On December 17, 2018 CPDA-Canada submitted comments in response to the Pest Management Regulatory Agency (PMRA) updated consultation that proposes additional changes to the Agreement for Data Protection under Section 66 of the Pest Control Products Act (PCPA), commonly referred to as the Ministerial Agreement for Data Protection. The Ministerial Agreement sets forth the procedures and requirements that must be followed when a generic pesticide registration applicant wishes to rely on a registrant’s compensable data to register a generic pesticide. The updated PMRA consultation document contains draft changes to the Ministerial Agreement for Data Protection based on the public comment the Agency received in response to its original consultation published on December 30, 2016. As reported previously, on February 24, 2017, CPDA-Canada submitted comments to PMRA on its prior consultation expressing disappointment that the Agency’s proposed mechanism failed to equitably balance the interests of companies that develop new pesticides (‘innovator’ companies) with the interests of companies that produce generic pesticides (‘generic’ companies).
In its latest submission to PMRA, CPDA-Canada reiterated its concerns set forth in its previous comments but also acknowledged and commended the Agency for several small improvements contained in the revised consultation. Among these, CPDA-Canada thanked PMRA for the addition of language aimed at deterring poor conduct in negotiations over data compensation through the proposed imposition of consequences that could be placed on parties acting in bad faith. CPDA-Canada also expressed its support for provisions that would establish a definitive timeframe by which an applicant would be required to provide all parties with notice of intent to initiate arbitration once negotiations fail. In addition, CPDA-Canada cited new provisions that would allow an applicant to opt out of arbitration proceedings at any time. Previously, if an applicant was uncomfortable with the final offer made by the registrant, they would not pursue arbitration because there was no opt-out mechanism and the arbitration tribunal’s award decision would be binding.
Despite these improvements, CPDA-Canada pointed out that deficiencies in the data compensation negotiation and arbitration scheme, as set forth in the updated consultation document, have not been satisfactorily addressed by PMRA. For example, the proposed revisions would give the Arbitral Tribunal the power to assign fees, such as legal fees, incurred by one party during arbitration to the other party. CPDA-Canada explained that parties to an arbitration typically agree that company specific costs are the responsibility of that company and not the other company.
CPDA-Canada also objected to a provision in the revised consultation that would give the Arbitral Tribunal the unilateral ability to extend the arbitration process which would add more time and expense to the proceedings. CPDA-Canada maintained that any extension should be agreed to in writing by both parties to the arbitration and should be limited to no more than 30 days.
In its other comments, CPDA-Canada called upon PMRA to retain the “cost sharing” provisions that appeared in its original consultation document. That language specified that compensation should be based on the equitable sharing of costs between a data owner and follow-on applicant. Where data compensation for the same data has already been paid by another generic previously, an award in a subsequent process could be based on the determined cost of data divided by the number of applicable parties (i.e., the data owner, the generic company that paid compensation in the first process, and the applicant in the subsequent process).
CPDA-Canada will continue to engage with PMRA on the inequities in the current Canadian data compensation mechanism, the process for the registration of tank-mix adjuvants, and the barriers to entrance of member company products into the Canadian market. To access a full copy of the recent comments submitted by CPDA-Canada to PMRA, please click here.