The biotechnology industry is one of the most heavily regulated industries in the United States. Public policy issues at all levels - international, national, and local - have affected the industry, and the North Carolina biotech industry is no exception. At the state level, policy issues revolve around training and retraining North Carolina's workforce to serve the growing number of biomanufacturing facilities and absorb job losses from more traditional industries. Nationally, the rising cost of prescription medicine has become a policy issue, and the importation of cheaper pharmaceuticals from price-controlled Canada a concern. At the international level, intellectual property (IP) protection is the primary issue concerning the industry.
Education and Training for Biomanufacturing Jobs
Having an educated, well-trained workforce is essential to North Carolina's success as a biotech hub. A wide spectrum of jobs exists to accommodate people with degrees from community college certificates to PhDs in specialties ranging from industrial process control to genomics. One area that is becoming increasingly important to biotechnology in North Carolina is the area of biomanufacturing. The manufacturing of biopharmaceutical drugs will create jobs for more people with high-school education to community college degrees because such jobs require specialized training, technical skills, and certain mindsets, behaviors and procedures rather than the high educational qualifications required for research and development work.1 Industry surveys show that finding and maintaining a trained workforce is one of the top considerations by biotechnology firms in their decisions to locate biomanufacturing facilities. To stay ahead of competition, there is a critical need for new training programs to provide a qualified workforce for company expansions and for new manufacturing enterprises locating in North Carolina.
Biomanufacturing employers prefer to hire people with prior experience in the pharmaceutical industry above those that have high educational qualifications. According to the "Window on the Workplace" survey conducted by the NC Biotechnology Center, many biomanufacturing and pharmaceutical manufacturing companies are hiring each other's employees because they face problems finding qualified and experienced employees in entry-level positions.2 Ideally, workers for these positions should have basic education in the sciences and skill sets specific to biomanufacturing and pharmaceutical manufacturing that are not typically taught in traditional college courses.
Current Policies and Plans
One of the major investments in North Carolina's workforce has come from the Golden LEAF (Long-term Economic Advancement Foundation), a nonprofit formed in the wake of a settlement between the state and the tobacco industry.3 The Golden LEAF and key biomanufacturing companies have invested $64.5 million into an integrated system of workforce/hands-on training for North Carolina's biomanufacturing and pharmaceutical industries as well as for students in various institutions.4 These projects include biomanufacturing training facilities at North Carolina State University (NCSU) that simulate real plants, $19.1 million in funding for North Carolina Central University (NCCU) to create degree programs in applied process research, and another $9.4 million for North Carolina's community college system.5
The issue of training was also addressed in NC's state wide Strategic Plan for growing the state's biotechnology industry that was released in January 2004. The plan emphasized the importance of state wide biomanufacturing training networks and a system of community colleges in order to address the long-term needs of rural areas suffering from job losses in other manufacturing sectors. According to the Strategic Plan, "Three areas should be considered immediate priorities for the state's biotechnology investments: biomanufacturing; biotechnology start-ups; and statewide development."6
As of 2003, 67% of the biomanufacturing and pharmaceutical manufacturing workforce in North Carolina have a high school diploma, certificate, or AAS degree, while 27% hold a B.S. and 6% have graduate degrees (See Figure 1.)7 It is therefore realistic that employment growth in the biomanufacturing sector could offset the jobs lost in other North Carolina manufacturing sectors, but this is conditional upon workers getting retrained.
Figure 1: Current Educational Profile of the Biomanufacturing Workforce8
Community Colleges and the Bionetwork
The community college system in North Carolina has become the backbone of workforce training for the state. The Strategic Plan has recommended the state to provide sufficient resources to the community college system so that it can implement biotechnology-related programs and build well-equipped science teaching facilities in every college. This will increase the number of local options for hands-on training across the state and improve basic infrastructure for relevant science and technology education in all areas of North Carolina.
The North Carolina Community College System (NCCCS) describes its BioNetwork as "a statewide initiative that connects community colleges across North Carolina, providing specialized hands-on training, curricula and equipment to develop a world-class workforce for the biotechnology, pharmaceutical and life sciences industries."9 The main focus of the BioNetwork in North Carolina is to promote industry by upgrading the skills of incumbent workers. As part of this effort, the community colleges in the state train workers at all levels from top management to entry-level manufacturing workers. One way in which the BioNetwork prepares North Carolina's workforce for jobs in biotechnology is through the BioWork course offered at community colleges across the state. Colleges teaching BioWork creates the opportunity for workers laid off from jobs in the traditional manufacturing industries to be retrained in newer industries.
BioWork consists of "a 128-hour introductory course bringing together the basics of manufacturing technology and the fundamentals of science-two essentials for competent, entry-level technicians in biotechnology, pharmaceutical, and chemical manufacturing."10 It was developed by the North Carolina Biotechnology Center's Education and Training Program, with support (in course development) from the biomanufacturing industry, and implemented by the North Carolina Community College System. It prepares students for entry-level jobs in bioprocessing plants and is intended for high school graduates, traditional manufacturing workers who have lost jobs, or anyone interested in a new line of higher-paying jobs. These jobs have salaries ranging from $26,000 to $40,000.
Public Policy Recommendations
Currently, insufficient money is being allocated to community colleges for the training and retraining of the bulk of the workforce in biomanufacturing and pharmaceuticals. As of 2001, the community college system only received 8 cents of every dollar that North Carolina allocates to education.11 The Strategic Plan recommends $5-$15 million to be set aside for training from 2005 onwards, but that is subject to legislators' decisions.
Tax breaks and incentives are not the only ways to attract companies to invest in a place. Moreover, incentives may not be a long-term solution for attracting companies to establish themselves in North Carolina. Companies also consider the infrastructure and human resources a state has to offer. North Carolina can leverage the situation by further developing a skilled workforce and bio-infrastructure by investing more in retraining programs, K-12 education and start-up local companies. Such an investment is likely to draw companies to establish in North Carolina even without the state having to offer extremely attractive incentives.
Addressing the Problem of Uneven Development
The development of North Carolina's growing biotech industry has not been distributed evenly across the state, but rather has clustered around areas like Research Triangle Park (RTP). This can be beneficial for the biotech industry because clusters tend to facilitate a trained "out-of-the-box" workforce, specialized infrastructure, and the development of a specialized/complimentary services industry. However, it is not necessarily good for North Carolina because it only brings money, jobs, and infrastructure to one narrow and already highly developed corner of the state. This poses two major difficulties for the state.
Figure 2: Geographic concentration of biotechnology companies in North Carolina
First, the jobs North Carolina is losing in furniture, textiles & apparel, and other manufacturing industries are largely rural. These workers can't be expected to relocate to RTP midway through their lives, nor would such an influx be desirable for RTP. This means that while the biotech industry may be creating jobs for people in NC, the jobs are not being created where they are most needed. Additionally, workforce pressures may develop in the Triangle, where most North Carolina biotech firms locate. Even as under- or unemployment may persist in other parts of the state, not enough properly trained workers may exist in the Triangle and Triad to serve the biotech industry. This may force companies to relocate out-of-state workers to RTP rather than hiring local workers.
One answer is to turn the entire state into a virtual biotech cluster by loosening the resources that attract companies from their geographic location. The statewide education network discussed above is one such effort, but it is not adequate alone. Firms must also have access to the informational and infrastructural resources that would be available to them if they located in one of the geographic biotech clusters. One way of extending these resources statewide is through the North Carolina Biogrid. The North Carolina Biotech Center established the North Carolina Genomics and Bioinformatics Consortium (NCBGC) in 2000 to facilitate the research and development of "genomics, proteomics and bioinformatics."12 Shortly thereafter in 2001, an alliance between the non-profit R&D organization MCNC, the North Carolina Supercomputing Center, IBM and the NCBGC built the North Carolina Bioinformatics Grid to utilize the computing resources "sitting idle...across organizations" in order to accelerate "the pace of genomic research."13 The collaboration of researchers working on a single project is reflected in the distributed nature of accessing "hardware resources, applications, data sets and results."14
The more than 85 organizations involved in the BioGrid make up the NCBGC. These include entities from academia like the University of North Carolina system and Duke University to various bio-related companies like Biogen Idec and GlaxoSmith Kline Inc and non-profit organizations like the Research Triangle Institute.15 While these organizations modify their resources for their individual purposes, these shared resources are made available for other Consortium members to use.16 The BioGrid is based off the North Carolina Research and Education Network (NCREN) [see Figure 3]. The BioGrid Testbed links Duke University, the University of North Carolina System, North Carolina State University and the Centennial Campus to MCNC [see Figure 4]. Developers of the BioGrid were concerned with three primary elements: storage, processing and access.17 This supercomputer network needed to be able to store the vast amounts of research data securely and reliably in a decentralized fashion, yet allow for transparent data searching and dependable backup/recovery systems.
Figure 3: Distribution of the North Carolina Research and Education Network18
Figure 4: Distribution of the Phase 1 Test Bed19
Nationally, pharmaceutical companies face an increasingly hostile political environment as concerns about rising prescription prices deepen and scandals further tarnish the industry's image. The major public policy issues for biopharmaceuticals are the pressures created by rising healthcare costs and national bioethics debates. Rising healthcare costs in the context of the severely limited health coverage many Americans attain have begun to place social, political, and economic pressures on the pharmaceutical and biopharmaceutical industry. Politicians and social critics have targeted exorbitant and rising pharmaceutical costs as a major public policy issue. The pharmaceutical industry argues that it spend billions of dollars each year on research and development and must recoup that money as well as maintain incentives for further research by exploiting the monopolies granted to them by their patents. But critics have paid increasing attention to the industry's R&D record, alleging that less innovation is taking place than in the past even while R&D budgets grow. As the healthcare crisis deepens, the pharmaceutical industry is likely to face more attacks on its right to exploit monopolies granted by patents.
One attack on these monopolies comes from up north. The importation of drugs from Canada, a country whose government has imposed price controls on pharmaceuticals, is becoming more socially and politically accepted in the United States. Imported drugs cost as much as 40% less than their counterparts sold on U.S. shelves. While the United States has not manipulated pharmaceutical patent protection by setting price controls, the importation of these drugs amounts to de facto price suppression and if pursued in bulk may eventually affect the profit margins of many firms. It also indicates increasing acceptance of the practice of regulating prices, a development that would rock the industry and its inefficient R&D process.
Another public policy issue that looms for biopharmaceuticals in particular is the bioethics debate. The industry is already one of the most heavily regulated in the country, and ethical concerns about the manipulation of genetic code may continue to drive this trend. This is an issue that is most likely to effect biotech research, a great deal of which happens in NC's universities and labs.
At the international level, IP protection is the primary public policy issue. As an industry that poured $19.8 billion in 2005 into research to discover and develop new compounds, the biotech industry has a serious interest in strong international IP standards.20 In recent years the WTO has attempted to create an international patent policy with the agreement on Trade Related Aspects of Intellectual Property (TRIPS.) The TRIPS agreement is intended to eventually extend patent protection uniformly across the globe, but the effect of its implementation on developing countries remains controversial, particularly in the area of pharmaceutical patents.
Ratified in 1994, the TRIPS agreement represents perhaps the most far-reaching and distinctive development in the history of international intellectual property protection. It is one of 25 treaties and agreements on which the World Trade Organization was founded, giving it legitimacy that no previous intellectual property rights (IPR) legislation can claim. Controversial from the outset, TRIPS is hoped to eventually "unambiguously strengthen protection of IPR almost worldwide, a feat not achieved by any other single international treaty ever before," according to Jayashree Watal, a former TRIPS negotiator for India.21 The implications for developing countries, however, do remain ambiguous, particularly in the area of public health. While developed countries can find many reasons to support the agreement, the needs of the developing world are often at odds with "unambiguously" strong IPR.
The TRIPS agreement establishes a plethora of new IPR standards, definitions, and conventions previously unprecedented in international property law.22 The agreement went even further, outlining a dispute settlement process with the possibility of trade penalties, parameters for domestic enforcement, and new categories of certain already established IPR. Under the agreement, pharmaceutical patents confer exclusive rights to the patent-holder whether the patent is on an actual product or process. The absence of discrimination between products and processes in most cases is an important difference between TRIPS and the previously existing patent regimes of certain developing countries with strong domestic generic pharmaceutical industries.23
Developing countries seeking to keep drug and crop production prices down to treat and feed their populations are qualified to certain, explicitly limited, exemptions from protection of certain patents. Exceptions to full patent protection are allowed under Article 31 "provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties."24 Opponents point out that this caveat effectively nullifies the article, and indeed the meaning of unreasonable conflict with the normal exploitation of a patent has been widely interpreted, as evidenced by the high profile lawsuits against the South African and Brazilian governments.
The public furor over TRIPS' strict protection of pharmaceutical patents and their adverse effect on public health in developing nations has caused some NGO's and activists to actually question the legitimacy of the agreement.25 Widespread and longstanding international criticism of the agreement ultimately led to what is known as the Doha Declaration in 2001, an affirmation of the primacy of public health over intellectual property standards. Meanwhile, countries like Brazil have invoked TRIPS provisions for protection of public health to combat their HIV/AIDS epidemics with massive generic drugs programs. As more developing countries reach the end of their grace period before TRIPS implementation, the fight over IP and flexibility for governments of countries with public health crises is likely to remain at the forefront of the biotech industry's international public policy concerns.
- North Carolina Biotechnology Center (NCBC), "New Jobs Across North Carolina," January 2004, p. 63.
- Golden Leaf Foundation, "Golden Leaf, Inc.," Website, Last accessed on 17 November, 2004. [http://www.goldenleaf.org]
- NCBC "New Jobs..." (fn. 1, p. 64)
- NCBC, "Strategic Plan Executive Summary," Last accessed on December 5, 2004. [http://www.ncbiotech.org/biotechnology_in_nc/strategic_plan/executive_summary.html]
- North Carolina Biotech Center (NCBC), Education and Training Program, "Window on the Workplace Executive Summary," March 2003
- North Carolina Community College System, "BioNetwork, Biotechnology Facts." Last accessed on November 18, 2004
- NCCCS (fn.9)
- NCBC, "New Jobs..." (fn. 1, pg. 64)
- MCNC, "MCNC and IBM to collaborate on first-of-a-kind computer grid for life sciences," Press Release, November 14, 2001
- J. Charles Kesler, MSNC, "Overview
of Grid Computing," April 2003;
North Carolina BioGrid, "North Carolina Bioinformatics Grid," Website, Last accessed on November 15, 2004
- Phil Emer, Chuck Kesler and Lavanya Ramakrishnan, MCNC, "MCNC's North Carolina Statewide Grid Computing Initiative," last accessed on November 15, 2004. [https://www.softwaretechnews.com/stn_view.php?stn_id=10&article_id=55]
- Leslie Versweyveld, "North Carolina MCNC Corporation and IBM build Bioinformatics Grid to support drug discover," November 15 2001; MCNC (fn. 12)
- North Carolina BioGrid, "Applications on the North Carolina BioGrid," Last accessed on November 15, 2004
- North Carolina BioGrid, "North Carolina BioGrid Objectives and Requirements," Last accessed on November 15, 2004
- North Carolina BioGrid, "North Carolina BioGrid Network Infrastructure," Last accessed on November 15, 2004
- BIO (Biotechnology Industry Organization), "Biotechnology Industry Statistics." Accessed on August 4, 2007. [http://bio.org/speeches/pubs/er/statistics.asp]
- Jayashree Watal, Intellectual Property Rights in the WTO and Developing Countries. (Kluwer Law International, The Hague, Netherlands), 2001. p.6
- Ibid. p. 3
- It should be noted that not all "processes" in the general sense are subject to patents under TRIPS. Surgical processes, for instance, cannot be patented. While the TRIPS agreement implicitly distinguishes between "processes" which can be patented and "diagnostic, therapeutic, and surgical methods" which cannot be, the parallels between the two categories are unmistakable. A particular method of heart surgery cannot be patented, while a particular process of producing a heart disease drug can be patented.
- World Trade Organization, TRIPS Agreement. Full text available
- Cecelia Oh, "TRIPS, Patents and Access to Medicines: Proposals for Clarification and Reform," Third World Network Briefing Paper: June 2001.