Financial situation Communication Human resources
In order to successfully complete its missions, the Institut Pasteur imperatively requires new financial resources. Launching new research programmes, modernising equipment, recruiting new talent, and expanding its international role cannot be implemented without real growth in financing.
The financial situation, whilst remaining fundamentally healthy, has become more difficult. Over the last ten years, the Institut Pasteur has been able to markedly expand its research potential, through the favourable trend in its own resources (in particular, industrial royalties), and continuing State subsidies, despite the setting of an upper limit. The growth rate was particularly high over the first half of the period, in parallel with bringing three important new buildings into service: the AIDS and Retrovirus building, the Medical Biology building, and the Scientific Information Centre. Over the same period, the policy of actively reconstituting the Institut Pasteur heritage has borne fruit since, in twelve years, the Foundation equity has increased four-fold. That trend results from the high-volume and regular bequests from which the Institut Pasteur benefits, the capital gains achieved through industrial restructuring and management of the Institute's fixed and mobile assets. Growth in equity constitutes an essential objective for the Institut Pasteur insofar as equity generates new operating resources, which will be indispensable in coming years. In order to give fresh impetus to the Pasteur mission, take up the public health challenges of the 21st century and maintain the Institut Pasteur position on the international scene, it is today important to increase financial resources. In order to do so, considerable work has been done on developing sponsorship and the revenue derived from research spin-offs but those measures are not liable to have an immediate effect.
In the year 2000, the Institut Pasteur running expenses amounted to FF 1,008 million, as against FF 964 million in 1999 (excluding carry-over of resources unused in previous years). Personnel expenditures accounted for a little more than half of all expenses (51%). This ratio is normal for a research organisation, whose performance essentially depends on the number and quality of its scientists. Operating expenditures (purchasing, external expenditures, taxes and duties, etc.) accounted for 38% and depreciation and provisions for 11%. Those proportions have changed little over the last ten years.
Structure of financing
Three headings have been selected in order to analyse the financing structure of the Institut Pasteur everyday operations: Revenue from own activities; Sponsorship and heritage revenue; The State contribution.
Revenue from own activities
(FF 473 million as against FF 421 million in 1999) contributed 44.4% of the Institute financing in 2000. Industrial royalties account for 60% of that total. The remainder was generated by sales and services rendered (expert assessments and agreements with industry and international organisations, Medical Centre consultations and vaccinations, etc.).
Giving and endorsement revenues
(FF 258 million as against FF 251 million in 1999) generated 24.2% of the Institute everyday resources in the year 2000. Sponsorship accounts for almost three quarters of that total. Sponsorship consists in donations and bequests, the apprenticeship tax and miscellaneous subsidies. The amounts reported for that item in the profit-and-loss account with respect to the donations and bequests are different from those actually received during the financial year. Pursuant to the articles of association, only the unit part of donations and bequests under 1 million francs is reported as an operating resource (the part exceeding that threshold is posted as an exceptional resource, then posted in the endowment fund). The annual coverage of depreciation of acquisitions financed by gifts is also taken into account. Heritage revenue, which accounted for 7.2% of the Institute overall resources in the year 2000, cover current financial revenue, rents and agricultural revenue.
The Government contribution
amounted to FF 335 million (as against FF 319 million in 1999) and accounted for 31.4% of the Institute current resources in the year 2000. The major part (86%) of the State contribution consists in the Ministry of Research subsidy. The contribution also includes the subvention from the Ministry of Health for the activities of the Reference Centres (4% of the State's contribution), the research contracts and agreements concluded with public research organisations, such as the ANRS, Inserm and CNRS, and the incentive credits allocated by the Ministry of Research (10% of the State's contribution). Those amounts are equivalent to the funds managed and accounted for by the Institut Pasteur. They do not take into account the salaries of people working on the Institut Pasteur campus but remunerated by public organisations and the universities, which amount to about FF 100 million, or the credits to support programmes allocated to associated units, but managed by those organisations, which amount to a little less than FF 20 million in the direct and indirect State contributions, assessed at 38% of the expenditure made on campus, irrespective of whether that expenditure relates to running the Institut Pasteur, public bodies, or universities.
Changes in the financing structure
Over the last ten years, the current resources of the Institut Pasteur have grown, overall, by 70% in value, equivalent to 44% volume growth. This marked increase in the Institute potential is practically exclusively related to the first half of the period, since current resources grew by 40% between 1990 and 1995 and 4% between 1995 and 2000.
The revenue from own activities
accounted for 44.4% of resources in 2000 as against 32.5% in 1990. The growth is the consequence of markedly-contrasting trends in the components of that aggregate. Sales and services, which generated over 60% of revenue from own activities at the start of the period, decreased in relative importance due to discontinuation of the manufacture of the main products marketed by the Institut Pasteur. However, in 1992, the trend was reversed, mainly as a result of the sustained growth in the revenue from medical laboratory tests, a consequence of the reorganisation of that activity within the framework of the specialised Medical Laboratory Centre and the very positive course of the volume of research contracts with the European Union in recent years. The reduction observed in 1999 reflects a loss of revenue from medical laboratory work, subsequent to divestment of those activities to Laboratoire Pasteur Cerba. The resumption of growth in 2000 mainly resulted from the incorporation of consultancy and vaccination activities, previously conducted in the context of the Institut Pasteur Hospital, which shut down at the end of 1999. In 1999 and 2000, the amount of industrial royalties received by the Institute increased three-fold in volume. Over the same period, the contribution of that revenue to the Institute budget increased from 12 to 26%. The Institut Pasteur has thus become the research organisation receiving the highest amount of industrial royalties. These results are the fruit of a policy of developing relationships with industry, encouraging the conclusion of agreements, royalties related to research projects, and use of the Pasteur brand. However, since 1997, those resources have grown more slowly, pointing to a reduction in coming years as HIV- and hepatitisrelated patents expire.
Sponsorship and heritage revenue
showed a two-fold increase in their contributions to the Institut Pasteur resources over ten years. The growth mainly results from the extremelypositive trend over the first part of the period with regard to the number and amount of bequests to the Institut Pasteur. The growth was further amplified by application of the reform of the articles of association in 1992. The reform resulted in a greater proportion of the gifts being posted to operating resources (FF 1 million instead of FF 500,000 in the form of donations or bequests). It should also be noted that the reorganisation of fund collection resulted in a change in the method of accounting for donations, which are now shown as current revenue. Prior to 1995, those measures thus resulted in a noteworthy progression in current resources derived from sponsorship. The heritage revenue (rents, agricultural revenue and current financial revenue) have grown, on average, 6.5% in volume per year over the last ten years. The trend is the result of the policy of reconstituting the heritage, implemented over a number of years. However, the fall in interest rates from 1993 has limited growth over the second half of the period. With 18% growth in value, the State contributions in 2000 were equivalent, in constant francs, to those in 1990.
The State contribution
to the Institute budget has thus fallen, in relative terms, from 46% in 1990 to 31.4% in 2000. The proportion remained close to 50% over several years, until the end of the eighties. The proportion then fell rapidly, over the phase of strong growth potential for the Institute, and has remained stable since 1995, between 31 and 33%. The trend closely reflects that of the Ministry of Research subsidy, which is the major State contribution. That subvention partially accompanied the growth in the Institute budget until commissioning of the AIDS and Retrovirus building in 1991. The amount of the subsidy first stabilised, and then was reduced from 1993. The trend was reversed in 1999, by allocation of an additional subsidy of FF 6 million, inclusive of VAT, which was confirmed in the year 2000. The contribution of the Ministry of Health to financing the Reference Centres activities has fallen in volume by 10% over twelve years. Currently, the contribution accounts for less than 40% of the cost of those activities. Public research contracts and agreements accounted for between 6 and 12% of all the State contributions over the period. The preponderant share of the ANRS with respect to financing AIDS research (on average, more than half throughout the period) should be noted. In 1998, the Ministry of Research set up the National Fund for Science (FNS) and, in particular, programmes devoted to microbiology and genomics. This enabled the trend towards reduction in the amount of public financing, observed since 1993, to be reversed.