SAN FRANCISCO _ A U.S. Commerce Department official saidgovernment investment in scientific research helped make Americathe world leader in biotechnology, but now GOP-proposed budgetcuts threaten that funding source.

If fiscal proposals in the Republican-controlled House and Senateremain intact, they would slash funding for basic research by 30percent, warned Mary Good, the Commerce Department'sundersecretary for technology.

"People don't realize the harm it will do," Good said, "and how itwill affect the biotech research community."

Good outlined the Clinton administration's efforts in support ofscientific research at the annual convention of the BiotechnologyIndustry Organization. The four-day conference in San Franciscoends Thursday.

Her remarks on the Democrats' initiatives were not as warmlyreceived as those of House Speaker Newt Gingrich (R-Ga.). In avideotaped message shown Monday, the GOP House leader pledgedsweeping reforms at the FDA and a friendlier tax environment forbusiness development. But he did not discuss government spendingfor scientific research.

Good reminded the more than 2,000 participants at the NinthInternational Biotechnology Meeting and Exposition that federalfunding was essential in developing their industry in the U.S. and itwill be crucial to its long-term future.

"One of the few things that is certain about biotechnology is itsreliance on fundamental research," she said. "This industry hasbenefited greatly from federal investments in basic research and thisstrong partnership continues with the government spending more than$4 billion annually on biotechnology-related research anddevelopment."

Among the government-backed research efforts highlighted by Goodwas the Commerce Department's Advanced Technology Program,which funds private companies on high-risk projects.

"Nineteen percent of all ATP awards have gone to biotechnologyprojects," she said.

Rather than reduce basic research financing, she said the Clintonadministration "has sought increases in funding."

With all the talk about Medicare costs, health care and defense, Goodsaid, discussion about funding for technological research anddevelopment gets lost.

"This government investment has made the difference," sheobserved, "This is why the biotechnology industry exists."

Good also said the Clinton administration favors changes in the FDA.

"We cannot ignore the fact that the biotechnology industry faces acomplex web of regulations," she noted, adding that in the last 20years "the amount of time and money required to develop new drugsand bring them to market has steadily increased."

In the 1970s, she said, "The average time to move a product frombench to bedside" was five to seven years at a cost of about $70million. Today it takes 10 to 12 years and costs more than $366million.

"Both the length of time and investment are tremendous impedimentsto the biotechnology industry," Good said.

She observed that the Clinton administration, in trying to reform theFDA, has implemented several initiatives. She said those include:"using performance standards rather than command and controlregulations; expediting product review without sacrificing the healthand safety of the public; eliminating unnecessary requirements thatmay have been appropriate once but are not now necessary to publichealth; and utilizing modern automated technology as a tool instreamlining internal FDA management."

In addition, Good said President Clinton wants to make it easier forbiotechnology companies to secure private-sector capital.

"We have sought permanent extension of the research anddevelopment tax credit," she said, "We have sought retroactiveapplication and future permanent extension of the Orphan Drug TaxCredit and we supported targeted capital gains reduction forinvestments in small business."

Good described biotechnology as "one of the major technologicalopportunities of this century for America, ranking in importance withtelecommunications and space exploration."

She noted that 70 percent of the world's biotechnology patents areheld in the U.S. Seven out of 10 biotechnology drugs on the marketand 7 out of 10 in development are attributed to U.S. companies.

Estimates of total research and development spending range from $7billion to $10 billion a year, she said, "and research alone accountsfor 49 percent of all costs incurred by biotech companies." n

-- Charles Craig

(c) 1997 American Health Consultants. All rights reserved.