BIOTECanada highlights need for tax and regulatory changes with series of events

Canada’s largest biotechnology industry association has completed a week-long series of public events gauged to raise and improve the profile of the sector while outlining two key demands of government. BIOTECanada hopes to convince the federal recognition of US limited liability corporations (LLCs) and changes to the Canadian regulatory regime are essential for the future growth of Canadian biotechnology firms.

The campaign was highlighted by the 2nd Annual National Biotechnology Week featuring 60 events from coast to coast and the release of a poll suggesting that positive impressions of biotechnology increase with higher levels of education and income.

“We need to move because private and equity markets are drying up,” says Peter Brenders, president and CEO of BIOTECanada. “Canada needs to ensure that companies can commercialize their products here. Right now, Canadian companies are setting up US affiliates to get US venture capital investment.”

Changes to LLC legislation would bring Canada into line with the US, where they are tax exempt as opposed to Canada where taxation can be as high as 25%. Eliminating the tax, BIOTECanada argues, would allow for foreign direct investment into Canadian firms and lead to the commercialization of world class science that may otherwise be acquired by interests south of the border.

On the regulatory front, BIOTECanada is advocating several changes:

* eliminate the backlog of new technologies being reviewed by federal agencies;

* adopt patent protection measures currently in place in other countries such as a 10-year data protection clause;

* create an orphan product policy to encourage R&D for treatments of rare diseases similar to those in other nations. This would include fee waivers, expedited review times, higher tax credits and dedicated federal funding to purchase the products.

Review times have long been an irritant for both biotechnology and pharmaceutical firms. Despite improvements in recent years, BIOTECanada says they remain a problem for large and cash-strapped smaller firms, particularly at Health Canada’s Biologics and Genetic Therapies Directorate (BGTD).

There are currently 51 biologic products backlogged at BGTD, including 14 that have been backlogged for more than 400 days. BIOTECanada contends that a government target of 2007 for clearing the backlog is “unacceptable”.

Review times by the Canadian Food Inspection Agency are somewhat better but BIOTECanada says the agency must prepare itself for a new generation of agricultural biotech products, such as plant-made pharmaceuticals and industrial products, enhanced nutritional crops and transgenic animals.

“The Canadian regulatory environment lags behind. It’s slower and more complicated than other countries and progress is very slow,” says Brenders. “Adoption of technologies remains a challenge.”

Critical to convincing the government to enact changes to tax and regulatory legislation is demonstration that there is growing public acceptance of biotechnology. The BIOTECanada poll — conducted by Pollara Strategic Public Opinion and Market Research as part of a consumer perspectives survey — indicates that a majority of Canadians believe biotechnology will derive major benefits in the area of health sciences (62%), followed by genetics (46%) and agriculture (38%).

A majority of the nearly 1,300 respondents strongly or somewhat believe that biotechnology will benefit the general health of Canadians, the environment and even the Canadian economy.

Somewhat worrisome, however, is the lack of awareness among Canadians to the biotechnology in their own country. Only one in 10 know that Canada is a world leader.

“Canadian knowledge of where Canada stands ... has room to grow,” says Brenders.

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