Registration Reinvented

The publication of Federal Decree 5981 / 2006 on the registration of pesticides by equivalency in December 2006 resulted in a significant reduction in the registration costs of this category of products.

Nonetheless, the process of registering “me-too” products has not become as streamlined as had been anticipated. On the contrary, with the new regulatory rules introduced by this decree and the experience gained both by the registration authorities and by registrant companies’ representatives, the process became much more complex and detailed, demanding that registrants and manufacturers produce extensive documentation to prepare and to elaborate on the required reports.

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This has resulted in longer periods of time to prepare the registration packages, particularly for technical products.

Three-Step Process

Federal Decree 5981 /  2006 provides for registrations by equivalency of technical products in three phases, with the following requirements:

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Phase I: 5-batch analysis, physical-chemical tests.

Phase II: Acute toxicity tests, mutagenicity.

Phase III: Sub-chronic and chronic toxicity and eco-toxicological tests.

Thus, the registrant company may apply for registration by considering chemical equivalency only (Phase I) based on the results of the 5-batch and physical-chemical studies.

If equivalency cannot be proven in the first phase, registration authorities may request additional acute toxicity studies including but not limited to mutagenesis tests (Ames and Micronucleus) as required in Phase II.

If the acute toxicity tests are not sufficient to prove product equivalency in Phase II, authorities may request additional tests that can include sub-chronic and chronic tests (Phase III), thereby resulting in a significant cost increase and exceeding by far the estimated cost prior to the implementation of the decree on registration by equivalency.

In this case, the feasability of going forward with the application for the relevant registration should be reconsidered.

More Complications

Further, in certain cases, depending on the type of active ingredient and formulation, the submission of efficacy and residue tests shall be required.

For the purpose of registrations in each individual state, no amendment has been made to the legislation with respect to Me-Too product registration. Individual states are free to enact their own legislation on this matter according to the Brazilian constitution. In fact, as an example, the state of Parana — one of the most important agricultural producers in Brazil — requires two efficacy trials for each recommended rate and biological target to be performed by diverse official entities at different locations, as well as one residue trial.

Watching Costs

Today, the registration cost of a technical product plus its formulation and its components is estimated at approximately US $170,000. This estimate is the average cost of laboratory, field efficacy, and residue tests for two crops, two biological targets, and two rates for each target, in addition to governmental fees from the Health and Environment Ministries for Phase II. The estimated amounts are those charged by the top laboratories, with international Good Laboratory Practice (GLP) accreditation, and field research entities operating in Brazil.

Additional costs should also be considered, including but not limited to: document translation, notarization, consularization, travel expenses, and sample import taxes. Variations may be found depending on tested crops as well as the active ingredient due to the 5-batch analysis.

Further Regulations

In addition, cost increases shall result after May and June 2008 due to a new regulation that requires the accreditation of all official field research institutions, plus Good Field Practice for field residue trials, with respective official accreditation of the entities which perform the trials. From June 2008 on, laboratory residue trials should all be performed according to GLP.

The procedure of contracting laboratory tests in different entities is widely adopted by several companies in order to help them reduce costs; however, their results may differ, and this could invalidate some of the tests ordered, creating further delays.

In addition, due to the tight demand for studies with pesticides, many laboratories work at maximum capacity to perform the tests — particularly the 5-batch analysis — which may require a lead time of up to 24 months in certain cases, such as for physical-chemical and mutagenicity tests. Thus, it is quite common to have an incomplete test package, causing delays in the submittal of the registration application.

Speed To Market

In spite of the complexity of the Me-Too product registration process in Brazil, upon the determination of the High Authority of the Brazilian government, registrations have been expedited, and this has yielded a record number of 202 approved registrations last year — 54 technical products and 148 formulations.

Today, an unofficial estimate of the approval lead time for registering a technical product is approximately eight months from the time of application.
This parameter is relevant for technical products, since this registration approval is mandatory prior to the review of the corresponding formulated product.

High Stakes

Thus, for the near future, a new outlook exists for Me-Too products in the Brazilian market — which is the most attractive market, worldwide. Total sales in 2007 reached the historical figure of US $5.31 billion at the distributor level. This means almost 60% growth compared to 2003, when sales were $3.2 billion.

Even though it is the most important tool to gain access to the immense Brazilian crop protection market, product registration per se is not a guarantee of success. Recent cases have shown that some international companies who are new to this market have suffered heavy losses in the first year following registration approvals, and sometimes in the years immediately beyond that, as well.

Distribution, marketing, credit and payment terms, and competition are all key items to be considered in a strategic plan to ensure high performance and significant margins when choosing to do business in Brazil.

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