The team from Utrecht University and Dow Chemical Co
produced ethylene and propylene – precursors of materials found
in everything from CDs to carrier bags and carpets – after
developing a new kind of iron catalyst made of nanoparticles.

Existing bioplastics, which are made from crops such as corn
and sugar, have only limited use as they are not exact
substitutes for oil-based products.

The new system, by contrast, produces chemicals that are the
same as those made in petrochemical works, allowing them to be
used in a wide range of industries.

This also means they will not be biodegradable, although
they will be made from renewable resources.

Researcher Krijn De Jong and his colleagues envisage using
non-food sources of biomass for the new process, such as
fast-growing trees or grasses, rather than traditional crops, in
order to reduce competition for resources between food and fuel.

Plastics made from biomass could, however, be vulnerable to
the same criticism that has beset biofuel production.

Critics say the production of some biofuels can occupy land
that would otherwise be used for agricultural purposes, thus
limiting food and water resources for a rapidly rising world
population.

Some biofuel production could also increase carbon
emissions, especially if rainforests are cut down to facilitate
production.

The research by De Jong and his colleagues, which was
published on Thursday in the journal Science, is still at an
early stage. It now requires larger-scale testing and pilot
projects, so it will not reach the market for several years.

RISING DEMAND

Diminishing reserves of fossil fuels and rising greenhouse
gas emissions suggest there should be increased demand for
bioplastics. But that argument could be disrupted by recent vast
finds of shale gas, which now provide a cheap alternative
feedstock for ethylene in the United States.

The Dutch-designed catalysts consist of tiny nanoparticles
separated from each other on carbon nanofibres. In laboratory
tests, the catalysts proved highly effective at converting
biomass-derived synthesis gas – a mix for hydrogen and carbon
monoxide – in ethylene and propylene.

Importantly, the process worked without producing large
amounts of methane, an unwanted byproduct of another catalytic
process using large iron particles.

The team now plan to increase catalyst production by linking
with experts from Johnson Matthey, the world’s largest
supplier of catalytic converters for vehicles.

Nanotechnology, which involves designing and manufacturing
materials on the scale of one-billionth of a metre, is a rapidly
expanding area of materials science with applications in
medicine, electronics and coatings.

Cash-strapped governments have slashed drug prices, racked up close to $20 billion (12.7 billion pounds) in unpaid bills for treatments and are becoming increasingly reluctant to pay for innovation.

So disillusioned drugmakers are cutting back operations in Europe and launching more and more drugs elsewhere – trends that look set to accelerate as they question the case for clinical research in countries that may never pay for their inventions.

The frustration is evident at pharmaceutical giants like Britain’s GlaxoSmithKline (GSK.L: Quote, Profile, Research) and Germany’s Bayer (BAYGn.DE: Quote, Profile, Research), both of which have deep manufacturing and research roots in their home markets.

“Europe has unfortunately slipped in terms of its willingness to pay for innovation,” GSK Chief Executive Andrew Witty told analysts last week.

“We’re now at a point where we have to take the view and I think face the reality that really it’s about the U.S. and, excitingly anew, it’s about Japan in terms of where innovation should be driven.”

It is not as if the United States and Japan are pushovers.

There was protest from Big Pharma on Monday about plans for $364 billion of U.S. healthcare savings over 10 years that industry said could cause massive job losses.

Witty argues, however, there is a widening gulf between attitudes in Europe, which is “stuck in a bad place”, and those in the United States and Japan.

Modern drugs for complex diseases like cancer can cost tens of thousands of dollars but may transform outcomes for patients.

The United States in 2010 accounted for 61 percent of all sales of new drugs launched during the preceding five years, while Europe made up just 22 percent, according to IMS Health, which tracks prescription drug sales and trends worldwide.

Witty’s comments will resonate, since the boss of Britain’s biggest pharmaceuticals group is also the influential head of the European Federation of Pharmaceutical Industries and Associations (Efpia).

“He doesn’t speak up in public unless it’s needed. Everybody in the industry thinks the same way – this is a problem that is growing by the day,” Richard Bergstrom, director general of the European lobby group, said in a telephone interview.

“The euro crisis has triggered the worst in the national governments. That is what really frustrates CEOs. People in governments don’t seem to realise the risks they are taking, both in the short term with supplies and longer term with innovation.”

AGEING POPULATIONS

Strains between drug companies and European governments – facing a daunting challenge to rein in rising costs of care for ageing populations – have been building for years.

The industry has long complained about cost-effectiveness watchdogs like Britain’s National Institute for Health and Clinical Excellence (NICE), which sets an extra hurdle for reimbursement after a drug has been licensed for use.

NICE argues such benchmarking of value for money is vital.

GSK and patient groups were exasperated by a NICE decision last September not to recommend Benlysta for reimbursement – under which its cost would have been covered by the state health system – even though the GSK medicine is the first new treatment for lupus in a half-century and has been widely adopted elsewhere.

Concerns are also growing about economically strong Germany, the world’s third-largest market for pharmaceuticals, where IMS logged sales of $44 billion in the 12 months through September 2011.

Bayer CEO Marijn Dekkers thinks medicines have become an easy target for governments, as exemplified by Germany’s 16 percent mandatory rebate on all prescriptions.

“We are going to lose 16 cents with every euro of sales. It feels good short term, but for society it has consequences for the future,” he said in a February 7 Wall Street Journal interview.

There are deep misgivings, too, about Germany’s new system for setting drug prices, which allows for reassessment – and potentially big price cuts – a year after launch.

The new legislation prompted Eli Lilly (LLY.N: Quote, Profile, Research) and Boehringer Ingelheim to scrap plans to market their diabetes drug Trajenta in the country last September.

France, the world’s No. 4 market with sales of $41 billion, is also increasingly “picky” in rating drugs for reimbursement – another sign of a tough line in health departments across Europe, according to drugmakers.

There is fierce resistance among governments, too, to plans being drawn up by the European Commission for next month that would shorten timelines for approving new drugs, Bergstrom said.

Meanwhile, the shockwaves from price cuts in southern Europe, the epicentre of the euro zone crisis, are still rippling through stronger economies.

The common practice of cross-referring to prices in other countries means that exceptional price cuts in Spain or Greece – where the latest austerity package will spur further cuts in drug spending this year – will trigger knock-on cuts elsewhere.

Any Greek devaluation following a potential exit from the euro would take reference pricing into uncharted territory.

By comparison, the U.S. market is a better bet, even with healthcare reform, and Japan is a surprise bright spot. Green lights for a run of new drugs means 48 percent of GSK’s Japanese sales in 2011 were of products launched in the last five years.

(Editing by Mark Potter)

Cash-strapped governments have slashed drug prices, racked up close to $20 billion in unpaid bills for treatments and are becoming increasingly reluctant to pay for innovation.

So disillusioned drugmakers are cutting back operations in Europe and launching more and more drugs elsewhere – trends that look set to accelerate as they question the case for clinical research in countries that may never pay for their inventions.

The frustration is evident at pharmaceutical giants like Britain’s GlaxoSmithKline and Germany’s Bayer, both of which have deep manufacturing and research roots in their home markets.

“Europe has unfortunately slipped in terms of its willingness to pay for innovation,” GSK Chief Executive Andrew Witty told analysts last week.

“We’re now at a point where we have to take the view and I think face the reality that really it’s about the U.S. and, excitingly anew, it’s about Japan in terms of where innovation should be driven.”

It is not as if the United States and Japan are pushovers.

There was protest from Big Pharma on Monday about plans for $364 billion of U.S. healthcare savings over 10 years that industry said could cause massive job losses.

Witty argues, however, there is a widening gulf between attitudes in Europe, which is “stuck in a bad place,” and those in the United States and Japan.

Modern drugs for complex diseases like cancer can cost tens of thousands of dollars but may transform outcomes for patients.

The United States in 2010 accounted for 61 percent of all sales of new drugs launched during the preceding five years, while Europe made up just 22 percent, according to IMS Health, which tracks prescription drug sales and trends worldwide.

Witty’s comments will resonate, since the boss of Britain’s biggest pharmaceuticals group is also the influential head of the European Federation of Pharmaceutical Industries and Associations (Efpia).

“He doesn’t speak up in public unless it’s needed. Everybody in the industry thinks the same way – this is a problem that is growing by the day,” Richard Bergstrom, director general of the European lobby group, said in a telephone interview.

“The euro crisis has triggered the worst in the national governments. That is what really frustrates CEOs. People in governments don’t seem to realize the risks they are taking, both in the short term with supplies and longer term with innovation.”

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

For graphic on government share of health spending see: link.reuters.com/fap84s

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AGEING POPULATIONS

Strains between drug companies and European governments – facing a daunting challenge to rein in rising costs of care for ageing populations – have been building for years.

The industry has long complained about cost-effectiveness watchdogs like Britain’s National Institute for Health and Clinical Excellence (NICE), which sets an extra hurdle for reimbursement after a drug has been licensed for use.

NICE argues such benchmarking of value for money is vital.

GSK and patient groups were exasperated by a NICE decision last September not to recommend Benlysta for reimbursement – under which its cost would have been covered by the state health system – even though the GSK medicine is the first new treatment for lupus in a half-century and has been widely adopted elsewhere.

Concerns are also growing about economically strong Germany, the world’s third-largest market for pharmaceuticals, where IMS logged sales of $44 billion in the 12 months through September 2011.

Bayer CEO Marijn Dekkers thinks medicines have become an easy target for governments, as exemplified by Germany’s 16 percent mandatory rebate on all prescriptions.

“We are going to lose 16 cents with every euro of sales. It feels good short term, but for society it has consequences for the future,” he said in a February 7 Wall Street Journal interview.

There are deep misgivings, too, about Germany’s new system for setting drug prices, which allows for reassessment – and potentially big price cuts – a year after launch.

The new legislation prompted Eli Lilly and Boehringer Ingelheim to scrap plans to market their diabetes drug Trajenta in the country last September.

France, the world’s No. 4 market with sales of $41 billion, is also increasingly “picky” in rating drugs for reimbursement – another sign of a tough line in health departments across Europe, according to drugmakers.

There is fierce resistance among governments, too, to plans being drawn up by the European Commission for next month that would shorten timelines for approving new drugs, Bergstrom said.

Meanwhile, the shockwaves from price cuts in southern Europe, the epicenter of the euro zone crisis, are still rippling through stronger economies.

The common practice of cross-referring to prices in other countries means that exceptional price cuts in Spain or Greece – where the latest austerity package will spur further cuts in drug spending this year – will trigger knock-on cuts elsewhere.

Any Greek devaluation following a potential exit from the euro would take reference pricing into uncharted territory.

By comparison, the U.S. market is a better bet, even with healthcare reform, and Japan is a surprise bright spot. Green lights for a run of new drugs means 48 percent of GSK’s Japanese sales in 2011 were of products launched in the last five years.

(Editing by Mark Potter)