icabr presentation falck zepeda et al june 2016 abrev

Program for Biosafety Systems – http://pbs.ifpri.info/

“Developing Efficient Regulations: Implications of the Cost of Compliance and

Regulatory Delays for Genome Editing Techniques (GETs)”

Jose Falck-Zepeda, Patricia Zambrano, David Spielman, Mark Rosegrant and Judy

ChambersEnvironment and Production Technology Division, IFPRI

Paper presented at the 20th ICABR CONFERENCE TRANSFORMING THE

BIOECONOMY: BEHAVIOR, INNOVATION AND SCIENCE; , Ravello (Amalfi

Coast – Italy), June 26–29, 2016; Oscar Niemeyer Auditorium


Why GETs?

• Improved delivery efficiency

• Reduced time to delivery

• Ability to combine multiple traits efficiently

• Potential to increase yield potential

• Expanded trait modification capacity

Technical paradigmatic change….


Broad research questions

1) Will GETs reduce R&D costs?

2) Will GETs reduce or eliminate regulatory and deployment costs? Time to complete regulatory processes?

3) Would a reduction in the cost of R&D be enough to compensate for potential market acceptance issues (if any)?

4) Would a reduction in the cost of R&D compensate even for potential regulatory costs?

5) Would this be an incentive for public sector and small private firms to invest in gene editing technologies for developing new products?


The U.S. National Academies of Science, Medicine and Engineering Report on GE Crops

• Examined the relevant literature (1000+ research and other publications)

• Held information-gathering meetings

• 3 meetings + 15 webinars = 80 presentations

• All presentations are archived on the study’s website

• Read more than 700 comments submitted by members of the public


Existing and prospect advanced biotechnologies

Techniques Examples Applications

Nuclear genome transformation

Agrobacterium mediated Gene gun mediated

Most commercially available technologies

Plastome transformation Not widely usedGene silencing techniques Antisense silencing FLAVR SAVR tomato delayed fruit ripening and enhanced fruit quality

RNA Interference(RNAi) Yellow/Golden mosaic virus resistant bean produced by EMBRAPA

Transformation methods that do not rely on tissue culture

Floral dip For example, certain members of the Brassicaceae family such as Arabidopsis thaliana and Camelina sativa can be transformed using the floral dip method (Clough and Bent, 1998; Liu et al., 2012) in which Agrobacterium tumefaciens delivers the transgene directly into the genome of egg cells, thereby permitting production of transgenic plants directly from seed. Used to avoid somaclonal variation

Genome editing Meganucleases Not widely usedZinc finger nucleases (ZFNs) Not used yet for commercial application

transcription activator-like effector nucleases (TALENs)

Not used yet for commercial application

Clustered regularly interspaced palindromic repeats (CRISPR)/Cas9 nuclease system

Release approvals for waxy corn and disease resistant mushrooms in the US

Artificial and synthethic chromosomes


Targeted epigenetic modifications


Source: Based on data presented in the NAS Report 2016


Potential regulatory pathways

• No regulation

• Same regulatory framework as GE crops

• Novel approach (i.e. the Canadian system)

• Stricter regulatory oversight as a result from the stricter application of the precautionary principle


Cost and regulatory delay scenariosTitle Scenario Rationale

Baseline => GEDs crops have the same regulatorytimeline and cost profile as GE crops

GEDs will be regulated as GE crops within the biosafety regulatory system as currently implemented. Option subject to regulatory risk, uncertainty and vagueness inherent with product regulation.

Scenario 1 => GEDs have a lower regulatory cost +shorter timeline

May be comparable to the novel based approaches such as the one in Canada. May also be associated with regulatory agency not

reviewing a GED application deemed not required as it is not within its purview. Greater clarity in terms of identifying regulatory pathway. If a product deemed novel then it is subject to regulation.

Scenario 2 => GEDs have a higher regulatory cost +longer timeline due to regulatory delays

Pursuing an even more stringent approach to regulation appealing to the precautionary approach as it is a “new” technique

Scenario 3 => GEDs gave the “same” cost + longertimeline to complete process due to

regulatory delays

Pure regulatory delay as related to longer time needed to complete a decision.


QI

Higher

cost

Lower

time

QII

Higher

cost

Higher

time

QIII

Lower

cost

Lower

time

QIV

Lower

cost

Higher

time

Time

Cost

Tb

CbB

S1

S2

S3


Timeline and estimated R&D and regulatory costs for a GE crop

Year Early

Discovery

Late

Discovery

Construct

optimisati

on

Commercial event

production &

selection

Introgression

breeding & wide

area testing

Regulatory

science

Registration

& Regulatory

affairs

R&D Total Regulatory science

+ Registration and

Regulatory Affairs

Total

1 15.9 0.0

2 13.9 0.0

3 8.8 0.0

4 10.4 0.0

5 14.4 4.2

6 8.8 4.6

7 12.8 4.6

8 8.0 6.0

9 8.0 3.2

10 0.0 3.2

11 0.0 3.2

12 0.0 3.2

13 0.0 3.2

Total 17.6 13.4 28.3 13.6 28.0 17.9 17.2 100.9 35.1

Source: Based upon Phillips McDougal 2011


Indicative Philippines IR rice case study protocol - based on Kikulwe et al. 2008;2012

• Use FAOSTAT data on yield and production from 1961-2014 to obtain estimates of the drift rate (α) and variance (σ2)

• Estimate the hurdle rate along with assumed values of the Discount rate (μ) of 0.12 and a Risk-free rate (r) of 0.04.

• Use farm level budgets compiled by PhilRice (2013) to estimate the Average Incremental Benefit from a GET insect resistant rice expressed in pesos per ha/year.

• Converted into US$ using an exchange rate of 44.53 pesos/$. • The average incremental benefit pursues a similar yield performance difference

than the one used in Bayer, Norton and Falck-Zepeda (2008) of 10%. In line with the same article we did not include a pesticide cost reduction in our estimations. This may be one potential source of underestimation in our projections.

• Use estimates for rice in the Philippines – Total number of farmers of 11,500,000– Total number of households of 18,539,769– Total area 4.5 million hectares planted to rice

• Estimate the Social Incremental Reversible Benefits (SIRBs) and the Maximum Incremental Social Tolerable Irreversible Costs (MISTICs)


Estimates SIRBs for an insect resistant rice in the Philippines

Baseline S1 Lower regulatory cost (50%) & shorter time (5 years)

S2 Higher cost (50%) and longer time (5 years)

S3 Same cost and longer time (5 years)

Discount rate (μ) 0.12 0.12 0.12 0.12Risk-free rate(r) 0.04 0.04 0.04 0.04Hurdle rate 1.25 1.25 1.25 1.25

NPV (millions US$) 1,445 1,859 1,113 1,113

Average benefit per year (Millions US$)

130 168 100 100

Total NPV benefit per ha (US$/ha)

620 798 477 477

Average benefit per ha and year

56 72 43 43

Average per household/year

11 15 9 9

Average per farmer/year

7 9 5 5


Estimates MISTICs and NPV to investor for an insect resistant rice in the Philippines

Baseline S1 Lower regulatory cost (50%) & time (5 years)



NPV (millions US$) 1,152 1,482 887 887 Average benefit per year (million US$)

104 134 80 80

Total NPV benefit per ha (US$)

494 636 381 381

Average benefit per ha and year(US$)

45 57 34 34

Average per household/year (US$)

9 12 7 7

Average per farmer/year (US$)

6 7 4 4

NPV (Millions US$) for an investor

699 937 507 516


Summary impacts

S1 Lower regulatory cost (50%) & time (5 years)



Total NPV benefit per ha (US$)

29% -23% -23%

Average benefit per ha and year(US$) 27% -24% -24%

Average per household/year (US$) 33% -22% -22%

NPV (Millions US$) for an investor 34% -27% -26%


Benefits from Improvements in Regulatory Efficiency

• Reduced uncertainty

• Reduced cost of compliance

• Reduce possibility of rejecting useful technologies

• Increased innovation and possibility of products approved for commercialization

• Increased number and types of products adopted and used by farmers

• BUT…..


Reality Check


Can GET be an option for developing countries or even “pro-poor”?

• Strengths– Expedite – can accelerate R&D processes

– Portable – techniques can be used in different crops

– Versatile – can be used to address problems at different levels of the marketing chain

– Political will

• Limitations– More complex process

• Science

• Institutional arrangements (IP, PPPs, Business model for deployment)

• Biosafety requirements

– New paradigm => Knowledge intensive process

– Who will push the cart? Public vs. Private sector

– Political will


Will the private sector become dominant as in the case of GE crops?

• Private sector successful in organizing multi-disciplinary teams to deliver a project that will serve their clients

– Mandated holistic research (My way or the highway)

– Can the public sector learn some operational lessons from this experience…yes it can and it should!!

– EMBRAPA and the VR bean as one model

• The “producer centered” model of technology diffusion and the rise of the consumer


GE technology transfer: Insect resistant / Herbicide tolerant maize in Honduras

Seed innovator

Breeding/Agronomy

Capacity and R&D

Asgrow / Dekalb A5753

Gene innovator

Biotechnology Capacity and

R&D

Monsanto

MON810 & NK 603

Biosafety

analysis

Bt / RR maize hybrid

A5753BT/RR

Intellectual

Property

Farmers /

Households

+

Socio-Economic

Impact

Assessment?

Dir

ect

seed

tra

nsf

erUSA, South

Africa, Chile

Honduras

Seed SystemSustainable

livelihoods and

gender analysis

Public Private

Partnerships and

strategic alliances

Innovation System


Knowledge and information flows in biotechnology, biosafety and market systems

Smallholder

Farmers

Larger

Farmers

Farmer, Community

Organizations /

Coops

Market Supply Chain

Domestic

Consumption

User

Community

National

International

Community Information

Space

Multi-Stakeholder Leaning

Negotiated Action

Biosafety

Regulatory

Bodies

Ministries

Biotechnology

policies and

regulations

Government

Ministries

Codex

AlimentariusCartagena

Protocol

WTO

Treaties ?

Foreign

regulatory

policies

Foreign

regulatory

bodies

Import /

Export

Sustainable

Livelihoods

Levels

Labeling

Domain

Falck Zepeda, Maru and Komen, 2003


Policy Lessons

• GETs are exciting techniques that have the potential of improving potential yields of many crops

• Interesting option for developing countries

• No specific technical reasons why GETs need to be regulated unless they introduce novel trait – same as a mutation

• If GETs were to be regulated as GE crops it is unlikely they will be commercialized especially in those countries that have not commercialized

José Benjamin Falck-Zepeda

Senior Research FellowIFPRI

2033 K Street NWWashington, DC 20006-1002

[email protected]

Brief bio/pubs: http://www.ifpri.org/staffprofile/jose-falck-zepeda

Blog: http://socioeconomicbiosafety.wordpress.com/

Follow me on Twitter: @josefalck

mailto:[email protected]

http://www.ifpri.org/staffprofile/jose-falck-zepeda

http://socioeconomicbiosafety.wordpress.com/