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Does this sound familiar to anyone?

Found this while screening e-mail for my absent boss.  Started thinking
that it sounds a lot like the nuclear industry (one could change "biotech"
to "nuclear" and still hit real close to home).  Apparently the EPA is
equal-opportunity in its tendencies toward lethal over-regulation.


Date: Tue, 07 Apr 1998 02:02:31 -0500
From: "Henry I. Miller" <miller@hoover.stanford.edu>
Subject: Biotech Regulation Article
To: Multiple recipients of list <bcepp@relay.doit.wisc.edu>

This article appeared in the March 1998 issue of CONSUMERS' RESEARCH (vol.
81, pp19-21):

FAX: (650) 723-0576; PHONE: (650) 725-0185=20

Needing to replace my home computer recently, I decided to buy the same
model purchased for my office a year ago for about $2400. I was delighted
and surprised to find I could buy an upgraded version from the same vendor
for half the price.

We consumers are enjoying this windfall for several reasons. First is the
rapid pace of innovation and marketing of new chips and other components.
According to Moore's Law, the computing capacity of chips doubles about
every eighteen months making yesterday's technology quickly obsolescent and
making today's computing power considerably more cost- effective.

The second is the furious competition among developers of hardware,
software and everything in between that fuels creativity, innovation, and
quality control. In this climate, even a small strategic miscalculation or
glitch can be fatal.

These factors converge to stimulate consumer demand for continuous system
upgrades which, in turn, stimulates new rounds of capital investment in R&D
and creates new products -- a positive feedback loop.

Add to these "active," positive factors the absence of a potentially
negative effect -- namely, government regulation. Federal regulation of the
product development process in the form of case-by-case evaluations of the
safety or effectiveness of each microelectronics innovation, for example --
could have imposed lengthy delays and driven up the cost of R&D. Regulatory
costs would have reduced both profits and innovation as R&D expenditures
were diverted to regulatory compliance.

This is more than a hypothetical scenario. Take, for example,
biotechnology, once touted as a major economic development vector for the
21st century. Government regulation has created a black hole from which
biotechnology's agricultural and environmental applications may never
completely emerge.

Biotech's cautionary tale begins a decade ago, when the US Department of
Agriculture (USDA) required for the first time in the history of plant
breeding that field trials with new plant varieties higher-yielding wheat
and pest-resistant squash, for example -- could proceed only under a
federal permit and environmental assessment system. Government oversight
applied only to those plants that had been genetically modified using
biotechnology's most sophisticated and precise new methods of genetic
modification. USDA's regulatory approach was tantamount to imposing
case-by-case regulation of every advance in microchip design, which would
vastly have inflated the cost of next generation computers and slowed the
pace of R&D. My computer store might now be offering $4000 "386" computers,
instead of my recent bargain.

USDA's policies fly in the face of a widely-held scientific consensus that
new biotechnology's molecular techniques represent merely an extension, or
refinement, of earlier, less precise genetic techniques (which provide
virtually all of the fruits, vegetables and grains consumed in North
America and Europe). The prestigious National Research Council evaluated
the potential risks of new biotechnology, concluding in 1989 that, "with
classical techniques of gene transfer, a variable number of genes can be
transferred, the number depending on the mechanism of transfer; but
predicting the precise number or the traits that have been transferred is
difficult, and we cannot always predict the [effects] . . . As the
molecular methods are more specific, users of these methods will be more
certain about the traits they introduce into the plants."

USDA has extolled 1997 regulatory changes as significant reforms.
Regulators will reduce the burden of the permit application process
somewhat by enabling researchers merely to notify regulators, for most
field trials. But for biotech companies and especially for academic
researchers, this is too little, too late.

The potential relief is severely limited by USDA's insistence on retaining
unnecessary and hugely expensive field test design, monitoring and
reporting requirements that impose an unacceptably high cost on R&D. For
example, gene-spliced plants being shipped or cultivated cannot be mixed
with plants modified in other ways (which includes virtually all cultivated
crop and garden plants), and all living plants must be destroyed at the
completion of the field trial. These requirements make as much sense as not
permitting the mixed shipment of computer monitors produced by different
manufacturers and with different techniques.

Thanks to USDA's unyielding requirements, U.S. leadership in agricultural
biotechnology has been seriously eroded, if not abolished. The number of
field trials of plants crafted with new biotechnology techniques performed
by academic researchers has been stagnant for more than three years, and
agbiotech companies have been closing their doors or being acquired by
multinational agricultural chemical companies.

USDA is not alone in promulgating unscientific and burdensome policies.
Regulatory policies from the Environmental Protection Agency have ravaged
whole industrial sectors. At the same time that EPA's licensing of new
chemical pesticides has shrunk to a trickle, the agency has placed costly
barriers in the path to needed biological pest control methods that depend
upon new biotechnology R&D. EPA regulates as a PESTICIDE any crop or garden
plant whose pest- or disease-resistance has been enhanced with new biotech
techniques. They aren't even that hard on chemicals -- small-scale field
trials of all chemicals (and all other plants) are exempt from regulation.
EPA regulates biotech-derived, insect-resistant tomatoes and marigolds MORE
STRINGENTLY than chemicals similar to DDT or sarin.

And last year the EPA issued a regulation that ensures that biotech
researchers in several other industrial sectors, including bioremediation
(the cleanup of toxic wastes), will continue to be intimidated by
regulatory barriers. The new EPA regulation will inhibit research into any
"new" organism (strangely defined as one which contains combinations of DNA
from unrelated sources) that might, for example, literally eat up oil
spills. For EPA, "newness" is synonymous with risk, and because
gene-splicing techniques can easily be used to create new gene combinations
with DNA from disparate sources, these techniques therefore "have the
greatest potential to pose risks to people or the environment," according
to an agency press release. That's like automobiles with air bags are
actually more dangerous, because people are likely to drive them longer

Differences in federal regulation are not the sole reason for the boom in
the computer-centered industries and the bust in certain sectors of
biotechnology, to be sure. But they are potent. Over-regulation has reduced
the overall amount of biotechnology R&D performed in the U.S. Basic
research produced by publicly funded academic institutions has become an
orphan, with few industrial partners available to carry it through R&D and
into manufacturing.

The big losers? Those who believe that Americans should have access to the
broadest possible spectrum of product choices and competitive prices -- for
food, fiber and environmental protection. Oh, yes, and all of those
entrepreneurial companies, hundreds of thousands of well-paid employees,
and state and federal tax coffers, which would have reaped the benefits of
a $100 billion biotech industry.

Dr. Miller is a Senior Research Fellow at Stanford University's Hoover
Institution and the author of "Policy Controversy in Biotechnology: An
Insider's View" (Austin: R.G. Landes Co., 1997).

J. Eric Denison
Program Assistant to the Director
Neurobiotechnology Center
The Ohio State University
206 Rightmire Hall
1060 Carmack Road
Columbus, Ohio  43210
ph: 614-292-5682
e-mail: denison.8@osu.edu