More Trouble at the EU Pharmaceutical Mill

No matter how hard the European Union (EU) tries to keep the wheels of pharmaceutical development turning in Europe, it keeps having to admit that things are still not right. The latest example is an open admission that despite all the exhortations to give life sciences and biotechnology the right conditions for growth, EU member states are not yet fully playing their part.

At the beginning of March, the European Commission (EC) issued yet another call to member states to intensify their efforts in life sciences and biotechnology. The call was provoked by a disappointing analysis of the progress they have made since the adoption of an EU strategy on life sciences and biotechnology in 2002. "The risk of diverging policies in member states could seriously hamper the effectiveness and consistency of the EU strategy in this field," warned the Commission in a public statement that had the backing of EC President, Romano Prodi, European Research Commissioner, Philippe Busquin, and Erkki Liikanen, European Commissioner for Enterprise and the Information Society.

Serious delays

Progress has been made in some areas, such as the adoption of the EU's 6th Research Framework Programme and the EU regulatory framework for genetically modified organisms (GMOs); other vital policy areas, however, "are suffering from serious delays," the Commission said.

In particular, the Commission highlighted, once again, the fact that member states are slow in transposing biotechnology patents legislation. "These delays increase the risk of failing to meet" key EU objectives in the area of life sciences and biotechnology, according to the Commission's analysis - in particular the so-called Lisbon strategy, agreed by EU leaders at their summit in Lisbon (Portugal) in March 2000, which set the objective for Europe to become the most competitive and dynamic knowledge-based economy in the world by 2010, capable of sustainable growth with more and better jobs.

Aiming to foster competitiveness and innovation in this field, the Commission is insisting not only on better co-ordinated research across Europe and better access to finance, in particular to risk capital, but also on a "clear, equitable, affordable and effective intellectual property rights regime in Europe." And this, it says, in a direct appeal to the member states themselves, "requires the swift adoption of the Commission's proposal for a Community Patent and transposition into national legislation of the Directive on biotechnological inventions by non-compliant member states." After a decade of discussion, the Community Patent is still only a concept, and specific biotechnology patent rules that were agreed have still not been put into full effect in half the member states.

The European employers federation, UNICE, has also been pushing hard to persuade member state ministers. In a late-February statement on the Community Patent, it said that "innovation is closely linked to a strong system of intellectual property rights, more particularly patents. As things currently stand, European innovators are at a disadvantage when it comes to obtaining and enforcing patents compared with their competitors."

Only words, no deeds

The Commission, which is responsible for driving forward agreed EU policies, is conscious that time is slipping away without words being turned into deeds: "Decisive action and concrete commitments are now urgent - these include, in particular, more research and financial resources, and completing the system for the protection of intellectual property rights," it said.

Busquin, who has been trying with increasing desperation to get the European pharmaceutical industry and the EU member states to take seriously his programmes to stimulate research since he took over the Commission's research portfolio 4 years ago, spoke with evident feeling regarding the failures as he announced the findings of the analysis. "A recent Commission survey of private biotech companies and public research institutes reveals that 39% of the respondents have cancelled research projects on GMOs during the last 4 years," he said gloomily.

"In the private sector alone, 61% of respondents have cancelled research projects in this field. Furthermore, between 1998 and 2001, the number of notifications for GMO's field trials in the EU decreased by 76%."

The palpable sense of Commission disappointment is all the sharper because major efforts have been made during recent years to overcome the reticence among the many EU member states with a strong anti-science and anti-biotechnology lobby. "Considerable progress has been made on the legislative framework surrounding GMOs. The new regulatory framework on GMOs, including the Commission's proposals on traceability and labelling of GMOs and on GM food and feed, provides legal certainty for operators. It also addresses public concerns and aids consumer choice, thereby encouraging further public acceptance of GMO use. It is also important that the regulatory framework is clear and predictable if the rapid decline in European GMO field research is to be reversed," the Commission points out.

And while rapid advances in life sciences have created high expectations for curing diseases and improving quality of life, they have raised concerns as to their ethical and social consequences, the Commission recognizes. So it stresses that it is more than doing its bit to ensure that ethical, legal, social and wider cultural aspects are taken into account in policymaking and research funding. These sensitive issues include human reproductive cloning - and the Commission has made clear it supports a worldwide ban on this issue. On human embryonic stem cell research, the Commission will present a report to the European Parliament and Council shortly, as the basis for an inter-institutional seminar on this kind of research.

Similarly, because international issues also have their impact on European pharmaceutical and biotechnology policymaking and implementation, the Commission has been working away at improving understanding across a broad range of issues and institutions too. It is recommending the development of a multilateral consultative forum with the EU's main trading partners "to contribute to building an international consensus on biotechnology," because important questions of principle are repeatedly raised: "Biotechnology is currently discussed in many international fora. This is a reflection of the different concerns and objectives surrounding biotechnology, but raises a question of international governance. It is, therefore, essential to create an adequate forum for promoting an open and transparent dialogue between all stakeholders concerned, facilitating mutual understanding of the concerns and objectives of the different countries and regions."

Reverse the downward trend

The Commission's view is that it has satisfactorily contained most of the anxieties that underpin member states' reluctance to give biotech the boost it needs. "Now that legitimate consumer and environmental concerns have been tackled by strict EU legislation, it is time to reverse this downward trend. If we do not react, we will be dependent on technology developed elsewhere in the world within the next 10 years," Busquin pointed out.

Ten years ahead is too long a time frame to affect Busquin's career directly - he will step down from his post in a little more than a year's time. But he clearly wants to leave his mark on the evolution of EU thinking and action on biotechnology, and he is keenly aware that this is turning into his last chance to do so.

And Erkki Liikanen, the Commissioner responsible for business and business development in the EU, also feels the wind whistling around his ears. "Practically the entire European biotechnology industry is facing difficulties because of the collapse in investor confidence in knowledge-based industries. Many small biotechnology enterprises, working on medical, industrial, agricultural and environmental applications, are unable to obtain the funding they need to turn their research findings into a commercial reality. If a large number of such enterprises were to fail, it would seriously undermine knowledge that is critical to the long-term competitiveness of major European industries," he added, as the findings were released. Recognizing that time is running out, Liikanen insisted: "Concerted action, involving public authorities as well as the private sector, is needed to improve the investment climate for biotechnology in Europe."

An action plan with no action

It is more than a year ago now (January 2002) that the Commission adopted a "Strategy for Europe on Life Sciences and Biotechnology," which included policy recommendations and a 30-point action plan. It proposes a road map up to 2010, in a bid to put the sector "at the forefront of frontier technologies," as the Commission termed it.

The action plan is supposed to persuade member states and industry to tackle a long list of issues crucial to making a success of Europe's potential as a producer of high-technology products. The comprehensive list covers areas as diverse as:

• human resources in life sciences research

• management of biotechnology companies

• legal issues

• intellectual property rights

• access to finance

• networking of players in this field

• the role of public authorities and regulators

• public debate and dialogue with stakeholders

• pharmaceutical legislation

• ethics

• GMO regulation

• the international framework

• EU policy in developing countries, including agriculture, genetic resources and health.

The EU institutions -- the Commission, the European Parliament, the European Economic and Social Committee, and even the European Council (which is the formal gathering of EU ministers) -- have declared their support for this integrated approach as the way to promote this high-technology area. "Life sciences and biotech can foster growth, create new jobs and benefit a wide range of sectors such as health and agriculture, while at the same time contributing to broader goals such as sustainable development," the Commission has pointed out plaintively -- aghast at the limited on-the-ground action to make a reality out of expressions of good intention.

The report assesses progress in implementing the strategy in fields such as research; science and society; competitiveness; innovation; access to finance and intellectual property; GMOs; and international issues such as the impact on EU relations with trade partners and developing countries involved in the current EU moratorium on authorizing new GMOs.

And whereas there is satisfaction that late last year the member states eventually agreed on the E2.22 billion research programme for 2003–2006 on life sciences, genomics and biotechnology for health, "this is a relatively small amount compared with private investment in this field," the Commission acknowledges. It knows that European biotech companies invested E7.5 billion in research last year and biotech-related industry, such as pharmaceuticals and chemicals, substantially more. It is also uncomfortably aware that if the current trend towards moving biotech research outside Europe continues, this contribution to building EU competitiveness and skilled jobs will decrease.

There is some small new hope of a breakthrough in Commission circles - and in the pharmaceutical industry, which finds itself largely the victim of the deficiencies in the operating circumstances member states have created for it. In anticipation of the EU's 2003 spring summit on 21 March, a trio of heavyweight EU leaders issued their own call for action in this field. German Federal Chancellor, Gerhard Schrý, French President, Jacques Chirac, and British Prime Minister, Tony Blair, have publicly stressed the potential of biotechnology to improve European industrial competitiveness and ensure employment opportunities.

Growing US pressure

The intensity of international concern regarding EU backsliding on biotechnology can be measured by the renewed vigour in the bid by the US to end the EU moratorium on import approvals for biotechnology-derived products. The Bush administration is working to build an international coalition to fight the EU, US Trade Representative, Robert Zoellick, announced in early March. "I'm trying to build a coalition" that would join the US in filing a challenge in the World Trade Organization (WTO) against the 4 year old EU moratorium, Zoellick said in testimony before the Senate Finance Committee on 5 March. "I don't want this to be just the US versus the EU," Zoellick said, indicating that he hoped action could be taken "soon."

US industry groups say the EU moratorium on approvals of new biotech-derived products costs them more than $300 million in annual sales. Some members of Congress have been pressing the Bush administration to initiate action in the WTO, noting that virtually all experts agree that the US would win the case. Committee chairman, Charles Grassley, (Republican, Iowa) said he was "profoundly disappointed" with the slow pace of action. "I simply can't understand the administration's decision to delay bringing a WTO case against the EU on biotech policies," he said.

The ranking Democrat on the Committee, Max Baucus of Montana, USA, was similarly critical of the administration's decision not to move forward immediately with a WTO challenge to the EU. "I don't know any objective commentator who believes that we would not prevail at the WTO," Baucus said. "And yet the US is not bringing an action before the WTO. And I, for the life of me, cannot understand why."

Zoellick said administration officials agree on the need to lift the EU moratorium "including by bringing the case, if appropriate and necessary."

But in an apparent reference to current US–EU tensions concerning Iraq, he also pointed to the "international context" in which such decisions are made. Moreover, Zoellick said that beyond winning EU compliance on import approvals, he was interested in addressing the larger need to educate the public on the benefits of biotechnology.