Science and Research
John Voumard, Inquiry Chair
© Commonwealth of Australia, 2000
ISBN 0642547157
7.1 The Inquiry's terms of reference require the access scheme to operate 'in a manner that promotes certainty for industry and facilitates access to biological resources for environmentally sound uses'.
7.2 In the press release announcing the Inquiry (see Appendix 3), Senator Hill said,
Access to biological and genetic resources for environmentally sound uses is of strategic importance to Australia's capacity to develop a biotechnology industry. The inquiry will therefore look at options for implementing a streamlined access regime that, consistent with the principles of ecologically sustainable development, delivers certainty for industry.
7.3 The Inquiry's expert reference group included an industry expert, Professor Ronald J Quinn, Director, AstraZeneca R&D Griffith University and an expert from the science community, Ms Elizabeth Evans-Illidge, a Research Scientist at the Australian Institute of Marine Science, Townsville.
7.4 I sent letters inviting submissions and the Inquiry Secretariat sent notices to a large number of organisations involved in the biotechnology industry, based on a comprehensive mailing list provided by the Department of Industry, Science and Resources. The Secretariat also sent notices to overseas companies with an interest in bioprospecting (from a list provided by Ms Evans-Illidge) and to vice-chancellors of all Australian universities (from a list provided by the Department of Education, Training and Youth Affairs, a member of Biotechnology Australia). Approximately 25 submissions were received from industry and research interests.
7.5 I also met representatives of the Australian Biotechnology Association and key industries.
7.6 At present, several major companies and organisations are involved in bioprospecting and/or biodiscovery in Australia. These include AstraZeneca, ExGenix (formerly AMRAD), the Australian Institute of Marine Science, CSIRO and BioProspect Limited. The Inquiry received submissions from all of these organisations.
7.7 AMRAD Discovery Technologies 25 was established in 1993 to secure access to Australia's diverse and extensive biota and to explore its potential for the discovery of novel pharmaceutically active compounds.
7.8 AMRAD's collection agreements provide long-term and exclusive access to a significant proportion the genetic resources of Australia and other countries.
7.9 Agreements relating to plant species were made with:
7.10 Agreements relating to micro-organisms were made with:
7.11 Agreements relating to marine macro-organisms were made with:
7.12 ExGenix provided the Inquiry with the following 'principles of plant collecting arrangements':
7.13 BioProspect is a non-listed public company, owned almost exclusively by Australians. BioProspect believes that its independence is significant to its success,
... in that [it is] not owned or controlled by any pharmaceutical company or any other organisation with a vested interest, either in Australia or internationally and that this independence allows [it] to operate ... as a fair and honest broker of the biological resources to which [it has] access rights.
7.14 BioProspect identified the following as key elements of its contracts:
7.15 The Commonwealth Government established the Australian Institute of Marine Science in 1972 to generate the knowledge needed for the sustainable use and protection of the marine environment through innovative, world-class scientific and technological research.
7.16 For over a decade, the Australian Institute of Marine Science research activities have included biodiscovery or bioprospecting research. The goals of this research are:
7.17 This research involves the systematic search, through biodiversity present in nature, for novel molecules (chemical entities) that cause a desired action in a molecular process associated with some commercial product, ie are biologically active in ways which might have commercial value. In order to gain access to appropriate world-class expertise and facilities to achieve these goals, the Australian Institute of Marine Science needs to access facilities, funding, logistical support and expertise beyond that available in-house at the Institute. This is achieved through strategic links to various collaborators, particularly within industry.
7.18 The centrepiece of this research is the marine biodiversity collection. The collection includes material from more than 10 000 marine macro-organisms and 7 500 marine micro-organisms, collected and isolated from over 1 500 sites around Australia. The collection was designed for natural products research, but also includes material and data for ongoing expert systematic and taxonomic study of the samples.
7.19 Key points from the Institute's proposal for a model for access and benefit-sharing regulations are as follows:
7.20 The Institute's submission recommends that benefit-sharing negotiations be conducted separately from access negotiations, as each requires different kinds of expertise. The Inquiry understands that this would allow a benefit-sharing agreement to be struck with, say, a State government, while details concerning access could be dealt with separately with the various State-based agencies which control access to different parts of the State's biota.
7.21 On 11 June 1993, a joint venture agreement was signed between Griffith University, Brisbane and Astra Pharmaceuticals Pty Ltd, Sydney, a subsidiary of AstraAB, a Swedish pharmaceutical company (since April 1999, AstraZeneca). The joint venture project undertakes screening of extracts of plants and marine organisms collected from Australia's rainforests and the Great Barrier Reef. Extracts displaying activity in the screens are examined using bioassay-guided fractionation to identify the structure of the active components. This work is undertaken at facilities located at Griffith University.
7.22 Professor Quinn's26 submission identified the following benefits to Australia from this arrangement:
7.23 The Queensland Herbarium collects plants and the Queensland Museum collects marine species for the project. Benefits of collaboration with the Herbarium to date are:
7.24 Benefits of the collaboration with the Queensland Museum to date are:
7.25 Griffith University has contracts with the Queensland Museum and the Queensland Herbarium under which it pays them a specified rate for samples. Further key terms of these contracts include:
7.26 Submissions to the Inquiry presented considerable evidence of both actual and potential benefits to the parties involved in bioprospecting agreements, but also of the costs, long lead times and uncertain results of drug discovery and development work. While wanting to ensure that benefit sharing agreements are fair to all parties, the Inquiry is also concerned to ensure that potential providers of biological resources do not have unrealistic expectations of the monetary or non-monetary returns which future benefit-sharing agreements might offer.
7.27 The submission from the United States National Cancer Institute emphasised the obstacles to drug discovery and development. Based on a four-step process, the Institute identified the chances of a compound tested in the discovery (first step) phase entering the pre-clinical phase (steps two and three), to becoming a drug on pharmacy shelves as one in 10,000. It was calculated that it requires the expenditure of over US$400 million from the discovery phase to clinical trials to commercial success.
7.28 Dr Trowell, from the CSIRO confirmed this experience, describing the likelihood of discovering a useful lead as being like a lottery:
... your chances of winning are extremely low and yet, if you do win, the rewards are potentially very high. We are talking of royalties for a successful drug that might run to 10 million -- between $10 million to $50 million per annum. The chances, I think, of doing that are significantly lower than the lottery.27
7.29 The National Cancer Institute also commented on the 'value' of samples (in the absence of any biological assay data) as being probably in the range of US$1.00 to US$5.00, irrespective of the cost of collection. The cost to the Institute of a collection of one kilogram of marine invertebrates is in the order of US$750. The sample then has to be processed, identified and stored before it can be tested. The complete assay that the Institute uses for anti-tumour activity costs around US$250 per sample. The Institute adds that this is only the start of the process. CSIRO also commented that the intrinsic value of biological resources and associated (traditional) knowledge can be quite limited.
7.30 The Queensland Government commented that successful lead compounds require an approximate investment of $700 million and eight to 15 years research and development to realise commercial success. The success versus 'hit' ratio is very disproportionate. Considering the level of research and development investment required, and on the basis of industry estimates that indicate the chance of discovering a new pharmaceutical may be in excess of one in 1 000 000 samples screened, biodiscovery can be considered a 'lottery'. CSIRO made similar comments, first that commercial returns from bioprospecting may be quite limited and, second, that possible monetary benefits from agreements are often overestimated (see also 6.28 above).
7.31 The high costs, long lead times and uncertain outcomes of research and development led the Queensland Government to conclude that onerous benefit-sharing provisions may hinder industry development, impact negatively on the development of positive international research alliances and on trade in biological and genetic resources, and lead to covert and unregulated biodiscovery activities.
7.32 Research institutions and industry were agreed on the importance of ensuring continued access to biological resources for research and commercial purposes (although an industry submission sounded the warning that biological resources are often available from alternative sources). Several submissions commented on the economic, social and environmental benefits to Australia of agreements involving collection and screening of plants and micro-organisms.
7.33 There was support for regulating bioprospecting to ensure that samples and extracts remain in Australia and, also, as far as possible, that the subsequent discovery and development work is done in Australia. In contrast, however, the point was made that, unless the scientific infrastructure exists in the source country to do the discovery work, restrictions on overseas collaboration, by not permitting export of samples, will prevent discoveries.
7.34 The Australian Institute of Marine Science commented that,
Access to Australian biological resources in marine areas, including Commonwealth waters, is controlled by a maze of legislation, principally designed for either fisheries management or conservation. A single activity in one location frequently requires permits from multiple agencies representing more than one tier of government and administering a wide range of access legislation. (This issue is discussed further in Chapter 8.)
7.35 Many submissions expressed concerns about the number and complexity of permits required at Commonwealth and State level to access resources (in both land and marine areas) for research and commercial purposes.
7.36 Various suggestions for reform were made. These included:
7.37 In addition to this jurisdictional complexity, the Australian Institute of Marine Science commented that it could:
document an increased reluctance on the part of some marine access controlling agencies within Australia (including the Commonwealth) to grant permits for biodiscovery research at the Institute. This reluctance has not been due to any environmental grounds, but has rather been over concerns that adequate benefit sharing will not take place, should commercialisation of a discovery occur ... some agencies have attempted to ... require some downstream benefit negotiations in the event of a commercial discovery. In other cases, access has been delayed, restricted or denied.28
7.38 According to the Institute, this has resulted in lost opportunities through stalled projects, sometimes after leads have been identified. In discussions with the Institute, industry indicated a strong preference for negotiating benefit-sharing terms at the outset of a process, rather than having to re-negotiate over such terms later in the process. To address this issue, the Institute recommended that benefit sharing be negotiated at the outset of a project, rather than after a lead has been identified. The Inquiry strongly supports this proposal.
7.39 Most submissions did not make detailed comments about environmental issues but support for conservation and sustainable use was implicit in many comments regarding the need for continuing access to biological resources. The Australian Institute of Marine Science, for example, described a bioprospecting project involving a species which is extremely rare in nature, resulting in the fishing community placing a voluntary trawling ban on the species' home range, pending formal marine reserve status. Some submissions also commented on the small samples required to enable screening to be carried out.
7.40 CSIRO expressed strong support for the Convention on Biological Diversity and suggested that:
in dealing with access to biological resources the primary policy principle should be based upon managing the custodianship of biological resources that preserves biological diversity while enhancing the capacity to deliver benefits to all Australians.
7.41 BioProspect stated that its corporate mission statement is based on the Convention on Biological Diversity. Key elements which the company insists be included in any contract are as follows:
7.42 BioProspect also supported a possible model whereby royalty income derived from bioprospecting would reside in a managed fund or pool and be distributed to protect biodiversity and reward the use of Indigenous knowledge in the sustainable development of that biota.
7.43 Professor L R Webb, Vice-Chancellor, Griffith University suggested that collecting activities should be restricted to professional agencies (such as herbaria and museums) which can house the specimens and undertake taxonomy.
7.44 As in the case of environmental issues, submissions did not address Indigenous/traditional knowledge issues in detail. The Inquiry's informal discussions with industry suggest that Indigenous knowledge is not widely used as a source of information about the potential uses of plants. One explanation offered for this was that, in the absence of clear and fair rules, companies were generally reluctant to pursue the application of Indigenous knowledge to biodiscovery. Companies were concerned that irrespective of the good faith agreements they might make with Indigenous groups, they might be vulnerable to criticism about the adequacy of the agreement unless there were independent standards against which they could be judged. The Inquiry also heard comments that, increasingly, the focus of biodiscovery is on micro-organisms which industry believes did not play a role in Indigenous culture.
7.45 However, the Australian Biotechnology Association stated that Indigenous people's intellectual property rights must be recognised.
7.46 CSIRO suggested two options to recognise the value of Indigenous knowledge about biological resources. One is to create a new property right for all Indigenous knowledge attached to biological resources and negotiate a formula to facilitate benefit sharing. Alternatively, Indigenous knowledge could be declared and validated in a similar way to the declaration of background intellectual property when commercial technology relationships are created. Under this model a more specific benefit-sharing arrangement could be negotiated on a case-by-case basis.
7.47 Professor Barry Conyngham, Vice-Chancellor, Southern Cross University, said that,
Knowledge held by Indigenous people, if in the public domain, should be open to exploration using the biological resources of Commonwealth areas, ... with the ... proviso that a proportion of any profit arising be attributable to a general fund for the development of all Indigenous people of Australia. Where Indigenous knowledge is not in the public domain [but there is a desire to develop it], this needs to be done through a formal set of protocols.
7.48 Several submissions commented on the need to resolve questions of the ownership of biological resources, to ensure industry is able to secure and protect the intellectual property and financial outlay invested in the discovery and development of their inventions. The Inquiry was also advised that industry was unlikely to be willing to enter into joint patenting agreements.
7.49 In developing the proposed scheme in Chapter 2, I have given careful consideration to the issues discussed above.
7.50 The proposed scheme takes into account the major concerns and suggestions in the submissions from industry and research interests, and the terms of reference: to implement a streamlined access regime which, consistent with the principles of ecologically sustainable development, delivers certainty for industry. Accordingly, the proposed scheme includes:
