Pharmaceutical Corn Spurs
$3 Million Fine

December 7, 2002

Spread of Gene-Altered Pharmaceutical Corn Spurs $3 Million Fine

A biotechnology company will pay the government about $3 million
to settle charges that it did not take proper steps to prevent
corn that was genetically engineered to produce pharmaceuticals
from entering the food supply.

The company, ProdiGene, agreed to pay a civil fine of $250,000
and to reimburse the government for buying and incinerating
500,000 bushels of soybeans contaminated with the genetically
modified corn. The fine is the first ever for violation of a
permit for a field trial of a genetically engineered crop,
government officials said yesterday.

The incident has raised concerns among environmentalists and food
companies about a fledgling area of biotechnology, implanting
genes in crops to make them produce pharmaceuticals or industrial
chemicals. Until now, genetic engineering has been used mainly to
make crops resistant to insects or herbicides.

Biopharming, as it is sometimes called, may one day be an
inexpensive way to produce large volumes of certain proteins,
like insulin for diabetes or antibodies to treat cancer, that are
now made in vats of genetically modified cells. The technology
may also be used to make vaccines that can be eaten rather than
injected. But if such crops were to become intermixed with food
crops, they could pose a health hazard and require huge food

Officials of the Department of Agriculture and the Food and Drug
Administration said yesterday that ProdiGene's corn never made it
into food or animal feed. That, plus the fine, shows the system
is working, they said. "I think this demonstrates the rigor of
our regulatory system," said Bobby Acord, administrator of the
agriculture agency's Animal and Plant Health Inspection Service.

But a spokeswoman for the food industry, while applauding the
fine, said concerns remained. "The incident over all just
reaffirms our concerns that something could go wrong," said
Stephanie Childs of the Grocery Manufacturers of America, which
represents food companies like Kellogg and General Mills. The
organization wants pharmaceuticals to be grown in plants that are
not used for food, but the biotech companies say that would be

ProdiGene, a private company based in College Station, Tex., has
been one of the most aggressive companies in the new field and
already sells some industrial chemicals produced in genetically
modified corn. It was accused of two incidents of possible

In one case, soybeans were planted this year on a plot in
Nebraska that was used last year to grow genetically engineered
corn. Some corn stalks sprouted from seed still remaining in the
ground, and the company failed to destroy them. About 500 bushels
of soybeans were contaminated with a small amount of the corn.
But those 500 bushels were then mixed in a grain elevator with
500,000 bushels.

In the second incident, ProdiGene corn growing in Iowa was feared
to have cross-pollinated with corn in nearby fields. So the
company was required to burn 155 acres of corn.

The product grown in the corn is a protein to be used as a
vaccine to prevent diarrhea in pigs.

Under its consent decree, ProdiGene agreed to post a $1 million
bond to pay for problems arising from any possible future
infractions. It also agreed to train all its employees about
regulations and to undergo more stringent inspections. "We have
learned some valuable lessons," Anthony G. Laos, the company's
president, said in a statement.

Some biotech executives said privately that ProdiGene's behavior
undermined confidence in the entire industry. The biotech
companies are in a tight spot, with food companies, normally
supporters of genetically modified crops, now siding with
environmentalists in asking that food crops not be used to make

The Biotechnology Industry Organization, a trade group, recently
proposed voluntary guidelines to keep the pharmaceutical corn
from being grown in the Corn Belt. But politicians from Iowa
objected, saying that such a restriction would keep farmers from
taking part in a big new business. So the biotechnology
organization has now changed its guidelines so that no region is
automatically off limits.

Copyright The New York Times Company

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