- What is new about the report The Economics of Pharmaceutical Crops?
- What are pharmaceutical (pharma) crops?
- What kinds of crops are engineered to produce drugs and where are they grown?
- Why do companies choose food crops as pharma crops?
- Why do pharma crops threaten the food supply?
- Who is most likely to gain if the pharma crop industry were to be successful?
- Aren’t the farmers currently growing pharma crops reaping financial rewards?
- Don't small farmers need these types of new technologies—that is, value-added crops—in order to stay in business?
- Won't pharma crop technologies bring good jobs to struggling rural areas of our country?
- Who might be harmed by pharma crop production?
- Given the high costs of health care, shouldn't we be trying new ways to produce drugs more cheaply?
1. What is new about the report The Economics of Pharmaceutical Crops?
The Economics of Pharmaceutical Crops is the first analysis by a land-grant university economist of the potential economic benefits and risks of pharmaceutical crops to farmers and rural America.
Over the past few years, the debate over pharmaceutical crops has often included claims of substantial economic benefit, particularly to farmers and rural Americans. However, these claims have not been backed up by economic analyses. So UCS commissioned Dr. Robert Wisner, University Professor in the Department of Economics at Iowa State University, to fill this gap.
2. What are pharmaceutical (pharma) crops?
Pharma crops are crops genetically engineered to produce drugs to prevent or treat a variety of diseases such as cancer, AIDS, and hepatitis. The term can also encompass industrial crops engineered to produce raw materials for plastics, detergents, paints, and other products.
3. What kinds of crops are engineered to produce drugs and where are they grown?
The pharma crop industry has focused primarily on food crops such as corn, soybeans, and rice. Tobacco is the only major non-food plant used for drug production. Pharma crops are usually grown in regions where the food and feed versions of these crops are produced commercially. For example, pharma corn—the most common pharma crop—has been produced mainly in the Corn Belt.
4. Why do companies choose food crops as pharma crops?
They are easy for farmers to grow and for scientists to genetically engineer. Their grains and seeds are good for storing the drugs until the time for processing and purification.
5. Why do pharma crops threaten the food supply?
Most pharma crops are food crops such as corn, soybeans, and rice, which are grown in areas of the country where food versions of the crop are also grown. So far, the government has not required pharma crop companies to grow their crops under conditions that ensure virtually zero contamination of food and feed crops. As a result, pharma crops’ proximity to food and feed crops and the lack of strict confinement measures mean that contamination of the food supply may occur, or may already have occurred, through accidental mixing of pharma and food crop seeds and the movement of pharma pollen into fields growing food and feed crops.
6. Who is most likely to gain if the pharma crop industry were to be successful?
The largest gains, in the form of potentially lower production costs, would go to pharma crop, pharmaceutical, and biotechnology companies that own the technology. However, the reduction in production costs will depend on the containment needed to protect the food supply from pharma crop contamination. Containment-related costs may be high enough to at least partially outweigh potential savings in other areas of drug production.
Consumers might benefit from possibly lower drug costs (if production savings were actually achieved and passed along to consumers) and potentially greater availability of certain drugs. Universities and private research firms might benefit in the form of research contracts.
7. Aren’t the farmers currently growing pharma crops reaping financial rewards?
A small group of farmers is currently growing pharma crops and there are reports that they are being paid premium prices. This makes sense because the companies are anxious to enlist the support of the farm community for this application of biotechnology. The question is whether companies would continue to pay premium prices once the industry was established and they were in a position to drive down their costs by forcing farmers to compete for their business.
8. Don't small farmers need these types of new technologies—that is, value-added crops—in order to stay in business?
Yes. They do. And we support new value-added crops that will help farmers improve their bottom lines. But this report finds that farmers are unlikely to be major beneficiaries of pharma crop production for two reasons. First, they will not have a strong position from which to negotiate with pharma crop companies. Market forces, including foreign competition, will drive farmer compensation down to the lowest levels that pharma crop companies can achieve. Second, the acreage likely required for a successful pharma crop industry is so small compared with commodity crop acreage that only a small number of growers will be needed.
9. Won't pharma crop technologies bring good jobs to struggling rural areas of our country?
Rural communities are unlikely to see major benefits unless the local pharma crop industry brings in substantial research contracts for universities and private research firms in the area and pharmaceutical processing companies also locate near where the crops are grown.
10. Who might be harmed by pharma crop production?
The report identifies several groups that could suffer important economic losses as a result of pharma crop production, including farmers growing food versions of the pharma crop, grain exporters, and food processors and retailers. Losses, which would most likely occur if pharma crops contaminated food supplies, would be in the form of lower product value and higher costs associated with liability, additional testing, clearing out supplies of contaminated products, canceled sales contracts, and loss of markets to foreign competitors.
11. Given the high costs of health care, shouldn't we be trying new ways to produce drugs more cheaply?
Yes, we should. In theory, lower production costs could lead to lower drug prices and reduce the overall tab for medical care and that is why UCS generally supports using genetically engineered organisms (including yeasts, fungi, and algae) to produce drugs, especially in closed systems where they pose minimal threats to the environment.
But at this point it is premature to assume that pharma crops will lower production costs. The report found the claims of lower production costs should be, first, treated only as tentative estimates, and, second, balanced against the costs of preventing contamination of the food supply.
Moreover, even in the event that lower overall production costs could be achieved, it is uncertain whether or not those savings would be passed along to consumers. | 
