EPA Issues Interim Guidance on the Elements of an Offer to Pay for the Use of Inert Ingredient Data

Since the establishment of the Endocrine Disruptor Screening Program (EDSP) and the U.S. Environmental Protection Agency’s (EPA) issuance of EDSP test rules for pesticide active ingredients and pesticide inert ingredients, questions have been raised regarding the procedures for addressing the compensability of data on inert ingredients. For example, on March 14, 2012, EPA published a Federal Register notice concerning the results from the EDSP inert ingredient test orders, in which EPA states it has determined that the data protection rights as given in Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) Section 3(c)(1)(F) and Federal Food, Drug, and Cosmetic Act (FFDCA) Section 408(i) apply for all data submitted in support of the EDSP test orders. A memorandum regarding the status of inert ingredients subject to EDSP test orders is available online.

To assist companies in addressing issues related to compensation for inert ingredients, EPA recently released an interim guidance document on the elements of an offer to pay for the use of inert ingredient data. The undated guidance, Elements of an Offer to Pay for the Use of Inert Ingredient Data, is not yet available on EPA’s website. A copy of the guidance is available online. In this one-page guidance, EPA states: “While EPA does not have regulations or forms setting forth the precise language to be used in offers to pay that address compensation obligations for data protection by FFDCA section 408(i), EPA believes it is appropriate to look to the FIFRA data compensation regulations as a guidepost for section 408(i).” EPA states that it would “likely deem [an offer to pay] sufficient for purposes” of FFDCA Section 408(i) if it includes the same elements of an offer to pay as required in EPA’s regulations at 40 C.F.R. § 152.93(b)(2). Thus, an offer to pay should include, according to EPA:

• A clear identification of the ingredient at issue intended to be marketed as a pesticide inert ingredient;
   
• The studies for which the offer to pay is being made (i.e., is the company relying upon the cite all method of data citation for all studies submitted in support of a specific action or is the company relying upon the selective method of data citation by listing specific studies/MRIDs);
   
• A statement that the offeror agrees to pay the original data submitter for use of the data to the extent required by FFDCA Section 408(i) and to commence negotiations to determine the amount and terms of compensation, if any, to be paid for use of the data; and
   
• The offeror’s name, address, telephone number, and e-mail address.

Although not required under FIFRA, EPA also states that a copy of the offeror’s letter should be submitted to EPA together with proof of receipt by the original data submitter. EPA states: “While this is not a requirement under FIFRA, EPA does not yet have certification forms that serve as a substitute for such proof and therefore believes it is appropriate to ask for copies of both the offer to pay and proof of receipt of the offer to pay. EPA may in the future develop forms that can be used to demonstrate compliance with section 408(i).” EPA does not require that copies of the offer to pay be provided to it with regard to FIFRA active ingredients because in those cases, companies must submit a “Certification with Respect to Citation of Data” (EPA Form 8570-34) with their applications, which requires applicants to certify that they provided all necessary offers to pay.