interactions. They also produce and investigate applications of radioisotopes For instance, the direct
neutron irradiation of deep-seated melanoma (skin cancer) and brain tumors that have taken up a
boronated drug is being investigated through use of URRs at a number of universities This treatment is
termed Boron Neutron Capture Therapy (BNCT).
Studies have suggested that BNCT may be effective in
combating these diseases. In contrast, these diseases are invariably fatal when treated with conventional
But nuclear facilities are expensive to maintain. Host Institutions bear a disproportionate share of URR
operating expenses Sharing of costs for such major research facilities by Federal agencies demonstrates
to university administrators their significance and value, and helps prevent further reactor and program
closures. The National Academy of Sciences recommends Federal support to maintain, refurbish,
modernize, and upgrade existing URRs, a much less costly alternative than replacing them.
Without significant university research reactor support, the United States will continue to fall behind its
international competitors In technological advances. The number of papers presented at a mid-decade
International Conference on Neutron Scattering, a frontier of nuclear science research with widespread
applications in fields as diverse as health science and advanced materials, is indicative of the loss of US.
Origin of Papers
Why is Federal support needed? Investments must be made to modernize these facilities, which are up to
forty years old, including equipment replacement, new equipment purchases, and major preventive
maintenance. Modem equipment such as multi-channel analyzers must be purchased, and major new
research capabilities such as neutron scattenng facilities must be added, to match the capabilities of other
research reactors throughout the wortd. In some cases major life extension projects such as lining
concrete pools or replacing embedded piping are necessary.
What are the numbers? From FY 90 through FY93 the Department of Energy provided funding in the
amount of $10.1 million for university research reactors, URR (hardware), and nuclear engineering
education, NEE ("software," In the sense that it was spent on people). Over the four years the $10 1 was
split, on the average, almost precisely 50:50 between URR support, including reactor fuel, reactor sharing,
and Instrumentation, and NEE activities, research, fellowships, and DOE funds designed to match grants
In FY94 and FY95, total funding was cut over fifty percent to $4 2 million, with well over half of what was
left going for the most fundamental aspect of URRs, reactor fuel. Research grants for graduate students
were eliminated all together For FY96, in an attempt to restore programs supported in previous years, the
Administration asked for $6 1 The amount received was actually only $3 5, and the fellowship program
was left unfunded. This $3.5 was 16 percent less than in the previous year and only about one third of the
$10.1 of the decade's earlier years, without even taking account of inflation.
For FY97 the university nuclear community is asking to restore programs at the same level as they were
funded eariier in this decade. Funding would be broken down into $6.8 million for nuclear engineering
education and $5.4 million for university research reactors A priority of the $6.8 million for NEE would be
the reinstatement of the research grant program at $5 million and the fellowship program at $1 million
The $12.2 million figure seems quite reasonable, considering that it funds programs that cost $10.1 million
Representatives from academia testified this moming, introducing an approach to preserve the hardware
needed for nuclear science research in this country With such developments as the cancellation of the
Advanced Neutron Source coincident with a growing need for radiation science research, university reactor
research programs take on a new significance. The university people are exploring the possibility of
establishing five to seven "centers of excellence," university reactor programs which would be chosen on
the basis of professional peer review To illustrate a DOE budget including such centers:
1 . The centers of excellence would require $1 million in operating costs from DOE per year
2. The centers would also need capital investment at the rate of $5 million per year for five
The total for Pf 97 would be $15 million for the centers of excellence. The concept would take advantage
of the relatively low cost of operating university reactors, as acknowledged in a statement by Secretary
Total operBtina costs of al universitv reactors are equivalent to the cost of operating one
Department of Energy research reactor It is cost-effective to maintain and upgrade existing
facilities when maintenance and upgrades are done in a cooperative way with the universities
("Report to the Congress on the Condition and Status of University Research and Training
Reactors," US. Department of Energy, May 19, 1994, underlining in the original)
ANS must express its concern with the overall direction that funding for nuclear projects has taken over the
past several years. This Is especially the case when just one technology, nuclear, can be used for so
many different purposes to improve the human condition. As we noted eariier, nuclear is environmentally
benign, emitting no greenhouse gases or air pollutants. And nuclear is essential in such areas of great
importance to humankind as medicine, energy, and, through irradiation, food safety.
We thus appreciate the Government's continued support of university nuclear programs, even on an
attenuated level. Congress and the Administration both are showing varying degrees of support for a
solution to the high-level waste situation. It would be very beneficial if together the two branches can do
the same in regard to the Ward Valley, California, low-level waste facility. But this can only be a beginning
in the necessary effort to preserve and strengthen a technology which has so much to offer the worid
Thank you, Mr. Chairman.
Point of contact
Mr. James Toscas
American Nuclear Society
555 Kensington Avenue
La Grange Parte, IL 60526
Thursday, February 29, 1996.
DONALD P. SMITH, CHAIRMAN & CEO, PROTON THERAPY CORPORA-
TION OF AMERICA, INC.
Mr. Knollenberg. We have one more individual that would like
to testify and we would like to hear from him.
Mr. Donald Smith, Chairman and CEO of the Proton Therapy
Corporation of America; he will probably talk a little on Proton
therapy, I believe.
So, Mr. Smith, you are recognized for 5 minutes, and all of your
material will be included in the record.
Mr. Smith. Thank you very much, Mr. Chairman.
In the interest of brevity, I will summarize my statement and
talk very briefly about my statement.
You have heard a lot about research and demonstration projects
that are going on. I would like to discuss very briefly the result of
one of the demonstration projects that this subcommittee supported
a number of years ago which is the Proton Therapy Treatment
Center at Loma Linda University. That has been a tremendous
success, not only in its actual treatment of patients, but it has in
fact done what a demonstration project should do, and that is it
has created an industry around which additional proton therapy
treatment centers will be established throughout the country. We
are in the process of doing that right now.
The three points I would like to make in summarizing, the sub-
committee has played a major role in proton therapy by supporting
the Loma Linda Project. The second is that this demonstration
project has created a viable industry, both in the manufacture of
proton therapy and in the use of it to treat patients.
Third, the subcommittee, in terms of a recommendation, should
continue to support this type of new technology, and look for public/
private demonstration projects that can create industries and cre-
ate new opportunities. Proton therapy is unique in medical tech-
nology, and the previous two spokespersons talked about the pro-
gram within which this has been done, this research has been
done, that is the nuclear medicine program.
Proton therapy is a little bit unique, in that it is the scale of pro-
ton therapy equipment is such that it has required some Federal
investment in order to get it to the commercial stage. It has been
around for about 50 years and has treated 15,000 patients. It has
been approved for patient use by the Food and Drug Administra-
Medicare reimburses payments for proton treatment. The dif-
ficulty, however, is that it requires very large and sophisticated
equipment. The machine itself weighs 500 tons. It involves a build-
ing that is 175 feet long and 75 feet wide. It costs $65 million to
build one of these centers. No individual hospital was willing to
risk that kind of investment without some support from the Fed-
There is the first project supported at Loma Linda by this sub-
committee which has been tremendously successful. There is the
second project at Harvard University which was supported by the
subcommittee down the hall, the Labor-HHS subcommittee using
two different technologies. The result of these two projects has been
the establishment of an industry, and my company, the Proton
Therapy Corporation, is one of the companies that is promoting
and developing the establishment of proton therapy treatment cen-
We plan over the next 8 years to build 10 cancer treatment cen-
ters with a capability to treat 20,000 patients a year. If you ever
have a question in the subcommittee about the value of demonstra-
tion projects, this is one of the true success stories of what this
subcommittee has done. There is no question about it, that the in-
dustry itself has been a direct result of the demonstration projects
I would like to make a couple of recommendations summarized
on the last page of my testimony in order to continue support for
the Nuclear Medicine Research Program. The results are very de-
monstrable and very effective.
You should continue to support, where appropriate, demonstra-
tion projects of all types where there is a direct commercialization,
Finally, you should assure that technology is available through
competitive means, either through patent use or nonuse, and
through assurances that the competitive process is in place.
In the interest of the hour, I will summarize with that.
If there are any questions, I would be glad to answer them.
[The statement of Mr. Smith follows:]
Proton Therapy Corporation of America, Inc.
513 CAPITOL COURT. N.E.. SUITE 300. WASHINGTON. D.C. 20002
202-547-6985 FAX 202-546-8540
Statement of Donald P. Smith
Chairman and Chief Executive Officer
Proton Therapy Corporation of America, Inc.
Subcommittee on Energy and Water Development
Committee on Appropriations
United States House of Representatives
February 29, 1996
Mr. Chairman, Mr. Bevill, members of the Subcommittee, my name is Donald P. Smith
and I am Chairman and Chief Executive Officer of the Proton Therapy Corporation of
America, Inc. (PTCA). Thank you for the opportimity to appear before the Subcommittee
I am here to update the Subcommittee on progress made in proton therapy in recent years
since you provided support for a demonstration proton therapy center in California. I also
want to encourage you to continue to support demonstration projects of the type you
supported in proton therapy. Proton therapy is a form of radiation used in the treatment
of malignant and non-malignant tumors. Conventional radiation therapy uses the particle
of the atom called the electron, proton therapy uses the proton. The proton is 1,835 times
denser than the electron and can therefore be delivered into a tumor with much greater
accuracy with little or no side effects. The use of protons for cancer treatment was
originally proposed by Robert Wilson, Nobel Prize-winning first director of Fermi
National Laboratory. It was first used experimentally for patient treatment in 1956.
Since then, more than 15,000 patients have been treated with protons throughout the
world at sixteen locations, primarily large national laboratories. The results of these
treatments have demonstrated significant advantages for proton therapy. This is because
protons can be delivered with greater precision and can deliver larger doses of radiation
with virtually no adverse side effects. \
Proton therapy has evolved from the experimental stage in the 1960's through patient
treatment into the 1980's. The clinical demonstration project supported by this
Subcommittee at Loma Linda University Medical Center in the early 1990's uses a
synchrotron accelerator fabricated at Fermi National Laboratory and installed by SAIC.
Further development is currently underway at Massachusetts General Hospital in
conjunction with the Harvard Cyclotron Laboratory using a commercially developed
cyclotron accelerator manufactured by Ion Beam Applications, a Belgian company, the
world leader in cyclotron science and technology, with the clinical components ~ the
gantries and health system ~ developed by General Atomic of San Diego, California.
This project received federal support from the National Cancer Institute through the
Labor-HHS Appropriations Subcommittee.
These two federally-supported projects were critical to making proton therapy viable
today. They have also encouraged two additional facilities at Indiana University and the
University of California/Davis. These four centers are developing medical treatment
expertise, including experience in a hospital environment at Loma Linda, where they are
developing the protocols, treatment methodologies and procedures that will allow proton
therapy to become widely available. Much of the basic research and the treatment
systems were invented and pioneered at the Harvard Cyclotron Laboratory. Harvard and
Massachusetts General working with Fermi Laboratory, Berkeley and other national and
university laboratories, created the intellectual, scientific, and medical framework for
proton therapy equipment in the world.
The research and prototype demonstration projects supported by the Federal government
have had very pronounced success. Harvard has treated more than 6,000 patients in its
existing cyclotron facility and its new center will greatly enhance its research and clinical
capabilities. Loma Linda has demonstrated that proton therapy can be effectively used to
treat patients in a hospital environment. These two projects have received Medicare-
Medicaid reimbursement approval and 175 other third party insurers pay for proton
therapy on a routine basis. This confirms its non-experimental status. The Food and
Drug Administration (FDA) has approved the use of protons for patient treatment and has
approved the manufacture and use of proton therapy equipment. Finally, these two
federally supported demonstration projects, using different technical approaches to the
production of protons, one a synchrotron, one a cyclotron, have created a commercial
manufacturing base that makes proton therapy available.
The availability of the technology alone however does not mean that proton therapy will
become generally available to the public and accepted by the medical community. Proton
therapy requires the largest, most sophisticated medical equipment in the world and a
substantial capital investment. Until recently there has been no infrastructure in existence
to support the expansion of proton therapy to the 320,000 annual estimated new cases of
tumor cancer in the United States that could be effectively treated with protons.
This is the point at which the transition from these experimental and demonstration
projects takes place. The technology has been proven and commercial development can
begin. The Proton Therapy Corporation of America is a company that is picking up the
development of proton therapy where the demonstration projects end. There are several
roles we will assume in doing this. Our first role has been to create a national strategic
plan to build ten regional proton therapy treatment centers in the United States in the next
eight years. Working in conjunction with the team currently building the
Harvard/Massachusetts General project, the Proton Therapy Consortium is made up of
Ion Beam Applications, General Atomic, Bechtel and Tsoi/Kobus and Associates, we
have established a prototype treatment facility design that standardizes the equipment and
provides for uniform treatment methods. It also provides the basis for accurate capital
and operating cost estimates.
Our second role has been the development of a national network of prestigious, highly -
regarded academic and regional medical centers to operate the proton therapy treatment
centers. This national alliance includes institutions in New York, Pennsylvania,
Maryland, South Carolina, Michigan, Missouri, Minnesota, Washington, and northern
California. Two additional facilities in Florida and Texas are also well along in the
planning stages. These proton therapy centers will ultimately treat more than 20,000
cancer victims annually. Treatment will be effective and with virtually no side effects.
These regional centers will be accessible to everybody in the United States and will be
electronically linked to share treatment expertise and diagnosis assistance.
Finally, PCTA's role includes the development of an economic model and a financing
mechanism that relies on private sector investment with no public funding requirement to
make proton therapy a reality. The economic model and private financing allow us to
select the most appropriate locations with the best medical partners available, so that
proton therapy is driven by market factors, patient needs and the excellence of our
alliance rather than other external factors.
Because of the limitations on federal research funding, PTCA is assuming part of this
responsibility by establishing an independent, non-profit Proton Therapy Research
Foundation. This Foundation will support proton therapy research in clinical, medical,
technology and other areas. It will maintain the database of information from every
patient treated at the treatment facilities in our alliance. This will eventually become the
largest uniformly maintained database of clinical treatment experience available for
cancer research in the world and will be publicly available through the Foundation.
Mr. Chairman, 1 want to conclude today by applauding this Committee and its support of
nuclear medicine research, proton therapy development and the demonstration projects
that have established the framework upon which the proton therapy industry is based.
Without this support there would be no possibility that proton therapy would ever become
publicly available. I would also like to conclude with three recommendations for the
consideration of the Subcommittee.
First, continue to support proton therapy and nuclear medicine research activities of the
Department of Energy. The talent, resources and facilities of the Department are well-
suited to this research and the results of it, ranging from imaging and diagnostic
technologies all the way to proton therapy and boron-neutron capture therapy will
contribute to finding a cure for cancer.
Second, continue to support cost-shared demonstration projects where there is genuine
opportunity for privatization and commercialization of technology. The effort by the
Department of Energy and other federal agencies to establish industry partnerships should
be supported and expanded. There will be failures in these partnerships, but there will be
important successes, and these warrant support.
Third and finally, in supporting the development of new technologies, you should ensure,
through competitive means, that technologies developed are available to all, ensuring that
Federally financed projects truly become the demonstrations they are intended to be and
do not serve only limited purposes or financial interests of a single institution.
Thank you Mr. Chairman and members of the Subcommittee, for the opportunity to
appear here today. What you have done in the area of proton therapy will ultimately
affect tens of thousands of people and will save thousands of lives. You should be justly
proud of this.
PROTON THERAPY CORPORATION OF AMERICA, INC.
513 CAPITOL COURT, N.E.. SUITE 300, WASHINGTON, D.C. 20002
202-544-9716 FAX 202-543-5233
Donald P. Smith
Chairman & Chief Executive Officer
Donald Smith is the founder of the Proton Therapy Corporation of America, Inc. He has
enjoyed a twenty-five year career in the public and private sectors, specializing in
financial management, healthcare and high technology development. He has worked
with numerous health care providers, hospitals, medical centers and institutions of higher
education, as well as with Fortune 1 00 corporations and other high-technology companies
involved in health care technology development.
As the principal architect of the strategic plan to introduce proton therapy into
mainstream medicine in the Untied States, Mr. Smith has been instrumental in bringing
together the Proton Therapy Consortium, the group of companies that will manufacture,
construct and commission the national network of proton therapy treatment centers. He
has been involved in the financing, planning and inauguration of the first clinical proton
therapy treatment in this country and has worked wdth international corporations and
organizations in developing market opportunities for proton therapy.
Mr. Smith's career includes seventeen years in the Executive and Legislative Branches of
the Federal government where he began his career as a Presidential Management Intern in
the U.S. Department of Commerce in 1970. At the Cost of Living Council fi-om 1971 to
1973, Mr. Smith served as Acting Executive Secretary of the Council. In the Office of
Management and Budget (0MB) he was awarded the 0MB Professional Achievement
Award. As a Professional staff members of the House Appropriations committee fi-om
1975 to 1987, Mr. Smith was responsible for Defense, Energy and science research and
Mr. Smith is founding Director of the National Association for Proton Therapy, a
healthcare trade association promoting proton cancer therapy and providing public
relations support to this emerging industry He has also established a highly successfiil
Washington-based healthcare and public affairs consulting company. The Franklin
Don Smith has been recognized by the Challenger Center for Space Science Education
with its annual achievement award and by the Governors of the Appalachian Region with
their Silver Medal for contributions to the people of Appalachia.
Mr. Smith has a BA degree form the University of Texas at Austin and a Masters degree
in Public Administration from the University of Virginia. He lives in Annandale,
Virginia, is married with two grown daughters.
PROTON THERAPY CORPORATION OF AMERICA, INC.
513 CAPITOL COURT. N.E., SUITE 300, WASHINGTON, D.C. 20002
202-544-9716 FAX 202-543-5233
Ronald J. Anderson
Ronald J. Anderson has enjoyed a 22 year career in hospital and university administration. Prior
to joining the Proton Therapy Corporation of America, Mr. Anderson served as the Senior Vice
President for Operations and Chief Financial Officer at Loma Linda University Medical Center.
In this capacity he oversaw the day to day operations and finances of a $400,000,000 a year
institution with over 4,000 employees.
During his tenure Mr. Anderson was involved in leading many strategic initiatives and
innovative projects, the most significant of which included:
Assisting in overseeing the development of the world's first hospital based
proton therapy cancer treatment center. Mr. Anderson's involvement included
working with the Congress and the Department of Energy in obtaining a
$20,000,000 grant, securing FDA approval for use of the facility and
obtaining approval fi-om the Medicare program, numerous insurance and
health maintenance organizations for third-party payments.