Ulrich, and anyone doing non-human cloning at the time, had to work within a P3 facility. A P3 facility must contain all equipment necessary for the experiment and be kept in conditions such that bacteria could not escape from the laboratory. Typically, this requirement meant that the laboratory had to be maintained at a negative pressure (if you open a door to the room, wind blows into the laboratory, not out.)
The requirement for cloning human genes were even more stringent. The NIH guidelines only allowed experimentation with human genes, if it was performed in a P4 facility. A P4 facility was the highest level of biological containment. It had extreme measures designed to prevent escape of any living organism. P4 facilities were typically used for infectious disease research like smallpox and ebola. A P4 facility required that the organism be contained within a sealed enclosure.
Humans could interact with the organisms inside the P4 facility only through glove boxes. The humans were outside of the P4 facility. They could only stick their arms into special fixed arm length rubber gloves attached to the walls of a cabinet. All material exiting the P4 facility had to be disinfected, typically through a high temperature autoclave that killed anything alive. The P4 requirements for cloning human DNA were so stringent that they essentially stopped all human cloning work in the US. The NIH guidelines were relaxed in January 1979, removing the requirement that cloning human genes must be done within P4 facilities.
In January 1979, Axel Ullrich moved to a small company in San Francisco called Genentech. Many of the UCSF scientists moved to, or had an affiliation with Genentech. Eli Lilly had research agreements with both UCSF and Genentech; they were interested in getting a clone of human insulin any way they could.
Once at Genentech, Ullrich continued his quest to clone human insulin. The regulatory roadblock, NIH regulations requiring that recombinant DNA work be done in a P4 facility, was overcome by moving the research to France, which only required a P3 facility for such work. Eli Lilly had a research facility in France and made it available to Genentech and Ullrich. The second roadblock was getting enough insulin mRNA to effectively perform the cloning.