REACH Opt-out dossiers

Data sharing disputes and 12-year rule

Note, at the time of preparing, this page only relates to EU REACH as the UK is still considering data sharing options – the UK Government wants to return the concept of data sharing and registrants working together to a fair scientific process and avoid the potential profiteering by profligate consortia and consultancies.

The 12-year rule does apply to GB REACH where the initial year-0 was the date when data was provided to support existing Registrations; in other words, the date provided to national agencies for pre-REACH NONs (EC list numbers starting ‘4’) or if provided to ECHA for EU REACH.

Of course, data added later as part of a tonnage update or on request by agencies may have a different year-0 that the main submission.

Concept of Joint Submission

Registrants need to work together to prepare Joint Registrations with the primary aim to avoid repeating animal testing. To facilitate this, there was a pre-registration process starting in 2008 and companies with interests in the same substances were required to form SIEFs.  It is illegal to repeat vertebrate animal testing, and such data must be shared, but non-animal studies can in theory be repeated.

Most SIEFs are worked well; either as part of a formal Consortium or under a less rigid agreement by a small number of organisations and costs were being evenly shared in a fair, transparent and non-discriminatory manner.  Costs for Registration can be significant, and if only a small number of potential registrants, then the costs could be high, especially, if adding the cost of dossier preparation and justification of waivers or read-across.

However, there are some limited cases where data holders are attempting to charge what could be considered excessive fees for data access or where consortia or consulting groups are attempting to charge excessive management costs.  A caution though it that what one company may consider ‘excessive’ work is considered an appropriate level of detail by others. 

Also, when it comes to money, what is seen as fair by one party is not necessarily considered fair by others and disputes have arisen.  Many organisations considered the fees requested for a letter of access to be excessive; REACH is not cheap and there will be high costs, especially where there are few companies to share the costs between.  However, there are cases where the letter of access costs are perhaps too high, often for a variety of reasons considered valid by the lead registrant or consortium.

Help in estimating the value of a dossier is provided below.

Where no agreement can be reached

In cases where there is no agreement, independent help may be needed to assess the value of the dossier to be submitted. It is possible that those selling the letter of access have included multiple studies for the same endpoint; for example, five of the registrants have repeat dose toxicity studies and two have full reproduction toxicity tests with a total value of several hundred thousand Euro. However, the new registrant only set of data does not need to pay for all of them.  It is not the new-registrant’s fault that there was a historical duplication of effort.

A total data set for a 10 – 100 t substance, including repeated dose toxicity studies, but excluding some of the more obscure terrestrial and sediment studies that are infrequently needed, is about € 300 000.  Dossier preparation should not normally cost more than €5000 (including the CSR) and it is also only right to add some administrative fees of € 5000.  

Total costs can rise where consortium fees are levied, or if there are multiple studies, but €310 000 will get you a very good Annex VIII dossier – with good use of waivers and alternative data assessment methods (such as read-across, if applicable, the total could be significantly lower.

By looking at the disseminated dossiers on ECHA web-site, which also gives the number of registration holders, it is possible to estimate a reasonable (‘fair’) value for the dossier share.  Of course, if needing a higher-tonnage Registration, you may find yourself sharing with those only paying for a low-volume Registration, distorting relative cost shares.

Those requiring a registration should consider this crude estimate before deciding if the fees requested by the Lead Registrant or consortium are reasonable.

Of course, if you suspect the data was submitted more than 12 years ago (eg 2010 first Registrations), then access should be free for those data.

The next stage

If the letter of access cost is in the same order of magnitude as the independent estimate, the new registrant is advised to pay the sum requested; if the difference is minimal between perceived value and asking price, the time and trouble spent on haggling and then opting out of the joint registration may not be worth the apparent saving.  It is better to work together.

If there is a big difference in opinion over value, negotiation is needed and an independent report prepared. In many cases, differences have been overcome with simple dialogue.  The new registrant must attempt to purchase access to the dossier for a ‘fair’ sum and offers that are clearly inadequate will be rightly rejected by the Lead Registrant. 

If agreement is not reached, the new registrant will need to ‘opt out’.

Opting out

Although the ideal is to be part of a Joint Registration, it is possible to opt out of a joint submission and a registrant can prepare their own dossier using their own data, literature, read-across, modelling etc.  Good reasons are needed to opt out, including ‘disproportionate costs’. If even at this stage, the data holder chooses not to provide data, or a cost is not agreed, ECHA are accepting registrations and asking that the parties settle their differences post-Registration.  This means that the existing registrants are unable to prevent entry to market by imposing anti-competitive or punitive costs. .

Partial opt-out is possible with the new registrant picking the studies that they need to complete other data gaps; for example, if all the data points are covered by publications, but a skin sensitisation study has not been found in the public domain, they can ask for aces to only specific endpoints. Data endpoints not purchased will need to be covered by, for example, existing data, read across, literature surveys, modelling. 

If opting out, a full dossier with data will need to be prepared and this itself will take time and money; this extra ‘hassle-factor’ must be taken into account when deciding what is an appropriate fee to pay for the letter of access.

The registration stage – and legal issues

A dossier submitted that is not part of a joint registration will draw attention to itself.  Dossiers that have no letter of access for end points where the registrant is not a data holder, and ones with data gaps or waivers that are not fully justified will face more attention.

Therefore, opting out is not a decision to be taken lightly.

Even if the dossier is accepted, data holders who consider that their data has been used without payment will rightly be able to pursue the user of their data through the courts for damages, and costs could be awarded against the new registrant. ECHA will leave this to the courts and not play a part in the legal process.

However, if it can be shown that the new registrant (the user of data) had made a ‘reasonable’ offer to the data holder that reflected true commercial value of the dossier or of specific data that had been requested, then the courts will very likely find in favour of the data user.  There is a risk that the data holders will receive nothing, or at best, the offer originally made and face extensive legal fees.

Where the data holder is a consortium or industry body, members must be warned that cases that are lost in this way will ultimately be a cost to all members and due consideration must be made of this risk when setting ‘fair’ letter of access fees. Members of such consortia who pursue high disproportionate costs need to ensure that their consortium acts fairly.

Summary – Steps to be taken

Opting out is a big decision and a stepwise approach, keeping options open, is advised.

Phase I – valuation

  1. Assess data value
  2. Consider ‘minimal’ dossier value and a commercial value
  3. Suggest offer to Lead Registrant based on ‘reasonable’ commercial value

Phase II – Opting out of joint registration

  1. Determine data gaps, using all public and read-across options etc
  2. Determine remaining studies to purchase
  3. Propose values for studies to purchase
  4. Make formal offers, perhaps through a legal representative with ultimatum

Phase III -Prepare registration

  1. Prepare new testing for non-vertebrate studies if needed
  2. For registration, prepare CSR / extended SDS
  3. Attempt to obtain ‘token’, register with your own dossier and explain in the dossier reasons for opting out or why letters of access are not provided

Phase IV- Legal

  1. Prepare to face legal action

Estimating the value of a dossier

Various models are in use and support has been provided by CEFIC and other trade bodies to help industry reach agreement; conflicting ideas are clearly going to play a part. 

Organisations who have historically made major capital investments to assess safety of substances will have a different perspective of ‘fair’ to those companies who have been placing the same substance on the market without data.

The methods given below are based on what is known to have worked in many SIEFs, but will not necessarily apply in every case.  One lesson learnt in 2010 was that these methods need to be agreed at an early stage of SIEF formation.

1. Data you need for tonnage band

A lower tonnage registrant in the 1 – 10 t band need only pay access for the data covered in Annex VII, 10 – 100 t in Annex VIII etc.   It is perhaps fair that as both high and low tonnage registrants need such an endpoint that they both pay the same share of those costs.  Note that only a small proportion of Annex X dossiers have full data sets, and the value of data will be similar for Annex IX and X dossiers; so, 2013 registrants may find the letter of access costs similar to those for > 1000 t.

2. Old for new costs

Old work performed well is worth the cost of conducting the study today.  There seems a reasonable agreement among much of industry that this is ‘fair’.

3. Quality of data

Data quality should be judged on whether it is sufficient to avoid new testing costs.  It is proposed by some that if a report is scored 2 or lower in IUCLID then it is of lower value; this approach is perhaps too simple, but easy to apply. So, do two low-quality reports acting as a valid weight of evidence have the same value as a single perfect test report?

4. Surplus data

Only data that is directly relevant to the registrant has value and excessive testing, multiple studies on the same endpoint or to cover specific uses not required by the registrant will have limited value. 

5. ‘Risk factors’

Many consortia have added ‘risk factors’ to study values of up to 30%, stating that the original testing carried a risk and those now on the market wanting to buy data did not take that risk.  To date, this does not appear to have been tested in court, but there does need to be some recognition of past capital investment.

Compensation for management costs

Organising test work is time consuming and although there is no direct correlation between the cost of the study and the effort needed to manage, the relationship is close enough to consider a percentage claim.  A rough estimate would suggest a couple of hours to monitor simple physico-chemical tests, but perhaps to 15 hours or more for larger studies.

Preparing a registration dossier is also time consuming and figures from experience may take 20 hours for an Annex VII (1 – 10 tonnes) and 100 hours on a full 100 tonne dossier with complex data to add. Where there are extensive waivers and read-across (reducing direct test costs), these dossier costs may be higher. A CSR will take some added time, but with good use of software, perhaps 10 – 20 hours for a moderately hazardous substance. 

Managing a SIEF can add to the administrative burden, especially if members are awkward and demanding.

Obtaining the ‘token’ from ECHA and administrating the letter of access agreements and funds transfer takes time; an administration fee of €500 – €1000 is reasonable, but avoid getting bogged down in complex legal arrangements.

Opting out costs

Searching for public data can take time and some new non-animal testing work may still be needed. Take for example a simple metal salt like zinc carbonate. A lot of data is in the public domain, but some basic physical tests may still be needed.

An opt out will need to show that toxicity data on zinc and carbonates are a sufficient surrogate to testing the salt itself. Bit in-vitro irritation work may be needed if no irritancy data is found.  Evidence of dissociation to the respective ions under biological or environmental conditions may be needed.

Creating a dossier on these surrogate zinc and carbonate ions will take more time than if using good data, so you may find many hours are needed to create a dossier acceptable for submission; a budget of perhaps €20 000 is needed (especially if using external help). 

Therefore, an LoA costing less than €20 000 will be worth considering, even if it does make you think you are being ripped off

Ultimately, if considering opt-out, weigh up respective direct costs and costs in time, and if making a counter offer, be generous to make it defendable in case of later challenges.

Denehurst can provide independent advice on this