OTTAWA, THURSDAY, SEPTEMBER 7, 2017
SOR/2017-169 September 1, 2017
PEST CONTROL PRODUCTS ACT
Regulations Amending the Pest Control Products Regulations (Test Data Protection)
P.C. 2017-1118 August 31, 2017
His Excellency the Governor General in Council, on the recommendation of the Minister of Health pursuant to section 67 (see footnote a) of the Pest Control Products Act (see footnote b), makes the annexed Regulations Amending the Pest Control Products Regulations (Test Data Protection).
Regulations Amending the Pest Control Products Regulations (Test Data Protection)
1 Paragraph (b) of the definition of test data in section 17.1 of the Pest Control Products Regulations (see footnote 1) is replaced by the following:
- (b) to support a re-evaluation under section 16 of the Act or a special review under section 17 of the Act and that is submitted in response to a notice delivered to the registrant under subsection 16(3), 18(1) or 19(1) of the Act; or
2 Section 17.3 of the Regulations is replaced by the following:
Re-evaluations and special reviews
17.3 Sections 17.1, 17.2 and 17.4 to 17.94 apply, with any necessary modifications, to a registrant who wishes to use or rely on test data of another registrant for the purpose of subsection 16(5), (5.1), 18(3) or (3.1) of the Act.
3 Subsection 17.8(1) of the Regulations is replaced by the following:
Minister to identify compensable data
17.8 (1) For the purpose of subsection 7(2) of the Act, the Minister must provide the applicant with a list of the compensable data that they may use or rely on and in respect of which they will need to enter into an agreement with each registrant.
Coming into Force
4 These Regulations come into force on the day on which section 113 of the Canada–European Union Comprehensive Economic and Trade Agreement Implementation Act, chapter 6 of the Statutes of Canada, 2017, comes into force, but if they are registered after that day, they come into force on the day on which they are registered.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Article 20.30 of the Canada-European Union (EU) Comprehensive Economic and Trade Agreement (CETA), paragraphs 6 and 7, obliges Canada to make rules to avoid duplicative animal testing. The Pest Control Products Act (the Act) has been amended via Bill C-30 to provide the flexibility to adjust Health Canada’s pest control product data protection program to allow reliance on any study, including those involving animals, if the Minister determines it is necessary to support the application, re-evaluation or special review of a pest control product. This will help to avoid animal testing by allowing an applicant or registrant of a pest control product to rely on a previous study involving animals, rather than completing a new, duplicative one.
However, to meet these CETA obligations, the Pest Control Products Regulations (the Regulations) also needs to be amended to reflect changes to the Act.
Before a pest control product can be used or sold in Canada, it must be registered under the Act. In order to be registered, it must undergo a thorough pre-market, science-based assessment by Health Canada and meet strict health and environmental standards, and the pest control product must have value. If the specified uses of a pest control product pose risks of concern to human health or the environment, it is not registered for use in Canada.
In addition, Health Canada conducts post-market reviews of registered pest control products to confirm continued acceptability via periodic re-evaluations (conducted every 15 years) and special reviews (conducted when the Minister has reasonable grounds to believe that health, environmental risks of the pest control product are, or its value is, unacceptable). In both cases, the Minister can decide to continue the registrations as is, modify it (e.g. by establishing measures to mitigate risks), or cancel it.
During both pre-market and post-market reviews, to determine whether a registered pest control product does not present unacceptable risk (i.e. the pest control product can be used safely when used according to the label directions) Health Canada assesses applicant/registrant-supplied data, which can include animal studies, and information from the published scientific literature.
Data protection program
The Act and the Regulations also set out a data protection program, established in 2010 (see the Canada Gazette, Part II, publication at http://publications.gc.ca/gazette/archives/p2/2010/2010-06-23/pdf/g2-14413.pdf), applicable to both pre-market and post-market reviews. These provisions strike a balance between encouraging the registration of new innovative pest control products and the availability of generic pest control products by outlining the conditions that an applicant needs to follow to rely on an existing registrant’s data to support their application. The program also allows Canada to meet its commitments, under Article 1711 of the North American Free Trade Agreement and subsection 39(3) of the Agreement on Trade-related Aspects of Intellectual Property Rights set out in Annex 1C to the World Trade Organization Agreement, to provide protection from unfair commercial use of proprietary test data.
Data generated by pest control product registrants to support registrations in Canada receive exclusive or compensable protection status for a period of time to encourage innovation. The Regulations give 10 years of exclusive use protection to data supporting a registration containing a new active ingredient never before registered in Canada. This exclusive use period begins at the time of registration and registrants of pest control products under exclusive protection status can voluntarily allow other applicants (e.g. generic companies) to rely on their data. Data submitted that does not support the registration of a new active ingredient, but is used to amend a registration or register a new end-use product containing a registered active ingredient, is given a 12-year compensatory protection status. This compensable period begins at the time of application and during this time other applicants may rely on such data, providing compensation is paid; this supports the registration of competing “generic” pest control products, thereby potentially lowering the price for pest control product users. Once either the exclusive use period or the compensable period has lapsed, the data becomes generic and can be relied upon without consent and without the payment of compensation.
Thus, the data protection program provides applicants and registrants with the flexibility to choose how to fulfill the data requirements during a pre-market or post-market review: they can provide their own data, or pay to rely on the data of another registrant (i.e. if it is not already “generic”), whichever suits their business needs best. In particular:
- During pre-market reviews, a generic applicant seeking to register a pest control product, may choose to rely on the data supporting the previous registration of an equivalent pest control product (i.e. by paying compensation), or to provide their own data to demonstrate its safety and value.
- During post-market reviews, Health Canada may issue a notice to all registrants of a particular active ingredient to submit specific studies needed to verify the continued acceptability and value of a pest control product. In this case, registrants can choose to either submit their own data in response to the notice or to rely on the data submitted by another registrant (e.g. by paying compensation).
The Regulations also set out provisions for mandatory negotiation and binding arbitration to determine the amount of compensation payable for reliance on a registrant’s test data.
A key objective of CETA is to eliminate trade barriers between Canada and the European Union (EU) on most goods. CETA’s Article 20.30 on intellectual property protection for plant protection products (i.e. pest control products) requires the creation of rules to avoid duplicative testing on vertebrate animals. However, the previous Act limited the range of data that an applicant could have relied upon when seeking to register a generic version of an existing registered pest control product or during a re-evaluation or special review (i.e. to data related to pest control products that are equivalent). This could have resulted in duplicative testing on vertebrate animals as applicants may not have been able to rely on certain existing studies that might have helped to establish the safety of the pest control product. Thus, to implement this requirement, Bill C-30 amended the Act to provide the flexibility to adjust Canada’s pest control product data protection program, via regulatory amendments, to allow reliance on any study, including those involving animals, if the Minister determines that study is necessary to support the application, re-evaluation or special review of a pest control product. Applicants and registrants will therefore be able to choose to rely on a wider range of studies (i.e. rather than providing their own data, possibly including data derived from duplicative animal testing).
Thus, under the amended Act, during both pre-market and post-market reviews, in addition to being able to rely on data concerning the equivalent product (the previous situation), an applicant (or registrant) can also choose to rely on the results of a relevant study (test data) from a non-equivalent product to meet their data requirements for registration. For example, a chemical-specific study that provides information on the amount of residue transferred to workers when checking a given crop for pests can be applied to the same activity for another product that is non-equivalent. Another example is to use data from the most potent, non-equivalent chemical (but same chemical group) to represent the toxic potential for the other chemicals that belong to that same chemical group (i.e. have the same toxic mode of action).
Health Canada is engaged in ongoing efforts to develop and implement testing methods that avoid the use of live animals, and adheres to the Three Rs (reduce, refine, replace), which are the guiding principles for more ethical use of animals in testing. As an example, Health Canada has implemented guidance and criteria for pest control product applicants and registrants concerning the waiving of acute toxicity data, and the extrapolation of data from one pest control product to another (often referred to as bridging). The guidance and criteria clarify two important concepts, which are to ensure that Health Canada is provided with the appropriate data required for decision-making and that unnecessary animal testing is avoided. The Bill C-30 amendments to the Act reinforced these efforts.
The objective of the amendments to the Regulations is to align the Regulations with the amendments to the Act in order to meet the CETA commitment to avoid duplicative animal testing.
The following amendments are made to the Regulations:
In section 17.1 of the previous Regulations, the definition of “test data” is amended to reflect the change in the Act indicating the test data is now “necessary.” This revision replaces the current wording “that is included in the information used by the Minister” with the word “necessary,” thus eliminating a redundancy in the definition (i.e. “is included in the information”) and incorporating the term now used in the Act.
In paragraph (b) of section 17.1 of the previous Regulations, the definition of “test data” is amended to indicate that in addition to being submitted in response to a notice delivered under subsections 16(3), 18(1), or 19(1) of the Act (as per the previous Regulations) it also “supports” a re-evaluation or special review. This aligns paragraph (b) with the wording of paragraph (a) and clarifies that in addition to being submitted in response to a notice, the data must support the re-evaluation and special review; thus, for example, data that is submitted but is found to be scientifically flawed or not relevant to the re-evaluation or special review, will be considered not to support the re-evaluation.
Section 17.3 of the previous Regulations is amended to include references to the new subsections 16(5.1) and 18(3.1) of the Act, which have been added via Bill C-30 and, allow a registrant to rely on data (including data derived from animal testing) relating to non-equivalent active ingredient data the Minister is satisfied is necessary for the re-evaluation or special review, respectively.
Subsection 17.8(1) of the previous Regulations is amended to clarify that an applicant may enter into an agreement with “each registrant” if the test data they choose to rely on is owned by different registrants. The wording of the previous Regulations used “the registrant” as there was no flexibility to include test data from multiple registrants of pesticides from non-equivalent active ingredients.
These changes will broaden the range of data that can be relied upon both: during an application to register or amend a registration of a pest control product (a premarket evaluation process); and during a re-evaluation or special review (post-market evaluation processes).
The “One-for-One” Rule does not apply to these amendments, as there are no expected increases in administrative costs or burden to business.
Small business lens
The small business lens applies to regulatory proposals that impact small business and that have nationwide cost impacts of over $1 million annually. The small business lens does not apply to these amendments, as the small costs associated with the amendments are expected to be well below the $1 million threshold.
The main Canadian industry associations for pest control product manufacturers — Croplife Canada and the Canada Consumer Specialty Products Association (CCSPA) — as well as various representatives of their member companies who own test data, were consulted on the regulatory amendments via face-to-face presentations on May 2 and 3, 2017. Additionally, on May 4, Health Canada consulted more broadly with interested and affected stakeholders, including generic pest control product manufacturers who are not members of Croplife Canada or CCSPA, via a webinar and conference call; invitees were provided a copy of the consultation presentation (with the amendments) on April 27. In addition to providing their views during the webinar, participants could also provide written comments by May 5, 2017, on the regulatory amendments.
Over 40 stakeholders participated in the May 4, 2017, webinar and conference call, and 10 written submissions were received. Overall, there were no major concerns expressed with the regulatory amendments. However, a variety of issues were raised with respect to the regulation of data protection for pest control products more generally.
Several stakeholders expressed a desire to have had more opportunities to provide their views on CETA’s Article 20.30 on intellectual property protection for plant protection products provisions and on the Bill C-30 amendments to the Act. Several stakeholders also expressed concern about the limited time available for consultations on the proposed amendments to the Regulations.
Several stakeholders, representing generic manufacturers, indicated their interest in Health Canada continuing progress towards the creation of an online-accessible database of existing test data with their protection status indicated, and to create a process to recognize when data had been compensated previously in the EU. While both of these operational issues fall outside the scope of the regulatory amendments, Health Canada indicated that with respect to the former, that work is continuing on having an accessible database for applicants and registrants to view the status of protected data; with respect to the latter, that such information can be disclosed at either negotiations or, if needed, at arbitration.
Several stakeholders, representing innovator registrants, suggested amending the Regulations to allow data protection of task forces (i.e. groups of companies that conduct scientific studies jointly) to be eligible for compensation, rather than registrants, as these are not always registrants of pest control products. While this issue falls outside the scope of the regulatory amendments, Health Canada notes that it is possible for any party, including a task force, to become a registrant under the Act by registering a pest control product.
Several innovator registrants indicated that while they understand and support broadening the range of data eligible for protection to allow an applicant (or registrant) to choose to rely on the results of a relevant study (test data) from a non-equivalent product to meet their data requirements, they feel that this should be limited to animal studies. However, the Bill C-30 amendments to the Act do not envisage such a limitation and Health Canada has long supported providing industry with the option to avoid the unnecessary duplication of studies, including those that do not involve testing vertebrate animals; indeed, that is the basis of the current data protection regime, which allows for the reliance on existing studies for compensation, rather than having to duplicate them.
Several innovator registrants also suggested that with the amendments applicants will be allowed to rely on existing older data that will not pass a modern scientific evaluation (i.e. to avoid having to rely on the data of, and compensate, innovator companies). However, the amendments will not have any impact on the test data requirements that all applicants are required to meet for any scientific evaluation conducted under the Act; no test data Health Canada deems to be invalid for regulatory purposes will be used for such an evaluation, whether it is from an older study or a more recent one.
Both innovator and generic stakeholder representatives suggested that Health Canada develop guidance on what conditions and scenarios data generated for one active ingredient can be relied upon for a separate and non-equivalent active ingredient. While some guidance on equivalency already exists, Health Canada will consider whether further guidance is needed.
Canada Gazette, Part I consultations
The amended Regulations were published in the Canada Gazette, Part I, on July 15, 2017, for a 15-day comment period. No comments were received.
Benefits to society and culture
Article 20.30 of CETA, paragraphs 6 and 7, require the establishment of rules to avoid duplicative testing on vertebrate animals for studies necessary to register pest control products. Canada is engaged in ongoing efforts to develop and implement testing methods that avoid the use of live animals, and adheres to the Three Rs (reduce, refine, replace), which are the guiding principles for more ethical use of animals in testing.
The Bill C-30 amendments to the Act and these regulatory amendments expand the scope of information that applicants and registrants (data holders) could rely upon, if that information is necessary and relevant for new pest control product applications, or re-evaluations or special reviews of older pest control products. As a result, if a test or study on vertebrate animals was protected under the previous Regulations (e.g. because it was used by the Minister in a decision to register a product), and is necessary and relevant for an application, re-evaluation or special review, it can be used or relied upon provided the processes for negotiation, binding arbitration and compensation set out in the existing Regulations are followed.
Thus, the regulatory amendments, along with existing Health Canada policies and guidelines on animal testing, will allow for duplicative tests on vertebrate animals to be avoided in more situations.
Benefits to the economy, business and trade
The time for generating the scientific data and evidence to support the registration of a pest control product ranges from several months to several years. The amendments potentially allow businesses incremental benefits as some of this time delay may be reduced as they can rely on more existing data and therefore enter the pest control products market at a faster rate.
Given that, with the amendments to the Regulations, applicants and registrants can have the option of relying on a wider range of test data (i.e. rather than generating their own test data), and are likely to opt for the lower-cost option, there can be a small incremental reduction to the cost of pest control product registration. This potential reduction in the cost might be reflected in the final price of pest control products for Canadians (e.g. growers), which can improve market efficiency. However, given that the amendments only somewhat broaden the existing program, any such impacts are likely to be minimal.
The Government of Canada also stands to benefit from these amendments because evaluators can rely on previously reviewed test data as opposed to reviewing newly generated test data that may be unnecessary or duplicative. The incremental benefits to Government (Health Canada) can include potential for reduced time spent reviewing unnecessary or duplicative test data and potential for more time that risk assessments of pesticides can focus on new data. In the pre-market context, this will be a saving as user fees cover only approximately 30% of the cost of an application to register or amend a registration. In the post-market context, this will also be a saving as annual charges paid by registrants for each registered pest control products only partially defray the costs of re-evaluations and special reviews. However, as the amendments will only somewhat broaden the current program, any such savings are likely to be limited.
Overall, it is anticipated that these amendments will not result in significant incremental cost increases for government, businesses, or consumers. In addition, it is important to note that in all cases, as the data protection program requires certain businesses to pay compensation to other businesses for the fair use of the latter’s data, the net cost to industry will always be zero.
Impacts on pre-market assessments
At the pre-market stage, the amendments create no additional costs to government, businesses, or consumers. The amendments will provide applicants with the option to rely on a wider range of data (i.e. for compensation) to demonstrate the safety and value of their pest control product. However, applicants will continue to retain the option of providing their own test data if they do not wish to rely on existing data. It is expected that applicants will generally choose the least costly option, which in most cases will likely be to rely on existing studies (test data) instead of unnecessarily duplicating them, including those that involve animals.
Impacts on post-market assessments
At the post-market stage, the amendments may in some cases result in some limited additional incremental costs to the registrants seeking to rely on another registrant’s test data. Previously, registrants would have the option to either provide their own data or pay to rely on others’ data during a re-evaluation or special review. However, as will be explained below, with the amendments, in some cases more data will either have to be compensated for or generated.
During re-evaluations or special reviews, the previous provisions in the Act and the Regulations allowed participating registrants to either provide their own data, or rely upon (and pay compensation for) any new data that Health Canada called in (e.g. via a notice to all relevant registrants) and used in the decision (i.e. to continue the registration as is, modify it or phase it out). However, the Minister could also have used other data that Health Canada had on hand, including data from a non-equivalent active ingredient under exclusive or compensable protection status, without giving consideration to compensation for that data holder; thus, in such cases, some registrants were implicitly “relying” on the data of another registrant without having to pay compensation.
Under the amendments to the Act and the amendments to the Regulations, any such data on hand from another non-equivalent active ingredient that is still under compensable protection status, and included in the information provided by the registrant to the Minister in response to a data call in notice, can be relied upon by a registrant with compensation payable to the data owner to support the re-evaluation or special review. They can, however, still choose to submit their own data. Thus, in such cases, registrants will have the incremental cost of either generating their own data or paying to rely on others’ data. It is expected that registrants will choose the lowest cost option, which in most cases will likely be to pay to rely on others’ data; in such cases, the net cost to industry will be zero, since the payment will be made by one registrant to another.
The cost of paying to rely on data can vary significantly depending on the specific test data, including the cost of generating it and how much compensable time is left (data with 10 years of compensable protection may be considered more valuable than data with 10 weeks of protection left). The Regulations provide for mandatory negotiation or binding arbitration to establish the amount of compensation payable. In all cases, registrants retain the option of responding to a notice by providing their own test data.
Thus, the regulatory amendments will make the data protection program more consistent and ensure that registrants cannot implicitly rely on the data of another registrant without having to pay compensation. This will be consistent with Canada’s commitments, under Article 1711 of the North American Free Trade Agreement and subsection 39(3) of the Agreement on Trade-related Aspects of Intellectual Property Rights set out in Annex 1C to the World Trade Organization (WTO) Agreement, to provide protection from unfair commercial use of proprietary test data.
Implementation, enforcement and service standards
Health Canada will seek to raise regulated parties’ awareness of the new requirements through its existing communications and outreach mechanisms. The effectiveness of these amendments will be evaluated as part of the regular evaluation of the broader pest control product regulatory program. The evaluation will include examination of whether, after the amendments for CETA came into force, applicants and registrants relied more frequently on previous studies involving vertebrate animals rather than completing new, duplicative studies, thereby helping to avoid duplicative testing on vertebrate animals.
These amendments will come into force on the day section 109 of CETA comes into force.
Pest Management Regulatory Agency
Policy, Communications and Regulatory Affairs Directorate
2720 Riverside Drive