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Part 5—
The Role Of Government In The
Development Of Biotechnology

Scientists, industrialists, and the general public all have different expectations of government. Today the role of government in the lives of Americans is being widely questioned, with many people arguing forcefully that government has become too big and intrusive: that it is time to roll back excessive government regulation and reassert market forces. This ongoing public debate serves as a backdrop to the final section of this book, which examines the role governments have played (and continue to play) in the development of biotechnology not only in the United States but also in other major industrialized countries.

In Chapter 19, Louis Lasagna of Tufts University School of Medicine compares and contrasts drug approval policies in the United States, Europe, and Japan. He notes that although most biopharmaceutical products originate in the United States and begin clinical trials here, they are usually marketed first in Europe. As a result of the longer time required for clinical studies in the United States, together with lengthy and stringent product review processes, fewer new drugs are introduced in this country than anywhere else except Norway. By contrast, Lasagna points out, other industrialized countries regulate drug prices and pharmaceutical industry profits much more strictly than does the United States.

The former associate director for science in the Clinton White House, M. R. C. Greenwood, is in no doubt that the U.S. government has played a crucial role in nurturing research on biotechnology and will continue to play an important role in supporting the growth of the burgeoning biotechnology industry. In Chapter 20, Greenwood asserts that federal funding

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of basic research was critical to the development of biotechnology and that the government's role now is to promote policies that help the biotechnology industry grow. The Clinton administration's efforts in this regard, according to Greenwood, include promoting partnerships between federal laboratories and the private sector and authorizing tax incentives to stimulate investment in biotechnology companies.

The final chapter in this section provides an insight into the U.S. government's regulatory process. Although author Suzanne Giannini Spohn of the Environmental Protection Agency (EPA) focuses on the development of regulations by EPA, the general principles that she outlines are probably common to all government rule-making agencies. Noting that the regulatory process involves trying to resolve many conflicting interests, Giannini Spohn predicts that until a more solid knowledge base exists upon which to base risk assessment of biotechnology products and until these products gain wider public acceptance, the EPA's approach to their regulation likely will remain relatively conservative.

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19—
Comparison of U.S.,
European, and Japanese Policies
Affecting Pharmaceutical and
Biotechnology Development

LOUIS LASAGNA

Biotechnology-derived pharmaceutical products in the United States are regulated by our Food and Drug Administration (FDA), whose philosophy has been that the processes by which new health care products are produced are in principle irrelevant to the scrutiny they undergo to gain approval for marketing. The decision as to whether a biotechnology drug will travel the regulatory pathway as a biologic (and hence under the jurisdiction of the Center for Biologics Evaluation Research [CBER]) or as a drug (and hence under the jurisdiction of the Center for Drug Evaluation Research [CDER]) is made case by case, although there is a 1991 working agreement between CBER and CDER that sets out general guidelines for the allocation of review authority. There are, however, implications of this decision, because a biologic requires a product license application instead of a new drug application, and every product license application must be accompanied by an establishment license application for the site of manufacture (Hawkins, 1990).

Worldwide Biopharmaceutical Development

The patterns of worldwide development of biopharmaceuticals are of considerable interest (Bienz-Tadmor, 1993). In the decade ending in 1992, 14 different such products had been marketed in at least one country. If one counts identical versions of the original products, there was a total of 40 such products, 36 of them marketed in the United States, Europe, or Japan. Of the 14 new biological entities, 11 had been introduced in the

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United States, all 14 somewhere in Europe (primarily in Germany, France, Italy, the United Kingdom, and Spain), and 10 in Japan.

A different picture emerges if one looks at all 40 products. Only 15 were on the market in the United States whereas 27 were available in Europe and 23 in Japan (2 of which were later removed from the market).

Although most biopharmaceuticals originated and began clinical trials in the United States, they tended to be marketed first in Europe. Why? Although regulatory review time was on average longer in the United States than in the average European country, it was about the same in Japan. More important, it would seem, was the time required for the clinical studies: just over 3 years in the United States (similar to Japan) but only 2 years in Europe. (Japan also suffered from a later entry into this market, with clinical testing having started about 2 years after the United States.)

In the major European countries and in Japan, many different companies have been able to market their products, even when their products are similar to one another, whereas in the United States generally only one version of each product is available. A partial explanation for many of these products lies in the provisions of the U.S. Orphan Drug Act, which prevents subsequent similar versions for the same indication from entering the market for 7 years.

U.S. Lag In Drug Introduction

In a way, biotechnology products in the decade in question conjure up the vision of the drug lag first documented in the 1970s by Wardell (1973, 1978). Wardell pointed out that drugs were introduced later in the United States than in the United Kingdom and that some of these drugs were important therapeutic advances. More recently, Andersson (1992) noted that the longest delays in the introduction of new drugs occur in the United States, Sweden, and Norway whereas shortest delays are generally found in the United Kingdom and (West) Germany. Regarding the introduction of new drugs, he noted that the United States and Norway have introduced far fewer than have any other industrialized countries.

One can only hope that the situation will not deteriorate further, because both FDA Commissioner Kessler and the Pharmaceutical Manufacturers Association have expressed concern about the growing backlog of biotechnology applications. In September 1992, Kessler said that he was worried about the biotechnology product pipeline; although drugs take an average of 20 months for approval, biologics average 40 months (PMA, 1992). According to Kessler, 3,000 biotechnology products entered the investigation stage in 1991, but only 6 to 12 are approved annually, and these products had been in the investigation pipeline for approximately 5

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years. However, a major reorganization of CBER in January 1993, a new review scheme, 124 new staff additions, and a "refusal-to-file" policy may improve the situation.

Biotechnology Product Development

It is not clear what effect the current movement toward international harmonization of regulatory requirements will have on biotechnology product development. European harmonization moves have been ongoing for some time, in observance of the 1992 deadline established by the Treaty of Rome in 1957, but it is problematic how much facilitation of drug registration has been achieved in the European Community (Donnely, 1993; Orzack et al., 1992). According to Orzack et al.:

The abilities of national governments to protect public health seem threatened; health ministries and regulatory bodies may lose the prerogative of direct control of the domestic market for drugs approved in other countries or by a multinational agency; regulatory systems intended to monitor how well medicines meet international standards of safety, efficacy, and quality are seen as protectionist bodies, restricting trade among nations and as barriers to European unity.

… The Community will in all likelihood try to resolve many of these problems. But the extent to which it can come up with workable and effective arrangements for pharmaceutical medicines is not clear. Will the proposed legislation speed evaluations? Can it aid the introduction of pharmaceuticals? If the EC [European Community] is to achieve a single market, its member states must support it and show the political will to cooperate. The EC may in time achieve its objective of a unified economic region within which goods (including pharmaceutical medicines), services, people, and capital may circulate without confronting restrictive national barriers, but when and how appear uncertain.

In the last few years, however, Europe, the United States, and Japan seem to have made substantial progress, at least in agreeing on certain kinds of technical requirements, including general toxicity testing, reproductive toxicology, clinical safety, good clinical practices, and dose-response trial designs, among others. Some of the trends support the hope that applications for product registration can profit not only by the elimination of needlessly extensive and prolonged animal toxicity testing, but from the possibility that different countries will accept the same filing format.

On November 19, 1993, a new regulation went into effect permitting FDA to share confidential commercial information with foreign regulatory bodies (but not the public) without the consent of the sponsor. Nevertheless, one has the feeling that we are a long way from an "international

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FDA" whose judgment would be binding on all developed countries, despite what seem to be moves in that direction. The European Committee for Proprietary Medicinal Products, for example, was supposed to facilitate the free movement of medicinal products, but its efficacy has been questionable, to say the least. It is almost impossible to imagine our FDA yielding approval authority to an international regulatory agency, given our history and politics. (A "super FDA" was dealt a cruel blow when the leading candidate for Drug Czar, Dr. Duilio Poggiolini, was put in prison in Italy for unsavory regulatory practices.)

Drug Pricing And Reimbursement

Market approval is, worldwide, infinitely less important than drug pricing and reimbursement. Every developed country except the United States has a formal governmental procedure for controlling pharmaceutical costs, and even the United States is moving rapidly away from a truly free market environment. The schemes used to this end are almost as numerous as the countries that have adopted them. It is far from clear whether each system is right even for the country adopting it, let alone desirable for other countries. Needless to say, research cannot thrive without investment of resources, and the biotechnology industry is particularly vulnerable to cost containment. Except for programs supported heavily by traditional pharmaceutical companies, small biotechnology firms are crucially dependent on venture capital to keep their research going until a product reaches the market. When that happy even occurs, there is the not-surprising desire to recoup past investment, reward investors, and plow more money into new research. Decisions about manufacturing are difficult as well. A new production plant may cost $25 million and the timing of its construction is tricky, given the uncertainties of FDA approval and the timing of the signal for ground-breaking.

Europe

Let us first consider Europe. As Heinz Redwood (In press) has put it, there are three principles in European public policy: solidarity (the conviction that society must provide health care to all), subsidiarity ("Eurocrats Keep Out whenever our own national bureaucrats can do the job at least as well"), and pharmapolitics, with its four strands (financial, medical, industrial, and electoral).

In all member states except Portugal, public drug spending has risen more rapidly than the national rate of inflation, and price controls have seemed to provide no modulating influence. The French have tried superimposing volume control over price control and are discussing sanctions

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for excessive prescribing by physicians. The British provide budgets for large medical practices, with financial incentives for underspending. Germany tried reference pricing without success but discovered a system that reduces drug prescribing. If the German national drug budget is overspent, the doctors' associations are responsible for the first 280 million DM (about $175 million) and the pharmaceutical industry is responsible for the next 280 million DM. The scheme has been in effect since January 1993 and is working even though 280 million DM is said to be only 1 percent of the German medical profession's income from treating patients under the government health system. (No one is tracking the effect of these prescribing cutbacks on the quality of health care.) Expenditures for drugs were 26.2 billion DM in 1992, the budget target for 1993 was 23.8 billion, and actual expenditures were 21.2 billion DM.

Only the United Kingdom has approached drug pricing with an imaginative scheme for keeping firms profitable but not excessively so. British politicians like the drug industry and are grateful for its products and for its positive contributions to the balance of trade. This British mechanism, called the Pharmaceutical Price Regulation Scheme (PPRS), is based on profits and operates at the level of a company's total business with the National Health Service, not individual products, the prices of which are set by each company. The basis is to be a return on capital used or, for some foreign firms, the return on sales. A target profit is set within an allowable range of 17 to 21 percent, with a 25 percent margin for error. Costs associated with sales are assessed on production expenses, distribution, information, research and development, general and administrative expenses, and promotion. The latter is limited to about 9 percent of sales, a lot less than is spent in other countries. Research and development averages around 20 percent of sales, substantially above the 14 percent that is typical of the rest of the developed world. In August 1993 the PPRS was renegotiated and renewed for 5 years. The terms will reduce profits by imposing an across-the-board reduction of 2.5 percent for 3 years, which began October 1, 1993. The U.K. approach is not without its critics, but it may be superior to other European approaches.

Japan

Japan is also unique. The Ministry of Health and Welfare sets a fee schedule for drugs. Physicians in Japan not only prescribe drugs, they also dispense them, and much of their income comes from the margin between drug acquisition prices and the fee schedule. Manufacturers need the loyalty of doctors, so they compete by maximizing this margin. Drug prices start high but come down rapidly in succeeding years, creating an incentive for doctors to prescribe newly marketed drugs. To contain drug

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costs, the government decreed eight price cuts for drugs in the period from 1981 to 1992, with the squeeze being largely absorbed by the drug industry.

For this and other reasons, the Japanese industry is moving into the other two huge pharmaceutical markets: Europe and the United States. Japan, although a huge market by itself, cannot sufficie to serve the income needs of an industry that wishes not just to survive, but to thrive. Biotechnology represents a part of that international effort.

For those who believe that Japanese scientists are only imitators, not innovators, the paper by Hawkins and Reich (1992) is necessary reading. They examined Japanese-originated ethical pharmaceuticals introduced in the United States during the past 30 years, looking for evidence of true innovation. They used the following requirements: structural novelty, biologic novelty, therapeutic importance, and economic success. They found that Japan not only had produced innovative compounds, but was responsible for some of the best-selling drugs in the U.S. market.

Japan also illustrates other interesting differences. It spends more than any other nation on pharmaceuticals (almost twice as much as the United States in 1990 and three times as much as the United Kingdom). Hence 30 percent of national health expenditure goes for medicines. Hospital stays are unbelievably long, mental health services are inadequate, and elderly people have one of the highest suicide rates in the world (Imamura, 1993).

Japan has almost no U.S.-style small biotechnology companies. Instead, such research is focused in large, well-established pharmaceutical, fermentation, or chemical companies. The Japanese government began stimulating interest in industrial biotechnology in the late 1970s and early 1980s. Many of the preferential treatment areas for federal grants are in biotechnology. By contrast, venture capital investors have been slow to show interest. However, large Japanese companies—pharmaceutical, chemical, and food—are becoming major investors in the U.S. biotechnology industry (National Research Council, 1992).

Patent Protection

In most countries, patent protection runs from the date of filing of the patent application. In the United States, patents date from the granting of the patent. In Janpan, the patent term commences from the date of publication of the specification. Since the European Patent Convention of 1977, most European countries allow patent exclusivity for 20 years. In the United States, patent protection theoretically lasts for 17 years, but for pharmaceuticals the lengthy development and approval process (which usually occurs while the patent clock is ticking) in essence halves this

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amount. The 1984 Drug Price Competition and Patent Term Restoration Act provides for up to five years of increase in patent protection in certain cases. The terms of the General Agreement on Tariffs and Trade (GATT) and the North American Free Trade Agreement (NAFTA) provide for a patent term of 20 years from date of filing as well as for product and process patents for almost all types of inventions, including pharmaceuticals. Signatories are under a general obligation to comply with the agreement terms through implementing legislation.

In the 1960s and 1970s Japan was mainly licensing drugs from foreign countries and patent protection only applied to chemical processes. In 1976 a product patent system with 15 years of exclusivity was introduced. In 1980, responding to the problem of lengthy development times, Japan revised the law to ensure a minimum 6 years of exclusivity. In 1987 a further amendment provided for patent term restoration to a maximum of 5 years (Centre for Medicines Research, 1989).

The Future For Biotechnology

Will the United States maintain its strong biotechnology leadership in the future? Should our government be increasing financial incentives to encourage innovation, venture capital investment, and long-term strategic planning? The next century will be an interesting period in the history of global technology.

References

Andersson, F. 1992. The drug lag issue: the debate seen from an international perspective. Int. J. Health Sci. 22:53-72.

Bienz-Tadmor, B. 1993. Biopharmaceuticals go to market: patterns of worldwide development. Biotechnology 11:168-172.

Centre for Medicines Research. 1989. Pharmaceutical Patents. The Stimulus to Medicines Research. Carshalton, Surrey, U. K.: CMR.

Donnely, M. 1993. Experience with the multi-state procedure: transition to the decentralized procedure. Drug Inf. J. 27:43-49.

Hawkins, E. S. 1990. Biotechnology in the United States pharmaceutical industry. Pharmaceut. Med. 4:229-302.

Hawkins, E. S., and M. R. Reich. 1992. Japanese-originated pharmaceutical products in the United States from 1960 to 1989: an assessment of innovation. Clin. Pharmacol. Ther. 51:1-11.

Imamura, K. 1993. A critical look at health research in Japan. Lancet 342:279-282.

National Research Council. 1992. U.S.–Japan Technology Linkages in Biotechnology. Challenges for the 1990s. Washington, D.C.: National Academy Press.

Orzack, L. H., K. I. Kaitin, and L. Lasagna. 1992. Pharmaceutical regulation in the European Community: barriers to single market integration. J. Health Polit. Policy Law 17:847-868.

PMA. 1992. PMA Newslett. Sept. 28: 4.

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Redwood, H. 1994. Public policy trends in drug pricing and reimbursement in the European Community. International Symposium on Pricing and Reimbursement of Pharmaceuticals: An Evaluation of Cost-Containment Strategies, July 21-22, 1993. PharmacoEconomics 6(Suppl. 1):3-10.

Wardell, W. M. 1973. Introduction of new therapeutic drugs in the United States and Great Britain: an international comparison. Clin. Pharmacol. Ther. 14:773-790.

Wardell, W. M. 1978. The drug lag revisited: comparison by therapeutic area of patterns of drugs marketed in the United States and Great Britain from 1972 through 1976. Clin. Pharmacol. Ther. 24:499-524.

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20—
Expanding the Horizons
of Biotechnology in the
Twenty-first Century

M. R. C. GREENWOOD and RACHEL E. LEVINSON

The Clinton administration has embarked on an important initiative. Shortly after taking office, President Clinton and Vice President Gore released a report entitled ''Technology for America's Economic Growth, A New Direction to Build Economic Strength." (Clinton and Gore, 1993). This document presents three key goals: 1) longterm economic growth that creates jobs and protects the environment, 2) a government that is more productive and more responsive to the needs of its citizens, and 3) world leadership in basic science, mathematics, and engineering.

The report outlined policies and initiatives that support efforts to attain the first goal. Vice President Gore's national performance review addressed the second goal. After becoming associated with the Office of Science and Technology Policy (OSTP), we began thinking about ways in which we might address the third goal. With the wonderful assistance of Drs. Neal Lane and Harold Varmus (directors of the National Science Foundation [NSF] and the National Institutes of Health [NIH], respectively), we have begun to develop a companion document to the technology policy report, one that will enunciate a presidential science policy for the twenty-first century, define a vision of science in the national interest, and describe the steps toward making this vision a reality.

As a first step toward achieving this goal, the OSTP in conjunction with the National Academy of Sciences convened a national forum entitled Science in the National Interest: World Leadership in Basic Science, Mathematics, and Engineering. The forum was held at the academy on January

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31 and February 1, 1994, to identify opportunities and challenges facing our nation and to define the points of convergence between science policy and public policy. Fifteen organizations, including NSF; NIH; U.S. Department of Agriculture; Department of Energy (DOE); Department of Defense; American Association for the Advancement of Science; Carnegie Commission on Science, Technology, and Government; Industrial Research Institute; Dana Foundation; National Association of State Universities and Land Grant Colleges; and Association of American Universities cosponsored the forum, indicating its broad spectrum of interest and involvement across government, academia, and industry (Mervis, 1993).

Some of the key speakers at the forum included OSTP Director John Gibbons, Senator Barbara Mikulski, Senator Jay Rockefeller, Senator Tom Harkin, Representative George Brown, National Academy of Sciences President Bruce Alberts, and, of course, Neal Lane and Harold Varmus. Vice President Al Gore also attended and stressed his commitment to science, especially fundamental science. He emphasized the importance of the forum as critical to the process of developing a national science policy that will guide federal investment in the scientific enterprise. The following quote from Vice President Gore's speech captures and conveys the strongest elements of this administration's commitment to basic scientific research:

It is clear to this Administration that the needs of scientists who are addressing basic questions about the nature of matter, the nature of our earth, the nature of the universe, the structure of thought, the biochemical structure of genetic inheritance, the interaction of environment and biological development, the modification of behavior and the design of social institutions, must be met. For their discoveries today will be the rich soil that will support the growth of innovations and applications that we can not yet foresee in the 21st Century. We are keenly aware that the Federal investment in funding their research and supporting their laboratories and their education is an investment in our Nation's future. The challenge we face is how to make this investment with the limited resources we have available today.

There is much to be proud of in U.S. science. Our nation is without peer in many areas of scientific outcomes, whether we measure that success by the award of Nobel prizes, the type and number of discoveries and publications, or the potential for a new industrial, informational revolution. Clearly, we are privileged to be in a time of extraordinary opportunity and excitement. However, the sad truth is that we are also facing the reality of unprecedented fiscal constraints that force some very difficult choices in allocating the federal budget.

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Research And Development In FY 1995

President's Budget Request

On February 7, 1994, the president transmitted to Congress his budget request for fiscal year (FY)1995 (Table 20-1). The proposed budget recognizes research and development (R&D) funding as a priority investment. Within an overall freeze on discretionary spending that forced cuts in hundreds of programs, the president proposed an increase of 4 percent for R&D spending relative to what we are spending now as a necessary investment in the future. This comes to a total of over $71 billion ($73 billion with facilities), up $2.5 billion over 1994. Within this table, you may be particularly interested to note that the president has proposed a 4.7 percent increase for NIH, a 10 percent increase for university-based research and education funded by NSF, and a 6 percent increase overall.

While maintaining our overall investment in R&D, we are also shifting our R&D spending to increase the focus on new relevant national goals. The president has proposed an increase for R&D investments in areas that are directly relevant to strengthening our economic security, improving our quality of life, and maintaining our national security in a changing international environment. To accomplish this, the budget proposal

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includes R&D increases in such areas as biomedical research, our national information infrastructure, manufacturing technologies, environmental technologies, transportation, and dual-use technologies.

Throughout the R&D budget we propose to continue to expand partnerships with the private sector. This is the single best way to leverage our science and technology investments to ensure that those investments are relevant to the real-world problems and challenges facing our industries, state and local governments, etc. The budget includes increases in funding, for example, for cooperative research efforts and technology transfer programs (including manufacturing technology extension centers) that may be expected to have a positive effect on advances in biotechnology.

We want to ensure continued leadership in fundamental science through continued investments in basic science, math, and engineering research. This fundamental research drives our basic understanding of our world and its problems and is the seedbed for the new technologies and new options of the future. It represents our most important investment over the long term in our security (broadly defined) and our quality of life.

Human Genome Project

One example of how designated investments have fared in the FY 1995 budget request is the Human Genome Project, a "big science" effort managed cooperatively under the aegis of NIH and the DOE Office of Energy Research (Table 20-2). For FY 1995, the president has proposed $241 million to fund the DOE and NIH genome efforts. This represents an increase of $42 million, or 21 percent over the 1994 budget. Even if the purse strings were loose, this would look good. There is good reason for such optimism about genome research in the White House.

Alexander Pope once wrote that "the proper study of Man is Man." For what is daily being revealed about us as a result of this revolutionary effort, the Human Genome Project could easily be the most important organized scientific effort in the history of mankind. This is an historic research effort that will analyze the structure of human DNA and determine the location and sequence of the estimated 100,000 human genes that constitute the human blueprint. As you heard earlier in this forum from Tom Caskey and others, accomplishment of this goal will allow the identification of the genetic basis of a wide array of diseases, profoundly change the practice of medicine, provide a powerful stimulus for the biotechnology industry, and radically alter the future of biomedical research.

The Human Genome Project may be thought of by many as a "big science" project, but it is quite different from other such projects. First,

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although it is centrally coordinated, it is being carried out by hundreds of investigators at dozens of research centers nationwide. Second, it has been producing beneficial results since it began and has already woven itself seamlessly into the fabric of biomedical research. Third, there is a strong and essential emphasis on creativity and innovation and a tight synthesis of science and technology. This has encouraged some of the best and brightest people in the country to invest their talents in achieving these ambitious goals.

NIH and DOE are the key agencies managing this project in the United States, but it is international in its scope and many other countries are making significant contributions, both scientifically and financially. The project has powerful implications for the future health and vigor of the American economy. Already new biotechnology companies are springing up across the country, ready to take advantage of the commercial opportunities generated by this project; 10 new companies were founded in the past year alone. These companies hope to capitalize on the advances in technology that have made it feasible to even consider sequencing the entire human genome.

The project evolved from decades of fundamental science research, involving many researchers from a broad spectrum of scientific disciplines, including disciplines beyond biology and medicine; it requires the skills and expertise of computer scientists, engineers, robotics experts, physicists, chemists, ethicists, lawyers, sociologists, and theologians. The project has also presented a complex challenge of information storage and access. The project illustrates the way in which fundamental science demands rapid access to large amounts of information. It might be said that the genome project is devoted to uncovering nature's information infrastructure. Powerful information superhighways are already being developed and used to allow researchers, physicians, companies, and the public to take full advantage of this remarkable treasure.

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The project was finally initiated after several years of vigorous scientific debate about its merits. Today it is indisputable that the Human Genome Project is already providing researchers with powerful tools to rapidly and efficiently search for disease genes. The recent identification of a major gene for colon cancer illustrates these relationships very well: discovery of the gene will pave the way for a diagnostic test to identify individuals at high risk, which may include as many as 1 million Americans. This is particularly significant because careful medical surveillance and early detection vastly improves the outcome for individuals with this common inherited disease. A similar story is unfolding for breast cancer, with the identification of a major susceptibility gene expected in the near future.

A spectacular example of society's investment in basic biological research, and the way that research sometimes yields totally unexpected connections to problems important to human health and welfare, was described by Mark Peifer (1993). He discussed two articles appearing in the December 10 issue of Science that establish a link among human colon cancer, epithelial cell adhesion molecules, and pattern formation in the fruit fly Drosophila. Peifer makes the point that "the discovery of this unexpected protein-protein interaction is bound to stimulate much activity in three no longer disparate fields of research."

Cross-Disciplinary Linkages

One lesson we can learn from this example is that the likelihood of identifying such unexpected connections is greatly enhanced if we can speed the exchange of meaningful information among scientists, even those in apparently unrelated fields that may turn out to be related after all. This is an important concept that can be reasonably extended from the genome project to biotechnology and to science in its entirety.

Another lesson is that increasingly we must appreciate that the notion of unrelated fields is not particularly helpful and will prove meaningless in the twenty-first century. The pages of Science are replete with descriptions of squabbling within disciplines, such as the "biology-culture" gap within the field of anthropology. Yet we are increasingly impressed with the unifying links between disciplines and the value of identifying or establishing those links to advance what amounts to a multidisciplinary understanding of nature. Surely our ability to combat disease, solve our pressing social problems, and ensure our nation's future prosperity and security will grow out of a truly comprehensive understanding. The cross-disciplinary nature of the biotechnology toolbox illustrates this lesson rather graphically. How many of you were forced to master database searching methods to look for gene homologies or even to see what your

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competitors were up to? How many bioengineers went back to school to catch up on the latest in molecular biology?

What we are learning about the genetics of colon cancer and breast cancer suggests the likelihood that all of us carry at least some genetic predisposition to illness. The human genome project thus has clear consequences for health care, because it will provide individuals with the ability to determine their risks for future disease, allowing development of individualized programs of lifestyle alterations and medical surveillance designed to maintain wellness.

The identification of disease susceptibility that can be ameliorated by behavioral change brings up a crucial public health challenge that we will only be able to meet with the assistance of fundamental research in the social and behavioral sciences. We know that 5 of the 10 leading causes of death are linked to behavior—the way we eat and the way we live—yet we know little about how to effect lasting positive behavioral change.

The economic benefit of helping large numbers of people adopt and sustain healthy behaviors and thereby avoid the medical costs of treating major chronic diseases such as heart disease, certain cancers, diabetes, hypertension, stroke, and osteoporosis is enormous. Because rising medical costs are the biggest contributor to our current inflationary spiral, the savings produced by positive behavioral change would substantially reduce the economic burden that medical costs represent to our society.

Challenges By And For Biotechnology

The Human Genome Project provides a glimpse into the future of biomedical science. Biotechnology expands that vision and shows how the different disciplines can work synergistically, applying the tools and skills of physicists, bioengineers, and materials scientists to problems in bioprocessing; theoretical mathematicians, pharmacologists, and physicians to rational drug development; and, on a global scale, environmental ecologists, biochemists, and computer systems engineers to bioremediation and environmental restoration.

Biotechnology also challenges our current notions of integrated systems and feedback loops simply because of the rapid pace with which discoveries are put into practice and diffuse into many areas of application. Our traditional mechanisms for overseeing the support, application, and commercialization of new technologies have not been able to keep up with the explosion of growth in the biotechnology industries. This deficiency begins with the funding of technology development; some of our most important work that might advance an entire field has gone begging for resources because it falls between the cracks of programs offered by

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NIH or NSF. This is particularly true, for example, for funding the development of new reagents and instruments.

It is painfully apparent that the public has not been adequately informed about the benign nature of biotechnology food products, for example, that pose absolutely no health risks but are still the target of antibiotechnology campaigns. Our regulatory systems are struggling valiantly to provide an appropriate, scientifically sound framework for product review and, at the same time, provide guidance to the applicants and the public to ensure a credible and rigorous oversight process.

As more biotechnology products attain commercial viability, intellectual property protection becomes more crucial on both the domestic and international fronts. This issue may seem tangential to the research concerns, but the absence of protection measures has an immediated and resounding effect on the ability to raise investment capital to fund biotechnology start-ups, which are already hampered somewhat by other uncertainties, such as public acceptance, regulatory approval, and a relatively long lead time between the lab and the marketplace.

Although the U.S. biotechnology industry is generally regarded as the world leader, no one is, or should be, complacent about our situation. There are signs indicating that biotechnology is at a particularly critical juncture right now, and the future vitality of our domestic capability may rest on what we in the administration and Congress and our partners in industry and academia can accomplish together in the coming several years. The Clinton administration has taken a very strong position that recognizes the critical role technology must play in stimulating and sustaining the long-term economic growth that creates high-quality jobs and protects our environment and the importance of biotechnology to our success in these areas.

The ability to enlist the cooperation of the forces of nature and put them to work in solving many of the problems we face today, such as feeding and providing energy to a growing population, improving human health, undoing some of the damage man has wrought on the global ecosystem, and sustaining our natural resources, resulted directly from government-funded basic research.

The National Science And Technology Council And
The Biotechnology Research Subcommittee

Like other emerging industries, biotechnology is moving toward a phase in which much of the information necessary for advanced product and process development will be proprietary. However, this industry is one that will continue to look to the kind of fundamental scientific research that is supported through NIH, NSF, and other federal agencies.

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For FY 1995, the administration is not conducting a comprehensive budget analysis of federal support for biotechnology research as was performed for the two previous years by the Biotechnology Research Subcommittee under the Federal Coordinating Council for Science, Engineering and Technology. Unfortunately, this has been interpreted to mean that we have phased out the activities of the Biotechnology Research Subcommittee. This is not so. On November 23, 1993, the president signed an executive order establishing the National Science and Technology Council (NSTC), which he will chair. The charge to this new cabinet-level council is to establish clear national goals for federal science and technology investments and to ensure that science and technology policies and programs are developed and implemented to contribute effectively to those national goals.

Private sector involvement with the NSTC will be essential to developing successful science and technology policies that will help American businesses achieve sustainable growth, create high-quality jobs, and maintain our academic and research institutions' world leadership in science, engineering, and mathematics. To ensure that federal science and technology policies reflect U.S. national needs, the president also established the President's Committee of Advisors on Science and Technology, which will advise the president on science and technology issues and assist the NSTC in securing private sector involvement in its activities. Committee members will be appointed by the president and will include distinguished individuals from industry, education, research institutions, nongovernmental organizations, and other sources.

As one of the first actions taken under this new policy coordination and implementation mechanism, we made certain that the efforts of the Biotechnology Research Subcommittee would continue under the new committee structure. This subcommittee will operate under the aegis of a single, overarching committee, the Committee on Fundamental Science, which is cochaired by Drs. Lane, Varmus, and Greenwood. The Biotechnology Research Subcommittee will continue to provide government-wide coordination and focus for biotechnology research in the various federal departments and agencies. Biotechnology will also receive attention in at least two other of the nine NSTC committees (e.g., Health, Safety, & Food; Environment and Natural Resources).

Federal Investment In Biotechnology

Under the NSTC, we will focus on extending the scientific and technical foundations necessary to the development of biotechnology, developing the human resources necessary to biotechnology, facilitating the transfer of biotechnology research discoveries to commercial applications, and

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FIGURE 20-1 Federal investment in biotechnology research by research area.

realizing the benefits of biotechnology for human health, agriculture, and the restoration and protection of the environment (Figure 20-1). The Biotechnology Research Subcommittee is developing strategic plans for federal research in agricultural, environmental, and marine and aquatic biotechnology and for manufacturing and bioprocessing technology.

Biotechnology research and development are supported through several other mechanisms. One of those is the Advanced Technology Program, administered by the Department of Commerce through the National Institute for Standards and Technology (NIST). The program is designed to promote the economic growth and competitiveness of U.S. business and industry by accelerating the development and commercialization of promising high-risk technologies with substantial potential for enhancing the nation's economy. The program's research priorities are set through an interactive process with industry, by means of competitive proposals from industry and academia for developing and commercializing innovative technologies. Out of 400 industry responses to a recent Advanced Technology Program announcement, 50 were in the biotechnology area. On January 12, 1994, NIST hosted a workshop on biotechnology

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to explain the procedures necessary to obtain support through the program and to solicit industry input on setting research priorities that meet the program selection criteria.

Instructions have been given to federal laboratories to devote more of their budgets to R&D partnerships with civilian industry. We are emphasizing increased use of cooperative, cost-shared research and development agreements (CRADAs) as well as other cooperative arrangements. One of the first CRADAs initiated by NIH is noteworthy in several respects. This agreement with Genetic Therapy Inc. capitalized on technology and expertise in the NIH laboratories of Drs. French Anderson, Michael Blaese, and Steven Rosenberg to launch a new company, a new form of treatment for genetic and other diseases, and a new industry sector, that is, gene therapy. Since the first human gene transfer trial initiated in 1988, NIH has approved more than 50 clinical gene therapy trials at centers across the nation. Studies involving revolutionary approaches to the treatment of cystic fibrosis, severe combined immune deficiency, advanced melanoma, and acquired immune deficiency syndrome are now underway or are about to begin. These represent tremendous health care and economic opportunities for this country.

Reflecting its growth dynamics, biotechnology depends heavily on the public and private investment markets to finance start-up and follow-on financing. Although we hear differing views on how long the window may remain open for biotechnology company public offerings, some are doing quite well right now. Biotechnology firms have generally been able to raise cash for the initial stages of operation, but second and third rounds of capital financing, which are necessary to bridge the gap between research and profit generation from marketable products, are more difficult to come by. A bottleneck is developing as start-up companies attempt to move forward into development, testing, and marketing: the expensive part of the process. As much as $5 billion to $10 billion may be needed just to develop the 100 biotechnology products currently in clinical trials.

The administration has taken some steps to improve the long-term, lower-cost availability of capital. The president has signed into law tax incentives for private-sector investment in R&D and new business formation, including a targeted reduction in the capital gains tax for investment in small businesses. We also continue to push on reducing federal deficits that siphon off savings that otherwise could flow to private capital markets.

The 1991 Office of Technology Assessment report on biotechnology in a global economy cited the research and experimentation tax credit as a key issue for congressional consideration in protecting U.S. industrial innovation and international competitiveness. In the past the effectiveness of this credit was seriously undermined because it was extended 1

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year at a time. Under those conditions companies cannot accurately project the real costs of a given R&D project. R&D, by its nature, requires long-term investment, and businesses will be reluctant to make such commitments without a permanent research and experimentation tax credit. The tax credit was reauthorized for 3 years and we will continue to work toward our goal of making it permanent.

Regulatory Policy

We need a thoughtful, sensible, and, above all, clear regulatory framework that will encourage innovation and enable us to meet our national social objectives efficiently. As part of the technology initiative, the president and vice president stated that, ''We can promote technology as a catalyst for economic growth by … directly supporting the development, commercialization and deployment of new technology" and "to improve the environment for private sector investment and create jobs, we will ensure that Federal regulatory policy encourages investment in innovation and technology development that achieve the purposes of the regulation at the lowest possible cost."

The Clinton administration welcomes open discussion and debate as key ingredients in developing successful regulations. Only through public dialogue can we develop regulations that address the necessary questions in a way that facilitates decision making by the government, increases certainty and predictability for industry at the lowest practical cost, and is demonstrably fair to the public interest.

It is the responsibility of the government to provide an effective and credible regulatory system. The biotechnology industry wants this as the best means to ensure public confidence in and acceptance of the products of biotechnology. There is no better antidote to the actions of anti-biotechnology activists than an informed public and an open debate.

Conclusion

Biotechnology offers great promise for the future and has the potential to affect nearly every facet of our lives. The keys to successful innovation and commercialization will be a strong basic research program, fiscal and economic tax policies that encourage investment, a rational regulatory policy, and an educated public. The Clinton administration will help sustain the strong research base for biotechnology and will offer a forum for biotechnology advocates and critics to reach consensus on how various biotechnology products can benefit our society.

This administration will work with the research communities in the public and private sectors and the American people to build that consensus,

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so that 10 years from now we can look back and say that the 1990s were the decade of continued vigorous research and of the successful commercialization of biotechnology and biotechnology products in the United States and throughout the world.

Biotechnology offers the science policy community at large a unique opportunity to forge linkages among the scientific disciplines and among the elements of the research community located in the government, in our institutions of higher education, and in the private sector. As policymakers, we see our responsibility as one of fostering these nascent relationships and attempting to foresee and forestall the emergence of barriers to progress. We have the support of the president's science adviser and the administration in conveying their firm commitment to expanding the horizons of biotechnology and, indeed, for science more broadly, into the twenty-first century.

Paraphrasing Vice President Gore's recent remarks: We simply cannot afford to take the narrow view of science, looking only at immediate results. We have to cast our eyes ahead a few years, a few decades, a century or more, and imagine the unimaginable. There is much to do, but we have made a good start and have the will to continue.

References

Clinton, W. J., and A. Gore. 1993. Technology for America's Ecomonic Growth, A New Direction to Build Economic Strength. Washington, D.C.: U.S. Government Printing Office.

Mervis, J. 1993. U. S. research forum fails to find a common front. Science 263:752. Office of Technology Assessment, B. Brown, ed. 1991. Biotechnology in a Global Economy. Washington, D.C.: U.S. Government Printing Office.

Peifer, M. 1993. Cancer, catenins, and cuticle pattern: a complex connection. Science 262:1667-1668.

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21—
The Making of Environmental
Policy Decisions

SUZANNE GIANNINI SPOHN

This article represents the views of the author and it does not necessarily represent the official position of the U.S. Environmental Protection Agency.

Simply stated, the mission of the U.S. Environmental Protection Agency (EPA) is to protect human health and the environment. The potential environmental benefits that biotechnology products can provide are enormous: safer, less toxic pesticides; bioremediation agents to restore a degraded environment to its previous quality; more environment-friendly mining and oil-recovery processes, and pollution prevention in fossil fuel extraction and refining.

The ecological effect of large-scale, deliberate environmental releases of genetically engineered organisms is not simple to predict. This is especially true in the area of soil ecology and ecosystems processes, which are enormously complex and about which very little is understood. In the face of this kind of uncertainty, how does EPA decide what are acceptable levels of risk? In other words, how does EPA set regulatory policy?

To answer this question, I first need to make it clear that EPA is a regulatory agency, distinct from other federal agencies such as the National Science Foundation and the National Institutes of Health, whose primary mission is research. As a regulatory agency, EPA is an arm of the executive branch of the federal government, and our primary function is to implement the laws passed by the Congress that concern the environment.

Federal acts or laws are usually fairly broadly written directives from the Congress either requiring people or corporations to do something or prohibiting them from doing something else. These laws very rarely

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specify in great detail how these actions are to be implemented. For example, what technology will be used to attain the desired results? Who is going to pay for or maintain the technology? How will violations be defined or detected? What kinds of evidence or data must be supplied to show that the requirements of the law are being met?

These are technically very complex questions, often with political ramifications, and Congress delegates these decisions to the regulatory agencies. What EPA does is produce fairly detailed technical rules that specify just how the regulated community will be expected to comply with the law. So regulations that are promulgated by regulatory agencies have the force of law, unlike guidelines or policies. Violators of these regulations are subject to criminal or civil penalties. EPA cannot act unless Congress has said that it can, and must act if Congress directs it to do so. Sometimes Congress stipulates a time limit and regulations must be produced quickly.

Federal Policy Decisions Of
Biotechnology Regulation

A series of federal policy decisions led to a coordinated framework for the regulation of biotechnology, which was published in June 1986 by the White House Office of Science and Technology Policy. First and probably most importantly, it was decided that products of recombinant DNA technology are not inherently more risky than those made by conventional production methods, so that no new legislation to regulate recombinant DNA products is necessary. The risks depend on hazards posed by the recipient organism and the donor gene and by the likelihood of exposure. So the decision was made to regulate the products, not the processes, of biotechnology and to do this under the currently existing regulatory authorities of different agencies.

It was also decided that risks from contained research are minimal because of limited exposure and that a scaled level of oversight is appropriate. EPA does very little regulation of laboratory research. At the greenhouse level, we might require some notification, but we do not begin to oversee biotechnology products until the point when they are released into the environment. It was also decided that the potential environmental and health benefits of recombinant DNA technology far outweigh any potential risks and that regulation should not be so burdensome as to impede the development of this promising field. Therefore, duplication of oversight by federal agencies should be avoided, not only because it would be a waste of government resources to review the same thing repeatedly, but also because it would require businesses and others to submit multiple applications for approval.

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Federal Agencies That Regulate Biotechnology

Most of the recombinant DNA applications in the medical field (e.g., human drugs and medical diagnostic methods) are regulated by the Food and Drug Administration (FDA). People often ask me about the "flavor saver" tomato (the delayed ripening tomato in which an altered tomato gene was introduced into a tomato plant). Foods are regulated by FDA. The U.S. Department of Agriculture (USDA)—specifically the Animal and Plant Health Inspection Service in the USDA—regulates veterinary biological products, plants, and plant pests and animals or pathogens of agricultural animals. Therefore, recombinant DNA organisms that fall into any of these categories would be regulated by the USDA. EPA regulates pesticides, including those made by recombinant DNA techniques, and as a sort of catch-all, products that are not explicitly regulated by another federal agency, which includes bioremediation products.

The EPA is responsible for implementing three laws that apply to certain biotechnology products. These are the Federal Insecticide, Fungicide, and Rodenticide Act as amended, or FIFRA (P.L. 100-532, Oct. 25, 1988, 102 Stat. 2654); the Federal Food, Drug and Cosmetic Act, or FFDCA (P.L. 100-690, title II, 2403, 2631, 102 Stat. 4230, 4244); and the Toxic Substances Control Act, or TSCA (P.L. 100-551, 1, Oct. 28, 1988, 102 Stat. 2755). These laws determine what EPA can and cannot legally require.

Federal Insecticide, Fungicide, and Rodenticide Act

FIFRA regulates the marketing of pesticides, including those produced by recombinant DNA methods. It also deals with environmental release during research and development. EPA can require manufacturers to provide health and environmental effects data before a pesticide is registered for marketing in the United States, essentially to obtain a license to sell a pesticide. EPA will determine risk and specify the conditions of use—for example, the application rates and the frequency of application—and also the sites of use for the pesticide. Under FIFRA "site" has a very specific meaning. A crop (e.g., corn) is considered a site. The risks that may be posed by a pesticide used on one site, such as corn, may be quite different if the same pesticide were used on another site, such as indoors in dairy barns. Some sites will have predominantly human health risks, some will have environmental risks, some will have occupational risks, and so on.

EPA may suspend, cancel, or restrict use of a pesticide at any time if it determines that the risks outweigh the benefits of use. FIFRA is a risk-benefit balancing statute: risks from the pesticide must be balanced against the benefits of its continued use. A pesticide may pose some risk, but the

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benefits could be extremely high. For example, there may be a single pesticide available to treat a major pest of a major food crop, and if we cancel use of that pesticide because of risk concerns, it could result in a loss of millions of dollars to consumers because of increases in cost of food. In that case, we might decide not to cancel use of the pesticide completely, but to reduce risk by requiring other risk management methods, for example, reducing the application rate or restricting the application methods.

Federal Food, Drug and Cosmetic Act

FFDCA applies to a subset of pesticides, namely those used on food and animal feed. FFDCA directs EPA to take into account the results of toxicity testing and to estimate people's exposure to pesticides obtained in the diet. After these dietary risks are quantified, EPA does one of two things. It either sets a tolerance (an acceptable level of pesticides on food in the marketplace) or, if risk from the pesticide is considered to be negligible, it may exempt the pesticide from the requirement for a tolerance. Although the setting of tolerance levels is done by EPA, the monitoring of food for violations and the enforcement of the law is left to FDA. Most decisions regarding pesticides used on foods require an interplay between EPA and FDA. FFDCA is not a risk-benefit balancing statute, and decisions are based entirely on risk levels.

Toxic Substances Control Act

TSCA regulates the manufacture, commerce, and disposal of toxic chemicals. The concern here is not research but the entry of these products into the marketplace or the manufacturing of other products. The law authorizes EPA to screen both existing compounds and new chemicals as they are developed or brought into manufacturing processes and into commerce to identify those that are potentially dangerous. The agency has the authority to require manufacturers to provide toxicity testing information. TSCA is in a sense a risk-benefit balancing authority, because EPA must use the least burdensome risk management option to reduce risks to an acceptable level.

Many very toxic chemicals are used in manufacturing. Obviously, it is undesirable to ban these indiscriminately, but we can specify risk management methods to reduce possibilities for exposure. We can specify how chemicals will be transported and disposed of. EPA can also develop policies that promote reduced use of toxic chemicals and favor alternative environmentally friendly (or "greener") production technologies where feasible.

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Considerations For Development Of
Regulatory Policies

How does EPA decide whether a regulatory policy needs to be developed for recombinant DNA products resulting from biotechnology? For example, do we need to modify existing regulations that were largely meant to apply to chemical compounds and in some cases to naturally occurring indigenous biocontrol agents believed to be in balance with the environment? Of course, chemical compounds are not self-reproducing so we do not have the same concerns that we might have with genetically modified organisms.

Several factors are considered in the decision to regulate. First, does the situation pose significant risk to human health or the environment? The problem with biotechnology and the release of genetically modified organisms is that nobody really knows how to quantify the risks. We cannot really say whether the risk from biotechnology is significant, but we can express concern for potential risks; until we have more experience, the thinking is that it is better for us to be on the safe side.

Second, is the situation extensive enough geographically to warrant action? If a problem is restricted to one state, it clearly does not justify the intervention of the entire federal government. However, environmental releases of genetically modified organisms from various technologies are probably occurring in all states and have been for some years, so the situation is broad enough to warrant some EPA action.

A third consideration is whether there is public concern about risks. Often scientists may not feel that public concern is justified, but the public has a right to have its needs addressed. The responses of people in various states when releases of genetically modified organisms have been planned indicate that there is some concern that these releases be of minimal risk.

Another consideration is whether industry has a need for regulations. This seems paradoxical, but companies need to be able to plan how much money they may have to spend to compile the data necessary to bring a product to the commercial stage and to register it. There is a certainty involved in knowing what the rules are instead of having decisions made on a case-by-case basis, with different reviewers making ad hoc decisions. Groups from the biotechnology industry have indicated to EPA that they would favor the development of specific guidelines or policies for recombinant DNA releases.

An important question is whether EPA has sufficient resources available to address the problem, given EPA priorities, shrinking budgets, etc. EPA is already regulating biotechnology products under the Office of Science and Technology Policy framework. By clarifying and narrowing

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the scope of oversight, it may be possible to reduce the resources needed to review applications and also reduce the regulatory burden on industry by screening out recombinant DNA organisms that pose minimal risks.

The final consideration is whether EPA has the statutory authority to act. Many environmental problems raise real concerns, but until Congress passes a law giving EPA authority to implement that law, we really cannot regulate. However, if biotechnology products are to be used for pesticides or if products are not regulated by another agency, EPA does have the statutory authority to regulate them.

What are the societal and economic costs of regulating, and what are the costs and benefits of not regulating? Executive orders direct EPA to consider these costs in determining whether or not to promulgate regulations although it is important to note that some environmental laws specifically prohibit this. In the case of biotechnology regulation, the societal and economic costs are probably warranted because of the need to develop a rigorous framework for risk analysis.

A Case Study: Risk Determination Of
Transgenic Plant Pesticides

A case study concerning transgenic plant pesticides illustrates some of the considerations that would be used in risk determination and how EPA policy would be applied. Some plants naturally make pesticidal substances. For example, chrysanthemums make pyrethrums, which are toxic to certain insects. Chrysanthemums are not a major component of most diets. They do not move around or contaminate the groundwater. EPA traditionally exempted plants from the requirements of FIFRA because plants are considered to be biocontrol agents and they are not considered to be very risky. However, EPA reserved the right to revoke the exemption of pesticidal plants if the situation changed enough to warrant it. Furthermore, if the pyrethrums are extracted from plants and used as active ingredients, for example, to make another pesticide that can be sprayed from a can, the pyrethrums are subject to the FIFRA requirements. If they are used on food or animal feed, they are also subject to the FFDCA requirements.

The rationale behind the earlier exemption of pesticidal plants and other biocontrol agents is that they already occur in nature. They do not expose nontarget organisms that would not otherwise be exposed, and natural cross breeding would have already occurred. However, recombinant DNA technology can now be used to construct transgenic plant pesticides, and this opens the possibility for both nontarget organisms and humans to be exposed to the pesticide by novel pathways. EPA recently developed a policy governing transgenic plant pesticides (EPA,

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1994d). The level of concern for risks from transgenic plant pesticides will vary depending on the properties of both the plant and the pesticidal product.

If the plant and its progeny are contained on site, EPA would have less concern about risks than if the plant or its progeny could move off site, for example, if there were dispersal of seeds. Likewise, if pollen from the plant can be contained, there is less concern than if the pollen is not contained; it is even better if the pollen can be not made at all. If there are no weedy relatives—for example corn does not have any known relatives in the continental United States with which it can outcross—we clearly would have less concern than if a plant has many weedy relatives and can potentially outcross and spread the transgenic gene into the wild.

Different risk concerns are associated with pesticidal products. Pesticidal products such as pyrethrum, for example, that are normally a component of the plant or of a cross-hybridizing species into which the pesticide gene is introduced, would cause much less concern than one that was not normally a component of the plant and would not be likely to get into it by traditional breeding methods. A pesticidal product that readily degrades in the environment is of less concern than one that is highly persistent and for which exposure will continue over time. A pesticidal product that may act by a nontoxic mode of action—for example, a structural modification that may make it more difficult for an insect to penetrate the cuticle of the plant—would certainly be of less concern than a pesticide that acts directly by a toxic mechanism on the target pest, because of the possibility of lack of specificity and toxic effects on nontarget organisms. Another factor is the level of exposure. A pesticide that might be used in a greenhouse situation only, for example in nurseries, would be of less concern than a pesticidal gene introduced into a food or feed crop, particularly a major crop such as corn, which occupies about 71 million acres (USDA, 1993).

Developing EPA Regulations

How then does EPA develop environmental regulations such as those now under development for transgenic plant pesticides? Although many people are not aware of it, opportunities exist at many levels for input by other agencies, other EPA offices, and nongovernmental groups. Everything is done in a public forum. The development of regulations involves resolving the interests of conflicting groups.

Figure 21-1 shows the developmental pathway for a biotechnology regulation. Within EPA, the development of the regulations and the wording of the text is guided by a work group headed by the office that is responsible for implementing the law in question. EPA recently streamlined

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FIGURE 21-1 Biotechnology regulation: developmental pathway.

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the regulatory and policy development process. Tiered levels of across-office participation and senior management involvement are scaled to reflect the proposed action's environmental and economic significance, external stakeholders' interest in it, its cross-media or cross-office consequences, and its precedent-setting nature. The work-group process applies to development of policies and regulations belonging to the two highest tiers [Administrator's priority actions and cross-agency actions (EPA, 1994a)]. Both TSCA and FIFRA fall within the purview of the Office of Prevention, Pesticides, and Toxic Substances, which provides much of the expertise on exposure pathways, risk analysis, and scientific issues.

The program office generally is concerned with regulatory clarity and risk management. If a regulation is presented clearly, the regulated community can read it and know right away if talks with EPA are needed about a product. A carefully defined scope of regulation will focus examination on those products that are believed to pose the greatest risk and will exclude or exempt from coverage those posing negligible risk. The program office assesses the level of risk posed by a situation and develops several options for managing the risk.

Representatives from other EPA offices also serve on the work group. The Office of General Counsel has to defend EPA in court when the agency is sued. EPA is sued regularly both by industry and environmentalists. The environmentalists usually accuse EPA of not doing enough to protect the public, and industry usually accuses us of overstepping our authority and overregulating. The Office of General Counsel is very concerned about whether the law actually gives EPA the authority to require people in the regulated community to take a specific action. They want to be sure that the regulation will stand up to legal challenge.

Representatives from the Office of Enforcement and Compliance Assurance (OECA), which goes after violators of regulations, are also on the work group. OCEA is generally eager to have rules written that permit EPA to detect violations and, if necessary, impose clean-up costs and penalties.

The Office of Research and Development reviews the scientific basis of the proposed regulation and offers advice on how risk is determined. Risk assessment is a very controversial area. There is not always agreement on how to quantify risks or what constitutes a risk.

My office, the Office of Policy, Planning and Evaluation (OPPE), is interested in seeing that the rules will promote the overall goals of EPA and that all EPA program offices speak with one voice. This is important because, besides the laws I have mentioned here, EPA through other program offices issues regulations under other acts. OPPE wants to be sure that we do not just transfer a problem from one medium to another. For example, we do not want to take an air pollution problem, write a

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regulation about air, and have the same pollutant now show up in solid waste. We also want the regulation to be cost effective and risk based.

All the offices work out the details of a draft rule. At various decision points, or if there are disagreements, senior management is consulted to select among various risk management options. Various external science advisory groups may provide input on key scientific issues during the development process. Senior management also takes into account political and economic considerations, for example, whether the burden of risks or the costs of compliance may fall on a tiny segment of the affected community. Eventually the offices concur on an acceptable draft rule. Reviewing bodies include, but are not limited to, the Science Advisory Board, the Science Advisory Panel (which is specific for pesticides), the Biotechnology Science Advisory Council, and others. We solicit opinions from the National Research Council, the Institutes of Medicine, and other bodies.

After we take the comments of the scientific reviewers into account and modify the draft rule, we consult other federal agencies. I mentioned that there is some overlap with USDA and FDA. These agencies have to be satisfied that what EPA proposes is not going to conflict with what they have to do. Finally, when all the offices have signed off on the rule and the EPA administrator has approved it, the rule goes to the Office of Management and Budget (OMB) in the White House. That office has to ensure that the rule concurs with various executive orders (e.g., Executive Order 12866, which mandates cost-benefit analyses for major actions or those that affect the economy, and Executive Order 12898, which addresses environmental justice in minority and low-income populations) and that all affected agencies involved are satisfied. Then the rule is published in the Federal Register, usually as a proposed rule.

This is where the public becomes involved, if they have not already served on one of the science advisory groups. EPA is required to request and to consider public comment on proposed rules, and we receive public comment from environmental groups, industry, states, community groups, academia, and private individuals. So if there is a regulation that may affect how you do business or may have a bearing on your life, you definitely have the right—indeed, you are expected—to contact the appropriate agency and say whether or not you think the regulation is a good idea and your reasons for thinking this.

After the 90-day comment period closes, all comments are analyzed, summarized, and taken into account in the promulgation of the final rule. If public comment is overwhelmingly opposed to a proposed rule and we are fairly certain that the public comment is representative, we have two choices. Either we can go ahead with the rule knowing that it is going to cause a great deal of political flak (usually the higher management will

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take that route only if they can be convinced that there is a very good reason), or we can conclude that our proposed ideas were bad and go back to the early stage of the process. Because of the extensive prepublication consultations, this does not happen too often, but when it does, the proposed rule is modified on the basis of public comment. Again we will get input from other agencies and OMB will review the rule. After OMB approves it, it is published as a final rule in the Federal Register, at which time it has the force of law.

Regulations For Biotechnology Products

Three EPA regulations that apply to biotechnology products were recently published. The first of the rules comes under FIFRA and concerns microbial pesticides, including those genetically modified, and non-indigenous microorganisms (EPA, 1994c). The second rule regulates transgenic plant pesticides under FIFRA and FFDCA (EPA, 1994e). The third rule, concerning microbial products of biotechnology, comes under TSCA and applies to bioremediation agents and other non-food, non-pesticide products (EPA, 1994b).

Role Of Biotechnology In Pollution Prevention

What biotechnology products do we see on the horizon? I think the most exciting possibilities are those relating to waste management strategies. ''Waste" is really another way of saying pollution. For example, a highly toxic chemical that may be safely used in manufacturing can cause problems if it gets out into the environment. This is both pollution and a waste of resources.

The waste management strategies developed to deal with pollution are remediation, waste conversion, and pollution prevention. The least desirable is remediation, because this occurs after the damage is done. However, we definitely need remediation products, and we are counting on biotechnology to give them to us. Somewhat earlier in the waste pipeline is waste conversion. In this strategy, waste—that is, toxic pollutants—are converted into harmless by-products or, if possible, useful products. Rarely are these kinds of strategies 100 percent effective and they also occur after the pollutant has been produced.

Probably the most effective strategy is pollution prevention. This means altering the manufacturing process so that waste is not produced. Most biotechnology products near the commercialization stage are biopesticides, and the focus of biopesticides is pollution prevention.

Biopesticides create safer pesticides that can decrease the use of conventional toxic chemical pesticides and their release into the environment.

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Two applications for which we now have regulations in place are microbial pesticides and plant pesticides. With microbial pesticides, microorganisms that are pest-specific pathogens are genetically engineered so that they have enhanced or in some cases new pesticidal properties. If they are pest specific, the risk to nontarget organisms and to humans is much less than with conventional pesticides, some of which act by highly toxic actions analogous to nerve gas.

The second application is the plant pesticide. Plants can be genetically engineered to be pest resistant or to express pesticidal substances directly. Again, there is no waste because all the pesticide is in the plant. There is no worry about spraying nontarget organisms in the area or about the pesticide moving off site and contaminating groundwater or about other environmental concerns arising from the use of chemical pesticides.

Bioprocessing and bioremediation have significant potential for pollution prevention and environmental remediation. Bioprocessing and bioremediation agents are primarily in the research stage, but we hope to see commercial applications in the future because they provide opportunities to solve very important environmental problems. For example, microbes, plants, and fungi could be modified to synthesize polymers used in plastics, paint, and adhesive manufacturing. Traditional manufacturing processes generate many toxic by-products. If these polymers could be generated biosynthetically, toxic waste generation would be reduced at the source.

As far as waste conversion is concerned, the possibility exists to convert organic wastes, such as those from sludge and from water purification plants, into methane or alcohol. These products could be used instead of fossil fuels, sparing them for manufacturing uses where there are no substitutes.

Remediation is clearly of great interest to EPA because of the halogenated organic compounds that have persisted in the environment, as well as heavy metals. It is very striking that in the 1970s EPA canceled all uses of the pesticide dichlorodiphenyl-trichloroethane (DDT) and all manufacturing and most uses of polychlorinated biphenyls (PCBs) (EPA, 1972, 1979). Yet in a 1990 survey of fish tissues in the United States, the most predominant contaminants in fish tissues were PCBs and dichlorodiphenyl-dichloroethylene (DDE), a breakdown product of DDT that is highly toxic in its own right (EPA, 1992). EPA has done all that it can to stop the introduction of these chemicals into the environment, but because of their persistence they are continuing to pose a problem that may only be resolved by remediation.

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Conclusion

Environmental applications of biotechnology have brought us to the threshold of commercialization of many products, primarily biopesticides. These products may soon enable us to stop or in some cases reverse the negative effects of human activities on the environment. Initially some in the biotechnology community may feel that federal regulators are guarding the door to the marketplace too vigilantly in the face of what many view as largely theoretical risks. However, public concerns about the safety of this relatively new technology must be addressed by a rigorous and credible oversight process, at least until biotechnology gains wider public acceptance and people are more comfortable with its use.

What we do not want to happen to this promising industry is, through sloppy regulation, for a risky product to get out into the environment and cause a disaster. This would give the entire industry a black eye. As an analogy, consider what happened when the Hindenburg exploded. We do not want the dirigible industry to be a model for the biotechnology industry.

In the future, as we gain more experience about the survival and dispersal of cloned genetic information and as we get more information about the level of perturbation that can be expected in ecosystems in which new organisms are introduced, we will likely see exclusions from regulation for classes of genetically modified organisms that have been determined empirically to pose minimal risks. As we build up a larger database that allows us to make more accurate risk assessments, streamlined risk-based determinations will very likely become commonplace for most recombinant DNA products.

References

U.S. Department of Agriculture. 1993. Agricultural Chemical Usage: 1992 Field Crops Summary. Washington, DC: USDA National Agricultural Statistics Service.

U.S. Environmental Protection Agency. 1972. Consolidated DDT hearings opinion and order of the administrator. Fed. Regist. 37 (131):13369-13376.

U.S. Environmental Protection Agency. 1979. Polychlorinated biphenyls (PCBs) manufacturing, processing, distribution in commerce, and use prohibitions: final rule. Fed. Regist. 44 (106):31514-31568.

U.S. Environmental Protection Agency. 1992. National Study of Chemical Residues in Fish. Vol. I. EPA 823-R-92-008a. Washington, DC: Office of Science and Technology.

U.S. Environmental Protection Agency. 1994a. Initiation of EPA's New Regulatory and Policy Development Process. Memorandum from the administrator to EPA's assistant administrators, general counsel, associate administrator, regional administrators, and office directors.

U.S. Environmental Protection Agency. 1994b. 40CFR Part 700, et al. Microbial products of biotechnology; proposed regulation under the Toxic Substances Control Act; proposed rule. Fed. Regist. 59 (169):45526-45585.

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U.S. Environmental Protection Agency. 1994c. 40CFR Part 172. Microbial pesticides; experimental use permits and notifications; final rule. Fed. Regist. 59 (169):45600-45615.

U.S. Environmental Protection Agency. 1994d. Plant-pesticides subject to the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and the Federal Food, Drug and Cosmetic Act (FFDCA); proposed policy; notice. Fed. Regist. 59 (225):60496-60518.

U.S. Environmental Protection Agency. 1994e. 40 CFR Parts 152, 174, and 180. Proposed exemptions from the requirement of a tolerance for plant pesticides and nucleic acids and viral coat proteins produced in plants under FFDCA, and plant-pesticides subject to FIFRA; proposed rules. Fed. Regist. 59 (225):60519-60547.

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