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The Life Sciences Law
Review
Law Business Research
Fifth Edition
Editor
Richard Kingham
The Life Sciences Law Review
The Life Sciences Law ReviewReproduced with permission from Law Business Research Ltd.
This article was first published in The Life Sciences Law Review - Edition 5(published in March 2017 – editor Richard Kingham)
For further information please [email protected]
The Life
Sciences Law Review
Fifth Edition
EditorRichard Kingham
Law Business Research Ltd
PUBLISHER Gideon Roberton
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Acknowledgements
ii
LEE AND LI, ATTORNEYS-AT-LAW
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iii
Editor’s Preface ..................................................................................................viiRichard Kingham
Chapter 1 INTERNATIONAL HARMONISATION ................................... 1Richard Kingham
Chapter 2 ARGENTINA ............................................................................. 7Emilio N Vogelius
Chapter 3 AUSTRALIA ............................................................................. 20Anthony Muratore, Stephen Rohl and Matthew Whitaker
Chapter 4 AUSTRIA.................................................................................. 33Karina Hellbert
Chapter 5 BELGIUM ................................................................................ 47Peter Bogaert and Charlotte Ryckman
Chapter 6 BRAZIL .................................................................................... 62Angela Fan Chi Kung and Nicole Recchi Aun
Chapter 7 CHINA ..................................................................................... 74Shaoyu Chen and John Balzano
Chapter 8 DENMARK ............................................................................ 109Mikkel Vittrup and Mette Hygum Clausen
Chapter 9 EUROPEAN UNION ............................................................. 127Grant Castle and Robin Blaney
CONTENTS
iv
Contents
Chapter 10 FINLAND .............................................................................. 151Hanna Paloheimo and Hilma-Karoliina Markkanen
Chapter 11 FRANCE ................................................................................ 162Sophie Pelé
Chapter 12 GERMANY ............................................................................. 173Christian Dierks
Chapter 13 GREECE................................................................................. 186Gregory Triantafillopoulos
Chapter 14 INDIA .................................................................................... 195Pravin Anand and Archana Shanker
Chapter 15 IRELAND ............................................................................... 205Colin Kavanagh and Ciara Farrell
Chapter 16 ISRAEL ................................................................................... 222Dovev Apel
Chapter 17 ITALY ..................................................................................... 240Giovanni Galimberti, Massimiliano Mostardini, Mauro Turrini and Evelina Marchesoni
Chapter 18 JAPAN .................................................................................... 256Takeshi S Komatani
Chapter 19 KOREA ................................................................................... 278Jung Min Jo
Chapter 20 LITHUANIA .......................................................................... 291Rūta Pumputienė and Ieva Balėnė
Chapter 21 MEXICO ................................................................................ 307José Alberto Campos-Vargas
v
Contents
Chapter 22 NEW ZEALAND .................................................................... 323Robert Andrew Bycroft
Chapter 23 NORWAY ............................................................................... 339Kirti Mahajan Thomassen and Rune Nordengen
Chapter 24 PERU ...................................................................................... 350María del Carmen Alvarado Bayo and Ricardo De Vettor Pinillos
Chapter 25 POLAND ................................................................................ 361Ewa Skrzydło-Tefelska and Jacek Myszko
Chapter 26 PORTUGAL ........................................................................... 373Paulo Pinheiro and Francisca Paulouro
Chapter 27 RUSSIA ................................................................................... 386Evgeny Alexandrov and Ilya Goryachev
Chapter 28 SERBIA ................................................................................... 399Bogdan Ivanišević and Slobodan Trivić
Chapter 29 SINGAPORE .......................................................................... 411Melanie Ho and Jacqueline Chua
Chapter 30 SPAIN ..................................................................................... 430Raquel Ballesteros
Chapter 31 SWEDEN ............................................................................... 441Peter Forsberg and Julia Tavaststjerna
Chapter 32 SWITZERLAND .................................................................... 453Markus Schott and Markus Wang
Chapter 33 TAIWAN ................................................................................ 466Katherine YC Juang, Jill Niu and Daisy Wang
Contents
vi
Chapter 34 THAILAND ........................................................................... 481Peerapan Tungsuwan and Praween Chantanakomes
Chapter 35 TURKEY ................................................................................ 493Selma Ünlü and Burcu Gürel
Chapter 36 UNITED ARAB EMIRATES ................................................... 505Melissa Murray and Saladin Aljurf
Chapter 37 UNITED KINGDOM ............................................................ 514Grant Castle and Sarah Cowlishaw
Chapter 38 UNITED STATES................................................................... 530Richard Kingham and Krista Hessler Carver
Appendix 1 ABOUT THE AUTHORS ...................................................... 569
Appendix 2 CONTRIBUTING LAW FIRMS’ CONTACT DETAILS ........ 591
vii
EDITOR’S PREFACE
The fifth edition of The Life Sciences Law Review covers a total of 37 jurisdictions, providing an overview of legal requirements of interest to pharmaceutical, biotechnology and medical device companies. The chapters are arranged to describe requirements throughout the life cycle of a regulated product, from discovery to clinical trials, the marketing authorisation process and post-approval controls. Certain other legal matters of special interest to manufacturers of medical products – including administrative remedies, pricing and reimbursement, competition law, special liability regimes and commercial transactions – are also covered. Finally, there is a special chapter on international harmonisation, which is of increasing importance in many of the regulatory systems that are described in the national chapters.
Now, more than ever, it is important for leaders in the pharmaceutical and medical device industries and their advisers to be knowledgeable about the laws and regulations in major jurisdictions around the world. In the past year, there have been significant developments in the regulation of drugs and medical devices, especially in the United States, where a new law – the 21st Century Cures Act – was passed at the end of 2016. There are prospects for further developments in the coming year. The new president and the Republican-controlled Congress will consider legislative measures affecting the pharmaceutical and medical device sectors, including proposed repeal of the Affordable Care Act, continuing inquiries into pricing of medical products and reauthorisation of user fee laws that fund a substantial part of the drug and device approval processes. The United Kingdom will initiate formal proceedings to begin the process of withdrawing from the European Union, with potential consequences for the medical products sectors. Other jurisdictions, including China and India, are considering reforms to their regulatory systems for medicinal products.
Each of the chapters has been written by leading experts within the relevant jurisdiction. They are an impressive group, and it is a pleasure to be associated with them in the preparation of this annual publication.
Richard KinghamCovington & Burling LLPWashington, DCMarch 2017
62
Chapter 6
BRAZIL
Angela Fan Chi Kung and Nicole Recchi Aun1
I INTRODUCTION
Health in Brazil is a constitutional right, by which citizens are warranted universal access to healthcare services and products. In such context, the Unified Health System (SUS) promotes a set of health-oriented actions and services, and is supported by financial resources coordinated and managed at federal level by the Ministry of Health (MoH), and decentralised to states, the Federal District and municipalities, pursuant to Law No. 8,080 of 1990.
Public health surveillance actions fall within the scope of the MoH; medicines and medical devices are regulated by the MoH itself and by the National Public Health Agency (ANVISA) at federal level. ANVISA, a regulatory agency reporting to the MoH, was created by Law No. 9,782 of 1999 with the institutional purpose of promoting and protecting people’s health through public health control over the production and marketing of pertinent products and services, including environments, processes, materials and technologies related to them, as well as through public health control measures at ports, airports and borders.2
At the state, Federal District and municipal levels, local public health authorities are in charge of regulating and inspecting the production and circulation of goods, and the provision of health-related services.3
Following a global trend, the healthcare market in Brazil, especially in what regards the pharmaceutical sector, has grown steadily despite the country’s current economic and political instability. Based on industry estimates, an 8.5 per cent annual growth in the pharmaceutical sector is expected until 2020.4
1 Angela Fan Chi Kung is a partner and Nicole Recchi Aun is an associate at Pinheiro Neto Advogados.
2 Law No. 9,782/1999, Article 2.3 Law No. 8,080/1990, Articles 6, Section 2; 17 and 18.4 Statistic reported by the consultancy company GlobalData.
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The medical devices sector, for its part, is actually facing some challenges in production, importation and sales, mostly in light of economic uncertainties and of cost control measures adopted by the government and healthcare insurers. As a result, the increasing demand for good and competitive devices is a promising opportunity in the medical devices sector.5
II THE REGULATORY REGIME
In Brazil, ANVISA is responsible for product approval (through a product registration and notification process referred to as ‘marketing authorisation’), as well as for certification and inspection of the manufacturing plant and for after-sale surveillance. ANVISA and the state and municipal health authorities are responsible for issuing the federal and state and municipal healthcare licences, respectively, for the companies to operate.
Medicines are highly regulated under more detailed and sophisticated regulations. All medicines require registration, except those posing fewer risks to health, which are subject to notification only. Medicines are subject to price control.
The regulation on medical devices requires improvement. The current regulation is based on general rules not always applicable to all types of medical devices, which often leads to confusion in terms of risk classification and applicable registration rules. Medical devices are not subject to price control.
Companies engaged in the manufacturing, importation or distribution of medicines and medical devices (or all of the above) must bear the following public health licences: federal authorisation to operate6 and special authorisation for controlled pharmaceuticals, issued by ANVISA;7 and a local licence to operate issued by the state or municipal public health authorities where the establishment is located.8 The licensing procedure requires a facility with adequate operational capacity according to technical and public health requirements depending on the target activity; the appointment and effective assistance of a responsible technician duly enrolled with the relevant professional council, usually a pharmacist, engineer or chemist, is also required.9
i Classification
Medicines are defined as ‘pharmaceutical products, technically obtained or prepared, for prophylactic, curative, palliative, or diagnostic purposes’,10 while medical devices comprise ‘appliances, instruments and accessories used in medicine, dentistry and related activities, as well as in the activities of physical education, embellishment of aesthetic correction’.11 The presence of an active pharmaceutical ingredient (API) in the product defines it as a medicine, even in case of devices.
5 This is further analysed by McKinsey & Company’s article at www.mckinsey.com/industries/pharmaceuticals-and-medical-products/our-insights/capturing-the-new-value-segment- in-medical-devices.
6 Law No. 6,360/1976, Article 50.7 ANVISA’s Ordinance No. 344/1998.8 Law No. 6,360/1976, Article 51.9 Law No. 6,360/1976, Article 53.10 Law No, Article 4, II.11 Law No. 6,360, Article 25.
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As to other products subject to healthcare control, cosmetics and food products with medical or therapeutic claims, such as the ‘cosmeceuticals’ and ‘medical foods’, raise a classification issue, as the definition on foods and cosmetics expressly excludes products with medical or therapeutic purposes. In those cases, a detailed analysis on the technical characteristics, intended use and promotional claims of a product is a determining factor for adequate classification under Brazilian law.
ii Non-clinical studies
Experiments with animals are regulated by Law No. 11,794 of 2008 and Decree No. 6,899 of 2009, as well as by normative rulings and regulations issued by the Ministry of Science, Technology, Innovation and Communications (MCTIC) and the National Council for Animal Experimentation Control (CONCEA). Such rules aim to regulate the humanitarian use of animals for teaching and scientific research purposes, as well as to establish procedures for the set-up and operation of breeding centres, animal hospitals and laboratories for animal experimentation. Some methods recognised by CONCEA as an alternative to the use of animals in non-clinical trials, such as computer simulations and in vitro studies, have been approved by ANVISA, aiming to replace, reduce or improve conditions for the use of animals in research activities.12
To conduct trials with animals, establishments must be accredited with CONCEA and licensed by the MCTIC. To that end, the establishment must set up a specific ethics committee to analyse and deliberate on trials protocols, in accordance with applicable legislation. No prior approval from CONCEA is required for non-clinical trials, but establishments must keep updated records on the studies and submit copies thereof to CONCEA.
iii Clinical trials
Clinical trials are regulated in Brazil, from an ethical and regulatory perspective, by the National Health Council (CNS) and ANVISA, respectively. Any research protocol involving human subjects must be reviewed by a research ethics committee (CEP) of the institution where the research is to take place. Specific research must also be approved by the National Research Ethics Committee (CONEP), as is the case for trials sponsored by entities located outside of Brazil.13 Upon approval of the research protocol by a CEP or CONEP, the applicant must request ANVISA’s approval for clinical trials involving medicines. Clinical trials involving low-risk medical devices must only be notified to ANVISA.14
Brazilian regulation embraced the ethical principles of the Helsinki Declaration but increased the level of protection accorded to trial subjects, who are entitled to full medical assistance during and after the trial for any trial-related occurrence; and to post-trial access to the best treatments proven effective at the end of clinical trial, at no cost and indefinitely.15 This responsibility lies with the sponsor or with the investigator under an investigator-initiated study. Trial subjects must sign an informed consent to join the trial, and no compensation is allowed (except for Phase II trials). Insurance coverage is not mandatory. Adverse event reports must be made to the CEP or CONEP, as the case may be, and to ANVISA.
12 ANVISA’s Resolution RDC No. 136/2015.13 Resolution CNS No. 466/2012.14 ANVISA’s Resolution RDC No. 9/2015 and Resolution RDC No. 10/2015.15 ANVISA’s Resolution CNS No. 466/2012.
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A bill of law is under analysis and Congress is aiming to regulate clinical trials from a legal standpoint in a more substantial way.16
iv Named-patient and compassionate use procedures
Manufacturing, importation or use of unregistered products are exclusively allowed for new medicines under medical control and intended for experimental use. Such exception is valid for three years, after which registration becomes mandatory.17
ANVISA’s regulations contain specific rules by which non-trial subjects with severe or life-threatening diseases are provided with free-of-charge access to unregistered pharmaceutical products when there is no commercially available therapeutic alternative for chronic diseases (within the context of compassionate use and expanded use programmes). Under the compassionate use programme, individual patients have access to unregistered medicines under clinical development, while the expanded use programme provides groups of patients with access to unregistered medicines during a Phase III trial or after its completion. ANVISA’s reporting requirements apply to sponsors or CROs, as the case may be, in connection with such programmes.18
v Pre-market clearance
Only a local company (i.e., a company established in Brazil) can apply for public health licences to operate and for marketing authorisation in connection with medicines and medical devices; therefore, a local presence is mandatory, either through a local subsidiary or a third-party distributor.
ANVISA’s resolutions set out specific technical requirements as to the marketing authorisation effective for each category and classification of products subject to public health control. For generics and branded generics, for example, ANVISA requires evidence on their interchangeability with the reference medicine, via bioequivalence and bioavailability studies.19 As to biologics, ANVISA defines two different registration pathways: individual development and comparability. The first requires submission of complete data, while the latter requires the comparison of the product’s efficacy and safety attributes to a comparator product registered with ANVISA.20
Fees for obtaining marketing authorisations vary according to the company size (small, medium and large) in terms of annual revenues. Depending on the priority status ascribed to medicines, ANVISA grants a marketing authorisation between 120 and 365 days from the respective application.21 By law, ANVISA should grant priority in analysing marketing authorisations for generics; certain strategic products for the SUS as defined by the MoH; products under technology transfer to public entities; and highly innovative products manufactured locally.22 Also, pursuant to ANVISA’s regulations, medicines intended for
16 Bill of law No. 200/2015, as amended.17 Law No. 6,360/1976, Article 24.18 ANVISA’s Resolution No. 38/2013.19 Law No. 9,787/1999 and ANVISA’s Resolution RDC No. 60/2014, Resolution RDC No.
16/2007 and Resolution RDC No. 58/2014.20 ANVISA’s Resolution RDC No. 55/2010.21 Law No. 6,360/1976, Article 17-A.22 Law No. 9,782/1999, Article 41-A and Decree 8,077/2013, Article 7, Section 2.
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treatment of rare, neglected, emerging or re-emerging diseases also have priority as to the analysis of the marketing authorisation application, under certain specific conditions.23 The marketing authorisation for other products should, in theory, be granted within 90 days from the respective application,24 but in practice ANVISA takes longer to do so.
vi Regulatory incentives
In Brazil, the National Industrial Property Institute (INPI) is in charge of granting patents. However, patents for pharmaceutical products and processes are subject to prior consent from ANVISA, which analyses health-related risks and verifies whether the subject matter of the patent application is in the interest of SUS public health policies.25 Invention patents and utility models are valid for non-extendable terms of 20 years and 15 years, respectively, from patent application before the INPI; nevertheless, invention patents and utility models cannot be valid for less than 10 years and seven years, respectively, from their granting by the INPI.
Brazilian law has no specific rules on data exclusivity protection, which takes shape by confidentiality obligations only.26 Studies in progress and other non-public information must be kept confidential by ANVISA up to their publication. Confidential knowledge, information or data usable in industry, as well as data submitted to governmental bodies as a condition for approval of products, are protected under unfair competition rules, until they fall into the public domain.
As to incentives, the Brazilian regulatory framework lacks a robust policy for rare, neglected diseases, even though this is a matter repeatedly discussed in Congress and by associations of pharmaceutical companies. Under ANVISA’s regulations, the analysis of a marketing authorisation application for rare, neglected, emerging and re-emerging diseases is prioritised under certain specific conditions. Based on information published by ANVISA during 2015–2016, six out of 35 innovative medicines and four out of 44 biologics approved by ANVISA are targeted at rare diseases.27
vii Post-approval controls
Any updates to the original marketing authorisation, such as changes in formula, composition, qualitative and quantitative elements, additions, subtractions, innovations, indications, counter indications, precautions, renaming, among others, must be notified to ANVISA or submitted to ANVISA’s prior approval, as the case may be.28 In addition, the marketing authorisation holder must develop pharmacovigilance (for medicines) and technovigilance (for medical devices) actions for detection, evaluation, understanding, prevention, risk management and reporting of adverse events caused by the use of said products. Depending
23 ANVISA’s Resolution No. 37/2014.24 Law No. 6,360/1976, Article 12, Section 3.25 Law No. 9,279/1996, Article 229-C and ANVISA’s Resolution No. 21/2013.26 Especially under Brazilian IP Law (Law No. 9,279/1996), Access to Information Law (Law
No. 12,527/2011 and Decree No. 7,724/2012) ANVISA’s internal ruling (Decree No. 3,029/1999 and Ordinance No. 748-B/2012).
27 http://portal.anvisa.gov.br.28 Post-registration updates for medicines and medical devices are ruled under ANVISA’s
Resolution RDC No. 48/2009 and Resolution RDC No. 185/2001, respectively.
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on the severity and potential health risks of an adverse event, a recall or field action may be voluntarily put in place by the marketing authorisation holder or else required by ANVISA or consumer protection authorities.29
Either for updating or amending an existing marketing authorisation or for post-approval control purposes, Phase IV clinical trials must be carried out as prescribed in the ethical and regulatory rules outlined above.
A relevant post-approval issue refers to Resolution RDC No. 102 of 2016 recently issued by ANVISA to relax the erstwhile marketing authorisation transfer rules. Until then, transfers were possible only in case of corporate deals (consolidation, spin-off or merger), but are now possible in case of commercial transactions as well (the sale of an asset or set of assets without entailing any corporate transaction between the deal companies).
viii Manufacturing controls
Activities that are subject to public health control may be carried out only at facilities bearing public health licences to that end. For licensing purposes, the establishment must satisfy the following general requirements:a technical and operational capacity and availability of premises, equipment and
apparatus in adequate condition for the intended use;b a mechanism to assure the quality of products and activities being developed there;c human resources duly qualified and skilled to performed the intended activities; andd mechanisms to prevent, eliminate or reduce the potential health risks from on-site
activities.
ANVISA also inspects manufacturing facilities to verify their compliance with ANVISA’s good manufacturing practices (GMP) and certificate for GMP (cGMP); this extends to foreign-based facilities exporting products to Brazil. The cGMP of a foreign manufacturer must be applied for by the marketing authorisation holder in Brazil.
Public health licences and cGMPs are linked to the company’s taxpayer number; thus, the transfer of a licensed facility from a company to another, in theory, triggers a new site inspection for issuance of new public health licences and cGMPs.
ix Advertising and promotion
Advertising and promotion of products subject to public health control are mainly regulated by Law No. 6,360 of 1976; the Consumer Defence Code (Law No. 8,078 of 1990); and the Brazilian Advertising Self-Regulation Code rules. Generally speaking, only products duly registered or notified with ANVISA qualify for advertising or promotion. In addition, prescription-only products cannot be advertised directly to consumers, but only to healthcare professionals. Promotional claims must be in accordance with the data submitted to ANVISA for marketing authorisation purposes, and must not contain any indication that may lead to misinterpretation, error or confusion as to source, origin, nature, composition or quality of the product, or that gives the product any characteristics other than those it actually has. Abusive or misleading advertising is prohibited.
29 Pharmacovigilance and recalls are ruled by ANVISA’s Resolution RDC No. 4/2009, Normative Ruling No. 14/2009 and Resolution RDC No. 55/2005; Technovigilance and field actions are ruled under Resolution RDC No. 67/2009.
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While advertising of medical devices is not specifically governed by ANVISA, advertising of medicines is subject to restrictive rules under Law No. 9,294 of 1996 (applicable to medicines only), coupled with Resolution RDC No. 96 of 2008. Besides the general rules mentioned above, the regulation basically sets forth that promotional information must be scientifically evidenced and must be balanced as to the indication of risks and benefits, and also provides a set of rules on mandatory, authorised and prohibited content in promotional activities. Distribution of free samples of drugs is considered a promotional activity and, as such, can only be directed at prescribing professionals in outpatient facilities, hospitals, medical and dentistry offices.30
From an ethical perspective, promotion of medicines is subject to the dictates of industry codes and are solely binding on the respective industry association members, such as the Interfarma Code of Conduct, especially in what refers to interactions with healthcare professionals. In this context, the Interfarma Code of Conduct sets guidelines aiming to protect healthcare professionals against improper influence as well as to assure ethical and adequate disclosure, and sharing of scientific and promotional information.
x Distributors and wholesalers
Distributors and wholesalers of pharmaceutical products must hold public health licences for resale activities. If the distributor is also the product importer, then licences must cover import activities as well.
xi Classification of products
For sales purposes, medicines are classified (or re-classified) as prescription-only products or over-the-counter (OTC) products,31 generally based on the following criteria (as per Resolution RDC No. 98 of 2016):a marketing period (in Brazil or abroad, as the case may be);b safety profile;c indication for treatment of non-serious diseases;d indication of short-term use;e manageability by patients;f low-risk potential in situations of misuse or abuse; andg no addictive potential.
As a primary consequence, prescription-only drugs can be sold to patients only against presentation of the respective prescription, and advertisement is limited to prescribing and dispensing professionals. OTCs, in turn, are available without a prescription, and can be promoted to the public (except in communication channels intended for children).32
30 ANVISA’s Resolution RDC No. 60/2009.31 Brazilian legislation is unclear as to the classification of medical devices under prescription or
OTC categories.32 ANVISA’s Resolution RDC No. 96/2008.
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xii Imports and exports
Imports and exports of medicines and medical devices are governed by tax and foreign exchange regulations as well as by ANVISA rules (as per ANVISA’s Resolution RDC No. 81 of 2008). As a rule, public health licensing is required for such imports and exports, and the respective product must be registered or notified with ANVISA (unless otherwise exempted). In addition, companies must be enrolled with the Integrated Foreign Trade System (SISCOMEX) and obtain the Ambient of Registration and Tracking of Activities of the Customs Agents licensing that enables a company to carry out imports up to a certain monetary level (to be established by the authorities based on the company’s financial information).
Imports of medicines and medical devices are subject to ANVISA’s prior approval for: (1) the importation licence processed and registered through SISCOMEX by the importer at the time products are cleared at Brazilian customs; or (2) the Cargo Loading Authorisation given by ANVISA before products are shipped abroad, as the case may be. In theory, products must be imported by the respective marketing authorisation holder, but import activities may be outsourced upon express authorisation from the marketing authorisation holder to the third-party importer.
xiii Controlled substances
Activities that involve controlled products, including narcotics and psychotropics or others causing physical or psychic dependence as defined in MoH Ordinance No. 344 of 1998, are subject to special control by ANVISA. A special authorisation from ANVISA is thus required for manufacturing, manipulating, distributing, importing or exporting controlled substances and medicines.33
In addition, the importer or exporter of certain controlled substances (such as narcotics and psychotropics) must apply for a special import or export authorisation from ANVISA. On selling products containing controlled substances, the pharmacist must retain the prescription and keep proper pharmacy record of sales.34
xiv Enforcement
Manufacturing, importing, distributing, putting to commercial sale or advertising drugs in breach of public health regulation is a public health offence that may subject the offender to administrative penalties under Law No. 6,437 of 1977, such as: warning; seizure; destruction or prohibition against sale of the product; suspension of sales or product manufacturing; cancellation of product registration; partial or total shutdown of facilities; cancellation of the company’s authorisation to operate; cancellation of the establishment licensing; prohibition against advertising; or a fine varying from 2,000 reais to 1.5 million reais depending on the severity of the offence (a fine may also be imposed in addition to another penalty). The offender’s financial condition is also considered when applying the penalty. In classifying an offence, the authorities discretionally evaluate the existence of aggravating and mitigating circumstances and, in case of recidivism, penalties can be doubled.
33 MoH Ordinance No. 344/1998, Article 2.34 MoH Ordinance No. 344/1998, Articles 14, 18 and 62.
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Violations of an industry code of conduct can subject the offender (associate member) to disciplinary penalties, such as a fine, or membership suspension or exclusion (or both).
Administrative penalties apply without prejudice to civil or criminal liability for the offence, especially as provided in the Civil Code (Law No. 10,406 of 2002), the Consumer Defence Code (Law No. 8,078 of 1990), and the Penal Code (Decree-law No. 2,848 of 1940).35
III PRICING AND REIMBURSEMENT
The Brazilian healthcare system is grounded on universal, full and free access to healthcare as warranted by the Federal Constitution.36 Healthcare-related actions are coordinated by the SUS and are regionally and hierarchically organised at levels of increasing complexity, comprising the basic, specialised and high-complexity categories of healthcare services.37 Since the SUS is organised as a decentralised structure, each sphere of the public administration has its own duties and obligations to secure healthcare actions and services. The SUS is managed by the MoH, at federal level; by state health offices at state level; and by municipal health offices at municipal level.38 The private sector plays a supplementary role at the SUS, through private healthcare and insurance plans, as well as through healthcare service entities (such as private hospitals and clinics).39
Given the complexities of the Brazilian healthcare system and considering that the government is the main purchaser of healthcare products and services, it is key that these be provided in an accessible and low-cost fashion. That being so, the government intervenes in the market by controlling prices and imposing mandatory discounts for medicines.
Within this context, the ANVISA Drugs Chamber (CMED) is in charge of controlling the price for certain medicines in Brazil. After a given medicine is approved and registered by ANVISA, the marketing authorisation holder must obtain CMED’s approval for the respective price, before launch. The CMED-approved price is the maximum selling price in the private market. In any case, CMED also defines the final price for consumers and for the public market based on certain rules. Therefore, there is a price cap effective for suppliers and distributors in Brazil.
IV ADMINISTRATIVE AND JUDICIAL REMEDIES
From an administrative standpoint, procedures involving federal entities are governed by Law No. 9,784 of 1999 and must be guided by the principles of legality, purpose, motivation, reasonableness, proportionality, morality, full right to defence and adversary proceedings, legal certainty, public interest and efficiency.40 Administrative decisions can be appealed to a higher-ranking authority, and the appealed decision may be reconsidered.41 ANVISA’s Board
35 Law No. 6,437, Article 2.36 Brazilian Federal Constitution, Article 196 and Law No. 8,080/1990, Article 2.37 Law No. 8,080/1990, Article 8.38 Law No. 8080/90, Article 9.39 Law No. 8,080, Article 4, Section 2.40 Law No. 9,784/1999, Article 2.41 Law No. 9,784/1999, Article 56.
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of Directors is the authority in charge of ultimately reviewing decisions issued by ANVISA in the administrative sphere, pursuant to Resolution RDC No. 25 of 2008. Under Brazilian law, appeals against ANVISA’s decisions have staying effects, with some exceptions.42
Since the access to judicial remedies is a right warranted by the Federal Constitution, a final decision issued by ANVISA’s Board of Directors can be further taken to the courts.43 Illegal or abusive administrative acts committed by government entities or officials are subject to judiciary control.
V FINANCIAL RELATIONSHIPS WITH PRESCRIBERS AND PAYERS
Interactions with healthcare professionals in the pharmaceutical industry are subject to regulatory and ethical rules, while interactions in the medical devices industry are subject to ethical guidelines. In the pharmaceutical industry, advertisement regulations provide a set of rules on interactions with healthcare professionals, essentially establishing that:44
a the offering or distribution of gifts, benefits or advantages to healthcare professionals or to the public in general is prohibited, except for (1) institutional gifts without advertising content; and (2) scientific articles, published technical books, scientific journals and publications used for professional education;
b any support for the participation of healthcare professionals in scientific events cannot be conditioned to prescription, dispensation or advertisement of medicines;
c sponsorships of events, congresses or symposiums must be clearly disclosed; andd speakers in scientific events must disclose any conflict of interests with regard to their
relationship with the pharmaceutical industry.
Ethical guidelines as to interactions with healthcare professionals in the pharmaceutical and medical devices industries are provided in the Interfarma Code of Conduct and in the Abimed Code of Conduct, respectively. Essentially, both industry codes contain rules on the participation of healthcare professionals in scientific and promotional events; hiring of healthcare professionals as consultants; sponsorships; reimbursement of expenses with meals, accommodation and travel or transport; educational and research grants; relationship with patients associations; and other interaction-related subjects, aiming to avoid potential conflicts of interests between the industry objectives, and the ethical duties and conduct of healthcare professionals.
Specifically in connection with governmental officials, interactions are governed by the Penal Code, the Clean Company Act (anti-corruption law) and the Conflict of Interests Law.45 Under the Penal Code, active and passive bribery is treated as a crime of corruption, punishable by imprisonment and a fine. The Clean Company Act has drawn inspiration from the US Foreign Corrupt Practices Act and UK Anti-Bribery Act, and holds companies strictly liable for corruption or any acts practised in the companies’ interests to the detriment
42 Law No. 9782/1999, Article 15, Section 2.43 Federal Constitution, Article 5, XXXV.44 ANVISA’s Resolution RDC No. 96/2008, Articles 5 and 42, and Normative Ruling No.
5/2009.45 Respectively, Decree-law No. 2,848/1940; Law No. 12,846/2013, as ruled by Decree No.
8,420/2015; and Law No. 12,813/2013.
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of Brazilian or foreign public administration in general, including acts that cause injury to the public treasury or acts that defraud public procurement processes and public contracts. Violations of the Clean Company Act could result in fines ranging from 0.1 per cent to 20 per cent of the company’s gross revenue in the previous fiscal year minus taxes, but in no event less than the advantage obtained. If gross revenues are not identifiable, the fine will range from 6,000 reais to 60 million reais. Certain top-echelon government officials are also subject to the Conflict of Interests Law, which aims to prevent conflict of interests and undue disclosure of confidential or sensitive information obtained by the government official by virtue of his or her public post.
VI SPECIAL LIABILITY OR COMPENSATION SYSTEMS
In Brazil, whoever, by an illicit act, causes harm to another must arrange for the respective redress to the extent of the damage.46 This is the general rule of damages set out in the Civil Code, and also applies to injuries caused by virtue of medicines and medical devices, as there is no special system or mechanism specifically dealing with this issue in Brazil. It is worth noting, however, that consumer relations are subject to the Consumer Defence Code, by which the whole supply chain of a product posing risk to consumer health can be held liable for damage caused to the consumer.
VII TRANSACTIONAL AND COMPETITION ISSUES
i Competition law
In Brazil, the paradigmatic case involving antitrust litigation in the life sciences sector thus far47 refers to a patent dispute between originator and generic manufacturers involving ‘sham litigation’.48 There are few other cases dealing with a similar subject under the scrutiny of the Administrative Council for Economic Defence (CADE).
46 Brazilian Civil Code (Law No. 10,406/2002), Articles 927 and 944.47 Administrative Proceeding No. 08012.011508/2007-91. Representative: Brazilian Association
of National Generic Pharmaceutical-producing Industries, Pró Genéricos. Respondents: Eli Lilly do Brasil Ltda and Eli Lilly and Company. CADE condemned the respondents, in a decision rendered on 24 June 2015, and imposed a fine of 36.6 million reais for the anticompetitive practice known as sham litigation. According to the decision, in general lines, sham litigation consists in the abuse of the right of petition with anticompetitive purpose. In the given case, the patent dispute involved a drug for cancer treatment by which Eli Lilly abused its dominant market position, since its practice kept competitors out of the market. In summary, Eli Lilly filed multiple and simultaneous actions before different public institutions, such as the Judiciary and INPI, in order to obtain the exclusivity of commercialisation of the referred medicine and so prevent competitors from gaining authorisation to sell medicines. By way of this conduct, CADE considered that Eli Lilly created artificial barriers to competition through the filing of the plurality of actions.
48 In 2010, for the first time, CADE passed a judgment in a case involving sham litigation. But it was not until 2015, in the Pró Genéricos case, that CADE established a leading case on the sham litigation matter.
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In addition, there is a considerable number of cartel investigations in the life sciences sector, including bid-rigging practices for products such as hemoderivatives, insulin, medicines (both reference and generic), active ingredients and specialty food ingredients, among others.49
ii Transactional issues
As of November 2016, an important change in the Brazilian antitrust rules on merger control proceedings came into force: CADE’s Resolution No. 17/2016. According to the new rules, certain associative agreements that were previously subject to prior approval of CADE (including some types of licence and distribution agreements) are no longer subject to the merger control regime. A specific evaluation in this regard should be made on a case-by-case basis.
However, if on the one hand, the new rules exempt certain vertical agreements from notification, on the other, it emphasised the need to pursue an in-depth analysis of possible clauses that restrict competition, such as non-compete and exclusivity provisions. This is because if an agreement is no longer subject to prior analysis from the authorities, the adoption of restrictive practices may fall within the scope of anticompetitive conduct and therefore be scrutinised as possible antitrust violation. In light of this, prior to entering into agreements of this nature, it is important to analyse the impacts of possible restrictive clauses in the market so as to prevent future questioning by CADE.
VIII CURRENT DEVELOPMENTS
A relevant recent change in regulation includes ANVISA’s Resolution RDC No. 102/2016, which has authorised transfers of products registration from a company to another by means of commercial transactions involving sales of assets. Since under prior regulation, products registrations could only be transferred in the context of corporate transactions (amalgamation, merger or spin-off), the new rules will facilitate transactions between companies focused on products registrations.
There is a bill of law for clinical trials under discussion in Congress, which will be the first law regulating clinical trials. Also, a provisional measure was published granting powers to the CMED to increase or reduce prices of pharmaceuticals. Such provisional measure is being discussed and it may be converted into law or extinguished in a determined period established by law.
49 In this respect, for proceedings that have already been judged, please see: Administrative Proceedings Nos. 08012.005928/2003-12, 08012.003321/2004-71, 08012.008821/2008-22 and 08012.009645/2008-46. There are also proceedings that are still under CADE’s scrutiny, for more details please see: Administrative Proceeding No. 08012.002222/2011-09.
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ABOUT THE AUTHORS
ANGELA FAN CHI KUNGPinheiro Neto AdvogadosMs Kung is a life sciences partner of Pinheiro Neto Advogados in Brazil, mostly representing international clients of the healthcare industry in regulatory and compliance matters.
Ms Kung graduated at the São Paulo University School of Law, earned an LLM degree at Georgetown University, and has a specialisation degree in Public Health Law from the São Paulo University School of Public Health.
She is a professor of law for regulated industries in several institutions in Brazil (FGV, the Syrian-Lebanese Hospital and Santa Casa de Misericordia hospital).
She is also a member of UNIFESP’s Research Ethics Institute (IRB).
NICOLE RECCHI AUNPinheiro Neto AdvogadosMs Aun is a mid-level associate attorney in the life sciences area of Pinheiro Neto Advogados, practising in regulatory affairs and compliance matters related to the healthcare industry.
Ms Aun obtained an LLB degree from Pontifical Catholic University of São Paulo (2010) and has engaged in graduate courses related to civil law and intellectual property law at the Law School, University of São Paulo, as well as in short-term courses in the life sciences field.
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PINHEIRO NETO ADVOGADOS1100 Rua HungriaJardim Europa01455-906São PauloBrazilTel: +55 11 3247 8400Fax: +55 11 3247 [email protected]@pn.com.brwww.pinheironeto.com.br
