- (i) a document that establishes that, as of the date the application is made, a negotiated settlement between the registrant and the data holder has been reached or an arbitral award has been made in respect of the test data and the data holder has not provided a letter of access referred to in section 17.1 to the registrant, or
- (ii) a copy of the letter of access referred to in section 17.1; and
- (i) a document that establishes that, as of the date the application is made,
- (A) the registrant and data holder are negotiating the compensation payable in respect of the test data,
- (B) the determination of the compensation payable in respect of the test data has been submitted to binding arbitration and an arbitral award has not been made, or
- (C) a negotiated settlement between the registrant and the data holder has been reached or an arbitral award has been made in respect of the test data and the data holder has not provided a letter of access referred to in section 17.17 to the registrant, or
(2) Section 16 of the Regulations is amended by adding the following after subsection (2):
Interpretation — data holder and test data
(2.1) In subsection (2), data holder and test data have the same meanings as in section 17.01.
2 The heading “Interpretation” before section 17.1 of the English version of the Regulations is replaced by the following:
Definitions
3 Section 17.1 of the Regulations is replaced by the following:
Definitions
17.01 The following definitions apply in this section and sections 17.02 to 17.17.
- (a) test data that is referred to in the definition exclusive rights ;
- (b) test data that is included in a scientific study that has been published; or
- (c) test data that is generated by a scientific study that is fully funded by a government or one of its institutions. ( données assujetties à des droits à payer )
- (a) test data that the applicant provides in support of an application to register a new active ingredient;
- (b) test data that the applicant provides in support of a concurrent application to register a new pest control product that contains the new active ingredient referred to in paragraph (a); or
- (c) test data that the applicant provides in support of an application to register a new compound or substance referred to in paragraph 2(b), if the compound or substance has never been an ingredient in a registered pest control product. ( droits exclusifs )
- (a) the use is for an agricultural purpose;
- (b) the use is supported by a federal or provincial agricultural authority;
- (c) the use is supported by crop residue data or dislodgeable foliar residue data. ( usage limité )
- (a) in support of an application to register a pest control product or to amend a registration made under section 7 of the Act, or
- (b) in the context of a re-evaluation or special review, in response to a notice initiating the process under subsection 16(3) or 18(1) of the Act or a notice requiring additional information under paragraph 19(1)(a) of the Act. ( données d’essai )
4 The heading before section 17.2 of the French version of the Regulations is replaced by the following:
Application
5 Sections 17.2 to 17.94 of the Regulations are replaced by the following:
Non-application — product copies
17.02 When an applicant wishes to use or rely on the test data of a registrant in order to register a pest control product that is equivalent to the registrant’s product by using an active ingredient provided by the registrant, sections 17.03 to 17.11 do not apply if
- (a) the registrant provides the Minister with a letter, signed by the registrant, that specifies the active ingredient that they agree to provide to the applicant; and
- (b) the only active ingredient used in the manufacture of the applicant’s pest control product is the one provided by the registrant.
Exclusive Rights
Period — general
17.03 (1) A registrant has exclusive rights for 10 years after the date of registration of the new active ingredient, of the new pest control product that contains the new active ingredient or of the new compound or substance.
Extension — minor uses
(2) The Minister must extend the period of exclusive rights if all of the following conditions are met:
- (a) the registrant meets one of the following requirements:
- (i) they proposed a minor use in the concurrent application to register a new pest control product referred to in paragraph (b) of the definition exclusive rights in section 17.01, or
- (ii) they made one of the following applications within seven years after the date of registration of the product referred to in subparagraph (i):
- (A) an application to amend its registration by adding a minor use, or
- (B) an application to register another new pest control product that contains the same active ingredient as the product and in respect of which a minor use is proposed;
Calculation of extension
(3) The Minister must apply the following rules when calculating an extension:
- (a) the period of exclusive rights is extended by one year for every three minor uses that are added, whether one or more at a time, to the registration for a total period of exclusive rights of 15 years; and
- (b) the maximum number of minor uses in respect of a crop group is the number of representative crops in the crop group.
When minor use removed
(4) The Minister must cancel any extension of one year if
- (a) the Minister, on his or her own initiative or in response to a request from the registrant, amends the registration and removes one or more minor uses; and
- (b) the remaining number of minor uses is insufficient to uphold the extension.
Consent
17.04 Subject to paragraph 17.05(1)(b), during the period of exclusive rights an applicant may use or rely on a registrant’s test data in an application to register a pest control product or amend a registration if the registrant provides the applicant with written consent to use or rely on the test data.
Compensation Payable
Registration
Conditions — use of or reliance on test data
17.05 (1) Subject to subsection 17.1(2), an applicant who makes an application to register a pest control product or to amend a registration may, in accordance with the agreement concluded with the data holder under subsection 17.07(2), use or rely on the following test data if they pay compensation to the data holder in accordance with the negotiated settlement or arbitral award for the period provided for in subsection (2) and if the applicant provides the Minister with a copy of a letter of access:
- (a) compensable data that the applicant wishes to use or rely on;
- (b) test data for which the data holder has exclusive rights, if the test data is relevant to the pest control product of the data holder and the test data is relevant to an active ingredient that is not equivalent to the active ingredient contained in the applicant’s pest control product; and
- (c) test data that was considered during an evaluation or review of a pest control product by a foreign regulatory authority and that the data holder has not previously provided to the Minister, if the following conditions are met:
- (i) the Minister has considered for the first time the decision that results from the evaluation or review of the pest control product by the foreign regulatory authority in support of the re-evaluation or special review decision of the data holder’s pest control product,
- (ii) the Minister requests that the data holder provide the Minister with the following in the form and manner directed by the Minister:
- (A) documents demonstrating that the test data was provided to the foreign regulatory authority in support of the evaluation or review of the pest control product, or in response to a request from the foreign regulatory authority relating to the evaluation or review,
- (B) documents demonstrating that the foreign regulatory authority considered the test data in support of its decision of the evaluation or review, and
- (C) the test data, and
Compensable period
(2) The period for which compensation is payable by the applicant to the data holder commences on one of the following days and must not exceed 12 years, except in the case of the test data referred to in paragraph (d) for which the period must not exceed the period set out in section 17.03:
- (a) in the case of compensable data in support of an application to register a pest control product of the data holder, the day on which the Minister receives the application;
- (b) in the case of compensable data in support of an application to amend the registration of a pest control product of the data holder, the day on which the Minister receives the application;
- (c) in the case of compensable data that is considered by the Minister during a re-evaluation or special review of a pest control product of the data holder, if the test data was provided by the data holder in response to a notice initiating the process under subsection 16(3) or 18(1) of the Act or a notice requiring additional information under paragraph 19(1)(a) of the Act, the day on which the Minister receives the data;
- (d) in the case of test data referred to in paragraph (1)(b), the day of registration referred to in subsection 17.03(1); or
- (e) in the case of test data referred to in paragraph (1)(c), the day on which the Minister initiates the re-evaluation or special review.
Minister to identify test data
17.06 For the purpose of subsection 7(2) of the Act, the Minister must provide the applicant with a list of the test data referred to in subsection 17.05(1) for which compensation may be payable by the applicant and in respect of which an agreement is required to be entered into between the applicant and each data holder whose data the applicant wishes to use or rely on.
Proposed agreement on test data
17.07 (1) On receipt of the list of test data, an applicant may deliver to each data holder a proposed agreement that specifies the test data that the applicant wishes to use or rely on.
Agreement entered into
(2) On receipt of the proposed agreement, the data holder must enter into the agreement with the applicant.
Negotiation of compensation payable and settlement
17.08 (1) When the agreement is entered into, an applicant and a data holder must, in order to reach a settlement, begin to negotiate the compensation payable in respect of the test data that the applicant wishes to use or rely on.
Period of negotiation and settlement of compensation payable
(2) The applicant and the data holder must reach a negotiated settlement in respect of the compensation payable
- (a) within 120 days after the day on which the data holder receives the proposed agreement; or
- (b) by the end of any additional negotiation period, if the parties agree in writing to continue negotiating.
Arbitration
17.09 (1) Despite subsection 17.08(2), in the absence of a negotiated settlement at the end of the negotiation and in accordance with the agreement entered into by the parties, the applicant may, by delivering to the data holder a written notice, submit the determination of the compensation payable to binding arbitration.
Notice
(2) The notice must contain the last offers of the applicant and the data holder, if they were presented in writing at the end of the negotiation.
Arbitral award
(3) The arbitrator must make an arbitral award within 120 days after the day on which the notice is delivered, unless
- (a) the parties agree to an extension before the end of that period and provide written notice to the arbitrator; or
- (b) the arbitrator provides written notice of an extension to the parties before the end of that period.
17.1 (1) When a negotiated settlement is reached or an arbitral award is made, the data holder must provide the applicant with a letter of access, signed by the data holder, confirming that the applicant may use or rely on their test data.
Failure to provide letter of access
(2) If the data holder fails to provide the letter of access within the period specified in the negotiated settlement or arbitral award, the applicant may use or rely on the test data without having to continue to comply with the settlement or award.
Early registration
17.11 (1) The applicant may, as soon as a notice referred to in subsection 17.09(1) has been delivered to the data holder, request that the Minister register their pest control product before obtaining a letter of access and may use or rely on the test data of the data holder if all of the following conditions are met:
- (a) the applicant enters into an escrow agreement with a third party;
- (b) the third party is entitled under the laws of a province to receive and hold an amount of money on behalf of another person;
- (c) under the escrow agreement, the applicant deposits with the third party an amount of money equal to the data holder’s last offer referred to in subsection 17.09(2);
- (d) the escrow agreement contains all of the following terms:
- (i) the third party holds the money until it becomes payable in accordance with the escrow agreement,
- (ii) on receipt of a copy of the registration certificate, the third party pays the data holder an amount of money equal to the applicant’s last offer referred to in subsection 17.09(2),
- (iii) on receipt of a copy of the negotiated settlement or arbitral award, the third party pays the data holder the compensation payable as determined in the settlement or award, less the amount paid under subparagraph (ii),
- (iv) the third party pays any remaining balance to the applicant.
Copy and proof to Minister
(2) The applicant must send the Minister both a copy of the escrow agreement and proof that the applicant has deposited the money in accordance with paragraph (1)(c).
When no last offer in writing
(3) If the data holder’s last offer was not made in writing at the end of the negotiation, the conditions set out in subsection (1) and subsection (2) do not apply.
Re-evaluation and Special Review
Conditions — use of or reliance on test data
17.12 (1) Subject to subsection 17.17(2), in the context of a re-evaluation or special review and on receipt of a notice initiating the process under subsection 16(3) or 18(1) of the Act or a notice requiring additional information under paragraph 19(1)(a) of the Act, a registrant may, in accordance with the agreement concluded with the data holder under subsection 17.14(2), use or rely on the following test data if they pay compensation to the data holder in accordance with the negotiated settlement or arbitral award for the period set out in subsection (2):
- (a) compensable data that the registrant wishes to use or rely on that is
- (i) provided to the Minister, in the context of the re-evaluation or special review, by the data holder in response to a notice initiating the process under subsection 16(3) or 18(1) of the Act or to a notice requiring additional information under paragraph 19(1)(a) of the Act, and
- (ii) relevant to the pest control product that is the subject of the re-evaluation or special review; and
- (i) the test data is already compensable data, or
- (ii) the data holder already has exclusive rights in respect of the test data.
Compensable period
(2) The period for which compensation is payable for the following test data by the registrant to the data holder commences on one of the following days and must not exceed 12 years, except in the case of the test data referred to in subparagraph (b)(ii) for which the period must not exceed the period provided for in section 17.03:
- (a) in the case of compensable data provided by the data holder under paragraph (1)(a), the day on which the Minister receives the data; or
- (b) in the case of test data referred to in paragraph (1)(b),
- (i) if the data is already compensable data, one of the days referred to in paragraph 17.05(2)(a), (b), (c) or (e), as the case may be, or
- (ii) if the data holder already has exclusive rights in respect of the data, the day of registration referred to in subsection 17.03(1).
Minister to identify test data
17.13 For the purposes of subsections 16(5) and (5.1) and 18(3) and (3.1) of the Act, the Minister must make available to data holders and other registrants, on the day on which the Minister makes public the decision statement referred to in subsection 28(5) of the Act, a list of the test data referred to in subsection 17.12(1) in respect of which compensation may be payable by any of those registrants and in respect of which an agreement is required to be entered into between the registrant and each data holder whose data the registrant wishes to use or rely on.
Proposed agreement on test data
17.14 (1) Either the registrant or the data holder may deliver to the other party a proposed agreement that specifies the test data that the registrant wishes to use or rely on no later than 60 days after the day on which the decision statement referred to in subsection 28(5) of the Act is made public.
Agreement entered into
(2) The registrant or the data holder must, on receipt of the proposed agreement from the other party, enter into the agreement with the other party.
Negotiation of compensation payable and settlement
17.15 (1) When the agreement is entered into, a registrant and a data holder must, in order to reach a settlement, begin to negotiate the compensation payable in respect of the test data that the registrant wishes to use or rely on.
Period of negotiation and settlement
(2) The registrant and the data holder must reach a negotiated settlement in respect of the compensation payable
- (a) within 120 days after the day on which the decision statement referred to in subsection 28(5) of the Act is made public; or
- (b) by the end of any additional negotiation period, if the parties agree in writing to continue negotiating.
Arbitration
17.16 (1) Despite subsection 17.15(2), in the absence of a negotiated settlement at the end of the negotiation and in accordance with the agreement entered into by the parties, the registrant or the data holder may, by delivering to the other party a written notice, submit the determination of the compensation payable to binding arbitration.
Notice
(2) The notice must contain the last offers of the registrant and the data holder, if they were presented in writing at the end of the negotiation.
Arbitral award
(3) The arbitrator must make an arbitral award within 120 days after the day on which the notice is delivered, unless
- (a) the parties agree to an extension before the end of that period and provide written notice to the arbitrator; or
- (b) the arbitrator provides written notice of an extension to the parties before the end of that period.
17.17 (1) When a negotiated settlement is reached or an arbitral award is made, the data holder must provide the registrant with a letter of access, signed by the data holder, confirming that the registrant may use or rely on their test data.
Failure to provide letter of access
(2) If the data holder fails to provide the letter of access within the period specified in the negotiated settlement or arbitral award, the registrant may use or rely on the test data without having to continue to comply with the settlement or award.
6 (1) Paragraph 38(3)(b) of the Regulations is replaced by the following:
- (b) the test data referred to in paragraphs (a) and (b) of the definition exclusive rights in section 17.01 that were provided in support of its registration are no longer subject to exclusive rights within the meaning of that definition.
(2) Section 38 of the Regulations is amended by adding the following after subsection (3):
Interpretation — test data
(3.1) In subsection (3), test data has the same meaning as in section 17.01.
Transitional Provisions
7 The following definitions apply in this section and in sections 8 to 12:
Act means the Pest Control Products Act . ( Loi ) commencement day means the day on which these Regulations come into force. ( date d’entrée en vigueur ) former Regulations means the Pest Control Products Regulations as they read immediately before the commencement day. ( règlement antérieur ) new Regulations means the Pest Control Products Regulations as they read on the commencement day. ( nouveau règlement )
8 (1) The new Regulations apply in respect of an application to register a pest control product or to amend a registration if a decision under subsection 8(1) of the Act in respect of the application is pending on the commencement day.
(2) Despite section 17.06 of the new Regulations, the Minister is not required to provide a new list in respect of an application referred to in subsection (1) if the Minister provided a list in respect of the application under subsection 17.8(1) of the former Regulations.
9 If a portion of a period of exclusive use referred to in section 17.5 of the former Regulations remains on the commencement day, the portion is deemed to be the remaining portion of a period of exclusive rights as defined in section 17.01 of the new Regulations.
10 In the context of a re-evaluation or special review of a pest control product, the new Regulations apply in respect of test data received by the Minister in response to one of the following notices that was delivered on or after June 3, 2010 and before the commencement day, if the Minister has not made public a decision statement in respect of the re-evaluation or special review under subsection 28(5) of the Act before the commencement day:
- (a) a notice initiating the re-evaluation or special review under subsection 16(3) or 18(1) of the Act; or
- (b) if the re-evaluation or special review commenced on or after June 28, 2006, a notice requiring additional information under paragraph 19(1)(a) of the Act.
11 In the context of a re-evaluation or special review of a pest control product, the former Regulations apply in respect of test data received by the Minister in response to one of the following notices that was delivered on or after June 3, 2010 and before the commencement day, if the Minister has made public a decision statement in respect of the re-evaluation or special review under subsection 28(5) of the Act before the commencement day:
- (a) a notice initiating the re-evaluation or special review under subsection 16(3) or 18(1) of the Act or a notice initiating any previous re-evaluation or special review under those provisions; or
- (b) if the re-evaluation or special review or any previous re-evaluation or special review commenced on or after June 28, 2006, a notice requiring additional information under paragraph 19(1)(a) of the Act.
12 In the context of a re-evaluation or special review of a pest control product, the former Regulations apply in respect of test data provided in support of an application by another registrant under subsection 7(1) of the Act to register another pest control product or to amend its registration if the following conditions are met:
- (a) the active ingredient contained in the pest control product that is the subject of the re-evaluation or special review is not equivalent to the active ingredient contained in the other pest control product;
- (b) the re-evaluation or special review commenced on or after June 28, 2006;
- (c) the application was made on or after June 3, 2010; and
- (d) the Minister has made public a decision statement in respect of the re-evaluation or special review under subsection 28(5) of the Act on or after September 21, 2017 but before the commencement date.
Coming into Force
13 These Regulations come into force on the 180th day after the day on which they are published in the Canada Gazette , Part II.
REGULATORY IMPACT ANALYSIS STATEMENT
( This statement is not part of the Regulations .)
Issues
While there are data compensation provisions in the Pest Control Products Regulations (PCPR) for re-evaluation and special review (post-market review), stakeholders have indicated they are not comprehensive and clear. In addition, minor technical amendments are required to bring further clarity to the existing data compensation provisions.
Background
Pest control product registration system
Pesticides are regulated in Canada by Health Canada’s Pest Management Regulatory Agency (PMRA) to ensure that they pose minimal risk to human health and the environment. The Pest Control Products Act (PCPA) governs how pesticides are regulated based on scientific risk assessment and risk management, before and after they are registered for use in Canada.
Before a pest control product can be approved for use and marketed in Canada, it must be registered or otherwise authorized under the PCPA. In order to be registered, pest control products must undergo a thorough pre-market, science-based assessment by PMRA to determine if the risks to human health and the environment are acceptable and the products have acceptable value. If the value of a pest control product or its health or environmental risks are unacceptable, it is not registered for use in Canada.
Once a pest control product is registered for use in Canada, it becomes subject to a system of post-market risk management controls under the PCPA. This includes re-evaluations and special reviews (i.e. post-market reviews), compliance and enforcement activities, and reporting of health and environmental incidents.
Under the PCPA, registered pest control products are generally re-evaluated on a 15-year cycle to ensure that registered pesticides continue to meet current health and environmental standards and continue to have value. Unlike re-evaluations, special reviews have narrower scopes, and they may be triggered when the Minister has reasonable grounds to believe that health or environmental risks of the pest control product, or its value, are unacceptable. In either a re-evaluation or special review, the Minister can decide to continue the registration as is, modify it (e.g. by establishing measures to mitigate risks), or cancel it.
Pre-market data compensation program
The PCPA and the PCPR set out a data compensation program for pest control products. footnote 2 During a pre-market review, an applicant seeking to register a new pest control product or amend a product’s registration may choose to provide their own data to demonstrate that the health and environmental risks and the value of their product are acceptable, or they may choose to pay compensation to use or rely on the data of other registrants (to simplify, the term “rely” is used in the remainder of the Regulatory Impact Analysis Statement [RIAS]).
Under the PCPR’s protection of test data provisions, 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 by requiring competing product manufacturers to wait and to pay compensation before gaining market access and providing timely grower access to competitively priced generic pesticides. The PCPR gives 10 years of exclusive protection to data supporting a new registration that contains an active ingredient never before registered in Canada. The exclusive 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 exclusive data by providing them with a Letter of Access (LOA). Data is given 12 years of compensable protection status if it is considered by the Minister to support the subsequent registration or amendment in respect of a pest control product with a previously registered active ingredient. This compensable data could be used by a registrant to amend a registration or by an applicant to register a new product provided compensation is paid to the data holder. Once either the exclusive period or the compensable period has lapsed, the data becomes generic and can be used or relied upon without consent and without the payment of compensation.
The PCPR also set out provisions for negotiation and binding arbitration to determine the amount of compensation payable for reliance on a registrant’s compensable data. footnote 3 The Agreement for Data Protection under Section 66 of the Pest Control Products Act is prescribed by the Minister of Health and sets out the process for determining the amount of compensation payable for the reliance on a registrant’s data, including mandatory negotiations and binding arbitration. Registrants and applicants are able to download the Agreement from the Health Canada website.
The program allows Canada to meet international commitments, including under Article 20.45 of the Canada–United States–Mexico Agreement (CUSMA), Article 39 of the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) set out in Annex 1C to the World Trade Organization (WTO) Agreement, and Article 20.30 of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), footnote 4 to provide protection from unfair commercial use of data.
Post-market data compensation program
The Minister initiates a re-evaluation or a special review for a registered pest control product by delivering a written notice, under subsections 16(3) or 18(1) of the PCPA, to registrants explaining the reasons for the initiation (e.g. to verify the continued acceptability of a pest control product) and, if necessary, specifying the data required for such re-evaluation or special review. Under subsection 19(1) of the PCPA, additional data may be required during the re-evaluation or special review. PMRA publishes its proposed decision document respecting a post-market review for consultation followed by a final decision document.
As indicated above, the current data compensation provisions of the PCPR came into force in June 2010. These provisions apply to the reliance on data for the purpose of re-evaluations and special reviews as per section 17.3 of the PCPR. Specifically, section 17.3 indicates that the pre-market data compensation process applies “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), 16(5.1), 18(3) or 18(3.1) of the Act.” However, the lack of specific post-market provisions in the PCPR has led to questions of clarity about the processes that registrants are to follow for reliance on data during post-market reviews.
Objective
The primary objective of the regulatory amendments is to clarify data compensation provisions for re-evaluations and special reviews by specifying a process under which registrants who are data holders and registrants who are relying on the data of data holders can establish compensation payable, what data is subject to compensation and when to initiate negotiations and binding arbitration (if necessary).
Description
The following amendments are made to the PCPR.
Minor technical changes for clarification
The minor changes to the existing PCPR include updated wording to clarify the data compensation provisions. For example, these amendments include changing the term “exclusive use” to “exclusive rights” and including a definition of that term to clarify its meaning. To distinguish registrants that hold data that can be compensated from registrants who are relying on their data, a definition of “data holder” is included. References to section 12 of the PCPA are removed for applications received under section 7 of the PCPA as these were for conditional registrations where some of the data came in after the date of registration and PMRA no longer grants these (provisions on conditional registrations were repealed in 2017). The amendments use the words “considers … in support of” to replace the word “used” in relation to data necessary to support a pre- or post-market registration decision as the former is more specific; this amendment will not change current practice or administration.
Other minor changes include removing references to “certified mail” as the delivery requirements are set out in section 62 of the PCPA and removing section 17.2 of the PCPR that echoes the requirement within subsection 7(2) of the PCPA that an applicant can rely on information provided by other registrants if the active ingredient of the applicant’s pest control product is equivalent to the active ingredient of a registered pest control product. As well, registrants relying on others’ data will be required to provide an LOA or documents demonstrating that they and the data holder are negotiating or that the matter has been submitted to binding arbitration, or that though a negotiated settlement has been reached or an arbitral award made, the data holder has not provided the registrant an LOA at the next renewal following a re-evaluation or special review decision. Also, to better reflect its focus and activities, PMRA is now calling the program “exclusive rights and compensable data” rather than “protection of test data.” Therefore, the title of the regulatory proposal has been updated to Regulations Amending the Pest Control Products Regulations (Exclusive Rights and Compensable Data) .
Foreign test data eligibility criteria
Under the previous regulations, where a generic applicant wishes to rely on existing data at PMRA to support their application, and a relevant re-evaluation or special review has been completed that references a foreign regulatory authority evaluation or review, then eligible underlying foreign test data considered by the foreign regulatory authority may be compensable by the applicant. These amendments further require that at the time of the generic application, the data holder must provide documents establishing that the data was submitted to or requested by that foreign regulatory authority and considered in support of the foreign evaluation or review decision, and must also provide the data to PMRA in order to receive compensation.
Activities at the end of the re-evaluation or special review
The previous regulations indicated that “the Minister must provide the applicant with a list of the compensable data” without providing detail regarding how this works in re-evaluations and special reviews. Under section 17.13 of the amendments, at the end of the re-evaluation or special review (i.e. when the final decision statement is made public under subsection 28(5) of the PCPA), it is clarified that the Minister can make available a single list of test data considered by the Minister in support of the review decision and for which compensation may be payable. This list, to be made available to data holders and other registrants, can include data that was called in by the Minister for the re-evaluation or special review under subsections 16(3), 18(1), or 19(1) of the PCPA and data that was already on hand and relevant to a non-equivalent active ingredient if the latter was considered in support of a previous pre- or post-market review.
Compensability of exclusive rights data from non-equivalent active ingredients
The PCPR is amended to allow for compensation to be payable for exclusive rights status data relevant to non-equivalent active ingredients where it is relied on by a registrant in a re-evaluation or special review or by an applicant with an application to register or amend the registration of a pest control product. This is being implemented further to Canada’s obligations under CETA. By contrast, exclusive rights data that was previously submitted to the Minister for the active ingredient under review and that is consequently on hand for a re-evaluation or special review will be considered by the Minister in support of a re-evaluation or special review decision without the requirement for compensation (as per current legislation).
Negotiation and arbitration (Agreement for Exclusive Rights and Compensable Data under Section 66 of the PCPA for Re-evaluations and Special Reviews)
Under section 66 of the PCPA, the Minister determines the terms and conditions of agreements entered into by registrants and data holders for the purposes of determining compensation. Under the amendments, either the registrant wishing to rely on the data holder’s data or the data holder themselves may deliver a proposed agreement to the other party that specifies the test data that the registrant wishes to rely on. Parties will have 60 days after the final re-evaluation or special review decision is made public under subsection 28(5) of the PCPA to deliver the proposed agreement to the other party. As per current requirements, when an agreement is entered into, parties must begin to negotiate the amount of compensation payable to the data holder.
Under the amendments, the negotiation period will run for 120 days after the final decision statement is made public under subsection 28(5) of the PCPA but can be extended upon agreement between the parties. This will provide registrants flexibility to negotiate compensation at the end of the re-evaluation or special review process, if they prefer, once they know what data may be relied on. At the end of the negotiation period, if no settlement is reached, either party may trigger binding arbitration that will last for 120 days, unless the parties or the arbitrator extend the period.
PMRA has previously published a section 66 Agreement for use in the context of generic pest control product applications that will be updated to align with these amendments. There will be a separate “agreement” specifically for use in re-evaluations and special reviews called “Agreement for Exclusive Rights and Compensable Data under Section 66 of the PCPA for Re-evaluations and Special Reviews” also published on PMRA’s website.
Transitional provisions
Provisions are included that provide a clear transition to the amendments when they come into force. The amendments generally apply to test data received in the context of any pending re-evaluation or special review where a final decision statement under subsection 28(5) of the PCPA has not yet been made public on the coming into force. The amendments also apply to pending applications that have not had a final decision made under subsection 8(1) of the PCPA on the coming-into-force date of these amendments. Additionally, any established lists of compensable data made in respect of an application, before the coming-into-force date will continue to be applicable under these amendments. As well, any exclusive or compensable protection status periods that started before the coming-into-force date continue under these amendments as exclusive rights or compensable protection periods, respectively.
Regulatory development
Third-party data compensation program review
In 2014, PMRA requested advice from a neutral third party (Intersol) to assess whether its pesticide data compensation program was achieving the right balance, thereby optimizing its impact on the competitiveness of the Canadian agricultural sector. In developing its recommendations, the third party consulted extensively with innovator companies and companies that rely on the data of data holders, as well as trade associations and PMRA. The Intersol Report recommendations for PMRA focused on the preparation of compensable data lists, the compensable status of foreign test data, guidance on the re-evaluation and special review process, conduct of the arbitration process, time limits for applicant decision-making, and for the monitoring and review of the program’s performance. In 2016, PMRA published its response to the Report, indicating that it would be developing proposed regulatory changes to clarify data compensation requirements during re-evaluations and special reviews and adding criteria for the compensable status of foreign test data. footnote 5
Agri-food and Aquaculture Roadmap
During the 2018 targeted regulatory review of the agri-food and agriculture sectors, stakeholders likewise recommended that the PCPR be amended to clarify the process for data compensation in the post-market context. Specifically, the Agri-food and Aquaculture Regulatory Roadmap identified that data compensation requirements for pesticides are not clear enough and do not do enough to help industry reach compensation agreements. footnote 6 Therefore, regulatory amendments relating to data compensation during post-market reviews are included in the Health Canada Forward Regulatory Plan. footnote 7
Consultation
PMRA consulted pesticide industry stakeholders via a webinar in 2018 on a proposed approach for regulating data compensation during post-market reviews (i.e. re-evaluations and special reviews) and to seek stakeholders’ comments on that approach. Stakeholders were provided 60 days to provide written comments on the proposal. Comments were received from six respondents, including three representing innovator registrants, two representing generic registrants, and one from the trade association CropLife Canada. There was strong support from all respondents for the general principle that registrants must generate data or commit to reliance on others’ data from the outset of the re-evaluation or special review through PMRA requiring responses to notices issued under sections 16, 18, and 19 of the PCPA. However, all respondents indicated they would require further details on the revised section 66 Agreement, timelines, and the amendments’ wording to fully comment on the proposal. To address this concern, PMRA developed and distributed to stakeholders a second document outlining how the regulatory changes would interact with a new section 66 Agreement for use in re-evaluations and special reviews and provided 30 days to provide further written comments.
Prepublication in the Canada Gazette , Part I
The amendments were prepublished in the Canada Gazette , Part I, on June 11, 2022, followed by a 75-day comment period. PMRA also published the proposed Agreement for Exclusive Rights and Compensable Data under section 66 of the PCPA for Re-evaluations and Special Reviews on July 26, 2022, and held a stakeholder webinar and conference call to discuss both on July 28, 2022, in advance of the comment period ending on August 25, 2022. Approximately 59 stakeholders participated in the webinar and conference call, representing the pesticide industry, growers, and non-government organizations. The comments received represented approximately 42 of these stakeholders.
Written comments were received from CropLife Canada, representing developers, manufacturers and distributors of plant science innovations for pest control products and products of modern plant breeding. In addition, written comments were received from four individual innovator registrants who are also CropLife members. Written comments were received from the Generic Crop Protection Group of Canada (the Generic Group), representing 10 generic product manufacturers and regulatory partners. Overall, there were no major concerns expressed with the regulatory amendments, and only one comment resulted in a minor change to the regulatory text. However, a variety of issues were raised with respect to exclusive rights and compensable data implementation as related to re-evaluations and special reviews, and those directly related to the amendments are discussed below. Other issues raised will be addressed through notices, section 66 agreements, or guidance.
Exclusive rights definition
CropLife and an innovator registrant requested that the definition of exclusive rights be modified to include the word “exclusive” or that “exclusive” be defined elsewhere to provide additional clarity. In response, PMRA has added the word “exclusive” to the definition of “exclusive rights” as it clarifies for parties that these amendments do not change the nature of the exclusive period, and it does not change the meaning of the definition.
Registration renewals
CropLife and several innovators individually expressed interest in ensuring timely removal from the market of any registrant relying on data who did not comply with the settlement or award and did not pay the compensation owing. One suggestion from innovators was to cancel the registrant’s registration before the next registration renewal as renewal periods are generally up to five years in duration. Generic product representatives indicated they preferred that all registrants be provided a set two-year period to submit the LOA as the renewal period is different for each registration.
The amendments provide that following a re-evaluation or special review decision, either party can initiate negotiations within 60 days of the final decision and binding arbitration if necessary. Also, an arbitral award is enforceable at court as per the Commercial Arbitration Act and Code. Additionally, a registrant’s application to renew following a re-evaluation or special review decision must be accompanied by an LOA or documents that indicate that parties are still in negotiation or arbitration, or that though a negotiated settlement has been reached or an arbitral award made, the data holder has not provided the registrant an LOA. Therefore, no changes to the amendments were considered necessary and none were made as a result of these comments.
Other comments
The Generic Group indicated that replacing the word “use” in the previous regulations with the word “considers” through these amendments could result in including data that was not relevant to the registration decision in the list of data for which compensation may be payable. This wording change does not alter PMRA’s current interpretation or administration, and all data must be considered in support of, and therefore necessary for, the final evaluation decisions in order to receive compensable status or exclusive rights.
It was requested by two innovator registrants that for re-evaluations and special reviews, the start date of the compensable status period should be when the list of data for which compensation may be payable is established to allow for a full 12 years for compensation eligibility for data submitted in response to a call-in. Changes to the compensable time periods for re-evaluations and special reviews from the date the called-in data is received were not part of the proposal and are not being considered at this time.
An innovator registrant requested that sections 17.1 and 17.17 conform to the way in which section 17.94 of the previous regulations is drafted and require the data holder to provide the registrant with an LOA in accordance with the negotiated settlement or arbitral award. No changes were made to the amendments as a result of this comment. Sections 17.1 and 17.17 require the LOA to be provided in accordance with the settlement or award.
An innovator registrant indicated that section 17.12 does not provide sufficient clarity regarding the treatment of data on hand and indicated that all data should be considered compensable provided it has been relied upon by PMRA in a re-evaluation and special review decision. PMRA’s approach for re-evaluations and special reviews is that all data on hand (i.e. previously submitted) for the active ingredient under review do not require compensation for that review. However, any called-in data or data under compensable or exclusive status relevant to another active ingredient that is not equivalent to the one under review will be compensated for if considered in support of the re-evaluation or special review.
There were requests from two innovator registrants to apply the amendments for re-evaluations and special reviews retroactively back to August 2007 when the Protection of Proprietary Interests in Pesticide Data in Canada (DIR2007-03) policy came into effect. It was argued that allowing the retroactive application of the amendments would ensure that all registrants in Canada have paid similar costs to maintain their registrations. The transitional provisions prescribe that the previous regulations will apply to any data received in response to a call-in notice from June 3, 2010, forward, providing the re-evaluation or special review commenced after June 28, 2006 (i.e. the date the new PCPA came into force), and the final decision has been made before the coming into force of these amendments. Based on the transitional provisions, the amendments will apply to any data received in response to a call-in notice from June 3, 2010, forward, providing the re-evaluation or special review commenced after June 28, 2006, and a decision is pending at the coming into force of these amendments. No changes were made to the proposal as the result of this comment.
Both CropLife and the Generic Group commented on the need to have an opportunity for input and review of the list of data for which compensation may be payable prior to it being made available for parties to commence negotiations. PMRA is working on guidelines for the establishment of the list of data for which compensation may be payable.
The Generic Group requested that only the foreign test data provided in response to a request by a foreign regulatory authority should be compensable and studies that are no longer compensable in the foreign jurisdiction should not become compensable in Canada. Under the amendments, data will be eligible for compensable status in Canada if the conditions previously discussed in the description are met, including demonstrating that it was submitted for the foreign review and considered in support of that review decision. If the data is new to Canada, it can receive exclusive rights or compensable data status regardless of its protection status in a foreign jurisdiction.
Instrument choice
In developing these amendments, two instrument options were considered: continue to rely on the previous section 17.3 of the PCPR, which indicates the pre-market exclusive rights and compensable data application process applies to re-evaluations and special reviews “with any necessary modifications,” or draft separate amendment provisions for re-evaluations and special reviews. The option to proceed with amendments was selected, since it provides for a clear legal process for exclusive rights and compensable data in the post-market context while providing clarity for regulated parties on the issues of concern to them. These issues included the need to clarify which party can trigger mandatory negotiation and binding arbitration process, when and how to trigger such processes, and when and how lists of data for which compensation may be payable will be made available. The amendments also allow PMRA to address the compensable status of foreign test data criteria recommended in the Intersol Report.
Stakeholders were largely in agreement with the above-mentioned design option.
Regulatory analysis
Benefits and costs
Costs to government
Costs to PMRA to implement the Regulations will be in the form of providing communications and updating guidance documents to stakeholders (applicants, registrants and data holders).
Costs to industry
Costs to industry will include the costs for applicants and registrants to familiarize themselves with the amendments. This cost is expected to be minor as most registrants have been involved with the consultations to date.
There will be costs under some circumstances for data holders wishing to be compensated for data considered in foreign regulatory reviews, as they will need to provide additional information to PMRA, as per the description above. This cost is not expected to be significant as these registrants already provide a cover letter for this purpose as a process requirement under the previous Regulations when an application is made under subsection 7(2) of the PCPA and the applicant wishes to rely on a data holder’s data. Further, PMRA may direct that a data holder include supporting documents with this cover letter, or add the reference source (e.g. a web link or page number of the foreign review) to this cover letter. This additional information will assist PMRA to establish which data requires compensation and will be included in the list of test data.
Benefits
There will be added clarity for both industry and PMRA as the additional detail set out in the amendments provides more certainty in the process for data compensation in the context of post-market reviews. As indicated in the Agri-Food and Aquaculture Roadmap, this will help registrants reach compensation agreements in a more timely manner. PMRA can benefit from reduced costs, as it may decide to no longer review, compile and send a list of data for which compensation may be payable to each registrant for each review. Instead, there can be one list per review made available at the time of the final re-evaluation or special review decision. Likewise, industry can benefit from having one list to refer to rather than having to seek and review multiple lists.
There will be a benefit to data holders who will be compensated for exclusive rights status data considered in pre- and post-market registration decisions involving non-equivalent active ingredients. Registrants and applicants choosing to rely on the data of data holders with exclusive rights from a non-equivalent active ingredient will have to pay compensation to the data holder. However, this will benefit the registrants choosing to rely on this data as they will not have to provide their own data, allowing for more options to keep their products on the market.
Clarifying that either party can trigger a negotiation or arbitration following a re-evaluation or special review will likewise clarify the process and help data holders and other registrants to enter into these processes in a predictable and timely manner.
Small business lens
Most major pest control product registrants (data holders) are multinationals with subsidiary offices representing them in Canada. However, PMRA estimates that most registrants are small businesses under the definition of having fewer than 100 employees. Small businesses are expected to have the same costs and benefits as described above, as these amendments will apply to small, medium and large businesses equally. Small businesses are expected to benefit from being allowed to rely on data in more situations, such as exclusive rights status data considered for re-evaluation or special review registration decisions involving non-equivalent active ingredients, instead of either providing their own data or having to leave the market. At the same time, data holders are expected to benefit because if their exclusive rights status data is considered in such situations they will have the opportunity to be paid compensation.
Small businesses will be required to incur incremental compliance costs to learn the new processes; however, these are expected to be low. Most registrants, including those that are small businesses, are expected to be familiar with the existing requirements and have been actively involved in consultations. They will also see more certainty in the process, which will provide clearer options for how to keep their products on the Canadian market.
These amendments are intended to improve conditions for a market with clear rules, in support of fair transactions for data used in support of re-evaluations and special reviews. Market transactions will take place under conditions where an exchange is favourable to both parties; therefore, no flexibility specifically for small businesses was considered.
One-for-one rule
The one-for-one rule applies since there will be an incremental increase in administrative burden on businesses, and the amendments are considered a burden under the rule. This increase in administrative burden has been estimated at an annualized cost of $7, as calculated in accordance with the Red Tape Reduction Regulations (2012 price levels and discounted to 2012 at a discount rate of 7%).
This administrative burden increase is associated with requirements to receive compensable data status for underlying data that support a foreign regulatory authority’s evaluation or review. To be eligible, at the time of a generic application, the data holder will have to provide a document or a reference that indicates the data was submitted for or called in by that foreign regulatory authority and considered in support of the evaluation or review. PMRA has observed over the last three years only one registration using data from a foreign review. In order to not underestimate this cost, it is assumed that this may occur up to once every two years, or a frequency of 0.5 per year. It is also assumed that a data holder will require at most one hour to provide evidence (e.g. documentation, links to references) to support compensable data status, and this task will be performed by the national occupational code for administrative occupations at a cost of labour of nearly $30 an hour (2012 CAD including overhead costs).
Regulatory cooperation and alignment
These amendments are modelled, in part, on the United States Environmental Protection Agency (U.S. EPA) system, and are consistent with CUSMA, CETA and TRIPS, which require protection of pest control product regulatory test data from unfair commercial use.
As well, on September 21, 2017, the PCPA and the PCPR amendments came into force regarding protecting test data across non-equivalent active ingredients to implement CETA. As noted above, aspects of the amendments help to fulfil obligations under CETA.
Strategic environmental assessment
In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals , a preliminary scan concluded that a strategic environmental assessment is not required.
Gender-based analysis plus
No gender-based analysis plus (GBA+) impacts have been identified for these amendments.
Implementation, compliance and enforcement, and service standards
Implementation
To provide registrants and applicants with time to adjust to the amendments, Health Canada is delaying the coming into force as part of the implementation. The amendments come into force six months after the day on which they are published in the Canada Gazette , Part II.
The regulatory amendments may result in changes to related policies and interpretive guidance. Consistent with Health Canada’s obligations under the PCPA, consultation on those changes to policies and guidance will take place as required.
Compliance and enforcement
Health Canada encourages, promotes, maintains and enforces compliance with the PCPA through active prevention; inspections, including surveillance; and enforcement response actions. Active prevention aims to educate, facilitate and promote compliance as well as to communicate regulatory information. Inspections are designed to determine the level of compliance of users, distributors and registrants of pesticides with the general provisions of the PCPA and its regulations, as well as specific terms and conditions of registration.
Enforcement response may include warning letters; detention, seizure and forfeiture of products; compliance orders under the PCPA; and notices of violation with warning or monetary penalty under the Agriculture and Agri-Food Administrative Monetary Penalties Act .
Compliance with the PCPA and its regulations is achieved through a network of officers and inspectors across Canada. Health Canada regional offices also have formal agreements with provincial pesticide regulatory departments, providing a basis to collaborate with them in inspections and in the development and delivery of compliance activities.
Health Canada follows an established compliance and enforcement policy to promote and enhance fair treatment of the regulated community.
Service standards
PMRA follows established service standards, or defined timelines, for evaluating new or amended registrations as outlined in PMRA’s Management of Submissions Policy. footnote 8
Contact
Jordan Hancey
Policy and Operations Directorate
Pest Management Regulatory Agency
Health Canada
2720 Riverside Drive
Ottawa, Ontario
K1A 0K9
Email: pmra.regulatory.affairs-affaires.reglementaires.arla@hc-sc.gc.caFootnotes
Footnote aS.C. 2020, c. 1, s. 206
