Consequences, Opportunities and Challenges for

Transcription

CONSEQUENCES, OPPORTUNITIES AND
CHALLENGES OF MODERN BIOTECHNOLOGY
FOR EUROPE (BIO4EU) - TASK 2
REPORT 3
DELIVERABLE 16
Framework Service Contract
150083-2005-02-BE
Specific Contract C150083.X12
Version no. 5
This report has been produced by the ETEPS AISBL with contributions from:
Thomas Reiss, Fraunhofer Institute for Systems and Innovation Research, Germany
Sibylle Gaisser, Fraunhofer Institute for Systems and Innovation Research, Germany
Iciar Dominguez Lacasa, Fraunhofer Institute for Systems and Innovation Research, Germany
Bernhard Bührlen, Fraunhofer Institute for Systems and Innovation Research, Germany
Bettina Schiel, Fraunhofer Institute for Systems and Innovation Research, Germany
Christien Enzing, TNO Innovation Policy Group, Netherlands
Annelieke van der Giessen, TNO Innovation Policy Group, Netherlands
Sander van der Molen, TNO Innovation Policy Group, Netherlands
Johan van Groenestijn, TNO Microbiology Group, Netherlands
Koen Meesters, TNO Microbiology Group, Netherlands
Raija Koivisto, VTT Innovation Studies Group, Finland
Sanna Auer, VTT Innovation Group, Finland
Willem M. Albers, VTT Innovation Group, Finland
Harri Siitari, VTT Innovation Group, Finland
Gun Wirtanen, VTT Bioprocessing Group, Finland
Arja Miettinen-Oinonen, VTT Bioprocessing Group, Finland
Klaus Menrad, University of Applied Sciences of Weihenstephan, Germany
Marina Petzoldt, University of Applied Sciences of Weihenstephan, Germany
Sandra Feigl, University of Applied Sciences of Weihenstephan, Germany
Tobias Hirzinger, University of Applied Sciences of Weihenstephan, Germany
Andreas Gabriel, University of Applied Sciences of Weihenstephan, Germany
Joyce Tait, Innogen Centre, University of Edinburgh, United Kingdom
Ann Bruce, Innogen Centre, University of Edinburgh, United Kingdom
Clare Shelley-Egan, Innogen Centre, University of Edinburgh, United Kingdom
Alessandro Rosiello, Innogen Centre, University of Edinburgh, United Kingdom
Natalie Nicholls, Innogen Centre, University of Edinburgh, United Kingdom
Gareth Butterfield, Innogen Centre, University of Edinburgh, United Kingdom
Shefaly Yogendra, Innogen Centre, University of Edinburgh, United Kingdom
Catherine Lyall, Innogen Centre, University of Edinburgh, United Kingdom
Jonathan Suk, Innogen Centre, University of Edinburgh, United Kingdom
Graham Plastow, Innogen Centre, University of Edinburgh, United Kingdom
Farah Huzair, Innogen Centre, University of Edinburgh, United Kingdom
Jim Ryan, CIRCA Group Europe, Ireland
Tony Forde, CIRCA Group Europe, Ireland
Samantha Smith, CIRCA Group Europe, Ireland
Susan Cozzens, Georgia Tech Technology Policy Assessment Center (TPAC), USA
Anthony Arundel, Maastricht Economic Research Institute on Innovation and Technology
(MERIT), Netherlands
Framework Service Contract 150083-2005-02-BE
Consequences, opportunities and challenges of modern biotechnology for Europe - Task 2
Report 3/Deliverable 16
Page 2 of 315
Document Change Record
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Date
Change
Release
4th October 2006
1
2
all
13th October 2006
3
all
5th January 2007
4
17, 67
16th March 2007
5
all
28th September 2007
Distribution
Organisation
Number of Documents
Page 3 of 315
Page 4 of 315
Table of Contents
List of Figures ............................................................................................................7
List of Tables ..............................................................................................................8
Executive summary .....................................................................................13
I. Introduction ...............................................................................................23
II. Results ......................................................................................................29
1. Introduction...................................................................................................................... 29
2. Modern biotechnology R&D landscape and human capital ............................................ 29
2.1
Introduction .................................................................................................... 29
2.2
Methodological issues ................................................................................... 30
2.2.1
Private sector indicators ................................................................................ 30
2.2.2
Public research and development in biotechnology ...................................... 31
2.2.3
Patent indicators ............................................................................................ 32
2.2.4
Bibliometric indicators.................................................................................... 33
2.3
Indicators ....................................................................................................... 34
2.3.1
Indicators on the private sector C1-C5 .......................................................... 34
2.3.2
Indicators on the public sector C6-C8............................................................ 34
2.3.3
Patent indicators C9-C12............................................................................... 35
2.3.4
Bibliometric indicators C13-C14 .................................................................... 38
2.4
Discussion...................................................................................................... 38
2.4.1
Private sector indicators ................................................................................ 38
2.4.2
Public sector indicators.................................................................................. 39
2.4.3
Patent indicators ............................................................................................ 40
2.4.4
Bibliometric indicators.................................................................................... 42
3. Modern biotechnology for human and animal health ...................................................... 42
3.1
Introduction .................................................................................................... 42
3.2
Adoption......................................................................................................... 44
3.2.1
Human health sector...................................................................................... 44
3.2.1.1
Introduction human health ............................................................................. 44
3.2.1.2
Pharmaceuticals ............................................................................................ 45
3.2.1.2.1 Number of products and application fields .................................................... 45
3.2.1.2.2 Revenues....................................................................................................... 49
3.2.1.2.3 Companies..................................................................................................... 52
3.2.1.2.4 Products in development ............................................................................... 54
3.2.1.2.5 End-user acceptance..................................................................................... 56
3.2.1.2.6 Global market situation .................................................................................. 57
3.2.1.2.7 Transition into the chemical sector ................................................................ 60
3.2.1.3
Diagnostics .................................................................................................... 61
3.2.1.3.1 Revenues....................................................................................................... 61
3.2.1.3.2 Companies..................................................................................................... 64
3.2.1.3.3 End-user acceptance..................................................................................... 65
3.2.1.4
Vaccines ........................................................................................................ 68
3.2.1.4.1 Number of products and application fields .................................................... 68
3.2.1.4.2 Revenues....................................................................................................... 71
3.2.1.4.3 Companies..................................................................................................... 72
3.2.1.4.4 Products in development ............................................................................... 73
3.2.1.5
Novel therapeutic approaches ....................................................................... 75
3.2.1.5.1 Pipeline products ........................................................................................... 75
Page 5 of 315
3.2.1.5.2
3.2.2
3.2.2.1
3.2.2.2
3.2.2.3
3.2.2.4
3.2.3
3.3
3.3.1
3.3.2
3.3.2.1
3.3.2.2
3.3.3
3.3.3.1
3.3.3.2
3.3.3.3
3.3.3.4
3.3.3.5
3.3.3.6
3.3.3.7
3.3.3.8
3.3.4
Emerging technologies .................................................................................. 81
Animal health sector ...................................................................................... 82
Introduction animal health.............................................................................. 82
Indicator-based analysis of animal health ..................................................... 83
Pharmaceuticals ............................................................................................ 85
Vaccines ........................................................................................................ 88
Summary on adoption.................................................................................... 88
Impact ............................................................................................................ 89
Introduction .................................................................................................... 89
Generic indicators .......................................................................................... 90
Description of generic impact indicators in human health sector .................. 90
Results of generic impact in human health sector......................................... 91
Case study summaries .................................................................................. 98
Hepatitis B vaccine ........................................................................................ 98
Insulin........................................................................................................... 101
Interferon...................................................................................................... 104
Glucocerebrosidase ..................................................................................... 106
CD20 antibodies .......................................................................................... 109
Cardiac diagnostics ..................................................................................... 114
HIV-testing ................................................................................................... 116
Phenylketonuria (PKU) ................................................................................ 119
Summary on impact..................................................................................... 122
4. Modern biotechnology in primary production and agro-food......................................... 123
4.1
Introduction .................................................................................................. 123
4.2
Scope........................................................................................................... 124
4.2.1
Molecular diagnostics .................................................................................. 124
4.2.2
The development of new or improved varieties and breeds........................ 125
4.2.3
Propagation of desired genotypes ............................................................... 125
4.2.4
Organisation of research on primary production and agro-food sectors ..... 126
4.3
Adoption of new biotechnology in the primary production and
agro-food sectors ......................................................................................... 126
4.3.1
Objectives and description........................................................................... 126
4.3.2
Adoption indicators - overview..................................................................... 126
4.3.2.1
Indicators available from public statistics and/or reports ............................. 127
4.3.2.2
Indicators to be elaborated on the basis of surveys and/or interviews........ 127
4.3.3
Indicators available from public statistics and/or reports ............................. 128
4.3.4
Indicators elaborated on the basis of surveys and interviews molecular diagnostics .................................................................................. 138
4.3.5
Numbers and shares of molecular diagnostics used in natural resource
management, compliance and monitoring and by processors,
wholesalers and retailers ............................................................................. 141
4.3.5.1
management, compliance and monitoring................................................... 141
4.3.5.2
Numbers and shares of molecular diagnostics used by processors,
wholesalers and retailers ............................................................................. 142
4.3.6
Indicators elaborated on the basis of surveys and interviews new varieties and breeds and their propagation: livestock.......................... 143
4.3.7
Indicators elaborated on the basis of surveys and interviews new varieties and breeds and their propagation: fish .................................. 145
4.3.8
Indicators elaborated on the basis of surveys and interviews new varieties and breeds and their propagation: plants .............................. 150
4.3.9
Summary on adoption.................................................................................. 152
4.3.9.1
Conclusions related to share of companies active in biotechnology ........... 152
4.3.9.2
Conclusions related to European competitiveness in the agro-food area ... 152
4.3.9.3
Adoption of modern biotechnology in molecular diagnostics ...................... 153
4.3.9.4
Adoption of modern biotechnology-based diagnostic tests by natural
resource managers and food processors, wholesalers and retailers .......... 153
4.3.9.5
Adoption of modern biotechnology in livestock breeding and propagation . 154
Page 6 of 315
4.3.9.6
4.3.9.7
4.4
4.4.1
4.4.1.1
4.4.1.2
4.4.1.3
4.4.2
4.4.3
4.4.3.1
4.4.3.2
4.4.3.3
4.4.3.4
4.4.3.5
4.4.4
4.4.4.1
4.4.4.2
4.4.4.3
4.4.4.4
4.4.4.5
4.4.5
Adoption of modern biotechnology in fish and shellfish breeding and
propagation .................................................................................................. 154
Adoption of modern biotechnology in plant breeding and propagation ....... 155
Impact of new biotechnology on primary production applications ............... 155
Introduction .................................................................................................. 155
Objectives .................................................................................................... 155
Indicators ..................................................................................................... 156
Choice of case studies................................................................................. 158
Generic impact indicators ............................................................................ 160
Case study summaries: molecular diagnostics ........................................... 170
Changes in diagnostic techniques (foot and mouth disease diagnostics)... 171
New diagnostics (BSE diagnosis)................................................................ 173
Animal vaccines (Pseudorabies) ................................................................. 176
Surveillance of food safety (Salmonella testing).......................................... 178
Traceability of GMO in the Food and Feed Industry.................................... 182
Case study summaries: new varieties and breeds and their propagation... 185
Marker-assisted selection in livestock breeding (pigs) ................................ 185
MAS in maize............................................................................................... 189
Livestock propagation techniques in cattle.................................................. 192
Fish propagation techniques........................................................................ 198
Micropropagation in horticulture .................................................................. 202
Summary on impact indicators .................................................................... 205
5. Industrial biotechnology applications ............................................................................ 208
5.1
Introduction .................................................................................................. 208
5.2
Adoption of biotechnology in the industrial sector ....................................... 209
5.2.1
Field 1: Bioethanol ....................................................................................... 210
5.2.1.1
Introduction .................................................................................................. 210
5.2.1.2
Number of factories...................................................................................... 211
5.2.1.3
Bioethanol production volumes as share of liquid fuel production volumes 212
5.2.1.4
Revenues..................................................................................................... 213
5.2.1.5
Adoption by end-users: fuel filling stations .................................................. 214
5.2.1.6
Share of regional production out of world production of bioethanol ............ 215
5.2.1.6
Import and domestic consumption of all ethanol ......................................... 215
5.2.2
Field 2: Biotech-based chemicals ................................................................ 216
5.2.2.1
Introduction .................................................................................................. 216
5.2.2.2
Enzymes ...................................................................................................... 218
5.2.2.2.1 Number of companies.................................................................................. 218
5.2.2.2.2 Production volumes ..................................................................................... 219
5.2.2.2.3 Revenues, market value .............................................................................. 219
5.2.2.3
Biopolymers ................................................................................................. 219
5.2.2.4
Other bulk and fine biotech-based chemicals.............................................. 220
5.2.2.5
Overall biotech-based chemicals................................................................. 222
5.2.2.5.1 Number of companies active in industrial biotechnology............................. 222
5.2.2.5.3 Revenues, market volume ........................................................................... 223
5.2.3
Field 3. Biosensors for environmental applications ..................................... 224
5.2.3.1
Introduction .................................................................................................. 224
5.2.3.2
Number of companies.................................................................................. 224
5.2.3.3
Revenues/Market......................................................................................... 226
5.2.3.4
Adoption by end-users................................................................................. 227
5.2.3.5
Regional contribution to world production ................................................... 228
5.2.4
Summary on adoption.................................................................................. 228
Page 7 of 315
5.3
5.3.1
5.3.1.1
5.3.1.2
5.3.2
5.3.2.1
5.3.2.2
5.3.2.3
5.3.2.4
5.3.3
5.3.3.1
5.3.3.2
5.3.3.3
5.3.3.4
5.3.3.5
5.3.3.6
5.3.3.7
5.3.3.8
5.3.3.9
5.3.3.10
5.3.4.
5.3.4.1
5.3.4.2
Impact of biotechnology in the industrial sector........................................... 230
Introduction .................................................................................................. 230
Generic impact of biotechnology in the industrial sector of the three fields 230
Specific impact of biotechnology in the industrial sector for ten specific
applications .................................................................................................. 232
Results of generic impact ............................................................................ 233
Field 1. Bioethanol ....................................................................................... 233
Field 2. Biotech-based chemicals ................................................................ 235
Field 3. Biosensors for environmental applications ..................................... 235
Generic impact of biotechnology for the industrial and environmental
sector as a whole ......................................................................................... 236
Case study summaries ................................................................................ 238
Bioethanol as fuel ........................................................................................ 238
Biopolymers ................................................................................................. 243
Cephalosporins ............................................................................................ 251
Enzymes for detergents............................................................................... 255
Enzymes for fruit juice processing ............................................................... 259
Enzymes for pulp and paper industry .......................................................... 262
Enzymes for textile processing .................................................................... 267
Lysine........................................................................................................... 271
Riboflavin – vitamin B 2 ............................................................................... 273
Biosensors for environmental applications .................................................. 278
Summary on impact of biotechnology on the industrial sector .................... 281
Generic impact of biotechnology on the industrial sector ............................ 281
Specific impact of biotechnology on the industrial sector ............................ 283
III. Conclusions ..........................................................................................285
IV. References ............................................................................................297
V. Acronyms/Glossary...............................................................................311
VI. Annexes.................................................................................................315
Page 8 of 315
List of Figures
Figure 1-1:
Figure 3-1:
Figure 3-2:
Figure 3-3:
Figure 3-4:
Figure 3-5:
Figure 3-6:
Figure 3-7:
Figure 3-8:
Figure 3-9:
Figure 3-10:
Figure 3-11:
Figure 3-12:
Figure 3-13:
Figure 3-14:
Figure 3-15:
Figure 3-16:
Figure 3-17:
Figure 3-18:
Figure 3-19:
Figure 3-20:
Figure 3-21:
Figure 3-22:
Figure 3-23:
Figure 3-24:
Figure 3-25:
Figure 3-26:
Figure 3-27:
Figure 3-28:
Figure 3-29:
Figure 3-30:
Figure 4-1:
Figure 4-2:
Conceptual framework for biotechnology indicators ......................................... 26
Share of number of biopharmaceuticals out of all pharmaceuticals newly
launched in the indicated countries (indicator HA1b) ....................................... 47
Therapeutic fields of biopharmaceuticals in the market by originator country
of inventing company in 2005 ........................................................................... 48
Number of NMEs by product classes and countries in 2006 ............................ 49
Share of revenues of biopharmaceuticals out of all pharmaceuticals
(indicator HA1e) ................................................................................................ 50
Penetration of the biopharmaceutical sector into the overall pharmaceutical
market ............................................................................................................... 51
Average annual growth rate for the pharmaceutical and biopharmaceutical
market for 1998-2001 and 2002-2005 .............................................................. 52
Number of biopharmaceutical and vaccines companies 1996-2006 ................ 53
Share of all companies that use biotechnology for developing and
producing biopharmaceuticals and recombinant vaccines (indicator HA3) ...... 53
Biopharmaceuticals in clinical trials (a)) and all clinical trials (b)) 1996-2005... 54
Adoption rate of biotechnology for drug development (indicator HA6a):
share of clinical trials with biopharmaceuticals out of all clinical trials.............. 55
Share of biopharmaceutical prescriptions out of all prescriptions
(Indicator HA2e). ............................................................................................... 56
Share of global biotechnology revenues in public companies in 2005 ............. 57
Share of imports of four biotechnology product classes out of total
domestic revenues of biopharmaceuticals........................................................ 60
The acceptability of diagnostic and societal use of genetic data...................... 67
Age and optimism about pharmacogenetics in the EU..................................... 68
Number of recombinant (a)) and all vaccines (b)) by origin of inventing
company 1996-2005 (country assignment by national localisation of
headquarter)...................................................................................................... 69
Share of recombinant vaccines out of all vaccines launched 1996-2005
(indicator HA1c) ................................................................................................ 70
Share of revenues of recombinant vaccines in all vaccines (indicator HA1f) ... 71
Share of vaccines in all pharmaceuticals (Indicator HA2b) .............................. 72
Number of clinical trials with vaccines 1996-2005,
a): recombinant vaccines, b): all vaccines ........................................................ 73
Share of recombinant vaccines in clinical trials out of all vaccines in clinical
trials (indicator HA6e)........................................................................................ 74
Therapeutic vaccines in clinical trials................................................................ 74
Number of gene therapy trials 1996-2005 ........................................................ 75
Share of gene therapy trials out of all clinical trials (indicator HA6b) ............... 76
Number of cell-based products at the market (a)) and in clinical trial (b)) ........ 77
Share of cell-based products out of all pharmaceuticals at the market (a))
and in clinical trials (b)) (indicators HA6c and HA6d) ....................................... 78
Stem cell applications in clinical trials 1996-2006............................................. 81
Development of RNA interference (RNAi) products world-wide in preclinical
and clinical development................................................................................... 82
Distribution of biotechnology companies by sector 2003.................................. 98
Oncology therapeutic monoclonal antibodies market and revenue
forecasts in US................................................................................................ 113
Relative trade advantage index by region 1990-2000 .................................... 138
Total GDP in the agricultural sector ................................................................ 161
Page 9 of 315
List of Tables
Table 2-1:
Table 2-2:
Table 2-3:
Table 2-4:
Table 2-5:
Table 2-6:
Table 2-7:
Table 2-8:
Table 2-9:
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Table 3-1:
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Table 3-3:
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Table 4-1:
Table 4-2:
Table 4-3:
Table 4-4:
Table 4-5:
Table 4-6:
Table 4-7:
Private sector indicators C1-C2 ........................................................................ 34
Private sector indicators C3-C5 ........................................................................ 34
Public sector indicators C6.1-C6.2.................................................................... 34
Public sector indicators C7-C8.......................................................................... 35
Patent indicators C9.......................................................................................... 35
Patent indicators C10........................................................................................ 36
Bibliometric indicators C13 ............................................................................... 38
Bibliometric indicators C14 ............................................................................... 38
Biopharmaceuticals in clinical trial according to therapeutic field in 2005 ........ 55
Global biotechnology revenues (€ million) ........................................................ 57
Comparison between ten-digit and six-digit product categorisation for
the USA............................................................................................................. 58
Import data for four biotechnological product categories.................................. 59
Total IVD Market in 2004 and 2010 Outlook..................................................... 62
Region-specific revenues of total IVD and molecular diagnostics in 2004
on basis of 16 leading countries ....................................................................... 62
Share of different molecular diagnostic applications and their CAGR
on the basis of 2004 market values in Europe* ................................................ 63
Leading in vitro diagnostic companies (2005) .................................................. 64
Number and type of US Genetic Testing laboratories ...................................... 65
Genetic polymorphisms listed in the OMIM database ...................................... 66
Genetic testing in 2004 ..................................................................................... 67
Indications for all vaccines listed in the PHARMAPROJECTS database ......... 70
Revenue from tissue engineering products, cell therapies and
biomolecules 1997 ............................................................................................ 79
Comparison of tissue engineering industry in the USA and ROW ................... 81
Major veterinary pharmaceutical producers...................................................... 84
Animal target of 64 vet products approved by EMEA, 1995-2006 * ................. 86
Number and type of veterinary product approved by EMEA, 1995-2006 ......... 86
Financial performance by size of US biotechnology companies in 2001 ......... 92
Production in the health and social work (€ bn)................................................ 93
Biotechnology revenues by application field 2003............................................ 93
Extrapolated health-specific and total biotechnology revenues 2003............... 94
Biotechnology employment by application field 2003 ....................................... 94
Extrapolated health-specific employment in biotechnology companies 2003 .. 95
Biotechnology R&D employment in the health sector 2003 ............................. 96
Application-specific employment in biotechnology companies 2003................ 97
Extrapolated employment numbers 2003 (health-specific biotechnology
applications and total biotechnology)................................................................ 98
Comparison of the NHL treatment prices (in EUR) by different drugs.
A study performed in UK in 2000. ................................................................... 111
Number and proportion of companies active in the primary
production/agro-food sector (active in biotechnology) .................................... 129
Number and proportion of companies active in the primary
production/agro-food sector (active in biotechnology) –
without agricultural farms ................................................................................ 131
EU share of world production – agricultural crops – indicator AA2 ................ 133
EU share of world production – meat products – indicator AA2 ..................... 134
EU domestic consumption – crops – indicator AA3........................................ 134
EU domestic consumption – meat products – indicator AA3.......................... 134
Agricultural and raw material products, % of national exports compared
to world exports............................................................................................... 136
Page 10 of 315
Table 4-8:
Table 4-9:
Table 4-10:
Table 4-11:
Table 4-12:
Table 4-13:
Table 4-14:
Table 4-15:
Table 4-16:
Table 4-17:
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Table 5-1:
Table 5-2.:
Table 5-3
Table 5-4:
Table 5-5
Table 5-6
Table 5-7
Table 5-8
Table 5-9
Table 5-10
Table 5-11
World agricultural exports by region (percentage) and standardised
balance (billion dollars) 1990-2000 ................................................................. 137
Growth in agricultural import flows by region – 1990-2000 (percentage) ....... 137
Growth in agricultural export flows by region – 1990-2000 (percentage) ....... 137
Results from survey on molecular diagnostics ............................................... 140
Phenomena analysed for livestock propagation ............................................. 143
Summary of results from survey+ ................................................................... 144
Phenomena analysed for fish propagation ..................................................... 145
Summary of results from survey of fish and shellfish breeders+ .................... 146
Results from fish propagation case study ....................................................... 146
Companies involved in aquaculture breeding or genetic enhancement
programmes .................................................................................................... 149
Aquaculture production by Member State - CI2003 (Metric Tonnes) ............. 150
Definition of generic impact indicators for primary production and
agro-food sector .............................................................................................. 156
Definition of specific impact indicators for primary production and
agro-food sector (to be elaborated through case studies) .............................. 157
Amount and share of biotechnology-related revenues out of total
revenues in agro-food applications (AI2_1 modified) ..................................... 162
revenues in agro-food applications (AI2_1 modified) –
without revenues of agricultural farms ............................................................ 163
Amount and share of total revenues of biotechnology-active firms in the
agro-food sector out of total revenues in agro-food applications
(AI2_2 modified).............................................................................................. 165
Amount and share of total revenues of biotechnology-active firms in the agrofood sector out of total revenues in agro-food applications
(AI2_2 modified) – without revenues of agricultural farms.............................. 165
revenues of biotechnology-related applications in all sectors (AI4 modified) . 166
Number and share of biotechnology-active employees in agro-food
applications out of total employees in agro-food applications (AI5) ............... 167
Number and share of biotechnology-active employees in agro-food
applications out of total employees in agro-food applications (AI5) –
without employees of agricultural farms.......................................................... 168
Number and share of biotechnology-active employees out of total
employment in biotechnology-active firms (AI6) ............................................. 169
Economic impact of Salmonella testing .......................................................... 179
Social impacts of Salmonella testing .............................................................. 180
Top European countries ranked according to total numbers of embryos
transferred (in vivo plus in vitro) in 2004. ........................................................ 194
Impact summary.............................................................................................. 195
Specification of adoption indicators and data availability................................ 210
Number of factories producing fuel bioethanol and liquid fuels in four world
regions, 2005 .................................................................................................. 211
Average production volumes of bioethanol per company (2005) ................... 212
Production volumes of fuel bioethanol compared with production volumes
of liquid fuel in four different world regions ..................................................... 213
Number of filling stations offering bioethanol compared to the total number
of filling stations in three world regions ........................................................... 214
Share of region to world production of bioethanol, 1999, 2002 and 2005 ...... 215
Import and consumption of bioethanol (in 1,000 tonnes), 2004 ..................... 215
Production volumes of enzymes (tonnes/year) by country, 2001................... 219
Production volumes biotech based polymers ................................................. 220
Production volumes and world market prices of biotech-based
chemicals, 2004 ............................................................................................. 221
Distribution of production volumes for three product groups across
world regions.................................................................................................. 222
Page 11 of 315
Table 5-12
Table 5-13:
Table 5-14:
Table 5-15:
Table 5-16:
Table 5-17:
Table 5-18:
Table 5-19:
Table 5-20:
Distribution of production volumes for the product groups enzymes,
biopolymers, bioethanol, amino acids, acids, vitamins and sweeteners
across world regions ....................................................................................... 223
Suppliers of biosensors and other bio-based tests for environmental
monitoring ....................................................................................................... 225
Adoption of biotechnology in three fields of industrial biotechnology ............. 229
Generic impact indicators: specifications and data availability ....................... 231
Bioethanol and liquid fuel production: share of GDP in four different world
regions (2003 and 2005*) ............................................................................... 234
Number of employees in bioethanol production in four world regions............ 234
Biotechnology revenues, totals and share 2003............................................. 236
Biotech-active employment: totals and share 2003 ........................................ 237
Generic impact of industrial biotechnology ..................................................... 282
Page 12 of 315
Executive summary
Modern biotechnology is one of the key enabling technologies of the 21st century with a potentially wide range of applications in many sectors, including health, agriculture and industrial
processes. Considering the potential of modern biotechnology to contribute to the achievement of major European Union policy goals, such as economic growth and job creation, public
health, environmental protection and sustainable development, the European Parliament has
requested the European Commission to carry out an assessment of modern biotechnology.
The European Commission welcomed the initiative and announced to undertake a study “to
conduct a cost benefit analysis of biotechnology and genetic engineering, including genetically modified organisms in the light of major European policy goals formulated in the Lisbon
Strategy, Agenda 21 and sustainable development”. This led to the development of the
Bio4EU study by JRC/IPTS.
The purpose of this study is two-fold. Firstly, it should evaluate the consequences, opportunities and challenges of modern biotechnology for Europe in terms of economic, social and environmental aspects. Secondly, it should help to increase public awareness and understanding of life sciences and biotechnology.
The study focuses on major modern biotechnologies in three main application areas: human
and animal health, primary production and agro-food, and industrial processes, energy and
environment. The focus of the study is on existing biotechnology applications and applications
in the pipeline, considering a timeframe of the next five years. The study concentrates on the
EU25 and other major players, in particular the USA and Japan. However, for specific application areas additional countries such as Switzerland, Canada, Russia, South Korea, Singapore, China, India and Brazil are included in the analysis. The study comprises the following
three tasks:
• Task 1: Mapping of modern biotechnologies and applications, analysis of data availability
and identification of indicator sets.
• Task 2: Adoption of modern biotechnologies and its consequences, opportunities and
challenges.
• Task 3: Contribution of modern biotechnology applications to the achievement of major
European policy objectives.
This report presents the results of task 2. Task 2 had three core objectives:
• Identifying the current adoption of modern biotechnology in the EU in comparison to nonEU countries in the areas health, primary production and agro-food, and industrial processes, energy and environment.
• Evaluating as quantitatively as possible the consequences, opportunities and challenges
of modern biotechnology applications for the EU in terms of economic, social and environmental aspects.
• Characterising the EU biotechnology R&D landscape, including human capital and analysing strengths and weaknesses compared to non-EU countries.
R&D landscape and human capital
The international comparative analysis of the capabilities of public and private biotechnology
sectors in the European Union reveals the following results:
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The capabilities in the private biotechnology sector are most developed in the USA compared
to the EU25 and Japan as indicated by the number, size (measured as employment and revenues), and ability to raise capital of dedicated biotechnology firms (DBF). However, if a
broader perspective of the sector is taken, that includes both DBFs and other biotech-active
firms, the EU25 compares well with the USA. Public sector indicators illustrate that there are
more and larger biotechnology research centres in the EU25 compared to the USA. A clear
European strength is observed in human capital for life sciences as indicated by the number
of PhDs in life sciences per population. However, public funding for biotechnology is much
lower in the EU25 compared to the USA.
Patent indicators confirm the strong position of the USA in biotechnology. In particular there is
a stronger focus of the USA on biotechnology compared to the EU25 and Japan. China is an
interesting case with very high patenting activities in biotechnology during the period 19992001. South Korea and Singapore are other emerging economies with increasing biotechnology patenting activities. However, in the case of South Korea, this reflects mainly the general
growth of patent applications from this country. Singapore on the other side is putting a
stronger focus on biotechnology in recent years as indicated by increasing shares of biotechnology patent applications in all patent applications. On a world level, we observe a trend of
decreasing patenting activities after the period 1999-2001 which is driven by the USA, where
the "high-tech crisis" at the beginning of this century led to a considerable reduction of patenting, in particular in biotechnology and ICT. Patenting activities of all regions are focussing
on health applications. This trend is most pronounced in the USA, however, the differences to
the EU25 are small. Industrial biotechnology is the second largest field followed by agro-food
applications. Again differences between the EU25 and USA are small, indicating a similar
specialisation pattern. Considering other countries, India, Japan and Russia seem to have a
rather strong focus on industrial biotechnology. There is a general trend to increasing patenting activities in generic (platform) biotechnologies pointing to the significance of generic technologies which are not linked directly to a specific application field.
The share of biotechnology patents among all patents in each application field indicates clear
regional differences in the significance of biotechnology in each sector. In all three application
fields biotechnology is most important in the USA. Differences between USA and the EU25
are most pronounced in industrial applications where the share of the USA is about twice the
respective value of the EU25 over the total period considered. Obviously, the importance of
biotechnology for such applications has been acknowledged much more in the USA
compared to the EU25. However, in the most recent period the EU25 is catching up. With
respect to patent applications in emerging fields (microarrays, human and animal stem cells,
RNAi, cloning and gene therapy) the USA have considerably larger capabilities in these
technologies as indicated by higher patenting shares compared to the EU25 and other
regions. Among the emerging economies, China is performing best with respect to emerging
technologies. A focus of China seems to be cloning and microarray technologies. In India,
Singapore and South Korea we also observe increasing patenting activities in emerging fields
with a main focus on stem cells and gene therapy.
The analysis of publication activities in biotechnology indicates that the USA and Japan have
a stronger focus on biotechnology than the EU25. However the absolute numbers of
publications are similar in the EU25 and the USA. The distribution of scientific activities
across the different application fields is quite similar between the EU25, the USA and Japan
with pharmaceutical/health applications gaining the largest share of publications.
General observations on adoption and impact of biotechnology
The adoption analysis indicates a broad penetration of modern biotechnology in all three
application fields considered. Generally, the EU25 has improved its international position
during the last years and gained market shares in comparison to the USA as outlined for
specific indicators in the sector-specific discussion below. However, we also observe pronounced differences between the three application areas in terms of general level of adoption
and also in terms of regional differences. The highest adoption rates are observed in the huFramework Service Contract 150083-2005-02-BE
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man and animal health field, followed by industrial applications of modern biotechnology and
primary production/agro-food.
The impact of modern biotechnology was analysed within the three categories economic, environmental, and social aspects. In all of the application fields considered, impact was
assessed using generic indicators measuring biotechnology's contributions to GDP, production, revenues and employment. However, the impact assessment turned out to be extremely
difficult due to lacking data, incomplete and incompatible statistics and differing definitions of
biotechnology and biotechnology-related economic parameters. In particular, in the primary
production and agro-food sector data availability of statistics is very poor. To overcome this,
task 2 of the Bio4EU study conducted a number of written surveys among companies,
industry associations and private research institutes. Within the surveying process we
experienced poor response rates and obtained little information on revenue figures and
production costs. This information is kept confidential as the analysed fields are highly
competitive. Response rates were lowest in the survey of seed companies. In order to
improve the response, some major companies were contacted by phone to elicit the reasons
for low participation. Company representatives explained that often the required information is
highly confidential and cannot be disclosed. Even the guaranty to use the information on an
anonymous basis and only for the Bio4EU study could not convince them to participate.
Furthermore, often no differentiation of data between conventional and biotechnology
approaches takes place on a company level. Following company recommendations, a second
wave of the survey with a significantly reduced questionnaire was sent out, but the response
rate remained too low. As an additional approach interviews with firms were carried out. Again
interviewees refused to answer the questions or were not able to give answers due to the
reasons mentioned above. Discussions with IPTS revealed no alternative strategies to solve
the problem so that it was agreed to drop this survey.
On the other hand, we were able to develop a set of very meaningful impact indicators which
in principle would be well suited to monitoring the impact of modern biotechnology on the
economy, society and environment.
A case study approach proved to be the best way to obtain detailed information on the impact
of the use of modern biotechnology in the various application fields. However, this approach
revealed some general limitations confirming the observations made with surveys: On a company level, in most cases no differentiation between biotechnology and non-biotechnology activities is made in the internal accounting systems. Accordingly, for companies it is very difficult, if not impossible, to provide detailed information e. g. on biotechnology-active employees
or biotechnology-related revenues. On the other hand, this is also an indication of the state of
diffusion of modern biotechnology: Companies no longer consider biotechnology as something particular which would need specific accounting - rather it has become an integrated tool
of a company's technological portfolio.
Human health
The adoption of modern biotechnology by firms for developing and producing biopharmaceuticals increased considerably during the last years in the EU25, now achieving an adoption
level of about 40 % (share of companies developing or selling at least one biopharmaceutical
in all pharmaceutical companies) which is comparable to the adoption rate of the United
States with 45 %. This indicates that firms in the EU25 increasingly appreciate the use of
biotechnology in this sector. A particular strength in the EU25 are vaccines, while the USA
dominate biopharmaceuticals, such as growth factors and recombinant interleukins/interferon.
In the case of diagnostics, biotechnology adoption in the EU25 is high as indicated by a
similar share of diagnostic companies among total biotechnology companies in the EU25 and
the USA.
Currently, the EU25 also achieves adoption rates similar to the United States in the clinical
development of drugs. The same observation holds true for vaccines, where in general a very
high adoption of modern biotechnology of almost 80 % is observed in Europe as well as in the
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United States. If we also include the “indirect” influence of biotechnology on the drug development process (the use of knowledge about disease mechanisms and drug targets which is
derived from biotechnology), nowadays pharmaceutical drug development is based nearly
100 % upon modern biotechnology. This is equally the case in the EU25 and the USA.
Pipeline products which are expected to be launched within about five years seem to be
dominated by companies located in the United States. Both in the cases of cell therapy and
gene therapyx the United States lead in terms of number and share of such trials;
nevertheless for gene therapy developments the EU25 was able to catch up with the United
States recently. The use of emerging technologies such as RNAi and stem cells for
developing therapies is also more prevalent in the United States compared to the EU25.
However, for example in the case of RNAi, total activities world-wide are still at a very low
level as measured by the number of preclinical and clinical projects and the EU25 is playing a
significant role in these world-wide efforts. Due to the early stage of this technology, there is a
good opportunity for the EU25 to expand its activities. It should be noted that Japan seems
not to play a significant role in all biotechnology applications for human health considered.
Adoption indicators for the use of modern biotechnology in veterinary medical applications
show that the EU25 has a strong position in some of the core technologies, such as recombinant and subunit vaccines. European companies are competing effectively in the local veterinary pharmaceutical and biologics markets and are among the global technology leaders in
animal vaccine development. US companies are the major competition and Japan has only
minor activity. The nature of animal medicine is changing, due to restrictions on therapeutics
in feed. In parallel, improvements in vaccine technology are facilitating protection against a
wider range of organisms. Use of microbial additives is also increasing.
General trends emerging from the impact analysis indicate that the EU lags behind the USA
in terms of economic and employment effects. Considering different biotechnology application
fields, the USA focuses more strongly on health care applications compared to the EU. This is
illustrated for example by health-specific revenues which account for 87 % of total
biotechnology revenues in the USA and only for 64 % of total biotechnology revenues in
dedicated biotechnology firms in the EU.
Within health care applications, the overall economic impact of biotechnology reaches with
1.40 % of total specific GDP in the EU only half the rate of the USA. Here health-care-specific
biotechnology contributes to 2.87 % of total health care GDP. A similar situation is found for
production: in the EU biotechnology accounts for 1.3 % of total health production compared to
2.5 % in the USA. These differences between the EU and the USA are also reflected in a
higher impact on employment. Whereas biotechnology contributes to 0.4 % of total health
sector employment in the EU, in the USA biotechnology-related staff in the health sector is
calculated to reach approximately 1 %.
An important impact dimension of the use of modern biotechnology in health applications is
the cost-benefit ratio. The exploration of this dimension within the different case studies
clearly indicates that additional cost-benefit studies are required for consistent conclusions on
cost-benefit, as this aspect is of increasing relevance for the approval and reimbursement
situation of new drugs. In order to achieve reliable cost data, a standardisation in economic
modelling will be necessary to evaluate properly the economic consequences of new and expensive therapies, e. g. in multiple sclerosis.
Both insulin and hepatitis B vaccine are examples for a complete transition from a conventional therapeutic or preventive regime to a biotechnology-derived approach illustrating a
large economic and social impact of biotechnology. Future impact is largely influenced by
general conditions such as reimbursement and national health strategies (e. g. vaccination
policy).
In the case of molecular diagnostics the EU has an established presence (illustrated by the
cardiac diagnostics case study) but there are more active companies outside the EU (USA,
Switzerland) in this field. In addition, it would appear that US clinics have been faster in taking
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up cardiac diagnostics than the EU. It seems that the USA health system, which is organised
in very cost-conscious Health Maintenance Organisation is taking the ‘big picture’ on the cost
benefit of these products, while many EU clinics are only comparing the cost of the new
products with the ‘old’ clinical chemistry assays, which are very cheap. In the case of
phenylketonuria genetic testing, the economic impact in terms of screening and testing costs
is low due to established biochemical alternatives.
The case study on therapy with glucocerebrosidase illustrates the strong impact of the Orphan Drugs legislation on the introduction of biotechnological products. The vast bulk of activity in the orphan drugs area is in the USA, although the EU is now benefiting from the
placement of certain Genzyme manufacturing activities in the EU. The case of CD20 antibodies for Non-Hodgkin's lymphoma (NHL) illustrates the benefits of antibody treatment in a
disease that causes a heavy burden for Europe. The outlook for the CD20 market is
promising and there are some new developments going on in Europe.
Primary production/agro-food
At a company level we observe only very low adoption rates of modern biotechnology in this
sector compared with the fields of human and animal health and industrial applications. In the
European Union less than 0.3 % of the companies active in this sector are bioactive
companies. In the United States the corresponding adoption rate is slightly higher, but still low
in the overall context. In this context, however, it must be considered that biotechnology in
human/animal health as well as in industrial companies is often directly applied in the
research and/or production processes, whereas in the agro-food application mainly
downstream users can be found which use products in which often a very limited proportion of
biotechnology-related methods, tools and/or products has been applied in the value chain.
Accordingly sector specifities also contribute to some extent to the low adoption rate at a firm
level.
Concerning the different subareas of primary production/agro-food, adoption is rather low for
the use of modern biotechnology in molecular diagnostics, while breeding and propagation in
livestock, fish and plants is using modern biotechnology quite extensively. In this context,
marker-assisted selection (MAS) technologies play a crucial role as indicated, for example, by
the percentage of total revenues from MAS in livestock breeding which ranges between 23 %
(EU) and 33 % (outside the EU). In the case of maize breeding, almost all multinational companies which dominate the market are applying MAS due to the reduced time for breeding
and launching a specific new variety.
Due to this low adoption of modern biotechnology in primary production/agro-food, also the
current impact of biotechnology in this sector is rather limited. General impact indicators show
that the share of biotechnology-active employees in the agro-food sector ranges between
0.13 % and 0.60 % in different EU Member States. Related to the total biotechnology sector,
the share of biotechnology-active employees in the agro-food sector out of all employees in
the sector ranges between 7 % and 16 % in the EU Member States.
The share of total biotechnology-related revenues of biotechnology-active firms in the agrofood sector out of the total revenues of the agro-food sector ranges between 0.068 % and
1.364 % when the revenues of agricultural farms is included and between 0.069 % and
1.718 % in the different EU Member States when it is excluded. The share of biotechnologyrelated revenues of biotechnology-active firms in the agro-food sector out of the total
revenues of biotechnology-related applications in all sectors range between 4 and 40 %. In
general, EU Member States can be divided into two groups. For one group agro-food
biotechnology has a relatively high importance compared to other biotech applications,
whereas for the other the share is relatively low. In addition, it must be considered that even if
the revenues of large agro-chemical and seed companies are taken into account, the
presented proportions are very high (especially in the Mediterranean countries) compared to
other indicators in the agro-food field (like e. g. number of companies) as well as compared to
indicators found for other biotech applications. The total revenues of biotechnology-related
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applications in all sectors realised by European firms differs greatly among the countries.
Compared to the USA, however, the figures are rather lowl. Furthermore, the USA showed a
continuous and impressive growth rate over the years in contrast to most EU Member States
where the revenues mainly stagnated.
The impression of a rather low current impact of modern biotechnology in primary production
and agro-food in the EU is based on indicators measuring impact for the total sector. The
case studies of ten different specific applications of modern biotechnology in this field, however, indicate that for some applications current economic and social impact is rather high.
The case of biotechnology-related diagnostics for Foot and Mouth Disease (FMD) demonstrates that there is a potentially very high economic, social and animal health impact from the
development of a rapid and effective test for the disease. Eleven companies and public sector
laboratories involved in the development of FMD diagnostics were identified, but it was not
possible to obtain reliable quantitative data, either from interviews or publicly available
sources, on the indicators of interest for this case study. However, qualitatively it is clear that
this is an area of major interest for the development of biotechnology-based diagnostic tests
with potentially enormous economic, societal and environmental impact in the event of a disease outbreak.
The development of rapid diagnostic test kits for BSE was driven by the need to cope with the
large numbers of samples that were legally required to be processed. Much of the financial
information required to evaluate the significance of the impact was regarded as confidential
by the companies concerned. However, we estimate that the income to laboratories from
biotechnology-based BSE diagnostic tests is about € 190 million in 2006. The workforce in the
companies producing the kits had increased by 100-300 %, reflecting the increased numbers
of samples processed. There is also an economic impact due to the re-opening of trade in
beef across national borders. Social impacts are related to a return of consumer confidence in
the food industry, as well as a reduced incidence of vCJD in humans.
The case study on pseudo-rabies animal vaccine shows that Aujesky’s disease primarily
affects pigs and the use of marker vaccine technology, along with Europe-wide co-ordination,
has made it possible to eradicate the disease from many countries. It has proven more costeffective to eradicate the disease than to treat it or to allow it to remain endemic. The live
attenuated marker vaccine now available revolutionised vaccination and eradication strategies in the EU and since many countries are now free of the disease, it is no longer used. All
vaccines registered for use in the European Union are manufactured within Europe, but actual
revenues figures are confidential.
New biotechnology-based tests for Salmonella, the second most prevalent food pathogen in
the EU, are only slightly more accurate in detecting Salmonella, but they deliver results much
more rapidly and allow more effective action to control food-borne disease. We found 76 firms
world-wide that are active in this area. Most of the firms develop a wide range of diagnostic
tests in addition to Salmonella. Changing trends in the incidence of Salmonellosis in the EU
and elsewhere are due to a range of factors, including improved animal husbandry, and cannot be attributed to the availability of the modern biotechnology-based test kits.
The case study on traceability of GMOs in the food and feed industry shows that there is
hardly a noticeable economic impact in terms of revenues and employment. However, if the
current political conditions and the regulatory framework in the EU are not changed significantly, some increases of revenues and employment are to be expected for test kit producers
and diagnostic laboratories while higher additional costs will incur for the food and feed industry. Although GMO testing is only carried out for approved products, potential negative
health and environmental effects of GM food and feed products are a complex issue and of
significant relevance for the perception and acceptance of GM food and feed by the European
consumers. Their attitudes towards GM food products are determined by their individual
attributes and values. However, the latest Eurobarometer report (2006) comes to the
conclusion that recent communication activities and the introduction of new regulations
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concerning the commercialisation of GM crops and the labelling of GM food products have
done little to allay the anxieties of the European public about biotechnology in the agro-food
sector 1.
Pig production is an important economic activity in the EU which has 39 % of world trade in
pig meat, and producers are competing with other countries with a lower cost base, requiring
them to adopt modern technologies that can contribute to their efficiency. Two European
companies produce genetic tests to support MAS, but the main product sold is pigs that are
derived using MAS. We estimate that MAS has contributed to the breeding of between 4080 % of breeding females in the EU.
The case study on marker-assisted selection in maize breeding shows that this biotechnological method has a high economic impact. The share of MAS-maize revenues out of the total
maize revenues is (at least) almost 100 % in large companies. Similar is true for the proportion of employees active in MAS-maize breeding out of all employees working in the field of
maize breeding. Also, in the last five years up to 70 % of the newly created jobs in maize
breeding were related to MAS. For the future it is expected that both revenues and employment will increase in the field of MAS due to an expected intensified application of MAS and
an expanded cultivation of maize (in particular for non-food purposes). Marker-assisted selection has only very limited (and often an ambiguous) influence on environmental factors.
Cattle breeding and production, mainly in the dairy sector, is the only area where embryo
technologies are currently applied on any scale, and its application is limited to the top of the
breeding pyramid where its impact on genetic improvement justifies its high cost. Five of the
ten largest cattle breeding companies are based in the EU in a context which involves a
complex range of public/private partnerships. The impact of the technology on employment is
very variable (from <5-80 % of employees in sector firms, depending on the type of business).
The share of revenues out of the total revenues can be up to 60 %; and the share of producer
prices influenced by embryo transfer (ET) is estimated to be 75 %. Social impacts include the
development of approaches that fit into sustainable land use programmes. ET is also a very
safe method of disseminating genetics from an infectious disease point of view. The
environment benefits indirectly from the improved productivity derived from genetic
improvement.
European aquaculture occupies a low share (3 %) of world production, but within that it has
approx. 12 % of global production of higher value species such as salmon, trout and oysters.
Genetic improvement referring to the use of molecular markers (e.g. microsatellites for
individual identification and family selection) is the most efficient form of biotechnology-related
improvement in salmon production and its current level of use of 30 % of overall production is
expected to increase in future. In Pacific oyster production, modern biotechnology is enabling
the introduction of 100 % triploidisation with minimal associated mortality. However, adoption
of modern biotechnology in hatchery production is expensive and increases production costs
by approx. 50 %.
The case study on micropropagation in horticulture showed that this biotechnological method
has gained a quite high economic impact in recent years. In most of the interviewed companies, micropropagation is applied (in some cases even up to 100 %). In 73 % of the firms
more than 50 % of the employees are dedicated to micropropagation activities. Moreover,
new jobs have been created in this field within the last years – mainly in eastern European
countries. For the future a slight increase both in revenues and employment is expected, due
to micropropagation especially in the new EU Member States. However, there is the problem
that more and more European companies relocate their production/propagation of plants to
countries with low-wage economy due to the high labour costs in the EU.
1
Gaskell, G. et al. (2006): Europeans and Biotechnology in 2005: Patterns and Trends. Eurobarometer
64.3
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Industrial biotechnology applications
The adoption of biotechnology in this sector was investigated for three fields: ‘Bioethanol as
fuel’, ‘Biotech-based chemicals’ (chemicals that are – partly - produced through
biotechnological production processes) and biosensors in environmental applications. The
adoption was measured using five adoption indicators.
It was estimated that the total number of companies that apply biotechnology in the EU25 in
the three fields together is at least 380. Most of them are companies that produce biotechbased chemicals: at least 305 have been identified. There are 16 large bioethanol producing
companies and at least 21 companies that produce biosensors for environmental applications
in the EU. The total figures for the USA and Brazil are rather similar: at most 370 and at least
340. However, the Brazilian figure only deals with bioethanol. For Japan at least 129 bioactive
companies that produce biotech-based chemicals and biosensors in environmental
applications have been identified.
Bioethanol production as a commercial activity has been mainly adopted by sugar and grain
industries. The EU contribution to the total world bioethanol production volume (29 million
tonnes) was 2.6 %. The USA and Brazil were responsible for the contribution of almost the
rest: 49 % and 40.8 % (2005 data). In the same year, the share of bioethanol factories out of
all liquid fuel plants was 12 % in the EU. In the United States this share is much higher,
reaching 54 %. In Brazil 96 % of all liquid fuel producing plants are bioethanol plants. Similar
differences can be observed in production volumes of bioethanol where the EU achieves a
share in all liquid fields of about 0.12 % in 2005, while the respective rate is 1.9 % in the
United States and 14 % in Brazil. Also the adoption by end users is much lower in the EU
compared to the United States or Brazil. Only about 8 % of liquid fuel filling stations in the EU
offer the bioethanol compared to 30 % in the United States and 100 % in Brazil.
In the case of biotech-based chemicals, the share of companies that produce these biotechchemicals of all chemical companies in the EU is rather low, achieving a rate of 0.5 %. In the
United States adoption is higher, indicated by 1.7 % and in Japan the adoption rate even
achieves 2.5 %. Data on relative shares of production volumes are only available for the
EU25, indicating that bio-based chemicals contribute 2.5 % of the total chemical production
volume. Biosensors for environmental monitoring are only produced by 21 companies which
is about 1.4 % of all companies producing environmental tests in Europe. However,
differences in this respect to the USA (at least nine companies identified) and Japan (at least
two companies identified) are not as large as in the case of bioethanol. In 2006 the US
represented 55 % of the biosensor environmental monitoring market, the EU 27% and Japan
14%. Regarding revenues the EU performs better than the US: 0.7 % of the EU revenues of
the environmental market are biosensors against 0.56 % for the US. In Japan this share is
0.19%.
The generic impact of industrial biotechnology applications was investigated again for the
three fields, using three generic impact indicators.
Analysis of the share of the field’s contribution to GDP as share of the total sectors
contribution to GDP (IBI1) could be made for Field 1 ‘Bioethanol as fuel’ (sector is liquid fuel
production sector) and Field 3 ‘Biosensors for environmental applications (sector is
environmental monitoring). For bioethanol these figures are for EU25 0.21 %, USA 2.0 % and
Brazil 13 % and for biosensors 0.007 % in the EU25, 0.006 % in the USA and 0.019 % in
Japan (2005 data). No data was available for Field 2 biotech-based chemicals.
The average share of revenues from biotechnology applications in the industrial and
environmental sector in the seven EU15 countries for which data are available was about
2.7 % of total biotechnology revenues. The biotech-related revenues for the industrial and
environmental sector in the EU15 was estimated at about € 440 million An extrapolation to
EU25 was not possible as no information was available for accession countries. Data on the
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biotech part of the revenues of active firms in each of the three fields separately were not
available; most companies contacted would not provide them.
The share of biotechnology-active employment in the industrial and environmental sector out
of total employment is about 4 % in EU15. It was estimated that about 3,300 biotech-active
employees work in companies in the industrial and environmental sector that apply
biotechnology in the EU15.
The specific impact of industrial biotechnology was investigated for ten specific applications
and for a number of specific impact indicators (case studies). The applications include: Bio
ethanol as fuel, Biopolymers, Cephalosporin, Enzymes for detergents, Enzymes for fruit juice
processing, Enzymes in the pulp and paper industry, Enzymes in textile processing, Lysine,
Riboflavin and Biosensors in environmental applications.
The case study on bioethanol impact confirms the differences between the EU, the United
States and Brazil already observed for the adoption of biotechnology. In general, the
economic impact is much lower in the EU. For example, the share of fuel bioethanol revenues
out of total liquid fuel revenues in Europe is currently about 0.15 %. This share ranges for the
United States between 1.7 % and 2 % and for Brazil between 10 % and 13 %. Accordingly,
the impact on job creation in Brazil is two orders of magnitude higher than the impact in the
EU. In the EU currently bioethanol factories employ about 525 people and another 3,000
indirect jobs exist in agriculture, transportation and fuel blending. In Brazil 12,000 jobs have
been created in bioethanol factories and additional 700,000 jobs are estimated in rural areas
to support the bioethanol industry. In the United States, the economic impact on employment
(5,760 jobs in bioethanol firms) is also much larger compared to Europe.
The impact analysis of biotech-basedpolymers indicates that both the USA and Japan – but
also China - are far ahead in the development and production of biotech-based polymers.
Even though no exact quantitative figures are available, it can be concluded that the USA and
Japanese shares of biotech-based polymer production volumes are considerably higher than
those of the EU: 42 % abd 25 % against 8 % for the EU. The main factors explaining such
differences are active public policies aimed at replacing fossil fuels by biomass in order to
become more independent from oil sources in the Middle East and to make use of agricultural
over-production (USA) and environmentally friendly waste management (Japan).
In a number of product groups that are addressed in the case studies Chinese firms are already very active. These include vitamins, antibiotics, amino acids, acids, but also polylactic
acid (PLA) and in the future also enzymes. Data about China’s activities in the field of industrial biotechnology are hardly available and rather poor and patchy.
The economic impact of biotechnology varies very much between the specific applications. It
is relatively high in applications where European firms have already existed for a long time
and biotechnology is an integral part of the R&D and production process, such as enzymes,
vitamins and cephalosporin building blocks. In a number of other applications the economic
impact is relatively low, such as in bioethanol and biotech-based polymers, which reflects also
that these two fields are at the beginning of their development.
The impact on production cost is a good indicator for the economic impact, mainly for reasons
of reducing production cost, biotechnological processes have replaced chemical production
steps. No hard data are available, but cost reduction has been illustrated in a qualitative way.
In cephalosporin production new biotech-based production processes have been developed
that generate only 0.7 % of material for incineration compared to the old chemical process,
and use less energy, solvents and raw materials.
Use of enzymes in downstream sectors such as the fruit juice processing, pulp and paper and
textile industries also contributes to more cost-efficient processes. Enzymes in fruit juice
production increase the yield and also the quality of the product, decrease filtration and
reduce filtration problems and waste. In paper making the use of lipases has led to a
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substantial reduction in pitch-related problems. In textile production catalases are used for
degradation of residual hydrogen peroxide after bleaching of cotton. In riboflavin production,
the introduction of a biotech-based manufacturing process for riboflavin has resulted in a 4050 % reduction of costs. Almost 50 % of all cotton bleaching liquor (batch and continuous
mode) is treated with catalase. This has led to significant reductions in overall production
costs. In the case of lysine in pig feed, the market price of lysine has become a function of the
price difference between soy bean on the one hand and wheat and corn to the other hand. A
high soy bean price allows a high lysine price. Start ups of large facilities have lead to
considerable price drops. As a result, large price fluctuations appear which have a dramatic
effect on the profitability of lysine factories.
Environmental impact of biotechnology varies considerably between the applications
addressed in the case studies and also between product groups and processes within a case
study. In some cases such as cephalosporin and riboflavin considerable saving of waste
streams and reduction of the use of energy and non-renewable resources are achieved.
Page 22 of 315
I. Introduction
Background and objectives
Modern biotechnology is one of the key enabling technologies of the 21st century with a potentially wide range of applications in e. g. health care, agriculture, and industrial processes.
At the same time, modern biotechnology has contributed to major advances in basic science.
In its simplest sense, modern biotechnology can be defined as the use of cellular, molecular
and genetic processes in the production of goods and services, and its beginning dates back
to the early 1970s when recombinant DNA technology was first developed. Unlike traditional
biotechnology – which includes fermentation and plant and animal hybridisation – modern
biotechnology is associated with a different set of technologies including the industrial use of
recombinant DNA, cell fusion, tissue engineering and others (http://bio4eu.jrc.es/).
In health care, modern biotechnology tools have opened up new avenues for the
development of innovative and more accurate diagnostics, and for the discovery of novel
drugs, thereby impacting disease prevention and therapy significantly (e. g. human insulin,
monoclonal antibodies). Additionally, modern biotechnology tools are now being applied in
plant breeding (e. g. cereal crop with increased protein yield, pest-resistant crops), and in the
production of industrial goods (e. g. chemicals or biodegradable polymers). It is evident that
modern biotechnology offers unique opportunities to address many needs and could
consequently serve as a major contributor in achieving European policy goals on e. g.
economic growth and job creation, public health, environmental protection and sustainable
development2.
In spite of these observations, recent data on the economic performance as well as on R&D
activities of the European biotechnology industry indicate that 2004 was a year of consolidation rather than growth3, 4. Moreover, recent reports 5 suggest that the actual adoption of
modern biotechnologies by various European industry sectors may be lower than anticipated,
even after major scientific breakthroughs, such as the sequencing of the human genome.
However, data on the actual uptake of modern biotechnology by various sectors (e. g. health,
agriculture, and environment) and its socio-economic consequences in Europe is still scarce.
Against this background, at the end of 2004 the European Parliament requested the
European Commission to carry out an assessment of modern biotechnology. The European
Commission welcomed the initiative and announced to undertake a study “into, and conduct a
cost-benefit analysis of, biotechnology and genetic engineering, including genetically modified
organisms, in the light of major European policy goals formulated in the Lisbon strategy,
Agenda 216, and sustainable development”. It has also announced that “The purpose of this
study is twofold. First of all, an evaluation of the consequences, opportunities and challenges
of modern biotechnology for Europe, in terms of economic, social and environmental aspects,
is important both for policy-makers and industry. The study would therefore constitute the
primary input to [the reflection on the role of the Life Sciences and Biotechnology in the re-
2
COM (2002): 27 Life Sciences and Biotechnology – a strategy for Europe.
Critical I (2005): Biotechnology in Europe: 2005 Comparative Study.
4
van Beuzekom (2004): Biotechnology statistics in OECD member countries: an inventory. OECD STI
working paper 2004/8
5
Arundel, A. (2003): Biotechnology indicators and public policy. OECD STI working paper 2003/5
6
Agenda 21 is a comprehensive plan of action to promote sustainable development, adopted by the
1992 United Nations Conference on Environment and Development in Rio de Janeiro, Brazil.
Page 23 of 315
3
newed Lisbon Agenda]. Secondly, this kind of independent study should help to increase
public awareness and understanding of life sciences and biotechnology.”7
The Commission Services have assigned the study to its Joint Research Centre (JRC), where
the study is led by the Institute for Prospective Technological Studies (IPTS), Seville. On this
basis IPTS developed the study “Consequences, opportunities and challenges of modern
biotechnology for Europe” (Bio4EU).
The envisaged reflection on the role of the Life Sciences and Biotechnology in the renewed
Lisbon Agenda will be supported by a mid-term review of the Community Strategy on Life
Sciences and Biotechnology in good time for the 2007 Spring European Council.
The study is structured along three tasks:
• Task 1, the mapping of modern biotechnologies and applications, analysis of data availability and identification of indicator sets was carried out in collaboration with the ETEPS
network, a consortium of the leading national counterparts of JRC-IPTS throughout Europe
with whom JRC has a contract framework for engaging in support activities. The report8 of
task 1 was published in April 2006.
• Task 2, adoption of modern biotechnologies and its consequences, opportunities and
challenges, is the core data gathering and evaluation exercise of the study. Task 2 was
launched in April 2006 and ran over a period of six months. The study was carried out in
collaboration with the ETEPS network. The present report presents the results of task 2.
• Task 3, contribution of modern biotechnology to major EU policy objectives, mainly deals
with relating the economic, social, and environmental consequences, opportunities and
challenges of modern biotechnology applications to major EU policy objectives, assessing
the contribution to their achievement. Furthermore, potential future impacts of biotechnology applications will be analysed.
Task 3 is carried out by JRC-IPTS, partly in parallel to task 2.
Task 2 has the following main objectives:
• Identifying the current adoption of modern biotechnology in the EU and compared to non-
EU countries in the areas health, agro-food and industrial processes, energy and environment.
• Evaluating as quantitatively as possible the consequences, opportunities and challenges
of modern biotechnology applications for the EU in terms of economic, social and environmental aspects.
• Characterising the EU biotechnology R&D landscape, including human capital and analysing its strengths and weaknesses compared to non-EU countries.
Scope
The scope of the study is delineated by the definition and understanding of biotechnology, by
the application areas of biotechnology considered, by the geographic coverage and by the
timeframe to be considered.
Modern biotechnologies
The study (encompassing tasks 1, 2 and 3) focuses on major modern biotechnologies. These
encompass DNA- , protein- and cell-based technologies utilised in the modification of living or
non-living materials for the production of goods and services. Under this definition, traditional
7
Life Sciences and biotechnology – a strategy for Europe. Third progress report and future orientations.
COM (2005) 286 final
8
http://bio4eu.jrc.es/documents/Bio4EU-Task1.pdf
Page 24 of 315
biotechnologies, such as fermentation and conventional animal and plant breeding, are not
included. However, modern biotechnologies used in combination with traditional biotechnologies, e. g. fermentation processes using recombinant organisms, are considered modern
biotechnology. Major modern biotechnologies have been identified in task 1 of the study and
are described in the report of task 1 (chapter 2). The identified biotechnologies are included in
the analysis.
Biotechnology application areas included
Modern biotechnology applications in the following areas were analysed:
• Human and animal health (see section 3)
• Primary production/agro-food (see section 4)
• Industrial processes, environment and energy (see section 5)
The specific scopes of these application areas are detailed in the respective parts.
Geographic area
Task 2 focuses on the EU25, and competitors, in particular the USA and Japan, and for specific application areas additional countries such as Switzerland, Canada, South Korea, Singapore, China, India and Brazil. It should be noted, however, that results of task 1 indicate that
the geographic coverage for several data needed is rather narrow.
Timeframe
The focus of task 2 is on existing biotechnology applications. In addition applications in the
pipeline, considering a timeframe of the next 5 years, are discussed.
Approach
As a general approach, data gathering is structured along a set of indicators based on the
work done in task 1. Accordingly, an indicator system was developed for the study within a
conceptual framework which allows differentiating biotechnology into several stages that can
be measured through suitable indicators. The following figure summarises these stages and
identifies three main types of indicators.
The focus of the analysis is on identifying indicators that can capture the development, diffusion and impacts of biotechnology in specific application fields. Therefore, indicators are classified into three main categories.
Input indicators describe capabilities and capacities in researching and developing biotechnologies. They include the necessary knowledge to develop biotechnology applications and to
apply them in various economic sectors.
Output indicators evaluate the extent of adoption and use of biotechnology products, services
and processes within each application field.
Impact indicators assess the economic, social and environmental impacts of modern biotechnology applications. Biotechnology inputs such as R&D can also directly affect policy goals,
as indicated by the arrow on the right hand of the Figure 1-1 above, independent of its
adoption by various industry sectors.
The general approach to developing suitable indicators according to this framework comprises three steps: first, to describe the phenomena to be measured by each indicator category; second, to identify suitable indicators for these phenomena; and third, to collect the required data for constructing the indicators.
Page 25 of 315
All indicators consist of nominators providing information on the specific biotechnology-related
phenomenon to be described and denominators (respective information e. g. for the whole
sector under consideration) which put the indicators into context (for detailed explanation of
indicators see the report of task 1).
Figure 1-1:
Conceptual framework for biotechnology indicators
Policy goals
impact
Products
Application
fields
output
Services
Processes
input
Biotechnology
Data gathering relied on a broad variety of different sources:
• Publicly available sources (scientific literature, reports, company reports, information provided by various associations, the internet)
• Publicly accessible statistics (e. g. OECD, Eurostat)
• Online databases for patent and bibliometric analyses
• Market reports
• The PHARMAPROJECTS database
• Market information from IMS Health
• Written surveys of specific target groups (153 questionnaires were returned for analysis
within task 2)
• Interviews with representatives of research institutions, industrial enterprises, associations
and other stakeholders (190 experts from all over Europe participated in detailed interviews)
• Case studies
Case studies comprised a major part of the work, allowing in-depth analyses of the economic,
social and environmental impact of certain applications of modern biotechnology. All in all,
28 case studies were carried out.
The case studies covered those applications of modern biotechnology in each of these parts
that are considered to have the highest current impact, in economic, social or environmental
Page 26 of 315
terms. Each case study concerns a product, preferably a product group, a process or a
specific application. The case studies are put into context by relating the biotechnologyspecific information to whole sector information (reflecting e. g. the role of the biotech-specific
product within the whole product group).
Details of the methodology are described within the different workpackages and in the methodological annex.
All in all, task 2 could make a significant contribution to close the information gap on the
current state of the uptake of modern biotechnology by various sectors and its socio-economic impacts in Europe. On the other hand, the study also identified remaining gaps in data
availability. During our numerous interviews and contacts with various stakeholders, it
became obvious that such gaps are not due to limitations in methodology, but rather are
related to more basic problems. On a company level, we frequently came across the issue of
keeping separate accounts of biotechnology-related data within the company’s information
management systems. From a company perspective there is no benefit in keeping such data.
separate. In consequence, in most cases it was not possible to obtain information on the
biotechnology-dependent share of revenues or employees. This principle limitation of data
accessibility, however, also marks the degree in which biotechnology has already been
integrated by companies. Biotechnology is no more considered as something specific which
would need separate accounting. Rather, it has become an integrated part of the industry’s
technology portfolio, indicating an advanced state of diffusion.
Another issue of principle on a company level is confidentiality. Many of the sectors
investigated are highly competitive and in some cases only few companies are dominating the
sector. In consequence, commercial information in particular on revenues is kept strictly
confidential. The case studies in particular in the field of primary production and agro-food
also revealed that some sectors (in particular food) do not want to be associated with modern
biotechnology. In consequence, companies are hesitant to provide any biotechnologyrelevant information. Finally, some basic data on the state of the biotechnology industry in
different countries rely on the availability of comparable statistics. Such statistics rely on
standardised industry surveys which currently are performed only in a limited (however,
increasing) number of countries.
Structure of the report
Task 2 of the Bio4EU study consists of four workpackages:
• Workpackage 1 analysing the adoption of modern biotechnology applications in human
and animal health and its consequences, opportunities and challenges;
• Workpackage 2 dealing with the adoption of modern biotechnology applications in primary
production and agro-food and impacts thereof;
• Workpackage 3 elaborating on the adoption of modern biotechnology applications in
industrial processes, environment and energy and its consequences, opportunities and
challenges and
• Workpackage 4 focusing on the modern biotechnology R&D landscape and human capital.
Report 3 is deliverable number 16 according to the implementation plan of the Bio4EU project, task 2. The report is structured in the following way:
• Section 2 demonstrates the results of workpackage 4 elaborating on the capabilities of the
public and private biotechnology sector in the European Union in terms of its state, trends
and potentials. Comparisons with important competitors are included in the analysis.
• In section 3 the results of workpackage 1, dealing with adoption and impact of modern biotechnology for human and animal health applications are presented.
• Section 4 illustrates the adoption and impact of modern biotechnology in primary production/agro-food.
Page 27 of 315
• In section 5 the adoption and impact of modern biotechnology in industrial applications are
presented.
• Conclusions are summarised in section 6.
• Methodological details are presented in a separate annex report.
This main report of task 2 is complemented by five supplements. Three of these
supplementary reports contain the full text of the 28 case studies carried out within task 2. For
each application field a separate report is made. An additional report contains all background
data, in particular tables with primary data used for constructing the various indicators are
presented. In this report on background data and also in the main part of the report, indicators
are identified by specific acronyms (HAX: health adoption indicator no. X; HIX: health impact
indicator no. X; AAX: agro-food adoption indicator no. X; AIX: agro-food impact indicator no.
X; IBAX: industrial biotechnology adoption indicator no. X; IBAX: industrial biotechnology
impact indicator no. X). Finally, a methodology report describes the various methods and
definitions used for carrying out task 2.
Page 28 of 315
II. Results
1. Introduction
See Section I
2. Modern biotechnology R&D landscape and human capital
2.1
Introduction
For assessment of the R&D landscape and human capital, the following indicators have been
derived:
Private sector indicators
• C1: Number of biotechnology firms:
C1.1: Number of Dedicated Biotechnology Firms (DBFs) per million capita (pMC) 2004
C1.2: Number of biotech-active firms pMC 2003/2004
• C2: Size distribution of biotech-active firms 2003/2004
• C3.1: Capital raised in million € (capital from all external sources) per DBF 2004
• C3.2: Revenues in million € per DBF 2004
• C4: R&D expenditure per revenues (data for DBF only) 2004
• C5: Employment:
C5.1: Biotech-active employment per million (pM) employees 2003/2004
C5.2: Total employment per DBF 2004
Public research and development in biotechnology
• C6: Biotechnology Research Centres (BRC):
C6.1: Number and size of BRC 2001
C6.2: Distribution of BRC by size (in terms of full time employees FTE)
• C7: PhD graduates:
C7.1: PhD graduates in life sciences per million capita (pMC) 2003/2004
C7.2: PhD graduates in life sciences over PhD graduates in all fields 2003
C8: Public budget for biotechnology in EUR pMC 2005
Patent indicators
• C9: Biotechnology patents (number and share of all patents in %)9
• C10: Biotechnology patents in selected application fields (share of biotechnology patents
in %)10
• C11: Biotechnology patents in selected application fields (share of patents in each application area)
9
For patent and bibliometric indicators the time period 1995-2004 was considered.
The aim of the indicators C10 and C11 is not to compare countries in absolute terms. They are
derived to compare specialisation patterns in the application fields across countries with a simple
indicator. For comparisons of inventing activity in absolute terms across countries, we propose the first
indicators under C9 (biotechnology patents) and C12 biotechnology (emerging field patents).
Page 29 of 315
10
• C12: Patents in biotechnology emerging fields
-
Biotechnology patents in emerging fields11 total (share of biotechnology patents
in %)
-
Microarray patents (share of biotechnology patents in %)12
-
Stem Cell (human and animal) patents (share of biotechnology patents in %)
-
RNAi patents (share of biotechnology patents in %)
-
Cloning Patents (share of biotechnology patents in %)
-
Gene Therapy patents (share of biotechnology patents in %)
Bibliometric indicators
• C13: Share of biotechnology publications over all publications
• C14: Share of biotechnology publications in each application field over all biotechnology
publications
2.2
Methodological issues
2.2.1
For comparability reasons the indicators have been derived using two sources, OECD
(2006)13 and Critical I (2006)14. Both surveys are consistent with the biotechnology definition
used in this project.
Due to problems of data availability and comparability over time, there are no trend data for
this set of indicators. Apart from data availability, the main methodological problem deals with
the different definitions of biotechnology firm used in both sources.
The OECD study differentiates between "core biotech firms" and "biotech-active firms". “Core
biotech firms” have biotechnology as main activity while “biotech-active firms” are all firms that
report activities in biotechnology. It excludes firms that only supply biotechnology equipment.
The OECD does not carry out own company surveys to collect data on industrial biotechnology activities. It relies on existing official national statistics. Accordingly, for each country the
study needs to adjust its definition of "biotechnology firm" to the one used by governmental
surveys. In particular the definition of “core biotech firms” varies across countries. Hence data
comparability is very constrained.
Critical I considers companies "whose primary commercial activity depends on the application
of biological organisms, systems or processes, or on the provision of specialist services to
facilitate the understanding thereof." Accordingly, these companies may also present research and development investments or revenues from other activities different from biotechnology.
In this report "core biotech firms" in the OECD sense and "biotechnology companies" in the
Critical I sense are considered as Dedicated Biotechnology Firms (DBFs). The OECD defini-
11
Biotechnology emerging fields refer to: Microarrays, Stem Cells (human and animal), RNAi, Cloning,
Gene Therapy.
12
The first intention was to analyse this diagnostic technology in the fields of genomics, proteomics,
metabolomics and nutrigenomics. However, these fields cannot be defined appropriately using patent or
keywords classes.
13
van Beuzekom, B.; Arundel, A. (2006): OECD Biotechnology Statistics 2006: OECD.
14
Critical I (2006): Biotechnology in Europe: 2006 Comparative Study - Critical I Comparative Study for
EuropaBio, Lyon: BioVision.
Page 30 of 315
tion of "biotech-active firm" is analogous to the "biotech-active firm" definition applied in this
project.
The better approach to estimate the volume of private biotechnology is to consider the biotechnology activities of all biotech-active firms (provided by the OECD source). However, in
most cases these data are not available for the EU25. In order to obtain indicators for the
EU25, data were extrapolated.15
Even though considering only the capabilities of DBFs underestimates total national private
capabilities in biotechnology, due to the data gaps concerning the activities of biotech-active
firms the study includes indicators on the activities of DBFs (data provided by Critical I).
Again, data for the EU25 needs to be extrapolated.
Another important handicap in the analysis of biotechnology industrial capabilities due to data
gaps concerns the estimation of biotechnology employment and biotechnology R&D expenditures. In most cases, the available data refer to total employment and total R&D expenditures in companies (not separately reporting only biotechnology-related data), which overestimate the results for industrial biotechnology.
2.2.2
Public research and development in biotechnology
The source to derive the indicators on Biotechnology Research Centres has been the "International Benchmark of Biotechnology Research Centres" carried out between 2001 and 2002
for the European Commission by Senker et al. (2002)16. To define biotechnology, this source
uses the list-based approach applied by Enzing et al. (1999)17. This biotechnology definition is
similar to the OECD definition; however, rather than on biotechnology methods, the list
focuses on biotechnology application areas. Moreover, to define a "Biotechnology Research
Centre" the source establishes 3 criteria: focus of research, financing and mission. The
criteria are specified as follows:
• Focus of research: 50 % of researchers in the centre focus mainly on biotechnology.
• Financing: 50 % of funding comes from public sources. “Public” funding does not include
funds from charities. Centres wholly funded by charities are not considered.
• Mission: the centre has been established deliberately, or evolved, to fulfil a specific
mission related to biotechnology.
The selected source provides the number of BRC in 2001 and their size in terms of number of
staff18 as of 1998-1999 for 15 EU Member States and for the USA.
The source chosen to derive indicator C7 (PhDs) is the "OECD Education Online Database"
(update of 13-Sep-2005) which provides internationally comparable data on key aspects of
education systems. This OECD database does not include "Biotechnology" in the classification of fields of study (ISC). For this reason, the indicator refers to "Life Sciences" (ISC 42)19,
which is usually a much broader field. Regarding the level of education, the data gathered
refer to "Advance Research Programmes" (International Standard Classification of Education
15
See Annex “Data Report”, delilverable 18, for detailed data at the country level. Details on the methodology to extrapolate the data for EU25 are given in Annex “Methodology Report”, deliverable 17.
16
Senker, J.M.; Patel, P.; Calvert, J.; Hinze, S.; Reiss, T.; Etzkowitz, H. (2002): An International
Benchmark of Biotech Research Centres: European Commission CBSTII Contract No ERBHPV2-CT2000-03.
17
Enzing, C.M.; Benedictus, J.N.; Engelen-Smeets, E.; Senker, J.M.; Reiss, T.; Schmidt, H.; Assouline,
G.; Joly, P.B.; Nesta, L. (1999): Inventory of Public Biotechnology R&D Programmes in Europe,
Luxembourg: Office for Official Publications of the European Communities.
18
To be accurate, the staff is measured in terms of full time equivalent posts (FTE)
19
Field of education and training as described in the 1997 International Standard Classification of
Education (ISCED-97).
Page 31 of 315
- ISCED 6), which include tertiary programmes that lead directly to the award of an advanced
research qualification, e. g., PhD.
Regarding the indicator C8, biotechnology public R&D expenditure, information was used
from the BIOPOLIS project20 (a Specific Support Action within priority 5 of the 6th Framework
Programme).
2.2.3
Patent indicators
To assure comparability we used patent counts of European patent applications. Comparability of European patent applications between different countries is much higher compared to
applications at national patent offices, due to a lack of national bias. In addition, European
applications are usually considered as higher quality applications compared to national applications. The primary raw data was gathered from the database EPFULL of the vendor STN
International. EPFULL covers the full text of the European patent applications and bibliographic records for PCT (Patent Cooperation Treaty) applications transferred to the EPO.
Following the OECD methodological recommendations for deriving patent indicators from
patent counts, the annual time series were built according to the priority date (date of first
publication) of patent applications. In case priority data were not available, application data
were used. The geographical distribution was assigned by the inventor‘s country of
residence.21 Due to the delay of 18 months between application and publication of patents
filed according to the PCT procedure, the total number of patent applications for the most
recent year 2004 has been estimated. To present the data we have selected 3 time periods:
1995-1997, 1999-2001, 2002-200422.
An important methodological issue in the development of the patent indicators is the specification of definitions for biotechnology, for biotechnology in the application areas and for
emerging biotechnology fields, which are used to retrieve patent counts from the patent databases. For this purpose the International Patent Classification (IPC) was used. Additionally
selected fields were specified using keywords. In this case data gathering was refined by
combining the EPFULL database with the database WPINDEX of the vendor STN.
First, biotechnology patents over all fields (indicator C9) were identified by translating the
OECD biotechnology definition into patent classes. Concerning biotechnology patents in the
different application areas (indicators C10 and C11), three application areas of biotechnology
were considered: (1) Human and animal health, (2) Primary production and agro-food, (3)
Industrial processes, energy and environment. Additionally, emerging biotechnology fields
were explored (indicator C12).
Each of the three application areas was specified using IPC codes and (if necessary) keywords. The application areas include the following fields:
• Application area 1: Therapeutics for humans, therapeutics for animals, diagnostics;
• Application area 2: Animal husbandry, fisheries and aquaculture, insect and crop production, forestry, food and feed industry;
• Application area 3: Fuels, chemicals, polymers, textile and leather, pulp and paper, water
waste treatment, air and gas purification, organic waste treatment.
20
Enzing et al. (2007) ‘BioPolis - Inventory and analysis of national public policies that stimulate
research in biotechnology, its exploitation and commercialisation by industry in Europe in the period
2002–2005’ http://ec.europa.eu/research/biosociety/library/brochures_reports-biopolis_en.htm
21
See H. Dernis, D. Guellec and B. van Pottelsberghe (2001), "Using Patent Counts for Cross-country
Comparisons of Technology Output", STI Review No. 27, OECD, Paris.
22
Since a period of 10 years was to be covered for patent (and bibliometric) indicators, this division into
three equal time periods results in the omission of one year. Accordingly, data for the year 1998 is
missing in this comparison.
Page 32 of 315
These application areas include patent classes belonging to different technologies. For instance, application area 1 includes biotechnology patents and non-biotechnology patents for
human therapeutics.23
The basic logic to find the biotechnology-relevant patents in each application area is to identify patent counts at the intersection between biotechnology and the application area. In some
cases keywords and/or IPC codes specific to the biotechnology application areas have been
included to obtain the biotechnology applications in each area.
Accordingly, the biotechnology patents in each application area cover all biotechnology application in the area. Most importantly, the fields aim at including the following biotechnology
applications in each area:
• Biotechnology in application area 1: Therapeutics for humans and animals including tailormade medicines, cell-based therapies, gene therapies, RNAi interference, molecular diagnostics (including protein testing and DNA-based testing), vaccines;
• Biotechnology in application area 2: GMOs, molecular diagnostics in food and plants,
marker-assisted selection, propagation;
• Biotechnology in application area 3: Processing of biomass to biological feedstock with
modern biotechnology (including: ethanol production, bio-based polymers and bio-based
chemicals), industrial processes using biological systems, biosensors and biological remediation systems.
Even though the search strategies have been defined to try to separate the application of
biotechnology into the three areas, the applications of molecular diagnostics and the industrial
processes using biological systems produced some overlapping between the application
areas. The set of biotechnology patents that did not have an explicit application focus was
included in a fourth set: "generic biotechnology patents" (not included in application fields).
Finally, to count the patent applications in biotechnology emerging fields (microarrays, stem
cells (human and animal), RNAi, cloning, gene therapy) a list of keywords and patent classes
covering these fields was used:24
2.2.4
Bibliometric indicators are based on publication counts. Data of publications was retrieved
from the Science Citation Index (SCI) database provided by STN. SCI contains more than
22 million records, starting from 1974 and is updated weekly with about 14,500 records. It is
the most comprehensive publications database so far and covers most of the disciplines.
To specify a biotechnology definition for the publication counts, a set of keywords covering
the biotechnology definition used in the project was elaborated. An article was classified in the
area of biotechnology if it had the SCI classification code of biotechnology or biomaterials, or
if it had any of the keywords selected to define biotechnology in the fields of title, author keywords or keywords plus.
Again, as in the patent analysis, biotechnology was divided into three categories: (1) Human
and animal health, (2) Primary production and agro-food, (3) Industrial processes, energy and
23
Due to the fact that the IPC classes are technology-oriented and not sector- or product-oriented, the
definition of application areas is rather problematic. In general terms, each application area entails the
relevant IPC classes for that application area. After a first selection of IPC classes for each area
different tests were carried out to evaluate the area definition. Next, if necessary, the area definition was
refined to exclude certain patent documents, which did not comply with the definition of the area. All in
all, the inidicators are estimations. However, the bias in the estimates is the same for all countries.
24
In the framework of this workpackage, it was not possible to define the field "synthetic biology".
Page 33 of 315
environment. Additional generic biotechnology publications (having no focus in one of the
three application fields) were explored.
The strategy to derive the indicators in these areas (indicator C14) is homologous with the
strategy applied for the patent indicators. However, due to the different tools to classify articles, the overlapping between application areas is lower than in the case of patent indicators.
2.3
Indicators
2.3.1
Indicators on the private sector C1-C525
Table 2-1:
Private sector indicators C1-C2
Indicator
C1.1
DBF pMC 2004
C1.2
Biotech active firms
pMC 2003/2004
4
5
7
n.a
5
7
8
6
EU25 data available
EU25 extrapolation
USA
Japan
Primary Data Source
Comments
Table 2-2:
C3.2
C4
Turnover (Million Euro) R&D Expenditures per
per DBF 2004
Turnover 2004
0,94
0,87
4,83
n.a
9
9
21
n.a
Primary Data Source Critical I 2006
Comments
Extrapolation based on
data for 16 countries
C5.1
C5.2
Biotech active employment Total Employment
pM employess 2003/2004
per DBF 2004
0,35
0,35
0,50
n.a
Critical I 2006
Critical I 2006
509
620
952
n.a.
OECD 2006
Extrapolation based on data
for 3 countries
45
43
96
n.a
Critical I 2006
Extrapolation based
on data for 15
countries
Indicators on the public sector C6-C8
Table 2-3:
Public sector indicators C6.1-C6.2
Indicator
EU25 data available
EU25 extrapolation
USA
Japan
Primary data source
Comments
25
24%
24%
31%
73%
OECD 2006
Critical I 2006
OECD 2006
Extrapolation based on Extrapolation based on data for 3 countries
Extrapolation
based on data for data for 8 countries
16 countries
C3.1
Capital raised (Million
Euro) per DBF 2004
EU25 data available
EU25 extrapolation
USA
Japan
*
76%
76%
69%
27%
Private sector indicators C3-C5
Indicator
2.3.2
C2
% of Biotech active
% of Biotech active
firms with less than firms with more than 49
49 employess
employess
C6.1
BRC* pMC 2001
0,41
0,49
0,11
n.a
C6.2
BRC with BRC with BRC with
25 or less 26-50 FTE 51-100
FTE*
FTE
26%
27%
17%
26%
27%
17%
40%
24%
16%
n.a
n.a
n.a
BRC with BRC with
101-200 > 200 FTE
FTE
15%
15%
15%
15%
12%
8%
n.a
n.a
Hinze et al. (2002) Hinze et al. (2002)
Extrapolation
Extrapolation based on data for 15 countries
based on data for
15 countries
BRC Biotechnology Research Centre
FTE Full Time Equivalent
Please note that these indicators draw on data from two different sources. The methodolgical constraints are summarised in the methodological section 2.2.1
Page 34 of 315
Public sector indicators C7-C826
Table 2-4:
Indicator
C7.1
C7.2
PhDs in Life Sciences pMC Share of PhDs in Life Sciences
2003/2004
over PhDs in all sectors 2003
EU25 data available
EU25 extrapolation
USA
Japan
Primary data source
Comments
0,10
0,12
0,11
n.a.
63,0
13,5
OECD (ISCED 6)
OECD (ISCED 6)
Extrapolation based on data for Extrapolation based on data for
15 countries
15 countries
BIOPOLIS project
public R&D expenditure include
all national and regional public
funding for biotechnology as
defined in the BIOPOLIS project
Patent indicators C9-C1227
2.3.3
Table 2-5:
Time Period
1995-1997
1999-2001
2002-2004*
19
27
17
n.a.
C8
Biotechnology public R&D
expenditure (€ per capita)
2005
8,3
World
18657
33189
29433
Patent indicators C9
EU25
5915
10612
10254
Brazil
25
50
58
China
60
1367
504
India
28
146
242
Japan
1809
3274
4234
Russia
71
141
147
Singapore South Korea
29
115
93
427
129
600
USA
10518
16673
12089
* Estimation
Time Period
1995-1997
1999-2001
2002-2004*
*Estimation
Time Period
1995-1997
1999-2001
2002-2004*
*Estimation
World
7%
8%
6%
EU25
5%
6%
5%
Brazil
6%
7%
6%
Biotechnology patents (share of all patents in %)
China
India
Japan
Russia
9%
11%
4%
5%
6%
6%
36%
12%
5%
6%
7%
6%
7%
8%
5%
6%
9%
4%
USA
11%
11%
8%
Time Period
1995-1997
1995-1998
1995-1999
*Estimation
Data: European patent applications and PCT (Patent Cooperation Treaty) applications transferred to the
European Patent Office (EPO).
Source: EPFULL via host STN International.
26
Sources for indicator C8: EU25: Enzing et al.(2007) ‘BioPolis - Inventory and analysis of national
public policies that stimulate research in biotechnology, its exploitation and commercialisation by
industry in Europe in the period 2002–2005’ forthcoming; USA: National Science Foundation (2006)
Federal Funds for Research and Development:
Fiscal Years 2003-2005. Expenditures in fields biological sciences, environmental biology, agricultural
sciences and life sciences, nec; Japan: Japan Bioindustry Association (2004) Fiscal 2004 Government
budget related to biotechnology, JBL, Vol 20 no. 4-5.
27
Please note that the inidicators in % refer to the share of national (biotechnology) patents. These
shares do not give any information on the differences in the absolute level of national biotechnology
patent volume across countries. Moreover, for each time period the national shares do not need to add
up to the share for “World”.
Page 35 of 315
Table 2-6:
Time Period
1995-1997
1999-2001
2002-2004*
World
58%
54%
51%
Health Biotechnology patents (share of Biotechnology patents in %)
EU25
Japan
Brazil
China
India
Russia
56%
54%
58%
51%
46%
40%
54%
51%
87%
37%
49%
47%
55%
54%
55%
32%
51%
51%
USA
61%
53%
46%
Time Period
1995-1997
1999-2001
2002-2004*
*Estimation
Time Period
1995-1997
1999-2001
2002-2004*
*Estimation
Agrofood Biotechnology patents (share of Biotechnology patents in %)
EU25
Japan
World
Brazil
China
India
Russia
13%
13%
15%
14%
14%
12%
17%
14%
14%
20%
2%
23%
15%
10%
11%
11%
10%
12%
15%
14%
10%
USA
13%
14%
10%
Time Period
1995-1997
1999-2001
2002-2004*
*Estimation
*Estimation
Manufacturing, Energy and Environment (MEE) Biotechnology patents (share of Biotechnology patents in %)
EU25
Japan
USA
Time period
World
Brazil
China
India
Russia
Time period
1995-1997
18%
18%
15%
17%
24%
29%
32%
16%
1995-1997
1999-2001
17%
16%
15%
6%
29%
26%
31%
17%
1999-2001
2002-2004*
16%
13%
19%
16%
26%
21%
23%
16%
2002-2004*
*Estimation
*Estimation
Generic Biotechnology Patents (not included in application fields) (share of Biotechnology patents in %)
EU25
Japan
USA
Time period
World
Brazil
China
India
Russia
Time period
1995-1997
11%
13%
15%
10%
11%
13%
11%
10%
1995-1997
1999-2001
15%
17%
14%
5%
11%
10%
13%
16%
1999-2001
2002-2004*
22%
21%
17%
16%
27%
14%
16%
27%
2002-2004*
*Estimation
*Estimation
Data: European patent applications and PCT (Patent Cooperation Treaty) applications transferred to the
European Patent Office (EPO).
Source: EPFULL and WPINDEX via host STN International
Table 2-7:
Time Period
1995-1997
1999-2001
2002-2004*
World
49%
51%
41%
Health Biotechnology patents (share of health patents in %)
EU25
Japan
Brazil
China
India
43%
54%
50%
21%
36%
46%
45%
86%
19%
44%
39%
45%
39%
9%
47%
Russia
34%
49%
46%
USA
56%
54%
41%
*Estimation
Time Period
1995-1997
1999-2001
2002-2004*
*Estimation
Agrofood Biotechnology patents Biotechnology patents (share of Agrofood patens in %)
World
EU25
Brazil
China
India
Japan
Russia
USA
29%
21%
15%
36%
33%
25%
33%
43%
36%
28%
19%
32%
46%
36%
22%
50%
26%
21%
12%
27%
25%
32%
27%
32%
*Estimation
Time period
1995-1997
1999-2001
2002-2004*
Time Period
1995-1997
1999-2001
2002-2004*
Time Period
1995-1997
1999-2001
2002-2004*
*Estimation
MEE** Biotechnology patents (share of Manufacturing, Energy and Environment patens in %)
World
EU25
Brazil
China
India
Japan
Russia
USA
7%
5%
5%
7%
8%
8%
8%
10%
9%
6%
5%
16%
11%
9%
11%
13%
7%
5%
5%
8%
5%
8%
8%
9%
*Estimation
Time period
1995-1997
1999-2001
2002-2004*
*Estimation
** MEE: Manufacturing, Energy and Environment
Data: European patent applications and PCT (Patent Cooperation Treaty) applications transferred to the European Patent Office (EPO).
Page 36 of 315
Table 2-8:
Time Period
1995-1997
1999-2001
2002-2004*
World
1275
10600
7619
EU25
336
2765
2658
Brazil
2
9
6
Biotechnology Emerging Fields patents (number)
China
India
Japan
Russia
19
4
77
7
4
7
1171
20
566
8
19
82
97
40
779
8
42
149
USA
808
6024
3549
*Estimation
Time period
1995-1997
1999-2001
2002-2004*
*Estimation
World
7%
32%
26%
Biotechnology Emerging Fields patents (share of Biotechnology patents in %)
EU25
Brazil
China
India
Japan
Russia
6%
8%
32%
14%
4%
10%
14%
6%
26%
18%
86%
14%
17%
6%
20%
19%
26%
10%
19%
17%
18%
5%
32%
25%
USA
8%
36%
29%
*Estimation
Time period
1995-1997
1999-2001
2002-2004*
World
0%
6%
3%
EU25
0%
2%
2%
Microarrays Patents (share of Biotechnology patents in %)
Brazil
China
India
Japan
Russia
0%
0%
0%
0%
0%
0%
0%
0%
82%
1%
1%
1%
0%
2%
0%
2%
1%
2%
0%
4%
4%
USA
0%
4%
4%
World
4%
6%
6%
Share of Stem Cell (human and animal) Patents (share of Biotechnology patents in %)
EU25
Brazil
China
India
Japan
Russia
3%
0%
5%
4%
3%
0%
7%
3%
6%
4%
1%
2%
6%
1%
5%
4%
6%
4%
5%
3%
8%
2%
14%
8%
USA
5%
7%
7%
World
0%
0%
3%
EU25
0%
1%
2%
Brazil
0%
0%
0%
RNAi Patents (share of Biotechnology Petents in %)
China
India
Japan
Russia
0%
0%
0%
0%
0%
0%
0%
0%
0%
1%
0%
0%
1%
1%
2%
0%
1%
1%
USA
0%
0%
4%
*Estimation
Time period
1995-1997
1999-2001
2002-2004*
*Estimation
World
3%
4%
2%
EU25
3%
5%
3%
Cloning patents (share of Biotechnology patents in %)
Brazil
China
India
Japan
Russia
8%
27%
11%
2%
10%
7%
3%
6%
2%
5%
1%
2%
1%
4%
2%
4%
7%
1%
1%
1%
4%
USA
3%
4%
2%
*Estimation
Time period
1995-1997
1999-2001
2002-2004*
Time period
1995-1997
1999-2001
2002-2004*
*Estimation
*Estimation
Time period
1995-1997
1999-2001
2002-2004*
Time period
1995-1997
1999-2001
2002-2004*
*Estimation
*Estimation
Time period
1995-1997
1999-2001
2002-2004*
Time period
1995-1997
1999-2001
2002-2004*
*Estimation
*Estimation
Time period
1995-1997
1999-2001
2002-2004*
Time period
1995-1997
1999-2001
2002-2004*
Time period
1995-1997
1999-2001
2002-2004*
*Estimation
World
0%
22%
14%
EU25
0%
16%
16%
Gene Thearpy patents (share of Biotechnology patents in %)
Japan
Brazil
China
India
Russia
0%
0%
0%
0%
0%
0%
0%
10%
47%
6%
9%
3%
15%
11%
3%
11%
6%
7%
2%
16%
12%
USA
0%
27%
18%
Time period
1995-1997
1999-2001
2002-2004*
*Estimation
Data: European patent applications and PCT (Patent Cooperation Treaty) applications transferred to the European Patent Office (EPO).
28
Please note that the inidicators in % refer to the share of national biotechnology patents. For each
time period the national shares do not need to add up to the share for “World”. The search strategy for
Emerging Fields in total excludes double countings due to overlap between individual Emerging Fields.
Accordingly, the overall share of Emerging Fields (total) is smaller than the sum of individual shares.
Page 37 of 315
2.3.4
Bibliometric indicators C13-C14
Table 2-9:
Bibliometric indicators C13
Time period
1995-1997
1999-2001
2002-2004
World
271935
324119
357638
Time period
1995-1997
1999-2001
2002-2004
World
11%
13%
13%
EU25
101921
125962
135797
Biotechnology Publications (number)
Brazil
India
Japan
Russia
1842
3134
30070
4094
3693
4464
38187
4370
5233
5919
40219
4575
Biotechnology publications (share of all publications in %)
EU25
Brazil
India
Japan
Russia
12%
9%
6%
15%
5%
14%
11%
8%
17%
5%
14%
12%
9%
17%
6%
USA
111562
126010
136781
Time period
1995-1997
1999-2001
2002-2004
USA
15%
16%
17%
Time period
1995-1997
1999-2001
2002-2004
Source: Science Citation Index via host STN, searches and calculations by Fraunhofer ISI
Table 2-10:
Bibliometric indicators C14
Time Period
1995-1997
1999-2001
2002-2004
Health Biotechnology publications (share of Biotechnology publications in %)
World
EU25
Brazil
India
Japan
Russia
USA
53%
55%
43%
27%
57%
25%
57%
53%
54%
36%
24%
56%
25%
57%
52%
54%
34%
22%
56%
25%
56%
Time Period
1995-1997
1999-2001
2002-2004
Time Period
1995-1997
1999-2001
2002-2004
Agrofood Biotechnology publications (share of Biotechnology publications in %)
World
EU25
Brazil
India
Japan
Russia
USA
15%
14%
21%
26%
19%
12%
12%
16%
16%
29%
30%
19%
14%
13%
17%
17%
29%
32%
19%
15%
14%
Time Period
1995-1997
1999-2001
2002-2004
Manufacturing, Energy and Environment Biotechnology publications (share of Biotechnology publications in %)
Time Period
World
EU25
Brazil
India
Japan
Russia
USA
Time Period
1995-1997
2%
2%
3%
8%
1%
5%
2%
1995-1997
1999-2001
4%
4%
7%
13%
3%
5%
3%
1999-2001
2002-2004
4%
4%
7%
13%
4%
6%
3%
2002-2004
Time Period
1995-1997
1999-2001
2002-2004
Generic Biotechnology publications (share of Biotechnology
All
EU25
Brazil
India
Japan
29%
29%
33%
40%
22%
27%
27%
28%
33%
22%
27%
26%
30%
33%
21%
publications in %)
Russia
USA
58%
29%
56%
28%
54%
27%
Time Period
1995-1997
1999-2001
2002-2004
Source: Science Citation Index via host STN, searches and calculations by Fraunhofer ISI
2.4
Discussion
2.4.1
The indicators are given in Tables 2-1 and 2-2 and present the biotechnology capabilities in
the private sector in the EU25, the USA and Japan.
The indicator DBF per million capita (pMC) provides a rough measure of the strength of the
industrial capabilities. Data for Japan are unfortunately not available. Data available for the
EU25 cover 16 Member States. Consideration of the extrapolated indicator C1.1 for the EU25
and for the USA reveals that in 2004 the USA had a stronger landscape of dedicated
biotechnology firms in terms of number of companies. This advantage of the American
industry is reinforced if we additionally consider the employment indicator C5.2. American
DBFs are much larger in terms of employees.
Page 38 of 315
However, considering the number of biotech-active companies per million capita (pMC), the
differences between the US and EU biotechnology industries are smaller. Moreover, the EU
industry is larger than the industry in Japan.
With regard to the size distribution of companies in terms of employees (indicator C2), the
EU25 indicator is based on data available for Finland, Germany and France. Accordingly, the
presented distribution may not be representative for the EU25 in total. Nevertheless, the data
indicate that EU activities seem to be more concentrated in small firms than in the USA and in
Japan.
Indicators C3.1 and 3.2 are not available for Japan. The indicators demonstrate a clear difference between the capabilities of the US and the EU biotechnology industries in terms of
capital raised and revenues per DBF. The American DBFs are stronger in acquiring financial
resources and in generating revenues. Both US and EU DBFs seem to be able to cover their
R&D expenditures with their revenues.
Finally, indicator C5.1 gives an estimation of the importance of the biotechnology industry in
the economy in terms of employment. Again, the US biotechnology industry has a higher
share of biotechnology-active employment in the economy (corresponding to 0.095 % of total
employment) than in the EU (corresponding to 0.062 % of total employment).
In summary, the analysis indicates that the biotech industry in the USA is more mature compared to the EU as measured by number, size (employment, revenues), and capital raised.
However, if a broader perspective of the sector is taken by including biotech-active firms, the
EU compares well with the USA.
2.4.2
Public sector indicators
Public sector indicators are given in Tables 2-3 and 2-4 and reflect the capabilities in the public sector in the EU25, the USA and Japan.
In Table 2-3, the indicator refers to the number and size distribution of biotechnology research
centres (BRC). This indicator provides an estimation of the research organisation in different
regions. According to the indicators, the EU25 has more research units of this type in relative
terms. Moreover, according to the size distribution, in the EU25 this type of research centres
are usually larger in terms of employment.
In Table 2-4, the public sector indicators demonstrate the share of PhDs in life sciences per
capita as a capacity measure of the human capital for research and development activities in
biotechnology-related fields. Both indicators for the EU25, the indicator based on available
data and the extrapolated indicator, suggest a significant strength in human capital in life
sciences in the EU. With regard to the distribution of PhDs across fields (Indicator 7.2), the
EU25 and the USA do not show any significant differences. Accordingly, the observed
strength in the EU with respect to human capital seems not to be restricted to life sciences,
but is more a general phenomenon. In terms of availability of human capital with skills for
research and development, the EU seems to be in a favourable position.The indicators on
public funding of biotechnology demonstrate a clear advantage of the USA with annual
budgets (on a per capita basis) being about eight times larger than the EU budget. Also
compared to Japan, the EU funding seems lower on a per capita basis. It should be noted
that comparability of such data is limited, because methods of data gathering for the EU25,
USA and Japan are different. Nevertheless, we consider the general trend revealed by these
data as a valid assessment of the current situation.
Page 39 of 315
2.4.3
Patent indicators
Indicator C9 in Table 2-5 reflects performance in terms of the inventing activity in biotechnology in different regions.
From both perspectives, in terms of absolute number of patent applications and in terms of
the importance of biotechnology patent applications in the total patent output, the USA has
stronger capabilities in biotechnology than the other regions over all three periods.
The EU25 follows with the second largest patent application output before Japan. However, in
terms of the share of biotechnology applications over all patent applications, Japan and the
EU25 demonstrate similar performance. Both regions, the EU25 and Japan, present lower
shares of biotechnology patent applications over all patent applications than the world
average, indicating that their focus on biotechnology is below the world average (which is
largely determined by the USA).
Regarding the other regions, the indicator for China is remarkably high in the period 19992001. Additional desk research on this issue suggests that a single company in the health
sector is responsible for this outstanding growth of patent applications between 1999 and
2001.
As far as the other countries are concerned, in absolute terms South Korea presents the
largest patent volume in biotechnology while India holds the strongest position in terms of
specialisation.
Considering the overall trend, the indicators suggest that after the period 1999-2001 the volume of biotechnology new patent applications decreases in the USA, the EU25 and in China.
Indicator C10 in Table 2-6 shows the distribution of the inventive activity in biotechnology
among three application fields. The set of biotechnology patents that did not have an explicit
application focus was combined in a fourth category: generic biotechnology patents (not included in application fields).
The discussion focuses first on the indicators for the EU25, the USA and Japan. In the three
regions the application field health biotechnology concentrates the largest share of
biotechnology patents, followed by manufacturing, energy and environment (MEE)
biotechnology. This field is relatively important in Japan, but still not as important as health
biotechnology. The agro-food biotechnology sector seems to be the weakest application area
in terms of patent counts in these regions. In the different time periods, the relative
importance of the health biotechnology sector decreases, especially in the USA. Interestingly,
the share of generic biotechnology patents increases along all three periods. This trend
suggests a growing concentration of resources in generic biotechnology activities.
With regard to the other regions, China concentrates its biotechnology inventing activities in
the health biotechnology field, especially in the second period. Russia and Japan present a
similar distribution of patent counts across application fields. India shows a strong orientation
of resources towards agro-food biotechnology in the second period.
Indicator C11 in Table 2-7 demonstrates the share of biotechnology patents in each application field over all patents in the application field. The indicator estimates the share of biotechnology-related invention activities in the total volume of invention activities of each field.
Hence, this indicator can be considered as a rough measure for the significance of biotechnology in the respective sector.
Concerning the health biotechnology sector, in both regions, the USA and the EU25, biotechnology plays a very important role in the inventing activities, especially in the USA, however the share is decreasing along the three periods. On the contrary, in the case of Japan,
Page 40 of 315
biotechnology in the health sector is becoming more important. With regard to the other regions, the indicator for China is coherent with the previous indicators. In the second period,
more than 80 % of the health patent applications involved biotechnology.
Considering the agro-food and MEE sectors, the role played by biotechnology in the inventing
activities is not as strong as in the case of health.
Concerning the agro-food sector in the USA, the share of biotechnology-related patents is the
largest of all regions. In the period 2002-2004 Japan reaches the level of the USA. The agrofood sector in the EU25 holds a lower level than the USA and Japan in the three periods. For
all regions except for China and Russia, the share of biotechnology in agro-food experienced
a strong peak in the period 1999-2001.
With regard to the manufacturing, energy and environment sector, the role played by biotechnology in the inventing activities is very low, especially for the EU25. Among all regions, the
EU25 has together with Brazil the lowest share of biotechnology-related patents over the total
patent output of the sector.
Indicator C12 in Table 2-8 gives first the share of patents in biotechnology emerging fields
over all biotechnology patents. The indicator estimates the share of inventing activities dedicated to emerging technologies in biotechnology. The emerging technologies considered are:
• Microarrays
• Stem cells (human and animal)
• RNAi
• Cloning
• Gene therapy
An additional indicator has been derived involving all 5 emerging fields.29
As far as the first set of indicators are concerned, which refer to all emerging fields, in
absolute terms the results suggest that the USA has considerably larger capabilities in these
technologies than the other regions followed by the EU25. However, the patent applications
are decreasing in number. In the EU25 the decrease is not as strong as in the USA.
Regarding the other countries considered, China is the best performing country in the period 1999-2001. Japan presents quite a good performance. Even though the patent volume is
much smaller than in the case of the USA and the EU25, the trend shows that inventing
activities in these fields keep increasing. India, Singapore and South Korea are increasingly
active in these fields as well. However, the patent volume compared to the USA and the
EU25 is not very significant.
Concerning the share of emerging field patents in all biotechnology patents, the indicator
suggests that China concentrated a large share of biotechnology patenting activities in
emerging fields. Furthermore, the indicators per emerging field suggest that these activities in
China were specially oriented to cloning research in the first period and to microarrays in the
second period.
The USA and the EU25 present a similar specialisation in emerging fields in terms of the
share of emerging field patents in all biotechnology patents. The USA, however, holds slightly
higher shares in periods 2 and 3 despite the decreasing trend. The indicators per emerging
field suggest that in the case of the USA and the EU25 gene therapies attracted the largest
share of inventing resources.
29
The analysis has been done using keywords. If a patent document contains keywords characterising
two different fields, the same patent application is counted in each field.
Page 41 of 315
Regarding the specialisation of the other countries in emerging fields, South Korea and Singapore are increasingly engaging in biotechnology emerging fields, however, in absolute
terms, the patent activities are not significant. Stem cell research and gene therapy research
are the largest emerging fields in these countries in terms of patent applications.
2.4.4
Indicator C13 in Table 2-9 gives the performance of scientific activities in biotechnology in
different regions.
As in the case of patent applications, in terms of the absolute number of biotechnology
publications, the USA has stronger scientific capabilities in biotechnology than the other
regions for the three periods. However, in this case the differences between the USA and the
EU25 are very small in absolute terms. Japan follows behind both regions. With regards to
the relative volume of biotechnology publications over all publications the USA and Japan
present a larger share than the EU25, indicating a stronger focus on biotechnology in these
two regions.
Indicator C14 in Table 2-10 shows the distribution of scientific activities in biotechnology
among three application fields. As in the case of patent indicators, the set of biotechnology
publications that did not have an explicit application focus was included in a fourth set: generic biotechnology publications (not included in application fields).
Again, the discussion focuses on the indicators for the EU25, the USA and Japan. The
distribution of scientific biotechnology activities across application fields in these regions is
quite similar. In the three regions the application field health biotechnology concentrates the
largest share of biotechnology scientific activity. However, the importance of health
biotechnology is slightly lower in the EU25 than in the USA and Japan. Agro-food
biotechnology follows with considerably lower shares than health biotechnology in the three
regions. Japan has the largest share of the three regions in this field followed by the EU25.
Manufacturing, energy and environment (MEE) biotechnology obtains between 1 % and 4 %,
depending on the regions and the time period. In the period 2002-2004 the EU25 and Japan
are the regions with the largest share of biotechnology applications in this field reaching the
4 %.
With regard to the other regions, China is not included in the Science Citation Index in a systematic way. For this reason, the analysis omits this country. Brazil, India and specially
Russia show considerably lower shares than the EU25, the USA and Japan in the health
biotechnology field. Especially in Russia scientific activities seem to concentrate on generic
fields without an explicit sectoral focus. Brazil and India have a rather strong focus on agrofood applications.
Regarding the changes of the distribution of biotechnology scientific activities over time, the
three regions present quite stable distributions. The major change occurs in India in the
second period, where the field generic biotechnology loses importance while agro-food
becomes the largest field in relative terms in the country.
3. Modern biotechnology for human and animal health
3.1
Introduction
Modern biotechnologies have opened up new avenues for the development of better and
more accurate diagnostics, and for designing improved therapies and vaccines. This potential
has been well recognised by the biotechnology industry, the majority of which is involved in
Page 42 of 315
health-related activities both in the EU and the USA (according to a recent study, 51 % of EU
and 60 % of US biotechnology companies were active in the health care sector30).
Since the development of the first true biotechnology drug (recombinant human insulin for the
treatment of diabetes), more than 160 biopharmaceuticals (e. g. recombinant proteins, monoclonal antibodies) have reached the market in the USA and the EU for the treatment of a
range of conditions including rheumatoid arthritis, hepatitis and various cancers, and about
500 were undergoing clinical evaluation in 2003 (monoclonal antibodies and vaccines are the
main product groups under development)31. Moreover, recent advances in genomics have
created new possibilities in genetic diagnosis and detection of predisposition to diseases such
as cancer (e. g. BRCA1 test). The number of genetic tests performed in Europe alone for disease diagnostic, confirmatory or predictive purposes was recently estimated to be likely
above 700.000 per year with an economic dimension of around € 500 million 32. Modern biotechnology is also important for designing vaccines targeted at both preventing disease (e. g.
malaria, AIDS) and treating conditions such as cancer (e. g. dendritic cell-based vaccines).
Finally, cell-based therapies (e. g. stem cells, tissue engineering) are emerging as a potentially important contributor to regenerative medicine.
Thus modern biotechnology applications offer unique opportunities to respond to unmet
health-related needs, to tailor medical treatment to patients, and to prevent and better diagnose diseases. However, recent observations suggest that this potential has not been entirely
realised as many applications, including gene therapy, have not yet reached the clinic. Moreover, a recent study indicates that only 12 recombinant proteins and three monoclonal antibodies have become widely used since 1980 (i. e. more than € 550 million revenues a year
since 200233). An analysis of success rates from first-in-human to registration during a tenyear period (1991-2000) for ten big pharma companies in the United States and Europe
indicated that the average success rate for all therapeutic areas was approximately 11 %34,
indicating a gap between scientific advancement and bedside application. The actual socioeconomic benefits of biotechnology-based drugs have also been questioned. Another recent
study suggests that there has been a decline in the share of biopharmaceuticals that offer a
therapeutic advance as the share of “me too” biopharmaceuticals has increased35.
In spite of these observations, the extent to which modern biotechnologies are actually
adopted by the health sector (e. g. actual use of biopharmaceuticals, biotechnology share in
drug development, number of biotechnology-derived vaccines etc.), is not clear. Moreover,
data on their socio-economic consequences in Europe is missing.
The objective of work package 1 is to quantify the adoption and impact of modern biotechnologies in the human and animal health areas. This includes biotechnology-derived products
which are already marketed or in the pipeline in the EU for diagnostic, therapeutic and preventive purposes. In the context of competitiveness, this should include information about the
origin of biotechnology products, i. e. if they have been developed and produced in the EU.
Additionally, the level of biotechnology use for the development of small molecule drugs
should be investigated. Data collection was structured along a set of indicators, which were
developed and verified in terms of data quality and data availability during task 1 of the study.
30
Critical 1, “Biotechnology in Europe: 2005 Comparative Study”.
Walsh, G. (2003): “Biopharmaceutical benchmarks – 2003”. Nature Biotechnology, 21, 865-870.
Walsh, G (2005): “Biopharmaceuticals: recent approvals and likely directions”, Trends in Biotechnology,
23, 553-558.
32
Ibarreta, D., Bock, A.K., Klein, C., Rodriguez-Cerezo, E. (2003): “Towards quality assurance and
harmonisation of genetic testing services in the EU”. EC/JRC (2003).
33
Nightingale, P. and Martin, P. (2004): “The myth of biotechnology”. Trends in Biotechnology, 22 (11).
34
Kola, I.; Landis, J. (2004): Can the pharmaceutical industry reduce attrition rates. Nature Reviews
Drug Discovery. 3 (August 2004), 711-715
35
Arundel, A. and Mintzes, B. (2004): “The benefits of biopharmaceuticals”. Innogen Working Paper, No
14.
Page 43 of 315
31
3.2
Adoption
3.2.1
Human health sector
3.2.1.1
Introduction human health
Biotechnology products in human health care can be categorised into four classes:
biopharmaceuticals, biotechnology-based in vitro diagnostics, vaccines and products for new
therapeutic approaches. In 2004 revenues of the biggest group, the biotherapeutics
accounted for € 27.5 billion, followed by in vitro diagnostics (approx. € 22 billion). Vaccines
ranked third with revenues of € 6.4 billion world-wide in 2004. This is in the range of 1-2 % of
the total pharmaceutical market. Additionally, biotechnology influences therapeutic
approaches. New products such as tissue engineering products and stem cell products or
therapeutic possibilities such as gene therapy and RNA interference technology open new
medical options for often untreatable diseases. The adoption rate for these emerging technologies were analysed in the section novel therapeutic approaches.
The adoption of biotechnology was investigated in the following fields:
• Industrial adoption: indicators in this field illustrate the adoption of modern biotechnology
by the industry in terms of market shares of human health biotechnology both as absolute
numbers and revenues for the three main application areas molecular diagnostic tests,
"bio-therapeutics" , and vaccines (indicator HA1). Industrial adoption was also described
by the number and share of companies in the human health sector active in biotechnology
(indicator HA3). Finally, industrial adoption was analysed under the perspective of pipeline
and emerging products by the number and share of clinical trials (indicators HA6 and
HA7).
• End-user adoption: adoption of biotechnology by end-users was analysed by various indi-
cators in terms of revenues of biotechnological products, knowledge transfer from science
to clinic and prescription of biopharmaceuticals (indicator HA2). End-users in this context
were service companies and hospitals, which use diagnostics, doctors, who prescribe biopharmaceuticals, and consumers/patients, who have a certain attitude towards biotechnological health products. Adoption of end-users is influenced by advisory bodies such as
immunisation committees in the case of vaccines. Detailed and comprehensive studies are
rare in the field of end-user behaviour. This was approved by various interview partners
from EuropaBio, the Standing Committee of European Doctors (CPME) and the European
Biopharmaceutical Enterprises. Thus the indicators HA2a-e rely on scattered data which is
not directly comparable among countries. Still, the indicators give an insight into general
national attitudes and possible barriers.
• Market perspectives: a view on the market perspective was gained by the analysis of the
changes in international market shares of EU products (indicator HA4) and the changes in
shares of imports in total domestic consumption (indicator HA5). A precise delineation of
human biotechnology products for these indicators on the basis of existing statistics and
databases (e. g. OECD) was hardly possible. The presented values should only be used
as trend values.
• Processes: biotechnology also influences classical small molecule production. The extent
of the adoption in this business sector was estimated as share of processes that use biotechnology for small molecule production related to chemical processes for the same purpose (indicator HA8). No statistics are available for the analysis of this indicator. Expert
opinion was analysed in this context.
Adoption indicators for the analysis of the use of modern biotechnology in human health
applications were derived using the database PHARMAPROJECTS36, statistics and data36
The PJB database PHARMAPROJECTS tracks global pharmaceutical R&D since 1980. Over 35,000
drugs are reported with their own profile, details of the compound’s history and progress to date. The
database allows a global search for medical products in all developmental stages, from the pre-clinic to
Page 44 of 315
bases of the OECD, industry organisations and private consultants, and interviews with representatives of stakeholder associations (EBE, CPME, VDGH, EDMA, EVM) and the pharmaceutical industry. Especially the interviews illustrated the difficulties the project team experienced during the collection of reliable EU data (“the relative lack of reliable regional
market data tells me that EBE may have to start compiling annual statistical review in the
future” Emmanuel Chantelot, Executive Manager of European Biopharmaceutical Enterprises
(EBE)) In contrast, the US Department of Commerce started detailed research activities several years ago (e. g. “A Survey of the Use of Biotechnology in the U.S. Industry”, 2003)37.
Despite the lack of some detailed data the picture of biotechnology adoption in the EU in
comparison to the USA and Japan drawn in the following sections gives a clear insight into
strengths and weaknesses of the European biopharmaceutical innovation system.
3.2.1.2
Pharmaceuticals
In the pharmaceutical sector, the economically most important group of biotechnology products are biopharmaceuticals. Thus meaningful measures for the adoption of biotechnology in
this sector are the number of biopharmaceuticals out of all pharmaceuticals (indicator HA1b),
the revenues of biopharmaceuticals (indicator HA1e), the number of companies with biopharmaceutical activities (indicator HA3a) and the adoption of biopharmaceuticals by physicians, i. e. the prescription rate of biopharmaceuticals (indicator HA2e). These indicators are
complemeted by the more general perspective of international market shares (indicator HA4a)
and imports of biopharmaceuticals (indicator HA5a).
3.2.1.2.1
Number of products and application fields
The share of biopharmaceuticals38 out out of all pharmaceuticals on the market gives an insight into adoption of biopharmaceuticals by the different regional markets. Data for calculating this indicator was retrieved from the PHARMAPROJECTS database.
the registered product and world-wide launch. Data is continuously updated and the quality of data is
assessed as good according to the criteria developed in task 1 (country coverage and timeliness) .
However, due to the continuous update there is one methodological difficulty in the country-specific
assignment of companies. Mergers and acquisitions of companies affect present and past data. i. e. a
product which was assigned to a specific country according to the companies headquarter will be
assigned to another country after a merger. If a sufficiently large number of products is affected by a few
mergers and acquisitions, the effect of this counting mechanism is negligible. However, in the case of
small absolute figures this could result in big effects on share of contribution of a specific
country. Therfore it is important to record the date of data retrieval.The data presented in this report
th
refers to the release of PHARMAPROJECTS 15 December 2006.
Sources of PHARMAPROJECTS include more than 500 international research publications, many webbased news providers, business newsletters such as Scrip World Pharmaceutical News, conferences,
and in particular companies themselves, which provide not only written material but are also interviewed
by the PHARMAPROJECTS staff. EU25 is covered as a group with the exception of Estonia, Latvia,
Lithuania, Malta, Slovenia and Cyprus; for these countries no data is available in the
PHARMAPROJECTS database. Accordingly, in the following sections 3 “EU” refers to the EU25 without
these 6 countries. Companies are assigned to a country according to their headquarters.
PHARMAPROJECTS was used to derive indicators describing market shares of human health biotechnology products (HA1b, HA1c, see Table 3.1 in report 1), number and share of biotech-active
companies (HA3, see Table 3.1 in report 1), pipeline products and emerging technology applications in
clinical trials (HA6 and HA7, see Table 3.1 in report 1). In addition to graphs presented all data is shown
in Table format in the annex.
37
US Department of Commerce (2003): A survey of the use of biotechnology in the US industry.
http://www.technology.gov/reports/Biotechnology/CD120a_0310.pdf
38
Biopharmaceuticals were defined in a narrower sense i. e. all recombinant products such as
interferon, interleukin, growth factors; blood factors, hormones and other peptides and proteins;
antibodies, immuntoxins, and immunoconjugates.
Page 45 of 315
In 2006 91 biopharmaceutical active substances39 are available in the EU25. In the USA 101
biopharmaceutical active substances are listed and in Japan 52. World-wide over
3,700 chemical entities (pharmaceutical active substances) are listed in PHARMAPROJECTS
in 2006. National data on the number of chemical entities is difficult to obtain. Neither the FDA
nor the EMEA provide this information40. On the basis of approval data (i. e. country-specific
activities in registration and marketing described in PHARMAPROJECTS), approx.
2,000 chemical entities are available in the USA, and an average of 1,700 chemical entities
available in EU15 in 2006. The number of chemical entities in different European countries
varies with over 2,000 chemical entities available in Germany, France and Italy, and less than
1,500 chemical entities available in Sweden, Luxemburg, Finland and Ireland. In Japan 1,658
chemical entities are listed in 2006. These numbers point out that there is a similar share of
biopharmaceutical active substances out of all pharmaceutical active substances available in
the USA and in the EU (approximately 5 %-6 %), and approx. 3 % of biopharmaceuticals out
of all pharmaceuticals in Japan.
The dynamics of adoption of biopharmaceuticals in the different markets was described by
the analysis of the introduction of drugs into the national markets. In this context a general
methodological difficulty needs to be considered: The effect of a countrywise step-by-step
introduction of (bio) pharmaceuticals in the EU market leads to a higher absolute number of
drugs in the EU. This fact must be considered in the comparison of the number of registered
drugs available in the EU and the USA.
The number of biopharmaceuticals newly launched in the EU as defined by their legal national registration was between nine and 17 products per year until 2002, followed by a decline to seven products annually during the last years. In the USA, the number of newly
launched biopharmaceuticals ranged between two and 13 drugs per year. In Japan zero to
five new biopharmaceuticals were launched per year. The total number of pharmaceuticals
launched in the EU25, USA and Japan decreased continuously during the last 10 years. This
can be explained by reduced R&D activities in the 90s and the difficulty of pure
pharmaceutical therapeutic approaches in multifactorial disorders (Gaisser et al. 2005)41.
Since during the same period of time the number of biopharmaceuticals launched per year did
not decline to such an extent, the share of biopharmaceuticals out of all pharmaceuticals
newly launched in the EU grew over the last 10 years (indicator HA1b), indicating that
biotechnology has gained increasing importance on the drug market (Figure 3-1). In the USA
for both biopharmaceuticals and chemical pharmaceuticals the overall decline was not as
strong as in the EU. Japan revealed similar market patterns in terms of adoption of
biopharmaceuticals as the EU however, on a lower level in respect to absolute numbers
(Figure 3-1).
The inventive capacities of the national (bio) pharmaceutical industry were determined by an
assignment of new biopharmaceuticals according to countries and therapeutic fields. The
latter gave an insight in national strengths and specialisation. Two different approaches to
assess the national contribution to the drug development process were applied. The first was
based on the originator country, i. e. the country in which the headquarters of the company is
located that described the compound for the first time42. This data was derived by the analysis
39
Active substances are defined as the therapeutic priniciple of a drug. One active substance can be
marketed in different drugs as these drugs can vary in the galenic composition (packing), the concentration of the active substance or the indications the drug is approved for.
40
The European drug database EudraPharm (eudrapharm.eu) is still under construction. It is intended
to be a source of information on all medicinal products for human or veterinary use that have been
authorised in the European Union (EU) and the European Economic Area (EEA) in the future. Howeve,r
it was just recently launched in the web in a preliminary version containing 312 pharmaceutical active
substances.
41
Gaisser, S.; Nusser, M.; Reiss, T. (2005): Stärkung des Pharma-Innovationsstandortes Deutschland.
Fraunhofer IRB Verlag. ISBN 3-8167-6779-6
42
Originator is defined in the database PHARMAPROJECTS as "the company, academic institution or
other non-industrial organisation responsible for discovering the drug." It thus gives no information
whether the company actually produces or markets the product.
Page 46 of 315
of all biopharmaceuticals (without vaccines) marketed in 2005 that were listed in the database
PHARMAPROJECTS by originator company. The second approach was based on a manual
assignment of biopharmaceuticals to product classes and countries according to the country
of the company that finalised drug development and approval. In the case of collaborations
between the EU and the USA, the country of the lead inventor was chosen for countryspecific assignment.
Figure 3-1:
Share of number of biopharmaceuticals out of all pharmaceuticals newly
launched in the indicated countries (indicator HA1b)
EU
USA
JP
25
Share of biopharmaceuticals (%)
20
15
10
5
0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Source: Fraunhofer ISI analysis based on PHARMAPROJECTS
The national assignment of drugs according to company headquarters (approach one) resulted in 21 different biopharmaceutical drugs launched from companies with headquarters in
the EU25 between 1995 and 2005, 76 from USA companies, and 8 from Japanese
companies. Other orginators were Switzerland (15 drugs), and South Korea, India, Australia
(5 drugs). This illustrates the strong position of US companies in the early invention process.
World-wide biopharmaceuticals played an important role in the area of metabolic disorders
(22 biopharmaceuticals, among them, 7 in the EU25, 12 in USA), cancer (24 biopharmaceuticals, among them 4 in the EU25, 15 in USA), musculoskeletal disorders (16 biopharmaceuticals, among them 2 in the EU25, 13 in USA), and immunological disorders (15 biopharmaceuticals, among them 2 in the EU25, 8 in USA). The number of indications exceeds
the number of NMEs slightly as several biopharmaceuticals had more than one indication.
The biopharmaceuticals launched between 1996 and 2005 were used for the therapeutic
fields summarised in Figure 3-2.
A second approach based on the manual country-specific assignment of biopharmaceuticals
was carried out, using the data published by Walsh (2006). This analysis covered biopharmaceuticals and vaccines for Europe as a geographic term, i.e. including Switzerland. It resulted
in a list of 46 NMEs developed by European companies. 54 biopharmaceuticals developed by
US companies and 13 biopharmaceuticals developed by Japanese companies43. Differences
in the number of biopharmaceuticals per country between the two approaches result from a
different understanding of the contribution of a company in the invention process. Whereas
pharmaprojects assigns all substances to the original inventor (i.e. the company that
43
8 products were developed in 2006. They were not covered in the PHARMAPROJECTS analysis in
the first approach.
Page 47 of 315
published the substance first) and even includes substances of another company after merger
and acquisition, the second approach reflects more the developmental process and share of
contribution of a company in the development. Especially European countries tend to license
in substances in a later developmental stage (Gambardella et al. 2000). Thus the second
approach will result in a higher assignment of substances to EU companies. The categories
with the highest number of different recombinant NMES world-wide are recombinant
hormones (39 NMEs), recombinant antibodies (29 NMEs), and recombinant interleukins/interferons (22 NMEs). The national distribution showed a specialisation of US and EU
companies. Whereas the EU was strong in recombinant vaccines, the USA had the predominant role in the field of recombinant antibodies, growth factors, and interleukins/interferons. In
the field of recombinant hormones the USA and the EU showed similar strengths.
Figure 3-2:
Therapeutic fields of biopharmaceuticals in the market by originator country
of inventing company in 2005
EU
USA
Japan
16
14
Number of drugs
12
10
8
6
4
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Figure 3-3:
Number of NMEs by product classes and countries in 2006
Japan
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Source: Fraunhofer ISI analysis based on Walsh (2006) and PHARMAPROJECTS
The data retrieved from the PHARMAPROJECTS database approach seem to underestimate
the EU contribution in the innovation process. Studies of Gambardella et al. (2000)44 showed
that European pharmaceutical companies tend to have less pure in-house research projects
than US companies. European pharmaceutical companies follow an in-licensing strategy.
Thus more drug developments will be assigned to US companies in approach one which
reflects the nationality of the company that describes the compound for the first time, even if
the major part of drug development was carried out by European companies. A second
reason for the underestimated role of European companies is the assignment of companies to
a country in the database PHARMAPROJECTS: A company is assigned to the most recent
national headquarter of the originator company, even if the drug development was carried out
by another company and the company merged later. Thus, in order to assess national
adoption of biotechnology in the drug development process it is recommended to consider the
whole value chain and calculate the national contribution according to approach two.
3.2.1.2.2
Revenues
The world market of biopharmaceuticals was estimated at € 27.5 billion in 2004 and projected
to reach € 58.3 billion by the end of the decade (Walsh 2006). Visiongain valued the 2005
global biopharma market at € 59 billion (Visiongain 2005a)45. The USA dominate this market
presently. Analysts at Visiongain saw a fall in global market share in Japan and Europe, whilst
the Asia-Pacific region was expected to reach high levels of unprecedented growth (Visiongain 2005a). This could be illustrated by the fact that the two largest biotechnology companies
Amgen (Thousand Oaks, CA, USA) and Genetech (San Franscisco, CA, USA) continued to
dwarf the rest of the market with 30 % of the world-wide revenues (Lähteenmäki and Lawrence 2006)46.
The analysis of (bio) pharmaceutical revenues on basis of the manufacturer ex-factory prices
was carried out by using the IMS Health database. All biotherapeutics (biopharmaceuticals
without recombinant vaccines) approved by FDA or EMEA as listed by Walsh in June 2006
44
Gambardella, A.; Orsenigo, L.; Pamolli, F. (2000): Global competitiveness in pharmaceuticals: a
European perspective. Report prepared for the Directorate General Enterprise of the European
Commission
45
Visiongain (2005a): World Biotech Market 2005. Piribo Publication VIS020
46
Lähteenmäki, R. and Lawrence, S. (2006): Public biotechnology 2005 – the numbers. Nature
Biotechnology 24 (6), 625-634
Page 49 of 315
were used by their generic name(s) as basis for biopharmaceuticals. Of this list 16 products
(among them six monoclonal antibodies, one insulin analogue, two growth hormones and
three morphogeneic proteins) could not be found in the database. The analysis indicates that
in the EU25 the revenues of biopharmaceuticals increased from € 1.7 billion in 1996 to
€ 11.3 billion in 2005 with an average annual growth rate of 23.14 %. The USA
biopharmaceutical market rose from € 2.9 billion in 1996 to € 25.1 billion in 2005 with an
average annual growth rate of 27.6 %. The Japanese biopharmaceutical market rose from
€ 0.9 billion in 1996 to € 2.1 billion in 2005 with an average annual growth rate of 8.72 %.
Thus the USA covered approx. 42.5 % of the global biopharmaceutical market in 2005, the
EU25 accounted for 19.2 %, and Japan for 3.6 %.
The world pharmaceutical market (including biopharmaceutical drugs) was worth an estimated € 438.2 billion in 2004 and € 454.8 billion at ex-factory prices in 200547. The US market
represents the largest world-wide with 44 % of revenues, followed by 27 % in the European
Union and 10 % in Japan. The total pharmaceutical market grew more slowly compared to the
subgroup of biopharmaceuticals. The average annual growth rate of the US pharmaceutical
market between 1996 and 2005 was 13.58 % with a volume of € 64.69 billion in 1996 and
€ 201.39 billion in 2005. The EU25 pharmaceutical market was € 48.69 billion in 1996 and
€ 123.92 billion in 2005 with an average annual growth rate of 11.22 %. The Japanese pharmaceutical market grew with an average annual growth rate of 2.99 % from € 35.57 billion in
1996 to € 46.21 billion in 2005.
As it can be seen in Figure 3-4, the USA had the strongest market adoption of biopharmaceuticals in all pharmaceuticals. The EU25 followed with a similar trend as the USA but on a
lower level. As shown in an analysis of Danzon and Furukawa (2006) the process for identical
biopharmaceutical formulations are not higher in the USA than in other markets. Differences
in revenues reflect primarily greater availability and use of new biopharmaceuticals, i.e. many
products are primarily approved and prescribed in the USA and follow some years later in the
European market.
Figure 3-4:
Share of revenues of biopharmaceuticals out of all pharmaceuticals (indicator HA1e)
Share of revenues of biopharmaceutical in all
pharmaceuticals (%)
EU
USA
Japan
12,00
10,00
8,00
6,00
4,00
2,00
0,00
1997 1998 1999 2000 2001 2002 2003 2004 2005
Source: Fraunhofer ISI analysis based on IMS Health
47
EFPIA: The pharmaceutical industry in figures (2006). www.efpia.org/6_publ/infigures2006.pdf
Page 50 of 315
An earlier study of Bibby et al. (2003)48 analysed the penetration rate of biopharmaceuticals
within the pharmaceutical market between 1993 and 2002 on basis of product revenues given
in the IMS Health Database. The penetration rate was taken as degree of adoption as
described in the Bio4EU study. The role of Japan changed from a leading biopharmaceutical
nation with the highest share of biopharmaceuticals in all pharmaceuticals in the early 1990s
to the last position among the three actors EU, USA and Japan (Figure 3-5).
As discussed above, annual growth rates for biopharmaceuticals were significantly higher
than those of the total pharmaceutical market. Innovation in the traditional small molecule
area appeared to be slowing down and biopharmaceutical development and production
methods were becoming an integral part of the pharmaceutical companies. The comparison
of the average annual growth rates for the two periods 1998-2001 and 2002-2005 showed
that market growth slowed down globally. Whereas both the US and the EU25 experienced a
similar slow down in market growth of the pharmaceutical market, the decline in market
growth in biopharmaceuticals in the time period 2002-2005 was smaller in the EU25. This resulted in a similar CAGR in the EU25 and the USA in the period 2002-2005 in the
biopharmaceutical market. In other words, the EU25 reached a similar position in terms of
dynamics of growth in biopharmaceuticals in the last 3 years as the USA. Japan was stable at
low CAGR in the pharmaceutical market, it showed some increase in CAGR in the period
2002-2005 in the biopharmaceutical market. However, the dynamics of growth in Japan in the
biopharmaceutical market is still behind the EU25 and the USA.
Figure 3-5:
Penetration of the biopharmaceutical sector into the overall pharmaceutical
market
Source: IMS MIDAS 2002 cited in Bibby et al. 2003
48
Bibby, K.; Davis, J. and Jones, C. (2003): Biopharmaceuticals – Moving to Centre Stage. Biopeople
2003.
http://www.imshealth.com/vgn/images/portal/cit_40000873/43028586Bio_Moving_to_Centre_Stage.pdf
Page 51 of 315
Figure 3-6:
Average annual growth rate for the pharmaceutical and biopharmaceutical
market for 1998-2001 and 2002-2005
USA Pharma
EU25 Pharma
JP Pharma
USA BT
EU25 BT
JP BT
40,00
35,00
CAGR (%)
30,00
25,00
20,00
15,00
10,00
5,00
0,00
average 1998-2001
average 2002-2005
3.2.1.2.3
Companies
The PHARMAPROJECTS database allows the search for companies that are active in developing or producing biopharmaceuticals or recombinant vaccines. Thus for the analysis of
biopharmaceutical companies, it was searched for all companies that have a minimum of one
biopharmaceutical product or recombinant vaccine, in clinical trials or launched in any
country. Pharmaceutical companies are all companies that have a pharmaceutical product or
vaccine in clinical trials or launched in any country.The attribution of a company to a specific
country was carried out in PHARMAPROJECTS on the basis of company headquarter.
During the last 10 years the number of companies with activities in biopharmaceuticals and
recombinant vaccines (i. e. having at least one product in development or on the market) increased rapidly, in the EU25 from 37 companies in 1996 to 142 in 2006, in the USA from 102
to 292. In Japan the number remained stable at approx. 20 companies (Figure 3-7). Other
countries with companies active in the field of biopharmaceuticals and recombinant vaccines
are Argentina, Australia, Bermuda, Brazil, Canada, China, Cuba, Iceland, India, Israel,
Norway, Philippines, Russian Federation, Singapore, South Korea, Switzerland, and Taiwan.
Page 52 of 315
Figure 3-7:
Number of biopharmaceutical and vaccines companies 1996-2006
EU
USA
JP
Others
350
Number of biotech-related companies
300
250
200
150
100
50
0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
The share of EU companies with activities in biotechnology (as defined above) out of all
companies developing or producing pharmaceuticals doubled in the last 10 years and
reached 40 % of all pharmaceuticals companies, while the respective rate for the USA remained stable at a level of about 45 % (Figure 3-8). These data indicated that the adoption of
biotechnology by EU firms for producing pharmaceuticals improved considerably during the
last 10 years, achieving levels that were comparable to the United States. It should be noted
that this indicator described both the use of biotechnology by established pharmaceutical
firms as well as small and medium-sized biotechnology firms developing or producing
pharmaceuticals.
Figure 3-8:
Share of all companies that use biotechnology for developing and producing biopharmaceuticals and recombinant vaccines (indicator HA3)
EU
USA
JP
60
Share of firms using biotech (%)
50
40
30
20
10
0
1996
1998
2000
2002
2004
2006
Page 53 of 315
3.2.1.2.4
Products in development
The adoption of new technologies by industry is assessed by analysing the contribution of
these technologies to the developmental process, i.e. in the case of pharmaceutical industry
the share of biopharmaceuticals in clinical trials out of all products in clinical trials. (indicator
HA6a). The country assignment of the (bio) pharmaceutical products in development determined in PHARMAPROJECTS was carried out according to the headquarter of the developing originator company. As illustrated in Figure 3-9, the USA and the EU followed a similar
pattern with a significant increase in the number of biopharmaceuticals in 2001, whereas the
development process for pharmaceuticals rose linearly within the last 10 years. Japan is
characterised by decreasing development activities both for biopharmaceuticals and pharmaceuticals.
Figure 3-9:
Biopharmaceuticals in clinical trials (a)) and all clinical trials (b)) 1996-2005
EU
USA
JP
Number of biopharmaceuticals in clinical trial
250
200
150
100
50
0
1996
1997
1998
1999
2000
EU
2001
USA
2002
2003
2004
2005
a)
JP
1800
1600
Number of all clinical trials
1400
1200
1000
800
600
400
200
0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
b)
As shown in Figure 3-10, the USA started with an adoption rate of 18 % of biotechnology
among all drug development processes in 1996. By that time the EU had an adoption rate of
11 %. In 2005 the adoption rates of the USA (12 %) and the EU (10 %) had reached nearly
the same level.
Page 54 of 315
Figure 3-10:
Adoption rate of biotechnology for drug development (indicator HA6a):
share of clinical trials with biopharmaceuticals out of all clinical trials
EU
USA
JP
20
18
Share of biopharmaceuticals (%)
16
14
12
10
8
6
4
2
0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
The biopharmaceuticals reported to be in clinical trials between 1996 and 2005 were used for
the therapeutic fields listed in Table 3-1. The number of indications exceeds the number of
NMEs as several biopharmaceuticals have more than one indication. Biopharmaceuticals
played an important role in the area of metabolic disorders (37 drugs in clinical trial), blood
and clotting disorders (45 drugs), immunologicals (51 drugs), anticancer (84 drugs) and musculoskeletal disorders (57 drugs). The attribution of specific countries was based on the localisation of the headquarters of the originator company. It illustrated the strong position of
the USA in the ongoing invention process.
Table 3-1:
Biopharmaceuticals in clinical trial according to therapeutic field in 2005
Therapeutic field
Alimentary/Metabolic
Blood/clotting
Cardiovascular
Dermatological
Genitorurinary
Hormones (ex. sex hormones)
Immunologicals
Anti-infective
Anticancer
Musculoskeletal
Neurological
Antiparasitic
Respiratory
Sensory
Total
EU
11
11
3
7
2
5
13
4
26
19
5
0
6
2
114
USA
22
25
14
15
5
5
33
21
52
35
17
1
18
7
270
Japan
4
9
2
4
1
2
5
1
6
3
2
0
1
0
40
Total
37
45
19
26
8
12
51
26
84
57
24
1
25
9
424
Page 55 of 315
3.2.1.2.5
End-user acceptance
End-user acceptance for biopharmaceuticals was determined by the uptake of biopharmaceuticals by physicians measuring the share of biopharmaceutical prescriptions out of all
pharmaceutical prescriptions (indicator HA2e). The number of biopharmaceuticals prescribed
is considered as an indicator for knowledge and acceptance of biopharmaceutical drugs. The
private consulting company Visiongain calculated a world-wide prescription rate of biopharmaceuticals of 12 % of all prescriptions in 2005. They expect that composed of nine major
therapeutic areas including oncology, antiinfectives, vaccines and the market leader blood
disorders, the market of biopharmaceuticals would represent 17 % of all prescriptions written
by 2010 (Visiongain 2005).
A detailed analysis of the prescription behaviour was carried out using the IMS MIDAS Database of IMS Health. However, due to different regulatory conditions, the absolute numbers of
prescriptionswere not comparable between the USA, Japan and the EU25. In the USA a repeated refill of a prescription once given by a doctor is possible. Thus, the number of prescriptions is underestimated. In Japan prescriptions are given both from general practitioners/specialist doctors and doctors in hospital. Thus the number of prescriptions will be higher
than the equivalent number in the EU25, where most countries have the rule of one
prescription per visit at a physician’s without refill option. However, on the basis of share of
biopharmaceuticals prescribed in all pharmaceutical prescriptions, the indicator gives a
reliable insight into adoption and uptake of biopharmaceuticals in the sector of general
practitioners. Biopharmaceutical prescriptions accounted for 0.92 % in the USA in 2000. The
share rose to 1.46 % of all prescriptions in 2005. In the EU25 the share of biopharmaceutical
prescriptions out of all prescriptions underwent only a small increase from 0.55 % in 2000 to
0.73 % in 2005. The Japanese situation was similar to the EU25; biopharmaceutical
prescriptions accounted for 0.35 % (2000) and rose to 0.59 % in 2005. This indicated a
stronger adoption of biopharmaceuticals by general practitioners in the USA than in the EU25
and Japan (Figure 3-11).
Figure 3-11:
Share of biopharmaceutical prescriptions out of all prescriptions (Indicator
HA2e).
Share of biopharmaceuticals prescribed out of all
prescriptions (%)
EU
USA
Japan
1,60
1,40
1,20
1,00
0,80
0,60
0,40
0,20
0,00
2000
2001
2002
2003
2004
2005
Page 56 of 315
3.2.1.2.6
Global market situation
The competitiveness of European human health biotechnology products was analysed by
determination of international market shares of human health products (indicator HA4a). Published by Ernst & Young in 200349, 200450, 200551 and 200652 global biotechnology revenues
of public biotechnology companies53 reached a total of € 50,000 million in 2005. The strongest
player was the USA with an average contribution of 75 % of total revenues since 2001.
Europe was the second strongest player, it contributed an average of 17 % of total biotechnology revenues since 2001. The Asia/Pacific region contributed an average of 4 % of total
biotechnology revenues. Though the global biotechnology revenues nearly doubled during the
last five years, Europe could not gain profit out of this growth. In contrast, the share of European biotechnology revenues fell from 22 % of total biotechnology revenues in 2001 to 15 %
of total biotechnology revenues in 2005. Data for a detailed analysis of revenues of different
application areas (e. g. health applications) or subclasses of health applications such as biopharmaceuticals or recombinant vaccines was not available.
Table 3-2:
Global biotechnology revenues (€ million)
Revenues Biotechnology
Global
USA
Europe
Asia/Pacific
2001
27335
19846
5905
1001
2002
32436
23723
6475
1077
2003
41153
31695
6599
1077
2004
41831
32059
6787
1608
2005
50765
38413
7862
2413
Source: Ernst and Young 2003, 2004, 2005, 2006
Figure 3-12:
Share of global biotechnology revenues in public companies in 2005
USA
Europe
Asia/Pacific
5%
20%
75%
Source: Ernst and Young (2006)
49
Ernst & Young (2003): Beyond Borders. The Global Biotechnology Report 2003
Ernst & Young (2004): Beyond Borders. The Global Biotechnology Report 2004.
51
Ernst Young (2005). Beyond Borders. The Global Biotechnology Report 2005. EYG No. CW0006
52
Ernst & Young (2006): Beyond Borders. Global Biotechnology Report 2006. EYG No. CW0020
53
Ernst & Young applies its own definition of the biotechnology sector which is very similar to the OECD
definition of dedicated biotechnology firms (DBFs).
Page 57 of 315
50
A second approach to determine national competitiveness of human health products was followed by the analysis of share of imports of human biotechnology products (indicator HA5).54
Statistical indicators on the production and trade of biotechnology produced goods were derived on the basis of commodity classifications. According to an analysis of the OECD (2005),
an approximation to biotechnology commodities could be achieved using the Harmonised
Tariff Schedule (HTS) commodity code. In this classification only biopharmaceuticals are
covered. However, there are a number of disadvantages in this classification system: the tendigit classification is only available for the USA provided by the US Census Bureau, the
OECD provides only a six-digit classification in the ITCS International Trade by Commodity
Database55. Major biotechnology products such as insulin, interferon, and erythropoietin etc.
fall into the category "biologics". This definition both includes many products that are not part
of advanced biotechnology (such as blood products) and excludes other important
biotechnologies (such as antibiotics). Additionally, diagnostics that use biotechnological
principles could not be retrieved. A comparison of the three categories HTS 2940006000
(sugars), HTS 3002200000 (vaccines for human medicine), and HTS 3002905150 (bloods
and vaccines) for which the ten-digit code and the six-digit code were available showed that
the divergence between the two categories is below 10 %. Due to the lack of more
comprehensive data an estimation for four biotechnological product categories (sugars,
hormones, blood products, vaccines) was carried out using the OECD–ITCS database
(Table 3-3) and the OECD six-digit data was used for international comparison.
Table 3-3:
Comparison between ten-digit and six-digit product categorisation for the
USA
U.S. Imports For Consumption
(in 1000 US $)
HTS - 2940006000: OTHER SUGARS,
NESOI EXCL D-ARABINOSE
294000 Sugars, chemically pure, their ethers,
esters and their salts
divergence
HTS - 3002200000: VACCINES FOR
HUMAN MEDICINE
300220 Vaccines, human use
divergence
HTS - 3002905150: BLOODS, VACCINES,
TOXINS, CULTURES OF MICROORGANISMS (EXCLUDING YEASTS) AND
SIMILAR PRODUCTS, NESOI
300290 Human blood; animl blood f therap,
prophltc/diag uses; microbial prep
divergence
2002
46239
2003
56524
2004
70143
average divergence
49036
6,05
746388
59532
5,32
848392
74603
6,36
615804
5,91
749053
0,36
257788
851268
0,34
386133
617961
0,35
416234
0,35
274633
6,53
405764
5,08
435500
4,63
5,42
Source: Fraunhofer ISI analysis based on data of US Census Bureau, OECD ITCS Database
54
OECD (2005): A framework for biotechnology statistics.
Source OECD - ITCS International Trade by Commodity Database.
http://hermia.sourceoecd.org/vl=22576495/cl=15/nw=1/rpsv/cw/vhosts/oecdstats/16081218/v173n1/cont
p1-1.htm
Page 58 of 315
55
1996
300290 Human blood; animal blood
for therapeutic, prophylactic/
diagnostic uses; microbial
preparations
5739
33924
42319
1996
135582
317195
377781
Japan
USA
EU15
Total imports in €
Japan
USA
EU15
1997
142601
531043
408888
6927
52294
42280
1997
1317
373692
177765
1997
110596
79393
142703
1997
23761
25665
46141
1997
1998
117757
543132
404363
6160
70971
45208
1998
1006
344457
168418
1998
82401
96295
151417
1998
28189
31409
39321
1998
1999
137981
720224
476816
10636
125178
47229
1999
1644
432719
206533
1999
94125
128473
183533
1999
31576
33854
39521
1999
2000
159157
896234
543233
2000
Imports in €
11472
160022
47386
2000
Imports in €
1181
512913
272660
2000
Imports in €
111737
177243
185104
2000
Imports in €
34767
46055
38083
13787
188587
56590
2001
775
576592
348301
2001
142290
217616
212074
2001
46619
45352
43418
2001
2001
203471
1028147
660383
2002
304524
1303961
583964
13820
166876
70859
2002
1829
793996
291295
2002
240267
291111
186111
2002
48607
51978
35699
2002
2003
161062
1326516
513680
10175
154774
63383
2003
2316
757628
247427
2003
97951
361130
171531
2003
50620
52984
31339
2003
2004
153240
1047775
668694
8099
134043
51784
2004
2880
500548
344328
2004
88468
352755
241129
2004
53793
60428
31453
2004
Source: Fraunhofer ISI analysis based on OECD International Trade Statistics HS 1996
1996
1190
215899
171068
1996
293792 oestrogens and
progestogens, in bulk
Japan
USA
EU 15
300220 Vaccines, human use
114668
46254
137456
13985
21118
26938
Japan
USA
EU15
Japan
USA
EU15
1996
Import data for four biotechnological product categories
294000 Sugars, chemically pure,
their ethers, esters and their salts
Table 3-4:
Page 59 of 315
The original definition of the indicator HA5 was to use the total domestic consumption of all
biotechnological products as a reference. This would include biotechnological diagnostics.
However, in order to illustrate the dependency upon biotechnology in the total pharmaceutical
sector, revenues of pharmaceuticals were chosen as denominator. The development of the
pharmaceutical market was determined by revenues at manufacturers' ex-factory prices (see
chapter 3.1.2.1).
The indicator illustrates that the dependence of Europe on imports56 decreased gradually
since 1996 indicating an improvement of Europe’s competitive position in biotechnology
commodity production (Figure 3-13).
Figure 3-13:
Share of imports of four biotechnology product classes out of total domestic
revenues of biopharmaceuticals
Europe
USA
Japan
1,00
Share of imports in total revenues (%)
0,90
0,80
0,70
0,60
0,50
0,40
0,30
0,20
0,10
0,00
1996
1997
1998
1999
2000
2001
2002
2003
2004
Source: Fraunhofer ISI analysis based on OECD International Trade Statistics HS 1996 and
IMS Health
3.2.1.2.7
Transition into the chemical sector
The pharmaceutical industry adopted biotechnology not only in the development and production of big molecules ("biopharmaceuticals"). Biotechnology plays an increasing role in the
production of small molecules (indicator HA8). Biotechnological processes have the potential
to substitute existing chemical processes for the production of bulk and fine chemicals. Many
studies in the field of industrial production analysed these aspects on a highly aggregated
level or for main products such as bioethanol or biopolymers (for detailed information, see
chapter 5). The current and future share of biotechnological processes in the production of
small molecules for human health was determined only on a case-by-case basis. Reason for
this is the big heterogeneity of production processes and product portfolios of different companies that makes an overall estimation difficult. On the basis of 30 assessments of representatives of the chemical and pharmaceutical industry the share of biotechnological processes out of all processes was estimated to be in the range between 10 and 15 % for all
small molecules currently. A typical production process of a simple molecule consists of five
56
It can be assumed that the majority of the imports come from the USA as important producer of
biotechnological commodities.
Page 60 of 315
to eight steps, thereunder at most one or two biotechnological steps (20-25 %). A typical production process of a more complex molecule consists of 15 to 20 steps, thereunder at most
two or three biotechnological steps (13-20 %). The interviewees were not aware of any
difference between the adoption of biotechnological processes in the EU25 and the USA57.
No information was available for Japan.
In the future all experts clearly saw an increase in the share of biotechnological processes in
the production of small molecules for human health. This expectation was based on three
main reasons. Firstly, glucose as an alternative resource for biotechnological processes is in
contrast to conventional energy sources proportionally cheaper and not finite. Secondly, one
biotechnological step is able to replace up to five conventional steps, thus production time can
be reduced dramatically. Thirdly, biotechnological transformations using enzymes are much
more specific than chemical transformations, regarding for example the production of specific
enantiomers or the conversion of a racemate. Furthermore, in the future the synthesis of new
active ingredients might be necessary which simply cannot be produced by a chemical process. The reason why companies still stick to absolute chemical processes is still a rather
difficult accessibility to enzymes which are needed for biotransformation.
Additionally, none of the experts forecasted a reduction in the number of jobs. But they
agreed about a change in the hierarchy of scientists; so-called "hot chemistry" will take a back
seat while biotechnologists will become more and more important. For the well educated
employees special training activities were considered sufficient to make them familiar with
biotechnological processes of manufacture.
3.2.1.3
Diagnostics
Biotechnology added a new class of diagnostic tests to the tests available. These new tests
are genetic, metabolic and immunological tests which are summarised as molecular tests.
The adoption of biotechnology in diagnosis was measured by the following indicators: the
share of molecular diagnostics out of all diagnostics (indicator HA1a/HA1d), the performance
of molecular tests (HA2d) and the number of biotechnology companies in the field of diagnosis (HA3a).
3.2.1.3.1
Revenues
The in vitro diagnostics market was divided into six main categories58: immunochemistry,
haematology, microbiology, infectious immunology, genetic testing and clinical chemistry.
Molecular diagnostics are subclasses of some of these categories, i. e. the testing of infectious diseases within infectious immunology, the testing of cancer within haematology and
genetic testing including pharmacogenomic testing as total. Other types of molecular testing
refer to tissue typing, ID forensic and food testing (i.e. protein marker and DNA testing) . The
latter is covered in the primary production chapter. Due to the different delineation of the field
molecular testing and in vitro diagnostics as total, a comparison of different statistics and
analyses was difficult and prone to misinterpretations.
Absolute numbers of test kits or products (indicator HA1a) were not available. The only (limited) data available was on the basis of revenue figures of in vitro diagnostics. However, such
figures published by various studies differ most likely due to different field delineation and
number and type of companies included in the analysis. As details on the methods of data
gathering of different studies were not available the different estimates indicate the bandwith
to which the total IVD and molecular diagnostic market was estimated.
57
Interviewees worked mainly in international companies thus they had insight in potential differences
between the countries. However 80 % of the interviewees were employed in companies with
headquarters in the EU25.
58
EDMA (2004): European IVD market steimates by category. www.
vdgh.de/internet/Marktdaten/Diangostikamarkt/Europa/europa.htm
Page 61 of 315
The global IVD market was calculated at € 22 billion in 2004 and prospected to reach nearly
€ 34 billion in 2010. Molecular diagnostics accounted for 5.4 % (€ = 1,219 million) of the total
IVD market (Frost and Sullivan 2005). The segments with the strongest growth world-wide
were molecular diagnostics (CAGR 15.3 %), Self Monitoring Blood Glucose (CAGR 11.5 %),
Point of Care Testing (CAGR 10.9 %), and Hemostatis/Coagulation (CAGR 10.2 %)59
Table 3-5:
Total IVD Market in 2004 and 2010 Outlook
Segment
2004 (€ m)
forecast
2010 (€ m)
Clinical Chemistry
5,242.66
6,117.66
(2004-2010)
2.6 %
Immuno-Chemistry
5,467.81
7,206.56
4.7 %
350.94
484.30
5.5 %
Microbiology
1,283.59
1,794.14
5.7 %
Hematology
1,466.64
1,845.08
3.9 %
Point of Care (POC)
1,220.23
2,267.50
10.9 %
888.05
1,594.38
10.2 %
1,219.69
2,859.92
15.3 %
418.67
572.03
5.3 %
4,428.05
8,491.25
11.5 %
418.20
516.48
3.6 %
22,404.45
33,749.22
7.1 %
Diabetes
Hemostasis/Coagulation
Molecular Diagnostics
Urine
Self Monitoring Blood
Glucoces (SMBG)
Others
Total
CAGR (%)
Source: Frost and Sullivan 2005, original data in US $ (conversion factor US $ 1 = € 0.78)
Frost and Sullivan (2005) carried out a region-specific analysis of revenues based on
16 leading countries. In this analysis North America is represented by the USA and Canada,
Latin America by Brazil and Mexico, Europe by Germany, Italy, France, Spain, the United
Kingdom and Russia, and Asia Pacific by Japan, China, India, Korea, Taiwan and Indonesia.
As shown in Table 3-6 North America generates most revenues (€ 9,725 million), followed by
Europe (€ 7,500 million). Molecular diagnostics contribute to 9.7 % (€ = 943 million) of total
IVD in North America but only 2.2 % (€ 161 million) in Europe.
Table 3-6:
Region-specific revenues of total IVD and molecular diagnostics in 2004 on
basis of 16 leading countries
total IVD (€ m)
molecular
diagnostics (€ m)
North America
9,725.08
943.0
share molecular
diagnostics out of
total IVD (%)
9.7
Latin America
495.94
7.8
1.6
Europe*
7,500.78
161.7
2.2
Asia Pacific
3,363.36
72.6
2.2
ROW
1,319.30
34.5
2.6
Total
22,404.45
1,219.6
5.4
Region
* Europe is represented in this analysis by Germany, Italy, France, Spain, the United Kingdom and Russia
Source: Frost and Sullivan 2005
59
Frost and Sullivan 2005: Global In vitro Diagnostics Market.
Page 62 of 315
A more detailed analysis of the European situation was carried out by the European Diagnostics Manufacturer Association (EDMA) and its national European associations. The total IVD
market for these 14 countries was calculated to be € 6,951 million. The top five countries
were Germany with 24 % of the total IVD market, Italy and France with 19 % of the total IVD
market, Spain with 10 % of the total IVD market, and the UK with 7 % of the total IVD market.
The most recent calculation of the total IVD market for all European countries (33 countries
without Turkey and Russia) was carried out by EDMA on the basis of national market data of
all countries. This market estimate resulted in a total IVD market of € 9,524 million in 200560.
In summary the total IVD market was estimated to be in the range between € 6,951 million
and € 7,5 million in Europe.
The European market of genetic testing reagents was calculated for 14 European countries
by EDMA and the national associations in 200461 to account for € 38.7 million A breakdown to
different subclasses ov IVD was not carried out in the most recent analysis of EDMA. The
contribution of different applications to the molecular diagnostics market was calculated by
Frost and Sullivan (2005a) on the basis of 2004 market analysis (Table 3-7). In this analysis
Frost and Sullivan defined the field of molecular diagnostics as tests that are based on nucleic
acid-based technologies (NATs). The study showed that infectious diseases testing was the
major application field, with nearly 80 % of total molecular diagnostics applications currently.
The share was expected to decrease slightly to 70 % of all molecular diagnostics in 2011. The
application with the highest compound annual growth rate was cancer diagnostics.
Pharmacogenetic applications did not show a significant increase in market shares until 2011.
Their market share was estimated to remain at approx. 11 %.
Table 3-7:
Share of different molecular diagnostic applications and their CAGR on the
basis of 2004 market values in Europe*
Infectious diseases (ID)
year
Share ID
CAGR ID
of total MD (%)
(%)
Cancer diagnostics (CD)
Share CD
of total MD
(%)
CAGR CD
(%)
5,98
Pharmacogenetics (PGx)
Share PGx
out of total
MD (%)
CAGR
PGx (%)
2001
83,27
10,76
2002
81,35
21,05
7,72
59,95
10,93
25,95
2003
79,47
17,79
9,33
45,83
11,20
23,53
2004
77,60
15,10
11,31
42,87
11,09
16,68
2005
76,15
13,00
12,77
30,01
11,08
15,10
2006
74,92
11,51
13,87
23,08
14,70
2007
74,16
10,32
14,78
18,74
11,21
11,06
2008
73,46
9,35
15,50
15,79
11,05
10,26
2009
72,77
8,53
16,07
13,64
11,16
10,72
2010
72,37
7,88
16,60
12,00
11,04
7,25
2011
71,94
7,31
17,02
10,71
11,04
7,95
9,90
* Europe was represented by national data from Germany, France, Italy, the United Kingdom, Spain, Benelux
(Belgium, Luxembourg and the Netherlands), Scandinavia (Denmark, Finland, Norway and Sweden)
60
European Diagnostic Manufacturer Association (2006): European IVD market estimates 2005.
Germany, Italy, France, Spain, the UK, Switzerland, Belgium, the Netherlands, Austria, Portugal,
Greece, Finland, Poland, Czech Republic.
Page 63 of 315
61
3.2.1.3.2
Companies
The IVD market is dominated by a rather small number of companies. The top 15 companies
represented almost € 19 billion in revenues for 2005. This corresponded to a market share of
85 % of total IVD market. Within the list of the top 15 companies, revenues start tailing off significantly with the last company. The USA dominated with nine of the top 15 companies.
Three of the leading companies were Japanese, and another three located in Europe (by
geographic definition). Table 3-8 lists the leading in vitro diagnostic companies.
Table 3-8:
Leading in vitro diagnostic companies (2005)
Company/Country of Origin
IVD Revenues
(€ m)
Total Company
Revenues
(€ m)
IVD as % of
Total Business
1. Roche Diagnostics (Switzerland - U.S.
HQ Indiana)
4,938
21,163
23 %
2. Abbott Labs (U.S. - Illinois)
2,978
17,479
17 %
3. Bayer Diagnostics (Germany)
1,959
25,082
8%
4. Becton Dickinson (U.S. - New Jersey)
1,959
4,232
46 %
5. Beckman Coulter (U.S. - California)
1,489
1,881
79 %
6. Dade-Behring (U.S. - Illinois)
1,332
1,332
100 %
7. Ortho - Clinical Diagnostics (U.S. - New
Jersey)
1,097
39,594
3%
8. bioMerieux (France)
940
940
100 %
9. Sysmex (Japan)
561
561
100 %
10. Bio-Rad Labs (California)
484
940
52 %
11. Arkray (Japan)
368
368
100 %
12. Diagnostic Products Corp. (California)
312
312
100 %
13. Olympus America (Japan - U.S. HQ in
Pennsylvania)
300
6,505
5%
14. Cytyc (U.S. - Massachusetts)
283
398
71 %
15. Gen-Probe (U.S. - California)
239
239
100 %
19,246
121,033
16 %
TOTAL Top 15 Companies
Source: Medical Product Outsourcing, June 2006 cited in Rosen (2006)62
62
Rosen, M. (2006): The world of in vitro diagnostics in another Midwest success story.
http://wistechnology.com/article.php?id=3158
Page 64 of 315
As diagnostic companies define themselves from a product view i. e. as developers and producers of IVD rather than from a technological perspective, the number of biotechnological
diagnostic companies is difficult to obtain (indicator HA3). A detailed listing of the subclass of
biotechnological diagnostic companies was not available, as national and international diagnostic manufacturers associations represent all types of companies active in the field of diagnostics which covers reagents and instruments. Biotechnology is one strategic positioning
among others. A better insight was gained from the analysis of biotechnology companies and
their distribution by industry segments. This analysis revealed that both in Europe and the
USA diagnostic biotechnology companies accounted for 12 % of all biotechnology companies
in 2005. In absolute numbers these were 193 companies in Europe and 170 companies in the
USA (Lawrence 2006)63. Experts estimated that biotechnological methods will steadily penetrate "classical" diagnostic companies as was the case with biotechnology in the pharmaceutical industry.
3.2.1.3.3
End-user acceptance
Consumers can play an important role in influencing the further development of the diagnostic
sector. In this context, consumers are diagnostic service companies i. e. the purchasers of
IVD reagents and test kits from the producing biopharmaceutical industry and lay people. The
behaviour of purchasers was analysed by indicator HA2a. Data on number and type of
genetic testing laboratories was retrieved from the genetests database64, a body funded by
the National Institute of Health. Genetests has the mission to provide current, authoritative
information on genetic testing and its use in diagnosis, management, and genetic counselling.
It has an online directory with the focus on gene and protein tests, that lists US and
international laboratories with activities in genetic testing. However as it is a US based
voluntary database, the number of European research institutions is underestimated and
cannot be used for this study. This analysis showed that most users of molecular testing were
in the public sector. Only 18 % were private companies.
Table 3-9:
Number and type of US Genetic Testing laboratories
Number and Type of Users of Genetic Testing
Hospitals
Companies
Universities
Research Institutes
total
101
71
191
25
388
Source: genetests.org
A similar situation was determined for Europe. The European Molecular Genetics Quality
Network (EMQN) carried out a survey with the focus on the dimension (number of labs, number of tests, etc) of genetic testing services in Europe in 2001 (Ibarreta et al. 2003)65. This
study counted 631 clinical/research institutes and 120 commercial institutes for Europe. Public organisations such as hospitals and universities accounted for 76 % of all testing laboratories (hospitals 52 %, universities 24 %). Commercial laboratories contributed only about 15 %.
Various national studies were conducted in the late 90s and early 2000 in order to determine
the number of tests performed in Europe: These were summarised in Ibarreta et al. (2003)
and extrapolated for Europe. According to this extrapolation, 735,000 genetic tests were
carried out in Europe in 2002. There were no comparable data for the USA for the same period of time. In 1996 more than 175,000 tests were performed.
63
Lawrence, S. (2006): State of biotech sector – 2005. Nature Biotechnology. 24(6), p. 603
genetests: laboratory directory. www.genetests.org
65
Ibarette, D. et al. (2003): Towards quality assurance and harmonisation of genetic testing services in
the EU. EUR No. 20977 EN
Page 65 of 315
64
According to an analysis published in Ibarreta et al. genetic tests worth € 15.08 million (52 %)
were conducted in hospitals, genetic tests worth € 6.96 million (24 %) were conducted in universities, and private, commercial institutes contribute with € 4.35 million (15 %) to the genetic
tests market. The low proportion of commercial institutes was confirmed by expert interviews.
For example DIAGNED, the Dutch Diagnostic Association outlined that “in Holland most clients of diagnostic industry are public hospital labs (± 125). Hardly any private service labs (at
this moment)”.
Though it was impossible to determine end-user-adoption on basis of companies' revenues in
this project, one could assume that the primary end-users for molecular tests are public institutions (hospitals and universities). This applied both to Europe and the USA. Private users
are in the range between 15 and 18 %. For Japan no information could be determined.
The degree of transfer of research knowledge into the clinic is an important factor that influences the adoption of biotechnology. The knowledge transfer in genetic testing was measured by the analysis of known tests versus applied tests in the clinic (indicator HA2d). In order to determine the number of known tests, entries in the OMIM database were analysed. As
summarised in Table 3-10 there were 16,949 entries in the OMIM database (release
08/2006). Among them were 10,887 genes listed in the database according to their genotype,
385 genes were known both by their DNA sequence and their phenotype and 1,946 diseases
were characterised by their phenotype and the molecular mechanism.
Table 3-10:
Genetic polymorphisms listed in the OMIM database
Autosomal
Gene with known
sequence
X-Linked Y-Linked
Mitochondrial
Total
10,320
482
48
37
10,887
Gene with known sequence and phenotype
352
33
0
0
385
Phenotype description,
molecular basis known
1,762
156
2
26
1,946
Mendelian phenotype or
locus, molecular basis unknown
1,399
136
4
0
1,539
Other, mainly phenotypes
with suspected mendelian
basis
2,045
145
2
0
2,192
Total
15,878
953
56
63
16,949
Source: OMIM database release 08/2006
World-wide 1,283 diseases could be tested on a genetic basis in 2006 (among them 991 in
the clinic, 292 for research purpose only) (www.genetests.org, release 08/2006). Thus a testing possibility existed for 66 % of all diseases with a proven genetic basis. Though there was
a small national variation as described by Hucho et al. (2005) (Table 3-11), it could be
assumed that every test was available world-wide. As long as the physician in charge of a
patient has the knowledge of a certain test, the blood or tissue sample could be shipped to
any destination world-wide for analysis. So the difference of testable disease of 42 % out of
all known diseases that were characterised by their phenotype and the molecular mechanism
in Europe and 54 % in the USA was more “academic” and was not interpreted as a lack of
end-user acceptance in Europe. However, it could be a different attitude and perception of the
readiness of a test. The European number of tests available did not specify the number of
tests for research purposes only, as was indicated in the USA. It could not be told whether the
research tests were included or neglected in the European listing in orphanet. The US institutions seemed to handle this category more offensively as part of their portfolio.
Page 66 of 315
Table 3-11:
Genetic testing in 2004
Source of Data
Regional focus
Number of Laboratories
Number of diseases
orphanet
Europe
601
824
genetests
USA
587 (among them
187 out of the USA)
732 clinical routine
330 research purpose
only
Source: Hucho et al. 2005
A detailed analysis of disease-associated allelic variations was carried out by Hucho et al.
(2005)66 on the basis of the OMIM database67. They found that on average 125 new diseaseassociated genes were included in the database during 2000 and 2004. An analysis of the
authors showed a strong position of the USA (82 authors in 2004). However, the total of all
European authors reached a similar number. Japan did not play a significant role in the discovery of disease-associated genes (10 authors).
Figure 3-14:
The acceptability of diagnostic and societal use of genetic data
Source: Eurobarometer 64.3 (2006)
End-user acceptance is an important factor that influences adoption of biotechnology. The
latest report of Eurobarometer68 illustrates among others the acceptability of the use of genetic data across Europe. Across the EU there was a majority of people who would take a
genetic test (64 %) in 2005, would give police access to genetic information (59 %) and would
allow banking of genetic information for medical research. This fact illustrates the openness of
end-users which is required for favourable market conditions. However, the privacy of genetic
data is a point to be considered. This points to the importance of a suitable regulatory frame66
Hucho, et al. (2005): Gentechnologiebericht. Analyse einer Hochtechnologie in Deutschland.
Spektrum Akademischer Verlag.
67
OMIM – Online Mendelian Inheritance in Man. Database. John Hopkins University.
http://www.ncbi.nlm.nih.gov/entrez/query.fcgi?db=OMIM
68
Gaskell, G. et al. (2006): Europeans and Biotechnology in 2005:Patterns and Trends. Eurobarometer
64.3
Page 67 of 315
work that would protect people from undesired release of their genetic data: 69 % of all questioned EU citizens would not give government access to genetic data and 81 % did not want
to give insurance companies access to genetic data. Across the EU countries attitudes
towards genetic testing in general varied. Citizens in Spain, UK, Malta, Denmark and Portugal
were on average characterised by a stronger aceptance of diagnostic and societal use of genetic data, whereas citizens in Germany, Austria, Greece, Hungary and Czech Republic
showed less acceptance of the use of genetic data (Figure 3-18).
Acceptance by lay people was age-related. The Eurobarometer 64.3 reported that up to an
age of 65 over 50 % of all interviewed lay people accepted pharmacogenetics and thought
that they will improve the way of life (Figure 3-15). Above an age of 65 the majority was not
optimistic about the effects of pharmacogenetics.
Figure 3-15:
Age and optimism about pharmacogenetics in the EU
Source: Eurobarometer 64.3 (2006)
3.2.1.4
Vaccines
The third class of biotechnological products in human health care is vaccines. Vaccines
nowadays are produced by a range of techniques; these include the classical techniques
such as the use of killed vaccines and live attenuated vaccines ("old biotechnology"), up to
more recent techniques such as recombinant products (using bacterial plasmids), or DNA
vaccines ("modern biotechnology"). However, "a breakdown to various vaccine products/technologies and their specific revenues is not available through the EVM", as outlined by Mrs
Rodriguez de Azero of the European Vaccine Manufacturers Association. The following
analysis is mainly based on the distinction of "recombinant" and "other vaccines", as catagorised by the PHARMAPROJECTS database assuming that "other vaccines" use old biotechnology.
3.2.1.4.1
Number of products and application fields
The development of the market of vaccines was analysed by the number of vaccines on the
market (indicators HA1c) and the revenues of vaccines in a specific country/region (indicator
HA1f). In the database PHARMAPROJECTS 15 recombinant vaccines were listed that were
developed and launched world-wide between 1996 and 2005. Companies in the EU25
(according to headquarter location) contributed with six recombinant vaccines, US companies
with two products, and Japanese companies with three recombinant vaccines. Other actors in
the field of recombinant vaccines were Switzerland with three products and South Korea (one
product) in the last 10 years. In the same period of time 82 non-recombinant vaccines were
developed world-wide. EU companies invented more than 50 % of the world-wide developed
vaccines. US companies contributed with approx. 20 % to the world-wide invention of
Page 68 of 315
vaccines. In Japan vaccines played a minor role (10 % of world-wide vaccine development
was carried out by Japanese companies). Figure 3-16 shows the total number of (recombinant) vaccines available on the market developed by companies assigned to the indicated
country/region by their headquarter69. The adoption of modern biotechnology by vaccine developing companies in EU25 and the USA was similar. Japan with a rather low number of
total vaccines developed in the last 10 years showed a higher adoption of recombinant technology (Figure 3-17).
Figure 3-16:
Number of recombinant (a)) and all vaccines (b)) by origin of inventing company 1996-2005 (country assignment by national localisation of headquarter)
EU25
USA
JP
7
Number of recombinant vaccines
6
5
4
3
2
1
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
a)
EU25
USA
JP
50
45
Number of all vaccines
40
35
30
25
20
15
10
5
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
b)
69
The same number in a country in consecutive years indicates that there was no new product
launched.
Page 69 of 315
Figure 3-17:
Share of recombinant vaccines out of all vaccines launched 1996-2005 (indicator HA1c)
Share of recombinant vaccines out of all vaccines (%)
EU25
USA
JP
70
60
50
40
30
20
10
0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
The total number of vaccines per indication is listed in the Table 3-12: accordingly the EU is
characterised by a broader spectrum of different vaccines compared to the USA.
There was a limited number of indications for which recombinant technology was used solely
and which were classified as recombinant vaccines in the PHARMAPROJECTS database.
Currently recombinant technology is listed in PHARMAPROJECTS in the development of
vaccines against Cholera, Haemophilus infections, Hepatitis A, Hepatitis B, Influenza, Pertussis, and Lyme disease.
Table 3-12:
Indications for all vaccines listed in the PHARMAPROJECTS database
total
EU
USA
Japan
Others
Pertussis
19
14
2
2
1
DT
13
11
2
0
0
Polio
5
5
0
0
0
Hepatitis B
9
6
2
1
0
Hepatitis A
7
4
1
1
1
Haemophilus
3
2
1
0
0
Influenza
5
2
1
0
2
Measles
2
1
0
1
0
Rubella
2
1
0
1
0
Meningitis
5
2
2
0
1
Pneumokokken
2
0
2
0
0
Rotavirus
2
0
2
0
0
Typhus
Yellow Fever
3
3
0
0
0
2
1
0
0
1
others
Total
8
3
3
0
2
87
55
18
6
8
Page 70 of 315
3.2.1.4.2
Revenues
A detailed analysis of revenues in the vaccine market was carried out on the basis of the IMS
health database. Recombinant vaccines were defined as a group for which the national/
regional revenues were determined irrespective of the national origin of the vaccine. Basis for
the delineation was the list of approved biopharmaceuticals and recombinant vaccines published by Walsh 200670. The market in the EU25 for recombinant vaccines rose from
€ 65 million in 1996 to € 259 million in 2005 (average annual growth rate 18.74 %). In the
USA the market was accounted at € 58 million in 1996 and rose to € 304 million in 2005
(average annual growth rate 21.96 %). Japan was not an interesting market for recombinant
vaccines. The market for recombinant vaccines in Japan declined from € 0.89 million in 1996
to € 0.09 million in 2005 (average annual growth rate -13.31 %).71
Figure 3-18:
Share of revenues of recombinant vaccines in all vaccines (indicator HA1f)
Share of recombinant vaccines
in all vaccines (%)
25,00
EU
USA
Japan
20,00
15,00
10,00
5,00
0,00
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
The EU25 showed the highest adoption rate of recombinant vaccines in terms of revenues.
Recombinant vaccines reached over 20 % in 1999 (Figure 3-18). Since then the share of
recombinant vaccine revenues in all vaccine revenues reached a plateau at approximately
16 %. Recently, there was a small loss in market shares. The US market reached a similar
70
With the exception of Hepacare and Primavax, all recombinant vaccines listed in Walsh 2006 could be
retrieved from the database.
71
Market estimates were also published by the European Vaccines Manufacturers Association (EVM).
They reported the results of a survey carried out in 2002. More recent numbers should be published in
autumn 2006. The survey intended to assess economic indicators amongst major world-wide vaccine
manufacturers, which represent about 85 % of world-wide vaccine sales. The nine major vaccine manufacturers are Sanofi Pasteur (FR), Sanofi Pasteur MSD (FR), Baxter (USA), Berna Biotech (CH), Chiron
Vaccines (UK), GlaxoSmithKline Biologicals (BE), Merck & Co (USA), Solvay Pharmaceuticals (BE) and
Wyeth Vaccines (USA).These companies collectively supply almost all the vaccines in Europe and USA
and the majority used in the rest of the world. Regional and local manufacturers, which represent about
15 % of vaccine sales, are not covered by the survey.
The global market of all prophylactic vaccines is estimated to be in the range between € 6.3 billion
(EVM) and € 7 billion (AlphaVax, company communication 12/13/2005). The US vaccine market rose
from € 0.59 billion in 1996 to€ 2.1 billion in 2005 with an average annual growth rate of 16.71 %. The
European vaccine market started with € 0.6 billion in 1996 from a similar level as the US market. However the growth was slower; with an average annual growth rate of 11.57 % the market accounted for €
1.56 billion in 2005. The Japanese vaccine market is small. It accounted for € 0.2 billion in 1996 and
rose with an average annual growth rate of 9.24 % to € 0.44 billion in 2005.
Page 71 of 315
market share of recombinant vaccines in 2004, however, it underwent a decline in 2005 and
is currently at 14 %. In the small Japanese vaccine market recombinant products had no
significant market share.
Figure 3-19:
Share of vaccines in all pharmaceuticals (Indicator HA2b)
EU
USA
Japan
Share vaccines in all pharmaceuticals (%)
1,60
1,40
1,20
1,00
0,80
0,60
0,40
0,20
0,00
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
As outlined in the previous chapter, vaccines are based on different biotechnological
methods, a significant number uses recombinant technologies. The total vaccine market in
the EU rose from € 615 million in 1996 to € 1,562 million in 2005 with an average annual
growth rate of 11.57 %. The US market rose more quickly with an average annual growth rate
of 16.71 % € 598 million in 1996 to € 2,152 million in 2005. The Japanese vaccine market
was small. It rose with an average annual growth rate of 9.24 % from € 204 million (1996) to
€ 443 million (2005). The development of the total pharmaceutical market was described in
detail for indicator HA1e. The analysis of the share of vaccines in all pharmaceuticals showed
that the relevance of vaccines in the EU market is still very high, though it lost its strong
leading position in terms of share of all pharmaceuticals (Figure 3-19). Assuming similar price
levels for vaccines in the analysed countries, one could conclude for end-user adoption that
the European population has trust in (biotechnological) vaccines and followed the advice of
national immunisation commissions. Vaccination as part of prophylactic medicine produced a
highest share of revenues out of total pharmaceuticals in the EU.
3.2.1.4.3
Companies
The number of companies was retrieved using the database PHARMAPROJECTS. In a first
step all vaccines were retrieved that were classified as "prophylactic, therapeutic, or recombinant" that were "fully launched" (i. e. world-wide). The number of companies was determined
from this product list by re-sorting the list by company name and counting companies with
more than one product only once. Country-assignment of companies and products was carried out on the basis of companies' headquarters. The number of companies that produced
recombinant vaccines was rather small. In 2005 these were Sanofi-Aventis (France), Crucell
(NL), Glaxo Smith Kline (UK) in the EU25. In the USA two companies were mentioned in the
database PHARMAPROJECTS (Biogen Idec and Merck & Co). In Japan three companies
were listed (Mitsubishi Pharma, Kaketsuken, Research Development Corp). Other important
actors with recombinant vaccine activities were Novartis in Switzerland and LG Life Sciences
in South Korea. Also the number of companies producing all types of vaccines was rather
small. In 2005 there were eight companies in the USA, five companies in the EU25, and
seven in Japan. This shows that the adoption of recombinant vaccine technology was highest
Page 72 of 315
in the EU25 (60 % of all companies use recombinant vaccine technology) and lower in USA
(25 %) and Japan (42 %).
3.2.1.4.4
Products in development
The adoption of biotechnology by vaccine manufacturing industry was determined by the
analysis of the share of clinical trials with recombinant vaccines out of all vaccines. Recombinant development and production technologies account for approx. 75 % of all activities
(Figure 3-21). EU and US activities were characterised by a similar adoption pattern for
recombinant techniques in clinical trials with vaccines. From an adoption rate of approximately 50 % in 1996, the adoption of biotechnology for vaccine development rose to nearly
80 % in the EU and the USA in 2005. The strong increase in Japan results from relatively
small absolute numbers of vaccines (Figure 3-20).
Figure 3-20:
Number of clinical trials with vaccines 1996-2005, a): recombinant vaccines,
b): all vaccines
EU
USA
JP
80
70
Number of clinical trials with
recombinant vaccines
60
50
40
30
20
10
0
1996
1997
1998
1999
2000
EU
2001
USA
2002
2003
2004
2005
2002
2003
2004
2005
a)
JP
120
Number of clinical trials with of all vaccines
100
80
60
40
20
0
1996
1997
1998
1999
2000
2001
b)
Page 73 of 315
Figure 3-21:
Share of recombinant vaccines in clinical trials out of all vaccines in clinical
trials (indicator HA6e)
EU
USA
JP
120
Share of recombinant vaccines (%)
100
80
60
40
20
0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
A field of emerging relevance in the vaccine segment are therapeutic vaccines. Currently
there are only few vaccines marketed under the label prophylactic and therapeutic. These are
four products: a rabies vaccine, a leprosy vaccine, an influenza vaccine, and a Lactobacillus
vaccine. All other therapeutic vaccines are still in clinical or preclinical development. As
shown in Figure 3-22, the USA had most clinical activities in this field since 1996. The EU25
was second, Japan did not have any activities in this field. Other actors world-wide were
Australia, Canada, Israel, South Korea, Switzerland and Thailand. Therapeutic vaccines are
intended for the treatment of cancer, arthritis, inflammation, AIDS, asthma, ulcers, viruses and
fungi.
Figure 3-22:
Therapeutic vaccines in clinical trials
number of therapeutic vaccine in clinical trials
EU25
USA
Japan
others
60
50
40
30
20
10
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Page 74 of 315
3.2.1.5
Novel therapeutic approaches
Novel therapeutic approaches can be categorised by their time horizon until market entry. In
this report pipeline products are defined as products that are likely to be launched within the
next five years or have been launched in a limited number of countries in the last three years.
This category contains products based on gene therapy, on cell therapies, and on tissue engineering.
3.2.1.5.1
Pipeline products
During the last ten years both the number of gene therapy trials and the total number of clinical trials increased in the EU and the USA, with the USA starting from a higher absolute value
in 1996 and the EU with a stronger increase from 2001 onwards. The share of gene therapy
trials out of all clinical trials (indicator HA6b) indicating the adoption of this new technology in
clinical development increased considerably in the EU from 1 % in 1996 to about 3 % in 2005,
reaching the same level as the United States (Figure 3-24). In Japan gene therapy trials
played a minor role compared to the EU and the United States. Gene therapy trials were
intended to develop therapies against cancer, cardiovascular diseases, cystic fibrosis, blood
and metabolic disorders, and respiratory disease such as asthma.
Figure 3-23:
Number of gene therapy trials 1996-2005
EU
USA
JP
60
Number of gene therapy trials
50
40
30
20
10
0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Page 75 of 315
Figure 3-24:
Share of gene therapy trials out of all clinical trials (indicator HA6b)
EU
USA
JP
5,0
4,5
Share of gene therapy trials (%)
4,0
3,5
3,0
2,5
2,0
1,5
1,0
0,5
0,0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Tissue engineering and cell-based products in a wider sense are another important field of
future biotechnological health applications. Both for cell-based products launched and products in development, data indicate a strong lead for the USA with the EU following on a
lower level both in absolute numbers and as a share of all pharmaceutical products (Figure 325). In 2005, cell-based products accounted for only 0.3 % out of all pharmaceutical products
at the market in the USA, and a maximum of 0.1 % in the EU. The ten-fold number was found
for cell-based products in development out of all clinical trials (3 % for USA, 1 % for EU)
(Figure 3-26).
Cell-based products were developed for the following indications: cancer, wound treatment,
diabetes, musculoskeletal disorders (e. g. osteoporosis treatment), cardiovascular, neurological, and haematological disorders and as immune modulators (e. g. in the treatment of AIDS).
Page 76 of 315
Figure 3-25:
Number of cell-based products at the market (a)) and in clinical trial (b))
EU
USA
JP
6
Cell-based products
at the market
5
4
3
2
1
0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
a)
EU
USA
JP
Number cell-based products
in clinical trials
40
35
30
25
20
15
10
5
0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
b)
Page 77 of 315
Figure 3-26:
Share of cell-based products out of all pharmaceuticals at the market (a))
and in clinical trials (b)) (indicators HA6c and HA6d)
Share of cell-based products at the market (%)
EU
USA
JP
0,40
0,35
0,30
0,25
0,20
0,15
0,10
0,05
0,00
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Share of cell-based products in trials (%)
a)
EU
USA
JP
3,00
2,50
2,00
1,50
1,00
0,50
0,00
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
b)
Adoption of pipeline products was analysed for cell-based products as they already reached
the clinic with some applications (indicator HA2c)72. A detailed analysis of human tissue engineered products was carried out by Bock et al. (2003). Although tissue engineering offers the
potential to provide novel treatments in the areas of skin, cartilage, bone, cardiovascular disease, central nervous system, and organs, only tissue engineered skin and cartilage (and to a
limited extent bone), few products were commercialised until today. These markets were
characterised by the fact that the value of the products is primarily based on quality of life,
rather than survival. This could explain the difficulties cell-based products experience in market penetration.
The data base for cell-based products was fragmentary. Total annual world-wide revenues for
tissue engineered skin replacement products were estimated to be in the range of € 20 million
72
Bock, A.K., Ibarreta, D., Rodriguez-Cerezo, E. (2003): Human tissue-engineered products - Today's
markets and future prospects, EUR No: EUR 21000 EN ISBN: 92-894-7051-8
Page 78 of 315
and world-wide revenues of autologous chondrocyte transplants were assumed to result in
revenues of a maximum of € 40 million/year. Therefore, it was calculated that actual revenues
of tissue engineered products amounted to approximately € 60 million/year (Bock et al. 2003).
Table 3-13:
Revenue from tissue engineering products, cell therapies and biomolecules
1997
Revenue 1997
Estimated
Market 2007
Average annual
growth rate (%)
(mio.€)
(mio.€)
1997-2007
0
14,572
--
61
3,867
55
(cytokines, morphogenetic proteins, anergenic peptides used in supporting therapies)
91
1,819
35
Total
152
20,258
60
Cell therapies
(Bone marrow transplants, stem cell
transplants, lymphocyte therapy, xenografts for treatment of Parkinson’s disease)
Tissue Engineering
Proteins and peptides
73
Source: Business Communication Company 1998
Similar market assessments were published according to Lysaght (2002)74. He assessed the
total revenues of tissue engineered products (i. e. skin and cartilage products) at € 40 million
in 2001, with European combined revenues under € 1 million Revenues from tissue engineering products (which were not specified in detail) were estimated at € 61 million in 1997
(Table 3.1). However, the estimated annual growth rate of 55 %, leading to € 3,867 million for
the global market ten years later, seemed over-optimistic from the current point of view. A
different source used a narrower definition of tissue engineering and estimated the global cellbased tissue engineering market at € 47 million in 2001. It also assumed vital growth over the
following years, with a € 270 million market in skin repair alone by 2007 (MedMarket Diligence
2002)75.
When estimating the overall potential market for tissue engineering, most publications referred to estimations for the USA published in 1993 (Langer et al. 1993)76 and updated in
1999 (Vacanti et al. 1999)77. In this publication, medical procedures which required some type
of replacement structure for the area of defect or injury were taken into account, and it was
assumed that these medical procedures in principle could also be amenable to tissue engineering applications. In total, more than 11 million medical procedures which were also potentially relevant for tissue engineering are performed in the USA annually. This corresponds
to a total national health care cost of approx. € 400 billion/year (this estimation only includes
73
Business Communication Company. (1998): Cell Therapy and Tissue Engineering: Emerging Products. Norwalk T: Business Communication Company
74
Lysaght, M. (2002): Tissue Engineering – Is the allure only skin deep? In: Science and Medicine,
pp. 191-193
75
MedMarket Diligence. (2002): Cell-Based Tissue Engineering. Foothill Ranch, CA: MedMarket Diligence LLC, 247 p.
76
Langer, R.; Vacanti, J.P. (1993): Tissue engineering. In Science 260, pp. 920-926
77
Vacanti, J.P.; Langer, R. (1999): Tissue engineering: the design and fabrication of living replacement
devices for surgical reconstruction and transplantation. In: The Lancet 354, No. Supplement 1, pp S32S34
Page 79 of 315
costs for patients with cardiovascular disease and coronary artery disease, for stents used in
angioplasty and costs of care for diabetes).
A different definition of tissue engineering was applied by Lysaght et al. (2000)78, who additionally included organ transplantations and dialysis, but excluded neurological disorders and
skin replacement. They concluded that world-wide, more than 20 million patients were affected, and the costs associated with organ replacement therapies amounted to more than
€ 300 billion per year world-wide, with approx. € 100 billion/year in the USA. This amounted to
approx. 8 % of the medical spending world-wide (Lysaght et al. 2000).
These two studies focus on the total health care costs caused by organ replacement therapies. Another market study focused on potential industry revenues. It estimated the Human
Tissue Products Market at more than € 80 billion in the USA alone. This is put into perspective with the global medical devices market, estimated at € 130 billion and the global pharmaceuticals market of € 265 billion (MedTech Insight 2000)79. In another study, however, the
total market for the regeneration and repair of tissues and organs was estimated to be
€ 25 billion world-wide (Bassett 2001)80. It is not known whether different definitions of tissue
engineering were used which could explain these differences in market potentials.
Lysaght and Reyes (2001)81 reported adoption of tissue engineering activities on the basis of
number of companies, R&D expenditure and employees. They found that at the beginning of
2001 more than 70 start-up companies or business units with a combined annual expenditure
of over € 470 million spending by tissue engineering firms was growing at a CAGR of 16 %
and the aggregated investment since 1990 exceeded € 2.7 billion The latest trend saw a notable number of companies outside the USA, with at least 14 European and Australian companies (16 % of total). The authors speculated that future growth for tissue engineering would
result from advances in stem cell technology and regenerative medicine.
In an updated analysis of the tissue engineering situation, Lysaght and Hazlehurst (2004)82
figured out that the position of the USA stagnated, and the rest of world caught up. Whereas
the USA had still 59 companies, the number of European companies had doubled to 30.
Similarly, the number of employees in TE companies had increased outside the USA.
However, the general trend of TE world-wide was less promising than in the beginning of
2000. Tissue engineering had difficulties transitioning from a development stage industry to
one with successful product portfolio.
The analysis of tissue engineering markets shows that there is only limited data available.
The data is very heterogeneous in terms of field delineation (type of cells included, type of
medical procedures that could require replacement therapies) and assumptions of market
conditions (potential industry revenues, actual market situation etc.). The most realistic
description of the tissue engineering market seems to be the analysis of Lysaght on the basis
of companies, R&D expenditures and employees. This data is summarised in Table 3-14.
78
Lysaght, M.; O'Loughlin, J.A. (2000): Demographic Scope and Economic Magnitude of Contemporary
Organ Replacement Therapies. In: ASAIO Journal, pp. 515-521
79
MedTech Insight. (2000): Cost-Benefit New Approach to EU Regulation of Human Tissue Products.
ES-2 Report #A101. without location: MedTech Insight, 1-5 pp.
80
Bassett, P. (2001): Tissue Engineering – Technologies, Markets, and Opportunities.
MarketResearch.com, 523 p.
81
Lysaght, M.; Reyes, J. (2001): The Growth of Tissue Engineering. In: Tissue Engineering 7, No. 5,
pp. 485-493
82
Lysaght, M.; Hazlehurst, A. (2004): Tissue Engineering: the end of the beginning. In: Tissue Engineering 10 (1-2), pp. 309-320
Page 80 of 315
Table 3-14:
Comparison of tissue engineering industry in the USA and ROW
Year (Source)
2000 (Lysaght 2001)
2002 (Lysaght 2004)
USA
ROW
USA
ROW
number of firms
59
14
59
30
number of scientists and
support staff
2640
60
1403
1201
annual spending
3.2.1.5.2
€ 478 million
€ 381 million
Emerging technologies
Within the Bio4EU study emerging technologies were defined as technologies with a time horizon for products on the market of five to ten years. The study focused on stem cell applications, RNAi-products and therapeutic vaccines (described already in the vaccine chapter) and
their country-specific adoption. As shown in Figure 3-27 there was a clear lead of the USA in
the field of stem cell applications. Other countries with some activities are Switzerland, Canada and Israel. The first clinical trial in the EU was started in Spain in 2006.
Figure 3-27:
Stem cell applications in clinical trials 1996-2006
EU
USA
JP
CA
CH
Israel
10
9
Number of stem cell applications
8
7
6
5
4
3
2
1
0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Stem cell products in clinical trial accounted for a maximum of 0.6 % out of all pharmaceutical
products in clinical trial in the USA in 2004, decreasing to 0.3 % in 2005 (data shown in annex
table).
Page 81 of 315
Figure 3-28:
Development of RNA interference (RNAi) products world-wide in preclinical
and clinical development
EU
USA
JP
CA
NZ
60
Number of RNAi products
50
40
30
20
10
0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Products using the RNA interference technology are in an earlier developmental stage.
World-wide only five products are in clinical trials (all in the USA), all others are in preclinical
trial (in 2005 there were 46 preclinical products listed in the PHARMAPROJECTS database).
EU activities started in 2005 in the UK, two years after the first documented preclinical
development in the USA (Figure 3-28). Other actors with some activities were Canada and
New Zealand.
Other pipeline products in the human health sector are diagnostic equipment such as highthroughput metabolite arrays and products produced by molecular farming. However, a detailed analysis of international activities was not possible on an aggregated level as there
were no databases available. An analysis of these products would require the identification of
relevant companies followed by company surveys.
3.2.2
Animal health sector
3.2.2.1
Introduction animal health
Though animal health is an important economic field, only little data is available that allows
the distinction between the three main application fields of pharmaceuticals, diagnostics and
vaccines. The results for the total animal health sector were summarised following the
indicator-based methodology using the set of indicators:
• HA1: Indicators for the adoption of modern biotechnology by the industry: market shares of
human and animal health biotechnology products already on the market in terms of absolute numbers HA1a and revenues HA1b for the 3 main application areas mentioned above:
molecular diagnostic tests, "bio-therapeutics", vaccines
• HA2: Indicators for the adoption by end-users of molecular diagnostics and bio-therapeutics by end-users: turn-over of service companies in the field of molecular diagnostics, of
companies developing vaccines, and firms in the field of cell-based therapies, number of
Page 82 of 315
tests analysing gene polymorphisms conducted per year, share of biotechnology-derived
drugs in all prescription drugs on the market.
• HA3: Number and share of companies in the human and animal health sector active in
biotechnology
• HA4: Changes in international market shares of European products
• HA5:Changes in shares of imports in total domestic consumption
• HA6: Number and share of pipeline products
• HA7: Number and share of clinical studies (or equivalent for animal health products) for
emerging biotechnology applications
• HA8: Share of processes that use biotechnology for small molecule drug development related to chemical processes for the same purpose
A more detailed insight into the applications of veterinary pharmaceuticals and veterinary vaccines and their market perspectives is given in two additional chapters.
3.2.2.2
Indicator-based analysis of animal health
HA1: Indicators for the adoption of modern biotechnology by the industry:
Molecular diagnostic tests: because of the major concern about costs, and the emphasis on
preventive medicine rather than on therapy, diagnostics are far less used in the veterinary
sector than in human medicine. The major usage of diagnostics in farm animal care is by
state and public institutions for detection of notifiable diseases such as Brucellosis, Bovine TB
etc, and by the owners of herds which are susceptible to these diseases for monitoring purposes. In companion animal care, there is some usage of diagnostic products.
Bio-therapeutics: the emphasis is on prevention rather than therapy and therapeutics are
less important than vaccines in the sector. The major therapeutics are anti-parasitics, antiinflammatory and analgesic products and the latter 2 are mainly used in companion animals.
There is no major demand for products in this category and therefore little developmental activity.
The anti-parasitic field is a major sector of therapeutic activity. However, biotechnology
approaches in this area are focussing on the development of vaccines for parasite species
rather than on chemical approaches.
Vaccines: this is the major area of biotechnology activity, and indeed veterinary vaccines use
technologies which are not used in human medicine to date. An indication of the relative
activity in this sector is seen by the fact that 33 of the 64 products approved by EMEA to date
(Table 3-16) are vaccines. Of these, 33 involve a biotechnology-based approach to development: 16 use recombinant strains or antigens produced using recombinant technology; 6 are
sub-unit vaccine as described above, while 2 others use other biotechnology-based
approaches.
HA2: Indicators for the adoption of molecular diagnostics and biotherapeutics by endusers:
Other than in the area of anti-parasitic products, there is significant uptake of biotechnology
approaches by the veterinary products industry. This is most apparent in the vaccines area,
where the majority of new vaccines are now produced using biotechnology approaches.
These products are becoming more important, significantly due to the fact that new technologies can deliver effective vaccines and thereby obviate the need for therapy.
Page 83 of 315
A further area of significant biotechnology-based activity is the use of microbial or probiotic
cultures and products. These products are now widely used as additives in feed and include
bacterial cultures which are claimed to reduce pathogens; immunoglobulin products, prebiotics etc. Unless specific medical claims are made for these products, they are not covered by
the CVMP regulations83, and their entry to the market is difficult to trace.
HA3: Number and share of companies in the animal health sector active in biotechnology.
The major global producers of animal health products are listed in Table 3-15. EU companies
are well represented in the list and 4 of the top 10 are EU companies. In terms of
biotechnology activity, it is difficult to obtain a definitive answer as to whether a company is
‘active in biotechnology’. Companies in this field ultimately supply either the food industry (i. e.
through products provided to farmers) or consumers (through products supplied for use in
pets). The negative connotations of biotechnology for the food industry, and among
consumers, make companies unwilling to declare an active involvement. However, analysis of
publications and product approval data suggests that almost all companies are actively using
biotechnology in their product development activities.
Of the EU companies, Merial, Intervet, Virbac and Vetoquinol are actively involved in biotechnology-based discovery and manufacturing activities.
Addisseo specialises in nutrition ingredients, but uses biotechnology approaches to development of its poultry feed ingredients, while CEVA also uses biotechnology approaches in development of its vaccine products.
Table 3-15:
Major veterinary pharmaceutical producers84
Revenues
'05
Company
Country
Employees
Pfizer Animal Health
USA
1,600.00
Merial
Fr
1,500.00
5,000
Intervet
NL
1,094.00
4,800
Bayer
D
700.00
Fort Dodge
USA
693.00
Schering Plough AH
USA
672.00
Elanco
USA
680.00
Novartis
CH
622.00
2,300
Adisseo
Fr
512.00
1,200
Idexx
USA
500.00
3,000
VIRBAC
Fr
372.40
2,230
Boehringer Ingelheim D
361.00
CEVA
Fr
271.00
1,732
Alpharma
USA
248.00
Phibro Animal Health
USA
220.00
992
Vetoquinol
Fr
196.60
1,140
BASF
D
*
Dainippon/Sumitomo
Japan
*
Degussa
D
*
DSM
Nl
*
* No separate data available for animal health activities
83
EMEA/CVMP/046/00-Rev. 9: Substances considered as not falling within the scope of Council Regulation (EEC) No 2377/90
84
Based on Animal Pharms’ Top 20: 2005 Edition (PJB Publications, UK) with additional information from IPTS
Page 84 of 315
It has not been possible to find definitive information on the changes in international market
shares of European products (indicator HA4), the share of imports in total domestic consumption (indicator HA5) and the share of pipeline products: "bio-therapeutics" in clinical
trials (indicator HA6) and number and share of clinical studies (indicator HA7). There is no
data available on clinical studies in progress on veterinary products EMEA policy is not to disclose information about the products for which approval is being sought and they were therefore unwilling to provide data on products using novel vaccine technology (e. g. DNA vaccines).
HA8: Share of processes that use biotechnology for small molecule drug development
related to chemical processes for the same purpose.
Small molecule products are not a significant part of veterinary medicine, other than in antiparasite products. There is no evidence that production of these molecules is converting from
chemical to bio-based production.
3.2.2.3
Pharmaceuticals
The market for veterinary pharmaceuticals is approximately 3 % of the size of the human
pharmaceutical industry, with a total size in 2004 of approximately € 13 billion The small
market size and relatively low number of participants (see below) means that there is limited
interest from commercial market research companies in collecting market data. In addition,
veterinary products are not covered by the PHARMAPROJECTS database, which reduces
the data available on activities in the sector. Analysis of biotechnology impact has therefore
been conducted from EMEA data, company information and published reports.
The Veterinary Pharmaceuticals Market is very different to the human market. There are
fewer classes of product, cost is a major issue for farm-animal products, and products for pets
are a major component. Some features of the market, and the consequences for application
of biotechnology are described below.
Veterinary Pharmaceutical products can be segmented in two ways:
Animal Type: Veterinary Pharmaceuticals are used for:
• Farmed animals
− Cattle,
− Pigs,
− Poultry,
− Fish,
− Others
• Companion animals
− Dogs,
− Cats,
− Horses,
− Others
Companion animal revenues generated global revenues of € 5.35 billion in 2005 or 39 % of
the whole world market for animal health products. However, the market is effectively concentrated in developed countries, and ten countries are responsible for 84 % of global revenues. The companion animal market is much less cost-sensitive than the farmed animal market and is very diverse in terms of products. Table 3-16 shows that 69 % of the products
approved by EMEA since 1995 have been for companion animals i. e. dogs (31 %), cats
(27 %) or horses (11 %).
Page 85 of 315
Table 3-16:
Species
No.
Animal target of 64 vet products approved by EMEA, 1995-2006 *
Pigs
Cattle
Dogs
Cats
Fish
Poultry
Horses
11
10
20
17
1
7
7
Other
1
* Certain products are suitable for several species.
The farmed animal sector is highly driven by the food market. This has impacted veterinary
pharmaceutical usage in several ways. Firstly, there is pressure on prices which means that
high-cost therapy is often not an option for sick animals. The emphasis is on prevention of
disease. Secondly, pharmaceuticals whose residues may be carried into food products are
increasingly subject to regulatory control (see antibiotics discussion below) and this is also
having a major impact on veterinary health product usage.
The shortage of products for minor species is of concern to the veterinary profession and to
EMEA, which has provided encouragement to the veterinary industry to develop such products.
Product Type: as noted above, there is a narrow range of product types in the veterinary field.
The major veterinary products are Antibiotics, Anti-Parasitics and Vaccines. To demonstrate
this, an analysis of EMEA approvals (to 1 September 2006) shows that CVMP has approved
only 64 veterinary products since its initiation in 1995.85
An analysis of the products approved shows the following distribution:
Table 3-17:
Number and type of veterinary product approved by EMEA, 1995-2006
Product
Type
Vaccines &
immunostimulants
AntiParasitics
Antibiotics
AntiInflammatories
No.
Approved
33
4
13
3
Analgesics
Other
4
7
Antibiotics and anti-microbials:
Veterinary antibacterials comprise some of the most important pharmaceutical products on
the global animal health market, which was worth € 3.6 billion in 2004.86 Antibiotics are used
as prophylactics for prevention of disease (usually through incorporation in feed or water), or
by oral/parenteral routes for acute therapeutic purposes. A significant use of antibacterials in
dairy animals is intra-mammary antibiotics for control of mastitis. However, use of feed antibiotics for prophylactic or growth promotion use has been gradually reduced due to food
safety concerns and also to reduce the possibility of resistance to antibiotics which are also
used in humans.
A further significant factor in their removal from feed has been pressure from consumers, enforced through retailer QA demands. Many supermarket chains and fast-food outlets have
used the perceived quality of their food as a marketing opportunity. The EU has now banned
all in-feed antibacterials and only coccidiostats will remain as in-feed additives.
85
86
Data on EMEA approved products: http://www.emea.europa.eu/index/indexh1.htm
PJB Publications: Antibacterials in Animal Health Industry: Current markets & future prospects. 2005
Page 86 of 315
Many of the products used in this sector are older products “It should not be forgotten that
antibacterials launched 30 years ago are still in widespread use and returning healthy profits.”
(PJB Publications 2005).
Biotechnology is having an impact in this sector by creating alternative mechanisms for control of pathogens. The major approaches used are:
• Microbial products (originally called probiotics). These are preparations of bacteria which
colonise the animal gut and confer certain advantages (prevention of pathogen colonisation, digestion etc). These products generally do not make health care claims and are not
regulated as pharmaceuticals. However, they are commonly used as animal feed additives, particularly for young animals. Frost & Sullivan87 predict that their use will increase
as a result of the banning of other anti-bacterial additives. Microbials are a product of biotechnology and are developed by using screening systems to test thousands of strains of
bacteria for specific beneficial traits such as anti-microbial activity. Some strains of bacteria have been identified which secrete compounds called bacteriocins which have selective
antimicrobial effects.
• Immune Modulators: these are products designed to supplement the immune system of
young animals, or to specifically boost the immune reaction to the presence of a particular
pathogen. They include eggs or milk extracts with antibodies against pathogens which are
added to feed to provide additional control during weaning of young animals.
Anti-parasitics:
These are chemotherapeutic drugs which either kill parasite populations or prevent the development of immature parasites into adult forms. They are used in all sectors of the veterinary market and represent the second largest segment of the vetpharma market. These
products represent a global market worth almost € 3.67 billion making it the most valuable
sector of the animal health products market.
The major products in this market are not biotechnology-derived and are generally produced
using chemical synthesis technology. One of the major products is Ivermectin which was
identified in 1975 by screening of soil samples. Many of the products in this category are also
used as human anti-parasitics.
The products in this market are generally very effective. Although resistance to these products develops gradually, it has been managed by rotation of different chemicals and there
has not been a major incidence of resistance to the market leading compounds88. The innovation in the market has therefore been in developing new delivery methods for existing products, and also development of combinations of existing parasiticides, to treat more than one
pest in a single product. 89 For instance, three of the products (Table 3-17) approved by
EMEA to date are:
• Advasure: a combination of two well-established compounds produced by chemical synthesis.
• Provender is a combination of 2 compounds produced by chemical synthesis
• Stronghold is a chemical analogue of Ivermectin, which is a well-established chemical
anti-parasitic.
However, it is clear that resistance to these products will occur in time. There is no indication
of biotechnology involvement in development or production of anti-parasitic products. However, biotechnology is more likely to address the task of parasite control by means of a vac-
87
Frost & Sullivan. European Animal Health Feed Additives Markets. 2000
Nature Reviews Drug Discovery 4, 727-740 (2005)
89
Vet Parasitol. 2003 Jul 25;115(2):167-84
Page 87 of 315
88
cine rather than through a therapeutic. Parasite vaccines are already being developed by
several companies.
3.2.2.4
Vaccines
The veterinary vaccines sector accounted for 20 % of global animal health product revenues
in 2004 with revenues of € 2.52 billion and is expected to grow in excess of € 3.1 billion by
2009. 90 The impact of biotechnology has been significant in the veterinary vaccines sector,
which includes both vaccines and also immunostimulant products which act to boost immune
function.
Data and information to precisely document the impact of biotechnology in this sector has
proven more difficult to obtain.
Molecular biological techniques are being widely applied to animal vaccines. Several
approaches are being taken:
• Vector vaccines are non-pathogenic live microorganisms (bacteria or viruses) with low
pathogenicity for the target species and in which have been inserted one or more genes
encoding antigens that stimulate an immune response protective against other microorganisms.
• Attenuated ‘gene-deletion’ vaccines are live recombinant viruses from which the gene
causing pathogenesis has been deleted. The virus can therefore be injected into the target
animal and a normal immune process will take place, without any adverse affect being
caused by the pathogenic organism. Several examples of these vaccines have been
launched in recent years including Intervet’s Recombinant Equilis Strep E vaccine for
Strangles disease in horses, and Merial’s Recombinant canarypoxvirus vaccine for cats.
• Subunit vaccines result from biomolecular analysis of the structure of the viral or bacterial
pathogen and isolation of subunits which are specific and immunogenic, but non-pathogenic. There are many examples of such vaccines in the veterinary field.
• DNA Vaccines. These are very novel vaccines which contain only DNA fragments from
the target pathogen. These fragments express in the host animal and immunity develops
to the expressed protein(s). They are therefore somewhat similar to sub-unit vaccines in
their mechanism of action. The first such veterinary vaccine (approved in the USA in 2005)
is for West Nile Virus in horses. In announcing the approval the USDA stated “This technology represents a new generation of vaccines. Traditional vaccine development involves
either passing a disease-producing virus through a different species or cell type until it no
longer causes disease but does create immunity, or by killing the virus in such a manner
that allows it to produce immunity but no disease in the recipient. DNA vaccines, by contrast, use specific fragments of a pathogen’s unique genetic material to stimulate a targeted immune response from the host” 91 The EMEA Committee on Veterinary Medicinal
Products issued a Guidance document on DNA vaccines in 199892, in recognition of the
fact that such developments were taking place, but no DNA vaccine has been approved in
the EU to date.
3.2.3
Summary on adoption
The analysis of adoption indicators for the use of modern biotechnology in human health
applications on the basis of launched products and innovative activities showed that the EU
has a strong position in well established technologies such as biopharmaceuticals and
90
PJB Publications. Veterinary Vaccines 2005
USDA Press Release: July 18 2005.
92
CVMP/IWP/07/98-Final
Page 88 of 315
91
recombinant vaccines. Early stage developments such as gene therapy, stem cell technology
and RNAi were more limited to the USA. Japan did not play any significant role in the current
biotechnology development in health applications.
Biotechnology is an important method for drug development. Within the last 10 years the EU
reached a similar adoption rate of biotechnology in the pharmaceutical sector as the USA.
Though the pipeline in the EU for biopharmaceuticals is well filled, the EU25 has only half the
number of biopharmaceuticals in clinical development compared to the USA.
EU25 is an important market for biotechnological products in the health sector. The dependence of Europe on imports decreased gradually since 1996, indicating an improvement
of Europe’s competitive position in biotechnology commodity production.
End-user adoption of biotechnological products in Europe is well developed. Most EU citizens
are optimistic about the positive role of biotechnology and genetic engineering in Europe.
Molecular diagnostics are widely accepted by lay people and applied by public and private
institutions. However, there is a certain reluctance in prescription of biopharmaceuticals, with
only half of the biopharmaceutical prescription rate compared to the USA.
Biotechnology as a tool for small molecule production has been well adopted by many companies. According to expert opinion, there is no difference in adoption rate between Europe
and the USA.
The analysis of adoption indicators for the use of modern biotechnology in veterinary medical
applications on the basis of EMEA-approved products and innovative activities showed that
the Eu has a strong position in some of the core technologies such as recombinant and subunit vaccines. EU companies are competing effectively in the global veterinary pharmaceutical and biologics markets and are among the global technology leaders in animal
vaccine development. US companies are the major competition and Japan has only minor
activity. The nature of animal medicine is changing, due to restrictions on therapeutics in feed.
In parallel, improvements in vaccine technology are facilitating protection against a wider
range of organisms. Use of microbial additives is also increasing.
The attitude of the industry in relation to biotechnology is variable. While there is high uptake
of technology in many sectors, there is a reluctance to be associated with biotechnology due
to the association of the industry with food-producing animals, and with companion animals.
Expert opinion and evidence of product launches suggests that there is no difference in adoption rate between Europe and the USA.
3.3
Impact
3.3.1
Introduction
The objective of this section is to evaluate the consequences, opportunities and challenges of
modern biotechnology applications in the human health area (as mapped in WP 1.1), in terms
of social, economic and environmental aspects. Animal health applications are covered in
section 4 (primary production/agro-food). The impact assessment involves a comprehensive
(and as quantitative as possible) analysis of the benefits and costs of health biotechnology
applications in the EU, mainly based on case studies (see Annex Report Methodology,
Chapter 3). The analysis also considers the development of the applications in the near future
by taking into account pipeline products and services.
For cases of no or very little adoption of certain biotechnology applications in the EU as compared to the USA or other relevant countries, potential consequences for the EU of not using
these applications will be investigated. In this context, barriers for the uptake of modern biotechnology applications by the health sector, such as social non-acceptance, ethical concerns, reimbursement, intellectual property rights, or time to market will be discussed.
Page 89 of 315
Data collection was structured along a set of impact indicators which was developed and verified in terms of data quality and data availability during task 1 of the study. However, in several cases considerable limitations with respect to data availability need to be taken into
account. The indicators cover the micro (e. g. the company level) and macro (e. g. economy
wide/distributional) levels.
For the human health sector, eight case studies were carried out that illustrate the application
areas preventives, therapeutics and diagnostics in more detail. Section 3.3.2 presents generic
impact indicators describing impact on the sector level. Section 3.3.3 discusses impact of
modern biotechnology in the health sector for a selected set of applications which were elaborated in the eight case studies.
3.3.2
Generic indicators
3.3.2.1
Description of generic impact indicators in human health sector
The generic impact indicators were gathered for the sector of human health applications. The
field delineation "human health applications" is rather complex and varies among the different
sources. In general it refers to the human health care sector, i.e. it includes hospital
actitivities, medical and dental activities and other human health activities93. For all these
indicators data availability was poor, as discussed in the report of task 1 of the study. In most
cases less than 5 countries (including non-European countries) provided such data (see
Table 9.2 of the task 1 report). Additional country-wide surveys would be required to improve
data availability. However, such surveys were not possible within the time frame of the task 2
study.
This section was based on data that was available from published statistics or surveys. The
following generic indicators were included:
• HI194: Total sector-specific biotechnology-related GDP out of total health-sector-specific
GDP: related to indicator 1a in Table 9.2 of the task 1 report. This indicator was not
possible in the way suggested by the technical specifications because no such data was
on hand. Instead the relation of biotechnology revenues in the health sector to the total
health-sector-specific GDP was calculated. However, the required data was available only
for very few countries (see task 1 report)
• HI2: Share of biotechnology revenues out of total revenues of biotechnology-active firms in
the health sector
• HI3: Share of biotechnology revenues in health application out of total revenues in health
application
93
This class includes all activities for human health not performed by hospitals or by medical doctors or
dentists. This involves activities of, or under the supervision of, nurses, midwives, physiotherapists or
other para-medical practitioners in the field of optometry, hydrotherapy, medical massage, occupational
therapy, speech therapy, chiropody, homeopathy, chiropractice, acupuncture, etc. These activities may
be carried out in health clinics such as those attached to firms, schools, homes for the aged, labour
organizations and fraternal organizations, in residential health facilities other than hospitals, as well as in
own consulting rooms, patients' homes or elsewhere. Included are the activities of dental auxiliaries
such as dental therapists, school dental nurses and dental hygienists, who may work remote from the
dentist but who are supervised periodically by the dentist.
Also included are clinics pathological and other diagnostic activities carried out by independent
laboratories, of any kind, activities of blood banks, ambulance and air-ambulance activities, residential
health facilities except hospitals,etc. Exclusions: Production of artificial teeth, dentures and prosthetic
appliances by dental laboratories are classified in class 3311 (Manufacture of medical and surgical
equipment and orthopaedic appliances).
Testing activities in the field of food hygiene are classified in class 7422 (Technical testing and analysis).
For detailed information on the field delineation of human health actitivies refer to
http://unstats.un.org/unsd/cr/registry/regcs.asp?Cl=2&Lg=1&Co=851
94
HIx: Health Impact Indicator x.
Page 90 of 315
• HI4: Share of biotechnology revenues in health application out of total biotechnology revenues
• HI5: Number of biotechnology-active employees in health applications out of total employees in health application
• HI6: Share of biotechnology-active employees out of total employment in biotechnologyactive firms
• HI7: Shares of employment in each application out of total biotechnology employment
3.3.2.2
Results of generic impact in human health sector
In the human health sector many examples such as recombinant insulin, growth factors or
interferons illustrate the impact of modern biotechnology under social, economic and environmental perspectives. This impact will increase the further adoption proceeds. The aim of
the following section is to illustrate and quantify this impact for the whole sector. However, as
discussed in the task 1 report, data availability was very poor so often only singular values for
few countries and years rather than time series were available for the impact evaluation.
The importance of health-related biotechnology for the EU economy was measured by the
analysis of the share of biotechnology-based revenues in the health sector out of the total
health-specific GDP (Indicator HI1). Revenues for EU15 could be extrapolated using the national data summarised in OECD Biotechnology Statistics 2006. EU15 biotechnology-based
revenues in the health sector in 2003 are estimated at € 12.03 billion95. In the USA, biotechnology companies contributed with revenues of € 27.6 billion in the health care sector in 2003
to 66 % of the total biotechnology revenues (€ 41.66 billion (DTI 2005).
The total health-specific GDP could be calculated from OECD Health Data96 and the EurostatDatabase97. In 2003 total spending on health care98 was 8.6 % of GDP at market prices in the
EU (= € 857,117 billion 15.0 % of GDP at market prices in the USA (= € 1,453,429 billion and
7.9 % of GDP at market prices in Japan (= € 295.891 billion
Accordingly, in the EU health care biotechnology contributed to 1.40 % of the total healthspecific GDP, in the USA health care biotechnology had a stronger impact on the GDP with
2.87 % of total health-specific GDP. As the numerator was not available for Japan, the indicator HI1 could not be calculated.
The firm-specific biotechnology contribution in the health sector was determined by analysis
of the share of biotechnology products` revenues out of the total revenues of biotechnologyactive companies in the health sector (Indicator HI2). For European and Japanese companies in the health care sector, values for net revenues or operating income out of biotechnology activities in the health sector were not available. According to the OECD Biotechnology
Statistics99 four countries provide data for both revenues from biotechnology goods and services only and for total revenues. However, it was only available on an aggregated level for all
95
Extrapolation was carried out using the methodology described in the methodology annex report. The
extrapolation is based on sales data for SE (cluster 1), DE, UK (cluster 2), FR, IE (cluster 3), ES (cluster
4) and the population figures retrieved from Eurostat.
96
OECD Health Data (2006): Statistics and Indicators for 30 Countries
97
Eurostat (2006): Gross domestic products at market prices. epp.eurostat.ec.europa.eu
98
Total expenditure on health is defined as the sum of expenditure on activities that – through
application of medical, paramedical, and nursing knowledge and technology – has the goals of:
- Promoting health and preventing disease;
- Curing illness and reducing premature mortality;
- Caring for persons affected by chronic illness who require nursing care;
- Caring for persons with health-related impairments, disability, and handicaps who require nursing care;
- Assisting patients to die with dignity;
- Providing and administering public health;
- Providing and administering health programmes, health insurance and other funding arrangements.
99
OECD (2006): OECD Biotechnology Statistics. http://www.oecd.org/dataoecd/51/59/36760212.pdf
Page 91 of 315
biotechnology companies and not broken down to different applications. The percentage of
biotechnology revenues out of total revenues was 92 % in Israel, 46 % in New Zealand, 15 %
in Canada, and 10 % in the United States. The biotechnology-specific contribution was high
when most biotechnology-active firms were small (Israel) and lower when biotechnology-active firms included large firms (United States). This observation is supported by an analysis of
the total US biotechnology industry. Small companies had biotechnology revenues of 90 % of
total revenues, in bigger companies this percentage decreased to 4 % of total revenues
(Table 3-18).
Table 3-18:
Financial performance by size of US biotechnology companies in 2001
Size of company
(number of employees)
1 to 10
11 to 50
51 to 500
501 to 2,500
2,501 to 15,000
> 15,000
total
Entire business
revenues (€ m)
321
436
12,174
22,936
96,674
31,1701
44,4419
BT business revenues
(€ m)
292
404
4,647
8,118
12,121
13,900
39,562
90.73
92.63
38.18
35.39
12.54
4.46
8.90
Share (%)
Source: US Department of Commerce (2003)
The US data resulted from the survey of the Department of Commerce in 2003100. In this
study health care companies were analysed separately. On average the 747 companies with
primary application in the human health care sector had net revenues in their biotechnology
activities of € 34,534 million. Their entire business accounted for net revenues of
€ 325,891 million. Thus 10.6 % of the total revenues resulted from biotechnology activities.
This small share can be explained by the following two factors. According to expert opinion,
the US pharmaceutical industry tends to call itself biopharmaceutical industry even if core
business is not in the biotechnology sector. Secondly, it could be a result of the size effect as
outlined above.
The relevance of biotechnology for the health applications was analysed on basis of BT-specific revenues in the health sector as share of the total production in the health sector (Indicator HI3). As described for HI1, the estimated EU15 revenue in 2003 was € 12.03 billion. The
total health production figures could be retrieved from the OECD STAN database. Production
in the health and social sector could be used as a rough estimate for revenues as it is considered over a longer period of time101. The classification "Health and Social Work" was defined according to the ISIC rev 3, Code 85 of the United Nations Statistics Division as production in human health activities (851), veterinary activities (852) and social work activities
(853). However the OECD STAN database did not allow the more detailed analysis on the
category 851 (human health activities) which would be preferable for the present analysis.
For EU15 the figure was extrapolated on the basis of population numbers as production
figures were only available for a limited number of EU countries (1996-2000 EU14 without
Ireland, 2001-2002 EU13 without Ireland and Spain, 2003 EU12 without Ireland, Spain and
Sweden).
100
US Department of Commerce (2003): A survey of the use of biotechnology in the US industry.
www.technology.gov
101
Production represents the value of goods and/or services produced in a year, whether sold or
stocked. The related measure (not present in STAN) corresponds to the actual sales in the year and can
be greater than Production in a given year if all production is sold together with stocks from previous
years. While production and revenues will be different in a year, their averages over a long period of
time should converge (depending on how perishable the stock is).
Page 92 of 315
Table 3-19:
Production in the health and social work (€ bn)102
1996
1997
1998
1999
2000
2001
2002
2003
EU15 extr
598
640
671
706
765
855
914
935
USA
596
726
777
854
1,056
1,177
1,207
1,076
Source: OECD STAN103
For EU15 in 2003 BT-specific revenues accounted for 1.3 % of total health production. In the
USA it accounted for 2.5 %. For Japan data was not available. This value shows that biotechnology had a greater impact on health-related production in the USA.
The significance of health-related biotechnology within the total biotechnology sector was investigated by relating revenues based on health biotechnology to the revenues of the total
biotechnology sector (Indicator HI4). A detailed list of national revenues in BT companies in
health application was summarised in the OECD biotechnology statistics 2006 (Table 3-20).
This data allowed the extrapolation for EU15 using the method described in the annex report
methodology (chapter 3). As shown in Table 3-21 the share of health-specific biotechnology
revenues varied among the four European clusters between 55 % of total biotechnology
revenues in cluster 2 (NL, DE, BE, UK) and 86 % in cluster 3 (FR, AT, IE). The average share
of health-specific revenues in EU15 was 64 % of total biotechnology revenues. In contrast,
the share of health-specific revenues of total biotechnology revenues in the USA was 87 %,
Japan’s share of health-specific revenues was 57 % of total biotechnology revenues (Table 320).
Table 3-20:
Biotechnology revenues by application field 2003
Country
Canada
China (Shanghai)
France
Germany
Ireland
Israel
Japan
Norway
Spain
Sweden
Switzerland
United Kingdom
United States
Health (€ m)
1592.58
1158.55
1424.56
1834.54
719.41
138.62
4523.13
55.21
207.06
280.75
1511.32
3190.11
35933.91
Total (€ m)
3060.88
1504.87
1709.46
2566.54
782.35
264.34
7876.32
84.93
311.43
386.39
1718.46
4588.93
41312.36
Share (%)
52.03
76.99
83.33
71.48
91.96
52.44
57.43
65.01
66.49
72.66
87.95
69.52
86.98
Source: OECD Biotechnology Statistics 2006
102
Basis is the ISIC Rev 3, Code 85 of the United Nations Statistics, that summarised human health
activities (851) (i.e. hospital activities, medical and dental activities, other human health activities),
veterinary activities (852), and social work activities (853) (with and without accommodation).
http://unstats.un.org/unsd/cr/registry/regcs.asp?Cl=2&Lg=1&Co=85. A breakdown to the subcategory
human health activities (851) which would be preferable is not possible in the OECD STAN database.
Thus the numbers overestimate the production in the human health sector.
103
OECD STAN Database (2006), SourceOECD STAN Structural Analysis Database Vol 2005 release
05 http://titania.sourceoecd.org/vl=1411597/cl=12/nw=1/rpsv/ij/oecdstats/16081307/v265n1/s1/p1
Page 93 of 315
The high share of health-specific revenues in the USA can be explained by the fact that the
assignment as health-specific revenues was carried out on the basis of self-assessment of
the companies as biotechnology company or not. According to expert opinion, US pharmaceutical companies tend to consider themselves a biotechnology company even if they carry
out only little biotechnology. As the total revenues of these so-called biotechnology companies were added to the health revenues (as pharmaceutical companies have health applications as their primary application field) the revenues value is likely to be overestimated. This
interpretation is supported by an analysis of the British DTI in 2005. They determined a share
of health-specific revenues out of total biotechnology revenues of 66 % in the USA.
Table 3-21:
Extrapolated health-specific and total biotechnology revenues 2003
Cluster 1 DK, SE, Fi
Cluster 2: NL, DE, BE, UK
Cluster 3, FR, AT, IE
Cluster 4 IT, ES, PT, GR
Total EU15
Extrapolated health
revenues
(€ m)
613.28
4722.47
2408.86
598.18
Extrapolated total
revenues
(€ m)
844.05
8493.50
2799.67
899.95
Share (%)
8342.79
13037.18
63.99
72.66
55.60
86.04
66.47
The impact of biotechnology in the health care sector on employment and its relation to employment in total health sector was illustrated in Indicator HI5. Measuring BT-specific employment in biotechnology companies was complicated by the difficulty of finding an exact
and generally accepted definition of a BT-active employee. The OECD Biotechnology
Statistics 2006 discusses in detail the methodological problems in measuring biotechnology
employment. Three different measures of biotechnology employment are determined:
• biotechnology R&D employees (scientists and technical support),
• all employees with biotechnology-related activities (biotechnology-active employment),
including R&D, management, marketing, and production; and
• total employment in biotechnology-active firms.
The OECD Biotechnology Statistics 2006 summarised data on total employment by application field for 11 countries (Table 3-22).
Table 3-22:
Country
Belgium
Canada
France
Germany
Ireland
Israel
Korea
Norway
Sweden
United Kingdom
United States
Biotechnology employment by application field 2003
health-specific
employment
3380
9255
6182
10434
2452
1879
4356
710
2413
13199
104024
total biotechnology
employment
4261
11864
8923
17277
2941
3427
12138
971
3717
22406
130305
share (%)
79.32
78.01
69.28
60.39
83.37
54.83
35.89
73.12
64.92
58.91
79.83
Page 94 of 315
For eight countries data were only available for total employment in firms active in
biotechnology. For four countries (Belgium, Canada, Israel and the United States), data were
given for bio-active employees, or employees with biotechnology-related responsibilities. Data
for Belgium, Canada, Israel, Korea and the United States were for all firms active in
biotechnology, whereas the results for the other six countries were for core biotechnology
firms only.
Table 3-23:
Extrapolated health-specific employment in biotechnology companies 2003
Total EU15
Extrapolated health employment
5271
29862
9701
5834
50668
European country employment in health-specific BT companies could be extrapolated on the
basis of national data for six countries (see annex report methodology, chapter 3). In this extrapolation health-specific employment data was calculated for the three clusters (DK, SE, FI),
(NL, DE, BE, UK) and (FR, AT, IE). For cluster 4 (IT, ES, PT, GR) there was only information
on total BT employment in Spain; in this case the average share of health-specific employment in the known European countries (70 %), was used in order to estimate health-specific
employment of cluster 4. This extrapolation led to the estimate of 50,668 employees in healthrelated BT companies in the EU15. An extrapolation to the EU25 was not possible as no
information is available for accession countries, with the exception of Poland. However
Poland’s R&D employees in total biotechnology were calculated to be 109. From this one can
assume that the accession countries do not contribute significantly to the number of
biotechnology employees in the EU. The US companies employed 104,024 people in health
biotechnology applications. No data is available for Japan.
The total number of employees in the health sector could be retrieved from the OECD Health
Data 2006 for the EU15 without Austria, Belgium, Germany and Sweden104. These countries
accounted for 29 % of the total population of EU15. Assuming a similar employment rate in
the health sector as in the known EU15 countries, this resulted in 7.6 million employees in
1996. Until 2003 the number rose to 12.6 million people working in the health sector. The
USA had 10.361 million people employed in the health sector in 2001. Thus biotechnology
contributed to 0.4 % of employment in the health sector in the EU (2003) and 1 % in the USA
(2001).
Further insight into biotechnology-specific employment in the health sector is given by Indicator HI6 which describes the share of biotechnology-active employment out of total employment in the health sector. Data availability was extremely poor as definitions of BT-ctive employees differed among countries. Data on the total number of employees in biotechnologyactive firms were available for 18 countries for 2003 or the closest available year (Table 3-24).
The most commonly available employment statistic was for biotechnology R&D employees
(OECD 2006). For eight countries the figure given in the statistic was equal to all R&D employees in core biotechnology firms. This approach results in an overestimation of biotechnology R&D employment because an unknown percentage of R&D staff will not be active in biotechnology R&D. The number of health-specific employees could be extrapolated using the
104
The OECD health database defines number of health employees by the number of full-time
equivalent (FTE) persons, employed (including self-employed) in health services, including 'contracted
out' staff and excluding pharmaceutical and medical equipment manufacturing employees.
Administrative staff, private for-profit and non-profit medical benefit insurers are included. Health
professionals working outside health services are excluded (e.g. physicians employed in industry).
Page 95 of 315
known share of health employees out of total biotechnology employees as calculated in HI5.
For those countries in EU15 with an unknown share of employees the average share of all
known countries (67.08 %) was used for extrapolation over all clusters.
Table 3-24:
Biotechnology R&D employment in the health sector 2003
total biotechnology
R&D employment1
share of health
application 2
health-specific biotechnology
R&D employment
United States
73520*
79.83
58691
United Kingdom
9644*
58.91
5681
Germany
8024
60.39
4846
Korea
6554
67.08
4396
Canada
6441
67.08
4321
Denmark
4781
67.08
3207
France
*
4193
69.28
2905
Switzerland
4143*
67.08
2779
Spain
2884
67.08
1935
Sweden
2359*
64.92
1531
Belgium
1984
79.32
1574
Israel
1596
54.83
875
China (Shanghai)
1447
67.08
971
Finland
1146*
67.08
769
*
R&D employment
Ireland
1053
83.37
878
Iceland
458
67.08
307
Norway
283
67.08
190
Poland
109
67.08
73
1
for the countries marked with * all R&D employees in biotechnology firms are calculated,
for the other countries biotechnology R&D employees only are listed.
2
for unknown share of health-specific employment, the average share 67.08 % was used.
The United States led with an estimated 58,691 biotechnology R&D employees in the health
sector in 2003. Using the extrapolation method described earlier, the number of biotechnology
R&D employees in health applications in EU15 was estimated at 45,704 in 2003.
The number of all R&D employees in the health sector was not available. An approximation
could be achieved using the R&D employment of big pharmaceutical companies. Their R&D
employees accounted for approx. 75 % of all R&D employees in the pharmaceutical sector105
105
In an analysis of the German Statistical Office for the manufacturing sectors it was determined that in
2001 27.0 % of all employees worked in companies with less than 500 employees. In the total manufacturing sector the share was 57.7 % of employees working in companies with less than 500 employees. The share of employees in companies with less than 100 was 2.4 % in the pharmaceutical sector,
compared to 10.7 % in the total manufacturing sector.
Page 96 of 315
(Statistisches Bundesamt 2001)106. R&D employees were analysed by the pharmaceutical associations EFPIA and PhRMA for Europe and the USA, respectively. For 2003 EFPIA counted 99,337 R&D employees in their member companies, PhRMA counted 77,459 R&D employees. Thus the share of biotechnology R&D employees out of total health R&D employees
in Europe was 46 %, in the USA this share was 75.8 %. For Japan no data was available. The
high share of biotechnology employees confirms the important role biotechnology gained in
the pharmaceutical innovation process.
Employment effects of biotechnology in health care applications in respect to the total employment effects of biotechnology were described with Indicator HI7. As outlined for indicator
HI5, national data for several European countries was summarised in the OECD Biotechnology Statistics 2006 (Table 3-25).
Table 3-25:
Application-specific employment in biotechnology companies 2003
Country
Health-specific
employment
Total biotechnology
employment
Share (%)
Belgium
3380
4261
79.32
Canada
9255
11864
78.01
France
6182
8923
69.28
Germany
10434
17277
60.39
Ireland
2452
2941
83.37
Israel
1879
3427
54.83
Korea
4356
12138
35.89
Norway
710
971
73.12
Sweden
2413
3717
64.92
United Kingdom
13199
22406
58.91
United States
104024
130305
79.83
At least for the EU and USA there were enough data available for an extrapolation to assess
the effect of the health-specific biotechnology applications.
Health-related and total biotechnology employment for EU15 could be extrapolated on the
basis of this data (Table 3-26). With 50,668 health-specific employees in the biotechnology
sector this application contributed to 65 % of all biotechnology employees in 2003. In the USA
health-related BT employees were determined by the US Department of Trade and Commerce to be 104,024; the total number of BT employees was recalculated by the OECD Biotechnology statistics in order to remove double counting and resulted in 130,305 employees.
Thus the share of health-related employees in the USA was 79 % of all BT employees. This
predominance of health applications in total biotechnology harmonised with the reported distribution of companies by sector. Both in the USA and Europe health care companies contributed to more than 50 % of all biotechnology companies (Figure 3-29).
106
Statisches Bundesamt (2001). Produzierendes Gewerbe. Fachserie 4/Reihe 4.1.2. Metzler Poeschel
Page 97 of 315
Table 3-26:
Extrapolated employment numbers 2003 (health-specific biotechnology
applications and total biotechnology)
Extrapolated health
employment
Extrapolated total
employment
Share (%)
5271
8120
64.92
29862
48615
61.43
9701
13330
72.77
5834
8334
70.00
Total EU15
50668
78399
64.63
Figure 3-29:
Distribution of biotechnology companies by sector 2003
US biotech companies by sector
European biotech companies by sector
Service 33%
Healthcare
60%
Service 35%
Healthcare
51%
AgBio 5%
Environment
2%
Environment
7%
AgBio 7%
Source: Critical I 2005107
3.3.3
Case study summaries
3.3.3.1
Hepatitis B vaccine
Introduction
Infection with the hepatitis B virus (HBV) is relatively common in the industrialised world.
About 95,700 new infections take place in the EU every year. Most infected persons stay
asymptomatic, but can develop liver cirrhosis and liver carcinoma. First-generation hepatitis B
(HB) vaccines, the so-called plasma vaccines, are still in use in some parts of the world, but
have been totally replaced in the industrialised countries by vaccines produced in recombinant yeast since 1986. The production of plasma HB vaccines was technologically complex
and included gaining the antigen from patients’ blood and purification and chemical inactivation of the raw material. Recombinant vaccines are produced in yeast, are free from human
plasma particles and therefore potential contamination of the vaccine with infectious material
is excluded108. The last plasma vaccine was taken from the USA market in 1990 and in the
EU in 1991.
Because the transition from traditional to biotechnological production of HB vaccines was
finalised nearly 20 years ago, no actual economic data e. g. on direct changes in employment
107
108
Critical I (2005): Biotechnology in Europe: 2005 Comparative study.
Hartmann, Keller-Stanislawski 2002
Page 98 of 315
caused by the change from traditional production processes to biotechnology can be
presented; the historically found differences in market performance of the products, employment for development and production etc. are confounded with other framework conditions, as particularly changes in health care systems and vaccination strategies, as well as
the general economic trends.
Together with the availability of recombinant technology, the transition away from human
blood plasma as a source for the antigen was mainly founded in rising fears that plasma vaccine might be contaminated with remaining active HB and other, e. g. HI viruses. This fear
was generally unfounded as the inactivation of plasma antigen worked safely, but considering
the lack of other, e. g. technological or economic reasons for the transition, this fear seems to
be the main cause for the introduction of biotechnological methods in HB vaccine production.
Significance of impact
The world-wide hepatitis B Vaccine market was over € 530 million in 2001 and growing at the
rate of 15 % per annum109. Since the introduction of recombinant vaccines, competition in the
market of HBV vaccines rose. Although the technological knowledge as well as the genetically modified yeast strains are necessary, biotechnological production of HB vaccines may
now even be less complicated and costly than traditional production from plasma. The sales
prices, however, have remained at the same level.
The share of biotechnologically produced HB vaccines of all HB vaccines is now 100 % in the
industrialised countries, and therefore all employees producing HB vaccines work in the
biotechnology sector. Accordingly, the share of biotechnology revenues out of total revenues
that firms make with the production of HB vaccine in the EU25 is also 100 %. Probably due to
easier production methods and rising biotechnological knowledge, the number of companies
producing HB vaccine has increased.
The introduction of recombinant HB vaccine in the second half of the 1980s was not caused
by economic reasons, but was fuelled by the fear of viral contamination of blood products in
general and plasma vaccines in particular and the availability of recombinant technology. The
transition had no significant economic effects, e. g. regarding prices or market development,
but contributed to (at least perceived) safer products, and therefore probably to higher rates of
vaccination in the populations and lower incidence of HB infection and the resulting diseases.
However, these effects cannot be disentangled from other framework conditions and cannot
be captured in numbers.
The demand strongly increased caused by the introduction of public vaccination programmes.
The social and economic effects of vaccination programmes depend on the underlying prevalence of the disease: the higher the prevalence, the cheaper to avoid one new case. The
costs of vaccination programmes on the one side and costs of HBV infections and resulting
treatment of sequelae also highly depend on the structure of the national health care system
and therefore cannot be generalised from national studies to other countries or to the EU
level.
Depending on the vaccination strategy, van Damme et al.110 compute costs of € 7,071 or
€ 9,601 per infection prevented for the WHO European Region. Under the premise that HBV
infection rates, effectiveness of vaccination programmes and costs for treatment of HB-induced diseases are similar in the EU Member States, for the EU25 with a population of
457 million and an incidence of 3.49 cases of HB per 100,000, i. e. 15,949 cases per year,
this would mean annual costs between € 113 million and € 153 million to prevent all symptomatic HBV cases in the EU population.
109
110
SciGen Ltd. 2006
Van Damme et al. 1995
Page 99 of 315
Between 1985 and 1990, incidence of symptomatic HBV infection showed a strong decrease
from 10.16 to 7.19 infections per 100,000 capita, but the mortality due to HB malignant neoplasm of liver and intrahepatic bile ducts increased from 3.38 vs. 3.81 deaths per 100,000
capita in the actual EU Member States. However, the influence of biotechnological production
on incidence is unclear for infection rates and cannot be assumed for the changes in mortality.
Actual figures show high differences between EU Member States with a larger average number of 4.13 infections per 100,000 capita in the New Member States and 3.49 in the whole
EU111. Since 1992, WHO recommends mass vaccination of all children, which has found its
way into many national vaccination policies.
Except minor chemical waste that can probably be avoided with the new production methods,
no environmental effects can be identified for changing the production from traditional to biotechnological processes.
EU/non-EU comparison
As the USA and Japan also have finalised the transition from plasma to recombinant HB vaccine, no different trends can be found for these countries compared to the EU. European
companies are world market leaders. 11 European, 13 US and five Japanese companies are
active in R&D or production of prophylactic HB vaccines. Compared to 10 products from three
EU companies on the market, two of these companies being world market leaders, four
marketed products originate from four US companies and 6 marketed products from five
Japanese companies.
The pipeline of products in development is distributed differently to the number of marketed
products, with the US companies having a larger share of products in the pipeline than on the
market. 13 of the products in the pipeline are developed by EU, and 12 by US companies. No
product is in the pipeline of a Japanese company. Other countries with products in the pipeline are Australia (4 products), South Korea (4), Switzerland (3), India (1), Russian Federation
(1), and one product from a non-industrial source.
It can be concluded that the production of HB vaccines is concentrated in the EU, whereas in
the US relatively more companies are active in R&D than only in production.
Outlook
The replacement of traditional by biotechnological production processes for HB vaccines was
finalised in the industrialised world in the early 1990s. To date, the production of HB vaccines
is nearly totally done by biotechnology. Accordingly, in the industrialised countries, there is no
further industrial trend from production of these products with traditional methods to
biotechnological production. The further development now taking place is stepwise innovation
within the recombinant products and market development, the latter driven by vaccination
policies. According to the product pipeline, Europe is on the same level as the USA regarding
number of active companies' products in the pipeline, and far ahead of Japan which is not
significantly active in this field. Technological trends include e. g. oral immunisation for easier
administration of the products or vaccines expressed in transgenic plants112. As in the past,
vaccination policies will probably exert stronger influence on the market for these products
than technological changes.
111
112
World Health Organisation European Region 2006
Kong, Q. et al. (2001): Oral immunization with hepatitis B surface antigen expressed in transgenic plants. In:
Proceedings of the National Academy of Sciences, 98 (20), 11539-11544.
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3.3.3.2
Insulin
Introduction
Insulin is a protein naturally produced by the pancreas and which is vital in the regulation of
glucose levels in the blood. The loss of insulin regulatory process results in Diabetes mellitus,
a chronic disease which is dramatically increasing world-wide and which has very significant
socio-economic consequences. There is no cure, and no known means of effective prevention. There are two main types of diabetes. In Type 1 diabetes (which account for 5 –
10 % of all diabetes) the pancreas fails to produce any, or sufficient insulin. In Type 2 diabetes (90-95 % of all diabetes cases) the body is unable to respond properly to the action of
insulin produced by the pancreas. The role of insulin was established in the 1920s and Type 1
diabetics were treated with insulin extracted from animal pancreases until the 1980s, when
genetically engineered insulin first became available.
The major impact of biotechnology on diabetes has been the development of a genetically
engineered human insulin. Human insulin is now used by well over 95 % of EU Type 1 diabetic patients, although there is no overall definitive EU figure. Anecdotal information, and the
results of a specific survey in eight of the new Member States, suggests the figure is probably
over 99 %.
Human insulin has had little direct clinical advantages to patients (in comparison to pig insulin) in regard to controlling diabetes. However, there is a wide clinician and regulatory agreement that it is safer both in terms of avoidance of possible immune reactions to animal insulin,
and also of avoiding potential contamination arising from the animal origin of the pig insulin113.
Human insulin has also paved the way for the development of the analogue insulins which are
now being increasingly used by diabetic patients throughout the EU.
There is significant economic benefit to the EU as two of the three major producers of human
insulin are EU companies whose production is based in the EU. An estimation of employment
in insulin (human and analogues) production and marketing within these two companies is
approximately 17,800, while exports of insulin products from the EU by Novo alone were
worth €1.1 billion in 2005.
Insulin analogues are used by a significant proportion of EU diabetics, and their use (on their
own or in mixtures) is increasing rapidly. However, an issue which could significantly affect
this outcome is reimbursement. The German health insurance agency has recently put a price
ceiling on rapid insulin analogues for Type 2 diabetes treatment. This resulted from a study
which showed no advantage which justified the additional cost. If other national health
organisations follow suit, it will significantly affect the rise in the popularity of insulin
analogues. Both the UK (see section 3.2.5) and German health services have noted the need
for further research on the cost effectiveness of analogue products. The outcome of such
studies will be critical in ensuring that analogues are included in public health reimbursement
schemes.
EU companies are also the major producers of analogue products, which is a further
economic benefit to the EU.
113
An analysis of pros and cons of the animal and recombinant insulin was carried out by Mohan. V. (2002): Which
insulin to use? Human or Animal? http://www.iddtindia.org/whichinsulin.asp
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USA
There are no major differences in impact between EU and USA. The USA has a relatively
higher number of diabetes sufferers per head of population, and use of insulin for treatment of
Type 2 diabetics is also relatively higher. This is mainly because of a higher level of obesity,
which is directly linked to the onset and progress of the condition. Insulin usage at high dosage is common in severe cases of Type 2, and this explains the relatively high usage of insulin in the US.
In regard to the market, the US market for human insulin is dominated by a US producer (Eli
Lilly) which has 74 % of the market. However, EU-produced human insulin claims the remainder of the market. Insulin analogues have become very popular in the US market and it is
likely that conversion of patients to these therapies will reduce the need for standard human
insulin in the future. Eli Lilly has recently decided to halve the size of a manufacturing facility
which was in planning in Prince William County, Virginia 114 and this decision is linked to a
reduction in the market for human insulin.
In the insulin analogues market, Novo Nordisk has been very successful in the US market
and has recently taken the market leader position from Eli Lilly.
The US has also been more active in development of new insulin-based therapies and in development of insulin delivery technologies. For instance, of the 9 companies identified by
Frost & Sullivan 115 as being active (in 2002) in the development of oral insulin products, only
three were EU companies.
Similarly, Frost & Sullivan identified four companies 116 as active in the late-stage development of inhalable insulin products: Of these, none were EU companies.
Japan
Japan has historically had one of the lowest rates of diabetes in the world, although dietary
and lifestyle changes are causing a rapid increase in the rate of occurrence. Type 1 diabetes,
however, is of very low occurrence with only 64,000 diagnosed patients, or 2 % of the total
diabetes population.
Japan is also characterised by having a high rate of undiagnosed Type 2 diabetes sufferers.
The total of 3.2 million diagnosed diabetes patients is estimated to include only 45 % of the
total number of diabetes sufferers.
The Japanese market is overwhelmingly dominated by foreign suppliers, i. e. Novo Nordisk
(83 %) and Eli Lilly (16.8 %). The remainder is supplied by Shimidzu, a Japanese animal insulin producer. None of the Japanese animal insulin producers took up the opportunity of recombinant insulin production when the technology was available in the 1980s. The Japanese
pharma industry therefore has no presence in the world market for human insulin, even in
their home market. Industry analysts note that entry of any Japanese company into this market would be difficult at this stage of its development.
114
115
Pharmaceutical Technology, July, 2005
Frost & Sullivan: U.S. Diabetes Therapies and Complications Markets (2002)
116
Aradigm, Alkermes, Aerogen and Inhale (some of which are in collaboration with the major insulin
producers). Earlier stage companies include Autoimmune Inc., Elan, Provalis and Endorex.
Page 102 of 315
Outlook
The two factors that operate in the insulin market are the increasing use of insulin by Type 2
diabetics, and the increasing conversion of all diabetics from human insulin to one or a mixture of insulin analogues. While demand for insulin is increasing due to increasing population
and the major increase in Type 2 diabetes, the market is also rapidly converting to one of the
analogue insulins, or a mixture of analogues, or of an analogue and human insulin.
These products have major advantages for patients as they are longer lasting and can also
cope with the mealtime peaks in sugar intake. As clinical and patient experience of these
analogues grows, it is expected that their usage will increase and reduce the market for standard human insulin. In those countries where insulin analogues are available under state
health schemes, the outlook for the next five years is probably for a decline in use of the
nature-identical human insulin, and a rise in analogues.
Other developments in the insulin market will include further improvements in the method of
administration of insulin. These include:
Inhalation: Injection has historically been the only feasible route for administration of insulin.
However many other potential routes are being explored or have recently become available.
One inhalable product, Exubera117 is already available in the EU and several others are in
development. Further companies involved in development of products for inhalable insulin
include Aradigm, Alkermes, Aerogen and Inhale.118 The Exubera product requires a very high
dose of insulin as the uptake by this route is only about 15 % efficient. This highly inefficient
use of insulin is regarded by many commentators119 as questionable in a situation where
many of the diabetics in third world countries cannot afford insulin. However, the BioSante
(USA) inhalable product BioAir, currently in development, claims a 60 % efficiency120
Oral intake: There are also several companies pursuing mechanisms which would allow oral
intake of insulin. This can be either through a mouth spray, or a pill which can deliver insulin
to the GI tract without degradation in the stomach. One mouth-spray product is the Oral-lyn™
product121 of Generex, a Canadian company which specialises in administration of proteins
through an oral device. This product is available in Ecuador, but has not been approved by
US or EU authorities. Among companies trialling insulin pills for GI administration are Emisphere (USA) which has trialled their product on Type 2 patients; and Biocon (India) which
has obtained the IUP assets of Nobex (USA) following their bankruptcy. Nobex had previously
been in partnership with GlaxoSmithkline in development of an oral product.
Insulin Pumps: There are a wide range of pumps available for administration of insulin to
patients. They are used in situations where injection has failed to provide the required control
of hyperglycaemia. They involve a pump system fixed to the body which gradually releases
insulin into the bloodstream. They are attractive to patients who seek a high level of control of
their condition, and are willing to accept the consequences of attachment to the pump. “Patients make an important trade-off in accepting the long-term attachment to the pump in exchange for better control and a lower risk of complications”122. A limiting factor on usage is
that the user requires long-term training in the useage of the pump. It is expected that developments in miniaturisation and microfluidics will enhance the usefulness of this technology
in the future. A UK study on pumps concludes „Pumps appear to be a useful advance for pa-
117
Launched by Pfizer (US) in association with several collaborators. See www.exubera.com
Frost & Sullivan: U.S. Diabetes Therapies and Complications Markets (2002)
119
Including Prof Lefebvre – See Interviews.
120
http://www.biosantepharma.com/products/protein_delivery.html
121
http://www.generex.com/products/oral-lyn/
122
Insulin pump therapy for type 1 diabetes. Proposed criteria for approval. Diabetes Federation of
Ireland. 2001.
Page 103 of 315
118
tients having particular problems, rather than a dramatic breakthrough in therapy, and would
probably be used by only a small percentage of patients.“123
Other approaches to Diabetes control: An entirely different approach to diabetes therapy is
to obviate the need for insulin administration through the restoration of insulin secretion within
the body. Several approaches to this are being researched.
One possibility is to restore the secretion capability of the pancreatic Islets of Langerhans
cells, which produce insulin. Research by Transition Therapeutics (Canada) on an Islet Neogenesis Therapy124 seeks to restore the insulin-secreting capabilities of the pancreas using a
regime of growth factors and gastrin. This technology is currently in Phase 2 clinical trials.
A further approach is to transplant pancreatic tissue (or the specific insulin-producing Islets of
Langerhans cells) into the body where it would secrete insulin. Many different approaches to
this goal have been researched since the 1960s with only modest success. Although many
significant technical obstacles remain, research in this direction continues.
3.3.3.3
Interferon
Introduction
Interferon is one of the most prominent examples of biopharmaceuticals. The market of interferon-beta (IFN-beta) reached € 2.6 billion in the leading industry nations in 2005 with 1520 % growth annually in the last 5 years (IMS Health Data)125. It currently accounts for 9.6 %
of all biopharmaceuticals in Europe by revenues. After its discovery in the late 1950s the use
of this strong antiviral and immunomodulating agent for treatment only became possible with
the development of molecular biology and the application of this technology to the production
of drugs. Thus this case study on Interferon and its use in therapy of multiple sclerosis
illustrates the effect of biotechnology in therapy for conditions which were previously
untreatable and which became treatable solely by means of a biotechnological development.
Multiple sclerosis is a disease of young adults. Throughout the world between 1.3 and
2.5 million people are affected. For total Europe as geographic term there are an estimated
20,000 new MS cases annually. MS affects subjects who live in temperate climates, the
prevalence increases from the equator to the pole. Women are affected twice as much as
men. Multiple sclerosis is an autoimmune disease which affects the white matter of the central
nervous system (CNS). This inflammatory demyelinating disorder is characterised by
remitting or progressive development and neuronal lesions which are disseminated
throughout the brain and spinal cord. The lesions cause alterations in the transmission of
messages by the nervous system and lead to many symptoms such as loss of memory, loss
of balance and muscle coordination making walking difficult; other symptoms are slurred
speech, tremors, stiffness, and bladder problems. The exact cause of the disease is
unknown. Genetic predisposition is suspected.
Prior to the development of biotechnological drugs the therapy option was an induction of
accelerated recovery of nerves by corticoids. Current therapies are three different types of
IFN-beta, which are marketed by Serono/Pfizer, Schering/Chiron and BiogenIdec, glatiramer
acetate marketed by Teva/Sanofi-Aventis, and the monoclonal antibody Tysabri, marketed by
BiogenIdec/Elan Pharmaceuticals.
123
Colquitt JL, Green C, Sidhu MK, Hartwell D, Waugh N. Clinical and cost-effectiveness of continuous
subcutaneous insulin infusion for diabetes. Health Technol Assess 2004;8(43).
124
www.transitiontherapeutics.com
125
IMS Health Data (2006): Database search in IMS MIDAS. Retrieval 21.08.2006
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IFN-beta is a blockbuster for the three inventing companies with 16 % drug revenues of total
revenues for Schering, 42 % drug revenues of total revenues for Serono and 62 % drug revenues of total revenues for BiogenIdec. Biopharmaceutical drug development and production is
a job motor for EU contract manufacturers. Within the last 3 years, 600 new jobs were
generated in biopharmaceutical production in the EU. Pharmaceutical R&D processes are
based nearly 100 % upon biotechnological methods.
From a clinical viewpoint, IFN-beta has been a major benefit to therapy options in Europe.
Treatment with IFN-beta could help to retard disability leading to increased quality of life of an
estimated 200,000 to 500,000 MS patients in Europe (Frost and Sullivan 2004). At an
average 60 % of all eligible MS patients receive disease modifying drugs (Interferon beta-1a,
Interferon beta-1b, glatiramer acetate, Mitoxantrone) in the EU25126. Accessibility of novel
drugs shows big differences among European countries. The share of eligible people with MS
who receive disease modifying drugs is very heterogeneous in Europe, varying between
100 % in Luxemburg and 8 % in Hungary. Mean annual treatment costs were calculated to be
in the range of € 27,77 (UK) and € 53,25 (Sweden). Annual costs per QALY were estimated
to be between € 70,000 and € 100,000, depending on the type if IFN-beta. Incremental
costs/QALY for treated versus untreated group are assessed to be € 7,800 per annum. This
results from the small share of drug costs of a maximum of 10 % of total costs and the high
share of indirect costs of approx. 50 % of total costs.
The USA is still the largest market for IFN-beta (revenues of € 1.48 billion in 2005; 56 %) with
the EU closing the gap in the last years (revenues of € 1.09 billion in 2005, 42 %). In the EU
IFN-beta has reached a market share of 9.6 % of all biopharmaceutical revenues, whereas in
the USA IFN-beta contributes only to 5.8 % of total biopharmaceutical revenues.
Japan is not a relevant actor in the field of IFN-beta. The market share is 2.5 % of the world
market of IFN-beta (revenues of € 0.06 billion). These low activities result from the fact that
classical multiple sclerosis is not a disease in Eastern Asia. A disease that resembles MS
affects the optical/spinal functions. Current activities of companies and MS patient organisations try to get insight into the epidemiology of this disease and raise awareness for possible
therapeutic approaches.
Considering the health care situation in the USA versus the EU, physicians state a slightly
better situation in the USA. This refers to the point of time to initiate MS therapy with immunomodulatory drugs and accessibility to novel treatment options.
Outlook
The outlook presents estimations of (a) future possibilities for products and therapy options
and (b) future actors and national distribution.
(a) Future MS therapies
World-wide 172 products are in the development phase or already available for the therapy of
MS. Among them are 25 monoclonal antibodies and 17 recombinant proteins. Considering all
MS therapeutics currently in the pipeline there are four main pharmacological principles of
these drugs. These are agonists and antagonists of the involved cells, enzymatic inhibitors of
126
The database did not allow to distinguish between the different disease modifying drugs to get the
picture for Interferon separately (http://www.europeanmapofms.org/query.aspx).
Page 105 of 315
involved pathways, and immunosuppressants. In comparison to the USA, there is a relative
dominance of the USA in the field of antagonists. Monoclonal antibodies such as Tysabri are
thought to add an additional dimension to MS therapy. Due to high costs and difficult reimbursement negotiations their market penetration is retarded. Stem cells do not offer shortterm perspectives for MS therapy. Both physicians and patients are reluctant both because of
the high price (€ 15,000-20,000 for a single therapy) and their limited clinical effects.
Oral MS therapeutics represents an important novel product class. A number of companies
are involved in their development. First products are in the late stage of clinical trial and are
supposed to enter the market in the near future.
(b) Future industrial actors in MS therapies
World-wide there are 54 products listed in PHARMAPROJECTS for biotechnological MS
therapy. The majority of products are developed by companies with headquarter in the USA
(37 products). Nine products are developed by companies are located in the EU, none in
Japan and 8 in the rest of world (Australia, Canada, Israel, Switzerland, South Korea). The
EU and the USA are equally positioned in terms of launched products. Considering the strong
pipeline activities in the USA, there is the risk that US companies will dominate the market in
the future.
3.3.3.4
Glucocerebrosidase
Introduction
Gaucher’s Disease is an inherited metabolic disorder caused by one or more genetic defects
which result in functional deficiency of an enzyme called glucocerebrosidase or glucosylceramidase. The absence of the glucocerebrosidase enzyme causes abnormal accumulation of
lipids within the lysosomes of macrophages, resulting in cellular enlargement. These enlarged
cells, called Gaucher cells, are found in the spleen, liver and bone marrow, where they cause
functional abnormalities of these organ systems. The disease is lethal in some cases.
It affects less than 10,000 people world-wide127, with a particularly high incidence in the Ashkenazi Jewish population. Some 3,800 people in the EU have the genetic defect, but not all
have clinical symptoms. For those patients who have clinical symptoms, it is a severely debilitating and potentially lethal genetic disorder.
Biotechnology has been central to the development of an ‘enzyme replacement therapy’ for
Gaucher’s disease. This approach involves replacing the defective enzyme (glucocerebrosidase) with a functional enzyme which is injected into the patient on a regular basis. Different
biotechniques were involved at various stages in the development of this therapy. Molecular
genetics was involved in the elucidation of the genetic basis for the disease, and in the cloning of the glucocerebrosidase gene. Molecular biological techniques were further used in the
early 1990s to clone the gene required to produce the glucocerebrosidase enzyme. This was
inserted into a mammalian cell to produce a recombinant form of the enzyme. This enzyme
was launched by the Genzyme Corp (USA) in 1994 under the brand name Cerezyme®.
Gaucher's disease is one of a group of diseases which are caused by genetic defects in lipid
storage metabolism and which are collectively called Lipid Storage Disease or Lysosomal
127
Estimate by Genzyme Corp. www.genzyme.com
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Storage diseases. Enzyme replacement therapies are available, or in development, for several diseases in this group.
From an economic viewpoint, all of the industrial activity in enzyme replacement therapy for
Gaucher's disease has been by US companies. The major player is Genzyme Corporation,
which produces Cerezyme® (and therapies for two other Lipid Storage Disorders). Two other
companies are in late-phase regulatory approval for competitor products to Cerezyme®.
These are:
• Shire PLC (UK) whose involvement is the result of their purchase of a US company Transkaryotic Technologies in 2005. Their product is in Phase III trial.
• Protalix Therapeutics (Israel) which is producing glucocerebrosidase in cultured plant
cells. Their product is awaiting approval to enter Phase III trial.
One explanation for the predominance of US companies in this area is the introduction in the
USA of incentives for orphan drug development in 1983. Orphan drugs are therapies for rare
diseases which would normally not be of interest to the pharma industry due to the small market. In 1983 the US enacted legislation which provided research funding, IP benefits, regulatory assistance and market exclusivity for orphan drug development. This created significant
activity in this field and facilitated the development of Cerezyme® among other drugs. Similar
EU legislation was enacted in 2000.
Genzyme plan to site stand-by production of Cerezyme® in the EU over the next few years.
Shire PLC have not made a decision on a location for their product (presuming it is
approved), but it is likely to be manufactured in the US.
From a clinical viewpoint, the availability of Cerezyme ® has been a major benefit to
Gaucher's disease patients in the EU. Based on international prevalence rates, it is estimated
that there are approximately 3,800 people with a Gaucher genetic defect in the EU. The
disease is likely to be more prevalent in the eastern EU countries because the disorder is
more common in Ashkenazi Jews. The availability of Cerezyme® has a life-changing benefit
for the 1,750 EU patients receiving the treatment, as there was previously no therapy for the
disease.
Cerezyme ® is expensive, however. Average costs of the therapy per patient per year can be
from € 50,000 to € 430,000, depending on dosage etc, but average in the region of
150,000 €. The high cost has sparked a debate in many EU countries about the affordability
of these costs. It has also exposed a paradox in public policy. While orphan drug legislation
encourages development of therapies for rare diseases, there are no clear policy guidelines in
the EU for the use, and funding of the drugs developed under this legislation. Health policymakers are therefore left with the dilemma of having to balance concern for cost control with
the equal concern to ensure adequate access to health care. To date, it has been possible for
EU health systems to tackle decisions on orphan therapies on an ad hoc basis due to the
small number of such therapies. In other words, although the individual treatment cost is high,
the small number of patients affected means that the total cost is small relative to the national
health care budget. The inevitable arrival of further such products will force a more significant
debate on this issue.
The relevant comparison here would appear to be EU versus US, as Japan is in a very similar
situation to the EU. World revenues of Cerezyme® by Genzyme in the 2nd quarter of 2006
were € 200 million (€ 254 million)128 which suggests annual revenues of over € 800 million. At
the moment all of this revenue is earned in the USA. However, Genzyme plan to base stand-
128
Genzyme Corp Rept to SEC on Quarter ended June 30, 2006. Accessed at http://www.sec.gov
Page 107 of 315
by production of Cerezyme®, and all of the related Myozyme product, in the EU over the next
few years.
A significant factor in the success of the USA in this area is the early introduction of orphan
drug legislation. This legislation provided the tax, market and IP incentives which encouraged
industry involvement in the area.
Outlook
The outlook will be discussed in relation to future possibilities for products for Gaucher and
other therapies for Gaucher's disease.
Two companies are developing enzyme replacement therapies for treatment of Gaucher's
disease. These are Shire and Protalix (see 5.5.1). Other approaches are:
Gene Therapy: The major alternative option for treatment of Gaucher's disease is through
gene therapy. In principle, the disease is suitable for gene therapy since it requires expression of a single gene at a defined site. The potential for a gene therapy solution has already been shown in vitro using a retroviral vector.129
Several companies have looked at the possibility of developing gene therapies for Gaucher's
dDisease. The PHARMAPROJECTS Database lists activities by Genzyme, Novartis (CH),
Crucell (Australia), Targetted Genetics (USA), Avigen (USA), and Virogen (S. Korea) in the
development of gene therapies for the disease. However, all were in the 1990s and all these
development approache seem to have now ceased.
At the moment, there is no evidence of any pharmaceutical company involved in development
of such a therapy.
Pharmacological Chaperones. Chaperone molecules are designed to restore the functional
structure in proteins which are incorrectly folded. A consequence of some of the possible
mutations in Gaucher's disease is that the enzyme glucocerebrosidase is present, but is
structurally ineffective. A US company Amicus Therapeutics has developed a chaperone
molecule, provisionally called AT2101. AT2101 selectively binds to glucocerebrocidase. After
binding to the enzyme, it “promotes the proper folding, processing, and trafficking of the
enzyme from the endoplasmic reticulum to its final destination, the lysosome, the area of the
cell where the enzyme does its work. Once it reaches the lysosome, the pharmacological
chaperone is displaced and the enzyme can perform its normal function”.130 Efficacy of this
molecule has been shown in vitro and in animal studies and the company has applied for FDA
permission to enter Phase 1 trials, which are hoped to commence in the second half of 2006.
The molecule has also been granted Orphan Drug Status by the FDA.
Oral Ceramide analogue: Genzyme announced in July 2006131 that it has commenced trials
of a ceramide analogue to be administered as an oral capsule. This molecule Genz-112638,
is designed to inhibit the enzyme glucosylceramide synthase, which results in reduced production of glucocerebroside. The molecule has proven high potency and specificity in preclinical research. The open-label trial will evaluate patient response for one year according to
several primary endpoints, including changes in haemoglobin, platelet levels and spleen
volume. Other endpoints to be investigated include change in liver volume and a series of
biomarkers and quality of life indicators relevant to Gaucher's disease. Genzyme Europe is
leading the development of this potential treatment.
129
Fink, J.K. et al. Correction of glucocerebrosidase deficiency after retroviral-mediated gene transfer
into hematopoietic progenitor cells from patients with Gaucher's disease. Proc Natl Acad Sci U S A.
1990 March; 87(6): 2334–2338.
130
Information from Amicus website: http://www.amicustherapeutics.com
131
Genzyme Press Release (USA) July 26, 2006
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Orphan Drug Payment Issues
Apart from the specific issues related to future therapies for this rare disease, this case study
illustrates a further issue of relevance to the future of therapies for rare diseases. While there
are significant incentives for development of these therapies, there is also uncertainty about
the principles for their payment from health care budgets. Current therapies are being funded
in several countries on the basis that the rarity of the conditions being treated has a very
small impact on the overall health budget.
3.3.3.5
CD20 antibodies
Introduction
Lymphoma132 is a general term for cancers of the lymphatic system, which is part of the immune system. It consists of a network of vessels and nodes. The vessels carry a watery fluid
called lymph, which contains infection-fighting white blood cells, to all parts of the body.
Scattered throughout the network of vessels are lymph nodes, where white blood cells are
made and stored. Lymphoma develops when white blood cells known as lymphocytes become abnormal and start dividing without control. Because lymphatic tissue is present in
many parts of the body, lymphoma can start almost anywhere and then spread to almost any
area of the body.
Hodgkin’s disease is one type of lymphoma, named after Dr. Thomas Hodgkin who first identified the disease in 1832. All other lymphomas are collectively classified as non-Hodgkin’s
lymphoma (NHL). Hodgkin’s disease and non-Hodgkin’s lymphoma are distinguished by how
the cancer cells look under a microscope. Non-Hodgkin’s lymphoma is far more common. The
NHL-cases can be further divided in different subclasses depending on the stage and distribution of the lymphomas133.
Cancer can be treated by surgical resection, with radiotherapy, chemotherapy, hormones or
immunotherapy. In the immunotherapy, the immune system is put on a higher level of alertness with respect to cancer cells with the aid of interferons or interleukins, or monoclonal antibodies134. CD20 antibody products have proven to be very efficient in curing the NHL cancer.
One of the most notable achievements of modern medicine135 is the development of specific
diagnostic tests that can characterise individual tumours, thereby permitting customised therapy.
This case study illustrates the use of CD20 antibodies in the treatment of non-Hodgkin’s lymphomas and assesses the economic, social and environmental impacts of CD20 antibodies in
EU as well as comparing the situation in the EU with the one in US and Japan.
Non-Hodgkin’s lymphoma (NHL), a group of malignancies of the lymphatic system, affects
approximately 1.5 million people world-wide and claims an estimated 300,000 lives each
year136. In Europe137, 60 000 people develop NHL each year, leading to 6.6 million doctor’s
appointments yearly in Europe and consequently to the hospitalisation in 109,000 cases.
Every year in Europe 4.6 million working days are lost because of the NHL, and the direct
annual costs of non-Hodgkin’s lymphoma in Europe are € 407 million The NHL incidence is
132
www.nfcr.org
http://www.lymphoma-net.org/
134
http://www.health-kiosk.ch/start_krebs/text_krebs_the_1.htm
135
136
Roche: Annual report 2005
137
Page 109 of 315
133
increasing rapidly. To sum up, NHL is causing a heavy burden for Europe as well as for the
societies and individuals in terms of costs and human suffering.
In the case of CD20 antibodies for the treatment of Non-Hodgkin’s Lymphoma, only 3-4 main
players in the biotechnology industry can be found with their basis in the US. The only European company involved in the business is Roche. The main CD20 products in the markets
are Rituxan®, Mabthera®, Zevalin® and Bexxar®. Biogen Idec and Genentech are the producers for Rituximab, Roche involved in the marketing. Zevalin® is produced by Biogen Idec,
Genentech and Schering apparently having a role in the marketing. Bexxar® is developed by
Corixa and is marketed currently only in USA by GlaxoSmithKline. A Danish company Genmab is also producing CD20 antibodies for the markets, but the products are in phase III in
clinical trials at the moment, not yet available in the markets.
Economic impact
Roche is the only pharmaceutical company currently marketing CD20 products for NHL treatment in Europe. This product is MabThera® (i. e. Rituximab® for the product marketed in the
USA). Roche’s Mabthera revenues138 in 2005 were € 2,603 million out of the total revenues of
€ 22,256 million and the total pharmaceuticals revenues of € 17,091 million . The revenues of
Mabthera have increased during the three quarters of 2006 by 15 % compared to the same
period in 2005, being now € 2,193 million (in the first three quarters of 2006). The increase of
Mabthera revenues during the three quarters of 2006 was biggest, +23 %, in Europe and the
rest of the world (excluding US and Japan) whereas in US and Japan it was +11 % and +2 %,
respectively.
The impact of CD20 antibodies on employment in the EU can be assessed from several
points of view. The companies producing and marketing MabThera or Rituximab – in this
case only Roche139 – estimate some 800 employees to do work related to the MabThera. This
is only about 1 % of Roche’s employees in Europe. Referring to the jobs created by CD20
antibodies, the direct data is not available. When knowing140 that in 2005 Roche created 3600
new jobs, we can estimate that based on the share of MabThera revenues out of the total
revenues (11,6 %) the respective amount of new jobs may have been created when keeping
in mind that MabThera revenues has increased by about 15 % during the past years.
Genmab A/S141 is currently developing another CD20 antibody – HuMax-CD20 – for the treatment of NHL. Genmab employs 215 people, 84 % of them in research and development, but
it is not known how many of them are working on HuMax-CD20.
The other impact on employment is due to the working days lost because of the NHL, which is
discussed under the Social Impact below, as well as the cost of the treatment.
Social impacts
The social impact of the NHL affects both society and the individual as it results in in
additional costs and human suffering. Hence, the social impact of CD20 antibodies can be
assessed by assessing the cost due to the CD20 treatment, and the impact to the quality of
life. The basic assumption is that the incidence of NHL will increase substantially along with
age, the average age of diagnosis being around 65 years. In Europe142. 60,000 people
currently develop NHL each year and the amount is increasing causing remarkable cost and
suffering for the society and individuals.
138
Interview with Dr. Papadopoulos
140
141
Genmab A/S Annual report 2005
142
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139
There are several calculations on the cost of different treatments143, 144, 145, 146. It looks likethat
the price of the MabThera treatment is in the range of € 5,000 to € 15,000, depending on the
amount of fusions (4 to 8), and the price of combined MabThera CHOP147 treatment is more
or less € 20,000 depending on the age of the patient. The CHOP treatment alone is in the
range of € 4,000 to 8,000.
Table 3-27 presents a summary of one study in the UK148, where the prices of the drug, the
adverse effects and the total prices were compared in cases of Rituximab, CHOP and Fludata
treatments. In this comparison, the Rituximab treatment was the most cost-efficient mainly
because of the low price of adverse effects.
Table 3-27:
Cost type
Drug
Adverse events
Total
Comparison of the NHL treatment prices (in EUR) by different drugs. A
study performed in UK in 2000.
Rituximab
4,479
81
4,560
CHOP
1,620
3,787
5,407
Fludara
5,377
2,217
7,594
The advantages150, 151, 152 of CD20 antibodies (MabThera/Rituximab) treatment include:
• CD20 antibodies are able to specifically target cancer cells. thus avoiding damage to the
healthy cells
• fewer deaths, the survival rate increases and patient lives longer
• less follow-up treatment
• fewer side effects: Rituxan is not myelosuppressive and therefore does not cause side
effects typically associated with chemotherapy, such as hair loss, nausea and vomiting
and depletion of white blood cells
• hospitalisation decreases
• human suffering decreases and the quality of life increases.
Efficient treatment of NHL can be done with CD20 antibody-products and as Kalevi Nikula
(Strategic Manager of Roche Finland) put it: “Because the disease progression in many NHL
subtypes may be very slow (8-10 years), it’s difficult to say how rituximab will finally affect on
the natural course of the disease in these kind of patients. It has been already shown that
also from them, many may be fully cured, and the rest can live very long when giving rituximab as a maintenance therapy, e. g. 4 times a year. Thus, cancer may be changed to a
"chronic" disease, many patients living long having only minor symptoms.”
143
Frost & Sullivan 2006: European Cancer Market Analysis, Biotechnology and Pharmaceuticals,
B945-52
144
Kalevi Nikula, Strategic Manager of Roche, Finland
145
Rituximab (MabThera®) for aggressive nonHodgkin’s lymphoma: systematic review and economic
evaluation. Health Technology Assessment 2004; Vol 8: number 37
146
Jenabian and Cramer 2004: Biotechnology for cancer: Rituximab and other CD20 antibodies
147
148
Frost & Sullivan 2001: European Monoclonal Antibody Cancer Therapeutics Market, 3976-52
149
150
Interview with Dr. Papadopoulos
151
Frost & Sullivan 2001: U.S. Emerging Non-Hodgkin´s Lymphoma Therapeutics Market, A030-52
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The prevalence153 of non-Hodgkin’s lymphoma is similar in Japan and twice as high in the
USA as it is in Europe. NHL is relatively rare in the Japanese and black populations in the
US154, 155. 54 000 people in USA develop NHL each year156. Direct annual costs of nonHodgkin´s lymphoma in Europe are € 407 million, € 219 million in USA and € 5.5 million in
Switzerland. Indirect annual costs by non-Hodgkin´s lymphoma in Europe are € 336 million,
157
€ 266 million in USA and € 9.4 million in Switzerland . The cancer cases are evolving
rapidly. The monoclonal therapeutical markets in USA are expected to grow at a compound
annual growth rate (CAGR) of 10 percent during the period 2004-2011 representing revenues
158
of € 4,248 million in 2011 . The cost for society is heavy both in the cost of the treatment as
well as in the cost of lost working days by patients.
Outlook
According to the WHO estimates159, in the next twenty years there will be 10 million deaths
from cancer and 10 to 15 million new cases of cancer each year (Frost & Sullivan160, WHO):
about 3.0 million cases are tobacco-related and another 3.0 million are due to diet-related
reasons and about 1.5 million cases are due to infections. For the newer cases of cancer,
causes are unknown and still under study. With a rise in demand predicted for cancer treatment, health care costs are also expected to increase creating immense challenges for the
already troubled health care system in Europe. Europe will continue depending on the treatment designed by the United States, the largest health care market, which consumes about
50.0 to 55.0 per cent of cancer medications. A high level of increase is expected for cancer
incidences in future with chances that cancer will become one of the major chronic diseases
that will continuously impact people’s lives. The future will see greater progress in cancer
therapy with improved understanding of the causes of cancer. However, it is yet to see how
much this refinement in present detection, diagnostic and therapeutic technologies will ensure
the controllability of this disease. Future technology will be based on post-genomic research
and targeted cancer treatments will be developed based on gene studies supported with genetic mapping efforts.
The industrial perspective is reflected in the following statement of Kalevi Nikula, Strategic
Manager of Roche Finland: “In 2010-2015, patents of some early biotechnology drugs will
expire, allowing generic products (biosimilars) to enter the market. This will obviously lead to
price reductions, as have been seen with older chemotherapy and other compounds in this
kind of situations, where the generic companies do not need to compensate early research,
development, and clinical trial costs of the compound. Still, the new biotechnology innovations
are mainly expected to come from the USA, where the biotechnological research is far better
financed and supported than currently in the EU. Pharmaceutical industry especially is very
high-risk area due to strict and increasing safety requirements of the drugs, and thus it needs
long-term risk taking and enough financial capacity to carry the risks of possible failures.”
Immunotherapeutics161 (Frost & Sullivan 2001) account nowadays for two-thirds of the entire
novel drugs in development for non-Hodgkin’s lymphoma, and these products, which include
naked and radiolabeled antibodies, vaccines, antisense and other small molecule immuno153
http://www.mabthera.com/portal/eipf/pb/mabthera/com/diseasebackground
Rituximab (MabThera®) for aggressive non-Hodgkin’s lymphoma: systematic review and economic
evaluation. Health Technology Assessment 2004; Vol 8: number 37,
155
http://www.mabthera.com/portal/eipf/pb/mabthera/com/diseasebackground
156
157
158
Frost & Sullivan 2005: Therapeutic Monoclonal Antibodies Markets, F337-52
159
160
161
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154
modulators are expected to transform the market over the next ten years. Future treatment
options also for NHL contain for example vaccine therapy, where a substance or group of
substances is meant to cause the immune system to respond to a tumour and kill it. For cancer vaccines, regulatory and approval regimes need to develop quickly. Current procedures
are not advanced, and standardised response assessment criteria need to be established to
facilitate the smooth approval of these vaccines.
Any product that prevents or delays disease recurrence, or prevents disease progression in
refractory patients, without causing serious side effects that compromise patient quality of life,
will command premium prices in the market162. According to Frost & Sullivan163 prices of
novel immunotherapeutics are expected to increase by 5.0 to 10.0 % per annum. From 2008
onwards, as the number of market participants increase, prices may experience some downward pressure. Suppliers of first generation products may lower prices in order to protect their
market share from technologically superior, second and third generation products. New market entrants may be forced to discount prices in order to capture market share from the leading players.
Figure 3-30 shows the forecast of oncology therapeutic monoclonal antibodies market and the
revenue from 2001 to 2011.
Figure 3-30:
Oncology therapeutic monoclonal antibodies market and revenue forecasts in US
Clinical evidence is expected (Frost & Sullivan 2005)165 to accumulate over the forecast period and increase the credibility and acceptance of monoclonal antibodies in therapeutics.
Higher prices of monoclonal antibodies are expected to be one of the strongest restraints impacting market penetration in the first 4-5 years (2008-2009) of the forecast period. As physicians understand that the long-term benefits of monoclonal antibodies actually reduce the
total health care and financial burdens, cost is likely to become less of an issue. As more and
more branded monoclonal antibodies are recognised by policy-makers with government reimbursement trusts and reimbursement companies, positive changes in demand and revenues
are expected.
162
164
165
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163
Several of the marketed products are being researched currently for additional indications—
either in the same segment or in other segments166. This phenomenon is expected to positively influence the growth of these monoclonal antibodies. In most cases, additional indications are expected to receive early approvals with FDA fast-track statuses avoiding duplication of safety data.
Roche167 filed an application with EU regulators in December 2005 to expand the product’s
indications to include maintenance treatment in patients with indolent NHL. At the end of the
year 2005 Roche had 111 research projects in major therapeutic areas, of which 30 related to
oncology. Roche is also trying for expansion of product indication: rituximab has been
accepted in Europe also in treatment of Rheumatoid Arthritis besides NHL.
3.3.3.6
Cardiac diagnostics
Introduction
Tests or assays for cardiac biomarkers help differentiate AMI and other heart conditions from
other medical conditions that have similar symptoms. These assays allow clinicians to identify
acute cardiac disorders, and to also differentiate between patients who are not experiencing
AMIs and those who are. They can also differentiate between a range of possible cardiac
conditions. Many of these could not previously be determined at their early stages, if at all.
Cardiac assays have been developed using a combination of different outputs from several
areas of modern biotechnology. Molecular biology methodology has generally been used in
the discovery of the markers and, in most cases, immunoassay technology is used in their
detection. Newer biomarkers for cardiac disease and in particular AMI have been developed
through the use of a variety of biotechnological processes. These tests contribute to the specific welfare of patients, save hospital resources and provide employment in the diagnostic
industry.
The current use of cardiac biomarkers for the determination of heart attacks (Myocardial infarction) provides for the early detection and/or the elimination of other medical conditions
having the same symptoms. The results from the tests provide the medical doctor with a positive or negative aid to the diagnosis of AMI and thereby increase the opportunity to immediately start life saving therapy.
While the decreasing mortality due to CVD in the western world cannot be directly attributed
to the use of diagnostics, they do make a contribution. Other significant factors include
changes in diet and lifestyle, more effective therapies and other clinical interventions. The
development of these assays has also led to increases in hospital efficiency and to reducing
the costs of hospital stays.
The diagnostic industry has also benefited in terms of increased revenue and while there may
not be an significant increase in employment figures, the cardiac biomarkers test systems do
provide the opportunity for the further development of the industry.
The European Market for cardiac diagnostics tests in 2005 was € 141 million, which is 2.56 %
of the total European diagnostic market. It is expected to reach over € 195 million in 2008.
Roche Diagnostics, Switzerland has almost 29 % of the EU market in this area, which is
valued at approximately € 55 million, and is the major company in the cardiac diagnostic area.
166
167
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Although the use of these assays has grown significantly, the EU has not been a significant
economic beneficiary from the viewpoint of industrial activity. The majority of the market
(approx. 68 %) is held by US companies. In regard to employment on Cardiac test production
and sales, within Europe this is mainly within Roche Diagnostics which has facilities in Switzerland and Germany. The total related employment is approximately 200 people. If other
smaller EU companies are included, the total employment is estimated to reach 300 employees. The US suppliers will obviously be responsible for further employment in the EU as they
have sales, marketing and distribution centres in Europe for the promotion of their ranges of
diagnostic test systems.
Note that this is the employment estimated to result from sales for the EU market only. The
EU suppliers will also have export sales outside Europe which will generate further revenues
and provide further employment.
A further aspect of economic benefit is the savings to the health care system arising from their
use. Cardio-vascular disease (CVD) is estimated to cost the EU economy €169 billion a year.
This represents a total annual cost per capita of € 372. Per capita costs vary over 10-fold
between Member States – from around under €50/capita/year in Malta to over
€ 600/capita/year in Germany and the UK. Of the total cost of CVD in the EU, around 62 % is
due to direct health care costs, 21 % to productivity losses and 17 % to the informal care of
people with CVD.
Of the patients present in A&E hospital wards, only 10 % of these patients have an AMI and
using cardiac diagnostics to eliminate patients who are not at risk of AMI have shown major
savings. US figures show that the cost of a cardiac bed-day is € 2,740, and a usual cost for
such an observational stay as up to € 11,700 per visit168, while a UK study169 estimated the
cost of a bed day at € 3,250.
There are a limited number of surveys that have included an economic evaluation of the use
of the cardiac tests. However, all of these have justified the use of the assays and have
shown overall savings in their utility as well as providing better and more efficient health care.
Moreover, there are indications that following the recommendation of the ACS/ESC that hospital and critical care staff are using the newer cardiac diagnostic biomarkers and that the
trend is growing world-wide.
The US is the largest market for cardiac diagnostic systems, (€ 217 million, revenue
forecast)168 with the EU becoming more aware of their increasing importance. The companies
producing the kits for the cardiac biomarkers are almost exclusively American or European
based companies. The production of the assays is international and depend on, in many
cases, the technology of the parent company for the format of the assay system and the
associated instrumentation.
Outlook
The bulk of traditional diagnostic products are designed to be used by hospital or service
laboratories. Clinicians send a sample and request a result, and the laboratory conducts the
test and returns the result. This is because (a) most diagnostic require time and expertise and
often specialised equipments to perform. Cardiac diagnostics is one of those areas in which
an immediate result is required. The patient presenting at the doctors office or the emergency
room has to be diagnosed rapidly.
168
Frost & Sullivan: U.S. cardiac diagnostics market
Avril Owen Principal Biochemist in Gwynedd Hospital, UK reported in Clinical Laboratory
International. December 2001
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169
Suppliers of Cardiac diagnostics have therefore concentrated on products for the doctor's
office or the A&E ward of the hospital. Tests which can be performed on blood test present
one of the best alternatives to rule in/rule out cardiac arrest. The hospital procedure is that
one can perform a quick test, a spot test (Point of Care, POC) or send a sample to the hospital laboratory requesting an immediate assay performance.
Biotechnology has provided both the biomarkers which are useful in the determination of CV
diseases, and also the immunoassay technology for rapid assays. Because of the resulting
combination of market need and availability of products, the cardiac primary care diagnostics
segment is a rapidly growing market. High growth rates are expected by Frost & Sullivan to
continue for the next few years due to the use of high-quality instruments. “The growth will not
be centred in any particular region, and there will rather be a steady growth throughout the
European markets.“
Many cardiologists have adopted these tests and switched from conventional methods of
heart disease diagnosis to try novel markers. The use of these cardiac diagnostic tests, such
as NPs, in primary care is expected to grow due to the introduction of better Point of Care
technologies and further useful markers. These markers (see 7.3.1) may give more valuable
indications in determining appropriate treatments and the level of risk of a heart attack.
According to Frost & Sullivan170 “The European cardiac primary care diagnostics market is
growing, even though the need for POC testing was previously seen as an unnecessary cost
to the EU health care environment. This was because central laboratories traditionally regarded decentralised testing as inefficient and unworkable. In 2004, 15.0 per cent of cardiac
tests were carried out in primary care. This is forecast to grow to 20.0 % by 2008, indicating a
gradual increase in near-patient testing or a more decentralised approach to testing”
Cardiac biomarker tests will continue to grow not only within the European market but worldwide. It has the potential to provide immediate diagnosis of myocardial infraction and will in
the future provide the means to differentiate other cardiac conditions. This will help to improve
the quality of life and the productivity of people world-wide.
Europe is reasonably well placed in that the leading company in this field of test development
is in Switzerland and that one of its main manufacturing and R&D facilities is based in Germany.
A number of US-based companies also have manufacturing units in the EU as well as marketing and sales distribution outlets in Europe, which contribute to employment.
There is also a growing SME presence in the market that will contribute in the future to the
development of the cardiac market internationally and provide employment in a European
context. Examples of these companies include Ani Biotech and Hytest (Finland), Diasys Diagnosic Systems GmbH, (Germany) and Ark Therapeutics (UK).
3.3.3.7
HIV-testing
Introduction
Development of diagnostic tests for Human Immunodeficiency Virus (HIV) was critical in the
campaign against HIV/AIDS in many respects, but particularly in reducing the transmission of
AIDS through blood transfusion in developed countries. HIV is now a major disease affecting
all EU countries. Europeans with AIDS represent about 3 % of the total world AIDS patients.
The cumulative numbers of HIV positive patients in the EU (1998-2005) is 215,510 and
170
Frost & Sullivan: The Future of Cardiac Markers in Primary Care, 2006
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24,184 new cases were reported in 2004 which is the most recent year for which comprehensive data is available.
There are multiple needs for HIV detection, and therefore HIV assays are available in various
formats for use on a range of sample types. They are also used at various stages of disease
from initial screening to confirmation; and for identification of the virus sub-type, and also in
characterising blood donations.
Modern biotechnology has provided the technology for the development of a wide variety of
diagnostic systems for use in HIV detection in blood and other samples, and for monitoring
the virus so as to reduce the spread of infection and for therapeutic monitoring purposes. The
tests systems available are designed for specific purposes within a wide range of clinical and
health needs. Immuno-assays have been developed that can detect antigens of the virus and
antibodies that respond to the infection. NAT (Nucleic Acid Technologies) systems on the
other hand have applications in determining viral load and in providing information on the
genotype of the virus and its response to infection. The range of assay usage includes:
• Disease surveillance: simple immuno-assays which provide a qualitative result i. e. disease is present or absent.
• For screening of blood donors, medical personnel etc a sensitive quantitative surveillance
assay is required. These may be sensitive immuno-assays or DNA assays.
• Patient monitoring during therapy requires an assay to measure viral load. These again
may be sensitive immuno-assays or NAT assays.
• Epidemiological studies require assays which will determine the strain of HIV. These
assays are usually NAT assays.
Thus, both immunodiagnostics and the other molecular techniques are useful to different degrees in various clinical situations. One of the major constraints in using the appropriate technology in areas of mass screening, i. e. AIDS clinics, maternity wards, and blood banking, is
the costs of the reagents and the associated instrumentation.
In terms of economic impact, EU companies represent a significant proportion of the global
companies active in this sector. As one indication of this, EU producers of assays evaluated
by WHO over the period 1998 to 2005 were analysed in four categories of test type. Although
the proportion of companies was variable between test types, at least 35 % of the companies
in all categories were based in the EU.
As a further indication, four of the top 10 companies in the world in HIV diagnostics are EUbased, although it is noted that the diagnostics business is global and a single assay product
may contain components and reagents manufactured in several different parts of the world. It
was not possible to derive the precise distribution of market value between EU and non-EU
companies.
The social value of HIV diagnostics in controlling HIV is major, although it is difficult to precisely ascribe the benefit. Diagnostics are a vital part of the overall effort to control this disease, but they are one of many tools which have together made the EU one of the safest
places in the world in relation to risk of HIV. Specific benefits of HIV diagnostics include:
• Ensuring the safety of transfused blood: Assays for screening of blood samples for HIV
virus are now widely used, and have contributed to ensuring the safety of blood used in
the EU.
• Screening of ‘at-risk’ groups. Assays are used to regularly screen ‘sex workers’ and
drug users for the disease for prevention purposes. These assays may also be used to
screen hospital workers and others who may inadvertently contract HIV.
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• Therapeutic monitoring: A further set of assays can be used to monitor the HIV load during the course of anti-viral therapy. This has a major benefit in determining dosage regimes.
The social benefits of HIV diagnostics are similar in the EU, USA and Japan. All countries use
diagnostics within relatively sophisticated programmes of HIV prevention and therapy.
As in many areas of the diagnostic industry, US companies are marginally stronger in HIV
diagnostic development and production. Of the top 10 global companies in HIV diagnostic
sales, six are US-based. Japan has no major producer of HIV diagnostics, although Fujirebio
does have products in this market.
HIV is a global disease and is most prevalent in Africa (where 24.6 million are affected) and
Asia (8.3 million affected). A comparison of the EU with these regions is stark. Many African
and Asian countries lack the health and educational infrastructure required to control HIV.
This, coupled with the relatively high cost of HIV diagnostics, has created a situation whereby
the benefits of these products are not available.
Outlook
There will be continued development of diagnostic kits suitable to the wide range of requirements in detecting HIV, and in monitoring disease progression. This will be assured both by
the high value of the market, and also by the heathcare imperative. The European Commission, for instance, has a policy of enhancing surveillance capacity in Member States, and
‘to invest in development of affordable and easier-to-use therapeutics and diagnostics to support expanded access to treatment’.171
One possibility that might arise from the availability of more affordable and easier test systems could be a wider screening of the general population for AIDS. However, there are divided views on this issue. This is because patients with early AIDS, and who do not require
anti-retroviral therapy, are not treated and only receive counseling and advice designed to
change their behaviour, thereby preventing transmission. However, it is not known whether
this advice has any impact on the spread of the disease. As a major US study reports, “the
case for screening, particularly in lower-risk populations, would be greatly strengthened by
studies showing that identification at earlier stages of disease is associated with decreased
transmission rates”.172
HIV is a world problem, and efforts to control the disease cannot be confined to the developed
countries. As noted by Frost & Sullivan173 “Global public health officials seek new ways to
bring testing and results reporting to the point of care, and the availability of testing and
treatments to developing areas to quell a spreading epidemic.” It is therefore likely that there
will be continuing emphasis on development of simple, low-cost but sensitive and specific
assays for use in monitoring and screening in developing countries.
171
COM(2005) 654: On combating HIV/AIDS within the European Union and in the neighbouring
countries, 2006-2009
172
Chou et al. Screening for HIV: A Review of the Evidence for the U.S. Preventive Services Task
Force. Ann. Internal Med. 5 July 2005, Vo. 143 (1) pp 55-73
173
Frost & Sullivan. Global HIV Diagnostics & Monitoring Market. 2005.
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3.3.3.8
Phenylketonuria (PKU)
Introduction
Phenylketonuria (PKU) is a genetically inherited metabolic disease. PKU was originally discovered by Asbjörn Fölling in 1934, and is caused by the deficiency of phenylalanine hydroxylase (PAH), an enzyme responsible for metabolising the amino acid phenylalanine into
tyrosine in the liver. When the PAH enzyme is inactive, phenylalanine abnormally accumulates in the blood. Since phenylalanine is toxic to brain tissue, infants with PKU develop
mental retardation without appropriate therapy. Those with untreated PKU may also develop
additional symptoms, such as microcephaly, speech disorders, seizures or eczema174. A related genetic disorder, Dihydropteridine reductase (DHPR) deficiency, also causes high
phenylalanine levels. DHPR deficiency is thus sometimes called type-2 phenylketonuria.
Presently only 0.04 to 1 % of the residents in mental retardation clinics have PKU, and this is
probably due to the fact that the disease can be kept under good control by dietary measures.
The treatment consists of a carefully controlled phenylalanine-restricted diet, which should be
started within the first weeks after birth. Most experts suggest that a phenylalanine-restricted
diet should be life-long. It is generally believed that keeping blood phenylalanine levels in the
range of 20 – 60 mg/l is the safest, especially in infancy and early childhood. Frequent blood
monitoring should be done to achieve this goal175. Pregnant women must also be extra careful, because high phenylalanine levels may affect the development of the foetus. In many
countries newborn babies are routinely screened for PKU and the screening seems to be very
effective.
This study deals with the trends in testing of PKU, particularly genetic testing, and aims to
show the economical, social and environmental impacts of the use of new biotechnical products in this area. Although molecular genetics and pathology has been intensively studied for
the PAH gene for almost 40 years, there are still no DNA tests widely available. This is likely
due to lack of consensus about those factors that cause the classical PKU condition.
Phenylketonuria (PKU) is an inborn metabolic disease that can be managed quite effectively
nowadays in the EU and the USA. Once diagnosed, by an effective screening programme
and by confirmatory genetic testing, certain dietary measures can insure a very good quality
of life.
As the global market for neonatal screening for PKU is relatively small (about € 5 million per
year), the overall significance of the impact of PKU testing should be measured more in its
relatively large social impact. An effective screening programme produces a net cost saving
to society, as observed both in the USA and the EU.
As in Europe and the US the efficacy of the newborn screening programmes has been very
high (nearly 100 %), there is not any significant growth of the testing markets in Europe and
the US to be expected in the near future. There is however, some increase in the demand for
carrier testing, as people want to know more and more about their genetic heritage, particularly in the US.
In Asia (particularly China and India) PKU screening programmes are still in their initial stage,
and in this area the larger growth for screening tests will occur, as well as the need for confirmatory genetic testing. Thus, a huge increase in the Asian market may be expected for the
superiorly cost-effective fluorescent test for neonatal screening and this will benefit a few
European firms operative in this arena. Thus, the largest economical impact will be the crea174
175
Centerwall, S. A. and Centerwall, W. R. (2000). Pediatrics 105, 89-103.
http://www.pkunetwork.org/PKU.html
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tion of increased sales of PKU neonatal screening tests in Asia. Evidently, this market may
grow larger than the markets of Europe and the US together. The overall amount of people
directly working with PKU neonatal test production is, however, quite small, and an increase
in sales will not necessarily reflect in a proportionally large increase of jobs.
The environmental impact was not further evaluated, but was not deemed particularly large,
also for the reason of the small volume of reagents used both in screening and genetic testing.
From a genetics point of view, PKU is still a complicated genetic disease, in which phenotype/genotype correlations have been hard to establish. Due to some collaborative efforts in
Europe, however, the situation seems to be brightening. Recently, some 105 known
mutations in Europe have been classified into four clinical phenotypes of the disease, which
can be used as a basis for improving the management of PKU.
As for genetic testing for PKU, it seems that in Europe those activities are still much
performed on a country-to-country basis in centralised (university) hospitals. Some useful
collaborative studies have been performed, pertaining to quality control and
phenotype/genotype correlation, but in general the organisation of genetic testing is still
kaleidoscopic.
Analysis of the results of a targeted questionnaire to about 30 laboratories in Europe active in
genetic testing for PKU gave the following results:
• Most laboratories are publicly funded institutions, with only a few private laboratories.
• Collaboration between the laboratories was surprisingly low: only about half of the labs informed they had cooperation in Europe and one fifth in the US. In PKU testing the cooperation with US was even lower.
• There was great variability in the types of test performed.
• The price of the tests varied greatly.
• The purposes of the test were highly variable, although confirmatory screening was
nearly always on the list.
It was noticed from the inquiry that prenatal screening was mostly decreasing in demand and
carrier testing increasing in demand. This may be related to the fact that a positive diagnosis
of PKU in the prenatal stage is generally not considered a reason for abortion. Instead,
people want to know more about their own mutations, and since there is now some database
for PKU genetic mutations available risks can be reasonably well calculated beforehand. The
effects on reproductive decision-making was, however, reported to be also variable,
according to those institutions at which counselling was performed frequently.
Further progress in the management of the disease is still needed. One point for innovation
would be a home test for phenylalanine. Although the market is small, new fluorescencebased assays could be developed for home testing.
The management of PKU in the US and Europe share a common figure of merit: in both
areas there is a screening efficiency higher than 95 %, and the efficacy of genetic testing is
high. Unexpectedly the prevalence of PKU in the EU was slightly higher as in the US and in
China (1 per 8,321, versus 1 per 15,000 and 1 per 11,000), and the regional differences are
very large.
In the US the newborn screening and confirmatory genetic testing is organised on the statelevel. In the EU the activities are organised by country. The main difference between the EU
and US is that in the US the market for genetic testing is strongly customer-driven, while in
the EU it is more driven by public health institutions and by research programmes. This is parFramework Service Contract 150083-2005-02-BE
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ticularly visible in the trend in carrier testing. In the United States, there are about 120 centres
where PKU monitoring is conducted and for some patients frequent testing can be costly and
inconvenient due to longer distances with travelling. This is probably why the home test has
originally been developed in the US.
As earlier stated, the situation in Asia with PKU testing is quite different from the one in the
US and Europe. In Asia still a good screening and management programme needs to be installed for PKU, and genetic testing facilities are also increasingly needed.
Outlook
In the coming five years the following developments are expected:
The market for neonatal PKU testing will grow rapidly in Asia, more than doubling the sales of
the test kits. Particularly the growing market in India, with a rural population of about 700 million, could be an interesting target for European firms. The Asian markets for neonatal PKU
testing are expected to grow rapidly in the coming five years. Since the metabolic control is
necessary across the lifespan of individuals with PKU there is an increased demand for a
home phenylalanine measuring device.
In the EU and the US there will be more elaborate genotyping of all persons carrying PAH
gene mutations. Carrier testing was clearly noticed in the inquiry as an increasing trend,
which could indicate a similar desire of Europeans, as in the US, to know about their genetic
heritage. The results would have a great impact on initial diagnosis, genetic and management
counselling, follow-up, and long-term prognosis. Additional laboratories capable of performing
genotype analysis will need to be developed. Optimal therapeutic management will also require mutation analysis in the near future. Information about mutation frequency can be useful
for calculating allele frequency and prevalence of PKU also in those countries where the
prevalence is very low (e. g. Finland).
Adoption of new laboratory technologies (e. g. dedicated biochips or POC testing devices)
should be based upon benefits to the screened population, improvements in sensitivity and
specificity of testing, and cost effectiveness. Instrumentation that quantitatively measures
phenylalanine and tyrosine concentrations is beneficial in the early positive identification of
PKU, while reducing the prevalence of false-positive results. Any new laboratory technology
must be thoroughly evaluated and carefully implemented to avoid temporary or long-term
negative effects on established PKU screening programmes176.
Further unification and standardisation in PKU testing is needed in the EU. Due to the huge
amount of mutations observed in the PAH gene, and some problems with targeted mutation
analysis, a standard methodology could be adopted to sequence the whole PAH gene for
each case of PKU found. This, however, would need substantial automation and centralisation.
The US National Institutes of Health conclude in their report177 about the following needs and
requirements concerning the screening and management of PKU:
• A comprehensive, multidisciplinary, integrated system is required for the delivery of care to
individuals with PKU.
• There is some demand for consistency and coordination among screening, treatment, data
collection, and patient support programmes.
• There should be equal access to culturally sensitive, age-appropriate treatment
programmes.
176
(http://consensus.nih.gov/2000/2000Phenylketonuria113html.htm)
Phenylketonuria: Screening and Management. NIH Consensus Statement Online 2000 October 1618; 17(3): 1-27. (See link: http://consensus.nih.gov/2000/2000Phenylketonuria113html.htm)
Page 121 of 315
177
• Ethically sound, specific policies for storage, ownership, and use in future studies of archived samples remaining from PKU testing should be established.
• Research into the pathophysiology of PKU and relationship to genetic, neural, and behavioral variation is strongly encouraged.
• Uniform policies need to be established to remove from the individual and the family financial barriers to the acquisition of medical foods and modified low-protein foods, as well as
to provide access to support services required to maintain metabolic control in individuals
with PKU.
• Research on non-dietary alternatives to treatment of PKU is strongly encouraged (drug
development or gene therapy).
To achieve optimal statistical power, as well as cross-cultural applicability, it will be beneficial
to use data acquired via national and international collaboration.
3.3.4
Summary on impact
Impact of biotechnology in the human health sector is difficult to analyse over a period of time
due to the lack of comprehensive and reliable data. Rough estimations are only possible for
single years from the beginning of 2000. The general trend shows that Europe lags behind
the USA in terms of economic and employment effects. For Japan hardly any information is
available. Considering the economic impact in terms of health-specific revenues out of total
biotech revenues it can be seen that biotechnology revenues in Europe result from a broader
field of applications. Whereas in the USA health-specific revenues account for 87 % of total
biotech revenues, in Europe health-specific revenues account only for 64 % of total biotech
revenues. Considering the share of health-related revenues in total health-specific GDP, the
impact of European biotechnology is 1.45 %, which is only half of the impact in the USA. Here
health care-specific biotechnology contributes to 2.87 % of total health care GDP.
A similar situation can be seen on a company level: Biotechnology accounts for only 1.3 % of
total health production in Europe compared to 2.5 % of US companies' revenues in health
production. The higher economic impact is also reflected in a higher impact on employment.
While biotechnology contributes to 0.4 % of total health sector employment in Europe, in the
USA biotechnology-related staff in the health sector are calculated to reach 1 %.
The case studies have shown different impact of biotechnology depending on the developmental stage of the products. In the case of hepatitis B vaccines the replacement of traditional
production by biotechnological processes has been finalised in the industrialised world in the
early 1990s. The further development now taking place is stepwise innovation within the recombinant products and market development, the latter driven by vaccination policies. Similarly the insulin case showed that replacement of animal insulin by recombinant insulin has
been finalised. The European competitive position isgood, with 2 of the 3 major global
companies coming from Europe (DK and CH). Thus future developmental actitivies are likely
to be shaped by European actors.
Benefits from biotechnological drugs such as interferon are clearly seen by patients and patients organisations as clinical studies show that disability is retarded. However, cost-benefit
studies yield controversial results. Only some of the interferons have a probability of being
cost-efficient. The case of Cerezyme illustrates the benefit of the orphan drugs legislation and
the impact of regulation on adoption of a new technology. The vast bulk of activity in the
orphan drugs area is in the USA, although the EU is now benefiting from the placement of
certain Genzyme manufacturing activity in the EU. The health benefits to the 1,700 patients
receiving the drug are very clear. The case of CD20 antibodies for treatment of NonHodgkin's lymphoma (NHL) illustrates the benefits of antibody treatment in a disease that
causes a heavy burden for Europe. Though currently CD 20 antibodies are produced in the
US there are some employment effects already in Europe. The outlook for CD20 market is
promising and there are some new developments going on in Europe.
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In molecular diagnostics such as cardiac and HIV diagnosis the EU has an established
presence but there are more active companies outside the EU (USA, Switzerland) in this field.
In addition, it would appear that US clinics have been faster to take up cardiac diagnostics
than their counterparts in the EU. In the case of phenylketonuria genetic testing, the economic
impact in terms of screening and testing costs is low due to established biochemical
alternatives. However, efficacy of screening and treatment is very high, thus the PKU
screening and treatment, which is often performed as confimatory screening represents a net
direct cost saving to the society.
4. Modern biotechnology in primary production and agro-food
4.1
Introduction
Modern biotechnology is already making important contributions - and poses significant
challenges - to agriculture, livestock, forestry and fisheries development, and food and fibre
production and processing in general (agro-food). Particularly in the primary production area,
modern biotechnology is applied to develop molecular diagnostics (e. g. for the diagnosis of
plant and animal diseases), new or improved varieties and breeds, and to improve species
propagation (e. g. speeding up breeding programmes for plants, livestock and fish). New tools
are also being developed for traceability, anti-fraud and food safety purposes and for the
measurement and conservation of natural and agricultural genetic resources.
Modern biotechnology tools are also utilised in research, thus generating a wealth of useful
information to the agro-food sector. For example, the genomes of several hundred species,
including mammals, plants, fish, bacteria and viruses, have been or are in the process of being sequenced, and the information generated from genomic studies in other fields, such as
human medicine or basic science, may also be useful for applications in the primary production and agro-food area. Moreover, a vast range of approaches for the improvement of agronomic traits of crops and livestock are under development.
In spite of the large expectations from biotechnology applications in the agro-food area and
the presence of a significant amount of relevant R&D activity, the extent of their actual adoption (e. g. actual use of marker-assisted selection in breeding, the number of diagnostic tests
used in the different agro-food sectors etc.) is not known. For example, in the case of marker
development for diagnostics and marker-assisted selection (MAS), some studies suggest that
despite the potential and considerable resources that have been invested, the expected
benefits in commercial breeding programmes have not been delivered (e. g. uptake of MAS
has been more successful in the case of maize compared to wheat and barley178). However,
other studies analysing EU seed firms179 report an increasing share of R&D budget allocated
to genetic engineering and assisted conventional plant breeding. Similarly, a recent review of
commercial applications of MAS in livestock breeding shows that several gene or marker tests
are commercially available (e. g. for meat quality, growth and milk yield/composition), but also
notes that information on the extent and manner of use as well as the performance is poor 180.
In addition to MAS, advances in artificial insemination (AI) and multiple ovulation followed by
embryo transfer (MOET) have made a major impact on livestock improvement programmes,
178
Koebner, R. (2003): MAS in cereals: Green for maize, amber for rice, still red for wheat and barley.
Paper presented at an international workshop on "Marker-assisted selection: A fast track to increase
genetic gain in plant and animal breeding?" in Turin, Italy, 17-18 October 2003 http://www.fao.org/biotech/Torino.htm.
179
Arundel, A. (2001): Agricultural biotechnology in the European Union: alternative technologies and
economic outcomes. Technology Analysis and Strategic management, Vol. 13, No. 2.
180
Dekkers, J.C.M. (2004): Commercial application of marker- and gene-assisted selection in livestock:
strategies and lessons. Journal of Animal Science, 2004. 82: E313-E328.
Page 123 of 315
as recent data indicate a considerable adoption of in vivo ET and in vitro embryo production
(IVP) around the world181.
Additional biotechnology applications for crops, but also horticultural species, encompass
crop micropropagation and apomixis. The former is now the basis of a large commercial
industry involving hundreds of laboratories around the world, whereas the latter is still at an
experimental phase. Few commercial applications for micropropagation also exist in the area
of forestry. However, the majority of biotechnology activities (i. e. genetic diversity, MAS and
micropropagation) appear to be restricted to the laboratory and some supporting field trials182.
Detailed data on the extent to which modern biotechnologies are adopted by the primary production and agro-food sector is therefore largely unavailable, and the same is true for data on
the related socio-economic consequences for Europe. However, the research carried out on
the primary production and agro-food sectors for this project has given us a much better
appreciation of the extent of application of these technologies than was previously available.
4.2
Scope
The study focuses on applications of modern biotechnology in the primary production and
agro-food sectors, i. e. Agriculture, Horticulture, Forestry, Animal Production, and Fisheries
(including vertebrates and invertebrates)183. This includes the applications of biotechnology
throughout the production chain of food and feed, directly related to primary production (such
as applications used for traceability, food safety, anti-fraud testing, etc.). GM crops are not
included in the study.
The main biotechnology applications fall into the following three categories:
1. Molecular diagnostics
2. Development of new/improved varieties and breeds
3. Propagation
The biotechnology applications considered within these categories are described in the following.
4.2.1
Molecular diagnostics
Biotechnology-based diagnostics are rapidly gaining ground and may be used for a variety of
applications. DNA- and protein-based diagnostics are already being used commercially,
whereas metabolite-based diagnostics are largely in the development phase.
• DNA-based diagnostics:
− Genotyping for individual identification, pedigree verification and in general traceability
and anti-fraud purposes is widely used in the primary production sectors and all along
the food chain.
− Genetic testing for disease traits and specific characteristics are now a common feature
of diagnostic services offered by specialised laboratories.
181
http://www.genesisfaraday.org/downloadables/downloads/GF_Genomics_in_Practical_Cattle_Breeding.pdf
www.iets.org/pdf/data_retrieval/december2004.pdf
182
Preliminary review of biotechnology in forestry, including genetic modification. Forest Resources
Development Service Working Paper FGR/59E, Forest Resources Division FAO, Rome, Italy.
http://www.fao.org/documents/
show_cdr.asp?url_file=/docrep/008/ae574e/ae574e00.htm.
183
National Accounts in Europe;
http://europa.eu.int/comm/competition/mergers/cases/index/nace_all.html.
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− DNA-based diagnostics for the identification of food-borne microbiological pathogens in
the context of quality and safety of food and food products.
− Quantification of genetic diversity for conservation and propagation purposes may also
be based on the use of DNA markers. Such tools are very promising in improving the
management of natural (forestry/fisheries) and agricultural/aquacultural resources.
• Protein-based diagnostics:
Isozymes (also called allozymes) and other proteins are used for identification and genetic
diversity quantification purposes. Protein-based tests are also used for the detection of
plant and animal species in foods, as well as for food-borne pathogens. The use of protein
diagnostics for disease traits is currently under development. Protein-based diagnostics
make use of advanced separation techniques (e. g. electrophoresis), and medium/high
throughput technologies and immunodiagnostics (e. g. ELISA, RIA, etc.).
4.2.2
The development of new or improved varieties and breeds
• Marker-assisted Selection (MAS):
MAS may be viewed as a more complex application of diagnostics, where DNA-based
markers are combined with other tools such as quantitative trait loci (QTL), genetic maps,
high-throughput tools etc. in order to increase the response to conventional selection.
Similar applications include gene-assisted selection (looking at polymorphisms that are in
strong linkage disequilibrium; LD with QTL) and marker-assisted introgression (used to increase the speed or efficiency of introgression).
4.2.3
Propagation of desired genotypes
A wide variety of biotechnologies for propagation exist, with large differences of use for the
different types of organisms. Modern biotechnologies in this section are cell-based.
• Livestock reproduction:
Based on the progress in scientific knowledge during the last fifty years, new biotechnologies have been developed and introduced into animal breeding and husbandry. Among
them are artificial insemination, multiple ovulation induction and embryo transfer (MOET),
embryo/semen sexing, in vitro embryo production (IVP) and cloning by nuclear transfer
(NT). Artificial insemination is long established as a central method of animal reproduction
with an essential role in breeding programmes and genetic dissemination. Technologies
such as embryo transfer and MOET have considerable applications, IVP to a lesser extent,
while cloning and sexing are under development. The aims of these reproductive technologies were initially to speed up the genetic improvements of farm animals by the increase of the number of offspring of selected males and females and the reduction of the
generation intervals. NT is mainly applied for enhancement of the uniformity of herds for
an easier management or for the multiplication of transgenic animals after gene-targeting.
• Fish reproduction:
Sex reversal and ploidy manipulation technologies are beginning to have an impact on fish
reproduction. In the EU, monosex triploid rainbow trout and triploid oysters are already
being cultured. Ploidy manipulation is achieved through applying some kind of shock
shortly after fertilisation (temperature, pressure or chemical), while sex reversal is accomplished through hormonal treatment followed by an appropriate breeding technique. The
objective for sex reversal and ploidy manipulation is mainly to create sterile organisms,
enhance productivity and product quality. Induced spawning based on improved delivery
systems for administration of natural and synthetic hormones has been a key factor enabling the propagation of aquaculture species in captivity.
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• Plant propagation:
For crop and horticultural species, micropropagation is now the basis of a large industry
involving hundreds of laboratories around the world. This section includes vegetative
propagation biotechnologies based on tissue culture such as micropropagation, but also
embryo rescue; plant regeneration from callus and cell suspension; and protoplast, anther
and microspore culture, and in vitro selection which are used particularly for large-scale
plant multiplication. Apart from its rapid propagation advantages, micropropagation can
also be used to generate disease-free planting material and to overcome reproductive
isolating barriers between distantly related wild relatives.
4.2.4
Organisation of research on primary production and agro-food sectors
As indicated in the following sections of this report, the research focused on Adoption Indicators and Impact Indicators. Data on Adoption Indicators were collected (where available)
from published statistics, supplemented by surveys of companies working with relevant technologies and also of public bodies and government agencies. Data on generic Impact Indicators were collected (where available) from published statistics (national and international),
supplemented by ten case studies focusing on companies engaged with modern biotechnologies that are already being marketed, and that are considered representative of the range of
innovations being considered in this report. The published data are very sensitive in this field
and should be interpreted cautiously, not least due to the fact that on the one hand the agrofood sector is rather limited in countries like Sweden, Denmark or Belgium and on the other
hand it often could not be exactly clarified which definition of biotechnology and the agro-food
sector has been used in the published information.
4.3
Adoption of new biotechnology in the primary production and agro-food
sectors
4.3.1
Objectives and description
The objective of this work package is to identify, describe and quantify the adoption of modern
biotechnologies in the agro-food sectors. This includes biotechnology-derived products/services which are already marketed in the EU or in the pipeline. In contrast to human
health applications there are no defined pipeline stages of products to be considered in this
sector. Likewise no databases listing pipelines (comparable e. g. to "PHARMAPROJECTS")
exist. Accordingly we attempted to gather information about pipeline products via interviews
and questionnaires, although we encountered difficulties due either to the confidentiality of the
data or to the fact that companies and public bodies did not discriminate among products on
the basis of their derivation from modern biotechnology. In the context of competitiveness,
information about the origin of biotechnology products, i. e. if they have been developed and
produced in the EU, are included where they are available.
Data were gathered through a combination of desk research, interviews and surveys targeted
at key stakeholders (see annex report methodology, chapter 4 and 5).
Comparisons with relevant non-European countries, particularly the USA and Japan, were
also included.
4.3.2
Adoption indicators - overview
Data collection was structured around a set of output indicators, developed and verified in
Task 1 of the study which showed that there is a "near total lack of data on non GM biotechnology use in agro-food applications". Data collection in this area therefore relied mainly on
surveys of firms and other key stakeholders in the field, although this was complicated by the
short time frame of the study and its extension over the summer period. We attempted to obFramework Service Contract 150083-2005-02-BE
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tain information from selected groups of stakeholders which would allow the derivation of estimates on the extent of adoption in the different applications.
4.3.2.1
Indicators available from public statistics and/or reports
• Number and share of companies in the primary production and agro-food sector active in
biotechnology.
This indicator was elaborated for the whole sector based on available statistics and reports. (From Task 1 of the study, we were aware that such information is available only for
less than 10 countries.)
• Changes in international market shares of European products.
Data for this indicator are available only for total product groups; there are no statistical
data available which differentiate between conventional and biotechnology products.
• Changes in shares of imports in total domestic consumption.
Data for this indicator are available only for total product groups; there are no statistical
data available which differentiate between conventional and biotechnology products.
Where possible, data for the above three indicators were broken down into main application
areas and product groups: wheat, maize, sugar beet etc.
4.3.2.2
Indicators to be elaborated on the basis of surveys and/or interviews
• Hectares and share planted to non-GM biotechnology crops (i. e. MAS) and conventional
varieties.
Based on a survey of seed firms.
• Percentage of seed/eggs/sperm/embryo revenues and shares in terms of weight, revenue
from MAS, and conventional varieties/breeds.
Based on surveys of seed firms and livestock and fish breeding companies.
• Hectares and share planted to crops for food, animal feed, industrial processing, and food
processing.
Based on a survey of seed firms and interviews with associations and public authorities.
• Total production (weight, value) from MAS, and conventional varieties/breeds.
Based on surveys of respective firms.
• Absolute number and shares of labs providing molecular diagnostic services.
Based on a survey of respective labs and associations.
• Absolute number and shares of molecular diagnostic tests available/provided by laboratories.
• Revenues (absolute and shares) of molecular diagnostic tests/services.
• Absolute number and shares (weight, value) of embryos produced through
MOET/IVP/sexing.
Based on a survey of firms in this field.
• Absolute number and shares (weight, value) of fish produced with sex and/or ploidy manipulation.
Based on a survey of firms in this field.
• Absolute number and shares (weight, value) of plants produced through plant tissue culture.
Based on a survey of seed firms and/or specialist horticultural suppliers.
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• Absolute number and shares of molecular diagnostics used in natural resource management and compliance and monitoring.
Based on a survey of respective authorities.
• Absolute number and shares of molecular diagnostics used by processors, wholesalers,
retailers.
Based on the survey of diagnostic labs and associations and interviews with selected foodprocessing companies and large wholesalers and retailers.
These indicators were investigated for the three main application areas - molecular diagnostics, development of new/improved varieties and breeds, and propagation.
A general problem was encountered here with the denominators for the above indicators.
These data are not publicly available and, if we had been able to get reasonable coverage of
the total population of companies from the surveys, we would have been able to estimate values for the denominators at the overall European level from this. However, the response rates
were not sufficiently high to enable us to do this. For many of the above indicators, we therefore have data only for numerators.
4.3.3
Indicators available from public statistics and/or reports
Biotech-active companies in primary production and agro-food (indicator AA1)
Indicator AA1 elaborates the number and share of companies in the primary production and
agro-food sector active in biotechnology. Therefore, the number of companies which are active in the agro-food biotechnology (=numerator) and the total number of companies active in
primary production and agro-food sectors (=denominator) had to be determined.
Data for the nominator were taken from official statistics and reports. Details on the numerator
can be taken from the footnotes included in the corresponding tables. It was only possible to
elaborate the corresponding numbers for 9 EU Member States (namely Belgium, Finland, the
United Kingdom, Denmark, Ireland, Germany, Poland, Sweden, France) for certain years
(mostly 2003). The assessment of data based on a time series is not feasible due to lack of
data. Additionally, the numbers for the USA and Japan were available.
As available data sources allow no differentiation between main application areas and product
groups (e. g. wheat, maize, pigs) this indicator can only be calculated for the entire primary
production/agro-food sector.
Using the statistic databases Eurostat and Statistics Sweden, the corresponding data for the
denominator can be presented for all mentioned EU countries as well as for the EU25. The
numbers of companies active in the primary production and the agro-food sector result from
an aggregation of the numbers of agricultural and horticultural companies, the numbers of
companies active in food processing and the numbers of companies of the input industries
(i. e. producers of feed, fertilisers and pesticides). There were no official statistical data
available regarding the number of seed producers, livestock/aquaculture companies as well
as diagnostic and animal health companies in the different countries (in particular such figures
are not published by Eurostat). As these industries are, however, highly concentrated or
consist of a limited number of companies no huge bias on the results for the indicator has to
be expected. The number of agricultural farms and food processing companies in the USA is
derived from the US Census. However, data for Japan are totally missing. The following
Table 4-1 shows the numbers of biotechnology-active companies in primary production and
food processing in the EU as well as the proportion in relation to all companies active in this
sector. Furthermore, the aggregated 2003 data for the single countries and the resulting
proportion are shown in this table which are regarded to be the best estimator for a figure for
the EU.
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Most companies active in biotechnology in the primary production and the agro-food sector in
the EU are located in Germany followed by France and Denmark. Compared to these countries the remaining EU Member States have relatively few firms which are active in
biotechnology (especially Poland). In contrast, Japan and the USA have a higher number of
companies active in biotechnology which work in primary production and the agro-food sector.
However, considering the whole EU, the total number of firms which are active in
biotechnology and work in primary production and the agro-food sector is higher compared to
the USA and Japan. In order to get comparable data between the differing EU countries the
proportion of firms is the more interesting indicator which is shown in the fourth column of
table 4-1.
Table 4-1:
Number and proportion of companies active in the primary production/agrofood sector (active in biotechnology)
Country (year)
Number of companies active in biotechnology in the
primary production/agrofood sector
Number of companies active in primary production/agro-food sector
Share
Belgium (2000)
17 a) 2)
70,407 5)
0.024
Belgium (2003)
11
b) 1)
62,805
5)
0.017
64
c) 3)
50,490
5)
0.127
22
d) 1)
76,868
5)
0.028
78
e) 1)
Denmark (2003)
Finland (2003)
France (2003)
Germany (2003)
Ireland (2003)
Poland (2003)
Sweden (1997)
Sweden (2000)
Sweden (2003)
United Kingdom (2003)
EU25 (2003)
Total of single EU
countries (data basis
2003) and proportion
f) 1)
149
g) 4)
11
(%)
682,882
5)
0.011
447,767
5)
0.033
135,943
5)
0.008
h) 1)
2,190,312
14
i) 1)
92,493
5)
0.015
20
i) 1)
84,409
5)
0.024
17
i) 1)
5) 6)
0.024
34
j) 1)
2
388
70,942
288,050
5)
5)
10,154,806
4,006,059
0.0001
0.012
5)
0.009
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Table 4-1 continued
Country (year)
Japan (2003)
USA (2001)
primary production/agrofood sector
Number of companies active in primary production/agro-food sector
Share
269 k) 1)
-
-
260
l)
7)
2,155,915
(%)
0.012
Definitions of companies active in biotechnology given in the corresponding reports (see
“Sources”):
a)
Number of companies active in the “Agri-Bio sector” (clear definition not available).
Number of companies active in the “agro-food sector”, which is defined as comprising “agriculture, food and beverages”.
c)
Number of companies active in the biotech applications “animal, plant/agro and food”, which
comprises “firms with core and significant biotech activities as well as biotech users”.
d)
Number of SMEs active in the biotech applications “Agro and Forest” and “Food and Feed”
(clear definition not available).
e)
Number of companies active in the “agri-food sector”, which are active in biotechnology R&D.
f)
Number of companies active in “Green Biotechnology” (defined to cover agricultural and food
biotech), which comprises “core biotech firms, core biotech firms and suppliers and large life
science firms”.
g)
Number of companies active in the “agri-food sector” (clear definition not available).
h)
Number of companies active in “Agriculture and Food processing” (clear definition not available).
i)
Number of companies active in the biotech applications “agrobiotech” and “biotech food”
(clear definition not available).
j)
Number of companies active in the biotech applications “Agricultural and Marine” (clear definition not available).
k)
Number of companies active in “Agriculture, Forestry and Fisheries” and “Food or Drink
Manufacturers” (clear definition not available).
l)
Number of companies active in the biotech applications “Agriculture and Aquaculture/Marine”
and “Industrial and Agricultural-Derived” (clear definition not available).
Sources:
1)
Van Beuzekom, B.; Arundel, A. (2006): OECD Biotechnology Statistics – 2006.
2)
LUC; ULg; Vlerick Management (2004): Report on the national Biopharma innovation system
of Belgium. Report to the Federal Science Policy Office.
3)
Biotechnology in Denmark: A Preliminary Report.
4)
InterTradeIreland (2003): Mapping the Bio-Island – A North/South study of the private bio
technology sector.
5)
Eurostat (2006): http://epp.eurostat.ec.europa.eu. Call date 27/06/06.
6)
Statistics Sweden (2006): http://www.scb.se/indexeng.htm. Call date 08/08/06.
7)
Agricultural Census (2002): http://www.nass.usda.gov/Census_of_Agriculture/index.asp. and
http://www.census.gov. Call date 03/07/06.
b)
Regarding the proportion of companies active in biotechnology in the primary production and
the agro-food sector, there is a range of 0.0001 % in Poland up to 0.127 % in Denmark. The
quite low percentages in each of the considered EU countries can be explained by the data
structure. For the nominator basically data of core biotechnology producers are considered,
whereas the denominator mainly consists of thousands of firms which are partly applying
these technologies, like e. g. the agricultural companies for which it is, however, unknown to
what extent they use biotechnology (e. g. artificial insemination of pigs). Denmark shows a
relatively high proportion of biotechnology companies active in primary production/agro-food.
This can be partly explained by the fact that in this country more privatisation has taken place
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than in other EU Member States which results in more private firms which are active in
biotechnology in the field of agro-food and primary production. The low share of companies
for Poland results from the huge number of often small-scaled Polish agricultural farms. The
relatively low proportion in the United States can not directly be compared with the data of the
EU countries as for the denominator the number of companies of the input industries and of
the food processing are totally missing. On the other hand, the inclusion of these companies
would not increase the denominator considerably because by far most companies are in
primary production.
Agricultural farmers mostly do neither research in the field of biotechnology nor directly apply
different biotechnology methods. They use seed, plants and livestock which might be developed with the help of biotechnology methods (e. g. by means of MAS). Furthermore, even if
biotechnology-related techniques are applied, e. g. for artificial insemination of pigs, it is often
unknown to which extent farmers use these techniques. As therefore farmers are mainly supposed to be biotech users the following Table 4-2 shows the numbers of companies active in
primary production and food processing without agricultural farms in the EU and the corresponding proportion of companies active in biotechnology in this sector.
Table 4-2 shows a range of proportion of companies active in biotechnology in the primary
production and the agro-food sector between 0.011 % in Poland and 3.404 % in Denmark.
The exclusion of agricultural farms in the denominator leads to an increase of the shares in all
considered countries. The proportion most strongly increased in Denmark, Finland and Ireland. In these countries a relatively high number of agricultural farms are located, compared
to companies active in the agricultural input industries and food processing. Thus the
exclusion of agricultural farms strongly increases the proportion of firms active in
biotechnology. In contrast the increase of this proportion was rather low in Belgium, France
and Poland (Table 4-2).
Table 4-2:
Country (year)
Number and proportion of companies active in the primary production/agrofood sector (active in biotechnology) – without agricultural farms
primary production/agro-food sector
Number of companies active in primary
production/agro-food
sector
(without agriculture)
Share
Belgium (2000)
17 a) 2)
8,697 5)
0.195
+ 0.171
Belgium (2003)
11
b) 1)
7,865
5)
0.139
+ 0.122
64
c) 3)
1,880
5)
3.404
+ 3.277
22
d) 1)
1,918
5)
78
e) 1)
Denmark (2003)
Finland (2003)
France (2003)
Germany (2003)
Ireland (2003)
Poland (2003)
Sweden (1997)
Sweden (2000)
Sweden (2003)
United Kingdom
(2003)
68,882
5)
f) 1)
35,467
5)
g) 4)
5)
149
11
2
h) 1)
14
i) 1)
20
i) 1)
17
i) 1)
34
j) 1)
693
18,102
5)
(%)
Difference of
share (excluding
and including
agriculture in
denominator)
(Tables 4-2/4-1)
1.147
+ 1.119
0.113
+ 0.102
0.420
+ 0.387
1.587
+ 1.579
0.011
+ 0.011
2,913
5)
0.481
+ 0.466
2,999
5)
0.669
+ 0.645
5) 6)
0.557
+ 0.533
5)
0.458
+ 0.446
3,052
7,420
Page 131 of 315
Table 4-2 continued
Country (year)
EU25 (2003)
Total of single
EU
countries
(data
basis
2003)
primary production/agro-food sector
Number of companies active in primary
production/agro-food
sector
-
284,216 5)
388
145,279
Share
(%)
0.267
Difference of
share (excluding
and including
agriculture in
denominator)
(Tables 4-2/4-1)
+ 0.258
Definitions of companies active in biotechnology given in the corresponding reports (see “Sources”):
a)
Number of companies active in the “agri-bio sector” (clear definition not available).
Number of companies active in the “agro-food sector”, which is defined as comprising “agriculture, food and
beverages”.
c)
Number of companies active in the biotech applications “animal, plant/agro and food”, which comprises
“firms with core and significant biotech activities as well as biotech users”.
d)
Number of SMEs active in the biotech applications “Agro and Forest” and “Food and Feed” (clear definition
not available).
e)
Number of companies active in the “agri-food sector”, which are active in biotechnology R&D.
f)
Number of companies active in “Green Biotechnology” (defined to cover agricultural and food biotech), which
comprises “core biotech firms, core biotech firms and suppliers and large life science firms”.
g)
Number of companies active in the “agri-food sector” (clear definition not available).
h)
Number of companies active in “Agriculture and Food processing” (clear definition not available).
i)
Number of companies active in the biotech applications “agrobiotech” and “biotech food” (clear definition not
available).
j)
Number of companies active in the biotech applications “Agricultural and Marine” (clear definition not available).
b)
Sources:
1)
LUC; ULG; Vlerick Management (2004): Report on the national Biopharma innovation system of Belgium.
Report to the Federal Science Policy Office.
3)
Biotechnology in Denmark: A Preliminary Report.
4)
InterTradeIreland (2003): Mapping the Bio-Island – A North/South study of the private bio technology sector.
5)
6)
2)
International market shares of European products (indicator AA2) and shares of imports in European domestic consumption (indicator AA3)
Indicators AA2 and AA3, to be collected from public statistics and/or reports, relate to
changes in international market shares of European products (AA2) and changes in shares of
imports in total domestic consumption (AA3) for a range of European crops and animal products, with the aim of providing information about European competitiveness in the agro-food
area.
As indicated in Report 1, for these two indicators, no statistical data are available which distinguish between conventional and biotechnology products. We therefore cannot use such
data to determine the role of modern biotechnology in contributing to competitiveness. The
case studies and surveys conducted for this work package will however contribute to an
assessment of this role.
Page 132 of 315
The two Adoption Indicators AA2 and AA3 are specified as follows:
AA2:
Numerator - Market value (€) of the top 10 European products from the agro-food sector;
Denominator – Total world market value for the same products.
AA3:
Numerator – Value (€) of European imports in the agro-food sector;
Denominator – Value (€) of total European consumption in each product group.
For both indicators, data were not available to allow calculations to be made on the basis of
values in €. Available statistics are generally expressed in terms of metric tonnes, and the
data that are available on crop prices are difficult to match to the tonnage data on a consistent
basis.
Tables 4-3 and 4-4 give the EU share of world production of seven crops and three meat
products (Indicator AA2) for the period 2000-2005. Tables 4-5 and 4-6 give the total European
domestic consumption of the same range of crops and meat products (Indicator AA3) for the
period 2000-2005. All data are presented in metric tonnes. Data on EU production, consumption and imports are taken from Index Mundi World Fact Book184; Data on world production of
crops and animal products are taken from the FAOstat website185. All data refer to the EU25.
Table 4-3:
Barley
Corn
Oats
Rapeseed
Rye
Soft wheat
Barley
Corn
Oats
Rapeseed
Rye
Soft wheat
Barley
Corn
Oats
Rapeseed
Rye
Soft wheat
184
185
EU share of world production – agricultural crops – indicator AA2
EU Production
2000
2001
2002
2003
2004
2005
58,816,000
56,962,000
56,509,000
54,826,000
61,753,000
53,122,000
44,529,000
50,142,000
49,360,000
39,876,000
53,478,000
48,318,000
8,383,000
8,091,000
9,280,000
8,623,000
8,755,000
7,517,000
11,288,000
11,483,000
11,652,000
11,174,000
15,336,000
15,411,000
10,203,000
11,891,000
9,190,000
6,907,000
9,966,000
7,671,000
124,197,000
113,553,000
124,829,000
106,878,000
136,774,000
122,590,000
World Production
2000
2001
2002
2003
2004
2005
133,117,156
144,091,823
141,158,538
142,971,114
153,830,140
137,302,263
592,606,728
614,735,171
603,163,668
642,711,958
724,515,133
694,575,552
26,111,589
27,320,605
25,483,516
26,924,402
25,827,513
23,972,508
39,515,161
35,929,748
34,249,210
36,614,168
46,171,103
46,409,830
20,113,216
23,338,518
20,949,725
14,611,908
17,650,366
15,605,370
586,059,624
590,026,606
574,392,263
561,121,913
629,872,877
628,101,035
EU share of World Production
2000
2001
2002
2003
2004
2005
0.442
0.395
0.400
0.383
0.401
0.387
0.075
0.082
0.082
0.062
0.074
0.070
0.321
0.296
0.364
0.320
0.339
0.314
0.286
0.320
0.340
0.305
0.332
0.332
0.507
0.510
0.439
0.473
0.565
0.492
0.212
0.192
0.217
0.190
0.217
0.195
http://www.indexmundi.com/en.commodities/agricultural (accessed on 01/07/06)
http://faostat.fao.org/ (accessed on 01/07/06)
Page 133 of 315
Table 4-4:
EU share of world production – meat products – indicator AA2
Beef and veal
Swine
Poultry meat:
broiler
Beef and veal
Swine
Poultry meat:
broiler
Beef and veal
Swine
Poultry meat:
broiler
EU Production
2000
2001
8,224,000
8,084,000
20,717,000
20,427,000
2002
8,145,000
20,938,000
2003
8,061,000
21,150,000
2004
8,007,000
21,192,000
2005
7,770,000
21,200,000
7,606,000
7,788,000
7,512,000
7,627,000
7,625,000
World Production
2000
2001
56,950,613
56,147,726
90,094,832
92,081,267
2002
57,816,924
95,248,542
2003
58,512,252
98,472,599
2004
59,713,839
100,482,512
2005
60,239,448
102,523,358
69,191,731
75,108,338
76,636,213
79,164,879
81,004,823
EU share of World Production
2000
2001
2002
0.144
0.144
0.141
0.230
0.222
0.220
2003
0.138
0.215
2004
0.134
0.211
2005
0.129
0.207
0.110
0.098
0.096
0.094
7,883,000
71,934,674
0.110
0.104
For Indicator AA3 (Tables 4-5 and 4-6) we have focused only on the quantity of European
consumption (the denominator). Figures for the quantity of imports are available on the Index
Mundi database, but for most products a considerable amount was also exported. Thus, for
barley in 2000, 54,867K were consumed, 1.123K MT were imported, and 7,685K MT were
exported. The figures vary across products and across years, depending in part on the broad
range of factors that affect crop and animal production, including variation in crop yields per
hectare achieved from year to year. Thus, “quantity of EU imports/quantity of EU consumption” would not give a reliable indication of EU self-sufficiency in an agricultural product.
Table 4-5:
Barley
Corn
Oats
Rapeseed
Rye
Soft wheat
EU domestic consumption – crops – indicator AA3
EU total domestic consumption
2000
2001
2002
54867000
53871000
54400000
48158000
50508000
49526000
7745000
7420000
8287000
11279000
11051000
11215000
9425000
10169000
9310000
111094000
110100000
118100000
Table 4-6:
Beef and veal
Swine
Poultry meat:
broiler
2003
56877000
46814000
8276000
11267000
8700000
107900000
2004
52900000
52500000
8330000
14255000
10075000
115200000
2005
52500000
49600000
7450000
15631000
8600000
119500000
EU domestic consumption – meat products – indicator AA3
EU total domestic consumption of meat products
2000
2001
2002
2003
8,106,000
7,658,000
8,187,000
8,315,000
19,242,000 19,317,000 19,746,000 20,043,000
2004
8,292,000
19,773,000
2005
8,145,000
19,839,000
7,007,000
7,280,000
7,370,000
7,359,000
7,417,000
7,312,000
As noted above, indicators AA2 and AA3 were developed with the aim of providing information about European competitiveness in the agro-food area. There are no clear trends over
the period 2000-2005 covered by the data presented here. Even with a longer time series (for
Page 134 of 315
which data are available on the Index Mundi and FAO databases) it would not be valid to
draw conclusions about European competitiveness from this type of data.
Annual area of crops planted depends partly on the previous year’s market prices which, in
most case, are distorted by the EU Common Agricultural Policy (CAP). Crop yields also vary
greatly from year to year due to variable weather patterns, the varieties planted, pest and disease incidence and the use of fertilisers and pesticides, all of which confuse the interpretation
of data based on tonnage of crops produced. A similar range of factors influences animal production. Even if we had been able to collect data based on prices and to express Indicators
AA2 and AA3 in terms of market value, as originally intended, this would not directly reflect
the relative competitiveness of the EU – such figures are very dependent on global balance of
production and demand in any one year (leaving aside the distorting influence of the CAP)
and this balance is influenced indirectly by the levels of prosperity (and hence the demand for
meat products) in heavily populated developing countries like China, India and Brazil.
Given these difficulties in collecting and interpreting data for these two indices, we conducted
a brief literature search based on the keywords ‘Europe’ ‘agriculture’, ‘competitiveness’ and
‘biotechnology’ using Google Scholar, and we also searched Nature Biotechnology and the
Proceedings of the US National Academy of Sciences. Articles dealing with biotechnology
referred almost exclusively to GM crops and we ignored those since GM crops are not within
the scope of the study.
From the numerous articles that emerged from this search, many dealt with the global competitiveness of European agriculture or with the relative competitiveness of different European
nations (particularly the new accession countries), but very few included any quantitative data
to support their assertions. This confirms our initial impression of the difficulty of answering
such questions from the currently available statistics. None of the articles found dealt with the
role of modern biotechnology (other than GM crops) in contributing to competitiveness.
The following four articles were the most relevant to the questions addressed by these indicators. We have noted the main conclusions of each article and where relevant quantitative
data were included in the article, we have reproduced these below.
1. ‘CAP Reform, competitiveness and sustainability’186
This paper relates to Franz Fischler’s proposals for the further reform of the CAP to
achieve a competitive and profitable agricultural industry that is also ecologically and environmentally stable. The qualitative analysis concludes that the reform’s objectives are irreconcilable and that ultimately policy-makers will have to choose between a competitive
industry and the protection of smaller farm businesses. No supporting data provided.
2. ‘The international competitiveness of CEEC agriculture’187
The paper surveys the price competitiveness of agricultural production in central and
eastern European Countries (CEECs), on the basis of domestic resource cost ratios. It
identifies that in general CEEC crop production is more internationally competitive than
livestock farming.
3. ‘The economic challenge for Europe: adapting to innovation-based growth’188
Data based on the TSER Project ‘Technology, Economic Integration and Social Cohesion’
compares European performance across innovation areas in general to that of US and
Asian countries. It includes the following data on Agricultural and Raw Material Products
(ratio of national exports to world exports, %; based on UN and OECD data from the SIE
World Trade database). Interpretation of this indicator should be subject to a similar de-
186
Sean Rickard (2004) CAP Reform, competitiveness and sustainability. Journal of the Science of
Food and Agriculture, 84, 745-756
187
M. Gordon and S. Davidova (2001) The international competitiveness of CEEC agriculture. The
World Economy, 24(2), 185-200
188
J. Fagerberg, (undated) The economic challenge for Europe: adapting to innovation-based growth.
Centre for Technology, Innovation and Culture, Oslo ([email protected])
Page 135 of 315
gree of caution to AA3 above – in the absence of information about the quantity imported
and other factors leading to annual variations in the quantities produced.
Table 4-7:
Agricultural and raw material products, % of national exports compared to
world exports
Agricultural and Raw Material Products
Europe (15)
USA
Japan
Asian NICs
1970
24.1
1988
30.3
1995
31.6
Change 1970-95
7.5
1970
13.1
1988
13.4
1995
11.0
Change 1970-95
-2.1
1970
1.2
1988
1.1
1995
1.4
Change 1970-95
0.2
1970
2.0
1988
2.6
1995
3.4
Change 1970-95
1.4
At least up till 1995, these data imply that Europe (EU15) may have been increasing its market share for agricultural and raw material products compared to other major producing regions of the world.
4. ‘The competitiveness of agricultural products in world trade and the role of the European Union’189
This paper presents a quantitative analysis of the distribution of the costs and benefits
from market liberalisation and how trends in competitiveness and agricultural specialisation in the EU compare to world trends. It deals with agricultural products as a whole and
does not differentiate between them.
Among other things, the introduction to this paper confirms the points we made above, that
prices have played an important role in the position of the agricultural sector in foreign
trade, as have reduction of import demand in East and Southeast Asia and climatic variation.
In 2000, western Europe (due to lack of data, w. Europe is a proxy for the evaluation of the
EU position in global trade) remained the largest exporter of agricultural products (Table 48) and the major exporters of agricultural products also tended to be the major importers.
The paper also provides data on agricultural export and import flows by region (Tables 4-9
189
M. Sassi (2003) The competitiveness of agricultural products in world trade and the role of the European Union. Paper presented at the International Conference on Agricultural Policy Reform and the
WTO: where are we heading?, Capri, Italy, June 23-26, 2003.
Page 136 of 315
and 4-10). These data demonstrate the important role of intra-regional markets for both
exports and imports.
Table 4-8:
World agricultural exports by region (percentage) and standardised balance
(billion dollars) 1990-2000
North America
Latin America
Western Europe
C/E Europe
Africa
Middle East
Asia
World
Export
19.76
9.60
45.20
3.06
3.92
1.06
17.38
100.00
1990
Import
11.14
3.85
50.67
5.12
3.77
3.69
21.75
100.00
SB
27.91
42.70
-5.70
-25.23
2.04
-55.30
-11.16
Export
16.63
5.64
38.36
4.26
2.27
4.13
28.72
100.00
2000
Import
15.05
5.58
43.92
4.43
3.26
3.54
24.22
100.00
SB
11.60
35.89
-3.10
-2.20
0.27
-53.15
-11.32
Source: based on WTO (2001)
Table 4-9:
Growth in agricultural import flows by region – 1990-2000 (percentage)
North America
Latin America
Western Europe
C/E Europe
Africa
Middle East
Asia
North
America
5.01
12.05
-18.05
-2.63
-40.10
3.57
-6.29
Latin
America
3.45
33.26
-40.58
-79.54
128.94
-24.00
-26.66
Western
Europe
-24.15
18.11
1.92
-1.81
-10.29
-16.00
2.52
C/E
Europe
-72.27
-69.71
49.96
319.23
17.40
-51.09
-57.94
Africa
4.73
53.57
-14.80
17.77
-19.57
46.87
38.14
Middle
East
-8.12
21.19
-17.43
102.29
27.57
56.21
0.99
Asia
-23.96
42.18
8.89
67.83
-8.39
100.00
8.78
Table 4-10:
Growth in agricultural export flows by region – 1990-2000 (percentage)
North America
Latin America
Western Europe
C/E Europe
Africa
Middle East
Asia
North
America
47.6
27.04
21.16
-5.05
-2.82
34.34
14.02
Latin
America
55.79
56.57
5.52
-78.70
300.0
1.89
-4.10
Western
Europe
-31.59
-16.96
-3.36
-38.57
-6.84
-28.50
-19.98
C/E
Europe
-75.05
-78.73
42.20
161.63
21.87
-58.53
-67.73
Africa
-5.66
7.90
-19.26
-26.35
-16.11
24.12
7.38
Middle
East
-8.51
-5.51
-13.24
39.87
46.28
46.99
-12.81
Asia
-11.91
28.57
49.53
35.31
22.25
116.11
10.03
The Relative Trade Advantage (RTA) analysis developed in this paper for 1990-2000 provides preliminary indications of the net competitive advantage in agricultural trade for Latin
America and North America (Figure 4-1). Alternatively, Western Europe and Asia, the two
main exporters and importers, together with the remaining geographic regions, show a competitive disadvantage. Nevertheless, from 1990-2000 the two American regions show a loss in
competitiveness, while the others show an improvement. The net agricultural trade disadvantage in Western Europe and Africa also reduces, contrary to what one would conclude
from the deterioration of their relative position in world trade.
Page 137 of 315
Figure 4-1:
Relative trade advantage index by region 1990-2000
4.3.4
Indicators elaborated on the basis of surveys and interviews - molecular
diagnostics
Biotechnology-based diagnostics may be used for a variety of applications, such as genotyping, traceability, identification of disease traits, quantification of genetic diversity, and detection of pathogens in foods (see Section 4.2.1 above). DNA- and protein-based diagnostics are
already being used commercially, whereas metabolite-based diagnostics are largely in the
development phase.
The following indicators were relevant to companies operating in this area:
• Number and shares of labs providing molecular diagnostic services
• Number and shares of molecular diagnostic tests available/provided by laboratories
• Revenues (number and shares) of molecular diagnostic tests/services
We attempted to obtain data on uptake of biotechnology-based diagnostic tests by food companies (food producers and retailers) and organisations involved in natural resource management, by asking the companies producing such tests how much of their market was in
these areas:
• Total revenue from molecular diagnostic tests and services sold to food processors,
wholesalers and retailers
•
% of revenue from selling molecular diagnostic tests and services to food processors,
wholesalers and retailers
• Total revenue from molecular diagnostic tests and services sold to organisations involved
in natural resource management
•
% of revenue from selling molecular diagnostic tests and services to organisations involved in natural resource management
A review of materials available publicly showed that much more is written about the technologies emerging in this area than about the uptake or impact of uptake of such technologies.
Potential sources of information include the following:
a) Towards Livestock Disease Diagnosis and Control in the 21st Century.
STI/PUB/1023 (602 pp.; 70 figures; 1998) ISBN 92-0-102498-3, FAO/IAEA,Vienna
(1998).
Page 138 of 315
These are the proceedings of a symposium on Diagnosis and Control of Livestock
Diseases Using Nuclear and Related Techniques jointly organised by the IAEA and
FAO, Vienna, in 1997. The purpose of the symposium was to consider the application
of science to livestock production as a complex of socioeconomic problems. It dealt
not only with the impact of developments in serology and molecular biology, but also
with questions of epidemiology, vaccines, information networks, geographical information systems and socioeconomic factors.
b) Book of Extended Synopses.IAEA-CN-110. Vienna 2003.
This is a report on the FAO/IAEA International Symposium on Applications of GeneBased Technologies for Improving Animal Production and Health in Developing
Countries held in Vienna, Austria in October 2003.
c) Applications of Gene-Based Technologies for Improving Animal Production and
Health in Developing Countries. Edited by Harinder P.S. Makkar and Gerrit J. Viljoen.
This is a compilation of peer-reviewed scientific contributions from authoritative researchers attending an international symposium convened by the Animal Production
and Health Sub-programme of the Animal Production and Health (APH), Joint
FAO/IAEA Programme in cooperation with the Animal Production and Health Division
of the FAO.
These Proceedings contain invaluable information on the role and future potential of
gene-based technologies for improving animal production and health, possible applications and constraints in the use of this technology in developing countries and their
specific research needs.
d) Molecular Diagnostic PCR handbook. Edited by Gerrit J. Viljoen, Louis H. Nel and
John R. Crowther.
This book gives a comprehensive account of the practical aspects of PCR. The difficulties, advantages and disadvantages in PCR applications are explained and placed
in context with other test systems.
Data collection in this area proved to be even more difficult than for other surveys. Commercial companies were unwilling to share data – information relevant to the above indicators
was regarded as ‘commercial in confidence’. Publicly available data were not detailed enough
to be relevant to this analysis.
Questionnaires were sent to the following actors:
• Thirty nine organisations, including 13 industry-related organisations, two consumer-related organisations, three environmental lobby groups, one farming union representative
group, two organisations with interests in animal welfare, one forestry-related group, 2
government bodies, 3 associations/agencies, and 4 science-based organisations;
• Twenty four companies.190
190
This sample covers all major actors in the field. However as thereares a number of very small
diagnostic companies not listed in any directory, a 100 % coverage of the actors goes beyond the scope
of this project.
Page 139 of 315
Only one questionnaire was returned from this survey, giving the following information:
Table 4-11:
Results from survey on molecular diagnostics
Within the EU
Outside the EU
Total revenues from all activities
€50.77 million
(US$ 65 million )
€ 50.77 million
(US$ 65 million )
Total number of employees in the company that are focused on biotechnologyrelated production
80
50
(a) Number of different molecular diagnostic tests and services provided by
your company
70
70
(b) % of the total diagnostic tests and services provided by your company that are
in the “molecular” category
100 %
100 %
(c) Number of different molecular diagnostic tests and services that you sell to
food processors, wholesalers and retailers
10
10
(d) Number of different molecular diagnostic tests and services that you sell to
organisations involved in natural resource
management
10
10
Total revenue from molecular diagnostic
tests and services sold to food processors, wholesalers and retailers
€ 7.62 million
(US$ 9.75 million)
€ 7.62 million
(US$ 9.75 million)
% of revenue from selling molecular diagnostic tests and services to food processors, wholesalers and retailers
15 %
15 %
% of revenue from selling molecular diagnostic tests and services to organisations involved in natural resource
management
<1%
<1%
Number of laboratories providing molecular diagnostic tests and services
3000
3500
In the above table, we have assumed that the figure for ‘Total Revenues from all Activities’
(€ 50.77 million is the global figure for this company and that they are not able to differentiate
between revenues within and outside the EU.
This company was active in the following European countries:
Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,
Malta, the Netherlands, Portugal, Spain, Sweden and the UK.
In the rest of the world it was active in Asia, Australia, Canada, China, Latin America and the
USA.
Page 140 of 315
4.3.5
management, compliance and monitoring and by processors, wholesalers
and retailers
Two different approaches were adopted to obtain information on these two indicators:
1.
Surveys of these two sets of potential users, (i) in natural resource management and
compliance monitoring and (ii) by processors, wholesalers and retailers, to derive estimates of: the number of molecular diagnostic techniques used (numerator); and the
total number of diagnostic techniques used (denominator).
2.
In addition, in an attempt to gather additional information, questions were included in
the above survey of labs and associations employing molecular diagnostic techniques,
to assess how many of their customers were in these categories.
4.3.5.1
management, compliance and monitoring
We discussed the adoption of new biotechnology-related diagnostic tests in natural resource
management and compliance monitoring with Dr. John Baxter, Director of Habitats and Species Division of Scottish Natural Heritage (SNH), the main body charged with protection of
natural resources and the natural environment in Scotland. He confirmed that SNH are currently commissioning research to develop molecular tests to distinguish, for example, between closely related species only one of which is regarded as being in need of special protection, but that no such tests are currently commercially available in Europe. His opinion was
that such tests were likely to remain available only as specialist research services because of
the very limited market for each test.
We undertook a further investigation to confirm whether Dr. Baxter’s views are shared with
experts in other countries and are reflected in available reports.
The indications are that no commercial tests191 are available in the EU which distinguish between plant and animal species or materials. However, the following published papers and
reports are available, with information on the use of genetic markers to evaluate the genetic
diversity of a population: La Scala et al. (1999)192 Scotti et al. (1999)193 and Schubert et al.
(2001)194. Primmer (2005)195 also gives examples of how molecular diagnostics is useful in
fish management and conservation.
Interviews with representatives of international conservation bodies (such as the WWF and
the IUCN), have confirmed that their conservation projects are based on information released
from research bodies. Further contact with scientists in Finland,and Germany who are currently involved in the development of such genetic markers, or who were involved in the past,
have indicated that such tests cannot be standardised, as for each species involved, markers
191
Note that this project was asked to exclude any activities that were entirely one-off research based
projects.
192
Sabina La Scala, Roland Schubert, Gerhard Müller-Starck, Klaus Liepe (1999) Nuclear
microsatellites as a tool in the genetic certification of forest reproductive material. A case study in sessile
oak (Quercus petraea, Matt.,Lieb.). http://webdoc.gwdg.de/ebook/y/1999/whichmarker/m07/Chap7.htm
193
Ivan Scotti*, Gianpaolo Paglia, Federica Magni, Michele Morgante (1999) Microsatellite markers as a
tool for the detection of intra- and interpopulational genetic structure.
http://webdoc.gwdg.de/ebook/y/1999/whichmarker/m08/Chap8.htm
194
R. Schubert · G. Mueller-Starck · R. Riegel (2001) Development of EST-PCR markers and monitoring
their intrapopulational genetic variation in Picea abies (L.) Karst. Theoretical and Applied Genetics
103:1223–1231
195
CR. Primmer (2005) Genetic characterisation of populations and its use in conservation decisionmaking in fish. http://www.fao.org/BIOTECH/docs/primmer.pdf
Page 141 of 315
have to be designed, and so there are no commercially available test kits. Scotti et al.
(1999)196 reported that the development of new markers is not an easy process and is potentially time-consuming and expensive. This paper alludes to the unavailability of commercial
test kits and suggests that markers should be developed by research laboratories.
Information from the above survey respondent (Section 4.3.4) confirms this impression.
4.3.5.2
Numbers and shares of molecular diagnostics used by processors, wholesalers and retailers
Initial investigations for this indicator suggested that wholesalers are unlikely to be major users of diagnostic techniques and tests, as they rarely monitor the quality of materials passing
through their hands. This is usually the responsibility of either processors or retailers. We
therefore concentrated on food processing companies, and major supermarket chains.
For this area, the use of molecular diagnostics concerned mainly food assurance: traceability
of foodstuffs, such as identifying where animals/plants came from and if they were what they
were advertised to be (but not including GMOs in the food chain); as well as detecting of
chemical and microbial contamination. In some cases, molecular diagnostics were also used
in detection of allergens.
Processors
Five big food processing companies were contacted, with four surveyed. The figures from the
processing company are unavailable, with one confirming that no molecular diagnostic techniques were used, and another indicating that such testing was contracted out to specialist
laboratories. Of the other two, molecular diagnostic tests were used in their manufacturing
process, but this information was classified.
Retailers
Twelve supermarkets in the EU were contacted for interviewing. Of these, three responded,
the main problem in carrying out this survey being the language barrier. Where possible English-speaking branches were contacted, otherwise e-mail contact was made with the supermarkets.
It was determined that, in general, retailers tend to contract out most of their diagnostic testing
work to specialist laboratories, with very little testing being done in house. The specialist laboratories were not able or willing to place an exact figure on the amount of testing done or the
cost of the tests, although they used a range of molecular techniques, in chemical analysis,
microbiological testing and allergy testing, as well as using rapid test kits for products with
short shelf-life.
For retailers that did perform in-house testing, this was estimated to be less than 10 % of all
their diagnostic techniques, and very likely less than 1 %, in most areas. One retailer reported
that it does carry out allergen testing, using molecular techniques, and this represented
approximately 5 % of its overall testing work.
In summary, there is very little data available for the number of molecular diagnostic tests
used by processors and retailers. From the interviews, the estimated figure is at most 10 %
for retailers, but not determinable for processors.
196
Ivan Scotti*, Gianpaolo Paglia, Federica Magni, Michele Morgante (1999) Microsatellite markers as a
tool for the detection of intra- and interpopulational genetic structure.
Page 142 of 315
From the above survey return from a company developing molecular diagnostic tests (Section 4.3.4), it was estimated that 15 % of total revenues (probably not distinguished within and
outwith the EU) arose from selling molecular diagnostic tests and services to food processors,
wholesalers and retailers and that there are 3000 laboratories providing such services inside
the EU and 3500 outwith the EU.
4.3.6
Indicators elaborated on the basis of surveys and interviews - new varieties and breeds and their propagation: livestock
Table 4-12:
Phenomena analysed for livestock propagation
Phenomenon
Impact of biotechnology
(MAS) on production
Indicator
Numerator
Denominator
Percentage of seed/
eggs/sperm/embryo
turnover and shares in
terms of weight, revenue
from MAS, and conventional varieties/breeds
Value (€) of revenues
arising from MAS eggs,
sperm and embryos in
livestock breeding firms,
within Europe and exported
Total value (€) of revenues
from livestock breeding
firms (eggs, sperm,
embryos) within Europe
and exported.
Total production (weight,
value) from MAS, and
conventional varieties/breeds
Total value (€) of
European revenues from
adult animals arising from
MAS
Total value (€uro) of European revenues from the
same groups arising from
conventional breeding
Absolute number and
shares (weight, value) of
embryos produced
through MOET197/
IVP198/sexing
Number and value (€) of
embryos produced
through MOET/IVP/sexing
by firms surveyed
Total number and value of
embryos produced by
firms surveyed.
The intention, as described in Table 4-12, was thus to report: (in the first indicator) the value
of MAS sales from gametes (numerator) as a % of total sales of gametes (denominator); and
(in the second indicator) the value of MAS sales of animals (numerator) compared with the
value of conventional sales of animals (denominator).
However, we were not able to provide these values from the available data. As indicated in
the following table we were able to provide:
a) value of MAS livestock+gametes / total sales
b) values of MAS livestock+gametes / conventional sales
Survey Responses
Sixteen responses were obtained and analysed (from 15 groups). These represented returns
from the following groups:
• Pig Breeders: 3
• Cattle Breeders/Associations: 8 (inc. one ET organisation)
• Poultry Breeders: 2
• Sheep Breeders/Associations: 1
• Intermediate Organisation: 1 (two returns)
Nine of the respondents indicated that they generated biotechnology-derived revenues and a
further three had biotechnology focused employees.
197
198
MOET = Multiple Ovulation
IVP = in vitro production
Page 143 of 315
Table 4-13:
Summary of results from survey+
Total revenue (%)
Europe
Non-Europe
Total
All sales
387,975,000
353,770,000
740,745,000
Total biotech derived
sales
111,909,000
118,000,000
229,909,000
(29%)
(33%)
(31%)
Total MAS derived sales
95,047,000
118,000,000
213,047,000
(25%)
(33%)
(29%)
16,862,000
0
16,862
Total embryo sales
(4%)
(2%)
+
based on data from the 15 companies that replied, therefore not representative of the industry as a
whole
*derived by subtracting numerator from denominator in data from above index
Summary Results of Livestock Breeders/Embryo Transfer Teams Questionnaire
Employment
The following data refer to number of employees in the company that are focused on biotechnology-related production and does not include sales staff.
• These 15 organisations employ a total of 5,246 people world-wide with 3,316 (63 %) of
these employed in Europe.
• Approximately 5 % of these employees were said to be focused on biotechnology with little
difference by region.
• The total number of biotechnology focused employees in Europe was 170 for these 15
organisations including poultry as well as cattle and pig breeding organisations.
Revenues
• Total revenues reported were € 741 million with approx. 52 % generated within Europe.
• Thirty one percent (31 %) of these revenues were said to be generated by the revenue of
biotechnology products and services. This percentage was slightly higher outside the EU
than inside: 33 % versus 29 %, respectively.
• The biotechnology-based revenues consisted of animals/semen generated by MAS (pigs
and cattle) or from cattle embryos.
Revenues from MAS (as reported by the organisations that responded to the survey)
• The total revenue from MAS products/animals was approx. € 213 million 45 % of this
within the EU.
• The total revenue from MAS pigs (including sperm) was approx. € 196 million, with 40 %
within the EU.
• The total revenue from MAS sperm for pigs was not indicated by the respondents.
• The total revenue from MAS in cattle was € 13 million, almost entirely within the EU, with
approx. 50% associated with sperm.
• MAS did not contribute in the case of poultry.
Page 144 of 315
Revenues from embryos produced through MOET/IVP/sexing (as reported by the organisations that responded to the survey)
• The only species reported to be generating biotechnology-derived income from embryo
transfer was cattle. Revenues were approximately € 18 million within the EU and
€ 1.25 million outside the EU.
• Only 7 % of these revenues were generated outwith the EU.
• The companies responding sold approximately 9,000 embryos with 94 % sold within the
EU. Approximately 15 % of the embryos were for beef cattle. (This represents around
10 % of the embryo transfer activity reported for Europe (although it may be closer to 5 %,
as the reported activity is probably an underestimate of the actual total)).
The revenues attributed to cattle embryo transfer in the survey were the direct sales of
embryos and transfer services. This does not include the (indirect) impact of embryo transfer
on cattle breeding programmes where ET takes a significant role in genetic improvement and
the competitiveness of cattle breeding organisations. The total revenue generated by the
cattle breeding companies in Europe was approx. € 190 million, if we assume that 75 % of the
AI sires are derived from embryo transfer (which is probably an underestimate as these
breeding companies use ET extensively within their breeding pyramids but do not count this
activity as direct sales) then this equates to more than € 140 million that results from this
class of biotechnological activity in the companies responding to the survey.
4.3.7
Indicators elaborated on the basis of surveys and interviews - new varieties and breeds and their propagation: fish
Table 4-14:
Phenomena analysed for fish propagation
Phenomenon
Indicator
Numerator
(MAS and/or
G.I) on production
Percentage of
seed/eggs/sperm/
embryo revenues and
shares in terms of
weight, revenue from
MAS, and conventional varieties/breeds
Value (€) of revenues
arising from MAS eggs,
sperm and embryos in
fish breeding firms,
within Europe and
exported
revenues from fish
breeding firms (eggs,
sperm and embryos)
within Europe and exported.
Total production
(weight, value) from
MAS, and conventional varieties/breeds
European revenues
from adult fish arising
from MAS
European revenues
from the same groups
arising from conventional breeding
Absolute number and
shares (weight, value)
of fish produced with
sex and/or ploidy manipulation
Total value (€) of fish
produced by sex
and/or ploidy manipulation by the firms surveyed
Total value of fish produced by the firms surveyed
(ploidy- and
sex-manipulation) on production
Denominator
Page 145 of 315
Table 4-15:
Summary of results from survey of fish and shellfish breeders+
Indicator
Numerator
Denominator
Value
Comments
25,110,000
94,564,000
29 %
Fish, within EU
n/a
220,000
21,725
1,418,000
0
0
Total production (value)
from MAS, and conventional varieties/breeds
25,110,000
69,454,000*
36 %
Fish, within EU
21,725
1,396,275*
2%
Shellfish, within
EU
Absolute number and
shares (value) of fish
produced with sex and/or
ploidy manipulation
41,262,000
94,564,000
44 %
Fish, within EU
140,000
220,000
64 %
Fish, outside
EU
268,640
1,418,000
20 %
Shellfish, within
EU
Percentage of
seed/eggs/sperm/embryo
revenues and shares in
terms of revenue from
MAS, and conventional
varieties/breeds
2%
-
Fish, outside
EU
Shellfish, within
EU
Shellfish, outside EU
+
based on data from the 12 companies that replied, therefore not representative of the industry as a
whole: fish, 10 responses; shellfish, 2 responses
* derived by subtracting numerator from denominator in data from above index
The following results from the fish propagation case study are also relevant to this survey
Table 4-16:
Results from fish propagation case study
Impact of biotechnology (MAS
and/or G.I) on
production
Percentage of hatchery
produce (revenues and
weight) from MAS and/or
GI
(ploidy- and sexmanipulation) on
production
Percentage of production
(weight and value) from
ploidy and/or sex manipulation
€ 15 %
Wt 13 %
€ 53 %
Wt 53 %
Results from the two countries who reported GI being
conducted on salmonid species. n = 8
Most represented forms of
BT. 63 % of respondents
across a range of seven
countries reported its use.
n=8
The above indicators represent the percentage of hatchery produce (in terms of monetary and
weight value) from biotechnology procedures involving Salmonids and the European oyster,
Crassostrea gigas. In the introduction to this case study it was noted that MAS has still to
influence the aquaculture industry at the commercial level, and so the figure of 15 %
represents genetic improvement through selective breeding including the use of molecular
markers only. The figure of 14.82 % relating to the percentage of hatchery produce from GI is
somewhat above that expected. There also appears to be a small monetary advantage in
using GI as the actual percentage of biotechnology production in weight is only 13 %.
Conversely in ploidy and sex manipulation there appears to be no direct monetary advantage
Page 146 of 315
from using biotechnology. For this technique, it could be argued that its use is purely for
production efficiency rather than productivity, but to make this assumption would be unfair in
this instance, as all respondents involved in ploidy or sex manipulation adopted the method(s)
100 %, hence no difference in the weight or monetary value could be calculated.
Summary of Results of Fish and Shellfish Questionnaire
The questionnaire was sent to 73 companies and 11 associations (some of whom circulated it
to their members)199
Responses
Fourteen responses were obtained and analysed from the following groups:
• 2 shellfish
• 10 fish
• 2 Norwegian fish
Eleven of the respondents indicated that they generated biotechnology-derived revenues and
a further company had biotechnology-focused employees.
Note that, due to the small number of respondents to the survey questionnaire and also in the
case study, it is not possible to draw meaningful comparisons between the two sets of results.
Employment
These organisations employ a total of 1,311 people world-wide with 1,213 (93 %) of these
employed in Europe. Approximately 5 % of these employees were said to be focused on the
use of biotechnology in product development. The total number of biotechnology focused employees in Europe was 35 for these 14 organisations.
Revenues
Total revenues reported were € 115 million with 84 % generated within Europe. Thirty five
percent (35 %) of these revenues were said to be generated by the sale of biotechnology
products and services. This percentage was higher inside the EU than outside: 25 % versus
10 % respectively.
Revenues from MAS
The total amount of revenues from MAS in fish was € 25 million. All of these revenues were
generated within the EU and were generated from revenues of salmon (over 99 %) and trout.
For MAS in shellfish, we only have data for ‘within EU’ revenues, as indicated in the above
table, and this is a small proportion compared to the revenues generated from MAS in fish.
Revenues from eggs produced by sex reversal, ploidy manipulation and/or induced spawning
In fish production, the total amount of revenues from eggs produced by sex reversal, ploidy
manipulation and/or induced spawning was € 41.3 million. Only 1 % of these revenues were
generated from revenues outside the EU. € 1.3 million of the revenues within Europe came
from revenues from trout eggs.
199
Only fish breeders were included as they apply biotechnological methods.
Page 147 of 315
In shellfish production, total revenue within Europe in this category was € 269,000, € 23,000
from clams and € 350,000 from oysters
Total number of eggs produced by sex reversal, ploidy manipulation and/or induced spawning
In the analysis of fish breeders, 92 million eggs were produced by sex reversal, ploidy manipulation and/or induced spawning, 67 % of these within the EU. 83 % of the eggs sold in the
EU, produced using these techniques were salmon and the majority of the others trout, with
very small numbers of sea bass and sea bream.
Data from Norwegian survey
The two companies that responded had 53 employees, 53 % of whom worked in biotechnology-related areas.
Total revenues were € 1 million within the EU (100 % of this was biotechnology related) and
€ 18 million outside the EU (61 % biotechnology-related).
Additional literature analysis relevant to fish and shellfish data
Given the difficulties in collecting and interpreting data for the indices above, a brief literature
search was conducted based on the keywords ‘modern biotechnology applications’, ‘aquaculture’, ‘fish breeding’ and ‘Europe’ using Google Scholar.
The following paragraphs summarise the most relevant articles.
1. ‘Genetics & Biotechnology in Aquaculture: Status, Promises & Issues’ 200
The relevant section of the paper is ‘improvement of aquaculture stocks’. The section summarises what is involved in selective breeding, marker-assisted breeding and
gender manipulation and sterility induction. The issues surrounding genetically managed
stocks and GMOs are discussed.
2. Recommendations for future programmes to be implemented at the EU level in the field of
genetics for fisheries and aquaculture201
This document was produced following a workshop held by the European Fisheries and
Aquaculture Research Organisations (EFARO). A multidisciplinary group including geneticists, biologists and fisheries scientists from EU and North American countries came together to give advice about the ways in which genetics and genetic tools could be mobilised to increase the scientific basis for sustaining aquaculture and fisheries development.
The following are the most important points taken from the paper:
− The situation regarding genetic progress seems incumbent on the fact that not enough
critical information regarding the input and efficiency of breeding programmes or the
necessary means to set them up has reached the decision makers of the sector.
− A lack of theoretical studies along with technical limitations have severely hampered
the wide–scale adoption of genome duplication by the industry
− Recent studies have demonstrated that the mechanism by which genome duplication is
induced might differ from what is commonly assumed. These studies and the
200
Lam, T.J. (2002) Genetics & Biotechnology in Aquaculture: Status, Promises & Issues. Paper
presented at the Aqua Challenge workshop Beijing 2002.
201
European Fisheries and Aquaculture Research Organisations (2004) Recommendations for future
programs to be implemented at the EU level in the field of genetics for fisheries and aquaculture. Contributions made during the Vth EFARO Workshop held in Lisbon 28-31 October, 2004.
Page 148 of 315
constraints mentioned above make it necessary to renew the investigation on both
technical improvements to produce triploids and double haploids and the potential for
applying these techniques in practical breeding programmes.
3. Opportunities for Marine Biotechnology Application in Ireland202
This report gives an overview of marine biotechnology development, national programmes,
strategies and activities and European Commission support for marine biotechnology.
The basic finding of this study is that few countries have formal comprehensive strategies
or programmes for marine biotechnology. However, most countries do conduct marine
biotech research. However, this research is typically carried out within programmes which
do not highlight biotechnology as their objective. For example, Iceland does not identify
marine biotech as a national priority, but biotechnology is significantly used within its fisheries research.
Information is provided concerning the major players in aquaculture genetics; these are
the commercial aquaculture companies.
Table 4-17 lists some of the major companies involved in aquaculture breeding.
Table 4-17:
Companies involved in aquaculture breeding or genetic enhancement programmes
4. EU25 Fishery Products Annual Report – EU Policy & Statistics 2006 203
This report gives an overview of the present situation in the EU fishery sector and provides
information and statistical data concerning EU fish catches, aquaculture and exports.
The Table below gives the aquaculture production (MT) by Member State in 2003.
202
The CIRCA Group Europe Ltd. (2005) Opportunities for Marine Biotechnology Application in Ireland.
Prepared for Marine Institute, Ireland.
203
USDA Foreign Agricultural Service GAIN Report (2006) EU25 Fishery Products Annual Report – EU
Policy & Statistics 2006.
Page 149 of 315
Table 4-18:
Aquaculture production by Member State - CI2003 (Metric Tonnes)
Aquaculture Production by Member State – CY 2003 (Metric Tonnes)
Belgium
1 010
Denmark
32 187
Germany
74 280
Greece
101 209
Spain
313 288
France
245 846
Ireland
62 516
Italy
191 662
The Netherlands
67 025
Austria
2 233
Portugal
7 829
Finland
13 335
Sweden
6 334
United Kingdom
181 837
Total EU15
1 300 591
Czech Rep.
19 670
Estonia
372
Cyprus
1 821
Latvia
637
Lithuania
2 356
Hungary
11 870
Malta
881
Poland
34 526
Slovenia
1 353
Slovak Rep.
881
EU25
1 374 958
Source: Eurostat
4.3.8
Indicators elaborated on the basis of surveys and interviews - new varieties and breeds and their propagation: plants
In order to measure adoption of modern biotechnology in seed firms and plant propagating
companies the following indicators should be calculated:
• Hectares and shares planted to non-GM biotechnology crops (i. e. MAS) and conventional
varieties (AA4);
• Percentage of seed revenues and shares in terms of weight, revenue from MAS and conventional varieties/breeds (AA5);
• Hectares and shares planted to crops for food, animal feed, industrial processing and food
processing (AA6);
• Total production (weight, value) from MAS and conventional varieties/breeds (AA7);
• Absolute number and shares (weight, value) of plants produced through plant tissue culture (AA13).
The questionnaire which was elaborated for that purpose contained questions dealing with
the following topics:
• Company characteristics (e. g. total revenues, employees, countries where company is
active);
• Character of modern biotechnology methods and techniques applied by the company;
• Varieties developed with conventional breeding methods and with biotech methods;
Page 150 of 315
• Weight and revenues realised with sold seed/plants developed with conventional and with
biotech methods;
• Average yield per hectare with seed developed with conventional and with biotech methods;
• Weight of sold seed developed with conventional and with biotech methods for the different application areas food/food processing, animal feed, industrial processing;
• Estimation of development trends for the recent and for the future five years.
Altogether the questionnaire and an accompanying letter explaining the study and its purpose
were sent to 357 seed firms and plant propagating companies in June 2006. Companies with
branches in several EU countries were contacted in each country. The firms were asked to fill
in the questionnaire with data which refer to the country where their subsidiary is located.
Therefore, an extrapolation of the data would have been more precise as e. g. the prices for
seed/plants, the average yield and value per hectare differ between the various EU Member
States.
However, the response rate to the first round of the survey was very poor (3.4 %) mainly due
to the complex issue covered in the survey and the confidentiality character of most of the
data requested. In general the responding companies only filled in the general questions concerning the company but the important questions for generating the indicators were refused
answer by the respondents. Thus some of the major seed firms were contacted in order to
elicit the reasons for this low participation. Main reasons indicated by the companies were:
• Complex and sensitive questions;
• Most requested information is confidential;
• No differentiation of data between conventional and biotechnology approaches on a company level.
Therefore, the questionnaire was discussed with some seed breeding companies in order to
defuse the questions. According to their recommendations the questionnaire was reduced by
the following questions:
• Varieties developed with conventional breeding methods and with biotech methods;
• Average yield per hectare with seed developed with conventional and with biotech
methods;
• Weight of sold seed developed with conventional and with biotech methods for the different application areas food/food processing, animal feed, industrial processing;
• Estimation of development trends for the recent and for the future five years.
167 seed breeding and plant propagating companies (only headquarters were addressed)
were contacted again with this significantly reduced questionnaire in July 2006. Furthermore,
it was tried to get some information when carrying out the case studies on marker-assisted
selection in maize breeding and micropropagation in horticulture as important companies
were contacted in the oral or telephone interviews for these case studies.
With this second survey wave an overall response rate of 12.6 % was reached for the survey.
However 57 % of the filled in questionnaires were not usable as again only the warming up
questions about the company were answered or estimations were made for crops of minor
importance (e. g. grasses, flax). Altogether only nine questionnaires contained useful information concerning the adoption of non-GM biotechnology in primary production in the EU, but
often only for one single crop.
Also during the interviews for the two case studies, interviewees refused to provide additional
information concerning the adoption of non-GM biotechnology approaches within the company. An inquiry revealed the following reasons for that behaviour:
Page 151 of 315
• Although the questionnaire was reduced, the sensitive information (e. g. revenues) were
still requested.
• The interviewees were not allowed to answer these questions, otherwise it could even
have personal consequences for them.
• Even if interviewees were allowed to answer these questions, it is not possible as companies do not separate e. g. revenues of conventionally developed crops and crops developed by modern biotechnology in their bookkeeping and internal data management.
As nine usable questionnaires are by far too vague a data base to extrapolate the adoption of
modern biotechnology in the EU25, it was decided during the project meeting dated
11/09/2006 in Seville to present no data from the seed breeding company survey. During the
whole project period this problem of requesting very sensitive and complex data from the
companies was discussed between IPTS and ETEPS. However, the discussions in the
project meeting in September 2006 in Seville revealed no alternative approach (to those
which had been already conducted) to solve this problem. A calculation of seed market
shares according to small, medium and large companies was not possible as no data is
available on this topic in statistics, reports or on homepages of large seed breeding
companies.
4.3.9
Summary on adoption
Despite the difficulties in obtaining data relevant to the adoption of new biotechnologies in
European primary production and agro-food sectors, we have been able to make a useful
contribution to the available information on adoption of new biotechnologies in primary production and agro-food industries.
4.3.9.1
Conclusions related to share of companies active in biotechnology
In the European Union the adoption of modern biotechnology in primary production/agro-food
as measured by the share of companies active in biotechnology out of all companies in the
sector (AA1) is very low (0.009 % in case agricultural farms are taken into account or 0.267 %
in case agricultural farms are not taken into account) compared to human and animal health
applications as well as industrial biotechnology applications where the share of
biotechnology-active firms is 0.41 % and 12 %, respectively. In the USA slightly higher
adoption rates could be observed. Nevertheless, in both regions presently the adoption of
modern biotechnology by companies in the sector is still low compared to other sectors.
However, it must be considered that this conclusion is biased by the fact that biotechnology in
human/animal health as well as in industrial companies is often directly applied in the
research and/or production processes, whereas in the agro-food application mainly
downstream users can be found which use products in which often a very limited proportion of
biotechnology-related methods, tools and/or products has been applied in the value chain.
4.3.9.2
Conclusions related to European competitiveness in the agro-food area
We were not able to collect data from any source that would give an indication of the contribution of modern biotechnology (non-GM) to the competitiveness of European agriculture.
Also, the data collected on ‘International Market Shares of European Products’ and ‘Shares of
Imports in Total Domestic Consumption’ did not show any evidence of a consistent trend in
overall European production of a range of crops or animal products, with the possible exception of ‘beef+veal’ and ‘poultry meat (broiler)’ where there may be a declining trend in production from 2000-2005.
The lack of published papers giving quantitative information on these questions confirms the
difficulty and complexity of conducting such analyses. We found a few papers giving mainly
qualitative data but there was nothing in any of the data (our own analysis and those of
Page 152 of 315
others) to suggest major shifts (positive or negative) in the competitiveness of European agriculture.
4.3.9.3
Adoption of modern biotechnology in molecular diagnostics
Biotechnology-based diagnostics may be used for a variety of applications, such as genotyping, traceability, identification of disease traits, quantification of genetic diversity, and detection of pathogens in foods (see Section 4.2.1 above). DNA- and protein-based diagnostics are
already being used commercially, whereas metabolite-based diagnostics are largely in the
development phase.
We would expect there to be considerable European activity in the development of molecular
diagnostic techniques but we were unable to demonstrate this due to the reluctance of companies to be interviewed or to respond to questionnaires. Company information was either not
available or was regarded as confidential. There is a large literature on the development of
molecular diagnostic techniques, but none directly relevant to the adoption questions of
interest here.
Questionnaires were sent to 39 organisations, including 13 industry-related organisations, two
consumer-related organisations, three environmental lobby groups, one farming union representative group, two organisations with interests in animal welfare, one forestry-related group,
two government bodies, three associations/agencies, and four science-based organisations;
and also 24 companies.
The one (moderate sized) company that responded had € 50.77 million in revenue; it employed 80 people in the EU and 50 outside the EU; all the tests produced by the company (70
different tests) were based on molecular diagnostic technology.
4.3.9.4
Adoption of modern biotechnology-based diagnostic tests by natural resource managers and food processors, wholesalers and retailers
We attempted to obtain data relevant to these indicators by including questions in the survey
of companies developing diagnostic tests about the extent of their market in these areas. The
company that responded to the questionnaire had € 7.62 million of revenues to food processors and retailers (15 % of the total company revenue). Less than 1 % of revenues were to
organisations involved in natural resource management.
This last figure is consistent with the information obtained nature conservation organisations,
that there are no commercially available diagnostic tests that fit their needs. Tests in this area
are all one-off research tools.
A small number of interviews was obtained with large food processing companies (4 out of 5
contacted), and major supermarket chains (3 out of 12 contacted). None of these organisations was willing to give any quantitative information.
One processing company confirmed that no molecular diagnostic techniques were used, and
another indicated that such testing was contracted out to specialist laboratories. Of the other
two, molecular diagnostic tests were used in their manufacturing process, but this information
was classified.
The supermarkets in general tended to contract out diagnostic testing to specialist laboratories and they were not able or willing to place an exact figure on the amount of testing done or
the cost of the tests, although they used a range of molecular techniques, in chemical analysis, microbiological testing and allergy testing, as well as using rapid test kits for products with
short shelf-life.
Page 153 of 315
The estimated figure for the number of molecular diagnostic tests used by retailers is at most
10 %, but not determinable for processors. This is consistent with the information from the
one company that responded to the questionnaire sent to companies developing molecular
diagnostic tests, reporting 15 % of total revenue from sales to food processors and retailers.
4.3.9.5
Adoption of modern biotechnology in livestock breeding and propagation
The three main indicators to be elaborated through this survey were:
• Percentage of seed/eggs/sperm/embryo revenues and shares in terms of weight, revenue
from MAS, and conventional varieties/breeds;
• Total production (weight, value) from MAS, and conventional varieties/breeds;
• Absolute number and shares (weight, value) of embryos produced through
MOET/IVP/sexing.
We are not able to comment, from the data we were able to collect, on the values for these
indicators at the European level. However, we can comment on their importance for the companies who did respond to our questionnaires.
Among the 16 organisations that responded to the questionnaire, the percentage of total
revenues from MAS was 23 % within the EU and 33 % outwith the EU. Total production from
MAS, compared to production from conventional techniques was 30 %, and the total number
of embryos produced was 9,086.
These organisations employed a total of 5,246 people world-wide, 63 % of these being in
Europe and 5 % being focused on biotechnology with little difference by region. The total
number of biotechnology focused employees in Europe was 170 for these 15 organisations
including poultry as well as cattle and pig breeding organisations.
Total revenues reported were € 742 million with approx. 50 % generated within Europe, and
32 % generated by the sale of biotechnology products and services. The biotechnology-based
revenues consisted of animals/semen generated by MAS (pigs and cattle) or from cattle embryos.
Revenues from MAS products/animals was approx. € 207 million, 76 % of this within the EU:
from MAS sperm, approx. € 199 million, 41 % of this within the EU; from MAS dairy cattle
€ 3.9 million, entirely within the EU; from MAS beef cattle approx. € 118 million, entirely outwith the EU; and from MAS pigs approx. € 78.75 million, entirely within the EU.
Revenues from embryos produced through MOET/IVP/sexing mainly arose from cattle embryo transfer (approximately € 18 million within the EU and € 1.25 million outside the EU);
approximately 9,000 embryos were sold (94 % within the EU, 15 % being beef cattle).
4.3.9.6
Adoption of modern biotechnology in fish and shellfish breeding and propagation
The three main indicators to be elaborated through this survey were:
• Percentage of seed/eggs/sperm/embryo revenues and shares in terms of revenue from
MAS, and conventional varieties/breeds;
• Total production (value) from MAS, and conventional varieties/breeds;
• Absolute number and shares (value) of fish produced with sex and/or ploidy manipulation.
• We are not able to comment, from the data we were able to collect, on the values for these
indicators at the European level. However, we can comment on their importance for the
companies who did respond to our questionnaires.
Page 154 of 315
Among the 12 organisations that responded to the questionnaire, the percentage of total
revenues from MAS was 29 % for fish within the EU and 2 % for shellfish. Total production
from MAS, compared to production from conventional techniques was 36 % for fish in the EU
and 2 % for shellfish.
For fish produced with sex and/or ploidy manipulation, the percentage of total value generated was 44 % for fish within the EU and 64 % for fish outside the EU (albeit based on a very
low total value). The figure for shellfish within the EU was 20 %.
The responding organisations employed a total of 1,311 people world-wide, 93 % in Europe
and 5 % focused on biotechnology. The total number of biotechnology focused employees in
Europe was 35.
Total revenues reported were € 115 million, 84 % generated within Europe and 35 % generated from the sale of biotechnology products and services.
The total revenues from MAS in fish was € 25 million, all generated within the EU, from revenues of salmon (over 99 %) and trout.
The revenues from MAS, compared to conventional breeding techniques, in shellfish were
very low (2 %) in comparison with those generated in fish.
In fish production, revenues from eggs produced by sex reversal, ploidy manipulation and/or
induced spawning was € 41.3 million, only 1 % being from revenues outside the EU, and
1.3 million € being from revenues of trout eggs. In shellfish production, total revenue within
Europe in this category was relatively low - € 269,000, € 23,000 from clams and € 350,000
from oysters.
For fish breeders, 92 million eggs were produced by sex reversal, ploidy manipulation and/or
induced spawning, 67 % of these being sold within the EU (83 % of the EU total being salmon
and the majority of the others trout, with very small numbers of sea bass and sea bream).
4.3.9.7
Adoption of modern biotechnology in plant breeding and propagation
In order to calculate several indicators measuring the adoption of modern biotechnology in
seed and plant breeding companies (hectares and shares planted with biotech seed, weight
and revenues of sold biotech seed and plants, total production of biotech seed, shares of different application areas for biotech seed) several approaches were undertaken for the data
gathering. However two survey waves, interviews with experts and the attempt to elicit data
during the case studies on MAS in maize breeding and micropropagation in horticulture produced no significant data for an extrapolation on the EU25 basis. Main reasons for that were
the confidentiality of economic data and the fact that companies do not differentiate between
biotechnology approaches and conventional approaches. During the whole project period the
problem of requesting very sensitive and complex data from the companies was discussed
with IPTS and ETEPS. However, the discussions in the project meeting in September 2006 in
Seville revealed no alternative approach (to those which had already been conducted) to
solve this problem.
4.4
Impact of new biotechnology on primary production applications
4.4.1
Introduction
4.4.1.1
Objectives
The objective of the research on the impact of new biotechnology was to evaluate the consequences, opportunities and challenges of the adoption of modern biotechnologies in the primary production and agro-food areas, particularly in terms of social, economic and environFramework Service Contract 150083-2005-02-BE
Page 155 of 315
mental aspects. This has involved a comprehensive (and as quantitative as possible) analysis
of the benefits and costs of agro-food biotechnology applications in the EU, mainly based on
case studies. The analysis also considered the development of applications in the near future,
taking into account pipeline products and services.
For cases of no or very little adoption of a certain biotechnology application in the EU as
compared to the USA or other competitor countries, the potential consequences for the EU of
not using the respective biotechnology application will be investigated. In this context, barriers
for the uptake of modern biotechnology applications by the primary production and agro-food
sector, such as social non-acceptance, ethical concerns, intellectual property rights, legal
framework, and time to market will be discussed.
4.4.1.2
Indicators
Data collection was structured around a set of impact indicators, developed during task 1 of
the study. In several cases considerable limitations of data availability had to be considered.
The indicators cover the micro (e. g. the company level) and macro (e. g. economy wide/
distributional) levels. As available data sources allowed no differentiation between main application areas and product groups (e. g. wheat, maize, pigs), the following generic impact indicators could only be calculated for the entire agro-food sector.
Generic Impact Indicators:
These indicators were gathered for the whole sector (primary production and agro-food), although availability is poor as less than five countries (including non-European countries) provide such data. Also many of these indicators require an assessment of a producer or revenues stream as being “biotechnology” or otherwise and such data are usually not available in
the primary production and agro-food sectors.
We have collected those data that are available from published statistics or surveys, for the
following generic indicators:
Table 4-19:
Definition of generic impact indicators for primary production and agro-food
sector
Description
Numerator
Denominator
Comments
Total sector-specific
biotechnology-related
GDP out of total
sector-specific GDP
Total biotechnologyrelated GDP in the
agro-food sector
Total GDP in the
agro-food sector.
Share of biotechnology revenues out
of total revenues of
biotechnology-active
firms in the agro-food
sector
Total biotechnologyrelated revenues of
firms in the agrofood sector
Total revenues of
firms in the agro-food
sector
Data available for
a maximum of 5
countries: Canada, USA, Belgium,
UK, Finland
AI2
Share of biotechnology revenues in
agro-food applications out of total
revenues in agrofood-applications
Total revenues in
the agro-food industry sector that
arises from biotechnology-related
applications
Total revenues of the
agro-food industry
sector
Data available for
a maximum of 5
countries.
AI3
Share of biotechnology revenues in
agro-food applica-
Total revenues in
the agro-food industry sector that
Total revenues of
biotechnology-related
applications in all
AI1
Denominator:
based on national
and international
statistics
Data available for
a maximum of 5
countries
AI4
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Description
tions out of total biotechnology revenues
Numerator
arises from biotechnology-related
applications
Denominator
sectors
Comments
Number of
employees in agrofood applications out
of total employees in
agro-food applications
Number of
employees in the
agro-food sector
Total number of employees in the agrofood sector
Feasible for very
few countries
AI5
Share of
employees out of
total employment in
firms
Number of
employees in the
agro-food sector
Total number of employees in the agrofood sector
Feasible for very
few countries
AI6
Shares of employment in each application out of total
biotechnology employment
Number of
employees in each
component of the
agro-food sector –
seeds and crops,
livestock, and fish.
Number of
employees in the
agro-food sector
No statistical data
available - rough
estimates possible
based on indirect
measures.
AI7
(aggregate measure
including data collected by the other
two workpackages)
Specific Impact Indicators
These indicators were elaborated, where possible through case studies. However, in general,
the required data were either unavailable or regarded by companies contacted as confidential.
Table 4-20:
Definition of specific impact indicators for primary production and agro-food
sector (to be elaborated through case studies)
Description
Numerator
Denominator
Comments
Share of BT revenues of
the total revenues of the
firms included on the case
study
BT revenues of firms
included in case
study
Total revenues of
firms included in
case study
Data will be collected
through interviews with
firms in case studies.
Share of BT-active employees out of total employment in firms included
in the case study
BT-active employees
in case study firms
Total employment
in case study firms
Number of BT-active employees in agro-food applications out of total employees in firms included in
case study
Number of BT-active
employees in agrofood application in
firms included
Total employees in
agro-food application in firms included in case
study
Number of jobs created
through agro-food applications at the firm level
(direct and spill over
effects)
Number of jobs created through agrofood BT applications
at the firm level
Total employment
created in a certain
period
In many cases distinctions
were not made between
biotechnology and nonbiotechnology-related employees
Total production costs of
BT product per unit output
compared to alternative
conventional product
Total production
costs of BT product
Total production
costs of alternative
conventional product
Companies may not know
or be unwilling to give this
information.
Page 157 of 315
Description
Numerator
Denominator
Comments
BT revenues per BT employee compared to revenues of alternative conventional products per employee
BT revenues per BT
employee
Revenues of alternative conventional products per
employee
This indicator can be calculated using the information gathered for the first
two indicators in this set.
Impact on food safety
Change in number of
food contamination
cases
Will only be relevant to a
few cases.
Food-related diseases diagnosed
through molecular
diagnostics
Will only be relevant to a
few cases.
Reduction of animal
tests
Time series data on the
number of animal tests
conducted, if available,
would not lead to valid
conclusions related to the
availability of biotechnology-based diagnostics.
Impact on animal welfare
Number of molecular
diagnostics for
monitoring animal
welfare
Number of animals
getting ill
Animal health
Number of human
zoonotic cases
Change in chemical
use/emissions; nutrient
use/emissions;
land/water/energy use;
overall efficiency in production
4.4.1.3
Eco-efficiency
LCA
Ecological footprint
approach
Will result in non-representative qualitative data.
Will result in non-representative qualitative data.
Time series data on the
number of animal tests
conducted, if available,
would not lead to valid
conclusions related to the
availability of biotechnology-based diagnostics.
Questions to be covered in
interviews (not valid to
relate changes to biotechnology-related innovation)
Choice of case studies
For the agro-food sector ten case-studies were developed illustrating the impact of new biotechnology techniques on the primary production and agro-food sectors.
(1) Molecular Diagnostics and Vaccines
(1.1) Foot and mouth disease diagnostics
Foot and mouth disease (FMD) is a highly contagious disease affecting cloven-hoofed animals and is of major economic importance globally. It is caused by a small RNA virus. The
World Reference Laboratory at the Institute for Animal Health provides a world-wide diagnostic service, maintaining global surveillance to warn of the presence of the disease in a country
and to help prevent its spread to neighbouring countries and trading partners. Diagnosis is by
virus isolation or by demonstration of viral antigen or nucleic acid in samples of tissue or fluid.
(1.2) BSE Diagnostics
The BSE case study aims to assess the impact of applying modern biotechnology for the development of tests for new diseases in animals. This topic touches a number of issues with an
important European dimension such as high social impact on public health or implementation
of international rulings at the national level.
Page 158 of 315
(1.3) Pseudo-rabies (Aujesky’s disease) animal vaccine
Pseudo-rabies (Aujesky’s disease) is caused by porcine herpes virus 1. It primarily affects
pigs, attacking respiratory, reproductive and nervous systems. Once infected, animals should
be considered potentially persistently infected for life. The disease has been eradicated in
Great Britain and in many other countries and its incidence has been reduced world-wide.
Pseudo-rabies is included in an EC Decision (22 August, 2002)204 laying down standard reporting requirements for a range of programmes of eradication and control of animal diseases
that are co-financed by the Community.
Vaccines, either modified live virus or inactivated virus antigens should prevent or at least
limit the excretion of virus from infected pigs. More recently these conventional vaccines have
been supplemented by rDNA-derived gene-deleted or naturally deleted live pseudo-rabies
virus vaccines. The virus used in these new vaccines, sometimes referred to as marker vaccines, lacks a specific glycol-protein (gG. gE, or gC). At least one commercially available vaccine has dual deletions.
Modified live marker vaccines, given by injection, have been the critical tool in eliminating
pseudo-rabies from most of the USA, and gene-deleted vaccine testing methods can be used
to monitor compliance and assess progress. GE deleted vaccines were involved in a national
eradication programme in Germany, successful in 2003. Ingelvac Aujesky MLV, a gE-deleted
vaccine is available form Boehringer Ingelheim Animal Health.
Gene-deleted marker vaccines have the advantage over conventional whole virus vaccines
that it is possible to distinguish non-infected vaccinated animals from those with field infection.
Therefore in countries where eradication of pseudo-rabies is planned, these marker vaccines
are the product of choice.
(1.4) Surveillance of quality of food products - Salmonella testing
This case study deals with new biotechnology approaches for improving food surveillance.
The focus of the study is on Salmonella detection, one of the most prevalent food pathogens.
(1.5) GMO Testing
The aim of this case study is to evaluate the impact of biotechnological testing procedures
within the framework of GMO traceability in the food and feed industry. Thereby some issues
are taken into consideration which are of special interest within the European Union as e. g. a
high economic impact on agriculture and the affected processing industries. In addition this
case study incorporates a specific social dimension, since freedom of choice of consumers
and users of genetically modified, conventional and organic plants and food has to be ensured for which a specific regulatory framework has been created by the EU. Thus this case
study might be also an example in which a specific regulatory environment can create new
economic and business opportunities.
(2) Development and Propagation of New Varieties and Breeds
(2.1) Marker-assisted Selection (MAS) in Pigs
MAS is a common approach to livestock breeding. The case study aims to assess the economic impact of such approaches in Europe in pigs.
204
Official Journal of the European Communities, 27.8.2002, L229/24
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(2.2) MAS Breeding of Major Crops
Presently MAS of crops is expected to have even larger economic impact than GMOs. The
case study aims to quantify the economic impact of MAS in the breeding of major crops. The
study focuses on maize.
(2.3) Cattle Propagation
With thirty years of experience, commercial bovine embryo production and transfer has become a large international business. Throughout the world, approximately 15 % of bovine
embryos are produced by in vitro technology. Through the use of artificial insemination (AI),
the average producer has access to a wide range of high-accuracy sires that can be selected
to match production goals. Polymerase chain reaction technology is currently being used for
sexing embryos on a small scale, and it is likely that this technology will be used for 'embryo
diagnostics' in the future. Semen sexing is an established technology and is likely to be used
on a small scale in the near future, especially in vitro embryo production systems. This case
study will cover all of these application areas for species where use of the techniques is
commercially significant.
(2.4) Fish Propagation
Similar techniques to those being applied in cattle propagation are now being applied in fish
propagation and multiplication.
(2.5) Micropropagation in horticulture
Horticulture is characterised by high value generation and often increasing consumer demand
in EU countries compared to agricultural crops. This case study focuses on horticultural products, although in terms of market size horticulture is smaller compared to crop or food species. Micropropagation (e. g. in vitro culture, cell-based) approaches are of particular relevance in some horticultural plants (like e. g. orchids or Cyclamen persicum) or grasses. In
addition they are often used for cultivation of nursery plants like e. g. rhododendron hybrids or
azalea.
4.4.2
Generic impact indicators
Gross domestic product GDP (AI1)
As no statistics were available for the “total biotechnology-related GDP in the agro-food sector” a calculation of the indicator AI1 is not possible. For the denominator “total GDP in the
agro-food sector”, only data for the EU15 exist for the GDP in agriculture (see Figure 4-2 for
selected years) while corresponding data for the food industry as well as the input industries
of agriculture could not be extracted from Eurostat.
Page 160 of 315
Figure 4-2:
Total GDP in the agricultural sector
160000
AT
BE
140000
DE
120000
DK
EL
million €
100000
ES
FR
80000
FI
IE
60000
IT
40000
LU
NL
20000
PT
SE
0
1998
1999
2001
years
2003
UK
EU-15
Source: Statistisches Jahrbuch über Ernährung, Landwirtschaft und Forsten, 44. Edition,
2000; Statistisches Jahrbuch über Ernährung, Landwirtschaft und Forsten, 45. Edition, 2001;
Statistisches Jahrbuch über Ernährung, Landwirtschaft und Forsten, 46. Edition, 2002; Statistisches Jahrbuch über Ernährung, Landwirtschaft und Forsten, 48. Edition, 2004.
Revenues (AI2-AI4)
Data for the calculation of the indicator “share of biotechnology revenues out of total revenues
of biotechnology-active firms in the agro-food sector” (AI2) were taken for the numerator (i. e.
total biotechnology-related revenues of biotechnology-active firms in the agro-food sector) out
of official statistics and specific reports. However numbers were only available for some
countries and years. For the originally foreseen denominator (i. e. total revenues of biotechnology-active firms in the agro-food sector) data are largely missing (i. e. these data are available only for two countries). However, as data for the denominator of indicator AI3 – total
revenues of the agro-food industry sector – can be elaborated from 1995 until 2003 by addition of the revenues of the input sectors (i. e. producers of feed, fertilisers and pesticides,
without seed firms), of the agricultural and horticultural sector (value at producer prices) and
of the food processing sector, it is suggested to modify indicator AI2 and to calculate the
“share of biotechnology revenues out of total revenues in agro-food applications” (see
Table 4-21) as well as the “share of total revenues of biotechnology-active firms in the agrofood sector out of total revenues in agro-food applications” (see Table 4-24).
Page 161 of 315
Table 4-21:
Amount and share of biotechnology-related revenues out of total revenues
in agro-food applications (AI2_1 modified)
Country (year)
Belgium (2004)
France (2004)
Germany (2004)
Italy (2004)
Netherlands (2004)
Spain (2004)
Sweden (1997)
Sweden (1998)
Sweden (1999)
Sweden (2000)
USA (2001)
a)
Total biotechnologyrelated revenues of
firms in agro-food sector
(€ m)
498.2 b) 1)
103.4 b) 2)
244.4 b) 3)
225.6 b) 4)
47 b) 5)
253.8 b) 6)
194.7 c) 7)
233.2 c) 7)
223.3 c) 7)
275 c) 7)
723.8 b) 8)
76 d) 9)
Total revenues
of the agrofood sector
(€ m)
Share
(%)
36,509.4 a) 10)
212,505.9 a) 10)
191,557.7 a) 10)
140,354.4 a) 10)
69,489.9 a) 10)
120,272.5 a) 10)
20,875.5 10) 11)
19,399.44 10) 11)
19,043.86 10) 11)
20,877.95 10) 11)
127,109.5 a) 10)
746,040.8 12)
1.364
0.048
0.127
0.161
0.068
0.211
0.932
1.202
1.172
1.317
0.569
0.010
Data of the year 2003
Definitions of revenues of biotechnology companies given in the corresponding reports (see “Sources”):
b)
Biotech revenues of companies active in the “Agriculture and Food segment” (clear definition not available).
c)
Biotech revenues of companies active in “agrobiotechnology” (which covers “plant improvement and
biological plant protection”) and “Functional food and feed” (whereas “traditional use of classical biotechnology is excluded”). This value may be underestimated as “bioproduction” is definitely excluded.
d)
Biotech revenues of companies active in “agricultural and aquacultural/marine” and in “industrial and
agricultural-derived processing”. Net revenues.
Sources:
1)
Datamonitor (2005): Biotechnology in Belgium – Industry Profile.
2)
Datamonitor (2005): Biotechnology in France – Industry Profile.
3)
Datamonitor (2005): Biotechnology in Germany – Industry Profile.
4)
Datamonitor (2005): Biotechnology in Italy – Industry Profile.
5)
Datamonitor (2005): Biotechnology in the Netherlands – Industry Profile.
6)
Datamonitor (2005): Biotechnology in Spain – Industry Profile.
7)
Sandström, A.; Norgren, L. (2003): Swedish Biotechnology – scientific publications, patenting and industrial development. VINNOVA Analysis.
8)
Datamonitor (2005): Biotechnology in the United Kingdom – Industry Profile.
9)
U.S. Department of Commerce (2003): A Survey of the Use of Biotechnology in U.S. Industry.
10)
11)
12)
http://www.nass.usda.gov/Census_of_Agriculture/index.asp and http://www.census.gov. Call date
28/11/2006.
In the year 2004 the United Kingdom had by far the highest total biotechnology-related revenues (around € 724 million) of biotechnology-active firms in the agro-food sector, followed by
Belgium with nearly € 500 million (Table 4-22). For Germany, Italy and Spain about 220 to
€ 250 million revenues were dedicated to biotechnology-related applications in the agro-food
sector while France and especially the Netherlands showed the lowest biotechnology-related
revenues in this sector.
Page 162 of 315
Table 4-22:
Country (year)
in agro-food applications (AI2_1 modified) – without revenues of agricultural
farms
Total biotechnology-related
revenues of
biotechnologyactive firms in
agro-food sector
(€ m)
Total revenues of the
agro-food
sector
Share
(%)
Difference of
share (excluding and including agriculture in denominator)
(Tables 4-22/421)
(€ m)
Belgium (2004)
498.2 b) 1)
29,696.3 a) 9)
1.678
+ 0.314
France (2004)
103.4 b) 2)
149,788.3 a) 9)
0.069
+ 0.021
b) 3)
a) 9)
0.161
+ 0.034
Germany (2004)
244.4
Italy (2004)
225.6 b) 4)
96,539.1 a) 9)
0.234
+ 0.073
Netherlands
(2004)
47 b) 5)
48,888.4 a) 9)
0.096
+ 0.028
Spain (2004)
253.8 b) 6)
78,117.1 a) 9)
Sweden (1997)
Sweden (1998)
Sweden (1999)
Sweden (2000)
194.7
c) 7)
233.2
c) 7)
223.3
c) 7)
275
c) 7)
151,283.1
0.325
+ 0.114
16,072.0
10)
1.211
+ 0.279
14,780.0
10)
1.578
+ 0.376
14,559.0
10)
1.534
+ 0.362
16,009.0
10)
1.718
+ 0.401
United Kingdom
(2004)
723.8 b) 8)
103,456.1 a) 9)
0.699
+ 0.130
USA (2001)
76 d) 11)
519,042.1 12)
0.015
+ 0.005
a)
Data of the year 2003
Biotech revenues of companies active in the “Agriculture and Food segment” (clear definition not
available).
c)
d)
Biotech revenues of companies active in “agricultural and aquacultural/marine” and in “industrial and
agricultural-derived processing”. Net revenues.
b)
Sources:
1)
3)
4)
5)
6)
7)
Sandström, A.; Norgren, L. (2003): Swedish Biotechnology – scientific publications, patenting and
industrial development. VINNOVA Analysis.
8)
9)
10)
11)
U.S. Department of Commerce (2003): A Survey of the Use of Biotechnology in U.S. Industry.
12)
http://www.census.gov. Call date 28/11/2006.
2)
Page 163 of 315
When regarding the biotechnology-related revenues in relation to the total revenues of the
agro-food sector, high differences can be observed between the EU Member States. On the
one hand there is the Scandinavian country Sweden where a share of around 1 % (or higher
for single years) can be found for the biotechnology-related revenues in relation to the total
revenues of the agro-food sector, while on the other hand the corresponding figure is below
0.2 % in large countries like France, Germany, Italy or Spain (with corresponding high revenues of agriculture and in particular the food processing industry) (Table 4-21). A share for
the aggregated countries is not calculated since no data are available for any new Member
State of the EU for the modified indicator AI2.
As already explained agricultural farmers can be defined as biotech users. Therefore it is interesting to see to what extent the shares of biotechnology-related revenues out of total revenues in agro-food applications (indicator AI2_1 modified) change when excluding the revenues derived from agricultural farms for the denominator (see Table 4-22). The input industry
like feed companies as well as food processing companies are still considered in the
denominator although they are also partly biotech users but not to the extent of agricultural
farms.
Also when excluding the revenues of agricultural farms Sweden and Belgium still show the
highest shares of biotechnology-related revenues out of total revenues in agro-food applications whereas the proportion only increases by 0.1 or less percent points in large countries
like Germany, France, Italy, Spain and the USA. This result might be partly due to the fact
that the revenues derived from agricultural companies do not contribute a lot to the total revenues in the agro-food sector.
Comparing the shares of the number of companies active in biotechnology in the agro-food
sector and their revenue shares, it can be observed that (if agricultural farms and their revenues are included in the denominator) Sweden shows an about 60fold higher share of biotechnology-related revenues in the agro-food sector than of companies whereas in countries
like Germany and France this relation is only about 4fold. As these differences are almost
smoothened when excluding agricultural farms and their revenues in the denominator, it can
be concluded that the before mentioned difference at least partly results from the fact that in
Sweden a few food processing and food ingredient companies realise high biotechnologyrelated revenues e. g. with the production of functional ingredients using biotechnology methods. Such companies are widely lacking in France and Germany. Moreover, the total agricultural sector in Sweden is rather limited, due to natural conditions compared to France and
Germany.
Regarding the “share of total revenues of biotechnology-active firms in the agro-food sector
out of total revenues in agro-food applications” (AI2_2 modified) data was only available for
Belgium and Finland, included and excluded the revenues derived from agricultural farms
Finland shows a more as twice as high proportion than Belgium. The reason for that is the
three times higher total revenues of the agro-food sector in Belgium whereas the total revenues of biotechnology-active firms in the agro-food sector is about the same in both countries
(see Tables 4-23 and 4-24).
The calculation of the indicator “share of biotechnology revenues in agro-food applications out
of total revenues in agro-food applications” (AI3) is not possible as data for the numerator
(i. e. total revenues in the agro-food industry sector that arises from biotechnology-related
applications) are completely missing. Data for the denominator (total revenues in the agrofood industry sector) are shown in Table 4-21 and can be calculated for other EU Member
States as well.
Page 164 of 315
Table 4-23:
agro-food sector out of total revenues in agro-food applications (AI2_2
modified)
Country (year)
Total revenues of
agro-food sector
(€ m)
284 a) 1)
261 b) 2)
Belgium (2000)
Finland (2001)
Total revenues
(€ m)
Share
(%)
34,238.7 3)
13,159.9 3)
0.829
1.983
a)
b)
Number of employees active in the “agri-bio sector” (clear definition not available).
Revenues of biotechnology- active companies active in “Agro” and “Food sector”. This value may be
underestimated as “Diagnostics” are definitely excluded (no further definition available).
Sources:
1)
LUC; ULG; Vlerick Management (2004): Report on the national Biopharma innovation system of Belgium. Report to the Federal Science Policy Office.
2)
Von Blankenfeld-Enkvist, G. et al. (2004): OECD Case Study on Innovation: The Finnish Biotechnology Innovation System.
3)
Table 4-24:
Country (year)
agro-food sector out of total revenues in agro-food applications (AI2_2
modified) – without revenues of agricultural farms
Total revenues
of
agro-food
sector
(€ m)
Belgium (2000)
Finland (2001)
284 a) 1)
261
b) 2)
Total revenues
Share
(%)
Difference of
share (excluding and including agriculture in denominator)
(€ m)
(Tables 4-24/423)
27,126.1 3)
8,983.1
3)
1.046
+0.217
2.905
+ 0.922
a)
b)
Revenues of biotechnology-active companies active in “Agro” and “Food sector”. This value may be
underestimated as “Diagnostics” are definitely excluded (no further definition available).
Sources:
1)
2)
Von Blankenfeld-Enkvist, G. et al. (2004): OECD Case Study on Innovation: The Finnish Biotechnology Innovation System.
3)
Also, the calculation of the indicator „share of biotechnology revenues in agro-food applications out of total biotechnology revenues” (AI4) is not possible, since the same numerator as
for indicator AI3 is needed. However, as some data for the numerator of indicator AI2 (i. e.
total biotechnology-related revenues of biotechnology-active firms in agro-food sector) and
some data for the denominator (i. e. total revenues of biotechnology-related applications in all
Page 165 of 315
sectors) are available it is suggested to modify indicator AI4 and to calculate the “share of
total biotechnology-related revenues of biotechnology-active firms in agro-food sector out of
total revenues of biotechnology-related applications in all sectors”.
The following Table 4-25 shows the shares of biotechnology-related revenues out of total
revenues of biotechnology-related applications in all sectors (indicator AI4 modified) for 8 EU
Member States for the years 2000 and 2004.
Table 4-25:
of biotechnology-related applications in all sectors (AI4 modified)
Country (year)
Belgium (2004)
France (2004)
Germany (2004)
Italy (2004)
Netherlands (2004)
Spain (2004)
Sweden (2000)
Total biotechnology-related
revenues of
agro-food sector
(€ bn)
0.49 a) 1)
0.10 a) 2)
0.24 a) 3)
0.23 a) 4)
0.047 a) 5)
0.25 a) 6)
0.082 b) 7)
0.72 a) 8)
Total revenues
of biotechnology-related
applications in
all sectors
(€ bn)
Share
(%)
2.4 1)
2.1 2)
3.3 3)
1.0 4)
0.18 5)
0.58 6)
0.48 7)
6.7 8)
20.417
4.762
7.273
23.000
26.111
43.103
17.083
10.746
a)
b)
Biotech revenues of companies active in the “Agriculture and Food segment” (clear definition not
available).
Sources:
1)
3)
4)
5)
6)
7)
Sandström, A.; Norgren, L. (2003): Swedish Biotechnology – scientific publications, patenting and
industrial development. VINNOVA Analysis.
8)
2)
By far the highest share of biotechnology-related revenues of biotechnology-active firms in
the agro-food sector out of the total revenues of biotechnology-related applications in all
sectors shows Spain in 2004 with more than 40 %. The remaining countries can be divided
into two groups. In the Netherlands, Italy, Belgium and Sweden agro-food biotechnology has
a relatively high importance compared to other biotech applications (17-26 %), whereas in
Germany, the United Kingdom and France the share is relatively low (4-10 %). However, it
must be considered that even if the revenues of large agro-chemical and seed companies are
taken into account (which might be partially included in the figures presented in column 2 of
table 4-25), the presented proportions are very high (especially in the Mediterranean
countries) compared to other indicators in the agro-food field (like e. g. number of companies)
as well as compared to indicators found for other biotech applications. Therefore, the quality
of the published data can be questioned.
Page 166 of 315
Employment (AI5-AI7)
Data for the calculation of the indicator “share of biotechnology-active employees in agro-food
applications out of total employees in agro-food applications” (AI5) were taken for the numerator (i. e. number of biotechnology-active employees in the agro-food sector) out of official
statistics and published reports which were only available for a few countries and years. The
denominator (i. e. total number of employees in the agro-food sector), was aggregated using
mainly Eurostat data of the numbers of employees in the input sector (i. e. producers of feed,
fertilisers and pesticides), in the agricultural and horticultural sector and the food processing
sector. The number of employees in agricultural and horticultural companies was calculated
using annual work units. There were no precise data available regarding the employees of the
seed producing industry which is rather small compared to the other three aggregates so that
no big bias on the results of this indicator has to be expected.
Sweden showed the highest share of biotechnology-active employees in agro-food applications out of total employees in agro-food applications. Between 1998 and 2000 this proportion
continuously increased while it decreased in 2002 and 2003 (Table 4-26). In Belgium around
0.58 % of all employees of the agro-food sector are related to biotechnology applications,
while this figure is below 0.2 % in Ireland showing the very limited relevance of biotechnology
for employment in the agro-food sector in this country.
Table 4-26:
Country (year)
Number and share of biotechnology-active employees in agro-food applications out of total employees in agro-food applications (AI5)
Number of
biotechnologyactive employees
in the agro-food
sector a)
Total number of
employees in the
agro-food sector
Share
Belgium (2000)
1,026 b) 1)
176,814 4)
0.580
Ireland (2003)
277 c) 2)
208,439 4)
0.133
d) 3)
4) 5)
0.530
Sweden (1998)
777
Sweden (1999)
811 d) 3)
140,333 4) 5)
0.578
Sweden (2000)
832
d) 3)
4) 5)
0.599
Sweden (2002)
691 d) 3)
136,378 4) 5)
0.507
Sweden (2003)
d) 3)
4) 5)
0.449
a)
607
146,510
(%)
138,967
134,891
In the statistics/reports it was not clearly mentioned if all employees working in biotechnology-active
firms in the agro-food sector are meant or all biotechnology-active employees in the agro-food sector.
Definitions of employees active in biotechnology companies given in the corresponding reports (see
“Sources”):
b)
c)
Number of employees active in the “agri-food sector” (clear definition not available).
d)
Number of employees active in the biotech applications “agrobiotech” and “biotech food” (clear definition not available).
Page 167 of 315
Sources:
1)
2)
Inter Trade Ireland (2003): Mapping the Bio-Island – A North/South study of the private biotechnology
sector.
3)
4)
5)
In order to evaluate direct employment effects of the application of biotechnology, the
following Table 4-27 shows the number and share of biotechnology-active employees in the
agro-food sector without employees of agricultural farms when calculating the denominator.
Due to the exclusion of employees of agricultural farms (when calculating the denominator)
the proportion of biotechnology-active employees in the agro-food sector out of total employees in the agro-food sector increased by around 0.5 % up to more than 1 %. The only exception is Ireland which shows a proportion of 0.55 % when agriculture is excluded in the denominator (Table 4-27). If this indicator is used, Belgium and Ireland have a lower rate of increase compared to Sweden thus showing that agricultural farms contribute less to total
employment in the agro-food sector in Sweden than in Belgium and Ireland, respectively.
Table 4-27:
Country (year)
Belgium (2000)
Ireland (2003)
Sweden (1998)
Sweden (1999)
Sweden (2000)
Sweden (2002)
Sweden (2003)
a)
Number and share of biotechnology-active employees in agro-food applications out of total employees in agro-food applications (AI5) – without employees of agricultural farms
Number of
in the agro-food
sector a)
Total number of
employees in the
agro-food sector
Share
1,026 b) 1)
102,014 4)
277
c) 2)
777
d) 3)
811
d) 3)
832
d) 3)
691
d) 3)
607
d) 3)
(%)
Difference of
share (excluding
and including
agriculture in denominator)
Tables 4-27/4-26)
1.006
+ 0.426
50,139
4)
0.552
+ 0.419
65,510
5)
1.186
+ 0.656
62,933
5)
1.289
+ 0.711
62,467
5)
1.332
+ 0.733
61,078
5)
1.131
+ 0.624
60,591
5)
1.002
+ 0.553
In the statistics/reports it was not clearly mentioned if all employees working in biotechnology-active
firms in the agro-food sector are meant or all biotechnology-active employees in the agro-food sector.
Definitions of employees active in biotechnology companies given in the corresponding reports (see
“Sources”):
b)
c)
d)
Number of employees active in the biotech applications “agrobiotech” and “biotech food” (clear definition
not available).
Sources:
1)
2)
Inter Trade Ireland (2003): Mapping the Bio-Island – A North/South study of the private biotechnology
sector.
3)
4)
5)
Page 168 of 315
Data for the calculation of the indicator “share of biotechnology-active employees in agro-food
applications out of total employment in biotechnology-active firms” (AI6) were taken from official statistics and reports both for the numerator (i. e. number of biotechnology-active employees in the agro-food sector) and the denominator (i. e. total number of employees in
biotechnology-active firms). Whereas data for the denominator were available for quite a lot of
countries and years, the data basis for the nominator was rather limited. Therefore, it only
was possible to calculate this indicator for a few countries and single years (Table 4-28).
The total number of employees in biotechnology-active firms continuously increased in Belgium, Denmark, France, Spain, Sweden and the United States during the analysed years. A
decrease of the number of biotechnology-related employees, however, can be observed in
Ireland and the United Kingdom.
In Ireland the proportion of biotechnology-active employees in the agro-food sector out of the
total number of employees in biotechnology-active firms is rather low, with less than 10 %
showing the relative strength of other biotechnology fields in this country (e. g. health-related
biotechnology). In Sweden the corresponding share of employees active in agro-food biotechnology continuously decreased over the years, implying that the agro-food sector has lost
significance for the biotechnological activities of firms and that the importance of other fields
has increased as the total number of employees in biotechnology-active firms in Sweden has
risen over the years.
Table 4-28:
Country (year)
Belgium (2000)
Belgium (2003)
Denmark (2001)
Denmark (2002)
Denmark (2003)
Finland (2004)
France (2001)
France (2002)
France (2003)
Germany (2001)
Germany (2002)
Germany (2003)
Ireland (2001)
Ireland (2002)
Ireland (2003)
Poland (2003)
Spain (2000)
Spain (2001)
Spain (2002)
Spain (2003)
Number and share of biotechnology-active employees out of total employment in biotechnology-active firms (AI6)
Number of
in the agro-food
sector a)
Total number of employees in
firms
Share
1,026 b) 1)
7,160 1)
14.329
277
-
11,137
3)
-
15,300
4)
-
16,800
4)
-
17,300
4)
-
e) 5)
-
8,300
4)
-
8,500
4)
-
8,900
4)
-
2,450
-
c) 2)
(%)
16,200
4)
-
18,600
4)
-
17,300
4)
-
5,800
4)
-
3,900
4)
-
2,900
4)
9.552
946
3)
-
17,532
f) 6)
-
18,535
f) 6)
-
19,753
f) 6)
-
20,627
f) 6)
-
Page 169 of 315
Country (year)
Spain (2004)
Sweden (1998)
Sweden (1999)
Sweden (2000)
Sweden (2001)
Sweden (2002)
Sweden (2003)
USA (2002)
USA (2003)
a)
Number of
in the agro-food
sector a)
Total number of employees in
firms
Share
-
1,793 g) 6)
-
777
d) 3)
811
d) 3)
832
d) 3)
691
d) 3)
607
d) 3)
-
(%)
4,842
3)
16.047
6,009
3)
13.496
6,445
3)
12.909
7,160
3)
-
7,939
3)
8.704
8,632
3)
7.032
25,100
4)
-
24,400
4)
-
22,400
4)
-
168,100
4)
-
172,400
4)
-
In the statistics/reports it was not clearly mentioned if all employees working in biotechnology-active firms in the
agro-food sector are concerned or all biotechnology-active employees in the agro-food sector.
Definitions of employees active in biotechnology companies given in the corresponding reports (see “Sources”:
b)
d)
Number of employees active in the biotech applications “agrobiotech” and “biotech food” (clear definition not available).
e)
Number of employees active in biotechnology SMEs.
f)
Number of employees of “companies fully devoted to biotechnology (= biotechnology accounts for over 80 % of
activities and for over 50 % of revenues, a clear commitment to conducting biotechnology RDI in Spain and submission of calls for public biotechnology research proposals in Spain)” and of “companies partly devoted to biotechnology (= biotechnology accounts for less than 80 % of activities and partly for revenues, a clear commitment
to conducting biotechnology RDI in Spain and application to take part in biotechnology research projects in Spain)”.
g)
Number of employees of “companies fully devoted to biotechnology (= biotechnology accounts for over 80 % of
activities and for over 50 % of revenues, a clear commitment to conducting biotechnology RDI in Spain and submission of calls for public biotechnology research proposals in Spain)”.
c)
Sources:
1)
LUC; ULG; Vlerick Management (2004): Report on the national Biopharma innovation system of Belgium. Report to
the Federal Science Policy Office.
2)
Inter Trade Ireland (2003): Mapping the Bio-Island – A North/South study of the private biotechnology sector.
3)
4)
Critical I Limited (2003): Comparative Statistics for the UK, European and US Biotechnology Sectors – Analysis
Year 2003.
5)
Hermans, R. et al. (2004): ETLA 2004 Survey on the Finnish Biotechnology Industry – Background and Descriptive
Statistics.
6)
Genoma Espana (2005): Spanish Biotechnology: Economic Impact, Trend and Perspectives.
As data for the denominator “number of biotechnology-active employees in each component
of the agro-food sector (seeds, crops, livestock, fish)” could not be elaborated from the statistics, the calculation of the indicator “shares of employment in each application out of total biotechnology employment” (AI7) is not possible.
4.4.3
Case study summaries: molecular diagnostics
The following sections summarise case studies carried out in the areas of ‘Molecular Diagnostics’. The full case studies are included in a separate report.
Page 170 of 315
4.4.3.1
Changes in diagnostic techniques (foot and mouth disease diagnostics)
Introduction
Foot and mouth disease (FMD) is a highly contagious disease affecting cloven-hoofed animals and is of major economic importance globally. It is caused by a small RNA virus. The
World Reference Laboratory at the Institute for Animal Health provides a world-wide diagnostic service, maintaining global surveillance to warn of the presence of the disease in a country
and to help prevent its spread to neighbouring countries and trading partners.
There are seven sero-types and FMD cannot be differentiated clinically from several other
diseases. Laboratory diagnosis of any suspected case is therefore a matter of extreme urgency.
Diagnosis is by virus isolation or by demonstration of viral antigen or nucleic acid in samples
of tissue or fluid. Laboratory-based sero-diagnosis can be enhanced by new non-structural
protein (NSP) assays that may enable determination of past or current infection, irrespective
of vaccination status. The complement fixation (CF) method has been replaced in many laboratories by the more specific and sensitive ELISA-based assay. Nucleic acid recognition tests,
e. g. polymerase chain reaction (PCR) are also being increasingly used as rapid and sensitive
diagnostic methods.
With heightened awareness post-2001 outbreaks of FMD, biotechnology firms in the EU are
addressing the pressing need for speed, accuracy and reliability in FMD detection. As largescale adoption of such biotechnological tests comes about, more jobs in sales, training and
laboratory analysis will be created. Jobs in inspection and surveillance roles are already increasing, not just in the EU25, but also globally post-2001205.
Following the outbreak in 2001, the EC made provisions for € 400 million from the budget
2001, and a further € 400 million was earmarked.
The UK government alone is estimated to have lost 2.4 billion £ over two years and this sum
does not include the heavy losses incurred by the agricultural export, transport, tourism, hotels and restaurants in the UK.
Following the 2001 outbreaks, Member States have increased their surveillance activities and
that may be contributing to the fact that no new cases of FMD have been reported since
2001. However it is not possible to attribute this fall in incidences to new biotechnological
approaches for early diagnosis of FMD.
Searches for biotechnological firms active in FMD diagnostics lead to several governmental
and academic organisations. These are not all academic or research laboratories but often
they are policy influencers in their respective countries and as such important players in the
debate.
In the EU as well as in the USA, the initiatives for developing new biotechnological methods
for swifter and more certain diagnosis of FMD are located in academic and research laboratories, rather than in commercial outfits. New academia-industry collaborations may emerge in
this area creating wealth as well as jobs, while positively affecting animal health outcomes.
205
“The 2001 FMD Outbreak in Great Britain“ by Jim Scudamore.
http://www.defra.gov.uk/animalh/svj/fmd/pages1-12.pdf#search= %22FMD %20cases %20trends %22
Page 171 of 315
In the EU as well as in the USA, much focus is on developing field-side diagnostic devices or
kits which may reduce the delay introduced when samples are transported to laboratories.
There is a key point of difference. In the USA, the government actively participates in and
funds emerging biotechnologies in FMD, while this is not happening in the EU.
Governments however are the main customers for these biotechnological products for diagnosing FMD, and they must stock-pile kits and provide ample analytical facilities in an outbreak.
In the USA, the government takes the lead in strict border controls, surveillance and stamping-out, backed by a compensation plan for destroyed herds. In the EU, it is the EU that provides compensation based on the case made by individual farms in Member States affected
by an FMD outbreak.
Post-2001 FMD outbreaks, the costs to the UK economy were analysed by Nottingham University’s business school. The Nottingham Model of the UK includes production relationships
for 115 sectors of the economy and markets for 115 goods and services. The model quantifies the links between sectors, between government, households, firms and other institutions.
It includes direct, indirect and induced impacts of tourism demand and agricultural restrictions,
as well as labour market, capital market, and foreign exchange market links between sectors.
The modelling technique of computable general equilibrium, simultaneously computes economic models of each sector and market. The study showed that many sectors – agriculture,
tourism, hotels, restaurants and transport – in the UK made considerable losses and that, including compensation claims paid out and lost tax revenues, the government stood to lose
about £ 2.4 billion over two years.
In an earlier paper206, Javier Ekboir of University of California in Davis had projected the costs
of an FMD outbreak to the State of California using a model that took into account costs related to eradication, production losses and trade restrictions. His estimate stood at
US $ 13.6 billion for California State alone.
While the Nottingham model and the Ekboir model use different methodologies, both reports
highlight that the USA and the EU must reconsider their policies on vaccination as a tool to
contain future outbreaks. Currently both regions focus heavily on slaughter of affected and
exposed animals. Not withstanding the EU’s and the USA’s different approach to geneticallyengineered products, which would include vaccines for FMD, there should be no societal concerns about the adoption of such vaccines.
The key framework condition that may account for the difference in approaches in the USA
and the EU is the different sovereignty structures at play. In the USA, a unified Animal and
Plant Health Inspection Service (APHIS) is active in surveillance and outbreak management
activities throughout the states. In the EU, however, Member States are free to interpret EC
directives for enforcement in their own countries. This may mean that differences in standards
may exist and with free trade and open borders, especially physically in the European continent, the risk of an outbreak is considerable.
Outlook
Many firms and academic laboratories world-wide are working on rapid, reliable, “pen-side“
tests for early detection of FMD.
Some remarkable recent developments regarding mobile PCR, which has generated strong
interest include Enigma Diagnostics’s PCR-Light®, a portable real-time PCR platform for ul-
206
Ekboir, J (1999), “Potential Impact of Foot and Mouth Disease in California: The role and contribution
of animal health surveillance and monitoring services“ Available on: http://aic.ucdavis.edu/pub/fmd.html
Page 172 of 315
tra-rapid, in-field genetic analysis or the detection of pathogens or toxins. Enigma is a spin-out
from the Defence Science and Technology Labs in Porton Down in the UK. Recently the
scientists of the Lawrence Livermore National Laboratory, funded by the Federal Homeland
Security and Agriculture departments and the University of California-Davis, have developed
a rapid diagnostic test that simultaneously tests for foot-and-mouth disease and six other
look-alike diseases in livestock. This new candidate test, still in the process of validation, reduces the period for diagnosing all seven diseases from days to hours, and could significantly
reduce costs.
These and many other emerging biotechnology firms in the EU and the USA are creating innovative technologies, but the most significant impact will come in two areas – firstly in creating simple interfaces so that a farmer can use “pen-side“ tests without much technical expertise or training; secondly enabling surveillance rather than post-facto detection, which may be
aided by new marker vaccines.
4.4.3.2
New diagnostics (BSE diagnosis)
Introduction
The BSE case study aims to assess the impact of applying modern biotechnology for the development of tests for new diseases in animals. This topic touches a number of issues with an
important European dimension:
• High social impact on public health
• High impact on public discussion and perception
• High economic impact on affected primary production and processing industry
• Research activities and research funding, coordination of European with national activities
• Standardisation
• Implementation of international rulings at the national level
The EU directive for compulsory BSE surveillance across the Member States has resulted in
an expansion of surveillance systems that were already in place. The development of rapid,
biotechnology-based test kits was necessary in order to cope with the large numbers of
samples which were required to be processed. In addition, as these kits were testing animals
slaughtered at abattoir, a rapid result was essential, as the carcase of an animal is held at the
abattoir until the BSE result is known. The traditional methods of BSE testing could not cope
with the high throughput, with a sample taking 3-5 days to produce a result. Initially, the EU
funded research into the development of such kits, although current research into BSE testing
methods is mostly performed through private companies or research bodies. Within the UK,
research into BSE is funded by DEFRA and other research bodies.
The effect on revenues within the companies can only be estimated, as this information, including production costs, is sensitive information, as are the cost of the kits themselves. The
cost of a BSE test across the EU is estimated to be between € 40 and € 50, so from the number of tests performed in the EU, the laboratory charge for performance of these tests for
2006 can be estimated as € 190 million. The companies’ production costs and revenues must
be a fraction of that figure, as the laboratories have overheads to cover.
There has also been a positive impact on employment in companies producing the kits and in
the laboratories performing the surveillance, with expansions in workforce of around 100300 %. This reflects the response to the demands of the surveillance, and the increased
number of samples processed through passive BSE surveillance.
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Indirectly, BSE surveillance has also had an economic impact through the re-opening of market borders. For example, recently beef was re-approved for export from the UK to EU Member States. This was achieved through the continued surveillance for BSE, which proved that
the incidence of the disease was below the agreed threshold, and that there was compliance
with the introduced measures designed to eradicate the disease207.
The social impact of the use of BSE rapid test kits is mostly related to consumer confidence in
the food industry. Although the aim of surveillance is to ensure that the prevalence of BSE is
below an agreed level and to monitor how well the control measures are working, it also provided a level of public assurance. An additional effect observed in Germany was that people
became more aware to how food was produced, with increased demands for organic and less
intensively produced food, as organic farms were being promoted as ‘BSE-free’ areas208. The
environmental impact of the BSE rapid test kits is not easily definable, but is mostly related to
the number of extra animal carcases that would require destruction as a result of the detection of a clinical case by passive surveillance.
Three of the companies producing kits used in the EU, are located outside of the EU –
Prionics, Idexx and Fujirebio. Of these, Prionics and Idexx have major shares of the market in
rapid diagnostic tests, with the Fujirebio product being more recently released and approved.
There are no available data on the effect on employment in Japan, where is it possible that
there had to be an expansion in the workforce similar to the EU to cope with the requirements
of their testing programme.
Likewise, information on revenues of the rapid test kits is unavailable, although some figures
are available for the costs of surveillance in the USA (US $ 6-12 million(= € 4.7-9.3 million))
and Japan (US $ 13-16 million (= € 10.1-12.4 million)209. Both these figures are much lower
than that of the EU: there fewer animals tested in both countries, and the costs per test are
also lower. Other indirect effects of the BSE surveillance are the re-opening of markets
between Japan and the USA.
As noted earlier, the main social impact is in the public perception of the safety of food. Generally, Japanese consumers had trusted home-grown produce more than imported food stuffs,
so BSE in the domestic herd resulted in an increase in consumer anxiety, and an immediate
fall in beef consumption by up to 50 %, which had recovered to within about 5-10 % of preBSE levels in early 2003210. This reaction was similar to those in some mainland European
countries when BSE was discovered, and in the UK when the BSE-nvCJD link was discovered. Apart from the increased surveillance measures, the Japanese government has
implemented assurance schemes to try to regain the confidence of consumers. These
schemes would allow customers to trace their food from the farm to the retailer. Similarly to
Germany, there is also a raised social awareness of where the food comes from.
In contrast, in the USA, there was not a very significant fall in demand or consumption of beef
products211 on discovery of BSE cases in cattle and the public response in Finland was similar
to that in the USA. These responses may reflect the number of cases found in these herds
207
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/06/278&format=PDF&aged=
1&language=EN&guiLanguage=en
208
Philip Lowe, Christianne Ratschow, Johanne Allinson, Lutz Laschewski. Government decisionmaking under crisis: A comparison of the German and British responses to BSE and FMD.
209
Gino C. Matibag, Manabu Igarashi and Hiko Tamashiro (2005) BSE Safety Standards: An Evaluation
of Public Health Policies of Japan, Europe, and USA. Environmental Health and Preventive Medicine
10, 303–314.
210
Rozanne Clemens (2003) Meat Traceability and consumer Assurance in Japan.
211
Meyer (2005) Impact of BSE on beef marketing :
http://www.uky.edu/Ag/AnimalSciences/farm/bseinfosheet.pdf
Page 174 of 315
(one case in Finland, two in the USA), although it has been suggested that the Finnish response was also partly influenced by keeping the public informed about the BSE situation.
As Japan maintains a more extensive surveillance programme, there would be greater revenues of disposal kits than in the EU. Neither Japan nor the USA appear to enforce cohort
culling, so there is not the extra number of animals that need to be destroyed as a result of
being linked to a BSE case, and hence minimum environmental impact of using the rapid test
kits for BSE surveillance.
The approach to BSE surveillance in non-EU countries may also be influenced by the historical perception that BSE was an EU problem, until domestic cases began to appear worldwide. In Japan, with the public pressure, this resulted in a comprehensive surveillance programme, in which all cattle were slaughtered whereas in the USA, with a rather indifferent
public attitude to what seems to be regarded as isolated cases, a less stringent testing
programme was adopted, although the need for active surveillance was recognised.
Outlook
In the EU, BSE surveillance is likely to decline over time, as the number of cases detected
decreases, although it is likely that there will always be some baseline level of BSE in the
herd. As the incidence declines, there is less risk to the consumer from eating infected meat,
and the cost of BSE surveillance compared to its benefits at the current level in the EU will no
longer be sustainable. For example, in 2002, the cost of finding one positive case in the 30 –
35 month age group of healthy animals was € 302 million. If the decrease in the incidence in
BSE continues, three types of surveillance need to be considered, two which focus on older
animals, and one which considers the option of a live animal test212. It has been estimated
that a live animal test for BSE will not be available for at least a year: the blood of cattle does
not have the same level of infectivity as that of sheep, so the test will not be as sensitive. Although it is possible that BSE may never be completely eradicated, it may reach a low
enough level that trade resumes without the requirement for BSE-free assurance.
From a company perspective, with the decline in the number BSE cases, those which focus
solely on prion diseases are likely to start aiming their research and development towards the
detection of clinical cases in the live animal, or to focus on diagnostic tests for humans (for
example, nvCJD), if they choose to remain within the field of prion diseases. Other companies
have branched out into other areas of surveillance for other endemic animal diseases, both in
the provision of the testing kits, and in the provision of diagnostic laboratories.
Overall, it is likely that these rapid post-mortem kits may not play as great a role in BSE surveillance in the future, especially as the incidence of the disease declines, and the extent of
surveillance is reduced. There is a pressing need for the development of live tests, both for
animals and in humans. Such live animal tests would also have the benefit of reducing the
number of animals culled when a positive animal was detected. In the EU, under the current
regulations a cohort cull of animals is associated with a positive case. Other benefits would
include reducing the strain on laboratories to return results to the slaughterhouse where the
carcases are being held, and a reduction of strain on the slaughterhouses themselves, as
cases would be detected before reaching the abattoirs, and contamination of the premises by
BSE-infected meat would be avoided.
212
EC: The TSE Roadmap, Brussels, 17.07.05
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4.4.3.3
Animal vaccines (Pseudorabies)
Introduction
This case study considers the impact of the Pseudorabies or Aujeszky’s Disease (AD) vaccine as an example of the successful application of biotechnology. The vaccine was developed in the early 1990s and has been effective in combating, and in many cases, eradicating
AD from many parts of Europe. Prior to vaccine development and administration there were
substantial economic losses and AD, though not as damaging as swine fever, is considered
as one of the most dangerous diseases in domestic pigs213.
Aujeszky’s disease (AD) or pseudorabies is primarily a disease affecting pigs. It is a highly
infective air-borne herpes virus. Infected pigs display a range of clinical symptoms including
nervous system damage, a reduced fertility of sows (specifically an increased number of
abortions, a reduction in the average number of litters per year and an increase in still-born
pigs)214. Suckled piglets might show signs of nervous disorders and have high mortality rates.
Weaned pigs also develop nervous disorders and in addition, vomiting, diarrhoea, sneezing,
coughing and high temperatures.
A large body of work was done in the early 1990s by a team of scientists led by Dr. Jan van
Oirschot at the Central Veterinary Institute in Lelystad, The Netherlands. Through the selection of a particular protein from the virus genome, they made the first significant advances in
the development of what is now called the DIVA vaccines (differentiating infected from vaccinated animals). The use of this marker vaccine in the control of Aujeszky’s disease represents the first application of this type of technology in the veterinary field.
Marker vaccines in the eradication process, although not essential, make it possible to differentiate between vaccinated and infected animals and so this greatly shortens the time
needed to complete the eradication215. Eradication was also made possible due to the coordinated effort of the EU.
Economic impact of this vaccine is complex to estimate. Particular types of data which are
necessary in this compound measure are not available due to company confidentiality and the
nature of vaccine production. Upon completion of an eradication programme and part of the
eradication strategy, the vaccine is commonly prohibited from further use. Data across the
EU25 will in some cases be historic with costs and benefits being shown as singular timespecific occurrences.
There are two main groups of informants that this study specifically targets. Firstly the vaccine
manufacturers who number only six in Europe. Vaccines authorised for use in Europe are
only sourced from European companies, with one exception (Fort Dodge, partly located in
Holland). Therefore data from this group is gained by undertaking semi-structured interviews,
ideally with business or marketing managers who would be aware of revenues figures and
distribution networks.
Secondly, competent authorities responsible for the authorisation of the vaccine have also
been included. Information from this group has acted as the starting point as the companies
213
Muller, T., H. J. Batza, et al. (2003). Eradication of Aujesky's disease in Germany. Journal of
Veterinary Medicine B: 207-213.
214
McInerney, J. and D. Kooij (1997). Economic analysis of alternative AD control programmes.
Veterinary Microbiology. 55: 113-121.
215
Visser, N. (1997). Vaccination strategies for improving the efficacy of programs to eradicate
Aujeszky's disease virus. Veterinary Microbiology. 55: 61-74
Page 176 of 315
registered for authorised manufacture were disclosed to the researcher allowing for subsequent research. Such groups it was assumed may be the focal point for any centralised collection of statistics regarding animal welfare and the incidence of AD.
A third group who proved to be useful in light of the difficulty in engaging with the two groups
above, were academics and scientists. Scientists were familiar with research, progress and
the development of the area. They also identified particular scientific papers (which often they
had co-authored) arguing the case for eradication and the use of vaccine strategies in
Europe.
Additional sources have been consulted, in particular grey literature sources such as official
documents and various academic databases have been searched for similar kinds of costbenefit analyses or evaluation of the vaccine as mentioned above. National statistics collections and online statistical databases for the EC and various Member States have been
combed for the information relating to the indicators mentioned above.
Economic impact can be assessed according to two main criteria; the cost savings from animals which do not become infected and die or have to be slaughtered due to contracting infection, and the value to the company and economy due to the production, revenues and employment that vaccine manufacture generates.
Eradication programmes in Europe commonly have three stages. The first is to begin vaccination amongst the endemically affected population. The second stage is marked by the disappearance of the disease though with preventative vaccination being carried out, the third is
where the disease is eradicated and vaccination is prohibited. At least nine countries out of
the EU25 have been declared ‘disease free’ under EU guidelines. A total of 15 countries out
of 25 either have a disease free status or have not had an outbreak in the last five years.
Individually countries demonstrate the value of the vaccine to pig production. Prior to the
discovery and use of the GE deleted marker vaccine, eradication was largely through testing
and slaughter. There is no evidence that alternative vaccines were used. For example, in the
Czech Republic pork production increased from 361,000 metric tonnes in 1959 to 750,000
metric tonnes in 1988 via a policy of testing and slaughter216. However, the overall cost was
650 mil. Kcs, with an initial annual loss of 250, but an end cumulative benefit of 1750, with the
cumulative benefit after five years being 3000217. The last reported case occurred in 1987.
In Germany since establishing the eradication programme in 1989, the number of manifest
cases of illness decreased from 916 in 1991 to none reported for the first time in 2002218.
Correspondence from the German competent authority (Bundesministerium fur Ernährung) in
August 2006 reports that a milestone in the eradication programme was the use of the GE
deleted marker vaccine. In the Netherlands prior to attaining disease free status under EU
guidelines (i.e. including vaccinating with the marker vaccine), prevalence of AD ranged as
high as 60 – 80 %219.
The costs of the eradication programmes vary according to the country but some examples of
a few cost-benefit studies show that a full eradication programme is beneficial in the long run.
Data from the Netherlands show that the cost of vaccination is approximately € 0.73 per
animal with a total estimated cost of € 13 to 14 million annually to eradicate the disease220
216
Author (Kouba, V.) suggests that this increase is largely due to the eradication programmes which
targeted various pig diseases, of which AD was one. Source: Proceedings of the VIII International
Symposium on Veterinary Epidemiology and Economics, Paris, July 1997
217
All values in mil. Kcs. Source: Adapted from (Kouba, V.) Proceedings of the VIII International
Symposium on Veterinary Epidemiology and Economics, Paris, July 1997.
218
Personal written communication from Bundesministerium fur Ernährung, Landwirtschaft und
Verbraucherschutz – translated from German
219
Telephone interview
220
Telephone interview
Page 177 of 315
All vaccines registered for use within Europe are manufactured within Europe either by European companies or European subsidiaries of international companies (6 companies in total).
Interview data with Fort Dodge shows that this company does manufacture vaccines for sale
in North and South America (though these are manufactured in the USA and not in Europe)
and exports the vaccine from Europe to South East Asia. The greater proportion of their revenues are within Europe and this is thought to be similar for other European based AD manufacturers221. Revenues figures, export percentages etc. are confidential and were not disclosed to the researcher.
Figures show that in the long term it has proved to be more cost-effective to attempt a full
programme of eradication rather than to treat the disease or allow it to remain endemic in the
population. Economic benefit is much greater when taking into account the full savings made
through eradicating the disease, especially in light of the trade and livestock movement restrictions introduced by EC decisions.
The live attenuated marker vaccine developed by van Oirschot and his team was a break
though in term of vaccine technology - it revolutionised vaccine and eradication strategies for
AD in Europe. Eradication would have been a much longer and costlier process without it. In
addition, it might be noted that as demonstrated by the contrasting positions of the EU and
the USA, the successful application, distribution and development of the vaccine owed a great
deal to the centralised decision making of the EU.
Outlook
The current live vaccine is effective and well established. Research into the disease and the
vaccine is progressing along the lines of developing sub-unit vaccines. However, these subunit vaccines have so far not matched the performance of the live attenuated marker vaccines.
4.4.3.4
Surveillance of food safety (Salmonella testing)
Introduction
This case study deals with new biotechnology approaches for improving food surveillance.
The focus of this study is on the detection of Salmonella which, after Campylobacter, is the
most prevalent food pathogen and the leading cause of food-borne bacterial gastroenteritis in
the European Community222. However studies indicate that more than 80% of all
salmonellosis cases occur individually rather than as outbreaks223.
The impact of such testing systems relates to
• Economic issues: food quality and market acceptance;
• Social issues: public health, public perception, consumer acceptance
The reporting of antimicrobial resistance in Salmonella infections in Member States clearly
demonstrates the presence of a reservoir of resistance in food animals and food of animal
origin. Such infection is a concern as effective treatment may be compromised. This
221
222
Telephone interview
http://www.efsa.europa.eu/etc/medialib/efsa/press_room/publications/scientific/1497.Par.0019.File.dat/zoonoses20
04-levels1-2-part111.pdf
223
http://www.who.int/mediacentre/factsheets/fs139/en/
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establishes the need for early detection of Salmonella before such zoonoses can affect
human beings.
Modern biotechnological techniques for detection of Salmonella aid the improvement of food
quality in two ways – firstly by shortening the time-frame required to provide pre-enrichment
or selective enrichment of Salmonella cultures with time-saving genetic or immunological
tests; secondly by rapid detection methods for the presumptive identification of Salmonella.
Commercial testing kits and methods include those involving monoclonal antibodies,
fluorescent or chemiluminescent substrates, immuno-latex agglutination and other
biochemical methods. They are expected to reduce testing times by 1 to 5 days. We were
unable to obtain information on the proportion of all Salmonella tests and kits sold that are
using these new techniques224.
Several comparative studies show that some of the new biotechnological methods may only
be as good as or slightly better than existing methods for statistical detection of Salmonella;
however many new biotechnological methods do deliver results much more rapidly225. This
may allow preventative action such as removal of tainted foods from the supply chain to be
taken more rapidly, thereby effecting a reduction in human incidence of Salmonellosis226.
Data related to the following categories were sought:
Economic data
Our research into the economic impact explored growth in revenue and employment by firms
that developed or provided these new tests, costs borne by the food industry (farmers,
retailers, processors) for ensuring Salmonella control and safety, costs borne by consumers/
patients in case of Salmonellosis and accordingly changes in budgets for public health.
From over 75 firms providing Salmonella testing products in the EU-25, twenty-six were
targeted for interviews. However, as only three responses were obtained, primary data related
to economic impact could not be obtained. The following table summarises the data obtained
from the three companies interviewed (table 4-29).
Table 4-29:
Economic impact of Salmonella testing
Phenomenon/ Indicator
Value
Share of biotech in
turnover
11.3%
Comments
The reported range is from 2% to 70% for share of
turnover from food safety and sales to food industry.
Share of biotech-active
employees
14%
Most of the firms in our case study are fully biotechnology
oriented firms. This figure assumes that R&D employees
are fully biotech focused and estimate the R&D employee
number as a percentage of all employees.
Number of jobs created
through biotechnology
2066
Sum of jobs created (where data on EU employees are
available)
on turnover per
employee
Difficult to
assess
224
Most of the firms are 100% biotechnology oriented. Some
testing laboratories may be providing conventional testing
but that information is not available.
A good overview is available on: http://safefood.wsu.edu/wsud2.html
http://www.findarticles.com/p/articles/mi_m0887/is_5_18/ai_54680289 - New Tests For Salmonella
Detection Prove No Better Than Standard Tests; by Melissa O. Peplow, Maria Correa-Prisant, Martha
E. Stebbins, Nutrition Research Newsletter, May, 1999.
226
Evaluation of overnight enrichment and next day detection of Salmonella in food matrices; by S S
Rowe, E P Jeffries, C C Young, J A. White. http://ift.confex.com/ift/2002/techprogram/paper_13645.htm
Page 179 of 315
225
From publicly available information we have drawn data relating to the economic indicators of
job creation and revenues due to emerging biotechnologies in salmonella detection.
Biotechnology is playing an increasingly important role in enhancing food safety through enabling more rapid Salmonella detection than conventional tests
Most firms in our target list sell to a wide range of clients in food & pharmaceutical manufacturing, cosmetics & personal care products, water, veterinary/livestock production, environmental and clinical markets. They make between 45-70 % of their revenues from serving the
food manufacturing and safety market, either directly or through government-owned or private
diagnostics and testing laboratories. Many firms, besides being innovators of tests and kits
also have distribution relationships with other similar firms to provide market access to other
the EU25 firms or those with a US base. These firms serve a range of needs in the entire
value chain of early Salmonella detection in the food chain, from enrichment technologies, to
test kits to providing analytical services.
However the geographical and service-line-based breakdown of revenue, and the detailed
breakdown of employees by their involvement in Salmonella or R&D or location in the EU25
in these mainly privately held firms have been difficult to obtain. Since many of our target
firms also serve needs other than Salmonella testing, it is therefore difficult to attribute specifically their revenues or the number of jobs created by them to biotechnological advances in
Salmonella testing.
Social Impact
Societal impact includes changes in burden of disease and disease incidences in animals and
humans.
Data related to social impact was mainly collated for human and animal incidence of Salmonella. The trends in the Member States, excluding the new Member States, indicate positive
developments in reducing the human incidence of Salmonellosis. Further, data from 2005
onwards is to be reported in accordance with newly effective New Zoonoses Directive
2003/99/EC. This means better – and more uniform – data will be available in future, making
it easier to draw comparisons, learn from the more successful nation Member States and
implement comparative public health studies in future. However exact cost figures for the
disease burden for animal or human were not available. The data collected are summarised
in table 4-30.
Table 4-30:
Social impacts of Salmonella testing
Phenomenon/
indicator
Change in number
of food
contamination
cases
Value
0 – 80% variation
Impact on animal
welfare
Change in number
of ill animals and in
human zoonotic
cases
Comments
Across the EU-25, there is a general declining trend in
food contamination cases. However due to free movement
of goods, imported foods often skew the numbers for
those Member States where domestic incidence is low.
The better-performing Member States report vaccination
and heat-treatment of eggs as measures to curb
salmonella incidence. As these treatments benefit animals
directly, but do not involve emerging biotech, it can be
said that biotech is not playing a key role in animal welfare
yet.
- 15%
A general trend in fewer human zoonotic cases is seen
across the EU-25 over the period 1999-2004; the number
of biotechnology firms serving the EU- 25 region is
significant and as most of them gain significant portions of
their revenues from the EU-25, it is fair to conclude that
biotechnology is affecting the downward trend positively.
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The trends in the Member States, excluding the new Member States, indicate positive
developments in reducing the human incidence of Salmonellosis. Data from 2005 onwards
are reported in accordance with the New Zoonoses Directive 2003/99/EC, so that better and
more uniform data will make it easier to draw comparisons, learn from the more successful
Member States and implement comparative public health studies in future.
Within the EU, new member-states have reported high incidences of Salmonella enteritidis
infections in 2004, whereas decreasing trends are observed in several of the EU-15227. It s
generally accepted that infections caused by S. enteritidis are related to poultry products,
especially table eggs and egg products. It is also notable that those Member States having
the lowest proportions of S. Enteritidis cases have control programmes running not only in the
breeding flocks in egg production line, but also in the laying hen flocks producing table eggs,
which includes restrictions such as heat treatment of table eggs from flocks suspected of
being infected. Such programmes rely on rapid and effective diagnostic techniques.
In the USA, compared to the baseline, there is a steady downward trend in animal disease
burden although no clear trend is identifiable in the human isolates related data. It is difficult
to draw conclusions from the available Japanese data.
The key differences are in the type, frequency and quality of data available from the EU and
the USA. Some of this is possibly due to the public health enforcement and measurement
structures in both regions. However, a key common factor is the ‘federated’ nature of data
collection both in the USA and the EU. Uniformity of data collected is very important for policy-makers to make any sensible conclusions about trends and actions and corrective
measures required, if any.
Another key factor appears to be US regulatory requirement that any food entering human
consumption chain should be free of Salmonella enteritidis. Neogen for instance reports that
the revenues from its Salmonella testing kits are expected to go up when this requirement
comes into force.
Outlook
Some country-specific data reported by Member States capture the incidents of Salmonella
caused by imports and sometimes the exporting nations are also identifiable. An open European market in goods can cause an upward trend in animal incidence and consequently human incidence of salmonella, especially if Member States are allowed to interpret the enforcement needs and implement different systems of measuring, reporting, confirming and
managing disease outbreaks.
Emerging biotechnologies are focused on enabling more rapid Salmonella detection. This
makes a clear contribution to enhanced food safety. However future technological innovation
may come as a result of “preventative” applications at various stages in the human food
chain, such as vaccination (preventative for animal health purposes) and heat-treatment (preventative prior to entry into food chain) type applications.
227
http://www.efsa.europa.eu/etc/medialib/efsa/press_room/publications/scientific/1497.Par.0019.File.dat/zoonoses20
04-levels1-2-part111.pdf
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4.4.3.5
Traceability of GMO in the Food and Feed Industry
Introduction
The application of genetically modified organisms (GMOs) in agriculture and food production
has steadily increased in the recent years in many overseas countries, while EU consumers´
acceptance of using GMOs in the food area still is lower compared to non-food GM
applications228. In order to ensure consumers and users freedom of choice, the EU adopted
specific regulations (in particular regulations (EC) No 1829/2003 and (EC) No 1830/2003)
which regulate the admission, labelling and traceability of GMOs in food and feed. In this
context it is important to consider that the aforesaid regulations refer to GMOs which have
been tested concerning their health and environmental impacts during their approval process.
Accordingly, food and feed products have to be labelled if containing more than a defined
proportion of GMOs. This threshold has been set to 0.9 % adventitious presence of GMOs in
the final food product if the GMO is approved in the EU. In order to comply with these rules, a
strict documentation system along the entire supply chain is also needed as the GMO content
cannot be measured by analytical tests in highly processed food products (e. g. soybean oil)
229 230 231 232
.
As GMOs contain unique novel DNA sequencies and/or proteins, they can be detected by
specific analytical tests. By carrying out these tests it is possible to check if a certain food or
feed product contains GMOs or not, as well as the GMO content, in order to ensure the
correct labelling in accordance to the EU regulations. At present there are mainly two
analytical methods applied to detect and quantify GMOs: ELISA- and PCR-tests 233 234.
Data on the economic impacts of GMO testing are largely missing, although this topic gains
more and more importance in the European Union's food and feed market. Therefore, this
case study is based mainly on the information given by some small and medium-sized
European companies which are involved in and affected by GMO identification. Interviews
were conducted with 17 experts from six EU Member States. Contacted firms included
representatives of producers of analytical test kits, diagnostic laboratories which carry out
these tests and companies in specific branches of the food industry which are supposed to
use GM ingredients (namely the bakery, milling, dairy and confectionary industry). As it was
especially hard to gather information from the last group (due to confidentiality reasons) it was
tried to elaborate the requested data by contacting the corresponding associations. The
228
Clive, J. (2005): Global Status of Commercialised Biotech/GM Crops in 2005. ISAAA Briefs No. 34.
ISAAA: Ithaca, NY.
229
Jany, K.-D.; Schuh, S. (2005): Die neuen EU-Verordnungen Nr. 1829/2003 und Nr. 1830/2003 zu
genetisch veränderten Lebens- und Futtermitteln: die Kennzeichnung. In: Journal für
Ernährungsmedizin, Iss.2, p. 6-12.
230
Gaskell, G. et al. (2006): Eurobarometer 64.3 – Europeans and Biotechnology in 2005: Patterns and
Trends.
231
European Parliament and the Council of the European Union (2003a): Regulation (EC) No
1829/2003. Office Journal of the European Union.
http://europa.eu.int/eurolex/pri/en/oj/dat/2003/1_268/1_26820031018en00010023.pdf. Call date
27/05/06.
232
European Parliament and the Council of the European Union (2003b): Regulation (EC) No
1830/2003. Office Journal of the European Union.
http://europa.eu.int/eurolex/pri/en/oj/dat/2003/1_268/1_26820031018en00240028.pdf. Call date
27/05/06.
233
Directorate-General for Agriculture European Commission (2002): Economic Impacts of Genetically
Modified Crops on the Agri-Food Sector – Second Review. Working Document, Brussels.
http://eu.europa.eu/agriculture/publi/gmo/fullrep/ch5/htm. Call date 25/05/06.
234
Deckwer, W.-D.; Pühler, A.; Schmid, R.D (1999): Römpp-Lexikon Biotechnologie und Gentechnik. 2.
Edition.
Page 182 of 315
associations, however, were not able to indicate exact numbers in terms of economic impacts
on the branches, but gave an interesting evaluation of the general situation. In addition,
results of a survey carried out in May 2005 among German food and feed processing
companies were used in order to partly fill this data gap.
Data on the total revenues and on the proportion of the revenues realised by producing and
carrying out analytical tests for the identification of GMOs in food and feed on the EU25 level
were hard to elicit since the interviewed experts lack an overview of the EU25. This might be
due to the fact that for confidentiality reasons big firms active in GMO testing refused to participate in the interviews. The gathered information, however, indicate that the revenues share
due to GMO detection in food and feed is – according to the interview partners - rather limited, ranging between 9 % and 13 % in the case of test kit producing firms and between 0.06 %
and 50 % (one interviewed company) in the case of diagnostic laboratories. When interpreting
these percentages, the total revenues of the interviewed companies should be taken into consideration which was in all cases below € 18million per year.
For test kit producing firms as well as for diagnostic laboratories quite high costs are incurred
by GMO identification due to the need of a continuous advancement and standardisation of
the tests and due to specific and expensive laboratory equipment. Therefore, for most interviewed companies the production of test kits of GMOs for food and feed and the carrying out
of these tests are not yet profitable and are mainly regarded as a customer loyalty and binding tool.
Most of the interviewed test kit producing firms and diagnostic laboratories have not created
many new jobs in recent years, and if so, the new jobs are mainly not due to business
activities related to GMO analyses in food and feed. The proportion of employees dealing with
the development, production and marketing of GMO test kits ranges between 1 % and 22 %
in test producing companies. Again, when interpreting these percentages, the total number of
employees of the interviewed companies should be considered which was in all cases below
500 employees. Furthermore, the employees needed no additional qualification due to the
production of GMO tests. Only the advancement of tests requires higher skills. For diagnostic
laboratories it is difficult to determine the share of employees carrying out GMO tests in food
and feed because most employees also accomplish other analytical tests. Also in diagnostic
laboratories there is no additional demand for academics or PhD graduates due to GMO
testing in food and feed.
Among the interviewed and surveyed companies and associations of the European Union's
food and feed industry, oil mills mainly carry out analytical tests for the identification of GMOs
followed by confectionary, feed, bakery and dairy industry. A very limited part of the firms
carries out GMO tests in their own laboratories. Mainly, external diagnostic labs are assigned.
In most cases food and feed industry companies realise quantitative tests as this kind of
analysis is more appropriate for them, considering that the GMO content is the most
interesting value for them in order to fulfil the EU´s labelling requirements. The additional
direct costs of GMO testing regimes are rather marginal, being in the range of 0.02 % of the
total revenues or lower. However, additional costs occur in food and feed industry companies,
like costs of changing to GMO-free raw materials, additional personnel costs, costs of
changing organisational or processing steps as well as increased liability or security
assurance schemes which could not be quantified within the scope of this case study. Also in
the food and feed industry the identification of GMOs by analytical means has not led to a
noticeable creation of new jobs. But the documentation duty of their suppliers has increased
the administrative effort which is, however, mainly handled by already existing personnel and
within the existing or established quality management systems.
To conclude: the economic impact of GMO testing in the European Union's food and feed
industry is rather small, both for companies producing analytical test kits for the identification
of GMOs in food and feed and for the diagnostic laboratories which carry out these tests. In
almost all cases of the interviewed firms the additional realised revenue is limited and often
neutralised by the comparable high costs. Therefore, for many firms analytical GMO
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identification in food and feed is not cost-effective and often a service for the clients of the
food industry rather than a profitable business.
Furthermore, the creation of new jobs due to the identification of GMOs in food and feed is
not noticeable in most companies. Also qualification requirements on the employees dealing
with this task have not significantly increased.
In the case of food and feed industry companies, traceability of GMOs and GMO testing mean
an additional administrative effort and higher, even if low additional costs, but has not led to
increasing employment. The documentation requirements mainly can be handled by existing
or established quality management systems in many food and feed industry companies which
are required due to general traceability requirements in the food and feed industry (regulation
(EC) No 178/2002) or requested by major food retailing companies.
As GMO testing is only carried out for approved products, potential negative health impacts
as well as potential adverse environmental effects of GM food and feed products are beyond
the scope of this case study. However, these potential negative impacts/effects are a complex
issue and are relevant for the perception and acceptance of GM food and feed by the European consumers. Their attitudes towards GM food products are determined by their individual
attributes and values. The latest Eurobarometer report (2006) comes however to the conclusion that recent communication activities and the introduction of new regulations on the commercialisation of GM crops and the labelling of GM food products have done little to allay the
anxieties of the European public about biotechnology in the agro-food sector.
Data on the situation in Japan were neither available from published statistics nor from the
interviewed companies.
In terms of technology of GMO detection in food and feed, the EU is regarded as being comparable with the USA. In the USA more ELISA-tests are applied which allow mainly a qualitative analysis. This can be explained with the requirement of European importers who have to
comply with the EU´s labelling regulations and therefore shift analysing costs to their American suppliers. Another reason may be that US companies which produce non-GMO products
test their ingredients with ELISA-tests for the absence or presence of GMOs in order to avoid
problems with the very strict US product liability regulations. However, the number of accomplished analytical tests and of companies of the food industry which realise such tests was
estimated as being smaller in the USA than the EU.
Outlook
Especially political decisions and the regulatory framework had and have influence on the
developments in the different branches involved in and affected by GMO analytical identification in food and feed. According to the interview partners, the EU legislation on GMOs will remain the most decisive influential factor in the future. Therefore, an assessment of future developments is only possible considering that the regulations will not change noticeably.
According to the views of the interviewees presumably more and more GMOs will be
approved in the next years in the EU, for which new specific tests have to be developed.
Furthermore, more tests will have to be carried out leading to higher costs for the food and
feed industry. For test kit producers and diagnostic laboratories this will increase the costs as
well as the revenues. Additionally, the experts expect that some new jobs will be created due
to the rising demand for GMO identification tests. In the case of test kit producers also an increased demand for higher skilled personnel is possible which is required by the advancement of test kits.
Regarding the technology of the analyses per se no huge change is expected considering the
methods: PCR will remain the most applied technique.
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4.4.4
Case study summaries: new varieties and breeds and their propagation
The following sections summarise the case studies carried out in the areas of ‘New Varieties
and Breeds and their Propagation’. The full case studies are included in a separate report.
4.4.4.1
Marker-assisted selection in livestock breeding (pigs)
Introduction
Pig production is an important activity in the EU, the EU being the second largest producer in
the world after China235. Pig production also contributes to EU export activity, with the EU
accounting for some 39 % of the world trade in pig meat236. Pig meat production in the EU has
received very limited support from the Common Agricultural Policy and is therefore primarily
market-oriented.237 EU pig producers must compete with countries that have a lower cost basis (e. g. South America) and this means EU producers are under pressure to adopt new
technologies, such as the use of genetic markers in breeding pigs. The EU is home to a number of pig breeding organisations that are multinational actors and breeding pigs, as well as
expertise, is exported from the EU. Two of the EU-based pig breeding organisations record
activities in five or six continents and several in three or more continents238. Major pig breeding organisations have their headquarters based in Belgium, Denmark, France, the
Netherlands and the UK and additionally pig production is important in Germany, Spain,
Poland and Italy239. Exports of pig meat are important from Denmark (particularly to Japan)
and Netherlands240
This considers the development of improved strains of pigs through the use of Markerassisted Selection (MAS) but not GM methodology. Data on pig breeding is not collated
centrally and therefore this case study relied very heavily on interview data and published
information, including annual reports. Interviews were conducted with 18 specialists from
eight European countries including representatives from breeding organisations, national
breeding schemes, intermediary organisations and academics. Several breeding
organisations considered this data to be highly confidential and whilst very helpful, were
unable to divulge information on employment, revenues or revenues. It is therefore not
possible to estimate the impact of this technology on the EU quantitatively in any meaningful
manner.
Whilst we were able to identify two companies in Europe that sell genetic tests for use in
marker-assisted selection, the main product sold is pigs that are derived using markerassisted selection. Pigs may be sold as parent animals, grand-parent animals, semen or
(more rarely) embryos. Traditionally, pig breeding has consisted of taking physical measurements and using statistical methods to evaluate the genetic merit of these animals in a combination of different traits of economic interest to pig farmers. Since the 1990s, information on
genetic markers and causal genes are increasingly being added to the evaluation of the genetic merit of pigs. MAS improves the accuracy of estimating breeding value and therefore
increases the rate of genetic improvement that can be attained. In addition, MAS may enable
new traits (those that are difficult and/or expensive to measure by other means) to be incorporated into selection schemes.
235 235
FAOSTAT 2005 data
The meat sector in the European Union, EC Fact Sheet, Agriculture in the European Union –
Statistical and economic information 2003
237
238
Information published by the companies
239
FAOSTAT, 2005 data
240
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236
The impacts of the adoption of MAS in pigs should be understood in the context of the structure of the industry in Europe. It is not a straightforward model of commercial companies providing a biotechnology-based product, but a complex range of public-private partnerships, private companies and national breeding schemes. Half of all European pig breeding organisations are privately owned companies and half are cooperatives. Where they are organised
nationally, for example in Denmark and Finland, these organisations often have a high domestic market share of between 75 % and 100 %. In countries such as the Netherlands, the
UK and France between three and six breeding companies serve each country. No single pig
breeding organisation has more than 25 % of the European (or global) market.241
We found that 2-3 genetic markers appear to be in very general use within pig breeding.
These genetic markers are of large effect, where the causal mutation is known and which are
available on non-exclusive licenses. We were unable to obtain firm quantitative data on market share, revenues volume or extent of use of markers for most of the organisations studied
in this case study, but based on very limited quantitative data and descriptive qualitative data
from interviews, our best informed guess is that MAS has contributed to the breeding of
around 40-80 % of breeding females242 in that they or their parents or grandparent have been
selected using MAS or testing has been used to ascertain that that marker is not useful in the
population because the gene is not segregating in that population. The impact of MAS will be
multiplied in the 152 million head of pigs in the EU25243.
A small number of breeding organisations appear to be making extensive use of MAS involving a large number of markers. A great deal of research appears to be taking place in the
area of MAS and more applications are expected in the future. Many respondents commented
that they feel advertising literature is claiming that more MAS is taking place than is actually
the case and this may partly explain the reluctance of many interviewees to divulge detailed
information. The main barrier appears to be identification of markers of sufficient value to justify the cost-benefit of their application. There are also a few examples of niche applications of
MAS e. g. to produce branded meats or check breed identity.
One issue raised by several interviewees was intellectual property protection. Genetic markers may be patent protected, however, the reproduction rights for an animal belong to the
animal’s owner. There is no animal equivalent of plant breeders’ rights. This means it is easy
to ‘cheat’ the system and use genetic material without paying royalties244. Furthermore, since
MAS is identifying natural variation in genetic composition, this variation already exists in
other populations and no violation of patent is required if the appropriate genetic variants already exist (the IGF2 marker was particularly mentioned in this context). These aspects are
likely to place a premium on secrecy to protect intellectual property and may be one of the
reasons why several interviewees were reluctant to state explicitly what they are doing. Finally, we should also note that small breeding companies (or universities) may not have the
financial resources to defend a patent and this is likely to be an issue particularly for the
smaller breeding organisations. However, the major issue raised by interviewees with respect
to the impact of intellectual property protection was the potential for protection being used to
‘block’ certain areas. The major threat mentioned in this respect by several interviewees
comes from Monsanto (USA).
241
http://www.eadgene.info/animalbreeding.html
Assuming 15 m sows in the EU25 with 40 % replaced per year and hence a market of 6 m gilts per
year. Assumptions were made about market shares of different organisations based around stated
revenues from organisations which are expected to be broadly similar in size and verbal indications of
use of MAS or indications from marketing literature. Where no data were available, the assumption
based on interviews was that 25-80 % of pigs were produced using MAS. Note that MAS may not be
used to the same extent in the production of parent males and females.
243
FAOSTAT, 2005 data
244
Sustainable Farm Animal Breeding and Reproduction – A Vision for 2025, Working Group ‘FABRE
Technology Platform’ February 2006. http://www.fabretp.org/content/view/21/43/
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242
Pig breeding organisations sell pigs rather than MAS and the markers are in the context of the
total ‘package’ of the genetic background and merit, health and physical aspects of the animal
being sold. Organisations found it difficult to quantify the value of MAS to their operations,
however some had rejected individual-specific genetic markers on the basis that they
appeared to have little merit in the context of the genetic background of their pig breeding
stock.
Since the impact of a marker depends on the specific marker being applied and the genotype
within which it is being applied, as well as the specific market, it is not possible to make general statements about the value of MAS as the impact will be context-specific. Data on the
overall economic value of using these markers was therefore not available. MAS is incorporated in standard breeding practice and hence is very difficult to disaggregate from a ‘conventional’ product which no longer exists. It should be noted, however, that because of the way in
which pig breeding is organised in a pyramid structure, a small change at the apex will be reflected in a large number of individual slaughter pigs (e. g. one male pig at the apex of the
pyramid may be responsible for 570,000 slaughter pigs per year). The different markers may
apply equally well to extensive and organic systems as conventional intensive ones and we
have not been able to identify any statements from organic or welfare-focus production systems about the acceptability or otherwise of use of MAS. In some cases the rationale for
using a specific marker is based on social rather than economic arguments (e. g. the use of
genetic markers to reduce pig mortality or reduce the use of antibiotics).
From the major breeding organisations with published annual reports, revenues ranged from
around € 8 million to € 200 million but in many instances this figure related to breeding in a
number of different species. Research spending reported varied from around € 50,000 to
€ 10.2 million but it was not possible to distinguish research spending on MAS, genetics or
other research. Drawing any meaningful conclusion from these data is therefore difficult.
One company gave a figure of gross profit from revenues from products improved through
biotechnology as € 9.6 million and accounting for 14 % of total gross profit.245 This figure will
include activities outside the EU and the term ‘biotechnology’ was not defined. The estimated
gain in value derived from breeding (in all species) in Europe has been reported at
€ 1.8 billion per year. This excludes income from the export of breeding stock (which is expected to double the figure).246 These figures will of course include all breeding activity in all
farm animal species and not just marker-assisted selection.
In terms of social impacts, MAS in pigs will have contributed to reduction of pig deaths due to
Porcine Stress Syndrome but it is not possible to quantify the extent of this reduction as there
are no central statistics on pig mortality. As an example of the impact of the gene, a survey of
two Spanish commercial abattoirs in 2002 suggested that pre-slaughter deaths could be reduced from 0.22 % to 0.02 % by selecting out the undesirable ‘Halothane’ allele.247 Internal
data from one breeding company (PIC) suggest reduced mortality between 4-16 per 1,000
head to zero (as well as improved meat quality) from selection on the same ‘Halothane’
allele.248
This genetic marker to select against stress deaths appears to be very extensively used. MAS
will also have contributed to the reduction in use of antibiotics, particularly in Denmark,
245
Sygen International Plc, Annual Report and Accounts 2005
Sustainable Farm Animal Breeding and Reproduction – A Vision for 2025, Working Group ‘FABRE
Technology Platform’ February 2006. http://www.fabretp.org/content/view/21/43/
246
247
Fàbrega, E.; Diestre, A.; Carrión, D.; Font, J.; Manteca, X. (2002) ‘Effect of the halothane gene on
pre-slaughter mortality in two Spanish commercial pig abattoirs’ , Animal Welfare, 11 (4), pp. 449-452
248
McLaren and Rohl, personal communication quoted in
http://dbgenome.iastate.edu/|max/Reviews/1998_review/implic.html, accessed 06/05/2006
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through the use of a genetic marker that allows selection for increased resistance to a specific
disease that would otherwise be treated with antibiotics. No data are available to quantify this
impact.
We found one example of a pig breeding organisation (PIC Deutschland) collaborating with a
retailer (EDEKA Südwest ) to use genetic markers to identify pigs with improved meat quality
to supply branded meat.249. A group of boars (not limited to PIC stock) are selected on the
basis of a package of 7 meat quality genetic markers derived from PIC, and made available in
AI stations for use in the “Gutfleisch-Programm”. Producers are being offered around € 0.02
per kg premium if they use boars selected for the programme250 and EDEKA require a supply
of around 7,000-10,000 pigs per week.
Environmentally, MAS will have contributed to reduced nitrogen and phosphorus pollution by
reducing the number of parent animals that require to be kept to produce a specific amount of
pig meat. Increasing the growth rate and feed efficiency of the slaughter pigs will also have
reduced nitrogen and phosphorus pollution and also pollution from transport of feed which is
often necessary for pig production. MAS will have contributed to this, but the main impact will
have been from traditional breeding methods. Again, it is impossible to quantify these benefits
without making extensive assumptions.
Only a small number of staff (many highly qualified) are needed to run these genetic improvement programmes, but a much larger number of staff would be required in the implementation of the programmes e. g. at the multiplier herd level. Such staff may not be employed by the breeding organisation. Many breeding organisations also have close links with
academic institutions. From a small sample of interviewees, the share of biotechnology-active
employees is estimated at around 5-28 %, although as interviews tended to be with larger
organisations this may be an overestimate of the industry as a whole. The general view was
that MAS has increased employment opportunities in the EU but the extent is difficult to
quantify, partly because the employment opportunities will largely arise outside the pig breeding organisations. Our best estimate, based on very limited interview data, would be that a
total of about 100 jobs may have been created over the last ten years within the breeding
organisations due to the introduction of MAS. However, ensuring competitiveness of the EU
pig production and meat production sector is likely to be the major employment impact from
this technology, bearing in mind that EU pig farms alone employ some 8.5 m people251.
The USA is a major competitor in the application of biotechnology to pig breeding, but no
quantitative data are available on the use of MAS in the USA. European pig breeders are
viewed as being very competitive with breeders from the USA, and similarly European academics in this area are seen as competitive with those in the USA, although the USA is
thought to be capable of investing more resources systematically into the area, and the integrated structure of pig production may mean that it is easier for pig producers to adopt MAS
technology.
It should be noted that the supply of pig breeding stock is globalised and many of the EU pig
breeding organisations supply the same genetic material or selection methods across the
world, this means that they can be using the same markers in all national markets. A few
European breeding organisations have a presence in the USA, notably PIC, who claim to
have a 60 % market share in supplying male pig replacements252. In the USA, Monsanto
Choice Genetics are seen as a key competitor. Japan was seen as having very particular re-
249
Press release, PIC Germany 27th June 2005
Interview data
251
Agricultural statistics, quarterly bulletin. Special issue: Farm Structure Survey 2003, Eurostat
252
Sygen international Plc. Annual Report and Accounts 2005
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250
quirements for meat quality, but as a major importer of pig meat (much of it supplied from
Europe) it was not seen as a competitor with Europe in the area of MAS.
EU’s competitive edge was seen to be derived from:
• A strong track record of knowledge of breeding with EU pig breeding organisations at the
forefront of this area.
• An understanding of the genetic background as well as the genetic markers. It was noted
that the genetic marker on its own would not be sufficient to be competitive.
• Availability of public research funding (at EU and national level).
• Availability of world leading geneticists at universities in EU.
• Long history and availability of excellent detailed records for multiple traits (particularly for
low heritability traits) in some EU countries.
Disadvantages were seen as:
• Small size of the pig breeding organisations.
• Cumbersome nature of EU funding structures for research.
• Difficulty of setting up collaborative research projects.
China is important as the main producer of pig meat. Chinese researchers were involved in a
Sino-Danish project on sequencing the pig genome and this project generated many singlenucleotide polymorphisms that can be used for MAS. We are aware of three Chinese laboratories which have partnered with European labs in the characterisation of biodiversity in Chinese pig breeds and there are some groups running experiments to identify genes using
crosses between Western and Chinese breeds. At least two markers have been patented by
Chinese scientists. The extent of the use of these markers in production of breeding stock in
China however, cannot be evaluated.
Outlook
Despite scepticism about the extent of use of MAS in pig breeding at the moment, there was
a general view that MAS will be increasingly used, both in more organisations and across a
broader range of traits. Several pig breeding organisations stated that they are carrying out
research in the area at the moment and the expected fall in costs of genotyping is expected to
facilitate the adoption of the technology. MAS is expected to be of particular value in traits that
are less amenable to traditional selection methods, particularly meat quality, disease resistance and reducing the number of genetic defects.
4.4.4.2
MAS in maize
Introduction
Plants are the basis of nourishment for humans and animals. However, the global area for
cultivating plants is steadily decreasing due to erosion, salinisation, urban growth, expansion
of industrial areas etc. At the same time, a constant growth of human population can be observed. Therefore it is important to increase agricultural productivity within the framework of
existing resources. In addition the world-wide infestation of harvest due to insects, weeds and
diseases must be reduced, thereby taking environmental demands into consideration as
well 253 254 255 256.
253
Anonymous: Über Syngenta: Marktdaten und Zahlen. http://www.syngenta.com/de. Call date
01/08/2006.
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In order to fulfil the aforementioned demands (in particular yield increase, resistance against
pests and biotic and abiotic stress factors, environmental aspects), which are made on crops,
many plant breeding companies increasingly apply – beside conventional breeding procedures - biotechnological methods. In particular marker-assisted selection (MAS) is more and
more used as a technique for the selection of plants obtaining the required traits 257.
However, data on the impact of marker-assisted selection are largely missing so far. In order
to combat this lack of information, this case study deals with the economic and environmental
effects of MAS on breeding companies in the EU. Due to its high attractiveness and its large
cultivated area in the EU as well as in the rest of the world particular attention is given on the
breeding of maize 258 259. In order to gather valuable information on the effect of MAS, altogether 11 phone interviews were carried out with appropriate contact persons in maize
breeding companies, universities, associations and laboratories specialised on the development of molecular markers.
Marker-assisted selection is mainly applied by European breeding companies in order to select plants, which are resistant towards pathogens or certain climatic factors (e. g. drought
and coldness) and to improve the ingredients of maize (e. g. quality of protein).
The fingerprinting which is necessary for MAS is mainly accomplished in in-house laboratories. The analysis-techniques are mostly PCR-based as they have clear advantages (e. g.
velocity, accuracy) compared to RFLP-methods.
In general the interviewed companies gave only very little information concerning the revenues as these details are bound to maintain strict confidentiality. This is true both for the
revenue which is realised with maize seeds and for the revenue which is realised from MAS
breeding in maize. However, large companies indicated that the share of revenues resulting
from MAS-maize out of the total maize revenues is almost 100 %. In contrary, one smaller
company estimated this proportion at about 33 %, but it should be considered that this is only
a singular information from one company. Taken alltogether, the share which is realised due
to marker-assisted selection can be evaluated as very high (in particular in large multinational
seed breeding companies).
Only qualitative information could be elicited concerning the costs. The additional investments
for specialised equipment and the high personnel expenditures, which are entailed by markerassisted selection mean a relatively high cost for breeding companies. This is often a specific
problem for smaller firms which can hardly apply this technology on their own. Due to the
more efficient plant breeding process, MAS became an inevitable instrument in order to stand
up to competitors in recent years. Due to time savings in the breeding process (and thus a
decreased time to market) the use of MAS in maize breeding is also profitable and the initial
high costs are thereby smoothed – at least in the view of the interviewed experts. For
254
Daniel, G. et al. (2006): Pflanzenzüchtung, von der klassischen Züchtung zur Biotechnologie.
Bayerische Landesanstalt für Landwirtschaft (LFL), Freising.
255
Anonymous: Über Syngenta: Biotechnologie. http://www.syngenta.com/de. Call date 01/08/2006.
256
Sharma, H.C. et al. (2002): Applications of biotechnology for crop improvement: prospects and
contraints. In: Plant Science, Iss. 163, p. 381-295.
257
Anonymous: Mais gestern und heute, von der tropischen Wildpflanze zur weltweit genutzten
Kulturpflanze. http://www.lgmais.de/download.php/pdf/broschueren/RZ_HistorFolder_Internet_72_1.pdf. Call date 01/08/2006.
258
Amberger, C. (2005): Maiszüchtung: Neue Anforderungen – moderne Techniken – innovative
Lösungen. Talk at DLG-Pflanzenbautagung 2005.
http://www.dlg.org/de/landwirtschaft/veranstaltungen/pflanzenbautagung/amberger.html. Call date
01/08/2006.
259
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companies which have to pass on the use of MAS due to cost reasons it will become even
more difficult to remain in the market in the coming years.
Altogether the interviewed companies employ between 70 und 600 employees each working
in the field of maize breeding. For the respondents of smaller firms it was rather difficult to
give exact information about the share of employees working in the field of MAS breeding.
This is due to the fact that employees of these plant breeding companies are often entrusted
with activities, which concern conventional maize breeding as well as MAS in maize breeding.
Nevertheless, they roughly estimated the share of employees working in the field of MAS
maize breeding at about 30 %. Large companies however indicated that up to 100 % of their
employees active in maize breeding are dedicated to marker-assisted selection.
Between 4 % and 70 % of the jobs which were created in the interviewed companies within
the last five years were dedicated to MAS in maize breeding. This relatively high share indicates that the importance of marker-assisted selection strongly gained significance in the
past. In the future some more new jobs will be created within the field of MAS. Clearly noticeable are the effects of applying MAS on the required qualifications of employees. Due to the
complex analysis techniques, employees must have a comprehensive knowledge in
molecular biology and genetics. Thus an academic education is inevitable in most cases.
Important factors for the recent development of MAS in maize breeding are new findings in
the field of molecular genetics, the results of plant genome sequencing projects (in particular
in maize) as well as improvements of analytical tests which have contributed a lot to the establishment of MAS in breeding firms. Also the low acceptance of genetic engineering among
the population of many EU Member States260 has promoted marker-assisted selection which
is a good alternative to genetic engineering approaches.
The impact of MAS on the environment is only marginal. By selection of plants which are resistant to drought or certain pathogens, need of water and chemicals (e. g. insecticides) could
theoretically be diminished. Due to the achieved yield increase (by MAS) and the expansion
of the area cultivated with maize (which is expected to further increase in future due to growing of maize for non-food purposes), the mentioned positive effects on water, chemical as well
as land use are reduced.
To conclude: profitable plant breeding is – in the opinion of the interviewed companies –
hardly possible without the use of marker-assisted selection, above all the economic impact of
MAS on plant breeding companies can be evaluated to be relatively large. The fact that in
breeding companies up to 70 % of the jobs which were newly created within the last five
years were dedicated to the field of MAS in maize breeding indicates that this technology
gained strongly in significance. This is also expressed in the figures for revenues. Between
33 % and 100 % of the total maize revenue is created by maize varieties developed by means
of MAS.
The qualification requirements of employees dealing with MAS are significantly high at this
stage. The influence on the expenses is also significant, due to the high investment in new
equipment and/or personnel costs which MAS involves.
Marker-assisted selection has hardly any influence on the environment however.
Data on the situation in Japan were neither available from published statistics nor from the
interviewed companies.
260
Gaskell, G. et al. (2006): Eurobarometer 64.3 – Europeans and Biotechnology in 2005: Patterns and
Trends.
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As the large breeding companies are active world-wide basically both in the EU and in the
United States the differences between these two regions are only marginal with respect to
technology use. However, in the USA the application of marker-assisted selection still plays a
slightly larger role than in the EU. This is mainly due to the widespread cultivation of maize in
the USA (50 % of the world’s maize harvest). Furthermore in the USA 45 % of the cultivated
maize is genetically modified. The technical situation in the USA is comparable with the one in
the EU. Both in the EU and in the United States mainly PCR-based techniques are applied for
the development of fingerprintings. According to the interviewed experts based in the EU, the
greater importance of MAS in maize breeding in the USA (compared to the European Union)
becomes also apparent in the employment situation. The share of employees active in the
field of marker-assisted selection is classified to be higher in the United States than in the
European Union. Also the revenues resulting from MAS-maize is estimated to be higher in the
United States. It was not possible to elicit. quantitative data however.
Outlook
The importance of MAS in maize breeding will gain further significance for breeding companies in the future. Due to the expected intensified application of MAS and the expected expanded cultivation of maize both the revenues and the share of the employees in the field of
MAS will presumably increase. The analysis - according to the interviewed companies - will
also mainly be carried out by PCR-based techniques in future. However, these techniques are
subject to constant improvements. In the future presumably more and more chip techniques
will be used as well. The rising specificity and complexity of the analyses will require a more
specialised knowledge on the part of employees.
4.4.4.3
Livestock propagation techniques in cattle
Introduction
Embryo technology (embryo transfer and in vitro embryo production) was identified as one of
four main agro-food applications of biotechnology261. This study aims to show the level of embryo technology activity and its impact in cattle breeding and production, which is the only
area of livestock agriculture where embryo technologies are currently applied on any scale.
Cattle propagation covers a range of reproductive techniques that are used to disseminate
cattle genetics and in particular the genetic improvement that is created at the top of the
breeding or multiplication pyramid. Reproductive capabilities of animals put a major constraint
on animal breeding operations and artificial insemination and embryo transfer have been developed to help overcome these constraints262. The development of reproductive biotechnology, particularly in cattle, may be regarded as one of the best examples of successful technology transfer. The first reproduction technique to be applied in cattle production was artificial insemination. Artificial insemination (AI) has been practised extensively since 1945 and
has been a major factor in breeding programmes since then, but it is not considered in this
study as it is a well-established technology. Embryo transfer (ET) including in vitro fertilisation,
embryo splitting, embryo sexing and embryo freezing represent the next generation of applications. Sexed semen (SS) is expected to play a significant role in the future, but at the moment its use in Europe is relatively small.
Although embryo technology is used widely within the cattle sector in Europe, its application is
essentially limited to the top of the breeding pyramid where its impact on genetic improvement
261
Study 1 ‘Mapping of modern biotechnology applications and industrial sectors, identification of data
needs and development of indicators’ Final Report Page 79
262
van Arendonk, J.A.M. and Liinamo, A.E. (2003) State of the Art in Farm Animal Breeding and Reproduction: a Bird’s Eye View. Sustainable European Farm Animal Breeding And Reproduction (SEFABAR)
Final Workshop Proceedings. p4-16 ISBN: 90-76642-20-6.
Page 192 of 315
justifies its high cost relative to AI263. ET teams exist within AI/breeding companies but also
within specialist companies supplying embryos and in veterinary practises providing ET and
related activities as a specialist service. It is estimated that there are more than 100 such
“teams” in the EU25 (more than 200 ET teams are registered according to the SANCO
Veterinary Website264).
The EU25 cattle herd consists of approximately 40 million cows and heifers (breeding females
and their replacements)265. The dairy segment accounts for the majority of gain achieved
through genetic improvement in cattle266. In cattle there is a large international trade in semen
and embryos meaning that livestock genetic evaluation can occur across countries. The International Bull Evaluation Service (Interbull, founded in 1983 and based in Sweden;
www.interbull.org) involves nearly 50 countries and is responsible for standardising the international genetic evaluation of bulls.
Five of the ten largest cattle breeding companies are based in Europe. As well as large privately owned companies (e. g. Genus in the UK, AltaGenetics in the Netherlands) and cooperatives (e. g. CRV in the Netherlands267, Svensk Avel in Sweden) operating on an international scale, there are also significant national schemes (e. g. in Denmark, France and Italy)
as well as numerous smaller organisations such as individual breed societies or AI associations (e. g. in Germany several of the AI associations have their own breeding programmes).
Most European ruminant breeders breed cattle. A small number combine cattle with other
ruminants, such as sheep and goats, or work with a combination of ruminants and pigs. Many
ruminant breeders are farmers' cooperatives and most have modest revenues and fewer than
250 employees. Many of the cooperatives have no international operations, but within their
own countries some have a market share of 75 % or more. No single cattle-breeding
organisation has a European market share of more than 25 %268.
The context for cattle breeding in Europe is therefore a complex range of public-private partnerships, private companies and national breeding schemes. Several organisations work internationally and several supply breeding stock to at least four continents, either as exports of
animals, semen or embryos. Others collaborate across borders: e. g. the “dominating” Swedish cattle breeding company, Svensk Avel269, is jointly owned by Swedish dairy farmers.
Their nucleus herd, is a joint project with Dansire in Denmark and FABA in Finland, and the
UK agent for Svensk Avel is the largest international cattle breeding company, Genus, illustrating the interconnectedness of the industry9.
Statistics on cattle embryo transfer are collated by the professional embryo transfer societies
and this case study has used publicly available data from the Association Européenne de
Transfert Embryonnaire (AETE) and the International Embryo Transfer Society (IETS) and
also data from the Canadian Embryo Transfer Association (CETA) and the American Embryo
263
The on farm cost of embryo transfer is approximately 10 times the cost of AI, not taking into account
the genetic cost (semen and embryos). An embryo may be up to 50 times the cost for the semen
equivalent (i. e. of the same genetic merit). This means that ET is approximately 15 to 30 times the cost
of AI.
264
http://forum.europa.eu.int/irc/sanco/vets/info/data/semen/semen.html
265
Eurostat. Statistics in focus, Agriculture and fisheries 7/2006
266
Sustainable Farm Animal Breeding and Reproduction – A Vision for 2025. 30 pages February 2006.
www.fabretp.org
which indicates that a conservative estimate of the economic gain achieved each year by breeding at
farm level for all species in Europe is € 1.83 billion, with the cattle sector contributing € 500 million or
27 % (with 430m from dairy cattle).
267
CRV, a farmer co-operative with around 44,000 members in the Netherlands and Belgium
(www.hg.nl see “Our facts”)
268
http://www.eadgene.info/animalbreeding.html
269
http://www.svavel.se/english/ accessed 13 July 2006.
Page 193 of 315
Transfer Association (AETA). Table 4-29 provides an indication of the level of ET activity in
Europe.
Table 4-31:
Top European countries ranked according to total numbers of embryos
transferred (in vivo plus in vitro) in 2004.
Country
1. France
2. Netherlands
3. Germany
4. Belgium
5. Italy
6. Czech Republic
7. United Kingdom
8. Denmark
9. Finland
10. Switzerland
11. Ireland
12. Spain
13. Sweden
Number of embryos transferred
Total
In vitro
29,618
204
16,466
1,688
11,285
763
7,190
390
6,755
2,198
6,427
88
5,000
Nd
3,983
0
2,985
23
1,680
17
1,444
200
1,329
8
1,300
0
Source: Embryo Transfer Activity in Europe AETE; 21st Annual Meeting, Keszthely, Sept 2005
Economic Impact
The EU level impact is summarised in Table 4-30.
If the total ET-related return of genetic improvement is 375m then this represents 0.3 % of the
value of animal production (122 billion) or 0.58 % of the cattle share of animal production
(65 billion).
The EU is currently the world’s leading milk producer (25 % of total), accounting for one third
of the world cheese and whole milk powder markets, and is the second largest beef producer270. The majority of EU farm land is used for raising animals or feed production. Embryo
transfer plays an important role in cattle breeding and production, however, the scale of activity is relatively small, reflecting the role of ET at the top of the breeding pyramid in part due
to its high cost relative to AI. As noted by the Sustainable Farm Animal Breeding and Reproduction Technology Platform (FABRE), the strategic importance of animal breeding and
reproduction is much greater than one might guess from the size and volume of the sector271
- a conservative estimate of the economic gain per annum from breeding at farm level for all
species in Europe is € 1.83 billion, with the cattle sector contributing € 500 million or 27 %
(with 430 million from dairy cattle). Importantly, the proportion of AI bulls derived themselves
from ET is at least 75 % in those countries with the largest numbers of cattle272.
270
A.E. Liinamo and A.M. Netteson-van Nieuwenhoven (2003) The economic value of livestock
production in the EU Farm Animal Industrial Platform brochure 31 pages ISBN 90-76642-19-2 AnNe
Publishers.
271
Sustainable Farm Animal Breeding and Reproduction – A Vision for 2025. 30 pages February 2006.
www.fabretp.org
272
This case study.
Page 194 of 315
Table 4-32:
Impact summary
Phenomenon
Impact of biotechnology on employment
Impact on revenues
Impact on animal
production
Indicator
Share of ET/SS employees
in sector (cattle breeding)
firms in the EU25
Value
<5 – 80 %
Breeding/AI companies
Vet businesses
ET/reproduction specialists
<5 %
No data obtained
Up to 80 %
Estimated number employed
in the EU25
Share of revenues out of
total revenues for firms using
ET
Share of impact from genetic
improvement (selection)
made at farm gate
Approx. 500
Share of Producer prices
influenced by ET (based on
Eurostat data for 2002 and
2005)
75 %
(75 % of the
share from cattle
is equivalent to
approx.
€ 49 billion.)
Up to 60 %
75 %
(€ 375 million)
Comments
Varies from very low
to >80 % depending
on business type (see
next 3 rows)
Other aspects relate to
R&D and/or sale of
genetics.
Assuming 200 ET
teams/groups
Varies according to
business
Assume 75 % of selected bulls derived by
ET and 500m p.a. total. (footnote 3)
See previous comment. Underpinned by
cattle breeding (genetic improvement).
Total EU animal production was estimated
at 122 billion (2002).
Share from cattle including milk was 53 %
in 2005 which equates
to € 65 billion.
This benefit is illustrated by the following examples:
Genus indicate that their MOET breeding herd (which is at the top of the pyramid) in the UK
averages 14,000 litres of milk per cow per year compared to a UK average of 7,000 litres273.
Cogent illustrate the value of genetic improvement for beef indicating that the difference between the offspring of an average bull and a bull with an outstanding breeding value is £ 30
as a calf and £ 70 for the finished animal274.
In Denmark between 1984 and 2002 protein production in first lactation increased by
approximately 80kg in 305 days with more than 50 % of this increase due to genetic progress
(the rest is the result of management improvements)275.
In the Netherlands average production per lactation of recorded cows increased by 62 % in
the 20 years from 1985 (from 5,600 kg to 8,900 kg milk)276.
World-wide approximately 750,000 cattle embryos were transferred to recipient cows in 2004.
Of these 550,000 (70 % of the total) were in vivo derived embryos which was a small increase
273
Genus Interim Results statement 7 June 2006 see www.sygeninternational.com IR Presentations
Duncan Sinclair, MLC quoted in Cogent Beef Management at www.cogentuk.com
275
Profile on Danish Cattle Federation and Facts of Danish Cattle Husbandry. Danish Cattle Federation
Publication 2004.
276
Table 30 Jaarstatistieken 2005 © NRS BV
Page 195 of 315
274
over the total in 2003. About 17 % of transfers of in vivo derived embryos occurred in Europe
in 2004, with the proportion in Europe dropping due to a large increase in South America
(Europe represented 20 % in 2003)277. Europe now only represents 12 % of the total number
(in vivo plus in vitro derived embryos) of transfers. N. America is 28 %, S. America 25 % and
Asia 34 %.
Although the proportion of calves resulting from ET is very small (<0.5 %), the impact is relatively large because of the high genetic status (merit) of the animals being produced. Importantly for genetic improvement, the majority of AI bulls have resulted from transferred
embryos (from highly proven cows and bulls). Embryo transfer is also used to improve
breeding herds by upgrading the merit of the cows in the herd and in turn the prospective bull
dams (ensuring replacement cows are of the highest possible merit).
Social Impact
Embryo transfer is a key technology that underpins cattle genetic improvement in the EU.
Genetic improvement is permanent, cumulative and usually both sustainable and highly costeffective278. Successful improvement is required in order to maintain this industry in Europe in
competition with third party production. In addition, maintaining a production industry ensures
that production complies with the social requirements within the countries of the European
Union. This will include the development of approaches that fit into sustainable land use programmes.
Embryo technology is relatively new and may be regarded as artificial in the same way as
breeding (as opposed to “natural” selection) and artificial insemination. This has a negative
perception for some people. Education, labelling and minimum standards are suggested as
means of addressing concerns.
ET is a very safe method of disseminating genetics from an infectious disease point of view
(under regulations established by IETS and OIE). Thus, on a global level, it does contribute
positively to animal welfare from an animal health point of view. In addition, in the case of the
Belgian Blue breed it can alleviate problems with calving in the multiplication of the breed, as
purebred calves can be transferred to recipient cows (of other breeds) that are better able to
deliver Belgian Blue calves. Ovum pick up (OPU) is an invasive method and may have a
negative impact on the welfare of individual animals. The effective use of ET in breeding programmes means that there is an overall reduction in the number of cows required to produce
candidate bulls. Sexed semen may also be viewed positively from a welfare point of view, as
it will mean that replacement heifers can be produced from a smaller number of cows, so that
the number of unwanted bull calves will be significantly reduced.
Embryo freezing provides a very effective means of conserving biodiversity where breeds are
under threat. It is more efficient for recovery of a breed than frozen semen as semen only
provides a hybrid in the first instance and it is then necessary to go through rounds of backcrossing to recover the lost breed. Embryo freezing and transfer also provides a mechanism
for salvaging a population, for example, when eradication is required for disease control purposes (e. g. to control foot and mouth disease outbreaks).
Environmental impact
The main impact of embryo transfer on the environment is indirectly through the improvement
in productivity that is derived from genetic improvement. For example, the number of cattle in
Europe is declining whilst output is maintained or is increasing. This is particularly obvious for
milk production, which has been the focus of selection for the last fifty years. In the EU15
277
Note the total number of transfers in Europe (Table 6) is equivalent to about 0.25 % of the cow herd
Simm, G. et al. (1997) Returns from genetic improvement of sheep and beef cattle in Britain. SAC
Animal Science Review article quoted in FAIP “The economic value of livestock production in the EU
2003” see footnote 13.
Page 196 of 315
278
countries cattle numbers decreased from 1994 to 2001 (with the exception of Sweden) by
approx. 11 %. In the same period the average milk yield per head increased from 5,132 to
6,003 kg (17 %).
Although embryo transfer activity appears to be declining in Europe when considered as a
proportion of world-wide activity, this appears to relate to the maturity of the cattle breeding
industry in Europe rather than an indication of an uncompetitive situation in Europe. The
technology appears to be efficiently implemented within the EU in comparison to other regions. Although in vitro embryo production (IVP) is used sparingly, this is also the situation in
N. America and greater use in Asia probably relates to a greater need for replacement genetics and a smaller sensitivity to the reduced conception rates experienced with IVP derived
embryos. ET usage statistics are essentially similar to those in N. America although conception rates may actually be better in Europe.
Outlook
The research community appears to be advanced from a technology point of view, but funding is potentially limited, in part by the restricted role of ET in commercial breeding and production. Research on nuclear transfer (cloning) also appears to be limited, primarily because
of uncertainty over its acceptance and regulation in large animal agriculture. Some respondents indicated that they anticipated that new developments were more likely to occur within
(or in collaboration with) commercial organisations as they have the larger numbers of animals or larger scale activity that is required for some aspects of research in this area. At this
time, some of the largest commercial organisations (including national programmes) are
based in Europe, which should mean that Europe will continue to play a significant role in the
279
development of reproduction technology . The area of cloning may be an exception unless
it is supported from a strategic point of view or unless cloning becomes an approved activity
within breeding and production.
Embryo transfer was generally expected to remain at current levels (as it is now a relatively
mature technology that is effectively integrated into cattle breeding and production). A few
people anticipated that IVP may increase in part as a result of the general decline in fertility
experienced in the industry. The high cost and complexity of ET means that its use will continue to be restricted to the top of the breeding pyramid (where it has a high impact). However, a few people thought that the use of ET might increase as a result of the extra value that
could be created by genetic profiling (genetic diagnostics) together with the use of sexed embryos. ET may also be used increasingly for equines. It was also anticipated that sexed semen would play a greater role once problems with conception rates had been overcome.
Greater use of sexed semen would result in fewer unwanted bull calves (and a resulting reduction in calving problems associated with larger bull calves) and a reduction in the number
of cows required for the production of replacement heifers allowing surplus cows to be inseminated with “beef” semen to produce higher value cross-bred calves for beef.
Some of the groups involved in basic R&D suggested that cloning (NT) and genetic manipulation would play a role in cattle production in the future. None of the commercial companies
considered cloning within the next five years (and none expected GM animals to be marketed). However, some participants commented on the status of commercial cloning in the
USA and elsewhere (e. g. Korea). It was suggested that this activity might result in the im-
279
Activity in Australia and New Zealand should also be considered as the former has 23 % of the
world’s beef trade (with only 2.5 % of the world’s cattle) and the latter is a significant player in dairy.
Both have significant investment in agricultural biotechnology (for example, see Genetics and Genomics
of Sheep and Cattle in Australia and New Zealand (2003) UK dti Global Watch Mission Report (URN
03/1317).
Page 197 of 315
portation of semen from cloned bulls even when cloning is unapproved in Europe (or indeed
in the USA).
Ruminants (particularly sheep) play an important role in upland agriculture which may benefit
from these technologies in the future.
4.4.4.4
Fish propagation techniques
Introduction
Current European aquaculture production accounts for barely 3 %Wt of world production, but
as Europe and Norway top the list for commercially high-value species, their economic importance should not be underestimated. Atlantic salmon, rainbow trout and Pacific oysters all
fall within the top twenty aquatically reared species in the world, accounting for some € 12 %
of global production6. In Europe these species helped to generate € 2,500 million in 2000
when 1,315,000 tonnes of aquatic products were cultivated280. In future European aquaculture
is likely to develop and increase as the demand for fish as a protein source continues to grow.
Continual pressure on producers to minimise costs in an attempt to compete with countries
that have a lower cost basis, e. g. Chile, encourages the adoption of new techniques such as
modern biotechnology to improve production.
To date no research has taken place in an attempt to quantify the amount of modern biotechnology applied in Europe and Norway. In the present case study, producers of Atlantic
salmon, rainbow trout, and Pacific oysters, as well as a member of a French aquaculture
association were questioned on the amount of modern biotechnology used at the hatchery
level in each of the species listed. The response of interviewees was expected to give an
overall interpretation of the current use of modern biotechnology in the 25 EU countries and
Norway, but due to the limited number of replies, only a qualitative estimate can be produced.
The fact that data relating to this subject is not readily available in published literature meant
background research via organisations, academics and scientists was required to build a
profile of the subject area. From this research, and including the response of the seven
interviewees representing six countries, certain assumptions can be made relating to the
current use of modern biotechnology throughout Europe and Norway.
Economic impact
Atlantic salmon and rainbow trout are the main finfish species reared in Europe, accounting
for over 65 % of global farmed salmonids. It is therefore unsurprising that close attention has
been paid to these species. However, continuously increased production has resulted in the
FAO voicing concerns relating to over-production and the subsequent saturation of markets
within the European aquaculture sector17. In Norway, the Norwegian fish farmers association
took drastic measures in an attempt to prevent such an occurrence, as mass euthanasia of
smolts, and the introduction of strict feed quotas have been enforced to limit salmonid
production281. Until recently such actions were not in vain, but recent publications suggest this
situation is beginning to occur in Europe, shifting Atlantic salmon to a relatively medium priced
product in the international seafood market282. The reduction in market prices has forced
280
Europa. 2006. A strategy for the sustainable development of European aquaculture. Located:
www.europa.eu/scadplus/leg/en/lvb/166015.htm. Accessed: 23/08/2006.
281
Europa. 2006. A strategy for the sustainable development of European aquaculture. Located:
www.europa.eu/scadplus/leg/en/lvb/166015.htm. Accessed: 23/08/2006.
282
Lem, A. and Shehadeh, Z. H. 2005. International trade in aquaculture products. Located:
www.fao.org/docrep/005/w7611e/W7611e3.htm. Accessed: 23/08/2006.
Page 198 of 315
aquaculturists to find alternative methods to improve production efficiency, and at present
modern biotechnology appears to be the best solution.
Although initial research on triploid Atlantic salmon produced equivalent or better results than
those of diploids, transfer to commercial producers lead to complaints regarding the organisms,283. Recent studies have improved efficiency of production284 but the scepticism surrounding triploid Atlantic salmon continues to affect their uptake. Hatcheries considering triploid Atlantic salmon must be guaranteed equal or better performance to that of diploids under commercial conditions. However, even if performance can be assured, the interests now
associated with food production will undoubtedly play a large role in the type and amount of
modern biotechnology adopted. Risking confusion between genetic manipulation and genetic
modification could result in disastrous consequences for the Atlantic salmon industry from
which recovery could be difficult.
The most efficient form of biotechnology to adopt in the Atlantic salmon industry, which is
likely to cause the least controversy, is that reported in the present study; genetic improvement, incorporating the use of molecular markers. Not only is selective breeding generally
accepted by consumers due to a vague understanding, but the cumulative genetic gains of
applying the technique have been well-documented in the species285. In the present study, the
improved production, although buffered by the low level of feedback on the application, shows
the potential of this modern biotechnology. The reported use of currently less than 15 % of
overall production is expected to rise in the future.
Similarly, the rainbow trout industry is expected to benefit from genetically improved lines of
selectively bred stock. Although no figures were provided for the technology in this case
study, it is known through experience and reported by the French interviewee that selective
breeding programmes are currently underway in European countries to improve stocks of
rainbow trout. Previous work entailed the improvement of production traits, with emphasis
now being placed on disease resistance to commercially important pathogens. As emphasis
is placed on selection methodologies, the use of ploidy and sex manipulation will continue, as
the technologies are an invaluable technique to improve production efficiency.
With all interviewees involved in rainbow trout production reporting 100 % use of sex and
ploidy manipulation, the rainbow trout industry appears to have reached chromosomal set and
physiological manipulating limits. However, according to one respondent, in some countries
ploidy and sex manipulation are yet to be practiced and a lack of knowledge prevents the
processes being utilised. As awareness is increased, the full adoption is expected.
Triploidy in the Pacific oyster has been practiced for over 20 years286, but due to inconsistent
results associated with traditional techniques (temperature, pressure and chemical shocking)
modern biotechnology has been devised in an attempt to avert high mortalities and variable
success rates. The introduction of tetraploid male-diploid female crosses to guarantee 100 %
triploidisation with minimal associated mortality will undoubtedly saturate the Pacific oyster
industry. At present its use is limited to the pioneering companies, but as commercial systems
demonstrate its capabilities, especially continued growth throughout reproductive months,
interest will most likely lead to high adoption rates throughout the European and Norwegian
Pacific oyster industries.
The controlled conditions under which Pacific oysters are reared have created opportunities
for the implementation of selective breeding methods. A report in 2002 discussed approaches
283
Bodo, P. 2002. Sterlised frankenfish-biotech progress? New York times. March 31, 2002.
Oppedal, F., Taranger, G. L. and Hansen, T. 2003. Growth performance and sexual maturation in
diploid and triploid Atlantic salmon (Salmo salar L.) in seawater tanks exposed to continuous light or
simulated natural photoperiod. Aquaculture. Vol. 215, pp. 145-162.
285
Torrisen, K. R. 1991. Genetic variation in growth rate of Atlantic salmon with different trypsin-like
isozyme patterns. Aquaculture. Vol. 93(4), pp. 299-312.
286
Nell, J. A. 2002. Farming triploid oysters. Aquaculture. Vol. 210, pp. 69-88.
Page 199 of 315
284
relating to selective breeding for commercially important traits, such as growth, survival, and
disease resistance in oysters287. Since that time reports of approximately 10 % increase in live
weight per generation have been attained in the species288.
Recent research on all species covered in the present case study suggests immense
amounts of potential gain can be achieved through genetic improvement. However, it must be
remembered that although an improved product is the intended final result of any selective
breeding programme, the investment in both time and capital must be taken in to consideration. As identified by the respondent practising genetic improvement, production costs of 50 %
greater per unit can be expected due to the extra time and capital invested. At present, most
research into genetic improvement is being undertaken at university or government facilities.
The research is expensive, requires highly trained personnel, and can take many years to
yield results. Costs relating to genotyping are continually reducing, but the requirement of
separate holding facilities until fish reach a suitable size for tagging will hinder selective
breeding programmes indefinitely. Most commercial hatcheries do not have the time or the
resources to undertake such long-term programmes, but they can become active participants.
The monetary factor relating to the establishment of breeding programmes was brought to
attention in the current study on numerous occasions. Most interviewees described a severe
lack of government funding to assist in initiating selective breeding projects. The current scenario leaves large multinationals continuing to grow whilst small holders experience the reverse affect. This is the general situation throughout Europe and Norway.
Social impact
The general trend relating to employment and modern biotechnology is relatively unchanged.
Although one job was created due to the onset of modern biotechnology, the general acceptance was that hatchery staff must adapt to any new technology adopted. The fact that over
50 % of employees focus solely on biotechnology is related simply to the number of rainbow
trout producers interviewed, as each practiced 100 % biotechnology, having a subsidiary
effect on the impact of biotechnology employees out of total employees.
With impending increases in the adoption of modern biotechnology, the alteration of staff is
both technique and species dependent. Sex and ploidy manipulation in salmonids requires no
introduction and no further training past management level. Improvements in the techniques
to increase efficiency may require further research as producers continually draw attention to
negative factors associated with the converted organism. One report suggests the poor performance of triploid salmonids is related to inefficient nutrient factors; as triploids contain 50 %
more protein than their diploid counterparts their feed requirement may differ significantly289.
Research in such a field will not affect the employment level in hatcheries directly, but a
supplementary increase in research staff may be required.
In Pacific oysters, the traditional techniques to induce triploidy are well understood and practiced; employment is therefore not likely to increase. The adoption of tetraploid-diploid
crosses may or may not have a marked effect on employment in the industry. Certainly in the
early stages of adoption, guidance and advice will be required, but this will be sought from
specialists in the subject area, with employment level at the hatchery unlikely to alter, either in
number or education level. However, with the increased adoption of the more successful tri-
287
Stiles, S. and Choromanski, J. 2002. Trends in genetics of bivalve molluscs: A review. International council for
the exploration of the sea. pp. 1-28.
288
GSF. 1996. Summer special oysters. Guernsey sea farms. Located:
www.guernseyseafarms.com/seed/triploid.htm. Accessed: 26/07/2006.
289
Aquaculture information. 2006. Biotechnology to help protect wild salmon stocks – the triploid
approach. Aquaculture – biotechnology topics. Located: www.pac.dfompo.gc.ca/aquaculture/topics/triploid_e.htm. Accessed: 26/07/2006.
Page 200 of 315
ploidy technique in oysters the share of biotechnology-active employees will almost certainly
increase, so much so it may mirror the current status of the rainbow trout industry.
Any hatchery that introduces genetic improvement to their production will require the assistance of specialists in the area, not only for direction throughout the programme but for the
laboratory work involved in molecular markers and their analysis. As genetic improvements
increase, so too will the share of biotechnology workers.
The increase in use of tetraploid-diploid cross triploid oysters and the initiation of selective
breeding programmes for improved disease resistance will undoubtedly benefit almost every
aspect of the aquaculture environment. The use of these technologies has a rolling affect on
food safety, animal health, animal welfare, chemical and nutrient emissions, as well as overall
efficiency. In the case of triploid oysters, avoidance of stressors associated with maturity in
summer months due to the sterility of the organisms will benefit the industry both directly and
indirectly; it is believed the stress associated with maturity in oysters is a causal factor in
summer disease and mortality. As energy is converted to growth and not gameto-genesis, the
overall health and welfare of the individual is likely to improve, increasing the chance of
survival during summer when disease risk is at its greatest. The fact that animals can be produced throughout summer without maturity and mortality, allows markets currently hindered
by maturation to be developed, improving the overall efficiency of hatchery production.
Selective breeding in any species requires no description of its advantages. Most species today have already undergone unintentional selection pressure for ‘foundation’ traits, such as
growth and meat yield. Aquaculturists now believe disease resistance is the most economically important trait. With an improvement in disease tolerance, fewer fish will suffer due to
the effects of the pathogen, there will be reduced requirements for treatment, which in turn
benefits both food safety and chemical emissions, and more fish will reach market improving
overall efficiency.
Sex and ploidy manipulation in rainbow trout has already been discussed, with the advantages of employing the technologies being well understood. To summarise, the production of
mono-sex stocks to prevent the disadvantages associated with males (early maturity and
aggression, resulting in secondary infection in both instances) has left the industry with a reduced requirement of chemotherapeutics, improved health and welfare, and better efficiency
as market rejects are now an infrequent occurrence. Triploids hold the advantage of reaching
a large size-grade after two, three and occasionally four winters without maturation. Although
believed to be a more susceptible organism, the advantages of all-female sterile fish far outweigh conventional production where manual stripping, treating for secondary infections, and
reduced aesthetics caused by secondary sexual characteristics were all too common.
Outlook
Modern biotechnology in aquaculture is used as an accessory to conventional methods in the
hope that larger profit margins can be attained by reducing the loss associated with traditional
breeding. By manipulating stock and advertising improved products, aquaculturists aim to
achieve higher farm-gate prices in a market where recent years have seen only reductions.
All of the modern biotechnologies covered in the present case study accomplish this goal directly through genetic improvement, or indirectly by reducing losses associated with traditional production techniques.
In the next five years, the current trend occurring in modern biotechnology is expected to continue. One hundred percent adoption of ploidy and sex manipulation already witnessed in the
rainbow trout industry in the majority of European countries will continue. As knowledge increases, additional employment will occur in those countries where the technology has not yet
been utilised. Genetic improvement of rainbow trout stocks is currently at an extremely low
Page 201 of 315
level in comparison to salmon production. Current pilot-scale commercial studies are expected to demonstrate the potential of genetic improvement in rainbow trout, encouraging its
increased use in future production.
Although practised at extremely low levels compared to terrestrial animals, from the aquatic
species covered in the present study, genetic improvement using molecular markers is
currently dominated by the salmon industry, with a handful of large companies dominating
consumer demands. Competition from countries outwith the EU and Norway (USA) is expected to encourage continued research in this field to improve efficiency. With money available in companies dominating large shares of the European market, continued investment
into improving economic traits is expected. Conversely, sex and ploidy manipulation is unlikely to occur in any significant amount in the next five years. Public perception and historic
data discourage hatchery producers from adopting the techniques, even though triploidisation
is thought to have been improved.
The advantages of producing triploid oysters have already been experienced in the European
industry. Due to negative effects associated with shocking, such techniques are likely to diminish in coming years. The modern biotechnology of tetraploid-diploid cross is expected to
infiltrate the European market once inventors broaden their sales area. Success will relate to
the triploids’ ability to withstand varied environments. Initially, uptake is expected to soar due
to the novelty of a new product but, dependent on location performance, further adoption
could be variable. Selective breeding programmes in Pacific oysters are already showing
potential at the research level. In companies who can afford the investment, an increment in
the amount of genetic improvement employed is anticipated.
Marker assisted selection, in terms of linkage and genome mapping allowing the identification
of multiple genes governing a single trait of economic importance (quantitative trait loci; QTL)
to be incorporated into breeding schemes in an attempt to improve the accuracy and rate at
which improvement of particular traits can be attained, is not expected in any of the species
involved in the present study within the next five years. Considerable progress in aquaculture
genomics has been made in recent years, including the development of QTL markers for
growth, feed conversion efficiency, tolerance of bacterial disease, spawning time, embryonic
development rates and cold tolerance in salmonid species290,291, demonstrating the potential
of MAS in the aquaculture sector. Its adoption would prove useful for traits that are impossible
to measure in the selection candidate; e. g. disease resistance, fillet quality and maturation1,
but the time taken to establish QTLs, validate their use, and the fact they are species, often
strain specific, discourages the use of this process at present. Genetic improvement using
molecular markers is therefore expected to dominate future genetic gain until such a time as
traditional MAS can be applied to the industry with relative ease.
4.4.4.5
Micropropagation in horticulture
Introduction
In the last 25 years micropropagation in horticulture – especially for ornamental plants - has
become an accepted commercial practice. Especially the research activities of several
specialised scientists have had an important impact for the rapid and large improvements in
290
LaPatra, S. E., Lauda, K. A., Jones, G. R., Shewmaker, W. D., Groff, J. M. and Routledoe, D. 1996.
Susceptibility and humoral response of brown trout x lake trout hybrids to infectious hematopoietic
necrosis virus: a model for examining disease resistance mechanisms. Aquaculture. Vol. 146, pp. 179188.
291
LaPatra, S.E. Parsons, J.E., Jones, G.R., and McRoberts, W. O. 1993. Early life stage survival and
susceptibility of brook trout, coho salmon, and rainbow trout x brook trout or coho salmon hybrids to
IHN. Journal of aquatic animal health. Vol. 5, pp. 270-264.
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applying this technology in horticulture 292. Micropropagation is a technique of plant culture
and plant propagation on agars in sterile, closed vessels. Especially in the horticultural sector
a fast, space-saving propagation of healthy plants is possible due to this method. Therefore
large and uniform plant stocks can be produced and offered to customers at reasonable
prices.
Most common techniques for micropropagation are axillary bud systems, adventitious shooting systems, somatic embryogenesis and meristem culture 293. They are mainly carried out in
commercial and specialised laboratories as well as in labs of larger companies specialised in
producing young plants. These labs active in micropropagation can be classified according to
different criteria: marketing and cooperation strategies, points of sale, product markets and
technical facilities.
It is very difficult to estimate the exact number of micropropagating labs in the EU25 due to
data gaps and often different fields of activities in commercial labs. However, according to a
survey conducted by the COST 822 programme in 1996, there are 505 laboratories situated
in the EU, most of them in the Netherlands, Germany, the United Kingdom, Belgium and Italy
294 295
.
In 2003 the Netherlands showed the highest production and import values for young plant
material for pot plants and cut flowers 296. Regarding costs little information could be elicited
from the literature. However labour costs are by far the highest cost factor in horticultural
companies using micropropagation 297. Thus several companies have (at least partly) moved
to countries with a low-wage economy.
In order to get an overview of micropropagation of ornamental plants in the EU, eleven horticultural companies active in this field – commercial labs and labs of young plant companies as well as three experts from universities and associations were interviewed. The interviews
carried out within the framework of this case study concentrated only on those cultures which
are important for micropropagation. These are in particular orchids and pot plants but also
strawberries and certain ornamental woods showing high production volumes in the European
Union.
The interviews revealed that economic data are hardly disclosed. This is due to the fact that
most of these questions are very sensitive (revenues, costs) for confidentiality reasons. In
addition it was hardly possible for the respondents to quantify differences in costs and revenues regarding micropropagation and conventional propagation techniques.
The interviewed companies differ greatly regarding their activity fields and cooperation strategies. On the one hand, there are pure micropropagating companies as well as companies
which apply both micropropagation and conventional methods on the other hand. However
mainly micropropagation techniques are used in most companies. Regarding marketing and
cooperation strategies, the respondents indicated to market young and mother plants by their
own, to market them to cooperation partners bound by contract or to sell finished plants to the
292
Read, P; Hosier, M. (1985): Tissue culture propagation of ornamental crops – an overview. In: US
Department of Agriculture (ARS): Tissue Culture as a plant production system for horticultural crops.
Conference on tissue culture, October 1985, p. 283-292.
293
Rowe, W. (1985): New technologies in plant tissue culture. In: US Department of Agriculture (ARS):
Tissue Culture as a plant production system for horticultural crops. Conference on tissue culture,
October 1985, p.35-51.
294
http://uwe.ac.uk/fas/cost822
295
O`Riordáin, F. (1996): Cost 822 – The directory of European plant tissue culture – 1996.
296
Center for the Promotion of Imports from developing countries (CBI) (2005): EU market survey 2005:
Cut flowers and foliage.
297
Preil, W. (2001): Gewebekultur kontra traditionelle Vermehrung. http://www.gruenebiotechnologie.com.
Page 203 of 315
trade. However also hybrid forms occur with respect to the marketing of the propagated
plants.
Employment rates dedicated to a specific technology use were hard to indicate by the interviewed companies. The same is true for a comparison of the employment effects of conventional and micropropagating companies. Most companies employ less than 10 employees.
However two companies were interviewed which employ more than 100 people. In 55 % of
the interviewed firms all employees are dedicated to the field of micropropagation, in another
18 % of the companies this share exceeds 50 %. Altogether three of the interviewed companies have created new jobs within the recent five years. Two of them started new laboratories
in eastern Europe and employed therefore more than 100 new workers in the field of micropropagation.
Because of the specialised work in laboratories, differences can be observed between
conventional and micropropagating companies regarding the qualification requirements of
their employees. Thus in micropropagating firms more biologists and agricultural scientists
and less horticultural specialists are employed. According to the interviewed companies about
11 % of all employees are academics and qualified employees.
The annual total revenues of the interviewed firms ranges between € 250,000 and
€ 2,000,000. However this is not only due to micropropagation in all cases. Detailed information on the share of revenues derived from micropropagation out of the total revenues could
not be elicited.
Currently especially orchids are micropropagated and sold according to the strongly increasing consumer demand in the EU. Most of the micropropagated horticultural products are marketed nationally or within the EU. There is only marginal export overseas.
Only very vague information are available regarding the costs of building up a laboratory for
micropropagation. This is mainly due to the fact that the laboratories were extended step by
step, which makes it difficult for the interviewed companies to indicate exact figures. However
the costs for a clear bench (as key equipment of such a laboratory) were estimated between
€ 10,000 to € 25,000. Also no definite numbers exist for the running costs of a
micropropagation laboratory but the share of labour costs on the total costs was assessed to
range between 30 % and 50 %. The share of material costs however is between 10 % and
20 %.
Micropropagation in horticulture has hardly any environmental or societal impact.
To conclude, the interviewed experts estimated that it is hardly possible to run a profitable horticultural business without the use of micropropagation in production of young plants
(i. e. the production of healthy, uniform, large plant stocks). Thus above all the economic impact of micropropagation on horticultural companies can be evaluated as relatively large. The
facts that in most of the interviewed companies micropropagation is mainly applied and that in
73 % of the interviewed firms more than 50 % of all employees are dedicated to micropropagation techniques indicate that this technology gained significance within the recent
years in the horticultural sector.
The qualification requirements of employees dealing with micropropagation techniques differ
from those employees working with conventional propagating methods. More biology or biotechnology-related know-how is needed in contrast to horticultural expertise in case of conventional propagation. There are also higher costs associated with micropropagating horticultural plants due to the high personnel expenditures and the higher investment and running
costs for micropropagation laboratories compared to laboratories which use conventional
propagating techniques. This is however compensated by the faster propagation and the production of large, uniform and healthy plant stocks.
The use of micropropagation in horticulture has hardly any environmental or societal impact.
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Major competitors to EU companies dealing with micropropagation are in particular Asian
countries like India, Thailand, Indonesia, Taiwan and China. According to the interviewed
companies there are no differences regarding technological standards between EU and nonEU Member States. On the contrary laboratories outside the European Union are often better
equipped than those within the EU. This is due to fact that investors not only come from the
horticultural field but also from the financially strong sector of biotechnology. Moreover
relocated companies can combine western technology with better basic conditions (e. g.
appropriate climate). Especially the lower labour costs due to the low wages in Asian
countries are a clear advantage compared to European countries. Thus several EU
companies decided to relocate their production to Asia. Due to the lower hourly wages in
Asian countries the companies can afford to hire more employees in particular with low
qualification levels. This fact enables the companies to intensify the cultivation work when
growing plants thereby improving their quality. On the other hand, European producers argue
that the long routes of transport can influence the plants` quality negatively. The same applies
to the flexibility and the terms of delivering such plants.
Outlook
In the opinion of the interviewees the further development of micropropagation depends on
the overall economic development in the EU and other industrialised countries since ornamental plants can be classified as goods with some luxury characteristics. Many European
laboratories are already in competition with laboratories in countries with low-wage economy,
e. g. Asian countries. Especially small companies will have difficulties to stay in competition
due to their small production volumes.
The respondents expect a slight increase regarding the creation of new jobs in the future.
This will mainly be due to the establishment of start-ups of laboratories in eastern European
countries. The demand of higher skilled and educated employees however will not rise. As
the “orchid-boom” is still ongoing and additional market potential exists also for other
ornamental plants the experts count on an increase of revenues within the range of 5 % to
10 %. This expected increase in revenues will at least partly compensate the future rising
costs of companies using micropropagation in horticulture.
4.4.5
Summary on impact indicators
Regarding the generic impact indicators, only a few indicators could be calculated due to lack
of data.
The share of total biotechnology-related revenues of biotechnology-active firms in the agrofood sector out of the total revenues of the agro-food sector ranges in the different EU Member States between 0.068 % and 1.364 % when the revenues of agricultural farms is included
and between 0.069 % and 1.718 % when it is excluded. The share of total biotechnology-related revenues of biotechnology-active firms in the agro-food sector out of the total revenues
of biotechnology-related applications in all sectors is between 4.76 % and43.10 % among the
EU Member States.
The share of biotechnology-active employees in the agro-food sector out of the total number
of employees in the agro-food sector ranges in the different EU Member States between
0.133 % and 0.599 % when employees of agricultural farms are included and between
0.552 % and 1.332 % when they are excluded. The proportion of biotechnology-active employees in the agro-food sector out of the total number of employees in biotechnology-active
firms is between 7.032 % and 16.047 %.
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The case of biotechnology-related diagnostics for foot and mouth disease (FMD) demonstrated that there is a potentially very high economic, social and animal health impact from the
development of a rapid and effective pen-side test for the disease. Current techniques involve
isolation of the virus itself or of antigens or nucleic acid from tissue or fluid samples using
ELISA-based assays or PCR-based methods, not yet available as pen-side tests. Eleven
companies and public sector laboratories involved in the development of FMD diagnostics
were identified, but we were only able to interview two of them, one almost entirely active in
the USA, the other more heavily involved in the EU. We were not able to obtain reliable
quantitative data, either from interviews or publicly available sources, on the indicators of interest for this case study. However, qualitatively, it is clear that this is an area of major interest
for the development of biotechnology-based diagnostic tests with potentially enormous economic, societal and environmental impact in the event of a disease outbreak.
The development of rapid diagnostic test kits for BSE was necessary to cope with the large
numbers of samples that were legally required to be processed. Much of the financial
information needed to evaluate the significance of the impact was regarded as confidential by
the companies concerned. However, we estimated that the income to laboratories from biotechnology-based BSE diagnostic tests was € 190 million in 2006, without taking account of
production costs and overheads. The workforce in the companies producing the kits had increased by 100-300 %, reflecting the increased numbers of samples processed. There was
also an economic impact due to the re-opening of trade in beef across national borders. Social impacts are related to a return of consumer confidence in the food industry as well as a
reduced incidence of vCJD in humans. Potential environmental impact relates to the reduction
in the number of animal carcases needing to be destroyed. BSE surveillance is likely to decline in future as the incidence of the disease declines (in 2002 the cost of finding one positive
case in the 30-35 month age group of cattle was € 302 million). Research is on-going on the
development of a live animal test for BSE.
The case study on pseudo-rabies animal vaccine shows that Aujesky’s disease primarily
affects pigs and the use of marker vaccine technology, along with Europe-wide co-ordination,
has made it possible to eradicate the disease from many countries. It has proved more costeffective to eradicate the disease than to allow it to remain endemic. Data to enable us to
quantify the economic impact of this technology were not available from companies due both
to confidentiality of the information and the nature of vaccine production. The live attenuated
marker vaccine now available revolutionised vaccine and eradication strategies in the
European Union and since many countries are now free of the disease, it is no longer used.
All vaccines registered for use in the EU are manufactured within Europe, but actual revenues
figures were confidential.
New biotechnology-based tests for Salmonella, the second most prevalent food pathogen in
Europe, are only slightly more accurate in detecting Salmonella but they deliver results much
more rapidly and allow more effective action to control food-borne disease. We found 76 firms
world-wide that are active in this area and targeted 26 for interviews, although the data required for the indicators relevant to this case study were regarded as confidential. Most of the
firms developed a wide range of diagnostic tests in addition to Salmonella. Changing trends in
the incidence of Salmonellosis in the EU and elsewhere are due to a range of factors, including improved animal husbandry, and cannot be attributed to the availability of the modern
biotechnology-based test kits.
The case study on traceability of GMOs in the food and feed industry showed that there is
hardly a noticeable economic impact in terms of revenues and employment. However, if the
current political conditions and the regulatory framework in the EU are not changed significantly, some increases of revenues and employment are to be expected for test kit producers
and diagnostic laboratories while higher additional costs will incur for the food and feed industry. Although GMO testing is only carried out for approved products potential negative
health and environmental effects of GM food and feed products are a complex issue and of
significant relevance for the perception and acceptance of GM food and feed by the European
consumers. Their attitudes towards GM food products are determined by their individual
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attributes and values. However, the latest Eurobarometer report (2006) comes to the
conclusion that recent communication activities and the introduction of new regulations
concerning the commercialisation of GM crops and the labelling of GM food products have
done little to allay the anxieties of the European public about biotechnology in the agro-food
sector 298.
Pig production is an important economic activity in the EU which has 39 % of world trade in
pig meat, and producers are competing with other countries with a lower cost base, requiring
them to adopt modern technologies that can contribute to their efficiency. Two European
companies produce genetic tests to support MAS, but the main product sold is pigs derived
using MAS. No single pig breeding organisation has more than 25 % of the EU or global market. Two or three markers are in very general use, but we were not able to obtain quantitative
data on indicators relevant to this case study – a general estimate would be that MAS has
contributed to the breeding of between 40-80 % of breeding females in the EU. Company
research activity in this area appears to be high but is perhaps over-estimated in companies’
advertising literature. Genetic markers have been used extensively to reduce pigs’ susceptibility to stress, to reduce the use of antibiotics through increased disease resistance to improve meat quality and to reduce nitrogen and phosphorus pollution from intensive production
units, all with very significant economic, social and environmental benefits to the European
Union's agriculture. However, only a small number of staff is required to achieve these
benefits.
The case study on marker-assisted selection in maize breeding showed that this biotechnological method has a high economic impact. The share of MAS-maize revenues out of the
total maize revenues is (at least) in large companies almost 100 %. Similar is true for the proportion of employees active in MAS-maize breeding out of all employees working in the field
of maize breeding. Also in the last five years up to 70 % of the newly created jobs in maize
breeding were dedicated to MAS. For the future it is expected that both revenues and employment will increase in the field of MAS due to an expected intensified application of MAS
and an expanded cultivation of maize (in particular for non-food purposes). Marker-assisted
selection has only very limited (and often an ambiguous) influence on environmental factors.
Cattle breeding and production, mainly in the dairy sector, is the only area where embryo
technologies are currently applied on any scale and its application is limited to the top of the
breeding pyramid where its impact on genetic improvement justifies its high cost. Five of the
ten largest cattle breeding companies are based in the EU in a context which involves a
complex range of public/private partnerships. The impact of the technology is very variable
(from <5 – 80 % depending on the type of business); approx. 500 people are estimated to be
employed in the EU25 (based on the number of teams operating there). The share of
revenues out of the total revenues can be up to 60 %; and the share of producer prices
influenced by embryo transfer (ET) is estimated to be 75 %. Social impacts include the
development of approaches that fit into sustainable land use programmes. ET is also a very
safe method of disseminating genetics from an infectious disease point of view. The
environment benefits indirectly from the improved productivity derived from genetic
improvement.
European aquaculture occupies a low share (3 %) of world production but within that it has
approx. 12 % of global production of higher value species such as salmon, trout and oysters.
Genetic improvement is the most efficient form of biotechnology-related improvement in
salmon production and its current level of use of 15 % of overall production is expected to
increase in future. No figures were available for genetic improvement of rainbow trout, but
emphasis in the past has been on production traits and is now moving to disease resistance;
also in trout, 100 % use of ploidy and sex manipulation was reported. In Pacific oyster production, modern biotechnology is enabling the introduction of 100 % triploidisation with minimal associated mortality. However, adoption of modern biotechnology is expensive and in298
Gaskell, G. et al. (2006): Europeans and Biotechnology in 2005:Patterns and Trends. Eurobarometer
64.3
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creases production costs by approx. 50 %. Disease resistance is believed to be the most
economically important trait, implying a reduced requirement for chemotherapeutics.
The case study on micropropagation in horticulture showed that this biotechnological method
has had a quite high economic impact in recent years. In most of the interviewed companies
micropropagation is applied (in some cases even up to 100 %). In 73 % of the firms more
than 50 % of the employees are dedicated to micropropagation activities. Moreover new jobs
have been created in this field within the last years – mainly in eastern European countries.
For the future a slight increase both in revenues and employment is expected, due to micropropagation especially in the new EU Member States. However there is the problem that
more and more European companies relocate their production/propagation of plants to countries with low-wage economy due to the high labour costs in the EU. Environmental and societal impacts of micropropagation were hardly determined.
5. Industrial biotechnology applications
5.1
Introduction
Modern biotechnology has developed its potentials mainly in the fields of health care and
agriculture. However, since more than 20 years a new set of application areas is emerging
that focuses both on improving efficiency of industrial processes, using biomass for new
applications and reducing negative environmental impacts. These applications, although very
heterogeneous, are subsumed under the label “industrial biotechnology” (in Europe also referred to as “white biotechnology”).
The first developments in this area have been end-of-pipe technologies, in which biotechnology is used to clean up contaminated environmental media. These bioremediation technologies were first used for wastewater treatment, followed by air and off gas cleaning with biofilters. Today, bioremediation technologies are also used for the treatment of soil (on site and
off site) and solid waste.
Recently, the focus has shifted from end-of-pipe solutions to more preventive applications,
i. e. to the use of biotechnology for pollution reduction in industrial production processes.
Many new industrial applications of biotechnology have been developed; in most of the cases
they complement or even substitute traditional chemical processes. One of the most common
applications is the replacement of chemical catalysts by enzymes, increasing the process efficiency while at the same time being far less energy intensive.
The world market for enzymes is currently growing by around 3 % per year, with revenues of
€ 1.7 billion in 2003299. The dominating application areas representing about 75 % of the enzymes market are food and feed, and detergents.
During the last years also the substitution of petrol-based raw materials by biological feedstock has been developed as an integral part of industrial biotechnology. The new ‘Bioeconomy’, as it is also referred to, promises to reduce dependency on scarce resources, leading to
increased stability on raw material markets, and to reduce greenhouse gas emissions, as
products from biological feedstock are CO2 neutral. Apart from the environmental advantages,
the substitution of petrol-based raw material bears significant potential. By 2010, according to
EU targets, 5.75 % of the European road transport should be run with biofuel.
The developments described above show that biotechnological processes have been developed for all stages of the value chain. However, the diffusion into industry seems to take
place at a rather modest pace, although in a number of cases the economic and environ-
299
Novozymes Annual Report 2004.
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mental superiority of a biotechnological process has been demonstrated300. The degree of
adoption of industrial biotechnology is very difficult to measure, as it is applied in a large
number of very diverse industrial sectors (e. g. food production, textile finishing, pulp and paper, mining, power generation).
Up to date, no systematic effort has been made to record applications of industrial biotechnology in Europe, and subsequently the scarce available information is hardly comparable
and not representative. This is also true for socio-economic impacts of the application of industrial biotechnology (e. g. direct and indirect job creation, contribution to growth, social
acceptance).
The goal of work package 3 is to obtain a more systematic overview of the current adoption
and impact of modern biotechnology applications in industrial processes, energy and environment in the EU, and in comparison with non-European countries, such as the USA, Japan and Brazil (for bioethanol), to quantify this as far as possible and evaluate it.
Industrial biotechnology is not a clearly defined technology, but consists of a set of various
biotechnologies, which are applied in different industrial sectors. In this work package on industrial biotechnology applications, three fields have been defined for which data on the
adoption and generic impact of biotechnology have been collected:
• Field 1: Bioethanol as fuel
• Field 2: Biotech-based chemicals
• Field 3: Biosensors for environmental applications
In the next section the results of the study on the adoption of biotechnology in the three fields
will be addressed. In section 5.3 the impact for the three fields in general and more
specifically for a number of applications will be presented.
5.2
Adoption of biotechnology in the industrial sector
In this section the results are presented on the adoption of biotechnology in the three fields
that have been defined for this study.
Data collection has been structured along a set of five adoption indicators that are presented
in Table 5.1. Adaptation of the indicators to specificities of the fields and to the data available
was necessary. The field-specific indicators and the data availability for each of the three
fields are also included in the table. We have collected those data that are available from
published statistics, publications, reports and personal communications with experts in the
fields.
Overall data availability for this sector is rather poor. Compared to the other two sectors in this
study there are not databases available that hold time series for a number of product
characteristics on the basis of which the adoption of biotechnology for the industrial sector
can be extracted. An exception is the Field Bioethanol as fuel; energy supply is a field of
public interest which stimulates national and international bodies to publish data on energy
production, energy consumption, etc. regularly.
300
The application of biotechnology to industrial sustainability, OECD, Paris, 2001.
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Table 5-1:
Nr
Specification of adoption indicators and data availability
Description
Specification and data coverage for the three fields
IBA1
Number of biotechnology
companies in the area of
industrial biotechnology
IBA2
Market shares of industrial
biotechnology products
(including intermediates)
already on the market in
terms of absolute numbers
and revenues
IBA3
Adoption by end-users
(e. g. number and share of
chemical companies using
biotechnology processes,
number and share of gas
stations distributing biofuels)
Changes in international
market shares of European
products
Biofuels: Number of firms producing fuel bioethanol; data
coverage for the EU25 (and a few EU Member States), USA,
Japan and Brazil
Biotech-based chemicals: number of biotechnology companies
in the field of industrial biotechnology, including those who use
biotechnological processes for the production of biotech-based
chemicals; data coverage is rather complete for Europe (for
some products groups also data on individuals European countries) and USA, not complete for Japan and China
Biosensors: number of firms that deliver biosensors and biobased detectors as share of the number of all firms producing
tests for environmental monitoring; data were available for
EU25, on the basis of which estimations could be made for
EU25; data coverage of USA and Japan is poor
Biofuels: production volumes of bioethanol fuels as share of
production volumes of total liquid fuels; data coverage for
EU25, USA, Japan and Brazil (IBA2a). Also for revenues
(IBA2b). Turn-over data are not available
Biotech-based chemicals:
IBA2a: market share of biotech-based chemicals in terms of
absolute numbers: production volumes,
IBA2b: market share of biotech-based chemicals in terms of
revenues or market value
Biosensors: Market size of biosensors of total market for products for environmental analyses; data available on the basis of
which rough estimates can be given for Europe, USA and Japan
Biofuels: proxy for end-users is number of filling stations that
offer blends of bioethanol or ETBE as share of total number of
fillings stations; data coverage for EU25, USA and Brazil.
Biotech-based chemicals: included in IBA1
Biosensors: no data available
IBA4
IBA5
Changes in shares of imports in total domestic consumption
5.2.1
Field 1: Bioethanol
5.2.1.1
Introduction
Biofuels: share of regional production volumes of world production volumes of bioethanol; data coverage for EU25, USA
and Brazil
Biotech-based chemicals: no data available
Biosensors: see IBA2
Biofuels: import and domestic consumption of all ethanol; data
coverage for EU25, USA, Japan and Brazil
Biotech-based chemicals: no data available
Biosensors: no data available
Presently, various types of biofuels are used and not only for the transportation sector. They
include: bioethanol, biodiesel, pure plant oil, biogas (methane), biohydrogen gas biological
produced from biomass, hydrogen gas produced by physico-chemical gasification of biomass
(which optionally can be converted to a liquid fuel by the Fischer Tropsch process) and wood
incinerated in power plants.
Modern biotechnology is an integral part of the production chain of bioethanol that is produced on the basis of wheat and corn. To convert starch (from wheat and corn) into
Page 210 of 315
monosaccharides that can be used by the yeast Saccharomyces cerevisiae, amylases are
used. The amylases are cost-effectively produced in fermentations using genetically modified
microorganisms.
Nowadays, the share of costs for the enzymes that are used in bioethanol production from
wheat is only a few percent. More modern biotechnology is underway in bioethanol
production. Genetically modified yeast strains have been developed that can simultaneously
convert glucose and xylose, the main monosaccharides produced by hydrolysing lignocellulosic biomass (wood, grass and straw). Bioethanol produced from these low cost
biomass types is called ‘second generation biofuel’, but in 2006 such production is still in an
experimental stage.
Therefore, Field 1 on Biofuels is represented solely by bioethanol and to be more specific by
fuel ethanol that is produced biotechnologically from renewable biomass. The adoption of
bioethanol in four world regions is presented in four regions: the EU, USA, Japan and Brazil
for the five adoption indicators presented in the introduction of this section. The tables in
Annex Report with data tables (section A3) include all data presented in this section, including
the sources that have been used.
5.2.1.2
Number of factories
Bioethanol production as a commercial activity has been mainly adopted by sugar and grain
industries as a new outlet for co-products and as a new product from raw materials. In addition, technology companies have started bioethanol production. New dedicated companies
have been established mostly as daughters of agro-industrial companies. Bioethanol
production has not been adopted very much by the oil industry, but the petro(chemical) industry blends bioethanol with gasoline and converts it into ETBE. Bioethanol is a replacement
for gasoline. Therefore, the number of bioethanol factories as share of the total number of
liquid fuel factories (e. g. oil refineries, large biodiesel plants) represents the adoption
(penetration actually) of bioethanol in the liquid oil sector (indicator IBA1). The liquid oil sector
is comprised of the fossil oil sector, the biodiesel and pure plant oil sector and the bioethanol
sector.
Table 5-2 presents the number of bioethanol production companies, the number of liquid oil
producing companies and the share of fuel bioethanol producing companies of the total
number of liquid oil companies.
Table 5-2.:
Number of factories producing fuel bioethanol and liquid fuels in four world
regions, 2005
EU
USA
Japan
Brazil
Number of factories producing fuel
bioethanol
16
95
0
340
Number of factories producing liquid
fuels
136
175
21
354
12 %
54 %
0%
96 %
Share of fuel bioethanol factories out of
total liquid fuel producing factories
In 2005 16 large bioethanol factories were active in the EU25: 3 in Germany, 3 in Spain, 5 in
France, 1 in Sweden, 1 in Hungary, 1 in Poland and 2 in Latvia. In addition, 104 oil refineries
and 16 large biodiesel plants were located in the EU25. Therefore the share of bioethanol
factories is 12 % out of a total of 136 liquid fuel plants. In 2006 the number of fuel bioethanol
factories has increased to 23 and the construction of 8 other factories has been approved301.
301
Personal communication with Mr R. Vierhout, chairman of the European Bioethanol Fuel Association
(23-6-2006)
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In the USA the number of bioethanol plants is higher: 95 out of a total of 175 liquid fuel
production plants (of which 79 oil refineries) (2005), so the share is 54 %. In Japan 21 oil
refineries are active, but no bioethanol plants (a share of 0 %). In Brazil 340 bioethanol plants
are operating out of 354 total liquid fuel production plants: a share of 96 %. This means that
Brazil and the USA are ahead of the EU in terms of entrepreneurial activity in the field of
bioethanol. In Brazil it is very attractive to start a new bioethanol company since the
production of ethanol from cane sugar is very cost-efficient and ethanol prices can compete
with gasoline. In the USA government policies and programmes have played an important
role in stimulating biomass-based fuels. This reduces the risks for companies to invest in
building new bioethanol factories (with about 100 million € investment costs per production
unit).
On the basis of these production volume figures (see section 5.2.1.3), the average production
per company has been calculated for each region (Table 5-3).
Table 5-3
Average production volumes of bioethanol per company (2005)
EU25
USA
Japan
Brazil
46.875
151.579
0
35.000
The figures show that the US companies have very large scale production facilities producing
on average about three times more than the EU25 companies and almost five times more
than Brazil companies.
5.2.1.3
Bioethanol production volumes as share of liquid fuel production volumes
The world production volume of bioethanol has increased from 14.6 million tonnes in 1999 to
29 million tonnes in 2005. In the same period, the EU production developed, starting from
110,000 tonnes in 1999 to 750,000 tonnes in 2005. Figure 5-1 presents the production
volumes of bioethanol in the EU over the period 1999 to 2005, and that of the USA and Brazil.
In the period 1999-2005 the USA has extended its production capacity from 4 to 14.4 million tonnes per year. The Brazilian bioethanol production increased from 10.3 million tonnes
in 1999 to 11.9 million tonnes in 2005.
Figure 5-1:
Bioethanol production volumes in three regions over the period 1999-2005
EU-25
USA
Brazil
W orld
Bioethanol production (thousands of tonnes)
60000
50000
40000
30000
20000
10000
0
1999
2000
2001
2002
2003
2004
2005
Ye ar
Page 212 of 315
For calculations of the contribution of bioethanol to the total fuel production (Indicator IBA2a),
only the data for total fuel production of 2003 and 2005 are available. Tables 5-4 shows that
in the EU the contribution of bioethanol to total fuel production has increased substantially in
the period 2003 – 2005: the absolute volumes almost doubled. This is also illustrated by the
figure that represents the share of bioethanol of total liquid production: from 0.077 % to
0.12 %.
Table 5-4:
EU
USA
Japan
Brazil
Production volumes of fuel bioethanol compared with production volumes of
liquid fuel in four different world regions
Production
volumes of fuel
bioethanol
(tonnes)
Production
volumes of liquid
fuels (tonnes)
Share of fuel
bioethanol out of
total liquid fuel
production
2003
446,000
577,000,000
0.077 %
2004
419,000
589,000,000
0.071 %
2005
750,000
601,000,000
0.12 %
2002
6,400,000
NA
2003
8,400,000
687,000,000
1.2 %
2004
10,200,000
701,000,000
1.5 %
2005
14,400,000
715,000,000
1.9 %
2003
0
169,000,000
0%
2005
0
2003
10,700,000
79,000,000
14 %
2004
11,100,000
80,000,000
14 %
2005
11,900,000
83,000,000
14 %
In 2004, within the EU the important fuel ethanol producers were: Spain (202,000 tonnes),
France (81,000 tonnes), Sweden (57,000 tonnes), Poland (38,000 tonnes), Germany (20,000
tonnes), the Netherlands (11,000 tonnes) and Italy (10,000 tonnes).
The USA and Brazil are far ahead of the EU. The bioethanol production volumes in the USA
are ten-times as high as those of the EU25; in 2005 they were more than double that of 2002.
The total liquid fuel production increased only with 2 % per year to 715 million tonnes in 2005.
The bioethanol share rose from 1.2 % (2003) via 1.5 % (2004) to 1.9 % (2005), which is also
ten times higher than that of the EU-25. Japan produces about 169 million tonnes of liquid
fuel, but no bioethanol. In Brazil the bioethanol production almost linearly increased from
8.7 million tonnes in 2000 to 11.9 million tonnes in 2005, while the liquid fuel production
increased from 79 million tonnes in 2003 to 83 million tonnes in 2005. So the production
volumes of Brazil are at a similar level as those of the USA, but their contribution to the total
liquid fuel production is much higher.
5.2.1.4
Revenues
When calculating the shares of the three regions’ annual revenues - estimated as produced
volume multiplied by the sales price ex factories - as share of total liquid fuel revenues
(indicator IBA2b), the figures are different as compared to the production figures, for in the EU
and the USA the price of bioethanol is higher than that of fossil liquid fuels.
Page 213 of 315
In the EU the bioethanol production revenues were € 204 and € 192 million (2003 and 2004,
respectively), while liquid fuel production revenue was € 136 and € 139 billion in the same
years. For a biotechnology application these revenues are relatively impressive. However, the
shares of bioethanol of total liquid fuel revenues were 0.15 % (2003) and 0.14 % (2004).
In the USA the revenues of bioethanol factories increased from € 2,730 million in 2003 to
€ 6,491 million in 2005, while in the same period the revenues in liquid fuel production increased from € 162 billion to € 241 billion. As a result, the bioethanol share in revenues
changed from 1.7 % to 1.9 %. In Brazil the revenues made by bioethanol factories increased
from € 1790 million in 2003 to € 3480 million in 2005, while the liquid fuel revenues increased
from € 18.6 billion to € 27.8 billion. The bioethanol share evolved from 10 % to 13 % in the
same period.
Also with respect to revenues, we can conclude that the USA holds the leading position,
followed by Brazil, followed by the EU.
5.2.1.5
Adoption by end-users: fuel filling stations
The third adoption indicator deals with the adoption by the end-user. In this case we have
used as a proxy the distribution channel of the product to the end-users (IBA3). More
specifically, the indicator refers to the number of fuel filling stations through which the
produced volumes of bioethanol are distributed to the consumer, as compared to the total
number of liquid fuel filling stations. Filling stations are places in which cars can refuel. Mostly,
a filling station comprises different pumps for gasoline, diesel, LPG or other fuels.
The distribution over the EU is rather low: only within a few countries do fuel stations offer
bioethanol to the consumer. In 2004 the EU had about 120,000 liquid fuel filling stations, of
which about 10,000 offered blends of bioethanol or ETBE and gasoline, a share of 8 % (Table
5-5). In 2005 330 filling stations also offered the higher blend E85 (85 % ethanol and 15 %
gasoline), a share of 0.3 % of the filling stations. Within the EU25 a large variation exists. In
Sweden all pump stations offer E5 gasoline (an adaptation of 100 %), while in France and
Spain bioethanol is added as ETBE and offered in about 25 % of the filling stations (2004).
The majority of the E85 filling stations are located in Sweden. In the other Member States the
share of stations offering ethanol is much lower and mostly 0 %. The share of stations offering
bioethanol of all liquid fuel filling stations in the EU is 8.6 %.
Table 5-5
EU
USA
Brazil
Number of filling stations offering bioethanol compared to the total number
of filling stations in three world regions
Number of
filling stations
offering
bioethanol
Number of
filling stations
offering E85
Total number
of filling
stations
Share of
bioethanol of
total liquid
field stations
2004
10,000
NA
120,000
8.6 %
2005
NA
330
120,000
2004
NA
600
200,000
2005
60,000
NA
200,000
2005
24,000
NA
24,000
30.3 %
100 %
Again on this adoption indicator, the USA and Brazil are ahead of the EU. The USA has
60,000 filling stations offering E10 out of a total of 200,000 stations (2005), which is higher
than the EU. E85 is found at 600 gas stations (2004), a share of 0.3 %. which is the same as
in the EU. In total their share is 30.3 %. All gasoline in Brazil contains bioethanol in various
Page 214 of 315
blends, ranging from 20 % to 100 % ethanol. Therefore, 100 % of Brazil’s 24,000 service
stations offer ethanol.
5.2.1.6
Share of regional production out of world production of bioethanol
In the period 1999 – 2005 there were considerable changes in market shares of the three
world regions that are the main producers of bioethanol for fuel (indicator IBA4). Figure 5-1
shows that compared to the USA and Brazil, the EU production volumes have been growing
very steadily, but still at a low level so the EU’s impact on these changes is rather small. The
share in world production increased from 0.8 % to 2.6 %, which means that the EU is gaining
market position in course of time. Table 5-6 presents the data for the share of the regions’
production volumes of bioethanol to the total world production volume, for 1999, 2002 and
2005.
Table 5-6
Share of region to world production of bioethanol, 1999, 2002 and 2005
1999
2002
2005
EU
0.7 %
1.8 %
2.6 %
USA
30.2 %
35.2 %
49.0 %
Brazil
70.5 %
52.2 %
40.8 %
Table 5-6 also shows that during this period the USA’s production volume has been growing
so fast that in 2005 they produced about 49% of the world volume coming from a position of
about 30 % in 1999. Brazil’s relative share decreased from about 70 % in 1999 to about 41 %
in 2005, as other countries have caught up.
5.2.1.6
Import and domestic consumption of all ethanol
In order to get insights into the dependencies related to bioethanol of regions, the last
adoption indicator deals with the import versus local consumption of bioethanol (IBA5). Since
it is not possible to distinguish between industrial, beverage and fuel imported ethanol, for this
indicator all ethanol is considered. 79 % of the ethanol produced in the world is used for fuel
applications302. Table 5-7 shows the import and consumption figures of bioethanol for the four
regions.
Table 5-7
Import and consumption of bioethanol (in 1,000 tonnes), 2004
EU
USA
Japan
Import of
bioethanol
300
727
391
Consumption
of bioethanol
2,300
11,800
316
Brazil
0
12,260
Within the EU, Germany is the largest ethanol importer and France the largest exporter and
consumer. In 2004 the EU25 imported 300,000 tonnes of ethanol and consumed 2,300,000
tonnes, which means that Europe produces the largest part itself. The ratio import/domestic
consumption is 0.13. Import is unattractive because of the relatively high transport costs and
import duties. Because of this one might expect that EU measures directed to stimulate of the
bioethanol consumption will lead to a higher productivity of EU’s bioethanol production sector.
302
NPN International, July 2001,
http://www.findarticles.com/p/articles/mi_hb3311/is_200107/ai_n8005129
Page 215 of 315
The import and domestic consumption of the USA were 727,000 and 11,800,000 tonnes in
2004, with an import/consumption ratio of 0.062. In 2005 the import was lower: 649,000
tonnes, while the domestic consumption was higher: 13,500,000 tonnes. The import/consumption ratio was 0.048, making the USA even more self-supporting than the EU.
The situation in Japan is completely different. Japan imported 391,000 tonnes of ethanol in
2004 and consumed 316,000 tonnes (the difference was exported). The import/consumption
ratio was 1.24. In 2005 402,000 tonnes were imported and 473,000 tonnes were consumed
(the difference was produced as non-fuel ethanol). The import/consumption ratio was 0.85.
Brazil consumed 12,260,000 tonnes ethanol and does not import (2004).
Overall, one can conclude that there is hardly any transport of ethanol from one world region
to another. Bioethanol is mainly produced for the local market, except for Japan.
5.2.2
Field 2: Biotech-based chemicals
5.2.2.1
Introduction
The chemical industry has used biotechnological processes for many years. Some product
groups such as enzymes, antibiotics, amino acids, and vitamins are mainly produced through
biotechnological processes. Advances in genetic engineering and other biotechnologies have
expanded the application potential of biotechnology and have overcome many obstacles. The
second field comprises biotech-based chemicals. In our definition, biotech-based chemicals
are chemicals that are produced through modern biotechnological production processes.
The biotech-based chemicals include a wide variety of chemical entities that include enzymes, vitamins, amino acids, acids, lipids, antibiotics, intermediates and chiralics for pharmaceutical and agro-chemical industry, biopolymers, sweeteners, solvents and feed additives. It varies from inexpensive bulk products - such as citric acid with a world production
volume of one million tonnes per year, and a cost price of € 0.80/kg - to very expensive fine
chemicals such as vitamin B12 with an annual production volume of approximately 10 tonnes
and a world market price of € 25,000/kg (BACAS 2004)303.
Biotech-based companies are companies that produce biotech-based chemicals that are entirely or partly produced through biotech-based processes. There are no hard figures on the
number of different biotech-based chemical production processes. On the basis of a number
of sources (including Dechema 2004304; Bacas 2004305; Gaisser et al. 2002306; OECD
2001307) we have identified approx. 360 different biotech-based chemical products (including
at least 100 different enzymes and approx. 160 different antibiotics), in production or in development. Straathof et al. (2002)308 listed 134 industrial biotransformations of which approx
90 % of the products are chiral fine chemicals. Others report that 22 out of 38 large scale
asymmetrical syntheses already apply biotech methods (Blaser and Smith 2003)309.
303
BACAS (2004) BACAS (2004) Industrial Biotechnology and Sustainable Chemistry, Royal Belgian
Academy Council of Applied Science, January 2004
304
Dechema (2004) White Biotechnology: Opportunities for Germany. Position paper of Dechema e.V.,
November 2004
305
BACAS (2004) Industrial Biotechnology and Sustainable Chemistry, Royal Belgian Academy Council
of Applied Science, January 2004
306
Gaisser, S., Hoogeveen, R., and B. Hüsing (2002) Überblick über den Stand von Wissenschaft und
Technik im produktionsintegreirten Umweltschutz durch Biotechnologie (PIUS-BT), Fraunhofer Institute
Systemtechnik und Innovationsforschung, Karlsruhe, Dezember 2002
307
OECD (2001) The application of Biotechnology to Industrial Sustainability (2001) OECD, Paris, 2001
308
Straathof, A., Panke, S. and A. Schmidt (2002) The production of fine chemicals by
biotransformations, Curr. Opin. Biotech. 13(6), 548-556, 2002
309
Blaser, H.U., and E. Smith (Eds.) (2003) Asymmetric Catalysis on Industrial Scale – Challenges,
Approaches and Solution, Wiley VCH, Weinheim, 2003
Page 216 of 315
The application of biotechnology in chemical production processes not only reduces costs,
but also has many environmental benefits. It can lead to a reduction of hazardous and nonhazardous waste, reduction of air emissions of green house gases and of energy
consumption. The total potential for reducing greenhouse gas reductions by using
biotechnological processes was estimated to be 65 to 180 millions tonnes per year world-wide
(Riese 2004)310.
Indicators for measuring the adoption of biotechnology in the chemical sector
Due to unavailability of data, the adoption of biotechnology in the chemical sector could only
for three of the five indicators be used:
• Number of biotechnology companies in the field of industrial biotechnology, including those
who use biotechnological processes for the production of biotech-based chemicals (IBA1);
• Market share of biotech-based chemicals in terms of absolute numbers: production
volumes (IBA2a);
• Market share of biotech-based chemicals in terms of revenues/market value (IBA2b).
Indicator IBA3 on end-users which deals with the number of companies that use biotechnological processes for the production of biotech-based chemicals, is included in IBA1.
For the indicators IBA4 and IBA5 no data were available at all. For IBA4 (Changes in
international market share of European products) no data are available on market shares of
bio-based products for a number of subsequent years. This became clear when data for IBA2
were collected. Even for one year it was hardly feasible to get a complete overview. Data on
changes in shares of imports in total domestic consumption of the individual chemicals and
the specific group we are dealing with (IBA5) are not available in national or European
statistics or other publications.
An important remark with respect to data availability is that data on production volumes (in
terms of tonnes per year) and sales or turn-over (in terms of million or billion € ) for biotechbased chemicals, but also for chemicals in general are hardly available. We have contacted
important European biotech-based companies and asked for information concerning their
company's total and biotech-related production volumes, sales and turn-over, their number of
employees and biotechnology-active employees. World figures for the product groups they
produce were also asked for, but except for a single company, they could not provide these
data, mostly because of confidentiality reasons. A few reports present data on production
volumes of a number of product groups in terms of tonnes per year and market value
in million € (Dechema 2004311, Gaisser et al. 2002312, Frost and Sullivan 2001313, Bacas
2004314). These reports are the main data sources for the data presented in this section. However they provide only global figures, but not for specific regions.
In this section the adoption of biotechnology in industry will be presented for the product
groups enzymes (section 5.2.2.2), and biopolymers (section 5.2.2.3) separately as they
present the most important industrial biotech product groups at the moment. Bioethanol is
also a biobased chemical and is produced in quantities that outperform all other biotech-
310
Riese, J. (2004) Industrial Biotech and Biomass – From awareness to capturing the value,
Presentation at the World Congres on Industrial Biotechnology and Bioprocessing, Orlando, 22 April
2004.
311
November 2004
312
Gaisser, S., Roeland Hoogeveen, R., Huesing, B. (2002) Überblick den Stand von Wissenschaft und
Technik im produktionsintegrierten Umweltschutz durch Biotechnologie (PIUS-BT), Fraunhofer Institut
Systemtechnik und Innovationsforschung, Karlsruhe, December 2002
313
Frost and Sullivan (2001) Advances in Biotechnology for the Manufacture of Commodity and
Specialty Chemicals, Technical Insights, New York
314
BACAS (2004) Industrial Biotechnology and Sustainable Chemistry, Royal Belgian Academy Council
of Applied Science, January 2004
Page 217 of 315
based chemicals. Bioethanol has already been addressed (in section 5.2.1) as it is a separate
field (Field 1) in this report. Bioethanol will be included in the last subsection that includes all
bioprocessing application in the chemical sector. The other product groups, including bulk and
fine/specialty chemicals like amino acids, acids, vitamins, antibiotics, intermediates for the
pharmaceutical industry and others will be presented in section 5.2.2.4. Section
5.2.2.5 provides overall figures and a comparison with the chemical sector as a whole.
5.2.2.2
Enzymes
Enzymes are the most well known product of biotechnology in the chemical industry.
Gavrilesci and Chisti (2005)315 estimated that about 60% of the enzymes commercially used
are products of modern biotechnology. Enzymes have an important value as biocatalysts,
accelerating (bio)chemical reactions in a wide range of production processes in various
industrial sectors. Compared to chemical catalysis, enzyme catalysis is highly specific and
operates under mild (temperature, pH, pressure), non-toxic and non-corrosive conditions.
These and other aspects make the use of enzyme-based processes more sustainable
compared to the chemical processes: less resources are consumed, less waste is produced
and also less toxic substances are needed as catalysts, etc. Also its high degree of reaction
specificity and the possibility of producing only the desired form of the two chiral forms that
certain chemicals have, make enzymes very suitable for chemical production processes.
Most enzymes (about 75%) are used in the food (cheese, baking, glucose and fructose
production, brewery, fruit processing) and feed sector and in detergents. These are mostly
hydrolytic enzymes such as proteases, amylases, lipases and cellulases. Another 15% is
used for leather processing, in the pulp and paper and textiles industry and for producing
commodity chemicals. Application as specialty chemical in the development of new drugs,
medical diagnostics and for other analytical uses is about 10% and finds also increasing use
(Dechema 2004; Gavrilescu and Chisti 2005)316.
5.2.2.2.1
Number of companies
We have identified at least 80 companies in Europe that produce industrial enzymes
(including for detergents, textile, pulp and paper, HFCS starch) and food and feed enzymes.
According to the report ‘Industrial Enzymes’ (2005)317, France has the largest number of
enzyme companies (17), followed by Spain (13), Germany (11) and Italy (8). Belgium,
Denmark and Switzerland each have 5 enzyme companies, Czech Republic and the UK,
each 4, Netherlands 3 and Bulgaria, Poland, Cyprus, Finland and Ireland each 1.
Key players in the EU in terms of production volumes and revenues are: Novozymes
(Denmark), Danisco (including Genencor) (Denmark), DSM (Netherlands), AB Enzymes
(Germany), Chr. Hansen (Denmark) and DIREVO Biotech AG (Germany)318.
Outside Europe the USA is the main player, with at least 21 companies, the other 16
companies we have identified in the rest of the regions can be found in India (4), Australia (3),
New Zealand (3), Korea (2) and Japan, Mauritius, Thailand and Canada each 1319.
315
Gavrilescu and Chisti (2005) Research review paper: Biotechnology – a sustainable alternative for
chemical industry, Biotechnology Advances 23 (2005), p. 471-499; p. 477
316
November 2004; Gavrilescu and Chisti (2005) Research review paper: Biotechnology – a sustainable
alternative for chemical industry, Biotechnology Advances 23 (2005), p. 471-499; p. 477
317
‘Industrial Enzymes’, Oct, 1 2005, Global Industry Analysts,
www.marketresearch.com/map/prod/1192314.html
318
Industrial Enzymes’ (2005), Global Industry Analysts, on: www.marketresearch.com/map/prod/
1192314.html
319
‘Industrial Enzymes’ (2005), Global Industry Analysts, on: www.marketresearch.com/map/prod/
1192314.html
Page 218 of 315
5.2.2.2.2
Production volumes
The total world production of enzymes, according to a report published in 2001320, was
53,000 tonnes per year. The report also provides data on production by country. These are
presented in Table 5-8.
Table 5-8
Production volumes of enzymes (tonnes/year) by country, 2001
Country
Share of total
production volume
Country
(continued)
Share of total
production volume
Denmark
47 %
France
3%
The Netherlands
19 %
UK
2%
USA
12 %
Switzerland
2%
Japan
8%
Rest of the world
1%
Germany
6%
TOTAL
100%
Denmark (read Novozymes) is by far the top producer, generating 47 % of the total
production volume, followed by the Netherlands (19 %) and the USA (12 %, with Genencor
still in US hands, since 2005 part of Danisco). Japan is on a fourth place with 8 %. Other main
producing countries are Germany (6 %), France (3 %), UK and Switzerland (each 2 %). The
other countries (which also might include European countries, such as Italy and Spain)
account for the rest (1 %).
5.2.2.2.3
Revenues, market value
The total market values of industrial enzymes and food and feed enzymes was in 2004/2005
€ 1,635 million (source: DSM expert); the Dechema report (2004)321 gives a higher figure:
€ 1,830 million. A Novozymes data source322 states that Novozymes is responsible for 44 %
of the market size of industrial enzymes, Genencor 18 %, DSM 5 %, BASF 5 % and other
companies for the other 28 %. No information is available on the basis of which data on the
distribution by world region can be provided.
In the enzymes part of the chemical sector the EU has a relatively very strong position as
more than 75% of the world production volume (2001 data) is produced by European
companies (Swiss production not included). In 2006, after the acquisition of Genencor by
Danisco in 2005, this share could have reached even 85%.
5.2.2.3
Biopolymers
Biopolymers such as cellulose-based polymers have already been used for a long time: it is
the main ingredient of paper and is also used to produce the textile fabric viscose. Starchbased polymers were introduced in the 1980s and are now the most important group of
commercially available biopolymers. The term “biopolymer” is used for a number of different
types of polymers: polymers that are produced on the basis of biomass, polymers that are
produced through biotransformation processes and polymers that are biologically degradable.
In our study we focus on the polymers that are – in most cases partly - produced through
biotransformation processes. Five types of bioprocessed polymers are already on the market:
polylactid acid, polyacrylamide, polyhydroxyalkanoates, Solanyl and 1,3 propanediol. See
320
Frost and Sullivan (2001) Advances in Biotechnology for the Manufacture of Commodity and
321
November 2004
322
www.novozymes.com/NR/rdonlyres, accessed 16/08/2006
Page 219 of 315
Section 5.3.3.2 in this report for a summary of the case study on BioPolymers and the full text
of the case study in the case study report.
5.2.2.3.1
Number of companies
The production of biotech-based polymers is still in its infancy. The number of companies
producing them and the volumes they produce are still very small. We have identified six
companies that produce biotech-based polymers in Europe: three in Germany, one in the UK
and two in the Netherlands. Outside Europe another 10 other biotech-based polymer
producing companies were found: four in the USA, five in Japan and one in Brazil.
5.2.2.3.2
Production volumes
The total annual world production volume of the five product groups (PLA, PHA/PHB, PDO,
Solanyl and polyacrylamide) was estimated at approximately 419,500 tonnes (Table 5-9).
Compared to the worldwide production volume of polymers of 224 millions tonnes in 2004,
this is only 0.2%.
Table 5-9
Production volumes biotech based polymers
Country
Production volume (tonnes)
USA
Japan
China
EU
175,350
101,000
100,000
43,176
The USA is the main producer of biotech-based polymers (about 42 %), followed by Japan
and China (each about 25 %). Europe is a relatively small player in this field (about 8 %).
5.2.2.3.3
On the basis of a combination of sources323 we have estimated the world wide market value
of the five biotech-based polymers at approximately € 778 million. The contribution of the
EU25 is € 55,3 million., which is 7.1 %. The others contribute as follows: USA 88 %, Japan
3.6 % and Brazil 1.3 %.
At first sight - when only considering the number of companies – the EU seems to perform
rather well in the biotech-based polymers part of the industrial sector: six out of 26 which is
almost 25%. However, when production volumes and market value are also taken into
consideration, it must be concluded that compared to the USA and Japan, the EU position in
the field of biotech-based polymers is rather weak; 8 % and 7.1 % respectively. Most of the
EU companies still operate on a pilot plant level or produce biotech-based polymers in small
volumes for specific markets, such as the biomedical market.
5.2.2.4
Other bulk and fine biotech-based chemicals
The remaining category of bulk and fine biotech-based chemicals includes the following
product groups: amino acids, acids, sweeteners, biomass (including micro-organisms, yeast,
yeast extracts, culture and media), vitamins, antibiotics, intermediates and chiralics for the
323
November 2004; Crank, M., Patel, M., Marscheider-Weidemann, F., Schleich, J., Huesing, B., Angerer,
G. Wolf, O. (Ed) (2005) Techno-economic feasibility of large-scale production of bio-based polymers in
Europe. European Commission – Institute for Prospective Technological Studies (IPTS) Seville, 2005,
EUR 22103 EN; www.demolenaar.nl/artikelen/show.asp?id=791 last accessed 16/09/2006
Page 220 of 315
pharmaceutical and agrochemical industry and a number of other chemicals.5.2.2.4.1
Number of companies
World-wide at least 67 companies were identified that are involved in the development and
production of these chemicals324. The EU is the main player, representing 49 % of all
companies, including BASF, Degussa, DSM, Lonza. Japan follows with 30 % of all companies
(it has a strong position in glutamic acid production) and the USA with 21 %.
5.2.2.4.2
Production volumes
Combining available data (for several years and from several sources)325 a rough estimation
says that the total production volume of these product groups is at least 260 million tonnes.
Table 5-10 presents the production volumes and world market prices of a selection of biotech
produced chemicals.
Table 5-10
Production volumes and world market prices of biotech-based chemicals,
2004
Product group
Annual production volume
World market prices *
(tonnes)
(€./kg)
Acids
1.444.000
0.50 – 1.80
Amino acids
2.259.660
1.20 - 20
Antibiotics and derivates
101.000
8 – 5.200
Biomass – bakers yeast
1.800.000
NA
Solvents (excl bioethanol)
4.200.000
NA
Sweeteners
28.110.000
0.3 - 20
160.020
8 (Vit C), 25,000 (Vit B12)
Vitamins
* presents range between cheapest and most expensive product in the product group
Dechema (2004)
This figure represents a lower estimation as we have no data available about the size of
activities in China which is very active in vitamins production (see the summary of the Case
Study on Riboflavin in this report, section 5.3.3.9).
Also no information is available on the basis of which data on the regional distribution of the
product groups in this category can be provided. Only ‘regional’ data for amino acids,
sweeteners and vitamins are available (Table 5-11).
324
November 2004 and Gaisser, S., Roeland Hoogeveen, R., Huesing, B. (2002) Überblick den Stand von
Wissenschaft und Technik im produktionsintegrierten Umweltschutz durch Biotechnologie (PIUS-BT),
Fraunhofer Institut Systemtechnik und Innovationsforschung, Karlsruhe, December 2002
325
November 2004; Gaisser, S., Roeland Hoogeveen, R., Huesing, B. (2002) Überblick den Stand von
Wissenschaft und Technik im produktionsintegrierten Umweltschutz durch Biotechnologie (PIUS-BT),
Fraunhofer Institut Systemtechnik und Innovationsforschung, Karlsruhe, December 2002; Frost and
Sullivan (2001) Advances in Biotechnology for the Manufacture of Commodity and Specialty Chemicals,
Technical Insights, New York; BACAS (2004) Industrial Biotechnology and Sustainable Chemistry,
Royal Belgian Academy Council of Applied Science, January 2004 and expert DSM
Page 221 of 315
Table 5-11
Distribution of production volumes for three product groups across world
regions
EU
USA
Japan
World
Amino acids
102 810
15 000
2 141 850
2 259 660
Sweeteners
102 500
20 005 000
8 002 500
28 110 000
Vitamins
104 800*
4 400*
20 800*
140 020*
Total
310 110
20 024 400
10 165 150
30 499 660
* Vitamin B12 ( 20 tonnes/year) is not included in distribution across regions
The data in Table 5-11 also show that the EU only contributes 1 % to the total sum of production volumes of these three product types. The USA is the main contributor: 66 %. Japan
contributes 33 %. As can be observed from the table, these figures are heavily influenced by
the very large sweeteners production volumes.
5.2.2.4.3
Very limited information is available on revenues and market value. The total market value of
a number of other bulk and fine biotech-based chemicals has been estimated on the basis of
production volumes, world market prices and market value as presented in Dechema
(2004)326 at approximately € 42,385 million. The product groups included are: amino acids,
acids, sweeteners, biomass, vitamins, antibiotics and a few other product group for which the
required data were available. No information is available on the basis of which data on the
distribution by region can be provided.
5.2.2.5
Overall biotech-based chemicals
In this last section on the adoption of biotechnology in the field of biotech-based chemicals,
the results for three adoption indicators are presented: number of companies, production
volumes and revenues, market value. This section covers the whole chemical sector and
includes the three product groups presented above (5.2.2.2 - 5.2.2.4) and bioethanol as
presented in the previous section (5.2.1). However, the picture that can be presented is very
patchy, mainly due to the absence of data sources that provide the data needed. Only by
combining data that could be found from the very few sources that were available, it was
possible to add a little to the overview of the adoption of biotechnology in the industrial sector.
5.2.2.5.1
Number of companies active in industrial biotechnology
In the EU we have identified at least 305 biotech-based companies of which 114 are dedicated biotech companies (biotech start-ups) and the other 191 are biotechnology-active
companies (including the companies mentioned in the previous sections). The large chemical
companies that produce biotech-based chemicals can be placed in the centre of a much
larger cluster of companies including suppliers of chemicals and other materials, of
equipment, instruments, etc. The large companies and the universities to whom they relate
are a fruitful breeding ground for new dedicated firms.
Data on biotech-based companies in Germany (DECHEMA 2004)327 and the Netherlands
(Enzing and Kern 2004)328 that are active in industrial biotech were available, also the
numbers of dedicated biotech companies in Switzerland and Austria could be found (mostly
326
November 2004
327
November 2004
328
Enzing, C. and S. Kern (2004) Industriële Biotechnologie in Nederland, TNO-rapport 2004
Page 222 of 315
on websites of national biotech industry associations), but for the rest of the EU countries no
data on biotech-based companies in the industrial sector are available. However, as Germany
and the Netherlands host the most important companies in the field of industrial biotechnology
(including BASF, Degussa, Bayer, DSM) it might be assumed that the number of 305
represents the larger part of the biotech-based companies in EU in the industrial sector.
With a total of 60,000 chemical companies (in 2004)329 the share of biotech-based companies
of the total number of companies in EU is at least 0.5 % (IBA1).
For the USA we have identified at least 266 biotech-based companies, including 45 dedicated
companies (survey 2003)330. Other than for the EU we are not able to assess this figure in
terms of what it represents. Recent publications (no information about year)331 say that there
are 15,843 chemical establishments in the USA. Based on these figures it can be concluded
that the share of biotech-based companies of the total number of chemical establishments in
the USA is at least 1.7 %.
In 2003 Japan had 127 biotechnology-active firms in the sector chemical industry (survey in
2003) and 5,000 chemical companies (in 2003)332, which makes the share of biotech-based
companies of the total number of chemical establishments in Japan at least 2.5 %.
5.2.2.5.2
Production volumes
The overall position of the EU as producer of biotech-based chemicals in terms of production
volumes is rather poor. The production volume of enzymes (about 42,000), biopolymers
(about 43,000), bioethanol (about 419,000) and amino acids, acids, vitamins and sweeteners
(about 310,000) together is about 814,000 (Table 5-12).
The EU’s contribution to the total production volumes of EU, USA and Japan is approx. 2 %
(IBA2a). The share of the USA is much higher (about 73 %) and very much influenced by the
high production volumes of sweeteners and bioethanol. Japan’s share is about 25 %.
Table 5-12
Distribution of production volumes for the product groups enzymes,
biopolymers, bioethanol, amino acids, acids, vitamins and sweeteners
across world regions
EU
USA
Japan
Total
814,000
30,406,000
10,270,000
41,490,000
2%
73 %
25 %
100%
Cefic, the industry association for the chemical industry in Europe considers data about production volumes as confidential, only indexed data are available for Europe. For that reason it
is not feasible to provide data on the share of biotech-based chemicals of the total chemicals
production (in terms of production volumes) for Europe. The same applies for the USA and
Japan.
5.2.2.5.3
Revenues, market volume
Information on market value/revenues of biotech-based chemicals by region is only available
for the product groups biopolymers, bioethanol and for some product groups in the fourth
‘Other group’ (only for food markets). Revenues data for chemicals in the EU25, the USA and
329
http://www.cefic.org/factsandfigures/level02/profile_index.html
A survey of the use of biotechnology in the US industry, Department of Commerce, 2003, p. 130
331
http://www.americanchemistry.com/s_acc
332
http://www.nikkakyo.org
Page 223 of 315
330
Japan are available333. However, as the data for biotech-based chemicals are far from
complete, it is not possible to make an estimate of the share of revenues of biotech-based
chemicals of the total revenues of chemicals by region (IBA2b).
5.2.3
Field 3. Biosensors for environmental applications
5.2.3.1
Introduction
The environmental sector has become a large field of economic activity in the EU25 and other
developed regions in the world. It comprises wastewater treatment, waste gas treatment, bioremediation of soil, waste processing and managing the quality of surface water, groundwater
and soil. Biological processes play an important role in the field of the environment. Most of
the wastewater treatment processes and soil bioremediation is carried out using
biodegradation processes. However, these processes are based on traditional biotechnology,
using natural occurring microorganisms. The application of modern biotechnology (i. e. use of
genetically modified organisms) is extremely rare in this field (TNO experts do not know any
example).
Nevertheless, novel biological processes based on newly discovered microorganisms e. g. for
the conversion of ammonia and the biodegradation of xenobiotics have been introduced in the
last ten years334 and more novel processes, e. g. the biological fuel cell (that directly generates electricity from the oxidation of waste streams) are on its way. Modern biotechnology as
defined by the EU, with respect to the environmental field is mainly used in detection and
monitoring. The development of biosensors and bio-based detection for environmental
applications has been promoted by the European Union starting with the fourth Framework
Programme. The adoption of the use of biotechnology in biosensors for environmental
applications has been assessed for three world regions (the EU25, USA and Japan) using
four adoption indicators: number of factories (IBA1), revenues (IBA2), adoption by end-users
(IBA3) and regional contribution to world production (IBA4).
5.2.3.2
Number of companies
There are at least 21 European companies and institutes (including one Norwegian actor)
active in the field of biosensors and bio-based detection for environmental application (see
Table 5-13). Some companies are specialised in environmental biosensors or bio-based
detection (mostly small start-up companies); others have a wide range of other products
(mostly very large companies such as Texas Instruments, Merck).
The denominator is the number of all firms producing tests for environmental monitoring. Included are firms that manufacture equipment (GC, HPLC, spectrophotometers, etc.),
chemicals and complete test kits. Mostly these firms have more markets than only the environmental market. The number of firms in the EU has been roughly estimated on the basis of
the 600 firms that were present at the most important Dutch fair for analytical equipment ‘Het
Instrument’. The number of firms with environment as one of its markets, present at ‘Het
Instrument’, is estimated to be somewhat lower: 400. At this fair firms from all over Europe
present their products, but not all firms. Using this number (400), it is estimated that the total
number of equipment, chemical and test kit manufacturers in the EU25 is approx. 1,500. Of
this 1,500 about 1.4 % deliver biosensors and bio-based detectors.
The USA has at least nine firms active in the field of biosensors and bio-based detection for
environmental application and Japan at least two.
333
334
www.cefic.be
TNO experts
Page 224 of 315
Table 5-13:
Name of
company
Nissin
Electric
Euroclone
Hach
GEM
Merck
LNLL
Argonne NL
Azur
Bas
AboaTox
Biosense
Biosensores
Texas
Instruments
xantec
remedios
Kincoln
Abtech
Affymetrix
BioCore
Biral
Microlan
biotrace
biodetection
systems
biothema
microbiotests
335
Suppliers of biosensors and other bio-based tests for environmental monitoring
Apparatus
CellSense
Eclox
Toxalert
Hanaa
MicroTox
mutatox
bas101
biotox
kits
Spreeta
SPR
remedios
micredox
Employee
number
Country
BOD
Japan
tox
tox
NH4
tox
pathogen
pioneering
path, tox
BOD tox
Italy
Germany
UK
Germany
USA
USA
USA
USA
Israel
Finland
Norway
Italy
35000
tox
USA
SPR
tox
tox, BOD
tox, voc
array
interaction
bioweapons
Many
Immunoassays
dioxins, PCBs
and hormons
Luminesc
Tox
Germany
UK
NZ
USA
USA
Sweden
UK
NL
UK
NL
650
30000
8000
2900
140
start up
6
7
900
284
Calux
Target
start up
tox
pathogen
Sweden
Belgium
EU
USA
Jap
Ref
1
335
336
1
1
1
1
337
338
339
1
1
1
340
341
342
343
344
1
1
1
345
346
1
348
1
1
349
350
1
1
1
1
1
1
1
347
351
352
353
354
355
356
357
358
359
http://www.nissin.co.jp/e
Euroclone,
http://www.euroclone.net/prodotti/prodotti.asp?catcar=47&wOpen0=22&wOpen1=23&wSelected=23&cri
ca=s&str_ric
337
Hach,
http://www.hach.com/hc/static.template/templateName=HcWhatsNew.HcProductNewsRelease2004October-c.htm
338
Gwent Electronic Materials, http://www.g-e-m.com/
339
Merck, http://www.merck.de
340
Lawrence Livermore National Laboratory, http://www.llnl.gov/
341
Argonne National Laboratory, http://www.bio.anl.gov/people/lhchen/index.html
342
Azur Environmental, http://www.azurenv.com/mtox.htm
343
Biological alarm systems, http://www.basdetect.com/Products.htm
344
Aboatox, http://www.aboatox.com/environmental_analysis.html
345
Biosense, http://www.biosense.com/render.asp?ID=9&segment=3&session=
346
Biosensores, http://www.biosensores.com/English/cronologia.htm
347
Texas Instruments, http://www.ti.com
348
Xantec, http://www.xantec.com
349
Remedios, http://www.remedios.uk.com/case-studies.html
350
Lincoln Technology, http://www.lincolntechnology.co.nz/
351
Abtech Scientific, http://www.abtechsci.com/advancedproducts.html
352
Affimetrix, http://www.affymetrix.com/corporate/history/factsheet.affx
353
Biacore, http://www.biacore.com/lifesciences/products/systems_overview/index.html
354
Biral, http://www.biral.com/biodetection/bioarticles.htm
355
Microlan, http://www.microlan.nl/
356
Biotrace, http://www.biotrace.co.uk/content.php?hID=2&nhID=234
357
BDS, http://www.biodetectionsystems.com/caluxd.html
358
Biothema, http://www.biothema.com/
Page 225 of 315
336
Name of
company
Berthold
Randox
Apparatus
Employee
number
SDI
tecna
Charm
Sciences
Country
EU
Tox
most medical
food safety
water
Germany
UK
1
Japan
EnviroChemicals
Universal
Sensors
Affinity
sensors
TOTAL
USA
Jap
Ref
360
USA
It
Envirologix
5.2.3.3
Target
361
362
1
363
1
water analysis
USA
1
364
ELISA and
other
USA
1
365
ELISA and
other
Japan
Unclear
Ireland
1
367
serves
biosensor
business
UK
1
368
1
21
9
366
2
Revenues/Market
The total world revenues of biosensors were € 1 billion in 2001 (90 % of the revenues were in
the glucose sensor business) (Smith 2006)369. In 2003 the biosensor market was € 4 billion
(Bogue 2005)370. According to Parkinson and Pejcic, the biosensor market had reached
€ 6 billion in 2003 already. The biosensor environmental monitoring market will be over
€ 70 million in 2006: 55 % in the USA, 27 % in the EU and 14 % in Japan (Parkinson and Pejcic 2005)371.
These amounts can be compared with the revenues of all tests for environmental monitoring
(as a denominator). Included are products required for chemical and biological analyses of
water, soil, air and waste comprising equipment, chemicals and complete test kits. The order
of magnitude has been estimated as follows. The environmental market of the EU amounts to
€ 90 billion; 40,000 companies are active in this market, 1.5 million jobs are involved and
hundreds of public institutions372.
Given the € 90 million for the total European market, it is assumed that the size of the EU
market is about € 85 billion. It is estimated that 6 % of this market is spent on chemical and
biological analyses excluding sampling. Support for this estimation has been given by H. Rij359
Microbiotests, http://www.microbiotests.be/
Berthold, http://www.berthold.com/ww/en/pub/home.cfm?was404=1
361
Randox, http://www.randox.com/English/about.cfm?CFID=2124403&CFTOKEN=15786133
362
SDI, http://www.sdix.com/ProductCategory.asp?nCategoryID=2
363
Tecnalab, http://www.tecnalab.it/itargomenti/section$sec=11&data=Argomenti&struct=section
364
Charm, http://www.charm.com/
365
Envirologix, http://www.envirologix.com/artman/publish/article_2.shtml
366
Japan Envirochemicals, http://www.jechem.co.jp/eco/index-e.html
367
Intel, http://intel.ucc.ie/sensors/universal/
368
Neosensors, http://www.affinity-sensors.com/
369
Smith J.P. (2005), Medical and biological sensors, Sensor review, Vol 25, No 4, 241-245
370
Bogue R. (2005), Developments in biosensors – where ore tomorrow’s markets?, Sensor review, vol
25, no 3, 180-18
http://europa.eu.int/information_society/activities/eten/cf/project/index.cfm?mode=desc&id=ENVIRO2B.
COM&noframe=1 (30-8-2006)
371
Parkinson G. and Pejcic B. (2005), Using biosensors to detect emerging infectious diseases
372
Bogue R. (2005), Developments in biosensors – where ore tomorrow’s markets?, Sensor review, vol
25, no 3, 180-18,
http://europa.eu.int/information_society/activities/eten/cf/project/index.cfm?mode=desc&id=ENVIRO2B.
COM&noframe=1 (30-8-2006)
Page 226 of 315
360
naarts373, expert in soil remediation, who estimates that 3 to 6 % of the € 500 million market
for Dutch soil remediation projects is spent on analyses. Based on the author’s estimations
the Dutch Water Pollution Boards (wastewater treatment and surface water quality) spends
7 % of their environment budget on monitoring. An impression of their monitoring tasks can
be found in the report Jaarverslag Oppervlaktewaterkwaliteit 2004374 (Annual report Surface
Water Monitoring) and Milieujaarverslag 2005 RWZI Dokhaven375 (Annual Report Monitoring
of Rotterdam’s domestic wastewater treatment plant Dokhaven). The budgets for environmental analyses are further broken down into personnel, material, energy and housing costs.
The material costs represent our denominator (equipment, chemicals, test kits) and amounts
to about 35 % of the total analyses costs376. Multiplication of € 85 billion with 0.06 and
0.35 yields an amount of about € 2 billion for products used for environmental analyses in the
EU25. This implies that 0.7 % of these revenues are biosensors.
In the United States, the environmental technology business encompasses some 115,000
enterprises and approximately 1.4 million jobs377. The US environmental market is worth
€ 240 billion with a growth of 3.3 % each year378. If a similar break-down of this market as
used for Europe is applied to the USA, the market for products for environmental analyses
must be nearly € 5 billion annually. 0.56 % of this market is for biosensors.
The Japanese environmental market amounts € 21.4 billion379. Following the estimation methods described above, the market for products for environmental analyses must be nearly
€ 0.4 billion annually. Biosensors make up 0.18 % of this market.
5.2.3.4
Adoption by end-users
Modern biosensors are rarely used by end-users such as drinking water suppliers, environmental agencies and soil remediation companies. Drinking water companies use older, well
established biosensors instead: fish, algae, daphnia and mussels are used to detect surface
water toxicity (Putte 2006)380. These measurements are done upstream from the inlet point
and can only indicate that something is wrong with the water so that the inlet can be closed in
time.
Bio-based detectors, which are products with a wider definition than strict biosensors, find a
much larger adoption by end-users. A few examples are:
• Dioxin toxicity can be measured with genetically modified bacteria that emit light when dioxin is present. This 20 year old method is accepted by the EU to screen food, and by the
Dutch and Japanese government to screen dredgings. If the method indicates no presence of dioxin, no further measurements are needed (Behnish 2006)381. Also PCB and
estrogens can be measured via similar methods sold by the same company.
• Remedios used luminescent bacteria to determine the toxicity of soil samples (Remedios
2006)382.
• In America atrazine and other insecticides were monitored in the Mississippi river via
ELISA (Ciucu 2002)383.
373
H. Rijnaarts, TNO, the Netherlands, personal communication
Jaarverslag oppervlaktewaterkwaliteit 2004; Waterschap Groot Salland
375
Milieujaarverslag 2005 RWZI Dokhaven; Waterschap Hollandse Delta
376
M. Houtzager (2006), TNO, expert on environmental analyses, personal communication
377
http://www.ita.doc.gov/exportamerica/NewOpportunities/no_EnvironTrends1102.htm (31-8-2006)
378
http://www.globe-net.ca/market_reports/index.cfm?ID_Report=484
379
Eurochambres press release, 24 March 2005; Japanese environmental market expected to double
by 2020: excellent opportunities for European SMEs
380
Putte (2006), Expert at Evides
381
Behnisch Dr P.A. (2006), director Commerce & marketing of Biotection Systems BV, Amsterdam
382
Remedios, http://www.remedios.uk.com/case-studies.html
383
Ciucu A. (2002), Progress and perspectives in biosensors for environmental monitoring, Roum.
Biotechnol. Lett., Vol 7, No 1, 2002, pp 537-546
Page 227 of 315
374
Almost 20 years after the first development of the Calux method, the method is now only
accepted for dioxin/PCB measurements in sediments and dredgings in the Netherlands,
Norway and Japan (Behnish 2006)384, which illustrates its slow adoption. No data were found
on the application of bio-based-sensors by end-users.
In the case study in Biosensors for the environment the main problems are addressed that
prevent biosensors from being adopted by end-users in the bioremediation sector.
5.2.3.5
Regional contribution to world production
The world market distribution over the USA, the EU and Japan was given for the year 2004
only (Parkinson and Pejcic)385. From this market distribution and the total world market in
2004, the revenues in the USA, the EU and Japan were calculated.
The share of the EU revenues value of biosensors for environmental monitoring out of world
revenues value of biosensors for environmental monitoring is approx. 27 %. For the USA this
figure is 55 % and for Japan 14 %.
5.2.4
Summary on adoption
The adoption of biotechnology in the production and conversion of energy, the production of
biotech-based chemicals and the production and use of biosensors in environmental applications has been measured by five adoption indicators. Data availability for the three fields
differed considerably. The energy field (as a public sector) was presented best: for all five
indicators, data could be collected and the performance of the EU25 could be compared with
those of the USA, Japan and Brazil. Biotech-based chemicals represent a diverse group
including biopolymers, enzymes, antibiotics, acids, amino acids, etc. Data available for these
product groups is much patchier, so only a few indicators could be covered. For the biosensor
field, in which actual adoption showed to be rather small, estimates could be provided for four
of the five indicators on the basis of a restricted number of sources and by consulting experts.
Table 5-14 provides an overview of the adoption of biotechnology in the three fields.
Although biotechnology is already used in many different industrial production processes, the
rough estimates of data that could be provided show that the adoption of biotechnology in the
chemical sector and in the environmental sector is still rather small. This does not account for
specific product groups such as enzymes, amino acids, acids, vitamins or antibiotics which
are mainly produced through biotechnological processes. The Dechema report (2004)
concludes on the basis of several consultancy reports that the share of biotechnological
processes in the production of chemicals is about 5% (2004, world-wide). However, they
expect that this share will increase to about 20% in 2010. The largest relative growth will be in
the fine chemicals part: from a share of 16% in 2001 to 60% in 2010. The bioprocess
contribution of specialty chemicals will grow from 2 % to 20% and for basic chemicals &
intermediates from 2% to 15%.
384
385
Behnisch Dr P.A. (2006), director Commerce & marketing of Biotection Systems BV (BDSAmsterdam
Page 228 of 315
Table 5-14:
Adoption of biotechnology in three fields of industrial biotechnology
Indicator
Biofuels
Biotech-based
chemicals
Biosensors
IBIA1: Number of
biotechnology
companies in the
field
EU25: 16
USA: 95
Japan: 0
Brazil: 340
NB: data for 2006
EU25: 305
USA: 266
Japan: 127
EU25: 21
USA: 9
Japan: 2
NB: data are underestimates
NB: data are under estimates
EU25: 3.6 %
USA: 61.9 %
Japan: 0 %
Brazil: 34.5 %
NB on the basis of revenues figures, 2004
EU25: 2 %
USA: 73 %
Japan: 25 %
EU25: 0.7 %
USA: 0.56 %
Japan: 0.18 %
NB: share of regions in
production volumes of
biotech-based chemicals
(enzymes, biotechbased polymers,
bioethanol, amino acids,
acids, vitamins, and
sweeteners)
NB: market size of biosensor as share of market size for products for
environmental analysis;
rough estimates
IBA3: Adoption by
end-users
EU25: 8 % (2004)
USA: 30 % (2005)
Japan: Brazil: 100 % (2005)
NB: gas filling stations
as % of total liquid gas
filling stations,
NB: Companies using
biotechnological processes for the production of biotech-based
chemicals are included
in IBA1
EU25: NA*
USA: NA
Japan: NA
IBA4: Changes in
international market shares of
European products
EU25: 0.8-2.6 %
USA: 30-50 %
Japan: Brazil: 71 – 41 %
NB: share of regional
production out of world
production for 1999 and
2005
EU25: NA
USA: NA
Japan: NA
EU25: 27 %
USA: 55 %
Japan: 14 %
IBI2: Market
shares of industrial biotechnology products
IBA5: (Changes
in) shares of imports in total domestic consumption
EU25: 0.13
USA: 0.048
Japan: 0.85
Brazil: does not import
NB: ration import/
domestic consumption,
for all ethanol (about
79 % for fuel application), data for 2005
* NA: no data available
NB: Regional contribution to world production on the basis of total
revenues value of biosensors for environmental monitoring; rough
estimates
EU25: NA
USA: NA
Japan: NA
EU25: NA
USA: NA
Japan: NA
Overall it can be concluded that the EU has a very strong position in specific parts of the
chemical industry, but in most parts the adoption of biotechnology in the EU is still in its
infancy. In the enzyme part of the chemical sector the EU is far ahead of the other world
regions. European companies produce about 85% of world production volumes. The EU also
has the largest number of enzymes-producing companies (80 of the 117 that could be
Page 229 of 315
identified). However, the EU share is still very small in the other product groups for which data
were available (bioethanol, biotech-based polymers and other biotech-based chemicals).
In bioethanol production the EU only produces 2.6 % of the world production. The 16
bioethanol companies in the EU produced 750,000 tonnes in 2005. The US companies not
only produced the largest volume, but they are producing them on a very large scale,
compared to the EU or Brazil. The 95 US companies (together producing 14.4 million tonnes,
in 2005) had an average production volume of almost 152,000 tonnes, the EU average
production was about 47,000 tonnes per company. Brazil has a large bioethanol industry (340
companies) that produced 11.9 million tonnes in 2005. Their average production volume is
about 35,000 tonnes per company. Also the number of gas filling stations where EU drivers of
motor vehicles can buy their bioethanol fuel is still rather small: only 8 % of all liquid gas filling
stations also provide bioethanol or EBTE and gasoline. In the US this is 30 % and in Brazil
100 %.
In the other product groups of the chemical industry where biotechnological processes have
replaced chemical processes, the EU position is also still rather weak. First of all, this can be
demonstrated by the relatively small number of companies. For the EU the share of biotech
companies of the total chemical industry is the smallest of the three regions: it was estimated
that only about 0.5 % of all chemical companies in Europe are involved in biotechnology
activities. For the US this share is about 1.7 % and for Japan 2.5 %. Similar participation
patterns can be found when considering the production volumes. The EU contribution to the
total production volumes of biotech-based polymers of the EU, US, Japan and China is about
8 % and to the production volumes of amino acids, vitamins and sweeteners (the only product
groups for which data on regional production volumes were available) even smaller: about
1%.
In the field of biosensors for environmental applications the EU proved to be rather strong. At
least 21 companies that supply biosensors and other bio-based tests for environmental
monitoring could be identified, against at least nine for the US and at least two for Japan.
Market data show that in 2006 the US represented 55 % of the biosensor environmental
monitoring market, the EU 27% and Japan 14%. Regarding revenues, the EU performs better
than the US: 0.7 % of the EU revenues of the environmental market are biosensors against
0.56 % for the US. In Japan this share is 0.19%.
5.3
Impact of biotechnology in the industrial sector
5.3.1
Introduction
The impact of biotechnology has been measured on two different levels. The generic impact
has been measured for the three fields that were already introduced in the Adoption section
(5.2). The specific impact was measured for ten applications of biotechnology in the industrial
sector.
5.3.1.1 Generic impact of biotechnology in the industrial sector of the three fields
The generic impact was measured for each of the three fields that are introduced above and
for the industrial and environmental sector as a whole.
The three so-called generic impact indicators were used to measure the impact. Table 5-15
presents the indicators and the specifications applied for numerator and denominator for each
of the fields. The table also addresses data availability for each indicator.
Page 230 of 315
Table 5-15:
Generic impact indicators: specifications and data availability
Nr
Indicator
IBI1
Total field-specific
biotechnology-related GDP out of
total sector-specific
GDP
Specification and data coverage for the three fields
Numerator
Biofuels: contribution of bioethanol production to GDP; data for
EU25, USA and Japan available
Biotech-based chemicals: contribution of biotech-based production to GDP; no data available
Biosensors: contribution of biosensors production to GDP; data
are available on the basis of
which rough estimates can be
made
Industrial/Environmental: not
available
IBI2
IBI3
Share of biotechnology revenues
out of total revenues of
biotechnologyactive firms in the
relevant field
Total
out of total employment in
biotechnologyactive firms, in the
relevant field.
Denominator
Biofuels: contribution of liquid fuel
production to GDP; data for EU25,
USA and Japan available
Biotech-based chemicals: contribution of chemical industry to
GDP; data coverage for Europe,
USA and Japan
Biosensors: contribution of
products for environmental monitoring to GDP; data are available
on the basis of which rough estimates can be made
Industrial/Environmental: not
available
Biofuels: no revenue data available
Biofuels: no revenue data available
Biotech-based chemicals: no
revenue data available
Biotech-based chemicals: no
revenue data available
Biosensors: no revenue data
available
Biosensors: no revenue data
available
Industrial/Environmental: biotech
revenues for this sector
Industrial/Environmental: total
biotech revenues
Biofuels: All employees in bioethanol factories are considered
as biotechnology-active; data
coverage for EU25, USA and
Japan
Biofuels: see nominator
Biotech-based chemicals: number
of biotechnology-active employees in biotec-based companies
Biotech-based chemicals: total
number of employees in biotechbased companies
Biosensors: biotechnology-active
employees in biosenor producing
companies; no data available
Biosensors: total number of employees in biosensors market;
data are available on a basis in
which rough estimate could be
made
Industrial/Environmental: biotechemployment for this sector
Industrial/Environmental: total
biotech employment
Again data availability differed largely between the three fields. For Field 1 (Bioethanol as
fuel) data for two impact indicators were available and on the basis of that a rather complete
overview of the general impact using the two indicators could be provided. The data
availability for Field 2 (Biotech-based Chemicals) was very poor and only a very patchy
picture could be provided. For the Field Biosensors used in environmental applications it was
possible to draw conclusions based on a combination of data on two of the three impact
indicators. For the sector ‘Industry and Environment’ as a whole, data are available for the
second and third impact indicator through which the significance of the sector in terms of
revenues and employment can be measured.
Page 231 of 315
5.3.1.2 Specific impact of biotechnology in the industrial sector for ten specific
applications
The impact for the specific applications was to be measured by the so-called specific impact
indicators, including both economic and environmental indicators. Ten specific applications
were selected.
The ten specific applications and their position in the three fields are as follows:
Field 1:
Case study
Biofuels
Fuel Bioethanol
Field 2:
Case studies
Biotech-based Chemicals
Biopolymers
Cephalosporin
Enzymes for Detergents
Enzymes for Fruit Juice Processing
Enzymes in the Pulp and Paper Industry
Enzymes in Textile Processing
Lysine
Riboflavin
Field 3:
Case study
Biosensors in environmental applications
Biosensors
The selection of these applications reflects on the one hand the strong position of Europe in
one of the industries that is completely biotechnology-based: the applications of enzymes in
four down stream industry (cases 4-7). Secondly, cases have been selected that illustrate the
uptake of biotechnologies in the chemical industry (cases 2, 3, 8 and 9). The third set of
cases deals with sectors where biotechnology has only been introduced recently: energy and
environmental monitoring (cases 1 and 10).
The specific impact indicators to be used to measure the impact of the ten applications include:
• IBI4: Share of biotechnology revenues in each application out of total revenues in each
application
• IBI5: Share of biotechnology revenues in each application out of total biotechnology revenues
• IBI6: Total production costs of biotechnology product per unit output compared to alternative conventional product, in each application
• IBI7: Biotechnology revenues per biotechnology employee compared to revenues of
alternative conventional products per employee, in each application
• IBI8: Number of biotechnology-active employees per application out of total employees in
each application
• IBI9:Shares of employment in each application out of total biotechnology employment
• IBI10: Number of jobs created through industrial biotechnology applications (direct and
spill over effects)
• IBI11: Reduction of the use of non-renewable resources and emissions, in each application
• IBI12: Reduction of energy, water and material inputs due to the use of commercial enzymes, reduction of resulting waste streams in different environmental media, in each
application
Page 232 of 315
Also the impact indicators have been customised to the specific characteristics and data
availability of the applications. For some applications this resulted in a large data set, for
others only for a few indicators so only rough estimates could be given of the impact of
biotechnology. In some applications social impacts were also relevant; they were summarized
where applicable.
In the section 5.3.2 the results of the generic impact assessment for the three fields are presented. The results of the impact assessment for each application were summarised in a case
study. The full text of the case studies is to be found in a separate ‘Case Studies Report on
the Impact of Industrial Biotechnology Applications’ (Annex to this report). Section 5.3.3
presents the summaries of the ten case studies with the results of the specific impact
assessments. The summaries all follow a similar structure which was used in all case studies
and the summaries of the case studies.
In the last section (5.3.4), conclusions on the impact of biotechnology in the industrial sector
are drawn.
5.3.2
Results of generic impact
The generic impact has been measures using two impact indicators:
- The share of field-specific biotechnology related to the total sector-specific GDP.
- The share of biotechnology revenues out of total revenues of biotechnology-active firms in the relevant field
- The share of biotechnology-active employees of total employment in biotechnology-active
firms, in the field.
Sections 5.3.2.1 to 5.3.2.3 present the outcomes for the impact measurement for each of the
three Fields separately. In section 5.3.2.4 the impact for indicators IBI2 and IBI3 are
investigated and presented for the industrial and environmental sector as a whole.
5.3.2.1
Field 1. Bioethanol
Introduction
Two generic impact indicators are used for Field 1 on Bioethanol as Fuel: the contribution of
bioethanol production to GDP, in the EU25, the USA, Japan and Brazil (IBI1) and the impact
on employment, also for the four regions (IBI3). Revenues data on biotech-related activities of
biotechnology-active firms in this sector (IBI2) are not available. The individual data on the
basis of the genetic impact was investigated and the sources for these are to be shown in a
separate annex “Data Report”.
Fraction of GDP
In order to provide data that show the economic importance of biofuels production, the share
of biofuels production to the Gross Domestic Product (GDP) was calculated for the four
regions: the EU, USA, Japan and Brazil. Table 5-16 presents the data for the years 2003 and
2005. Also the data for the share of liquid fuel production to GDP have been included in the
table.
Page 233 of 315
Table 5-16:
Bioethanol and liquid fuel production: share of GDP in four different world
regions (2003 and 2005*)
Region
Years
Share of bioethanol
production in GDP
Share of liquid fuel
production in GDP
EU
2003
0.0020 %
1.4 %
2005
0.0039 %
1.4 %
2003
0.028 %
1.7 %
2005
0.04 %
2.4 %
Japan
2005
0%
1.1 %
Brazil
2003
0.31 %
3.2%
2005
0.44 %
3.2%
USA
* Data are available on total liquid fuel production; only for 2003 and 2005, for Japan only for 2005.
In all regions liquid fuel production (mainly gasoline and diesel) contributes relatively
significantly to the regions’ GPD. It ranges from 1.1 % for Japan (2005) to 3.2 % for Brazil
(2003 and 2005).
As can be concluded from Table 5-16, currently, bioethanol contribution to GDP is still very
small. Shares to GDP of bioethanol are rather limited in the EU and USA, ranging from
0.0039 % for the EU (2005) to 0.04 % in the USA (2005). Nevertheless, the data also show
that the bioethanol contribution to GDP has been growing in both regions. Governments have
introduced programmes that stimulate the use of bioethanol as a fuel. In Brazil the relative
contribution of bioethanol to GDP has reached much higher levels (0.44 %, in 2005): two
orders of magnitude higher than in the EU. Japan does not play a role in bioethanol
production.
Employees
In the other industries that are included in this report (pharmaceutical industry, agro-food
sector), but also in the chemical industry only part of the employees in the companies is
active in biotech (mainly those in R&D and some in bioproduction). In the bioethanol
production, all employees are considered as biotechnology-active (100 % share).
Bioethanol factories are considered as separate companies; their connection to mother
companies, in which also non-biotech-active employees are working, is complex (e. g. sugar
factories and single farmers participating in bioethanol firms).
The figures on employment in bioethanol production show large differences between the four
regions (Table 5-17).
Table 5-17:
Number of employees in bioethanol production in four world regions
Regions
Years
Number of employees
EU
2003
312
2005
525
2002
2.560
2005
5.760
Japan
2005
0
Brazil
2003
9.500
2005
11.900
USA
Page 234 of 315
In the period 2003-2005, the numbers of employees in bioethanol production are relatively
low in all world regions. However, especially the EU and USA show high growth rates in this
period: 68 % and 125 % which illustrates that they are catching up. The Brazilian bioethanol
industry has grown less expansive in terms of employees in this period: about 25%.
5.3.2.2
Field 2. Biotech-based chemicals
As available data needed to measure the impact indicators for biotech-based products is very
poor, none of the generic impact indicators could be used to measure the generic impact of
Field 2.
By combining data on the market value (or revenues) of biotech-based chemicals in a region
and the GDP386 of that region for a specific year, the contribution of biotech-based chemicals
to GDP could have been measured. However, as the figures on market value/revenues of
biotech-based chemical are far from complete (only estimates for biopolymers and
bioethanol) no valid basis for calculating the contribution of biotech-based chemicals to GDP
was present.
Estimations on the basis of production volume figures can only be made when one deals with
a homogeneous product with market prices on the same level. This is not the case for the
enzymes and also not for some of the products in the fourth section (enzymes, vitamibs,
amino acids, acids, antibiotics): both are a combination of high volume/low value and low
volume/high value products.
Data on the contribution of chemicals to GDP for the three regions are available. For the
EU25, the USA and Japan they are 5.6 %, 4.3 % and 5 %, respectively.
Revenue data on biotech-related activities of biotechnology-active firms in this sector (IBI2)
are not available.
For measuring the impact on employment, the strategy that was chosen to collect the data on
biotechnology-active employees and total number of employees was to contact the most
important companies in the field (in terms of size) and ask them to provide us with these data.
As they would represent the larger part of the companies in the field, a rough estimate could
be made for the whole sector on the basis of their data. However, except for one company, no
employment data could be provided, mostly because they were considered confidential, but
also because these data were not available inside the company. So in the end, this means
that no data can be presented about employment in companies that produce biotech-based
chemicals. Data on staff in chemical companies in Europe, the USA and Japan are available:
1.9 million, 0.89 million and 0.34 million employees (2004 figures) respectively.
5.3.2.3
Field 3. Biosensors for environmental applications
Introduction
Two generic impact indicators are used for Field 3 on Biosensors for environmental applications. The first is the contribution of biosensors production to GDP, in the EU, the USA and
Japan (IBI1). The second is the impact on employment, also for the three regions (IBI3).
Revenue data on biotech-related activities of biotechnology-active firms in this sector (IBI2)
are not available.The data that served as basis for the impact calculation are summarised in
annex “Data Report”, including the sources for each of the data.
386
GDP: Gross Domestic Product is defined as the market value of all final goods and services
produced within a country (region) in a given period of time.
Page 235 of 315
Fraction of GDP
In the EU about 0.019 % of the GDP is spent on products for environmental monitoring, but
only 0.00013 % of the GDP on biosensors: its share being 0.007 (2004 data). In the USA both
percentages are higher (0.053 % and 0.00030 %: 0,006), while in Japan the numbers are
almost similar to the EU (0.01 % and 0.00019 %: 0,019). (2004). From these numbers, it can
be concluded that the impact of biosensors on the economy is very small. The potential
market is much larger, but until now market penetration has been very slow. Some biosensors
were developed 20 years ago and are still not sold in large quantities. The slow adoption of
this new technology is mainly caused by a lack of acceptance by the authorities (see also the
case study on Biosensors).
Employment
Based on data on the predicted market for biosensors in the EU by the year 2006 (Parkinson
and Pejcic 2005387) and the average GDP per worker in Europe (€ 56,000/yr)388 it is estimated
that in the EU approximately 340 people are directly employed in the biosensor sector. This is
only a very rough estimation. Data for other regions are not available.
5.3.2.4
Generic impact of biotechnology for the industrial and environmental
sector as a whole
Revenues
The share of biotechnology applications in the industrial and environmental sector of the total
biotechnology sector was measured by relating revenues based on biotechnology
applications in the industrial and environmental sector to the revenues of the total
biotechnology sector (IBI2). Based on the list of national revenues in companies that apply
biotechnology in this sector and of the total revenues for the three sectors (health, agro-food
and industrial plus environmental) as presented in the OECD Biotechnology Statistics 2006
the impact could be measured (Table 5-18).
Table 5-18:
Biotechnology revenues, totals and share 2003
Country
France
Germany
Ireland
Spain (2004)
Sweden
United Kingdom
EU15
Norway
Switzerland
Israel (2002)
United States
Canada
Japan
China (Shanghai)
Industrial and
E i 34.19
l
128.33
23.47
18.69
0.77
137.67
440
Total for all three
(€ illi )
1709.46
2566.54
782.35
311.43
386.39
4588.93
Share (%)
2
5
3
6
0.2
3
0
51.55
7.93
84.93
1718.46
264.34
0
3
3
1,239.37
30.61
1,732.79
180.58
41312.36
3060.88
7876.32
1504.87
3
1
22
12
387
388
ec.europa.eu/eurostat/
Page 236 of 315
environmental sector in the seven EU countries for which data are available was about 2.7 %
of total biotechnology revenues. This is comparable with the figures for the USA, Switzerland
and Israel. In contrast, Japan’s share of industrial/environmental sector related revenues was
22 % and China’s (Shanghai) 12 %.
Revenues figures for the EU15 could be calculated on the basis of national data for the six
countries (see for methods: annex report methodology, chapter 3). In this extrapolation
biotech-related revenues were calculated for each of the four clusters (DK, SE, FI), (NL, DE,
BE, UK), (FR, AT, IE) and (IT, ES, PT, GR). This extrapolation led to the estimate that the
biotech-related revenues for the industrial and environmental sector in the EU15 is about
€ 440 million. An extrapolation to the EU25 was not possible as no information is available for
accession countries. The US biotech-related revenues for the industrial and environmental
sector are € 1,239.37 million and for Japan € 1,732.79 million.
Employment
of total employment in the three biotech sectors (IBI3) could be measured on the basis of
national data for several European countries that were published in the OECD Biotechnology
Statistics 2006 Report (Table 5-19). The average share of employment in the industrial and
environmental sector as percentage of the total biotechnology employment in the five
European countries for which these data were available is about 4 %.
Table 5-19:
Biotech-active employment: totals and share 2003
Industrial and
environmental
sector
employment
Total biotechnology
employment
Share (%)
France
391
8923
4.38
Germany
990
17277
5.73
Ireland
207
2941
7.04
Sweden
19
3717
0.51
United Kingdom
941
22406
4.20
Country
EU15
3,300
Norway
17
971
1.75
Israel
274
3427
7.99
United States
7646
130305
5.87
Canada
246
11864
2.07
Korea
3780
12138
31.14
OECD Biotechnology Statistics 2006
Again an Asian country scores relatively very highly. In this case in Korea the share of
biotech-active employees in the industrial and environmental sector is much higher than those
of the EU (about 4 %) and the USA (6 %). We are not able to offer an explication for this
figure.
Page 237 of 315
Employment figures for the EU15 could be extrapolated on the basis of national data for the
five countries (see for methods: annex report methodology, chapter 3). In this extrapolation,
biotech-related employment was calculated for the three clusters (DK, SE, FI), (NL, DE, BE,
UK) and (FR, AT, IE). For cluster 4 (IT, ES, PT, GR) there was no information for any of the
four countries. We calculated the average share of sector-specific employment in the known
European countries (about 4 %). Based on data on employment in biotech R&D in the
Spanish enterprise sector (2,387 Full Time Equivalents) in the country-specific part of the
OECD Biotech statistics report, we estimated the sector-specific employment of cluster 4.
This extrapolation led to the estimate of about 3,300 biotech-active employees in companies
in the industrial and environmental sector that apply biotechnology in the EU15. An
extrapolation to the EU25 was not possible as no information is available for accession
countries. The US companies employed 7,646 people in biotechnology applications in the
industrial and environmental sector.
5.3.3
Case study summaries
5.3.3.1
Bioethanol as fuel
Introduction
The fermentative production of ethanol is one of the oldest biotechnology activities with a
history of thousands of years. It still holds a number one position in industrial fermentation
with respect to volumes produced, which implies a significant impact on society. The
production of bioethanol has got a boost by an increased demand of renewable energy
sources and by developments in modern biotechnology. Many countries all over the world
have decided to limit the emission of greenhouse gases, CO2 being the most important, and
the use of biofuels produced from renewable sources is one of the measures being
implemented in several world regions. The EU has formulated a guideline of 5.75 % biofuel
share in transportation fuels by 2010. In Europe the use of biodiesel and ethanol (in a few
countries incorporated in ETBE as a replacement of MTBE in gasoline) are the most
promising to reach the EU demands. In Europe bioethanol is mainly produced from wheat.
The cost-efficient production of bioethanol from wheat starch has been made possible by
modern biotechnology. The required enzymes (amylases) for the conversion of starch into
glucose (the substrate for ethanol-producing yeasts), can now be purchased at low prices due
to the efficient production of amylases by genetically modified microorganisms in large-scale
fermentations.
Fuel ethanol biotechnologically produced from renewable organic matter is the subject of this
study.
The purpose of this case study is to quantify the importance of bioethanol in liquid fuel production and job creation, and to assess the effect on fuel production costs. The situation in
the EU25 will be compared with that in the USA, Japan and Brazil. Further, the effect on the
use of non-renewable sources and CO2 emission will be quantified and compared in world
regions. A prediction as to how these effects will develop in the next five years will be given.
The social impact will be described qualitatively.
Economic impact
The share of ethanol in total liquid fuel production was 0.21 % in the EU25 in 2005. Although
this figure seems low, it represents an amount of € 192 million. This share is far away from
the EU25 consumption guidelines of 5.75 % biofuel share in 2010. That goal mainly has to be
reached by biodiesel and bioethanol. Since Europe consumes more diesel than gasoline, the
future share of bioethanol in 2010 may be between 1 % and 2 %, an order of magnitude
Page 238 of 315
higher than the present production. In 2004 Spain had the largest turn over in fuel bioethanol
production with a share of 48 % of the EU bioethanol production volume, followed by France
(19 % share). Sweden (14 %), Poland (9 %), Germany (5 %), Hungary and Latvia (2 %) also
produce large amounts of fuel bioethanol. In 2005, the EU25 had 16 large fuel bioethanol
factories, mainly converting starch from wheat. In addition, hundreds of farm scale ethanol
producers are active, with central distilleries. In 2004 419,000 tonnes of fuel bioethanol were
produced in the EU25 and in 2005 750,000 tonnes.
The production costs of bioethanol are higher than those gasoline and diesel. In the EU25 the
production costs of bioethanol from wheat amounted to € 0.53/l (2005). The production of
gasoline costs 1.6 times less per litre. Since a litre of ethanol contains less energy (67 %)
than a litre of gasoline, the production costs of bioethanol on basis of gasoline equivalents are
even 2.3 higher than that of gasoline. In order to stimulate consumers to use gasoline with
added ethanol, the production cost (and price) difference between bioethanol and gasoline is
compensated by tax exemptions. This way the EU25 accepts the higher costs connected to
driving on biofuels, in exchange for environmental benefits.
Another dramatic difference between bioethanol production and fossil fuel production is the
turnover per employee. This annual turnover amounts to € 800,000 (2005) in bioethanol factories and € 5,300,000 in oil refineries. The reason is the enormous size of oil refineries and the
economy of scale reached, as compared to bioethanol factories. The average European oil
refinery produces almost 6 million tonnes of fuel per year, while the average European
bioethanol factory operates in the 50,000 tonnes/year range. Although the size of bioethanol
factories may grow as a result of higher confidence in return of investments, the ultimate size
will be limited by a need for decentralisation of the production due to transportation costs of
voluminous raw materials (such as wheat) from agricultural fields to the factory.
In 2005 about 525 jobs had been created in bioethanol factories and another 5,000 indirect
jobs in agriculture, transportation and fuel blending. The replacement of gasoline by bioethanol will not create more jobs in the EU25 territory. The number of employees working at the
EU25 oil refineries is estimated 40,000.
Social impact
An important social impact of bioethanol production is the development of wealth and jobs in
rural areas. A large part of the indirect job creation takes place in agriculture. In addition, bioethanol factories are mostly built in agricultural regions. The use of wheat as a raw material
(which has been made possible by modern biotechnology: the use of amylases from genetically modified microorganisms) is very advantageous for areas that produced this crop in a
long tradition (e. g. the northern part of France). The margins and markets for wheat producers have been under pressure, but due to the creation of a new market (bioethanol) wheat
farms can continue their business.
A second social effect of a bioethanol production and use within the EU25 is that a start has
been made towards a lower level of dependency on the fossil industry. The present
dependence of the EU25 on a limited number of crude oil suppliers is felt as a risk and as an
unsafe and unsustainable situation.
Replacing 1 MJ of gasoline by 1 MJ of ethanol saves 0.31 MJ fossil fuel, a number that includes energy used in crop production and crude oil recovery, the production process and the
use in cars. The amount of oil equivalents saved in the EU25 in 2005 was 158,000 tonnes.
The EU15 ratified the Kyoto Protocol in which in the year 2008-2012 greenhouse gas
emission should be 5 % below the reference year 1990. The EU15 emitted 3,137 million tonnes CO2 in 1990 and the trend is a 3,310 million tonnes emission in 2012. Therefore,
the EU15 has to make an effort to reduce CO2 emission by 330 million tonnes. In 2005 the
Page 239 of 315
contribution of bioethanol produced in the EU25 countries to CO2 emission reduction was only
0.7 million tonnes.
The impacts of bioethanol production on the USA and Brazil are magnitudes higher than that
on the EU25. The share of fuel bioethanol revenues out of total liquid fuel revenues in Europe
dropped from 0.15 % (2003) to 0.14 % (2004). In the USA it rose from 1.7 %(2003) to 2 %
(2005) and in Brazil from 10 % (2003) to 13 % (2005). In Japan no fuel bioethanol is
produced.
One of the reasons for the high production volumes and revenues in the USA and Brazil are
the lower bioethanol production costs. The ratio of production costs fuel bioethanol/liquid fuels
in the USA is 1.0 on litre basis (2005) and in Brazil 0.5 on litre basis (0.8 on basis of litre
gasoline equivalents) (2005). The turnover per employee in bioethanol factories in USA is
slightly lower than in the EU25, whereas this parameter is much lower in Brazil
(€ 173,000/employee in 2004), which, besides the smaller production units and lower production costs, may be due to a relatively higher use of low salary employees. The impact of job
creation in Brazil is two orders of magnitude higher than the impact in the EU25: 12,000 jobs
have been created in bioethanol factories, while it is estimated that 700,000 jobs have been
created in rural areas to support the additional sugar cane and bioethanol industry. In the
USA 5760 jobs have been created in bioethanol plants, while it supported the creation of
153,725 jobs in all sectors of the economy, including more than 19,000 jobs in America’s
manufacturing sector. All estimations have been made for 2006 (see also full text of the case
study in the Annex Case Study Report). Note that the US estimation on indirect job creation is
more optimistic than the European estimation (the ratio indirect jobs / production volume is
higher in the USA).
Although bioethanol stimulation by tax exemption varies between states in the USA, in the
EU25 the situation is rather complex. Due to the relatively high price of bioethanol in the EU,
tax exemptions are required for a certain period. However, most single countries in the EU do
not stimulate the use of bioethanol with tax exemptions. In the EU some Member States are
ahead of the rest with respect to government regulations directed to the stimulation of the use
of bioethanol as a fuel. France and the UK have strict obligations for the oil companies to offer
certain blends in an ever higher percentage every year. The Netherlands and Germany start
obligations in 2007. In Hungary and Italy an ethanol obligation has been developed as well. In
the EU it is not allowed to mix more than 5 % ethanol in gasoline pumps. In the USA 10 % is
allowed and in Brazil 25 %.
In the USA the US Energy Bill389 announces that bioethanol production will be stimulated by
• Application goals for 2012
• Funds, e. g. to do pilot plant test using ligno-cellulosic biomass
• Incentives to use ligno-cellulose as raw material (the environmental benefit will be 2.5
times higher than that of corn-based ethanol).
Experts390, 391 argue that the European Commission could introduce similar measures and
can also stimulate the use of bio-ethanol by a larger support for energy crop production
(including wheat).
389
Energy Policy Act of 2005; Public Law 109-58- Aug. 8. 2005; 42 USC 15801 note
personal communication K. Werling (Agroetanol, Sweden; June 2006)
391
personal communication with Mr R. Vierhout, chairman of the European Bioethanol Fuel Association
(23-6-2006)
Page 240 of 315
390
The USA has been ahead of Europe in technological development in the field of bioethanol,
(more expertise and experience in first generation bioethanol production and a larger R&D
working force on second generation bioethanol production), but Europe is now catching up392.
The social impact defined for the EU25 is also true for the USA. The pronounced strong increase in ethanol production not only make the USA less dependent on oil, but also will be
beneficial for the corn farmers in the Mid West.
Due to the higher bioethanol production volumes in the USA, the reduction of the use of nonrenewable sources by the shift from gasoline production and use to bioethanol production and
use amounted 3 million tonnes oil equivalents in 2005. In Brazil the amount of non-renewables saved are considerably higher. In the USA a much higher reduction in CO2 emission is
attained (14 million tonnes in 2004) as compared to Europe. As a result of the efficient use of
sugar cane in bioethanol production (the co-product is used as fuel in the factories) the reduction of CO2 emissions in the chain sugar cane production to use in cars amounted to
33 million tonnes in 2005 in Brazil, based on bioethanol production figures, almost a hundred
times higher than in the EU25. As in 2004 Brazil exported 16 % of its produced ethanol, the
CO2 emission reduction has an international character. Japan does not produce ethanol and
the use of ethanol in cars is only in an experimental stage.
Outlook
In the next 5 years the amount of bioethanol that will be produced will increase tremendously.
Already the amount has been increased since 2004 due to the start up of several new large
bioethanol plants in Germany, Spain and France, so the production of bioethanol in the EU25
has increased to about 1 million tonnes (estimate for 2006). Plans have been made in several
other EU25 countries to construct bioethanol plants (e. g. Belgium, the Netherlands). The
amount of bioethanol produced in the EU25 may triple in the coming 5 years393, 394, 395.
Therefore, together with the increases between 2004-2006, the share of bioethanol in liquid
fuel may grow beyond 1 % in the next 5 years.
In Sweden expansion of the bioethanol production will depend on an EU mandate to use a
higher blending than 5 %, e. g. 10 %. If that is allowed, the cost/benefit ratio wil become positive and it is feasible to run ethanol factories in Sweden 396.
The bioethanol production in the USA will double in the next 5 years397, 398 (Herrera 2006)399,
while in Brazil the production will increase with a lower factor400. This smaller increase would
be due to limited land area available for extension of the sugar cane fields and uncertainties
about the export opportunities. Japan is planning to introduce ETBE in its gasoline in 2010,
but an own bioethanol production the coming next year is not expected401, 402.
The production costs are expected to slightly increase in the coming 5 years, due to the increase of the price of wheat. The explanation for this increase is a higher demand for wheat,
392
Personal communication K. Werling (Agroetanol, Sweden; June 2006)
394
communication with Mr R. Vierhout, chairman of the European Bioethanol Fuel Association (23-62006)
395
Well-to-Wheels analysis of the future automotive fuels and powertrains in the European context
(2006); Version 2b; EC-DG JRC, Concawe, Eucar
396
397
398
399
Herrera, S. (2006) Bonkers about biofuels; Nature Biotechnology: 2497): 755-760
400
401
402
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393
caused by the bioethanol factories403, 404. As a reaction, new low cost raw materials will become more attractive. In several European countries R&D is carried out to use ligno-cellulosic
material (wood, straw and grass) for the production of bioethanol, and in Sweden a pilot plant
for a daily production of 500 l bioethanol from (wood) saw dust is running. The application of
modern biotechnology is a crucial factor in its success: genetically modified yeasts able to
simultaneously convert various monosaccharides have been and are being developed
(Herrera 2006)405. Although the ligno-cellulosic materials are cheaper406, 407, the pre-treatment
and conversion costs are higher, and different opinions exist if this development will lead to a
low-cost bioethanol production process408, 409, 410 (Groenestijn 2006)411. However, the
gasoline production costs may also increase within the next 5 years as well.
In case the bioethanol production in the EU25 will have a share of 1 % in liquid fuel
production within 5 years, the number of jobs created in bioethanol plants will be 1600 and
the indirect jobs 20,000 (based on extrapolation of the available figures presented above) .
For the European wheat farmers, the outlooks for the next 5 years is promising: the ethanol
market will strongly increase which leads to a growing demand for wheat and higher prices for
this crop. R&D on the use of wheat straw for the production of bioethanol may lead to another
improvement of the farmers’ situation..
The EU25 is preparing for the use of ligno-cellulosic biomass as a raw material for bioethanol
production, the so called ‘second generation bioethanol production’. Besides a possible cost
reduction, another reason exists to shift from first to second generation production. The
amount of fossil fuel saved per MJ bioethanol produced from cellulosic biomass is substantially higher: 0.9 MJ. Cost-efficient pre-treatment processes for ligno-cellulosic biomass are
now being developed, and genetically modified strains that can convert the mixture of monosaccharides in the biomass hydrolysates have recently become available.
Other attractive properties of ligno-cellulosic biomass are that it can be harvested at any time
of the year, it can grow in nutrient-poor soils and it is a by-product of the forest industry
(Herrera 2006)412.
The EU is now mainly using wheat for ethanol production, but will increasingly use wheat
straw, grasses and wood (willow, pine). The USA will use more corn stover and wheat straw
next to corn as the main feedstock, while Brazil will use more bagasse (residual part of the
sugar cane) next to sugar recovered from cane.
The reduction of CO2 emissions via the bioethanol produced in 2005 amounted to less that
0.2 % of the obligations the EU has for 2012. Considerable growth of this activity still is required. The expectations are that bioethanol production will increase by an order of
magnitude by 2012. By shifting the raw material from wheat to wood, grass and straw,
another factor 3 can be gained in CO2 emission reduction. The production and import of much
403
Well-to-Wheels analysis of the future automotive fuels and powertrains in the European context
(2006); Version 2b; EC-DG JRC, Concawe, Eucar
405
406
International Resource Costs for Biodiesel and Bioethanol (2002) UK Department for Transport
407
Personal communication with Rudy van Hedel from Staatsbosbeheer (Dutch State Forest
Management)
408
409
Biofuels for Transportation (2006) Worldwatch Institute, Washington, D.C.
410
IBUS (Integrated Biomass Utilisation System); www.bioethanol.info
411
Groenestijn, J.W. van, Hazewinkel, J.H.O., & R. Bakker (2006) Pre-treatment of ligno-cellulose with
biological acid recyling (the Biosulfurol Process). In Proceedings World Bioenergy Conference, May 30
– June 1, 2006, Jönköping, Sweden
412
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404
more bioethanol is a political decision. The next limiting factor is the production of crops due
to the limited land area on this planet413.
The crops used for bioethanol production are not (yet) genetically modified. But such a
modern biotechnological approach may also help to create more CO2 reduction per MJ
ethanol produced in case crops are used whose cultivation needs less energy and
fertilisers414. This can be considered as a future opportunity.
5.3.3.2
Biopolymers
Introduction
Biopolymers such as cellulose-based polymers have already been used for a long time and in
a wide range of applications; it is the main ingredient of paper. Also viscose that is based on
cellulose is an important fibre already used for many applications since the beginning of the
20th century. Since the 1980’s starch-based polymers have been introduced and are now the
most important groups of commercially available biomass-based polymers.
However, since the 1930’s, as the petrochemical industry grew, these biomass-based
polymers have increasingly been replaced by petrochemical-based polymers (Crank et al.
2005)415.
High oil prices, world-wide interest in renewable resources, growing concern regarding
greenhouse gas emissions and new emphasis on waste management have created a renewed interest in biopolymers. These demand drivers, together with the technological
advances in biotechnologies, have led to the development of a new class of what has been
called in this study "biotech-based polymers". Biotechnology is used to rearrange biomass
carbon in such a way that new products are yielded that are equivalent or that outperform the
fossil/petro-based products.
Due to the use of biotechnology techniques, new and improved microorganisms can be created that convert biomass components (such as sugar, starch, cellulose) into end products or
intermediates that can be thermo-chemically upgraded as plastics. Biotechnology is also used
to improve the processing and performance characteristics of biomass feedstock. This is
done by increasing the content of desired components, decreasing the content of ‘negative’
components such as lignin, and adding the capability to produce new components.
Biotechnology has great potential for the development of new types of biopolymers; this
makes it an interesting case for the study of the impact of biotechnology on Europe. In this
case study the economic, social and environmental impact of this new class of biotechnologybased polymers on the EU is presented and compared with the US and Japan.
The term ‘biopolymer’ can stand for a number of different types of bio-related polymers: polymers produced on the basis of biomass (biomass-based polymers), polymers that are (partly)
produced through modern biotechnological production processes (biotech-based polymers)
and biodegradable polymers, or a combination of them.
The focus of this case study is on polymers that are produced on the basis of bioprocessed
monomers (i.e. produced through fermentation or enzymatic catalytic processes) and that are
now in production or will come into production the next few years:
413
Own calculations TNO
Bioethanol needs biotech now (2006) Nature Biotechnology: 24(7):725
415
Crank, M., Patel, M., Marscheider-Weidemann, F., Schleich, J., HU’sing, B., Angerer, G. Wolf, O.
(Ed) (2005) Techno-economic feasibility of large-scale production of bio-based polymers in Europe.
European Commission – Institute for Prospective Technological Studies (IPTS) Seville, 2005, EUR
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414
• Solanyl is a potato waste-based product produced through a fermentation step converting
the starch in the potato peelings to lactid acid (via glucose) by means of lactic acid bacteria that are naturally present in the feedstock. The product is then dried and extruded to
obtain thermoplastic properties.
• Polylactid acid (PLA). The biotech-based production process of PLA involves extracting
sugars from corn starch, sugar beet or wheat starch and then fermenting it to lactic acid
(one of the group of organic acids that are produced through bioprocessing). The lactic
acid (monomer) is converted to the dimer or lactide which is purified and polymerised to
polylactic acid using a special ring-opening process.
• Bio-PDO, the biotech-based 1,3 propanediol, is together with purified terephthalic acid
used for the production of polytrimethylene terephthalate (PTT). In the bioprocess dextrose
derived from wet-milled corn is metabolised by genetically engineering E.Coli bacteria and
converted within the organism directly to PDO via an aerobic respiration pathway.
• Polyhydroxyalkanoates (PHAs) are a family of natural polymers produced by many bacterial species. Through metabolic engineering an enzyme catalyzed polymerisation route
has been designed that expressed PHAs in E.coli to reduce production costs and simplify
purification.
• Polyacrylamide. Acrylamide, the monomer for polyacrylamide, is produced from acrylontrile, by using the immobilised bacterial enzyme nitrile hydratase. The acronitrile is then
polymerised to the conventional plastic polyacrylamide. This process is one of the first
large scale applications of enzymes in the production of bulk chemicals.
In Europe six companies are producing biotech-based polymers. Rodenburg BioPolymers
(the Netherlands) produces Solanyl, based on starch from potato peelings. Tate and Lyle
(headquarter based in the UK) through its joint venture with DuPont produces Bio-PDO for the
production of Sorono®.Tate and Lyle recently (June 2006) incorporated part of the employees
and the IP of what was left from Hycail. Hycail was a Dutch university spin-off that was a
subsidiary of Dairy Farmers of America (DFA) until March 2006 when the company stopped
its operations. Hycail was set-up in 1997 to investigate the production of PLA from lactose in
whey permeate, a by-product of cheese making. Hycail had a small PLA pilot plant. Purac (a
Dutch lactic acid producer) produces small amounts of PLA for medical applications416.
The other three companies are based in Germany: Uhde Inventa-Fisher GmbH, Biomer and
Boehringer Ingelheim. The last company produces high-value/low volume PLA for their Resomer® products used in medical applications. Biomer produces P(3HB) under the name
Biomer ® . Uhde Inventa-Fisher - a subsidiary of Uhde, a company of Thyssen Krupp Technologies - is an engineering company that has a PLA pilot plant in Berlin.
Apart from the above mentioned six companies that produce biotech-based polymers, at least
22 other companies produce biomass-based polymers, mainly starch- and cellulose-based.
Economic impact
The economic impact of biotechnology has been measured by the following indicators:
• Share of production volumes of biotech-based polymers of total production volume of all
polymers (IBI4a)417;
416
Personal communication Purac representative
In the implementation plan IBI4 is specified as: Share of biotechnology turnover in each application
out of total turnover in each application. As turnover figures are not available, they have been replaced
by production volumes and sales/market value.
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417
• Share of market value/revenues of biotech-based polymers of total revenues of all polymers (IBI4b)ibid;
• Share of production volume of bio-based polymers of total production volume of all biobased chemicals (Field 2) (refrasing of IBI5);
• Production costs of biotech-based polymer compared to production cost of alternative conventional polymers (IBI6);
• Number of biotechnology-active employees out of total employees in companies producing
biotech-based chemicals (IBI7,IBI8, IBI9)418;
• Number of jobs created through industrial biotechnology applications (IBI10).
The European production volumes of biotech-based polymers is estimated at 43,176 tonnes
per year (excluding the Tate and Lyle part of the production of bio-PDO® in the joint venture
with DuPont, to start in 2006). With an annual production in the EU15 plus Norway and
Switzerland in 2004 of 32,590,000 tonnes polymers per year (Plastics Europe 2004)419, the
share of biotech-based polymer production volume of the total polymer production volume (in
2005) is approx. 0.13 % (IBI4a).
Combining data on production volumes and cost prices (see below) per product, the market
value of biotech-based polymers in Europe was estimated at ca. € 55.3 million. This is ca 7 %
of the world production of biotech-based polymers. As no financial data on the world
production of polymers are available it is not possible to produce a figure on the share of
market value/revenues of biotech-based polymers of total revenues of all polymers (IBI4b).
The share of production volume of bio-based polymers of total production volume of all biobased chemicals in Europe (814,000 tonnes) is 5.3 % (IBI5).
The impact of biotechnology on cost efficiency (IBI6) is very small. Overall, the prices of most
biotech-based polymers are still high compared to oil-based polymers. These high prices are
mainly due to high development costs and small capacities, but this will change when production capacities increase. In general the prices of conventional plastics have increased considerably since 1998.
The cost price of Solanyl is € 1.13/kg420; it is the most competitive biotech-based polymer.
The market price for PLA was estimated in 2003 at € 2.20-3.40/kg, to decrease to € 1.35/kg in
2010 (Cargill Dow, 2003 in Crank et al. 2005)421. PHA ‘s prices were estimated in 2003 at
€ 20.00/kg and expected to decrease to € 3-5/kg in 2010 (Biomer, 2003 in Crank et al. 2005)
422
. On the basis of an average price of € 766/t of the six basic plastics (PE-HE, PE-LLD, PELD, PP, PS and PVC) in 2003 (VKE 2004)423 it can be concluded that at this moment the bio-
418
All three indicators deal with biotechnology-active employment figures. As these data, but also data
on biotech-specific turnover data (IBI7) and total biotechnology employment (IBI9) are hardly available,
it was decided to use only indicator IBI8 instead.
419
PlasticsEurope (2004) Plastics on the Move, Annual Report of PlasticsEurope, 2004
www.plasticseurope.org, accessed 30/05/2006
420
www.biopolymer.nl
421
Crank, M., Patel, M., Marscheider-Weidemann, F., Schleich, J., Hüsing, B., Angerer, G. Wolf, O. (Ed)
(2005) Techno-economic feasibility of large-scale production of bio-based polymers in Europe.
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422
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423
VKE (2004) Plastic Business Data and Charts, published on 16/04/2004, by the Ver-band
Kunststofferzeugende Industrie e.V. (VKE), Germany, http/www.vke.de, ac-cessed 30-05-2006
Page 245 of 315
tech-based polymers PLA and PHA are approx 4-26 times more expensive than the petrochemcial-based basic chemicals they are planned to replace.
The price of Bio-PDO is expected to be € 1,30-1,60/kg depending on location and market
conditions at the time of marketing (Crank et al. 2005)424. A representative of DuPont states
that the bioroute to PDO is more cost-effective than the petro-route (Heschmeyer 2004)425.
The current production costs of PHAs is estimated at € 9.98-15.97/kg, but will ultimately, after
up-scaling of production facilities cost under € 1.99/kg. PHAs produced directly in plants could
cost under € 1,00/kg (Bioplastics 2003)426.
The effects of the production of biotech-based polymers on employment in Europe are rather
limited. Estimates based on data available (not for all companies, as some of them consider
the number of biotechnology-active employees as confidential information) are that far less
than 1 % of the employees in the companies producing the biotech-based polymers are
biotechnology-active employees (IBI8). This low figure is mainly due to the high denominator:
the very large size of the two multinationals that are involved in the production of biotechbased polymers in Europe.
Except for the extra jobs created in R&D (some financed through public R&D programmes),
no extra jobs have been or are expected to be created in the production of biotech-based
polymers (representatives of companies) (IBI10). This is mostly because the biotech-based
polymers will replace petrochemical-based polymers. Eventually extra jobs could be created
in agriculture, as agricultural feed stocks are raw materials for a number of these biotechbased polymers. However, at the moment there is an overproduction in agriculture (representative of company).
Social impact
For the social impact part, no data are available on the use of biotechnology for polymer production. Studies on the impact of biomass-based polymers on land use and food markets in
2020 (Crank et al. 2005)427 show that this impact is very low. If all biomass-based polymers
were to be produced from wheat, land requirements as a percentage of total land used to
grow wheat range from 1 % to 5 % depending on the scenario. As a portion of total cereals
these figures are a factor 2 lower. Biomass-based polymers have modest land requirements
and will not cause any strain within the EU on agricultural requirements in the future. As a
consequence, it can be concluded that the employment potential in the agricultural sector will
also be limited until 2020.
Current market projections for biomass-based plastics in Europe and the US do not appear to
threaten food markets. The 3-5 million tonnes of bioplastics predicted for the EU by 2020
would require an estimated 2.5 million acres. The total identified market opportunities for PLA
world-wide would require about 6 % of the US corn production, well under annual ending
stocks (back up supply) of 10.3 % (Bioplastics 2003)428.
424
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425
Heschmeyer (2004) DuPont Sorona in Commercial Development, Company News. Article reprinted
forn International Fiber Journal, available on www.dupont.com/sorona, accessed 30/05/2006
426
Bioplastics (2003), Summary of Report prepared for Agriculture and AgriFood Canada, 29 August
2003, www.agr.gc.ca/misb/spec, accessed 30-5-2006
427
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428
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Two impact indicators are used to measure the environmental impact:
• Reduction of CO2 emissions (IBI11)
• Reduction of energy (IBI12).
The contribution of biotechnology to sustainable production of polymers differs widely
between the biotech-based polymer types. For the moment Solanyl and PLA seem the most
attractive.
Solanyl production uses 40 % less energy than bulk plastics such as PE429 (IBI12). Data on
the effect on CO2 emissions are not available (IBI11). Life cycle analysis of Solanyl are not
reported.
Total fossil energy requirements of PLA are lower than that of conventional plastics. Depending on the plastics replaced (PET, HDPE, Nylon-6), fossil energy use is reduced by 20-50 %
(Crank et al. 2005430; OECD 2001431; Gruber 2001432). However, the process energy requirements of the first commercial PLA plant was much higher than its petrochemical equivalents
(Bioplastics 2003)433 (IBI12). PLA has 67 % less CO2 emissions compared to nylon and 50 %
less than polyester (Gruber 2001)434 (IBI11). Other environmental properties of PLA are that it
is compostable and recyclable.
Life cycle analysis of CO2 emissions of PHA production differ widely between values larger
and smaller than those for petrochemical-based polymers. As no large scale facilities are already in operation, simulation studies have to provide the figures which imply that outcomes
depend very much on the systems boundaries that are chosen. Comparative LCA with PE
production shows an increase of CO2 eq production of more than 200 %, mainly due to the use
of energy (Van Ast et al. 2004)435. Another LCA study concludes that CO2 emission savings of
27-48 % can be made (Akiyama et al. 2003)436 (IBI11, IBI12). PE performs better on all ecological indicators (due to the fact that the PE production process has been highly optimised).
Fossil CO2 emissions for the production of PTT based on biotech-based PDO are practically
the same as for PET. Total energy requirements for the production of PTT based on biotechbased PDO are 16 % lower than for PET, but this is on the basis of glycerol and not of glucose (IBI12). The environmental impact of BioPDO based on glucose may be lower, this is
under investigation (Crank et al. 2005)437.
429
www.biopolymer.nl
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431
432
Gruber, Patrick, R. (2001) Testimony before the United States Senate Committee on Agriculture,
Nutrition and Forestry, March 29, 2001. Patrick R. Gruber, Cargill Dow LLC,
agriculture.senate.gov/hearings/hearings_2001/March_29_2001/, accessed 30/05/2006
433
434
Gruber, Patrick, R. (2001) Testimony before the United States Senate Committee on Agriculture,
435
Ast, J.A. van, Baas, L.W., Bouma, J.J., Loosdrecht, M.C.M. van, Stienstra, G.J. and E. van der Voet
(2004) Industriële Biotechnologie Duurzaam Getoetst, Een onderzoek naar de bijdrage van industriële
toepassingen van biotechnologie aan duurzame ontwikkeling, Ministry of VROM, November 2004
436
Akiyama, M., T. Tsuge and Y. Doi (2002) Environmental Life Cycle comparison of
polyhydroxyalkanoates from renewable carbon resources by bacterial fermentation, in Polymer
Degradation and Stability, through www.nodax.com/life %20cyclye.htm, ac-cessed 30/05/2006
437
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430
In the future, savings of use of energy and greenhouse gas emissions are expected as the
production processes will be optimised and new feedstock and cheaper energy sources will
become available (Crank et al. 2005438; Biocycle 2006439). The process energy figures of PLA
which are relatively high compared to petro-based polymers are expected to decrease
through optimisation of its production technology and by using lingo cellulose as biomass and
energy fraction (OECD 2001)440.
Both the US and Japan are far ahead in the development and production of biotech-based
polymers. This includes the PLA plant with a 140 000 t/a capacity of NatureWorksLLC, the
1100 t/a BioPol® plant of Metabolix, the 250 t/a PHBH production plant of Procter & Gamble
and the DuPont/Tate&Lyle Bio-PDO production plant with a capacity of 23,000-45,000 t/a,
that was planned to start in 2006. Last but not least, Metabolix, together with Archer Daniels
Midland (ADM) is constructing a 50,000 tonnes/a production plant for Bio-PDO to use corn
sugar as a primary feedstock, that should be completed by mid 2008 (Crank et al. 2005)441.
China is active in PLA production (approx. 100,000 tonnes/a)442. Japan is also active in PLA
production but still on a pilot plant scale (approx. 1,000 tonnes/a) (Dechema 2004)443. Japan
is active in polyacrylamide production. Annual production of biotech-based acrylamide –
mainly in Japan - is 100,000 tonnes (Dechema 2004444; OECD 2001445).
This implies that the impact of biotechnology on employment in biotech-based polymer production in US and Japan in absolute terms will also be larger than in the EU. Relative figures
cannot be provided. As the USA plastics production is similar to EU15: 52 250 000 t/a, the
share of biotech-based polymers to the total of polymer production is higher for the US and
consequently also the corresponding revenues figures. The same accounts for the Japanese
figures, although they are somewhat lower as the total of the Japanese plastics production is
estimated about half of that of the EU and the US; accounting for 14 140 000 t/a. In general it
can concluded that the US and Japanese share of biotech-based polymer production and corresponding sales volumes are higher than that of Europe.
The main factor that explains the differences between the activities in the EU, the USA and
Japan and their impact on the economy of these countries are active public policies aimed at
replacing fossil fuels by biomass in order to get more independent from oil sources in the
Middle East and to make use of agricultural overproduction (USA) and environmentally
friendly waste management (Japan). The governments of both countries are heavily stimulating these developments by R&D programmes and biotechnology is one of the core
technologies.
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439
Biocycle (2006) Plastics from plants, not petroleum, Biocycle May 2006, Vol. 47, No.5, p.43.
www.jgpress.com/accessed 30-5-2006
440
441
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442
Personal communication representative of Purac, The Netherlands
443
November 2004
444
November 2004
445
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The USA Department of Energy (DoE) and the Department of Agriculture (USDA) have allocated large funds for white biotechnology with a focus on programmes that stimulated
biomass as renewable source for now oil-based products. The Bio-based Research and
Development Act (2000) allocated € 40 million per year for a five year period for R&D in the
field of white biotech. The Farm Bill (2002) allocated € 10 million per year over a period of six
years. In 2004 € 186 million was earmarked for R&D of ‘bio-based products and bio-energy’
(DSM 2004)446.
In Japan already in 1989 MITI, the Japanese Ministry of Industry and Trade initiated the national programme on biodegradable polymers and plastics. The programme is coordinated by
the Biodegradable Plastics Society, which is funded by more than 70 companies and three
government departments. The main industrial incentives come from the consumer products
industries who feel the pressure from the public (Report on biodegradable plastics in Japan)447. Biodegradability is still a is key element in Japanese public policy; it was announced
in the Biotechnology Guideline of the Cabinet Office and the ‘Biomass Nippon Strategy ’of the
Japanese Ministry of Agriculture, Forestry and Fisheries, both in 2002. The demand for biodegradable plastics is estimated at 200,000 tonnes in 2010 and 1.5 million tonnes in 2015. The
use of biodegradable plastics offers the potential to shift a significant portion of municipal
waste plastic to compost disposal448.
China also has a strong policy that stimulates the development and use of biomass for fuels
and raw materials. As the country is very much dependent upon oil and gas imports, their
policy is to replace fossil fuels by biomass. Both US and China are also the biggest suppliers
of feedstock, which makes it very attractive to produce fuels and raw materials for an
attractive price. The availability of biomass in these countries has the biggest impact on price.
In Europe environmental arguments are an important added value and could be a stimulant
for growth of biomass and biotech-based polymer production and use. In Germany legislation
exists which says that no taxes/costs have to be paid when using PLA as packaging material.
This is a stimulant for packaging firms to use PLA instead of PET.
The 2004 amended German Packaging Ordinance comprises a new distinct regulation for
certified compostable packaging made from biodegradable polymers. These products are exempted during the market introduction phase until the end of the year 2012. This gives industry the freedom and time to build an independent disposal system (IBAW 2005)449. The German legislation could be implemented in other countries.
Outlook
In general the biomass and biotech-based polymer industry is expected to grow. There are a
number of major trends such as climate protection regulation, oil politics and sustainable
developments that will stimulate the production of biomass-based polymers. Biotechnology is
an important tool that can be used for an optimal exploitation of renewable resources for
polymers production.
In the EU, USA and China new production facilities are being built and planned. Information
for Japan is not available, but it is very likely that this is also the case in Japan.
446
DSM (2004) Industrial (White) Biotechnology. An Effective Route to Increase EU Innovation and
Sustainable Growth. Position document on industrial biotechnology in Europe and the Netherlands,
DSM Corporate Communications Depth, Heerlen, The Netherlands
447
Biodegradable Polymers in Japan: Executive summary, www.wtec.org/loyola/biopoly/execsum.htm,
accessed 16-3-2006
448
www.nodax.com
449
IBAW (2005) Highlights in Bioplastics, An IBAW publication, www.IBAW.org, accessed 30-05-2006
Page 249 of 315
In the EU new PLA production facilities are planned by Hycail/Tate and Lyle with a capacity of
50,000 tonnes per year, within the next five years. Galactic – a lactic acid producer located in
Belgium – is developing a production process for PLA. Brussels Biotech - 2B - is Galactic's
subsidiary in charge of R&D for lactic acid and lactates as well as for the development of new
applications for GALACTIC's products. One of these new products is PLA450. Purac – in
cooperation with plastics producing companies – is improving the characteristics of its lactide
products (made from lactic acid) so they can be more easily used by plastics producers and
also to make PLAs with improved performance characteristics for the higher value segment in
the plastics market451.
Currently sucrose (molases) or glucose from starch hydrolyses are the most important raw
materials for PLA. However, the available amounts of these raw materials are not enough and
as these materials are also used in food processing there is a price competition with the food
industry. Ligno cellulosic feedstocks are considered as an alternative (2nd generation raw
material) as they are available in large quantities. However,the high costs for the conversion
of polysaccharides (cellulose andd hemicellulose) into fermentable sugars inhibit its use.
Physical/chemical treatment is necessary and for the enzymatic conversion high amounts of
enzymes are needed, but the prices of enzyme arestill relatively high452. Research groups in
the USA, Europe, but also in Brazil (bioethanol) are searching for cheaper methods to use
lingo cellulosic biomass as fermentation feedstock. Biotechnology plays an important role in
the development of cheaper enzymes (Neureiter et al. 2004)453.
At the moment PHB is still a niche market. The PHB market size is less than 1% of the total
plastics market. In about 10 years’ time the market might grow to a few percentages. But this
very much depends on the prices of oil and biomass feedstock on the world market (interview
company representative).
In the US the DuPont/Tate&Lyle Bio-PDO production plant - start-up planned in 2006 - will
have a capacity of 23,000-45,000 tonnes/a. Together with Archer Daniels Midland (ADM),
Metabolix is constructing a 50.000 tonnes/a production plant for Bio-PDO to use corn sugar
as a primary feedstock, that should be completed by mid 2008. Metabolix is heading a research project – co-funded by the US Department of Energy - for the development of a genetically modified plant (Switchgrass) that produces PHA, which can be extracted from the
plant material directly. Cargill is in the process of engineering microorganisms that convert
pentose sugars as well as glucose into polylactide. This would enable the use of lingo cellulosic material such as corn stover and rice straw, decreasing production costs and providing a
higher value outlet for low value agricultural residues.
Recently Uhde Inventa-Fischer (Germany) signed a contract with a Chinese company to build
a PLA plant with a capacity of 10 000 t/a in China.
So production volumes of biotech-based polymers are expected to grow and will replace oilbased polymers (especially PET). Except in R&D, this probably will not have any net employments effects, mainly because of substitution effect. Extra jobs could be created in the
future in agriculture when demand for biomass is increasing and overproduction and biomass
waste disposal have been fully used. As production volumesincrease, the cost process of biotech-based polymers will decrease.
450
www.lactic.com
Personal communication of representative of Purac, the Netherlands.
452
Neureiter et al. (2004) – see next footnote - expect that enzyme prices are to be reduced by the
factor ten within the next five years due to the support of a $32 million grant by US DoE to the enzyme
producers Novozymes and genencor.
453
Neureiter, M., H. Danner, L. Madzingaidzo, H. Miyafuji, C. Thomasser, J. Bvochora, S. Bamusi and
R. Baum (2004) Lignocellulose Feedstocks for the Production of Lactic Acid, Chem. Biochem. Eng. Q.
18(1),p.55-63.
Page 250 of 315
451
5.3.3.3
Cephalosporins
Introduction
The industrial production of β-lactam antibiotics by fermentation over the past 50 years is one
of the outstanding examples of biotechnology. Cephalosporins together with penicillins (as
end products) are the main antibiotics: 60 % of all antibiotics are semi-synthesised β-lactam
antibiotics. According to the IMS Health database antibiotics are the dominant share of all
anti-infectives revenues (57 %). Global anti-infectives revenues in 2004 were US$ 60 billion
representing 11 % of the total global pharmaceuticals market.
The development of antibiotics started in 1928 with the discovery of penicillin and its largescale production in the early 1940s. In 1948 Cephalosporium acremonium cultures were first
discovered as being effective against Salmonella typhi, the cause of typhoid. In 1957, the first
cephalosporin antibiotic was patented (Pitkethly 2005)454 and in 1964 the first cephalosporin cephalothin - was launched on the market by Eli Lilly. Nowadays, there are four different
generations, including 55 different types of cephalosporins and some 18 types still to be
classified.
The cephalosporin nucleus, 7-aminocephalosporic acid (7-ACA), is derived from Cephalosporin C. Some cephalosporins (cephalexin, cephadroxil, cephradine) are made on the basis of the building block 7-ADCA (7-aminodeacetoxy cephalosporinic acid) which is derived
from Penicillum G. Both have a structure that is analogous to the penicillin nucleus, 6-aminopenicillanic acid (6-APA). Modification of the 7-ACA or 7-ADCA side-chains resulted in the
development of generations of cephalosporins.
The first generations that entered the market in 1964 were moderate spectrum agents that act
predominantly against Gram-positive bacteria (Staphylococcus and Streptococcus). Successive generations have increased activity against Gram-negative bacteria, mostly in combination with reduced activity against Gram-positive organisms. This is not the case for the fourth
generation cephalosporins; these are extended spectrum agents with similar activity against
Gram-positive organisms as the first generation cephalosporins. They also have a greater
resistance to β-lactamases than the third generation. Many can cross the blood brain barrier
and are effective against meningitis. Its greater stability against β-lactamases increases its
efficacy against drug-resistant bacteria (Barber et al. 2004)455.
The active nucleus of cephalosporin can result in a variety of antibacterial and pharmacologic
characteristics which is the active pharmaceutical ingredient (API). This modification is mainly
by substitution of side chains at two positions of the active nucleus that until today already
has led to the four generations of cephalosporins. On the basis of these APIs, pharmaceutical
companies produce the final drug forms of cephalosporins that are ready to be used. In this
study we focus on the production of the cephalosporin building blocks and its conversion to
cephalosporins as APIs. Thirteen therapeutically important semisynthetic cephalosporins are
commercially produced. They are as economically significant as penicillins.
Biotechnology can contribute to the development of more sustainable production processes
and the production of cheaper basic structures for antibiotics and also has potential in the
search for new antibiotics as there is a growing need for the treatment of resistant pathogens.
In principle biotechnology contributes to the production of all types of cephalosporin as the
first step in the processes is the production of Cephalosporin C or Penicillum G through fermentation on the basis of sugar. Traditionally, the next steps in the cephalosporin synthesis
process, in order to produce 7-ACA and 7-ADCA, are chemical. Recently, new biotechnological routes have been developed which replace one or more chemical synthesis steps by fermentation and/or enzymatic steps. In Europe the main producers of cephalosporins as active
454
Pitkethly, R. (2005) Intellectual Property Management, www.oiprc.ox.ac.uk www.sbs.ox.ac.uk, at
http://users.ox.ac.uk/~mast0140/SEC/SECIP.ppt accessed 25-08-06
455
Barber, M.S., U. Giesecke, A. Reichert, W. Minas (2004) Industrial Enzymatic production of
Cephalosporin-based β-lactams, Springer, Berlin/Heidelberg
Page 251 of 315
pharmaceutical ingredient and of its building blocks (7-ACA and 7-ADCA) are Sandoz (Switzerland), Antibioticos (Italy) and DSM (The Netherlands). Other smaller producers are ACS
Dobfar (Italy) and Bioferma (Spain)456.
In this case study the economic and environmental impact of the use of biotechnology in the
synthesis of cephalosporin on Europe is presented and compared with the USA and other
countries such as China, which are gaining importance in the production of β-lactam antibiotics.
Economic impact
The first step in all cephalosporin production processes is 100 % biotechnological. The rest of
the steps can be 100 % biotechnological, partly biotechnological/partly chemical or 100 %
chemical, depending on the type of cephalosporin, as there are a large number of different
types of cephalosporins and each company has its own specificities. Because of this, together
with the fact that no publications are available that provide (parts of) an overview of the
precise size and value of the production volumes and market values of the biotech-based
production of cephalosporins, only a patchy overview of the economic impact of
biotechnology on cephalosporin production can be given. On the basis of information from
company experts, company websites about their production processes and a number of
publications, rough estimations for a number of specific products can be provided.
Production volumes
The world market of 7-ACA in 2006 was 5,000 tonnes. The free market is smaller as most
companies that produce 7-ACA use this for their own production of cephalosporins. Europe’s
contribution to world-wide 7-ACA production in 2006 is approx. 35 %. World-wide, ten companies account for approx. 85 % of the total market.
Sandoz has a 7-ACA production capacity of more than 400 tonnes per year; which can be
considered as 100 % bioprocessed. Antibioticos (world largest 7-ACA producer) has a total
production capacity of 7-ACA of 600 tonnes/year, of which 300 tonnes is made enzymatically.
World-wide approx. 20 % of the 7-ACA production (approx. 1,000 tonnes) is produced
through biotech production processes. Europe (Sandoz and Antibioticos together) contributes
at least 14 % to the world market. The market value of 7-ACA in 2006 was estimated at
€ 300 million. DSM produces 7-ADCA and (on the basis of that) cephalexin, both through
biotechnological processes. The production volume of Cephalexin is the largest volume of all
cephalosporin types sold world-wide. DSM produces several hundreds of tonnes of 7- ADCA
and is the largest producer of 7-ADCA in the world.
The market value of 7-ADCA and its related by-products is approx. US$ 200 million. Europe
contributes approx. 50 %.
Annual production of cephalosporins is approx. 30,000 tonnes per year; that of penicillins
45,000 tonnes (Dechema 2004)457. Data on the portion of all API-cephalosporins produced
through biotech processes are not available; only data for some cephalosporins. Approximately 40 % of the Cephalexil production and 30-40 % of the cephatroxil is produced through
biotechnological processes; the rest only through chemical processes.
456
Expert Sandoz
November 2004
Page 252 of 315
457
Cost reduction
Over the past five decades, major improvements in the productivity of the producer organisms
of cephalosporins, Penicillium chrysogenum and Acremonium chrysogenum (syn.
Cephalosporium acremonium) and improved fermentation technology have culminated in
enhanced productivity and substantial cost reduction. Major fermentation producers are now
estimated to record harvest titers of 40-50 g/l for penicillin and 20-25 g/l for cephalosporin C.
Recovery yields for penicillin G or penicillin V are now >90 %. Chemical and enzymatic
hydrolysis process technology for 6-aminopenicillanic acid or 7-aminocephalosporanic acid is
also highly efficient (approx. 80-90 %) with new enzyme technology leading to major cost
reductions over the past decade (Elander 2003)458.
Cost reduction in the Sandoz production process was initiated by a new law in Germany that
forced Sandoz (at that time Biochemie) to pay additional taxes on waste to be incinerated.
The company had the choice: either to close the 7-ACA production facility or to improve the
process. In the new production facility that opened 2000 a biotechnological route is
implemented that produces only 0,7 % of material for incineration compared to the old
chemical process (OECD 2001). The company invested US$ 41 million in the building of the
new production plant.
In the new production process of 7-ADCA of DSM not only is a pure product produced, but
also with less use of energy (65 % electricity compared to old process) and less use of
solvents (only 9 % of the old process) leading to a more cost effective process. The new
biotech route to cephalexin needs less energy (approx. 40 %), space (approx. 50 %) and
resource consumption (approx. 35 %)459. The company invested US$ 130 million in the
building of the plant, also doubling its production capacity with more than 50 %.
Employment
It is estimated that in Europe, in the three main manufacturing firms that produce cephalosporin and its building blocks through biotechnological processes, approx. 1,200 employees
are involved in R&D, production and sales and that approx. 120 employees in these companies are biotech-active employees.
The new biological process developed by Sandoz for its 7-ACA production uses no toxic materials. It is an aqueous, room-temperature process with no restraints for biological waste water treatment and no production of hazardous chemicals or heavy metals. The use of the
enzymatic process resulted in a 100-fold reduction of liquid that needs to be incinerated: from
31 (chemical) to 0.3 (biosynthesis) tonnes per tonne of 7-ACA manufactured. Also the
production of waste water was reduced. However carbon oxygen demand (COD) of the
wastewater was slightly increased. The new biological route together with membrane filtration
brings more COD to the mycelium fraction. The mycelium fraction is used as fertiliser460.
The most important improvement from a sustainability point of view in the 7-ADCA production
process of DSM was the abolition of the use of aggressive solvents. In the chemical process,
these solvents were necessary during the reaction steps and to purify the product in the down
stream processing steps. In the new process, this is no longer the case: water is the only
solvent used. In 2000 a reduction of the use of solvents was reached: from 1.7 to 0.3 kg/kg for
the non-halogenated solvents and from 0.9 to 0 kg/kg for the halogenated solvents (OECD
458
Elander, R.P.; (2006) Industrial production of β-lactam antibiotics; Applied Microbiology and
Biotechnology; Abstract ; Volume 61, numbers 5-6/June 2003
459
Expert DSM
460
OECD (2001) The application of Biotechnology to Industrial Sustainability, OECD, Paris, 2001, p.5558
Page 253 of 315
2001)461. Further optimisation of the 7-ADCA production process, including metabolic
engineering and Simulated Moving Bed (SMB) technology led to lower costs, fewer
processing steps, more pure product, less energy requirements and drastic reduction of solvent use. In the new process no chemicals are being used and approx. 90 % less solvents.
Also there is 35 % less use of energy, 90 % less steam production, 75 % less CO2 production
from energy, 75 % less CO2 production from fermentation and 90 % less waste water. The life
cycle analysis of the new biotechnological route to Cephalexin of DSM showed a reduction of
emissions by 75 %, energy consumption was reduced by 65 % and consumption of resources
was reduced by 65 %. The toxicity potential was reduced with approx. 55 % and the risk potential with approx. 60 %462.
Only a few companies in the USA, Japan and the rest of the world have been identified that
produce cephalosporins and its building blocks. Orchid is a US-based company that produces
7-ACA, 7-ADCA and cephalosporins. Its biotech research is focused on replacing existing
chemical methods of manufacturing for these and other intermediates with fermentation and
enzymatic-based transformations to improve the environmental safety. However, the size of
its production and which part of it is produced through biotechnological processes is not
known.
Asahi Kasei Chemicals (Japan) is active in the production of bulk chemicals for the pharmaceutical industry, including 7-ACA and 7-ADCA. On the basis of a publication of researchers
of this company, it might be concluded that these compounds are (partly) produced through
biotechnological processes. Its market share in 7-ACA production is 16,7 %.
Also China is very active in this field, especially the Harbin Pharmaceutical Group and the
North China Pharmaceutical Corporation (NCPC). China is reckoned as one of the most
competitive manufacturing bases in the world and is also a fast growing market for pharmaceuticals. Both companies produced antibiotics and antibiotics intermediates. The Harbin
Pharmaceutical Group (more than 8,000 employees) produces both 7-ACA and 7-ADCA and
has a fermentation capacity of above 3,000 cubic meters.
NCPC sells 7,000 tonnes of bulk antibiotics and 7,500 tonnes of antibiotic intermediates (including 7-ADCA) annually. The capacity of penicillin, streptomycin, 6-APA, amoxycillin, cefaradine is in the lead world-wide. It is expected that the intermediates are produced mainly
through chemical synthesis steps, but this might change as NCPC’s next development focus
is on biotechnology products. Since 1984, the company has initiated research on modern
biotechnology and formed the system for developing generic drugs involving new products,
R&D, pilot production and commercial production.
There is a steady annual growth of the production volume of 2-3 % of antibiotics world-wide.
This growth is mainly concentrated in Asia, especially China. The main producers in China
have already enlarged their production capacities and due to specific measurements of the
Chinese government the prices for antibiotics decreased considerably in 2003/2004. This had
a negative impact on the position of most companies in the market, also those that produce
cephalosporins and its building blocks. This overcapacity world-wide and a weak dollar are
reasons for European manufacturers (such as DSM) to move their production capacities to
China and India; this is one of the main long-term strategies of these firms for more costefficient production of antibiotics.
461
OECD (2001) The application of Biotechnology to Industrial Sustainability, OECD, Paris, 2001, p.59-
62
462
Expert DSM
Page 254 of 315
Outlook
In general it is expected that price erosion will take place, esp. 1st and 2nd generation
cephalosporin are expected to reduce market potential in 2009. A number of established
cephalosporins of large global players have or will come off-patent (Rocephin, Maxipime),
competitors will acquire FDA ANDA approval for the generic version of these cephalosporins
and enter the market (e. g. Lupin, Sandoz, Orchid and Baxter). This will increase intensity in
competition among manufacturers and will in a similar way affect the manufacturers of the
APIs. Another factor for erosion of the cephalosporin market is the change in physician prescribing patterns; they are more inclined towards quinolones and extended-spectrum macrolides. There is also competition from carbapenems. In addition Streptococcus pneumonia
is rapidly developing resistance to 3rd generation cephalosporins due to its widespread use
(Frost and Sullivan 2003)463.
Europe remains the dominant manufacturing area for both penicillins and cephalosporins.
However, due to ever increasing labour, energy and raw material costs, more bulk manufacturing is moving to the Far East, with China, Korea and India becoming major production
countries and dosage form filling becoming more dominant in Puerto Rico and in Ireland
(Elander 2003)464.
Future developments include, according to a company representative, the development of
more effective fermentation of cephalosporin C (high energy and raw material consumption)
as well as effective enzymatic cleavage and downstream processing and purification technologies.
5.3.3.4
Enzymes for detergents
Introduction
Use of enzymes in detergents is one of the oldest commercial applications of the industrial
enzymes. The first enzyme-containing detergent was introduced to the household market as
early as 1913 when the protease trypsin was added to detergent (Aehle 2003)465. Commercial
utilisation of enzymes (protease) started in mid 1960s. In that period also the first use of
enzymes In the industrial cleaning products were applied (Potthoff et al. 1997)466.
Detergent enzymes are used for household laundry, dishwashing, and industrial and institutional detergents. Enzymes are used in detergents as additives and they aid the removal of
soils and stains. Proteases were historically the first enzymes in detergents. In addition to
proteases other hydrolases such as lipases, amylases and cellulases originating mainly from
bacteria and fungi are included in the detergent formulations. Enzymes are used in small
amounts in most detergent preparations, only 0.4-1 % enzyme by weight (about 1 % by cost).
Detergent enzymes account for 30 - 40 % of the total world-wide enzyme production and represent one of the largest and most successful applications of modern industrial biotechnology during the past five years.
This study aims to quantify the importance of enzymes in detergent products and in employment, and to assess the effect of enzymes on production costs of detergents. In addition, the
effect of detergent enzymes in the whole enzyme industry will be quantified. Further, the
463
Frost and Sullivan (2003) US Critical care Antibiotics markets, A443-52, 2003
Elander, R.P. (2003) Industrial production of β-lactam antibiotics; Applied Microbiology and
Biotechnology; Abstract ; Volume 61, numbers 5-6/June 2003
465
Aehle, W. (ed.) 2004. Enzymes in Industry. Production and Applications. Wiley-VCH.
466
Potthoff, A., Serve, W & Macharis, P. 1997. An enzyme-based cleaning concept for dairies could
revolutionise CIP routines, Cleaning in place, pp. 1-3.
Page 255 of 315
464
environmental benefits of using enzymes in detergents will be quantified. An outlook of these
effects in the next five years will be given.
This impact study has been made by interviewing European enzyme producing companies
and detergent producers as well as an association of detergent companies. Furthermore,
some statistics available about enzymes in detergents and other literature has been used.
Economic impact
In Europe there are at least five companies producing technical enzymes including detergent
enzymes. The main companies world-wide that produce detergent enzymes are European.
Novozymes holds 50 % of the whole market and Danisco/Genencor has 20 % of the markets.
World-wide more than 900 companies produce cleaning products467. The total market value of
the cleaning industry (soaps, detergents and maintenance products) was € 29.3 billion in
2005 in for the EU25 plus Norway, Switzerland and Iceland468.
The world markets of industrial enzymes are US$ 1.6-2 billion (€ 1.2-1.6 billion). The
detergent enzyme revenues hold 25-35 % of the revenues of industrial enzymes world-wide.
Increase of detergent enzymes in the last five years has been about 20 % with yearly
increase of 4-5 % both world-wide and in Europe.
At least half (and probably even more) of all household detergents, particularly for fabric
washing, contain enzymes or enzyme mixtures. The amount of enzymes used in automatic
dishwashing detergents is lower than in household detergents but is expected to grow in the
coming years.
The production costs of enzyme-containing detergents are estimated to be about the same as
the production costs of non-enzymatic detergents. Based on the fact that detergent enzymes
hold about 25-30 % of the revenues of industrial enzymes, it can be estimated that on
average one third of the employees in the enzyme companies are working with detergent
enzymes. But this can also depend on the company, since Novozymes has announced that
32 % of its enzyme revenues come from detergent enzymes and the figure for cleaning
market of Genencor is 47 %. The share of detergent enzymes might be lower in smaller
companies. Detergent enzymes have been the most important products for the enzyme
companies and maintaining the jobs. The sales of Novozymes grew by 1 % in 2006, which
was primarily due to the growing sales of detergents470.
The use of enzymes promotes sustainable development as considerable positive
environmental effects can be achieved by using enzymes in detergent formulations.
The use of enzymes in detergents allows washing at low temperatures and reducing duration
of washing and the amount of water consumed. Saving of energy is the most important environmental benefit of using enzymes in detergent compositions. Energy consumption is decreased to one third when washing temperature is lowered from 95oC to 40oC. Lowering the
washing temperature from 60oC to 40oC and by using enzyme-containing detergents also
contributes to environmental reductions of 203 g CO2 (Nielsen and Nielsen 2005)471 .
467
www.aise-net.org
www.aise-net.org
469
Report2006.novozymes.com
470
Report2006.novozymes.com
471
Nielsen, P and Nielsen, J. 2005. Environmental Assessment of low-temperature washing. Final
report. Luna no. 2005-26232-01. Novozymes, June 2005.
Page 256 of 315
468
Also the use of chemicals in detergents can be decreased by using enzymes. Enzymes are
biodegradable and by replacing chemicals (partly) by enzymes, positive environmental effects
can be obtained472. One of the most well known examples is the replacement of the
environmental very unfriendly phosphates by enzymes.. Enzyme-containing detergents also
show clear environmental saving potentials in reduction of emissions in waste water during
laundering; 5-60 % reduction of the amount of human toxic and eco-toxic substances has
been reported in waste water when modern enzyme-containing detergent has been used
instead of traditional detergent.
The world leading enzyme companies and detergent enzymes producing companies are
European. World-wide the detergent enzymes hold 25-35 % of the total industrial enzymes
revenues. The total value of the detergent enzymes revenues was in 2005 US$ 762 million
(€ 592 million) world-wide, US$ 247 million (€192 million) in Europe, US$ 178 million
(€ 138 million) in USA and US$ 76 million (€59 million) in Japan. The possibility to lower the
wash temperature and to maintain the washing performance due to the addition of the
enzymes is important in Japan and USA, because particularly in these countries cold washing
temperatures are used in laundering. The trend towards lowering washing temperatures and
the greater use of the liquid detergents in North America has boosted the sales of the
detergent enzymes. The increase of the detergent enzymes in the last five years has been
about 20 % with yearly increase of 4-5 % world-wide and in Europe, 5-6 % in USA and 3-4 %
in Japan.
The enzyme companies are investing in research and development in order to find more
efficient enzymes and enzymes with specific cleaning characteristics for use in detergents.
According to the enzyme companies, new washing detergent enzymes will be launched that
can remove stains at still lower temperatures (at 30oC instead of 40oC). This can fulfil the
Asian market requirements, where low-temperature washing is common, and could lead to
the growth of the enzyme revenues.
In the USA and Japan similar environmental benefits of using enzymes in the detergents are
achieved as in Europe. When enzymes become available for lower washing temperatures,
this might affect the environmental impact for Japans and other Asian countries.
Outlook
Revenues of detergent enzymes have been growing in the last years with annual growth rates
of 4 to 5 %. For the coming years growth rates of 5 to 10 % are expected for the following
reasons:
1. The trend is to reduce the wash temperature, which the addition of enzymes can allow by
removing the stains also at low temperatures.
2. The amount of automatic dishwashers is expected to grow. Therefore the amount of automatic dishwashing detergent (ADD) is growing also and the increase of revenues of the
detergent enzymes is expected to come particularly from the ADD markets.
3. The growth of the enzyme revenues is expected to come also from the liquid detergent
markets.
4. Furthermore, the innovation of new and improved enzymes will be critical in maintaining
the growth in detergent enzymes: The enzyme-based detergents can also be the solution
472
A VTT expert states that enzymes will not cause any problems in the environment for of a number of
reasons: the amounts of enzymes added in different processes are very small (catalysts) and enzymes
usually inactivate outside the optimal conditions where they are active. So it is most probable that
enzymes decompose in waste water cleaning systems. Hence, it is unlikely that enzymes end up in the
ecosystem at all.
Page 257 of 315
to the special cleaning problems such as the cleaning of utensils in hospitals, cleaning of
equipment in the cold processing areas and the cleaning of sensitive surfaces needing
mild treatments.
In the future, however, there will be hard competition from emerging markets such as China.
Enzymes are getting cheaper as the manufacturing process becomes more efficient. Therefore new products and concepts are being developed. At the moment on average over 10 %
of enzyme revenues is devoted to research and development. T Novozymes invested 13 % of
its sales in research and development in 2006473. The characteristics of enzymes and
production conditions are constantly been improved. Furthermore new enzyme types delivering unique performance benefits in detergents will be developed. Replacement of surfactants and bleaching chemicals in detergents by enzymes for development of bio-detergents is
the most obvious new innovation in enzyme and detergent industry.
Wash experiments with new enzyme types indicate that enzymes are efficient at low
temperatures: they hold a potential to reduce the wash temperature from the present 40oC to
30oC without compromising overall wash performance. An environmental assessment of the
detergent enzymes and the energy saving due to the wash temperature reduction from 40oC
to 30oC was made by Nielsen and Nielsen (2005)474. They conclude that the impacts from the
enzyme production are generally small compared with the environmental improvements
obtained by the energy savings. They conclude that there is room for further enzyme
supplementation to the detergents without compromising environmental performance.
(Nielsen and Nielsen 2005)475.
Surfactants and bleach are the most obvious areas to be replaced by enzymes. These two
together make up some 52 % of the total input cost in the detergents today, while enzymes
make up some 7 % of the input cost (Auerbach Grayson 2006)476. Enzymes can replace
surfactants as Genencor has demonstrated. However, it will take a few years before biodetergents will become a reality (ibid).
Some assumptions can be drawn from the environmental point of view if the chemicals are
substituted by enzymes. To outline the potential of substituting the fossil carbon-based ingredients with enzymes some findings can be observed: the use of enzymes instead of fossil
carbon-based ingredients is superior in terms of fossil energy consumption, GHG emission,
acidification and smog formation. For nutrient enrichment and land use, the use of enzymes
may provide an environmental load because enzyme production to a large extent is based on
agricultural production, which leads to the emissions of nutrients to the environment and the
occupation of the agricultural land. Displacement of toxic substances in detergents such as
ethoxylated alcohols with enzymes can also reduce the eco-toxicity of the detergent. The
energy savings from substituting detergent ingredients with enzymes is in the order of
magnitude 400 KJ per 2.7 kg laundry however, the actual figures depends heavily on the
enzyme dosage - doubling the enzyme dosage reduces the saving to 300 KJ, whereas half
the dosage provides a saving of 450 KJ477.
473
report2006.novozymes.com
report. Luna no. 2005-26232-01. Novozymes, June 2005
475
report. Luna no. 2005-26232-01. Novozymes, June 2005
476
Auerbach Grayson 2006. Danisco - Seizing the enzyme opportunities. Company report, March 30,
2006, Denmark. 11 pgs.
477
Interview of Novozymes
Page 258 of 315
474
5.3.3.5
Enzymes for fruit juice processing
Introduction
Food enzymes are one of three groups of industrial enzymes and have a broad range of
applications in the food industry. This case study focuses on the use of enzymes in the fruit
juice industry. The enzymes that are used in this industry are pectinases, hemicellulases,
amylases and proteases. They help to break down cell walls and enhance juice recovery.
They clarify the juice in order to produce clear concentrates of fruit juices. For specific applications they help to degrade the carbohydrates to give smooth textures, while at the same
time preserving colour and vitamins. Biotechnology plays an important role in the development of new and improved enzymes and especially in developing more cost-effective
production processes.
The main advantages of the use of pectinases in combination with amylases and proteases
are to (Frost and Sullivan 2005; Jayani et al. 2005; company websites)478:
• Increase the juice yield (fruits: 15-20 %; carrots: 20-60 %);
• Clarify and stabilise the juice and juice concentrate products;
• Increase the quality of the product: colour stabilisation, oxidative stability and health-promoting antioxidants;
• Avoid storage or post-packaging haze formation;
• Cut the risk of the juice jellifying during concentration and storage;
• Decrease filtration time up to 50 %;
• Reduce filtration problems;
• Reduce waste.
Until 1980 most enzyme companies offered just one or two enzyme products for every type of
fruit or vegetable processing. The same enzymes was recommended for apple, mango etc.
After 1980 new companies entered the market which specialised in developing of specific enzyme mixtures for specific applications. They developed their products in close contact with
the customer and their strategy led to new types of enzyme products on the market. New entrants followed and also the large enzyme manufacturers introduced this new product differentiation strategy.
The commercial enzymes used in juice processing are similar to the naturally occurring pectinases, amylases, proteases found in fruit during ripening. Most enzymes are marketed on the
basis that they are generally recognised as safe (GRAS) for their intended use in the fruit
juice process. In terms of food legislation, enzymes are considered as technical auxiliaries, in
a few exceptional cases they are considered as additives.
The fruit juices concentrates are always made in the country where the fresh fruits are grown.
So citrus fruit concentrates (mainly oranges) are mainly produced in South and Middle America and in Florida, with Brazil as the main producer. Apples and pears are grown in much
colder regions of the world. There are a number of apple and pear juice concentrate
producers in Europe: some 15 to 20 large firms and many small firms. But also in eastern
Europe, Ukraine and Turkey apple and pear juice concentrate companies are becoming
active. China is by far the largest producer; covering approx. 50 % of the world market.
478
Frost and Sullivan (2005) European Markets for Enzymes in Food Applications, B460-88, May 2005;
Jayani, R.S., S. Saxena and R. Gupta (2005) Microbial pectinolytic enzymes: A review, Process
Biochemistry, Vol.40, No.9, pp.2931-2944.
Page 259 of 315
The most important companies that produce enzymes for fruit juice applications in Europe
and world-wide are DSM (the Netherlands) and Novozymes (Denmark). The fruit processing
enzymes market is highly concentrated as the two together have a market share of approx.
71 % (42 % and 29 %, respectively). Other European enzymes producers for the fruit juice
market are AB Enzymes (Germany) and Erbsloeh Getränketechnologie (Germany) with world
market shares of 10 % and 5 %, respectively. The rest of the market for fruit juice enzymes is
covered by Lyven (France), Biocatalyst (UK). Danisco (Denmark) recently entered this market. Non-European companies on the European market are Valley Research (USA) and
Amano – Enzymes (Japan).
Economic impact
The economic impact of biotechnology has been measured by five indicators.
The share of the volume of fruit juice concentrates produced by industry with the help of enzymes (biotechnology part of production volumes/revenues) out of the total industrial production (total production volumes/revenues) of fruit juice concentrates is 100 % (IBI4), as
according to a company expert, enzymes are always used in the industrial production of fruit
juice concentrates.
The share of enzymes used in fruit juice production of total enzymes used in the food and
drink industry in Europe (IBI5a) is approx. 7 %, valued at € 12.8 million (US$ 7.4 million). The
total European food enzyme market was valuated at € 184.9 million (US$ 250.3 million) in
2004 (Frost and Sullivan 2005)479.
On the global market, fruit processing enzymes have a market share of approx. 20 % (approx.
US$ 30 million) of the total market for beverages enzymes (US$ 146 million). This market is
approx. 28 % of the global market of enzymes for food use. The food enzymes market (which
was US$ 521 million) accounted for approx. 28 % of the total industrial enzymes market
(technical enzymes, feed enzymes and food enzymes, excl.dietary enzymes).
It is only possible to provide a very rough figure for the share of fruit juice enzyme production
volumes of the total production volume of all biotech-based chemicals (IBI5b). Estimates concerning the size of the production volumes of biotech-based chemicals are available (approx.
814,000 tonnes/year, total of the product groups enzymes, biopolymers, bioethanol, amino
acids, acids, vitamins and sweeteners). Based on price information (see below) and revenues
in Europe the production volume of fruit processing enzymes accounted for approx. 700 and
2,500 tonnes/year. Using the average figure of 1,600 tonnes of fruit enzyme production on a
total of approx. 814,000 tonnes biotech-based chemicals, this is a share of approx. 0.2 %.
The market value of fruit processing enzymes (€ 12.8 million) is approx. 0.02 % of the total
revenues, of all industrial biotech products (including biofuels) which accounted for € 7.7 billion480 in 2005.
The prices of most enzymes used in fruit processing were in the range of € 12-43.2 (= US$ 725 /l) or kg. Although the enzymes for food processing fall under the category of speciality
enzymes, the prices of enzymes decreased since 2001 due to improved and more efficient
production methods and consolidation activities in both the supply and end-user sectors.
Price disadvantages of enzymes over chemical processes are anticipated to be negated to a
certain extent due to the drop in prices (ibid).
As a company representative claimed that all employees involved in enzyme R&D, production
and sales should be considered as biotechnology-active, the share of biotechnology-active
employees in the application ‘fruit juice enzymes production’ out of total employees in this
479
480
Frost and Sullivan (2005) European Markets for Enzymes in Food Applications, B460-88, May 2005
Expert DSM
Page 260 of 315
application is set at 100 % (IBI8). Also in the fruit juice processing industry biotechnology
expertise is needed. Due to the specific and often unforeseen condition of the fruit, enzyme
expertise is needed in order to fine tune the enzymes mixture to the conditions concerning
temperature, time, climate and of course the fruit itself. Döhler (Germany), one of the biggest
apple juice concentrate producers in Europe, has a large laboratory including enzyme
experts.
Companies could not provide us with any information about the numbers of employees involved in the production of fruit juice enzymes (the direct and spill-over effects). However, by
combining a number of data (share of fruit juice enzymes of food enzymes and data provided
by company expert about shares of revenues of food enzymes of total revenues and total
number of employees) a very rough calculation could be made. It was estimated that approx.
200 employees are working in fruit processing enzyme R&D, production and revenues in
Europe (IBI10).
Social impact
The social impact mainly deals with the consumer’s attitudes to the use of genetically
modified organisms (GMOs) in enzymes production. Also some enzymes that can be used in
fruit processing are made with GMOs, such as amyloglucosidase, pectinesterase and pectine
lysase. The USA is more or less a non-GMO market in juice processing; the EU is 50 % GMO
and 50 % non-GMO. Company’s views on the future consumers’ attitude to the use of GMO’s
in fruit enzyme making differ. One company representative argues that the views in Europe
on GMO in food processing are changing. The willingness of food manufacturers in Europe to
use GMO-enzymes is increasing as they are cheaper, work better or because there is no nonGMM alternative. Another company representative argues that, as in the eyes of the
European consumer “nutrition and health do not match with GMO organisms”, he expects that
no GMO-produced enzymes will be used in the near future. The representative of the
European fruit juice producers’ organisation shares this last opinion.
For the environmental impact of biotechnology in the application ‘enzymes in fruit juice’ one
ecological impact indicator is used that deals with the reduction of the use of energy, water
and material inputs due to the use of commercial enzymes.
On the basis of information gathered from a number of different sources (such as product
websites of companies that sell the enzymes, but also reports) it may be concluded that the
use of enzymes in fruit processing has a number of environmental benefits. However, this can
only be demonstrated in qualitative terms, as no quantitative data available.
Due to the use of enzymes less energy has to be used as, due to the broken cell walls the
fruit juice is released and pressing can be done less intensively. Traditionally the clarification
of lemon juice relied upon the fruits’ natural pectin esterase content. By adding calcium ions
the suspended solids could be precipitated as calcium pectate. This process took 4-16 weeks.
A preservative had to be added in order to prevent microbial spoilage during this period. Using enzymes implied a decrease in use of chemicals: no preservative and also no calcium had
to be used. Enzymatic peeling of fruit is a relatively new technology; it will replace older methods that use steam or lye (strong alkali). New enzyme mixtures can produce clean, residue
free, segments of citrus fruit.
In general, European enzyme companies have the largest share of the world market, also in
the USA and Japan. On the US market there are also some non-EU suppliers such as Ajino-
Page 261 of 315
moto Foods (Japan) and Valley Research (USA), CP Kelco (USA) and SpecialtyChemicals
(USA), they have a small share of the market (Frost and Sullivan 2004)481.
Also changes in the US market are dictated by the big European enzyme manufacturers. In
general the enzyme products are produced in Europe and marketed in the USA. US-based
companies have supplier agreements with European companies because of the cost advantage Europe offers for the manufacturers. The excessive reliance on EU enzymes weakening
US dollars against the euro is expected to push the food enzyme prices up in the USA (ibid)
Japan hardly plays a role in the enzymes for fruit juices market. Ajinomoto Foods has a small
position on the European and US markets.
Outlook
The forecasts of the food enzymes market are rather positive: the revenues of the total European food enzymes market will show a steady increase, with annual growth figures of 2-3 %
for the period 2006-2011 (Frost and Sullivan 2005). Also the market for fruit juice and nectar,
both showing growth figures of 7.3 or 13 %, respectively, during the period 2000 – 2004, is
expected to grow.
The trend in food consumption patterns of increased consumption of more healthy nutrition
will affect the fruit juice market. Juice can be enriched with vitamins or prebiotic fibres and
also the growing knowledge of health effects of natural compounds in fruits (such as
flavonoids, carotinoids) will have a positive effect on future markets. Also a small growth due
to new EU countries could be realised.
Frost and Sullivan (2005) expect that, due to consolidation, downward pricing measures of
enzymes will occur, so price reduction is expected to take place and the growth sketched
above will be flattened. The fruit processing enzymes market will show hardly any growth and
will stay more or less on the same level. Percentage of revenues of enzymes for the fruit
processing segment of the whole enzyme market will stay at 7 % in the years 2006, 2007 and
2008 and decrease to 6 % for the years 2009, 2010 and 2011.
The enzymes for food applications are a mature market that is also very competitive. Because
of the very high entry barriers only a few strong participants rule the market. The key to operate successfully in this market is to be highly cost-effective in manufacturing and be innovative in terms of regularly product innovations. It is expected that also on the fruit enzyme market new enzyme mixtures will be introduced on the market with higher activities and more
variation in action. However there are limitations, due to existing regulation which says that no
other enzymes than pectases, hemicellulases, amylases and proteases can be used on this
market. New enzymes of these types will be developed with improved characteristics of
greater health stability and lower pH optimum.
5.3.3.6
Enzymes for pulp and paper industry
Introduction
The European pulp and paper industry competes in the global market and the main concerns
are competitiveness and reduction of production costs. Despite a challenging economic
climate and competitors whose production costs can be substantially lower than those in
Europe, the European paper industry has managed to maintain its position as one of the
region´s most competitive and sustainable industries (CEPI)482.
481
482
Frost and Sullivan (2004) The US Enzymes for Food Applications Market, A660-88, 2004
www.cepi-eurokraft.org
Page 262 of 315
There are already several commercial enzyme products for papermaking on the market. Today xylanase-aided bleaching is the main application (BCC 2004)483. Since launching of the
first enzyme products implementation of the technology has not increased as quickly as was
perhaps expected, but it is estimated that today 10 % of kraft pulp is manufactured with xylanase pre-treatment. Bleaching of pulp is carried out in alkaline conditions and end-users at
mills are looking forward to an alkaline xylanase in order to avoid pH adjustments. If an alkaline xylanase will be launched on the market it is expected to increase substantially demand
for enzyme-aided bleaching.
On the market there are also enzyme products e. g. for control of pitch and microbial deposits, for improvement of drainage and for enhancement of deinking of recycled fibres. It is
difficult to obtain reliable figures, on how extensive the use of these products is at paper mills.
A conservative estimate is that these enzyme-based products are used regularly at tens of
mills or paper machines. However, demand for enzymatic products for stickies and deposit
control is increasing, especially in southern Europe, whereas in northern Europe there is less
interest on enzyme-based chemicals. This is perhaps due to the fact that in central Europe
the paper machines are smaller and older than in the Nordic countries.
The Nordic paper companies are ´on hold` when the use of enzymes is concerned. They are
not rejecting the technology, but waiting till good commercial products are available. There is
increased interest in testing new enzymes on mill scale to solve problems in paper making,
refining and formation. In addition, forest industry and chemical companies are actively
participating in research programmes dealing with new technologies (including biotechnology)
and innovations within paper making and packaging. The reason why they are interested in
new enzyme applications is that the competition between the paper companies is increasing
as paper markets have got saturated or grow slowly. The companies are looking for new
fibre-based products thereby combining various technologies (e. g. ICT, biotechnology, and
printing) in order to keep their market position.
Significance of Impact
Economic impact
The share of the pulp and paper enzymes out of the total industrial enzymes market (about
€ 1.2 billion.) is rather small, € 18-47 million (BCC 2004)484. The global market for industrial
enzymes in pulp and paper industry is estimated to increase from about 47 million € (in 2004)
to € 56 million in 2009 (ibid).
Today xylanase-aided bleaching is the main application (ibid). It is estimated that today about
20 mills in Scandinavia, Russia and North America constantly use xylanase in bleaching (Ullman´s485, AB Enzymes486). In the Far East and Asia (India, China, Indonesia, Japan) few mills
exploit the xylanase technology in bleaching487. It is estimated that today 10 % of kraft pulp is
manufactured with xylanase pre-treatment488 (IBI4).Total chemical costs for bleaching in a
modern pulp mill is € 20-25/t and with use of enzymes savings of 5-6 % in bleaching costs
can be obtained (IBI6). In India and Asia the main motives are insufficient bleaching capacity
and in some extent also environmental issues, which are due to tightening legislation on
waste water discharges489.
483
BCC, Inc Enzymes for Industrial Applications, BCC Research 12-1-2004
485
Ullmann’s Encyclopedia of Industrial Chemistry, Wiley-VCH Verlag GmbH & Co. KGaA, 2003, AB
Enzymes
486
www.ABEnzymes.com
487
www.ABEnzymes.com
488
www.Iogen.com
489
www.ABEnzymes.com
Page 263 of 315
484
Resinous constituents of wood are known as pitch and they create problems in paper machines by sticking to the rolls causing spots or holes in paper. A substantial reduction in pitchrelated problems has been observed using lipases and this has led to their regular use in
major Japanese paper mills490(IB14). Buckman has developed an interesting enzyme application for stickies control. The enzyme is an esterase which targets polyvinyl acetate, a component of stickies, hydrolysing the PVA to the less sticky polyvinyl alcohol. The enzyme is
now in use at many mills around the world (Jones 2005)491 and perhaps at 50 paper machines
in Europe492 (IB14). However, no estimates on the cost reductions obtained by the use of the
enzyme could be obtained.
Information on the mill-scale use of enzymes in deinking of recycled paper is scarce. Processes for deinking mixed office paper have been developed using cellulases, which considerably reduce the need of harsh chemicals493. Notices on application of enzymes within
deinking can be found on web-pages and company leaflets of enzyme producers and chemical companies. Additionally, mill-specific analysis and product (enzyme) development for
deinking of customer’s raw material are available494(BI14).
The global market for industrial enzymes in pulp and paper industry is estimated to increase
from about € 47 million (in 2004) to € 56 million in 2009 (BCC 2004)495. Novozymes anticipate
long-term annual revenues to grow approx. 10-15 % for technical enzymes496.
The main part of the estimated use of industrial enzymes in near future will be xylanases for
bleaching. The forecast for other enzymes is rather conservative. Bleaching of pulp is carried
out in alkaline conditions and end users at mills are looking forward to an alkaline xylanase in
order to avoid pH adjustments. If an alkaline xylanase will be launched to the market it is expected to substantially increase demand for enzyme-aided bleaching (AB Enzymes)497.
According to BCC (2004)498 the share of the global use of enzymes within paper industry is
divided rather evenly between North America, western Europe and rest of the world.
Social impact
In the past the pulp and paper industry has shown to be sensitive to consumers’ pressures for
the use of more environmental friendly production processes. In fact, in the late 1980s, when
the chlorine issue was hot, the consumers´ attitudes deeply affected the design of industrial
process and stimulated the search for environmentally benign processing technologies, e. g.
for bleaching (Viikari, 2002)499
The pulp and paper industry uses relatively large amounts of energy, water and chemicals of
various kinds. Energy consumption is especially high in mechanical pulping (2-3.5 MWh/t of
pulp). Water use varies between 8-16m3/t depending on raw material and process conditions.
Main chemicals used in different stages of paper making include bleaching chemicals,
retention aids, fixatives, surface sizing agents, optical brighteners and biocides. In pulping
490
www.novozymes.com, www.buckman.com
Jones, D.R. (2005), Enzymes; using Mother Nature’s tools to control man-made stickies. Pulp Pap.
Can., 106(2):23-25
492
www.buckman.com
493
www.novozymes.com
494
www.edt-enzymes.com
495
496
www.report2005.novozymes.com
497
www.abenzymes.com
498
499
Viikari, L. Trends in pulp and paper biotechnology, In (Viikari, L. & Lantto, R., eds), Biotechnology in
th
the pulp and paper industry: 8 ICBPPI meeting, Progress in Biotechnology, Vol. 21, pp. 1-5, Elsevier
Science B.V., 2002
Page 264 of 315
491
and paper making enzymes are used to improve processing and product quality, to decrease
use of chemicals and to decrease emissions into water or air. Hence enzyme technology has
helped the forest industry to implement sustainable technology into paper making processes.
The use of xylanases in different bleaching sequences leads to a reduction in chemical consumption. In chlorine bleaching an average reduction of 25 % in active chlorine consumption
in prebleaching or a reduction of about 15 % in total chlorine consumption has been reported
both in laboratory-scale and in mill trials. As a result, the concentration of chlorinated compounds, measured as AOX, in the bleaching effluent during mill trials was reduced by 15 –
20 %. Today, xylanases are industrially used both in ECF and TCF sequences. In ECF sequences, the enzymatic step is often implemented due to the limiting chlorine dioxide production capacity. The use of enzymes allows bleaching to higher brightness values when chlorine
gas is not used. In TCF sequences, the advantage of the enzymatic step is due to improved
brightness, maintenance of fibre strength, and savings in bleaching costs (Ullman´s 2006)500
The benefits obtained with enzymatic deposit control are claimed to be numerous. Combination of the enzyme product with traditional biocides enhances the efficacy of traditional biocide
treatment, thereby reducing the amount and frequency of biocide usage while maintaining
equal control. In addition the use of enzymates reduces and eliminates wet-end and effluent
toxicity concerns and improves safety at work 501.
One way of reducing the high energy consumption of mechanical pulping is to modify the raw
material by biotechnical means prior to refining. It has been demonstrated that a slight enzymatic modification of reject pulp resulted in energy savings of 5 - 10 % in mill scale trials
(Pere et al. 2002)502. A commercial enzyme product for this application will be launched late
2006503.
The leading enzyme companies in the world are European. In US and Canada the enzyme
markets for the pulp and paper industry are largely governed by local companies (Iogen, Dyadic, Diversa). Xylanases for bleaching are the most important products groups in US and
Canada.
Outlook
Biotechnical applications for the pulp and paper industry have been developed for the past
twenty years. The first introduction of enzymes at mill scale took place at 1980s, rapidly after
discovery and validation of the xylanase-aided bleaching concept. Since then, other
applications of industrial enzymes having pH and temperature ranges that are suitable for
target processes have been developed. The specificity of enzymes makes them unique tools
for targeted modification of specific components of fibres and their catalytic nature makes
them efficient even in small dosages (Viikari 2002) 504.
Notwithstanding the high expectations, the implementation of economically and technically
viable enzymatic treatments to mill scale operation has been found to be difficult. The
500
Ullmann’s Encyclopedia of Industrial Chemistry, Wiley-VCH Verlag GmbH & Co. KGaA, 2003
www.buckman.com
502
Pere, J., Ellmén, J., Honkasalo, J., Taipalus, P., & Tienvieri, T. Enhancement of TMP reject refining
by enzymatic modification of pulp carbohydrates - A mill study In (Viikari, L. & Lantto, R., eds), Biotechnology in the Pulp and Paper Industry: 8th ICBPPI Meeting, Progress in Biotechnology, Vol. 21, pp. 281290, Elsevier Science B.V., 2002.
503
www.abenzymes.com
504
Viikari, L. (2002) Trends in pulp and paper biotechnology, In Viikari, L. and Lantto, R., (eds),
th
Biotechnology in the pulp and paper industry: 8 ICBPPI meeting, Progress in Biotechnology, Vol. 21,
pp. 1-5, Elsevier Science B.V., 2002
Page 265 of 315
501
biotechnical applications competing with the chemical applications must overdo the
performance of traditional chemistry and result in economical benefits without compromising
the product quality. The real challenge for new commercial success is to identify superior
enzymes for new applications. It seems that the most potential future applications of
biotechnical methods will be found in the fields of speciality products, targeted modification of
the fibres and controlling the safety of products. Especially, enzymes exhibiting high
performance at elevated temperatures and high pH values are needed for aiding mechanical
pulping and bleaching (ibid).
Increasing energy prices have especially pushed forward interest in biotechnical concepts to
decrease energy consumption in mechanical pulping. Another driving force for decreasing
energy consumption within forest industry is the Kyoto Protocol and demands to decrease
emissions of GHGs. The use of enzymatic methods for improving energy efficiency of
mechanical pulping has already been tested on mill scale and with promising results. A new
thermophilic enzyme product for mechanical pulping is already in the pipeline and expected to
be on the market soon.
Another development that might stimulate the use of enzymes in the pulp and paper industry
is the new legislation on chemicals (REACH). REACH will affect strongly the number of
chemicals allowed in pulping and papermaking. More stringent legislation will promote R&D
efforts within enzyme and chemical companies to develop new enzyme-based products for
e. g. deposit control in paper machines. There might raise demand for new type of paper
chemicals, which are based on wood-derived biomolecules. This is one cornerstone of the
biorefinery concept; the conversion of the isolated chemicals and fibrous elements to valueadded speciality chemicals and other products.
Functional packaging from renewable materials is today the focus area for many paper and
board companies. There is need for novel fibre-based new materials having e. g. improved
barrier properties, rigidity, surface strength or moldability. Hygrostability, moisture resistance
and microbiological safety are also desired properties for tomorrow’s packaging materials.
This is a good opportunity for enzymes, especially for oxidoreductases, to be applied in
modification and functionalisation of fibrous materials. So far oxidoreductases have been
exploited in textile processing, but they also offer versatile means to functionalise fibres with
new properties (Suurnäkki et al. 2005) 505.
The global market for pulp and paper enzymes is predicted to grow with an annual growth
rate of 3.5 % (BCC 2004)506. As the fastest growing market for pulp and paper enzymes, AsiaPacific is projected to emerge at annual growth of 6.8 % (ibid). Within the enzyme companies
there are positive expectations on increasing markets for pulp & paper enzyme products.
Tropical wood species (eucalyptus, acacia) are increasingly used as raw material for pulping.
Hence new investments on pulp mills and paper machines are made both near the source of
materials (e. g. South America) and near the growing markets (e. g. China). This might also
affect regional markets for pulp and paper enzymes in the future.
The vision and strategic objectives for the European Forest-Based Sector is presented in A
Strategic Research Agenda for Innovation, Competitiveness and Quality of Life507. The SRA
aims at increasing the competitiveness of Europe’s forest-based sector by developing innovative products and services.
505
Suurnäkki, A., Oksanen, T., Grönqvist, S., Orlando, M., Canevali, M., Pere, J. & Viikari, L. (2005)
th
Targeted modification of fibre surface properties, 59 Appita Annual Conference and Exhibition, 12-13
May 2005, Auckland, New Zealand.
506
507
www.forestplatform.org
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The major research areas include:
1. Development of innovative products for changing markets and customer needs,
2. Development of intelligent and efficient manufacturing processes, including reduced
energy consumption,
3. Enhancing availability and use of forest biomass for products and energy
4. Meeting the multifunctional demands on forest resources and their sustainable management.
The SRA urges to engage scientists from essentially all fields to the objectives and biotechnology can provide strong input to the manufacturing and functionality of forest-based products. Examples of activities and research approaches include e. g. 1) development of more
selective and milder reaction conditions for wood constituents or their products, such as low
temperature delignification, novel pulping processes and enzymatic processes for higher
specificity of the desired compounds and 2) development of means to enhance the formation
of specific substances directly in the pulping processes, e. g. by catalytically or
biotechnologically (enzymatically)-assisted derivatisation reactions.
5.3.3.7
Enzymes for textile processing
Introduction
This case study focuses on assessing the economic, social and environmental impact of the
use of enzymes in textiles. Enzymes are biocatalysts catalysing specific reactions. They accelerate the rate of chemical reactions. Enzymes commonly catalyse reactions under mild
reaction conditions such as temperature < 100oC and pH around neutral.
Use of enzymes in textiles began in early 1900s when amylases were used in the process of
enzymatic desizing in many textile factories. Amylases were the only enzymes applied in textile wet processing for about 70 years, but in the late 1980s cellulases were introduced for
depilling of cotton and stonewashing. In the early 1990s catalases were introduced to
degrade hydrogen peroxide after cotton bleaching. In the 1990s alkaline pectinase was
launched for cotton pre-treatment to replace traditional alkaline scouring. Currently the use of
enzymes in textile processing and after-care is an established industrial technology and
enzymes are being applied in every step of cotton wet processing ranging from pre-treatment,
bleaching, dyeing to finishing and even effluent treatment.
Economic impact
In the last decade employment has shrunk significantly in the European textile industry. The
main reason for this is the increased competition from low-wage countries. Thus the
European textile industry needs to specialise in areas where other issues than wages such as
textiles and clothing with special requirements, high technical performance, high skill /
technology processes and customisation and service, are important (Wolf and Sørup
2000)508. Enzymatic textile applications have contributed to obtaining better quality products
and creating new improved processes. In this way, it might be concluded that the use of
enzymes in textile processes has facilitated the textile companies in developing modern
processes and new products, providing new changes for an industry and thus for keeping
jobs in the EU..
508
Wolf, O. and Sørup, P. (eds.) 2000. The introduction of process-integrated biocatalysts in companies.
Effect of dynamics in internal and external networks. Final report. IPTS. EUR 19582 EN
Page 267 of 315
The textile enzyme revenues amount to 12-14 % of the revenues of industrial enzymes worldwide. Approximately 1/3 of the textile enzymes are sold to Europe, 1/3 to America and the last
1/3 to Asia and the rest of the world (BCC 2004)509. The revenues of textiles enzymes have
been growing in the last years, mainly related to revenues to China and Southeast Asia510.
The market for textile enzymes are predicted to grow in 2004 – 2009 by 3.3 % (BCC 2004)511.
Enzymes can be used in textile processing in several ways and from pre-treatment to finishing of textiles. It is estimated that within the cotton industry almost all use enzymes in at least
part of their processes. In pre-treatment of textiles commercial enzymes are available for desizing, scouring and for removal of hydrogen peroxide after bleaching. Desizing of cotton is
currently performed 100 % with enzymes and from the textile enzyme markets desizing
accounts approx. 9 %. Enzymatic scouring (bioscouring) is a new application and it is
estimated that approx. 3 % of textiles enzymes are sold for bioscouring. About 10 % of the
textile enzyme value is coming from catalase which is used for degradation of residual
hydrogen peroxide after bleaching of cotton. Elimination of hydrogen peroxide in the
bleaching liquor of cotton can be done enzymatically with catalase and consequently the
same bath can be used for further dyeing. The following reductions have been reported:
energy consumption by 24 %, costs for chemicals by 83 %, water consumption by 50 % and
processing time by 33% (Aehle, 2004)512.
The rest of the commercial enzymes are marketed for finishing processes. Approximately 60
– 70 % of textile enzymes are cellulases and marketed for denim finishing and biopolishing
applications. World-wide an enzymatic approach using cellulases has replaced the traditional
stone wash process of denim fabrics and about 80-90 % of blue denim jeans are finished
using cellulases (Buchert and Heikinheimo 1998)513. Growth in the textile industry in 2005
came mainly from denim finishing enzymes514. Small amount of enzymes (less than 3 % from
all textile enzymes) are sold for enzymatic treatment of silk and wool.
Social impact
Enzymes are used to create new looks and appearance on textiles and can be tools to produce new fashions. The consumer can see the benefits of enzymes in everyday life as improved product quality. The new products are more user-friendly (soft, light, easy to clean,
etc.) and they may include special functionalities like water and dirt resistance, cooling or
warming effects, or even special health and safety related measurements and controls.
The use of natural biodegradable enzymes in industrial textile processes promotes development of wealth when chemical and water consumption and emissions are reduced.
The textile industry is a high water, energy and resources consuming industry. Most of the
loads are emitted via the waste stream since most textile processes are based on wet chemistry. The aim of using enzymes in the textile industry is to minimise environmental effects and
to improve quality of the product. Enzymes have a variety of environmental advantages in the
textile industry: possibility to use mild treatment condition; biodegradability; saving of chemicals, water and energy and reduction of processing times. According to life cycle analyses on
several enzymes and their applications, the environment benefits when biotechnology and the
use of enzymes replace traditional industrial processes515.
509
http://www.novozymes.com
511
512
513
Buchert, J. and Heikinheimo, L. 1998. New cellulase processes for the textile industry. EU-project
report. Carbohydr. Eur. 22:32-34
514
515
Page 268 of 315
510
From the individual enzymatic application in the textile industry the enzymatic desizing of
cotton (starch as sizing agent) is the one that is currently performed only with enzymes.
Enzymatic desizing with amylases is the oldest application of enzymes in textiles. The use of
enzymes ensures complete removal of starch-based sizes and also eliminates the need to
use aggressive chemicals like acids, alkalis and oxidising agents, and in addition, prevents
the degradation of the substrate and subsequent loss of strength in the fabric516.
According to Lu (2005)517 the advantages of bioscouring compared to the conventional
alkaline boiling are: saving of water and time by reducing one rinsing cycle, saving of energy
by lowering the treatment temperature from boiling to 50 – 65oC, permitting less fibre weight
loss and having less COD and BOD in the effluent. Comparing traditional scouring method to
the enzymatic procedure the following savings have been reported with enzymatic scouring:
run time 0.0302 $/pound (0.0175 €/kg), water 0.007 $/pound (0.004 €/kg), heat energy 0.0027
$/pound (0.0016 €/kg), and electricity 0.0006 $/pound (0.0003 €/kg), total 0.0405 dollars per
pound of yarn (0.0234 €/kg) (Durden et al. 2001)518.
Elimination of hydrogen peroxide in the bleaching liquor of cotton can be done enzymatically
with catalase and consequently the same bath can be used for further dyeing. The following
reductions have been reported (Aehle 2004)519: energy consumption by 24 %, costs for
chemicals by 83 %, water consumption by 50 % and processing time by33 %.
Cellulases are used in biostoning of denim and in biofinishing of cotton and other cellulosics.
The main benefit of the biofinishing process is obtaining an improved product quality.. Other
benefits in biostoning are: less damage to the machinery and to the garments, elimination of
the need for labour-intensive removal of dust from the finished garments. Environmental
benefits are decrease of waste formation and reduction in use of energy due to higher
machine capacity.
In Europe there are at least five companies producing technical enzymes. The world leading
enzyme companies and textile enzymes producing companies are European. World-wide, the
textile enzymes hold about 12-14 % of the total industrial enzymes revenues. The market
sizes of textile enzymes are predicted to grow in 2004 – 2009 in N. America by 3.3 %, in
Europe by 2.7 % and in the rest of the world including Asia by 3.9 % (BCC 2004)520. There
are no data available on the numbers of textile producing companies that use enzymes.
In USA and Japan the same environmental benefits are obtained as in Europe.
Outlook
Textile wet processes consume high amounts of chemicals and energy and are characterised
by alkaline or acidic pH and high temperatures and by long residence time (Nierstrasz and
Warmoeskerken 2003) 521. With the increasingly important requirement for textile
manufacturers to reduce pollution in textile production, the use of enzymes in the chemical
processing of fibres and textiles is rapidly gaining wider recognition because of their non-toxic
and eco-friendly characteristics. They can be safely used in a wide selection of textile
516
Lu, H. 2005. Insights into cotton enzymatic pre-treatment. International Dyer. April 2005.
518
Durden, D., Etters, J., Sarkar, A., Henderson, L and Hill, J. 2001. Advances in commercial
biopreparation of cotton with alkaline pectinase. AATCC Review. August 2001
519
520
521
Nierstrasz and Warmoeskerken 2003. Process engineering and industrial enzyme applications. In:
Cavaco-Paulo, A. and Gübitz, G.M. (eds). 2003. Textile processing with enzymes. The Textile Institute.
CRC Press. Woodhead Publishing Ltd Pp.120-123.
Page 269 of 315
517
processes such as de-sizing, scouring, bleaching, dyeing and finishing, where the alternatives
are very harsh chemicals whose disposal into the environment causes many problems522.
Enzymes have proven to be reliable tools in textile processes and promising technological
solutions have been developed and are under development for fulfilling the future requirements (ibid). In the future, enzymatic textile applications currently in the investigation
phase, (for example biofinishing of wool and enzymatic effluent treatment) will be brought to
implementation on an industrial scale (Aehel 2004)523.
Enzyme companies are looking at a wide range of new enzyme products and applications
across the whole of textile wet processing, including new concepts for pre-treatment, as well
as bio-based solutions for creating new textile effects. R&D investments of enzyme companies are quite high; for example, Novozymes invested 13 % of its sales in research and
development in 2006 (The Novozymes Report 2006)524.
The waste water load caused by alkaline chemicals in pre-treatment of cotton is high. The
opportunity to use enzymes instead of alkaline chemicals would help to decrease the waste
water load in pre-treatment of cotton. According to chemical companies, enzymatic scouring
is a good market opportunity for the enzymes. As energy and water are becoming
increasingly expensive, the need for the environmental friendly solutions for the pre-treatment
stages is increasing. New improved and more efficient enzyme systems as well as further
process development are needed to overcome the technical limitations currently existing in a
bioscouring process. The process is a batch process with some retention time; a continuous
process would be more practical and economical. Enzymatic processes need also to be
developed for production in a continuous mode. Currently most of the applications are
performed in batch mode. In addition, different bioprocesses, especially the pre-treatment
processes for fabrics made from natural fibres, will be integrated in a single process
(combination of desizing and bioscouring and possibly bleaching step) with benefits in time,
energy, water, chemical consumption and increased production capacity (Aehle 2004)525.
Furthermore, a successful combination of bioscouring and bleaching step (biobleaching) is
highly desired. Biobleaching and combination of bioscouring and biobleaching are still in a
development stage.
Production of textile fibres reached the total amount of over 50 million tonnes in 2000 (Wolf
and Sørup 2000)526, from which the share of synthetic man-made fibres was more than half
(54.3 %). Chemical approaches for synthetic fibre modification are not very attractive since
drastic conditions have to be used or multistage chemical reactions are required. It is
expected that the enzymatic textile applications will be broadened from natural fibres to
synthetic fibres such as polyester and nylon. Promising results on using enzymes for nylon,
acrylics and polyester have been reported. However, a search for more catalytically active
enzymes for these substrates is needed (ibid).
The major market trends in the textile industry are as follows: China and India are growing
areas as textile manufacturing spots. Textile manufacturers are looking for faster processes
and low temperature washing and finishing. Thus there is a need to obtain fast performing
enzymes and enzymes that have high performance even at low temperature. Quality is becoming more important in competitive markets. Innovations and breakthroughs for the enzymatic treatment of wool and synthetic fibres would be desired. In general, textile enzymes are
expected to lower energy and labour costs, to increase productivity and to participate in creation of new fashions.
522
http://www.cplbookshop.com/contents/C1883.htm, 17.9.2007
524
The Novozymes Report 2006. in :
http://report2006.novozymes.com/Menu/Novozymes+report+2006/Activities/Innovation/Novozymes%e2
%80%99+innovation+to+extend+far+and+wide (18.9.2007)
525
526
Wolf, O. and Sørup, P. (eds.) 2000. The introduction of process-integrated biocatalysts in companies.
Effect of dynamics in internal and external networks. Final report. IPTS. EUR 19582 EN
Page 270 of 315
523
According to the Textile-Platform of Europe, the future of Europe’s textile and clothing
industry will be built on its existing strengths (1) creativity in design and product development,
(2) innovation in materials and processes, (3) flexibility in production and supply chain
management and (4) quality of products and services. Among the visions of the Technology
Platform and widely shared by industry and the scientific community are a move from
commodities towards specialty products from high-tech processes and fibres, filaments,
fabrics and final products with highly functional, purpose-targeted properties based on nano-,
micro-, and biotechnologies. Bio-based materials, biotechnologies and environmentally
friendly textile processing as well as functionalisation of textile materials (possibility to utilise
enzymes) and related processes are included in the strategic research agenda of TextilePlatform of Europe.
5.3.3.8
Lysine
Introduction
Lysine is an essential amino acid for many animals and is mostly the limiting compound in
cereal-based feed. As a consequence, cattle has to consume large quantities of feed to get
the required amount of lysine. All excess of other amino acids in the feed are excreted by the
animal. In case the animals are fed with feed enriched with lysine, raw material use and
environmental emissions (manure, in particularly nitrogen) can be decreased. Moreover,
European wheat (containing low lysine) can be used as staple feed instead of imported soy.
Most of the lysine production is used as a feed additive. The product is sold as a more or less
pure product or together with the biomass. Lysine used to be produced chemically, but at present the production is only via fermentation.
Economic impact
Lysine production represents a large industry with decreasing added value in a very competitive market. In the EU25 about 130,000 tonnes of lysine (value € 195 million) are
produced out of 1 million tonnes world-wide (2006 data). European companies are
outsourcing their lysine production to low-wage countries. The European lysine factories are
converted to newer biotechnological products with high added value such as threonine and
tryptophane. Lysine contributes 26 % to the total world feed additive market. Other feed
amino acids are also made via biotechnology. Amino acids make up 36 % of all feed additive
revenues. In the EU25 only three factories, located in France, Italy and Denmark, are
producing lysine. In France and Denmark about 220 employees are active with lysine
production, but the indirect job creation is larger, in particular if wheat farming is included (the
wheat that together with lysine can replace imported soy bean as feed): 35,000 jobs. The
revenues of a biotechnology-active employee in lysine production is about € 700,000 per
year.
The EU25 is the largest market for lysine, but not the largest producer. A large part of the lysine required in Europe is produced outside the EU25 as a result of low wages and low raw
material (sugar) costs in other regions.
Modern biotechnological production methods using genetically modified bacteria costs 33 %
of the costs involved in chemical production. In addition, the farmer who buys the feed can
reduce total pig feed costs by 15 % by using lysine-enriched feed.
Since lysine plays an important role in the replacement of soy bean with wheat and corn, the
market price of lysine has become a function of the price difference between soy bean on the
Page 271 of 315
one hand and wheat and corn to the other hand (Tutour 2006)527. A high soy bean price
allows a high lysine price. Another important factor that influences the lysine price is the
production capacity. Considerable price drops have resulted from the start of large facilities in
the recent past. The resulting price fluctuations have a dramatic effect on the profitability of
lysine factories.
Social impact
The addition of lysine to the feed can reduce nitrogen excretion by more than 10 %. This
allows a farmer (that is bound to nitrogen quota) to grow 10 % more pigs, and therewith
increase his income by 10 %. In a business as tough as the pig breeding business, this extra
10 % can be necessary to keep the farm profitable.
The application of lysine in European feed makes it possible to use European wheat as staple
feed instead of importing soy bean. This will have an effect on the viability and wealth of
European wheat farmers and will affect life in areas in which wheat cultivation is important,
e. g. the northern part of France. The number of jobs related to the volumes involved makes
this a significant effect: about 35.000 jobs in Europe.
Normally soy bean protein is added to wheat to increase the lysine level so that it is not the
limiting amino acid. The area needed to grow soy bean, however, is much larger than the
area needed to grow wheat or corn. The addition of lysine can reduce the addition of soy
bean and thereby it can reduce the area needed to feed the stock. The agricultural area that
is needed can be reduced by a factor 4 when lysine is added to corn (Toride 2002)528.
The largest effects are reduction of nitrogen excretion. Addition of 28 g lysine (5 g N) per kilogram feed reduces the N excretion by pigs by 17 g/kilo feed. A decrease of the dietary crude
protein content by 1 percent results in a 10 % decrease in nitrogen output (Gatel et al.
2003)529.
Producers of lysine in the EU suffer from a difficult, non-competitive sugar market and high
wages. In Japan production of lysine has already stopped due to high costs. Producers in
Europe are shifting to new products with higher added value (threonine and tryptophane).
Some European companies have already shifted lysine production to south East Asia (Degussa and BASF) (Degussa 2005)530, (Johannsen 2006)531.
European producers complain about slow approval procedures for new products (Regulation
(EC) No 1829/2003), whereas producers from outside the EU can introduce new products on
the European market fairly easy (Hundeboell 2006)532.
527
Tutour L. Le (2006), Expert interview, August 2006, L. Le Tutour, area sales and marketing director,
Ajinomoto Eurolysine
528
Toride, Y. (2002), Lysine and other amino acids for feed: production and contribution to protein
utilisation in animal feeding, Ajinomoto Co., Inc.
529
Gatel F., Porcheron E. (2003), The role of cereals in the European protein supply, Protein supply for
European pigs 2010, Proceedings, Brussels, March 18, 2003
530
Degussa (2005), 7th guide to German biotech companies
531
Johanssen J.-F. (2006), Expert interview, August 2006, BASF
532
Hundeboell (2006), Expert Interview, August 2006, V. Hundeboell, director Agroferm Denmark
Page 272 of 315
Outlook
The consumption of lysine has increased by over 10 % per year over the last 3 years and
consumption increase is expected to continue. With the loss of antibiotic growth promoters in
pig feed in 2006, the further loss of zinc oxide at therapeutic levels (already in force in some
EU Member States), and ever tightening restrictions brought about through environmental
legislation, low protein formulations will be increasingly preferred (Gatel et al. 2003)533. As a
consequence, more lysine will be used in feed. Large changes in European meat production
in the coming five years are not expected. Pig breeding will slightly increase and cattle
breeding slightly decrease (Gatel et al. 2003)373.
The main problems in lysine production in the EU as indicated by the experts consulted can
be summarised as follows:
• Closed sugar market
• Expensive hydrocarbons
• High labour costs
• Control and approval of new products (Regulation (EC) No 1829/2003) takes much time
(>5 years)
• Suppliers from outside the EU do not need to go through same approval process.
Changes in these adverse factors will have an effect on future development of European lysine production and the production of other amino acids produced by modern biotechnology.
5.3.3.9
Riboflavin – vitamin B 2
Introduction
Vitamins are organic compounds essential to the life and health of humans and animals. The
body can not adequately synthesise all vitamins, some vitamins must be consumed regularly
as part of the diet. Vitamin B2, or riboflavin, is essential for the production of energy in the
body, mainly for metabolism of fats, carbohydrates, and proteins. Riboflavin is used as an
additive to human food and to animal feed for its nutritional properties, but may also be used
for its chemical properties, for example as an antioxidant. It is estimated that roughly 70 % of
the riboflavin is used as a feed additive for livestock, mainly pigs and poultry. Riboflavin was
discovered in 1920 and first isolated from egg albumen in 1933. Traditionally, riboflavin is
produced using a process more than 50 years old, starting with glucose and followed by a
sequence of six or eight chemical steps. In 1980, the mixed fermentation/chemical synthesis
process was introduced, in which ribose is produced from glucose (the starting material) by
fermentation, but the next steps were all chemical stages involving the use of toxic agents.
The biological process was first introduced in 1990 by BASF. It is a single step process in
which crude riboflavin is produced directly from raw material through fermentation
(Competition Commission 2001)534.
At the moment, it is estimated that approximately 75-85 % of the total riboflavin production is
based on a biocatalytical process (expert opinion). Using a biotechnological process for producing riboflavin results in substantial benefits for the environment. The biotechnology
process is less chemically intensive and is based on the use of renewable raw material
(glucoses). It drastically improves the life cycle performance of riboflavin production and offers
533
Gatel F., Porcheron E. (2003), The role of cereals in the European protein supply, Protein supply for
European pigs 2010, Proceedings, Brussels, March 18, 2003
534
Competition Commission (2001) BASF AG and Takeda Chemical Industries Ltd: A report on the
acquisition by BASF AG of certain assets of Takeda Chemical Industries Ltd
Page 273 of 315
a more sustainable production process (Hoppenheidt et al. 2004)535. The biotechnology
production of riboflavin is therefore a good example of the adoption of biotechnology by the
chemical industry.
The focus of this case study is on riboflavin produced through a single step fermentation
process from raw material to 80 % pure riboflavin. The mixed fermentation/chemical synthesis
process is considered as similar to a traditional chemical synthesis process.
In the EU there are two large companies producing riboflavin through a fermentation process.
BASF is based in Germany and started biotech-based production of riboflavin in 1990, using
the fungus ashbya gossypii and vegetable oils as feeding material. The production was first
located in Ludwigshafen, but in November 2003 the production was transferred to a new
production facility in Gunsan, South Korea. DSM took over the vitamins business of Roche in
2003. Roche started the development of a single step fermentation process for the production
of riboflavin in 1988. In 1996, a pilot plant in Japan was set up and in 2000 a large production
plant in Grenzach-Wyhlen, Germany started with the biotech-based production (OECD
2001)536.
Economic impact
The economic impact of biotechnology on riboflavin production has been measured through
the following indicators:
• Share of production/revenues volume of biotech-based riboflavin of total production/revenues volume of all riboflavin (IBI4)
• Share of production volume of biotech-based riboflavin of total production volume of all
biotech-based chemicals (IBI5)
• Production costs of biotech-based riboflavin compared to production costs of chemical
synthesis-based riboflavin (IBI6)
The production volumes of biotech-based riboflavin world-wide are estimated at 2,000 to
4,000 tonnes per year in 2002 (Gaisser et al. 2002)537. According to industry experts, 30 % of
the world-wide production of biotech-based riboflavin takes place in Europe and 70 % in Asia
(BASF has a production facility in Asia as well). Industry experts estimate the market of riboflavin in Europe at € 8.27 million (US$ 11 million)538, of which € 3.76 million (US$ 5 million
related to functional foods and € 4.51 million (US$ 6 million) to dietary supplements. This
would imply that Europe has a share of the global market for riboflavin of approximately 18 %
(global market is € 45.13 million (US$ 60 million)). Other experts estimate the European market share at between 27 and 35 % (Broll 2005)539. The manufacturers and industry experts
estimate that, at the moment, 75 to 85 % of the production and revenues volume of riboflavin
535
Hoppenheidt, K., W. Mücke, R. Peche, D. Tronecker, U. Roth, E. Würdinger, S. Hottenroth, W.
Rommerl (2004) Reducing Environmental Load of Chemical Engineering Processes and Chemical
Products by Biotechnological Substitutes – Summary of the Final Report, report for Umweltbundesambt,
Berlin, performed by Bayerisches Institut für Angewandte Umweltforschung und -technik
536
OECD (2001) The application of biotechnology to industrial sustainability
537
Gaisser, S., R. Hoogeveen and B. Hüsing (2002) Überblick uber den Stand von Wissenschaft und
Technik in productionsintegrierten Umweltschutz durch Biotechnologie, December 2002
538
Exchange rate US Dollar – EURO conversion: 0.7521821897 per 7 December 2006,
http://www.xe.com
539
H. Broll (2005) Praktikabilität des Kontrollverfahrens zum GVO-Verbot im Ökologischen Landbau
[Feasibility of the inspection and certification system concerning the prohibition of the use of GMO in
organic agriculture] Runs 15 April 2002 - 31 December 2003. Project leader(s): Broll, Hermann,
Bundesinstitut für Risikobewertung, Zentrale Koordinationsstelle für neuartige Lebensmittel und
Gentechnik, Berlin
Page 274 of 315
is biotech based. In production volumes, the share of biotech-based riboflavin in the total
European production volume of bio-based chemicals is rather limited; only 0.25 to 0.5 %.
The companies that introduced biotechnology in the production of riboflavin realised
substantial cost reductions. Improved production efficiency, lower intake of chemical auxiliary
materials, and lower waste disposal costs are the main contributors to the improved cost
efficiency. The reduction of costs differs per company, because it depends on the type of
microorganism and raw material used. The efficiency of the microorganism can differ as well
as the prices of raw material. The introduction of a biotech-based production process for
riboflavin at DSM/Roche resulted in a 50 % reduction of costs (OECD, 2001)540, while BASF
states that it saves overall costs up to 40 % (EuropaBio 2003)541. The capital costs for a
biotech production facility are similar to that for an equivalent chemical plant (OECD 2001)542.
The market prices for biotech-based riboflavin are not known, but the prices for vitamins,
including riboflavin, have fallen since mid 1990s, mainly because of the presence of Chinese
manufacturers.
Unfortunately, there are no data available about the effects of the production of biotech-based
riboflavin on the employment.
Social impact is not included either, because we could not identify specific social effects of the
introduction of biotechnology in the production of riboflavin.
For measuring the environmental impact two impact indicators are used:
• The reduction of the use of non-renewable resources and emissions (IBI11)
• The reduction of energy, water and material inputs (IBI12)
The use of a biotech-based process for the production of riboflavin results in substantial
environmental benefits. The next paragraph shows to what extent the use of raw materials
and the emission of hazardous materials has been reduced. The reduction in environmental
impact is based on a comparison of the production of riboflavin through a chemical-technical
process and the biotechnological process in two companies, BASF and DSM. The absolute
numbers for change in emissions and use of raw materials through biotechnology were
provided by the companies in several publications (including lyfe cylce analysis studies) and
the percentages presented are based on these numbers. The percentages show to what
extent the environmental impact has been reduced. It makes no sense to compare these
percentages and absolute data, because it all depends on the type of production process,
which often differs between companies producing the same product. The percentages clearly
show the reduction in environmental impact.
The DSM process leads to a 75 % reduction in the consumption of non-renewable materials.
There are 50 % more raw materials needed, but 90 % of this is renewable (OECD 2001)543. A
more recent study by Hoppenheidt et al. (2004) showed that both BASF and DSM clearly
reduced the environmental impact compared to the chemical synthesis process. The biotechbased process produced 25 to 33 % less CO2 and 50 to 68 % less SO2. In addition, the
emission of PO4 showed a decrease of 25 to 47% less PO4 and the production of ethane
decreased between 58 and 71 %. Nevertheless, the emission of PO4 to the water increased
drastically with 165 to 269 % more PO4. With regard to the consumption of energy, the
biotechnological process used 6 to 34 % less energy. Both processes also realised large
540
Biotechnology Industry Organisation (BIO) (2004) New Biotech Tools for a Cleaner Environment:
Industrial Biotechnology for Pollution Prevention, Resource Conservation, and Cost Reduction
541
Europabio (2003) White Biotechnology: Gateway to a More Sustainable Future
542
Biotechnology Industry Organisation (BIO) (2004) New Biotech Tools for a Cleaner Environment:
Industrial Biotechnology for Pollution Prevention, Resource Conservation, and Cost Reduction
543
OECD (2001) The application of biotechnology to industrial sustainability
Page 275 of 315
environmental benefits with regard to human toxic and eco-toxic substances, such as lead,
cadmium and sulphur dioxide. The biomass that results from the biotechnological process in
relatively large amounts can be biologically recycled and it therefore had no negative
influence on the overall environmental impact544.
Economic impact
In addition to the two European producers of biotech-based riboflavin, there is a Chinese
manufacturer using a biotechnology process for the production of riboflavin.
At the moment, of one Chinese company it is known that it produces biotech-based riboflavin.
This company, Hubei Guangji, started in 2000 with the production of a feed-grade 80 % riboflavin, using fermentation with a strain developed in Russia. In 2000, Hubei Guangji declared
its production capacity of riboflavin at 1,000 tonnes (Competition Commission 2001)545. At the
moment, Hubei Guangji produces its biotech-based riboflavin in its Guangning
Pharmaceutical Factory. The main products include pharma & food Riboflavin, Riboflavin
95 % DC grade, Riboflavin 96 % feed grade, Riboflavin 80 % SD (company website)546. In
2003, industry experts estimated that the market share of Chinese producers at the European
market for riboflavin has increased to 24 % in 2002, coming from 4 % in 1999 (Broll 2005)547.
Industry experts estimate the Asian riboflavin market at € 13.54 million (US$ 18 million).
Regarding the share of biotech-based riboflavin in the total production and revenues volume
of all riboflavin in China, there are no specific data available for the situation in this country.
However, the estimates by the industry experts of 75 to 85 % can be considered as global
estimates. The same holds for the reductions in costs by applying a biotechnology process
(between 40 and 50 %, depending on the exact production process and the raw material and
microorganism used). Back in 2001, BASF believed that the Chinese producers would enjoy
cost advantages because they use the cheapest raw material (molasses is cheaper than glucoses or soy oil) and had lower labour and financing costs as well as les demanding environmental standards (Competition Commission 2001)548.
Similar to the European situation, there are no data available about the employment related to
the production of biotech-based riboflavin in China.
When comparing the EU with China, the main observation is that the major biotech-based
riboflavin producers are European companies, although the production facilities of the German company BASF are located in South Korea. The Asian demand for riboflavin is also larger than the European one and it is expected that the future increase in demand will mainly
come from Asia. The size of the European market for riboflavin is expected to remain at
approximately 1,400 tonnes (Broll 2005). Since 2001, Chinese manufacturers have increased
their share of the European riboflavin market, mainly at the cost of other manufacturers. Be-
544
Hoppenheidt, K., W. Mücke, R. Peche, D. Tronecker, U. Roth, E. Würdinger, S. Hottenroth, W.
Rommerl (2004) Reducing Environmental Load of Chemical Engineering Processes and Chemical
Products by Biotechnological Substitutes – Summary of the Final Report, report for Umweltbundesamt,
Berlin, performed by Bayerisches Institut für Angewandte Umweltforschung und -technik
545
546
http://www.guangjipharm.com/doce/Subcompany.htm
547
organic agriculture]
Runs 15 April 2002 - 31 December 2003. Project leader(s): Broll, Hermann, Bundesinstitut für
Risikobewertung, Zentrale Koordinationsstelle für neuartige Lebensmittel und Gentechnik, Berlin
548
Page 276 of 315
tween 2000 and 2002, the Chinese manufacturers have doubled their export of riboflavin to
the rest of the world. Nevertheless, according to Broll (2005), firms like BASF and DSM have
been able to keep their position because of their cost advantages related to the use of the
biotechnology route. On the other hand, the Chinese decreased their export prices549. Also for
the near future, it is expected that Chinese manufacturers will strengthen their presence on
the vitamin markets and this may result in lower prices.
In the US, ADM (Archer Daniels Midland) used to produce biotech-based riboflavin. Mid
1990s it started a joint venture with Aventis Animal Nutrition (AAN). In this joint venture, ADM
was responsible for the production of riboflavin and AAN was responsible for the marketing.
The riboflavin was produced by fermentation. In 2002, Aventis sold the Animal Nutrition business to a private equity company CVC Capital Partners and AAN was transformed into Adisseo, based in France. After this change, ADM decided to stop the biotech-based riboflavin
production. The market for riboflavin in North America is larger than the European market.
Industry experts estimate that North America has a share of the world market for riboflavin of
approximately 40 to 45 % (Broll, 2005)550. The total revenues volume of biotech-based riboflavin in the NAFTA551 region amounts to approximately € 20.31 million (US$ 27 million), of
which € 6.77 million (US$ 9 million) concerns functional foods and € 13.54 million
(US$ 18 million) relates to dietary supplements (industry experts’ estimation).
The main riboflavin producer in Japan is Takeda. However, in 2001 BASF and Takeda came
to an agreement and BASF took over the complete vitamin business of Takeda outside Japan. Takeda used a chemical synthesis route for producing riboflavin (Competition Commission 2001)552. There is no indication that there are other relevant Japanese producers of
riboflavin that use a fermentation process.
Information about the environmental impact of applying a biotechnology process in the production of riboflavin is only available in case studies about the production processes of DSM
and BASF. There are no data available for the production processes used by Hubei Guangji.
Environmental impact differs for each process, because of the technical specifications of the
process and the raw material and microorganisms used. Therefore, the environmental impact
of the processes used by Hubei Guangji will differ from the ones used by DSM and BASF, but
at least they can give some indication of the environmental impact possibly realised.
Outlook
A growth in demand is expected for the coming years, also because consumption in feed and
food might increase, mainly in Asia (industry experts; BASF 2003; Business Communications
Company 2003)553. Industry experts expect that the global demand for riboflavin will grow with
549
550
551
NAFTA: North American Free Trade Agreement, includes Canada, Mexico and the United States of
America
552
553
BASF (2003) A big step forward in the extension of BASF’s vitamins business, a press release by
BASF, 10 November 2003, downloaded from
Page 277 of 315
2 to 4 % annually554. The prices of bio-based riboflavin could increase slightly in the coming
years, although it is also expected that the Chinese vitamin producers will strengthen their
presence on the world-wide vitamin market and this could result in lower prices (industry experts). Industry experts also expect that they will be able to increase the cost-effectiveness
and productivity of the biotech-based production of riboflavin, mainly because of further improvement of fermentation strains and production processes. For the coming five years, industry experts expect that environmental benefits may further improve.
5.3.3.10
Biosensors for environmental applications
Introduction
Biosensors are analytical devices incorporating a biological material, e. g. tissue, microorganisms, organelles, cell receptors, enzymes, antibodies, nucleic acids, a biologically derived
material or a biomimic intimately associated with or integrated within a physico-chemical
transducer or transducing micro system, which may be optical, electrochemical, thermometric,
piezoelectric or magnetic (Ciucu 2002)555.
Many types of biosensors were developed (based on DNA, antibodies, enzyme inhibition, enzymatic conversion, micro arrays, whole bacterial cells, cell array) and proved to be able to
measure many different components and parameters (pesticides, herbicides, paraquat, phenols, BOD, heavy metals, heavy metal oxides, ammonia, toxicity, genotoxicity, immunotoxicity, biotoxins endocrine disrupting effects, oxidative damage, viral pathogens and bacterial
pathogens) at very high sensitivities (up to µg/liter levels).
As stated above, true biosensors should have an integrated detecting element that gives a
readout. Therefore immuno assays and luminosity-based methods (that require a second
apparatus to measure fluorescence or luminosity) are not real biosensors. Since no evidence
of commercially available true biosensors for environmental applications was found,
immunoassays and luminosity-based methods were included in this study. Only modern
biosensors were included within the scope of this study: i. e. methods based on light emission
or oxygen consumption of naturally occurring bacteria without any genetic modification were
not included.
Economic impact
The total biosensor world market was around € 1 billion in 2001. Glucose sensors made up
90 % of this market. The largest part of the market was in the USA (640 million €) (Smith
2006)556. The biosensor market was estimated to be € 4 billion in 2003 (Bogue, 2005)557.
http://www.corporate.basf.com/en/investor/news/mitteilungen/pm.htm?pmid=1187&id=egb01997Lbcp2D
C, accessed at 29 August 2006; Business Communication Company (2003) press release on The
Global Market for Vitamins in Food, Feed, Pharma and Cosmetics, 15 July 2003,
http://www.bccresearch.com/editors/RGA-096N.html, accessed at 29 August 2006
554
Industry experts and BASF (2003) A big step forward in the extension of BASF’s vitamins business, a
press release by BASF, 10 November 2003, downloaded from
http://www.corporate.basf.com/en/investor/news/mitteilungen/pm.htm?pmid=1187&id=egb01997Lbcp2D
C, accessed at 29 August 2006
555
556
557
Bogue R. (2005), Developments in biosensors – where are tomorrow’s markets?, Sensor review, vol
25, no 3, 180-18
Page 278 of 315
According to Parkinson and Pejcic (2005)558 the biosensor market was already 6 billion € in
2003 and growing at a rate of 10.4 %/yr. Environmental applications of biosensors have a
much smaller market of over € 60 million in 2006, of which 55 % in the USA, 27 % in Europe
and 14 % in Japan. The investments in biosensor R&D are larger than € 240 million per year.
Little investment in devices for analysis of environmental samples is seen; instead large investments in clinical diagnostics and drug discovery are made (Chandler, 2002)559.
Bioweapon detection might follow up the glucose sensors as a next killer application (Smith,
2006)560
The environmental biosensor revenues can be very small compared to the total company
revenues for companies that are in the chemical industry (Merck and Hach). On the other
hand, many small start-up companies have recently emerged that are fully devoted to the production of biosensors.
The environmental biosensors make up only 1 % of the world biosensor revenues. Many (if
not all) of the biosensors reported are not true biosensors (in many cases the sample is mixed
with bacteria and then the production of light is measured in a separate apparatus and/or
there is no modern biotechnology involved). In fact no commercially available true biosensors
were found. All true biosensors have only been used in academic research until now.
The impact of biosensors (bio-essays) on the analysis costs is two-fold. Investment costs
generally increase and at the same time the sample costs decrease. It should be noted that
often the biosensor is measuring the sum of toxicity of a group of compounds such as dioxins,
PCB’s, estrogens or heavy metals. For example, the conventional measurement of dioxins
involves the GC-MS detection of several different dioxin components. Then the toxicity is calculated by addition of the concentrations corrected with a relative toxicity factor. The biosensor will immediately measure the total toxicity as perceived by the organism.
Especially where GC/MS is used as a conventional technique, the biosensor can be considerably cheaper, both per sample and by investment (more than 85 %).
The market of environmental biosensors in Europe was predicted to be around € 16 million in
the 2006 (Parkinson and Pejcic 2005)561). The USA and Japan have less companies active in
environmental biosensors than the EU, but the USA has a double revenues in this field as
compared to the EU (see Section 5.2.3 of this Report). This implies that in the USA
biosensors are produced by firms that are financially larger, which may be an advantage in
further innovation of biosensors and better chances for the future. The higher revenues in the
USA will directly have a positive effect on job creation. In Japan revenues is half of that of the
EU.
In the USA the 9/11 attacks have caused an enormous investment in biowarfare and chemical
warfare detection. It is aimed to develop systems that can be placed in public buildings and in
the streets of cities to warn against biological and chemical warfare activities (Bogue, 2005,
Smith 2005)562,563. The growth of the application of biosensors in this field can be expected.
558
Chandler D.P. (2002), Advances towards integrated biodetection systems for environmental
molecular microbiology, Curr. Issues Mol. Biol. 4 pp 19-32
560
561
562
25, no 3, 180-18
563
Page 279 of 315
559
Outlook
The use of biosensors in environmental monitoring is progressing only very slowly. This can
be illustrated by the following example. BDS has developed a system where the gene for light
emission of Vibrio Fischeri is placed after promotors that are sensitive to dioxins, PCBs and
estrogens. Thus the amount of light increases with sample toxicity. The system was developed 20 years ago. It has been validated in many scientific papers. Still the measurement
is not fully adopted by the environmental agencies. It is only allowed to prove absence of dioxins and PCBs in dredgings in the Netherlands, Norway and Japan. In general companies
cannot wait for 20 yearsfor market adoption of their products without any income; BDS could
because the method was adopted by the EU to screen food (during several food pollution
crises) and because the alternative methods are very expensive.
Large future markets are expected in the biowarfare detection area. In the USA US$ 8 million
were invested in this technology in 2003 (Bogue 2005)564. The market for chemical and biological agent detectors (not necessarily biosensors) will rise from US$ 265 million in the year
2000 to US$ 494 million in the year 2007565. The US government has set targets for equipment to be developed to monitor outdoor air in cities: € 20,000 per unit, indoor air buildings:
€ 40,000 per unit, and handheld monitors: € 1,600 per piece. The government has made an
investment of US$ 40 million in 18 months to reach these targets (Bogue 2005)566. In the UK
research in these areas has started, too (Biotrace, Biral).
According to Jan Gerritse (TNO expert in microbial ecology of soil bioremediation), other
applications of modern biotechnology in bioremediation and environmental monitoring than
biosensors will continue to be rare in the next 5 years. R&D is carried out on the use of
genetically modified microorganisms to biodegrade xenobiotics in environmental samples. In
these GMOs the genes required for a complete degradation pathway are collected by adding
them, or some genes are adapted to gain a higher activity for a rate-limiting biodegradation
step. Chlorinated hydrocarbons have been the target in many of these studies. However,
introduction of these organisms in the field is not yet considered as realistic as the new
constructs will probably not survive in the field. In addition, scientists think that a large part of
genetic recombination carried out in the laboratory also takes place in nature. The second
problem, prohibition of introduction of GMOs in the environment by the authorities, seems
less serious. Some genetically modified bacteria can already be introduced in the field, and
the list of GMO allowed for application in the field will grow in future.
Jan Gerritse567 could not imagine that products made by GMOs (not the GMOs itself) such as
enzymes and vitamins get an important role in a low cost market as bioremediation, as the
costs of these materials are too high.
Several hurdles for adoption of biosensors in environmental monitoring were mentioned in
literature and during the interviews:
• Biosensor methods are not recognised, approved or prescribed by environmental bodies
(Ciucu 2002568, Mardlin569, Behnish570, Rogers 1996571).
564
25, no 3, 180-18
565
www.photonics.com
566
25, no 3, 180-18
567
568
Gerritse, J. (2006), TNO, personal communication
569
Mardlin, Expert at Remedios
570
Behnisch Dr P.A. (2006), director Commerce & marketing of Biotection Systems BV (BDS) in
Amsterdam
Page 280 of 315
• An approval of a new method for food samples is not at all accepted as an approval for
environmental samples by environmental agencies (two completely different trajectories)
(Behnish 2006)572.
• Approval (in e. g. the Netherlands) does not easily lead to an approval in the whole of
Europe (ibid).
• Current standards are protected by stakeholders inside the agencies. The new biosensor
method might find different results than current standard. The problem is how to prove that
the current standard is wrong and the biosensor is actually better (ibid). Often lump sum
toxicity results are given by the biosensor, whereas the norms are given in maximum concentrations of a large series of components (Amine 2006)573.
• The costs of biosensor development to market application are very high (Souza 2005)574;
in between US$ 10 and 20 million. Small companies cannot afford this (Rogers 2006)575.
More than 80 % of the R&D activity in this area rarely results in commercial product
(Parkinson and Pejcic 2005)576.
• Biosensors have a limited shelf and operational lifetime (Souza2005577, Rogers 2006578).
• Universities that develop biosensors are not so much interested in validation of the sen-
sors but much more in the proof of principle. And proper validation, the proof that the
method can accurately measure some component and is not disturbed by several other
components that can be expected in the sample, is essential to the acceptance by end-users. Six years is too short to develop and validate a new measurement method, to
convince environmental bodies, to change legislation and to set international norms (ISO)
(Burg 2006, personal communication)579.
5.3.4.
Summary on impact of biotechnology on the industrial sector
The impact of biotechnology has been measured through generic impact indicators for the
three fields and through specific impact indicators for ten applications. It is rather difficult to
analyse the impact of biotechnology in the industrial sector over a period of time, due to the
lack of comprehensive and reliable data. Rough estimations are only possible for single years
from the beginning of 2000 and only for some indicators.
5.3.4.1
Generic impact of biotechnology on the industrial sector
571
Rogers K.R., Gerlach C.L. (1996), Environmental Biosensors: A Status Report,
http://pubs.acs.org/hotartcl/est/96/nov/envir.html
572
Behnisch Dr P.A. (2006), director Commerce & marketing of Biotection Systems BV (BDS) in
Amsterdam
573
Amine A., Mohammadi H., Bourais I., Pallesche P. (2006), Biosensors and bioelectronics 21, 1405,
1423
574
Souza, S.F.D’, Jha S.K. and Kumar J.(2005), Environmental biosensors, IANCS Bulletin, special
issue on Environ. Biotech. 4 (1), 54-59.
skjha.net/files/Enviromental.Biosensors.a.current.perspective.S.F.DSouza.pdf
575
Rogers K.R. (2006), biosensors for enalytical monitoring,
http://www.epa.gov/heasd/edrb/biochem/intro.htm
576
577
Souza, S.F.D’, Jha S.K. and Kumar J.(2005), Environmental biosensors, IANCS Bulletin, special
issue on Environ. Biotech. 4 (1), 54-59.
skjha.net/files/Enviromental.Biosensors.a.current.perspective.S.F.DSouza.pdf
578
Rogers K.R. (2006), biosensors for enalytical monitoring,
http://www.epa.gov/heasd/edrb/biochem/intro.htm
579
Burg v.d. (2006), Expert at Biodetection systems BV (BDS)
Page 281 of 315
environmental monitoring). For bioethanol these figures are for the EU25 0.21 %, USA 2.0 %
and Brazil 13 % and for biosensors 0.007 % in the EU25, 0.006 % in the USA and 0.019 % in
environmental sector in the seven EU15 countries for which data are available was about
2.7 % of total biotechnology revenues (IBI2). The biotech-related revenues for the industrial
and environmental sector in the EU15 was estimated at about € 440 million. An extrapolation
to the EU25 was not possible as no information was available for accession countries. Data
on the biotech part of the revenues of active firms in each of the three fields separately were
not available; most companies contacted would not provide them.
of total employment is about 4 % in EU15 (IBI3). It was estimated that about 3,300 biotechactive employees work in companies in the industrial and environmental sector that apply
biotechnology in the EU15. Also for this indicator extrapolation to the EU25 was not possible.
Data for each of the three fields separately could be provided for Field 1 and Field 3. For the
‘Bioethanol as fuel’-field the number of biotechnology-active employees was set at 100 % for
bioethanol firms as all employees were considered as biotechnology-active. In 2005
European bioethanol companies employed 525 employees, US firms 5,760 and Brazil firms
11,900. In firms producing biosensors for environmental applications it was estimated that
approx. 340 persons were employed in the EU25.
The data show that the generic impact of biotechnology in the industrial and environmental
sector is still very small; in absolute and in relative figures. However, the figures are an
underestimation of the biotech-active workforce in Europe in the industrial biotechnology
applications. This is not only because data for important parts of the industrial biotechnology
are simply missing, but also because in downstream industries such as the pharmaceutical
industry, in the food, pulp and paper and textile industries enzymes are gaining importance in
the production processes.
Table 5-20 provides the overview of the generic impact of biotechnology in the three fields
and for the industrial and environmental sector.
Table 5-20:
Generic impact of industrial biotechnology
Indicator
Biofuels
Biotech-based
chemicals
IBI1: Total field-specific biotechnologyrelated GDP out of
total sector-specific
GDP
EU25: 0.21 %
EU25: NA
EU25: 0.007 %
USA: 2.0 %
USA: NA
USA: 0.006 %
Japan: -
Japan: NA
Japan: 0.0.19 %
Brazil: 13 %
NB: data for 2005
IBI2: Share of biotechnology revenues
out of total revenues
of biotechnologyactive firms
Industrial and environmental sector:
EU15 2.7 %
EU25: NA
EU25: NA
EU25: NA
USA: NA
USA: NA
USA: NA
Japan: NA
Japan: NA
Japan: NA
Brazil: NA
IBI3: Total
Industrial and environmental sector:
EU15 4 %
Page 282 of 315
Indicator
Biofuels
Biotech-based
chemicals
employees out of
total employment in
firms, in the relevant
field.
EU25: 525-100 %
EU25: NA
USA: 5 760-100 %
USA: NA
EU25: 340
employees
Japan: NA
Japan: NA
USA: NA
Brazil: 11 900 100 %
Japan: NA
NB: number of employees in bioethanol factories in 2005
- all employees are
considered to be
NA: no data available
5.3.4.2
Specific impact of biotechnology on the industrial sector
The ten applications for which the specific impact has been measured are: fuel bioethanol,
biopolymers, Cephalosporin, enzymes for detergents, enzymes for fruit juice processing, enzymes in the pulp and paper industry, enzymes in textile processing, Lysine, Riboflavin and
biosensors in environmental applications. In the ten case studies data are presented that give
estimates of the economic impact of the applications in Europe, compared with USA and Japan, in a number of cases also China.
For companies that operate in more mature markets, China is an attractive place to make
joint venture manufacturing agreements. This is because of the size of its market and also because of lower wages and growing expertise in biotechnology. In a number of product groups
addressed in the case studies, Chinese firms are already very active. These include vitamins,
antibiotics, amino acids, acids, but also PLA and in the future also enzymes. Data about
China’s activities in the field of industrial biotechnology are hardly available and rather poor
and patchy.
The economic impact of biotechnology varies very much between the cases. It is relatively
high in applications where European firms have operated for a long time, and where biotechnology is an integral part of the R&D and production process. These applications include enzymes, vitamins and cephalosporin building blocks. In a number of other applications the
economic impact is relatively low such as in bioethanol and biotech-based polymers, which
reflects also that these two fields are at the beginning of their development.
Impact on production cost is a good indicator of economic impact. Biotechnological processes
have replaced chemical production mainly for reasons of reducing production cost and steps.
No hard data are available, but cost reduction has been illustrated in a qualitative way. In
cephalosporin production, new biotech-based production processes have been developed
that produce only 0.7 % of material for incineration. Compared to the old chemical processes,
they use less energy, solvents and raw materials.
Use of enzymes in sectors such as the fruit juice processing, pulp and paper and textile industries also contributes to more cost-efficient processes. Enzymes in fruit juice production
increase the yield and also quality of the product, decrease filtration and reduce filtration
problems and waste. In paper making the use of lipases has led to a substantial reduction in
pitch-related problems. In textile production catalases are used for degradation of residual
hydrogen peroxide after bleaching of cotton. In riboflavin production the introduction of a biotech-based production process has resulted in a 40-50 % reduction of costs. Almost 50 % of
all cotton bleaching liquor (batch + continuous mode) is treated with catalase. This has led to
significant reduction in overall production costs. In the case of lysine in pig feed, the market
Page 283 of 315
price of lysine has become a function of the price difference between soy bean, on the one
hand, and wheat and corn on the other hand. A high soy bean price allows a high lysine price.
Start-ups of large facilities have led to considerable price drops. As a result, large price fluctuations appear which have a dramatic effect on the profitability of lysine factories.
The production costs of bioethanol, on the basis of gasoline equivalents, are 2.3 higher than
that of gasoline. In order to stimulate consumers to use gasoline with added ethanol, the production cost (and price) difference between bioethanol and gasoline is compensated by tax
exemptions. Countries in Europe accept the higher costs connected to driving on biofuels, in
exchange for environmental benefits. Also the impact of biotechnology on cost efficiency of
biotech-based polymers is very small. Overall, the prices of most biotech-based polymers
(except for Solanyl) are still high compared to oil-based polymers, mainly due to high development costs and small capacities, but this will change when production capacities increase.
Environmental impact of biotechnology in the applications varies considerably between the
applications addressed in the case studies and also between product groups and processes
within a case study. The lysine case shows that use of lysine in pig feed led to a reduction of
nitrogen excretion: addition of 28 g lysine (5 g nitrogen) per kilogram feed reduces the
nitrogen excretion by pigs by 17 g/kilo feed. In some cases such as cephalosporin and
riboflavin, considerable saving of waste streams and reduction of the use of energy and nonrenewable resources emerge.
Page 284 of 315
III. Conclusions
1. R&D landscape and human capital
Capabilities in the private biotechnology sector are more developed in the USA than in the
EU25 or Japan. This is indicated by the number, size (measured by employment and
revenues), and ability to raise capital of dedicated biotechnology firms (DBF). However, if a
broader perspective of the sector is taken, to include not only DBFs but also other
biotechnology-active firms, the EU25 compares well with the USA. Public sector indicators
illustrate that there are more and larger biotechnology research centres in the EU compared
to the USA. A clear EU strength is observed in human capital for life sciences as indicated by
the number of PhDs in life sciences per population.
Patent indicators confirm the strong position of the USA in biotechnology. In particular there is
a stronger focus of the USA on biotechnology (indicated by the share of biotechnology patent
applications in all patent applications) compared to the EU25 and Japan. China is an
interesting case with very high patenting activities in biotechnology during the period 19992001, mainly by one company. South Korea, as another emerging economy, also increased
its biotechnology patenting activities considerably during the last ten years. However, this
reflects mainly a general increase in patent applications from this country, and it should be
noted that biotech patents represent a constant or even decreasing share of all patents. In
terms of specialisation, South Korea has a comparable focus on biotechnology as the EU.
Patenting activities in Singapore indicated an increasing focus on biotechnology. The share of
biotechnology patent applications in all patent applications increased from 6 % to 9 % during
the last ten years.
There is a general trend of decreasing patenting activity after the period 1999-2001 in most
regions. Patenting activity in all regions is mainly focused on health applications. This trend is
most pronounced in the USA, however the differences to the EU25 are small. Industrial
biotechnology is the second largest field followed by agro-food applications. Again,
differences between the EU25 and the USA are small indicating a similar specialisation
pattern. Among other countries India, Japan and Russia seem to have a rather strong focus
on industrial biotechnology. There is a general trend to increasing patenting activity in generic
(platform) biotechnologies pointing to the significance of generic technologies which are not
linked directly to a specific applications field.
The share of biotechnology patents among all patents in each application field indicates clear
regional differences in the significance of biotechnology in each sector. In all three application
fields biotechnology is most important in the USA. Differences between the USA and the
EU25 are most pronounced in industrial applications where the share of the USA is about two
times the respective EU value over the total period considered. Obviously the importance of
biotechnology for such applications has been acknowledged much more in the USA compared to the EU25. However, in the most recent period the EU25 seems to catch up.
The analysis of patent applications for emerging fields (microarrays, stem cells (human and
animal), RNAi, cloning, gene therapy) indicates that the USA have considerably larger capabilities in these technologies than the other regions. The EU is following in front of the other
regions considered. In recent years patent applications are decreasing in number. In the
EU25 this trend is not as strong as in the USA. Within emerging fields we observe a similar
specialisation for the USA and the EU, both focus on gene therapy.
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Regarding the other countries considered, China is the best performing country. China concentrated a large share of biotechnology patenting activities on emerging fields and in particular on cloning and microarray technology. Even though the patent volume from Japan is
much smaller than in the USA and the EU25, the trend shows that inventing activities in these
fields keep increasing. India, Singapore and South Korea are increasingly active in these
fields as well. Stem cell research and gene therapy research are the largest emerging fields in
these countries in terms of patent applications. However, the patent volume compared to the
USA and the EU25 is very low.
The analysis of publication activities in biotechnology indicates that the USA and Japan have
a stronger focus on biotechnology than the EU25. However over the last ten years the
absolute numbers of publications are similar in the EU25 and the USA. The distribution of
scientific activities across the different application fields is quite similar between the EU25, the
USA and Japan with pharmaceutical/health applications gaining the largest share of
publications.
In summary, data indicate a well developed biotechnology R&D landscape in the EU compared to other regions, EU strengths are the availability of human capital and scientific
activities as measured by publications output. However, public funding of biotechnology is
much lower in the EU compared to the USA (on a per capita basis). Since publications output
in the EU is similar to the USA, the funding figures seem to indicate that the EU is more
efficient in the use of public funding. As the comparability of funding data between EU and the
USA is limited due to different methodological approaches, this observation should be
considered as a first indication which would need more detailed analyses of the US situation.
On the other hand in the face of dynamic developments in emerging economics it seems
necessary for the EU to intensify public funding activities for biotechnology in order to keep
and further improve its current position. Private sector biotechnology capabilities are still more
developed in the USA. Patent indicators also demonstrate a stronger focus of the USA on
biotechnology in general and on emerging biotechnology fields in particular.
2. Adoption of modern biotechnology
The analysis of the adoption of modern biotechnology by three main application fields (human
and animal health, primary production and agro food, industrial applications) leads to two
main conclusions:
1) In all application fields we observe a broad penetration of modern biotechnology.
2) The EU has improved its international position and gained market share in comparison to
the USA during the last ten years as outlined for specific indicators in the sector specific
discussion. However, we also observe pronounced differences between the three application
areas in terms of general level of adoption, and also in terms of differences between the EU
and other regions.
The highest adoption rates are observed in the human and animal health field, followed by
industrial applications, and primary production/agro food. With respect to human and animal
health applications the USA are leading the EU25 in terms of adoption. However, the EU25
has been catching up considerably during the last 10 years. In industrial applications
pronounced differences between these three subfields were found. In energy applications
adoption rates are much higher in the USA and in particular Brazil compared to the EU. In
environmental applications of biosensors the EU and the USA have adopted modern
biotechnology at similar rates. In primary production and agro-food applications some
subfields show much higher adoption rates in the EU, but in general there is a low level of
adoption. The areas of high adoption are mainly applications in plant, livestock or fish
breeding and propagation, where revenues derived from modern biotechnology applications,
such as marker-assisted selection (MAS), can reach more than 30 % of total revenues.
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Human Health
The adoption of modern biotechnology by the health care industry (as indicated by shares of
companies using modern biotechnology, market shares and number of modern biotechnological products in clinical development) increased considerably during recent years. It should
also be noted that the health care industry is global and most of the world’s major companies
have activities in many countries world-wide. An ‘EU’ company is one whose headquarter is
located in the EU25. Currently in the EU modern biotechnology products are achieving
adoption rates of 8.2 % of revenues of all pharmaceuticals (USA 11.2 %, Japan 4.1 %). Biopharmaceuticals are the most important group in health applications (European market
€ 11.3 billion in 2005) followed by vaccines (European market € 1.56 billion) and molecular
diagnostics (European market approx. € 161 million in 2004).
In general the EU has a strong position in terms of biopharmaceuticals launched. Starting with
an adoption rate of 6 % of all pharmaceuticals launched in 1996 this rate increased to 11 % of
all pharmaceuticals introduced into the market in 2005. The USA showed the same adoption
rate in 1996 (6 %) with a sharp increase up to 24 % in 2001. However, in 2005 the share of
biopharmaceuticals launched in the USA had declined to 6 %. Additionally it was observed
that the annual growth rate (CAGR) for the biopharmaceutical market in the EU25 reached a
similar value as the USA (20 %). Japan was third with only 12 % growth in 2002-2005. This
seems to indicate that the position of the USA as the preferred market for biopharmaceuticals
is weakening, while the European market is becoming more important.
A particular European strength is vaccines while the USA dominate biopharmaceuticals such
as growth factors and recombinant interleukins/interferon. The relevance of diagnostics as a
field of activities for biotechnology companies is similar in the EU 25 and the USA which is
(both 12 % of all identified biotechnology companies). However the USA dominate the sector
in terms of numbers with nine US IVD companies.Three companies among the top 15 global
companies have their headquarter in the EU25, three in Japan.
Biopharmaceuticals have a similar significance in the clinical developmental process of
pharmaceuticals in the EU25 as the USA (approx. 11 % of all clinical projects). However,
biotechnology also has an "indirect" influence on the drug development process, in the sense
that drug development uses biotech-derived knowledge about disease mechanisms and drug
targets. If this contribution of biotech is also taken into account, it can be concluded that
nowadays pharmaceutical drug development is based nearly 100 % upon modern
biotechnology. This is equally the case in Europe and the USA.
Europe’s competitive position as a user of modern biotechnology in the pharmaceutical sector
was assessed by comparing the share of imports of biotechnology products in those groups
of goods where information was available: this shows that the share of biopharmaceutical
imports out of all pharmaceutical revenues decreased in the last ten years. Obviously, Europe
is becoming less dependent upon the import of US biotechnological products which indicates
an improvement in Europe's competitive position.
In the case of the adoption of diagnostics, biotechnological methods are steadily penetrating
"classical" diagnostic companies 580as was the case with biotechnology in the pharmaceutical
industry. While there are important major diagnostics players in the EU25 (e. g. Bayer) there
are more mid-range and large diagnostic companies in the USA.
Within the diagnostics segment genetic testing services is mainly carried out in the public
sector, and currently there is no significant market for private companies. On the other hand,
adoption of modern biotechnology in this field by clinics is proceeding rapidly as indicated by
the high rate of testing practised in relation to known tests in the R&D stage. Approximately
every second known polymorphism is testable in the clinical context. Accessibility of
biotechnology diagnostic knowledge in the EU25 and the USA is the same.
580
This was taken from estimates outlined in expert consultation with diagnostic industry associations
Page 287 of 315
In the case of novel therapeutic approaches (based on gene therapy, cell therapies, tissue
engineering) the EU25 has a weaker position than the USA in terms of adoption. With respect
to gene therapy we observe an improvement of the European position as indicated by the
growing share of gene therapy trials in all clinical trials since 1996 reaching the US level in
2005. In emerging applications such as stem cell-based or RNAi-based therapies, adoption in
R&D in the EU25 is considerably lower than the USA. Regulatory and ethical issues regarding
these therapies have obviously been a significant factor in EU activity. On the other hand, the
absolute adoption, in particular in the case of RNAi, on a world-wide level is still rather low so
that there is still an opportunity for the EU25 to make a significant contribution to this field.
Veterinary health
In veterinary health biotechnology is widely used, so in general there is high adoption in
appropriate product areas. This can be seen from the increase in approvals of biotech-based
vaccines and other products by EMEA. However, in this sector companies are very reluctant
to provide detailed information about their use of modern biotechnology due to presumed
problems with end-user acceptance.
Another difference to the human health sector relates to the market situation. The veterinary
health sector is only 3 % the size (monetary market value) of the human sector. In the market
for veterinary products for farmed animals, margins are much lower compared to the human
sector. Accordingly, there are fewer incentives to invest in costly biotech-based R&D
activities, or in development of high-cost products. For this reason molecular diagnostics and
therapeutics based on modern biotechnology play only a minor role. The emphasis is mainly
on disease prevention through vaccines and therapeutic feed-additives. Antibiotic usage for
this purpose is declining due to regulatory restrictions and consumer pressure.
A different situation is observed in animal vaccines. This is the most important application
field of modern biotechnology in the veterinary sector. The vaccine market is 20 % of the
global animal health market. Two reasons can be put forward to explain these peculiarities of
the animal vaccines market. Firstly, there is a strong need for novel vaccines and modern
biotechnology in many cases offers the only option to develop such products. The lower
regulatory hurdles in the animal sector have also allowed companies to develop products
using technologies which are not yet used in the human sector. Examples include vector vaccines, attenuated gene-deletion vaccines, and DNA vaccines.
From a company perspective the EU is well represented in the global animal health market:
among the top 10 companies there are four EU companies.
Primary production and agro-food
Compared to the health care sector it was very difficult (and finally impossible) to collect all
comparable quantitative adoption indicators. Two main reasons have to be considered in this
context:
• As already worked out in detail in the feasibility study of this project (see task 1 report581),
there are significantly less data published with respect to adoption of non-GMO582 applications biotechnology in primary production and agro-food in the EU as well as for single
Member States compared to the health care sector. This relates in particular to quantitative data (e. g. number of companies, revenues, employees) as well as the current and
future product pipeline of the companies.
• In order to reduce this data gap, several surveys were initiated within this project. Many
companies and industrial associations were requested to provide information concerning
the different adoption indicators. However, the companies were hesitant and in major fields
(e. g. seed breeding, plant propagation, animal breeding) unwilling to provide information
581
582
http://bio4eu.jrc.es/documents/Bio4EU-Task1.pdf
genetically modified organism
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e. g. related to revenues, cost structures and – in some cases – employees in non-GMO
biotechnology applications. This was true both for written surveys and for oral or telephone
interviews. Major reasons mentioned by the companies were lack of the requested data in
the internal data management and documentation system, strict confidentiality rules on the
requested information, as well as fear of loss of competitive advantage if such data were
published. The corresponding low response rate of the surveys and the very scattered
character of the data which could be collected within the project did finally not allow calculation of the suggested adoption indicators for the EU25.
As a general measure of the adoption in this sector the share of biotechnology-active companies out of all companies583 (less than 0.3 %) indicates a rather low level in particular compared to the health sector. This general low adoption rate seems to be specific to the application field and not due to regional differences, since we observe similar low levels for the USA
and Japan. On the other hand, for specific applications such as MAS in plant breeding, or micropropagation in horticulture, we observe high adoption rates by the few large companies
which are dominating the respective markets.
From published statistics we were not able to draw any conclusions on the contribution of
non-GMO modern biotechnology to the competitiveness of European agriculture. Indeed,
there was no indication of an overall trend in the competitiveness of European agriculture as a
whole.
Quantitative data were particularly difficult to obtain on the adoption of modern biotechnology
in molecular diagnostics. However, we could gain evidence indicating a rather low adoption
rate (ranging between 1 % and 10 %) of all diagnostic tests performed by retailers and less
than 1 % among organisations involved in natural resource management. The latter figure is
consistent with data from natural resource managers themselves – in such cases where tests
are used, they are one-off research tools. Food processors and supermarkets tend to contract
out diagnostic testing to small specialist laboratories.
Considering the adoption of modern biotechnology in livestock breeding and propagation, we
have a small amount of information indicating that the percentage of total revenues from MAS
was 23 % within the EU, and 33 % outside the EU. Of the companies surveyed, 63 % were
based in Europe, and 5 % of these worked on biotechnology. Total revenues from the companies surveyed were € 742 million, approximately 50 % of which was generated in Europe,
32 % from the sale of biotechnology products and services – a high figure relative to the
number of employees.
In fish and shellfish breeding and propagation the percentage of total revenues from MAS in
the EU was 29 % for fish and 2 % for shellfish. For sex and/or ploidy manipulation, the percentage of total value generated for fish within the EU was 44 %, and for shellfish 20 %. The
organisations who responded to the questionnaire employed 1,311 people, 93 % in the EU,
and only 5 % worked on biotechnology. Most of the revenue from MAS in fish was generated
within the EU from revenues of salmon. The fish and shellfish sector is thus considerably
smaller than the livestock sector and has lower percentages overall of revenues arising from
biotechnology-related techniques and fewer employees working in these areas.
Within primary production and the agro-food field, non-GMO biotechnology is generally more
adopted in plant production than in animal-related fields, mainly due to biological and
technical reasons. In plant production non-GMO biotechnology has a rather high relevance in
breeding of major agricultural crops (e. g. maize) with high-volume seed markets within the
EU and globally. As illustrated by the case of MAS in maize breeding, there is a limited
number of mainly multinational companies which have significant market shares. Due to the
resulting strong competitiveness in the specific market, the scale and duration of the
investment required, and the considerable risks involved, all of these companies apply MAS
583
including food processors
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in plant breeding. MAS significantly reduces the time required in breeding and launching a
specific new variety. Rather high-volume seed markets are necessary to give enough
incentive to companies to invest in the specific equipment, higher expertise employees and
increased running costs of MAS. This added expense can be more easily realised by largescale multinational seed breeding companies than by small companies. Another effect of the
higher investment cost is that more and more companies tend to concentrate their breeding
programmes on major agricultural crops with world-wide relevance. This is a process which is
expected to continue in future.
Industrial production
The adoption of biotechnology in the production and conversion of energy, the production of
bio-based chemicals and the production and use of biosensors in environmental applications
has been measured by five adoption indicators. Data availability for the three fields differ
considerably. The energy field (as a public sector) is presented best: for all five indicators
data could be collected and the performance of the EU25 could be compared with the USA,
Japan and Brazil. Bio-based chemicals represents a diverse group including biopolymers,
enzymes, antibiotics, acids, amino acids, etc. Data available for these product groups is much
patchier, so only a few indicators could be covered. For the biosensor field, where actual
adoption appeared to be rather small, on the basis of a restricted number of sources and by
consulting experts estimates could be provided for four of the five indicators.
The total number of companies that are active in the EU25 in the three fields together is at
least 377. For the bioethanol subsector this is 12% of all liquid fuel producing companies.
Com-pared to the USA and Brazil (54% and 96%) this is rather small. Japan is not active in
bioethanol production. For the other two fields the shares are even smaller: the biotech-based
chemicals producing companies form only 0.5% of all chemical companies in Europe and the
biosensors companies only 1.4% of all companies producing tests for environmental monitoring.
The USA production of bioethanol is on a much larger scale (95 companies producing 14.4
million tonnes, in 2005) than in Brazil (340 companies producing 11.9 million tonnes in 2005).
In the EU25, 16 companies produced 750 000 tonnes in 2005. On the basis of the production
volumes data regional distribution figures could be calculated showing that the EU25 only
produces 2.6% of the world production. On the basis of sales figures the contribution of EU is
3.6% (prices in the EU25 and USA are higher than in Brazil). End-users in terms of gas filling
stations could be calculated as % of total liquid gas filling stations (the EU25/USA/Brazil:
8%/30%/100%). Import to consumption values for bioethanol as fuel are in the EU25 0.13%
and in the USA 0.062%. Brazil’s production is sufficient for domestic consumption.
For the biotech-based chemicals field, data on relative share of sales are only available for
the EU25 for the bio-based chemicals (2.5% of total chemical sales). No data for the biotechbased chemicals field on other adoption indicators were available.
For the biosensors use in environment sales for the EU25, the USA and Japan it is estimated
at approx. 0.7%, 0.56% and 0.18% of total sales of tests for environmental monitoring. The
regional contribution as share of the total world sales of biosensors for environmental
applications are estimated at 27% in the EU25, 55% in the USA and 14% in Japan.
General conclusions on the adoption of biotechnology in industrial production can not be
made as important data sets (for instance on production volumes and sales of biotech-based
chemicals for the three regions) are not available. Conclusions for each of the fields
seperately, are that Europe’s position in bioethanol production (on the basis of the EU25 data)
is still very weak, although it has improved during the last six years. On the basis of data on
number of companies and regional production figures it might be concluded that Europe has a
firm position in the field of biosensors for environmental production.
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3. Impact
General observations
The impact of modern biotechnology was analysed within the three categories economic,
environmental, and social impact. In all of the application fields considered, impact was
assessed using generic indicators measuring biotechnology's contributions to GDP, production, revenues and employment. However the impact assessment turned out to be extremely
difficult due to lacking data, incomplete and incompatible statistics and differing definitions of
biotechnology and biotechnology-related economic parameters. On the other hand, we were
able to develop a set of very meaningful impact indicators which in principle would be well
suited for monitoring the impact of modern biotechnology on economy, society and environment. Accordingly, in order to improve this situation it would be necessary to advance the statistical basis for commercial and public activities based on modern biotechnology. Ongoing
efforts of the OECD and several national statistical offices are important steps towards this
end.
The case study approach proved to be the best way to obtain detailed information on the impact of the use of modern biotechnology in the various application fields. However, this
approach revealed some general limitations: on a company level in most cases no differentiation between biotechnology and non-biotechnology activities is made in the internal
accounting systems. Accordingly, for companies it is very difficult if not impossible to provide
detailed information e. g. on biotechnology-active employees or biotechnology-related revenues. On the other hand this is also an indication of the state of diffusion of modern biotechnology: companies no longer consider biotechnology as something particular which would
need specific accounting. Rather, it has become an integrated tool of a company's technological portfolio.
Human health
The general impact of applications of modern biotechnology in the human health sector is
difficult to analyse over a period of time due to the lack of comprehensive and reliable data.
Rough estimations are only possible for individual years in the beginning of 2000 and
dedicated biotechnology companies. The general trend shows that the EU25 lags behind the
USA in terms of economic and employment effects. For Japan hardly any information is
available. Considering different biotechnology application fields there is a stronger focus in
the USA on health care applications compared to the EU25. This is illustrated for example by
health-specific revenues which account for 87 % of total biotechnology revenues in the USA
and only for 64 % of total biotech revenues in the EU25. On the other hand, this finding also
indicates that biotechnology has a broader application base in Europe compared to the USA:
More fields are contributing significantly to the overall impact.
Within health care applications the overall economic impact of European biotechnology is
1.40 % of total specific GDP, which is only half the rate of the USA. Here health-care-specific
biotechnology contributes to 2.87 % of total health care GDP. A similar situation is found for
the production: in Europe biotechnology accounts for 1.3 % total health production compared
to 2.5 % in the US companies.
These differences between Europe and the USA are also reflected in a higher impact on employment. Whereas biotechnology contributed to 0.4 % of total health sector employment in
Europe, in the USA biotechnology-related staff in the health sector are calculated to reach
approximately 1 %. On the level of the biotechnology sector, biotechnology employees in the
health field contribute to 65 % of all biotechnology employees; the USA reaches with 79 % a
slightly higher share.
An important impact dimension of the use of modern biotechnology in health applications is
the cost-benefit ratio. The exploration of this dimension within the different case studies
clearly indicates that additional cost-benefit studies are required for consistent conclusions on
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cost-benefit. This aspect is of increasing relevance for the reimbursement and market situation of new drugs. The large differences between these cost-benefit studies demonstrate that
the data used to describe benefits and to estimate costs (direct and indirect), the assumptions
used, and the method of extrapolation and economic modelling have a considerable impact
on the results of health outcome studies. This is well illustrated by the case of multiple sclerosis. In order to achieve reliable cost data, standardisation of economic modelling will be necessary to evaluate properly the economic consequences of new and expensive therapies in
multiple sclerosis
Both insulin and hepatitis B are examples of a complete transition from a conventional therapeutic or preventive regime to a biotechnology-derived approach. Both also illustrate a
significant economic and social impact of biotechnology. Currently innovation in these cases
is more concerned e. g. with easier administration of the products or altered pharmacological
properties. Future impact is largely influenced by frame work conditions such as
reimbursement and national health strategies (e. g. vaccination policy).
In the case of molecular diagnostics (illustrated by the cardiac diagnostics case study) the EU
has some big players (mainly Roche) but there are more active companies in the USA in this
field. In addition, it would appear that US clinics have been faster in taking up cardiac diagnostics than those in the EU. It seems that the US health system, which is organised in very
cost-conscious HMOs584 is taking the ‘big picture’ on the cost benefit of these products, while
many EU clinics are only comparing the cost of the new products with the ‘old’ clinical
chemistry assays, which are very cheap, but do not provide comparable clinical information.
The case study on therapy with glucocerebrosidase illustrates the benefit of biotechnology to
EU health care. The availability of glucocerebrosidase has a life-changing benefit for the
1,750 EU patients as there was previously no therapy option. However it also illustrates the
strong impact of legislation on the introduction of biotechnological products. Due to the
(financial) incentives in the early 1980s, the vast bulk of activity in the orphan drugs area is in
the US, although the EU is now benefiting from the placement of certain orphan drug
manufacturing activity in the EU.
Primary production and agro-food
Generic impact indicators
From the available data we conclude that in 2004, the UK had the largest total biotechnologyrelated revenues (around € 724 million) of biotechnology-active firms in this sector, followed
by Belgium, Germany, Italy and Spain. France and the Netherlands showed the lowest biotechnology-related revenues. The proportion of biotechnology-active employees in the agrofood sector out of the total number of employees in this sector is between 0.6 and 1.3 % when
farm employees are excluded.
Survey-based data
Surveys were conducted of companies and organisations involved in molecular diagnostics
and vaccine development (Foot and Mouth Disease diagnostics; BSE diagnostics; Pseudorabies vaccine; Salmonella testing; and GMO traceability), and in animal and plant propagation and multiplication (MAS in pigs; MAS of major crops; cattle propagation; fish propagation;
584
HMO = Health Maintenance Organisation. A health maintenance organisation (HMO) is a type of
Managed Care Organisation (MCO) that provides a form of health insurance coverage in the United
States and Switzerland that is fulfilled through hospitals, doctors, and other providers with which the
HMO has a contract. Unlike traditional indemnity insurance, care provided in an HMO generally follows
a set of care guidelines provided through the HMO's network of providers. Under this model, providers
contract with an HMO to receive more patients and in return usually agree to provide services at a
discount. This arrangement allows the HMO to charge a lower monthly premium, which is an advantage
over indemnity insurance, provided that its members are willing to abide by the additional restrictions.
(www.wikipedia.org)
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and micropropagation in horticulture). Given the very varied nature of the cases, it is not possible to generalise across the different examples in discussing the economic, social and environmental benefits for Europe of the introduction of modern biotechnology-based applications.
Molecular diagnosis and vaccine development
1.
For molecular diagnostics and vaccine development, the need for the technology was
dictated by:
2.
Government-required on-going monitoring schemes as in BSE diagnostics or GMO
traceability
3.
Government needs to be prepared for a disease outbreak, as in foot and mouth diagnostics
4.
Government driven disease eradication schemes, as in pseudo-rabies or
5.
Industry requirements to ensure food safety, linked to government-run monitoring systems, as in Salmonella testing which greatly increases the speed of testing although it
has little overall impact on its accuracy
Thus in areas related to molecular diagnostics and vaccine development it is very often
governments that take the lead in creating and in closing down commercial opportunities for
companies. Where we had an indication of the size of the market and the numbers employed,
these were often rather small niche markets. However, with BSE diagnostic tests and pseudorabies vaccine development there has also been an increase in trade in meat and meat
products between EU countries and internationally, providing a significant indirect economic
benefit.
Innovation theory suggests that creating a favourable regulatory framework could be one
opportunity to support early adoption of a new technology and its subsequent penetration.
One example in this context could be the case of GMO testing in food in the EU. However,
the analysis showed that the existing legal requirement in the EU and the required testing for
GMO ingredients in food currently only leads to additional costs for the food and feed industry
but does not offer any significant advantage for the test kit producers and diagnostic
companies.
Social impacts from the adoption of modern biotechnology in the area of vaccines and diagnostics include a decline in human exposure to disease organisms. In relation to the traceability of GMOs, the apparent public need for reassurance that food or feed products are below the defined threshold of GMO adventitious presence will be satisfied, but GMO testing
cannot be regarded as a factor which could offer specific incentives to the companies in a
sense that the results could be positively used e. g. in the marketing of the respective food
products. In the case of the genuine risks presented by BSE, BSE testing is likely to contribute to an increase in social acceptance of meat products in EU. For Salmonella testing
there will also be an improvement in the burden of disease in animals and humans.
Animal and plant propagation and multiplication
The economic impact of new biotechnology on factors like revenues and employment is much
greater in plant and animal propagation than in diagnostic tests and vaccines, although we
were not able to quantify this difference.
For MAS in pigs there seems to be a significant impact on the revenues, and the international
competitiveness of the European companies producing breeding stocks. Furthermore, there
are additional indirect effects on the profitability of the farming enterprises that use the
breeded animals, although there was a suspicion that the companies involved in this area
were exaggerating the role of MAS. Because of the highly pyramidal nature of the breeding
system, the number of staff directly involved in the use of the new biotechnology techniques
is, however, relatively small. Similarly, for embryo technology in cattle breeding and producFramework Service Contract 150083-2005-02-BE
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tion, the impact of innovative biotechnology is considerable, but this occurs at the very top of
the breeding pyramid, employing relatively small numbers of staff. The EU is the world’s
leading milk producer and the second largest beef producer. The very considerable increases
in efficiency of production in milk and beef production in Europe are closely related to the impact of embryo technology.
For maize, MAS is widely used in Europe, mainly to develop resistance to pathogens or to low
temperatures and drought and it is regarded as a necessary component of a company’s profitability mainly due to the reduced time required for the breeding process. In large companies
almost 100 % of revenues is from maize produced using MAS, probably less in smaller companies. In order to assess the future role of MAS in plant breeding, it is interesting to note that
some seed breeding companies regard non-GMO biotechnology approaches such as MAS as
an alternative to genetic engineering of plants. This is particularly so if genetically engineered
agricultural crops cannot be commercialised within the EU. They particularly highlight “the
silent character” of this technology which does not lead to such high public opposition as genetic engineering and is also not in the focus of opponent groups.
European aquaculture is on a limited scale compared to terrestric animal production, although
the species involved (salmon, trout and oysters) are relatively high value. Early difficulties in
commercialising modern biotechnology techniques have delayed the eventual uptake of this
technology. Genetic improvement through selective breeding is the technique most likely to
be adopted in salmon farming. Ploidy and sex manipulation techniques are the ones most
likely to benefit rainbow trout development. For the Pacific oyster, triploidy is currently limited
to a few pioneering companies. There is a large potential gain from genetic improvement in
European fish production, but costs are currently inhibiting uptake by some companies.
Micropropagation has had a high economic impact in horticulture, occupying more than 50 %
of employees in 73 % of the firms, although the accession of new Member States has reduced these figures slightly. Indeed, micropropagation is claimed to be essential to the running of a competitive horticultural business. Considering the future adoption of modern biotechnology in the horticulture business, some specific market features of this sector need to
be taken into account. In such small-volume markets no high investment in specific equipment or in know-how of employees are affordable for the companies active in these fields.
The major activity in these markets is by SMEs. In this sense relatively low “entrance barriers”
with respect to specific equipment, regulatory requirements and know-how exist in such
niche-type markets. Due to these relatively low “entrance hurdles” and the still labour-intensive character of micropropagation, such fields tend to come under cost pressure from international competitors located within and outside the EU to which companies react with (partly)
relocation of production processes.
The high impact of (non-GMO) modern biotechnology on some important applications in primary production and agro-food also indicates that the focus of public discussions on GMO
seems to be missing important aspects of the application of modern (non-GMO) biotechnology.
MAS in pigs has contributed to fewer animal deaths due to stress and disease and is also
being used to deliver improved meat quality. Likewise in milk and beef production, maintaining a competitive industry in Europe ensures that Europe’s high standards of husbandry, including the development of approaches that fit with sustainable land use programmes, are
applied to the food we consume. Embryo transfer in cattle is also a very safe way of disseminating genetic traits without risking the spread of animal diseases, and embryo freezing and
transfer provide a useful mechanism to conserve endangered species or breeds.
MAS in pigs can contribute to reduced nitrogen and phosphorus pollution by increasing
growth rate and feed efficiency and, likewise, the main environmental benefit from cattle
propagation techniques comes from the increase in efficiency of production, particularly for
milk. The plant case studies only show limited and often ambiguous environmental impacts,
not least due to the (still dominating) general goal of increasing yields in plant breeding.
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Industrial production
The impact of biotechnology has been measured through generic impact indicators for the
three fields ‘Bio ethanol as fuel’, ‘Biotech-based chemicals’ and ‘Biosensors in environmental
applications’ and through specific impact indicators for the following ten applications (case
studies). These include: Fuel Bioethanol, Biopolymers, Cephalosporin, Enzymes for
detergents, Enzymes for fruit juice processing, Enzymes in the pulp and paper industry,
Enzymes in textile processing, Lysine, Riboflavin and Biosensors in environmental
applications.
It was rather difficult to analyse the impact of biotechnology in the industrial sector over a
period of time due to the lack of comprehensive and reliable data. Rough estimations could
only be made for single years from the beginning of 2000.
Generic impact
environmental monitoring). For bioethanol these figures are for the EU25 0.21 %, USA 2.0 %
and Brazil 13 % and for biosensors 0.007 % in the EU25, 0.006 % in the USA and 0.019 % in
environmental sector in the seven EU15 countries for which data are available was about 2.7
% of total biotechnology revenues (IBI2). The biotech related revenues for the industrial and
environmental sector in the EU15 was estimated at about € 440 million. An extrapolation to
the EU25 was not possible as no information was available for accession countries. Data on
the biotech part of the revenues of active firms in each of the three fields separately were not
available; most companies contacted would not provide them.
of total employment is about 4 % in the EU15 (IBI3). It was estimated that about 3,300
biotech-active employees work in companies in the industrial and environmental sector that
apply biotechnology in the EU15. Also for this indicator extrapolation to the EU25 was not
possible.
Data for each of the three fields separately could be provided for Field 1 and Field 3. For the
‘Bioethanol as fuel’-field the number of biotechnology-active employees was set at 100 % for
bioethanol firms as all employees were considered as biotechnology-active. In 2005
European bioethanol companies employed 525 employees, US firms 5,760 and Brazil firms
11,900. In firms producing biosensors for environmental applications it was estimated that
approx. 340 persons were employed in the EU25.
The data show that the generic impact of biotechnology in the industrial and environmental
sector is still very small; in absolute and in relative figures. However, the figures are an
underestimation of the biotech-active workforce in Europe in the industrial biotechnology
applications. This is not only because data for important parts of the industrial biotechnology
are simply missing, but also because in downstream industries such as the pharmaceutical
industry, in the food, pulp and paper and textile industries enzymes are gaining importance in
the production processes.
Specific impact
In the ten case studies data are presented that give estimates of the economic impact of the
applications in Europe, compared with USA and Japan, and in a number of cases also with
China. For companies that operate in more mature markets, China is an attractive place to
make joint venture manufacturing agreements. This is because of the size of its market and
also because of lower wages and growing expertise in biotechnology. In a number of product
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groups addressed in the case studies, Chinese firms are already very active. These include
vitamins, antibiotics, amino acids, acids, but also PLA and in the future also enzymes. Data
about China’s activities in the field of industrial biotechnology are hardly available and rather
poor and patchy.
The economic impact of biotechnology varies very much between the cases. It is relatively
high in applications where European firms have operated for a long time, and where
biotechnology is an integral part of the R&D and production process. These applications
include enzymes, vitamins and cephalosporin building blocks. In a number of other
applications the economic impact is relatively low, such as in bioethanol and biotech-based
polymers, which reflects also that these two fields are at the beginning of their development.
Impact on production cost is a good indicator of economic impact. Biotechnological processes
have replaced chemical production mainly for reasons of reducing production cost and steps.
No hard data are available, but cost reduction has been illustrated in a qualitative way. In
cephalosporin production new biotech-based production processes have been developed that
produce only 0.7% of material for incineration. Compared to the old chemical processes, they
use less energy, solvents and raw materials.
Use of enzymes in sectors such as the fruit juice processing, pulp and paper and textile
industries also contributes to more cost-efficient processes. Enzymes in fruit juice production
increase the yield and also quality of the product, decrease filtration and reduce filtration
problems and waste. In paper making the use of lipases has led to a substantial reduction in
pitch-related problems. In textile production catalases are used for degradation of residual
hydrogen peroxide after bleaching of cotton. In riboflavin production the introduction of a
biotech-based production process has resulted in a 40 - 50% reduction of costs. Almost 50%
of all cotton bleaching liquor (batch + continuous mode) is treated with catalase. This has led
to significant reduction in overall production costs. In the case of lysine in pig feed, the market
price of lysine has become a function of the price difference between soy bean on the one
hand and wheat and corn, on the other hand. A high soy bean price allows a high lysine price.
Start-ups of large facilities have lead to considerable price drops. As a result, large price
fluctuations appear which have a dramatic effect on the profitability of lysine factories.
The production costs of bioethanol, on the basis of gasoline equivalents, are 2.3 higher than
that of gasoline. In order to stimulate consumers to use gasoline with added ethanol, the
production cost (and price) difference between bioethanol and gasoline is compensated by
tax exemptions. Countries in Europe accept the higher costs connected to driving on biofuels,
in exchange for environmental benefits. Also the impact of biotechnology on cost efficiency of
biotech-based polymers is very small. Overall, the prices of most biotech-based polymers
(except for Solanyl) are still high compared to oil-based polymers, mainly due to high
development costs and small capacities, but this will change when production capacities
increase.
Environmental impact of biotechnology in the applications varies considerably between the
applications addressed in the case studies and also between product groups and processes
within a case study. The lysine case shows that use of lysine in pig feed led to a reduction of
nitrogen excretion: Addition of 28 g lysine (5 g nitrogen) per kilogram feed reduces the
nitrogen excretion by pigs by 17 g/kilo feed. In some cases such as cephalosporin and
riboflavin considerable saving of waste streams and reduction of the use of energy and nonrenewable resources emerge.
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