In­dus­tries of the New Era

Biotech­nolo­gies shape the de­vel­op­ment of hu­mankind in the 21st cen­tury

Economy of Belarus - - CONTENTS - Igor VOlOTOVSKY

Biotech­nolo­gies shape the de­vel­op­ment of hu­mankind

in the 21st cen­tury

Global Over­view

Ac­cord­ing to in­ter­na­tional ex­perts, the global sales of phar­ma­ceu­ti­cal prod­ucts are es­ti­mated at about $700 bil­lion. The global phar­ma­ceu­ti­cal mar­ket ex­pands by al­most 6% ev­ery year. The phar­ma­ceu­ti­cal mar­kets of de­vel­op­ing coun­tries are ex­pand­ing even faster. In the next five years they are ex­pected to grow by 13-16% and make sig­nif­i­cant in­roads into the global phar­ma­ceu­ti­cal mar­ket. For ex­am­ple, by 2013 the phar­ma­ceu­ti­cal mar­ket of China will ac­count for one fifth of the global phar­ma­ceu­ti­cal mar­ket growth. Bi­ol­ogy has made sig­nif­i­cant ad­vances over re­cent years pen­e­trat­ing into a mul­ti­tude of in­dus­tries, while biotech­nolo­gies have be­come one of the key in­stru­ments of the global sci-tech progress. The UN ex-

the ma­jor ob­jec­tive of Be­larus’ eco­nomic pol­icy till 2020 is to en­hance the com­pet­i­tive­ness of the national econ­omy and its ex­port po­ten­tial via a dras­tic up­grade and de­vel­op­ment of new prod­ucts in the man­u­fac­tur­ing in­dus­try, con­struc­tion, agri­cul­tural in­dus­try, trans­port, com­mu­ni­ca­tions and other in­dus­tries us­ing cut­ting-edge tech­nolo­gies. this fully per­tains to the phar­ma­ceu­ti­cal in­dus­try and biotech­nolo­gies – the in­dus­tries of the 21st cen­tury which are based on busi­ness-ori­ented re­search in­fra­struc­ture.

perts be­lieve bi­o­log­i­cal tech­nolo­gies will shape the de­vel­op­ment of hu­mankind across all walks of life in the 21st cen­tury.

Biotech­no­log­i­cal com­pa­nies are among the most tech­nol­ogy in­ten­sive enterprises, there­fore, they are con­cen­trated in tech­no­log­i­cally ad­vanced coun­tries like the U.S. (al­most half of the to­tal global pro­duc­tion), Ger­many, Ja­pan, Canada, France and the UK. The global mar­ket of biotech­no­log­i­cal prod­ucts is cur­rently es­ti­mated at $400 bil­lion per year. In the years to come, the global out­put is likely to grow by 7-8% ev­ery year. The mar­ket will be dom­i­nated by in­dus­trial mi­cro­bi­ol­ogy, DNA tech­nolo­gies, cre­ation of di­ag­nos­tic prepa­ra­tions for agri­cul­ture and medicine.

In the last decade the U.S. and the Euro­pean Union have been pro­vid­ing sig­nif­i­cant sup- port for biotech­nolo­gies. They have de­vel­oped a le­gal frame­work to com­mer­cial­ize biotech­no­log­i­cal prod­ucts and in­vested heav­ily in fun­da­men­tal re­search, bio­phar­ma­ceu­ti­cals, bioen­ergy, agri­cul­tural biotech­nolo­gies, etc.

The U.S. is the in­dus­try leader ac­count­ing for 73% of the global prof­its gen­er­ated by the in­dus­try, with Europe hold­ing 20%, Canada 4% and Asia 3%.

The Euro­pean Union, in turn, has de­vel­oped a long-term strat­egy with a pro­nounced en­vi­ron­men­tal fo­cus. The project is backed by over 50 bil­lion al­lo­cated in 2008-2013. In re­cent years biotech­nol­ogy-based enterprises have been on the rise in China, In­dia, Brazil, Ja­pan and other coun­tries. There is a rea­son be­hind it. The phar­ma­ceu­ti­cal in­dus­try and biotech­nolo­gies are among the most lu­cra­tive in­dus­tries, third only to oil and gas in­dus­try and bank­ing.

To Reach the Top

Over 85% of do­mes­tic phar­ma­ceu­ti­cals are pro­duced by com­pa­nies that were part of Bel­bio­pharm Con­cern not long ago. They in­clude ten phar­ma­ceuti-

cal com­pa­nies and two re­search firms. In 2009 the Be­laru­sian phar­ma­ceu­ti­cal mar­ket was es­ti­mated at $615.4 mil­lion (in sell­ing prices), up by 3% in mone­tary terms and 1.6% in phys­i­cal vol­ume. The phar­ma­ceu­ti­cal in­dus­try ac­counts for less than 1% of Be­larus’ in­dus­trial out­put. The ef­forts of Bel­bio­pharm Con­cern to raise for­eign in­vest­ments and es­tab­lish ad­vanced phar­ma­ceu­ti­cal com­pa­nies met with lit­tle suc­cess (only $7.3 mil­lion worth of for­eign in­vest­ments was raised in 2006-2010, all of them in 2010).

The con­cern was sup­posed to pro­mote the phar­ma­ceu­ti­cal and mi­cro­bi­o­log­i­cal in­dus­tries. How­ever, lit­tle has been done to up­grade mi­cro­bi­o­log­i­cal com­pa­nies. To­day, Be­larus has vir­tu­ally no ef­fec­tive mi­cro­bi­o­log­i­cal enterprises. They have been ei­ther shut down, like the Obol Feed Sup­ple­ment Plant, or be­came part of other com­pa­nies, like the Novopolotsk Pro­tein and Vi­ta­min Con­cen­trates Plant, or their pro­duc­tion fa­cil­i­ties got so an­ti­quated that they could not pro­duce com­pet­i­tive prod­ucts like the Enzim com­pany. Given the fo­cus on the de­vel­op­ment of the phar­ma­ceu­ti­cal in­dus­try, some changes took place in the struc­ture of per­son­nel. To­day the enterprises of the former con­cern have al­most no spe­cial­ists ca­pa­ble of solv­ing strate­gic prob­lems fac­ing the biotech­nol­ogy in­dus­try. Be­larus used to make a wide range of biotech­nol­ogy prod­ucts (pro­tein feed ad­di­tives, en­zymes, feed amino acids, vi­ta­mins) in the 1970-80s for the needs of the So­viet Union, while now it is de­pen­dent on imports of these prod­ucts. An­nu­ally, $300 mil­lion is spent to buy biotech prod­ucts abroad.

Be­larus imports bi­o­log­i­cal prod­ucts of an­i­mal ori­gin, herb- al prepa­ra­tions, bi­o­log­i­cal plant pro­tec­tion prod­ucts, feeds, feed ad­di­tives, preser­va­tives, pre­served feed, vet­eri­nary drugs, bac­te­rial prod­ucts for the dairy in­dus­try.

There­fore, the key task is not only to re­duce the de­pen­dence of the econ­omy on imports, but to start the pro­duc­tion of com­pet­i­tive prod­ucts with a high ex­port value.

This task which the govern­ment set be­fore sci­en­tists is not sim­ple. We need to deal with sci­en­tific and tech­no­log­i­cal stag­na­tion in the phar­ma­ceu­ti­cal and biotech­nol­ogy in­dus­try, to catch up with the world-class phar­ma­ceu­ti­cal and biotech­nol­ogy com­pa­nies, to im­ple­ment mech­a­nisms for sus­tain­able in­no­va­tion de­vel­op­ment of these sec­tors, to pro­mote the de­vel­op­ment of clus­ters of modern phar­ma­ceu­ti­cal and biotech­nol­ogy in­dus­try, to

cre­ate a modern R&D in­fra­struc­ture to de­velop and man­u­fac­ture:

– a wide range of drugs on the ba­sis of chem­i­cal syn­the­sis from plant and an­i­mal ma­te­ri­als, bio-medicines, drugs based on pro­tein-pep­tide sub­stances, vac­cines, in­clud­ing re­com­bi­nant vac­cines, stem cells, and also tar­geted drug de­liv­ery sys­tems;

– en­zyme prepa­ra­tions for in­dus­try and agri­cul­ture, plant pro­tec­tion agents, prepa­ra­tions to im­prove soil fer­til­ity, func­tional food prod­ucts, food and feed ad­di­tives, pro­bi­otic prepa­ra­tions for the food and agri­cul­tural pur­poses, prepa­ra­tions for pro­tect­ing the environment from man-made pol­lu­tion and biore­me­di­a­tion, clean bio-fuel from re­new­able raw ma­te­ri­als, etc.

In ad­di­tion, we need to cre­ate the now miss­ing sys­tem of lo­gis­tics of phar­ma­ceu­ti­cal and biotech­nol­ogy in­dus­try, to make do­mes­tic and im­ported medicines avail­able to the pop­u­la­tion and pub­lic health­care, to im­prove the reg­u­la­tory frame­work gov­ern­ing in­tel­lec­tual prop­erty in gen­eral and turnover, cer­ti­fi­ca­tion and li­cens­ing of phar­ma­ceu­ti­cal and biotech­nol­ogy prod­ucts in par­tic­u­lar, to up­grade the sys­tem of sec­ondary and higher ed­u­ca­tion and per­son­nel train­ing for these sec­tors, to bring the sys­tem of reg­is­tra­tion, qual­ity con­trol and turnover of phar­ma­ceu­ti­cal and biotech­nol­ogy prod­ucts in line with in­ter­na­tional stan­dards, to en­sure in­ter­na­tional ac­cred­i­ta­tion and cer­ti­fi­ca­tion of new phar­ma­ceu­ti­cals and biotech­nol­ogy and to ad­vance to at least top 70 global phar­ma­ceu­ti­cal man­u­fac­tur­ers by 2015.

We are ex­pected to pro­duce phar­ma­ceu­ti­cal and biotech­nol­ogy prod­ucts worth at least $1.2 bil­lion by 2015 and to make sure that Be­laru­sian medicines will ac­count for 50% of the do­mes­tic mar­ket by 2015. In the next five years we need to con­tin­u­ously up­grade 20 pro­duc­tion lines so that we could ex­port around $200 mil­lion worth of phar­ma­ceu­ti­cals a year.

Bel­bio­pharm Con­cern has failed to ex­pand the re­search sec­tor. Co­op­er­a­tion be­tween the con­cern and re­search in­sti­tu­tions of other de­part­men­tal af­fil­i­a­tion was not ef­fi­cient, ei­ther. Given every­thing men­tioned above, the Pres­i­dent is­sued a de­cree to re­or­ga­nize Bel­bio­pharm Con­cern and to cre­ate the Phar­ma­ceu­ti­cal In­dus­try Depart­ment at the Health­care Min­istry. Biotech­nol­ogy re­search will be han­dled by the re­search pro­duc­tion cor­po­ra­tion Biotech be­ing set up at the National Academy of Sciences.

Ar­eas of Fo­cus

The sec­tor will fo­cus on the three main ar­eas:

– phar­ma­ceu­ti­cal in­dus­try, i.e. pro­duc­tion of drugs, in­clud­ing medic­i­nal sub­stances and for­mu­las, with an em­pha­sis on pro­duc­tion of com­par­a­tively cheap gener­ics (drugs that were de­vel­oped and patented in other coun­tries), as well as new do­mes­ti­cally-de­vel­oped medicines;

– biotech­nol­ogy in­dus­try, i.e. pro­duc­tion of high-tech medicines based on chimeric pro­teins and mon­o­clonal an­ti­bod­ies (us­ing cell tech­nolo­gies and chimeric bod­ies), and highly pu­ri­fied fer­ments for medicine, agri­cul­ture, food and light in­dus­tries; pro­duc­tion of chimeric pro­teins with use­ful prop­er­ties (lacto­fer­rin, fil­gras­tim, ery­thro­poi­etin), ther­a­peu­tic mon­o­clonal an­ti­bod­ies and their frag­ments; de­vel­op­ment and ap­pli­ca­tion of genome biotech­nolo­gies in medicine, sports, agri­cul­ture, and en­vi­ron­men­tal pro­tec­tion;

– mi­cro­bi­ol­ogy in­dus­try, i.e. de­vel­op­ment and man­u­fac­tur­ing of prod­ucts of mi­cro­bi­o­logic syn­the­sis (phar­ma­ceu­ti­cal sub­stances, fer­ment prepa­ra­tions, pro­bi­otics, bi­o­log­i­cal de­con­tam­i­nants, bio preser­va­tives, fod­der and food ad­di­tives, bac­te­rial con­cen­trates for food in­dus­try, plant-pro­tect­ing agents, mi­cro­bial fer­til­iz­ers, agents for biore­me­di­a­tion, bio­fuel, etc.).

The main pri­or­ity of re­forms in the phar­ma­ceu­ti­cal and biotech­nol­ogy in­dus­try is to en­sure med­i­cal, food, en­ergy and en­vi­ron­men­tal safety of the coun­try by de­vel­op­ing and pro­duc­ing a wide range of phar­ma­ceu­ti­cal and biotech­nol­ogy goods, fos­ter­ing re­search in biotech­nol­ogy and rais­ing its com­pet­i­tive­ness.

To set up an ad­e­quate in­dus­trial in­fra­struc­ture for the de­vel­op­ment of the biotech­nol­ogy in­dus­try, it is nec­es­sary to re­con­struct ex­ist­ing mi­cro­bi­ol­ogy

pro­duc­tion fa­cil­i­ties and build new ones. New com­pa­nies and pro­duc­tion fa­cil­i­ties es­tab­lished un­der the govern­ment pro­gram “In­no­va­tive Biotech­nolo­gies” for 2010-2012 and up to 2015 can be used as a good ex­am­ple of such fa­cil­i­ties. Much needs to be done to up­grade and con­vert biotech­nol­ogy com­pa­nies that used to be part of Bel­bio­pharm Con­cern.

In or­der to raise the bar for the sci-tech biotech­nol­ogy projects and boost pro­duc­tion of sci­en­cein­ten­sive prod­ucts, it is nec­es­sary to launch pro­duc­tion of goods based on the lat­est achieve­ments in biotech­nol­ogy, gene en­gi­neer­ing, im­munol­ogy, and molec­u­lar ge­net­ics.

It is also nec­es­sary to en­sure close co­op­er­a­tion be­tween re­search and pro­duc­tion com­pa­nies, in­clud­ing pri­vate firms, when im­ple­ment­ing joint projects un­der govern­ment pro­grams.

With a view to im­ple­ment­ing govern­ment pol­icy in the phar­ma­ceu­ti­cal and biotech­nol- ogy in­dus­try and mak­ing it more com­pet­i­tive, it is nec­es­sary to set up a de­part­men­tal sys­tem of pro­fes­sional train­ing in these ar­eas, or­ga­nize reg­u­lar train­ing and re­train­ing cour­ses in or­der to keep the per­son­nel up­dated on the new de­vel­op­ments in this in­dus­try as well as to im­prove lo­gis­tics of uni­ver­si­ties and up­date cur­ric­ula with a fo­cus on im­prov­ing train­ing of highly qual­i­fied per­son­nel.

The ma­jor­ity of the ex­ist­ing biotech­no­log­i­cal com­pa­nies are loss-mak­ing. There­fore, it is dif- fi­cult for them to raise additional loans. In this con­text, up­grade projects need a lot of pri­vate in­vest­ments at the early stages of their im­ple­men­ta­tion in or­der to re­fo­cus loss-mak­ing com­pa­nies on pro­duc­tion of prof­itable goods. There is also an ur­gent need to form a mar­ket in­fra­struc­ture pro­mot­ing busi­ness ini­tia­tive and com­pet­i­tive­ness in the biotech­nol­ogy in­dus­try.

Large com­mer­cial­iza­tion projects should be im­ple­mented us- ing pub­lic-pri­vate part­ner­ship and in­volv­ing in­ter­na­tional cor­po­ra­tions.

The most im­por­tant in­vest­ment projects in the phar­ma­ceu­ti­cal in­dus­try will be funded from the state bud­get, by national phar­ma­ceu­ti­cal com­pa­nies and with the help of bank loans. Joint ven­tures with for­eign com­pa­nies us­ing the lat­est tech­nolo­gies and for­eign in­vest­ments will play an im­por­tant role in the de­vel­op­ment of the national phar­ma­ceu­ti­cal sec­tor.

In pur­suance of the pres­i­den­tial or­der, the Econ­omy Min­istry has been de­vel­op­ing a Biograd Techno Park con­cept to pro­mote phar­ma­ceu­ti­cal and biotech­nol­ogy in­dus­try. Be­larus has al­ready gained some ex­pe­ri­ence in op­er­at­ing in­sti­tu­tions of this kind. There­fore, the park is ex­pected to be­come a pow­er­ful tool for ev­ery­one in­volved in the de­vel­op­ment of new tech­nolo­gies and medicines to reach their goals.

As part of the govern­ment pro­gram “In­no­va­tive Biotech­nolo­gies” for 2010-2012 and un­til 2015, the Zhodi­noa­groPlemelita breed­ing com­pany has in­tro­duced cut­ting-edge tech­nolo­gies to in­crease the yield­ing ca­pac­ity of an­i­mals. Pic­tured is ju­nior re­search as­so­ci­ate Yuri Kirikovich at the mo­bile lab­o­ra­tory for trans­plant­ing em­bryos

Belmed­preparaty is Be­larus’ lead­ing phar­ma­ceu­ti­cal

com­pany

Novopolotsk Plant of Pro­tein and Vi­ta­min Con­cen­trates is Be­larus’ only pro­ducer of mi­cro­bi­o­log­i­cal pro­tein for an­i­mals – a nat­u­ral feed sup­ple­ment in­cluded in the govern­ment im­port sub­sti­tu­tion pro­gram

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