wyden: I want to ask in addition to this, this is of course the innovation side, Dr. palkowitz, tell us about affordability a little more.
▶ 1:25:01Dr. Palkowitz: Thank you, senator. The challenge, you know, building up on the last question, we have ideas that basically stall because, how do we move them forward? We need expertise. We need investment. We need to be able to draw them forward through the valley of death we talked about and then positioned them in ways that create a real value equation for the value they deliver ultimately.
▶ 1:25:32Dr. Palkowitz: I think that is a very important part of how we think about the continuum, of taking the science, and moving it forward to a value asset.
▶ 1:25:41Sen. Wyden: Only other thing I wanted to say is I hope early next year after we have had an election -- I heard that was official coming up, that we work on these issues and we have the same kind of coalition you are seeing here. You are doing good work. We need to follow it up. Thank you, Mr. chairman.
▶ 1:26:00Chair Young: Next is someone who has thought a lot about these issues, senator warner.
▶ 1:26:05Sen. Warner: Thank you, Mr. chairman. I appreciate you and senator hassan holding this hearing. Good to see you again, and thank you for your work on the bio commission. You are also where we make enormous investments in critical areas. One of the things I have actually worked with senator young on on the intel committee is to make sure the I.c.
▶ 1:26:38Sen. Warner: Dedicates leaders on bio threats and making sure that frankly we keep a closer eye on china. Until three or four years ago, we did not even look at the space in terms of manufacturing.
▶ 1:26:54Sen. Warner: Talk to me about what kind of investments the private sector and you guys are making to make sure we can reduce our dependence on key starting materials, ksm's, from china, and what else should we be doing in the private sector?
▶ 1:27:11Dr. Rozo: Yeah, so this is frankly an equation we have to change. It takes too long and is too expensive to get products from lab. We see products dying in the valley of death, and those that succeed are sunsetting platform technologies in favor of single assets because that is where they have hope of getting financing. This is not something that a single venture capitalist can solve alone.
▶ 1:27:42Dr. Rozo: I talked to a biotech ceo as part of the commission records and we are incentivized to make a drug that is 10% better, not 100% better. 10% is the next version of the drug. 100% better is a cure for a disease we don't have something for yet. So we have to change that equation. The commission recommends vehicles like an independent investment fund that would take strategic patient capital to help de-risk some of these investments and technology and crowd in private capital.
▶ 1:28:14Sen. Warner: But using the model where the fund would have a relatively small investment that hopefully wouldn't bring on others or would this be a larger fund where you can make a substantial effort to deliver some value there?
▶ 1:28:28Dr. Rozo: The commission recommends the fund is supported with close to $1 billion in funding, and that his point across a number of technology areas, including biotechnology. So it would be up to the fund manager how they would deploy the capital.
▶ 1:28:42Sen. Warner: Don't you think, I am sure the panel may have addressed this, with literally trillions being invested in ai, that should speed up some of this process and potentially make you able to swing for 10%?
▶ 1:28:55Dr. Rozo: Ai is revolutionizing what we think about biology. It is helping us understand and humans make sense of things that have been historically too difficult to understand. We lay out a series of recommendations to drive new data sets that would help train the next generation of ai models on biological data to help drive toward the next generation of cures.
▶ 1:29:17Sen. Warner: I also want to touch on the talent pipeline. I am not sure whether senator young has already mentioned this, but something we are working on. We have seen a real decline in american-born phd's, particularly -- not american-born, but americans in stem fields. We have seen a decline.
▶ 1:29:43Sen. Warner: One of the things, we stole this idea from perdue, where senator young and I are working on an accelerated phd program. Something to increase subsidies so people can be finished in six or seven years. The number of people who take an extra five years post undergraduate to get a phd. Accelerating that I think would be under norma's benefit. Do you or any of the panel want to touch on this idea of accelerating phd students?
▶ 1:30:15Dr. Palkowitz: I will comment. Thank you, senator. That is a great idea but we need to couple it with not just the academic phd but internships, experiential learning, being able to expose the students to environments that will be reflective of the true work environment they will be going into an expecting to deliver on commitments of innovation and advancement.
▶ 1:30:39Dr. Palkowitz: I think that is a great platform, but I think it can be enhanced even further by thinking about creative ways to leverage industry and other types of internship programs as one example or co-ops that actually could make even the workforce that much more ready.
▶ 1:30:56Sen. Warner: I am all for that. The number in all fields but stem fields as well where somebody finishes and they kind of wander around for 5, 6, 7 years before they get their phd, I think with limited resources we are to focus on the leveraging that process. Obviously, an inter-trip would be part of that. I think my time has expired. Thank you, Mr. chair.
▶ 1:31:18Chair Young: I think my colleagues -- thank my colleagues, certainly the witnesses for your compelling testimony today, and just emphasize to all who are observing these proceedings there are written statements that are full of great recommendations. We have members of the staff who will be pouring over these and members of congress will be in touch with our authors on an ongoing basis to act on these.
▶ 1:31:50Chair Young: I would also like to pull on a thread from senator warner's questioning. Artificial intelligence is accelerating the field of biotech and really just -- in really just dramatic ways. I know Dr. rozo has often said biotech is increasingly moving from a field of discovery to a field of design and engineering. To me, that is fraught with opportunity.
▶ 1:32:20Chair Young: If we sees it. -- opportunity if we seize it, also fraught with risks in washington. Lastly, senator bennet, who wished he could be her but has been very hard at work on the act over the years, and on behalf of senator bennet, I am entering a statement for the record in support of our bill. So, no objections among my colleagues. So ordered.
▶ 1:32:51Chair Young: That is what we have. So, thank you much. I would say that senators will have until the close of business on tuesday, august 11, to submit questions for the record. The witnesses will have until the close of business on tuesday august 25, to respond to those questions -- tuesday, august when he five -- tuesday, august 25, to respond to those questions, and with that, the committee is adjourned.
▶ 1:33:22Chair Young: [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap.org]