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The making and debating of biotechnology legislation in the European Parliament

Speech to the occasion of the 11th European Congress on Biotechnology, Basel, August 27

by Elly Plooij- van Gorsel

Biotechnology is, together with ICT, one of the most promising technologies of the 21st century and therefore a top priority on the European agenda. The European Council decided in Lisbon, 2000 to make Europe the most dynamic and competitive knowledge based economy in the world by 2010. The biotech industry is capable to enhance that knowledge based economy, as that sector is very well able to convert knowledge in products and employment.

At the Stockholm summit in March 2001, the European Council therefore decided to establish a b-Europe, next to an e- Europe. B-Europe is an Action Plan to stimulate the progress of biotechnology in Europe. European policymakers seem to have the right intentions but reality shows that the EU is still lagging behind in biotech developments compared to other countries, most notably the US.

So how can Europe enhance the competitiveness of the biotech industry?

Firstly, by establishing a favourable climate for entrepreneurship.
In my opinion, the significance of biotech for economic growth and competitiveness of the European industry will depend upon Community legislation towards the pharmaceutical and chemical industry, and the agricultural and food industry. This legislative framework needs to be transparent and needs to promote innovation. The European Parliament, as a European lawmaker, can and will play a vital role in this.

Furthermore, the European 6th Framework program for research and technological development (FP6) can and must play an important role to stimulate progress. This multi-annual program subsidises projects in which companies and research institutions from various EU Member States cooperate. This way, knowledge and research experience can be merged and streamlined.
Unfortunately, there is a serious lack of innovation in Europe, in spite of an excellent scientific infrastructure. Europe has no problem putting euros into research, but has a problem putting research into euros!

The good news is that European Parliament made biotechnology a priority within FP6, which has a 3 billion euro budget for 4 years.

Clearly, action plans have been outlined and money has been made available. In practice however, European lawmakers have hardly rewarded the biotech industry with legislation to support the sector economically. It took for instance ten years to develop patent legislation comparable to the US. The European Parliament suffered a long time from the "patenting life"- syndrome. However, scepticism towards life sciences and patent law has not hampered the application of these techniques throughout the world.

Finally, in 1998 the European Directive for the legal protection of biotechnological inventions came into force. This Directive should have been implemented by the Member States by July 2000, but until now not even half of the Member States have done so. This is a situation not to be tolerated and I therefore urged the European Commission at the time to take all necessary measures to have the Member States meet their obligations. The Commission now takes eight Member States to Court over their failure to implement this legislation.

There is a lot of controversy over this Directive as it also concerns the patentability of biological material, which can extend to isolated elements of the human body. This aspect triggers resistance among people. In my view, this is an attitude problem which needs to be seriously addressed by European policymakers and industry. An open and transparent public debate could turn the sceptical criticism towards a critical curiosity. Currently, the debate on biotechnology tends to be dominated by emotion instead of reason. Concerns about the environment and ethical implications are of course justified, but the negative prospects can be put into perspective by an open and honest debate.
It is first and foremost up to the Member States and the national Parliaments to meet their obligations and implement this Directive in order to provide one single European legal protection on biotechnological inventions. The current differences in practice in the various countries lead to trade barriers and a fragmented European market. Having such legislation in place would also help European companies compete on level terms with their Japanese and American rivals.

In March 2001, the European Parliament took the initiative to adopt a report about the future of biotechnology in Europe. The European Commission published subsequently in 2002 her strategy towards Life Sciences and biotechnology. This strategy is a positive first step to create a favourable economic climate. Nevertheless, the legislative framework is still too fragmented which creates insecurity and a lack of a level playing field for business. Biotech enterprises need well functioning legislation to support their activities.

Another promising field, stem cell research, also meets a lot of opposition due to ethical concerns, especially when the question is raised to what extent stem cell research should be financed by European Community means. The current situation in Europe regarding stem cell research is very differentiated. In some Member States embryonic stem cell research is allowed, albeit under conditions, and only on so-called 'supernumerary' embryos. The UK is the only Member State where it is allowed to actually create human embryos for research purposes. The Parliament was divided, but in a democratic way, we came to a point of view which was very attractive and workable!

Italy, Ireland, Austria and Portugal have succeeded in establishing a moratorium on the funding of stem cell research till the end of 2003. The Commission has recently (July) proposed ethical guidelines on EU funding in order to push things forward. The proposal does not aim at setting guidelines for Member States, as each country can decide for itself on this issue. The Commission merely wants to outline the conditions for European research within FP6 involving stem cells. Germany is opposed to EU funding of this type of research, which is prohibited in Germany, and therefore not willing to contribute German taxpayers' money to projects which involve embryonic stem cells.

The conservative attitude towards biotechnological innovation is truly deplorable, as this is an obstacle to become a dynamic and competitive knowledge based economy. There is already an enormous gap between Europe and the US regarding innovative research to biotechnological inventions. The most striking difference concerns the dissemination and market capitalisation of research results.

The figures:

In 2001 there were 1570 biotech companies in the EU against 1273 in the US. The US companies however employ 162.000 people against 61.000 employees in the European companies.
More importantly: the US companies are far more successful in market capitalisation than their European counterparts. In 2001 market capitalisation of biotechnological products in the US was 376 billion euro, where the European biotech industry came to 42 billion euro.

So the US revenues are nearly nine times as much than the European results, whereas the number of companies in Europe exceed the American amount.

Like I said earlier, Europe must learn to transfer research into euros and it is therefore important to facilitate the process from research to market. Firstly, the dissemination phase of research programs and projects plays an important role in this. Dissemination is a crucial activity for the valorisation of research findings. It is also however the least well developed phase within scientific research projects. This is partly due to the fact that it is not a core activity of universities and research institutions and therefore its effectiveness is too low.

Clearly, to bridge the gap between researchers and biotech companies is of the utmost importance to create innovative products. Secondly, the time-to-market needs to be reduced. With reducing the time-to-market an important competitive advantage can be gained. It will lead to a faster recovery of development costs and a longer lead time on competitors. Savings in the time taken to develop a biotechnology product will certainly lead to increased sales and profitability.

Europe must make an effort to reduce the time to market in order to bridge the gap with the US.

Another problem is the brain drain: many talented European scientists leave our continent to work in the US where the climate to carry out their work is better and where they have to deal with less restrictions. Statistics point out that three out of four Europeans who complete a doctorate in the US in the biotech field will remain there instead of returning to their home country. The proportion of workers with postgraduate qualifications is a little higher in Europe. However, researchers in Europe amount for only 5.4 out of every 1000 staff, against 8.7 in the US. One reason for this is the aforementioned lack of clear legislation on patenting and marketing of innovations. Furthermore, in the EU public spending on research makes up 1.9% of EU GDP, against 2.8% in the US. In general, in the US more private venture capital is available as well. A third reason is the public opposition to GM crops in Europe. This has brought GM companies to leave the EU or to cancel research projects. Apparently, 61% of private EU biotech companies have cancelled GMO research schemes in the last four years.

Later this year a legislative framework for GMOs will enter into force regarding the labelling and traceability of GMO material in products as well as for food and feed derived from GMOs. Obviously, this framework is too late, considering the fact that a major part of biotech companies have already moved their activities from Europe elsewhere. Furthermore, I think this legislation is still unworkable because it sets thresholds which are in my view not measurable. A product must be labelled when it contains 0.9% GMO material, and a 'tolerance threshold" of 0.5% for adventitious GMO material which is not permitted but is considered to be risk free. These are such marginal quantities that I believe this can hardly be measured properly and places unnecessary burderns.

Ladies and gentlemen, looking at the plans and problems I outlined to you this morning, I think it is fair to say that policymakers throughout Europe have the right intentions, but a lot more needs to be done to stimulate innovation instead of hampering it. Deeds, not words! The European general attitude towards biotech needs to be changed fundamentally in order to shape the legal and economic framework which the biotech industry rightly deserves.