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Data protection for agricultural compounds: summary of submissions

In July 2009, the New Zealand Food Safety Authority (NZFSA) circulated a public discussion paper seeking stakeholders’ views on New Zealand’s data protection regime. The main points from the eleven submissions received on the NZFSA public discussion paper are summarised below.

NB: ‘Data protection’ in this context refers to protection provided for data supplied in support of an application for a compound to be registered under the Agricultural Compounds and Veterinary Medicines Act 1997 (the ACVM Act) and under the Hazardous Substances and New Organisms Act 1996, or an innovative medicine application under the Medicines Act 1981.

Background

In 2008, NZFSA, the Environmental Risk Management Authority (ERMA), and the Ministry of Economic Development (MED) commissioned Covec Consultancy to undertake a study of the effects of New Zealand’s data protection rules. The aim of the study was to find any verifiable information that could be used to inform policy decisions on possible changes to the rules, and to assess the net benefits to New Zealand of any such changes. The findings of this study were incorporated in the NZFSA public discussion paper.

Period of data protection for innovative products

Status quo: under the ACVM Act, data protection is currently available for:

• applications for full registration, from the time the information is supplied until five years from the date that registration is granted or refused; and

• applications for provisional registration, (a) for a five-year period from the time the information is supplied; and (b) if application for full registration is made within that period, a five-year period from the date that registration is granted or refused.

Two submitters supported the status quo. Another expressed support for a modified status quo, involving: five years data protection for products developed for the New Zealand market, and a period of two to three years data protection for products developed initially for an overseas market.

Six submitters supported a 10 year data protection period for innovative products. One supported a seven year period. Another submitter expressed strong support for an extension to be made to the existing five years, but did not specify the length of the extended period.

Period of data protection for new uses/claims for existing products

Status quo: once the original period of data protection for an innovative compound has expired, any data submitted in support of registering a new use or a reformulation is not protected.

One submitter supported the status quo.

Four submitters supported a 10 year data protection period for new uses (one of whom stipulated that it should only apply to locally-generated data). Another expressed support for more data protection for new uses, but did not mention a preferred period.

Three submitters supported a five year data protection period for new uses – each of these submitters stipulated a different condition: one stated that the new use must involve the generation of New Zealand data; one stated that the five year period should not apply to reformulations; and one stated that the five year period should only apply to label extensions and novel reformulations.

One submitter supported tiered data protection periods, namely: five years for a significant change that requires residue data; three years for a significant change that offers a dramatic economic advantage for New Zealand; one year for a minor advance that requires field trials; one year for a new crop/use, extended to three years if the new crop/use requires residue work.

One submitter expressed support for the United States model, whereby data protection is extended for one year per three minor uses, to a maximum of three years.

Period of protection for data supplied for reassessments

Status quo: no protection for data supplied for reassessments.

Two submitters supported the status quo. Another opposed having any rule apply in this area, on the basis that it would be preferable to have the flexibility of a case by case approach.

Four submitters supported a 10 year period of protection for data supplied for reassessments. One submitter supported a three year period. Two submitters supported having some data protection for reassessments, but did not mention a period.

Compulsory compensation (or cost sharing)

Internationally, three distinct approaches are taken to making arrangements for generating data required by regulators for product reassessments: put in place a regulatory framework that states the relevant rules (the approach taken in Australia); follow legal precedent (the approach taken in the United States); and require product registrants to opt into membership of a taskforce, which agrees on cost-sharing arrangements (the approach taken in the European Union).

Of the seven submitters who commented on compulsory compensation, only one opposed it. This submitter expressed a preference for voluntary practices. Within the group of six submissions in support of some form of compulsory compensation, a range of points were raised by individual submitters, including:

• a preference for an “open book” approach, adjudicated by a competent Authority;

• that compulsory compensation and a specified period of data protection are not mutually exclusive, and that one may be more suitable than the other at different times;

• that NZFSA should be able to auction a data protection period for major data calls;

• that NZFSA should be able to negotiate with registrants on a flexible basis; and

• that it would be fraudulent for the New Zealand Government to use the findings of another Government (of a country that offered data protection) without first providing intellectual property protection to the generator of that data.

Other comments from submissions on data protection

Innovative products

Three submitters commented that patents for new products are generally applied for very early in the process, and that it usually takes a significant amount of time (for example, 10 years) before the product can be made available.

One submitter opposed any restriction on access to data on maximum residue limits (MRLs).

Another submitter commented that further data protection will only serve the commercial interests of multinational companies – and that in the absence of subsidies, there is no benefit to farmers in New Zealand having data protection rules equivalent to European or North American standards.

One submitter contended that if there is to be a real drive for the development of ‘soft’ products, something needs to be done to allow the original registrant to recoup development costs before generic products come in at low cost.

One submitter noted that current policy might have served the sector well to get access to cheap generic compounds, but it means New Zealand tends not to get access to new innovative compounds – and that when it does, the processes are rushed to maximise revenue through the small data protection period. This submitter also stated that limited agrichemical product choices is one of the greatest threats to the horticultural industry’s ability to achieve export growth targets.

New uses

Three submitters noted that there is little incentive to develop new uses, since registrants of generic trade name products are immediately able to cross-reference the data and exploit the investment made by the originator. One of these three submitters noted that as data protection for a new use is specific to the new use and not to the product, a product can have a mix of protected and unprotected uses. However, another expressed support for protection both for new use only and for whole product, as appropriate. This submitter commented that data protection will provide an incentive to develop new applications, especially for minor crops and minor animal species, and suggested a fund could be established to help grower industry groups with minor uses/crops to pay for data trials. The third submitter suggested that to encourage development of new uses, the Australian model could be used to extend intellectual property protection to incomplete or pending crop specific projects.

One submitter suggested that data protection for new uses should apply only to New Zealand data for New Zealand uses. This submitter added that data protection should apply to the new use only, ie the minor species and not the original product itself as this would be anti-competitive. This submitter also commented that reformulations will be used as a strategy for seeking additional data protection (and that this occurs overseas).

One submitter contended that due to off-label uses, additional data protection will not stimulate new uses of existing products – and that for new formulations, further data protection would serve to restrict existing innovation. On this note, another submitter commented that data protection for reformulations is questionable unless they offer a unique characteristic of benefit to New Zealand.

One submitter commented that data protection encourages companies to introduce products that may be marginal in commercial terms, but may potentially have an important role for growers.

One submitter noted that the international trend to increasingly require growers to only use crop protection products in line with label instructions gives additional certainty that MRLs will not be exceeded. This submitter stated that New Zealand’s lack of data protection for label extensions and reformulations creates a disincentive for companies to add new uses to product labels. The submitter criticised New Zealand’s off-label use flexibility, on the basis that it undermines companies’ abilities to realise return on investment on label extensions.

Minor uses

One submitter supported an extension of up to three years for adding minor uses to a label within the first 10 years, to only be granted to products registered at the time of approval of the new active ingredient. This submitter also noted that in other countries, the “minor use” extension period is only relevant to products based on new active ingredients, and only when the minor uses are added to the products containing new actives within the initial protection period. The submitter commented that the reason for the minor use extension provision not working in Australia is not to do with patents, but rather with a restrictive definition of minor use and the ability of the Australian Pesticides and Veterinary Medicines Authority (the APVMA) to assign a crop-group that includes minor uses based on major use data.

One submitter commented that while extending data protection for minor use would be desirable, it would be of limited effect given users are conditioned to off label use.

One submitter opposed data protection when minor uses are added, on the basis that it would be open to abuse, and suggested a reduced registration requirement could be better for minor uses.

Reassessments

Two submitters noted that information requested by regulatory agencies may be commercially sensitive – and that the reassessment can suffer should companies elect not to supply this information. Another commented that registrants increasingly have to do additional research to address data call-in requirements outlined by regulators, and it is becoming increasingly difficult to justify the significant investments required. This submitter noted many countries are looking to use the taskforce model for data protection regimes, and that this is an equitable approach [see discussion above under Compulsory compensation (or cost sharing)].

In contrast, another submitter argued that as companies are under an obligation to report data that could have serious implications on products’ continued use, the public interest is already served in this area. This submitter commented that allowing data protection on reassessments could open the system to manipulation, as proprietary data of marginal value could be used to enhance data protection to the benefit of a monopoly company.

One submitter observed that registrants can be drawn into reassessment processes that they did not initiate.

Risks associated with off-label uses

Three submitters commented on risks associated with off-label uses. One stated that the risk of off-label use increases if users are denied access to new uses. Another stated the current ACVM condition of allowing off-label uses without approval removes much of the incentive to add new uses to labels, and is dangerous from a residues-in-trade and an occupational and safety perspective. The other submitter expressed concern that data protected new uses could be legally used off-label, or that there would be no enforcement activity.

Competition

The Covec report ‘Data Protection for Agricultural Compounds and Veterinary Medicine’” stated that minimal data protection creates greater competition, which “can in turn result in reduced prices, improved social service standards and better quality products.”

Three submitters disagreed with the assumption about competition made in the Covec report. One noted the New Zealand market offers numerous treatment options, which allows competition regardless of the data protection. Another noted that data protection doesn’t prevent other companies from obtaining registration if they provide the required data, doesn’t prevent release of a data summary for public consultation purposes, and doesn’t override freedom of information laws. The third argued data protection for new uses does not create higher prices, because a new use does not allow a price increase in a market that has competing products, and a novel formulation that has the same uses as the superseded one still has to compete in the same market space.

One submitter pointed to the Australian experience with data protection, where a rule was introduced to prevent companies from deregistering products and then resubmitting a new application for a marginally different formulation – the rule provides that where deregistration occurs, the original data package remains available (unless other new health or safety information precludes its use). This submitter commented that it is not viable to exploitatively raise prices in New Zealand’s crop protection market: the wide range of products and agronomic techniques means growers can weigh up the costs and benefits; information is more available than before, so growers can make informed decisions; and the Australian data protection debate concluded that price impacts will vary on a case by case basis, and that most will be minor or negligible – and that this has been borne out in reality.

Registration process

One submitter requested that all costs associated with the registration process be minimised, and that it be kept simple so as to encourage the development of new uses.

One submitter commented that all cross-referencing should be done using international VICH guidelines in bioequivalence. The submitter noted that although these guidelines are designed to manage equivalence risks, NZFSA’s ACVM Group doesn’t consistently follow them.

Two submitters expressed concern that increased data protection could delay registration. One also expressed concern that the use of the ACVM Act for industrial protection could detract from its primary purpose and cause registration delays. The other suggested the registration requirements for minor species be relaxed to reduce off-label use, and that data protection could be managed separately from the approval process.

Updated 12 October 2009