RÉGIMEN MUNICIPAL
INSTITUTO COSTARRICENSE SOBRE DROGAS PUBLICACIÓN DE TERCERA VEZ
MAJ is the primary policy making organisation in the agricultural sector and employs 20% of the country‘s total employees in the sector. 154 MAJ‘s objectives and programmes were restated in 2002
at the cabinet meeting of MPO. The ministry‘s biotechnology related research training and innovation policy objectives include: ―to benefit from advanced biotechnology techniques and genetic engineering in agricultural sector, to develop suitable methods and apply modern technologies in agriculture and livestock, suitable for climate and geographical conditions of country‖.155 Following the 2001 merger of the Ministry of Constructional Jihad and the Ministry of
Agriculture, the responsibility of overseeing affiliated research institutes of the two ministries was
154 MAJ is active in policy making, planning and supervision; research, training and innovation; national
resources and watershed management; agricultural infrastructure and rural development; agricultural, livestock and aquatic affairs, and agricultural support, promotion and investment. Source: http://www.maj.ir/english/AboutUs/program.asp?p=aboutus
entrusted to AREEO. AREEO is involved in both demand and supply side. AREEO‘s demand side activities include policy making, funding and supervising agricultural R&D activities in its affiliated research institutes.
The seed prices of major agricultural crops are determined by the ‗Economic Council‘ of MAJ. The price of seed distributed by the public sector is lower than free market prices. For private companies price is determined based on supply and demand, particularly for vegetable seeds where there is better competition. The agricultural bank provides credit with low interest rates to farmers. Credit is available for contract growers to encourage contract seed production and for establishing seed drying and cleaning facilities. However, credit is not available for purchase of certified seed because the government is already subsidizing its production (Mobasser, 2003).
As biotechnology is a generic technology and its techniques can be applied in developing products for both humans and animals MAJ can also influence the demand for innovation in medicines designed for human consumption through its role in shaping the demand for vaccines in the veterinary sector. This is clearly reflected in the case of RVSRI, which, under the control of MAJ develops and produces vaccines and serum for both human and veterinary applications.
5.5 Summary
The biopharmaceutical R&D has been slowly but steadily progressing during the 2nd, 3rd, and 4th
EDPs. Production activities such as manufacturing of drugs are financed through the government budget. Production levels are decided by the government, and the budget is provided accordingly. The government‘s strategies to promote the national biopharmaceutical sector include optimizing resource allocation, replacing fixed drug subsidies with targeted subsidies, supporting private sector activities, and promoting national and international investment in biopharmaceutical industry (FDO, 2005). Iran‘s local pharmaceutical industry produces more than 97% of the market needs and only 3% of drugs are imported. However, in terms of value, these imports account for a third of the national drug budget. The government‘s import substitution strategy together with a focus on the private sector development has resulted in the emergence of private biopharmaceutical firms during the 3rd and 4th EDPs with a strategy to replace expensive imported drugs and has adopted a
growing role in biopharmaceutical R&D and innovation. Therefore the private sector‘s role is becoming increasingly important in introducing modern biopharmaceuticals to the Iranian and the regional markets. Access to highly qualified personnel is not a problem for established firms in both sectors, while it is a moderate problem for start-ups mainly due to financial constraints; however brain drain is also a problem in both sectors. The market niche for the firms‘ products is competitive in both sectors. However biopharmaceutical firms compete with established and powerful foreign brands in a market that is reluctant to accept local products. MHME has started
addressing this problem by introducing a levy on selected imported biopharmaceuticals that are also produced locally. Bioagricultural firms on the other hand find the market demand for local bioagricultural products strong. Competition is mainly with local firms as the number of local producers is increasing. During the 4th EDP (2005-2010), over ten modern biopharmaceutical drugs
have entered the market. Major sources of funding for the firms studied are own funds and bank loans with low interest. In both sectors, start-ups and small firms suffer from similar obstacles such as a macroeconomic environment of high inflation156 and high interest rates, burdensome and out
of date regulations, lengthy and difficult procedures for securing bank loans and lack of diversified sources of funding, and the dominance of large state enterprises in industrial production.
One unique feature of Iran‘s biopharmaceutical sector is that large organizations that produce a major portion of drugs required by Iran (e.g. IPI and RVSRI) are not companies but unique integrated research, education, and production institutes. Another unique feature of Iran‘s biopharmaceutical SI is the complete absence of TNC operations.
The main ministries supporting biopharmaceutical innovation (MHME, MSRT) have built up significant capabilities in this sector by investing in state of the art research institutes/centres. However most of these capabilities remain at the research institutes as the knowledge system has not integrated into the production system properly. State firms mainly undertake production and do not perform innovation activities. Moreover, even large manufacturing enterprises rely on imports for inputs. This is mainly because of the absence of strong supplier networks in the form of SME‘s. The previous IPR law enacted in 1931 did not refer to issues such as compulsory licensing nor clearly distinguished product and process patents. The new IP law (2008) is more comprehensive and aims to strengthen both legislation and implementation. Entering international IP systems is generally perceived to hinder the progress of the biopharmaceutical sector by protecting foreign technologies from being copied in Iran. However bioagricultural scientist/entrepreneurs insisted that only by joining international IP systems would the national legal system of IP protection become efficient.
The government‘s self-sufficiency policy is also the basis for Iran‘s incentive to develop the national agricultural production efficiency using biotechnology methods. Unsuitable landscape and shortage of water make Iran one of the largest importers of food crops in the world with maize, rice, soybean-oil, oilseed, and soybean annual imports alone adding up to US$1.67 billion. Iran‘s goal to grow over 0.5% of the global area of GM crops by 2015 as stated in the NSBP, emphasises the strong incentive towards bioagricultural development including the use of LMOs during the 3rd
156 Inflation was 25% in 2008 (measured by the annual growth rate of the GDP implicit deflator) (WDI,
EDP. The government‘s major focus on bioagriculture during 2nd and 3rd EDPs (1995-2005)
resulted in a ‗development spurt‘. R&D capabilities and technological knowledge at public research institutes caught-up with developed countries in genetic engineering of GM crops and plants as well as non GM technologies.157 However, despite the advanced research capabilities in modern
bioagriculture the results of the state of the art R&D in GM crops which were due for commercialisation in the 4th EDP have failed to enter the market.158,159 For example, insect resistant
cotton and rice and salinity-resistant wheat developed at ABRII and GM sugar beet and Canola developed at NIGEB have completed field trials and are awaiting full commercialisation. The GM case study in chapter 6 explores the reasons for the delay in the release of these GM crops. In addition to GM crops, Iran‘s research institutes have also produced bio-fertilisers and bio-pesticides (e.g. nitrogen bio-fertilizers for rice fields at ABRII, phosphate bio-fertiliser at NIGEB and Tehran University) as well as transgenic animals (IPI, Royan Institute).
The main player in Iran‘s bioagricultural policy and regulation system is MAJ and its affiliated ARREO. The majority of Iranian agricultural research institutes operate under AREEO. However NIGEB (under MSRT) and to a smaller extent universities also conduct advanced bioagricultural R&D activities. Public R&D is mainly funded by the government. The role of private sector in funding public agricultural R&D is limited. Nonetheless, the private sector has become increasingly involved in conducting its own agricultural R&D. Private sector‘s contribution to bioagricultural R&D and innovation is still marginal, but SMEs are increasingly entering this sector and the majority of the companies in the sample studied are young start-ups.
157 This rapid development of the sector fits Gerschenkron‘s definition of ‗development spurt‘. 158 Commercialisation here means full release of the GM crop to farmers for cultivation 159 Some of Iran‘s GM crops have been ready for commercialisation since 2004