Australasian Biotechnology (backfiles) AusBiotech ISSN: 1036-7128 Vol. 8, Num. 6, 1998

ABA Active in Lobbying Government

The ABA Directors have been active in monitoring activities in Government and contributing comment where appropriate. The Corporate Members of the ABA have been kept informed as part of the thrust to increase services to them in line with increases in membership fees.

Biosafety Protocol

6 November 1998

Ms Janaline Oh

Acting Director

Climate Change & Biodiversity Section

Department of Foreign Affairs and Trade,

Canberra ACT 0221

Dear Janaline,

Biosafety protocol: Australia's position

We strongly support the rational position taken by the Australian Delegation on the scope and operation of the Biosafety Protocol viz that the Protocol should be based on arrangements that are underpinned by scientific principles and that it should not be extended to meet other political and social objectives. It should focus on matters that impact biosafety and biodiversity.

A key element of the Biosafety Protocol is the Advanced Informed Agreement and the use of a proposed Clearing House Mechanism via the Internet for posting information that assists in assessments by importing parties. The concept of the Clearing House Mechanism is a good one in principle but how it operates will take time to define (verifying information, who has the right to post information; accessing information that is "Commercial-in-Confidence"). It helps to promote transparency through the exchange of information.

It is also important that any regimes in the Protocol do not conflict with those already in operation within the context, for example, of the World Trade Organization (WTO) and that the Protocol is set up so that there is not the opportunity for it to be abused by parties that might use it to get around their obligations under WTO.

There is a need to build on existing regimes where these are in place to deal with the transboundary movements of Living Modified Organisms; it is inappropriate to use the rules in place for hazardous wastes/chemicals which are a well-defined, specific group of substances and not at all analogous to LMOs which are not generically hazardous; an LMO that may be a risk in one environment may not necessarily be so in another.

Any global moratorium on LMOs and their products would considerably obstruct progress, particularly in those countries bound by the Protocol. Biotechnology is a tool to specifically modify organisms such as elite lines of crops and it has the potential to provide great gains for its users. The Protocol should help to realize these potential benefits.

We see that it is important that the definition of LMOs NOT include products or processed products from them (or even dead LMOs!)

There is a need for capacity building for those countries that do not have procedures already in place (such as Australia does via its quarantine mechanisms/AQIS; this is also necessary to assist decision making by the importing party based on risk assessments.

We appreciate the efforts that your Section has made to brief Non Government Organisations and Industry not only through the provision of the succinct and lucid written material but also through the opportunities for direct feedback and discussions at the face to face briefing sessions that have been held.

Yours sincerely,

Dr Anne Campbell

ABA President

Briefing Meeting with Gene Technology Office

Canberra, 13 November 1998

Chaired by: Mr Eric James, Department of Industry, Science & Resources

Presented by:Dr Michael Hirsch, on secondment to DISR from CSIRO

Supported by: Dr David Swanton, Gene Technology Office, DISR

The purpose of the meeting was to present the current model that has been developed to encompass a regulatory framework for gene technology and to seek the views of a selected range of Stakeholders. This meeting was one of a number being held in the last quarter of 1998 around Australia. The presentation was based on a paper which had been circulated in advance; the overheads from the presentation were also made available.

A decision to introduce statutory regulation for gene technology was taken in October 1997; the aim has been to make maximum use of the existing regulatory schemes while recognising that amendments would be needed as well as the establishment of a new regulatory body. The model presented was developed through extensive negotiations with the States and Territories and there has been agreement on most issues. In the period while feedback is being obtained from Stakeholders, State and Territory officials are seeking endorsement from their Governments and getting a mandate to proceed further; this is expected to be completed early in 1999. The legislation will then be drafted; provision has been made for its introduction in the Winter session of Parliament (at the earliest). Public comment will be sought in the first half of 1999. There will also be the opportunity for further comment from Stakeholders. The development of operational guidelines is expected to be very time consuming.

Some key elements:

• Use of existing regulatory mechanisms to minimise the burden

• National consistency

• Decision making on a case-by-case basis rather than prescriptive laws; this allows flexibility for the system to evolve with the technology

• Product liability will be assigned to the applicant rather than the Government

• The process is to be as user-friendly as possible (co-ordinated, efficient, timely, simple, transparent, regularly audited and evaluated)

• Decisions are to be based on rigorous scientific risk assessment

• Decisions to take into account relevant social, economic and ethical issues but considered separately from the safety issues.

• Costs to be borne by those marketing the product.

The main role of the Gene Technology Office will be to co-ordinate the process for gene technology risk assessment harmonisation for GMO products passing through existing regulatory streams (National Registration Authority (NRA) for Ag & Vet Chemicals; Therapeutic Goods Administration (TGA) for therapeutic goods, Australian & New Zealand Food Authority (ANZFA) for food and National Industrial Chemicals Notification & Assessment Scheme (NICNAS) for industrial chemicals). The Gene Technology Office will regulate GMO products not covered by the existing regulatory authorities. It will also serve as a "one-stop shop" for all enquiries and keep a database to track progress of GMO products. Where the GTO will be situated, departmentally, will be a matter for the Prime Minister.

The steps in the process include the referral of the GMO product to the GTO initially; the GTO will refer this to GTAC (Gene Technology Advisory Committee) for advice on which of the regulatory streams the products should be directed to and thus what has to be done in terms of risk assessment; approval for the product will be considered by the relevant regulator in its usual way, taking into account the risk assessment and other matters and post-approval monitoring/compliance will also be the responsibility of the particular regulator. The over-riding philosophy is that use will be prohibited until the GMO product is approved for sale or release. The emphasis is on regulating the product not the technology.

For research matters, the framework will build on the existing system that has been in place for 20 years eg. GTAC will provide expert scientific, technical and biosafety advice in the way in which voluntary committee of GMAC (Gene Manipulation Advisory Committee) does now and GTAC will also approve field trials. The regulation will also provide for a statutory role for the Institutional Biosafety Committees (IBC) which could be accredited to inspect and approve low-risk research facilities on behalf of GTO and also approve contained research (as is done currently).

One of the areas of particular discussion after the presentation at the meeting was the difficulty of synchronizing approvals for a GMO product being considered for different uses via several different regulators who all have different time frames.

GTO would not be able to "tell" other regulatory streams what to do; it should be able to monitor the progress of a GMO product application through the process however. A Stakeholder noted that the key elements of the system must be that the process is rigorous, scientifically based with clear guidelines and a need for it to conform to best practice (risk assessment is a science in itself), be neutral and accountable. There was also considerable discussion about item 7d in the regulatory framework of the policy principles in the briefing document viz "If a participating jurisdiction considers that the release of a GMO or GMO product will pose an unacceptable risk within its territory, then it may decline to allow release within its own territory or impose additional conditions on release within its own territory"; it was felt that it could allow states to "opt out" early; that it should only be based on risk assessment as for sanitary/phytosanitary agreements.

Anne Campbell

TRIPS Agreement

8^th December 1998

To ABA Corporate Members

Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement

Recently one of the current ABA Directors, Ms Lyndal Thorburn, attended a briefing meeting on the TRIPS Agreement at the Department of Foreign Affairs and Trade (DFAT) in Canberra. As a result, I am writing to seek corporate members' views on protection of biotechnology-based intellectual property (IP) in the context of a planned review of the TRIPS agreement.

The TRIPS agreement, to which Australia is a signatory, covers a range of intellectual property matters.

Article 27.3 b of TRIPS covers the patenting of biological material. It says that World Trade Organization (WTO) members must provide patent protection for micro-organisms such as bacteria and for non-biological and microbiological processes for the production of plants and animals; for plant varieties. In addition, members may exclude from patentability plants and animals and essentially biological processes for the production of plants and animals. "Plants and animals" includes transgenic plants and animals and possibly also parts of plants and animals or genetic information derived from or otherwise related to plants and animals, including genes. WTO members are free to determine how they reflect these obligations in their national laws. Australia protects both plant and animal patents, waiving the optional exclusion.

Article 27.3b is to be reviewed by all WTO members during 1999. DFAT will commence the review in about March next year and will be consulting with industry, government and other groups. The review will probably include discussion on the general application of IP rights (both patents and plant variety rights) to biotechnological and biological inventions and new plant varieties, covering modern gene technology and conventional breeding. It may also raise other issues such as Australia's activity and trade interests in biotechnology patenting, Australia's international research and commercial links in biotechnology, and Australia's current and future markets for biotech products with high IP components.

In 1999 each country which is a signatory to TRIPS will be conducting its own review of this Article. In the year 2000 a full review of TRIPS will be conducted. This review will include an analysis of the current scope of Article 27.3b and so the 1999 review will be important in developing the Australian position in the wider context.

DFAT will be consulting with industry as part of the 1999 review by distributing a questionnaire on the practical role of IP (patents, PVR, trade secrets etc) in enabling and supporting biotechnology exports, the role of IP in production, manufacturing and alliances, and other forms of IP protection used by companies.

The ABA will also be consulted as a peak body and we would like your input to our policy development on this issue. DFAT has prepared a Background Briefing* and we would like your comments on the issues it raises, in particular:

• Whether the optional exclusion of plants and animals from patentability should be maintained, narrowed, removed or clarified;

• What is the most effective form of IP protection for plant varieties;

• Whether other issues such as protection of biodiversity, access to and use of genetic resources, competition policy and investment relations need to be taken into account

• The role of harmonisation of IP regimes in either supporting or inhibiting your business either through exports or imports.

Your comments will assist the ABA to reflect its members' views during the formal consultation on Article 27.3b, in informal discussions with DFAT, and in the Year 2000 review of the TRIPS agreement as a whole. I look forward to your response by the end of January 1999.

Anne Campbell

President

*DFAT Briefing Paper available on request from ABA (email: aba@netspace.net.au)

Review of Trade Practices Act

19 January 1999

Mr E Willett,

The Executive Director,

National Competition Council,

Level 12, 2 Lonsdale Street,

MELBOURNE VIC 3000

Dear Mr Willett,

Re: Review of Sections (2) and 51 (3) of the Trade Practices Act 1974; Draft Report

I write on behalf of the Australian Biotechnology Association which represents Australian biotechnology/bioscience based industries and research institutions who have an interest in promoting the business side of biotechnology. The Australian Biotechnology Association includes both corporate members and more than 400 individual members from a range of agencies including a wide range of research institutions.

We have only just learned of this Review and the call for submissions which closed on 24 December 1998; as I understand it is still possible to comment up until 19 January, we are raising a few key points, as time does not permit a more considered and thorough response.

Great concern is expressed at the recommendation in the Draft Report of the Review to repeal Section 51 (3) of the Trade Practices Act 1974 and the potential impact of this on licensing - particularly exclusive licensing. Currently section 51 (3) exempts exclusive licences from the prohibition based on anti-competitive conduct.

The effect of the repeal of this exemption will be :

• to add significantly to the cost in every technology transfer transaction, since competition law issues would need to be considered

• the need to obtain a dispensation via an authorisation from the Australian Competition and Consumer Commission, if there is a contravention of the revamped Trade Practices Act by any proposed exclusive licence; this is likely. The cost of obtaining such an authorisation would be prohibitive ($50,000 or more we understand); also there would be added time delays.

Biotechnology has the potential to increase efficiency and reduce costs in many sectors including textiles, food manufacture, agriculture, mineral processing, chemicals and therapeutics for human and animal health e.g. in the USA more than 10% of pharmaceutical sales are now based on biotechnology products and the global market is estimated to be growing at between 12-20% per year. Many of the processes that are used as the basis of these improvements are being licensed from research institutions, either to established companies or to new start-up companies (spin-offs).

Australia has followed the US pattern in that small start-up firms have been used commonly as vehicles for commercialisation (Thorburn 1998). Of the current population of 132 dedicated Biotechnology Companies, 42 have been established since 1995 and 40% are spin-offs from research institutions (Thorburn 1998).

Innovation is the key to wealth generation. As it is a high-risk process, it is essential to have, as Australia does currently, a strong intellectual property system in patents and licensing to:

• reward inventors

• reward the risk takers to exploit the invention

• encourage investment in innovation

As inventors and their institutions do not necessarily have the skills and facilities to further develop the new technology for use in the market, it is important to be able to license others to do so. In many cases an exclusive licence is needed to attract a company to take on the risks associated with commercialisation for once an exclusive licence is granted, a licenser cannot grant another. As an illustration of the risks associated with the long lead times and costs, in the area of pharmaceutical drug development, times of 10-15 years from initial discovery to market launch are not uncommon, with a cost on average of $350 million.

Repealing Section 51 (3) would significantly disadvantage Australia internationally as it would add time and costs to licensing through the need to seek dispensation for an exclusive licence. This in turn would increase the incentives to licence offshore to the detriment of the Australian economy and the substantial investment of $3.7 billion that the Federal Government makes in Science & Technology. The market for the applications of biotechnology is global; Australia needs to be able to compete globally and a patents and licensing system which allows this (as is currently the case) is essential in order to capitalise on the investments in R&D already made. Australia also needs to be able to take up technology developed in other countries.

Not only are exclusive licences essential to raise money for commercialisation but also to leverage agreements with e.g. multinationals.

Recognising the great potential of biotechnology for wealth creation and employment in the next century, late last year, the Government established a Biotechnology Task Force within the Department of Industry, Science & Tourism; its role is to "advise the Government on strategies for the development of the Australian biotechnology sectors". The Task Force is to consult widely and to report on:

"opportunities for the development of internationally competitive biotechnology-based economic activities impediments to the development of such activities

strategies to address issues such as technology development and diffusion, intellectual property management and ownership, access to venture capital, market access and promotion, regulation, biosafety & biodiversity, public awareness, international agreements on intellectual property and other issues."

We would urge you to reconsider the recommendation to repeal Section 51 (3); access to exclusive licensing is needed in order to ensure our innovative research is taken up and used - so that Australia can be "The Clever Country".

Yours sincerely,

Dr Anne Campbell

President, Australian Biotechnology Association

Reference: Thorburn, L (1998) Australasian Biotechnology 8, #5, pp280 -286

Copyright 1998 Australian Biotechnology Association Ltd.