Appendix: Government response
The Government welcomes the Committee's report and
its support for the UK's world class bioengineering base. This
memorandum sets out the Government's response to the report.
This response has been prepared by the Department
for Business, Innovation and Skills (BIS) with major contributions
from the Department for Environment Food and Rural Affairs (Defra)
and the Department of Health (DH). In a number of areas the response
has required the development of the [Coalition] Government's policy
and the Committee's patience following the publication of its
report in March 2010 has been appreciated.
1 Basic Research
1. Bioengineering is an important component of
the UK research base and basic research is relatively well funded.
We detected, however, some tension between government priorities
and funding support in the area of GM crop research. This may
be a healthy manifestation of the Haldane Principle or a situation
peculiar to GM crops, but we invite the Government to consider
whether its overall strategy on the differential levels of funding
in key strategic areas is a cause for concern (Paragraph 21).
The Chief Scientific Adviser's 'Food Research and
Innovation Strategy', published in January 2010, set the strategic
direction for the implementation of Government's priorities from
a global as well as a national perspective. The Government has
since adopted this science strategy. In December 2010 the Government
announced the allocation of science and research funding[1]
stating that "Despite enormous pressure on public spending,
funding for science and research programmes has been protected
in cash terms demonstrating the Government's commitment to rebalancing
the economy and promoting economic growth." Resource funding
was protected with a £4.6 billion per annum flat-cash, ring-fenced
settlement for 2011-15 providing long-term stability and certainty
to the research base. An additional investment announced in the
budget of £100 million in science investment projects will
develop infrastructure at national research campuses[2].
These investments will protect national capability, maintain international
competitiveness and maximise the economic and social benefits
of research over many years. The Government recognises that under
the Haldane principle the precise balance of resources allocated
to the research and development of various types of improved crops,
including GM crops, is a matter for the Research Councils. The
Government does not therefore consider there to be a "tension"
between its strategic priorities and the funding of GM crop research,
but consider that there is a necessary and healthy determination
made by the Research Councils for their own allocation of funding
between the different types of food research, of which, GM is
only a small but important part.
Programmes such as the cross-Government 'Global Food
Security' programme led on behalf of the Research Councils by
the Biotechnology and Biological Sciences Research Council (BBSRC)
which BBSRC have confirmed to be a priority for them in their
2011-2015 Delivery Plan, published in December 2010[3]
bring together, in a co-ordinated way, the research and development
efforts of other Research Councils and agencies and departments
including the Food Standards Agency (FSA), Medical Research Council
(MRC), Natural Environment Research Council (NERC), Technology
Strategy Board (TSB), Department for International Development
(DFID), Department for Food, Environment and Rural affairs(Defra)
and Department of Health (DH). This currently represents some
£400m of combined annual expenditure on food research. Within
this the budget for GM crops is relatively small, but funding
for GM crop research needs to be considered in the context of
the Government's overall strategy and policy agenda for food and
farming.
The BBSRC is the main funder in the food research
area, focusing mostly on fundamental plant and crop science. Defra
and DFID are also significant funders, supporting work in line
with their specific policy aims as is the TSB through its Sustainable
Agriculture and Food Initiative, which covers industry-led collaborative
research.
At present, the amount of public funding specifically
for GM crop-related research is limited. However, the issue should
not be the level of support for GM relative to other technologies,
but pursuing the most effective solution for each identified need,
whatever approach that might entail. The Government considers
GM to be only one of the potential tools available to help society
to further increase future food supplies. Considerable progress
has also been made in recent years in the development of gene
sequencing technology, or 'genomics' much of it resulting from
research initially funded by BBSRC at Cambridge University and
this is enabling gene marker technology to identify those plants
with the desired characteristics in conventional breeding programmes.
The development and use of GM crops needs, therefore,
to be considered in the broader context of the challenge on global
food security. It may take more than improved crop breeding assisted
by new genomics technologies including rapid gene sequencing to
meet this challenge. There is a need to look at all the means
at our disposal to achieve the desired outcome. GM research could
offer a range of benefits over the longer term, with new crop
traits (e.g. drought-tolerance, disease-resistance) to improve
agricultural productivity and sustainability and potentially beneficial
implications for dietary requirements.
2. The UK is a world leader in basic research
in bioengineering. But there is no room for complacency, particularly
when faced with the dual threats of funding cuts and increasing
international competition. Excellence in research is an investment
for the UK's future, and it requires a long-term, sustained commitment
to funding from the Government. Funding cuts to bioengineering,
and indeed most areas of science and engineering, would risk throwing
away the investment the Government has already made over the past
10 years. It would be foolhardy to take away that support now
and lose out on the future benefits of past investment. We are
concerned that the UK would not maintain an internationally competitive
position in bioengineering if funding for basic research was cut,
even in the short-term (Paragraph 29).
The Government welcomes the Committee's recognition
that the UK is a world leader in research in bioengineering. The
Government is keen to promote Bioengineering as an important and
beneficial technology for key sectors including healthcare and
agriculture. Bioengineering fits well with the Government's strategic
long-term approach for science and technology based economic growth.
The Government's strategic objective will be to develop
further the strengths of the UK science base and to translate
the results into long term beneficial economic impact.
Government recognises that its role is to create
the right climate to nurture the UK research community and its
world class science base and to facilitate the translation of
research findings to best economic and societal effect such that
the UK becomes a leader in the future Knowledge Based Bioeconomy.
Funding Translation
3. We conclude that the private sector cannot
on its own fund the translation of basic bioengineering research
to commercial operation, particularly in the case of GM crops,
where the private sector is virtually non-existent in the UK.
Venture capitalists alone are not capable of providing the sustained
long-term investment in bioengineering to achieve the economic
and societal benefits the UK needs. The position of the pharmaceutical
industry is less certain. We consider that the pharmaceutical
sector's need to develop new business models is an opportunity
to embrace new bioengineering technologies based on, for example,
patient personalised cell-based therapies (Paragraph 47).
As far as drug development is concerned, the National
Institute for Health Research (NIHR) has established the research
infrastructure and programmes necessary to evaluate and support
the development of the technologies and interventions that may
arise from new business models adopted by the industry sector.
The TSB recognises the challenges faced by companies
in funding early stage technology development and the subsequent
adoption of that technology into the market-place (whether that
be in the health or the agricultural arenas). Interventions developed
by the TSB look to address not only the technological challenges
but also the difficulties faced by businesses in being able to
realise a return on their investments. Invariably this means that
businesses must change the 'way in which they do business either
through strategic partnerships or moving towards service-based
models rather than being product focussed. The TSB is funding
a number of commercially led projects in value systems and business
modelling in the Regen Med programme to help businesses better
understand and effectively address some of these issues.
Furthermore, it has also recently launched strategic
research programmes in the areas of Sustainable Agriculture and
Food in partnership with Defra and the Research Councils, and
Stratified Medicine in partnership with the DoH and the Research
Councils. The former, around £90m, will seek to stimulate
the development of new technologies that will increase food productivity,
while decreasing the environmental impact of the food and farming
industries. The Stratified Medicine Innovation Platform, worth
over £50m, seeks to enable the UK to become a world leader
in developing and adopting stratified medicine, which offers the
prospect of developing a greater number of medicines targeted
at smaller, specific groups of patients, and will fund business
led projects to establish R&D linkages between Pharma and
diagnostic companies, as well as pulling together the academic
and clinician bases.
The Government believes technology-based innovation
will be one of the key drivers of the private sector led economic
growth. A Blueprint for Technology (November 2010) sets
out how the Government will make Britain the most attractive place
in the world to start and invest in innovative technology companies.
The Blueprint aims to send a clear message to innovative
technology companies of all sizes, both established and emerging,
that we are committed to making the UK Government the most technology
friendly in the world. The Government is currently working
with businesses and other experts to set out its broader vision
for innovation in a cross-Government innovation strategy.
Measures outlined in the Blueprint include:
- creating an new Entrepreneurs
Visa for entrepreneurs backed by UK investors, to make the
UK the most attractive place in the world to set up and grow a
business;
- an independent review of the intellectual
property framework, including considering whether there are
benefits in a US style 'fair use' copyright provision;
- launching a new 'peer to patent' system
to make it quicker and cheaper to register a new patent.
4. We recommend that in October 2010 the Government
provide our successor committee with an assessment of the effectiveness
of the Office for the Strategic Coordination of Health Research
in facilitating rapid translation of research findings into health
and economic benefits (Paragraph 51).
5. We recommend that the Government provide our
successor committee with an update in October 2010 assessing the
effectiveness of the Technology Strategy Board's Sustainable Agriculture
and Food Innovation Platform in improving the translation of GM
crop technology (Paragraph 56).
Response to recommendations 4 and 5;
TSB's Sustainable Agriculture and Food Innovation
Platform (SAFIP), co-funded by Defra and BBSRC, will stimulate
the development of new technologies that will increase food productivity,
while decreasing the environmental impact of the food and farming
industries.
SAFIP will see investment around £90million
over the next five years in innovative technological research
and development in areas such as crop productivity, sustainable
livestock production, waste reduction and management, and greenhouse
gas reduction. Under the first competitive call for collaborative
research and development, a commitment from TSB of £13.5
million has been augmented by industry support to a total of £26
million funding for 32 approved projects to address crop protection.
The next call will focus on delivering a sustainable future supply
of protein for the UK. There will be two core themes: increasing
self-sufficiency in vegetable protein and increasing efficiency
of livestock systems.
The Government will provide a further update on these
matters should the Committee so request.
6. We welcome the Government's venture capital
fund, the UK Innovation Investment Fund, and commend its success
to date in raising funds in a tough fiscal climate. We request
that the Government provide our successor committee by October
2010 with a breakdown showing how funds will be allocated, particularly
how much will be available to the life sciences sector (Paragraph
58).
The UK Innovation Investment Fund is investing £150m
into two fund of funds, the European Investment Fund's UK Future
Technologies Fund and Hermes GPE's Environmental Innovation Fund.
This has already leveraged private sector investment of £175m,
creating a £325m pool of capital for investment. As funds
of funds, we envisage a 12-15 year lifespan, with the majority
of the money being invested in the next five years. This means
it would be too early to say how the funds will be invested. It
is worth noting that the specialist technology fund managers
will make all investment decisions, but that at least £25
million will be allocated to life sciences investments. The European
Investment Fund's UK Future Technologies Fund (£200M) will
invest in a number of specialist technology funds such as life
sciences, digital technology and advanced manufacturing. It has
made three investments to date - one into the DFJ Esprit III Fund;
one into Acton Capital Partners' Heureka Growth Fund; and one
into Advent's life sciences fund. The Hermes Environmental Innovation
Fund is focussed on increasing the efficient use of resources
and the development of clean technologies and is a major boost
in the transition to a low carbon economy and it made its first
investment into WHEB Ventures' second clean technology fund. Underlying
funds have made investments into companies and continue to carry
out due diligence.
7. We recommend that the Government consider increasing
funding for applied research into GM crops. As it aligns with
Defra's policy objectives on global food security, we suggest
that this increased funding could be provided, at least in part,
through Defra's R&D budget (Paragraph 61).
Core Defra's Evidence budget (which includes research,
monitoring and surveillance) for 2010/11 is approximately £210m,
of which about £123m is for research. To meet savings requirements
over the spending review, a total of £43m evidence savings
(which will include savings on both research and other evidence
activities) for 2014/15 has been committed.
The Chief Scientific Adviser has ensured that reductions
in evidence investment are strategically distributed across Defra's
entire portfolio in line with evidence priorities, as set out
in the Structural Reform Agenda, Business Plan and Evidence Investment
Strategy. This means greater savings will be found from areas
with lower evidence need and less savings from areas of higher
evidence need. Research needs for GM must be considered within
this wider strategic picture.
Defra's funding for research to support the delivery
of policy priorities including food security is needs led. GM
is one of the tools that could make a contribution to tackling
the challenges of global food security alongside other applications
of scientific knowledge. It could offer a range of benefits over
the longer term, with new crop traits (e.g. drought-tolerance,
disease-resistance) that help to make agriculture more efficient
and sustainable. It will take more than improved crop breeding
to meet the challenge of ensuring global food security, but we
need to look at all the means at our disposal to achieve the desired
outcome.
Research priorities in Defra are based on the merits
of individual approaches to solve specific problems. Defra funds
£3.5 million per annum in genetic improvement networks covering
arable crops and livestock, which is able to utilise a wide range
of advanced breeding techniques.
Conclusions on Funding
8. In early stage translation, we argue that the
Government has a greater duty than the private sector to bridge
the gap, particularly in areas that align with policy priorities.
More funding should be provided by the public sector for the early
stages of translation. In stem cells, for example, this would
be until the stage where it is possible for products to demonstrate
evidence of safety and efficacy (Paragraph 63).
9. The Government is right to intervene to bridge
the so called "valley of death" between basic research
and commercial production. But if it is serious about doing so,
funding for translation should be much greater. As a starting
point for debate, we propose that if the Government were serious
about translation in the same way that it is serious about basic
research, the funding for translation would be increased to at
least the same order of magnitude (Paragraph 64).
Response to recommendations 8 and 9.
The Government recognises that where the market has
yet to develop and the risk/reward ratio and spill over benefits
work against the financial viability of investment by companies
alone, particularly SMEs, there is a role for Government in promoting
the translation of research. A number of mechanisms are in place
to encourage this, not least Government investment funds, the
R&D tax credit, various grant funding programmes and other
initiatives managed by the TSB, including its Regenerative Medicine
programme, and a remit for Research Councils to address the economic
impact of their research.
R&D Tax Credits allow all companies undertaking
qualifying research and development expenditure to claim relief
from corporation tax. Since 2000 almost £4.9 billion of support
has been provided to UK companies through R&D Tax Credits
and over 80 per cent of claims are made by SMEs. A CBI survey
(2009) reported that R&D tax credits play an effective role
in encouraging business R&D investment and found that savings
on R&D costs delivered by the scheme now averaged 10.5 per
cent for SMEs, 8.5 per cent for medium-sized companies and 6 per
cent for large companies. In December 2010 HMRC published their
report evaluation of the impact of R&D tax credits for the
ten years since the introduction of the scheme in 2000. The findings
were positive and analysis of UK claims indicates that up to £3
of R&D expenditure might be stimulated by £1 of tax revenue
forgone.
The Government agrees with the importance of supporting
"early translation", as was emphasised by the Cooksey
review. Additional resources were granted to the MRC and National
Institute of Health Research (NIHR) specifically to address this
aspect of research, with coordinated programmes developed under
the auspices of OSCHR. The MRC remains committed to enhancing
translational research, a key component of their strategic plan,
Research Changes Lives, and have put in place specific funding
schemes with dedicated budgets to accelerate the development of
novel innovations (including therapies, diagnostics and technologies)
from discovery to evaluation. These include a new MRC Translational
Stem Cell Research Committee to promote preclinical research,
experimental medicine and early phase clinical trials.
A key ongoing initiative, in partnership with the
private sector, is Stem Cells for Safer Medicine. This
uses milestone-driven approaches to develop embryonic stem cell
technology for improved toxicological testing of potential new
medicines. In addition, the Department of Business, Innovation
and Skills, and the Department of Health will examine the UK's
position in regenerative medicine to ensure the UK is well-positioned
to take advantage of future developments. The work will identify
barriers to commercialisation; assess the current state of the
science; and assess the value of new products to the NHS and patients.
This work will underpin a 'roadmap' to be developed by the Public
Funders in this area (Research Councils and Technology Strategy
Board (TSB)) supporting the development of regenerative medicine
in the UK.
Early stage translation is also an area which the
TSB is addressing through its Emerging Technology strategy. The
strategy recognises that emerging technologies must progress from
scientific concepts into technological and application demonstrators,
each of which is progressively more robust and viable as a commercial
proposition. The TSB is working with the Research Councils in
order to understand and facilitate the transition phases in translational
work. This progression requires not only the provision of long
term funding strategies, but also access to key knowledge, facilities
and infrastructure. An example includes co-funding of a number
of Innovation and Knowledge Centres (with TSB, BBSRC and EPSRC
funding) to enable access to the relevant knowledge and facilities
needed by businesses to progress concepts to business propositions
(e.g. the Leeds Innovation and Knowledge Centre focused on healthcare
including regenerative devices and therapies).
The Role of the NHS
10. We agree with Lord Drayson that the NHS gives
a competitive advantage to the UK. It is therefore essential that
this advantage is fully exploited to assist the translation of
bioengineering therapies such as those based on autologous stem
cells (Paragraph 70).
The Government recognises the importance of the NHS
as a marketplace for new bioengineering therapies. A prerequisite
for successful translation of bioengineering therapies into mainstream
clinical practice is strict but facilitative regulation and an
ethically and scientifically robust clinical trials framework.
In the NHS White Paper—Equity and excellence:
Liberating the NHS published in July 2010—the Government
stated that it would cut the bureaucracy involved in medical research.
The Academy of Medical Sciences was commissioned to conduct an
independent review of the regulation and governance of medical
research, and the Academy published its findings on 11 January
2011 in 'A new pathway for the regulation and governance of health
research'.
In the Plan for Growth published alongside the 2011
Budget, the Government announced it will create a health research
regulatory agency. As a first step, a new Special Health Authority,
with the National Research Ethics Service as its core, will be
established. Where simplification can be achieved without primary
legislation, we shall do so. Where primary legislation is required
to consolidate the functions and further develop the role of the
health research regulatory agency, it will be introduced in a
later Bill.
The commitment to cutting bureaucracy involved in
medical research goes beyond regulation reform. We will also make
future NIHR funding to providers of NHS services conditional on
meeting benchmarks, including a 70 day benchmark to recruit first
patients for trials.
The Government will keep under review developments
in stem cell science starting with its regenerative medicine stock-take
in 2011, which will assess the translation and potential of autologous,
as well as allogeneic stem cells.
11. The Government is working on improving NHS
adoption of novel technologies through various initiatives. However
we are concerned that improving NHS culture and attitudes towards
novel technologies is being neglected. We recommend that the Government
produce a strategy for the NHS which will ensure: (1) that institutional
inertia and adherence to conventional models of healthcare does
not inhibit the introduction of new technologies and (2) that
the NHS develops greater strengths in clinician-researchers collaborations
to facilitate the translation of technologies from the laboratory
to the clinic (Paragraph 71).
The Government believes that to introduce an additional
government innovation strategy would be wasteful and add an unnecessary
layer of regulatory burden. Improving NHS culture and attitudes
towards innovation and novel technologies are already the predominant
focus of existing innovation policy and strategy—as articulated
in the High Quality Care for All report. These commitments
are now underlined by a new legal duty to promote innovation and
supported by statutory guidance. The Department's innovation strategy
further includes: regional innovation funds (£20m in 2009/10),
improved access to information through NHS Evidence and the creation
of a series of 'challenge' prizes - all of these initiatives are
aimed at ensuring faster uptake and diffusion of innovation throughout
the NHS. High Quality Care for All also introduced Health
Innovation and Education Clusters which are designed to address
workforce development capacity constraints in the uptake of innovations.
Seventeen of these Clusters have now been commissioned and they
have been operational since April 2010. In addition, five Academic
Health Science Centres have been accredited with the aim of promoting
greater collaboration between clinical and academic disciplines.
To strengthen clinician-researcher collaborations,
the National Institute of Health Research (NIHR) already fosters
and supports collaborative research within the Higher Education
sector and the NHS. Through its faculty schemes, the NIHR promotes
academic training paths for healthcare professionals to attract,
develop and retain the best research professionals. Similarly,
national research programmes, such as the Health Technology Assessment
and Invention for Innovation programmes, encourage NHS, university
and industry interactions. In addition, the NIHR has established
Biomedical Research Centres and Units that are University/NHS
research partnerships to facilitate translational clinical research.
Through the Regen Med programme (co-developed with
the MRC, BBSRC and EPSRC) the TSB is funding a number of consortia
involving businesses, NHS and academic organisations to enable
the partnerships required to develop bioengineered therapies in
a number of cell based therapies. This includes a project in the
'Value systems and Business modelling' competition being led by
Biolatris and including BUPA, Cell Medica, Consulting in Advanced
Biologics, NHS Blood and Transplant, NHS Technology Adoption Centre,
Pfizer, Tigenix and Loughborough University to examine the business
challenges in delivering not just autologous, but allogeneic cell
based therapies.
Further evidence of our support for innovation was
given when, in March 2011, the Secretary of State for Health announced
the country's largest ever funding for translational research,
providing up to £775 million over five years to provide the
best environment to support cutting edge translational research.
This will be made available to NHS and University partnerships
through the NIHR.
Translation of Emerging Technologies
12. Given that there is widespread consensus that
developing a national DNA synthesis capability would put the UK
at the forefront of synthetic biology translation and what some
consider to be the next industrial revolution, we recommend that
the Government should invest in a national initiative to develop
this capability. We consider that the Technology Strategy Board
should manage this programme (Paragraph 74).
Synthetic biology is very much at the research stage.
Whilst it is encouraging to see that some highly innovative companies
are already thinking in terms of the commercialisation of leading
edge synthetic biology research the Research Councils will initially
identify the most promising areas for synthetic biology, at which
point the need for a DNA synthesis capability would become more
evident. The TSB would want to consider the merits of such a programme
and DH would have an interest in trials of therapies that might
be developed from this technology.
Conclusions on Translation
13. Translation of research is widely recognised
as a persistent weakness in the UK, a view we share. While the
UK has an excellent research base, the all-too common message
is that we are missing opportunities to capitalise in the investments
in the research base (Paragraph 75).
The Technology Strategy Board will be the Government's
prime channel through which it will incentivise business led technology
innovation, simplifying the way in which companies seek and receive
support, with support focused on opportunities which offer the
greatest scope for boosting UK growth and productivity on the
basis of business and academic strength.
As stated in the recent allocation of science and
research funding there will be ongoing collaboration between the
Research Councils and the Technology Strategy Board in a number
of strategic priority areas within broad themes including healthcare
and resource efficiency. This partnership will help ensure that
investments in research are more closely informed by business,
and that businesses will more readily adopt innovations that stem
from excellent research. We will also through the Technology Strategy
Board invest over £200m to establish an elite network of
Technology and Innovation Centres to commercialise new and emerging
technologies. The Technology Strategy Board has published a prospectus
for the new centres which sets out more detailed proposals for
their management and operation, together with a list of six broad
candidate areas, including healthcare, for the first phase of
three to four centres, to be funded from 2011/12. It is seeking
comments on these proposals and will announce in March how it
will take this phase forward.
The Engineering and Physical Sciences Research Council
(EPSRC) plays a key role in supporting basic manufacturing research
through to the stage where applications can be developed by companies
or agencies such as the Technology Strategy Board.
This year, the EPSRC have invested £45 million
to establish nine new EPSRC Centres for Innovative Manufacturing
in areas such as biological pharmaceuticals, novel composite technologies,
and intelligent automation. These Centres will feed new ideas
and discoveries through to business and Technology and Innovation
Centres, helping to open up new industries and markets in growth
areas.
For example, the EPSRC Centre for Emergent Macromolecular
Therapies, led by three academic institutions and working with
24 UK companies, will work on research with the potential to dramatically
reduce the time and cost of developing new treatments, as well
as improving the therapeutic properties. These developments offer
the potential for a step change in the competitiveness and performance
of the UK-based biopharmaceutical sector.
14. The barriers to translation of bioengineering
extend beyond funding. However increasing funding for translation
would be one way for the Government to signal its commitment to
improving translation in the UK, irrespective of any strategic
prioritisation debate (Paragraph 76).
Research Councils invested £150 m in 2008/09
in science underpinning bioengineering. They are encouraged to
place a strong emphasis on realising the impacts of research they
fund, and on seeking opportunities for translation. Research Councils
also have technology transfer organisations to promote actively
the exploitation of results. This is consistent with their respective
strategic plans, which include the importance of economic impact
and the translation of research. The level of funding allocated
to these translation activities is a matter for the Research Councils
to consider as part of their distribution of research budgets.
The Research Councils work closely with the Technology
Strategy Board (TSB) which has been established to play a cross-Government
leadership role in delivering a national technology strategy.
It operates across all important sectors of the UK economy, and
focuses its support for those opportunities which offer the
greatest scope for boosting UK growth and productivity on the
basis of business and academic strength. Through its collaboration
with the Research Councils it helps accelerate the translation
of research excellence into new and improved products and services.
For its part, the Government has in place a number
of measures designed to promote translation and these will be
considered in the light of the new prioritisation of Government
expenditure:-
- Creating a regulatory framework
that can win the public's confidence and ensure the safe and ethical
application of technology.
- Improving the co-ordination and communication
of requirements (such as though the formation of OSCHR and initiatives
like the UK Stem Cell Toolkit).
- Providing risk funding where there are market
failures as demonstrated by the Government's funding to the MRC
for translational research (£132M), the UK Innovation Investment
Fund (£150M of which at least £25M will go to the life
sciences) and some £400M committed to a range of venture
capital funds. The Chancellor announced in the Emergency Budget
that we will consult with business in autumn 2010 to review the
taxation of intellectual property, the support R&D Tax Credits
provide for innovation and the proposals of the Dyson Review.
The Coalition Agreement makes it clear that we are committed to
considering Sir James Dyson's recommendation that R&D tax
credits should be refocused on hi-tech companies, small firms
and start ups. HM Treasury is currently leading a consultation
with business about development of the R&D tax credit scheme.
However it needs to be remembered that the UK has
one of the most developed Venture Capital sectors in the world
and venture capital funding is very important for the life sciences
sector and allows businesses to develop and take their innovative
products to the market.
The value of investment by Private Equity and Venture
Capital funds in the life science sector has steadily increased.
From 1998 to 2008, private equity (PE) and venture capital (VC)
investments increased from £210 million to £1,294 million.
As a proportion of all private equity and venture capital funding,
life sciences accounted for 15 per cent in 2008 compared to six
per cent in 1998 and with the majority of this growth being VC.
Within the PE funds the value of investment by venture
capital funds in the life science sector (such as for early stage
and start ups) has fluctuated widely over the last decade, as
investor sentiment has been influenced by events such as the collapse
of the dotcom bubble and the recession. However, the long term
trend in VC investment has been one of steady increase, including
into the life sciences sector.
15. The pharmaceutical sector, despite the difficulties
we found, can provide valuable expertise and funding to enable
translation, including in the area of stem cells. However both
the pharmaceutical sector and the NHS primarily operate under
a "one size fits all" approach to medicines, which will
make it difficult to translate and integrate autologous stem cell
therapies into clinical practise. New business and operational
models will be required (Paragraph 77).
The development of new business models is an area
that the TSB are already addressing by examining the 'Value systems
and Business models' that may be necessary to make new therapeutic
paradigms and cell based therapies commercially viable. The TSB
funded three collaborative R&D projects involving 19 separate
organisations (academic, business and NHS) to look into addressing
the challenge with the generic outputs being made available to
the UK Regenerative Medicine community. The MRC, working in partnership
with the Department of Health and others, have created the Stem
Cell Toolkit to help researchers in both industry, academia
and the NHS undertake the highest quality research in this area.
A prospective single research regulation model could also help
rationalise the variety of approvals processes.
Public Awareness and Engagement
16. In our view it is not just the responsibility
of companies or the media to make an evidence-based case for GM
crops to the public, but the responsibility of the Government
too. We consider that the Government, and particularly Defra,
is emphasising the importance of safety without informing the
public that it considers GM crops to be generally safe (Paragraph
88).
17. We welcome the Minister's positive attitude
towards raising public awareness about the potential benefits
of GM crops, but we believe that stronger leadership is necessary.
The Government, and particularly Defra, should actively lead the
public debate on this issue by stating its belief in the overall
safety and potential benefits of GM crops on the Defra website
and in relevant publications and speeches. It should also facilitate
ways for GM crop researchers to engage with the public about the
benefits of their research (Paragraph 89).
One of the Government's main roles in relation to
GM is to protect human health and the environment. The Government
will only agree to the planting of GM crops, the release of other
types of GM organism, or the marketing of GM food or feed products,
if a robust risk assessment indicates that it is safe for people
and the environment. Like other technologies, GM is not inherently
'good' or 'bad', safe or unsafe. Each application of the technology,
each proposed GM product, should be considered on its individual
merits. GM product applications should therefore, be assessed
for safety on a case-by-case basis, taking full account of the
scientific evidence.
The EU and UKs systems for regulating the use of
GMOs are the most robust in the world and both Defra and the FSA
are confident that they ensure that any approved GM products are
as safe as their conventional counterparts.
The Government recognises that GM technology could
deliver benefits providing it is used safely and responsibly,
in particular as one of a range of tools to address the longer
term challenges of global food security, climate change, and the
need for more sustainable agricultural production.
Informed debate in this area is important, and this
should be in the broader context of the major challenges we face
relating to climate change, food security and sustainability.
Consumers need to be able to exercise choice through clear GM
labelling rules and the provision of accessible and reliable information.
Government is currently considering the best way to understand
the public's views and information needs on GM.
Alongside this, Government has a role in communicating
the nature of its regulatory system and decisions, and also in
enabling innovation. But a range of other interested parties also
have roles to play in such debates including farmers, food producers
and retailers, civic society and scientists.
18. We are pleased to discover that public engagement
has been considered an early priority by those working in synthetic
biology research and policy. This commitment indicates that lessons
are being learned from past experiences (Paragraph 92).
Government recognises the importance of considering
public engagement upstream in the research process, especially
in potentially controversial issues such as synthetic biology.
In relation to this, the Biotechnology and Biological Sciences
Research Council (BBSRC) and the Engineering and Physical Sciences
Research Council (EPSRC) published their dialogue report on synthetic
biology on 14 June 2010. The EPSRC and BBSRC have subsequently
written an open letter to all dialogue participants outlining
how they will address the issues raised in the dialogue report.
The BIS funded Sciencewise Expert Resource Centre aims to help
policy makers commission and use public dialogue to inform policy
decisions specifically in emerging areas of science and technology.
Influence of Europe on Regulation
19. The impact of Europe, particularly EU Directives,
on UK science and engineering is a subject worthy of further scrutiny;
one that we hope our successor Science and Technology Committee
may take up as a stand-alone inquiry (Paragraph 94).
The Government recognises that legislation adopted
at the European level plays a significant role in establishing
the conditions in which science and engineering are conducted.
It is essential that legislation is firmly based on independent,
expert scientific advice and that prior to publishing legislative
proposals the European Commission consults widely with stakeholders
and considers the potential impacts on research and innovation.
In this regard the Government welcomes the plans which the President
of the European Commission has announced to appoint a Chief Scientific
Advisor.
Regulation of GM Crop Releases
20. We condemn the destruction of properly approved
GM crop field trials and recognise that in the face of organised
disruption the Government has to provide increased funding for
GM crop field trial security. We recommend that Government continue
to fund security for GM crop field trials (Paragraph 102).
21. We recommend that the Government consider
amending the Genetically Modified Organisms (Deliberate Release)
Regulations 2002 to remove the requirement that researchers publicly
disclose the six-figure grid reference location of planned field
trials, in order to assist GM crop field trials and reduce the
burden of security costs. This may involve a reinterpretation
of either the level of detail on location or the extent to which
the information should be made public (Paragraph 103).
Authorised GM crop trials should be allowed to proceed
without the threat of vandalism. Such vandalism is unacceptable,
and it is misguided to hamper research that will improve scientific
understanding and may lead to potentially beneficial new crops.
From 2009 to 2010 the BBSRC has funded security costs
for academic GM crop trials that form part of wider projects that
it is sponsoring, and that option will continue for BBSRC-funded
research. In addition, by working with interested parties the
Government is ready to facilitate the hosting of any trials at
suitable sites that could provide greater security than might
otherwise be the case. The Government will also continue to liaise
with the police to ensure that, whilst peaceful protest can proceed,
property is protected and those who engage in criminal activity
are prosecuted.
EU law specifically requires the location of GM trials
to be made publicly available. Moreover, the Government believes
that being open and transparent with the public is an important
consideration on this issue. It does not currently consider that
revealing less information about the location of trials would
be productive in terms of public trust or combating vandalism.
It is encouraging that the research trials in the last two years
have not been targeted by vandals. Nevertheless, the security
of GM trials will continue to be monitored and further action
considered if necessary.
22. The EU regulatory regime on the release of
GM crops for commercial purposes is adequate, but operates dysfunctionally
in practice, with blockages in the EU approval process occurring
for political reasons (Paragraph 107).
23. We are disappointed that the Government told
us it was pressing for change to the EU regime but was unable
to provide us with the evidence that it is doing so. We recommend
that the Government provide us with concrete details of how it
is pressing for the EU regime to be improved and what the outcomes
of its actions have been to date (Paragraph 108).
24. We recommend that the Government keep our
successor committee updated on proposals from the Dutch Government
which may contain the introduction of socio-economic criteria
as part of the EU GM crop approval process, and explain the UK
Government's position on these proposals as they develop (Paragraph
110).
25. While public engagement is important in developing
regulations, we believe that the introduction of socio-economic
criteria into the GM crop approval process is unwarranted and
inappropriate in what should be an evidence-based process. We
recommend that the Government oppose the introduction of socio-economic
criteria into the GM crop approval process at the EU level (Paragraph
111).
Response to recommendations 22, 23,24 and 25.
Whilst we have confidence that the EU regime does
ensure safety, it is not currently being operated in a proportionate
manner and has threatened both animal feed imports on which farmers
rely, and the development of new GM crops of potential beneficial
use in UK agriculture. However, decisions under new Commissioner
Dalli on import and cultivation have signalled an intention to
make the system more efficient, and proposals to allow national
discretion on the commercial cultivation of GM crops are intended
to improve the regulatory regime.
In particular, Member States have recently voted
with a qualified majority to support a Commission proposal to
allow for the low level presence in animal feed imports of certain
GM materials that are awaiting EU approval. This measure will
apply to test results that are no greater than the validated limits
of the relevant detection method, so that sporadic low-level findings
do not result in whole shipments being removed from the market.
Such a measure will help improve the security of all animal feed
imports to the EU and UK.
To help overcome the near deadlock in reaching EU
decisions on the commercial cultivation of GM crops, the Commission
has tabled a package which could give Member States more latitude
to ban GM cultivation in their own territory. Under the current
regime, applications to market GM products, including seeds for
cultivation, are assessed and decided upon at EU level, based
on whether or not the scientific evidence indicates a risk to
human health or the environment.
The Commission's proposal is to introduce a new 'opt-out'
provision allowing Member States to restrict or prohibit the cultivation
of EU-approved GM crops for reasons other than safety provided
such measures conform with the EU Treaties. The proposal is meant
to improve the regulatory situation, the hope being that with
greater freedom to impose national bans for non-safety reasons,
relevant Member States will not cause delays to the EU-approval
process by making unjustified safety arguments. Discussions on
the principle and detail of the proposal continue at EU level,
including on whether it will actually deliver the desired result
through providing adequate grounds for Member States to ban GMOs
given the need for them to be compatible with WTO and other legal
obligations.
The UK Government will continue to argue for the
proportionate implementation of the EU regime.
Regulatory System for Stem Cell Research and Translation
26. Effective regulation in complex areas of bioengineering
such as stem cell research and translation relies on efficient
inter-agency coordination. We welcome the MHRA's and HTA's commitment
to produce a memorandum of understanding. We recommend that other
agencies—such as the HFEA—should engage in the process
to eliminate regulatory overlaps and should be included in a memorandum
of understanding with the HTA and MHRA (Paragraph 118)
The Government agrees with this recommendation. We
recognise the need to increase efficiency and to minimise duplication
and the burden on the regulated sector. As regulators, MHRA, HTA
and HFEA recognise the importance of these issues and already
work closely together on areas of mutual interest. The HFEA (reproductive
cells) and HTA (all other human tissue and cells) are the respective
regulators for the EU Tissues and Cells Directive; having two
competent authorities for the Directive necessitates close working
between the two bodies. The MHRA is the UK competent authority
for medicines, medical devices, blood and blood components. As
the requirements of medicines legislation, including the European
Regulation on Advanced Therapy Medicinal Products, follow on from
the requirements of the Tissue and Cells Directive all three regulators
see a need to continue to enhance their joint working.
In the NHS White Paper—Equity and excellence:
Liberating the NHS published in July 2010—the Government
stated that it would cut the bureaucracy involved in medical research.
The Academy of Medical Sciences was commissioned to conduct an
independent review of the regulation and governance of medical
research, and published its findings on 11 January 2011 in 'A
new pathway for the regulation and governance of health research'.
The Government is considering this report and its recommendations.
In the Government's review of its Arms Length Bodies
(ALBs) it announced its intention to transfer the functions of
the Human Fertilisation & Embryology Authority (HFEA) and
the Human Tissue Authority (HTA) to the Care Quality Commission
and other bodies, including a new research regulator.
Following our consideration of the AMS Report on
research governance we will review the legislation affecting medical
research, and the bureaucracy that flows from it, and bring forward
plans for radical simplification, including the possible creation
of the recommended Health Research Agency as the new regulatory
body for medical research.
27. We welcome the development of the Stem Cell
Tool Kit and recommend that the quarterly reports on its impact,
including a summary of researchers' feedback, are published (Paragraph
120).
The Government is pleased that the Committee is supportive
of its approach in helping researchers understand and navigate
the UK regulatory framework and thereby facilitating UK-based
stem cell research. The Stem Cell Tool Kit, developed jointly
by the Department of Health and the MRC, was launched in December
2009. Its impact will be reviewed at regular intervals and we
will regularly work with stakeholders to ensure it remains useful
to the community, especially during the transition phase of our
commitment to streamline medical research regulation.
28. The UK is part of a global market and international
competitiveness in bioengineering will be enhanced by access to
European and American markets. We are keen to see more formalisation,
or planning for formalisation, between international regulatory
agencies. We recommend that the MHRA should lead on behalf of
the UK in working with the EMEA and FDA to develop regulatory
harmonisation, particularly for stem cell-based therapies (Paragraph
124).
The EU legislative framework that applies to advanced
therapy medicinal products has resulted in harmonisation throughout
the EU and this has been an important step in opening up European
markets. There is currently regular dialogue between both the
MHRA and the EMA (formerly EMEA) with the FDA.
The EMA's Committee for Advanced Therapies (CAT)
has a dialogue with the FDA on a bi-monthly basis. In addition,
the International Conference on Harmonisation of Technical Requirements
for Registration of Pharmaceuticals for Human Use (ICH) brings
together the regulatory authorities of Europe, Japan and the United
States to discuss scientific and technical aspects of product
authorisation.
The European Commission has committed to review the
operation of the Regulation on Advanced Therapy Medicinal Products
by 30 December 2012. The review will include an assessment of
the impact of technical progress on the application of the legislation.
Given this is a developing innovative area, it may be premature
to focus on developing further international regulatory harmonisation
before this review has taken place.
Conclusions
29. Rising competition from abroad means that
the UK simply cannot become complacent about its international
standing in bioengineering (Paragraph 127).
30. We consider that the UK is clearly a world
leader in bioengineering, and in the spirit of making the most
of the UK's strengths, bioengineering would be a strong contender
for strategic prioritisation. This would, however, require the
Government to address the UK's key weakness in exploiting basic
research, an area where, although much progress has been made,
more action is required (Paragraph 128).
The Government agrees with the Committee that the
UK should not be complacent about its acknowledged world class
standing in bioengineering.
The Government welcomes the Committee's acknowledgement
that the UK is a world leader in bioengineering and would wish
to reassure the Committee that the exploitation of such basic
research is high on the agenda for its continuing dialogue with
the Research Councils.
1 See http://www.bis.gov.uk/assets/biscore/science/docs/a/10-1356-allocation-of-science-and-research-funding-2011-2015
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2
This included funding for the Harwell Science and Innovation Campus,
the Daresbury Science and Innovation Campus, the Norwich Research
Park and the Babraham Campus. Back
3
See http://www.bbsrc.ac.uk/news/policy/2010/101220_pr_BBSRC_Delivery_Plan.aspx
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