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    Southeast Asia
     Apr 28, 2005
Malaysia's biotech folly
By Sabrina Ooi

PENANG, Malaysia - There are fears that the Malaysian government is attempting another bad swing in the biotechnology game by welcoming clinical trials outsourced by pharmaceutical giants, where monitoring mechanisms and regulations for research could be relaxed to spawn domestic biotech ventures.

On Thursday, the government is due to unveil a national policy that will earmark biotechnology - which harnesses the science of genetics to develop medicines - as the next engine of growth for the country. This national biotech policy comes after the disappointing Bio Valley project venture, which started in 2001 inside Malaysia's US$3.7 billion Multimedia Super Corridor. Malaysian officials were hoping to attract $10 billion in foreign and local investment in the biotechnology industry in 10 years - a tall order for a small domestic scientific community.

Four years later, indications are that Bio Valley has been a dismal failure, with only three companies signing up to establish plants. Now there is much speculation as to what the government has in mind. "We understand it [the draft policy] was essentially farmed out to a private consultant and even among government ministries and agencies, the consultation has been unsatisfactory," said Chee Yoke Ling, legal adviser for Third World Network - a coalition of non-governmental organizations in the developing world. "From the public statements made by Malaysia's minister of science, technology and innovation, Dr Jamaludin Jarjis, it is not clear exactly which part of the biotech world he is aspiring to."

In giving broad-brush glimpses of the policy, Jarjis had said, "We will discuss with the Ministry of Domestic Trade and Consumer Affairs for a complete review of IP [intellectual property] laws. Otherwise, foreign biotechnology giants will not outsource their clinical trials in our country."

It appears that Jarjis may want to follow in the footsteps of India, where monitoring mechanisms and regulations for research are relaxed to encourage the setting up of contact research organizations (CROs) to take up the business of experimenting with new drugs for pharmaceutical giants. Clinical trials performed on humans, animals or cells are estimated to cost only one-tenth in Asia what they do in the United States and Europe.

A report by Sandhya Srinivasan of the India Resource Center indicates that in the case of India, the middleman and CROs, for instance, could collect up to $2 million while spending only $20,000 on initial research outlay. He said the huge profit margin was made using the poor and sick of India "as raw material". The report goes on to add that unethical practices by drug companies and CROs are common, and the ones bearing the brunt are usually the unsuspecting Indian people in areas where the clinical trials are conducted. "Mostly, patients do not know that they are on experimental drugs," the report claims.

The 1964 Helsinki Declaration on ethical principles for medical research involving human subjects, in an updated note added last year, states clearly that "at the conclusion of the study, every patient entered into the study should be assured of access to the best proven prophylactic, diagnostic and therapeutic methods identified by the study".

But the Indian Resource Center report explicitly points out that most of the time these patients are shortchanged. "There is no guarantee that the drug will be made available post-trial," it states. Critics are concerned that the same thing could happen in Malaysia should the country take this biotech route.

Jamaludin's promise to have a one-stop agency to cut the red tape for foreign biotech companies has also created fear among certain quarters. Beth Burrows, president of the Edmonds Institute - a US-based public-interest group that looks into biosafety issues - cautioned that turning off the alarm bells just to invite investment from multinational biotech companies is tantamount to courting disaster. "Bravo Malaysia, if it takes the route of biosafety research. Good regulation is efficiency in the long run - it can help a country to have safe, dependable products on the market, build trust with consumers worldwide and thereby sustainable markets, and avoid human health and environmental disasters as well as long-term cleanup and litigation costs."

But Malaysia's neighbors could thwart the country's dreams by putting up strong competition for investment in the highly capital-intensive biotech industry. Australia, Japan, South Korea and China have all introduced new legislation and provided funding to jump start their life-science industry. Singapore, for example, set aside $2 billion to offer as incentive to attract leading research corporations and to invest in local and foreign biotech start-ups. To bolster its universities' research capabilities, Singapore is also offering competitive salaries to attract professors from top-ranking US institutions - something Malaysia is finding difficult to do.

"Many developing countries aspire toward this goal [of having a lucrative biotech industry]. Nonetheless, they go about this without very clear specific understanding of the various aspects of the industry," said Third World Network's Chee. "It's a very risky venture, especially since public funds will be spent."

A study of 51 biotech centers in the US by the Brookings Institution revealed that it often takes a decade or more to develop biotechnology-based products, and perhaps only one in 1,000 patented biotech innovations produces a successful commercial product. The study also showed that most biotechnology firms are quite small and typically contract with global pharmaceutical firms to produce, market, and distribute successful products rather than attempting to create their own capacity to do so.

The losses, too, have been tremendous. According to accounting firm Ernst and Young, publicly traded biotechnology companies in the US lost $41 billion from 1990 to 2003. As the saying goes, the road to hell is paved with good intentions gone astray, and Malaysia's national biotechnology policy might be another headstone in a graveyard of investors' dreams.

(Inter Press Service)

Biotech investing a high-risk gamble
(Jul 31, '04)

Singapore takes biomedical road to growth (Jul 9, '04)

Biotechnology: Breeding hurdles and hype (Jun 15, '04)

Malaysia's new dream: Biovalley
(Dec 24, '03)


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