Sustainable Urban Farming Has a Rising Hot Star: Bugs
In Sydney, Australia, in the basement of an inner-city high-rise, lives a mass of unexpected inhabitants: millions of maggots. The insects are far from unwelcome. They are there to feast on the food waste generated by the building's human residents.
Goterra, the start-up that installed the maggots in the building in December, belongs to the rapidly expanding insect agriculture industry, which is experiencing a surge of investment worldwide.
The maggots – the larvae of the black soldier fly – are voracious, unfussy eaters. As adult flies, they don't eat, so the young fatten up swiftly on whatever they can get. Goterra's basement colony can munch through 5 metric tons of waste in a day.
"Maggots are nature's cleaners," says Bob Gordon, Head of Growth at Goterra. "They're a great tool to manage waste streams."
Their capacity to consume presents a neat response to the problem of food waste, which contributes up to 8% of global greenhouse gas emissions each year as it rots in landfill.
"The maggots eat the food fairly fresh," Gordon says. "So, there's minimal degradation and you don't get those methane emissions."
Alongside their ability to devour waste, the soldier fly larvae hold further agricultural promise: they yield an incredibly efficient protein. After the maggots have binged for about 12 days, Goterra harvests and processes them into a protein-rich livestock feed. Their excrement, known as frass, is also collected and turned into soil conditioner.
"We are producing protein in a basement," says Gordon. "It's urban farming – really sustainable, urban farming."
Goterra's module in the basement at Barangaroo, Sydney.
Supplied by Goterra
Goterra's founder Olympia Yarger started producing the insects in "buckets in her backyard" in 2016. Today, Goterra has a large-scale processing plant and has developed proprietary modules – in shipping containers – that use robotics to manage the larvae.
The modules have been installed on site at municipal buildings, hospitals, supermarkets, several McDonald's restaurants, and a range of smaller enterprises in Australia. Users pay a subscription fee and simply pour in the waste; Goterra visits once a fortnight to harvest the bugs.
Insect agriculture is well established outside of the West, and the practice is gaining traction around the world. China has mega-facilities that can process hundreds of tons of waste in a day. In Kenya, a program recently trained 2000 farmers in soldier fly farming to boost their economic security. French biotech company InnovaFeed, in partnership with US agricultural heavyweight ADM, plans to build "the world's largest insect protein facility" in Illinois this year.
"The [maggots] are science fiction on earth. Watching them work is awe-inspiring."
But the concept is still not to everyone's taste.
"This is still a topic that I say is a bit like black liquorice – people tend to either really like it or really don't," says Wendy Lu McGill, Communications Director at the North American Coalition of Insect Agriculture (NACIA).
Formed in 2016, NACIA now has over 100 members – including researchers and commercial producers of black soldier flies, meal worms and crickets.
McGill says there have been a few iterations of insect agriculture in the US – beginning with worms produced for bait after World War II then shifting to food for exotic pets. The current focus – "insects as food and feed" – took root about a decade ago, with the establishment of the first commercial farms for this purpose.
"We're starting to see more expansion in the U.S. and a lot of the larger investments have been for black soldier fly producers," McGill says. "They tend to have larger facilities and the animal feed market they're looking at is potentially quite large."
InnovaFeed's Illinois facility is set to produce 60,000 metric tons of animal feed protein per year.
"They'll be trying to employ many different circular principles," McGill says of the project. "For example, the heat from the feed factory – the excess heat that would normally just be vented – will be used to heat the other side that's raising the black soldier fly."
Although commercial applications have started to flourish recently, scientific knowledge of the black soldier fly's potential has existed for decades.
Dr. Jeffery Tomberlin, an entomologist at Texas A&M University, has been studying the insect for over 20 years, contributing to key technologies used in the industry. He also founded Evo, a black soldier fly company in Texas, which feeds its larvae the waste from a local bakery and distillery.
"They are science fiction on earth," he says of the maggots. "Watching them work is awe-inspiring."
Tomberlin says fly farms can work effectively at different scales, and present possibilities for non-Western countries to shift towards "commodity independence."
"You don't have to have millions of dollars invested to be successful in producing this insect," he says. "[A farm] can be as simple as an open barn along the equator to a 30,000 square-foot indoor facility in the Netherlands."
As the world's population balloons, food insecurity is an increasing concern. By 2050, the UN predicts that to feed our projected population we will need to ramp up food production by at least 60%. Insect agriculture, which uses very little land and water compared to traditional livestock farming, could play a key role.
Insects may become more common human food, but the current commercial focus is animal feed. Aquaculture is a key market, with insects presenting an alternative to fish meal derived from over-exploited stocks. Insect meal is also increasingly popular in pet food, particularly in Europe.
While recent investment has been strong – NACIA says 2020 was the best year yet – reaching a scale that can match existing agricultural industries and providing a competitive price point are still hurdles for insect agriculture.
But COVID-19 has strengthened the argument for new agricultural approaches, such as the decentralized, indoor systems and circular principles employed by insect farms.
"This has given the world a preview – which no one wanted – of [future] supply chain disruptions," says McGill.
As the industry works to meet demand, Tomberlin predicts diversification and product innovation: "I think food science is going to play a big part in that. They can take an insect and create ice cream." (Dried soldier fly larvae "taste kind of like popcorn," if you were wondering.)
Tomberlin says the insects could even become an interplanetary protein source: "I do believe in that. I mean, if we're going to colonize other planets, we need to be sustainable."
But he issues a word of caution about the industry growing too big, too fast: "I think we as an industry need to be very careful of how we harness and apply [our knowledge]. The black soldier fly is considered the crown jewel today, but if it's mismanaged, it can be relegated back to a past."
Goterra's Gordon also warns against rushing into mass production: "If you're just replacing big intensive animal agriculture with big intensive animal agriculture with more efficient animals, then what's the change you're really effecting?"
But he expects the industry will continue its rise though the next decade, and Goterra – fuelled by recent $8 million Series A funding – plans to expand internationally this year.
"Within 10 years' time, I would like to see the vast majority of our unavoidable food waste being used to produce maggots to go into a protein application," Gordon says.
"There's no lack of demand. And there's no lack of food waste."
What causes aging? In a paper published last month, Dr. David Sinclair, Professor in the Department of Genetics at Harvard Medical School, reports that he and his co-authors have found the answer. Harnessing this knowledge, Dr. Sinclair was able to reverse this process, making mice younger, according to the study published in the journal Cell.
I talked with Dr. Sinclair about his new study for the latest episode of Making Sense of Science. Turning back the clock on mouse age through what’s called epigenetic reprogramming – and understanding why animals get older in the first place – are key steps toward finding therapies for healthier aging in humans. We also talked about questions that have been raised about the research.
Show links:
Dr. Sinclair's paper, published last month in Cell.
Recent pre-print paper - not yet peer reviewed - showing that mice treated with Yamanaka factors lived longer than the control group.
Dr. Sinclair's podcast.
Previous research on aging and DNA mutations.
Dr. Sinclair's book, Lifespan.
Harvard Medical School
Breakthrough therapies are breaking patients' banks. Key changes could improve access, experts say.
CSL Behring’s new gene therapy for hemophilia, Hemgenix, costs $3.5 million for one treatment, but helps the body create substances that allow blood to clot. It appears to be a cure, eliminating the need for other treatments for many years at least.
Likewise, Novartis’s Kymriah mobilizes the body’s immune system to fight B-cell lymphoma, but at a cost $475,000. For patients who respond, it seems to offer years of life without the cancer progressing.
These single-treatment therapies are at the forefront of a new, bold era of medicine. Unfortunately, they also come with new, bold prices that leave insurers and patients wondering whether they can afford treatment and, if they can, whether the high costs are worthwhile.
“Most pharmaceutical leaders are there to improve and save people’s lives,” says Jeremy Levin, chairman and CEO of Ovid Therapeutics, and immediate past chairman of the Biotechnology Innovation Organization. If the therapeutics they develop are too expensive for payers to authorize, patients aren’t helped.
“The right to receive care and the right of pharmaceuticals developers to profit should never be at odds,” Levin stresses. And yet, sometimes they are.
Leigh Turner, executive director of the bioethics program, University of California, Irvine, notes this same tension between drug developers that are “seeking to maximize profits by charging as much as the market will bear for cell and gene therapy products and other medical interventions, and payers trying to control costs while also attempting to provide access to medical products with promising safety and efficacy profiles.”
Why Payers Balk
Health insurers can become skittish around extremely high prices, yet these therapies often accompany significant overall savings. For perspective, the estimated annual treatment cost for hemophilia exceeds $300,000. With Hemgenix, payers would break even after about 12 years.
But, in 12 years, will the patient still have that insurer? Therein lies the rub. U.S. payers, are used to a “pay-as-you-go” model, in which the lifetime costs of therapies typically are shared by multiple payers over many years, as patients change jobs. Single treatment therapeutics eliminate that cost-sharing ability.
"As long as formularies are based on profits to middlemen…Americans’ healthcare costs will continue to skyrocket,” says Patricia Goldsmith, the CEO of CancerCare.
“There is a phenomenally complex, bureaucratic reimbursement system that has grown, layer upon layer, during several decades,” Levin says. As medicine has innovated, payment systems haven’t kept up.
Therefore, biopharma companies begin working with insurance companies and their pharmacy benefit managers (PBMs), which act on an insurer’s behalf to decide which drugs to cover and by how much, early in the drug approval process. Their goal is to make sophisticated new drugs available while still earning a return on their investment.
New Payment Models
Pay-for-performance is one increasingly popular strategy, Turner says. “These models typically link payments to evidence generation and clinically significant outcomes.”
A biotech company called bluebird bio, for example, offers value-based pricing for Zynteglo, a $2.8 million possible cure for the rare blood disorder known as beta thalassaemia. It generally eliminates patients’ need for blood transfusions. The company is so sure it works that it will refund 80 percent of the cost of the therapy if patients need blood transfusions related to that condition within five years of being treated with Zynteglo.
In his February 2023 State of the Union speech, President Biden proposed three pilot programs to reduce drug costs. One of them, the Cell and Gene Therapy Access Model calls on the federal Centers for Medicare & Medicaid Services to establish outcomes-based agreements with manufacturers for certain cell and gene therapies.
A mortgage-style payment system is another, albeit rare, approach. Amortized payments spread the cost of treatments over decades, and let people change employers without losing their healthcare benefits.
Only about 14 percent of all drugs that enter clinical trials are approved by the FDA. Pharma companies, therefore, have an exigent need to earn a profit.
The new payment models that are being discussed aren’t solutions to high prices, says Bill Kramer, senior advisor for health policy at Purchaser Business Group on Health (PBGH), a nonprofit that seeks to lower health care costs. He points out that innovative pricing models, although well-intended, may distract from the real problem of high prices. They are attempts to “soften the blow. The best thing would be to charge a reasonable price to begin with,” he says.
Instead, he proposes making better use of research on cost and clinical effectiveness. The Institute for Clinical and Economic Review (ICER) conducts such research in the U.S., determining whether the benefits of specific drugs justify their proposed prices. ICER is an independent non-profit research institute. Its reports typically assess the degrees of improvement new therapies offer and suggest prices that would reflect that. “Publicizing that data is very important,” Kramer says. “Their results aren’t used to the extent they could and should be.” Pharmaceutical companies tend to price their therapies higher than ICER’s recommendations.
Drug Development Costs Soar
Drug developers have long pointed to the onerous costs of drug development as a reason for high prices.
A 2020 study found the average cost to bring a drug to market exceeded $1.1 billion, while other studies have estimated overall costs as high as $2.6 billion. The development timeframe is about 10 years. That’s because modern therapeutics target precise mechanisms to create better outcomes, but also have high failure rates. Only about 14 percent of all drugs that enter clinical trials are approved by the FDA. Pharma companies, therefore, have an exigent need to earn a profit.
Skewed Incentives Increase Costs
Pricing isn’t solely at the discretion of pharma companies, though. “What patients end up paying has much more to do with their PBMs than the actual price of the drug,” Patricia Goldsmith, CEO, CancerCare, says. Transparency is vital.
PBMs control patients’ access to therapies at three levels, through price negotiations, pricing tiers and pharmacy management.
When negotiating with drug manufacturers, Goldsmith says, “PBMs exchange a preferred spot on a formulary (the insurer’s or healthcare provider’s list of acceptable drugs) for cash-base rebates.” Unfortunately, 25 percent of the time, those rebates are not passed to insurers, according to the PBGH report.
Then, PBMs use pricing tiers to steer patients and physicians to certain drugs. For example, Kramer says, “Sometimes PBMs put a high-cost brand name drug in a preferred tier and a lower-cost competitor in a less preferred, higher-cost tier.” As the PBGH report elaborates, “(PBMs) are incentivized to include the highest-priced drugs…since both manufacturing rebates, as well as the administrative fees they charge…are calculated as a percentage of the drug’s price.
Finally, by steering patients to certain pharmacies, PBMs coordinate patients’ access to treatments, control patients’ out-of-pocket costs and receive management fees from the pharmacies.
Therefore, Goldsmith says, “As long as formularies are based on profits to middlemen…Americans’ healthcare costs will continue to skyrocket.”
Transparency into drug pricing will help curb costs, as will new payment strategies. What will make the most impact, however, may well be the development of a new reimbursement system designed to handle dramatic, breakthrough drugs. As Kramer says, “We need a better system to identify drugs that offer dramatic improvements in clinical care.”