State-controlled Spanish foundations ‘cannot invest in business’?

Professor Barbacid ‘halts research into lung cancer treatment’

That was the headline in El País, 4th May 2011. Professor Barbacid is one of the leading cancer researchers in the world, brought back to Spain from the USA with the promise of a substantial research centre, and funding.

He is Director of the National Cancer Research Centre (CNIO, where he and his team have discovered that a specific cell protein could be used as the target for drug treatments for lung cancer. The results were published in Cancer Cell, April 2011. The next step, of course, is to develop the drug treatments.

Prof Barbacid proposed the creation of an entity that combined commercial and foundation interests, in order to attract the €10m he estimates that is required to develop a pharmaceutical treatment based on this latest discovery.

But the Ministry of Science and Innovation has told him, according to El País, that:

a state-controlled foundation cannot establish agreements which would imply its participation in a [profit-making] company.

This is, plainly, rubbish. A number of other state-controlled foundations – ranging from Spain’s largest museum, El Prado, to Spain’s universities – have shares in businesses.

Worse, it’s a brake on the development of different, new financial models for foundations in Spain. Spain desperately needs to renovate its foundation sector – and may do so soon, with a proposal to split savings banks into bank + foundation – but this type of bureaucratic intervention simply slows that process down.