Food Biotech Is Risky Business

By Kristen Philipkoskiby
Wired News
December 1, 2003

The genetically modified food industry has battled opposition from consumer and environmental groups to get its food on the table. Its lobbyists have cajoled skeptical politicians; its scientists have produced studies contradicting other studies suggesting the food is somehow tainted.

Now the industry faces another hurdle with long-range, dire consequences: It may be uninsurable.

The reason, industry representatives say, is that the Food and Drug Administration does not regulate GMO products. Without government regulation, no one knows the rules, and that troubles insurers.

"When it comes to a drug or medical device, what underwriters look to as most important is FDA oversight," said Thomas Greany, senior vice president and national practice leader for medical technology at Marsh, a risk-management firm. "It gives a great deal of comfort that FDA has high standards, and if something happens, a method or standard operating procedure is in place to handle adverse outcomes."

The genetically modified foods currently on the market are likely safe, said Michael Taylor, a senior fellow at Resources for the Future. But with the industry evolving toward more significant genetic changes, he said, FDA oversight would help ensure safety as well as encourage wider public acceptance. A recent study found that 89 percent of Americans believe the FDA should regulate genetically modified foods.

Groups concerned about the long-term health and environmental effects of genetically modified organisms agree, and empathize with insurers.

"Insurers should be concerned about this," said Craig Culp, a spokesman for the Center for Food Safety in Washington, D.C., promoting organic and sustainable agriculture. "It doesn't take much in terms of the regulatory landscape for them to suddenly find themselves in a position of paying out a lot of money because of genetic contamination."

Now, when agricultural biotech companies can get coverage, it's limited and expensive. Even if genetically modified crops prove to be safe for humans and the environment, the perception of risk can be enough to do damage, because insurers know all too well how that can influence a jury.

The top five insurers in Great Britain recently declared they'll have nothing to do with the genetically modified crop industry. Despite fewer protests by American consumers against agricultural biotech products than Europeans, U.S. insurers also express fears about class-action suits against GMO producers.

"Genetically modified foods are among the riskiest of all possible insurance exposures that we have today," said Robert Hartwig, the chief economist for the Insurance Information Institute, an industry trade association in New York. "And there's a good reason. No one company knows where this path of genetically modified foods is ultimately going to take us in terms of either human health or environmental contamination."

Agricultural biotech companies say insurers should treat their products in the same way they do conventionally grown crops.

Researchers worldwide recognize GMO products as "substantially equivalent to their conventional counterparts," said Lee Quarles, a spokesman for Monsanto, a leading agricultural biotech company based in the United States. "Therefore, there is no justification that would establish why the insurance model should be any different for a biotech versus a nonbiotech product -- when both are recognized as safe and substantially equivalent to one another."

The FDA's website says its job is to "see that the food we eat is safe and wholesome, the cosmetics we use won't hurt us, the medicines and medical devices we use are safe and effective, and that radiation-emitting products such as microwave ovens won't do us harm."

That's no small order, and a labyrinth of legislation determines how these tasks are executed. The agency must first determine what is a risk and then whether the product requires approval of a product before it hits the market.

The FDA decided in 1992 that genetically modified foods are "substantially equivalent" to regular food, and therefore do not require pre-market approval. Instead, companies voluntarily provide the FDA with a statement that their products are safe.

In January 2001, members of the FDA filed a proposal calling for some pre-market FDA oversight of genetically altered foods, but it was never enacted.

"The FDA is still looking into mandatory reporting," said Michael Herndon, a spokesman for the agency.

Without the FDA setting guidelines for consumers and insurers, critics believe insurers are more likely to face large payouts in various scenarios. Cross-contamination of conventional or organic crops from genetically modified fields is one potentially litigious scenario. Some farmers have already filed such lawsuits. In other cases, Monsanto has sued farmers for patent infringement.

Others fear genetically modified foods could pose a health threat to humans when eaten directly, or when consumed indirectly from livestock fed with genetically modified grains.

Every insurance company is in the business of risk, but it's not a topic companies enjoy talking about with the press. Representatives from Chubb insurance, which has a large life science unit, and Prudential declined to comment for this story. A representative from American International Group, which covers some biotechs as well as malpractice, flood, and terrorism, did not respond to requests for comment.

"Some insurers view it as potentially one of the biggest long-term problems this industry might face," said the Insurance Information Institute's Hartwig.

Genetically modified foods can be found in 75 percent of processed foods -- everything from cornflakes, bread, pasta and soy sauce to ice cream and candy, making the potential reach of a class-action lawsuit far-ranging. Millions of people eat genetically modified foods every day without knowing it -- because the FDA considers them "substantially equivalent" to regular foods, they're not labeled. But a recent study found that only 24 percent of Americans believe they have eaten GMO foods.

Companies cannot count on juries to rule in their favor, even taking into account that most Americans' knowledge of GMO foods remains low.

"The real risk that you're running is the capricious and arbitrary behavior of a jury," Greany said.

In 2000, the industry got a glimpse of what biotech companies could face in terms of liability. A genetically modified corn product called Starlink, made by Aventis CropScience, was approved only for animal feed, but it accidentally made its way into Taco Bell tortillas. Courts awarded farmers a $110 million settlement, and a $6 million settlement to individuals claiming they suffered severe allergic reactions.

Meanwhile, a man who won $10,000 in a Starlink lawsuit claiming he suffered allergies is apparently not allergic to the corn after all, according to a study published recently in the Journal of Allergy and Clinical Immunology.

"In today's litigious climate, where people seem to sue for things both real and imagined, (liability) can be a very costly proposition for companies and their insurers," said David Zoffer, an attorney in Chapel Hill, North Carolina, who runs a litigation management and outsourcing consulting practice.

In other cases, farmers claiming their fields have been contaminated by nearby genetically modified crops have been unable to win judgments. Monsanto sued Percy Schmeiser, a Canadian canola farmer, for growing its genetically modified version of the grain, although Schmeiser says the seeds drifted onto his land from a neighboring farm, ruining a crop he spent 40 years perfecting. Monsanto won two lower court rulings in Canada on the matter. The Canadian Supreme Court will hear the case in January.

The high court's decision "could be precedent-setting for North America," the Center for Food Safety's Culp said.

With the number of acres of genetically modified crops worldwide up to 145 million in 2002 and growing, cross-contamination -- and the potential for lawsuits resulting from it -- will likely increase in the coming years. The burden of liability could be heavily influenced by the outcome of these early lawsuits.

With so much uncertainty, it's not surprising insurance companies are skittish.

When risky businesses get insurance, a significant gap exists between how much coverage they can get and the amount of damage they may incur, Greany said.

A company the size of Monsanto would likely buy insurance with coverage for between $200 million and $300 million in assets. But lawsuits could result in settlements in the billions, experts said.

One option for difficult-to-insure companies is to self-insure by setting money aside for themselves. Or they can set up what's called a captive insurance company, often in Bermuda, where the tax situation is particularly favorable. Companies can establish captives individually or as a group within the same industry. But these options are much less efficient than a traditional insurance plan, Greany said.

There is always a limit to the amount of insurance coverage available to an industry at any given time. Marsh tracks those numbers closely. It can change day to day, and has been steadily decreasing over the past three years, according to the company's 2003 "Limits of Liability" report.

"For biotech, the most that would be available today is about $700 million," Greany said. "Three years ago it would have been about $1 billion."

Despite the concerns from insurance industry representatives, Monsanto officials insist coverage is not a problem.

"Monsanto has had no difficulty getting commercial insurance," spokesman Quarles said. "This is not something that we are concerned about at this time."

Regulatory Sham on Bt-Crops

ISIS Press Release
December 1, 2003

Prof. Joe Cummins exposes the regulatory sham involved in GM crops containing a range of biopesticides

At 80 million planted acres, corn is the largest crop grown in the US and accounts for one fifth of total agricultural cropland. Over the past years, conventional insecticides have been applied to between 14 to18 million acres of corn to control corn root worm (CRW). This single corn pest accounts for over 14% of insecticide applications to agricultural crops. Infested acreage is increasing due to extended diapause and change in the insect?behaviour as the CRW lays its eggs in soybean fields, which are planted in rotation with corn.

Currently, the main genetically modified (GM) corn contains the Bacillus thuringiensis (Bt) toxin gene Cry1Ab to control corn borer, but does not control CRW. CRW control has been the recent focus among the corporations developing GM crops. All candidate crops are being raced to market with the cooperation of regulatory authoritatives in the USA and Canada. The emphasis is on speedy evaluation and keeping down costs rather than to ensure safety to consumers and to the environment. Safety testing is done using toxins produced in bacteria acknowledged to be somewhat different from those produced in the corn plants. This is deemed to be "sound science" by the regulators.

GM corn with genes providing protection against CRW will soon reach the market. Monsanto corporation has focused on the Bt toxin Cry3Bb and has recently developed synthetic Bt toxins that combine amino acid sequences >from native Cry1Ac and Cry1F crystal protein, which have enhanced broad range specificity lacking in either toxin individually. Dow corporation has been developing corn with Cry34Ab/Cry 35Ab combined toxin. Monsanto?Cry3Bb-corn is ready for commercial release and the others will soon follow.

Patents describing the production of Bt-Cry3Bb describe the production of the synthetic Bt genes both used to produce the toxin produced in bacteria and the toxin produced in corn plants. The synthetic Bt-cry3Bb is altered from the bacterial gene by insertion of the cauliflower mosaic virus (CaMV) promoter and enhancers, the leader sequence of wheat chlorophyll a/b binding protein, the rice actin intron, and the 3' transcription terminator sequence of wheat heat shock protein 17.3. Along with the sequences above, many code words for amino acids were altered to enhance translation in the plant cell, and some amino acids were changed to enhance performance in the plant cell. An antibiotic resistance marker nptII, also with the CaMV promoter and the NOS transcription terminator from Agrobacterium tumefaciens nopaline synthetase gene was inserted into the corn chromosome along with the Bt-cry3Bb construct The genetic insert in corn was called MON 863. The US Food and Drug Administration (FDA) noted that the Bt toxin in Mon 863 differed from the bacterial toxin by seven amino acids and by an additional amino acid, alanine in the second position from the start of the protein.

US Environment Protection Agency has considered a large number of documents on human health and environmental impacts of Mon 863 corn. The petition to establish a tolerance exemption for Bt-Cry3Bb argued that it was not necessary to set a tolerance level because the toxin was not toxic to mammals. But the studies supporting the exemption were done with toxin produced in bacteria that are not identical to the product in Mon 863 corn. The biopesticides registration action document for event MON863 Bt-Cry3Bb1 corn provided information on product characterization. The action document on environmental assessment included evidence on non-target wildlife, but reviewed data from the bacterial Bt- Cry3Bb1 toxin, and not the toxin produced in MON863 corn. EPA has also provided a fact sheet on Bt-Cry3Bb1 protein and the genetic material necessary for its production.

Canada approved MON863 corn for livestock feed on March 5, 2003. Limited information was provided in the Canadian decision document, and the fact that the safety investigations had been based on a product significantly different from the toxin in MON863 corn was not mentioned. The approval of GM crops bearing toxins whose safety tests have been based on tests of surrogate products appears to have grown so commonplace among regulators that it is not worthy of mention.

Dow Agroscience Corporation has been developing a binary toxin mixture containing Bt- Cry34Ab1 and Bt-cry35Ab1 effective against CRW. Initial safety tests using toxins produced in bacteria showed that the mixture was digestible by mammals and for that reason unlikely to be allergenic. The petition to EPA for tolerance exemption, and the granted temporary exemption noted that the proteins were obtained from bacteria but believed to be similar to the proteins produced in corn (the product being regulated) because the products had similar gel electrophoresis mobility. The actual differences between the synthetic genes in corn and the protein they produce and the protein toxins produced in bacteria >from the native gene have not yet been disclosed.

Monsanto recently (Nov. 11,2003) disclosed methods for the construction of B. thuringiensis hybrid delta-endotoxins comprising amino acid sequences from native Cry1Ac and Cry1F crystal proteins. These hybrid proteins, in which all or a portion of Cry1Ac domain 2, all or a portion of Cry1Ac domain 3, and all or a portion of the Cry1Ac protoxin segment is replaced by the corresponding portions of Cry1F, possess not only the insecticidal characteristics of the parent delta-endotoxins, but also have the unexpected and remarkable properties of enhanced broad-range specificity not displayed by either of the native delta-endotoxins. The hybrid toxins incorporated into transgenic plants express broad-spectrum insecticidal activity against a variety of coleopteran, dipteran, and lepidopteran insects. Presumably, the deployment of the synthetic genes, described above, is meant to provide protection against all of the major insect pests of corn. It seems likely that the mammalian toxicity tests and the test of impact on non-target animals will be done with the protein produced in bacteria not the one produced in corn plants.

In spite of the clear differences between the genes and the insecticide toxin proteins produced in bacteria and those produced in transgenic plants the US and Canadian regulators have agreed with the corporations manufacturing the GM crops that the products are substantially equivalent. So long as the final toxins are similar the bacterial toxins can be used as surrogates for the crop toxin in safety testing. The regulators made little or no effort to directly test the validity of their presumptions. They are placing the burden of proof that the toxins in the GM crops are unsafe for mammals and the environment on the shoulders of the public, not the corporations who profit from the GM crops. In the final analysis, the regulators are providing essential public relations benefits for the corporations but not adequately protecting the public. And so long as GM crops are not labeled in the market, the errors of the regulators will go undetected.

New GM Toxin Looms over Our Food

ISIS Press Release
December 2, 2003 (AP)

Prof. Joe Cummins issues advance warning of new GM toxin from soil bacterium that’s to be incorporated into our food crops.

The soil bacterium, Bacillus thuringiensis (Bt), has proven to be a rich source of toxins for killing insect pests. Most of the toxin genes now being used in genetically modified (GM) crops are produced in sporulating Bt, and belong to the Cry family: designated Cry1, Cry 2 etc. up to at least Cry 41. The Cry genes are further distinguished as Cry1A, Cry1B etc for substantial sequence variations, and labeled Cry1Aa, Cry1Ab etc for very small differences in sequence. The Cry gene toxins target specific insect cell receptor proteins and create pores that lead to osmotic lysis of the insect gut cells. Only a few Cry genes have found favour in GM crops. Along with the Cry genes, Cyt genes have been characterized that are distinct from Cry genes and act by breaking open the insect’s blood cells.

In recent years, vegetative insecticidal proteins (VIP) have been found to have potent, broad-spectrum activity against insects. VIP genes are not homologous to Cry and Cyt genes, and bind to cell membrane proteins different from the other toxins.

Syngenta Corporation, producers of chemical and biological pesticides, has patented the VIP genes for use in transgenic crop plants and microbes. Syngenta’s United States patent 6 429 360 covers the use of Bt-VIP genes and their synthesis and alteration to improve performance in crop plants. Syngenta’s patent provided evidence that VIP3A toxin produced apoptotic type of cell death, including the production of membrane-bound apoptotic bodies and activation of endonuclease enzymes that cleave chromatin into discrete fragments.

Apoptosis (meaning petals falling from a flower) is a form of programmed cell death common to all cells with discrete nuclei. It is a part of normal development, but the VIP3A toxin uses programmed cell death to destroy the cells of the insect gut. In order to function fully in the plant cells, the Bt-VIP3A gene is modified in its coding sequence; a strong promoter added, as well as an intron to facilitate transfer of the pre-messenger RNA from nucleus to cytoplasm; and the usual transcription terminator and polyA addition sequences.

The insect VIP3A receptor was identified and its characteristic "death" recognition sequence was characterized. Organisms whose cells have nuclei generally have receptors with death signals and the insect VIP3A receptor is a unique member of the class of sequences.

Syngenta has petitioned the United States Environmental protection Agency (EPA) for commercial release of event COT102 cotton containing a synthetic VIPA3 gene. Presumably, corn containing the VIP3A gene will be proposed for commercial release. The EPA report of the Syngenta petition for tolerance in or near food reported that the VIPA3 toxin was homologous to the VIP3A toxin in numerous Bt strains. However, the petition failed to mention the numerous change in DNA sequence including promoter, introns, terminator and polyA signal, which were reported in the Syngenta patent for VIP genes. Mammalian acute toxicity studies were done using the VIPA3 toxin produced in bacteria, not the toxin produced in modified corn or cotton. The VIPA3 toxin in cotton is assumed to be substantially equivalent to the toxin produced in bacteria but, as in the case of most other commercial Bt cry toxins, the toxin protein is allowed to diverge significantly from the bacterial toxin so long as the protein remains active against insect cells and is immunologically similar to the toxin produced in cotton. The toxin tested by Syngenta showed no overt acute toxicity and there was no indication that it was allergenic. Sequence analysis showed no overt similarity to known toxins. The practice of putting forward Bt toxins produced in bacteria as equivalent to the Bt toxins produced in crops was criticised earlier. The practice is unsound and should, at least, be made very clear in the government announcements on the safety testing of GM crops bearing genes for Bt toxins.

The EPA report notes: "Once in the insect gut, the VIPA3 protein binds to specific receptors (different from those by Cry 1A proteins) and forms ion specific pores." There was no discussion, in the EPA report of the apoptosis and binding to death sequences receptors mentioned in the Syngenta patent. Indeed, the claim that the VIP3A toxin had no obvious homology to mammalian toxins seems to have ignored the homology of all apoptosis receptor death sequences. The contrast between the Syngenta patent and the EPA report is perplexing because the patent document was well supported with experiments while the EPA report provided little scientific evidence for its claims.

In conclusion, the Bt toxins of the VIP gene family provide potent broad spectrum insect control. The toxins have been reported to act by binding to death sequences and triggering apoptosis in insect cells. At the very least, the potential impact of such toxins on the receptors and death sequences in mammalian cells should be fully evaluated before GM crops bearing the toxins enter the mammalian food chain.

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