BioWorld International Correspondent

BRUSSELS, Belgium - New European Union rules allowing companies to share technology with rival firms have received a cautious welcome from biotechnology companies.

The easing of EU anti-trust law could help companies win access to the market of 450 million people that the EU will represent in just three weeks' time, but only if the small print makes provisions for the special needs of the biotechnology sector, said industry executives.

The so-called "technology transfer block exemption" is due to come into effect May 1, the day the EU grows from 15 to 25 member states. The new rules, adopted April 7, permit companies to license their innovative processes and products to partners, as long as they do not control more than 20 percent of their market sector. And high-tech companies benefit from an additional freedom - sharing patented innovations even when the market share exceeds 20 percent, provided they meet certain conditions designed to avert monopolization. The threshold is similar to that practiced by U.S. regulators.

EuropaBio, the biotechnology industry's principal European lobby, said: "Our members will need time to study the new rules and guidelines to check if our industry's concerns have been taken into account."

Only weeks ago, EuropaBio warned that the proposed rules could have serious implications for biotechnology companies and the development of innovative products. The association insisted that special permissions were needed for the biotechnology business, "which increasingly involves collaborations between companies for the development and marketing of medicinal products," it said. In particular, EuropaBio wanted more explicit provisions for agreements relating to biological materials.

If the new rules apply only to finished products and exclude manufacture of contract products or agreements in which further development work is necessary, the biotech industry will be disadvantaged, EuropaBio said.

"Such agreements are the life-blood of the biotech industry, since few biotech companies have the resources to undertake late-stage clinical trials and so are reliant on out-licensing to big pharma partners to see their products through to market," it said. "The exclusion of such agreements seems like a disincentive to innovation and it is difficult to see how such agreements could be considered anticompetitive."

EuropaBio also has highlighted the importance of making specific provision for licensing agreements related to orphan drugs, so that no thresholds apply based on market share.

The transfer of technology is a common way for companies seeking advancement in markets to share expertise in product manufacture. The EU, which has strict competition laws to prevent abuse of market position, is trying to balance the merits of innovation against the risk that the unchecked transfer of ideas could precipitate a spate of illegal cartels. It said the new rules "reduce bureaucracy and increase legal certainty for companies as more licensing agreements will benefit from a regulatory safe harbor, saving many agreements from individual scrutiny."

European Competition Commissioner Mario Monti said: "The reform of our rules on technology transfer agreements will facilitate wide dissemination of innovation and give companies greater scope and design freedom."

Biotech Voting Trends Thrust Into EU Arena

European Parliament voting on key biotechnology debates is being scrutinized by environmentalists in the run-up to the parliament elections in June. Friends of the Earth Europe, in collaboration with Greenpeace, the European Environmental Bureau and a range of other environmental activist organizations, is targeting current parliamentarians.

In particular, the finger is being pointed at a dozen MEPs with "the worst voting record" - all from the UK's Conservative party and the leading party in Italy's ruling coalition, Forza Italia, said Friends of the Earth Europe.

"We need a strong and environmentally aware European Parliament to deal with the challenges ahead," said Friends of the Earth Europe. "Voters can make this clear to candidates when they vote."

Justifying its choice of voting patterns by members of the Parliament in the July 2002 decision on labeling for genetically modified organisms, the campaigners said: "GMOs are already in our food and GM crops are growing in fields across Europe - yet we do not know if they are safe. Some companies, and even some governments, claim that our health and the environment are not at risk. Many people, however, including independent scientists, believe that not to be true."

Friends of the Earth Europe pointed to the European Parliament voting in July 2002 to include more GM food products (such as edible oils and sugar) in a mandatory labeling scheme, and said that MEPs voting against that proposal "wanted to deny consumers the right to choose GM-free food."

The Friends of the Earth Europe website shows that the motion on controls of GM products - won by a 308-208 vote, with 39 abstentions - was backed by most members of the Parliament's Green group, the European Liberal Democrat and Reform group, and the European Socialist Party. Opposition came mainly from the Christian democrat European People's Party and the group for European Democracies and Diversities. The website also groups the individual voting patterns by nation, showing that members of parliament from Austria, Belgium, Denmark, Finland, France, Greece, Ireland, the Netherlands, Portugal, Sweden and Spain were largely in favor of tighter GM controls, while parliamentarians from Italy, Germany and the UK were more against controls.