January 16th, 2003

Palermo University, Italy

To introduce myself, I was the Rapporteur of the European Parliament’s report on the future of the biotechnology industry, which was adopted in March 2001. Some were surprised by its very positive approach. But I believe it is high time to take action and promote the European biotechnology industries and the Parliament endorsed this line with a good majority. It is incumbent on politicians at the European, national and local level to provide the environment which allows you in the field of life sciences to develop and prosper. I hope this morning to explain to you some of the key points of the Parliament's position on biotechnology and to mention some other relevant issues which are being discussed currently at the European level.

At the Lisbon summit in March 2000, the leaders of the EU Member States declared their ambition to make the EU the most dynamic and competitive knowledge-based economy in the world. Biotechnology was singled out as an area of great potential promise. It is consistent with this ambition that we should support an industry that turns ideas into products, and thereby creates prosperity and high quality employment – two key aims of the European Union.

In recent years we have seen good growth of biotech in Europe, but the USA still dominates. There are more companies in European life sciences than in America, but we have just over a third of the employees, R&D expenditure is less than half, revenues only a third compared with the US. We are also facing tough competition from Brazil, Canada, China, India, Israel, Japan, Singapore, and others and are in danger of being left behind to become a customer rather than a producer.

My report called for an EU Action Plan to co-ordinate EU and national initiatives, to exchange best practices and identify where European action would be valuable. Mr Prodi, the President of the Commission, himself assumed responsibility for coordinating and cajoling his colleagues in the various specialist areas concerned to give biotech the priority it deserves and so badly needs.

The Commission responded with an Action Plan early in 2002. Even so, I believe the Commission is not doing enough fast enough. The industry has expressed quite rightly its concern that momentum is being lost with the focus shifting to the topic of enlargement during Spain’s and Denmark's presidencies of the Council during 2002. With the current Greek presidency this is unlikely to change significantly as the Convention on the future structure of Europe takes centre stage. One hope is that the Spring Council meeting will be assessing progress towards the Lisbon targets and surely biotech will be an issue in this.

To help the industry catch up, we must support it in several areas. Firstly in research. 1.6% of Europe's GDP is spent on research, compared with 2.8% in US and 2.9% in Japan. While much should be expected from the private sector, public funding is very necessary for research at the pre-competitive stage and to promote interdisciplinary and trans-Europe research collaboration.

1st January 2003 saw the start of the EU's 6th framework research programme with its budget of 17.5 billion euro. In this Parliament and Council endorsed the priority status of biotech research, the establishment and development of an European Research Area, and encouraging the creation of centres of excellence. Under the life sciences priority, the Parliament voted for €1.3 billion to be allocated to genomics and biotechnology for global health and welfare. It also voted to include biotech projects under the Food Quality and Safety area and under the Sustainable Development priorities.

The Parliament’s report called for a “stairway of excellence” to ensure the involvement of SMEs and smaller university units. I had also received many complaints from researchers about the cumbersome application process and general red tape. So Parliament has instructed the Commission, which manages the programme, to make this as straightforward as possible in order to encourage participation. This was an aspect we are determined to keep after and would be pleased to hear from researchers, including you here in Palermo, if you find difficulties with the bureaucracy.

The most worrying area of research is in agriculture and especially plant science. The percentage of new biotech companies across the EU involved in agricultural biotech has dropped dramatically over recent years. It is ironic that GM plants and crops, developed to reduce the use of herbicides and pesticides, or to provide the poor of the world with reliable and healthier food supplies in arid or saline soil conditions, have attracted such opposition from environmental NGOs. Sadly the biotech industry in Europe has failed to demonstrate adequately the benefits of this technology. Accordingly, the public’s attention has focused on potential environmental risks and imagined food dangers and the resulting regulatory regime tends to be very precautionary.

As an example, approval of the deliberate release of GMOs into the environment involves a tortuous procedure. First there has to be an assessment of the risks to human health, animal health and the environment prior to release. The manufacturer or importer must notify the competent authority of the Member State, where the product is to be placed on the market, with a risk assessment. If accepted, the information is sent to the European Commission and all the other Member States, who may raise objections. If there are objections, the Commission can put forward a favourable opinion to be decided by the Regulatory Committee, composed of representatives of the Member States, or a proposal is put forward to the Council which requires a qualified majority.

After all this, Member States have still put temporary bans on GM products for precautionary safety reasons, even when the Commission’s Scientific Committees have said the ban is unjustified. Is it surprising that nothing has been approved for four years?

Prior to the moratorium we saw four varieties of maize, one variety of soybean and three varieties of oilseed rape approved for release in the EU, while China approved 26 applications for commercialisation, 59 for environmental release and 73 for field trials (between 1997 and June 1999).

It is hoped that the new European Food Safety Authority will be able to speed up the approval process and make sure that decisions are solely science-based. The Commission has also proposed a revised directive to strengthen the rules on risk assessment and we now have a directive requiring mandatory information to the public by way of labelling and traceability at all stages of placing on the market. While evidence of action of some kind is reassuring, the traceability requirements on commodity products like soya bean oil are extremely burdensome and probably unworkable and will only lead to more trade wars with the USA. And even though this legislation was supposed to break up the log jam, there is every sign that some member states, urged on by extreme environmentalist NGOs, will still refuse to lift the moratorium. Meanwhile, European biotech companies are left with a very uncertain scene in which to plan their future.

Biotechnology for health, on the other hand, is an area which has seen some success in Europe. The pharmaceutical industry, a key industry in the EU, is a major investor in biopharmaceuticals. However it too is hindered by the Community’s regulatory system, the complex and expensive patenting regime and national price and profit controls in state-run health services. A more open, competitive market and a less costly and more efficient regulatory system would attract business, research and top quality jobs to Europe.

In the Parliament there has been much discussion about the directive on the legal protection of biotechnological inventions, due to concerns that this allows the patenting of life and prevents others from undertaking development and research. I don’t believe this to be the case. A patent must have an industrial application, it does not give ownership, and, as patents are published, the knowledge becomes accessible to others. The protection of intellectual property rights provided by patents are an essential incentive to research and innovation. It is unacceptable that, since being adopted by the Parliament and the Council, with a deadline of July 2000, only 6 Member States out of 15 have transposed this directive into national law. I am sad to say that Italy is one of the countries which has not transposed this legislation even though it approved it in the European Council of Ministers. The law is the law and the Commission is bound to uphold the law by firm and timely action. In December it sent an official demand to Italy and the other member states that they do follow through. Can I suggest that you also bring pressure to bear on your representatives in Rome.

The Parliament is also discussing the proposal to introduce a single Community patent that would coexist with the national and European systems. Here the argument revolves around the perennial European problem of language. Only by reducing the requirement to two or three languages instead of eleven will the cost and hassle be made competitive with other jurisdictions.

To promote biotech and, in particular, to help smaller innovative and start-up operators, the right financial environment and ready access to risk capital is essential. The European Investment Fund has €3-4 billion to invest in 2001/2003 in venture capital funds for new companies. However, there is still a major problem in getting initial investment – often family, friends and private business angels are important for the earliest stages. But these people need incentives to take on the considerable risks. I believe Member State governments must offer much more favourable fiscal environments and, in particular, much more friendly capital gains tax regimes for stock options. Academic researchers must be encouraged to spread their wings into the commercial world in order to exploit the scientific innovations they have realised

Apart from finance, venture capitalists and business angel investors bring business acumen and management skills. A culture of enterprise needs to be fostered in Europe. Both scientists and entrepreneurs need to be conscious of the commercial potential of research, and be prepared to work together to transpose ideas into prototypes and then into commercial products.

The general public also needs to be better-informed. While surveys show that the majority of consumers would not buy GM products, many do not really understand why. In the Eurobarometer survey of 1999, they were asked to respond true or false to the statement “ordinary tomatoes do not contain genes while genetically modified tomatoes do." - 35% agreed, 30% did not know. Scares such as Mad Cow Disease have made people sceptical about assurances they receive from scientists and politicians. Efforts must be made to restore confidence by providing consumers with well-balanced information on the benefits and the potential risks.

Discussion on setting boundaries to how far scientific research can go, has been the subject of huge debate. The European Parliament’s Temporary Committee on Human Genetics and our main Industry and Research Committee have returned again and again to the topics of embryonic stem cell research and therapeutic cloning.

I agree that human dignity must be safeguarded and limits must be set. Genetic engineering, however beneficial in eliminating dread hereditary diseases and disabilities, must not extend into eugenics. But what human dignity is there in Alzheimer’s? Europe will be left behind both in research terms and the development of new treatments if we hobble research in these areas and do not invest substantially in this promising area for advance.

For this reason Prof. Nistico, myself and other colleagues tabled a compromise amendment to the EU’s research programme giving priority to research on adult stem cells but allowing funding of research on early stage embryos, up to 14 days old and which genuinely result from in-vitro fertilisation, from spontaneous miscarriages or from therapeutic abortions, and which are destined in any case for destruction, in Member States where this is permitted by law and where there is strict regulation. This compromise was adopted by the Parliament, and was welcomed by the Commission. Unfortunately, after first ducking the issue, the Council of Ministers at the last moment (we understand instigated by the Italian government) placed a block in the way of such research. The Parliament objected vigorously and so we will be holding a debate with the Council over the next few months with the objective of reaching a conclusion before the end of the year.

The ethical differences in the Parliament (as elsewhere in society) are considerable and firmly held. The Genetics Committee’s report was rejected in the final overall vote by a massive majority but for completely opposite reasons. Probably that means it would have been just about right! In any case, it must be for the individual Member States to decide what should or should not be permitted on their territory, while it is quite proper for the EU to fund research which is legally permitted in a Member State and which is adequately supervised. This was in fact the outcome of the 6th research framework programme vote in the Parliament and rejection of the Genetics Committee’s report. It is regrettable that vested interests have persuaded certain member state governments to put a spanner in the works at the eleventh hour.

We have many problems still to overcome in Europe if biotechnology is to get ahead and keep pace with our competitors. Fine words are cheap. Action is more difficult – and action is badly required. I look to the European Commission’s Action Plan to set a forceful pace. I look to the Member States to stand by their declarations at Lisbon and Stockholm to make Europe the most dynamic and competitive knowledge-based economy in the world. Meanwhile, rather surprisingly, it is the European Parliament (representing the people of Europe) which is proclaiming – let’s get going!

I’m sure Sicily will be right up there, leading the way. But don’t forget to take the public with you.