Commentary:
Pot of Green Gold

Anti-free enterprise activists are at it again. This time they’re using the 1992 Convention on Biological Diversity (CBD), which gave signatory nations and indigenous people sovereignty over their biological resources. During the coming months, World Trade Organization (WTO) and CBD delegates will meet again in Geneva and elsewhere, to devise an international legal framework to control access to the resources – and ensure “fair and equitable sharing” of any financial or other benefits that might come from utilizing genetic materials and “traditional knowledge” to create new drugs.

Unfortunately, many aspects of the CBD are counterproductive. One of the most damaging proposals would curtail existing patent rights for pharmaceutical products derived from plants, under the guise of “benefit sharing.” This proposal is based on several fallacies and would have serious negative consequences for biotechnology and the Convention’s stated goals.

Fallacy 1: Existence equals value. The Stone Age didn’t end because our ancestors ran out of stones – and the Iron Age didn’t begin because iron ore deposits suddenly appeared on our planet. The resources were always here. But until human creativity – our “ultimate resource” – figured out how to extract, refine and forge ore into things people needed, those deposits had no value.

Likewise with the notion of “green gold,” the activists’ (and Convention’s) assumption that vast untapped wealth lies within these biological resources – and must be protected from “bio-pirates” who want to “patent them for private profit.”

Unlike gold, these bio-resources do not have intrinsic value. Genetic resources are valuable only if researchers are allowed to discover their pharmacological secrets and create affordable new drugs that address health problems better than alternatives. Until then, all this potential bio-wealth is just a pot of green gold at the end of the rhetorical rainbow.

Invention is 1% inspiration, 99% perspiration, and lots of cash. Unlocking the pharma vault in some Amazon plant might be relatively easy if locals already use it to relieve pain (aspirin), suppress appetites (hoodia) or cure malaria (artemisinin), for instance. Most often, though, it takes years of expensive trial-and-error research, followed by years in the drug-approval-process briar patch.

On average, companies invest 10 years and $800 million, to screen over 5,000 compounds, get 5 into human clinical trials, and launch a single new drug. Only 3 of every 10 successful new drugs generate revenues greater than their R&D costs; those three must finance all the unsuccessful efforts. Research with natural bio-resources faces even longer odds: only one sample in 250,000 will eventually yield a commercial drug, though many may provide leads to other drugs.

Moreover, the mere discovery of a resource does not garner a patent or create value. A patent will be granted – to safeguard the investment, intellectual property rights, process and product – only if a creative new process ensures probable commercial success and public benefit.

Fallacy 2: A big UN program is better than small bilateral agreements. Politics, ideology and infighting often impede progress. Nearly 7 years after the WHO’s Roll Back Malaria campaign was launched, malaria rates are up 10% and 10 million more people have died – while a straightforward South African program cut rates and deaths by 93% in three years.

In the decade before the CBD was signed, Costa Rica entered into agreements with drug companies to provide biological samples, in exchange for up-front fees, royalties, laboratories, equipment and training for local scientists. It’s now advising other developing nations. Today, the CBD is still moribund, as parties continue to squabble over definitions of fundamental terms like “bio-piracy” and “bio-prospecting.”

Worse, NGOs like Friends of the Earth insist that there is no such thing as legitimate bio-prospecting. To them, all bio-prospecting and patenting of genetic resource inventions is piracy, virtually any corporate engagement with indigenous people should be prohibited, and limiting biotech patentability is just one step toward eliminating all patents for biotech products.

Fallacy 3: Battling corporate biotechnology will spur development. Emotional polemics don’t generate progress. Companies and investors don’t have to go where they aren’t wanted – or to countries that attack intellectual property rights, pirate patented products, or threaten to impose fines and overturn drug patents years after the fact. At the 2001 WTO Ministerial meeting in Doha, activists attacked corporate patents for HIV/AIDS medicines – and succeeded only in reducing investment in developing new generations of AIDS drugs. Limiting patentability for biotech will simply hurt those with the most to gain from transferring technology and research opportunities to developing countries, through legitimate bio-prospecting.

The legal wrangling and threats have also played a major role in causing industry to lose interest in exploring rainforests for prospective drugs – and switch to synthetic drug development in labs. At this point, CBD countries would be better off if they worked with industry to reignite interest in biological resources.

Fallacy 4: A complex international regime will bring benefits to developing countries. In fact, 50% of zero is nada. Countries that create cumbersome, unfriendly, counterproductive legal regimes generate little investment, and fewer benefits. Those that participate in a system that’s already produced thousands of life-enhancing drugs will build a future founded in science, property rights and wealth-generation, ensuring better lives for their people.

When obstacles are strewn in the path of investment, innovation, discovery and patent protection, investors and researchers seek less risky opportunities, such as “combinatorial chemistry” with synthetic molecules. In the Philippines, Colombia and virtually every other country that has created such obstacles, bio-prospecting has evaporated. The result is that the next generation of biological drugs is never born – and countries and indigenous people who might actually have the next taxol, cortisone, artemisinin or hoodia never realize their dream of turning it into a blockbuster.

Governments, companies, NGOs, indigenous people and patients alike agree that benefits from commercial development of new products from genetic resources should flow back to their providers. But developing countries don’t need another symbolic victory. They need real, tangible benefits. That means recognizing these basic principles, abandoning polemics and the search for pots of green gold, and agreeing on workable, mutually acceptable definitions for basic terminology. Most of all, it means crafting a bilateral or global system that eliminates legal minefields … encourages and rewards investors, companies and researchers for their risk-taking and dogged persistence … and ensures the creation – and sharing – of real benefits that can come only from real discoveries.

It’s a lesson that should probably be applied to a lot of public policy debates these days.
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Paul Driessen is senior policy advisor for the Congress of Racial Equality and Center for the Defense of Free Enterprise, and author of Eco-Imperialism: Green power ? Black Death.