A survey of South-North health biotech collaboration

In recent years, biotech companies in North America and Europe have increasingly looked to developing countries to find new partners and develop new collaborations. Even though the growth rates of emerging economies like China and India, as well as several sub-Saharan African countries, have been hampered by the current global recession, over the past five years their economies have grown faster than economies anywhere else in the world1. This growth has been reflected by growing indigenous private sectors in health biotech that are also taking active steps to strengthen their innovation capabilities2, 3, 4, thereby allowing collaboration to become a two-way street. In health biotech, substantial benefits are accrued from collaboration between firms in high-income (developed) and low- and middle-income (developing) countries, or what we define as 'the North' and 'the South'. (Note: even though some developed countries, such as Australia, are South of the equator, we still refer to them as from the North. Likewise we refer to some developing countries North of the equator, such as China, as from the South.) Collaboration can minimize costs and share risks because expenditures for R&D and clinical trials are typically lower in the South than in the North5. Collaboration between firms in the North and South can also facilitate access to strategic knowledge and resources. This flow of resources is not solely North to South, with developed countries being the providers of knowledge; developing countries have been increasing their expertise in this field and possess other resources, such as indigenous materials, important for health biotech development6, 7. Furthermore, South-North collaboration can open firms' access to each other's markets. For developing countries, it can be key to gain access to the rich markets in the North, but market opportunities are also flourishing in the South. For example, the economic growth and growing middle-class populations of such countries as China and India are creating an increased demand for resources from abroad. In 2025, the urban middle-classes of China are expected to reach 612 million, increasing their spending fivefold to more than $2.3 trillion a year8. In addition, many developing countries have masses of poor people who, because of their large numbers, represent great market opportunities for affordable health products9. Very little information is available about the global spread of health biotech alliances and the extent to which the linkages cross the North and the South boundaries. Here, we present data that fill this gap using results from a survey on South-North entrepreneurial collaboration in this field. We surveyed firms working in the health biotech sector in six developing countries—Brazil, China, Cuba, Egypt, India and South Africa—about their international collaborations (see Supplementary Methods online for a fuller description of the methodology). These countries were selected on the basis of their position as southern leaders in the field, as identified through previous research on health biotech in developing countries10, 11. We followed a broad definition of 'collaboration', considering it to be any work jointly undertaken by firms and organizations in developed and developing countries that contributes to the production of knowledge, products or services in health biotech. We sent the survey to 467 firms and received responses from 288 firms, which constitutes a 62% response rate. We feel this is a solid response rate, given that participation was voluntary, and the fluidity and secrecy of the sector can make it challenging to collect responses. In the analysis, we mapped the extent of South-North entrepreneurial collaboration at the aggregate level reported by firms and organizations in our six focal countries, and compared it with their South-South collaboration levels. We further compared the extent of international collaboration initiatives in each of these main countries and explored where the main linkages lie. Our survey reveals that South-North entrepreneurial collaboration is considerable (Fig. 1). Over half of these firms (53%) reported collaborations with partners in developed countries (32% of firms in South-North collaboration only, and 21% of firms in both South-North and South-South collaborations). Most of the firms reported several collaborations with northern countries amounting to a total of 433 reported South-North collaboration initiatives. This reflects an average of 2.8 collaborations for each firm that is actively engaging in South-North collaborations and is an indication that health biotech firms in developing countries seem to be closely involved in networks with those of developed countries. In comparison, their collaboration with other developing countries is more modest, with about a quarter (27%) of firms reporting at least one South-South collaboration. Almost all the firms in South-South collaboration are also active in South-North collaboration. A total of 41% of the firms in the developing countries we surveyed reported that they had no international collaborations. Collaboration in health biotech is therefore roughly twice as likely to be along the South-North axis as the South-South one. One example of such a South-North collaboration is that between the major biomedical institution in Brazil, the Oswaldo Cruz Foundation (Fiocruz, Rio de Janeiro, Brazil), and the large US biotech firm, Genzyme (Framingham, MA, USA). In July 2007, the two came together to further drug discovery in neglected diseases—Fiocruz uses its bioinformatics expertise to identify novel drug targets in Trypanosoma cruzi, the causal agent of Chagas disease, which are then tested by Genzyme against its high-throughput screening libraries. In this project, the partners are leveraging complementary capabilities in their collaboration and facilitating knowledge flow through initiatives like Genzyme's hosting of a scientist from Fiocruz at its laboratories. Through its Humanitarian Assistance for Neglected Diseases program, Genzyme has an explicit focus on contributing to the public health interests of the countries in which it has strong market interest. And as part of the Brazilian Ministry of Health, Fiocruz is committed to basic applied health research on regional diseases of relevance to Latin America12. The countries we studied differed with respect to their extent of international collaboration (Fig. 2). Whereas the rates of South-North entrepreneurial collaboration for Brazil, Cuba, India and South Africa ranged from 60–75% of firms, only 33% of Chinese firms and 14% of Egyptian firms reported partnerships with the North. In the latter two countries, collaboration with developed countries does not seem to be a common practice for health biotech firms. This cannot be explained solely by the fact that these countries have large populations and therefore do not need to collaborate outside their borders. Another country with a large population, India, is among the countries that collaborate most with developed countries. India may collaborate more with developed countries because of the greater predominance of English as a second language and the stronger historical links with the UK. Different policy emphasis could also explain the wide difference between countries in their levels of collaborations. Further research is needed to understand why China and Egypt collaborate less with northern countries in the health biotech sector than other countries. We also observed that comparatively small countries, such as Cuba, are actively collaborating with the North and engaging in a relatively high number of such collaborations (10.5 per firm). We can see that Cuba is also active in South-South collaboration and is the only country we surveyed that has an equal percentage of firms involved in North and South collaboration. Cuba's small size is likely to encourage a more outward orientation. It is also notable how relatively rarely South-South collaboration is done by Chinese and Indian firms. The health biotech firms in China have generally limited international collaboration, whereas Indian firms emphasize much more collaboration with developed than with developing countries, as we saw above. We also observed that Egypt is the only country we surveyed that has more South-South collaboration than South-North collaboration. It may be because it actively collaborates with other Arabic-speaking countries in North Africa and the Middle East. To better examine where South-North collaborations in health biotech lie, we created a map of the main linkages (Fig. 3) using the software Ucinet 6. This map reveals that firms in the United States are the most common partners (35% of all partnerships) of firms in developing countries. In the map, we observe that China-US and India-US collaborations are particularly frequent. This most likely reflects the dominant position of the United States in the biotech field, both in number of firms and revenues13. Even though the United States is not the main northern collaborator of Cuban biotech, entrepreneurial collaborations with the United States still exist, despite the trade embargo against them. European countries are also common partners of developing countries' health biotech firms, with collaborations with firms in Germany, the UK and France, comprising 8%, 7% and 6% of partnerships, respectively. It is notable that Brazil seems to partner with a relatively high number of European countries, more so than any other surveyed country. Collaboration with Canada is also relatively common, with 6% of the developing countries' collaborations occurring with Canadian partners. To normalize the data according to the size of the respective biotech sectors in each country, we adjusted our analysis using data from the Organization for Economic Cooperation and Development (OECD; Paris)13 on the number of firms in each region (see Supplementary Methods online). Even when adjusting for this, the United States stands out as developing countries' main collaborator, with 0.0747 South-North collaborations per US biotech firm. This compares with 0.0571, 0.0550 and 0.0263 southern collaborations per firm from Canada, Europe and Australia, respectively. Regional biases in collaborations were also evident; for example, our data show that among the six developing countries we surveyed, China has the highest number of collaborations with firms in Japan, South Korea and Australia, indicating East Asia and Pacific networks. This is also the case with South-South collaboration where firms originate within Latin America; those within southern Africa also partner heavily within their regional networks. Furthermore, we observe the influence of past historical ties on South-North partnering patterns. Developing countries collaborate relatively frequently with their former colonial powers, which may be partly because they share languages and/or have similar institutional environments. For example, Brazilian firms collaborate as frequently with Portugal as with the UK (even though the former country is ranked by OECD to be relatively weak in health biotech, whereas the latter country is ranked as a strong country in the field)13. Cuban firms' collaborations with Spanish organizations are also notable in our survey, as are the relatively high rates of collaboration of Indian and South African firms with the UK. By examining the extent and geography of South-North collaboration of six leading developing countries, our survey provides an indication of how closely developing countries' firms are tied to northern health biotech networks. The findings of the study may be useful for firms in the North and the South considering global expansion, for research groups considering entrepreneurial alliances and in informing innovation, development and foreign affairs policies in both developed and developing countries. The data presented on the level and characteristics of firm collaboration can also be used as a reference by future studies on this topic, thereby affording the possibility to evaluate changes over time and the successes of initiatives for promoting South-North collaboration. As with any survey, several caveats apply. For logistical reasons, we had to restrain our data collection to a few (six) select countries that were likely to represent the bulk of developing countries' firms most active in health biotech and therefore most likely to be collaborating with northern firms. We have also not been able to receive information from every firm active in health biotech in the six countries surveyed, and the firms we contacted may not have reported to us the extent of characteristics of all their South-North collaboration. As we obtained a reasonable response rate, we nonetheless believe that the results accurately represent the extent and geography of South-North firm collaboration in the health biotech field. Our main conclusions are that South-North collaborations are common practice in health biotech. The results show that over half of the firms in Brazil, China, Cuba, Egypt, India and South Africa are actively collaborating with countries from the North. In comparison, only around a quarter of these firms are actively collaborating with other developing countries. Developing countries' firms therefore seem to be tied more closely in South-North health biotech networks than South-South networks. Second, the extent of collaboration varies widely among countries from the South. Some of the developing countries we focused on seem to rely heavily on collaboration with northern countries (e.g., over two-thirds of Indian firms actively collaborate with developed countries), whereas others do not (e.g., in China only around one-third of firms collaborate with developed countries). Further research is needed to identify whether Chinese firms don't need international collaboration or if a lack of English knowledge or other hindrance tends to limit the international collaboration of Chinese firms. Third, South-North collaborations are focused heavily on the United States for all the developing countries surveyed, except Cuba. This likely reflects the dominance of the United States in the global biotech scene in both capitalization and expertise, two factors that are likely to facilitate the flow of knowledge and catalyze collaboration. And finally, it is clear that collaboration is influenced by historical ties between countries. The effects of colonial legacies are evident in the regional patterning of partnerships, and some developing countries have stronger relationships with their former colonial power than we would have expected, considering the latter's respective strength in the health biotech sector. This is somewhat surprising as colonial ties were formally severed in these countries before the birth of the biotech sectors during the 1980s and 1990s. Even so, shared bureaucratic structures as well as official languages are likely to continue to promote tighter South-North linkages between such countries. As a large proportion of health biotech firms in the leading developing countries are collaborating with firms in North America and Europe, they are positioning themselves to access different types of strategic knowledge (e.g., technical, marketing, regulatory) that can be gained only through tight firm linkages with a northern partner. Developing countries with little or no South-North collaboration should thoroughly assess whether they are losing out on such opportunities by not emphasizing South-North collaboration more fully, and, if so, come up with ways to strengthen their international collaborations. Collaboration with developing countries can also be directly beneficial to northern countries. When developed countries experience economic recession, they should pay attention to global opportunities to help them survive hard times, as South-North collaboration can give firms in developed countries increased opportunities to reach developing countries' markets. This helps mitigate the losses they might experience in difficult economic conditions in their own countries. But they can also go further and collaborate with developing countries' firms in the research and development stages of their health biotech activities, thereby lowering the cost of getting products on the market. It is important that firms, researchers and governments all over the world realize that opportunities in the health biotech field are not confined to a handful of northern countries and that a global approach is required to advance the development of this field. Note: Supplementary information is available on the Nature Biotechnology website. The authors want to thank all the firms that responded to the survey and generously shared their expertise and time. They also thank Jocalyn Clark for her comments on the manuscript. This project was funded by Genome Canada through the Ontario Genomics Institute, the International Development Research Centre (IDRC) and supported by the McLaughlin-Rotman Centre for Global Health. The McLaughlin-Rotman Centre for Global Health, Program on Ethics and Commercialization is primarily supported by Genome Canada through the Ontario Genomics Institute, the Ontario Research Fund and the Bill and Melinda Gates Foundation. Other matching partners are listed at http://www.mrcglobal.org/. M.R. is supported by a Canadian Institutes of Health Research Training Award. A.S.D. and P.A.S. are supported by the McLaughlin Centre for Molecular Medicine. H.T. is supported by a New Investigator Award from the Canadian Institutes of Health Research.