Medical Device Daily National Editor
The multiple debates over the potential risks of nanotechnology have fueled a variety of initiatives for testing and regulating new products using nanotech materials. And the majority of these have focused on their safety, the possibility of threats to the environment and, for healthcare, the clinical risks.
Now, a new report by the Investor Environmental Health Network (IEHN; Falls Church, Virginia) broadens that debate, focusing attention on how these potential risks may impact investors, both on a short-term basis and on into the hazy, and potentially very risky, future.
The report, titled "Eight Accounting Loopholes – Lessons from Nanomaterials and Asbestos," essentially warns against the creation of a nanotech sector that parallels the sad history of asbestos, that history consisting of the disastrous effects of that material on human health, the resultant billions of dollars in healthcare costs and the ongoing expensive cleanup efforts. See sidebar, right, for a listing of the loopholes.
(On Wednesday Environmental Protection Agency Administrator Lisa Jackson announced that the agency has determined that a public health emergency exists at the Libby asbestos site in northwest Montana, the result, she said, of "hundreds of asbestos-related disease cases" in the community.)
The new IEHN report focuses on the need for greater reporting transparency that should be required of companies developing nanotech and nanotech-based products and the need for the Securities & Exchange Commission to develop the necessary policies to obtain this transparency.
The report was written by Sanford Lewis, counsel to IEHN, who told Medical Device Daily that with the emergence of this industry the financial regulators "are playing catch-up. The question that we looked at was, are investors being apprized of the risks of the risks associated with [nanotech] products coming to the market?"
He said that "what happened with asbestos" took many years to play out, the result of "a very incomplete regulatory framework." Likewise, nanotech products currently "are entering the market without a comprehensive regulatory framework in place."
The report specifically cites eight regulatory "loopholes" (see Sidebar, right) that need to be filled by the SEC, and Lewis said he is optimistic that the agency, and the Financial Accounting Standards Board (Norwalk, Connecticut), which advises the SEC, will develop the necessary disclosure and reporting requirements.
"We think that investors need to know about the science indicating [nanotech's] serious environmental hazards," he said, especially at a time when overall investor confidence is in need of being bolstered.
The study, Lewis said, was developed based on "financial statements, conversations with people within the industry, conversations with consultants and accountants on a whole array of issues."
And as one example of the potential industry hazards, he cited studies indicating that "certain carbon nanotubes can cause asbestos-like health harm. We don't just need to address these issues from the standpoint of the EPA but also from the standpoint of advising those sharing the potential financial loss."
Besides warning of a future asbestos scenario, he said another parallel could be with the possibility of environmental contamination and the need for a new nanotech Superfund remediation effort.
Nanotechnology, Lewis said, "very well could become an environemtnal cleanup problem. That is very much the kind of issue that we are concerned about. Our recommendations are very much applicable to environmental cleanup liabilities as well."
David Rejeski, director, project on emerging nanotechnologies at the Woodrow Wilson International Center for Scholars (Washington), and former federal agency representative on the White House Council on Environmental Quality, praised the IEHN report for identifying the regulatory gaps and offering "constructive suggestions for filling them."
"Ultimately," he said, "a regulatory system that does not address the liabilities of existing nanotechnologies puts consumers, investors, shareholders and the environment at risk and compromises the future promise of the technology."
The IEHN report cites estimates that current global investment in the sector totals more than $9.6 billion, that more than 2 million people work in the development and production of nanomaterials, and that the various sectors developing nanotech products will spend more than $1 trillion developing these products by 2015.
Against the backdrop of these efforts, Lewis says that "over the last 100 years we've seen that the regulatory engines tend to lag behind understanding what the safety risks of new technologies are. That's really an ongoing problem with our whole system of governance right now.
"We'll get lots of good things from nanotechnologies, but do we have to wait until another asbestos crisis happens?"
(Editor's note: This week's issue of MDD Perspectives, and next week's as well, offers comments on nanotechnology safety by David Hobson, chief scientific officer at nanoTox (Austin, Texas). Go to www.medicaldevicedaily.com and click on the MDD Perspectives button to sign up for this free weekly e-zine.)