Finlayson Christopher; Mallard TrevorAGRICULTURAL COMPOUNDS AND VETERINARY MEDICINES AMENDMENT BILLSecond ReadingHon CHRISTOPHER FINLAYSON (Attorney-General) on behalf of the Associate Minister for Primary Industries: I move That the Agricultural Compounds and Veterinary Medicines Amendment Bill be now read a second time. This bill changes how Government agencies both use and protect data supplied to them with applications to register agricultural compounds and veterinary medicines. Data protection is obviously hugely important as it provides time for businesses to recoup the costs of developing data to support a registration application. With greater certainty about being able to recoup their costs businesses are more likely to invest in research and development and register new products or uses in New Zealand. New products and uses will support better productivity competitiveness and safety outcomes for our primary industries. Before I talk about the bill in detail I want to thank the Primary Production Committee for its very good work in considering this bill. I also want to acknowledge the valuable input provided by the submitters.It is very important to distinguish between data protection and patents. Data protection prevents Government agencies from using data that they hold to assess subsequent applications to register similar products for the duration of the protected period. Data protection does not stop other parties from generating their own data and registering a competing product. Patents on the other hand enable the holder of a patent to restrict other parties from using their idea without their approval. The committee has recommended a number of revisions to this bill. At a high level the revisions extend expand and clarify data protection. The committee has recommended the following revisions: first for innovative products and uses extending data protection to 10 years and simplifying how it applies; secondly for non-innovative products and uses extending data protection from 3 years to 5 years; thirdly for new uses for innovative and non-innovative products clarifying what qualifies as a new use; and fourthly for data supplied as part of reassessments introducing 5 years' protection. The bill now also clarifies transitional arrangements and the scope of data protection. So as one can see the changes are quite significant and so I want to explore them in just a little more detail.First of all innovative products and uses: for registrations of new innovative products the revised bill would establish a base data-protection period of 10 years in place of the current 5 years. This would apply to applications under both the current Agricultural Compounds and Veterinary Medicines Act and the Hazardous Substances and New Organisms Act. Innovative products are those that contain an active ingredient not previously registered under the principal Act. Nearly all submitters called for a longer period of data protection with many supporting a base protection period of at least 10 years. I consider that 10 years is about the right period of time. It should result in more registrations and greater competition in the medium and long term without too much impact on competition in the short term. Where companies are applying to register new uses for their innovative products the revised bill would confer data protection for whichever is greater: the period remaining of the original innovative product's 10-year data-protection period or 5 years. This approach should encourage suppliers to register new uses early to take advantage of the 10-year period without deterring registrations later once there is less than 5 years remaining. This new approach is much simpler than the original policy and I submit would create the right incentives for suppliers.Then there is the issue of non-innovative products and uses. For these types of uses the revised bill would establish a base data-protection period of 5 years in place of the 3 years that was in the bill when it was introduced. These products are those that contain an active ingredient previously registered under the Act. Nearly all submitters called for a longer data-protection period for these types of applications but I consider that 5 years strikes the right balance between encouraging registrations of non-innovative products in an appropriate period on the one hand and allowing for competition on the other.Then there is the issue of new uses. The revised bill clarifies and expands what qualifies as a new use" both for innovative and non-innovative products. The bill as introduced proposed that a new use should qualify for data protection if it enabled a product to be used on an additional species of plant or animal. Submitters thought that this proposal was unclear and too narrow. They were concerned that it would not encourage products to be registered for a sufficiently broad range of new uses. The revised bill seeks to address this issue by making new use applications qualify for data protection if they enable one of the following: the product can be used on one or more additional species of crop or animal; the product can be used on one or more additional pests or diseases; or the product can have different application rates methods of application or withholding periods. I support these changes as they are going to ensure that our growers and farmers have the tools they need to be productive and internationally competitive.Finally with the issue of reassessments the revised bill introduces 5 years' data protection for information supplied in support of reassessments. These reassessments involve a Ministry for Primary Industries (MPI) review of all products containing particular agricultural compounds. These reassessments determine whether the agricultural compound should remain on the market and if so under what conditions. To inform reassessment decisions MPI often needs access to data held by other product suppliers. Originally the bill did not propose data protection for reassessments—however nearly all submitters commenting on reassessments supported data protection being introduced. Submissions by both suppliers and users alike argue that in the absence of data protection for reassessment suppliers have little incentive to supply data as part of reassessment processes.I want to conclude by talking about why this bill is so very important. It is going to give suppliers of compounds longer to recoup their data development costs so suppliers are more likely to register new products and uses when there is more likelihood that they will recoup their costs. Suppliers are also more likely to provide the data needed to support the ongoing registration of reassessed products. Increased data protection should therefore result in the latest products with more uses being available to the market and that is going to create a number of benefits.First new products and uses mean higher levels of investment in research and development. Secondly it means higher productivity and international competitiveness particularly for the smaller sectors. Thirdly new products and uses mean new options to manage pests and diseases. Fourthly new products and uses mean less off-label use resulting in fewer trade risks associated with breaching default maximum residue levels. Finally new products and uses mean stronger supply-side competition as substitute products are introduced into the market over time to compete with registered products. So all in all I believe these benefits will more than offset the short-term impact on competition associated with longer data-protection periods. So before commending the bill to the House can I say how much I have enjoyed reading this because I feel that I have learnt a lot in the last 10 minutes.The ASSISTANT SPEAKER (Hon Trevor Mallard): I hope so."