Pareto Policy Solutions, LLC

advancing innovation through smart regulation

Pareto Policy Solutions, LLC is a policy analysis and advocacy firm committed to advancing sustainability through “smart” regulation: regulation that rewards, and does not penalize, superior performance.  Often, such actions leverage advances in science and technology and make the regulatory program itself more effective as well as more efficient.

Something's Gotta Give

The Food and Drug Administration (FDA) recently announced approval of the first genetically engineered animal for human consumption, after twenty years of review.  Yes, that is correct, it took twenty years for the FDA to conclude its review.

No one thinks twenty years is a reasonable amount of time for pre-market review.  Yet inordinately long reviews have become the hallmark of the federal government’s approach toward biotechnology products.  The negative impact on innovation and investment is significant.

Maybe this will change.  Last July, the Obama Administration announced it would revise its nearly 30 year-old regulatory approach toward genetically engineered products.  Specifically, the White House has tasked FDA, the US Department of Agriculture (USDA), and the Environmental Protection Agency to update the Coordinated Framework for the Regulation of Biotechnology Products (CF) before President Obama leaves office.  These agencies are to clarify their current roles and responsibilities; develop a long-term strategy to ensure that the regulatory system is prepared for the future products of biotechnology; and commission an independent, expert analysis (by the National Academies of Sciences and Medicine) of the future landscape of biotechnology products.  The first of three public meetings—this one at FDA headquarters—was held October 30th.  And the White House Office of Science Policy has already solicited public comment through a request for information. 

Interestingly, in its July announcement, the White House lists two primary objectives:  (1) to ensure public confidence in the regulatory system and (2) to prevent unnecessary barriers to future innovation and competitiveness while continuing to protect health and the environment.

And this is the problem.  These two objectives—to ensure public confidence and increase innovation—are at odds.  To understand why, consider this:

--Some new biotechnology products escape regulatory coverage altogether.   According to the scientific journal Nature, companies are using modern techniques of biotechnology (e.g., gene editing) to develop products that regulators have no statutory authority to review.  Consequently, it is possible for the same product to be subject to regulation or not depending on the technique used to create it.  

--When pre-market review occurs, regulators take their time.  According to a 2011 study by CropLife International, bringing a new biotech crop to market, from inception to product introduction, takes on average 13 years and more than $130 million.

Even if these problems could be solved, innovation would still suffer. While professing a need to regulate products based on risk, regulators established, in the CF, pre-market review based on process.  And therein lies the inconvenient truth:  the public demands government review of genetically engineered products even though products produced via genetic engineering have not been found to be any riskier than products produced from conventional breeding techniques.  Numerous scientific reviews (by the National Academy of Sciences among others) have drawn this conclusion.

Since announcing this effort to revise the CF and soliciting input, federal regulators have received more than 900 written comments.  The vast majority of comments are from individuals, seeking mandatory labeling of GMOs, expansion of regulatory coverage to include gene editing and other modern technologies, and a requirement that FDA affirmatively approve (versus review) new biotech products, etc.  In other words, the public seeks a regulatory system that is presumptively anti-GMO.

A handful of public comments have come from businesses seeking expedited governmental reviews and/or major changes in the CF to focus on product risk.  The biotech industry is seeking a regulatory system that is agnostic on the process used to make the product.

Something’s gotta give.  If the end result is expansion of pre-market review by regulators to include gene editing, innovation will be discouraged.  If the end result is shifting pre-market review to focus solely on product risk, public confidence will be eroded.

In the final analysis, there is little overlap between a regulatory framework that promotes innovation and investment and one that ensures widespread public confidence.  And in a representative democracy, an agitated public usually gets its way. 

Not surprisingly, Congress is entering the fray.  The U.S. House of Representatives recently passed legislation (H.R.1599) that would allow federal law to preempt state law on GMO labeling, require USDA to create a voluntary labeling program for “GMO-free” foods, and give USDA new authority over commercializing genetically engineered crops as long as FDA has been consulted “voluntarily”. 

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