Abdallah S. Daar

The role of the domestic private sector in developing countries for addressing local health needs

Developing countries can benefit from conducting innovative research and development in science and technology prioritised to their own specific health and development needs. Here, the role of the domestic private sector in utilising its knowledge, expertise, resources and relationships is critical for translating R&D results into tangible health products and services for individuals. We have recently initiated a study to analyse how the domestic health biotechnology sectors of four developing countries - India, China, Brazil and South Africa - address local health needs. In this paper, we introduce the purpose, design and objectives of the study, describe our rationale for undertaking this research and present preliminary results from our analysis of health biotechnology firms in India.

AFFYMETRIX, INC.: USING CORPORATE ETHICS ADVICE

The chapter discusses the role of Thane Kreiner, Senior Vice President of Corporate Affairs at Affymetrix Inc., in inculcating business ethics in the companys day-to-day affairs. He was responsible for forming the company ethics committee, which has influenced some highly important corporate decisions. The relevance of ethics to Affymetrixs business has much to do with the technology that the company is commercializing. The DNA chips can perform massively parallel, miniature bio-analyses that allow scientists to carry out huge numbers of biology experiments. The first task of the new committee was to set up ground rules and operating guidelines. The topics included meeting frequency, operations, attendance, and the manner of decision making. The members decided that they would not have set terms, and that the nomination of new members would be an informal process, mutually agreed upon. All members agreed that committee deliberations were confidential unless disclosure was authorized by the company, and so a nondisclosure agreement was signed to this effect. Most Affymetrix customers use the chips for research, and each contract agreement with these researchers contains a clause stating that the chip cannot be used for clinical purposes because of Food and Drug Administration (FDA) regulations.

SCIONA LTD.: A PIONEER IN NUTRIGENOMICS: THE PATH TO CONSUMER ACCEPTANCE

The chapter reviews how Sciona Ltd., a 10-person British biotech start-up, managed ethical dilemmas and concerns, and the powerful public campaigns aimed against it for pursuing genetic testing. This chapter also examines how the company moved from responding to criticism and opposition, to building a proactive ethical decision-making framework, both internally and externally. From the early formation of its business strategy, Sciona management had recognized the need to address ethical issues associated with the new field of nutrigenomics and, more specifically, their direct-to-the-public business strategy, which had been their original business model. Company executives continued to seek the advice of an ethics expert to help them navigate through the ethical dilemmas surrounding them. The founder and Chief Executive Officer (CEO) of Sciona, Chris Martin, wanted to capitalize on the new advances in genetics research by offering customized dietary advice based on an individuals genetic make-up. Sciona faced the challenge of commercializing the concept of personalized medicine and translating the new science of nutritional genomics into a viable business strategy. Scionas strategy was to first commercialize the concept of nutritional genomics, with plans to expand to other areas in genetic diagnostics such as heart disease, skin care, drug metabolism, weight management, and sports.

MONSANTO COMPANY: BIO-AGRICULTURE PIONEER

This chapter discusses the transformation of Monsanto into a life-sciences company and the ethical debates surrounding its pioneering work in bioagriculture. Hendrik Verfaillie, who had lived through the genetically modified (GM) food controversy as head of Monsantos agricultural operations from 1993 to 2000, recognized that his firm was in a state of crisis. Monsantos main initial focus was on persuading farmers to buy its products and meeting the formal requirements of government regulators, without taking into account the final, retail consumer. When the company introduced the genetically engineered, insect-resistant NewLeaf Superior potato to agricultural markets, opposition increased and protesters began to engage in tactics such as the destruction of company field tests. Exacerbating the controversy, that summer the debate on GM foods spread through the United States and Canada. American and Canadian activist opponents launched domestic anti-GM campaigns, contending that large multinational firms, particularly Monsanto, had too much market power, and farmers who needed to buy biotech seeds every year would become dependent on Monsanto.

DIVERSA INC.: ETHICAL ISSUES IN BIOPROSPECTING PARTNERSHIPS

The chapter explains how Diversa Corporation, a biotech company founded in San Diego, California in 1994, set out to create a new approach to bioprospecting that would support the Convention on Biological Diversity (CBD) principles. The CBD provided a framework for Diversas biodiversity collaborations from the very outset of its operations. To ensure these rights and access, the firm established benefit-sharing partnerships wherever it collected its samples. Diversa Corporation was founded by a team of scientists who were among the worlds leading experts in molecular biology and extremophiles. A team of scientists comprising Professor Melvin Simon of Cal Tech, Professor Jeffrey Miller of UCLA, and Professor Karl Stetter, formerly with Germanys University of Regensburg, together with Healthcare Investment Corporation, provided backing to establish Short and Mathur as management co-founders of the company. Diversa is using the versatility of its technologies to develop applications that range from industrial products to drug development, with strategic partners in each segment.

TGN BIOTECH: A START-UP WITH ETHICAL ROOTS

The chapter examines how TGN Biotech (TGN) will become a leader in biological therapeutic production. TGN Biotechs goal is to become a public company and in the process create numerous highly skilled employment opportunities, both in research and in business development, expanding into newly defined fields and markets. TGN has an important partnership with Laval University, because TGNs two founders are still full-time professors in the animal sciences department of the University. TGN has a contract with the University to sponsor research in their laboratories in return for rights to license the technology. Recombinant proteins are a growing share of the biotech sector, with more than 50 approved products currently in the market. There are also more than 500 products in the development pipeline but, under current production methods, worldwide manufacturing is close to capacity. TGN is currently working on three proteins that have an estimated market value of US

MAXIM PHARMACEUTICALS (A): INTERNAL AND EXTERNAL DIALOGUES

1 billion. Although the company has not yet released what these proteins are, all three will become the raw material for biogeneric products. TGN has a full-time Regulatory Assurance Director to communicate with regulators, and a full-time Quality Assurance Director to ensure that internal quality control is developed at the same time as the science.

INTERLEUKIN GENETICS AND ALTICOR: AN UNLIKELY PARTNERSHIP

The chapter examines how Maxim Pharmaceuticals has faced a series of business, financial, and ethical challenges as it has navigated the long voyage from scientific discovery to trying to get an approved drug on the market. Maxim was founded in 1993, and Stambaugh was brought in to be Chairman, Chief Executive Officer (CEO), and President following his prior position as Chairman and CEO of ABC Laboratories, a contract research organization. For the first few years, Maxim operated as a virtual company. Stambaugh ran a small corporate headquarter in San Diego that focused on raising capital. In seeking to help the organization recover from the Food and Drug Administration (FDA) setback, Maxim has worked hard to incorporate its values into its main human resource (HR) and other processes. When screening potential new hires, they probe hard through behavioral-based interviews for “the ability to do active listening” and whether the person is a team player. The most unusual feature of Maxims approach to corporate governance is having an annual, 2-day strategic board retreat to focus on the key issues facing the organization.

MILLENNIUM PHARMACEUTICALS, INC.: CREATING AND SUSTAINING CORPORATE VALUES

The chapter discusses how a partnership was forged between Interleukin Genetics and Alticor after the former had tried unsuccessfully for several years to interest a large pharmaceutical company in setting up a pharmacogenomics partnership. Just when it looked as if Interleukins options might be running out, the company was approached by a new potential partner—Alticor, the parent company of Amway. Representatives of Alticor had heard Kornman speak at a conference in the Netherlands about how personalized medical information would transform healthcare and nutrition. As the discussions progressed, Alticor offered to purchase a controlling interest in Interleukin, and to make the substantial investment needed to complete the development of the technology. Recognizing how important ethical issues would be to its success, Interleukins Board made the unusual decision to offer the Chief Executive Officer (CEO) position to Phil Reilly. With his top leadership team in place, Reilly then made the decision to hire Rahul Dhanda in May 2001 to play a key business development role and deal with day-to-day ethical issues. With the hiring of Dhanda, Interleukin has been in the unusual position of having two ethics experts making strategic and operational decisions.

MERCK: STAYING THE COURSE

The chapter discusses how Millennium Pharmaceuticals, Inc. has experienced growth over time by creating and sustaining corporate values. Incorporated in January 1993, Millennium Pharmaceuticals was among a group of second-generation biotechnology companies whose business plan was devoted to genomics. Millennium started by associating with key scientists such as Massachusetts Institute of Technologys (MIT) Eric Lander, the head of the largest genome center in the United States. The company continued to be very successful in hiring or consulting with top-level scientists, and acquiring or licensing state-of-the-art technologies, all of which facilitated the process of gene discovery, gene function analysis, and identification of drug targets. Millenniums focus on values and ethics was instilled in the company by its founder, Mark Levin. As part of its commitment to its core business, Millennium has been dedicated to the ideals of corporate values and ethics. This vision began with Mark Levin, who started his career as a chemical and biomedical engineer at Eli Lilly. Partnering with pharmaceutical companies was fundamental to Millenniums early success, and the approach to partnering included aspects of its core values. Steven Holtzman, who negotiated the companys earliest agreements with large pharmaceutical companies, believed that the companys focus on values and ethics was one reason for Millenniums attractiveness to these companies.