Document ID: EPA-HQ-OPP-2002-0296-0003
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2003-01-29T05:00Z

Proposal
for
Implementing
Data
Compensation
Rights
for
Data
Submitted
in
Support
of
Tolerance
and
Tolerance
Exemption
Actions
1
This
paper
does
not
address
the
issue
of
data
that
are
"
voluntarily
submitted"
to
the
Agency
or
the
application
of
section
408(
i)
to
import
tolerance
data
submitted
to
support
tolerances
or
tolerances
exemptions.

Page
1
of
17
As
part
of
the
Food
Quality
Protection
Act
of
1996
(
FQPA),
Congress
amended
the
Federal
Food,
Drug,
and
Cosmetic
Act
(
FFDCA)
to
address
exclusive
use
and
compensation
rights
for
data
submitted
to
the
Environmental
Protection
Agency
(
EPA)
in
support
of
tolerance
and
tolerance
exemption
actions,
and
to
amend
treatment
of
confidential
information
under
the
statute.
On
January
19,
2000,
(
65
FR
2947)
EPA
announced
the
availability
for
comment
of
a
paper
discussing
options
to
enable
the
Agency
to
appropriately
implement
the
new
exclusive
use
and
data
compensation
provisions
contained
in
section
408(
i)
of
the
FFDCA.
This
paper
discusses
the
comments
received
and
sets
forth
a
proposal
which
considers
those
comments
and
incorporates
the
Agency's
concept
of
the
implementation
of
a
data
compensation
program
under
FFDCA
section
408(
i).
1
The
paper
also
proposes
an
interpretation
of
the
confidentiality
provisions
under
408(
i).
The
Agency
seeks
public
comment
on
this
proposal.

I.
Background
a.
Registration
of
pesticides
EPA
is
responsible
under
section
3
of
the
Federal
Insecticide,
Fungicide,
and
Rodenticide
Act
(
FIFRA)
for
registering
pesticide
products
on
the
basis
of
scientific
data
or
other
information
adequate
to
show
that,
among
other
things,
the
products
will
not
pose
unreasonable
adverse
effects
on
the
environment.
EPA
may
require
that
applicants
and
registrants
submit
data
to
the
Proposal
for
Implementing
Data
Compensation
Rights
for
Data
Submitted
in
Support
of
Tolerance
and
Tolerance
Exemption
Actions
Page
2
of
17
Agency
to
assess
whether
a
pesticide
should
be
registered
or
continue
to
be
registered.
Persons
wanting
to
obtain
a
registration
for
a
pesticide
product
must
submit
an
application
package
consisting
of,
among
other
things,
information
relating
to
the
identity
and
composition
of
the
product,
and
supporting
data
or
a
citation
to
supporting
data.

FIFRA
section
3(
c)(
1)(
F)
extends
exclusive
use
or
compensation
rights
to
certain
persons
("
original
data
submitters")
who
submit
data
in
support
of
an
application
for
registration,

reregistration,
or
experimental
use
permit,
or
to
maintain
an
existing
registration.
Applicants
who
cite
supporting
data
previously
submitted
to
the
Agency
by
the
original
data
submitter
must
certify
that
an
offer
of
compensation
has
been
made
to
the
original
data
submitter
or
that
the
submitter
has
granted
permission
to
cite
data.
In
the
case
of
"
exclusive
use"
data,
the
applicant
must
obtain
the
permission
of
the
original
data
submitter
and
certify
with
the
Agency
that
the
applicant
has
obtained
written
authorization
from
the
original
data
submitter.
If
an
applicant
or
registrant
fails
to
comply
with
these
requirements,
the
application/
registration
is
subject
to
denial
or
cancellation.

Since
FIFRA
places
an
obligation
on
the
Agency
to
ensure
that
the
original
data
submitter
is
offered
compensation
(
or
grants
permission)
for
the
use
of
data,
a
Pesticide
Data
Submitters
List
was
developed
to
assist
applicants
in
fulfilling
their
obligation.
The
Data
Submitters
List
is
a
compilation
of
names
and
addresses
of
original
data
submitters
who
wish
to
be
notified
and
offered
compensation
for
use
of
their
data.
The
Data
Submitters
List
is
available
via
the
Internet
at
http://
www.
epa.
gov/
opppmsd1/
DataSubmittersList.

b.
Pesticide
residue
tolerances
and
exemptions
Proposal
for
Implementing
Data
Compensation
Rights
for
Data
Submitted
in
Support
of
Tolerance
and
Tolerance
Exemption
Actions
Page
3
of
17
For
pesticides
that
may
remain
in
or
on
food
or
animal
feed,
a
maximum
residue
level
(
tolerance)
must
be
established.
In
considering
a
tolerance
action,
EPA
reviews
certain
types
of
data
on
a
pesticide
to
determine
if
residue
limits
will
be
safe.
Prior
to
passage
of
FQPA,
FFDCA
did
not
contain
a
data
compensation
and
exclusive
rights
provision.
Nonetheless,
EPA
has
consistently
taken
the
position
that
data
submitted
to
support
a
tolerance
or
tolerance
exemption
are
entitled
to
exclusive
use
or
compensation
if
the
data
otherwise
meet
the
requirements
of
section
3
of
FIFRA.
Specifically,
the
data
must
be
submitted
in
support
of
a
registration
or
reregistration
action
or
must
otherwise
be
submitted
to
support
or
maintain
registration.
Because
most
"
tolerance­
related"
data
are
submitted
to
support
registration
actions,
these
data
generally
are
subject
to
the
compensation
and
exclusive
use
provisions
of
FIFRA.

II.
Amendments
to
the
Law
In
1996,
Congress
amended
the
FFDCA
to
add
a
new
section
408(
i)
that
explicitly
addresses
compensation
and
exclusive
use
rights
for
data
submitted
to
support
tolerances
and
tolerance
exemptions.
Congress
provided
that
such
data
are
entitled
to
exclusive
use
and
compensation
"
to
the
same
extent"
provided
in
section
3
of
FIFRA.
However,
the
statute
gives
no
further
guidance
as
to
whether
this
provision
is
simply
intended
to
codify
EPA's
current
practice,
or
whether
Congress
intended
to
expand
data
rights
to
those
data
that
currently
do
not
enjoy
compensation
or
exclusive
use
rights.
The
pertinent
part
of
the
statutory
language
reads:

408(
i)
Confidentiality
and
Use
of
Data.
 
(
1)
General
rule.­
Data
and
information
that
are
or
have
been
submitted
to
the
Proposal
for
Implementing
Data
Compensation
Rights
for
Data
Submitted
in
Support
of
Tolerance
and
Tolerance
Exemption
Actions
Page
4
of
17
Administrator
under
this
section
or
section
409
in
support
of
a
tolerance
or
an
exemption
from
a
tolerance
shall
be
entitled
to
confidential
treatment
for
reasons
of
business
confidentiality
and
to
exclusive
use
and
data
compensation
to
the
same
extent
provided
by
sections
3
and
10
of
the
Federal
Insecticide,
Fungicide,
and
Rodenticide
Act.

EPA
may
receive
data
submitted
in
support
of
tolerance
or
tolerance
exemption
actions
that
are
not
submitted
to
support
FIFRA
registration
actions.
For
example,
data
submitted
by
manufacturers
of
inert
ingredients
petitioning
for
the
issuance
of
a
tolerance
or
exemption
and
data
submitted
by
persons
petitioning
for
the
issuance
of
a
tolerance
for
a
pesticide
on
imported
food
are
generally
not
submitted
in
connection
with
any
action
under
FIFRA.
Under
FIFRA
such
data
would
not,
therefore,
qualify
for
exclusive
use
or
compensation
status.

While
the
statute
is
silent
on
this
matter,
the
legislative
history
in
the
House
Committee
on
Commerce
Report
accompanying
H.
R.
1627
(
the
bill
that
was
enacted
as
the
FQPA
of
1996)

provides
that
"[
t]
he
Committee
intends
that
this
section
apply
to
data
submitted
to
EPA
prior
to
enactment,
under
old
section
408
or
409,
including
data
submitted
under
EPA
guidelines
by
manufacturers
of
inert
ingredients
of
pesticides"
(
H.
R.
No.
669,
104th
Cong.,
2nd
Sess.,
pt
2,
at
50,
1996).
Since
most
data
submitted
by
manufacturers
of
inert
ingredients
are
not
subject
to
protection
under
section
3
of
FIFRA
(
because
the
data
generally
are
not
submitted
in
connection
with
a
registration
action),
the
legislative
history
suggests
that
Congress
did
intend
to
expand
compensation
and
exclusive
use
rights
to
"
tolerance"
data
that
would
not
otherwise
be
entitled
to
protection
under
FIFRA.
Proposal
for
Implementing
Data
Compensation
Rights
for
Data
Submitted
in
Support
of
Tolerance
and
Tolerance
Exemption
Actions
Page
5
of
17
III.
Preliminary
Options
for
Implementing
Section
408(
i)

On
January
19,
2000,
EPA
solicited
comments
on
three
options
put
forth
by
the
Agency
to
address
implementation
of
the
provisions
of
section
408(
i)
of
FFDCA
that
relate
to
exclusive
use
and
compensation
rights.
The
three
options
presented
were
different
interpretations
of
the
potential
scope
of
the
new
provision
focusing
on
who
the
data
submitters
may
be.
Those
options
were:

A.
Option
1:
Only
Registrants
and
Applicants
for
Registration
One
approach
to
implementing
section
408(
i)
would
extend
data
compensation
and
exclusive
use
rights
(
data
rights)
only
to
those
persons
who
submit
data
in
support
of
tolerances
or
exemptions
from
tolerances
that
also
meet
all
the
conditions
necessary
to
obtain
such
rights
as
set
forth
in
section
3
of
FIFRA.
This
option
would
read
section
408(
i)
as
Congressional
ratification
of
the
Agency's
current
treatment
of
"
tolerance"
related
data.
Therefore,
under
this
option,
data
rights
under
section
408(
i)
would
only
extend
to
those
persons
who
qualify
as
"
applicants"
under
FIFRA
for
a
current
registration
or
reregistration
action
(
See
section
3(
c)(
1)(
F)
of
FIFRA).

B.
Option
2:
Any
Person
Who
Submits
Data
Related
to
Current
Registration/
reregistration
Action
This
reading
of
section
408(
i),
as
in
option
1,
would
extend
data
rights
to
those
persons
Proposal
for
Implementing
Data
Compensation
Rights
for
Data
Submitted
in
Support
of
Tolerance
and
Tolerance
Exemption
Actions
Page
6
of
17
who
submit
data
in
support
of
tolerances
or
exemptions
from
tolerances
that
also
meet
all
the
conditions
necessary
to
obtain
such
rights
as
set
forth
in
section
3
of
FIFRA,
the
difference
being
that
the
submitter
would
not
have
to
be
an
"
applicant
or
registrant"
as
section
3(
c)(
1)(
F)(
iii)
of
FIFRA
provides
for
data
subject
to
the
compensation
provisions
of
FIFRA
(
as
explained
in
section
1.
B.
above).
This
option
would
give
some
meaning
to
the
FQPA
legislative
history
that
indicates
that
Congress
intended
to
offer
protection
to
data
submitted
by
manufacturers
of
inert
ingredients.
It
is
unlikely,
however,
that
this
option
would
protect
much
data
submitted
by
manufacturers
of
inert
ingredients,
since
such
data
are
rarely
submitted
for
the
specific
purposes
identified
in
FIFRA
section
3
(
registration,
reregistration,
etc.).

C.
Option
3:
Any
Person
Without
Regard
to
Whether
Data
Relate
to
Current
Registration
or
Reregistration
This
reading
of
section
408(
i)
would
extend
data
compensation
and
exclusive
use
rights
to
persons
who
submit
data
and
who
would
otherwise
qualify
for
data
rights
under
both
options
1
and
2
above.
However,
this
option
would
also
extend
rights
to
data
submitters
without
regard
to
whether
the
data
submitted
relates
to
any
current
registration
or
reregistration
action
or
whether
the
data
submitter
is
a
pesticide
registrant.
Protections
would
only
be
linked
to
the
issuance
of
tolerances
and
tolerance
exemptions.
This
approach
would
likely
extend
protection
to
data
submitted
by
manufacturers
of
inert
ingredients.
Because
these
individuals
generally
do
not
submit
data
in
connection
with
pesticide
registration
activities
under
FIFRA,
options
1
and
2
above
would
likely
not
provide
the
measure
of
data
protection
provided
by
this
option.
Proposal
for
Implementing
Data
Compensation
Rights
for
Data
Submitted
in
Support
of
Tolerance
and
Tolerance
Exemption
Actions
2
See
comments
in
Public
Docket
"
OPP­
00621A"
located
in
the
Public
Information
and
Records
Integrity
Branch
(
PIRIB),
Office
of
Pesticides
Programs,
Environmental
Protection
Agency,
Rm.
119,
Crystal
Mall
#
2,
1921
Jefferson
Davis
Hwy.,
Arlington,
VA.
The
Docket
is
open
from
8:
30
a.
m.
to
4:
00
p.
m.,
Monday
through
Friday,
excluding
federal
holidays.
The
Docket
telephone
number
is
703­
305­
5805.

Page
7
of
17
IV.
Summary
of
Comments
Received
In
response
to
EPA's
solicitation
for
comment
on
the
options
noted
above,
EPA
received
comments
from
seven
commenters.
2
Six
of
the
seven
commenters
supported
the
development
of
Option
3,
to
expand
data
compensation
and
exclusive
use
rights
to
"
Any
Person
Without
Regard
to
Whether
Data
Relate
to
Current
Registration
or
Reregistration."
A
variety
of
reasons
were
given
for
support
of
Option
3,
including;
1)
the
expansion
of
data
protection
rights
would
encourage
further
development
of
inert
ingredients;
and
2)
data
protection
should
not
rely
on
the
registration
process.
One
commenter,
however,
was
concerned
that
the
options
did
not
contain
a
plan
to
enforce
data
protection
rights
and
proposed
a
tiered
scheme
in
which
data
protection
was
based
on
the
value
of
the
inert
ingredient.

V.
EPA
Position
EPA
believes
implementing
some
form
of
option
3
gives
meaning
to
408(
i)
and
provides
some
measure
of
equity
to
inert
manufacturers
who
have
paid
and
will
pay
money
to
conduct
testing
necessary
to
allow
approval
under
both
FIFRA
and
FFDCA.
EPA
believes
it
is
Proposal
for
Implementing
Data
Compensation
Rights
for
Data
Submitted
in
Support
of
Tolerance
and
Tolerance
Exemption
Actions
Page
8
of
17
appropriate
to
read
408(
i)
as
establishing
authority
for
EPA
to
use
FIFRA
as
a
guidepost
for
determining
the
nature
and
extent
of
protections
that
apply
to
data
covered
by
408(
i).
Thus,
EPA
has
developed
a
proposal
based
on
option
3
that
provides
a
mechanism
for
protecting
408(
i)
data
submissions.

VI.
Scope
of
Proposal
a.
Tolerance
&
tolerance
exemption
for
inert
ingredient
data
only
This
proposal
only
addresses
data
protections
for
studies
that
have
been
and
will
be
submitted
to
support
tolerances
or
tolerance
exemptions
(
i.
e.,
food
use
data)
on
inert
ingredients.

FFDCA
section
408(
i)
does
not
extend
to
data
submitted
solely
to
support
non­
food
uses.
To
the
extent
that
protections
for
non­
food
use
data
on
inert
ingredients
exist,
they
would
be
found
exclusively
in
FIFRA.

b.
Initial
listing
and
petition
process
EPA
believes
there
are
approximately
8
to
10
inert
ingredients
for
which
EPA
has
received
a
significant
amount
of
proprietary
data
from
the
manufacturer
to
establish
a
tolerance
or
tolerance
exemption.
Most
of
these
tolerances
or
exemptions
were
established
after
the
passage
of
the
FQPA
in
1996
and
were
therefore
evaluated
pursuant
to
the
FQPA
safety
standard,

as
set
forth
in
FFDCA
section
408(
b).
EPA
intends
to
address
these
inert
ingredients
in
the
initial
phase
of
the
proposed
data
compensation
program
for
inert
ingredients
by
inviting
the
data
submitters
of
these
inert
ingredients
to
be
listed
on
the
data
submitters
list
(
DSL),
which
is
currently
used
for
active
ingredients.
The
Agency
acknowledges,
however,
that
the
protections
of
Proposal
for
Implementing
Data
Compensation
Rights
for
Data
Submitted
in
Support
of
Tolerance
and
Tolerance
Exemption
Actions
Page
9
of
17
408(
i)
are
not
limited
to
data
submitted
after
the
passage
of
the
FQPA,
and
that
there
may
be
data
submitters
in
addition
to
those
identified
in
the
initial
phase
of
this
program
who
have
submitted
to
EPA
data
regarding
inert
ingredients
that
are
protected
under
section
408(
i).
For
this
reason,

any
person
who
believes
he
or
she
has
submitted
proprietary
data
to
support
other
tolerances
or
tolerance
exemptions
may
petition
the
Agency
to
supplement
the
list
of
ingredients
initially
addressed
by
EPA.

c.
Tolerance
reassessment
and
inert
data
requirements
As
required
by
section
408(
q)
of
FFDCA,
tolerances
and
tolerance
exemptions
established
prior
to
the
passage
of
FQPA
are
being
reassessed
under
the
new
FFDCA
section
408(
b)
safety
standard,
as
described
more
fully
in
section
VII
of
this
document.
EPA
may
require
the
submission
of
additional
data
in
connection
with
reassessment
determinations
for
inert
ingredients.

Section
3(
c)(
2)(
B)
of
FIFRA
and
408(
f)
of
the
FFDCA
provide
authority
for
the
Agency
to
call
in
additional
data
needed
for
tolerance
and
tolerance
exemption
reassessment.
EPA
anticipates
that
the
data
call­
in
process
would
also
provide
the
data
compensation
mechanism
for
data
generated
to
address
reassessment.
EPA
will
also
need
to
insure
that
applicants/
registrants
that
register
or
amend
products
after
the
issuance
of
any
such
DCIs
have
satisfied
these
requirements.

Accordingly,
EPA
will
also
make
the
section
408(
i)
data
compensation
program
applicable
to
data
submitted
for
new
inert
ingredients.

d.
Confidentiality
of
408
information
EPA
also
proposes
to
implement
the
revised
confidentiality
provisions
in
FFDCA
section
408(
i).
Prior
to
the
changes
made
in
FFDCA
by
FQPA
in
1996,
confidentiality
of
information
Proposal
for
Implementing
Data
Compensation
Rights
for
Data
Submitted
in
Support
of
Tolerance
and
Tolerance
Exemption
Actions
Page
10
of
17
submitted
in
support
of
a
tolerance
or
exemption
was
governed
by
old
section
408(
f),
which
made
all
such
information
confidential
until
publication
of
a
regulation
establishing
a
tolerance
or
exemption
(
unless
the
submitter
explicitly
waived
confidential
protection).
This
section
was
replaced
in
1996
by
current
section
408(
i),
which
provides
in
part,
"
Data
and
information
that
are
or
have
been
submitted
to
the
Administrator
under
this
section
or
section
348
of
this
title
in
support
of
a
tolerance
or
an
exemption
from
a
tolerance
shall
be
entitled
to
confidential
treatment
for
reasons
of
business
confidentiality
and
to
exclusive
use
and
data
compensation
to
the
same
extent
provided
by
sections
3
and
10
of
the
Federal
Insecticide,
Fungicide,
and
Rodenticide
Act."
EPA
has
never
formally
interpreted
the
meaning
of
section
408(
i)
with
respect
to
confidential
information.

The
likely
intent
of
Congress
was
to
accord
information
submitted
in
support
of
a
tolerance
or
exemption
the
same
confidentiality
protections
that
apply
to
data
submitted
under
FIFRA,
especially
considering
the
extent
to
which
FIFRA
and
FFDCA
were
intertwined
more
closely
by
FQPA.
Treating
information
submitted
under
the
two
statutes
identically
means
that
they
are
subject
to
the
same
protections
(
e.
g.,
restrictions
on
disclosure
of
entire
studies
to
multinational
corporations
in
accordance
with
FIFRA
section
10(
g))
and
the
same
disclosure
requirements
(
e.
g.,
mandatory
public
availability
of
safety
and
efficacy
information
in
accordance
with
FIFRA
10(
d)(
1)).
In
fact,
this
discussion
may
be
largely
academic,
because
EPA
expects
that
nearly
all
data
submitted
under
part
158
in
support
of
a
tolerance
or
exemption
will
also
be
information
submitted
under
FIFRA.
The
only
exception
would
pertain
to
import
tolerances
or
exemptions
for
pesticides
that
are
not
used
in
the
United
States,
submissions
which
are
Proposal
for
Implementing
Data
Compensation
Rights
for
Data
Submitted
in
Support
of
Tolerance
and
Tolerance
Exemption
Actions
Page
11
of
17
uncommon.
Therefore,
EPA
intends
to
apply
FIFRA
section
10
equally
to
data
submitted
pursuant
to
FFDCA
408.

VII.
Procedural
Matters
a.
Process:
What
mechanisms
will
EPA
use
to
implement
section
408(
i)?

While
the
implementation
of
section
408(
i)
necessarily
requires
EPA
to
interpret
that
provision,
the
statute
does
not
require
that
EPA
issue
rules
of
general
applicability
through
notice
and
comment
rulemaking.
Indeed,
given
that
Congress
gave
immediate
effect
to
408(
i)
upon
the
enactment
of
the
Food
Quality
Protection
Act
of
1996,
it
is
apparent
that
Congress
intended
EPA
to
ensure
protection
of
these
rights
in
the
absence
of
new
rulemaking
actions.
Further,
the
actual
determinations
regarding
the
need
for
any
individual
applicant
or
registrant
to
cite
data
protected
by
section
408(
i)
are
case­
by­
case
decisions
(
informal
adjudications)
made
in
connection
with
individual
registration
actions
and
do
not
require
the
development
of
rules.
Finally,
given
the
pendency
of
reassessment
activities
for
inert
ingredients,
EPA
believes
it
is
important
to
develop
and
implement
this
program
on
a
schedule
that
will
ensure
protection
of
data
that
are
being
developed
­­
and
that
will
be
cited
­­
in
connection
with
reassessment.
For
these
reasons,
EPA
does
not
intend
to
develop
its
approach
for
implementing
the
exclusive
use
and
data
compensation
provisions
of
section
408(
i)
through
rulemaking.

Since
new
data
compensation
programs
will
be
integrated
into
a
part
of
the
existing
registration
process,
some
additional
changes
will
likely
need
to
be
made
to
the
process
to
ensure
protection
of
data
on
inert
ingredients.
Specifically,
EPA
is
evaluating
the
extent
to
which
Proposal
for
Implementing
Data
Compensation
Rights
for
Data
Submitted
in
Support
of
Tolerance
and
Tolerance
Exemption
Actions
Page
12
of
17
Pesticide
Registration
Notice
(
PRN)
98­
10,
(
Notifications,
Non­
Notifications
and
Minor
Formulation
Amendments,
October
22,
1998)
should
be
amended
to
ensure
protection
of
rights
in
inert
ingredient
data.
Under
this
current
EPA
policy,
registrants
are
in
certain
instances
permitted
to
change
suppliers
of
inert
ingredients
by
either
"
notification"
or
"
non­
notification"
rather
than
full
amendment.
Because
only
the
full
amendment
process
includes
the
submission
and
review
of
data
or
data
compensation
materials,
notification
and
non­
notification
procedures
cannot
be
used
for
a
change
in
inert
ingredient
suppliers
if
data
must
be
submitted
or
cited
for
the
ingredient.

Likewise,
EPA
will
be
reviewing
for
potential
modification
PRN
98­
5,
(
New
forms
for
the
Certification
with
Respect
to
Citation
of
Data
and
EPA
form
8570­
34,
June
12,
1998);
and
the
Formulator's
Exemption
Statement,
EPA
form
8570­
27.
EPA
is
considering
modifications
to
the
language
to
provide
for
data
submitted
under
section
408(
i).
EPA
seeks
public
comments
on
whether
any
other
PRNs
or
forms
should
be
modified
and
reasons
why.

b.
Incorporating
FFDCA
section
408(
i)
data
protection
into
the
FIFRA
process
Currently,
the
obligation
to
satisfy
any
inert
ingredient
data
submission
and
compensation
requirement
is
part
of
an
applicant's
obligation
to
submit
or
cite
data
in
connection
with
FIFRA
registration
activities.
EPA
does
not
believe
section
408(
i)
either
mandates
or
creates
an
alternate
vehicle
for
protecting
the
additional
data
rights
created
by
that
section.
Indeed,
the
FFDCA
provides
no
mechanism
for
ensuring
protection
of
the
rights
provided
by
408(
i).
Further,
EPA
has
no
authority
under
FIFRA
or
the
FFDCA
to
develop
a
distinct
inert
ingredient
licensing
scheme
similar
to
that
provided
by
FIFRA
for
registration
of
pesticide
products,
that
would
allow
EPA
to
ensure
protection
of
rights
in
such
data
separate
and
apart
from
the
registration
of
Proposal
for
Implementing
Data
Compensation
Rights
for
Data
Submitted
in
Support
of
Tolerance
and
Tolerance
Exemption
Actions
Page
13
of
17
pesticide
products
that
contain
these
ingredients.
For
this
reason,
EPA
believes
Congress
intended
the
Agency
to
use
the
FIFRA
registration
process
to
protect
FFDCA
section
408(
i)
data
rights.

c.
Citing
data
and
the
formulator's
exemption
Under
FIFRA,
applicants
must
satisfy
applicable
EPA
data
requirements
at
the
time
of
registration
or
amended
registration
by
either
submitting
data
or
citing
to
data
in
EPA's
files
that
have
previously
been
submitted
by
another
person.
In
some
instances,
applicants
may
be
exempt
from
certain
data
requirements
if
they
purchase
registered
source
materials
(
the
"
formulator's
exemption").
When
applicants
cite
data,
they
generally
must
either
obtain
the
permission
of
the
data
submitter
to
cite
the
data,
or
they
must
offer
compensation
to
the
data
submitter.
EPA
believes
this
obligation
to
submit
or
cite
data
also
extends
to
data
protected
by
section
408(
i),
and
that
EPA's
existing
data
submission/
data
compensation
system
can
be
tailored
to
insure
protection
of
these
rights.
Accordingly,
applicants
and
registrants
whose
pesticide
products
contain
an
inert
ingredient
addressed
by
this
initial
program
will
be
required
to
satisfy
applicable
data
requirements
for
that
ingredient
prior
to
registration
or
amended
registration.
EPA
also
believes
that
the
principles
underlying
the
formulator's
exemption
(
i.
e.,
that
the
purchase
price
includes
data
development
costs)
can
also
be
extended
to
inert
ingredient
data.
Thus,
EPA
believes
that
inert
ingredient
data
requirements
can
also
be
satisfied
if
the
applicant
can
demonstrate
and
certify
that
its
supplier
(
or
the
person
or
persons
from
whom
its
supplier
obtained
the
ingredient)
has
already
submitted
the
required
data
to
EPA.

d.
Data
requirements
Proposal
for
Implementing
Data
Compensation
Rights
for
Data
Submitted
in
Support
of
Tolerance
and
Tolerance
Exemption
Actions
Page
14
of
17
While
EPA
has
not
by
regulation
established
a
generic
set
of
data
requirements
for
inert
ingredients
(
although
the
Agency
recently
proposed
a
paradigm
for
evaluating
inert
ingredients
that
involves
tiered
data
requirements
depending
upon
what
is
known
about
the
hazard
of
the
ingredient,
67
FR
40732,
June
13,
2002;

http://
www.
epa.
gov/
oppfead1/
cb/
csb_
page/
updates/
lowertox.
pdf),
EPA
believes
that
section
408(
i),
like
FIFRA,
extends
protections
to
data
that
EPA
requires
to
support
new
or
existing
tolerance
and
exemption
activities
regardless
of
whether
EPA
has
an
established
set
of
data
submission
guidelines.
Because
tolerance
and
tolerance
exemptions
must
be
issued
prior
to
registration
for
any
ingredient
that
may
result
in
residues
in
or
on
food,
any
data
that
are
needed
for
EPA
to
evaluate
and
issue
appropriate
tolerances
or
tolerance
exemptions
are
"
required"
data
that
must
be
submitted
or
cited
by
applicants.
Therefore,
section
408(
i)
similarly
protects
rights
for
data
submitted
on
new
inert
ingredients
that
are
necessary
for
the
establishment
of
a
new
or
existing
tolerance
or
tolerance
exemption
even
though
EPA
has
not
established
a
formal
set
of
requirements
for
such
data.

e.
Modification
of
the
Data
Submitters
List
(
DSL)

EPA
intends
to
expand
the
existing
data
submitters
list
(
DSL)
to
include
the
names
of
the
inert
ingredient
data
submitters
who
have
submitted
data
to
support
tolerance/
tolerance
exemptions
for
the
ingredients
addressed
in
the
initial
program.
As
with
the
existing
DSL,

applicants
and
registrants
will
be
able
to
contact
persons
on
the
list
to
make
the
appropriate
offers
of
compensation
or
otherwise
obtain
permission
in
order
to
cite
these
data.
Applicants
with
products
that
include
any
inert
ingredient
listed
on
the
DSL
will
need
to
indicate
on
the
required
Proposal
for
Implementing
Data
Compensation
Rights
for
Data
Submitted
in
Support
of
Tolerance
and
Tolerance
Exemption
Actions
Page
15
of
17
data
compensation
form
that
is
submitted
to
EPA
the
manner
in
which
the
applicant
or
registrant
has
satisfied
requirements
for
such
inert
ingredients
as
well
as
the
existing
requirements
for
the
active
ingredients
and
any
product
specific
data
requirements.

f.
What
measure
of
protection
do
the
data
receive?

As
articulated
above,
EPA
believes
the
best
and
most
fair
reading
of
section
408(
i)

expresses
Congressional
intent
that
EPA
use
section
3
of
FIFRA
as
a
guidepost
for
determining
both
the
extent
of
protection
and
the
procedural
events
to
initiate
protection
of
408(
i)
data.
Thus,

the
FIFRA
10­
year
"
exclusive
use"
and
15­
year
"
compensation"
periods
apply
to
inert
ingredient
data
submitted
in
support
of
a
tolerance
or
tolerance
exemption.

The
more
difficult
matter
is
determining
precisely
which
data
the
"
exclusive
use"
period
applies
to,
and
which
data
are
subject
only
to
"
compensation"
rights.
Under
section
3
of
FIFRA,

data
submitted
to
support
the
initial
registration
(
and
any
new
use)
of
a
product
containing
a
new
active
are
entitled
to
"
exclusive
use"
treatment
for
a
period
of
10
years
following
the
initial
registration
of
the
pesticide.
During
this
period,
applicants
for
registration
may
not
cite
these
data
to
satisfy
EPA
data
requirements
without
the
permission
of
the
original
data
submitter.
As
a
general
matter,
all
other
data
submitted
by
an
applicant
or
registrant
to
support
or
maintain
the
registration
of
a
pesticide
are
entitled
to
15
years
of
"
compensation"
protection
following
the
submission
of
the
data.
During
this
period,
applicants
may
not
cite
such
data
in
support
of
registration
or
reregistration
activities
without
first
offering
compensation
to
the
original
data
submitter.
A
comparable
and
consistent
application
of
the
principles
of
FIFRA
section
3(
C)(
1)(
F)

would
be
to
provide
exclusive
use
protection
to
data
submitted
to
establish
the
first
tolerance
or
Proposal
for
Implementing
Data
Compensation
Rights
for
Data
Submitted
in
Support
of
Tolerance
and
Tolerance
Exemption
Actions
Page
16
of
17
tolerance
exemption
for
an
inert
ingredient
for
the
10­
year
period
following
the
issuance
of
the
tolerance
or
exemption,
and
to
provide
compensation
rights
for
all
data
submitted
to
support
or
maintain
a
tolerance
for
the
15­
year
period
following
the
date
of
submission
of
the
data.
EPA
believes
that
the
mandatory
arbitration
clauses
will
also
apply.
EPA
believes
extending
these
provisions
to
section
408(
i)
data
submittals
would
provide
"
to
the
same
extent"
the
data
protection
rights
afforded
under
section
3
of
FIFRA.
EPA
would
like
to
receive
comment
on
this
interpretation
of
section
3(
C)(
1)(
F)
of
and
its
potential
applicability
to
408(
i)
data.

VIII.
Tolerance
Reassessment
Activities
for
Inert
Ingredients
EPA
envisions
that
the
section
408(
i)
data
compensation
program
will
be
expanded
through
tolerance
reassessment
as
EPA
identifies
potential
additional
data
needs
to
meet
the
requirements
of
Federal
Food,
Drug,
and
Cosmetic
Act
(
FFDCA),
as
amended
by
the
Food
Quality
Protection
Act
of
1996.
Under
section
408(
q),
EPA
is
required
to
reassess
all
tolerances
and
exemptions
for
both
active
and
inert
ingredients
that
were
in
effect
prior
to
the
enactment
of
the
FQPA
At
that
time,
over
850
tolerance
actions
involving
inert
ingredients
were
subject
to
tolerance
reassessment.

EPA
envisions
that
section
408(
i)
data
compensation
activities
will
be
tied
to
tolerance
reassessment
in
order
of
the
priority
established
by
EPA.
Section
3(
c)(
2)(
B)
of
FIFRA
and
408(
f)

of
the
FFDCA
provide
authority
for
the
Agency
to
call
in
additional
data
needed
for
tolerance
and
tolerance
exemption
reassessment.
EPA
anticipates
that
the
data
call­
in
process
would
also
provide
the
data
compensation
mechanism
for
data
generated
to
address
reassessment.
Thus,
Proposal
for
Implementing
Data
Compensation
Rights
for
Data
Submitted
in
Support
of
Tolerance
and
Tolerance
Exemption
Actions
Page
17
of
17
EPA
will
at
that
time
expand
this
program
to
ensure
that
EPA
protects
rights
in
inert
ingredient
data
that
flow
from
compliance
with
any
DCI
issued.
After
the
issuance
of
any
such
DCIs,
EPA
will
also
need
to
insure
that
applicants
for
registration
or
amended
registration
under
FIFRA
have
satisfied
these
requirements.

IX.
Submitting
Comments
EPA
specifically
solicits
public
comments
on
the
proposal
described
in
this
paper.

Comments
submitted
on
other
alternative
methods
of
implementing
section
408(
i)
will
also
be
considered.
For
additional
information
or
instructions
on
how
to
submit
comments
please
refer
to
the
related
Notice
of
Availability
in
E­
Docket
No.
OPP­
2002­
0296.