Factors affecting the commercial success of a novel crop
P. Lapinskas (1992)
Presented at 1st World Congress on Medicinal and Aromatic Plants for Human Welfare (WOCMAP), Maastricht, 19-24 July 1992

Contents:

Abstract
Introduction
The attitude of pharmaceutical companies
Subsidies
Agrochemical usage
Conclusions
References

Abstract

When planning the research and development of a new medicinal crop, the researcher must take into account the needs and concerns of the pharmaceutical buyer; be aware of the financial disadvantages faced in growing areas where competing crops are heavily subsidised; and ensure that the agrochemical products which are needed for the crop will be legally permitted in the growing area within a reasonable time and at a reasonable cost.

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Additional index words

Subsidies, agrochemicals, regulation, evening primrose, Oenothera.

Introduction

There are, of course, a myriad of factors which may impact on the commercial performance of a new crop and most of these will be familiar. This paper will however look at three aspects which can affect the success or failure of a crop, which might not be immediately apparent to the agricultural researcher on the ground, namely: the attitude of the pharmaceutical companies (as personified by their production departments); and the impact which government regulators may have, through subsidies and through the regulation of agrochemical usage.

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The attitude of pharmaceutical companies

Where there is a choice of sources for a pharmaceutical raw material, there are a number of factors which will affect the final decision, but they fall broadly into four categories - cost, quality, reliability and flexibility. Clearly the source of first choice will be the one which minimises the first and maximises the others.

If cost were not a consideration, the order of preference of sources for a pharmaceutical production manager would probably be:

  1. 'Off-the-shelf' chemical
  2. New chemical synthesis
  3. Fermentation
  4. Crop plant
  5. Wild collection

The earlier categories would be expected to be of higher quality and, given the level of control which can be applied in a factory environment, this level of quality would be maintained consistently from batch to batch. Furthermore, the cycle time is extremely short and so it is comparatively easy to ensure that production is always well matched to demand - if demand suddenly increases, then output can also be increased by, for instance, working extra shifts or leasing extra capacity. This permits some manufacturers to run their plants on a 'just-in-time' (JIT) basis whereby materials are not produced until the moment they are needed.

This kind of quality, reliability and flexibility are clearly beyond the reach of an agriculturally produced crop. Crop plants are subject to the vagaries of the weather and of farmers, so that supplies are often of variable quality, and subject to the depredations of mould and vermin. Crop failures are not uncommon, particularly as a new crop is being introduced, when improved varieties and agronomic techniques may not be available. Furthermore, the much longer growth cycle and the reliance on the cycle of the seasons means that production decisions have to be taken much earlier than would otherwise be the case. This means that the company will have to hold a considerable buffer stock to ensure that demand can always be met. In addition, since farmers will be reluctant to produce a new crop on the basis of anything other than a forward contract on an area basis, and, since yields are highly variable, the size of this buffer stock is likely to vary considerably from year to year. The problems encountered with agriculturally produced material will also apply, a fortiori to material collected from the wild.

Given these problems, there clearly has to be a good reason for a pharmaceutical company to choose a new crop plant in preference to a factory-based supply. For those outside the industry, the most obvious reason would probably be that of cost. However, cost is less important than might be supposed. The pharmaceutical industry is highly regulated and acutely conscious of the need for consistent quality of the highest standard. Therefore raw materials from different sources need to be broadly comparable in quality and availability before cost becomes a significant factor.

In spite of this, many pharmaceutical products are still based on plants, either cultivated or from the wild, and the reason usually is that there is simply no alternative available. Given the concerns expressed above, the location of suitable, more controllable, sources of supply becomes an attractive subject for research. This implies that a new medicinal crop will always be at risk of being superseded by new sources based on factory processes.

An example of this is the case of gamma linolenic acid (GLA, gamolenic acid), a fatty acid which is found in triglyceride form in the seed oil of the evening primrose (Oenothera spp.). GLA in evening primrose oil is licensed as a pharmaceutical for the treatment of atopic eczema (UK and Germany) and mastalgia (UK). Research is also under way to test for efficacy in a range of other conditions (Horrobin 1990, Horrobin 1992). GLA is an uncommon fatty acid which, whilst part of normal human metabolism, is only found in significant quantities in a small number of seed and fungal oils. It may be instructive to consider why the evening primrose is used as a source of GLA and what its future may be as a medicinal crop.

Whilst pure GLA is available from specialist suppliers in milligram quantities, the daily dose required for clinical efficacy is in the order of 500 mg/day per patient so this is clearly not a viable source of supply.

GLA is a simple molecule, consisting of an 18-carbon chain with three double bonds at the 6, 9 and 12 positions, counting from the carboxyl end. However, there are no simple synthetic routes by which it might be synthesised. The position of the double bonds in the carbon chain are critical for biological activity and, furthermore, all the double bonds must be in the cis rather than trans configuration. This suggests that any direct synthesis is likely to be complex and hence prohibitively expensive for the large volumes which are required.

The choice of source is therefore reduced to fungal or plant seed oils.

Although the active component of evening primrose oil is GLA, it does not occur as a free fatty acid but as part of a larger molecule called a triglyceride, comprising of three fatty acid moieties on a glycerol backbone. It has been shown experimentally that the efficacy of GLA containing oils other than evening primrose (borage oil, blackcurrant oil and fungal oil) is lower, even allowing for the fact that they contain higher proportions of GLA (Jenkins et al., 1988 and Horrobin et al., 1990). It has been suggested that the reason for this may be either due to the widely different fatty acid profiles of the different oils or due to their different triglyceride compositions. The GLA in evening primrose oil occurs mostly in one triglyceride species which contains one GLA and two linoleic acid moieties (LLG). The GLA in the other oils is spread across a range of different triglycerides and, in the case of fungal oil, phospholipids.

The position of evening primrose oil as the source of GLA for pharmaceutical products therefore appears secure, at least for the present.

However, there are active research programmes in progress which may change this. One of the problems of evening primrose oil as a source of GLA is that it is only present at a level of 8-10% by weight. To achieve pharmaceutical doses, 8-12 capsules (500 mg) are needed, which introduces problems of patient compliance. This also restricts the possibility of higher doses for other indications. Various methods have therefore been developed to produce a range of concentrated GLA products which are currently undergoing clinical trials. Since these methods involve separation on the basis of fatty acids rather than triglycerides, the triglyceride composition of the original is no longer a factor, and the source of choice will therefore swing towards fungal oil unless other plant sources can be found which compete on the terms outlined above. This may however not be the end of the evening primrose as a medicinal crop. The mode of action of GLA in evening primrose oil is nutritional, in that it is replacing a biochemical component normally produced from dietary fat, and seed oils are a normal part of the human diet. There will therefore remain a market for the oil in the health food industry as a nutritional supplement, and there is also likely to me a strong market in the alternative medicine field, where practitioners and patients alike are very wary of any product which cannot be considered to be 'natural'.

The lesson for the plant researcher then, who is considering the choice of species for development as a new medicinal crop, is to firstly choose a species where the active component is extremely difficult to synthesise in the laboratory and secondly to cultivate possible alternative uses so that, if the medicinal product should be superseded, there will still be a market for the crop.

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Subsidies

The question of agricultural subsidies is a topical issue at present, and is of particular relevance in EC countries. For those without experience of the system, the size of these subsidies and therefore the effect on the profitability of a farmers crop can be surprising (table 1).

Table 1 - UK Price Structure for a Range of Crops

Linseed Oilseed
Rape
Winter
Wheat
Evening
Primrose
Yield (t/ha)

World Price (£/tonne)

Value of output (£/ha)

Variable costs (£/ha)

True gross margin (GM) (£/ha)

Subsidy (£/ha)

Gross margin received (£/ha)

% GM from subsidy

1.9

140

265

220

45

425

470

90

3.0

130

390

200

190

385

575

67

6.7

70

470

245

225

260

485

54

0.75

(1500)

1125

440

685

0

685

0

Source: Nix (1992)

In the absence of a subsidy for evening primrose, it is clear that a higher price has to be paid for production in the UK than would otherwise be the case. If evening primrose crops received the same subsidy as linseed, the price could be reduced from £1500/tonne to £930/tonne or by 38%. Whilst the impact of this in the 'true' pharmaceutical market may not be great (as the consumer is largely sheltered from the true cost of drugs) it could be critical for 'alternative' medicines, herbals or health foods.

Therefore a researcher who is developing a new medicinal crop would be well advised to concentrate on production areas where world prices prevail for competing crops, or where significant subsidies are available.

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Agrochemical usage

In the context of modern farming, the use of agrochemicals is essential for most crops in order to obtain an economic yield with acceptable quality. The position is unlikely to be any different for a new medicinal crop, and so the degree to which such usage is permitted may be crucial to the success of the crop.

There has been a rising level of concern over the past twenty years about the effect of agrochemicals on the environment and the level of pesticide residues in our food. Consequently, the level of regulation on the use of agrochemicals is steadily increasing. However, there are quite marked differences in the degree of regulation applied in different countries in the context of a new, minor crop. This is illustrated by the situation in New Zealand, Holland and the United Kingdom.

In New Zealand, the focus of regulation is on the product. Therefore, when a company wishes to launch a new chemical, a full and exhaustive dossier of environmental, toxicological and residue data is submitted to the authorities who will then issue a licence. When the product is sold, the label will give details of the crops on which it may be used, application rates and harvest intervals. The authorities take the view that, since the product has passed a rigorous testing procedure, there is no need to repeat that assessment for every target crop plant species. The farmer is therefore permitted to use an approved product on any crop he chooses, at his own risk and provided that he observes the restrictions on rates and timing. Thus, when introducing a new crop, the full range of approved chemicals is available for use. Clearly, many of them (particularly herbicides) will be unsuitable because of crop damage, but when suitable products have been identified they will be immediately available for use by growers.

In Holland, in contrast, the focus of regulatory attention is on the particular use of the product. Thus, when a manufacturer receives regulatory approval for a product, he will specify on the label those crops on which his product is approved. All other uses are illegal. Thus, for a new crop, there are two hurdles to be cleared. Firstly, a data package must be assembled to demonstrate that the use of the product on the crop causes no unacceptable damage and does not leave significant residues. Then the manufacturer has to be persuaded to include the crop on the label. Given that a new medicinal crop is never likely to occupy a significant area and hence the resulting sales of chemical will be small, and that the manufacturer will be liable for any crop damage, this can be extremely difficult. This is a major obstacle to the introduction of a new crop.

In the United Kingdom, the position is similar to that in Holland, in that all situations in which a chemical is used must be formally approved; all unapproved uses are illegal. Again, the manufacturer may be liable for any damage caused to crops through use of the product in accordance with the label instructions. However, there is an additional category of permitted uses known as 'off-label' approvals, whereby the particular use of the product is approved by the authorities but does not appear on the label. In this case the use is entirely at the grower's risk. There are two categories of off-label approvals. The first is specific, whereby an interested party submits an application for a licence for a specific use of a specific product. The second, known as the off-label extrapolation system, involves the identification of an existing crop which is similar in terms of its cultural treatment and end use. The approval then permits the use on the new crop of any product permitted on the existing crop, subject to any restrictions. For evening primrose, the crop chosen for off-label extrapolation is oilseed rape.

Thus, in the UK, a new crop has much better access to agrochemicals than in Holland. However there are still barriers to be overcome. The extrapolation approval, if obtainable, will probably not cover all the products which are needed. These will have to be covered by specific off-label approvals which will probably require a supporting data package of residue data generated according to Good Laboratory Practice. To generate this through outside contractors may well cost £40,000 for a single product. Furthermore, since the approval relates to a particular product rather than active ingredient, a new approval is required if the manufacturer discontinues his product or changes the formulation, even though other, similar products with the same active ingredient remain available. These are formidable problems to overcome, both in terms of cost and delay, when it may not be certain that the potential of the new crop is capable of being realised in commercial agriculture.

Although the governments of all three countries are clearly concerned to protect their populations from risk from agrochemical residues, the approaches they have taken have quite different effects when viewed from the perspective of a novel or minor-use crop. When considering the introduction of such a crop, it is clear that the New Zealand position offers the best availability of products without regulatory delays and hence maximises the prospects for success.

The irony of this is that crops grown in New Zealand which have been treated with agrochemicals which are not permitted for such use in either Holland or the United Kingdom, may be freely imported for consumption in those countries.

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Conclusions

In summary, the following conclusions can be drawn:

1) Be aware of the needs and concerns of the pharmaceutical buyer and do not neglect alternative outlets.

2) Choose the growing location (as far as possible) so that competing crops are valued at world prices.

3) Choose a growing area such that the agrochemical products which are needed are legally permitted.

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References

Horrobin, D.F., 1990.
Omega-6 essential fatty acids: pathophysiology and roles in clinical medicine.
Wiley-Liss, New York.

Horrobin, D.F. (ed.) (1992a).
Treatment of diabetic neuropathy: a new approach.
Churchill Livingstone, Edinburgh.

Horrobin, D.F. and Manku, M.S., 1990.
Clinical biochemistry of essential fatty acids.
In: Omega-6 essential fatty acids: pathophysiology and roles in clinical medicine. Wiley-Liss, New York: 21-53.

Jenkins, D.K., Mitchell, J.C., Manku, M.S. and Horrobin, D.F., 1988.
Effects of different sources of gamma-linolenic acid on the formation of essential fatty acid and prostanoid metabolites.
Med. Sci. Res. 16:525-6

Nix, J., 1992.
Farm Management Pocketbook.
Wye College, University of London.

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© Peter Lapinskas 1999-2012 Email Peter Lapinskas Last updated: 3 July 2012

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