Federal, State, and Local Regulation of Biotechnology

Geoffrey M. Karny

Geoffrey M. Karny is a principal with Dickstein, Shapiro & Morin in Vienna, Virginia. Copyright Geoffrey M. Karny.

My task is to review federal and state regulation of genetically engineered organisms in the environment. This is not easy, because no single legislative act governs this type of activity. Instead, an array of statutes and regulations governs the various aspects and particular products of genetic engineering. This array has been criticized as a "patchwork," with the somewhat negative connotation that significant uncertainty is involved and, in addition, that certain situations may escape regulation.

But, before focusing on the regulatory system, we need to keep in mind a few points. First, genetic engineering is a cross-cutting technology. Products from the technology — drugs, devices, animals, agricultural chemicals, and so forth — will be used in many different industries. Second, at the federal and state levels, there exists already a vast array of product-directed statutes and regulations.

So the question arises: do we need technique-oriented regulation? Any special approach or special law in this area necessarily would be based on the rationale that there are unique, special, or high risks associated with genetic engineering.

It is axiomatic that regulation must be commensurate with risk. If risk is minimal, command-and-control legislation and specifically directed statutes are not needed.

On the other hand, the existing product-directed laws might not apply to products of genetic engineering. The Federal Food, Drug, and Cosmetic Act¹ regulates drugs, among other items. The Toxic Substances Control Act (TSCA)² regulates chemical substances. The Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA)³ regulates pesticides. There may be something different about genetically engineered products that would exclude them from the framework of these statutes.

That said, I will review federal and some state regulation of biotechnology, assessing the adequacies and inadequacies of the regulatory system from several different perspectives. First, I will discuss the risk of genetically engineered organisms as compared with risks presented by organisms that have been made by conventional techniques such as cross-breeding. Second, I will discuss the application of existing laws and regulations to genetically engineered organisms. This involves the question of to what degree society should account for unsubstantiated fears and hypothetical risks in its regulatory response to any technology.

Taking as a given that biotechnology will provide major, revolutionary benefits, we need to consider risk and regulation. To begin with risk, in the mid-1970s, bio-technology was still at the laboratory research stage, and processes were fairly rudimentary. Nobody was talking about transgenic pigs. However, there was concern about bio-catastrophes, because the technology was new and unknown.

Since then, the consensus has evolved that there is no special or unique risk inherent in genetic engineering technology, at least for its laboratory uses, where the organisms are contained. That is, there is no more risk beyond that which is already present in the raw materials. Obviously, if you are working with polio virus or rabies virus, you must take precautions, but recombinant DNA will not cause additional problems.

The situation is different for biotechnology's environmental applications, where engineered organisms are actually released into the environment. We know from past history that many exotic organisms, such as chestnut blight, kudzu vine, and the gypsy moth, have been imported into new environments and spread out of control.

In response, a number of scientists have argued that, because we know a good deal about biotechnology from our laboratory experience, there is no particular reason to be concerned about its environmental applications. In particular, the exotic organism analogy has been criticized because biotechnology is used to place one or two new genes into a known organism. The result is not a totally new and exotic organism.

Two interesting reports have issued on environmental release. First, a 1987 National Academy of Sciences (NAS) report⁴ concluded that there is no evidence of unique hazards associated with field-testing genetically engineered organisms. This study demonstrated that the environmental risk of such testing is the same in kind as the risk from placing conventionally produced organisms into the environment. The report therefore recommended that the level of risk assessment be determined by the type of organism, not by how it is made.

The NAS report has been criticized on a number of grounds, as 1) lacking a sufficient ecological perspective, 2) not being sufficiently comprehensive, and 3) placing fairly broad-brush statements in its summary but more carefully qualified statements in the body of the text. It was the only report on this subject until this week, however, when the Congressional Office of Technology Assessment (OTA) issued its report on the field-testing of genetically engineered organisms.⁵ The OTA report is a comprehensive, three-year study of the issue and reinforces the conclusions of the NAS report. In view of its comprehensiveness, there are few grounds for criticism.

[19 ELR 10493]

The OTA study concluded that there is reason to be cautious about biotechnology, but no cause for alarm. Although in some cases the only way to evaluate the risks of particular products will be to conduct the experiment in the environment, adequate review is possible. The OTA does not expect serious problems, at least for the next few years; the report left longer-term predictions open. The study suggested that potential risks of new organisms are generally qualitatively similar to, and may be quantitatively less than, that of old organisms.

I want now to turn to federal regulation. The "Coordinated Framework for Regulation of Biotechnology" was promulgated in June, 1986.⁶ It is a collection of policy statements by the relevant agencies concerned with biotechnology, including the National Institutes of Health (NIH), the U.S. Environmental Protection Agency (EPA), and the United States Department of Agriculture (USDA), and it addresses some of the criticisms of the biotechnology regulatory system as a patchwork. Under the Coordinated Framework, NIH has jurisdiction over laboratory research; EPA over genetically engineered organisms, such as pesticides or nitrogen-fixing organisms; and USDA over plants, certain microbes and animals.

Certain fundamental policies should be noted here. First, this statement reflects the policy determination that existing laws and regulations are adequate, with the exception of certain microbial products where additional regulatory requirements will be necessary under existing statutory authority. Second, this approach encourages product-specific regulation, since existing laws cover products, and biotechnology is not considered inherently dangerous. Third, agency review of biotechnology will be essentially the same under the Coordinated Framework as for existing products; but there will be some appropriate modifications, particularly with regard to data requirements.

Policy under the Coordinated Framework is implemented through certain uniform definitions.⁷ Intergeneric organisms are defined as organisms created from genetic material from different genera. Pathogens are defined as microorganisms that cause disease or that are derived from or contain genes from microorganisms that cause disease.

Another important definition is that of environmental release. Here there is a problem — there is no definition for release. Since they could not agree on a definition, the regulators decided to focus on containment. For now, environmental release is like pornography — the regulators cannot define it, but they will know it when they see it.

To illustrate how this framework applies to particular products, consider the example of a biotechnology conglomerate. Assume that this conglomerate works in all areas — genetically engineered microorganisms, plants, and animals. When products are developed by this conglomerate, they are first tested in the laboratory and then field-tested. Then the products are sold, subject to appropriate regulatory approvals.

Laboratory research in biotechnology is covered by the NIH Guidelines on Research Involving Recombinant DNA Molecules.⁸ The NIH Guidelines cover only recombinant DNA research; they have been criticized as not covering other techniques involved in genetic engineering, such as cell fusion. Other scientists believe that the Guidelines are sufficient, since we have never had concerns about cell fusion in the past.

The NIH Guidelines set up containment levels for certain experiments, with containment increasing as the possible risks involved increase. Oversight mechanisms are set up in the same way, with oversight increasing proportionate to risk. Oversight on the local level occurs through an Institutional Biosafety Committee (IBC). There also is oversight on the national level at NIH; certain experiments come before NIH for review by the director and by a body of experts called the Recombinant DNA Advisory Committee (RAC).

The NIH Guidelines are mandatory for anyone receiving federal funding or whose institution receives federal funding. Because they are guidelines, they are not mandatory for the private sector except in the rare instances where local jurisdictions have adopted them under local law. Nevertheless, the private sector has espoused voluntary compliance with the Guidelines, and there is no evidence that private industry is not following them. Clearly, because of the public scrutiny that biotechnology receives, it is in the private sector's interest to adhere to them. The Guidelines provide as well a standard of care for a liability suit against someone who does not follow them and who causes harm.

With minor dissent, the consensus is that the NIH Guidelines are a reasonable, flexible way to address the potential risks of biotechnology in view of its significant benefits. Clearly, to return to our particular examples, the Guidelines would apply to microorganisms, plants, and animals made by recombinant DNA techniques. The laboratory situation is thus fairly straightforward — we have regulation in place that seems to be working even though it is not promulgated across the board by any single piece of legislation.

The situation is different in the case of field-testing genetically engineered organisms. The NIH Guidelines envision field testing as the type of experiment that needs to undergo the most rigorous type of review. But the Guidelines also take the position that particular field test experiments should be submitted to other agencies for review, thereby recognizing the roles of EPA and USDA.

Consider, for instance, a genetically engineered microbial pesticide that creates a toxin to kill a certain insect. Under FIFRA, EPA has jurisdiction over pesticides, including microbial pesticides.

Our microbial pesticide is thus subject to the same review as a conventional pesticide. A pesticide must be registered with EPA under FIFRA. At the field testing stage, an experimental use permit (EUP) is generally required. Certain limited tests are exempt from EUP requirements,⁹ but EPA has taken the policy position that agency permission is needed for small-scale testing of genetically engineered organisms.

EPA has asserted jurisdiction under TSCA over most microorganisms that are not pesticides. EPA's position is that a genetically engineered organism is a chemical substance as defined under TSCA. Consider a genetically engineered nitrogen-fixing bacterium that is an intergeneric organism. EPA's position is that intergeneric organisms must undergo the premanufacture notice (PMN) process under TSCA.¹⁰ The [19 ELR 10494] PMN process for new chemicals allows EPA to review substances before they are used in the environment.

To implement PMN review of intergeneric organisms, EPA plans to promulgate several rules. First, EPA plans to issue Significant New Use Rules (SNURs)¹¹ for organisms that do not come under the PMN review process (nonintergeneric organisms) but are pathogens. The agency will also promulgate a Section 8(a) reporting rule for nonpathogenic, nonintergeneric organisms.¹²

Under TSCA, small quantities of chemicals used solely for research and development are exempt from the PMN process.¹³ EPA plans to promulgate a rule to exclude the field testing of the genetically engineered organisms from the Section 5 exemption.¹⁴

What has EPA done with biotechnology? A number of products have come before the agency for review. The "ice-minus" bacteria, of which most people are aware, was reviewed by EPA for several years and finally approved for field testing. A genetically engineered nitrogen-fixing bacteria was recently approved for field testing, and the field testing of a microbial pesticide is supposedly very near approval. In general, the approval process has moved slowly, but it should move faster in the future as EPA standardizes its procedures.

The final aspect of the federal regulatory structure which I will discuss is the role of the USDA. USDA has promulgated regulations that govern genetically engineered plants, if they are or might be a plant pest.¹⁵ Permits will be required before any such genetically engineered plant can be released. So, regulations are in place for plants for which there is a concern about adverse environmental impacts.

There is nothing per se in place at USDA regulating transgenic animals. It is important to keep in mind, however, that conventional animal breeding techniques are not regulated because there is no concern about risk. If we believe that transgenic animals do not present any additional risks, then it is questionable whether we need additional regulation. This question is still being debated, and the USDA may end up promulgating additional regulations requiring permits for transgenic animals. Since the USDA has the authority to control animal pathogens, it can use that authority as leverage in the same way that it has leveraged its authority over plants.

On the state and local level, there is very little biotechnology regulation on the books. Most state and local regulation focuses on laboratory research; much of this legislation was passed in the early days of recombinant DNA when most activity was in the laboratory. Since about 1984, and a few years earlier in California, there has been a flurry of activity on the local level because certain companies are preparing to field-test genetically engineered organisms. Essentially all the legislation proposed on this subject has not passed, however.

It appears that localities have become educated about the risks of biotechnology and about existing federal regulation, and they have seen fit to rely on federal regulation. There are a few exceptions to this trend: two townships in New Jersey have passed local ordinances requiring a $ 6 million bond before any field testing can take place in their locality.¹⁶ There are currently no biotechnology companies in those two jurisdictions; it is unlikely that any will locate there in the near future.

To conclude, I would like to return to the original criteria I mentioned, and to assess the regulatory system by them. On the question of risk, the consensus among the experts is that no special or unique risks are associated with biotechnology. Thus, there is no need for special regulation in the form of a "Genetic Engineering Act of 1988." Genetically engineered organisms should be regulated under existing law in the same way as any other organism. Existing law consists of a broad network of health, safety, and environmental statutes and regulations governing products on the federal, state, and local level. Genetic engineering produces products; there is no reason to believe that these products cannot be regulated adequately under existing law.

Questions remain as to how well existing law can be applied, and there is certainly plenty of work for lawyers to do in this area in the future. However, the Coordinated Framework has been an important and major first step forward. It has reduced much of the uncertainty and provided a degree of uniformity, especially regarding the jurisdiction of the agencies over particular categories of organisms.

Given this, what about the fact that people are still concerned about biotechnology? In our society, what obligation do we have to take unsubstantiated fears and hypothetical risk scenarios into account? If there are concerns, what should society do? One answer is that society should, and does to some extent, address these issues. We are wrestling with the issue now with the question of AIDS — what restrictions should be placed on people with AIDS because other people are unreasonably concerned about the risks?

The better answer may be that federal regulation of genetically engineered organisms already addresses these concerns. The Coordinated Framework does take into account hypothetical risk scenarios. A number of scientists would argue that the additional restrictions placed on microorganisms are there in response to societal concerns. Because we do not know the answers, we have placed additional restrictions on the use of these organisms where none were previously applicable.

In conclusion, we need to refine the Coordinated Framework and the existing federal statutes and regulations, and make them work in this area.

DISCUSSION

PARTICIPANT: You seem to be satisfied both that the regulatory apparatus works well now, and that there will be no problems in the future. Do you see changes taking place? Do you think there should be any changes?

KARNY: I think the fundamentals are already in place in the regulatory system, although work needs to be done to implement the system and work out the details. I do not believe that one single agency should regulate genetically engineered products across the board, because society has made the decision to regulate on a product-by-product basis, [19 ELR 10495] and we have those statutes in place. What we really need to do is apply existing statutes and make them work for the products of genetic engineering.

PARTICIPANT: You mentioned that the NIH Guidelines would set the standards for tort liability. Do you think that compliance with those standards will be a defense to tort liability?

KARNY: While they will help, I do not believe that they will be an absolute defense to tort liability. Under basic tort law principles, compliance with federal, state, and local statutes and regulations is not a per se defense to liability. The regulatory standards do provide a standard of care against which the decisionmaker can evaluate a company's actions. But, as a number of drug companies have learned, obtaining the FDA's approval of a pharmaceutical in no way insulates one from tort liability.

PARTICIPANT: I agree that genetically engineered livestock do not present inordinate environmental hazards, but a lot of effort is going into genetically engineering fish and shellfish. In those cases, we will be genetically engineering what are essentially wild organisms, and returning them to the environment to grow. Who should regulate these organisms?

KARNY: As I noted, there is no regulation in place for transgenic animals right now, just a diffuse type of oversight for new animals. Again, it is a question of risk-how much risk are we willing to accept? If there is limited risk or no risk, then the diffuse type of oversight that already exists at USDA is enough. As you know, the animal and plant research processes are such that a product does not enter the market until there has been about ten years of experimentation to determine its agricultural characteristics. This is done through the whole system — not specific regulation, but still an oversight mechanism.

In addition, USDA has set up the Agricultural Biotechnology Recombinant DNA Advisory Committee (ABRAC), a scientific advisory body patterned after the RAC, to conduct a scientific review of this area. But again, there is no command and control regulation here. The ultimate issue is that we need to know the risks in the area. If there is reason for concern, then USDA should use its authority under the various animal control acts to develop a permit-type system similar to what they have for plants.

MARGARET G. MELLON: Are you suggesting that the USDA should regulate transgenic fish and shellfish? I would think that we would not want to entrust regulation of fish and wildlife to the USDA, because its mandate is not to protect the environment but to protect our agroeconomy.

As for plants, I read the existing Framework to say that the only regulated plants are those that are engineered with a vector that happens to be taken from a plant pest. If a vector were found that did not come from a plant pest, how could those plants be regulated at all under the Federal Plant Pest Act (FPPA)¹ The FPPA is limited to regulating organisms that are plant pests, and it is hard to make a case that a tomato is itself a plant pest.

KARNY: I agree with you that it may be hard to make the case that a tomato is a plant pest. Similarly, it may be hard to make the case that a tomato presents any risk.

MELLON: But then you are arguing that the FPPA ought not to be applied to the organisms to which it is currently applied, and that is another issue.

KARNY: No, I am not saying that.

MELLON: It certainly seems to me that the FPPA is being arbitrarily extended to some groups of organisms and not to others, when it should cover only one very narrow group of organisms — plant — pests.

KARNY: As I understand the regulations, the FPPA applies not only to organisms created by vectors from plant pests, but also to cases where the source organism may have been from one of the genera that is a plant pest, or where there is reason to believe that the organism may be a plant pest. There is clearly a good deal of agency discretion in the last category, so if the USDA has grounds for concern, it can assert its jurisdiction.

To return to the question about whether USDA should regulate fish, I recognize that USDA is not everyone's favorite agency. But keep in mind that there are two components to USDA. One is the science and education component, which promotes agriculture, and the other is the marketing and inspection arm, which is a regulatory arm. Part of that regulatory arm is the Animal Plant and Health Inspection Service (APHIS), which has regulated plant and animal pathogens for quite a number of years. APHIS is the regulatory arm of USDA responsible for these plant pests, and it could be responsible for transgenic animals.

MICHAEL LIDSKY: What Dr. Mellon said about the USDA regulating only where something is a plant pest is true — we do not want to regulate solely on the basis that an organism is genetically engineered. If there is a valid reason to believe that an organism presents a risk to plants or agriculture, then we will take action.

MARK SAGOFF: Could you clarify what you mean by risk — in the sense of risk to what? To give an example, in Maryland a bass-perch hybrid fish has been released into the Chesapeake Bay. This hybrid may be more economical than nature's own species. Biotechnology allows us improve on nature, to correct nature, and to make nature more economical. So I am confused about how that process can be a risk to the environment. Aren't we really transforming the environment to make it more efficient economically, more profitable? Wouldn't we then say that the native species that would be competing with the ones we introduce really pose the risk?

KARNY: No, I don't agree.

SAGOFF: Then with what conceptof harm are we working? If we are only working with a concept of harm as harm to human health, welfare, and safety, then it seems that biotechnology may be safer and more productive than nature. It may be nature that we ought to be trying to regulate and restrict rather than biotechnology. Or are we talking about harm and risk to nature? If so, why tolerate any introduction of engineered species into the world?

KARNY: It is entirely appropriate to phrase the problem in terms of defining risk. People use the term risk in different ways, and you can devote much time to defining what they mean. When I use the term risk, I use it to mean the possibility of harm. The second question is, then, harm to what?

We can evaluate harm on a case-by-case basis. I use the concept to mean not only harm to humans, but also harm to other species in the environment and to the environment itself. Harm is a nebulous term — I try to use it broadly, recognizing that people who are concerned about biotechnology use the term broadly. The critics are not concerned only about risk to humans, but also about the proliferation of [19 ELR 10496] organisms in the environment, with whatever potential consequences may be involved.

JAMES FAUSONE: You have defined the Coordinated Framework as a diffuse approach to regulating biotechnology. In light of Congress's actions in the 1980s, enacting specific environmental regulation and legislation, do you think that they will leave biotechnology alone because existing legislation is sufficient? Or do you see additional, specific legislation in this area in the near future, similar to the Superfund Amendments and Reauthorization Act² or the Resource Conservation and Recovery Act³ amendments?

KARNY: Let me first clarify the characterization of the Coordinated Framework as "diffuse." The statutory authority for biotechnology could possibly be called diffuse, as a number of statutes are involved. But the Coordinated Framework itself is an attempt to pull together those statutes to form a more certain, consistent, and coherent system.

As for your question on legislation, I believe that the chance of passing specific federal legislation in this area is remote. Although bills continue to be introduced from time to time, if what we now know about the risk continues to hold true, I do not think that we will be able to make a case for specific legislation. In the 1970s and 1980s, when most of the environmental statutes were passed, there was a consensus that serious risks were involved and needed to be addressed. I do not think that the case has been made that biotechnology involves significant, serious risks that need to be addressed. Risk is a spectrum: simply because there may be some risk does not mean that one jumps to the other end of the spectrum and passes the equivalent of a FIFRA or a Federal Food, Drug and Cosmetic Act⁴ for this area. Intermediate stages are possible. TSCA is an example of an intermediate step, since it is a notification statute.

Other types of risk require less oversight, and we can rely on standards of conduct. Scientists have been handling dangerous pathogens for many years, using good laboratory practices, without federal regulation. With biotechnology, we are partially relying on voluntary codes of conduct, through the NIH Guidelines.

1. 21 U.S.C. §§ 321-392.

2. 15 U.S.C. §§ 2601-2654, ELR STAT. TSCA 001.

3. 7 U.S.C. §§ 136-136(y), ELR STAT. FIFRA 001.

4. NATIONAL ACADEMY OF SCIENCES, INTRODUCTION OF RECOMBINANT DNA-ENGINEERED ORGANISMS INTO THE ENVIRONMENT (1987) [hereinafter NAS REPORT].

5. U.S. CONGRESS, OFFICE OF TECHNOLOGY ASSESSMENT, NEW DEVELOPMENTS IN BIOTECHNOLOGY — FIELD-TESTING ENGINEERED ORGANISMS: GENETIC AND ECOLOGICAL ISSUES, OTA-BA-350 (1988) [hereinafter OTA REPORT].

6. OFFICE OF SCIENCE AND TECHNOLOGY POLICY, COORDINATED FRAMEWORK FOR REGULATION OF BIOTECHNOLOGY, 51 Fed. Reg. 23,302 et seq. (June 26, 1986) [hereinafter Coordinated Framework].

7. See id. at 23,307.

8. Department of Health and Human Services, Guidelines for Research Involving Recombinant DNA Molecules, 51 Fed. Reg. 16,958 et seq. (May 7, 1986) [hereinafter NIH Guidelines].

9. 40 C.F.R. § 172.3.

10. 15 U.S.C. § 2604, ELR STAT. TSCA 008.

11. See 40 C.F.R. Part 721.

12. 15 U.S.C. § 2607(a), ELR STAT. TSCA 017.

13. 40 C.F.R. § 720.36.

14. 15 U.S.C. § 2604(h), ELR STAT. TSCA 008.

15. 52 Fed. Reg. 22,892 et. seq. (June 16, 1987) to be codified at 7 C.F.R. Part 340 and amending 7 C.F.R. § 330.100.

16. Estell Manor and Shamong Township, New Jersey, have adopted a model ordinance developed by a member of the state Senate. See Karny, "Regulation of the Environmental Applications of Biotechnology," 37-38. [unpublished conference paper].

1. 7 U.S.C. §§ 147a, 150aa-jj.

2. Pub. L. No. 99-499, 100 Stat. 1613 (1986).

3. Pub. L. No. 98-616, 98 Stat. 3224 (1984).

4. 21 U.S.C. §§ 321-392.