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The economic aspects of using animals in research, testing, and education. It discusses the costs and benefits of animal use, focusing on biomedical research and toxicological testing. insights into the costs of animal acquisition and maintenance, the role of animals in research and testing, and the economic implications of using animals. It also touches upon the development of alternatives to animal testing and the impact of regulations on animal use.
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It would not be reasonable to make decisions on alternatives to animal use without having some idea of the consequences to the health and welfare of the public.
Kennerly H. Digges National Highway Traffic Safety Administration U.S. Department of Transportation March 20, 1985
P a g e
Costs and Benefits in Research.......................................... Biomedical Research......................................... ........ Supporting Patent Claims ,.......................... ..................
Costs and Benefits in Testing........................................ , .. Testing pesticides for Toxicity...................... .................... Testing and Product Liability....................... ................... Testing Costs of Animals and the Alternatives...... ,........ .,..........
National Expenditures for Research and Testing... ,....................... Toxicological Testing Services... .,....... .“......................... , ,. Government Toxicological Research and Testing.................... .. ...
Protecting Proprietary Interests ,....................... ................. Cooperative Research and Testing............................ ......... Toxicity Testing Data................................... .............
Summary and Conclusions........................................ .. ...
Chapter 11 References..... , ,................ ,........ ,............. ..
Table No.. Page 11-1. Total Savings Attributable to Biomedical Research......... ............ 11-z. Estimated Biomedical Research Outlays, Selected Years, 1900-75”...... ,.. 11-3. Selected Federal Expenditures Related to Toxicological Testing and Research, 1984-86...................... ,.....................
Figure No, Page 11-1. Relation Between Number of Animals Used and Cost of Animal Use...... 11-2. Development of a Typical Pesticide for Agriculture ,. ,. ,...............
244 l Alternatives to Animal Use in Research, Testing, and Education
Figure 11-1 .—Relation Between Number of Animals Used and Cost of Animal Use Acquisition Maintenance Total i (^). .h II
I
The total cost of animal acquisition and maintenance equals the sum of the acquisition cost and the maintenance cost. maintenance cost depends-on the animal’s length of stay in the animal facility.)
Acquisition Maintenance
I (^) Number of animals used
x
I
+
Number of animals used
x
Total
I
(The
Using fewer animals will yield a decrease in the total cost of animal acquisition and maintenance, but the proportionate sav- ings ‘will be less than the decrease in the number of animals used. Both the price of each animal and the cost of maintenance per animal can be expected to increase to support the operating costs of breeding facilities and animal facilities. SOURCE: Office of Technology Assessment.
ning in 1986, the Public Health Service (PHS) will
Ch.11 -Economic Considerations Ž 245
hand and ready for sale.) With reduced demand, would have to spread the cost of operation over vendors would have to raise prices to cover their fewer animals. In both breeding and laboratory overhead. Second, if the number of animals used maintenance of animals, there are economies of decreases, the expense of maintaining each re- scale such that breeding and maintenance of mar- maining animal in a laboratory facility can be ex- ginally fewer animals does not yield a correspond- pected to increase. Laboratory-animal facilities ing decrease in costs.
The many important economic contributions of research with animals are difficult to character- ize. First, research does not lend itself to such analysis. Normally, one experiment will draw from many others and contribute to future re- search, making allocation of costs and benefits to a particular activity virtually impossible. Second, the outcome of each experiment is uncertain, and the experiences in one program would not nec- essarily apply to others. Third, the delay between research and commercialization is long, reaching a decade or more, with payoff taking even longer. Thus, it is not possible to evaluate with any rea- sonable confidence the costs and benefits of cur- rent or even recent animal and nonanimal re- search practices,
This section discusses biomedical research in general, which unavoidably averages many di- verse research experiences. Biomedical research is of interest because it is a major user of animals, because it affects human health, and because it affects an important sector of the economy—the health care industry. As with most areas of re- search, many of the contributions are indirect and many are not easily quantified in economic terms (see ch. 5). Most benefits are realized in the health care industry, which in 1983 accounted for $355. billion (10.8 percent) of the gross national prod- uct (9). Drugs, which require both biomedical re- search and toxicological testing in their develop- ment, have annual sales of about $30 billion and contribute about 20,000 jobs to the economy (29).
The first medical discovery that was largely a result of research with animals was diphtheria antitoxin at the end of the 19th century. Its use reduced the likelihood of death for those contract-
Ch. 11-Economic Considerations. 247
Table 11-2.—Estimated Biomedical Research Outlays, Selected Years, 1900-75 (in millions)
Disease category 1900 1930 1963 1975 Total a........................................................... - - - - - -^ - - - - - - -^ -.^ - - -^ -^ - - -^ - - - Infective and parasitic diseases.................................... Neoplasms...................................................... Endocrine, nutritional, and metabolic diseases....................... Diseases of the blood and blood-forming organs..................... Mental disorders................................................. Diseases of the nervous system and sense organs.................... Diseases of the circulatory system.................................. Diseases of the respiratory system................................. Diseases of the digestive system, oral cavity, salivary glands, and jaws. Diseases of the genitourinary system............................... Complications of pregnancy, childbirth, and postpartum............... Diseases of the skin and subcutaneous tissue....................... Diseases of the musculoskeletal system and connective tissue........ Congenital anomalies............................................. Certain causes of perinatal morbidity and mortality................... Symptoms and ill-defined conditions................................ Accidents, poisonings, and violence................................ aTOtalS may not add due to rounding.
**$l0.
0.**
0,
**$1,561.
18.**
$4,640.
2,464.
SOURCEDatafrom S.J. Mushkin, Biomedica/ F?esearch:CosM and Benefits (Cambridge, MA’ Ballinger Publishing Cov 1979)
pound animals are much cheaper than purpose- bred ones and that it would be wasteful to de- stroy them when they could be used. The differ- ence in price between a purpose-bred and a pound dog ranges from $200 to $500 per animal. Estimates of the impact on research of a ban on using pound animals range from a tenfold in- crease in costs to effectively`stopping research in Los Angeles County (25). Others have argued that pound animals are poorly suited to most lab- oratory work because they are often in poor health and their genetic background is usually un- certain (25). It may seem ethically desirable to make use of animals that would be killed anyway, but an ani- mal that had been a pet may find laboratory con- ditions more stressful than a purpose-bred ani- mal would. Other nonpecuniary considerations are that people may hesitate to bring their ani- mals to a pound if they oppose laboratory use of pound animals and that those using pound ani- mals will see them as cheap, disposable experi- mental tools that need not be conserved (22).
Data derived from animal research have pro- prietary value and are often used to support pat- ent applications for drugs or devices for humans.
Patents give the inventor an exclusive right to make and sell the patented invention, thus pro- viding an incentive to invent, which in turn fuels a growing economy. Thus, animal use can have important economic consequences in addition to improvement in health.
To obtain a patent, an inventor must show that the invention is novel and useful and must dis- close how to make it and use it. Data from studies with humans are normally obtained to support a patent on an invention to be used by humans, but data on animals can provide evidence of util- ity as well (12,15). And because they are normally obtained before research is done on humans, such data sometimes play a crucial role in determin- ing the date of an invention, which could deter- mine who gets the patent in the case of two com- peting inventors. Utility can be demonstrated with animal studies, but only if the data would convince someone of ordinary skill in the art that the same effect would be observed in humans (14). The character and quantity of evidence needed to show utility de- pend, in part, on whether the results agree with established beliefs (13). Courts recognize that an animal may respond differently than a human would (16), and in demonstrating the utility of an invention it is not necessary to demonstrate safety (11)17).
248 l Alternatives to Animal Use in Research, Testing, and Education
In vitro experiments are sometimes sufficient to demonstrate utility for patent purposes. In one recent case (7), in vitro tests showed that the chemical to be patented, an imidazole derivative, inhibited thromboxane synthetase in blood plate- lets. The activity of thromboxane synthetase was thought to be related to hypertension, pulmonary vasoconstriction, and other cardiovascular dis- eases, and the demonstration of the chemical’s ability to inhibit it was sufficient to show utility. Data showing therapeutic use were not required in showing that an invention had taken place. In another case, the fact that the inventor had given
There are several major economic benefits to using animals in toxicological testing. Drugs, food additives, pesticides, and many consumer prod- ucts are tested for toxicity or other kinds of haz- ards before they can be marketed and begin to generate income for the manufacturer. This is often done to meet regulatory requirements, but the tests are also done to avoid marketing unsafe products. In addition, testing is done to confirm that a product does in fact confer a benefit.
structures and facilities. The Environmental Pro- tection Agency (EPA) estimates that 90 percent of all households regularly use or have used pes- ticides in the home, garden, or yard (31). The re- sults of tests on animals are used by EPA to iden- tify hazards and to develop acceptable exposure levels and safe handling and disposal practices (see ch. 7). Thus, animal testing plays an important role in the protection of virtually the entire U.S. population. Acute poisonings have been estimated to cost over $15 million annually (1980 dollars), exclud- ing the value of saving lives or avoiding suffer- ing. The estimated cost of each death due to pes- ticide poisoning is $112,000, whereas the average cost of a nonfatal poisoning is $200 (23,31). The costs of cancer, the most important chronic ef- fect, is over $34 billion in 1980 dollars, with each cancer costing $52,000 (31). One research goal is to find new pesticides that are less toxic and more effective than those now in use, a search that en- tails animal testing. There are over 48,000 registered pesticide for- mulations, with an estimated 1,400 to 1,500 ac- tive ingredients (5). There are between 5 and 20 new registrations for active ingredients issued an- nually, each requiring a complete toxicological evaluation based on animal testing and other data. Another 1,500 to 2,000 new formulations or uses are also registered annually (5,31). These require little additional testing, as a rule, and often rely on data in EPA’s files.
250 l Alternatives to Animal Use in Research, Testing, and Education
Corporate research and development (R&D) in the chemical industry is large and concentrated in the industrial chemicals and drug sectors. Ex- penditures by the industry totaled $7.6 billion in 1984 (8), a figure that includes in-house toxico- logical testing, research involving the use of ani- mals, and many other activities. It has been esti- mated that the toxicological testing industry accounts for just under 10 percent of the R&D expenditures in the chemical industry (27), mak- ing testing an estimated $700 million expenditure in 1984. An unknown percentage is spent on re- search involving animals.
Ch. n-Economic Considerations l 2 5 1
what by industry, will cost an estimated $2.9 bil- lion (8). Projections of future expenditures depend on a number of factors, including the growth of the chemical industry and of R&D within it; the areas of R&D (e.g., new substances, new uses for old substances, new processes for making old sub- stances); regulatory policies, both domestic and foreign; the growth of the overall economy; tax policy; and further developments in nonanimal tests. International developments can have economic repercussions. For example, Swiss voters defeated in 1985a referendum virtually banning all animal testing (see ch. 16). A number of companies have facilities in Switzerland, and such a change could have shifted testing to another country. whether U.S. labs could compete for that business depends on the strength of the dollar.
In 1984, the toxicity testing industry in the United States was estimated to be worth about $650 million per year (27). Sixty-five percent of the testing is done by corporations in-house. The remaining 35 percent (about $225 million annu- ally) is conducted by commercial laboratories, universities, and other organizations. Although there are over 110 U.S. laboratories that sell test- ing services, most specialize in a small number of assays and are not ‘(full service. ” Hazelton is the largest of the full-service labs, with domestic sales of $36 million in 1983. Except for Hazelton and several other large commercial labs, the in- dustry is a dispersed one, with the many small commercial firms accounting for approximately two-thirds of the value of domestic sales (10). The industry expanded its facilities in the 1970s in response to Federal regulatory changes and the passage of the Toxic Substances Control Act. Test- ing did not increase as much as expected, how- ever, and in the early and mid-1980s the indus- try was operating at 60 to 70 percent capacity (27). This has led to fairly level prices over the past few years and, in some cases, price cutting to maintain market position. Because of this com- petition, current prices reflect the actual costs of testing. Testing laboratories often do not quote set prices for some testing procedures or for par-
Table n-3.-Selected Federal Expenditures Reiated to Toxicoiogicai Testing and Research, 1984- (in thousands)
1984 1985a 1986a Environmental Protection Agency: Program expenses....... (^) $327,145 $380,341$376, Toxic substances...... (^) 34,484 39,341 38, Pesticides............. 32,772 (^) 37,805 36, Research and development......... 144,903 195,449 212, Toxic substances...... 12,327 14,450 26, Pesticides............. 1,738 5,121 (^) 6, Interdisciplinary........ 18,522 22,423 14, Food and Drug Administration: National Center for Toxicological Research. (^) 21,132 21,575 22, Drug program .,.......... 138,248 153,112 152, Food program........... 115,541 (^) 109,538 113, Devices and radiologic products.............. 62,568 67,081 68, Centers for Disease Control: Occupational safety and health research........ 54,740 54,863 57, Research on chronic and environmental disease.. 25,953 28,568 23, National Institutes of Health: National Cancer Institute: Cause and prevention... 276,075 (^) 301,655 285, Detection and diagnosis........... 63,182 70,524 66, Treatment............. 340,041 367,940 351, National Institute of Environmental and Health Sciences: Characterization of environmental hazards............. 19,152 21,136 21, Applied toxicological research and testing.. 57,781 57,303 56, Intramural research....... 48.643 55.051 52. aEstimates. SOURCE: U.S. Executive Office of the President, Office of Management and Budg- et, Budget of the United States Government, Fiscal Year IQ% (Washing- ton, DC: U.S. Government Printing Office, 1985),
Ch. 11-Economic Considerations l 2 5 3
requires that data be shared as long as compen- sation is offered. The terms of the compensation are subject to arbitration if the parties cannot agree. The other protection only applies to new pesticides (new active ingredients), not to new for- mulations of old ingredients. It gives exclusive use of the data to the data owner for 10 years unless the data owner explicitly agrees to sell the right to use the data. The Supreme Court recently decided in Ruck- elshaus v. Monsanto (26) that these provisions of FIFRA are constitutional. For data submitted be- fore 1972 or after 1978, there is no expectation of a proprietary interest, thus nothing is taken; for data submitted between those years, the com- pensation and arbitration provision, in combina- tion with the Tucker Act, provides adequate com- pensation. (See also the Environmental Protection Agency’s regulations at 40 CFR 1984 ed. 152; 40 FR 30884.)
Congress has recognized the important business interest in keeping information from competitors, but it also supports the public’s ‘(right to know” and the Federal Government’s need to know. An important barrier to the sharing of confidential business information among agencies is the differ- ing standards and procedures for handling it. The ad hoc interagency Toxic Substances Strategy Committee, coordinated by the Council on Envi- ronmental Quality, thought it would be necessary to pass legislation permitting the sharing of con- fidential data between health and environmental agencies (32). Such legislation would establish a need-to-know standard, require uniform security procedures for the data to be shared, impose uni- form penalties for disclosure, and provide for notification of the data submitted by the data holder at least 10 days prior to transfer.
accompanied by a reduction in cost—although the proportionate savings will be less than the propor- tionate decrease in the number of animals used. Many of the issues involved with using animals in research and testing have economic implica- tions, although they do not lend themselves well to rigorous quantitative economic analysis be- cause many considerations are nonmonetary. A highly contested concern, for example, is the propriety of using unclaimed pound animals in laboratory studies. An area of animal use that is of major economic importance is biomedical research, which contrib- utes to health care through the development of drugs, medical devices, diagnostic techniques, and surgical procedures. Health care accounts for
254. Alternatives to Animal Use in Research, Testing, and Education
11, In re Anthony, 56 CCPA 1443,414 F.2d 1383, 162 USPQ 594 (1969).
