Fungicide registration costs skyrocket

At up to $300 million to bring a product to market, companies have to be confident of a return on investment

It’s become a standard factoid at ag industry meetings in Canada: a new herbicide hasn’t been re-leased in years and new chemistries are not on the horizon.

There’s a reason for that.

In fact, almost 300 million reasons.

A 2016 consultant’s report, written for CropLife International, CropLife America and the European Crop Protection Agency, said it costs about US$286 million to bring a crop protection product to market.

Phillips McDougall, a British consultancy, surveyed BASF, Bayer, Dow, DuPont, Syngenta, Monsanto and smaller firms in 2015.

The survey was intended to de-termine the discovery and development costs of crop protection products such as herbicides, insecticides and fungicides and identify how those costs have changed over time.

It found that research and development costs nearly doubled from 1995 to 2010-14 to $286 million from $152 million.

A Bayer CropScience spokesperson said costs vary, depending whether it’s a fungicide, insecticide or herbicide, but the estimate is accurate.

With an average price tag of nearly $300 million, the major crop protection firms now think long and hard about commercializing an active ingredient.

“The increasing costs of bringing a product through development stages, companies need to satisfy themselves that potential commercial return can justify this expenditure,” the report said.

”It is believed that a significant number of product leads do not pass into development stages as the potential returns may not justify these costs.”

That means the chemical must be suitable for globally strategic crops. Otherwise it’s not coming to market.

“You can’t spend that kind of money and not end up with a product that is going to have a significant market opportunity,” said Wayne Barton, manager of research and commercial development for BASF Canada.

“So … corn, soybeans, cereals, rice, then canola (and) oilseed rape, we bundle those together.”

Unfortunately for Canadian farmers, 20 million acres of canola isn’t large enough to warrant a pest control product specific to Western Canada.

“Probably not on its own,” Barton said.

“Part of my job would be to communicate the needs and market opportunity here in Canada to stimulate investment in solutions that are going to fit here.… So we are always looking to similarities between solutions for Canada and Europe, Canada and the U.S., Canada/Australia and in some cases Canada/China, to put together a project that’s significant enough.”

The Phillips McDougall report said crop science companies are still investing in research and development for new chemistries, despite the massive cost of developing a product.

Companies spent $2.4 billion on R&D for new chemistries and biological products in 2014, based on responses from 11 firms. In 2019, they plan to spend $2.9 billion.

Jeannette Gaultier, Manitoba Agriculture’s weed specialist, said it’s encouraging that investment is happening.

“(But) it takes longer and it’s more costly,” she said.

“Probably in the future … at some point the advances in crop protection are not going to come just from chemistries. And I think we’re already seeing a bit of that.”

Barton said companies are definitely investing in alternatives to chemistry, such as biological products and genetics.

One nugget in the report is how long it takes to commercialize a new product: an average of 11.3 years in 2010-15 compared to 8.3 years in 1995.

So if a researcher discovered a new molecule this summer, it may take until 2029 to get that chemistry on the market. Because of the timelines, industry scientists must focus their efforts on the horizon, Barton said.

“Companies are working really hard, investing a lot of money, to try and find solutions to the challenges that they (growers) face now and that they will face in 10 to 15 years.”

In the meantime, it’s critical that growers use existing products wisely because the development pipeline is pumping out fewer products. Companies are committing people and money to research and development, but there are no guarantees that solutions will arrive quickly to solve problems with insects, fungi and weeds.

“They (growers) need to, I think, steward their land and their rotations and the use of technology carefully,” Barton said. Because it (chemistry) is hard to come by.”

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