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     In the Matter of:             :
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     LYLE E. CRAKER, Ph.D.         :  Docket No. 05-16
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                               VOLUME I
                             Monday, August 22, 2005
10                           DEA Headquarters
11                           600 Army Navy Drive
12                           Hearing Room E-2103
13                           Arlington, Virginia
15             The hearing in the above-entitled matter
17   convened, pursuant to notice, at 9:25 a.m.
19   BEFORE:
21             MARY ELLEN BITTNER
22             Chief Administrative Law Judge
 2        On Behalf of the DEA:
 3             BRIAN BAYLY, ESQ.
               Office of Chief Counsel
 4             Drug Enforcement Administration
               Washington, D.C.  20537
               IMELDA L. PAREDES, ESQ.
 6             Senior Attorney
               Office of Chief Counsel
 7             (202) 353-9676
 8             CHARLES E. TRANT, ESQ.
               Associate Chief Counsel
 9             Office of Chief Counsel
               (202) 307-8010
          On Behalf of the Respondent:
               JULIE M. CARPENTER, ESQ.
12             Jenner & Block LLP
               601 13th Street, N.W.
13             Suite 1200 South
               Washington, D.C.  20005
14             (202) 661-4810
15             M. ALLEN HOPPER, ESQ.
               Senior Staff Attorney
16             Drug Reform Project
               American Civil Liberties Union Foundation
17             1101 Pacific Avenue, Suite 333
               Santa Cruz, California  95060
18             (831) 471-9000  Ext. 14
20             MATTHEW STRAIT
               Representative of the Government
               Richard Doblin, Ph.D.
22             Representative of Respondent
 1                         C O N T E N T S
 3   Lyle E. Craker      12      --      --        --
 4   Irwin G. Martin     83     124     160       166
 5                              - - -
 6                         E X H I B I T S
     EXHIBIT NOS.                     MARKED    RECEIVED
       ALJ 1 - 9                         6          6
          3                             14          14
         11                             84          84
         43                             51          51
14       44                             68      Withheld
16       50                             72          72
20        2                             24          24
22        3                             32          32
 1                      P R O C E E D I N G S
 2             JUDGE BITTNER:  This is a formal hearing
 3   before the United States Department of Justice,
 4   Drug Enforcement Administration, in the matter of
 5   Lyle E. Craker, Ph.D., Docket No. 05-16.  The
 6   Administrative Law Judge presiding is Mary Ellen
 7   Bittner.  Would counsel please state your name and
 8   address and phone number for the record?  Mr.
 9   Bayly.
10             MR. BAYLY:  Yes, thank you, Judge Bittner.
11   Good morning.  Brian Bayly.  I'll spell the Bayly
12   because nobody spells it the way I do.  It's B-A-Y-L-Y,
13   Department of Justice, Drug Enforcement
14   Administration, Washington, D.C.  20537.
15             JUDGE BITTNER:  Okay.  And anyone else
16   entering an appearance for the government?
17             MS. PAREDES:  Good morning, Your Honor.
18   Imelda Paredes with Drug Enforcement
19   Administration.  The same address as Mr. Bayly.
20             JUDGE BITTNER:  Okay.
21             MR. TRANT:  Good morning, Your Honor.
22   Charles Trant, Associate Chief Counsel, Drug
 1   Enforcement Administration, same address.
 2             JUDGE BITTNER:  Thank you.  For
 3   Respondent?
 4             MS. CARPENTER:  Good morning, Your Honor,
 5   Julie Carpenter from Jenner & Block, J-E-N-N-E-R,
 6   B-L-O-C-K, 601 13th Street, N.W., Washington, D.C.
 7   20005.
 8             MR. HOPPER:  Good morning, Your Honor.
 9   Also for Respondent, Allen Hopper.  It's A-L-L-E-N
10   H-O-P-P-E-R, and I'm with the ACLU's Drug Law
11   Reform Project, and that's at 1101 Pacific Avenue,
12   Suite 333, in Santa Cruz, California  95060.
13             JUDGE BITTNER:  Thank you very much.  And
14   Dr. Craker is here?
15             MS. CARPENTER:  He is, Your Honor.
16             JUDGE BITTNER:  Thank you.  The issue in
17   this proceeding is whether a preponderance of the
18   evidence establishes that granting Respondent's
19   application for registration as a manufacturer of
20   the Schedule I controlled substance marijuana would
21   be in the public interest, as that term is used in
22   21 U.S. Code Section 823(a).
 1             At this time, I would like to offer into
 2   evidence the Administrative Law Judge Exhibits.
 3   They are numbered 1 through 9.  We prepared these
 4   on Friday before Mr. Trant entered his appearance
 5   so his appearance is not included in them, but he
 6   did enter it.
 7             Is there any objection to any of these
 8   exhibits, Ms. Carpenter?
 9             MS. CARPENTER:  No, Your Honor.
10             JUDGE BITTNER:  Mr. Bayly?
11             MR. BAYLY:  No, Judge Bittner.
12             JUDGE BITTNER:  Okay.  Then the ALJ
13   Exhibits 1 through 9 are received.
14                            [ALJ Exhibits No. 1 - 9 were
15                            marked for identification and
16                            received in evidence.]
17             JUDGE BITTNER:  I would have a few
18   preliminary matters.  First of all, on August 11,
19   the Government filed a motion to file a third
20   supplemental prehearing statement to which
21   Respondent advised there was no objection.  So I
22   grant that motion.
 1             On August 15, Respondent moved to file a
 2   second supplemental prehearing statement to which
 3   the Government has no objection, so that statement
 4   is deemed filed.
 5             And on August 18, the Government moved to
 6   file a fourth supplemental prehearing statement,
 7   and, Ms. Carpenter, I understand that you have no
 8   objection.
 9             MS. CARPENTER:  That's correct, Your
10   Honor.
11             JUDGE BITTNER:  So it is deemed filed.  I
12   would also like to note that there is to be no
13   recording in the courtroom other than that made by
14   the official court reporter, and no cameras in the
15   courtroom, at least not on, and I understand that
16   the parties have agreed that we will not sequester
17   the witnesses, and that Dr. Doblin will act as
18   representative of Respondent for sitting at the
19   counsel table, and Mr. Strait will act as
20   representative of the Government.
21             Am I correct?
22             MS. CARPENTER:  That's correct, Your
 1   Honor.
 2             MR. BAYLY:  Yes, Judge Bittner.
 3             JUDGE BITTNER:  Okay.  Ms. Carpenter,
 4   anything else before opening statements?
 5             MS. CARPENTER:  I don't think so, Your
 6   Honor.
 7             JUDGE BITTNER:  Mr. Bayly, anything else
 8   before opening statements?
 9             MR. BAYLY:  No, Your Honor.
10             JUDGE BITTNER:  Okay.  Ms. Carpenter?
11             MS. CARPENTER:  Thank you, Your Honor.  I
12   really just have a very brief comment, a brief
13   statement, and that is that as the proceedings go
14   forward, there are three critical reasons that I
15   would like Your Honor to focus on why it's in the
16   public interest, as defined in 21 U.S.C. 823(a),
17   for the DEA to grant Dr. Craker's application for
18   registration as a bulk manufacturer of marijuana.
19             The first reason is the language of the
20   statute and the regulation.  The statute and the
21   regulation specifically require, and I quote,
22   "adequately competitive conditions."
 1             Those are to ensure that there's an
 2   adequate and uninterrupted supply of whatever the
 3   Schedule I substance is, in this case marijuana, to
 4   meet the legitimate medical, scientific, research
 5   and industrial purposes.
 6             Congress commonly uses the term
 7   "competitive conditions" when it's talking about
 8   markets.  It uses it often in antitrust statutes,
 9   and it refers to those conditions existing between
10   buyers and sellers in a particular industry or
11   particular market.
12             And we would submit that because the
13   evidence will show that there is one supplier of
14   marijuana currently in the United States, and that
15   one supplier is the government, so essentially a
16   government monopoly, it is almost as a matter of
17   law impossible for that to meet the statutorily
18   required "adequately competitive" conditions.
19             The second point is that because the
20   government monopoly can decide on its own when it
21   will and will not provide marijuana to researchers
22   and doctors without any market incentive to be
 1   responsive to the needs of those researchers and
 2   doctors.  The facts are that the current supply
 3   with the government monopoly does not provide an
 4   adequate and uninterrupted supply that's necessary
 5   to meet legitimate needs of researchers and medical
 6   and science.
 7             The evidence will show here that NIDA has
 8   refused to provide medical marijuana for FDA-approved
 9   protocols and that they've refused to
10   provide marijuana to researchers attempting to help
11   develop new smokeless delivery devices to deliver
12   marijuana in a way that's less harmful than
13   smoking, and indeed the evidence will show that
14   NIDA itself makes clear that it believes it is not
15   its mission to further medical research into
16   marijuana or to facilitate bringing it to market.
17             The third point that I'd like Your Honor
18   to remember is that the statute also requires
19   consideration of whether or not the license will
20   promote technical advancements in the field.  It
21   will in this case, and the evidence will show that
22   one of the primary purposes for which Dr. Craker
 1   seeks this license or this registration is to
 2   assist researchers who want to develop a smokeless
 3   delivery device which is exactly what another
 4   branch of the government has called for in research
 5   in the medical marijuana issue.
 6             So for those reasons--because it will
 7   further technical advancements in the manufacture
 8   of marijuana and the delivery of new substances,
 9   because the current supply is not adequate and
10   uninterrupted, and because almost as a matter of
11   definition, a supplier of one, a government
12   monopoly, cannot constitute adequately competitive
13   conditions--we believe the evidence will show
14   strongly that it is in the public interest for DEA
15   to grant the license to Dr. Craker in this matter.
16             JUDGE BITTNER:  Thank you.  Mr. Bayly.
17             MR. BAYLY:  Your Honor, we are going to
18   reserve our opening argument, and at the time that
19   the Government puts on its rebuttal case, we will
20   then present the opening argument.
21             JUDGE BITTNER:  Okay.  Ms. Carpenter,
22   we're ready for your first witness.
 1             MS. CARPENTER:  Thank you, Your Honor.  We
 2   would call Dr. Lyle Craker.
 3             JUDGE BITTNER:  Doctor, if you would come
 4   right up here, please.
 5             DR. CRAKER:  Thank you, Your Honor.
 6             JUDGE BITTNER:  Good morning.  Stand and
 7   raise your right hand, please.
 8        Whereupon,
 9                      LYLE E. CRAKER, PH.D.
10   was called as a witness and, having been first duly
11   sworn by the Administrative Law Judge, was examined
12   and testified as follows:
13                        DIRECT EXAMINATION
14             BY MS. CARPENTER:
15        Q    Good morning, Dr. Craker.
16        A    Good morning.
17        Q    Can you state your name and address for
18   the record?
19        A    Certainly.  My name is Lyle E. Craker.  I
20   am a faculty member at the University of
21   Massachusetts at Amherst, and that's located in
22   Amherst, Massachusetts.  My home address is 119
 1   Mount Warner Road in Hadley, Massachusetts.
 2        Q    Thank you.  Dr. Craker, can you tell me--you
 3   mentioned you were currently a faculty member,
 4   and what department are you a faculty member?
 5        A    I'm a faculty member in the Department of
 6   Plant, Soil and Insect Sciences.
 7        Q    Okay.
 8        A    The Insect Sciences was added this last
 9   summer.
10        Q    And is that part of your specialty?
11        A    What?
12        Q    Is that part of your specialty?
13        A    No, it's not.
14        Q    Dr. Craker, could I ask you to turn in the
15   book that's up there to Respondent's Exhibit 3?
16        A    Yes.
17        Q    Do you recognize that document?
18        A    Yes, it's a resume that I've supplied.
19        Q    Okay.  And you prepared that and it
20   explains your experience and publications?
21        A    Yes, this is a record of my education, my
22   duties at the university and part of the scientific
 1   articles that I have been responsible for editing,
 2   writing, co-writing.
 3        Q    Okay.
 4        A    Editing, co-editing.
 5             MS. CARPENTER:  All right.  I would move
 6   the admission of Exhibit 3 into evidence.
 7             JUDGE BITTNER:  Any objection, Mr. Bayly?
 8             MR. BAYLY:  No, Judge Bittner.
 9             JUDGE BITTNER:  Received.
10                            [Respondent's Exhibit No. 3
11                            was marked for identification
12                            and received in evidence.]
13             MS. CARPENTER:  Okay.
14             BY MS. CARPENTER:
15        Q    Dr. Craker, can you tell me a little bit
16   about your education?  Where did you get your
17   undergraduate work?
18        A    I did my undergraduate work at the
19   University of Wisconsin in the Department of
20   Agronomy.
21        Q    And what is agronomy?
22        A    Agronomy is the study of crop production.
 1        Q    Okay.  And did you--
 2        A    And I did my doctorate degree at the
 3   University of Minnesota.  I got that degree in
 4   agronomy also, studying crop production.
 5        Q    Okay.  And what did you do your graduate
 6   work in, what particular project?
 7        A    My project had to do with the wheat and
 8   the absorption of radionucleotides into wheat
 9   because of the government concern about nuclear
10   bombs contaminating our food chain.
11             MS. CARPENTER:  Okay.
12             JUDGE BITTNER:  What are radionucleotides?
13             THE WITNESS:  The one we looked at was
14   Strontium 89.  It's a mineral, mineral element that
15   has radioactive properties.
16             BY MS. CARPENTER:
17        Q    What did you do after you got your Ph.D.?
18        A    After I finished my doctorate degree, I
19   did a postdoctorate in the Department of
20   Horticulture where I worked on, studied the cold
21   hardiness.  That is the ability of plants to
22   survive the winter and I worked there for six
 1   months and then after that I was called to active
 2   duty in the United States Army Chemical Corps.
 3        Q    Okay.  And what did you do in the Army?
 4        A    After training with the Chemical Corps in
 5   Alabama, I was assigned to work in research
 6   laboratories at the facility at Fort Detrick,
 7   Maryland.
 8        Q    And what did you study there?
 9        A    At Fort Detrick, Maryland, I studied the--we did
10   work in the leaf abscission.
11        Q    What is leaf--
12        A    Abscission is the process by which plants
13   lose their leaves and lose their fruit.
14        Q    Why was the Army interested in wheat
15   abscission?
16        A    The Army was interested in this because of
17   the use of foliage by enemy soldiers to hide
18   themselves and if they could remove the leaves from
19   trees, that would expose the enemy soldiers.
20        Q    Okay.  How long were you in the Army?
21        A    I was in the Army for 25 months.
22        Q    What was your rank there?
 1        A    Captain when I left.
 2        Q    Okay.  And what did you do after you left
 3   the Army?
 4        A    After I left the service I was hired by
 5   the--I got a position at the University of
 6   Massachusetts, and I worked at the University
 7   Experiment Station in Waltham, Massachusetts.
 8        Q    What kinds of projects did you work on
 9   there?
10        A    There my responsibilities were to study
11   the effect of air pollution on plant growth and
12   development.
13        Q    Okay.  And how long did you stay there?
14        A    I was there from 1969 till 1976 when I
15   went on sabbatical to Cambridge, England for six
16   months and then I returned.  I went to, they asked
17   me to come to the campus at Amherst and I've been
18   there since.
19        Q    Okay.  And are you a tenured professor?
20        A    I'm a full professor, yes.
21        Q    Okay.  And what have you continued to do
22   at Amherst when you moved to the main campus?
 1        A    In Amherst, I've worked on air pollution
 2   for, continued working on air pollution for five or
 3   six years, and have after that became interested in
 4   medicinal plants, looking at this for a potential
 5   crop for Massachusetts growers, and I've continued
 6   working in that area since that time.
 7        Q    Okay.  Can you talk about some of the
 8   projects with regard to medicinal plants?
 9        A    With medicinal plants, we've worked with
10   probably a number of plants over the years.  We've
11   had a study in Chinese medicinal plants.  We've
12   looked at Black Cohosh quite extensively, and
13   currently we're working with spearmint.
14        Q    Okay.  And in those projects, did you grow
15   those plants?
16        A    Yes.
17        Q    Right there at the University of
18   Massachusetts?
19        A    Yes, in the greenhouse, in environmental
20   chambers, and some of those were grown in the
21   field.
22        Q    Okay.  Who paid for that sort of work?
 1        A    Well, we've had money from some federal
 2   sources.  We've had money from some foreign sources
 3   that help support this, foreign governments, and I
 4   think that's--some state money also, also goes into
 5   these type of things, yes.
 6        Q    And what federal agencies have supported
 7   your work?
 8        A    We've had money from the, well, for some
 9   of our studies, we've had money from the
10   Environmental Protection Agency for our air
11   pollution work.  We've had money from the SARE
12   grants which are federal money, sustainable
13   agriculture grants.  We've had money from the
14   Experiment Station which comes through the Hatch
15   Act, federal money.
16        Q    The SARE grants, is that from the
17   Department of Agriculture?
18        A    Yes.
19        Q    And the Hatch Act federal money would be
20   from the--
21        A    Yes.
22        Q    --Department of Agriculture?  Okay.  And
 1   the medicinal plants that you worked with, I think
 2   you mentioned Black Cohosh?
 3        A    Yes.
 4        Q    Would you tell us a little bit about what
 5   that is and what it's used for?
 6        A    Black Cohosh is a native American plant,
 7   and it has extensive use by women for relief of
 8   menopausal symptoms.
 9        Q    Okay.  And what did you do with regard to
10   that particular project?
11        A    In the Black Cohosh we were concerned with
12   a few things.  Number one is that currently the
13   Black Cohosh, primarily the Black Cohosh is
14   collected in the wild, and we are worried about
15   whether the wild population can sustain the market,
16   so that we wanted to check where populations were
17   growing and the size of those populations.  So we
18   did a field inventory of the natural range of Black
19   Cohosh.
20             We wanted to in this think about bringing
21   this plant into cultivation in the U.S.  We made
22   collections at all our populations.  We brought
 1   those back to the Amherst facility.  We have looked
 2   at their DNA.  We've looked at their morphology and
 3   we've looked at their chemistry.
 4             We grew those at the university in a plot
 5   so they'd all have the same environment so when we
 6   checked the chemistry, any change in chemistry
 7   would be due to genetics as opposed to environment.
 8   We then submitted those plant materials to the germ
 9   plasm repository, at one of the germ plasm
10   repositories for the United States in Ames, Iowa,
11   where the populations we started are still being
12   grown and available to other researchers.
13             MS. CARPENTER:  Okay.
14             JUDGE BITTNER:  How do you spell Cohosh?
15             THE WITNESS:  C-O-H-O-S-H.
16             BY MS. CARPENTER:
17        Q    Okay.  And I think you also mentioned
18   spearmint that you're working with?  What are you
19   doing--
20        A    Yes.  We're working with spearmint.
21        Q    Can you tell a little bit about that work?
22        A    The spearmint we're using as a model to
 1   try and increase oil production, spearmint oil
 2   production.  The thought process is that in plants
 3   there are two systems of metabolism, regular
 4   glycolysis and the pentose phosphate shunt, which
 5   is an alternative type of metabolism, and most of
 6   the ingredients of essential oil come off the
 7   shunt.
 8             So if we could switch the plant from using
 9   the regular glycolysis to the shunt, we would
10   supply more of the raw ingredients for the oil and
11   theoretically produce more oil.
12        Q    Okay.  And who is funding the spearmint
13   work?
14        A    The spearmint work is being funded by--it's being
15   funded partially by the Egyptian
16   government and partially by USDA through the Hatch
17   Act.
18        Q    Okay.  Dr. Craker, you have submitted a
19   license, an application for registration to the DEA
20   to become a bulk manufacturer of marijuana; have
21   you?
22        A    That's true.
 1        Q    Okay.  If you would turn to--there are
 2   some loose exhibits up there.
 3        A    The what?
 4        Q    The loose exhibits there.
 5        A    Yes.
 6        Q    They're not in the book.  But it's marked
 7   Government's Exhibit 2.
 8        A    Yes.
 9        Q    Do you recognize that document?
10        A    Yes, this document is a memorandum from--it's a
11   copy of a memorandum from me to Sharon Lick
12   at the Registration Unit at the DEA.
13        Q    Okay.  And the next document that's
14   attached to that?
15        A    Yes.  Yes, this is a memorandum from Carol
16   Sprague who is the, was the associate director, I
17   think now she's the Director of Office of Grant and
18   Contract Administration at the University of
19   Massachusetts Amherst.
20        Q    Okay.  And then the next two documents
21   attached to that, or pages, I guess?
22        A    Yes.  This is the application for
 1   registration that was submitted from the university
 2   to the DEA for the manufacture of marijuana.
 3             MS. CARPENTER:  Okay.  At this point, I'd
 4   like to move the admission of Government's Exhibit
 5   2 into evidence?
 6             JUDGE BITTNER:  Mr. Bayly, any objection?
 7             MR. BAYLY:  That's two and three?
 8             MS. CARPENTER:  Not three yet.  This is
 9   just two.  I'll get to three in just a few minutes.
10             JUDGE BITTNER:  Okay.  Let's see.  What I
11   have in two is an August 22, 2002 memorandum, a
12   June 25, 2001 letter, and an application which I
13   assume was double-sided originally; is that
14   correct, Mr. Bayly?  So I have three documents.
15             MR. BAYLY:  Yes, Your Honor.
16             JUDGE BITTNER:  Okay.
17             MR. BAYLY:  That's what I have, and I have
18   no objection.
19             JUDGE BITTNER:  Okay.  Received.
20                            [Government Exhibit No. 2 was
21                            marked for identification and
22                            received in evidence.]
 1             BY MS. CARPENTER:
 2        Q    Before we talk more about the application
 3   itself, Dr. Craker, can you tell me how you came to
 4   file this application?
 5        A    I filed this application after I had
 6   spoken with Dr. Doblin.  He approached me about the
 7   possibility of growing marijuana for use in
 8   research trials.
 9        Q    Okay.  Did he tell you why he wanted to
10   grow marijuana for use in research trials?
11        A    At that time, we discussed the reasons for
12   the need for this material, the reasons for a need
13   for alternative source, and during that time, I
14   looked at this as something we did, grow medicinal
15   plants.
16        Q    Okay.  Did you talk with anybody at the
17   university about out?
18        A    I'm sorry?
19        Q    Did you speak with anybody at the--well,
20   what did you tell Dr. Doblin after--
21        A    Yes.
22        Q    --you first met?
 1        A    At that time, after I had spoken with Dr.
 2   Doblin, I approached my administrative unit and
 3   asked them if they had an objection to this type of
 4   research and I spoke to my department head.  I
 5   spoke to my dean and I spoke to the Office of
 6   Grants and Contracts, and I spoke to the Vice
 7   Chancellor for Research at that time, and asked if
 8   this was okay with all of them?
 9        Q    And what was their response?
10        A    Their answer was that, yes, this was okay
11   with them.
12        Q    Okay.  So what did you do next?
13        A    Well, the next thing was that we filed
14   the--I submitted the appropriate internal
15   processing forms and the form that we just looked
16   at to our Office of Grants and Contracts because
17   all proposals need to go through the Office of
18   Grants and Contracts at the university.
19        Q    Okay.
20        A    And for submission to the DEA.
21        Q    Okay.  And let me step back for just a
22   minute.
 1        A    Yes.
 2        Q    And then we'll go back to where you were.
 3   But when you spoke with Dr. Doblin, did he indicate
 4   to you--what did he say to you why were the reasons
 5   why he was not able to get the marijuana that he
 6   needed to do research?
 7             MR. BAYLY:  Objection.  I think that's
 8   been asked and answered.
 9             JUDGE BITTNER:  No, I don't think so.
10   Overruled.
11             BY MS. CARPENTER:
12        Q    Did he talk to you about particular
13   reasons that he was unable to get other marijuana?
14        A    He may have.  I don't really recall.  It's
15   an initial meeting.  It's a course of conversation
16   which probably lasted an hour and a half or so.
17        Q    Okay.
18        A    And we exchanged pleasantries.  We talked
19   about the need.  There may have been specific
20   conversation, but I don't recall.  That's five
21   years ago or so.  I don't recall.
22        Q    Sure.  Okay.  So after you submitted the
 1   application, do you recall roughly when that was?
 2        A    The initial application was submitted, as
 3   I recall, in the spring of 2001.
 4        Q    Okay.
 5        A    Late spring of 2001.
 6        Q    All right.  If you would look at
 7   Government's Exhibit 2, the second page of that,
 8   the June 25, 2001 letter from Carol Sprague.
 9        A    Yes.  That would be the cover letter that
10   went with the application.  So I assume that's the
11   date that it was submitted.
12        Q    Okay.  And then if you turn to the next
13   page and look at the date stamp on the long side of
14   the page, not the short top.
15        A    Yes.
16        Q    What's the date stamp there?
17        A    June 28, 2001, 3:51--
18        Q    Okay.  All right.
19        A    --in the afternoon.
20        Q    So after you submitted the application
21   and sent it in, what happened next?
22        A    Nothing.
 1        Q    Okay.  So what did you do?
 2        A    Well, I, after some time had gone by,
 3   probably I would guess eight to nine months, I got
 4   in contact with the DEA and I don't remember who my
 5   initial contact, but I got referred to Ms. Lick,
 6   and I spoke with her on several occasions about my
 7   application.
 8             At that time she told me that they had,
 9   the DEA had not received the application, that I
10   should refile.
11        Q    Okay.  So what did you do?
12        A    Well, I think that the memorandum in the
13   Exhibit 2 was that I resubmitted the application as
14   originally submitted.
15        Q    At some point, did you receive something
16   back from DEA?
17        A    Well, before this, I received my
18   application back from them after I talked to her,
19   and she said that they had not received it.  I did
20   receive the application back from them.
21        Q    Did it have anything attached to it?
22        A    I got the application in a plain brown
 1   envelope with no return address.
 2        Q    All right.  So what did you do after you
 3   received the application back?
 4        A    After I received it, this was shortly
 5   after I had spoken to her, probably within two or
 6   three weeks after I had spoken to her, I called her
 7   and asked her--she said they had not received it,
 8   and I said that I had received it back from someone
 9   and that indeed it was stamped as having been
10   received.
11             At that time, she told me that I had
12   incorrectly filled out the form, and that I should
13   submit a new form.  I asked her to go through the
14   form with me and tell me where I had made my
15   mistake, and we went through the form line by line
16   and at that time, it looked like to me that
17   everything had been filled out correctly and I told
18   her I was going to resubmit the same form.
19        Q    So she didn't have any corrections for you
20   to make on the form?
21        A    Not that I recall.
22        Q    Okay.  So in the first letter on
 1   Government's Exhibit 2 is dated August 22, 2002; is
 2   that--
 3        A    That's when it was resubmitted, yes.
 4        Q    Okay.  So you resubmitted the same form,
 5   and then if you look at the form again, is there a
 6   new date stamp on there?
 7        A    I see a new date stamp that says August
 8   28, 2002 at 6:37 in the morning.
 9        Q    Okay.
10        A    I sent the second one registered mail so
11   that I would be sure that they received it.
12        Q    Okay.  Great.  Just to make sure this is a
13   clear, I think you said earlier, but what's the
14   date stamp, the first date stamp on the exhibit?
15        A    The first date stamp was June 28, 2001.
16        Q    Okay.  Great.  At the time that you spoke
17   with Ms. Lick, did she have any additional
18   questions for you from the DEA?
19        A    She did have some additional, there were
20   additional questions that came up, and I responded
21   to those, yes.
22        Q    Okay.  And if you would look at what's
 1   been marked for identification as Government's
 2   Exhibit 3.
 3        A    Yes.
 4        Q    It's a loose copy up there.  Have you seen
 5   that before?
 6        A    Yes, this is the response to the bulk
 7   manufacture question.  It appears to me that I
 8   submitted to the DEA.
 9        Q    Okay.  This was in the response to
10   questions from Ms. Lick?
11        A    Yes.
12             MS. CARPENTER:  So at this point I would
13   move admission of Government's Exhibit 3 into the
14   record.
15             JUDGE BITTNER:  Mr. Bayly?
16             MR. BAYLY:  No objection.
17             JUDGE BITTNER:  Received.
18                            [Government Exhibit No. 3 was
19                            marked for identification and
20                            received in evidence.]
21             BY MS. CARPENTER:
22        Q    If you would look at that, Government's
 1   Exhibit 3, Dr. Craker.
 2        A    Yes.
 3        Q    The first question says what is the
 4   purpose of bulk manufacturer of controlled
 5   substances.  And then your answer follows that, I
 6   guess.
 7        A    Yes.
 8        Q    Can you--do you recall what the purpose
 9   was for your application for growing these?  Can
10   you summarize it there or we could read it if you
11   prefer?
12        A    Well, our purpose in growing, in asking
13   for a license to manufacture the marijuana was to
14   be able to supply a defined marijuana project, find
15   a defined marijuana product to investigators that
16   wanted to do clinical trials with marijuana.
17        Q    Okay.  And was this in particular to
18   further the drug development process?
19        A    Yes.
20        Q    And who was the organization that was
21   looking to do that?
22        A    MAPS was the organization that Dr. Doblin
 1   heads was the one that approached me and the one
 2   that was going to secure the funding for this, and
 3   I guess I would say looked for, look at or be the
 4   middle person for the clinical trials that would,
 5   he would interact with those initially.
 6        Q    Okay.
 7             JUDGE BITTNER:  Excuse me, doctor.  Did
 8   you say defined or refined process?
 9             THE WITNESS:  I said defined.
10             JUDGE BITTNER:  What does that mean?
11             THE WITNESS:  Well, defined means if we
12   want a particular level of in the case of marijuana
13   cannabinoids or something else, and that we would
14   supply a product with that level.
15             JUDGE BITTNER:  So, in other words, is it
16   like grow to suit or?
17             THE WITNESS:  Like what?
18             JUDGE BITTNER:  Grow to suit.  That you
19   could--
20             THE WITNESS:  Yes, that's right.
21             JUDGE BITTNER:  That you could grow it to
22   meet certain criteria?
 1             THE WITNESS:  Yes.
 2             JUDGE BITTNER:  Okay.
 3             THE WITNESS:  Yes.
 4             JUDGE BITTNER:  Thank you.
 5             BY MS. CARPENTER:
 6        Q    Was it your understanding that this
 7   research or the marijuana that you would grow,
 8   should the application for the registration be
 9   granted, would be used in research regarding
10   vaporizer devices?
11        A    Yes, this was new to me, a technology to
12   me, but this was the understanding that it would be
13   a new type of drug treatment.
14        Q    Okay.  Would it be a new type of drug
15   treatment or a new type of delivery device?
16        A    New type of delivery device for use of
17   marijuana.
18        Q    Okay.  And what's your understanding of
19   what the differences would be between smoked
20   marijuana and vaporized marijuana, if any?
21        A    Well, smoking marijuana has, in the
22   literature you can see that smoking marijuana has
 1   negative associations with the smoking in that the
 2   smoking itself, the burning of the material can
 3   cause adverse effects in patients.  My
 4   understanding of the vaporizer technology is it
 5   will be below the threshold for burning, and so
 6   that we will not have the same effects as smoking.
 7        Q    Okay.
 8        A    Same negative effects.
 9        Q    So essentially a different product would
10   be delivered through the delivery device?
11        A    Yes.
12        Q    In the second response to bulk
13   manufacturing questions, the question was please
14   describe the production process for these
15   controlled substances from start to finish.  Can
16   you summarize generally what you would do to grow
17   the marijuana under the application?
18        A    Certainly.  We looked at marijuana as we
19   would do any other medicinal plant.  The large
20   difference here, of course, is the security
21   requirements required for this type of plant
22   material to be sure that it's not diverted into the
 1   recreational market.  So that we had extra
 2   security, things which we've talked to DEA agents
 3   about, but otherwise we generally grow plants
 4   within a--start plants--seeds in a media, and then
 5   transplant them into pots, and then we would grow
 6   them in a controlled environment facility, a
 7   greenhouse or a growth chamber, environmental
 8   controlled chamber as necessary.
 9        Q    So would this growing be inside a room?
10        A    This would be inside a room, yes.
11        Q    Not field--
12        A    Locked room.
13        Q    Okay.  So it wouldn't be grown in a field,
14   for example?
15        A    No.  This is not for field growing.  Not
16   under the current situation.  It would be either--
17   it would be a secure facility.
18        Q    Okay.  And would that allow greater
19   environmental controls by growing it in a room?
20        A    Yes, that's the idea here is to control
21   the environment so that we can produce a defined
22   product.
 1        Q    And I think you had mentioned before that
 2   you would be, anticipate using different selections
 3   or different strains of marijuana?  What would be
 4   the purpose of that?
 5        A    Well, the plant material that is available
 6   varies quite considerably in the level of bioactive
 7   constituents, and so what we would want to do would
 8   be able to grow different strains of the plant
 9   material which have been previously characterized
10   as to certain levels of the constituents.
11        Q    Okay.  And so you'd grow different types
12   of plants for different testing?
13        A    Well, it would be the same type of plant.
14   It would be a little bit different strain of plant.
15        Q    I understand.  Get my botanical terms
16   clear.
17        A    Yes.
18        Q    The next question was what material would
19   be used to manufacture the controlled substances
20   and what quantities will be used?  Can you just
21   briefly summarize?  Maybe you've already said that.
22        A    Yes, well, we're going to--we said we're
 1   going to grow them in some type of controlled
 2   facility.
 3        Q    Okay.  And you mentioned a growth chamber;
 4   can you tell the Court what that is?
 5        A    Environmental growth chamber, yes.  That's
 6   a metal box where we can control the levels of
 7   light, the temperature, humidity in order to ensure
 8   the uniform plant growth around the year.
 9        Q    Okay.  And why would it be important to
10   ensure uniform consistency between plants?
11        A    Well, there are two things that affect the
12   active constituents in a plant, and that is the
13   genetics of the plant and the environment in which
14   the plant grows.  As I mentioned before, with the
15   Black Cohosh study, we wanted to determine the
16   differences in genetics.  We had to grow them in
17   all the same location with the same environment so
18   that any differences would be due to the genetics
19   as opposed to the environment.
20        Q    Okay.  And the question number six on
21   Exhibit 3 is what quantities of controlled
22   substance does your company anticipate producing
 1   and who are the interested customers?  What's your
 2   answer to that question?
 3        A    Well, in conversations with Dr. Doblin, it
 4   was calculated approximately 25 pounds would be
 5   needed in the first year.
 6        Q    Okay.  And how much table space do you
 7   think it would take to grow 25 pounds of marijuana?
 8        A    Well, since I'm not experienced in growing
 9   this plant, I'm not exactly sure.  I have talked
10   with other licensed growers and we have said that I
11   will talk with them to further determine the number
12   of plants we need.
13        Q    Okay.  But it would all fit in one room;
14   would it?
15        A    I'm sure it will fit in one room, yes.
16             MS. CARPENTER:  Okay.
17             JUDGE BITTNER:  Doctor, when you say dry
18   weight, do you mean after it's been dried or--
19             THE WITNESS:  Yes, after it's been dried.
20             JUDGE BITTNER:  Okay.
21             BY MS. CARPENTER:
22        Q    Now, Dr. Craker, at some point, did you
 1   receive an opportunity from the DEA to bid on a
 2   government contract to grow marijuana?
 3        A    Yes.  I received the notice from the
 4   government that they were taking bids on growing
 5   marijuana, yes.
 6        Q    Okay.  Were you interested in that
 7   opportunity at all?
 8        A    I looked at the prospectus on it and
 9   decided that there was little chance of the
10   university successfully bidding on this.
11        Q    And why was that?
12        A    Well, they were, first of all, we had
13   essentially no experience in producing the material
14   and whereas the current successful bidder has had
15   lots of experience.  There was call for and
16   analyzing material that's brought off the street.
17   We were not exactly interested in that.
18        Q    Okay.
19        A    And in looking at it, I thought if I was,
20   you know, that it was not for us at that time.
21        Q    Okay.  So after you submitted the answers
22   to the questions, and resubmitted your original
 1   application in August of 2002--
 2        A    Yes.
 3        Q    --what happened next?
 4        A    We had, next thing that came after we
 5   resubmitted, I would say approximately--again, the
 6   dates are approximate because I don't have them.
 7        Q    That's fine.
 8        A    But I would say probably within six to
 9   eight weeks after that submission, we had, I had
10   two DEA agents visit the campus.
11        Q    Okay.  And what happened during that
12   visit?
13        A    In the initial contact with the agents,
14   they asked that I come to a meeting along with my
15   department head, my dean, the Vice Chancellor for
16   Research, and the chancellor of the campus.
17        Q    So all you all gathered together and met
18   and what did they have to--
19        A    The chancellor did not come, but the
20   department head, the dean, and the Vice Chancellor
21   for Research did attend along with me.  We met with
22   the two agents.
 1        Q    Okay.  And what happened in that meeting?
 2        A    During that time, we met with the agents.
 3   The agents, the primary purpose of the meeting to
 4   me seemed to be that the agents were trying to
 5   discourage the university from participating in the
 6   research.  They asked the, they asked especially
 7   the Vice Chancellor for Research and my dean
 8   whether this is something that they really wanted
 9   the university working in, that the university
10   could get a bad reputation from growing this plant
11   material.
12        Q    Okay.  And what was the response from the
13   university?
14        A    The response from my department head, my
15   dean and my Vice Chancellor for Research said this
16   was a research university and these are the type of
17   problems that we worked on.
18        Q    Okay.  Did those DEA investigators ask
19   questions at all about security or any issues like
20   that?
21        A    Not that I recall.
22        Q    Okay.
 1        A    Not that I recall at that time.  I had a
 2   second visit by DEA agents to talk about security.
 3        Q    Okay.  So the first visit focused solely
 4   on whether or not the university would proceed with
 5   this?
 6        A    Well, we, again, it's been--
 7        Q    Okay.  Primarily.
 8        A    --three years ago or so.  That was the
 9   primary focus of the meeting.  We did not visit any
10   facilities.  We did not walk around campus.  We met
11   in a room and around a table and that was the
12   conversation as I recall.
13        Q    Okay.  And what happened at the second DEA
14   meeting?
15        A    At the second DEA meeting when the agents
16   came to, one of the original and another agent came
17   to visit me from the DEA, we walked around campus;
18   we talked about where the material would be
19   growing, grown.  They indicated some of their
20   requirements for growing the material.  They wanted
21   to, I think, be sure that I understood the need for
22   security of this plant material, which I assured
 1   them that I did.  We looked at--we looked at one
 2   room where I had secured from the department, had
 3   an agreement to use for growing the material.  They
 4   thought that room could be made secure with no
 5   problems.
 6             They wanted to know where I'd be drying
 7   the material.  I told them there was a small room
 8   next which we would connect the growth room to the
 9   small room where the plant would be dried so it
10   would all be contained in one facility.
11        Q    Okay.  Did any state investigators play a
12   role in this?
13        A    The state investigators were the first to
14   come and see me.  They came in 2001 immediately
15   after I had submitted the application.  They walked
16   around campus with me at that time, discussed their
17   security requirements, and at the time they told me
18   that a state permit would depend upon a federal
19   permit being granted.
20        Q    Did they indicate that if the federal
21   permit was granted, the state permit would be
22   granted?
 1        A    That's what they indicated to me, yes.
 2        Q    Okay.  So after these visits from the DEA,
 3   what happened after that?
 4        A    Well, as I talked with the agents and
 5   asked them what the next step would be, they said a
 6   decision was going to be made.  I expected shortly
 7   but heard nothing for awhile, and so then we filed
 8   a request or whatever it is for them to come to an
 9   answer.
10        Q    Okay.  So let me just be clear.  I
11   understand that you filed in August of 2002, and
12   the DEA agents came out within six or eight weeks
13   after that, so that would be--
14        A    No, we got, we got a response, final
15   response from the DEA, a negative response in 2004.
16        Q    Right.  I'm not there yet.
17        A    Yes.
18        Q    Back when you filed, you filed, you
19   refiled the application--
20        A    Yes.
21        Q    --in August of 2002.  Then I think you
22   said six or eight weeks after that, DEA agents came
 1   to visit?
 2        A    Yes.
 3        Q    So that would be fall of 2002?
 4        A    That's correct.
 5        Q    And then you didn't hear anything from the
 6   DEA?
 7        A    I heard nothing from the DEA.
 8        Q    Until?
 9        A    Until 2004 essentially.
10        Q    After you filed the lawsuit?
11        A    I think the second DEA visit came probably
12   in the spring of 2004, summer of 2004.  I can't
13   recall it at this time.
14             MS. CARPENTER:  Okay.
15             JUDGE BITTNER:  Summer of 2004 or 2003?
16             THE WITNESS:  2004.
17             JUDGE BITTNER:  Okay.  So some time after
18   the first visit?
19             THE WITNESS:  Yes.  Something like that as
20   I recall.
21             BY MS. CARPENTER:
22        Q    All right.  And did a point come when you
 1   filed a lawsuit to try and get an answer from DEA?
 2        A    Yes, that was in 2004.
 3        Q    Okay.  In the summer?
 4        A    Yes.
 5        Q    And let me just step back for one minute,
 6   and do you recall whether in July 2003, notice was
 7   published in the Federal Register of your
 8   application?
 9        A    I'm sorry.  I do not understand the
10   question.
11        Q    Do you recall that in July of 2003 that
12   DEA published in the Federal Register a notice of
13   your application finally?
14        A    Well, I knew that they did--
15        Q    Okay.
16        A    --because of publicity that comes and
17   newspaper people calling and things like that.
18        Q    Okay.  So that in July 2004, you filed a
19   lawsuit?
20        A    Yes.
21        Q    And what was the result of that lawsuit?
22        A    The result of that lawsuit was a decision
 1   to deny the license.
 2        Q    Okay.  And do you recall when you received
 3   that?
 4        A    In the fall of 2004.
 5        Q    Okay.  Does December 2004 sound about
 6   right?
 7        A    Sounds about right, yes.
 8        Q    All right.  The lawsuit that you filed,
 9   was that with the Court of Appeals in the District
10   of Columbia?  You don't recall what court it was?
11        A    I don't recall the court.
12        Q    Do you recall whether the court ordered
13   the DEA to give an answer?
14        A    Yes.
15        Q    Okay.  So basically about three and a half
16   years after you first applied, you got the denial;
17   does that sound about right?
18        A    Well, the initial application was in 2001.
19   We got an answer, a denial in 2004.
20        Q    Okay.  Let me ask you to turn in the
21   notebook up there, after you get a drink, to
22   Exhibit 43.
 1             JUDGE BITTNER:  And this is your Exhibit
 2   43?
 3             MS. CARPENTER:  Respondent's Exhibit 43.
 4   We're back to Respondent's Exhibits.
 5             THE WITNESS:  Yes.
 6             BY MS. CARPENTER:
 7        Q    Okay.  Do you recognize that document, Dr.
 8   Craker?
 9        A    Well, this looks like a copy of a
10   memorandum that I must have gotten from the Drug
11   Enforcement Agency.
12        Q    Okay.  This is dated--what's the date on
13   there?
14        A    December 10, 2004.
15        Q    Okay.  And to your knowledge, is this the
16   order that denied your application for registration
17   as a bulk grower of marijuana?
18        A    Yes.
19             MS. CARPENTER:  Okay.  I would move the
20   admission of Respondent's Exhibit 43 into evidence.
21             JUDGE BITTNER:  Mr. Bayly?
22             MR. BAYLY:  Judge Bittner, it's already an
 1   ALJ exhibit so I don't know.  I think it's like
 2   redundant and superfluous so I don't--
 3             JUDGE BITTNER:  I think the problem,
 4   though, is that where we have redundant exhibits,
 5   it usually turns out that either the witnesses or
 6   counsel are used to referring to them by the
 7   numbers that their counsel assigned them.  So I've
 8   tended to leave them in.  So--
 9             MR. BAYLY:  Okay.
10             JUDGE BITTNER:  All right.  No objection
11   then?
12             MR. BAYLY:  No.
13             JUDGE BITTNER:  Okay.  Respondent 43,
14   which is extremely similar to ALJ-1, is received.
15             [Laughter.]
16                            [Respondent's Exhibit No. 43
17                            was marked for identification
18                            and received in evidence.]
19             MS. CARPENTER:  Thank you, Your Honor.
20             BY MS. CARPENTER:
21        Q    Dr. Craker, I know it's been probably
22   awhile since you read this document, but if you
 1   could turn to page four of that document.  And
 2   there's three paragraphs there.  Do you understand
 3   those paragraphs (a), (b) and (c) at the top of the
 4   page to be essentially the reasons why your
 5   application for registration was denied?
 6        A    Yes, those are the three reasons that the,
 7   as I understood, that the license was denied.
 8        Q    Okay.  Could you read that first paragraph
 9   there, paragraph (a)?
10        A    Yes.  Current marijuana research has not
11   progressed to Phase 2 of the clinical trials
12   because current research must utilized smoked
13   marijuana which ultimately cannot be the permitted
14   delivery system for any potential marijuana
15   medication due to the deleterious effects and
16   difficulty in monitoring the efficaciousness of
17   smoked marijuana.
18        Q    Okay.  So is your understanding of that
19   paragraph that they're saying you can't have a
20   license because smoked marijuana cannot be a
21   permitted delivery system?
22        A    Yes.  When I received this, this was
 1   curious to me because I don't think we had ever
 2   asked about smoked marijuana.  We had asked about
 3   an alternative delivery system, the vaporizer.
 4        Q    And that was clear in your application;
 5   was it?
 6        A    That was clear in my application.
 7        Q    That part of the reason to do this was
 8   for--
 9        A    Yes.
10        Q    --working with the vaporizer?
11        A    To do away from the smoked marijuana.
12        Q    Okay.  Could you read the second paragraph
13   there, paragraph (b)?
14        A    As of January 2004, FDA has not received
15   any new drug application for the development of a
16   prescription drug containing marijuana or a
17   constituent of marijuana.  Since the new drug
18   application process cannot take many years--
19             MR. BAYLY:  Sorry.  I--
20             THE WITNESS:  Can take many years DEA
21   should not register another marijuana manufacturer
22   at this time on such a speculative basis.
 1             BY MS. CARPENTER:
 2        Q    Okay.  And in the information that you
 3   had, was it clear to you that there had to be an
 4   FDA new drug application pending before you could
 5   get a license?
 6        A    No, I saw nothing about that in the
 7   guidelines of following the application.
 8        Q    Okay.  And if you could read paragraph
 9   number (c) on that same page?
10        A    In accordance with the Single Convention,
11   the federal government has to limit marijuana
12   available for clinical research to one source.
13   Based upon this mandate of the Single Convention,
14   HHS through NIDA submits a contract to open bidding
15   every five years to determine which one enterprise
16   will be allowed to cultivate marijuana.  Since this
17   HHS policy is consistent with the Single
18   Convention, DEA has no authority to overturn this
19   policy.  Moreover, DEA agrees with HHS policy
20   inasmuch as DEA's interpretation of the Single
21   Convention, as noted previously, is that marijuana
22   available for clinical research must be limited to
 1   one source.
 2        Q    Okay.  I'm just going to ask you--I think
 3   you probably don't have any experience--but do you
 4   have any experience with the Single Convention that
 5   it refers to here?
 6        A    No.
 7        Q    Okay.  Doctor--just a minute, Your Honor.
 8   If you'd just turn to the next page there, page
 9   five.
10        A    Yes.
11        Q    And it's paragraphs (a), (b) and (c) of
12   paragraph 10.
13        A    Yes.
14        Q    If you look at paragraph (c), could you
15   just read that into the record, if you would?
16        A    Starting with "This system"?
17        Q    Yes, sir.
18        A    This system has not unduly limited
19   clinical research with marijuana.  Since the year
20   2000, there have been or are 11 approved clinical
21   trials utilizing smoked marijuana, three approved
22   clinical sub-studies on side effects of marijuana
 1   and four approved pre-clinical trials in laboratory
 2   and animal modes.  Current registered marijuana
 3   researchers administer marijuana to almost 500
 4   human subjects.  Research with other Schedule I
 5   controlled substances is not as extensive as it is
 6   with marijuana at this time.
 7        Q    Okay.  Do you understand what Phase 2
 8   studies are, FDA Phase 2 studies?
 9        A    That's not in my specialty area.
10        Q    Okay.  All right.  I'll move on.  Dr.
11   Craker, are you familiar with the statutory factors
12   that help determine the public interest in terms of
13   whether or not your application is granted?
14        A    Determine what?
15        Q    That determine whether or not your--
16        A    Am I familiar with the statutes that do
17   that?
18        Q    Let me start over.  Are you familiar with
19   the statute that lays out the factors the Court
20   will consider in determining whether or not your
21   application for a registration will be granted?
22        A    Only from a lay point of view.
 1        Q    Okay.
 2        A    Again, that's not my specialty.
 3        Q    Okay.  All right.  The first factor, do
 4   you recall that it is to ensure an adequate and
 5   uninterrupted supply under adequately competitive
 6   conditions?
 7        A    Well, I understand that--
 8             MR. BAYLY:  Your Honor, excuse me.  I'm
 9   going to object.  First of all, this is not within
10   the scope of the prehearing testimony of Dr.
11   Craker, and that would be in the Respondent's
12   Supplemental Prehearing Statement, pages, it looks
13   like the third through the fourth page.  I don't
14   see where he's talking about the statutory factors.
15             Secondly, Dr. Craker has already informed
16   us on the stand that this is not something that
17   he's familiar with.  He certainly has been
18   testifying about his qualification as a professor,
19   botany and growing, but certainly not in law or in
20   interpreting statutes.  So I would say for all
21   those reasons, we shouldn't be allowing his
22   testimony.
 1             MS. CARPENTER:  Your Honor, may I respond?
 2             JUDGE BITTNER:  Yes.
 3             MS. CARPENTER:  On the third paragraph,
 4   first line, Dr. Craker will further testify that he
 5   meets all the criteria for issuing a DEA license,
 6   and then it proceeds to discuss.  It doesn't say
 7   specifically he'll talk about each factor, but it
 8   clearly--obviously that's our burden of proof, and
 9   if our applicant can't testify as to why he meets
10   his factor, I think we're not able to meet our
11   burden.
12             It says--
13             JUDGE BITTNER:  Okay.  Did you have more?
14             MR. BAYLY:  No.
15             JUDGE BITTNER:  Okay.  First of all, I
16   think, and we are just--make sure we're all
17   literally on the same page.  We're talking about
18   Respondent's Supplemental Prehearing Statement
19   which was filed on July 26; right?
20             MS. CARPENTER:  That's correct, Your
21   Honor.
22             JUDGE BITTNER:  Page?
 1             MS. CARPENTER:  Page three.
 2             JUDGE BITTNER:  Okay.
 3             MS. CARPENTER:  I'm sorry that those pages
 4   are not numbered.  But it's subsection four.
 5             JUDGE BITTNER:  Yeah.  I think that
 6   reference to testifying that he meets the criteria
 7   is sufficient given that there was no request to
 8   expand upon it.
 9             However, I have a different problem, and
10   that is that I think rather than have the statutory
11   factor described to the witness, he should have it
12   in front of him because that particular one is
13   rather long and involved and has subparts.
14             MS. CARPENTER:  All right.
15             JUDGE BITTNER:  Would you like a copy of
16   the statute?
17             MS. CARPENTER:  I was going to say I don't
18   have one.
19             JUDGE BITTNER:  Why don't you take mine.
20   Nicole, would you please give this to the witness?
21             MS. CARPENTER:  I was cutting down on the
22   number of books I was bringing in and I should not
 1   have left that one.
 2             JUDGE BITTNER:  And I don't think he needs
 3   to read it into the record.  We're all familiar
 4   with it.
 5             MR. BAYLY:  I need to find the reference
 6   to--if we're going to go through all six criteria,
 7   I need to find the reference, too, Judge Bittner,
 8   if I may have a moment.
 9             JUDGE BITTNER:  Okay.  Let's go off the
10   record.
11             [Discussion held off the record.]
12             JUDGE BITTNER:  Back on the record.
13             BY MS. CARPENTER:
14        Q    Dr. Craker.
15        A    Yes.
16        Q    If you would look at 21 U.S.C. Section
17   823(a), subsection (1).
18        A    Yes.
19        Q    And just read that to yourself, if you
20   would.
21        A    Yes.
22        Q    Do you see the language in there that
 1   refers to "adequately competitive conditions for
 2   legitimate medical, scientific research"--
 3        A    Yes, the last sentence there.
 4        Q    Yes--"and industrial purposes."
 5        A    Yes.
 6        Q    As far as you know, would granting your
 7   license in your application for registration, would
 8   that as far as you know improve competitive
 9   conditions in manufacturing marijuana?
10             MR. BAYLY:  Your Honor, I need to object
11   for the record.  Again this is asking a question of
12   a witness that's not qualified to answer this.
13             JUDGE BITTNER:  Ask him if he knows and
14   let's get a foundation here.
15             MS. CARPENTER:  Okay.
16             BY MS. CARPENTER:
17        Q    Dr. Craker, do you know how many people or
18   how many people currently hold a license to bulk
19   manufacture marijuana?
20        A    In the United States--
21        Q    In the United States.
22        A    --only one that I'm aware of.
 1        Q    Okay.  And so do you know whether, as far
 2   as you know, granting your application would
 3   improve competitive conditions in the field of, in
 4   the area of growing bulk marijuana?
 5             MR. BAYLY:  Your Honor, again, I don't
 6   think that predicate question has covered the scope
 7   of the objection.
 8             JUDGE BITTNER:  I'm sorry.  I missed the
 9   question.  What was it?
10             MS. CARPENTER:  He testified--
11             MR. BAYLY:  Well, the predicate question
12   was simply asking do you know how many other
13   manufacturers are and the answer I believe was yes,
14   just one, but that is--that's a fact.  That's true,
15   but that kind of doesn't give you, I don't believe,
16   the necessary predicate to make a ruling on whether
17   this witness is qualified to answer such a
18   question.
19             MS. CARPENTER:  Your Honor, this is a
20   question any lay witness.  It's not a matter of
21   expertise.  The question is whether adding one to a
22   field of one would improve competition?
 1             JUDGE BITTNER:  Well, but, well, actually
 2   I had a case about that once.
 3             [Laughter.]
 4             JUDGE BITTNER:  It was really quite
 5   interesting.  Doctor, do you have any background in
 6   economics or competition or any of these issues?
 7             THE WITNESS:  Well, only to the extent
 8   that every college student takes a course in
 9   economics and I do have an associate's degree in
10   business that I took on the GI bill.
11             JUDGE BITTNER:  Do you know the
12   arrangements under which the one current
13   manufacturer of marijuana is manufacturing it and
14   the cost associated with it and the prices
15   associated with supplying it to researchers and so
16   on?
17             THE WITNESS:  I have no idea on the costs
18   or the prices.  The only thing I know that it's
19   produced under contract to NIDA.
20             JUDGE BITTNER:  In that instance, then, I
21   think I'll sustain the objection.
22             MS. CARPENTER:  Okay.
 1             BY MS. CARPENTER:
 2        Q    Dr. Craker, can I ask you to turn to
 3   Exhibit 44 in the book in front of you?  That's
 4   Respondent's Exhibit 44.
 5        A    Turn where?
 6        Q    I'm sorry.  Respondent's Exhibit 44.
 7        A    Yes.
 8        Q    Have you seen that letter before?
 9        A    Yes, I have.
10        Q    Okay.
11        A    This is a copy of a letter that I received
12   a copy of the letter sent to by Senator Kennedy and
13   Senator Kerry to the Drug Enforcement
14   Administration.
15        Q    And what's the date on that letter?
16        A    The date on that letter was October 20,
17   2003.
18        Q    Okay.  Dr. Craker, could you read the
19   second and third paragraphs of that letter into the
20   record?
21             JUDGE BITTNER:  I don't think he needs to
22   read it into the record.
 1             MS. CARPENTER:  Okay.
 2             JUDGE BITTNER:  Because if it's received
 3   in evidence, I'll read it.
 4             MS. CARPENTER:  Okay.  That's fine.  Let
 5   me just move the admission of Respondent's Exhibit
 6   44 into evidence.
 7             JUDGE BITTNER:  Is there a signed copy
 8   somewhere?
 9             MS. CARPENTER:  I don't have one, Your
10   Honor.  I think it was at the DEA.
11             JUDGE BITTNER:  Do we know if it was sent
12   and signed?
13             MS. CARPENTER:  It was sent and signed,
14   Your Honor, is my understanding.
15             JUDGE BITTNER:  Okay.  Mr. Bayly?
16             MR. BAYLY:  Yeah.  Just, well, a couple of
17   things, Judge Bittner.  First of all, the copy I
18   have, and maybe this can be cleared up with Dr.
19   Craker's counsel, but I've got October 20, 2003 as
20   the date, as one date, and then the very top, it's
21   got October 20, 2004.
22             JUDGE BITTNER:  So does mine.  Did you
 1   receive a copy of it at the time, Doctor?
 2             THE WITNESS:  I received a copy of it.  I
 3   would say it was probably 2003.
 4             JUDGE BITTNER:  But you're not certain?
 5             THE WITNESS:  No, I'm not certain.
 6             JUDGE BITTNER:  Okay.
 7             THE WITNESS:  All dates are approximate.
 8   I did not bring my calendar with me when various
 9   things happened.
10             JUDGE BITTNER:  Okay.
11             MS. CARPENTER:  I pulled this off a Web
12   site, as you can see at the bottom of the page.
13             JUDGE BITTNER:  Uh-huh.
14             MS. CARPENTER:  And I believe that that
15   line at the top is just, it's a mistake.  It was a
16   title for the document on the Web site, and I think
17   they just typed the date wrong.
18             JUDGE BITTNER:  Okay.  I think before I
19   receive it, I'd like to know the date.
20             MS. CARPENTER:  Can we get the original?
21             JUDGE BITTNER:  So can I just withhold
22   ruling on this until we can determine the date and
 1   perhaps reach a stipulation on it?
 2             MR. BAYLY:  Yeah.  I'm not going to
 3   object.  I think we can clear this date issue up.
 4             JUDGE BITTNER:  Okay.
 5             MR. BAYLY:  So that's not a problem.
 6             JUDGE BITTNER:  So I'll allow you to
 7   question the witness about it.  I just don't want
 8   to receive it when I don't know when it was
 9   written.
10             MS. CARPENTER:  Right.
11             MR. BAYLY:  But I will object to having
12   this letter used as a predicate for the witness
13   because this letter is, yes, maybe the witness has
14   seen it, but that doesn't necessarily mean it's a
15   predicate for it.
16             JUDGE BITTNER:  Okay.  Right.  We're not
17   there yet.
18             MR. BAYLY:  If the defense wants to admit
19   this on its own for whatever worth they think it
20   has, then I would not object on any other basis.
21             MS. CARPENTER:  That's fine, Your Honor.
22             JUDGE BITTNER:  Okay.  So I'll just
 1   withhold ruling pending--I'll receive it once we
 2   know when it was sent.
 3                            [Respondent's Exhibit No. 44
 4                            was marked for
 5                            identification.]
 6             MS. CARPENTER:  That sounds fine.
 7             JUDGE BITTNER:  Okay.
 8             BY MS. CARPENTER:
 9        Q    So just to back up for a moment, you
10   received a copy of this at the time it was--
11        A    Yes, I did.
12        Q    Okay.  And what's your understanding of
13   the reason that letter was written?
14        A    Well, my understanding was that this was--
15             MR. BAYLY:  I'm sorry.  I have to object
16   again.  I don't think this is covered in the
17   prehearing statement as to why this letter was
18   written.  There's no predicate that Dr. Craker has
19   contacted Senators Kennedy or Kerry.
20             JUDGE BITTNER:  Well, and the witness also
21   said that it was his understanding.  Do you know?
22   Did you talk to the senators or their staff about
 1   this?
 2             THE WITNESS:  I have not talked to the, I
 3   have not talked directly to either the two senators
 4   about this.  I have talked to staff of one of them.
 5   I think it was Kennedy's staff, but I--
 6             JUDGE BITTNER:  Okay.
 7             THE WITNESS:  Again, it's one of those
 8   things that have fogged over.
 9             JUDGE BITTNER:  I think the letter has to
10   stand on its own.
11             MS. CARPENTER:  That's fine.
12             JUDGE BITTNER:  Okay.
13             MS. CARPENTER:  That's fine.
14             THE WITNESS:  Their staff called me and
15   talked about the content of the letter.
16             BY MS. CARPENTER:
17        Q    Okay.  About this letter?
18        A    Yes.
19        Q    Okay.  So you did have discussions with
20   them about the content of the letter?
21        A    I had discussions with staff of one of the
22   two senators and I think it was Senator Kennedy's
 1   staff that contacted me.
 2        Q    Okay.  All right.  And do you know if they
 3   wrote this letter in support of your application?
 4        A    I considered it in support of my
 5   application, yes.
 6        Q    All right.  Thanks.  Do you know if in the
 7   letter they referred to the necessity for adequate
 8   competition in the field of manufacture?
 9             MR. BAYLY:  I have to object again.
10             MS. CARPENTER:  I'm simply asking him
11   whether it's in the letter?
12             JUDGE BITTNER:  Yeah, but the letter
13   speaks for itself.  I'll read it.
14             MS. CARPENTER:  Okay.
15             JUDGE BITTNER:  So--
16             MS. CARPENTER:  That's fine, Your Honor.
17             JUDGE BITTNER:  I really do read all this
18   stuff.
19             MS. CARPENTER:  I take your word on that.
20             JUDGE BITTNER:  Well, I'm not sure I'm
21   going to read the entire Single Convention.  I take
22   that back.
 1             [Laughter.]
 2             BY MS. CARPENTER:
 3        Q    Dr. Craker, if I could ask you to turn to
 4   Exhibit 50.  Hopefully this exhibit will have fewer
 5   issues.
 6        A    Yes.
 7        Q    Have you seen that letter before?
 8        A    Yes, this looks like a copy of the letter
 9   that was sent to the Drug Enforcement
10   Administration by members of Congress from
11   Massachusetts.
12        Q    Okay.  And do you recall whether you saw
13   this letter at or around July 26, 2005?
14        A    Again, the answer to that is yes, I
15   received a copy of this letter.  The exact date I
16   cannot be sure, but somewhere around that time.
17             MS. CARPENTER:  Okay.  I move the
18   admission of Respondent's Exhibit 50 into the
19   record.
20             JUDGE BITTNER:  Mr. Bayly?
21             MR. BAYLY:  No objection.
22             JUDGE BITTNER:  Received.
 1             MS. CARPENTER:  Okay.
 2                            [Respondent's Exhibit No. 50
 3                            was marked for identification
 4                            and received in evidence.]
 5             JUDGE BITTNER:  Doctor, do you know how
 6   many--I'm embarrassed that I don't know this--how
 7   many members of the House of Representatives
 8   Massachusetts has?
 9             THE WITNESS:  I think there are ten or 11.
10             JUDGE BITTNER:  Do you know if any others
11   took a position on your application?
12             THE WITNESS:  Not that have communicated
13   with me, no.
14             JUDGE BITTNER:  Okay.
15             BY MS. CARPENTER:
16        Q    If you would look back at the statute
17   again, Dr. Craker, in that big thick book.  That
18   would be 21 U.S.C. 823 Subsection (a), the second
19   factor there.
20        A    Yes.
21        Q    Which reads "Compliance with Applicable
22   State and Local Law."
 1        A    Yes.
 2        Q    Do you intend to comply with applicable
 3   state and local law should you be granted the
 4   registration you're seeking here?
 5        A    Certainly.
 6        Q    Will the cannabis grown under this license
 7   be available to anyone other than those allowed to
 8   obtain it in FDA approved research?
 9        A    No.
10        Q    With regard to clinical studies, FDA
11   approved clinical studies?
12        A    Yes, FDA approved clinical studies that
13   have permission to use this material in clinical
14   trials.
15        Q    Okay.  Would it also be available in some
16   circumstances to scientific users who do not intend
17   to use it in clinical trials but have legitimate
18   scientific, for example, vaporizer testing
19   techniques?
20        A    Well, if they have the appropriate federal
21   permits.
22        Q    Okay.
 1        A    Just sending us a letter saying we'd like
 2   some is not going to work.
 3        Q    Okay.  So will you comply with state and
 4   federal laws relating to the growing of any
 5   cannabis that you're allowed to grow?
 6        A    Yes.  We are prepared to meet those.
 7        Q    If you would look at factor number three.
 8        A    Yes.
 9        Q    And that refers to the promotion of
10   technical advances in the art of--
11             JUDGE BITTNER:  Actually I have--wait a
12   minute.  It would help if I read the right section
13   of the statute.  I'm sorry.
14             MS. CARPENTER:  Okay.
15             BY MS. CARPENTER:
16        Q    That refers to the promotion of technical
17   advances in the art of manufacturing these
18   substances and the development of new substances?
19   Do you believe that your application will further
20   promote the technical advancement of these
21   substances?
22             MR. BAYLY:  Objection.  This is leading. 
 1   I think we need to get a little more open
 2   questions.
 3             MS. CARPENTER:  That's fine, Your Honor.
 4   Are there any ways--
 5             JUDGE BITTNER:  Yeah, would you rephrase
 6   it?
 7             MS. CARPENTER:  Sorry.  I beg your pardon?
 8             JUDGE BITTNER:  Would you rephrase the
 9   question?
10             MS. CARPENTER:  Yes, I will.
11             BY MS. CARPENTER:
12        Q    Do you understand what promotion of
13   technical advances means?
14        A    Well, I think I do.  I mean it means
15   making scientific advances or technical advances in
16   something.
17        Q    Okay.  Do you think your application would
18   further technical advances?
19        A    Well, I think there is two answers to that
20   as far as I'm concerned.  One is that, yes, it
21   would make an advance in the understanding any
22   possible clinical use of marijuana if we were able
 1   to supply this to investigators to run trials, and,
 2   secondly, as I've explained to DEA agents that
 3   visited, that we would learn more about how the
 4   environment affects the constituents in the plant
 5   material which would enable, if this does become at
 6   some stage down the road here, becomes a useful
 7   drug, and that the manufacturer of it has to be
 8   controlled under security conditions, they would
 9   know the environment it needs to be grown under to
10   produce a clinical marijuana, medical marijuana.
11             MS. CARPENTER:  All right.
12             JUDGE BITTNER:  Could I just ask--
13             THE WITNESS:  Yes.
14             JUDGE BITTNER:  Because I want to make
15   sure I understand things.  Doctor, would you
16   distinguish for me between cannabis and marijuana?
17             THE WITNESS:  Well, the cannabis is the
18   Latin name for the marijuana plant.
19             JUDGE BITTNER:  So can you use the two
20   terms interchangeably?
21             THE WITNESS:  It can be used
22   interchangeably and they are.
 1             JUDGE BITTNER:  Okay.  Is there a
 2   connotation of using one over the other?
 3             THE WITNESS:  I don't--there would have
 4   been probably in the beginning, but I don't think
 5   there is anymore.  I think in the street, they're
 6   accepted as the same.  To me they are accepted as
 7   the same thing.
 8             JUDGE BITTNER:  Okay.  Thanks.  Go ahead,
 9   Ms. Carpenter.
10             THE WITNESS:  The only different
11   distinction I would make is between medical
12   marijuana and marijuana, marijuana being associated
13   with recreational use and medical marijuana being
14   restricted to use for helping people.
15             JUDGE BITTNER:  Okay.
16             BY MS. CARPENTER:
17        Q    And you mentioned earlier that part of the
18   work that Dr. Doblin had asked you all to help with
19   was to develop a vaporizer.  Do you think that work
20   would lead to any technical advances?
21        A    Well, whenever, I think whenever we can
22   talk about advances in drug delivery, we're talking
 1   about advances.  I mean that's why clinical trials
 2   need to be run.  I'm not qualified at this time
 3   without something that I can--a study that's been
 4   run by medical doctors under appropriate conditions
 5   to judge whether the vaporizer is better than
 6   anything else.  I don't have that expertise.
 7             I assume that the purpose of manufacturing
 8   this medical marijuana is to be able to test
 9   various delivery systems and to determine if they
10   are effective and will help patients.
11        Q    And in your opinion would that be a
12   technical advancement in medical marijuana?
13        A    That would be an advance over smoking the
14   marijuana, yes.
15        Q    Okay.  If you would look at statutory
16   factor number four, prior conviction record of
17   applicant?
18        A    Yes.
19        Q    Have you ever been convicted of any
20   offenses, federal or state?
21        A    I had a speeding ticket once.
22        Q    That's it?
 1        A    Yes.
 2        Q    Okay.  Factor number five is past
 3   experience in the manufacture of controlled
 4   substances and the existence in the establishment
 5   of effective control against diversion.  What do
 6   you understand that factor to mean?
 7        A    Well, I think what it means if I've had
 8   any experience in the manufacture of these or
 9   effective controls, and the answer is no, I have
10   not had any experience in that.
11        Q    Okay.
12        A    I've never grown marijuana or any other
13   controlled substance.  We have not--I have no
14   experience in the control against diversion.
15   That's why we've been working closely with the DEA
16   agents that came to visit campus to set up
17   appropriate security conditions.
18        Q    And have you agreed to meet all those
19   appropriate--
20        A    We've agreed to meet all of those.
21        Q    So the fact that they're not there now
22   wouldn't mean that they wouldn't be there should
 1   you get the license?
 2        A    No, and the university understands that
 3   we'd have to have appropriate security.
 4        Q    Okay.  To your knowledge, is there anybody
 5   in the country other than one person who has an
 6   experience growing medical marijuana for clinical
 7   use?
 8        A    Well, in growing, there are other people
 9   that are growing it, but for manufacture purpose,
10   only one that I'm aware of for supplying product.
11        Q    Okay.
12        A    Other studies that I'm aware of have to do
13   with detecting marijuana fields, but those are just
14   for that type of purpose.
15        Q    Okay.  So to your knowledge, would there
16   be anybody else in the country who would have that
17   experience except for one person?
18        A    No, I think that probably only the one
19   current under contract has any experience in
20   manufacture of this product.
21        Q    Okay.  All right.  And factor number six
22   is such other factors as may be relevant to and
 1   consistent with the public health and safety.  Do
 2   you think that your application would further any
 3   other factor that would fit into that category?
 4        A    Well, only that, you know, I'm looking
 5   for--as a scientist, I'm looking to forward
 6   advanced science in the study of this product and
 7   that's what our contribution would be, to determine
 8   if this material could be used clinically and if it
 9   would help patients and our part would be as the
10   beginning part of being able to manufacture the
11   product which could be tested.
12             MS. CARPENTER:  Okay.  Could I have the
13   Court's indulgence for one moment?  Your Honor, we
14   have no further questions at this time.
15             JUDGE BITTNER:  Okay.  Let's go--oh, yes,
16   Doctor.
17             THE WITNESS:  I have one correction I'd
18   like to make.
19             MS. CARPENTER:  Okay.
20             JUDGE BITTNER:  Okay.
21             THE WITNESS:  Okay.  In reference to the
22   dates, in the second DEA visit as I was thinking
 1   about as we were going through here, and I had
 2   mentioned it was in 2004 summer, but it could have
 3   very well been the fall of 2003.  Those dates are
 4   merging on me here, the second visit by the DEA,
 5   and I just want to be sure that we understand.
 6             JUDGE BITTNER:  You don't know how long
 7   after the first visit it was?
 8             THE WITNESS:  Well, the first visit was in
 9   2002.  So it was probably over a year since the
10   first visit and that's about all I can--I recall it
11   was in the summer because we walked across campus,
12   and it was very beautiful weather.  It was a
13   beautiful day and I remember talking about that,
14   but it could have been the fall of 2003 or the
15   spring of 2004, and I cannot, I cannot place it
16   exactly at this time.
17             JUDGE BITTNER:  Okay.  Okay.  Thank you.
18             MS. CARPENTER:  Thank you, Dr. Craker.
19             JUDGE BITTNER:  Let's go off the record.
20             [Discussion held off the record and a
21   short recess was taken.]
22             JUDGE BITTNER:  We are on the record.  Ms.
 1   Carpenter, your next witness.
 2             MS. CARPENTER:  Thank you, Your Honor.
 3   We'd like to call Dr. Irwin Martin.
 4             JUDGE BITTNER:  Doctor, raise your right
 5   hand, please.
 6        Whereupon,
 7                      IRWIN G. MARTIN, PH.D.
 8   was called as a witness herein and, having been
 9   first duly sworn by the Administrative Law Judge,
10   was examined and testified as follows:
11             JUDGE BITTNER:  Please be seated.
12                        DIRECT EXAMINATION
13             BY MS. CARPENTER:
14        Q    Would you state your name and address for
15   the record, please?
16        A    Irwin G. Martin, Ann Arbor, Michigan, 3812
17   Michael Road, North Ann Arbor, Michigan.
18        Q    Thank you.  What do you do, Dr. Martin?
19        A    I'm currently retired.
20        Q    Okay.  What did you do before you retired?
21        A    I was an executive in the pharmaceutical
22   industry and after that worked--did some consulting
 1   for a few years and then was an executive in the
 2   nonprofit world as well.
 3        Q    Okay.  Let me ask you to turn in one of
 4   those big fat books up there to Respondent's
 5   Exhibit 11.
 6        A    Okay.
 7        Q    Do you recognize that document?
 8        A    Yes.
 9        Q    What is it?
10        A    It is my CV as posted on my Web site.
11        Q    Okay.  And did you create that document?
12        A    Yes, I did.
13             MS. CARPENTER:  I would move Respondent's
14   Exhibit 11 into evidence?
15             MR. BAYLY:  No objection.
16             JUDGE BITTNER:  Received.
17                            [Respondent's Exhibit No. 11
18                            was marked for identification
19                            and received in evidence.]
20             JUDGE BITTNER:  Could I ask what is the
21   date of the document, Doctor?  Do you know when you
22   prepared this?
 1             THE WITNESS:  When I prepared this?
 2             JUDGE BITTNER:  Yes.
 3             THE WITNESS:  I constantly change it as I
 4   add and subtract things.  So it's sort of a fluid
 5   document.
 6             JUDGE BITTNER:  So it's current?
 7             THE WITNESS:  It is current except that
 8   I've recently taken off the picture because the
 9   picture no longer applies, as you can probably
10   tell.
11             [Laughter.]
12             JUDGE BITTNER:  I don't know.  I thought
13   it was pretty good.  I like the tie.
14             THE WITNESS:  Thank you.
15             JUDGE BITTNER:  So are you still the
16   acting President of the DIA Foundation?
17             THE WITNESS:  No, the new document has a
18   through 2005 there.
19             JUDGE BITTNER:  Okay.  Okay.  Go ahead,
20   Ms. Carpenter.
21             MS. CARPENTER:  Thank you, Your Honor.
22             BY MS. CARPENTER:
 1        Q    Let's talk a little bit about your
 2   education first.
 3        A    Sure.
 4        Q    Where did you receive your degrees?
 5        A    I have an undergraduate degree in biology
 6   and environmental studies from Brandeis University
 7   and a doctorate in zoology from the University of
 8   Massachusetts.
 9        Q    Okay.  Have you taken any other courses
10   along the way?
11        A    I've taken a number of business courses at
12   Drexel University School of Business and the
13   Wharton School at University of Pennsylvania.
14        Q    Okay.  And what did you do after you
15   graduated, got your doctorate?
16        A    I had a post-doc position at the Monell
17   Chemical Senses Center at the University of
18   Pennsylvania.
19        Q    And what did you do there?
20        A    I studied olfaction in guinea pigs.
21        Q    Okay.  And where did you go from there?
22        A    I was hired by SmithKline Beckman
 1   Corporation into a management training position.
 2        Q    And what were you training to manage?
 3        A    Regulatory affairs and pharmaceuticals.
 4        Q    So when was that?
 5        A    When was that?
 6        Q    When did you start at SmithKline?
 7        A    In 1982.
 8        Q    Okay.  And what did you do in that
 9   position?
10        A    Well, if for that six year period at
11   SmithKline and French, and I believe it was
12   SmithKline and French for most of those six years--we kept
13   changing names--I was in regulatory affairs
14   responsible in various levels of responsibility,
15   increasing levels of responsibility.  At all
16   levels, however, my primary role was to represent
17   the company at the FDA, be the liaison for the R&D
18   division to the FDA as well as advise internally my
19   colleagues in R&D on FDA issues, policies, et
20   cetera.
21        Q    Okay.  And were you working with regard to
22   a specific new drug that was being developed?
 1        A    Yes, a number of new drugs, yes.
 2        Q    Okay.  When you left SmithKline, where did
 3   you go from there?
 4        A    I had a short stint at Squibb, the Squibb
 5   Institute, and left there after they were acquired
 6   by Bristol-Myers.
 7        Q    And what did you do at Squibb?
 8        A    Similar position.  I was the Director of
 9   Regulatory Affairs.
10        Q    Director of Regulatory Affairs.  And so
11   what did that involve at Squibb?
12        A    Again, the same type of responsibilities,
13   just a larger portfolio of products representing
14   the company at the FDA and then providing
15   internally--my customer was the R&D Division to
16   whom I gave advice similar to what the FDA would
17   be.
18        Q    Just be clear.  R&D stands for?
19        A    Research and development.
20        Q    Okay.  And that would be for
21   pharmaceutical products?
22        A    Right.
 1        Q    Okay.  And after you left Squibb, where
 2   did you go?
 3        A    To Parke-Davis which was the
 4   pharmaceutical research division of the Warner-
 5   Lambert Company.
 6        Q    All right.  And how long did you stay
 7   there?
 8        A    That was ten years.
 9        Q    And what did you do while you were there?
10        A    Again, similar responsibilities.  At this
11   point, I was now heading first the U.S. Division
12   for Regulatory Affairs and then my last year there
13   I headed International Regulatory Affairs.
14        Q    Okay.  And so did you continue to work
15   with liaison with the FDA in those positions?
16        A    Up until that last year, yes.
17        Q    Okay.  And that was with regard to new
18   drugs being developed?
19        A    Again, new drug development; right.
20        Q    Was it also in regard to other new
21   indications for previously developed drugs or?
22        A    It was drugs in development, marketed
 1   drugs, which would include developing drugs for new
 2   indications, new formulations, responsible for the
 3   regulatory advice related to the advertising and
 4   promotion of drugs as well.
 5        Q    Okay.  So can you just--take your
 6   experience at Parke-Davis, what would be the
 7   experience, what would be the steps you would go
 8   through as the representative for Parke-Davis in
 9   terms of getting a new drug developed?  How would
10   that start out?
11        A    The Research Division discovers a
12   compound.  It would be within the research end of
13   things before we move into development.  They would
14   come forward with an idea.  The molecule would be
15   synthesized.  Initial animal testing would be done
16   to show that it seems to have some, that it's
17   pharmacologically active, that it actually does
18   something.
19             Once the research scientists have what
20   they think is a viable product, it comes forward to
21   a management team, who agrees or not agrees that we
22   can move forward towards testing in humans, at
 1   which point a project team is assembled.
 2   Regulatory affairs is part of that project team.
 3   The team works together towards an IND, an
 4   Investigational New Drug Application, which would
 5   allow the company to study the drug for the first
 6   time in humans.
 7        Q    So after you've done the animal research,
 8   would you meet with the FDA to propose the IND or
 9   how does that happen?
10        A    Depending on the type of drug and whether
11   it is a completely new pharmacologic class, if that
12   were the case, indeed we would be meeting with the
13   FDA well before the IND.  If it's another drug of a
14   well-known class, we might not meet with the FDA
15   until after we submit the IND.
16        Q    Okay.
17        A    But there is constant dialogue with the
18   agency throughout the drug development process.
19        Q    And again if you could just state, what is
20   an IND again?
21        A    Investigational New Drug Application.
22        Q    Okay.  And what does that do?  What does
 1   getting an IND do?
 2        A    Well, technically, by statute, it allows
 3   you to shift drug across state lines for clinical
 4   testing.
 5        Q    Okay.  So you met with the FDA, you've
 6   submitted an IND; do they have to approve an IND?
 7        A    An IND goes into effect in 30 days unless
 8   the FDA objects and puts it on hold.
 9        Q    Okay.
10        A    So they review INDs very quickly.
11        Q    So after the IND is--
12        A    In effect.
13        Q    --in effect, what happens next in that
14   drug development process?
15        A    Phase 1 studies are conducted.  Phase 1
16   studies are typically in healthy volunteers.  This
17   basically is to show obviously the initial safety
18   of the drug, whether there is some very quick
19   unpleasantry that is discovered, but most
20   importantly--well, that's important, but in
21   addition, how the drug is handled by the body, the
22   biopharmaceutics of the drug, if you will.
 1             So, how much drug you take in a tablet or
 2   in a solution and how much gets into the
 3   bloodstream, how that's excreted, how long it lasts
 4   in the blood.  Those are all the Phase 1 studies.
 5        Q    Okay.  And are you dealing with the FDA
 6   during the Phase 1 study?
 7        A    Absolutely.
 8        Q    Okay.  And what happens next?
 9        A    Once the company feels they have
10   sufficient data to proceed to patients, both safety
11   and biopharmaceutical data, they move on to Phase
12   2, Phase 2A would be small patient studies.  You
13   pick a patient class that is your intended patient
14   group when the drug is actually marketed, and this
15   is your first test of efficacy.
16             If you have a blood pressure drug, does it
17   lower blood pressure.  If you have a lipid lowering
18   drug, does it lower lipids?  This is really your
19   first test in patients.
20        Q    So the difference between Phase 1 and
21   Phase 2, they're both in people, but Phase 2 is the
22   first time you're studying whether the drug does
 1   what it's supposed to do; is that accurate?
 2        A    Right.  It's the first time it's actually
 3   in patients.
 4        Q    Okay.
 5        A    As opposed to healthy volunteers.
 6             JUDGE BITTNER:  At what point are you
 7   looking at what the impact of the drug on the body
 8   is?  Both or do you start that in Phase 1?
 9             THE WITNESS:  Well, always.
10             JUDGE BITTNER:  Okay.
11             THE WITNESS:  Any time you put it in
12   people, you're clearly measuring what the drug is
13   doing.  For instance, lipid lowering drugs while
14   you may not be looking at a patient class, Phase 1
15   studies, you can see whether the lipids are lowered
16   because the drug would have the effect even in
17   healthy people.
18             JUDGE BITTNER:  Okay.
19             THE WITNESS:  So you're always measuring
20   those sort of endpoints.
21             JUDGE BITTNER:  I also have an irrelevant
22   question that's been bothering me.
 1             THE WITNESS:  Okay.
 2             JUDGE BITTNER:  That is why are the
 3   initials for an Investigational New Drug
 4   Application IND without the "A" at the end?
 5             THE WITNESS:  It's actually a long story
 6   that has an answer.
 7             JUDGE BITTNER:  Okay.
 8             THE WITNESS:  The initial law or the
 9   initial regulation was written exemption for blah-blah-blah-
10   blah.  It was like a really long thing,
11   and IND was picked out of that.  It was only later
12   that they changed the name of the application to an
13   Investigational New Drug Application, but by that
14   time, the IND term had been so ingrained that
15   people just kept calling it IND.  Sort of like the
16   CDC.
17             JUDGE BITTNER:  Okay.
18             THE WITNESS:  You know people still call
19   it the CDC, but it's actually the CDC and whatever
20   the other letter is, you know.
21             JUDGE BITTNER:  Okay.  So the acronym IND
22   stands for Investigational New Drug Application.
 1             THE WITNESS:  Application, yes.
 2             JUDGE BITTNER:  Okay.  I just kept
 3   wondering why.
 4             THE WITNESS:  Yeah, it's--
 5             JUDGE BITTNER:  I'm sorry.  Go ahead, Ms.
 6   Carpenter.
 7             MS. CARPENTER:  That's quite all right.  I
 8   had that question myself.  I just didn't have the
 9   nerve to ask it.
10             BY MS. CARPENTER:
11        Q    So I think you were describing the Phase 2
12   studies.
13        A    Right.
14        Q    And again, is the FDA involved with those?
15        A    The FDA reviews every--well, the FDA
16   certainly has the ability to review every protocol
17   that is submitted.  You need to submit a clinical
18   protocol before conducting any study in humans.  So
19   the FDA is supposed to look at every protocol
20   submitted.  I have no reason to think they don't
21   because, again, their highest priority review--they
22   only have 30 days to object.
 1             Initially, they don't have any time to
 2   object.  If you submit a new protocol, technically
 3   you can go ahead and start that protocol
 4   immediately.  So typically they're looking at these
 5   things fairly readily.  So there's dialogue back
 6   and forth, formal, informal.  FDA will provide
 7   comments on protocols if they think it's a safety
 8   issue.
 9             So if they think that you're taking undue
10   risks with patients you will get a formal reply.
11   If they think you're doing something silly and
12   simply wasting your own money, you're not likely to
13   get any formal reply.
14             MS. CARPENTER:  Okay.
15             JUDGE BITTNER:  You were on Phase 2A, I
16   think, before--
17             THE WITNESS:  Right, right.
18             JUDGE BITTNER:  --got off my on my
19   question.
20             THE WITNESS:  Yeah.
21             JUDGE BITTNER:  Okay
22             BY MS. CARPENTER:
 1        Q    And what would Phase 2B be?
 2        A    Phase 2B is the larger proof of efficacy
 3   studies.  So now you actually power the study with
 4   enough patients so you can meet a statistical p-value.  You
 5   can actually say with some statistical
 6   certainty that indeed the drug shows efficacy.  So
 7   these are--
 8        Q    And what--sorry.  Go ahead.
 9        A    So you're moving from tens of patients to
10   hundreds of patients.
11        Q    And what is efficacy just to be clear?
12        A    Does the drug have the clinical effect
13   that it was intended to?  Does it lower blood
14   pressure?  Does it lower lipids?  Does it, you
15   know, slow the growth of a tumor or whatever your
16   intended clinical endpoint is.
17        Q    Okay.  And is there a Phase 2C?
18        A    No.
19        Q    Okay.
20        A    Then there is Phase 3.  And Phase 3 are
21   the large safety studies so you've moved from tens
22   of patients to hundreds of patients, and now you're
 1   into thousands of patients.  So you're once again
 2   proving your efficacy, but at this point collecting
 3   safety data.  You're always collecting safety data,
 4   but now in thousands of patients you have a safety
 5   database that is a lot more reliable than simply a
 6   few hundred patients.
 7             So Phase 3 is what you complete and then
 8   you're ready to go to the FDA with a package of
 9   thousands of patients and saying we think this drug
10   is suitable for marketing.
11        Q    Okay.  And so after you take that package
12   in, is that called something else?
13        A    I wish you could just take it in.  You
14   have to actually write a New Drug Application, an
15   NDA, which summarizes all these thousands of
16   patients as well as all the, how the drug is made
17   and manufactured and the controls there, all the
18   preclinical, all the animal testing, so everything
19   you ever know about the drug.  And basically the
20   NDA regulations are written, you know, tells A,
21   tells B, it tells C, and then the last one is
22   basically and tells everything else.
 1             So anything you know about the drug, you
 2   assemble into a coherent document.  Today, this is
 3   done electronically and send it into the FDA as a
 4   New Drug Application.
 5        Q    Okay.  And what does the FDA then do?
 6        A    The FDA has by agreement ten months to
 7   review the document.  That doesn't mean approve it
 8   or reject it, but they have to at least complete
 9   the review within ten months.  They provide
10   comments or they provide an approval, and then
11   there is discussion about what other data are
12   requested or how can I interpret these data; they
13   don't seem to make sense?  And then hopefully the
14   company and the agency discuss labeling and the
15   drug is hopefully then approved.
16        Q    Okay.  And what happens after it's
17   approved?
18        A    Companies often, usually because they want
19   to, sometimes because the FDA asks them to, conduct
20   Phase 4 studies, and these are studies in marketed
21   products either to gather additional safety
22   information, to gather efficacy information in a
 1   new patient population, maybe for a new indication.
 2   If you have a heart failure drug, maybe you're
 3   going to test it in, you know, blood pressure, you
 4   know, similar types of indications, but yet those
 5   were not done in the initial NDA.  So those are
 6   called supplemental NDAs.
 7        Q    Okay.  And then once it's approved, it's
 8   marketed as it's been approved, I presume?
 9        A    Right.  And there is obviously data
10   collected post-marketing on safety and always
11   submitted.  So the dialogue with the FDA is
12   constant throughout the life of a drug.
13        Q    Okay.  Dr. Martin, do you have any
14   academic affiliations or have you had them in the
15   past?
16        A    I've had an adjunct professorship at
17   University of Michigan in the College of Pharmacy
18   as well as at Eastern Michigan University in their
19   School of Allied Health, I believe, is the title.
20        Q    And did you give talks or teach classes on
21   drug development issues?
22        A    I lectured on regulatory affairs and drug
 1   development as well as was a preceptor for pharmacy
 2   students within Parke-Davis.
 3        Q    Okay.  And what professional associations
 4   do you have?
 5        A    I've been a long-time member of the Drug
 6   Information Association.
 7        Q    Can you tell us what that is?
 8        A    Drug Information Association, or DIA, is a
 9   nonprofit neutral organization that provides
10   primarily educational and networking opportunities
11   for people within the pharmaceutical and related
12   health care fields.  Members are from academia,
13   from the industry, from the regulators themselves,
14   from governments, and there are meetings,
15   workshops.
16             We just had an annual meeting here in
17   Washington back in June where we had approximately
18   8,000 people.  So it is a large, very respected, I
19   believe, organization.  Again, neutral.  We take no
20   positions.  I keep saying "we" even though I'm no
21   longer with them so forgive me for that.  It should
22   be "they" at this point.
 1        Q    And what were the positions that you held
 2   at the DIA?
 3        A    As a volunteer, while I was still in
 4   industry, I was, again, moved up through the ranks,
 5   became a member of the board and then was president
 6   of the association.  And after I left the industry
 7   and I was consulting, DIA then offered me a full-time job
 8   and I was Associate Executive Director and
 9   then Acting Executive Director up through the
10   beginning of this year.
11        Q    Okay.  What other professional
12   associations are you affiliated with?
13        A    I had been a member of the Food and Drug
14   Law Institute.  When I was a consultant I was a
15   member of that.  I've been a long-time member of
16   the Regulatory Affairs Professional Society and I
17   was a, when I was in industry, I was an active
18   volunteer for PhRMA which is the trade organization
19   of the pharmaceutical industry and did a lot of
20   work with them, for them.
21        Q    Have you done presentations for those
22   organizations relating to drug development?
 1        A    I've done a number of presentations,
 2   worldwide for a number of organizations relating to
 3   primarily regulatory affairs, drug development,
 4   submitting NDAs and, you know, new technology
 5   related to that.
 6        Q    Okay.  Have you also made presentations to
 7   the FDA?
 8        A    Yes, actually I was, I had the honor of
 9   being the first industry lecturer at the FDA new
10   reviewer training course.  They wanted to have
11   someone from the other side of the table come and
12   speak to their new reviewers.  That was probably
13   one of my favorite things to do.
14        Q    Okay.  Can you give us an estimate as to--well,
15   let me ask first.  How long does it take to
16   get a new drug through the very beginning stages
17   through market approval, just a ball park?
18        A    Well, a lot depends on how you define
19   "beginning" because there may be a ten year
20   research program before the first compound is even
21   discovered, but once you have a compound that you
22   say is a lead candidate and you want to actually
 1   bring that to the market, I think the average tends
 2   to be seven, eight years now, something like that.
 3        Q    Okay.  And so over the course of your
 4   career, can you ball park how many new drugs that
 5   you've shepherded through this new drug development
 6   process?
 7        A    Well, in a 20 plus year career, I'm
 8   guessing it was on the order of ten or 12.
 9        Q    Okay.  And were there other drugs that you
10   helped develop for new indications?
11        A    Oh, yeah, many.  I have no idea, but it
12   was more in the dozens.
13        Q    Okay.  And you would shepherd that through
14   the process at FDA in a similar way?
15        A    Right, right.
16             MS. CARPENTER:  Okay.  Your Honor, at this
17   time, I would tender Dr. Martin as an expert in new
18   drug development.
19             JUDGE BITTNER:  Mr. Bayly?
20             MR. BAYLY:  No objection.
21             JUDGE BITTNER:  Granted.  Could I just
22   ask, the DIA Foundation you reference, is that an
 1   affiliate with the Drug Information Association?
 2             THE WITNESS:  Right.
 3             JUDGE BITTNER:  And it's a 501(c)(3)?
 4             THE WITNESS:  Yes, they're both
 5   501(c)(3)s.
 6             JUDGE BITTNER:  Oh, okay.  So what's the
 7   difference between what they do?
 8             THE WITNESS:  Oh, how much time do we
 9   have?  The foundation was set up to provide grants
10   and right now the foundation's main mission is to
11   provide grants that no one else can provide and
12   that is to actually governments.  So that
13   developing countries can send their regulators to
14   the FDA, to the EMEA, to the TJA in Australia, to
15   learn from their colleagues.  Where their country
16   doesn't have enough money to actually spend, you
17   know, for travel and room and board where they get
18   there, the foundation will provide grants on the
19   order of $50,000 or so.
20             JUDGE BITTNER:  So it's really to provide
21   training to potential regulators?
22             THE WITNESS:  Right.
 1             JUDGE BITTNER:  Okay.
 2             THE WITNESS:  That's the primary purpose.
 3   We also have given academic grants, modest research
 4   grants on the 15, $20,000 range, but right now the
 5   thrust is to do those things that no one else can
 6   do, and the reason DIA can do it is, again, because
 7   it's that neutral forum that the FDA and other
 8   governments will accept money from.
 9             JUDGE BITTNER:  Okay.  Go ahead, Ms.
10   Carpenter.
11             MS. CARPENTER:  Thank you.
12             BY MS. CARPENTER:
13        Q    Dr. Martin, we've talked a little bit
14   about how you would take a drug through the
15   process, but we haven't talked about the FDA looks
16   at the drug.  So when a new drug or IND comes
17   through the door, what is it that the FDA is
18   evaluating?
19        A    The primary thing--I should say once they
20   receive a document, they create a parallel group to
21   the industry group.  The industry has a project
22   team.  The FDA then creates a review team which has
 1   technical experts from all their disciplines.
 2   Their primary responsibility is to assure public
 3   safety, not to assure new drugs are developed.
 4             That is part of their mission, but their
 5   primary mission is to protect the public.  So they
 6   review particular INDs for safety issues.
 7        Q    Okay.
 8        A    And again object within that 30-day period
 9   if they see something.
10        Q    All right.  Do they also--what else do
11   they review for, for efficacy or any other?
12        A    Well, as you move through the drug
13   development process and eventually towards an NDA
14   and then ask for marketing approval, the main
15   criteria upon which drugs are approved is basically
16   safety, efficacy and quality.  Those are the
17   international terminology.
18             Safety being not just the clinical safety
19   but all the animal data would be reviewed by their
20   safety experts.  So this is short term as well as
21   long term.  Carcinogenicity studies in animals.
22             Efficacy is all the clinical data to
 1   assure that indeed the drug does do what it is
 2   alleged to do, and then quality is all the
 3   manufacturing controls to assure that indeed the
 4   tablet that was tested or the dosage form that was
 5   tested in the clinic is the same as the patient
 6   takes in his or her doctor's office as well as two
 7   years later, it's exactly the same product.
 8             So that those three things is what
 9   determines whether a drug can be approved.
10        Q    Okay.
11        A    And the control of the formulation is a
12   very important part of that.
13        Q    Okay.  Let's talk a little bit about
14   quality.  How would a company go about assuring the
15   quality that you're talking about of making sure
16   that what is tested in the clinical studies is the
17   same thing that's delivered to a patient?
18        A    You have to test for consistency.  You
19   have to test batch to batch whether the product is
20   exactly the same.  You have to test for potency so
21   that, again, what was tested in Phase 1 is the same
22   as tested in Phase 2 as eventually on the
 1   marketplace.  This is done by a number of
 2   techniques, very complex analytical tools to assure
 3   that you're actually testing the formulations,
 4   you're testing the bulk drug before it's
 5   formulated.  It's a fairly rigorous thing.
 6        Q    Okay.  And I presume that would vary
 7   somewhat from product to product, what would be
 8   required for quality?
 9        A    Well, what would be required doesn't
10   really vary, but how one meets those requirements
11   varies greatly.  If you have a simple small
12   molecule that was designed to affect a particular
13   receptor, it is fairly easy to know whether the
14   tablet that tested here is the same as the tablet
15   you tested here because your analytical analysis
16   will show you the exact same amount of that
17   particular single small molecule because you know
18   that is the active component.
19             Some products are much more complex.
20   Botanicals is a great example.  Biotechnology
21   derived products where you have proteins and all
22   other things that are being made at the same time
 1   as that protein.
 2             One of my favorite examples is a very
 3   well-known drug called Premarin which actually
 4   stands for pregnant mare urine, and this is a
 5   naturally derived product from pregnant horses, and
 6   the active component is a whole combination of
 7   equine estrogens and the FDA was able to review
 8   that and approve it and it is a remarkably complex
 9   product.  So the answer to the question I guess is
10   the requirements are the same, but how you meet
11   those requirements, yes, is remarkably variable.
12        Q    Okay.  You mentioned botanicals.  Can
13   plants or botanicals ever be approved as a matter
14   of quality?
15        A    Well, last year, and while I wasn't active
16   in the industry, I do know that they did issue a
17   guidance document for how to submit an application,
18   a new drug application for botanically derived
19   material, and at a quick review of it, the standard
20   seemed fairly similar.
21             So it seems that the FDA is willing to
22   accept a botanically derived product and hold it to
 1   the same standards as any other product.
 2        Q    And did you happen to notice whether that
 3   review mentions marijuana at all?
 4        A    There was--
 5             MR. BAYLY:  Objection, Your Honor.  There
 6   is absolutely nothing in this prehearing statement
 7   where there's a proffer of the witness talking
 8   about a particular botanical, particularly
 9   marijuana.
10             JUDGE BITTNER:  Let me look.  I think this
11   was in your original prehearing statement?
12             MS. CARPENTER:  I believe it was the same
13   in the supplemental, Your Honor.  I tried to make
14   it all one document for ease of reference.
15             MR. BAYLY:  As I recall, the supplemental
16   incorporated the initial--
17             JUDGE BITTNER:  Okay.
18             MS. CARPENTER:  It did.
19             MR. BAYLY:  --and then added, which I
20   think is a pretty good idea really.
21             JUDGE BITTNER:  Actually I agree with you.
22             MS. CARPENTER:  Your Honor, the only thing
 1   I would point out is he does talk about the
 2   requirements, simply the requirements for the
 3   approval of new drugs and biologics, and I assumed,
 4   but I may be wrong that biologics included
 5   botanicals.  I may have--
 6             JUDGE BITTNER:  Let me just find it.  Let'
 7   see.
 8             MS. CARPENTER:  It may be my linguistic
 9   fault.  That line is--it's the first line of the
10   second paragraph.
11             JUDGE BITTNER:  I'm lost.
12             MS. CARPENTER:  It's under the proposed
13   testimony of Irwin Martin which is--
14             JUDGE BITTNER:  Right.
15             MS. CARPENTER:  --the second one under the
16   summary of testimony.  Second paragraph, first
17   sentence.
18             JUDGE BITTNER:  Will discuss the fact that
19   the major developed regions of the world.  That's
20   what I have.
21             MS. CARPENTER:  Have unified their
22   requirements for the approval of new drugs and
 1   biologics.
 2             JUDGE BITTNER:  Oh, I see.
 3             MS. CARPENTER:  This is not extensive
 4   testimony, Your Honor, but--
 5             JUDGE BITTNER:  Okay.  I'll overrule the
 6   objection.
 7             MS. CARPENTER:  Thank you.
 8             MR. BAYLY:  Judge Bittner, then in that
 9   event, we have proffered Dr. Ouslander.  I don't
10   know if he's going to come or not.  It looks more
11   like he's going to come and I'm going to ask that
12   he be able to testify about marijuana if Dr. Martin
13   is going to get into that.  I just don't think that
14   biologics--it may--really stretching it--talk
15   about, give us a slight hint about maybe talking
16   about botanicals in general, but particularly not
17   marijuana.
18             So we simply, this is not simply notice
19   that we have to take this on, so the best we can do
20   is to have Dr. Ouslander come in here and rebut it
21   even though I will admit that on our supplemental
22   prehearing statement, we didn't mention this issue.
 1             JUDGE BITTNER:  I think that's fair.
 2             MS. CARPENTER:  I think that's fair, too,
 3   Your Honor, and I would say it's one question about
 4   marijuana which is simply--and I don't think he's
 5   even answered if he knows.
 6             BY MS. CARPENTER:
 7        Q    So it's do you know if this botanical
 8   guidelines that you mentioned mentions marijuana at
 9   all?
10        A    I believe there is a parenthetical, for
11   example.
12        Q    Okay.
13        A    And that was it.  It was certainly not
14   directed towards marijuana.
15        Q    Thank you.
16        A    And that's all I'm going to say about
17   marijuana.
18             [Laughter.]
19             BY MS. CARPENTER:
20        Q    So given these requirements to meet
21   safety, efficacy and quality, as a company is
22   thinking about developing a new drug, what are some
 1   of the first steps a company has to take before it
 2   even decides to move to the IND process?
 3        A    Well, it's a very complex decision.  One
 4   of the most important meetings that are held in a
 5   research and development company is whether to move
 6   forward with a new drug candidate and there's a
 7   number of questions that management asks.  One,
 8   does it seem to work?  And two, does it, how safe
 9   does it seem to be?
10             And one of the most important is can we
11   make it and can we make it at a reasonable price
12   and can we assure ourselves that we'll continue to
13   be able to make it at a reasonable price.
14        Q    Okay.  So I guess you need a source for
15   the product?
16        A    Right.  Where are we getting it?  Are we
17   making it?  Are we buying it?  Can it be made again
18   reasonably?  You don't want to market drugs that
19   are going to cost thousands of dollars to the
20   patient when they can then take an aspirin instead,
21   for instance.
22        Q    Okay.
 1        A    It doesn't make sense.
 2        Q    And when they're deciding on what source
 3   they're going to use to obtain the either raw
 4   ingredients or the product itself, what are the
 5   things that you would think about?
 6        A    Well, I would think one of the most
 7   important decisions management has to make is do we
 8   have a consistent source, can we control that
 9   source?  For again, small molecules that we can
10   synthesize, the company controls that.  If they are
11   more complex molecules or these mixtures, you know,
12   when Wyeth was making Premarin, you know, can we
13   continue to have pregnant mares to produce enough
14   urine for us?  And they therefore went and built
15   huge farms so that they could control that raw
16   substance.
17             So any company would be unlikely to give a
18   positive development recommendation if they're not
19   assured that they will have a drug supply that is
20   unchanging and reliable.
21        Q    So it needs to be reliable in terms of its
22   quantity or in terms of its make up or what?
 1        A    Well, reliable in that can we assure that
 2   we can get it?  Can we assure that it won't change?
 3   Can we assure that it's consistent?  One of the
 4   biggest problems in drug development is the
 5   unfortunate need sometimes to repeat studies.  If
 6   you have a new formulation or your drug source has
 7   changed, you may need to repeat years worth of data
 8   because you can no longer assure that the data you
 9   developed with this earlier version of this drug
10   will actually be the same drug as you now have.
11             So companies go out of their way to assure
12   at Phase 1 or certainly at Phase 2A that that drug
13   substance is what they will develop throughout drug
14   development.  Repeating studies is a very costly,
15   both in money and time, endeavor.
16        Q    And having a reliable and a consistent
17   source would prevent that or at least come as close
18   as possible?
19        A    You would hope so.  Right.
20        Q    Is it important to be able to choose as a
21   drug developer exactly what components are in the
22   product?
 1        A    Are in the?
 2        Q    In the product that you're developing?
 3        A    Well, it's important to be able to control
 4   it.  You may not always be able to choose.  Again,
 5   if it's a naturally derived product, you may not
 6   have all those answers.  I keep coming back to
 7   Premarin, but, you know, again Wyeth did not
 8   necessarily choose which of those equine estrogens
 9   to develop, but they had to assure that once they
10   had that mixture, that that stated consistent, so
11   it's not necessarily the choice, but it's the
12   ability to control once you've made--once that
13   choice has been handed you.
14        Q    Okay.  And if there were differences in a
15   product, that different sorts of mares produced
16   different sorts of urine, for example, would it be
17   important for Wyeth to be able to choose which
18   mares were going to produce the urine it was going
19   to use?
20        A    Yeah, I think the analogy isn't quite
21   working, but--
22        Q    Probably not.
 1             [Laughter.]
 2             BY MS. CARPENTER:
 3        Q    Having not much familiarity with mare's
 4   urine and happy that way.
 5        A    Yeah.  I don't want anybody to think that
 6   women are actually taking urine.  You know it's a
 7   little bit more synthesized, purified than that.
 8   But it is important to be able to control the
 9   source, especially any naturally derived product
10   because there are variations, yes.
11        Q    Okay.  And what would be the effect on the
12   development of a new drug, in your opinion, if a
13   developer cannot be sure that they have a reliable
14   and consistent supply, as you've described?
15        A    Well, if you know from the beginning of
16   development that you're not going to have a
17   reliable consistent source, the impact is there is
18   no development.  No company, no reasonably
19   business-oriented company would ever develop a
20   product.
21             If during the course of development,
22   something changes because there is something out of
 1   your control or that a change was made because it
 2   may actually work towards a better product, then
 3   there's two things you do.  One is you try and show
 4   biopharmaceutically--in other words,
 5   pharmcokinetically like you do in Phase 1, is this
 6   new product equivalent?  Does the body use this new
 7   product the same way it used the old product?
 8             If that can't be done because of the
 9   complexity or the lack of analytical technique,
10   then you basically start over.  So those are your
11   two choices.
12        Q    Okay.  Just a couple of other quick
13   questions.  One is do you know what orphan drug
14   status is?
15        A    Yes.
16        Q    Can you explain to the Court what that is?
17        A    I can explain very broadly, not being an
18   expert, but I have submitted one or two orphan drug
19   applications in my life.  Basically the orphan drug
20   statute was passed to give some financial incentive
21   to companies to develop drugs that seem to be
22   effective or at least have been alluded to be
 1   effective for very small patient populations, and I
 2   believe the number is 200,000 patients or less in
 3   the U.S. so that these patients typically would not
 4   have had the benefit of a potentially efficacious
 5   drug because the economics were not there for the
 6   company.
 7             It costs hundreds of millions of dollars
 8   to develop a drug, and develop a drug for 200,000
 9   people, no company would ever get the return on
10   that investment.  So a law was passed to allow
11   companies to recoup tax credits as well as get
12   research grants to develop drugs for small
13   populations.
14        Q    Okay.  So if a company had an orphan drug
15   status, it would have a financial interest in
16   developing that drug?
17        A    It would not have a financial
18   disadvantage.  How is that?
19        Q    Okay.
20        A    I think that's a more accurate way of
21   saying it.
22             MS. CARPENTER:  Okay.  That's fine.
 1             JUDGE BITTNER:  Doctor, what happens if
 2   there's a small population in the United States,
 3   but a large population someplace else, is that
 4   considered?
 5             THE WITNESS:  I believe, for malaria, for
 6   instance, let's say, I believe you could get orphan
 7   drug status in the U.S., but most companies would
 8   be developing it overseas anyhow because you
 9   wouldn't be getting tax credit for clinical studies
10   in the U.S. since you wouldn't be doing your
11   clinical studies in the U.S. because there would be
12   so few patients.  You'd be doing your clinical
13   studies elsewhere.
14             JUDGE BITTNER:  So it just becomes
15   irrelevant?
16             THE WITNESS:  I believe so.  Again, I'm
17   not an expert in that.
18             JUDGE BITTNER:  Okay.
19             BY MS. CARPENTER:
20        Q    Can a drug developer develop an orphan
21   status drug without similar concerns about source
22   and consistency and availability of the product
 1   that you discussed earlier?
 2        A    If a drug is a true orphan, I would think
 3   those sort of decisions are even more important
 4   because you're sort of on the edge of profitability
 5   or at least maybe not even profitability.  You're
 6   sort of on the edge of losing a lot of money, and
 7   if indeed drug development is going to cost you
 8   even more, then that might be a way to make that
 9   decision to stop development even earlier if the
10   market is so small to start with.
11             This is in answer to a question about the
12   reliability of the source.
13        Q    Thank you.
14        A    I want to make sure I tie this long-winded
15   answer back together.
16             MS. CARPENTER:  Okay.  Thank you.  The
17   Court's indulgence for one minute.  Okay.  I think
18   we have no further questions, Your Honor.
19             JUDGE BITTNER:  Okay.  Mr. Bayly.
20             MR. BAYLY:  Thank you, Judge Bittner.
21                        CROSS-EXAMINATION
22             BY MR. BAYLY:
 1        Q    Good morning, Dr. Martin.
 2        A    Good morning.
 3        Q    I'm Brian Bayly.  I'm, as you probably may
 4   have heard, I'm one of the Government attorneys,
 5   and I just want to ask you a few questions about
 6   the testimony that you just gave.
 7             You said you retired.  When did you
 8   retire?
 9        A    I left DIA at the end of March of this
10   year.
11        Q    Oh, okay.  And I think you already talked
12   about or you indicated you're very familiar with an
13   NDA, or New Drug Application?
14        A    Right.
15        Q    Okay.  Are you familiar with what I would
16   term an abuse liability assessment in terms of
17   marking a potential drug?
18        A    I know that's part of the NDA.
19        Q    Okay.  All right.  Would you explain what
20   that is to us, Dr. Martin?
21        A    Well, I can tell you that of all the drugs
22   I've developed I've never had to complete that
 1   portion.
 2        Q    You never had what?
 3        A    I never had to complete that part because
 4   we didn't develop drugs that had abuse potential.
 5        Q    Okay.
 6        A    I know it's one of the boxes one has to
 7   check on the NDA form.  Having, I've never needed
 8   to complete that.
 9        Q    Well, would, then does that mean that you
10   didn't have to deal with marketing a drug that
11   would be controlled?
12        A    That's correct.
13        Q    I just want to make sure I got what you
14   said on direct correctly here, but I think you
15   indicated that in your career, you were responsible
16   for getting ten to 12 drugs on the market; is that
17   correct?
18        A    The numbers are difficult to remember.
19        Q    I'm not going to hold you to any specific
20   numbers, but it's--
21        A    I believe that's approximately the number
22   of NDAs that I've worked on, I've been responsible
 1   for, yes.
 2        Q    And what I'm interested in, Dr. Martin, is
 3   that number you're talking about the drugs that
 4   actually got approved and launched for marketing;
 5   is that correct?
 6        A    I think all but one of those NDAs was
 7   actually approved.
 8        Q    All but one?
 9        A    Yeah.
10        Q    Okay.  And how many, can you say
11   approximately how many drugs did you look into
12   that--well, let me put it this way.  Can you say
13   how many INDs you were involved in?
14        A    I have no way.  Many, many.
15        Q    A lot?
16        A    Yeah.  I think the numbers tend to be ten
17   NDAs to one--ten INDs to one NDA, in that order.
18   So if my career is representative of the industry,
19   then you might multiply that by ten.
20        Q    So would you then represent that's roughly
21   the ratio of INDs to NDAs?
22        A    For drugs that are actually submitted and
 1   go into clinical testing, I believe the number is
 2   about ten percent wind up actually on the market.
 3   I don't know exactly but that's certainly the order
 4   of magnitude.
 5        Q    Ball park figure?
 6        A    Yeah.
 7        Q    And of those, just to make sure now, of
 8   the ten percent of the NDAs that get approved then,
 9   of those how many actually get marketed, and I
10   think you said in your experience, one did not?
11        A    Let me restate that if you don't mind.
12        Q    Sure.
13        A    Of the ten percent that get submitted as
14   an IND, they get studied in humans.  Ten percent
15   get marketed.
16        Q    Okay.
17        A    That's a different question, and the one
18   out of ten or so that was not approved was an NDA.
19   It simply was withdrawn before it was approved.
20   Okay.  Do you understand?
21        Q    Well, was an NDA submitted--
22        A    Yes.
 1        Q    --and then withdrawn?
 2        A    Yes.
 3        Q    Okay.
 4        A    Yeah.
 5             JUDGE BITTNER:  So that was a kind of
 6   sport case?
 7             THE WITNESS:  It was kind of--sorry?
 8             JUDGE BITTNER:  Sport case?  It was an
 9   unusual situation?
10             THE WITNESS:  We like to think so.  I mean
11   it was withdrawn for a business decision.
12             JUDGE BITTNER:  Okay.
13             BY MR. BAYLY:
14        Q    But that happens?  That's not unusual?
15        A    Yes, yeah, clearly.  Well, I wouldn't say
16   it's unusual.  It's unusual, not unheard of.
17   Companies tend not to develop compounds and then
18   decide not to pursue them.  That's not a smart
19   thing to do.
20        Q    Dr. Martin, you've testified about the
21   source of supply for marketing a drug and the
22   consistency, but as based upon your experience and
 1   your education, are there other factors that a
 2   pharmaceutical company would consider before
 3   launching or getting an IND, before they would, and
 4   simultaneously consider the source of supply?
 5        A    Oh, of course.  There's many factors.  I'm
 6   saying three of the most important are the ones I
 7   identified.
 8        Q    Okay.
 9        A    I'm not sure--well, I'll let you ask the
10   question.
11             MR. BAYLY:  Right.  Judge Bittner, I would
12   request that we can give Dr. Martin Respondent
13   Exhibit No. 1.
14             JUDGE BITTNER:  Okay.
15             BY MR. BAYLY:
16        Q    Maybe you're way ahead of me.  You have
17   that already?
18        A    I think this is it, yeah.
19        Q    Is that the--it's the IOM report?
20             JUDGE BITTNER:  Right.  Let's find it.
21             THE WITNESS:  This is says "Marijuana in
22   Medicine."  Is that the one you're talking about?
 1             BY MR. BAYLY:
 2        Q    Yes.
 3        A    Okay.  Which I have not seen before.
 4             MR. BAYLY:  I'll make sure everybody has
 5   got it before I--
 6             BY MR. BAYLY:
 7        Q    Dr. Martin, I'm referring to this exhibit
 8   as a point of reference, but just let me ask you,
 9   is this exhibit something you're familiar with or
10   not?
11        A    No.
12        Q    Okay.  If you would please turn to page
13   213 of Exhibit 1, and I know this is going to--I'll
14   explain this right up front so we don't get
15   confused by the record.  It's the page numbers I'm
16   referring to looks like Bate stamps, and they are
17   on the very bottom so that it will actually read
18   0213.
19        A    Right.  Okay.
20        Q    And it's chapter five of this exhibit,
21   this book here.  And I want to take you down to the
22   second full paragraph, Dr. Martin.  Do you see
 1   that?
 2        A    Yes.
 3        Q    And since it's short, I'll read it for the
 4   record and then just ask you if you agree or
 5   disagree, just to get your thoughts on this
 6   statement.
 7             Drug development is a long and financially
 8   risky process.  For every drug that ultimately
 9   reaches clinical testing through an IND, thousands
10   of drugs are synthesized and tested in the
11   laboratory, and only about one in five drugs
12   initially tested in humans successfully secures FDA
13   approval for marketing through a new drug
14   application, NDA.
15        A    Right.
16        Q    Do you agree with that or what is your
17   reaction to that--
18        A    Yeah, I think that's correct.
19        Q    --short paragraph?
20        A    I was guessing one in ten.  They're saying
21   one in five.  I mean it's the same order of
22   magnitude.  That's correct.
 1        Q    And then I'd like you to look down at the
 2   bottom of the page 213 and I'm just going to read
 3   you one or two sentences here, but it skips over to
 4   215, Dr. Martin.  If you see, there's like a chart
 5   in between.
 6        A    Okay.
 7        Q    So the statement I want you to recess
 8   here, it starts at the very bottom of 213, quote:
 9   "With respect to the cost of a single drug's
10   development, a number of recent studies have
11   provided a range of estimates of about 200 to 300
12   million depending on the method and year of
13   calculation."
14             And what I'd like to ask you about that
15   statement, Dr. Martin, is that estimate roughly
16   true or is it somewhat obsolete in light of when
17   this report was written back in the late '90s?
18        A    Yes, I was just looking up references 33
19   and 44 and those are indeed late '90s.  The latest
20   out of Tufts which is the Tufts Center for Drug
21   something or other, it's the drug development
22   research group at Tufts University.  They're the
 1   ones who have been conducting or analyzing the cost
 2   of drug development.  I believe their latest number
 3   is about 800 million.
 4        Q    Is there a range in there or is it just
 5   roughly 800 million?
 6        A    Oh, 800 million is like a very rough
 7   estimate.  You know you take the cost of all of R&D
 8   and how many NDAs come out of that.  So it includes
 9   everything that was never developed.  It includes,
10   it actually includes the price, the cost of the
11   opportunity, so, you know, if you have $100
12   million, is it best to put it in new drug or can
13   you put it in a money market and, you know, earn
14   two and a half percent or something.  So it's the
15   loss of the what they would have made if they
16   simply invested the money somewhere else.  It is
17   not actually out of pocket costs.
18        Q    Okay.  So you're talking about opportunity
19   costs?
20        A    Yeah, yeah.  So the 800 million estimate
21   is across the entire industry for all new drugs
22   including opportunity costs.
 1        Q    Now, Dr. Martin, in your experience with
 2   drugs, have you also had to deal with drug devices,
 3   the delivery system?
 4        A    I've never dealt with devices.  I've been
 5   in pharmaceuticals only.  I've dealt with delivery
 6   systems, but not as a drug device.
 7        Q    Well, at least let me ask you then this
 8   question, though.
 9        A    Right.  Are we done with this?
10        Q    Your experience, is it with only dosage
11   units or some of the drugs that you developed that
12   got through the NDA process and were launched, were
13   some of those drugs delivered by other methods
14   other than just your normal dosage unit tablet
15   pill?
16        A    Well, I'm trying to answer this without
17   being--well, I'll try and answer it politely.
18   There are a number of chemists who would say that
19   there is no such thing as a simple tablet pill.  I
20   mean I know what you're trying to say, but there's
21   some fairly sophisticated things that go on inside
22   of some of those little capsules, and I've had
 1   experience in some fairly sophisticated
 2   pharmaceutical work, all within a tiny little
 3   capsule.
 4             There is actually pump mechanisms, osmotic
 5   pumps and things like that.  So the consumer looks
 6   at it and it's a simple capsule, but it's a very
 7   complex delivery system.  So that experience I have
 8   had.  I have not had experience in medical devices
 9   per se.
10             Does that answer your question?
11        Q    Well, yes, it does, but then as a follow
12   up, though, in the industry, are you familiar with
13   the fact that a device would need the FDA approval
14   as well as the drug?  In other words, if you're
15   marketing a drug and you want to deliver it through
16   a syringe or something like that, would that need
17   to be approved?
18        A    If it is indeed a drug device combination
19   product like a pre-filled syringe, basically the
20   centers, the Center for Drug Review and the Center
21   for Device Review, determine which has the primary
22   responsibility.  These are called combination
 1   products.
 2             So if the centers feel, and there's a
 3   committee they have that work together, if the
 4   centers feel that it is primarily a drug, such as a
 5   pre-filled syringe, we know very well what a pre-filled--
 6   what a syringe is.  We don't need to do an
 7   extensive review of that.  Then the responsibility
 8   would be within the Center for Drugs.
 9             If it is primarily a device, and I can't
10   frankly think of one at this point--maybe even--see, even
11   the drug-coated stints, I believe--I'm
12   not sure who has primary review for that.  I would
13   bet it was the drug side.  But I'm not sure.  So
14   there are mechanisms within the FDA review to
15   jointly review drug device combinations.
16             Does that answer your question?
17        Q    Yes.
18        A    Okay.
19        Q    But on follow-up to that, then in certain
20   cases, the drug manufacturer would have to consider
21   developing the drug itself as well as the device?
22   I mean that would be two separate issues or at
 1   least two separate expenses.  Let me put it that
 2   way.
 3        A    It would be a parallel development and it
 4   would all be part of the same NDA.  It may not be
 5   any more expensive than the capsule that I was
 6   describing, for instance.  Some devices are very
 7   inexpensive.  Some formulations are very expensive.
 8   I wouldn't take the next step and therefore
 9   conclude it's more expensive to develop a
10   combination that a non-combination.  I don't think
11   that's a cause and effect there.
12        Q    Well, it depends then on the device.
13        A    Sure.
14        Q    As one factor?
15        A    Right.
16        Q    Are you familiar with any of the safety
17   devices that have to be overcome with the delivery
18   system?  Any safety issues?
19        A    That have to be overcome with a delivery
20   system?
21        Q    I mean, yeah, as a drug company
22   anticipates a certain delivery system, are there
 1   safety issues that they have to consider?
 2        A    There are safety issues on everything the
 3   company considers.  I'm not trying to be smart, but
 4   I'm not sure what you're getting at.  I mean
 5   everything is, there is nothing done in drug
 6   development that is not with patient safety in
 7   mind.  So what are you--can you ask your question
 8   differently?
 9        Q    Well, could you tell us some of the safety
10   issues that have to be overcome with a delivery
11   device or does it depend on a particular delivery
12   device?
13        A    Well, it clearly depends on the delivery
14   device.  One of the more common questions for time
15   release products, most folks are familiar with
16   drugs that used to have to be taken six times a day
17   and now you can take one a day.  Well, that's
18   basically done through some fairly sophisticated
19   pharmaceutics, and one of the things that one must
20   show to oneself as well as to the agency, to the
21   FDA, is that all that drug indeed is delivered over
22   time.
 1             So dose dumping is what's that called.
 2   One has to assure that that doesn't happen.  So
 3   there are extra questions when you have a new
 4   device or any device that is part of a drug
 5   delivery system.  But I wouldn't say it's anything
 6   terribly unusual or a hurdle terribly high to jump
 7   over.
 8        Q    If you could turn, please to page 220,
 9   221.
10        A    Okay.
11        Q    Yeah.  Let me back up here.  That would be
12   page 219, Dr. Martin.  The bottom paragraph.
13   Again, I'll read it.
14             It says: The possibility of scheduling is
15   a major detriment of whether a manufacturer
16   proceeds with drug development.  In general,
17   pharmaceutical firms perceive scheduling to be a
18   detriment because it limits their ability to
19   achieve market share for the following reasons:
20   restricted access, physician disinclination to
21   prescribe controlled substances, stigma, the
22   additional expense for abuse liability studies, and
 1   expensive delays in reaching the market due to
 2   federal and state scheduling processes.
 3             Do you agree with that?
 4             MS. CARPENTER:  Sorry.  Could I just make
 5   one quick objection just because there were two
 6   mistakes in the reading, and I wanted it to be
 7   clear.  The first line, I think you said a major
 8   detriment, but it's actually a major determinant.
 9             MR. BAYLY:  Yeah, you're right.
10             MS. CARPENTER:  Is that correct?  And then
11   the second time you said detriment, it was in
12   general pharmaceutical firms perceive scheduling to
13   be a detriment, but it's actually deterrent.  Just
14   wanted to be clear on the record.
15             JUDGE BITTNER:  All right.
16             MS. CARPENTER:  Thank you.
17             BY MR. BAYLY:
18        Q    Dr. Martin, discount my reading.  Just
19   look at that paragraph that I read and ask you if
20   you could assess that, if you're in agreement with
21   that?
22        A    That sentence, yes, not that paragraph? 
 1   We've only read the sentence; yes?
 2             JUDGE BITTNER:  Uh-huh.
 3             THE WITNESS:  Yes, right.
 4             BY MR. BAYLY:
 5        Q    Okay.
 6        A    Because I haven't read the rest of the
 7   paragraph and I don't know what the rest of the
 8   paragraph says.  So I'm just being clear here.
 9             MS. CARPENTER:  And, Your Honor, let me
10   just object quickly.  I think he already testified
11   he had no experience with controlled substances.
12             JUDGE BITTNER:  He said that, I believe,
13   that he had not brought any controlled substances
14   to market.
15             THE WITNESS:  Right.
16             JUDGE BITTNER:  So I don't know.  Can you
17   answer the question?  I think the question was do
18   you agree with that sentence?
19             THE WITNESS:  Yeah, I can answer the
20   question, and that would certainly, I would agree
21   with the assessment that drug companies are not
22   keen to develop scheduled drugs because of the
 1   reasons outlined here.
 2             BY MR. BAYLY:
 3        Q    Okay.  Well, Dr. Martin, let me ask you
 4   just a few more general questions on your testimony
 5   here.  Would another consideration to launch an
 6   IND, would that be based on, would you assess
 7   whether there are already competing drugs on the
 8   market that address the same medical problem?
 9        A    Sure.
10        Q    Would you assess the potential drug
11   market?  I know it sounds rather cold, but if
12   you're marketing such a drug--would you see a
13   difference between wanting to market a drug such as
14   Lipitor, which is going to be a drug that you keep
15   taking indefinitely, as opposed to a drug where you
16   know the population has a terminal problem?  Would
17   that be a consideration?
18             JUDGE BITTNER:  Terminal problem as in the
19   population is going to die or terminal problem as
20   in the problem is going to go away?
21             MR. BAYLY:  Well, actually it could be
22   both.  I guess the problem goes away--
 1             JUDGE BITTNER:  Okay.  In other words,
 2   taking for an indefinite duration as opposed to--
 3             THE WITNESS:  Right.
 4             JUDGE BITTNER:  --something like a pain
 5   killer that you hope would not have to be taken
 6   forever.
 7             THE WITNESS:  If I may digress--thank you
 8   for the Lipitor example.  Having developed Lipitor,
 9   I just like to hear that name out there.
10             [Laughter.]
11             BY MR. BAYLY:
12        Q    A lot of us use it.
13        A    I have a tee-shirt that says--to answer
14   your question directly, no.  Market share clearly
15   or market size is clearly considered, but not
16   whether it's short-term versus long-term use.  In
17   other words, you could have a painkiller, for
18   instance, that is a huge market even though people
19   may only take it, you know, when they have a
20   headache once a month.
21             That's still a huge market.  Or you can
22   have a relatively small market, but people take it
 1   for the rest of their lives.  So it's not how long
 2   the patients take the drug; it's the size of the
 3   market is clearly considered.
 4        Q    So it depends then?  It's going to vary as
 5   to the people that need it as well as how long they
 6   take it?
 7        A    All of those things are taken into account
 8   and you know clearly part of every management team
 9   is a marketing person who helps to figure out just
10   how large the potential market is, and that's drug
11   companies are indeed businesses.  And they need to
12   make those smart business decisions.
13        Q    Is a market analysis done before the IND
14   is submitted?
15        A    Well, there's certainly an informal market
16   analysis done of every, you know, research program.
17   It's unlikely that companies would want to be
18   researching things for which there is no market.
19             I mean I've had too much experience in
20   drugs looking for indications, you know, where
21   scientists come up with a drug that inhibits this
22   particular enzyme perfectly or this receptor
 1   perfectly, yet it doesn't do anything.  You know
 2   there's no clinical indication for that.  We try
 3   not to do things like that.  So clearly before any
 4   decisions in research are made and clearly before
 5   any decisions in development are made, market
 6   potential is assessed, again initially informally
 7   and then much more formally as you move to the
 8   bigger dollar costs.
 9        Q    Could you tell us what a market analysis
10   would entail generally when you're assessing the
11   possibility of doing an IND?
12        A    I can give you some general, you know, a
13   few key things that would be included.
14        Q    Well, let me back up here.
15        A    Okay.
16        Q    And let me withdraw that just for a
17   second, Dr. Martin.
18        A    Sure.
19        Q    And ask you in your experience, were you
20   the one that or were you one of the ones that
21   participated in the market analysis or did they do
22   the market analysis and say, okay, Dr. Martin, here
 1   we've got this; now you take the ball?
 2        A    Well, everything is done as a team.  I
 3   never carried the ball on my own, if you will.  You
 4   know I worked very closely with the drug
 5   development folks, with the clinical folks, with,
 6   you know, clinical development is a huge
 7   discipline.  So there's hundreds of people that
 8   work on drug development.
 9             There's a management team on the order of
10   about 20 that might make that decision on whether
11   to move forward.  Did I conduct market analysis?
12   No.  I mean nor did the marketing person conduct
13   the regulatory analysis.  Everyone comes with their
14   own area of expertise, brings it to the team and
15   then the team makes a recommendation to senior
16   management.
17             Does that answer that question?
18        Q    Well, then I want to make--you're saying
19   you did participate in the market analysis somewhat
20   being a member of the team?
21        A    I would say that as a member of any
22   project team--we're not just talking about Lipitor
 1   now; right?  We're talking in general terms; right?
 2        Q    Right.
 3        A    Okay.  As a member of any project team,
 4   the team receives information on the potential
 5   market and then people with expertise and people
 6   without expertise put in their two cents, but
 7   hopefully those with the expertise formulate the
 8   team's opinion, if you will, the consensus opinion
 9   and that goes to senior management.
10             So in that regard, I've certainly heard
11   enough market proposals and my expertise was not in
12   marketing, so I would be on the listening end and
13   not on the participating end of, you know, the size
14   of that market.
15             Does that answer the question?
16        Q    Well, yeah, if I could follow it up, Dr.
17   Martin.
18        A    Okay.
19        Q    And at least if you were engaged in some
20   of the market proposals, could you tell us what
21   that entailed in your experience?
22        A    In very general terms.  How many patients
 1   have the disease or the symptom that the product is
 2   to help to treat or cure, whatever the type of
 3   product is.  So it's a size of the population.
 4   Again, how long the drug would be used.  Clearly
 5   that's part of it.
 6             Who else is on the market?  You know what
 7   other companies with whatever products?  And how
 8   good those products are versus what we think the
 9   profile of our product would be?  And then whatever
10   we can find publicly about what other companies are
11   doing as well in this particular field?  How many
12   new beta blockers does one need?  After awhile you
13   don't need anymore.  There's more than enough out
14   there.
15             So it's the incremental benefit of your
16   drug versus the competition and it may be smaller,
17   it may be huge, and then the size of the market.  I
18   mean that's basically how those decisions are made.
19        Q    Is the interaction with other drugs also a
20   factor in the market prospects or market analysis?
21        A    Now your question was specific to before
22   the IND, so we really wouldn't have much
 1   information about interaction with other drugs, but
 2   as you move into drug development and you're
 3   starting to get potential drug interactions, sure,
 4   companies stop development for a number of reasons,
 5   one of which may indeed be newly discovered drug
 6   interactions that makes the product no longer
 7   competitive.  That's a potential thing.
 8             Or you continue with development, but now
 9   you simply warn your investigators and then the
10   prescribing physicians about that drug interaction.
11        Q    Okay.  So an IND can be derailed perhaps
12   because of side effects?
13        A    That's the primary--well, yes.  Safety or
14   efficacy or lack of ability to make the drug
15   consistently.  Any of those things could cause a
16   drug company to decide to discontinue development;
17   yes.
18        Q    How about patents and the need for
19   patents; is that another factor to be considered
20   and is that a factor that you consider before the
21   IND?
22        A    The patent status is always part of the
 1   drug development decision; yes.  But there's lots
 2   of things that are patentable, not just the
 3   molecule itself.  The drug delivery system
 4   delivering that particular drug is a potential
 5   patentable product.  So drugs that have off patent
 6   have been developed.  Orphan Drug Product, for
 7   instance, gives seven years of exclusivity to that
 8   product if developed for that orphan status.  So
 9   that is as good as a patent.
10             So if you have an orphan drug status, you
11   get seven years of exclusivity if you develop it
12   for that indication.
13        Q    Okay.  Would you please turn to page 228?
14             MS. CARPENTER:  I'm sorry, Mr. Bayly.
15   What was that page number again?
16             MR. BAYLY:  228.
17             MS. CARPENTER:  Thank you.
18             BY MR. BAYLY:
19        Q    This is more for reference than anything
20   because I want to ask you this in the context of
21   your general experience, Dr. Martin, but the
22   sentence I'm pointing out to here is the, it's the
 1   first full paragraph, and it starts out "Three
 2   points," but then you go down a couple more
 3   sentences and it starts "In general."
 4        A    Okay.
 5        Q    Implies that their development is
 6   considered especially risky from a commercial
 7   standpoint in that small companies are often
 8   willing to assume greater development risk than
 9   larger more established firms.  In your experience,
10   would that statement be generally true, that there
11   are small companies that would be willing to take
12   more risk than the established older companies?
13             MS. CARPENTER:  Just object here for a
14   moment.  The predicate for "their" is unclear when
15   you read that sentence into the record.  In
16   general, that implies that their development.  And
17   the question is the development of what?
18             JUDGE BITTNER:  Oh, you have to refer to
19   the previous sentence.
20             MS. CARPENTER:  Yes.
21             JUDGE BITTNER:  But I would.
22             MS. CARPENTER:  Okay.
 1             JUDGE BITTNER:  Okay.
 2             THE WITNESS:  Well, I want to make sure
 3   that the witness is aware of what that is.
 4             JUDGE BITTNER:  Right.  That they're
 5   referring specifically to cannabinoids.
 6             THE WITNESS:  Right.
 7             MR. BAYLY:  Right.  It's not necessary to--that's
 8   more of a point of reference.
 9             BY MR. BAYLY:
10        Q    So it's just the general question is, Dr.
11   Martin, despite the various hurdles that we've
12   talked about, including the consistency of supply
13   would not the smaller companies be willing to take
14   somewhat more of a risk than your--
15        A    I wouldn't make that broad a
16   generalization.
17        Q    All right.  And how would you qualify it
18   then?
19        A    Well, the person whom they're quoting here
20   says often willing.  I'm not sure that I would be
21   comfortable saying often.  There certainly are
22   small companies who have taken greater risks.  It
 1   implies that large companies don't also take great
 2   risks because I've seen that as well.
 3             I mean sometimes a Pfizer, for instance,
 4   which I think is like $3 billion a year in R&D, for
 5   them to invest a couple hundred million dollars on
 6   a risky product, that's not a big part of their R&D
 7   expenses.  For a small company, that would be huge.
 8   So risk/benefit risk analysis is a complex thing,
 9   and I think this author is taking a little bit too
10   much liberty.  I understand what they're implying
11   but I'm not sure I would agree with the word
12   "often."
13        Q    Well, and then of course the risk is there
14   are many, many risks, right, as we've discussed?
15        A    Sure.
16        Q    It's going to be, the risk is relevant to
17   what the particular risk is and how much capital a
18   company has; would that be true?
19        A    I wouldn't--well, the risk is not related
20   to how much capital it may have.  What you do with
21   that risk might be, but even then I've seen small
22   companies, you know, take a risk, run out of money
 1   and then go raise more money.  I mean that happens
 2   all the time, as well.  I just think it's too broad
 3   a statement and without, you know, specifics, I
 4   really wouldn't agree with it.
 5        Q    Well, you said you wouldn't agree because
 6   of the--
 7        A    The often.
 8        Q    --the adverb "often."  Right?
 9        A    Yeah.
10        Q    But it's not totally untrue?
11        A    No, no.  There are companies that are
12   often formed.  Okay.  I won't use the word "often"
13   myself.  Companies have been formed to develop a
14   particular compound.  And if that compound doesn't
15   work out, the company goes out of business, and
16   then you may have had a couple dozen people, you
17   know, invest a couple of years and that was a risk
18   they were willing to make.
19             It does happen.  Again, it's the "often"
20   part.  There are small companies who are as
21   conservative as the big pharma companies.  We may
22   be quibbling, but I just think it's too broad a
 1   statement.
 2        Q    I think you've already testified a little
 3   bit about botanical products as opposed to
 4   developing other single entity chemical products;
 5   is that correct?  Characterize that correctly.
 6        A    Well, I testified that the FDA issued a
 7   guidance document so therefore they're willing to
 8   accept, therefore, the assumption I'm making is
 9   they're willing to accept botanicals held to the
10   same standards as drugs and approve them through an
11   NDA process.
12        Q    Okay.
13        A    I have no personal experience in
14   development of botanicals.
15        Q    Okay.
16             JUDGE BITTNER:  And by botanical, you
17   mean?
18             THE WITNESS:  Generally the term is used
19   for plant derived material.
20             JUDGE BITTNER:  Okay.  So are, would you
21   consider, for example, hydrocodone produced from
22   opium to be a botanical?
 1             THE WITNESS:  No, because it's a purified
 2   product that can be controlled.
 3             JUDGE BITTNER:  Okay.  That's kind of
 4   where I was trying to go.
 5             THE WITNESS:  Yeah.
 6             JUDGE BITTNER:  So a botanical is
 7   something that stays botanical all the way through?
 8             THE WITNESS:  In my mind, it's the
 9   ability--yeah, you grind up those leaves, you know,
10   and there may be some extraction, but not a whole
11   lot more than a simple extraction.
12             JUDGE BITTNER:  So if tobacco were a drug,
13   it would be a botanical?
14             THE WITNESS:  Tobacco would never be a
15   drug.
16             JUDGE BITTNER:  And I was just--because I
17   couldn't think of anything else, but if it were, it
18   would be--you would classify it.
19             THE WITNESS:  DEA should do something
20   about tobacco, but that's a whole another story.
21             JUDGE BITTNER:  Right, right.  No, I
22   realize that and I realize that was a poor choice. 
 1   I just couldn't think of something better off the
 2   top of my head without going into marijuana, which
 3   I didn't want to do.
 4             THE WITNESS:  You know the St. John's Wort
 5   and that kind of stuff that basically is ground-up
 6   plant material that is now sold as food supplements
 7   and the like.  Those are botanicals.
 8             JUDGE BITTNER:  Okay.  So it's that it's
 9   not purified down to it's sort of chemical
10   composition.
11             THE WITNESS:  Yeah, because if you do
12   that, generally people can either use that very
13   pure extracted compound or make it themselves
14   synthetically.  That's in my mind the difference.
15   I haven't read that guidance carefully enough to
16   see if the FDA has another definition for what they
17   consider a botanical is.
18             JUDGE BITTNER:  Okay.  Thank you.
19             BY MR. BAYLY:
20        Q    Dr. Martin, I think you also talked a
21   little bit about orphan drug status.  That is
22   allowed for how long?  Did you say seven years?
 1        A    Well, once a drug is developed as--an
 2   orphan drug status designation--you apply for the
 3   orphan drug status designation.
 4        Q    Right.
 5        A    And if you receive that designation, then
 6   you proceed to develop the drug as an orphan drug.
 7   Once that drug reaches the market, it is given
 8   seven years exclusivity, in essence, a FDA patent,
 9   if you will.
10        Q    Is there any time limit on developing this
11   orphan drug?  In other words, you apply for it and
12   then you're hoping to--
13        A    Yeah.
14        Q    --get it and get that seven year--
15        A    Does it expire, you mean?
16        Q    Right.
17        A    Does the status--I'm not sure.  I frankly
18   don't know.  I've never been in that situation.
19   I've developed orphan drugs, but I don't know
20   whether there is, you know, a statute of limitation
21   on that designation.
22        Q    Dr. Martin, are you familiar with what a
 1   Schedule I substance is?
 2        A    I'm familiar with the nomenclature, yeah.
 3        Q    And would the fact that a pharmaceutical
 4   product being developed from a Schedule I have to
 5   be, the company would also have to petition to
 6   lower it another schedule--
 7        A    Right.
 8        Q    --would that be another hurdle that the
 9   company would consider?
10        A    As I mentioned earlier, yes.  Those things
11   would all be part of the consideration of whether
12   to proceed with drug development.
13             MR. BAYLY:  Nothing further.  Thank you,
14   Dr. Martin.
15             THE WITNESS:  Thank you.
16             JUDGE BITTNER:  Redirect?
17             MS. CARPENTER:  I do, Your Honor.  Give me
18   just one minute.
19                       REDIRECT EXAMINATION
20             BY MS. CARPENTER:
21        Q    Dr. Martin, you were asked some questions
22   about the amount of money it would take to deliver
 1   a new drug, and I think you had indicated the
 2   latest number was 800 million, and that that was
 3   derived from including lost opportunity costs as
 4   well as direct development, as well as losses from
 5   other things it didn't develop; do you recall that?
 6        A    Right.
 7        Q    Okay.  Maybe you could go into--could you
 8   explain a little bit more what you meant by that?
 9   What kinds of costs go into that $800 million
10   number?
11        A    Well, it's basically the cost of all of
12   R&D absorbed by those few products that actually
13   make it on to the market, so the thousands of
14   chemicals that were synthesized and screened that
15   led to the five to ten INDs that led to the one
16   approved drug, well, that one approved drug then
17   absorbs, if you will, the cost of all that research
18   and all that development.
19             So it's really how much a hugh
20   pharmaceutical company spends on all their R&D
21   divided by how many NDAs they get at the end of the
22   year.
 1        Q    Okay.  So it's not the actual cost of
 2   developing a particular drug; is that right?
 3        A    No.  It's how much it costs for that
 4   company to remain in business, but certainly a
 5   smaller company with a very directed R&D on an
 6   orphan drug, for instance, is not going to spend
 7   anywhere near $800 million.
 8        Q    Okay.  And that was my next question.  Are
 9   there differences in development costs for
10   different drugs?
11        A    Oh, absolutely, sure.
12        Q    Okay.  And those could range quite a bit
13   with it?
14        A    There are clinical studies that cost a
15   couple hundred thousand dollars, and there's
16   clinical studies that cost $100 million.
17        Q    Okay.
18        A    I don't know.  Well, hundreds of, tens of
19   millions of dollars.  How's that?
20        Q    Okay.
21        A    So, yes, the prices are all over the
22   board.  The costs are all over the board.
 1        Q    Okay.  Mr. Bayly also asked you a series
 2   of questions about a lot of different factors that
 3   the drug companies or drug developers have to
 4   balance in terms of making a decision about whether
 5   to bring a drug to market--size of the market,
 6   sources, et cetera, like that.
 7             Who is the one who makes that decision?
 8   Who makes, who weighs all that and decides whether
 9   or move forward or not?
10        A    Well, clearly it varies in every company.
11   But most companies have a senior management team
12   that or a senior management team within the R&D
13   division, and some CEOs have a little bit more
14   control than others, but most of the time it's the
15   head of R&D and his direct reports, his or her
16   hopefully some day direct reports that make that
17   decision.
18        Q    Okay.
19             JUDGE BITTNER:  The direct reports being
20   the person who report to that head of R&D?
21             THE WITNESS:  To the head of R&D, yes.
22             JUDGE BITTNER:  Okay.
 1             BY MS. CARPENTER:
 2        Q    And do you think it's possible that some
 3   drug companies would disagree with another drug
 4   company's decision about how to balance and weigh
 5   those factors?
 6        A    That's why there's a very active in
 7   licensing and out-licensing department in every
 8   pharmaceutical company.  Different companies make
 9   different decisions, and whereas a company like
10   Pfizer may say if it doesn't, you know, if we're
11   not going to make $500 million a year it's not
12   worth our effort, whereas a smaller company may
13   say, my goodness, that's going to make $50 million
14   a year, and that's huge for us.  So absolutely,
15   different decisions by different companies.
16        Q    Okay.  And does the FDA have any role in
17   deciding whether or not a drug should be brought to
18   market because of those factors, that is the
19   economics of the decision?
20        A    No.
21        Q    Okay.  In your experience, has the FDA
22   ever denied an application because they said
 1   there's no way you're going to get this through the
 2   process?  As a financial matter?
 3        A    Oh, no.
 4        Q    Sorry.
 5        A    No, you know, they may offhanded say you
 6   guys must be crazy, but I'll review whatever you
 7   want.
 8        Q    Okay.
 9        A    But no, clearly from a formal review
10   standpoint, that is outside their responsibility.
11             MS. CARPENTER:  Okay.
12             JUDGE BITTNER:  So, Doctor, then, what
13   would happen, for example, if Company A says this
14   drug isn't going to work for us, but we'll sell it?
15             THE WITNESS:  Right.
16             JUDGE BITTNER:  We'll say the NDA to or
17   the IND to Company X?
18             THE WITNESS:  Yeah, they would sell the
19   rights to that compound to another company.
20             MS. CARPENTER:  I think that's all I had,
21   Your Honor.
22             JUDGE BITTNER:  Any recross?
 1                       RECROSS EXAMINATION
 2             BY MR. BAYLY:
 3        Q    Dr. Martin, the questions you were just
 4   asked, one of the questions by Mrs. Carpenter, I
 5   believe, was that the FDA doesn't assess the market
 6   potential of the drug; they'll go ahead and approve
 7   an IND as long as it meets the IND criteria; would
 8   that be correct?
 9        A    Yeah, the only market analysis they would
10   do is to grant a orphan drug application, but for
11   an IND, the FDA does not conduct a market analysis.
12        Q    But would it be a fair statement to say
13   that a pharmaceutical company looking for a profit
14   is not going to file an IND where they don't see a
15   potential profit?
16        A    People do--
17        Q    Almost a truism?
18        A    Well, one would think that would be a
19   truism, but I've seen lots of people do lots of
20   silly things.  You like to think that you're not
21   going to submit an IND that's not going to lead to
22   a profit, but sometimes INDs are submitted--maybe I
 1   just shut up and answer the question.
 2             [Laughter.]
 3             THE WITNESS:  Okay.  I've answered your
 4   question.
 5             MR. BAYLY:  That's fine.  That's all I
 6   have.
 7             THE WITNESS:  Okay.
 8             JUDGE BITTNER:  Are INDs ever submitted by
 9   nonprofit organizations?
10             THE WITNESS:  Sure.
11             JUDGE BITTNER:  So there could be another
12   motive in there somewhere?
13             THE WITNESS:  There are controversial
14   products that companies did not want to have their
15   names associated with and, yeah, and nonprofits
16   have stepped up and submitted.  You know, RU-486,
17   for instance, very few large companies were going
18   to put up with, you know, picketers outside their
19   research offices.  So sure, that does happen and
20   has happened successfully.
21             JUDGE BITTNER:  Okay.  Anything else, Mr.
22   Bayly?
 1             MR. BAYLY:  No, Your Honor.
 2             JUDGE BITTNER:  Ms. Carpenter?
 3             MS. CARPENTER:  I'm finished, Your Honor.
 4             JUDGE BITTNER:  Okay.  Dr. Martin.
 5             THE WITNESS:  Thank you.
 6             JUDGE BITTNER:  Are you flying on
 7   Northwest?
 8             THE WITNESS:  Yes, and there has been no
 9   implication--knock on wood--as far as I can tell.
10             JUDGE BITTNER:  Good luck.
11             THE WITNESS:  Thank you.
12             JUDGE BITTNER:  Thank you.  Off the
13   record.
14             [Discussion held off the record.]
15             JUDGE BITTNER:  Back on the record.  We
16   will recess for the day and resume at nine o'clock
17   tomorrow morning.  Off the record.
18             [Whereupon, at 12:20 p.m., the hearing
19   recessed, to reconvene at 9:00 a.m., Tuesday,
20   August 23, 2005.]