Potential Impacts of Genetically-Engineered Pharmaceutical Products from Tobacco:  The Case of Human Serum Albumin

Potential Impacts of Genetically-Engineered Pharmaceutical Products from Tobacco: The Case of Human Serum Albumin PowerPoint PPT Presentation

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Introduction. Why synthesize proteins in plants ?Able to synthesize complex proteinsReduced risk of contamination by mammalian pathogensEstimates show potentially 10

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Potential Impacts of Genetically-Engineered Pharmaceutical Products from Tobacco: The Case of Human Serum Albumin

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1. Potential Impacts of Genetically-Engineered Pharmaceutical Products from Tobacco: The Case of Human Serum Albumin Genti Kostandini Brad Mills Virginia Tech

2. Introduction Why synthesize proteins in plants ? Able to synthesize complex proteins Reduced risk of contamination by mammalian pathogens Estimates show potentially 10 –100 times cheaper production compared to cell culture systems Less expensive than other unique pharmaceutical production processes (e.g. Cohn’s fractionation process)

3. Tobacco as a Production Vehicle Why tobacco? Tobacco not strongly regulated by food laws Not used in feed or food supply Can produce biomass relatively quickly Potential to be among the first agricultural crops used in commercial pharmaceutical protein production

4. Proteins Synthesized in Transgenic Plants

5. Objectives Estimate potential benefits coming from transgenic tobacco use as a source of pharmaceutical proteins Assess size and distribution among consumers and pharmaceutical companies Discuss appropriate public policy in light of magnitude and distribution of benefits

6. Human Serum Albumin (HSA) The most abundant protein found in blood plasma Helps maintain balance of fluids in the blood Used for blood volume replacement during conditions of shock, surgeries, serious burns; coating of medical devices Worldwide yearly production estimated over $1 billion - 500 metric tons produced annually

7. HSA production – Cohn’s Fractionation Cold ethanol fractionation Many products recovered during plasma fractionation IntraVenous ImmuneGlobulin (IVIG) drives fractionation process - the most important product 1 liter of pooled plasma yields 25g of HSA

8. HSA Synthesized in Transgenic Tobacco (GM HSA) Protein expression level, recovery, and purification determine production costs 7-8% total soluble protein and biomass of 50MT per acre are realistic production targets Albumin can be expressed either in nucleus or chloroplasts Process more efficient if produced in chloroplasts 10,000 acres of transgenic tobacco could yield 500MT of GM HSA

9. HSA Production in the US US produces almost 40% of world HSA supply Production by non-profit organizations and commercial firms Competitive domestic HSA market

10. Methodology Marshallian producer and consumer surplus are used Imperfectly competitive setting because… GM HSA will be patented One (or few) buyer(s) will contract with farmers - pharmaceutical companies may extract surplus from tobacco producers

11. Economic Surplus Model – Imperfect Competition

12. Economic Surplus Model – Imperfect Competition

13. Economic Surplus Model - Assumptions GM HSA from transgenic tobacco and plasma HSA are perfect substitutes R & D costs considered sunk costs Linear supply and demand functions GM HSA causes a shift of HSA marginal cost curve of the patenting firm Patenting firm has enough capacity to meet current demand (licensing is an option) Surplus generated from unit cost reduction in HSA production measured only for US – a ‘closed’ economy

14. Study Parameters and Notation ? - Absolute value of price elasticity of demand e - Price elasticity of supply Po - Initial price Q0- Initial quantity k - Unit cost reduction K – Cost reduction as a percentage of initial price

15. Preliminary Results - Parallel and Pivotal Shift

16. Results Introduction of GM HSA results in significant benefits to pharmaceutical producers Deadweight loss small compared to benefits Supply and demand elasticities and nature of supply shift critical for the magnitude of benefits

17. Discussion Biopharming has significant potential to generate economic surplus gains Consumers’ surplus unchanged during the time product is under patent due to the non-drastic innovation Relatively small impact on tobacco farmers – 2.4% of US total needed to produce world’s HSA supply Benefits will increase as GM HSA goes off patent and is introduced in other countries

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