Govt covers up conflict of interest in Corngate/The biotechnology bubble machine/Patents
The third item below provides a series of brilliant insights into the medical biotechnology industry from an industry insider - the author worked for 20 years in pharmaceutical industry. It demonstrates that plant biotech is not the only one headed for disaster, as well as providing some very useful statistics.
Here's some telling excerpts from the article which concludes: "How long this self-referential, pyramid structure of the pharmaceutical/biotech industries will remain standing is anyone's guess":
*...the depressing regularity of biotechnology failures has led to the realization that, "Far from delivering on its early promise of effective cures for exotic diseases, biotechnology has instead proved to be a complex endeavor, with high costs and long lead times requiring the financial stamina only big corporations can usually deliver"
*...the entire healthcare industry in the United States is set for a major fall and biotechnology will likely lead the way.
*...in spite of its colossal size, favorable publicity in the popular media, and two decades of effort, biotechnology's real contributions to human health and economic growth are pitifully few.
*[one of the market leading biotech companies] has spent massive amounts of money on clinical studies in an effort to demonstrate the superiority of tPA over its competition and to justify its high cost. Because tPA works no better than streptokinase, a bacterial enzyme used for the same purpose that costs ten times less[8], Genentech has spent millions of dollars marketing tPA aggressively.
*Because biotechnology had so little to show after two decades and billions of dollars spent, it used to puzzle me that most people working or investing in biotechnology companies never seemed to lose money. The reason for this, I came to realize, was the sector's incestuous nature. The way money is made is for certain biotechnology companies to merge with or acquire other biotech companies. Some bioscience companies are acquired by large pharmaceutical companies eager to obtain the special capabilities of the smaller fish. With each merger and acquisition, money and stock change hands.
*In order to forestall the eventual implosion, a new breed of biotechnology company has chosen to abandon the painstaking and often spotty laboratory approach to research in favor of using higher mathematics to exploit a genetic map of the human genome to 'better target' that research. The recent surge in bioinformatics companies may set a record for swiftness of disillusionment. Bioinformatics is gambling that the secrets to health and disease are waiting to be deciphered from the labyrinth of the human genome and proteome. The bioinformatics fad is based on the same misguided belief used partly to justify funding of the genome project: that complex human diseases, such as cancer and arthritis, are caused by 'bad' genes. Gene therapy - replacing bad genes with good - would be the logical solution to such diseases. But, the naive belief in gene therapy for complex diseases is inexplicable given that it has not even been attempted in a real, well-recognized gene disease, such as hemophilia.
*How long this self-referential, pyramid structure of the pharmaceutical/biotech industries will remain standing is anyone's guess.
The second item, as well as providing quite a useful legal history of the patenting issue, shows just how critical patents are to the biotech industry. It includes the interesting observation, "moral standards are clearly an unsatisfactory benchmark for establishing patentability... better definitions are needed". Immoral or amoral benchmarks are fine, presumably, though the article phrases it differently: 'rational and scientific' are the preferred terms. But then the stakes are high, US$3 billion of business are riding on the patent in Canada alone, according to the article. Clearly, it would be unwise to bring morality into such an equation! To judge by item 3 though, how much this colossus of an industry is really worth as a long term investment is more than open to question.
*GOVT. COVERS UP CONFLICT OF INTEREST IN CORNGATE
*Patenting pieces of people
*Wish you were here without GM foods
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Govt covers up conflict of interest in Corngate
April 9, 2003
New Zealand National Party Press Release
National is crying foul that David Cunliffe, the senior Labour MP and deputy chair of the Select Committee undertaking the 'Corngate' inquiry, didn't disclose that his wife acted for a biotechnology company involved in a GM maize contamination case.
"It is scandalous that Mr Cunliffe failed to disclose a conflict of interest involving his wife, Karen Price, to the committee, but instead used his position to frustrate the inquiry at every step," says National's Environment spokesman, Nick Smith.
"David Cunliffe was pivotal in watering down the terms of reference, blocking the appointment of a technical advisor, cutting communication between committee members and the technical adviser and stopping further testing of the corn.
"His sudden resignation last week was explained away by the Government as a 'workload' issue. This was clearly a smokescreen for the conflict of interest over his wife, a conflict that should have been disclosed.
"The irony is that in an inquiry looking at whether the Government was involved in a cover-up, the Government has covered up the real reason for its lead MP resigning.
"These actions also contradict Helen Clark's pre-election commitment to a "policy of total disclosure" over the select committee inquiry into Corngate.
"This is like a judge not declaring that his wife is acting for the defence. Mr Cunliffe's conduct calls into question the many decisions made by the select committee on this inquiry over the last six months, a committee on which Mr Cunliffe has been very influential.
"If this inquiry is now to have any credibility, it should revisit all the decisions involving Mr Cunliffe."
Dr Smith says he is seeking advice on a possible breach of privilege case against Mr Cunliffe.
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Patenting pieces of people
Nature Biotechnology, Vol 21 (4), p. 341, Editorial
April 2003
Something very strange is going on in Canada. While patent offices in the United States and Europe have been granting patents on all things genetically modified - whether microbe or mammal, human or nonhuman-derived material - Canada has decided to call everything to a halt. At the end of 2002, the Supreme Court of Canada took the unprecedented step of ruling that the country's Patent Act must be amended before Canadian courts can continue to consider biotechnology patent applications on higher forms of life (Nat. Biotechnol. 21, 9, 2003).
The stakes are high. According to industry association BIOTECanada, around 400 Canadian companies generated US$3 billion of business in 2002, making the sector the second largest in the world after the United States. If the Canadian parliament disqualifies certain areas of biotechnology research from patent protection, multinational companies could flee and commercialization of Canadian research could be stymied - 99% of companies rely on patents (rather than products) as their sole source of value. No patents equates to no funding equates to no companies. Intellectual property drives research. As BIOTECanada's president puts it: "The decision stops our pursuit of knowledge and innovation dead in [its] tracks. It is a great loss to Canada at both the social and economic level."
The critter that precipitated this crisis is none other than the Harvard Oncomouse, a transgenic mouse line carrying a human v-Ha-ras oncogene fused to a mouse zeta-globin promoter. The Oncomouse has been courting controversy ever since Phil Leder, Timothy Stewart, and Harvard University were first granted patents by the US Patent and Trademark Office (US PTO) in 1988 and the European Patent Office (EPO) in 1992. Since then, oppositions to the European Oncomouse patent have been filed by numerous individuals, animal-rights groups, church organizations, the campaign against "patents on life," and various factions of the German Green party. The patent remains valid.
Controversy over patenting living creatures is nothing new. The issue first reared its head in 1972 when Ananda Chakrabarty applied for a US patent on a bacterium engineered to break down petroleum in oil spills. At the time, the US PTO denied the application, but the decision was later overturned in a federal court appeal, which in turn was appealed by the patent office in March 1980. In the subsequent ruling, the
justices held that Congress intended "anything under the sun that is made by man" to be patentable, including living bacteria. A 1987 case known as Ex parte Allen extended the principle to nonhuman multicellular organisms. Following issuance of the Oncomouse patent in 1988, the floodgates opened and all manner of transgenic fauna (rats, rabbits, fish, sheep, pigs, and cows to name a few) have now been patented.
In contrast to the US PTO's 'open door' approach to patenting animals (and the movement of the EPO in the same direction), the Canadian Intellectual Property Office has remained reluctant to grant patents on transgenics. Initially rejecting the Oncomouse patent in 1985, it stated it had no authority to grant ownership rights over a species of mammal.
A Canadian federal court upheld this decision in 1998, but two years later, the appellate court overturned the ruling and Harvard got its patent. Now, in the latest twist of the mouse's tale, the Supreme Court of Canada has upheld an appeal by the Canadian Intellectual Property Office, ruling that the Oncomouse does not constitute a "composition of matter" and therefore does not qualify as an invention worthy of a patent. The court went on to state that higher life forms could only be patented "under the clear and unequivocal direction of the Canadian parliament."
At present, human beings are unique in being the only living creatures that remain off limits to patents. No country's patent system has yet found a way of extricating itself from the philosophical and political morass associated with patent applications that encroach on definitions of humanness. In 1998, US PTO's former commissioner Bruce Lehman refused a patent application for human and animal chimeras filed by biotechnology provocateurs Jeremy Rifkin and Stuart Newman. As the basis for rejection, Lehman invoked a moral utility doctrine set by an obscure federal court decision in 1817. Essentially, he argued "there will be no patents on monsters."
But moral standards are clearly an unsatisfactory benchmark for establishing patentability: morality (like obscenity) is one of those things that arbiters (more specifically, patent examiners) are likely to have a hard time defining. Clearly, better definitions are needed. One potential criterion, for example, could be to reject patent applications on any product that requires the use or inclusion of human embryos over 14-days old (the point at which development of the nervous system and potentially human sentience begins).
If Canadian legislators adopt policies that broadly restrict patents on any human-derived products, the Canadian patent system could end up discriminating against a multitude of biotechnology products. Indeed, if the parliament prohibits patent protection for biotechnology therapies containing any material derived 'from human bodies at any stage of development' - as proposed in a report published in February by the Canadian Biotechnology Advisory Committee (see p. 351) the consequences for Canadian biotechnology could be dire. Certainly, the prospects for Canadian companies intending to develop stem cell therapies (derived from human embryos) look bleak.
The job of the courts is to interpret the law as written. It is appropriate that legislators should tackle larger ethical and societal questions. The decision of the Canadian court to let lawmakers, rather than judges, define the breadth of reach of patent laws is laudable, given widespread public concerns about the commoditization of humans and human body parts. But legislation clarifying the scope of patents on higher forms of life should steer clear of moral and ethical definitions. We need to stick to rational and scientific benchmarks that can be practically applied by patent agencies.
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The biotechnology bubble machine
Nature Biotechnology, Vol 21 (4), p. 355-356, by David Rasnick
April 2003
The Biotech Advisor newsletter[1] informs potential investors that biotechnology is "not the stuff of which bubbles are made." The reason biotechnology is so exciting, and such a great investment, we are assured, is because...
"[I]t's for real. It's substantial. It's not going away. Biotech companies aren't run by twenty-something MBAs with green hair whose lifelong goal is to cash in and retire by age 30. Biotechnology companies are managed by some of the smartest - and most ethical - people in the world: scientists, physicians, and top managers who have dedicated their lives to improving human health. These folks are smart enough to realize that the only way they're going to get rich is if the stockholders get rich. And the only way the stockholders are going to get rich is if their products work - if they pass five to eight years of testing that costs upwards of $800 million, culminating in approval by the toughest regulatory agency on earth, the US Food and Drug Administration."
Even within the pharmaceutical industry, biotechnology is different. Unlike the 'meds' in your bathroom cabinet (pills, creams, tablets, etc.), which pretty much only treat your symptoms, biotechnology products offer the potential for effective, long-lasting treatment for the root causes of such chronic diseases as cancer, diabetes, and heart disease. In some cases, biotech products (e.g., gene therapy) could even cure certain illnesses. That's the hope and the promise - the reason large pharmaceutical companies like Merck and Pfizer continue to pour billions into biotechnology, through partnerships and through their own home-grown biotechnology efforts. And that's also why individual investors also need to give biotechnology stocks a hard look[1].
However, the depressing regularity of biotechnology failures has led to the realization that, "Far from delivering on its early promise of effective cures for exotic diseases, biotechnology has instead proved to be a complex endeavor, with high costs and long lead times requiring the financial stamina only big corporations can usually deliver"[2].
While biotech continues the Sisyphean effort to realize its promise, the healthcare industry as a whole appears to thrive in a period of economic malaise. In a recent article in the New York Times, Henry A. McKinnell, the chief executive of Pfizer, said that while "The telecom industry and the financial industry have crashed[,] [w]e're still growing"[3] . Some of the people who once worked in the Northeast's technology sector have found a refuge in the healthcare industry. The Northeast has a higher proportion of healthcare workers than any other region of the country. In New York City, for example, 40% of the largest private employers are medical institutions. In Philadelphia, the figure is 70%2 . But this is a temporary refuge at best because the entire healthcare industry in the United States is set for a major fall and biotechnology will likely lead the way.
There are 1,457 biotechnology companies in the United States, of which 342 are publicly held 4. The total value of publicly traded biotech companies was $224 billion as of early May 2002. The biotechnology industry has more than tripled in size since 1992, with revenues increasing from $8 billion in 1992 to $35.9 billion in 2001 (ref. 5 ). The US biotechnology industry currently employs 179,000 people; that's more than all the people employed by the toy and sporting goods industries. Many biotechnology companies are small startups that disappear in a couple of years only to be replaced by a new crop of startups eager to recycle the highly skilled workforce.
Biotechnology is one of the most research-intensive industries in the world. The US biotech industry spent $13.5 billion on research and development in 2001 (ref. 5 ). The top five biotechnology companies spent an average of $89,400 per employee on R&D in 2000. Yet, in spite of its colossal size, favorable publicity in the popular media, and two decades of effort, biotechnology's real contributions to human health and economic growth are pitifully few. Only one of 16 regions in the United States where biotechnology has a significant presence showed net income for 1999 (ref. 6). And that income was largely due to Amgen (Thousand Oaks, CA) and a handful of other companies5, 6. Overall, publicly held biotechnology companies showed a loss of more than $5.3 billion in 2001 (ref. 5).
Amgen's Epogen and Neupogen, which stimulate the bone marrow to produce more red and white blood cells, respectively, are biotechnology's biggest moneymaking drugs. One of the main uses of both drugs is to treat the toxic effects to the bone marrow caused by chemotherapy for cancer and AIDS. Developing drugs to treat the toxic effects of other drugs has become a growth industry. Since 1996, 11 such drugs were approved by the US Food & Drug Administration (FDA; Rockville, MD) (ref. 7).
Genentech (S. San Francisco, CA) - one of the companies that pioneered the biotechnology sector and produced such groundbreaking products as recombinant insulin and human growth hormone - also brought us tissue plasminogen activator (tPA), a recombinant human factor used to prevent blood clots after heart attacks. The company has spent massive amounts of money on clinical studies in an effort to demonstrate the superiority of tPA over its competition and to justify its high cost. Because tPA works no better than streptokinase, a bacterial enzyme used for the same purpose that costs ten times less8, Genentech has spent millions of dollars marketing tPA aggressively.
Biogen, the world's oldest independent biotechnology company, is still trying to find a use for its otherwise highly profitable recombinant interferons, which have been sold for 17 different types of cancer, viral infections, hepatitis, hairy cell leukemia, Kaposi's sarcoma, AIDS, and multiple sclerosis.
These examples epitomize the triumphs of biotechnology. Most of the remaining 140 or so biotechnology products are not moneymakers either because FDA approval is for rare diseases with small markets or because they just plain don't work.
Because biotechnology had so little to show after two decades and billions of dollars spent, it used to puzzle me that most people working or investing in biotechnology companies never seemed to lose money. The reason for this, I came to realize, was the sector's incestuous nature.
The way money is made is for certain biotechnology companies to merge with or acquire other biotech companies. Some bioscience companies are acquired by large pharmaceutical companies eager to obtain the special capabilities of the smaller fish. With each merger and acquisition, money and stock change hands. A recent example is Amgen's $16 billion acquisition of Immunex (Seattle, WA)9 . A sure way to make money (though less glamorous) is by providing the technical reagents and equipment used by other biotechnology companies.
In order to forestall the eventual implosion, a new breed of biotechnology company has chosen to abandon the painstaking and often spotty laboratory approach to research in favor of using higher mathematics to exploit a genetic map of the human genome to 'better target' that research. The recent surge in bioinformatics companies may set a record for swiftness of disillusionment. Bioinformatics is gambling that the secrets to health and disease are waiting to be deciphered from the labyrinth of the human genome and proteome. The bioinformatics fad is based on the same misguided belief used partly to justify funding of the genome project: that complex human diseases, such as cancer and arthritis, are caused by 'bad' genes. Gene therapy - replacing bad genes with good - would be the logical solution to such diseases. But, the naive belief in gene therapy for complex diseases is inexplicable given that it has not even been attempted in a real, well-recognized gene disease, such as hemophilia.
How long this self-referential, pyramid structure of the pharmaceutical/biotech industries will remain standing is anyone's guess.
REFERENCES
1. The Biotech Advisor (Charter Financial Publishing Network, Shrewsbury, NJ, 2002).
2. Ackerman, J. A promise unfulfilled in biotechnology: decline and fall of Alpha-Beta speaks volumes about pitballs of industry. The Boston Globe, February 10 (1999).
3. Leonhardt, D. Northeast Quietly Becomes a Health Care Corridor. New York Times, December 30 (2002).
4. http://www.bio.org/news/stats.asp
5. Lähteenmäki, R. & Fletcher, L. Nat. Biotechnol. 21, 551-555 (2002).
6. Feldbaum, C.B., Convergence: Ernst & Young's Biotechnology Industry Report, Millennium Edition (E&Y, New York, 2000).
7. http://www.bio.org/er/approveddrugs.asp
8. Lee, K.L., et al. Ann. Intern. Med. 120, 876-885 (1994). | PubMed |
9. Federal Trade Commission. Resolving Anticompetitive Concerns, FTC Clears $16 Billion Acquisition of Immunex Corp. by Amgen Inc. (FTC, Washington, DC, 2002).
David Rasnick is chief science officer of Boveran (San Ramon, CA)
e-mail:
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Wish you were here without GM foods
York Evening Press, 9 April 2003
by Chris Greenwood
CAMPAIGNERS are to build a giant collage of postcards calling on City of York Council leaders to clear genetically-modified foods from their plates.
The protesters want the city council to declare itself "GM-free" and to take steps to stop crops that have been genetically-altered from being grown on their land.
Members of York and Ryedale Friends of the Earth believe such crops could contaminate other plants and damage our food and the environment.
The all-day event, on Saturday, will be part of a nationwide movement of up to 70 protests staged by the GM-Free Britain Campaign.
Organiser Josie Downs, of Friends Of The Earth, said: "We are building this collage to show the council that people in York do not want their food, farming and wildlife threatened by GM pollution.
"This is a crucial time in the GM debate because the Government will soon decide whether to allow GM crops to be commercially grown in the UK.
"If this happens, our right to continue to choose GM-free food will disappear. Other councils have taken a stand against GM crops and food by voting to go GM-free. We want York Council to make the same commitment."
The group is calling on City of York Council to write to the European Commission and the UK Government asking them to prevent particular crops from being grown here.
Campaigners are also asking the council to ensure that no GM crops are grown on publicly-owned land and to adopt a GM-free policy for goods and services.
New European legislation gives local authorities more powers to gain legal protection for their area from particular types of genetically-modified crop.
A spokeswoman for the council, said: "As with all petitions, we will ensure that the collage is handed over. It is up to councillors to debate and discuss the issues surrounding GM produce and farming and to decide on an appropriate policy for the council."
The protest will take place in Parliament Street, outside the Marks & Spencer store, on Saturday from 10am onwards.
Updated: 09:06 Wednesday, April 09, 2003