Generic chemical makers want rules changed

PMRA regulations too onerous, they claim | Major manufacturers say federal rules strike the proper balance

Companies that make generic farm chemicals say Canadian rules are too restrictive and cost farmers millions of dollars a year.

A spokesperson for a group representing some of those companies said last week that current regulations put too much financial risk on generic chemical manufacturers and offer too much protection to chemical companies that develop and register new products.

As a result, a limited number of generic products are entering the Canadian marketplace after patents and other regulatory protections have expired.

It means Canadian farmers have fewer lower priced generic brands to choose from and spend millions more each year on farm chemicals than they would if regulations were relaxed.

“The regulations were written poorly and need to be changed because there’s only been a handful of registrations in the past few years that mean anything in the Canadian marketplace,” said Craig Rath of Rath Consulting that represents generic chemical makers Mana, NewAgCo, Cheminova, UPI and Albaugh.

“Right now, we do not see the same number of generic registrations in Canada as we do in the United States.”

Regulations that deal with generic chemicals in Canada were updated as recently as 2010.

At that time, generic manufacturers hoped the new rules would result in more generic registrations and more competition in the Canadian farm chemical market, which is valued at $1.5 billion a year.

However, Rath said the 2010 regulations have not lived up to expectations.

Bob Friesen, vice-president of government affairs with Farmers of North America, agreed.

He said generic manufacturers were warning the Pest Management Regulatory Agency of potential flaws in the regulations as they were being drafted.

Top on the list of concerns is the process used to determine compensation.

As it stands, companies that register a generic chemical in Canada must negotiate payments to the company that originally developed the product, also known as the basic registrant.

If the two sides fail to reach an agreement, the next step in the process is binding, final-offer arbitration.

In many cases, the financial risks associated with losing an arbitrated settlement are too high, Friesen said.

In the United States, generic companies face fewer obstacles and less financial risk, he added, which explains why U.S. farmers have access to more chemicals and lower prices.

“One of the reasons why we’re (going public) … is that we’re so terribly frustrated that there hasn’t been any progress in fixing the things that don’t work,” Friesen said.

“We started pointing out to the PMRA as early as two years ago that we’ve got a problem here … but we just haven’t been able to move this file in a direction that gives us and generic companies any comfort.”

It is hard to estimate how the lack of generics has affected Canadian farmers, but Rath said a single generic registration of a widely used chemical could save Canadian producers tens of millions of dollars a year.

Farmers of North America, which launched a Group 1 generic called Mpower Aurora in May 2010, claims the product’s entry into the Canadian market reduced the price of similar non-generic products by $4 per acre and saved Canadian growers more than $60 million within the first month.

Last month, Friesen issued a letter to FNA’s 10,000 farmer members, encouraging them to get involved in a campaign urging Ottawa to amend pesticide regulations.

“FNA has had countless meetings with the Pest Management Regulatory Agency, including with the Generic Crop Protection Group of Canada, imploring them to create an environment that facilitates the registration of generics, but to no avail,” Friesen wrote.

“We need all farmers to help with a campaign to improve the process for registering generic crop protection products.”

Friesen’s letter said generic pesticide companies consider Canada one of the most difficult countries in which to register a generic product.

Only 15 percent of the crop protection products available in Canada are true generics, he said.

In the United States, it is closer to 50 percent.

“That is why certain crop protection products in the U.S. are so much cheaper,” Friesen said.

“Banvel II is three times more expensive in Canada. Refine Extra is double the price in Canada. Folicur is almost six times more expensive in Canada.… Tilt is more than triple the cost in Canada, (and) Select is more than triple the cost.”

Pierre Petelle, vice-president of chemistry with CropLife Canada, said the regulations are intended to strike a balance between the interests of basic registrants and generic chemical manufacturers.

He said price comparisons like those cited by the FNA can be misleading because many factors affect pricing on both sides of the border.

CropLife’s members include generic chemical manufacturers as well as major chemical companies that develop and register new products.

The current policy is “the result of many years of back and forth and give and take for both sides,” Petelle said.

“Is it perfect? No, probably not. Is it providing some results for generics and providing protection for innovators? Yes. I think it is.”

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