Reaching out: BIO abroad

People say the world is getting smaller. In some ways, that’s true. Global trade, the Internet, affordable international travel and instant communications have all made access easier. If you’re a biotechnology company today, you’re as likely to sell product in China as in Kentucky. But paradoxically, a smaller world is also a bigger world: greater ease of doing business means more business to do.

Developing countries provide huge opportunities for those who can operate effectively in them, but there are dangers too. And even though one of the symptoms of our shrinking world is that law, rules and regulations are trending towards harmonisation, there is a long way to go before companies can have confidence that they will be treated the same way wherever they operate.

That’s where the Biotechnology Industry Organization (BIO) comes in. Joe Damond, senior vice president of international affairs, is responsible for advancing the interests of the biotech industry around the world.

Although BIO is a US-based organisation, Damond highlights strong international membership and increasing engagement in the organisation by businesses from around the world. “These reflect both a growing interest in foreign countries in the biotech sector and the globalisation of the industry itself,” he says. “For those reasons, there was a desire to expand BIO’s engagement in international issues.”

Integral to the success of that department is Lila Feisee, vice president of international affairs, who has 10 years’ experience at BIO and particular expertise in how the organisation approaches the sometimes tricky issue of IP. She is helping organise and guide BIO’s international efforts.

Damond is clear about the organisation’s aims. “Our objective is to help foster a positive environment for the biotech industry overall, as well as in the countries in which we’re talking about,” he says. “It’s not just on behalf of the US industry that we’re doing this.

“TRYING TO ESTABLISH THE BIO AS A SOURCE OF USEFUL INPUT FOR HELPING COUNTRIES ACHIEVE SOME OF THEIR NATIONAL GOALS IS A TARGET.”

We’re trying to promote policies and business environments and related environments, for example in the academic world, that help foster biotech research and development and commercial enterprises. That will be good for our members, regardless of where they’re located, and it will be good for the countries involved. They’re very interested in the question of what policies they should adopt to help foster a successful industry.”

While BIO could usefully wield influence in many jurisdictions, especially where there is no local equivalent organisation, clearly some places are more important than others. BIO members have asked the organisation to focus on the big emerging markets, Damond says, because of the high levels of growth in healthcare and all industry segments.

There are two prongs to this: those markets provide potentially lucrative sales opportunities but, more interestingly, in several emerging markets there is considerable interest in developing a native biotech industry, which means there are opportunities for developing partnerships on the ground. “There is some good science being done in those industries, particularly in China, India and Brazil, and there’s also interest in Russia and Turkey,” Damond says.

There are difficulties in all jurisdictions, but China and India, as the largest, have the most potential for both success and distress. Damond admits that BIO is “just getting off the ground in both ... our first step needs to be to establish relationships with some of the key government and business people, and non-government stakeholders, in those countries and educate them about BIO and the work we do”.

“IN EXCHANGE FOR THAT, THERE WAS A STRONGLY NEGATIVE PERCEPTION CREATED FOR THE GLOBAL INDUSTRY, IN TERMS OF INDIA AS A PLACE TO DO BUSINESS.”

Trying to establish the organisation as a source of useful input for helping countries achieve some of their national goals is a target, which means travelling to these markets, meeting some of the key people, and establishing credentials. “The goal is developing a good dialogue with those governments and as that develops, we will get into the policy area and say ‘OK, what are you doing right, what aren't you, what more could the country be doing to develop innovation?’,” Damond says.

Feisee highlights some of the work BIO is already doing. “We had our first BIO China conference in Shanghai last October. It was well attended [and featured] partnership opportunities for the western companies that participated with Chinese companies.

"We’re doing another this year in October. For the past two years in India, we’ve held the BIO India conference in Hyderabad which has been mostly a partnering meeting, but we managed to have a few policy discussions and round tables as well. Those are things we can build on.”

India is perhaps the most complicated of all jurisdictions for the biotech industry. A huge, largely untapped market sits uneasily against a culture and political infrastructure that can be contradictory, especially where IP is concerned.

“There are definitely different perspectives on the industry within the country,” Damond says, “but there seems to be a desire to develop the biotech industry and make the pharma sector more innovative. On the other hand, with respect to IP and medicine, you find that there really isn’t coherent policy-making in this area within the Indian government.

“COUNTRIES WILL CONTINUE TO ENGAGE TO THE EXTENT THAT THEY CAN IN INDIA AND THAT THEY FEEL WILL BENEFIT THEM, BUT IT’S A BIG WORLD, AND THERE ARE OTHER MARKETS.”

There are various pockets within India—some are pulling in one direction and some are pulling in the other and I think one of our tasks is going to be pointing that out and then working with them to get the right kind of policies adopted.” That’s no easy task, especially since beyond central government, the Indian states also have a role in policy-making. That’s a double-edged sword, but does at least hold out the promise for BIO of making local partnerships that may work as leaders for the rest of the country.

One particular challenge in India is exemplified by the recent Nexavar compulsory licence case in which local company Natco won a compulsory licence to sell Bayer’s cancer drug. “In a nutshell, there are ostensibly some benefits in this narrow disease area, that the Indian government was pursuing by issuing that compulsory licence,” Damond says.

“What they don’t seem to have taken into account is that in exchange for that, there was a strongly negative perception created for the global industry, in terms of India as a place to do business. And it’s not just the biotech industry, but any industry involved in global innovation.” The question is, was the Indian government considering all the implications of that policy?

“There were better alternatives to pursuing that course,” Damond argues. “India took a blow in terms of the international media and our internal member companies. Had they seen the full ledger of the pros and cons, I think they might have taken a different course. But that’s exactly the problem—people didn’t care about the broader perspective and were only looking at it narrowly.”

The answer lies in making the IP issue real in India and having a dialogue about what is really at stake. “As more Indian companies develop IP and have a stake in it globally, that will have some influence over policy. But the other thing is to try and have a dialogue with government about the cost benefits,” Damond adds.

It’s not even clear that the compulsory licence has resulted in any benefit for patients. Feisee points out that “the compulsory licence was issued to Natco, which wanted to sell the medicine at a price beyond what the ordinary Indian can afford so, in essence, the people that the licence was supposed to help, have not been helped".

Given the potential size of the Indian market, it may seem as though companies will just have to put up with the caprices of the Indian system. Not necessarily, says Feisee. “You say companies are unlikely to pull out of India as a result. If the compulsory licence is just one issue and there are no other grievances then I’m sure companies would overlook it, but at some point, they’re going to do a risk:benefit assessment and say ‘OK, India is a huge market but a lot of other markets are now emerging’,” she says.

“One of the factors our companies are looking at now is the third wave of emerging markets. Yes, I’m sure countries will continue to engage to the extent that they can in India and that they feel will benefit them, but it’s a big world, and there are other markets that our companies are also very interested in looking at.”

“THE DISCLOSURE ISSUE IS AN IMPORTANT ONE, AND IS UNDER DISCUSSION AT WIPO’S INTER-GOVERNMENTAL COMMITTEE IN RELATION TO GENETIC RESOURCES, FOLKLORE AND TRADITIONAL KNOWLEDGE.”

Of course, engagement on a country-by-country basis is not the only way to tackle the problem. To that end, BIO continues to engage with international organisations such as the World Intellectual Property Organization (WIPO), the World Trade Organization and the World Health Organization. “The World Health Assembly meeting was in May and one issue we’ve been following closely is the possible initiation of an R&D treaty or convention, which has some aspects that are worrying,” Damond says.

“In WIPO, there are ongoing discussions of various issues surrounding genetic resources and the disclosure of patent holders, including whether patents could be suspended if there’s a lack of disclosure.”

The disclosure issue is an important one, and is under discussion at WIPO’s intergovernmental committee in relation to genetic resources, folklore and traditional knowledge. A text has already been compiled, including the controversial disclosure requirement, suggested by those who are concerned that their materials are being accessed inappropriately. “We don’t think any special disclosure requirements for genetic materials are necessary,” Feisee says.

“It would have severe unintended consequences because of the investment that goes into the research and development of biotech products, which generally use genetic material as their starting material. That kind of investment will probably not be made if there’s a chance that patents will be either appropriated at the end, denied, or held unenforceable because of these requirements. To us, it’s not only unnecessary but will in fact hinder the biotech sector from moving forward in some countries.”

BIO aims to be a strong and effective advocate for an industry that, despite the uncertain economic climate, continues to perform relatively well, not least because, at heart, it’s an industry that depends on inventiveness as much as it does on money. The trick, it seems, is working out how to ensure that the industry’s future is not jeopardised by wayward and counterproductive policymaking, both nationally and internationally. It’s certainly a challenge.