APPENDIX 2
Memorandum by the Department of Trade
and Industry (DTI)
INTRODUCTION
1. The Prime Minister made clear the Government's
commitment to the UK biotechnology sector when he stated in November
2000 that "Biotechnology is the next wave of the knowledge
economy, and I want Britain to become its European hub" and
that "the science of biotechnology is likely to be, to the
first half of the 21st Century, what the computer was to the second
half of the 20th Century." [7]There
is enormous commercial potential for the biotechnology sector
and the UK is well placed to seize the opportunities with its
strong science base and thriving industry. However, it will require
a continued, concerted, pro-active approach across Government,
working with industry on a range of issues to ensure that the
UK maintains its lead in Europe and secures the maximum benefits
for the economy and society more generally.
2. A number of Government Departments and
agencies have an active interest in the biotechnology sector and
work together to ensure a coordinated Government approach. Within
the DTI, the Bioscience Unit (formerly the "Biotechnology
Directorate") has responsibility for competitiveness issues,
including sponsorship, affecting the pharmaceutical, agricultural,
environmental and industrial biotechnology sectors. DTI works
closely with the Department of Health, which has overall responsibility
for sponsorship of the pharmaceutical industry. The Office of
Science and Technology in the DTI funds the Research Councils,
leads the Foresight programme and maintains oversight of transdepartmental
science and technology issues. The Department for Environment,
Food and Rural Affairs (DEFRA) is responsible for controls on
the deliberate release and marketing of Genetically Modified Organisms
(GMOs) and funds a research programme to underpin these regulatory
activities. In addition, DEFRAs responsibilities include the food,
farming and fishing industries and in this context supports research
on the application of biotechnology to sustainable agriculture
in a safe and responsible way. The Food Standards Agency (FSA)
is the Competent Authority for the UK for the approval of GM foods,
and funds two major research programmes which underpin the safety
and safety assessment of GM foods.
3. The Agriculture and Environment Biotechnology
Commission (AEBC), and the Human Genetics Commission (HGC) are
independent bodies. Both the AEBC and HGC are tasked with providing
the Government with strategic advice on biotechnology issues (see
Q7 for details). The Small Business Service and Regional Development
Agencies are among the organisations with an interest in the growth
of biotechnology companies. This memorandum does not cover the
activities of the devolved administrations.
4. Details about the Government's support
for biotechnology, in response to the seven areas identified in
the Committee's press notice, are provided below along with a
summary.
SUMMARY
5. The Government's support for biotechnology
includes seeking to ensure:
that the UK remains the best place
in Europe for bioscience;
a stable, macro-economic framework
and creation of a favourable business climate for businesses to
innovate in the UK;
funding of the basic and strategic
research that will underpin development of products and services
by industry and the wider economy;
regulation of those developments
to ensure health and safety, protection of the environment, and
other measures to maintain public confidence in science and its
applications;
encouragement of knowledge transfer
from the science and engineering base to industry and other users
of research, including promotion of biotechnology incubators and
clusters and intellectual property rights;
incentives for industry and others
to invest in R&D;
an adequate supply of skilled people
to meet the UK's needs, for example in science, technology, business
and enterprise;
promotion of UK bioscience and biotechnology
in European and international fora.
Q1. The contribution which biotechnology
industries can make to relative GDP growth and the performance
of the UK as a knowledge-based economy
6. Biotechnology has the potential to improve
health, food and the environment, both here and overseas, as well
as bringing considerable economic benefits. The potential for
the growing biotechnology industry is enormous. Industry estimates
suggest that by 2005, the European biotechnology market could
be worth over $100 billion.
7. There are currently over 335 biotechnology
companies in the UK, who employ some 18,400 sector specialists
(compared with 13,500 in 1998) and overall sector employment has
reached 40,000. While the number of employees in the sector is
relatively small, they have a high added value resulting in current
revenues of approximately £1.3 billion. The total UK biotechnology
industry market capitalisation was £18 billion in 2000; an
increase of over 100% over the previous year.
8. The UK biotechnology industry currently
leads Europe and is second only to the USA in the world (see Annex
1 for further details). Considerable efforts have been made by
government departments to help achieve this position. However,
many other countries are making strenuous efforts, through substantially
enhanced Government-led investment in biotechnology to capture
the economic benefits of the life sciences. In order to maintain
the UK's position and secure the maximum benefits from biotechnology,
the Government's pro-active approach to supporting the sectors
needs to continue.
9. Agriculture, food and drink, agrochemicals,
environment, health services and other health care products are
considered the most likely initially to benefit from the application
of biotechnology. These sectors already contributed over 11.4%
to UK GDP in 1999.
10. Given the close overlap and synergy
of the biotechnology and pharmaceutical industries, the UK has
the advantage of a long and prosperous history of pharmaceutical
investment. All the world's major companies maintain a presence,
with two of the largestGlaxoSmithkline Plc and AstraZeneca
Plchaving corporate headquarters in the UK. The pharmaceutical
industry is very important to the UK economy, contributing around
0.7% to GDP in 1999. With almost half UK production being exported,
it is the UK's third-highest earning sector by trade surplus£2.3
billion in 2000a figure which is expected to continue to
rise.
Q2. The relationship between industry, higher
education and research, including the effectiveness of the Government's
Science and Technology programmes in creating a positive environment
for the industry
11. The pivotal role that Higher Education
plays in providing the UK with a highly qualified workforce and
a world-class science and engineering base has long been acknowledged.
The Government also recognises the importance of setting up effective
mechanisms to foster closer links between publicly funded research
and industry. A range of programmes exist to create a favourable
environment for scientific exploitation and ensure the investment
in the science base is translated into economic success.
12. The Government has set out fully in
two White Papers[8]
its policies for science and technology and the relationship between
the science and engineering base and industry. The DTI's Science
and Innovation Strategy was published in August 2001. The
following comments of the Committee's questions highlight just
some of the related activities.
13. LINK is the Government's principal mechanism
for supporting collaborative research partnerships between industry
and the research base. Its objective is to accelerate the transfer
of knowledge and the exploitation of technology in areas of particularly
high potential benefit for industry, with Small and Medium Enterprises
(SMEs) being especially encouraged to participate. DEFRA, the
Biotechnology and Biological Sciences Research Council (BBSRC),
the Medical Research Council (MRC) and DTI have been major sponsors
of a number of recent LINK programmes in the biosciences. Since
1989, DTI has committed around £26 million to eight LINK
programmes which have supported around 130 projects involving
over 170 companies. DEFRA currently runs four LINK programmesHortLINK
(Horticulture), SAPPIO (arable) and two in food technology in
the biosciencesinvolving over 350 companies, and has committed
over £18 million to these programmes in the last five years.
This commitment is currently set to continue. In response to the
completion of the first full draft of the human genome in June
2000, the DTI announced the Applied Genomics LINK programme. This
major new programme combines £15 million of government support
with an equivalent from industry, and is designed to capture the
commercial potential of the revolution in genomics.
14. Many biotechnology companies begin as
spin-outs from universities; hence there is often a very close
relationship. In recent years across the sciences, universities
have spun out far more companies than in the past (199 in 1999-00
compared with an average of 70 per year in the previous five years).
12.3% of university research in the UK is now paid for by companiesin
the US it is only 10.1%. Whilst these figures are not specific
to biotechnology, they provide good evidence of a successful shift
in culture at our universities and an increased level of entrepreneurial
activity. DTI has helped to drive this culture shift through support
for biotechnology exploitation initiatives. The Research Councils
have also been active in ensuring effective exploitation of new
ideas developed in their own research institutes (see paragraph
42).
15. The £9 million Biotechnology Exploitation
Platform (BEP) Challenge was introduced in 1996 in response to
strong evidence that the UK was not as effective as other countries
in capturing, protecting, and exploiting early bioscience research
outputsto the detriment of the UK industry and the economy.
Through BEP, new networks have been established involving 50 Universities
and 21 NHS Trusts. These have helped generate 54 new company spin
outs; £22 million private sector investment; 75 commercial
licences, worth around £3.5 million; and 330 technology projects
selected for commercialisation. In addition the DTI, working with
the Research Councils and other Government Departments, is committed
to establishing a UK-wide network of 24 Faraday Partnerships which
promote improved interactions between the UK science, engineering
and technology base and industry through the involvement of intermediate
organisations. There are currently two in the biotechnology area,
one on advanced biotechnology for the chemical and pharmaceutical
industries, and one on environmental remediation by biological
as well as physical and chemical means.
Q3. The relative competitiveness of the UK
as a location for R&D, exploitation of research and for manufacturing
16. The UK leads Europe in biotechnology
and is second only to the US on the world stage. The UK's world-class
science base is complemented by a supportive framework for the
exploitation of advances in bioscience. This is combined with
private and public investment in the bio-manufacturing infrastructure
necessary to maintain a thriving bioscience industry. However,
other nations are beginning to invest heavily in biotechnology
and many challenge the UK's leadership in Europe.
17. As indicated by its record in publications,
citations, and international prizes, the UK has an excellent science
base in a wide range of biological sciences, supported by substantial
public and private sector funding, including the Wellcome Trust.
A number of world-class Centres of Excellence act as a magnet
to attract high-profile world-class scientists and inward investment
to the UK.
18. The Prime Minister has said that the
science base is the bedrock of our economic performance. To make
clear its commitment to science and build on earlier substantial
investment in the Comprehensive Spending Review, the Government
announced in July 2001 that the science budget would increase
in real terms by 7% a year over the Spending Review period 2001-02
to 2003-04. As a result, substantial additional support has gone
into the biosciences and the other disciplines with which they
need to interact in order to remain competitive internationally.
In particular, with the Wellcome Trust, the Government has invested
£1.75 billion in modernising research infrastructure in universities
and institutes. Annual research expenditure by DEFRA is over £32
million, with about £3 million in support of regulatory activities
(risk assessment of GMOs) and the remainder to ensure that the
agricultural industry has access to the technologies required
to support and develop a sustainable agricultural industry.
19. Following the Spending Review, the Government
has also made available an additional £110 million to the
Research Councils for genomics research, and the biosciences are
benefiting from the additional sums for e-science and "basic"
technology. "Biotechnology" remains a difficult term
to define, but grant-in-aid to BBSRC and MRC alone will total
over £600 million in the financial year 2002-03 and an approximate
figure for the Councils' total annual investment underpinning
"biotechnology" would be some £650 million a figure
matched by the UK specialist biotechnology companies. The Engineering
and Physical Sciences Research Council (EPSRC) is also involved
in biotechnology through its Life Sciences Interface initiative.
The Economic and Social Research Council (ESRC) supports work
on the social impact of the science, and the Natural Environment
Research Council (NERC) has interests in certain environmental
areas of biotechnology.
20. In February 2001, the Government's second
Competitiveness White Paper "Opportunity for All in a World
of Change" recognised the importance of science and innovation
and included the announcement of a major DTI flagship programme
worth £25 million over five years. "Harnessing Genomics"
has been designed specifically to help a thriving UK biotechnology
industry take up the exciting developments in bioscience, particularly
genomics, and apply them to a whole range of new commercial products,
processes and services. The programme focuses on: (i) stimulating
industrially-relevant R&D and enabling technologies, together
with the associated training; (ii) the development of a successful
UK bio-manufacturing capability; and (iii) mentoring and incubation
support for new companies and encouraging the development of business
and entrepreneurial skills.
21. One pioneering project to arise from
"Harnessing Genomics" funding is the joint venture between
Department of Health and DTI to establish a £15 million nationwide
network of Genetics Knowledge Parks. These aim to pull through
science into real benefits for NHS patients and will provide a
forum for public debate on the social and ethical issues surrounding
genetics. Other activities supported under the "Harnessing
Genomics" programme will be covered later in this memorandum.
22. The strength of the science base has
very much helped the growth of pharmaceutical research in the
UK. The UK's record in developing innovative medicines is second
only to that of the US13 of the world's top selling drugs
were discovered in British laboratories. The pharmaceutical industry's
annual R&D spend of £2.85 billion accounts for as much
as 38% of the UK total. The UK has been very successful in attracting
inward investment and indeed has the best record in Europe for
attracting pharmaceutical R&D investment. The industry makes
an important contribution to the UK economy through its manufacturing
and export performance, its employment (60,000 directly; 250,000
indirectly[9]
and its R&D effort. The UK is also the world's third largest
exporting nation of pharmaceuticals, with almost half of production
being exported and a balance of trade surplus of £2.3 billion
(in 2000).
23. It is important to note that biotechnology
and pharmaceutical companies need to maintain high levels of R&D
investment because of the coststypically in the order of
£350mand the timescales involved in bringing a drug
to market. From the first identification of a potential candidate
to market approval may take to 10 to 12 yearsindeed one
of the fastest developments for a recombinant vaccine took about
10 years from lab bench to patientfor Hepatitis B. To survive
in a sector characterised by merger and acquisition activity,
companies need a pipeline of emerging products, since with marketed
drugs they have only a limited number of years to recoup costs
and reinvest in research before patents expire.
24. Competitiveness in the UK industry is
also enhanced by the NHS, which provides a base both for research
commissioned by the pharmaceutical industry, and for non-commercial
R&D of value to patients and the health service. In March
2001, the Prime Minister's Pharmaceutical Industry Competitiveness
Task Force (PICTF) made recommendations aimed at ensuring that
the UK remains a competitive location for the pharmaceuticals
and biopharmaceutical sector[10].
A Working Group of the Task Force had reviewed the opportunities
and costs associated with the clinical research infrastructure
in the NHS. It noted the strengths of clinical research in Britain,
and set out an action plan to strengthen the UK's position on
the speed of starting up clinical studies, their quality of research
and cost. Actions included streamlining the NHS and ethics committee
approval process, setting out standards and responsibilities for
all R&D conducted in the NHS, and publishing guidance on the
costs charged by the NHS for commercial studies. In addition,
an updated report from the Working Group[11],
included details of a NHS R&D partnership with the pharmaceutical
industry. The partnership will enable joint funding of trials
that are non-commercial in nature, but important to both industry
and the NHS. These may include studies which would be unlikely
to be undertaken by individual companies.
25. The current UK contract manufacturing
capability compares favourably with that to be found elsewhere
in Europe. The presence of a well developed biotechnology sector
in the UK means there is an accumulation of expertise in this
area, which strengthens the prospects for accelerated future growth.
The DTI announced in March 2001 that £3m would be provided
to help support a National Biomanufacturing Centre (NBC) in the
North West. The NBC is expected to cost between £24m to £31m
with other funding being provided by the North West Development
Agency and the European Regional Development Fund. This will complement
the £70m Biomanufacturing Park being developed by Scottish
Enterprise at the Pentlands Science Park in Edinburgh.
26. The Government is committed to encouraging
UK manufacturing and service companies to use biotechnology more
widely to improve their economic competitiveness and enhance their
environmental performance. DTI's £13m BIO-WISE Programme
is helping achieve this goal by providing grant support for projects
demonstrating the potential of biotechnology. UK businesses have
already saved over £80m through the use of industrial biotechnology.
Q4. The importance of clusters, the characteristics
of successful clusters and locational factors for the industry
27. The Government believes that clusters
can make a significant contribution towards economic growth, and
are particularly important in knowledge-based sectors like biotechnology.
28. In 1999, Lord Sainsbury led a study
of biotechnology clusters [12]
which identified the following critical factors for cluster development,
which are still valid:
(ii) Entrepreneurial culture
(iii) Growing company base
(iv) Ability to attract key staff
(v) Availability of finance
(vi) Premises and infrastructure
(vii) Business support services and large
companies in related industries
(x) Supportive policy environment
29. Currently the largest concentrations
of biotechnology companies are Oxford, Cambridge, London, the
South East, and Central Scotland. These clusters are well established
and continue to develop. Many other parts of the UK are also in
the process of developing clusters in particular in the North
West and North East. Probably the most influential factor in determining
where the first concentrations developed was the existing investment
by the Research and Funding Councils in such areas. The RDAs are
now playing a very important role in developing clusters, particularly
the emerging clusters.
30. The UK's biotechnology clusters are
thriving. For example, in London there are now 74 biotech companies
(an increase of 24 over the last 20 months). The UK's clusters
have attracted the interest of some other EU Member States who
have come over to find out more about them. The Government welcomes
the efforts that have been made by the Regional Development Agencies
(RDAs), the Devolved Administrations, and the regional biotechnology
organisations to improve the environment for cluster growth. Most
RDAs have identified biotechnology as a priority area, and DTI
is working closely with them to develop regional strategies. In
particular, funds from the "Harnessing Genomics" programme
have been ear-marked for collaborative projects with RDAs and
regional specialist networks to enhance the UK's clusters.
31. The biotechnology sector is becoming
increasingly global in nature and UK clusters are increasingly
in competition with those in European countries. Government and
industry are working closely together to ensure that the UK clusters
continue to offer world-class facilities. In particular, DTI is
working with RDAs and regional biotechnology organisations on
several projects intended to identify and develop new premises
for biotechnology companies.
Q5. Sources of finance and the means of securing
soundly based risk finance in high-technology exploitations
32. The Government recognises the importance
of appropriate finance for high-tech businesses. It has introduced
a range of tailored support measures designed to meet the specific
needs of the sector.
33. Recent Budgets have put in place taxation
measures which have helped smaller biotechnology companies. The
extension of the R&D Tax Credit to larger companies should
provide relief for larger biotechnology and pharmaceutical companies.
In addition, Britain's Corporation Tax has a starting rate of
10% for profits not exceeding £10,000, which is the lowest
in the world. This eases the fiscal position for biotechnology
SMEs. A new tax regime was also recently announced which will
provide relief to companies for the costs of intellectual property,
goodwill and other intangible assets. This will encourage businesses
to take advantage of new opportunities in the emerging knowledge-based
economy, and will provide an even more attractive environment
for biotechnology companies to prosper.
34. Despite the difficulties that stock
markets often present to high technology companies, the biotechnology
sector has performed much better than other technologies and this
is expected to continue. In the first half of 2001, the BioCentury
London index of UK biotechnology shares fell just 10 per cent,
compared with a 37% fall in the UK's FT Telecoms index. In the
same period, two of the four biotechnology companies to successfully
float on the public markets were UK-based.
35. The UK biotechnology venture capital
market is the largest and most mature in Europe and is second
only to the USA. The significant growth of the Germany biotechnology
market has attracted increasing amounts of venture capital funding.
However, although this means that the venture capital funding
market is more competitive, there is no significant evidence to
suggest that UK companies are finding it ore difficult to obtain
funding. The fact that over half the new biotechnology drugs in
late stage clinical trials in Europe are from UK companies strengthens
their ability to attract investment. In the first half of 2001,
almost 40% of the £425 million venture capital investment
in biotechnology in Europe went to UK firms, as well as the three
largest amounts (£34 million to Cyclacel, £31 million
to Inpharmatica, £31 million to Strakan). For earlier rounds
of funding, private investors and Business Agnels are important
to the sector. A good example of interaction between the public
and private sectors has been MRC's success in establishing the
venture capital management company, MVM Ltd, which has raised
£79 million to date from the private sector for investment
in bioscience companies. It is hoped the Government's Regional
and High-Technology Venture Capital Funds will provide biotechnology
companies with further sources of finance.
36. To help companies obtain funding the
Government set up the UK Biotechnology Finance Advisory Service
(FAS) which provides free, independent advice on access to appropriate
forms of finance. After five years in existence, the FAS has approximately
530 clients on its contact list of which over 77 are currently
active. Approximately 10 new clients are added to the contract
list per month, and there is general recognition that ht e FAS
provides a valuable service. More recently the service has been
active in assisting with identifying not only early stage funding
but also first, second and third round funding.
37. Further DTRI support through the Biotechnology
Mentoring and Incubator (BMI Challenge have provided access to
£180 million of private finance (see Q6 for further details).
38. In the case of pharmaceutical companies,
contract research organisations and larger biotechnology companies,
the DTI's Regional Selective Assistance (RSA) Scheme remains an
important source of finance. Approval for an RSA grant can influence
the decision-making process of a company to favour the UK in locational
decisions.
Q6. The role of incubators and other means
of growing businesses from a research base
39. The Government believes that business
incubators provide a nuturing "hot-house" environment
for new companies by supplying specialist premises on flexible
terms with access to a network of mentors. Incubated companies
are selected for their potential to grow and are normally expected
to graduate from the incubator within three years. Incubators
are effective contributors to the development of new companies.
40. A 1995 DTI-commissioned study identified
inadequate investor support for biotechnology start-up, inadequate
business skills, and the non-availability of appropriate specialist
premises. Access to specialist advice on patenting, regulation,
legal and finance issues was not readily available to new companies
and was often too expensive for them. To address this market failure,
DTI introduced the Biotechnology Mentoring and Incubator (BMI)
Challenge in 1996. Its overall aim is to stimulate accelerated
creation and growth of high quality biotechnology companies in
the UK. The BMI Challenge has granted 12 awards over the last
six years to intermediaries providing high quality managerial
support and laboratory facilities to new and early stage bioscience
companies. £4.9 million was made available across the UK,
with each award winner receiving upto a maximum of £500,000.
BMI in turn has catalysed 80 new biotechnology companies that
employ over 500 staff and which have raised in excess of £180
million of external investment.
41. A UK Business Incubation report "UK
Incubation Impact Assessment Study 1999-2000" identified
that incubation is a process for supporting accelerated development
and that there is evidence to suggest that incubators have a positive
impact on survival rates of tenant and graduate businesses. For
many firms the intangible benefits of incubation, including a
prestige address, a supportive peer group environment, and access
to markets and specialist advisors, are as important as the provision
of basic services (office space/shared equipment and facilities
etc. There are currently over 30 incubators offering space and
facilities to bioscience companies in the UK
42. The OST, Research Councils and other
Government Departments are also active in encouraging the transfer
of know-how from research into business, in line with the Government's
overarching policies set out in its White Papers and the Government's
Response to the Baker Report [13]
Measures include University Challenge, Science Enterprise Centres,
the Higher Education Innovation Fund, Partnerships UK and the
Small Business Research Initiative. Research Councils have actively
sought licensing agreements for the use of new technologies. The
time between discovery and economic production can be lengthy
but humanised antibody technology developed in the 1980's has
been licensed to over 40 companies and five products have been
approved for clinical use. The DTI would be happy to provide the
Committee with further details of progress with these and other
initiatives
Q7. The impact of the legislative and regulatory
framework for science on industrial investment and location decision
43. Regulatory issues, as well as public
acceptance of biotechnology, have a significant bearing on investment
and location decision. The Government is committed to meeting
the five principles of good regulationthat they are transparent,
accountable, consistent, targeted and proportionate. The majority
of legislation in place or in the pipeline is derived from Europe.
The UK aims to ensure that regulations affecting the biotechnology
sector are practical, enforceable and based on sound science.
It is paramount that when assessing applications, human health
and the environment are protected.
44. The UK's well-established regulatory
framework ensures that it is well placed to implement sound legislation,
which encourages innovation whilst protecting health and environmental
concerns. The regulatory systems for products and processes is
extensive, with a wide range of experts scrutinising specific
biotechnology applications.
45. Although Biotechnology has the potential
to provide completely novel solutions to pressing health needs,
it is also clear that there is considerable public concern about
genetic modification in particular, and by association, about
biotechnology in general. There is also concern about areas of
biotechnology relating to safety, animal research and ethics.
There has been much public debate over the ethical and societal
concerns of such researchboth in Europe and internationally.
As a result of the Government's review of the Advisory and Regulatory
Framework for Biotechnology in May 1999, two new biotechnology-specific
strategic advisory bodies were established in addition to the
Food Standards Agency. The Human Genetics Commission (HGC) provides
the Government with strategic advice on developments in human
genetics, their likely impact on human health and healthcare and
their social and ethical implications. The Agriculture and Environment
Biotechnology Commission (AEBC) provides the Government with strategic
advice on biotechnology issues affecting agriculture and the environment,
taking into account social and ethical aspects. Both commissions
operate openly and undertake public consultation.
46. The HGC will report to Ministers on
the protection, storage and use of personal genetic information
later this spring. During the remainder of 2002 it will review,
and consult with the biotechnology industry and others, on the
provision and regulation of genetic tests available direct to
the public. In its relatively short life the HGC has built up
a strong reputation for openness and transparency and effective
consultation. It will continue to play an important role in the
future in promoting a considered debate and dialogue about advances
in human genetics. The HGC reports to Health and Science Ministers
and is part-funded by all four health departments and OST.
47. The AEBC published its first and widely
welcomed major report, "Crops on Trial" in September
2001 about the Government's Farm Scale Evaluations of genetically
modified crops. AEBC will publish its second major report, on
Animals and Biotechnology, this summer. AEBC reports to DTI and
DEFRA Ministers and to Ministers in the three Devolved Administrations,
and is funded by their Departments.
48. In the interest of transparency, DTI
and its partners are also developing a website that will consolidate
cross government information about biotechnology. Due to go live
in the Autumn, this "BioPortal" will ultimately include
a guide through the regulatory framework as well as a fast effective
route into public sector work in biotechnology. Government also
hopes to use this portal to extend awareness of this pivotal industry
and to contribute to a positive view of its role in both industry
and society.
49. The last year has seen more pro-active
interest from both the European Commission and other Member States
in developing biotechnology in Europe to ensure that European
expertise is not lostespecially as we are facing in the
next 10-20 years a more competitive global market. The UK has
worked closely with the Commission and other Member States to
raise the political profile of biotechnology and to gain clearer
recognition of the economic potential it brings.
50. Whilst pan European action achieves
a level of harmony, it can also lead to long delays and uncertainties,
as differing views need to be reconciled. This and the need for
informing the public and encouraging debate have been recognised
by the Commission as issues impacting on the competitiveness of
the European biotechnology sector, and were addressed in its January
2002 Strategic Vision for Life Sciences and Biotechnolog [14]
which drew extensively on UK ideas. The Barcelona Council (15-16
March 2002) further acknowledged that biotechnology is a key factor
for future economic growth. It tasked the "Council to examine
before June 2002 the Commission's communication "Life Sciences
and Biotechnologya strategy for Europe". It asks the
Council and the Commission to develop measures and a timetable
which enable Community businesses to exploit the potential of
biotechnology while taking due account of the precautionary principle
and meeting ethical and social concerns. The Commission's is invited
to report on progress in advance of the Spring European Council
2003".
51. In the UK, public perceptions of biotechnology
vary widely according to the application. For example, the industry
has had to face strong negative public opinion in relation to
developments in GM foods and crops. Public perception of GM food
and crops and the pressure for EC regulation in reaction to these
public concerns has had the effect of stifling innovation and
investment in the sector. Nevertheless, DEFRA has continued to
fund appropriate risk assessment research, to ensure that the
exploitation of GM crops proceeds on a safe and sound basis, and
research aimed at providing the necessary underpinning science
required for future developments. Another related area of public
perception concerns the effects of animal rights extremists. Within
the UK, the high profile targeting of Company Directors, scientists,
investors and bankers by animal rights extremists has caused major
concern within the sector. The formation of a special Ministerial
Group chaired by the Home Secretary catalysed several rapid reactions,
and was a major step forward to curtail the intimidation of all
affected. The Government's position remains that properly regulated
animal research is absolutely essential to the discovery of new
treatments as well as to the assessment of the safety and efficacy
of medicines. That of course includes biotechnology. And that
is why the Government has acted to protect not only the companies
that carry out this work for the pharmaceutical industry but also
the establishments in the public sector that do similar vital
research.
52. There are, however, applications of
biotechnology which have been subject to more measured and balanced
debate especially where there are key areas where competence lies
with the UK. An example of how best to engage the public, opinion
formers and parliamentarians in the issues raised by new scientific
opportunities is in the field of embryonic stem cell research.
The appropriate regulatory controls to help ensure that cutting
edge research aimed at developing new treatments can proceed are
in place under the Human Fertilisation and Embryology Act 1990
and the Human Fertilisation and Embryology (Research Purposes)
Regulations 2001; managed by the Human Fertilisation and Embryology
Authority (HFEA). Another area which has benefited from the UK's
approach to the oversight of biotechnology is the area of gene
therapy where the UK has moved to No. 1 in Europe and closed the
gap on the USA in terms of new clinical trials over the last two
years.
53. There is international recognition for
the openness of the UK's ethical debates, and the pragmatic and
open legislative path taken by the UK has given it a cutting edge
in attracting scientists and demonstrating to the biotechnology
and pharmaceutical industries that the UK remains a favourable
location for science and investment.
DTI Bioscience Unit
15 April 2002
Annex 1
INTERNATIONAL COMPARISON OF BIOTECHNOLOGY
SECTORS1
| UK | Germany
| France | USA |
Japan2 | Denmark
|
Revenue (£M) | 1,295 |
493 | 475 | 17,556
| | |
Employees | 18,400 | 10,673
| 4,500 | 174,000 | -7,000
| |
No of companies | 310 | 332
| 240 | 1,379 | 271
| 66 |
No of public companies | -48 |
20 | 8 | 339 | 2
| 5 |
R&D Expenditure (£M) | 665
| 451 | | 9,691
| 2,689 | |
IPOs*: January-June 2001 | 2 |
1 | 0 | 43
| | |
| | |
| | | |
Sources/Key
1 = Ernst & Young (2001)
2 = UK Embassy in Japan
3 = Biospace
*IPO = Initial Public Offering (Flotation)
7
Speech by the Prime Minister at the European Bioscience Conference
(17 November 2000). Back
8
Excellence and Opportunity: a science and innovation policy
for the 21st century (Cm 4814) July 2000 and Opportunity
for All in a World of Change (Cm 5052) February 2001. Back
9
Estimate by the Association of the British Pharmaceutical Industry
(ABPI). Back
10
Pharmaceutical Industry Competitiveness Task Force: Final
Report. Department of Health (March 2001). Back
11
Pharmaceutical Industry Competitiveness Task Force: Clinical
Research Report. Department of Health (March 2002). Back
12
Genome Valley Report: The Economic Potential and Strategic
Importance of Biotechnology in the UK. DTI URN99/1174 (December
1999). Back
13
Creating Knowledge, Creating Wealth: Realising the economic potential
of Public Sector Research Establishments (HMT/OST July 2000). Back
14
A Communication from the Commission "Life Sciences and
biotechnology-A Strategy for Europe"-6415/02 COM(2002)27
final of which an Explanatory Memorandum was placed in the Library
of the House on 20 March 2002. Back
|