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E Survey of Pesticide R&D Directors: How Do Current Laws Affect Agricultural Pesticide Research Productivity? Twenty research directors of major pesticide manufacturers partici- pated in the survey below. All are involved in investment planning to accommodate changes in EPA and other regulations. Survey responses are in boxes. I. Assume your company has a new product under development which produced an undisputed oncogenic response (statistically significant increase in the usual tumors seen in rat or mouse control popula- tions), and the use pattern results in residues in processed products which require a section 409 (food additive) tolerance. A. What would be the percent reductions in R&D cost (direct and administrative) to obtain a tolerance if the Delaney Clause was not applicable, e.g., such tolerances could be granted on the basis of a benefit/risk analysis as is done for setting 408 (raw agricultural commodity) tolerances? Answers varied from O to 25 percent, but most responses were in the 5-15 percent range. Two remarks suggested the same studies are needed in either case, whereas one remark suggested oncogenicity tests need to be repeated. B. What is the probability of receiving a tolerance if: (1) the current law remains as is? 249

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250 APPENDIX E (2) the Delaney Clause was not applicable? (1) Most respondents agreed the chances would be practically nonex- istent. (2) The majority of respondents agreed that the probability in the absence of the Delaney Clause would be 50 percent or greater. C. What reduction in time delays from product discovery to final registration would occur if Delaney was not applicable? (months) Answers varied from 0 to 48 months on this question, but there was l general agreement in the range of 12-24 months. l II. With regard to oncogenicity testing requirements that the entire industry must complete under the reregistration process: A. What percent of your currently registered product line do you estimate will trigger Delaney? Most answers to this question were in the 10-20 percent range, but six companies responded with answers of 35 percent or above. There were also three companies who felt Delaney would not be triggered for any of their reregistration compounds. B. What percent of the market for your products will be lost because of application of Delaney? Answers to this question were consistently in the 5-20 percent range. One company, however, correctly observed that the agency has not yet used Delaney in the reregistration process. C. What percent of your currently registered products in each class do you feel will be impacted substantially by Delaney (greater than 10% of sales)? insecticides fungicides herbicides other General feelings were that currently registered fungicides would be affected significantly by the Delaney Clause with answers (when not zero) at 50 percent or greater. Insecticides were the next most likely to be affected with answers in the 10-20 percent range. The responses on

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SURVEY OF PESTICIDE R&D DIRECTORS 251 herbicides varied greatly with eight answers ranging from 10 to 80 percent. There was an insignificant number of responses under the "other" category. There were 60 zero or blank answers out of a possible 80 answers to this question. The blank answers might mean the company has no reregistration candidates in the class, and the zeros could indicate either a certainty that none would be affected or that the EPA would not apply the Delaney Clause to cancel tolerances during the reregistration process. D. In terms of lost products and lack of substitute pesticides or other control practices, which two or three crops do you believe will be most significantly impacted by Delaney? The crops cited most frequently were citrus, apples, tomatoes, grapes, corn, soybeans, cotton, and small grains. III. A. Has the Delaney Clause ever been used by the EPA to deny the granting of a tolerance on a raw agricultural commodity (408) which did not involve the need for a food additive (409) tolerance? All answers were negative. B. If the Delaney Clause could be cited against one of your products to deny the granting of a necessary food additive tolerance (409), would you: (1) Abandon the pursuit of the tolerance? (2) Investigate changes in use pattern to eliminate the residue on the crop? (31.0ther (please specify) (4) What would be the cost of whatever action you chose to take? Specify action lost sales months delay direct testing cost (1) Only four companies answered this question with an unqualified yes. Three were ambivalent and the remainder said no.

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252 APPENDIX E (2) With two exceptions, all companies said yes to this question. This indicates that attempts to change use patterns as a means of avoiding a Delaney Clause issue is or could be a routine or common approach in seeking a section 409 tolerance. (3) Most companies did not respond to this part, but two companies indicated they would examine the risk/benefit aspects of the situation and a third indicated it would attempt to argue on the basis of the FDA de minimus, sensitivity of the method (SOM), or constituents policy loopholes. (4) There was no consensus on lost sales. More than half the respon- dents did not answer. The responses of those who did answer varied from $0.25MM to $50MM. The delay estimates varied from one year at a minimum to a three-year maximum with two years about average. The direct testing cost ranged from $200M to $500M. C. To your knowledge, has the EPA granted food additive toler- ances for compounds when there is clear evidence that the tumor of concern is benign rather than malignant? No evidence was cited that a tolerance was granted under these conditions, but one company reminded the committee that the EPA has not used Delaney in the reregistration process. D. Are food processing studies for determining the declining/ increasing concentration of pesticide residues part of your company's usual battery of tests for a new food use pesticide? If yes, what are the typical costs of such studies per product? Where are these processing studies done? Internal_ Universities Food processing companies- Eighteen of 20 companies answered yes to this question, with costs in the $25M-$50M range for each crop processed. Most of the companies used all three sources for doing these studies, but the university and food processing companies were named more frequently than internal studies. IV. Concerns have been raised that Delaney will prevent registration of new and/or old products for minor crops and pests.

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SURVEY OF PESTICIDE R&D DIRECTORS 253 Do you view this concern as major? average? minimal? Eleven of the respondents viewed the impact of Delaney on minor crops as major and an additional five felt the impact would be average. It might be concluded, therefore, that the burden on JR-4 (see Chapter 6) may be significantly increased in the future. Incentives for compa- nies to seek minor-use registrations must also be addressed. V. Given that our knowledge of oncogenic responses in laboratory animals and methods of risk assessment have advanced since the Delaney Clause became part of the Food, Drug and Cosmetic Act, what options would you favor for its modification (please rank in order of preference)? A. Status quo B. Repeal with no substitute language make section 409 track section 408. C. Apply Delaney to section 408make 408 track section 409. D. Repeal with substitute language stating approval of 409's for oncogenic substances based on benefit/risk considerations. E. D., but specific risk criteria. F. An amendment stating the Delaney Clause is not applicable to pesticides when they are not intentionally added to processed foods or animal feed. G. Amendment of section 409 to state that pesticides not intention- ally added to processed foods or animal feed are not subject to the 409 provisions. H. Other (please specify) It is difficult to summarize the responses to this question since the responses varied widely. Some statements can be made, however: No company rated the status quo higher than 5 and most rated this choice as 6 or 7. Making section 409 track section 408 was a popular choice (3 or higher) with nine companies. Applying Delaney to section 408 was rated no higher than 7 by any respondent. Repeal with substitute language was rated no lower than 3 by any company with most answers being either I or 2.

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254 APPENDIX E The application of specific risk criteria was rated from I to 6 with no consensus at all. The amendment stating Delaney is not applicable to pesticides when not added deliberately to food received a lot of support but there were also six companies who rated it 4 or below. Similarly, the amendment stating that pesticides not added intentionally to processed foods or animal feeds are not subject to section 409 provisions received mixed responses with seven an- swers 3 or higher and nine answers 4 or lower. Most companies (16) did not respond to other, but one response suggested that the definition of oncogen be sharpened so that only a clearly oncogenic substance (multiple species, metastasis, etc.) would trigger Delaney. The sensitivity of the method should also be considered since zero residue is approachable but not attainable. VI. A. How would your company's total discovery activities change (% increase or decrease) if: (1) 408 with specified risk criteria replaced 409 with Delaney? (2) 408 with benefit-risk criteria replaced 409 with Delaney? (3) Delaney also applied to 408? (1) A few companies felt their discovery activities would increase, but most believed the replacement would have no impact. (2) Similarly, a few companies felt discovery activities would increase 5-30 percent but most said no impact. (3) About a fourth of the respondents felt no change would take place; most companies said that if Delaney was applied to section 408, discovery activities would decrease, with those listing percentages ranging from a decrease of 35 to 100 percent. This response when compared with question II C indicates that possibly companies whose products are dominated by fungicide and herbicide products would anticipate the greatest decrease in discovery activities. B. List any other regulatory components you consider to be more restrictive than Delaney for your company (e.g., drinking water, mutagenicity, special review, teratology, reproductive effects, etc.~. (1) In the past. (2) In the future.

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SURVEY OF PESTICIDE R&D DIRECTORS 255 Special review, teratology, and reproductive effects were mentioned most frequently (by about half) as being more restrictive in the past, and groundwater and/or drinking water restrictions were listed by over half of the respondents as being more restrictive than Delaney in the future. This may indicate that Delaney is one of the most restrictive regulatory components but is not alone in its restrictive impact on companies. C. Would your company abandon development of a promising new active ingredient if it tested positive in: One mutagenic end point? Two mutagenic end points? Three mutagenic end points? One positive mutagenic result would cause no company to abandon development. Two mutagenic end points yielded only five yes or "possible" yes and 12 definite no answers. Three positive mutagenic end points, however, prompted 14 of the respondents to answer yes with only a few caveats. VII. Your company's approximate pesticides sales. Check one: Less than $100 million More than $400 million $100-$400 million There were no obvious trends in the replies as a function of company size. It is possible to conclude, therefore, that issues such as impact on discovery activities, testing methodologies, approaches (for example, changing use patterns in order to acquire tolerances) may be equally significant. Among the respondents, five companies have <$100MM in sales, nine have between $100MM and $400MM, and six have >$400MM.

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