same companies for maintaining existing registrations had increased to $16,829,00 or 23.5% of their total research and development expenditures. This trend has been sharply demonstrated by the large number of cancellation and suspension notices which have been issued under the Federal Insecticide, Fungicide and Rodenticide Act in the past two to three years.

Frequently the requirement for additional research to maintain in effect a registration comes late in the patent life of a product. Frequently it applies to pesticides which are not patentable or on which the patent has already expired.

The economic facts of life dictate that a registrant cannot assume the expense of such research to continue in effect a registration and continue to sell his product in competition with others if his competitors can obtain the protection resulting from such research at no cost.

As a practical result, numerous pesticides have been removed from the market over the past few years because it was not economically feasible for the registrant to meet the demands for the additional research necessary to maintain the product on the market and, at the same time, have such research inure to the benefit of his competitors.

The exclusive use of data provision of H.R. 10729 would make it feasible in many such instances for a registrant to undertake research necessary to maintain a product on the market or to put a nonpatentable pesticide on the market, if the registrant could be assured that such research expenditures would not make it possible for competitors to market the same product without the necessity of making such expenditures.

The significance of these research costs is apparent when it is considered that they constitute a substantial portion of the sales income of the pesticide involved. Dr. Richard H. Wellman, Vice President and General Manager, Process Chemicals Division, Union Carbide Corporation, has recently made an analysis of the cost of developing a new pesticide and the number of marketing years which are required to recover the development costs. In this study he used a portion of the data produced by the National Agricultural Chemicals Association's Cost of Research Survey. A copy of Dr. Wellman's analysis is attached as Appendix B. His analyses of the cost of developing, producing, marketing and recovering investments for two typical pesticide are set forth in Appendix A to his study. His hypotheses are stated at page 2 in paragraph 4. In example No. 1 he assumes that research started in 1963. He estimates that the costs of developing and putting the pesticide on the market would not have been recovered until 1980. In this case a patent probably would have been applied for in 1964 and issued in 1966 or 1967. By the time the costs were recovered there would remain only three or four years of the patent life. The Executive Committee of NACA has reviewed this study and believes that these two examples are typical for the Industry.

From these data it should be apparent that it is not economically feasible for a registrant to make expenditures of this magnitude if such research is to become readily available to competitors. The effect of the deletion of the exclusive use of data provision from H.R. 10729 clearly would be to discourage research on the production of new pesticides and to sharply limit research whether original or defensive to products having a substantial remaining patent life.

Under the present law registration information submitted to the Administrator has not routinely been made available for public inspection. Such information has, however, as a matter of practice but without statutory authority, been considered by the Administrator to support the registration of the same or a similar product by another registrant. The result for the pesticide industry has been that each company engaged in research for new pesticides makes a very early determination of the likelihood of obtaining a valid and enforceable patent since only by obtaining a patent can the company protect its research investment. If the company determines that it can not obtain a valid and enforceable patent, research and development of the pesticide is abandoned. The result for the users and distributors of pesticides is that a potentially important pesticide is never developed.

The new policy of H.R. 10729 requiring publication substantially aggravates the situation by providing competitors with the basis for further analysis and development of similar products. The inevitable effect under either the present system or the system proposed in H.R. 10729 with the exclusive use of data provision deleted would be to remove or keep from the market pesticides which could make a substantial contribution to the production of our national requirements for food and fiber.

III. The exclusive use of data provision is administratively feasible and is compatible with the other regulator requirements of H.R. 10729

From the foregoing discussion we believe it to be clear that the remaining reasons which have been advanced in opposition to this provision are without merit.

In the discussion on the floor of the House of Representatives, one opponent stated that this provision would preclude the Administrator from considering data submitted by one registrant as support for a conclusion that the comparable product of a second registrant is not safe and thereby shift the burden of establishing lack of safety to the Administrator. The provision does not require or permit this conclusion. The only thing which it precludes the Administrator from doing, is considering research data originated by one applicant in support of the registration of the product of another applicant. It does not preclude the Administrator from relying upon such data to deny the application of another applicant. The provision has no relationship to the burden of proof.

The charge was made that the provision would violate the Freedom of Information Act. This allegation cannot be sustained. The only thing which the Freedom of Information Act requires is that data in the files of the Government (with certain exceptions) be made available for public inspection. The provisions of Section 3 (c) of H.R. 10729 requires that all data in support of an ap plication which has been granted be made available for public inspection, except for certain limited exceptions. The data will be made available for public inspection. The data will be subject to appraisal by all interested parties as to its validity. This is a far different purpose and requirement than to make the data public property after it has been opened for public inspection.

IV. Additional research which would result from the exclusive use of data provision would be beneficial

Opponents have suggested that this provision would require a needless duplication of research. We do not believe this to be the case. The type of research to establish the safety of a pesticide and its effects on the environment is at the best imprecise. By necessity it generally is conducted on a limited number of laboratory animals. Replication of research conducted under these conditions can be quite beneficial.

Experience has shown that impurities resulting from production processes may have substantial toxicological effects. Research conducted with a compound produced by one company may not be valid for the same compound produced by another company.

To the extent that this provision would result in a replication of research it would thereby further contribute to the public knowledge of the pesticide and the assurance of its safety.

V. The exclusive use of data provision has been practiced for many years under the Federal Food, Drug and Cosmetic Act

The concept of the exclusive use of data provision is not novel. The new drug provision of the Federal Food, Drug and Cosmetic Act requires that the marketer of any new drug establish its safety. The type of research through which this is established is comparable to that under the Federal Insecticide, Fungicide and Rodenticide Act. Title 21, Code of Federal Regulations, Section 130.4(b) provides with reference to supporting data submitted to establish the safety of a new drug, as follows:

(b) Pertinent information may be incorporated in, and will be considered as part of, an application on the basis of specific reference to such informa tion, including information submitted under the provisions of § 130.3, in the files of the Food and Drug Administration; however, any reference to information furnished by a person other than the applicant may not be considered unless use of such information is authorized in a written statement signed by the person who submitted it.

CONCLUSION

The foregoing discussion, we believe, demonstrates that the bases of opposition of the opponents of the exclusive use of data provision are without merit: In no respect does the provision subvert our patent laws by extending indef. initely the right of exclusive protection of a pesticide material. The provision does not prevent any company from producing and marketing a pesticide after its patent has expired. It merely requires that the new marketer establish the safety and efficacy of the product which he now proposes to produce and market.

The exclusive use of data provision does not preclude the Administrator from considering data originated by one applicant to conclude that adverse effects might be expected to arise from the pesticide of the second applicant. It merely precludes the Administrator from using such data in support of the application to register another pesticide.

The provision in no way violates the Freedom of Information Act. The research data is made available for public inspection and appraisal.

The provision would not require needless duplication of research. It merely would require that one company establish the safety and efficacy of the product which it proposes to market.

APPENDIX A-1

A DEMONSTRATION OF THE TYPE OF DATA WHICH IS REQUIRED TO ESTABLISH THE PATENTABILITY OF A NEW PESTICIDE

1. The general description of the class of structures and the bounds, including generic and subgeneric structural formulas, and the general synthetic method (s) which can be used to prepare them.

2. A summary of the closest prior art both as to chemistry and biological properties.

3. A complete description of representative specific examples, often arranged by subclasses, including tables with physical and analytical data. For a novel class of structures, this often amounts to 100 examples or more.

4. The chemistry and description of novel intermediates.

5. A description of biological test methods.

6. Tables of representative biological data for the specific examples.

7. Descriptions of various formulations with specific examples.

8. An enumeration of other biocides with which these new structures can be advantageously combined.

9. Claims of what is intended.

APPENDIX A-2

CRITERIA FOR PESTICIDES REGISTRATION AND ESTABLISHMENT OF TOLERANCES

DEPARTMENT OF AGRICULTURE

Registration requirements

1. Criteria for establishing registration:

The applicant for registration must furnish documented proof to support the claims made for the proposed product. Data required to support registration usually include the following:

A. Toxicity tests

Toxicity tests on the proposed formulation must be conducted to show that the directed use of the product would not be injurious to exposed man or beneficial animals when warnings and cautions are carefully followed. The extent of toxicological data required will vary with the nature and proposed use of the product. Toxicity studies normally include:

(1). Safety data:

(a) Acute mammalian studies:

1. Oral

2. Dermal

3. Inhalation

4. Eye and skin irritation

(b) Subacute studies:

1. Oral-90 days

2. Dermal-21 days

3. Inhalation-14 days

(c) Other studies which may be required include:

1. Neurotoxicity

2. Teratogenicity

3. Effects on reproduction

4. Synergism

5. Potentiation

6. Metabolism

7. Avian and fish toxicity

(2). Physical-chemical properties:

(a) Boiling point

(b) Flash point
(c) Physical state
(d) Density

(e) Vapor pressure
(f) Solubility

(9) Stability

B. Efficacy data:

Biological tests under field and laboratory conditions must be conducted to determine if the product will control the pests named on the label, when used as directed, without causing significant adverse effects to the crop or property being treated. The following factors are considered in determining efficacy:

(1). Effectiveness

The product must be shown to be effective for the intended purposes when used as directed.

(2). Phytotoxicity

(3). Translocation within the plant or animal being treated
(4). Persistence in soil, water, or plants

(5). Compatability with other chemicals

(6). A thorough search and evaluation of the data submitted as well as other applicable data are made. After such search, the Department of Agriculture specialists concerned with efficacy determine whether or not the proposed formulation would be useful for the intended use without causing significant adverse effects when applied according to the proposed labeling.

2. General labeling requirements

A. Name of product

B. Name and address of manufacturer, registrant, or person for whom manufactured

C. Net contents

D. Ingredient statement

Name and percentage (by weight) of each active ingredient, and total percent of inert ingredients, or name of each active and each inert ingredient in descending order, and relative abundance in each category and the total percentage of inert ingredients

E. Warning or caution statement:

The label of any economic poison must show warnings pertaining to: (1). Ingestion

(2). Skin absorption

(3). Inhalation

(4). Flammability or explosion

The required signal word such as "Danger." "Warning." or "Caution." and the statement "Keep Out of Reach of Children" must appear on the front panel and meet the minimum type size requirements. The front panel of the label of economic poisons which are highly toxic to man must show:

(1). "Poison" in red on a contrasting background
(2). "Danger"

(3). Skull and crossbones

(4). Statement of antidote, including directions to call a physician immediately (in immediate vicinity of skull and crossbones and "Poison")

F. The registration number assigned to the product

G. Directions for use which are adequate to protect the public (optional on label-may appear on accompanying printed or graphic matter) 3. Other required information

A. Data to support any or all claims on the labeling

B. A complete statement of the composition of the product, including the percentage by weight of each of the active and inert ingredients, if such information does not appear on the label

C. Any pertinent information about inert ingredients

D. Any other information pertaining to physical or biological properties of the product, etc.

4. Review by other agencies:

Petitions for registration filed with the Department of the Federal Government. The Department of the Interior reviews all petitions for registration whose use patterns may have an impact on fish or wildlife. The Public Health Service of the Department of Health, Education, and Welfare reviews all petitions from the standpoint of human safety. The comments of these two agencies are forwarded to the Department of Agriculture and are considered before registration is granted or refused.

Opinion on adequacy of residue data and proposed tolerance

An analytical method suitable for enforcement purposes must be provided with the petition, when suggested use patterns will result in residues of the chemical on food or feed. The analytical method and the residue levels presented in the petition are evaluated and an opinion on whether the proposed tolerance reasonably reflects the residue is forwarded to the Food and Drug Administration.

The review includes consideration of the residues of the parent chemical metabolites, and the conversion products that may be formed. Residues occurring in plant parts other than the principal raw agricultural commodity are also considered.

Manpower and funds on criteria and registration

There are 258 people engaged in the work of the Pesticides Regulation Division, 115 in registration and 143 in enforcement. The Division is funded at $3,500,000.

FOOD AND DRUG ADMINISTRATION

If the product is proposed for use in a manner which is likely to result in residues in or on food or feed, it is not registered by the Department of Agriculture until a tolerance or exemption has been granted by the Food and Drug Administration.

The determination of the safety of a tolerance is a scientific judgment and cannot be derived from any arbitrary mathematical calculation. This judgment involves consideration of the "no-effect" levels demonstrated in the experimental animals, the cumulative potential, the metabolic data, the maximum contribution to the diet that could be expected if all commodities for which tolerances are sought bore residues at the tolerance levels taking into account any reduction in residues accomplished in preparing the food ready to eat, the probable exposure to other similar toxicants, and species differences in translating the animal data to possible effects on man. An adequate margin between the tolerance level and the "no-effect" level in the experimental data is required, taking into consideration the proportion of the diet involving crops on which residues might be expected.

Tolerances established under Section 408 of the Food, Drug, and Cosmetic Act are established on raw agricultural commodities, not only processed foods. If the residues remaining in a processed food have been removed to the extent possible in good manufacturing practices and do not exceed the tolerance on the raw product, the processed product complies with the law.

APPENDIX A-3

INFORMATION NEEDED FOR INITIAL REGISTRATION

Appropriate forms must be submitted depending on whether the registration is new, amended, or supplemental.

Information on the type of pesticide, type of formulation, container(s), labeling, supplemental labeling, must be submitted.

Disclosure of and data on the complete formulation is required.

Biological efficacy must be submitted.

Toxicology data must be submitted in support of the use and the labeling for non-food uses. In addition, copies of the petition for a tolerance must be submitted if the use is recommended on food commodities or where the use can result in residues in food commodities.

Data on the fate in the environment (soil, water, fish, and wildlife) is now required for all pesticide chemicals regardless of the proposed uses.

Toxicity to fish and wildlife.