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INSIGHT: Transparency Regulation Part 2 – Feed Additive Companies Issue Multiple Warnings

Source: Feedindo Logo Final

12 February 2021 – Yesterday we looked at Regulation (EU) 1381/2019, also known as the ‘Transparency Regulation’ entering into application on 27 March 2021, and what the EU feed additives industry thinks about its long-term goals. Today, EU feed additive companies and organisations talk more about the immediate challenges and longer-term, perhaps more detrimental implications.

With the fast-approaching 27 March deadline, naturally sector players are hugely concerned about time.

It is understood that the regulation will come without any delay. As of 27 March, the notification of studies via the European Food Safety Authority (EFSA) website prior to an application will be mandatory.

“EFSA and the EC have made it clear that they will not delay the date of the Transparency Regulation coming into effect. So, they will press the switch on that day,” states Evonik. “Nobody is asking if applicants can comply the same day. EFSA is publishing training videos and holding webinars but the time is in fact too short to train our staff in house and adapt our processes. So, at that point an inexperienced applicant meets an inexperienced authority with a system with ‘teething problems’ to be expected.”

FEFANA shares this view: “By retaining a fast-track implementation approach with the 27 March deadline, during times of COVID-19 causing very obvious delays in different parts of the process and a lack of dialogue with those who are mostly concerned, there will be considerable consequences for applicants, among whom are many SMEs who have very little time to prepare for adhering to a set of new measures, which still have not yet been fully explained by EFSA with many questions yet to be answered.”

Alltech also agrees: “We are less than two months from the implementation of the Regulation, yet few details have been provided on how everything will work.”

Or as Kemin EMENA adds: “We do feel that EFSA should have taken more time to transit this project and give time to explore, test, learn and adapt to all applicants. We have the impression that they didn’t assess it correctly and as a result, a lot of information is coming too late.”

“Additionally, the efforts that are required from all involved parties are considerable. Many systems and IT tools are not yet available, meaning that we cannot get acquainted with their use yet. We therefore hope that we can take a pragmatic approach.”

Building on this last comment made by Kemin EMENA, FEFANA adds that some of the IT tools are not yet available to allow applicants to get acquainted with their use, so it will be a learning process for all involved.

“We therefore call for pragmatic and reasonable approaches for mitigation of side effects related to the enforcement of increased transparency during the first phases of implementation in order not to disrupt the process of innovation by our companies and their orientation towards the EU market.”

After 27 March?

But even after 27 March, the industry is concerned that Regulation (EU) 1381/2019 may translate to an even longer timeframe for authorisations, and with that extra costs for the applicants.

As Alltech summarises: “There will be a significant economic burden on the industry in implementing the new rules. It will be especially difficult to allow for the extended time needed to pre-notify studies and wait on the public consultation phase. There will be a significant administrative burden on the EFSA to perform the extended risk assessment process, dealing with confidentiality issues, cross-checking the study database, review of third-party comments, and potentially the commission of verification studies. For the applicant, the value of the engagement through provision of scientific advice with applicants in the pre-submission phase is largely unknown and opening the dossier information for third party review including competitors could end up in a strategic mud-slinging fight. These delays are forecast to add a minimum of six months to the scientific evaluation process.”

Phileo by Lesaffre also points out to the possible delays taken with internal planning of submissions of dossiers and the six-month sanctions in case of missing notifications, which would apply in the event of a gap between the studies presented in the dossier and the notified studies.

“All of this will imply heavy processes and more administrative costs,” the company says.

“The area that will impact most organisations is the extended evaluation period prescribed for the dossier’s EFSA review. Increasing the time to market will cripple financial projections for companies and sink innovation in the EU. Currently the EFSA evaluation already takes longer than the six months foreseen in the legislation and this Regulation only provides more possibilities to delay the eventual adoption of a scientific opinion. This will come at the expense of additional time and resources required to take products to market,” adds Alltech. “A more realistic goal would be to complete the reauthorisation process first. There is little doubt that projects and investments in research will slow down for the initial month/year to allow labs and companies to understand how to navigate the new rules and procedures.”

Kemin EMENA also wonders what this might mean at EFSA level: “We expect that EFSA (who already struggle with delivering opinions and treating dossiers in a timely manner) will even have greater difficulties in managing these timelines as they will need to review the protocols (on top of the reports) and the confidentiality aspects of the dossiers. There might be a risk of more rejections or questions towards those protocols while the pre-submission meetings will not allow to revise them for their fitness for purpose.”

“We expect an increased uncertainty for companies on the cost, lead-time, and outcomes of each future dossier,” the company adds, highlighting extra costs which may not be necessarily easy to spot.

“Other costs are related to the obligation to provide access rights to the literature cited in the dossiers. These additional costs per dossier of EUR 60,000-100,000 will discourage many SMEs from submitting dossiers for innovative products.”

“We believe that most companies will wait until another business has made an application and learn from its experience. The unlucky ones who cannot wait are those who must keep time frames for renewals of authorised substances. Industry representatives have asked many times for a transition period for renewals, but it has been strictly denied,” also comments Evonik.

IP at Risk, and Unsolicited Interference

Time is an issue, but so is the general lack of clarity regarding confidentiality.

FEFANA states: “When launching its proposal in April 2018, the EC decided to proceed fast-track, meaning to go against the EC’s own rules for better regulation by omitting the conduct of an economic impact assessment before adoption of the proposal, and we are particularly concerned that certain aspects of the EFSA Practical Arrangements seem to go even beyond what is defined in the Transparency Regulation.”

“These critical elements have been highlighted in a joint stakeholder letter to the EC’s Secretary General, signed by 22 stakeholders, representing thousands of companies in the feed and food chain. These include, among others the absence of legal basis for the introduced criteria justifying confidentiality and the significant extra-costs that an applicant should shoulder to purchase from a publisher the rights for EFSA to publish copyrighted data and information that are part of an application dossier,” the association adds.

Kemin EMENA also says: “According to the Practical Arrangements, information more than five years old would automatically be disclosed without respect for the trade secrets a company might have for many years, thus ruining the competitive advantage. Moreover, information whose disclosure would cause a harm of up to 5% of applicants’ turnover won’t be claimed confidential. Although in their last version of 18 January the PAs leave the door open for a company to justify the confidential nature of information older than 5 years or representing less than 5% of its turnover, the mechanism by which EFSA would take its final decision is not disclosed, leaving a high level of uncertainty on this matter.”

“This criterion does not seem to consider the global market in which most companies are active: the impact should be considered for all markets where the confidentiality would be breached,” adds the company.

Evonik goes on to flag: “If there is a disagreement between an applicant and EFSA regarding confidentiality, then the applicant has to either to accept the EFSA ruling or withdraw their dossier. Meanwhile, the proactively published summary stays on the website. This means there is an unpredictable risk for the application. The Practical Arrangement states that it does not affect IP laws and the safekeeping of investments and innovations. However, the plans to publish, for example, study data and reports proactively prior to the safety evaluation, does not give us a sense of security for our innovations, in particular when data of studies and reports would be used by third parties to create new IP during the period where the originators IP has not yet been published. Legal disputes would be a consequence.”

Monitoring applications will be facilitated for competitors the company also warns: “There is a high risk that a competitor from outside the EU could copy the data and use our dossier to submit it with its own data in another country.”

And, with this sensitive data available publicly on the EFSA website, Huvepharma is wary of unsolicited interference in submissions.

“In the new system, there is a possibility for NGOs to interfere with the planning and work of EFSA which may seriously harm the neutrality of the work of EFSA’s scientific experts and EFSA itself.”

Furthermore, for Evonik, it is not entirely comprehensible why the public opinion aspect would be added to a scientific risk assessment process.

“This could prolong the case immensely, and its outcome would not be calculable anymore. Time to market, calculability of the outcome and of the necessary costs for such a project are essential,” the company comments.

And Alltech asks: “Will the consumers value our industry’s collective effort to engage more transparently in risk communication, with the desired outcome being a higher level of trust in food safety? Or will we look back in a few years and consider this legislative initiative as a regulatory mismatch? Time will tell. Alltech is keeping an open mind.”

Alltech extends its questioning to the scientific advice EFSA would be providing.
The company argues: “It is yet to be determined whether the EFSA will provide quality scientific advice to applicants and how specific that advice will be. A few other questions to consider are: Will the guidance documents continue to be the ultimate reference? (which means there is little value to hiring a scientific advice group) What qualifications will the advisors have? What criteria will the EFSA work to for the lab or facility evaluations? Will they create their own quality standard or go with a third-party assurance scheme?”

Going back to a point made yesterday by Regal BV’s Ruud Bremmers, pre-submission advice on paper is a positive change.

However, “one should not expect too much from it,” he also says.

Kemin EMENA fears that pre-submission meetings will most likely not focus on any technical elements, thus limiting the real benefits of such consultation.

Evonik also points out that a lot will depend on how informative the published meeting report will be and how helpful the meeting with an administrative person might be for the applicant.

“Unfortunately, we already know that this will not happen in the same way as the US FDA operates. There you can meet directly with the scientists and all meeting notes are kept confidential, which is essential if one is working on an innovation,” the company says.

Pushing Innovation Outside the EU

All these issues are preoccupying. And companies are increasingly worried that Regulation (EU) 1381/2019 may backfire and have a long-term impact on animal nutrition sector innovation with more applications for product registration happening more outside the EU.

Huvepharma states: “Innovative companies may reconsider their approach to gaining approvals, delaying their submissions in the EU until approvals have been obtained in other key markets to protect their data from abusive use by others of their investment in their intellectual property. This will have a direct impact on innovation and competitivity for agriculture, food production and even health care in the EU.”

“We expect that a lot of companies will search outside of the EU for trial organisations to partially escape the burden of trial and tests prenotification for both the applicant and the EU trial organisation. This provision of the EFSA Practical Arrangements will greatly increase the administrative burden for the applicants and will likely be the source of delays and rejections by EFSA in case of inconsistencies,” adds Kemin EMENA.

Adisseo and Phileo by Lesaffre both agree, arguing that companies will think twice before launching a product in the EU. And the sector is at risk of pushing knowledge and experience outside the EU.

“This would ultimately impede the EC’s own intentions to promote innovation and to make the EU the global leader of change as is stated in the European Green Deal/Farm to Fork Strategy,” says FEFANA. “The implementation of the Transparency Regulation is bound to have a significantly negative impact on innovation, administrative burden and economic viability of applications, having an effect which is opposite to of the one intended.”

Reflecting on the matter as well Evonik says: “The burden to authorise feed additives seems to be rising by the minute, while the gap between the demand and authorised additives is getting larger. One could even say this will let the EU fall further behind other areas of the world. The European Green Deal and the Farm to Fork strategy have set high goals for a sustainable and safe food production chain and climate change is among many issues on which feed additives have a positive and much needed impact. We fear that despite this positive outlook for the industry, the uncertainties and hardships of the Transparency Regulation might mean innovations will not be sent through the authorisation process in Europe unless companies can keep their IP safe, the time to market is short and a return on investment can be calculated and anticipated.”

The company adds: “The feed additive industry, being rather small compared to most of the other industries impacted by this regulation, feels like it has been trapped in a fire it did not initiate.”