AstraZeneca ‘said it could cut UK jobs’ if biodiversity drug levy is introduced

AstraZeneca has said it may cut jobs at its UK operation if the government enforces a global push to make companies share profits derived from nature’s genetic codes, multiple sources have told the Guardian.

The alleged comments from the company came amid a concerted lobbying push by the pharmaceutical industry against the profit-sharing measures.

Sources told the Guardian that the British-Swedish biotech company – which made $5.96bn (£4.59bn) profit last year – made the comments during a Department for Environment, Food and Rural Affairs roundtable meeting last week to discuss a proposed new global levy on drugs derived from the digital forms of biodiversity. A spokesperson for AstraZeneca denied the comments were made by their representative.

The genetic codes of nature – which, when stored digitally, are known as digital sequence information (DSI) – are playing a growing role in new drug development in the pharmaceutical and biotech industries.

But there is widespread anger among biodiverse countries about how DSI is being used by multinational companies to develop commercial products – almost always for free. Most of the world’s remaining biodiversity is concentrated in poorer countries. They argue that the free use of this genetic information amounts to “biopiracy”, and say companies should share profits when indigenous species are used to develop commercial products.

Global leaders have already agreed in principle that these benefits should be shared more fairly. They are now gathered in Cali, Colombia, at the biodiversity Cop16, in negotiations over what form that sharing should take.

Ideas under consideration include a 1% global tax on profits of goods derived from DSI, which could cost the Cambridge-based company as much as $60m if enforced by the UK government [that figure represents an estimated maximum, as not all of the firm’s profit would be derived from DSI].

The profit-sharing proposals have prompted significant backlash from pharmaceutical companies. In March, AstraZeneca announced a £650m investment in its UK operations, including £450m for its vaccine research and manufacturing facility in Liverpool. According to sources present at last week’s meeting, however, a representative for the company said jobs in north-west England could be affected by any levy.

Without a global agreement on how revenue is shared from discoveries based on DSI, some countries have threatened to restrict access to their biodiversity – potentially a major blow for commercial and scientific research. Proceeds from the global fund would be used for nature conservation around the world in an effort to prevent the continued destruction of ecosystems.

Eva Zabey, chief executive of Business for Nature, said making progress on DSI at the Cop16 negotiations was essential.

“Nature underpins every aspect of our economy. The benefits of natural resources – including through digital sequencing – must be valued and shared fairly. Businesses have a responsibility to contribute financially and non-financially for their use of these resources,” she said.

While any DSI levy would be voluntary, governments are free to implement compulsory national measures, an approach that is under consideration by the UK government.

At the Defra meeting on 15 October, pharmaceutical industry representatives voiced strong opposition to the idea and said a compulsory levy would damage competitiveness with countries such as the US, which is not a signatory to the UN biodiversity process and would not introduce any levy.

A sample of a plant is taken on the Galápagos islands for scientists to extract DNA as part of the Barcode Galapagos project. Genetic codes are also used by pharmaceutical companies to design new drugs, often for free. Photograph: Dolores Ochoa/AP

Richard Torbett, chief executive of the Association of the British Pharmaceutical Industry, who attended the Defra meeting, said the imposition of a compulsory levy for UK-based companies was “a poorly targeted and damaging response to a critical global challenge”.

“It would discourage the use of this vital data, stifling British research efforts into vital to public health concerns,” he said.

“Any multilateral benefit-sharing mechanism must promote conservation objectives alongside scientific innovation and economic growth. The proposals on the table at Cop16 for a compulsory levy do not achieve this.

“They will have a direct impact on UK innovation, investment and growth, made worse by the fact that key nations such as the US will not impose a levy, putting the UK at an active disadvantage in attracting cutting-edge medical research,” he said.

Ahead of the negotiations in Cali, the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA), said it had “serious concerns” about a proposed global DSI tax, and that it could further complicate research.

Steve Bates, chief executive of the UK Bioindustry Association, said: “Any rules or levies that come from this summit will be imposing barriers to innovation and business growth … We have already discussed this with the UK government delegation going to Colombia.”

International DSI negotiations at Cop16 are expected to conclude on Friday next week.

A spokesperson for AstraZeneca said it may be the case that others in the room at the meeting on 15 October who represent the industry may have made comments about the impact on companies.

“I can confirm that no AstraZeneca representative made threats to move operations or cut jobs. As a company we are aligned with the position set out by the IFPMA which can be found here,” they said.

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