A physician’s memoir describing a successful research program leads Brian Easton to ponder about research funding strategies

This is a re-post of an article originally published on pundit.co.nz. It is here with permission.

A few years back, I was, in effect, commissioned to review the development possibilities of a local biotech industry, especially one for creating new pharmaceuticals. At the time, it was fashionable in every regional plan – anywhere in the world – to claim that local prospects of developing an innovating biotech industry were high.

From my reading I concluded that the United States did not have a biotech industry. Rather, a dozen of its large urban centres had one and everywhere else hardly mattered. That was because the industry had to function in a deep, skilled-labour market with numerous medical centres and tertiary educational institutions, and a variety of specialist ancillary services such as precision assaying (measurement) and patent lawyers. Smaller centres would not have enough work to support the specialisation. (The technical term is ‘economies of agglomeration’; they are central to economic development as my Globalisation and the Wealth of Nations explains.)

The population of the smallest of the US biotech centres was larger than Auckland, although if Hamilton was added it just exceeded the threshold (especially given the expertise in Ruakura). That led me to argue that good linkages between the two centres were vital – we are getting there – and it seemed likely we could further enhance the potential ‘size’ of greater Auckland by improving its connections with the rest of New Zealand. (At the time, the expertise for maintaining high air quality was in Wellington, a short air trip or overnight shipping away; broadband was to come.)

Even so, the biotech industry has not thrived as much as was hoped. My guess is that there has not been enough private venture capital to fund the development of a biotech industry which has a high rate of failure, while the government was unwilling to fill the gap. I moved on to other issues.

Reading Eric Espiner’s A Physician’s Journey: Chasing Hormones You Never Knew You Had, and Why You Need Them prompted a return. (A warning. The book is not an easy read; its target audience is those very familiar with general medicine. This layman struggled to keep up.)

Hormones (their study is called ‘endocrinology’) are one of a body’s signalling devices in which molecules flow between glands and organs which react to their signals. The known number is 75, but more will be discovered. Most people know of a handful – adrenalin, cortisol, dopamine, growth hormone, insulin, melatonin, oxytocin, oestrogen, testosterone ... – and a handful of the glands which produce them – ovaries, pancreas, pituitary, testes, thyroid ...

To my surprise, even the heart secretes hormones. (On reflection, I shouldn’t be surprised at anything in endocrinology.) In between his clinical duties as a hospital physician, Espiner (and his team) was a pioneer in the study of one of three hormones the heart secretes: the C-type natriuretic peptide (CNP), which plays a crucial role in regulating various bodily functions, including cardiovascular homeostasis, bone growth, and neuronal function. (I am afraid you’ll have to look up elsewhere if you want more detail; I don’t trust myself.)

This internationally pioneering research was based in Christchurch. It occurred, serendipitously perhaps, because, like Espiner, Don Beaven was a Christchurch boy, who established what is now known as the Don Beaven Medical Unit. His interest was diabetes, where he developed a world class reputation and he recruited to his medical unit endocrinologists in training such as Espiner. The unit was not just an isolated part of the University of Otago. It drew on other local institutions: the Canterbury hospital system, the Canterbury Research Foundation (which Beaven helped found), Lincoln University (a lot of the experimental work was done on sheep) and the University of Canterbury science faculty. It had good connections with other international centres of excellence; as well as the professional interchange, they used the Christchurch team to do some of their assaying.

Such a centre of excellence does not make Christchurch a biotech centre comparable to the American dozen. It is a reminder that centres of excellence can exist in just about any city. It is also a reminder that public policy has to be flexible. Who would have guessed that such pioneering medical research would arise in Christchurch? (There is other excellent research being done outside Auckland. The Dunedin Multidisciplinary Health and Development Study has recently celebrated its fiftieth anniversary to international accolades.)

I am not convinced that our approach to public research has been responsive enough. Espiner grumbles about the time he wasted making abortive research grant applications. (The Canterbury Medical Research Foundation could only make a small contribution but what it did was invaluable.)

I know of a lot of other quality researchers with similar grumbles. It’s partly the funding shortage, but also – in my experience – the way the research funding selection boards tend to favour the fashionable and the conventional; moreover they tend to support projects rather than programs in centres of excellence. The failure applies to the social sciences as well as the natural sciences. You would have to be Trumpish brain-dead to support the Ministry of Culture and Heritage’s abandoning Te Ara, Aotearoa New Zealand’s world-leading electronic encyclopaedia.

What about commercialising the research by a patent which produces something which could be sold, thereby paying a royalty? That was the background to my original investigation. Create a new medical drug and one can end up with zillions; the fashion did not notice that only a trivial number of chemicals investigated got as far as commercial use (which was why venture capital is so important). Espiner describes the difficulties patenting their findings – patent lawyers were hard to find in New Zealand – but ultimately there was no commercial firm that could see how it could make a profit from them; eventually the patents were dropped because of the expense of maintaining them. The intellectual property is available free to all endocrinologists and their patients.

*Brian Easton, an independent scholar, is an economist, social statistician, public policy analyst and historian. He was the Listener economic columnist from 1978 to 2014. This is a re-post of an article originally published on pundit.co.nz. It is here with permission.