Middle ground on biotechnology satisfies no one

By SIMON COLLINS

Can New Zealand business keep up with the leaders in biotechnology under the yoke of the world's tightest "gold-standard" regulations?

Should we even be trying to keep up with a kind of biotechnology - genetic modification - that many New Zealanders, and many of our customers, view as too risky?

A strategy published by the Government today sets out a series of initiatives to ensure that the answer to the first question is "yes".

"While it is in our trading interests to keep a gold standard for safety, we must do so in a way that supports innovation and does not load the system with unnecessary complexity and costs," it says.

Implicitly, it argues that "gold-standard" regulations will also persuade New Zealanders and their customers that any genetically modified organisms (GMOs) meeting those standards will be safe.

"This strategy is about development with care," it says.

But in plumping for this middle line, it risks alienating both business and consumers.

Business giant Fonterra, which spends $42 million a year on biotechnology, said in its submission on the draft strategy: "It is presently [sic] often a better option for NZ companies to contract GMO work out to Australia, where work that would have prohibitive compliance costs or too much uncertainty as to outcome in New Zealand can be carried out."

AgResearch said last year that seeking regulatory approval to genetically modify cows to produce milk with medically valuable proteins cost $500,000 and frightened off a US venture capital firm that had been a potential partner.

Its permit is still subject to a High Court challenge starting on June 9.

For consumers, Sustainability Council executive officer Simon Terry said the strategy failed to do the key thing - choose the kind of biotechnology we want to encourage.

"The problem with the document is that it promotes the biotechnology sector in general, when that is not the issue," he said.

"The issue is what parts of biotechnology are to be favoured." In his view, GM medicines were fine, but GM foods would only scare buyers away.

The Royal Commission on Genetic Modification recommended in 2001 that New Zealand should "keep its options open" by weighing the benefits of each application for GM research or use against its potential environmental and other risks.

It said the Ministry of Research, Science and Technology should develop a strategy "to ensure that New Zealand kept abreast of developments in biotechnology and that these were used to national advantage while preserving essential social, cultural and environmental values".

A discussion paper issued by the ministry last October proposed an industry "code of best practice" covering "ethically and culturally appropriate behaviour", systems for seeking ethical and safety approvals for research, and guidelines on public participation.

Submissions were received from 38 individuals and 43 organisations, which were split between anti-GM groups and the biotech industry.

Jean Anderson of Physicians and Scientists for Responsible Genetics condemned the Government's "naive enthusiasm" for GM, the state's biotech research spending estimated in the discussion document at $186 million a year.

"The public are unaware of how severely scientists and departments have been purged from our universities to make way for genetic engineering biotechnology," she said.

But Auckland University, in a submission signed off by deputy vice-chancellor (research) Tom Barnes, said the high costs and delays involved in regulatory processes were causing "frustration and demoralisation" in research labs.

The ministry's discussion paper included a complicated diagram showing all the approvals required under the present regulations

New medicines, for example, had to pass through ethics committees and Health Ministry officials as well as the Environmental Risk Management Authority (Erma).

Yet after all that, today's final strategy document simply reproduces the same diagram without any proposed changes.

"That comprehensive web of regulations does provide a very thorough set of controls to ensure that what is developed and applied is done so in a safe and responsible way," said ministry chief executive Dr James Buwalda.

"People in New Zealand should draw some comfort from that extent of coverage and overlap."

The idea of a code of practice has been dropped, despite backing from submitters as varied as the Health Research Council and Whangarei's Ngatiwai Trust Board. It won no support from a biotech industry taskforce report earlier this month.

"It's something that was not considered to be as important as the other things," Buwalda said.

Instead, the strategy is in three parts: "community engagement", "growing the sector", and regulations. "Key actions" include:

Community engagement

* Make information available on biotech science, research, markets, regulations and ethics, possibly through a New Zealand biotech portal website.

* Provide biotech resources for technology and science teachers in schools.

* Fund "futurewatch" studies to scan for emerging biotechnologies and assess opportunities and risks.

* Fund "outreach" projects to highlight biotech advances through science centres, exhibitions and publications.

* Foster "constructive interaction with Maori communities" through groups such as Maori members of safety committees at universities and crown research institutes.

Growing the sector

* Encourage more students to study science and technology at senior high school and tertiary levels.

* Recruit "science and entrepreneurial talent" from overseas and lure New Zealanders home with scholarships and fellowships.

* Foster and draw on traditional Maori uses of native species, based on policy work that may provide legal protection for traditional knowledge that cannot be patented under present laws.

* Increase research funding and use it to build "critical mass" in areas of strength.

* Co-ordinate planning for infrastructure investments such as next-generation internet.

* Use the "pre-seed accelerator fund" announced in the Budget to increase the rate of commercialising research.

* Consider the biotech taskforce proposal for a $200 million private/public sector biotech investment fund, probably in response to a private sector initiative.

* Promote a New Zealand biotech "brand" at international events.

* Fund biotech research for environmental goals such as cleaner industrial processes.

Regulations


* Implement the changes now before Parliament to devolve low-risk GM approvals to the local safety committees and regulate fertility work.

* Change the Patents Act, probably extending patent protection beyond the present limit of 20 years for new drugs that may take several years to gain regulatory approval. Such extensions are allowed in Australia, the US and Europe.

* Extend the legal protection that plant breeders can get for new plants to include new varieties derived from those plants.

* Develop an intellectual property manual for biotech.

* Review controls on searching natural species for valuable products, or "bioprospecting", to ensure profits are shared with local Maori and communities.

* Audit all existing regulations periodically to ensure "an appropriate balance between assurance and innovation".

The strategy says nothing about tax changes. Buwalda said officials were still working on proposals to tax venture capital partnerships on the basis of the main partner's tax status rather than as companies, and to let firms carry forward tax losses when they are sold.

Nor does it mention another key concern of the industry taskforce: the Government's drug-buying agency Pharmac, which has upset the multinational drug companies by buying cheap generic medicines instead of their expensive patented ones.

Again, Buwalda said, Pharmac's policy was under review now that New Zealand's biotech researchers were starting to produce drugs they wanted to sell to the "big pharma".

"If you think of intellectual property exports as well as imports, there is a different balance of interests that is involved. This is work in progress," he said.

Equally, as Terry said, the strategy makes no attempt to select areas of biotech, such as non-GM foods or medicines, that might be favoured with research money. The closest it gets is the reference to building "critical mass" in unspecified areas of strength.

The Sustainability Council noted that New Zealand's modern biotech industry was still largely funded by the state through universities and research institutes, although new research consortiums are starting to bring in money from farmers and forestry companies too.

That makes the Foundation for Research, Science and Technology, which hands out most of the state's research funding, a key agent of any biotech strategy. And in fact, its biotech funding criteria are to "build off New Zealand's biological base" in primary industries and "build critical mass in both people and infrastructure".

In its latest $16 million-a-year biotech funding round, made public last week, the foundation gave $9.35 million a year - 58 per cent of the total - to AgResearch for GM cattle, cloning and related work.

The foundation received bids in the biotech category totalling $36 million, so it clearly felt that AgResearch's work was of more value to New Zealand than $20 million worth of bids from other institutes and universities that missed out.

In the long term, it may be right, and the regulatory hoops that AgResearch is still going through to do its research may limit the risk of any adverse environmental effects.

But, despite the long trail from the royal commission to today's document, it is still an open question as to whether most New Zealanders feel they have consented to a coherent strategy that led to that funding decision and others like it.

The Ministry of Research, Science & Technology