Brussels, 5 March 2003

In its first progress report since adopting the EU strategy on life sciences and biotechnology in 2002, the European Commission today indicated that the risk of diverging policies in Member States could seriously hamper the effectiveness and consistency of the EU strategy in this field. While progress has been made in some areas, such as the adoption of the EU 6 th Research Framework Programme and the EU regulatory framework for GMOs, others are suffering from serious delays. For instance, Member States are slow in transposing biotechnology patents legislation. These delays increase the risk of failing to meet in the area of life sciences and biotechnology the March 2000 Lisbon European Council objectives, for Europe to become the most competitive and dynamic knowledge-based economy in the world. Decisive action and concrete commitments are now urgent: these include in particular more research and financial resources, and completing the system for the protection of intellectual property rights.

"A recent Commission survey of private biotech companies and public research institutes reveals that 39% of the respondents have cancelled research projects on Genetically Modified Organisms (GMOs) over the last four years," said European Research Commissioner Philippe Busquin. "In the private sector alone, 61% of respondents have cancelled research projects in this field. Furthermore, between 1998 and 2001, the number of notifications for GMO field trials in the EU declined by 76 %. Now that legitimate consumer and environmental concerns have been tackled by strict EU legislation, it is time to reverse this downward trend. If we do not react, we will be dependent on technology developed elsewhere in the world within the next ten years."

Enterprise and Information Society Commissioner Erkki Liikanen said: "Practically the entire European biotechnology industry is facing difficulties due to the collapse in investor confidence in knowledge-based industries. Many small biotechnology enterprises, working on medical, industrial, agricultural and environmental applications, are unable to get the funding they need to turn their research findings into a commercial reality. If a large number of such enterprises were to fail, it would seriously undermine knowledge that is critical to the long-term competitiveness of major European industries. Concerted action, involving public authorities as well as the private sector, is needed to improve the investment climate for biotechnology in Europe."

The EU Strategy for life sciences and biotechnology

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In January 2002, the Commission adopted a Strategy for Europe on Life Sciences and Biotechnology, including policy recommendations and a 30-point Action Plan ( final). It proposes a comprehensive roadmap up to 2010 and puts the sector at the forefront of frontier technologies, helping the European Union meet its long-term strategic goal established by the Lisbon European Council in March 2000: to become the most competitive and dynamic, knowledge-based economy in the world, capable of sustainable growth with more and better jobs within a decade.

The Action Plan tackles issues such as human resources in life sciences, research, management of biotech companies, legal issues, intellectual property rights, access to finance, networking of players in this field, the role of public authorities and regulators, public debate and dialogue with stakeholders, ethics, pharmaceutical legislation, GMO regulation, the international framework, and EU policy in developing countries (including agriculture, genetic resources and health).

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European institutions support this integrated approach as the way to achieve the Lisbon objective of promoting this high-technology area. Life sciences and biotech can foster growth, create new jobs and benefit a wide range of sectors such as health and agriculture, while at the same time contributing to broader goals, such as sustainable development.

In anticipation of the 2003 Spring Council, the German Federal Chancellor Gerhard Schr?der, French President Jacques Chirac and British Prime Minister Tony Blair have stressed the potential of biotechnology to improve European industrial competitiveness and ensure employment opportunities. At the same time, they underlined the importance of developing all aspects of European business to achieve the Lisbon Strategy.

Progress, delays and the need for action

Today's report assesses progress in implementing the strategy in fields such as research, science and society, competitiveness, innovation, access to finance and intellectual property, Genetically Modified Organisms (GMOs), and international issues (the impact of the current situation on GMOs on our relations with trade partners and developing countries).

In line with the Action Plan timetable, the Commission has made progress on a wide range of specific actions and has supported various independent actions undertaken by European regions, academia and industry alike. In some Member States a number of measures are already in place, which tie in with the Biotechnology Strategy.

Research

Although strategy implementation is still at an early stage, a certain amount of progress has been made. A notable achievement has been the adoption of the 6 th EU Research Framework Programme (FP6 2003-2006), which will continue to underpin basic scientific research and help to build the European Research Area in this and other fields. FP6 devotes €2.225 billion to life sciences, genomics and biotechnology for health. A further €685 million will be dedicated to food quality and safety.

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However this is a relatively small amount compared to private investment in this field. European biotech companies invested €7.5 billion in research last year, and biotech-related industry, such as pharmaceuticals and chemicals, substantially more.

These companies are making a bigger contribution than other sectors to achieving the Barcelona European Council target, to allocate 3% of Gross Domestic Product (GDP) to research in Europe. If the current trend towards moving biotech research outside Europe continues, this contribution will decrease.

Competitiveness and innovation

To foster competitiveness and innovation in this field, the Commission calls for better co-ordinated research across Europe, better access to finance, in particular to risk capital, and for clear, equitable, affordable and effective intellectual property rights regime in Europe. This requires the swift adoption of the Commission proposal for a Community Patent, and transposition into national legislation of the Directive on biotechnological inventions (Dir ) by non-compliant Member States.

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GMOs

Considerable progress has been made on the legislative framework surrounding GMOs. The new regulatory framework on GMOs, including the Commission's proposals on traceability and labelling of GMOs and on GM food and feed, provides legal certainty for operators. It also addresses public concerns and aids consumer choice, thereby encouraging further public acceptance of GMO use. It is also important that the regulatory framework is clear and predictable if the rapid decline in European GMO field research is to be reversed.

Science and society

Rapid advances in life sciences have created high expectations for curing diseases and improving quality of life, while raising concerns as to their ethical and social consequences. The Commission is committed to ensuring that ethical, legal, social and wider cultural aspects are taken into account in policy-making and research funding. Sensitive issues include human reproductive cloning. The Commission supports a worldwide ban on this issue. On human embryonic stem cell research, the Commission will present a report to the European Parliament and Council shortly, as the basis for an inter-institutional seminar on this kind of research.

International issues

Biotechnology is currently discussed in many international fora. This is a reflection of the different concerns and objectives surrounding biotechnology, but raises a question of international governance. It is therefore essential to create an adequate forum for promoting an open and transparent dialogue between all stakeholders concerned, facilitating mutual understanding of the concerns and objectives of the different countries and regions. Therefore the Commission recommends giving further consideration (together with our trading partners) to the need for a multilateral consultative forum to contribute to building international consensus on biotechnology

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DN: Date: 05/03/2003