Singapore has gone all out to position itself as an international biotech and pharmaceutical R&D centre. More and more pharmaceutical companies line up to announce multi-million dollar investments in the island state as Singapore's Economic Development Board (EDB)'s policy started paying off.
In June this year, GlaxoSmithKline announced it was investing $100 million to expand its existing facilities. In July Pfizer opened a $350 million plant in Singapore - the company's first large scale active pharmaceutical ingredients manufacturing facility in Asia. In the same month the Novartis Institute for Tropical Diseases, a public-private partnership between the Swiss company and the EDB, was officially opened in Singapore's new Biopolis research facility.
In August the company announced plans to pour more cash into the island state - saying it would invest $180 million to build a new pharmaceutical production facility in Singapore making tablets for the world market. Some of the companies have taken up residence in Biopolis, a modern R&D park that less than three years ago was a green field site. Now it houses buildings with futuristic names such as Helios, Proteos and Nanos, home to a mixture of public and private laboratories.
Already Singapore's biomedical industry is the third largest manufacturing earner in the country after electronics and chemicals. The government has met its original target - for output in the biomedical sector to reach S$12 billion ($7 billion) - a year ahead of schedule. Last year biomedical sciences accounted for 7% of the country's total manufacturing output and that figure is rising. In July, the government officials said the country aimed to double biomedical output to S$24 billion (US$14 billion) over the next 10 years.
In 2003 Singapore signed a free trade agreement with the US - its second largest trading partner and its largest foreign direct investor. The agreement was one of the first free trade deals the US entered into outside its own NAFTA backyard and its first with an Asian country. In it, the island state agreed to a series of changes to its IP laws, making them even more IP owner-friendly. In June, its parliament passed legislation to implement many of the promises. The bulk of them came into force on July 1. Singapore is now under a new obligation to extend patent terms if IP owners can show that they suffered delays in obtaining a patent grant or marketing approval. In a special concession to big pharmaceutical companies, Singapore additionally agreed to reform its otherwise liberal parallel trade rules.
Traders are now banned from importing parallel-traded pharmaceuticals unless the IP owner already sells the patented product in Singapore. The government has beefed-up Singapore's rules on data exclusivity. It will still grant originators a data exclusivity period of up to five years, but the five year period now runs from the date that marketing approval is granted and not from the date of application. Singapore also now has a patent linkage system, which should prevent generic drug manufacturers from getting marketing approval for their products if the drug breaches a valid patent.
Moreover, the Singapore government has restricted its own right to use patented inventions. From now on, if it has not got prior approval from the IP owner, the government can only use a patent in situations involving national emergency, extreme urgency or public non-commercial use. And new, tighter rules on licensing mean the government can now only grant a compulsory licence in one situation - to remedy an anti-competitive practice.
Though the concession will make little practical difference the move is designed to give reassurance to pharmaceutical firms about the government's new, tougher approach to patent rights. For a country that already offered a business-friendly IP regime, the changes move Singapore up into a new tier of pro-multinational jurisdictions. From ranking fourth in the Swiss-based Institute for Management Development's world competitiveness rankings in 2003, Singapore has now taken second spot, just behind the US.
The links between business and government in Singapore are famously close. The negotiations on the US free trade agreement were led by the Ministry of Trade and Industry, but closely involved the Intellectual Property Office and the Attorney General's Chambers.
The Human Stem Cell Research subcommittee - part of the government's Bioethics Advisory Committee - wrapped up its consultation process with religious and professional groups on the ethics of research within eight months, before publishing its report in June 2002. The group recommended the government allow human stem cell research and therapeutic cloning under strict regulation. It also advised them to permit embryonic stem cell research with potential medical benefits as long as the stem cells were gathered from embryos less than 14 days old.
A month after handing over the report the deputy prime minister announced the government had accepted the group's recommendations and set about putting its guidelines on a statutory footing. In November 2003 the Ministry of Health held a public consultation on its draft Regulation of Biomedical Research Bill, which led to the Human Cloning and Other Prohibited Practice Bill being introduced into parliament in July this year. Since Singapore's ruling People's Action Party holds 82 of the country's 84 parliamentary seats, draft legislation is unlikely to undergo much change.
Inventions simply belong to the company if they are made in the course of employment. The government has also launched or revamped a series of bioscience-related bodies over the last five years - the neatly acronymed A Star - the Agency for Science, Technology and Research, its commercialization wing, Exploit Technologies, and public research bodies such as the Genome Institute of Singapore and the Institute of Bioengineering and Nanotechnology.
Crucially, the EDB is also helping biotech companies with their financial plans - particularly important given the potentially high commercial risks and lengthy investment period involved in scientific research. It re-launched Bio One Capital, its own venture capital fund that now manages four biomedical sciences funds totalling over $700 million. The fund's managers have been told to invest in strategic biotech industries that are going to generate jobs in Singapore and transfer technology and expertise to the island.
To attract more outside investment, this year's budget extended the period in which qualifying multinational companies can enjoy a zero corporate tax rate from 10 years to 15 under the pioneer incentive scheme. Singapore's determination to make the bioscience industry an economic priority has led to a boom in life sciences and pharmaceutical investment in Singapore. There is competition from developed countries such as the UK, the US and Japan and from countries such as India and Australia, but others have generally been slower to respond. Importantly, even those countries that recognize the potential returns from the bioscience sector are less proactive than Singapore, leaving much more decision-making to industry itself. One of the biggest reasons for Singapore's success is that it has the political will to marshal the necessary means to achieve its policy goals.
Singapore's political system - arguably benign, undoubtedly authoritarian and instinctively paternalistic - is able to mobilize the resources of its 4.2 million strong population, housed in a manageable 660 square kilometre (225 square mile) island, in a far more efficient and effective way than jurisdictions with more active civil societies and larger populations are able to do.
Singapore's talent for government-directed capitalism has been especially useful in the strategic, long-term and financially risky sector of biomedical sciences. The government has been able to do what it does best - using extensive government intervention to create an infrastructure and policy framework conducive to attracting outside investment.
The country's export-orientated economy and reliance on international trade and foreign investment also enabled the government to make concessions to the US over intellectual property - particularly in the area of patents - that it may be politically and economically unfeasible for other governments to make. Just last month Australia faced a domestic backlash over similar patent provisions in its own free trade agreement with the US, forcing the government to accept opposition Labor Party amendments to the implementing legislation.
The revisions were designed to limit the ability of originator drugs companies to keep rival generic products off the market. Instead, in Singapore, the government believed that any compromise over its intellectual property regime that could push up drug prices was more than outweighed by the potential gains for inward investment.
-Emma Barraclough