Select Committee on Science and Technology Minutes of Evidence

Examination of Witnesses (Questions 500-520)



Lord Haskel

  500. But do you not think it is right that some of these decisions should be taken locally?
  (Professor Borriello) Yes, absolutely, I do not disagree, but what I am saying is that the decisions are taken not necessarily after being exposed to the best available evidence or the best available impartial evidence. Decisions are mainly taken on who they spoke to last or the very last meeting they went to, which is not the full picture.

Lord Oxburgh

  501. What you are saying is that a series of locally made separate decisions will not have the same focus or leverage?
  (Professor Borriello) That is absolutely right, and the opportunities for linkage to IT and therefore developing what are huge holes in diagnostics in the UK are difficult even for an IT system that works. If you had a proper link on to an information hospital system you would need to interface it with all of your automated diagnostics but if you have a system where every other laboratory has a different IT system and everybody has got a different platform then you are not starting from a very good base.


  502. On a slightly different note, though still connected with this, what is the danger of litigation in this field? You mentioned litigation with respect to vaccine and vaccine development but not in diagnostic testing. Is it low, is it medium or is it high if you get a diagnostic test that gives you a wrong result and that leads on to litigation? Is that a worry in the development of diagnostics?
  (Professor Borriello) I am not aware at the moment of any litigation based on the failure of the diagnostic. It does not mean to say it cannot happen. Most diagnostics in the market do not claim to be 100 per cent and they would normally find they have the protection of the NHS almost inevitably because, as the user of the diagnostic, it would probably not adhere 100 per cent to the written guidance. They would also protect themselves by saying, for example, that the laboratory using it is accredited and their accreditation includes an independent accrediting body, so that is an appropriate diagnostic to use. They have an element of protection in the chain but I suspect that if there was a failure and the failure was due somewhere in the process to the manufacturer or the quality of the reagent, then there would be a risk of litigation. A classic example may be the failure to diagnose MRSA, not that the clinician did not bother to look but that the test said it was not there.

Lord Rea

  503. Do you think that university researchers are sufficiently engaged in developing the new technologies of the kind that you have been discussing? If not, could you suggest ways in which involving universities more in these activities could improve their entrepreneurial outlook? Would you think that that kind of emphasis would detract from the researchers' concentration on their scientific work?
  (Dr Logan) Firstly, science enterprise centres have had a very positive effect in most universities and have acted as a catalyst for the change in the enterprise culture. We are now in their third year but this changing of culture takes time. We are beginning to see the rewards. We have further to go. That is very positive. I think that could be extended to the NHS hubs as well. Certainly in London there is a lot of interest in this. The catalyst is very important, disseminating the information, having very clear IP policies in place so that people know, if they are going to go down the route of commercialising something, what is in it for them and their department, particularly what is in it for their department in terms of additional resources if something is commercialised or licensed. The SECs have been very useful. They are only funded as separate entities for another year or so. They then have to be funded through the universities but whether they will have completed their job by that time is open to debate. I have already mentioned the issue of more resources to do some of the basic testing. It is very often the case that the research group leader would prefer to carry on with the pure science so the role of the research assistant is absolutely vital. We do encourage research assistants to be the ones who are involved, in spinning out companies. There needs to be some funding for the proof the principle stage, before we get something that the VECs can look at. That is essential: funding to carry on those basic tests. There is then an issue about the technology transfer departments. If an academic goes to the technology transfer department, we still have the situation in universities where these departments are quite poorly trained. The DTI has set up a steering group to look at this issue. I am on that steering group. It is absolutely essential that we increase the expertise in the group dealing with the academic business interface. I have mentioned the RAE and the merit award. That really needs to be changed. I also think we must have more of a joined up provision. In certain areas of the country the RDAs are working very closely with universities. We are beginning to see great success. That is not happening in all areas. We have a long way to go in London, for example, which is where a lot of the medical spend is. This is very important. We must have the incubator space so that we can get potential spinouts to the level where these ideas will be interesting to VCS. Those are the main things: this lack of funding and the lack of clear guidelines and training.

Lord Oxburgh

  504. Should not these activities produce an income stream?
  (Dr Logan) It is a long term income stream. I have been talking to other SEC directors about this and we think that the university has to invest quite a lot in the whole licensing set-up before we get returns. If you take somewhere like Isis Innovation, they get £1 million a year from Oxford University, but that was a leap of faith. Oxford University had excellent research but they were prepared to make that investment and they are beginning to get that back now. Again, we are back to this patchy investment.

  505. Rather than saying we are not being given enough money from other sources, ought not the interested parties themselves, the institutions, say, "Yes, we believe in some of this work that is going on in our laboratories and we are going to apply some of our resources" to making the transitions that you describe?
  (Dr Logan) That is a very good point. But while our resources are still linked to the RAE, universities are going to go on being focused on the publications.

Lord Patel

  506. Is not the RAE linked with good research?
  (Dr Logan) It is but the RAE is not necessarily linked to the number of patents, is it?

Lord Oxburgh

  507. You are implying these things are mutually exclusive and they are clearly not.
  (Dr Logan) They are not mutually exclusive. I am not implying that they are. We are beginning to see a change and universities are beginning to invest, but it is still very patchy and not every university will have the leap of faith like Oxford has.
  (Dr Reeders) Not every university has technology worth developing. The return on these kinds of investments made at the very early stages does take time to come in. The Medical Research Council, which has been at this longest, had last year more than £10 million of income from exploitation activities, largely as a result of development of antibodies. Now they have a self-funding process where they have enough money to continue to proactively develop. To prime that pump elsewhere, there probably does need to be some funding. The quality of translation activities in universities is extremely uneven. A lot of good technology in certain universities is not being developed because they do not have anyone to tell the scientists how to do it. That is less true of Oxford and some other major universities, but I think there are good universities with good applied research which do not have people of sufficient quality to direct development.
  (Dr Logan) That is putting it extremely well.
  (Professor Borriello) There are a number of small things but they may make big differences. Overall, the awareness in academia of the intellectual property right potential of some of their basic research is not as high as it could be. We are still predominantly dependent upon what I would call active reporting. We would expect the researcher to recognise the potential value from their own basic research and notify someone. We have been less good at what I would call active, top-down mining of potential. You need somebody who can do an intellectual property right potential swoop on a particular department or university. That will only be of value if the outcome of that is some quick hits. In most academia, whatever people might think, their main interest and reward is not having a big bank balance; it is having some extra pairs of hands to help them do their research. The reward system has to be looked at and putting people there is useful. The other thing comes back to the research councils. It is true that the MRC get ten million, mostly off one product which I think is humanised antibodies from the eighties. Most research councils say all the IPR rests with the university, but it is possible that if the fund awarding body said, "We are also interested in ten per cent of this IPR", this gives them an incentive to chase up the IPR potential of the grant that has been awarded. That might help stimulate greater recognition of the IPR potential because somebody else would be asking that question. I do not think much academia would be averse to that except if it went back into grant awarding from those bodies.

Lord Haskel

  508. In another context, Dr Logan said she thought that the Yorkshire region was working very well as far as cooperation is concerned. I think this is because the Yorkshire region has developed a strategy called Yorkshire Forward incorporating the universities, the employers, voluntary organisations, hospitals, everybody in Yorkshire and the government as well. The government has a role to play in this. It is far better for the government to play a role in the strategy in that way rather than just to react to emergencies of pressures from MPs who may have marginal constituencies. If the regional development agencies all developed a strategy like that, that would solve some of the problems we have just been discussing that the universities might have.
  (Dr Logan) Definitely. There is a government steer on this for the RDAs and universities to work much more closely. We are now beginning to see that in the south west of England as well. We are less good at it in London. That is exactly what we need. We have to all be working together in collaboration and it has to be joined up because one of the problems we have now is we are in danger of wasting resources and even in some cases competing. We will have people who are working on the SEC side who will be in competition with people who are working on the BEP and we are all doing the same thing. It is having a joined up strategy that everybody participates in. We are not in competition at all. We can all work together and that is what I am trying to do in the areas in London in which I work.


  509. You mentioned a joined up strategy in this area and we have heard in the past in the United States when we were there that one of the failings to make progress in this general area is the absence of managerial skills and business skills to bring science and business together. There are one or two places in this country, incubator cases, that do both science and management and there probably is a need for more of these, but how does one get over that? Are there special skills that one needs to hone and develop even within universities to get development on the management side?
  (Dr Logan) There is a tremendous skill shortage. You are right. One way we are trying to deal with this is to have a mentoring programme, so that people who have done it work with people who are trying to go through the process. That is the only way we can fill that skill gap, by using mentors who have gone through the process themselves or who have been through a similar process. That is a real problem for us, finding enough skilled people to be on these teams.
  (Dr Reeders) There are three answers there: tax relief, tax relief and tax relief. If you can offer a manager of a new start up company so many options completely free of tax, you will suck into small companies, a lot of people looking for a chance to make a lot of money and willing to work very hard to do that. That is key. One of the things that has helped a lot in the US is the 20 per cent tax rate on long term capital gains. People look at that and say, "I am going to keep more of what I make." This tax treatment does not cost anything in the short term. It costs something in the long term but only in the event of success.

Lord Haskel

  510. I wanted to clarify whether you meant personal tax or company tax, because corporation tax in small companies is 10 or 12 per cent.
  (Dr Reeders) Most of these technology companies are not profitable and therefore corporation tax does not worry them. It is really personal tax. I was addressing the specific point of management skills. Why would someone who is a leading drug developer at Glaxo SmithKline go over and start a two man company where he has to plug in the phones and all of this stuff, which is very hard work, when the company cannot pay him as much as Glaxo SmithKline can? What is the incentive? What is the draw? One great advantage is to say, "If you make a big success of this and you have an equity interest which substantially appreciates, you will get a much more favourable tax position than earned income in a big company". That will draw people into small entities.

  511. One of the difficulties of that is how you tell the difference between the tax rate of somebody such as you describe and the chap next door who may be working in an engineering company or who is a teacher or a social worker. The tax credit system does try to tackle that but how would you differentiate between these people?
  (Dr Reeders) You would use classical, maybe more strict definitions of small entities. The management gap is not in the company with 100 to 200 people. It is right at the beginning, in companies with two, five or ten people, with annual turnovers of a few million pounds, maximum. Those would be two criteria. By and large, equity appreciation in small businesses is economically very advantageous generally but if you wanted to focus it more on technology I would take companies that were very small, had small turnovers and were relying on third party capital.

Lord Patel

  512. Dr Logan was referring to the RDAs and their involvement with developing science, engineering and technology as innovations, which is another inquiry that the House of Lords Science and Technology Committee is doing. They will be looking to see what evidence there is for that, but my question relates to something Professor Borriello has said about research councils themselves taking responsibility for IPR and investing in that IPR to take it to the market place. Do we have an example of anywhere else in the world where that is successful?
  (Professor Borriello) I am not sure of any examples anywhere else. The point I was making was not that they take the role but that they have a shared role in that, because that increases the potential number of people and bodies who have an interest in realising the intellectual property.

  513. The fact that we do not have an example is because research councils' business should be about funding good research and it is right that universities own and exploit that IPR rather than research councils saying, "If this comes to the market place, we will have a share in it."
  (Professor Borriello) That is a philosophical argument as opposed to a proposal as to how we may improve things. I can see no reason in law why a funding council should not have some interest in the IPR. Neither am I going to fight a pitched battle about it. It is just a proposal that might be a way of trying to unlock an increased awareness and drive to release the intellectual property that exists. Much of that research is funded by the research councils through to academia. If the funding bodies had some interest in the potential IPR, a small stake, there may be more incentive for them to help drive it and also to put at the disposal of the recipient of those grants some of their business officers that already underpin some of those research councils such as the MRC and the EPSRC.

  514. Most of the research is pretty complex funding; it is not just one stream funding. It comes from the private sector, charities and industry and it is very difficult to identify the component of IPR which can then go to research councils.
  (Professor Borriello) It can be difficult. There are many examples of multiple stakeholder IPRs.
  (Dr Reeders) The venture firm I manage is a wholly owned subsidiary of the Medical Research Council, so we watch the tensions from a little distance. Lord Patel has identified one key issue. I think there is a genuine tension between the need to do the very best research and the need to make sure that if you do something that is applicable it is correctly exploited. That tension is always there. It is at Harvard University just as much, where Harvard now has a very elaborate policy to stop people spending all their time in companies down the street. I do not think we will ever get over that. Having a highly professional translation organisation does stop the researchers spending too much time worrying about it. For example, one of the big problems is where patents are poorly drawn up. The Medical Research Council, for example, is highly sophisticated about its patent strategy and they get high quality patent lawyers to draw patents up that have a high chance of success. Many institutions do not have that knowhow. Often, you will find a professor struggling to help the translation group figure out how to file a patent. Higher quality translation specifically in relation to patents would be a very valuable thing and would save the researchers time.
  (Dr Logan) This brings us to an issue which is critical. Most universities have their own technology transfer office. We duplicate. Surely we have to now move to collaboration so that a number of universities share a very highly skilled technology transfer office. I am sure that has to be the move forward instead of having these technology transfer offices in each university where you might have somebody who is a physics technology specialist transfer having to deal with a number of other areas which are not theirs. That would be one of my main recommendations: could we somehow join up that provision?


  515. Professor Borriello, in your written evidence you describe the failure to analyse data using sophisticated techniques for trend analysis commonly in other areas such as meteorological analysis, financial analysis, etc. Could you expand on this and give some examples to provide some of the clues we need for the future?
  (Professor Borriello) Yes. Some of those things sounded very good when I wrote them but were maybe not so clever when I read your question. There is a serious point being made in there. I have a personal view, which may be shared by others around the country, that for a long time surveillance in the UK has been based on what I would call the hoover principle. You try and collect everything but you expect it to be driven to you. Then you are faced with trying to find those few nuggets or that lost earring in a hoover bag full of dust. The surveillance and the associated epidemiology should concentrate on being much more question orientated within an area where you can intervene and have an effect and measure the effect. It is a question of balances. In order to do that, you therefore need sophisticated analysis and there have been many years of development in the UK where there has simply been collation of data and presentation in tables and graphs. Very simple things, for example, from the financial markets would be time series plots where you would have lots of short gap analysis points collected over a long period of time. If you have single points every six months over ten years, you might see a nice curve. If you are looking at financial markets where it is collated by the hour or, say, infectious diseases which could be done by the week, you would then see a whole series of different points moving around, probably quite radically. It is the mean of those points that give a single curve. That sort of analysis would allow you to look for correlates. Is there a dip every third Wednesday and how can you explain that? You can then have time series analysis whereby, instead of accepting that the last point on your graph is an independent point, you accept that the last point may have an influence on the next one. The antibiotic resistance for E-coli to antibiotic Z this month—whatever that point is—must have some sort of effect on what the next point is going to be. The analysis simply tends to join the dots. The reason that is important is because it must feed through into the measurement of interventions and predictive models. You cannot assess what the effect of the intervention has been unless you can accurately assess what the prediction would be in the absence of that intervention. Otherwise, all your measuring is real time and what judgments can you make on that? A classic example would be from many, many years ago where it was said that vaccines caused a major decrease in infectious disease in the UK. If you take the plot back long enough, it was improved sanitation that had the effect. It depends where you start on the plot to draw your conclusion. Finally, a philosophical point is that in the hard sciences the prediction will not influence the result. The speed of light you predict in medium Z is going to be a particular value. You may predict all sorts of values but when you measure it it will always be whatever it is. In the softer sciences such as the financial markets, and also in infectious diseases because of human behaviour, the prediction will affect the outcome. If you predict the HIV is going to go right off the scale and the only people left alive will be in the Houses of Parliament, you can guarantee that there is going to be an intervention somewhere that will have an effect on that curve. How do you judge how good the intervention was unless you have an accurate prediction? There are many people far more skilled than I in that sort of analysis: Professor Andy Hall at the School of Hygiene; there is Roy Anderson at Imperial; Peter Davey at Dundee for antibiotic resistance. There is Monet in the Denmark Serum Institute who also has looked at predictor models. There are many people you may already have spoken to who may have said similar things but, if not, are probably worth speaking to.

  516. Is what you are talking about being done elsewhere in any other country, say, in Europe or north America?
  (Professor Borriello) I think it is a general fault of not bringing together sufficiently the mathematical skills that some of the best epidemiologists have into what are frequently at national level predominantly surveillance bodies, where most recruitment is from the public health arena, quite rightly. My surveillance colleagues would be insulted if I said their epidemiologists were not the best in the world and that is not what I mean. It is accepting that there are other skills to draw on and that they should draw on other disciplines that use these mathematical skills—for example, in the meteorological arena, where it is exceptionally complex; and yet they are still able to make predictions out of that chaos that it will rain on Wednesday. That takes a lot of computing and a lot of mathematical intellect.

  517. Can we presume that the data required for this analysis is available or should it be collected and made available?
  (Professor Borriello) That is one of the reasons why I suggested that maybe we need to shift the emphasis a little away from trying to capture everything, almost irrespective of its quality, to more targeted particular surveillance and epidemiological analysis, where we believe we can have an effect and therefore can accurately measure what the effect of our intervention was or was not. That may mean targeting a number of sentinel hospitals, perhaps for hospital acquired infections, and generally assessing the interventions effect of various behavioural changes or new policies, but having sufficient time periods either end and sufficient knowledge of mathematical analysis to draw a valid conclusion.

Lord Rea

  518. We realise that communicable disease is a global phenomenon and, as far as this Committee is concerned, that was emphasised to those of us who went to see the people at the WHO at Geneva four weeks ago. How can the UK liaise more closely with other countries and international organisations when deciding about priorities for researching, developing and using new technologies?
  (Dr Logan) There are a number of EU initiatives now but it seems to me there needs to be more international coordination of research. There is a lot of research going on but we need to bring that research together in some way so that we are using the resources in a more focused way.

  (Professor Borriello) At the European level there is the new drive towards a so-called European research area as well as now increasing talk of a European research council, still with the proviso that you would not disband the national ones. They would face the same problem, probably multiplied, that we face at national level of trying to involve small to medium enterprises. It is the continual failure to get individual companies involved. I do not think it solves that problem. Working together, I would see the opportunities through, for example, DFID and some of the major charities and the WHO. The trick would be to identify a diagnostic goal where there would be benefit to all contributors. One of these could be improved rapid diagnostics, say, for viral haemorrhagic fevers. The WHO would be keen because they could use it in the field. We might be keen because we could use it on military personnel or at immigration as a diagnostic exclusion. TB would be another example, where one could develop simple, easy to use, near target tests that could be used in a number of different settings. That is where you could get coordinated sign-up potentially. Outside of that, I do not see any easy solutions. Lots of things can be proposed but I do not see many coming to fruition.

  (Dr Reeders) I think the answer is vaccines. We have a huge moral dilemma. We have conquered all the major diseases for the rich countries and the poor countries are being decimated by TB and HIV and malaria. This is a huge problem for all rich nations: how do you live with the fact that there is this massive differential in ability to deliver care to these patients? The problem is now so huge, especially in the case of HIV in Africa, that trying to deliver western style care to very poor countries probably is too expensive and too difficult. There are infrastructure problems. Vaccines which have been developed here could be delivered in Africa and in the Indian sub-continent and elsewhere. One of the biggest efforts right now is from Mr Bill Gates, the founder of Microsoft, who has put in the first instance $750 million into the international AIDS vaccine initiative, the malaria vaccine initiative and TB, which are the three big killers. Programmes like that, perhaps with coordination from a number of governments, could be extremely effective. It is not impossible to make a vaccine for AIDS or malaria or TB. Money into that could be extremely well spent because vaccines are relatively cheap to deliver. We have to consider very carefully whether, as a nation, we put money into these programmes or we sit back and watch what is happening in the Third World. That is a key decision for governments to make. This is not a trivial problem. It is a massive problem, particularly for HIV, which is completely out of control at the moment.

  519. I wanted to hear what you felt about whether existing organisations would be sufficient providing they had more resources or do we need to have different mechanisms as well?
  (Dr Reeders) The problem is that the efforts of these organisations are too diffuse. I think you can have a bigger impact by targeting what really matters. On a global basis, right now, what clearly really matters is the epidemics of HIV, TB and the problem with malaria. A better way to go would be to have a direct programme, albeit allied with other direct programmes, in those key areas. By all means tie your effort to the international AIDS vaccine initiative or the malaria vaccine initiative or whatever, but it is important to target the money. There is a risk otherwise that it will be spread over too many areas. The milestones and goals will be too diffuse. If you are going to spend any money on these things, you have to have very concrete, specific milestones. That is the danger: that that does not happen. If you focused in on vaccines for the three big killers and you put significant funding into that, you could have an impact within five to ten years.

  520. There is the global fund, particularly aimed at these three conditions, of $10 million per annum. That money might be targeted exactly as you have suggested.
  (Dr Reeders) You will know better than I how to get these things delivered but it seems to me that if you wait for all sorts of other countries to get together and do it they will never do it. The way forward is to do it yourself. By all means, if someone else is independently willing to do it themselves, align yourself with them. Right now, courtesy largely of Mr Bill Gates, for whatever reason, he has put $750 million into this and it is not a bad starting fund. We should not have any pride of ownership if we merge our funds with his.
  (Professor Borriello) There is no doubt they are three of the world's biggest killers. I am not convinced that lack of progress has been due to lack of investment. There has been huge investment into HIV; massive investment into malaria and TB vaccines, including in the UK and the western world. The lack of development has been the intractability of the problem and the component factor of ensuring what is developed in western countries will work in Third World countries, particularly for TB when there is such a background of prior exposure to other tubercle organisms. Somebody put forward at the OECD meeting last year in Lisbon, which was particularly addressing how does one invest in public health in terms of ensuring economic development of countries, that the biggest inhibition of development in many of these countries is their public health problems. The point was put forward, which might have a lot of validity, is that instead of putting more money into vaccine research one should guarantee that whoever produces vaccines can sell them to Third World countries at a proper price. In other words, the western governments should underwrite part purchase of a vaccine, instead of continually asking manufacturers to put all the development money in and then kick them away. That is addressing the market the other way around. It is a slightly alternative point of view, to guarantee the investment at the commercial end and the market for that investment, which is that, if the vaccine was meant to cost $20 a shot in order to recover your investment and make some profit, that is what it would be charged at. If the country cannot afford it, the WHO and others, who are pouring billions into development, should pour some of that instead into purchases.
  (Dr Reeders) The international AIDS vaccine initiative, to my knowledge, is working very hard, lobbying the World Bank, saying, "Do not let us produce a vaccine when we have no way to pay for it. You have to come forward with a significant amount of money." The cost of that will be very substantial, but it will suck commercial enterprises into trying to work on these vaccines.

Chairman: That brings us to the end of our questions. Thank you very much indeed for coming along. If there are points which we have missed or you feel that you have not got over effectively, perhaps you would like to let us have something in writing. You will get a transcript of the morning so that you have an opportunity to correct it factually. In the meantime, thank you very much for coming along. It has been a good session and I hope you have enjoyed it.

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