By: Dr. David W. Hobson

How the new regulatory environment will affect manufacturers in the U.S. and abroad

On February 11, the U.S. House of Representatives’ Science and Technology Committee passed the National Nanotechnology Initiative Amendments Act of 2009 (H.R. 554), intending to gain a better understanding of the health and safety risks associated with nanomaterials seeking approval to enter the marketplace. The legislation followed a report by the National Research Council criticizing the current level of oversight regarding nanotechnology products and the Environmental Protection Agency’s interim report on the Nanoscale Materials Stewardship Program. The EPA report stressed the importance of understanding certain risks relating to nanoscale materials and their potential effects on human health and the environment, including chemical identification and physical properties characterization, environmental impacts, environmental detection and analysis, human and environmental exposure, and possible effects on human health and the environment, among others. H.R. 554 also parallels an effort by Canada to become the first nation to require companies to list nanomaterials used in their products for risk evaluation.

Nanotechnology is a rich, highly diversified, and promising technology platform that already is demonstrating amazing potential for the development of advanced technologies and products in many business sectors. Accompanying the recognition of these new opportunities are concerns that emerging nanotechnologies are not yet defined with respect to potential environmental safety and health impacts. In fact, the state of the science is showing that the properties of some “nanoproducts” potentially could adversely affect biologic systems. The recent actions requiring nanotechnology companies to list certain materials they incorporate into commercial products are just the start of events that will have lasting effects on nanotechnology companies and the marketplace for nanoproducts.

In addition to steps being taken by the EPA, the National Institute for Occupational Safety and Health (NIOSH) just published “Interim Guidance for Medical Screening and Hazard Surveillance for Workers Potentially Exposed to Engineered Nanoparticles” (www.cdc.gov/niosh/docs/2009-116). In this document, NIOSH makes the following interim general recommendations for workplaces where “workers may be exposed to engineered nanoparticles in the course of their work:

• take prudent measures to control exposures to engineered nanoparticles
• conduct hazard surveillance as the basis for implementing controls
• continue use of established medical surveillance approaches”

While NIOSH recognizes that there is “insufficient scientific and medical evidence to recommend the specific medical screening of workers potentially exposed to engineered nanoparticles,” it also recognizes that this lack of evidence does not preclude monitoring and medical vigilance by employers interested in ensuring the health and safety of their valued employees. Taking prudent precautions with some types of materials already showing potential for harm simply seems to make good sense for companies that desire longevity in their nano - technology businesses.

On February 26, 2009, an Energy and Commerce Subcommittee of the U.S. House of Representatives, held a hearing on “Revisiting the Toxic Substances Control Act of 1976,” that examined the adequacy of current Toxic Substances Control Act (TSCA) provisions to effectively address toxic or potentially toxic substances, including nanomaterials and nanotechnology products. In January, the Government Accountability Office included reforming TSCA in its 2009 “high risk” priority list, indicating it is a must-do for the new administration. The outcome of these discussions could have far-reaching impact for the U.S. and international nanomaterial manufacturers and importers.

For example, the U.S. EPA recently published two Federal Register notices concerning the regulation of nanomaterials under TSCA, 15 U.S.C. §§ 2601-2692. In the first notice on October 31, 2008, the EPA clarified the TSCA Inventory status of carbon nanotubes (CNTs), explaining to manufacturers and importers that many CNTs are considered “new” chemicals under TSCA, subject to the premanufacture notice requirements. This appeared in a Federal Register notice (73 Fed. Reg. 64946) clarifying the TSCA Inventory status of CNTs. According to the EPA, CNTs subject to TSCA jurisdiction may be “new” chemicals, with “molecular identities” that are distinct from graphite or other allotropes of carbon already listed on the TSCA Inventory. In the second notice (73 Fed. Reg. 65743), the EPA enacted significant new use rules for two different siloxane-modified nanoparticles. These were the agency’s first nanotechnology-specific regulations, and potentially signals more aggressive regulation of nanomaterials in the future.

The EPA has also issued a strong warning regarding noncompliance with the PMN requirements based on its current interpretation of the TSCA Inventory status of CNTs. The agency indicates that in March 2009, its Office of Enforcement and Compliance Assurance will begin to focus efforts on determining whether CNT manufacturers or importers are in compliance with TSCA PMN provisions.

Besides making changes to reporting requirements, the U.S. EPA, along with other government concerns, such as the Department of Transportation and the Occupational Safety and Health Administration, are poised to address nanomaterials reporting needs. The government is expected to develop specific recommendations and procedures for reporting the physicochemical characteristics and any potential adverse effects of nanomaterials in mandatory documents such as Material Safety Data Sheets. Although the recent NIOSH interim guidance does not establish specific procedures for worker protection in the nanoindustry, neither does it imply that companies should be lax in taking practical and reasonable steps to protect workers. Eventually, scientific data will coalesce into a much clearer picture of the potential risks, and such measures as environmental monitoring in the workplace, including establishment of inhalation and skin exposure limits for specific nanoparticles; and, potentially, recommendations or requirements for specific types of worker health monitoring — that may include lung, skin and immune system effects — could be required for some nanomaterials.

What might the new U.S. regulatory model look like? No one is certain, but the current state of affairs will change. Certainly, modifications of current regulations such as the TSCA will be made to include requirements for specific nanomaterials, as already seen with carbon nanotubes. Future changes may include completely new regulations to address specific issues identified by ongoing research. Mandatory reporting is likely, especially if a manufacturer or importer is making or shipping large quantities of raw nanomaterials that meet new regulatory criteria for concern. Much of the new regulatory thrust is expected to include reporting and accurately describing specific characteristics of nanomaterials, identifying their potential environmental hazards, and providing practical and effective procedures for the safe handling of accidental spills or releases that could contaminate the workplace, transportation corridors, and natural environments.

At present, most manufacturers do not make large or “bulk” quantities of nanomaterials; they will likely seek low-volume exemptions to reporting requirements if they have the data to support such exemptions. The EPA may anticipate this, and its regulations may require reporting if the agency feels that the public is at risk, even if the volume of materials and potential for release is low.

TAKING PROACTIVE MEASURES

The emerging nanotechnology industry is better off being proactive in its response to these emerging concerns — collecting its own data on the safety of its products, using it in the design of safe products and providing this information to the EPA and other concerned regulatory bodies. Waiting for the EPA and other regulators to collect general information and interpret it on the basis of potential “worst-case” scenarios across broad classes of nanomaterials may include products that would otherwise be proven safe by exception, even if the company had quality data to address regulatory concerns. Environmental safety and health is expected to have an increasingly significant presence and considerable political capital in the new administration, and nanomaterials represent a new frontier for potential environmental challenges and opportunities for new regulation. Memories of the Superfund effort, which was not entirely successful in retroactively cleaning up waste sites with industry funding, are still vivid. The EPA and the U.S. populace will want to avoid repeating that experience with the emerging and growing nanoindustry, while ideally creating a balance that does not overburden it.

To reduce or eliminate product risks prior to approaching the EPA, companies need to take responsibility for determining the environmental effects of their nanomaterials. Very few of them can answer such questions at this time, and it appears there are currently only a few truly proactive companies that realize the need for and are collecting their own data or understand what is at stake for their industries should they fail. Proper data reporting will require companies to accurately determine the quantities of their materials that could be released into the environment under worst-case conditions. Simply stating that such releases are unlikely or impossible will not be enough. They need to have hard facts at their disposal to prove their case. If a release can be anticipated, companies should attempt to design the materials to be biodegradable, if at all practical. If not, they must develop effective measures for avoiding environmental releases and handling any accidental spillage. Finally, they need methods for disposal of nanomaterials that can render waste products environmentally safe in a cost-efficient and effective manner.

As with many products already on the market, such as domestic and commercial cleaners, some nanoproducts simply cannot avoid being toxic, either by their intended use or because a nontoxic alternative is unavailable. An obvious example is a product intended to be a pesticide; another might be a therapeutic agent that is toxic only in excess. In such situations, the industry must attempt to make environmental impacts as negligible as possible and to eliminate any potential for environmental harm. Strict controls must ensure that the materials are not released in toxic amounts and that they biodegrade following their effective use period (pesticide design), or are disposed of appropriately to prevent them from entering the environment (toxic raw materials for electronic devices, etc.).

Some companies may attempt to counter claims of having little or no risk assessment data for their nanoproducts by pointing to a lack of specific and comprehensive information to perform proper risk assessments using data from government programs and universities. However, the nanotechnology industry must take responsibility for the products it plans to place into markets where human, animal, or environmental exposures are imminent, and take prudent steps to obtain its own data specific to its materials and anticipated uses to strengthen its knowledge of potential risks. This will increase its knowledge and credibility when addressing potential risks from its products with the public, government agencies, customers, insurers, and investors.

The open nature of laboratories in the academic setting is not specifically designed to protect emerging industrial intellectual property or to produce routine data for safety assessments that meet FDA or EPA Good Laboratory Practice (GLP) data quality requirements. Academic laboratories with dynamic research programs designed for discovery and innovation can become overburdened and slowed by the rigorous requirements mandated to achieve the GLP data quality that FDA or EPA expects for regulatory submissions. Companies with nanoproducts subject to GLP data quality regulations need experienced GLP facilities to collect the data necessary to proceed to the marketplace with confidence.

NANOTECHNOLOGY’S NEAR FUTURE

The next five years will be critical to nanotechnology’s commercial success. Even with the current slowdown of the economy, nanotechnology can produce new products, solving current technologic challenges and creating new markets relatively quickly. Nanotechnology will produce significant, long-term benefits for society at large, transforming the performance of materials such as polymers, electronics, paints, batteries, sensors, fuel cells, coatings, and computers, and significantly improving healthcare through the development of better medical devices and new treatments and medications. In fact, nanotechnology is already making substantial improvements to our lives while it enters various markets every day, without any substantial fanfare. Successful growth of emerging nanoindustries will require a fine balance between promises of increased quality of life and economic benefits and the need to ensure public and environmental safety. The public will demand it, as will the investment community, whose confidence must be won with high quality data and solid evidence.

DATA WILL DRIVE FUNDING

The $111 billion dedicated to science and infrastructure in the recent federal stimulus package suggests that the new administration will be supportive of nanotechnology research and development, particularly in the energy sector. Public funding, however, is not the only requirement for commercialization.

Without substantial private investment, the U.S. will lose many of its emerging nanocompanies and nanotechnologies to other nations in the EU, China, India, and Japan, all of which are keenly interested in nano - tech development and making significant investments. Up until now, the U.S. has been leading in many nanotechnology fields, but we could lose ground without increasing investor confidence and support.

If companies fail to include safety evaluations in their early-stage R&D, they may find themselves without program or test data to show interested investors that they have adequately considered and understand potential risks, and are addressing them in early stage development. Unfortunately, emerging companies often have limited capital and are more focused on the development and commercialization of their intellectual properties and technologies than on evaluating any potential for adverse biological effects. Early involvement with experienced toxicologists and safety professionals during design and early-stage development can identify potential problems and hurdles, and they can work to resolve them before they become a liability. Management enjoys describing the promise of their technologies to investors and other financially interested parties but often fails to address safety in a substantive way, leaving investors to assume more risk than they may want or realize. Savvy investors in future markets will likely avoid companies who cannot back up their claims of safety and efficacy with hard data.

After many years of practical experience, I’ve come to realize that a completely effective toxicologist should not simply identify problems but should measure success by what could have happened, but didn’t. Becoming part of the solution rather than a part of the problem is not easy. It takes considerable training, effort, and experience, but does have a certain quiet satisfaction. When toxicologists or safety professionals do their jobs correctly, no one should know they were there, because nothing happened.

Business professionals must address potential problems swiftly and effectively to avoid roadblocks to the emergence of promising nanoindustries. The picture within the insurance industry provides an example.

• Lloyd’s of London’s report, Nanotechnology: An Insurer’s Perspective, warned the insurance industry about the risks of nanoproducts, and listed types of insurance that might be affected, including professional indemnity, medical malpractice, directors’ and officers’ liability, general liability, employers’ liability, and product liability.
• In late 2008, Continental Western Insurance Group announced it would exclude nanotechnology and nanotubes from coverage.
• Multinational insurance company Allianz Gruppe International has stated that most insurers will “have to live with the uncertainties of nanotechnology related risks for a longer period of time and that it will not be able to quantify the probability of potential losses occurring and their possible extent.”
• Swiss Re’s 53-page report, Small Matter, Many Unknowns, warned “the insurance industry should waste no time in assessing the potential risks and benefits both for itself and for society in general.”

The good news is that while private investment is presently cautious in the U.S., investments are expected to increase — especially in the medical sector — as firms develop more understanding of the potential gains and the impact on their current investments if they fail to support the advancements nanotechnologies offer.

MOVING TOWARD COMMERCIALIZATION

New regulations introduced in coming year will mark a turning point for those seeking to commercialize their nanoproducts, which in many ways could secure nanotechnology’s successful future if developed with a mind to effectively promote and encourage proven safe nanotechnologies. By encouraging and supporting nanoproduct companies to perform early-stage risk assessments and eliminate problems, well-crafted regulations could make the sector more attractive to investors and the insurance industry, less worrisome to the public and smooth the path to commercialization substantially.

• An expert toxicologist and emerging authority on practical nanotechnology safety and commercialization issues, Dr. David W. Hobson is chief scientific officer for nanoTox Inc. which is the only company to provide confidential risk assessment exclusively to nanotechnology concerns. Dr. Hobson has 30 years of experience in pharmacological and toxicological research, preparation of pharmaceutical and medical device submissions to regulatory agencies, as well as the design and oversight of safe working operations with highly hazardous substances.