Compliance Costs for Regulatory Approval of New Biotech Crops

The regulatory approval process for new biotech crops is slow and expensive, and presents important barriers to the development and commercialization of new GM varieties. A team of scientists from the University of Missouri-Columbia, and the University of California, have characterized the structure of such compliance costs and identified key dimensions of their variability.

 The main conclusions of the study are:

1. there is a wide variance in the total compliance costs incurred by biotech developers, which is also attributable to the developers' expectations of the appropriate number and types of field trials, analytical tests and assessment studies that are likely to satisfy the various national regulators
2. four cost categories dominate: production of tissues; compositional assessment; protein production and characterization; and molecular characterization. These represent 60% of all variable costs
3. overhead costs for facilities and management represent between 10% and 20% of the total compliance costs

Not included in the study are indirect compliance costs, such as pre-regulatory safety assessments; indirect private compliance costs from unnecessary and unexpected regulatory delays; increased expenditures; foregone profits from delays in commercialization; and costs for channeling and segregating biotech crops away from certain markets in cases of partial approvals. Such indirect regulatory costs are likely significant but are more difficult to estimate than direct ones.

The article can be accessed at: http://www.nature.com/nbt/journal/v25/n5/index.html