Global Perspectives on Industrial Biotechnology International Bioenergy Summit

Global Perspectives on
Industrial Biotechnology

International Bioenergy Summit 2012
November 5-6 2012
Yali Friedman, Ph.D. – info@thinkbiotech.com www.CommercialBiotechnology.com

Global Biotechnology

Global Biotechnology Overview
Location matters
• Workforce cost, availability
• Access to skilled management, supportive
services
• Proximity to innovative science and markets

Who is doing what, where?

www.CommercialBiotechnology.com


Technology producers vs. consumers

Innovators • Products tailored • Gain foreign
to domestic needs
currency

• Tax revenues
• Reliant on others to from domestic
develop products for
domestic needs
companies
Followers
• Non profit-enabling and workers
projects are unlikely to
attract investment

Importers Exporters


Strong market opportunities drive innovation

Why is the U.S. the world leader in biotechnology?
• World’s largest market for most biotechnology
products
– Not divided like European countries
• World’s strongest patent protection
• World’s largest absolute expenditures on R&D
– The U.S. once spent more on R&D than the rest of the
world combined
• No government price controls on drugs



Developing Country
Perspective
Case Study: Philippines
• Limited domestic drug production capacity
• Must purchase essential medicines from foreign
countries with higher wage-costs (e.g. Singapore)
– This is effectively reverse-offshoring
• Government has a limited budget, must make difficult
decisions about how much of which vaccines to buy
• Domestic production would reduce costs, preserve
foreign currency, keep revenues domestic, and could
train workers for innovative drug development



Acquiring Medicines
Develop a domestic drug development industry
• Pros: Can develop drugs for domestic needs, can drive
tax revenues, can derive foreign currency from exports
• Cons: Expensive, takes time, requires unwavering
government support

Buy drugs from foreign countries
• Pros: No need to invest in risky R&D, gain access to best
drugs produced by global leaders
• Cons: Expensive, depletes foreign currency, doesn’t
generate tax revenues



Solution: Produce foreign drugs locally

Weak patent laws enable domestic production of
drugs developed elsewhere
• Pros: Low-cost domestic production of many
drugs using domestic workers, tax revenues
from production and sales
• Cons: Reduced foreign investment by global
firms, reduced motivation to develop drugs for
locally-endemic conditions



Costs of Weak Patent Protection
India (mostly) adopts TRIPS accords in 1995
• Amends patent laws to protect product patents, with the
notable extra criteria that new drug products must
“differ significantly in properties with regard to efficacy”
• In 2007 Novartis failed to obtain a patent on Glivec (sold
as Gleevec in the US)
• Novartis CEO: unfavorable patent ruling is “not an
invitation to invest in Indian research and development.”
Company will redirect hundreds of millions of dollars in
investments to countries where it has greater IP
protection.



Who benefits from not patenting Glivec?

Novartis provides Glivec free to most patients in India
• Because Indian manufacturers would be unable to
compete with Novartis’ free domestic
distribution, their target markets would likely be in
other countries, where they could potentially
erode Novartis’ market.

Is India forfeiting investments from Novartis simply
so that Indian companies can sell Novartis’ drugs
abroad? Does this serve the public?



Overcoming weak/poor markets
Mectizan
• River blindness drug developed by Merck
• Affected individuals unable to pay for drug, so Merck
distributes the drug for free
• This model is unsustainable. Doesn’t incentivize
development of drugs for these conditions, instead
relying on companies to support tangential discoveries.

OneWorld Health, Bill & Melinda Gates Foundation, etc.
• Non-profit drug company solicits foundation support to
actively develop shelved drugs for neglected populations



Meeting national needs: Economic Development

Three basic models
India, Brazil, Thailand
• Weak IP, focus on generic production and foreign sales

Israel, Cuba, maybe India
• Moderate IP, leverage generic production skills to develop innovative
drugs

Singapore, Puerto Rico
• Strong IP, attract manufacturing investments from global leaders


Measuring Global Biotechnology
www.saworldview.com


Biotechnology is a Global Industry


Measuring innovation capacity


Top and Bottom


Brain drain


University-Industry Collaboration


Agricultural Biotechnology


Biotechnology paper output


Higher Prices = Faster Access


Innovation is still in legacy pharma countries


IP and R&D


Bottom line
• Internal development or external? Innovation or duplication
– Patent policy must be aligned with goals

• Build strong foundations:
– R&D activity
– Brain drain

• Support the business case
– Identify global best practices with local relevance
– Answer the question: Why India? Why now?


Global Perspectives on Industrial Biotechnology International Bioenergy Summit

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