The Life SciencesLaw Review

Law Business Research

second Edition

Editor

Richard Kingham

The Life Sciences Law Review

Reproduced with permission from Law Business Research Ltd.

This article was first published in The Life Sciences Law Review, 2nd edition(published in March 2014 – editor Richard Kingham).

For further information please emailnick.barette@lbresearch.com

The Life SciencesLaw Review

Second Edition

EditorRichard Kingham

Law Business Research Ltd

THE MERGERS AND ACQUISITIONS REVIEW

THE RESTRUCTURING REVIEW

THE PRIVATE COMPETITION ENFORCEMENT REVIEW

THE DISPUTE RESOLUTION REVIEW

THE EMPLOYMENT LAW REVIEW

THE PUBLIC COMPETITION ENFORCEMENT REVIEW

THE BANKING REGULATION REVIEW

THE INTERNATIONAL ARBITRATION REVIEW

THE MERGER CONTROL REVIEW

THE TECHNOLOGY, MEDIA AND TELECOMMUNICATIONS REVIEW

THE INWARD INVESTMENT AND INTERNATIONAL TAXATION REVIEW

THE CORPORATE GOVERNANCE REVIEW

THE CORPORATE IMMIGRATION REVIEW

THE INTERNATIONAL INVESTIGATIONS REVIEW

THE PROJECTS AND CONSTRUCTION REVIEW

THE INTERNATIONAL CAPITAL MARKETS REVIEW

THE REAL ESTATE LAW REVIEW

THE PRIVATE EQUITY REVIEW

THE ENERGY REGULATION AND MARKETS REVIEW

The Law ReviewS

www.TheLawReviews.co.uk

THE INTELLECTUAL PROPERTY REVIEW

THE ASSET MANAGEMENT REVIEW

THE PRIVATE WEALTH AND PRIVATE CLIENT REVIEW

THE MINING LAW REVIEW

THE EXECUTIVE REMUNERATION REVIEW

THE ANTI-BRIBERY AND ANTI-CORRUPTION REVIEW

THE CARTELS AND LENIENCY REVIEW

THE TAX DISPUTES AND LITIGATION REVIEW

THE LIFE SCIENCES LAW REVIEW

THE INSURANCE AND REINSURANCE LAW REVIEW

THE GOVERNMENT PROCUREMENT REVIEW

THE DOMINANCE AND MONOPOLIES REVIEW

THE AVIATION LAW REVIEW

THE FOREIGN INVESTMENT REGULATION REVIEW

THE ASSET TRACING AND RECOVERY REVIEW

THE INTERNATIONAL INSOLVENCY REVIEW

THE OIL AND GAS LAW REVIEW

THE FRANCHISE LAW REVIEW

PUBLISHER Gideon Roberton

BUSINESS DEVELOPMENT MANAGERS Adam Sargent, Nick Barette

ACCOUNT MANAGERS Katherine Jablonowska, Thomas Lee, James Spearing, Felicity Bown

PUBLISHING ASSISTANT Lucy Brewer

MARKETING ASSISTANT Chloe Mclauchlan

EDITORIAL ASSISTANT Eve Ryle-Hodges

HEAD OF PRODUCTION Adam Myers

PRODUCTION EDITOR Jo Morley

SUBEDITOR Caroline Rawson

MANAGING DIRECTOR Richard Davey

Published in the United Kingdom by Law Business Research Ltd, London

87 Lancaster Road, London, W11 1QQ, UK© 2014 Law Business Research Ltd

www.TheLawReviews.co.uk No photocopying: copyright licences do not apply.

The information provided in this publication is general and may not apply in a specific situation, nor does it necessarily represent the views of authors’ firms or their clients.

Legal advice should always be sought before taking any legal action based on the information provided. The publishers accept no responsibility for any acts or omissions contained herein. Although the information provided is accurate as of March 2014, be

advised that this is a developing area.Enquiries concerning reproduction should be sent to Law Business Research, at the

address above. Enquiries concerning editorial content should be directed to the Publisher – gideon.roberton@lbresearch.com

ISBN 978-1-907606-97-7

Printed in Great Britain by Encompass Print Solutions, Derbyshire

Tel: 0844 2480 112

i

The publisher acknowledges and thanks the following law firms for their learned assistance throughout the preparation of this book:

ADVOKATFIRMAET BA-HR DA

AXON LAWYERS

BAE, KIM & LEE LLC

BäR & KARRER AG

CORPORATE LAW GROUP

COVINGTON & BURLING LLP

DIERKS + BOHLE

FAUS & MOLINER

FIEBINGER POLAK LEON & PARTNER RECHTSANWäLTE GMBH

HOGAN LOVELLS STUDIO LEGALE

KHURSHEED KHAN & ASSOCIATES

LEE AND LI, ATTORNEYS-AT-LAW

MAPLES AND CALDER

MATTOS MURIEL KESTENER ADVOGADOS

NAGASHIMA OHNO & TSUNEMATSU

NORTON ROSE FULBRIGHT

NSN LAW FIRM

PLESNER LAW FIRM

acknowLedgemenTS

Acknowledgements

ii

SáNCHEz DEVANNY

SOłTYSIńSKI KAWECKI & SzLęzAK

TOBAR & BUSTAMANTE

WONGPARTNERSHIP LLP

iii

Editor’s Preface ..................................................................................................viiRichard Kingham

Chapter 1 INTERNATIONAL HARMONISATION ...............................1Richard Kingham

Chapter 2 AUSTRALIA ...............................................................................7Bernard O’Shea

Chapter 3 AUSTRIA .................................................................................30Karina Hellbert

Chapter 4 BELGIUM ................................................................................45Peter Bogaert and Sarah Forest

Chapter 5 BRAzIL ....................................................................................58Beatriz MA Camargo Kestener, Rubens Granja and Marco Aurélio Antas Torronteguy

Chapter 6 CANADA .................................................................................71Martha A Healey, Adrienne M Blanchard and Jill Daley

Chapter 7 CHINA .....................................................................................86Shaoyu Chen

Chapter 8 CzECH REPUBLIC ..............................................................106Zuzana Valoušková and Eva Bušková

Chapter 9 DENMARK ............................................................................120Mikkel Vittrup and Mette Hygum Clausen

conTenTS

iv

Contents

Chapter 10 ECUADOR ............................................................................136Álvaro Sevilla, María del Lourdes Maldonado, Juan Carlos Domínguez, Hipatia Donoso, José Andrés Abad, Juan Fernando Larrea and Francisco Ortiz

Chapter 11 EUROPEAN UNION ............................................................151Grant Castle and Robin Blaney

Chapter 12 FRANCE ................................................................................175Sophie Pelé

Chapter 13 GERMANY ............................................................................187Christian Dierks and Daniel Geiger

Chapter 14 INDIA ....................................................................................200Krishna Sarma, Manisha Singh, Riku Sarma and Bhaskar Bhattacharya

Chapter 15 IRELAND...............................................................................213Maree Gallagher

Chapter 16 ITALY .....................................................................................231Francesca Rolla, Christian Di Mauro and Riccardo Fruscalzo

Chapter 17 JAPAN ....................................................................................248Kenji Utsumi and Kensuke Suzuki

Chapter 18 KOREA ...................................................................................262Jung Min Jo and Eun Soo Lim

Chapter 19 MEXICO ................................................................................275José Alberto Campos-Vargas

Chapter 20 NETHERLANDS ..................................................................292Arber Gjunkshi, Annemieke Kooy, Erik Vollebregt and Carine van den Brink

Chapter 21 NORWAY ...............................................................................307Are Stenvik, Beret Sundet, Andreas Bjørnebye and Kirsten Wøien Gilhuus

v

Contents

Chapter 22 PAKISTAN .............................................................................320Zulfiqar Khan

Chapter 23 POLAND ...............................................................................331Ewa Skrzydło-Tefelska and Jacek Myszko

Chapter 24 SINGAPORE .........................................................................343Melanie Ho

Chapter 25 SOUTH AFRICA ...................................................................357Andrew Parsons, Brian Wimpey, Justin Malherbe, Liesel Kok and Rosalind Lake

Chapter 26 SPAIN .....................................................................................371Jordi Faus

Chapter 27 SWITzERLAND ...................................................................381Markus Schott and Markus Wang

Chapter 28 TAIWAN ................................................................................393Katherine YC Juang, Jill Niu and Daisy Wang

Chapter 29 TURKEY ................................................................................407Selma Ünlü

Chapter 30 UNITED KINGDOM ...........................................................419Grant Castle and Sarah Cowlishaw

Chapter 31 UNITED STATES .................................................................434Richard Kingham and Krista Hessler Carver

Appendix 1 ABOUT THE AUTHORS .....................................................469

Appendix 2 CONTRIBUTING LAW FIRMS’ CONTACT DETAILS .....491

vii

ediToR’S PReface

The second edition of the Life Sciences Law Review provides an overview of legal issues of interest to pharmaceutical, biotechnology and medical device companies in 30 jurisdictions. As before, each chapter contains information on legal requirements relating to the key stages in the life cycle of a regulated product, from discovery, through the clinical development process, registration, manufacturing and promotion, plus other issues of special interest, such as pricing and reimbursement, special liability regimes, competition and commercial transactions in the context of the medical products business. Each of the chapters has been prepared by a recognised expert in the relevant jurisdiction, and the resulting work product will assist industry lawyers, regulatory affairs staff and others who need to have an understanding of the issues in each major market.

This edition also includes a new chapter on international harmonisation, which plays an increasingly important role in the regulation of pharmaceuticals and medical devices. In particular, the guidelines adopted by the International Conference on Harmonisation (ICH) have been incorporated into the national requirements for pharmaceuticals in the European Union, United States, Japan and most other developed countries, and are increasingly influential in developing countries. Readers may find it useful to review this chapter before consulting the national chapters, because it is often key to understanding many of local requirements.

Once again, I wish to thank all of the lawyers who contributed to this reference work. It is a pleasure to be associated with them.

Richard KinghamCovington & Burling LLPWashington, DCMarch 2014

58

Chapter 5

BrazilBeatriz MA Camargo Kestener, Rubens Granja

and Marco Aurélio Antas Torronteguy1

I INTRODUCTION

The market for pharmaceutical products and medical devices in Brazil is definitely taking off. The Brazilian Public Health System (SUS) is continually increasing pharmaceutical assistance, as new drugs become available, as a result of the development of new public health policies. Recent changes in health legislation include a new administrative procedure to incorporate new technologies into the SUS.

This is a promising market. Besides the strengthening of the generic medicines industry and the current discussions concerning the opening of the national market to foreign health-service providers, there is great interest in developing innovative drugs, looking for new blockbusters. From an epidemiological standpoint, there are relevant debates around the targets to be pursued by innovative medicines – neglected diseases, complex diseases (catastrophic ones), chronic illness, etc. In this context, the Brazilian government is providing stimuli for the development of technology to Brazilian pharmaceutical companies.

Brazilian health regulation must be understood from the perspective of a federated country. Local health authorities have competence to take local decisions and to grant local licences, but at a national level the federal governmental agency, the Brazilian Health Surveillance Agency (ANVISA), separate from – although linked with – the Ministry of Health (MoH), with administrative autonomy, financial independence and stability in its directors, is responsible for granting marketing authorisations for medicines and medical devices. Both federal and local authorities have power of oversight to impose administrative penalties concerning violations of the health regulations.

1 Beatriz MA Camargo Kestener is a senior partner and Rubens Granja and Marco Aurélio Antas Torronteguy are associates at Mattos Muriel Kestener Advogados.

Brazil

59

II THE REGULATORY REGIME

The main licences, registrations and requirements applicable to health products in general are the following:a a product registration (i.e., market authorisation (MA)); b an authorisation to operate a company (AFE); c a licence to operate the site (LF);d good manufacturing practices (GMP); ande having a technician in charge.

Law 6,360/1976 and Decree 8,077/2013 determine that all companies that extract, produce, manufacture, transform, synthesise, purify, fraction, pack, repack, import, export, store or distribute health products must obtain AFEs from ANVISA.

i Classification

The scope of health surveillance in Brazil is broad. Food, drugs, cosmetics, medical devices and sanitising products are submitted to health regulation, at different levels of regulatory standards. Medicines are the most regulated products. Brazilian health law defines medicines as products technically obtained or prepared for prophylactic, curative, palliative or diagnostic purposes.2 After this definition was introduced, ANVISA increased the national regulatory framework by Law 9,782/1999, but borderline issues still sometimes need to be clarified.

This is the case with medicinal gases. Due to their peculiar characteristics, it was not clear until recently into which category of health products such gases fell. Even though they were under health control, the manufacturing and sale of these products was not specifically regulated by ANVISA. This grey area in the regulatory system gave rise to doubts as to whether medicinal gases were subject to the same licences, registrations and requirements applicable to health products in general. For that reason, after recognising the specificities of medicinal gases and the lack of proper and specific regulations, ANVISA considered that they should be placed in the class of medicines. Indeed, Resolution RDC 32/2011 expressly equates medicinal gases with medicines and requires manufacturers of medicinal gases to have AFEs. According to this resolution, since 1 January 2013, all medicinal gas manufacturers need to have obtained an AFE to operate legally in Brazil.

ii Non-clinical studies

The regulation of studies on animals for scientific purposes is given by Law 11,794/2008, which includes several requirements to protect animal welfare. According to this law, the use of animals in scientific research is restricted to higher education institutions and to professional education institutions focusing on biomedicine.

Law 11,794/2008 also creates the National Council for Control of Animal Experimentation (CONCEA), which has the authority to establish rules for the humane

2 Law 5,991/1973, Article 4º(II).

Brazil

60

use of animals for educational and scientific research purposes. The breeding or use of animals for research purposes is restricted exclusively to institutions accredited by CONCEA. To obtain such accreditation, the prospective institution must constitute its own ethics committee on animal use.

In the field of in vitro research, Law 11,105/2005 allows, for purposes of research and therapy, the use of embryonic stem cells obtained from human embryos produced through in vitro fertilisation and discarded from this process. Such discarded embryos must be non-viable or have been frozen for at least three years; in any case, it is necessary to obtain the donors’ consent. Moreover, research institutions and health services that perform research or therapy with human embryonic stem cells must submit their projects for consideration and approval by the ethics committees responsible for the research. The marketing of such biological material is strictly forbidden.

iii Clinical trials

The Brazilian National Health Council (CNS) approved Resolution CNS No. 466 in 2012, replacing CNS No. 196/1996. Among the debates provoked by this new regulation is the topic of post-study drug supply. The new resolution slightly modified the wording of the previous regulation and introduced the requirement for clinical trial sponsors to continue to supply the drug to trial subjects free of charge, even after the MA is granted by ANVISA and the product is marketed. This question is highly controversial among experts and in the courts (see further, Section VIII, infra).

Also, Resolution CNS No. 466/2012 apparently broadened the legal concept of research sponsorship, which could potentially turn companies that provide only minor, informal and even disinterested support for medical research into formal sponsors, with all the legal implications that ensue. Although this argument is fairly unlikely to prevail, the question has not yet been resolved either by the CNS, ANVISA or the judiciary.

The new resolution provides ethical standards and procedures for research on human beings, based on the four main principles of bioethics: autonomy, non-maleficence, beneficence and justice. The regulation sets out a formal approval procedure that must be followed before a clinical trial can begin. Under Resolution 466/2012, every piece of research involving human beings must be submitted for the approval of a committee of ethics in research (CEP). A CEP is established in research institutions to evaluate every project undertaken within the institution – a university, for example. If an institution does not have its own CEP, it can submit its projects to a committee established in another research institution. The CEP responsible for the project must approve the free and informed consent statement – the written agreement that must be understood and signed by the patient (called the ‘research participant’).

The CEPs scattered around the country form a network at the centre of which is the federal institution responsible for the guidelines on ethics in research with human beings: the National Commission for Ethics in Research (CONEP). According to Resolution 466/2012, this is an advisory, deliberative, regulatory, educational and independent institution reporting to the CNS and, consequently, reporting to the MoH. CONEP is responsible for the evaluation of all ethical aspects of investigations involving human beings and is entitled to enforce the applicable rules. Among its responsibilities, CONEP is committed to supervising research protocols that have been

Brazil

61

approved by institutional CEPs regarding the development of new drugs, vaccines and diagnostic tests.

This kind of research – concerning innovative drugs, diagnostics tests or health-care equipment or devices – must be forwarded by the CEP to CONEP and, after their opinions, to ANVISA. In this respect, Resolution CNS 251/1997 set out special rules concerning pharmaceutical research. Also, on the part of ANVISA, it is necessary to comply with Resolution RDC 39/2008.

According to Resolution RDC 39/2008, a clinical trial should be conducted by a contract research organisation (CRO), which is understood as ‘any company regularly established in the national territory hired by the sponsor or the investigator-sponsor, which takes partially or completely, the role of the sponsor of the clinical research’. The CRO must comply with all health and ethical regulations relating to the performance of the clinical trial. Therefore, if the sponsor is not legally established in the country, the CRO will be responsible for all the duties originally intended for the clinical research sponsor.

The Coordination of Research and Clinical Trials Department (COPEM) at ANVISA is the department entitled to authorise or deny the execution of the research protocol. The authorising document issued by ANVISA is called a special communication.

In 2012, ANVISA enacted Resolution 36/2012 in order to amend Resolution 39/2008 and establish a fast-track approval procedure in some cases. Clinical trials concerning immunobiological and antiretroviral medicines are not permitted to be subject to the fast-track channel. As far as we are aware, at the time of writing, Resolution 39/2008 is still undergoing a review process.

iv Named-patient and compassionate use procedures

There are two types of named-patient programme often carried out in Brazil: compassionate use and expanded access.

Compassionate use is the treatment of seriously ill patients who have exhausted all alternative treatment options and do not match clinical trial entry criteria, using a new and as yet unapproved drug. Compassionate use programmes facilitate the availability to patients of new treatment options while still under development.

Compassionate use is regulated by Resolution RDC 38/2013 and Resolution CNS 251/1997. The drug can be supplied to the patient regardless of the phase of the trial, since there is prior written approval from the CEP, duly ratified by CONEP and ANVISA.

Expanded access is a programme established by a company sponsoring a clinical trial in the latter stages of drug development (Phase III clinical trials) with the objective of offering the drug to patients who were not able to enrol in the clinical trial. The expanded access programme is regulated by Resolution RDC 38/2013. The programme is allowed in three cases: (1) for drugs on clinical trial Phase III in Brazil or in the country of origin; (2) if the expanded access programme is already approved in the country of origin; or (3) if the drug has already been granted an MA in its country of origin. ANVISA’s approval is necessary and may only be granted for patients with serious and life-threatening illnesses, as long as no satisfactory alternative therapies are available. The drug must be supplied to the patients free of charge.

Brazil

62

v Pre-market clearance

There are two levels of health licence in respect of the producer, importer or distributor of drugs: at the state level (or municipality, as appropriate) there is the LF and at the federal level there is the AFE. While there are minimum documents referred to in Law 6,360/76, each state has the authority to establish the requirements deemed necessary to exercise health surveillance. First, the company must be properly incorporated in Brazil, and the respective articles of association or by-laws must explicitly describe the intended activity. It is the extent of these activities that will determine the type of licence required and, hence, determine the greater or lesser degree of requirements to be met to obtain it.

The manufacturer must meet more requirements than the distributor whose facility is a simple warehouse and whose activity is exclusively commercialisation. The importer, in turn, has a peculiar situation: although it is not a manufacturer, in certain situations it must have the specific characteristics of a manufacturer, because an importer is responsible to the Brazilian health and consumer authorities for the products it imports. Manufactures and importers can be MA holders, while distributors cannot.

Licences may be granted only after prior inspection by local health agents. Only after the LF and the AFE are granted will the company be able to start its manufacturing, importing, distributing and marketing activities. Also, only after obtaining all required licences will a company be able to apply for an MA for its products.

ANVISA has exclusive authority to grant MAs for medicines and other health-related products in Brazil. An MA is valid for five years and may be extended for successive equal periods, but the application form must be submitted to ANVISA at least six months before the expiration date. The MA application must be submitted to ANVISA with a list of supporting documents; the filing of separate documents later in the process is not allowed (except if required by the health authorities). Failure to submit the minimum necessary documentation will lead to denial of the application.

The main requirements for product registration are the following:a the product must have a name that distinguishes it from other similar products

and that does not cause misunderstanding;b the product must have a scientific or technical report attesting to its safety and

effectiveness;c extensive documentation must be provided (especially for new products) regarding

its composition and use, thus supporting the product’s safety and effectiveness;d ANVISA may require, at its own discretion, the submission of samples for analysis

and testing;e whenever a new substance is presented, a sample of such substance (duly

accompanied by its chemical and physical identification) must be offered to ANVISA;

f for drugs that require specific technical apparatus, evidence must be provided that the manufacturing facility is properly equipped with such items, and that employees have been adequately trained to operate them; otherwise, an outsourcing agreement must be presented for such purpose;

g economic information should be presented to satisfy pricing regulations; andh a public fee must be paid (health surveillance inspection fee).

Brazil

63

vi Regulatory incentives

The Brazilian government is currently pursuing a policy of incorporating new technologies into the SUS. In some cases, this pursuit has involved the encouragement of technology transfers from global companies to public or private Brazilian laboratories. The development of such policies is carried out by the Secretariat of Science, Technology and Strategic Inputs of the MoH. The government’s current tendency is to trigger a process of incorporation of strategic technology and have a Brazilian laboratory trained and capacitated at all stages of the development of the product. Biologic products have an important place on the government agenda.

The MoH regulated the establishment of partnerships for productive development (PDPs) by means of Ordinance 837/2012. The main points to know about PDPs are that:a they may be entered into with a single company or with a consortium of companies

or alliances;b private entities with manufacturing facilities in the country are favoured;c the proposed level of production in the national territory is also considered;d in order to maintain market competitiveness, the government will avoid, as

much as possible, entering into PDPs exclusively with holders of exclusive rights (patents) that are about to expire or have recently expired;

e high-cost biologic products may entail more than one PDP; andf any consortia and alliances, upon offering partnerships for technology transfers

regarding high-cost products, that also offer partnerships to fight neglected diseases will be favoured.

In addition to the foregoing, the whole process is subject to the Public Bidding Law, Law 8,666/93, which is hierarchically superior to the aforementioned ministerial ordinance.

vii Post-approval controls

The responsibility for monitoring the safety and efficacy of medicines in Brazil is assigned to the SUS under Law 8,080/1990, and to ANVISA according to Law 9,782/1999. The monitoring of side effects and overall problems related to the medicines offered to Brazilian consumers basically happens in the gathering of the information sent to ANVISA by three important agents: the ‘sentinel hospitals’, a group of hospitals recruited by ANVISA with the duty to communicate to the authorities any events related to the use of medicines; the doctors, who are expected to report any event through ANVISA’s online notification system, and the pharmaceutical industry, which is supposed to inform ANVISA of any problems associated with their products. Every MA holder (manufacturer or importer) must comply with legal and technical rules concerning pharmacovigilance. In the Brazilian health surveillance system, the liability for health issues is a chain, from the manufacturer to the pharmaceutical professional, who directly sells the drugs to consumers.3 Moreover, from the perspective of the laws on consumer protection, all participants of the drug market chain are jointly and severally liable.

3 Article 67 of the Law 8,078/1990 plus Resolution RDC 44/2009.

Brazil

64

viii Manufacturing controls

The manufacturing of drugs is basically regulated by Law 6,360/1976 and Decree 8,077/2013. The controls carried out by health authorities relate to two aspects: the conditions and quality of the manufacturing processes and the quality of the product itself.

The manufacturing of activity will be authorised if the company shows evidence that it has the appropriate facilities and equipment to achieve the company’s purpose. Companies whose activities are importation and subsequent fractionation, packaging or repackaging, storage, transportation or shipment, must have the appropriate facilities and equipment, as well as adequate means of transportation. If, in addition to distributing, importing or marketing, the company carries out repackaging activities (e.g., importation in large boxes and repackaging into smaller portions), in addition to storage space, it will be necessary to have a specific area or section in which to carry out this activity, and also to perform quality control testing.

The more complex the manufactured, imported, sold or distributed products, the greater the requirements for their commercialisation will be and the company will have to present adequate conditions to ensure purity and effectiveness of the products delivered to consumers (e.g., biologic products require cold storage). Generally, the company must own a laboratory to perform quality control tests. In some cases, however, the regulation authorises the outsourcing of these services to outside laboratories that have been previously accredited by the health authorities.

According to Articles 53 to 56 of Law No. 6,360/1976, all companies that manufacture, store and distribute health products – including, but not limited to, medicines – must have at least one technician duly registered with the local professional council. This technician will be in charge of the company’s manufacturing, quality control and other activities, in general.

ix Advertising and promotion

Section 220(4) of the Brazilian Constitution establishes that the advertising of medicinal products is subject to limitations because the eventual misuse of such products may cause harm to consumers’ health. According to Law 9,294/1996, prescription drugs may only be advertised to health-care professionals. This rule complies with the Brazilian health policy that seeks to prevent the population from being recklessly exposed to potentially dangerous products. The advertising of medical devices is not subject to such strict rules.

According to Resolution RDC 96/2008, any promotional material of a prescription drug must contain: the product’s MA number; the drug description; any indications, possible side effects, drug interactions and contraindications; warnings and precautions; and scientific sources, confirming every claim referring to the drug’s effectiveness and safety. It is forbidden to advertise and merchandise indirectly, or to grant, offer, promise or distribute promotional gifts, benefits and advantages to health-care professionals or to the general public. According to Law 9,294/1996, only over-the-counter medicines can be advertised directly to the general public.

Brazil

65

x Distributors and wholesalers

Distributors, importers and traders, even those not carrying out any manufacturing activity, must employ at least one pharmacist technician.4 Even companies importing and distributing after repackaging, must have a qualified professional to oversee compliance with good operating practices (GOP), who must be available at the establishment at the time of any inspection. Distributors carrying out repackaging activities must also present the process chart for the manufacturing lines of such activity to the health authorities at the time of the licensing application. Besides fulfilling these requirements, companies must fulfil specific requirements for obtaining the LFs and the AFEs, pay the public fees for the issuance of the licences, present the certificates of technical responsibility, and undergo inspections carried out by the local health authorities.

There was an important discussion in the Brazilian courts as to whether distributors of medicines should have to retain pharmacist technicians to be in charge of their activities. After the enactment of Provisional Measure 2,190-34, in 2001, however, Article 15 of Law 5,991/1973 incorporated an explicit provision establishing that any company that distributes medicines should have a pharmacist technician, registered with the regional council of pharmacy, in charge of its operations. Moreover, the physical presence of a pharmacist at the company is mandatory during all working hours.

xi Classification of products

In Brazil, an innovative drug, represented by a brand and initially protected by patent, is qualified as a reference drug as opposed to similar or generic drugs released to the market after the patent expires. The reference drug will lose patent protection at the end of a specified time – when it will continue to be protected by the trademark, but under less favourable competitive conditions.

A similar drug may differ from the reference drug in some aspects related to the form of the product, but should be equivalent in its effects. A trademark should always identify the similar drug. The generic drug is a faithful copy of the reference product and cannot bear a trademark, but only the official name of its active ingredient. Given the current configuration of the Brazilian health regulations, which now require the same bioequivalence and bioavailability tests for similar and generic drugs, the substantial difference between them lies in the possibility of identifying the product by brand and form of product presentation.

Biologic drugs receive specific treatment.5 Regulations distinguish between biologic drugs and new biologic drugs. Biologic products can be registered by individual development or by comparability. Due to the technical complexity of the manufacturing of biologic products – which involves, inter alia, the development of cell lines – such products cannot be treated in the same way as drugs with simpler chemical manufacturing processes. The protein molecules found specifically in biologic

4 Articles 53 to 56 of Law 6,360/76.5 There is specific regulation for biologics: RDC 55/2010, RDC 49/2011, RDC 50/2011, RDC

234/2005.

Brazil

66

drugs are themselves more complex than those found in other chemically synthesised drugs. Thus, because perfect copies of biologic drugs are so difficult – and unlikely – to be produced (in terms of effects), they should not be called ‘similar’ biologic drugs. Nevertheless, with the expiration of some biologic patents, other manufacturers may try to (re)produce biologic drugs – these are biosimilars, also called follow-on biologics – which are not identical copies of the reference drug (and therefore will not be generic, in the technical and legal meaning of the term). The term ‘biogeneric’ is, therefore, not appropriate as it is understood that perfect copies of a biologic product are not possible.

xii Imports and exports

Resolution RDC 81/2008 sets out the general rules for imports and exports, establishing the Technical Regulation for Imported Goods and Products for Purposes of Sanitary Surveillance.

If the product is manufactured exclusively outside the country, the importer will also be the MA holder. Also, even in the case of a company importing already-packaged products, in-country quality control testing will be required. Every drug importer must ensure the quality and effectiveness of the product it imports. For non-biologics,6 quality control testing should comply with RDC 10/2011. In this case, the importer must have its own laboratory for quality control tests, and carry out the test for each batch received. Outsourcing of quality control testing will only be allowed in the exceptional cases provided in RDC 25/2007.

xiii Controlled substances

Ordinance 344/1998 regulates controlled medicines and medicines that can only be sold with the retention of medical prescription. Resolution RDC 39/2012 currently sets out the complete list of controlled substances.

Furthermore, in order to prevent the counterfeiting and illegal distribution of medicines, Law 11,903/2009 regulates the traceability of medicines in Brazil and establishes the national system for the control of medicines. According to the law, the improvement in the control of medicinal products includes the adoption of a unique identification of the products, manufacturers, importers, suppliers, health professionals and consumers, as well as digital technologies for the capture, storage and transmission of data. ANVISA has implemented this law by means of Resolution RDC 54/2013, which provides for a specific electronic system (a two-dimensional bar code called ‘Datamatrix’) to achieve full traceability of medicines in Brazil.

xiv Enforcement

Both federal and local health authorities have power to enforce health regulations. The penalties provided by Law 6,437/1977 for federal health regulation violation are, in

6 For biologic products, the RDC 234/2005 applies.

Brazil

67

general, strict and harsh.7 Some health regulation violations may even have criminal consequences.8 Therefore, companies must be diligent in their activities in order to comply with regulatory provisions.

Also, the system provides several mechanisms for preliminary enforcement to either mitigate potential risks to public health (e.g., withdrawal of inappropriate products or seizure of counterfeit drugs) or to discourage unwanted practices (e.g., determining that a licence will become invalid if no products are marketed by the company within a certain period).

III PRICING AND REIMBURSEMENT

Law 10,742/2003 created the Drug Market Regulation Chamber (CMED), which fixes a capped price for sales from pharmaceutical companies to their distributors, and for final sales to consumers. Prices of new drugs or new pharmaceutical presentation forms, used in both the outpatient and inpatient sectors, also have their prices regulated by CMED. After an MA is granted, the company submits related economic data and proposes a price to CMED. In the case of new presentation forms and generic drugs, the company can start the marketing of the product immediately. In all other cases, CMED must approve the price proposed before the product is marketed. Prices are readjusted in March every year.

As a general rule, all sales of medicinal products to public health-care providers are subject to a public bidding process, which broadly aims to ensure the lowest price possible to the public entity. In addition, Resolution CMED 3/2011 defines situations in which manufacturers of medicinal products are obliged to give a discount to public health-care providers.

Iv ADMINISTRATIvE AND JUDICIAL REMEDIES

Every AFE, LF and MA application is an administrative procedure, in which the company has the right to appeal. As a general rule, administrative appeals against a governmental act do not have a staying effect, except as otherwise provided by the law.9 Article 15, Section 2 of Law 9,782/1999, which constitutes ANVISA, provides the general rules for its activities: ‘the actions taken by the Agency may be appealed to the Board of Directors, as the last administrative instance, with staying effect’. Thus, following this specific provision, in general, all administrative appeals filed before ANVISA will stay the effects of the appealed decision until a final decision is issued. It means that, for instance,

7 Article 10(IV) of Law 6,437/1977 defines the violations of federal public health legislation sets out the respective penalties. The manufacturing and distribution of medicines without the proper licensing is subject to warning, seizure and destruction of product, total or partial closing down of the establishment, cancellation of product registration, and/or fine.

8 Article 273 of the Criminal Code.9 Article 61 of Law 9,784/1999.

Brazil

68

in a procedure for the renewal of an MA, the product is still authorised to be marketed during the appeal, even if the MA renewal was denied by ANVISA’s first decision.

According to Article 10, Section 3 of Resolution RDC 25/2008, upon receiving an administrative appeal, the health authority must formulate its first assessment, deciding on whether the conditions for admissibility of the appeal are met, as well as its staying effect. Until the admissibility of the appeal’s first assessment is issued, the appealed decision will be stayed. There are two exceptions to this general rule: ANVISA will not apply the staying effect to the appeal at the first assessment if (1) the appeal is filed against a precautionary health measure, or (2) the staying of the effects of the appealed decision potentially poses a risk to public health, but such decision must have legal grounds and be backed up in fact.

The first assessment can deny staying the decision. In such a case, depending on the situation, the company has grounds to file a writ of mandamus, especially when ANVISA’s decision is unreasoned or improperly motivated. The writ must address only the formal aspects of the first assessment, and may ask the court for a preliminary injunction to stay the appeal until a final decision is issued. In general, the writ of mandamus is the judicial procedure that guarantees private rights against public authorities.

v FINANCIAL RELATIONSHIPS WITH PRESCRIBERS AND PAYORS

The relationship among the pharmaceutical industry, doctors and patients is strictly regulated in Brazil. Both ANVISA and the Federal Council of Medicine (CFM) have established rules for the purpose of limiting the influence of the pharmaceutical companies over doctors and patients. According to Resolution RDC 96/2008, companies are not allowed to grant, promote or distribute gifts, benefits or advantages to prescribers, dispensers, those who sell directly to customers, and the public in general.

CFM Resolution 1,931/2009 (the Code of Medical Ethics) limits the relationships between pharmaceutical companies and doctors, strictly preventing doctors from practising their profession with financial dependence on said companies. Doctors are prohibited from receiving any benefit from any company as a result of prescribing specific procedures, drugs, prostheses or any kind of implant whose purchase is a direct result of these professional relationship.

These rules, along with the restriction on advertising (see Section II.ix, infra), are intended to protect patients, as the eventual misuse, overprescribing or unnecessary treatments may be harmful.

vI SPECIAL LIABILITY OR COMPENSATION SYSTEMS

According to the Brazilian Civil Code, whoever violates a right or causes damage to another, by a voluntary act or omission, negligence, recklessness or malpractice, is obligated to make reparations for the damage, even if the damage is exclusively pain and

Brazil

69

suffering.10 This is an open rule whose interpretation depends on the facts of the case and the evidence of the damages.

According to the Brazilian Consumer Protection Code, the consumer is defined as the ‘end user’ of a service or product, but this definition also applies to everyone that is exposed to the marketing of a product or service. On the other hand, the supplier is defined as the company that provides the product or service to an end user. Thus, a consumer relationship exists when there is a party that the law identifies as consumer and another that is legally identified as supplier. As per the Brazilian Consumer Protection Code, all suppliers in the consumer chain are potentially jointly liable for any damages caused to consumers. Suppliers of products are jointly liable for either quality or quantity defects.11

Even if a medicine has not yet launched but causes damage during a clinical trial, any damage (foreseeable or not) caused to the patient should be compensated, according to Resolution 466/2012. Under the same resolution, the written consent statement to be signed will set out the specific forms of compensation to cover any damage resulting from the research. Also, according to the resolution, the written consent should not contain any waiver diminishing patients’ rights to indemnification.

vII TRANSACTIONAL AND COMPETITION ISSUES

i Competition law

Currently, the main statute that regulates anti-competitive practices in Brazil is Law 12,529/11. A violation of the economic order will be deemed to have occurred, notwithstanding malicious intent, by an act in any way intended or otherwise able to produce the following effects:a limiting, restraining or in anyway injuring free competition or free enterprise;b dominating a relevant market of a certain product or service;c arbitrarily increasing profits; or d abusing a dominant position.

This legislation covers every economic sector, including the pharmaceutical sector, and is applicable to any acts wholly or partially performed within Brazilian territory or the effects of which are or may be suffered therein. This new Competition Law introduced the abusive exercise of intellectual property rights as an antitrust violation (industrial, technological or branding), which means that investigations in the medicines and medical devices industry, which are still incipient, will likely increase in coming years.

ii Transactional issues

In terms of strategic collaborations, technology transfers for national (public or private)institutions emerges with the support of government and involves distinct steps. Initially, while it incorporates the later stages of production (labelling, packaging, secondary

10 Articles 186 and 927 of the Civil Code.11 Articles 18 and 19 of the Consumer Protection Code.

Brazil

70

packaging), it is possible that a drug marketed in Brazil may continue to be manufactured by the foreign company. In the first stages of the technology transfer, there may also be government purchases to supply the needs of the SUS while the transfer of know-how takes place.

It is important to clarify that the process of technology transfer to the government is the subject of Law 8,666/93. In principle, it requires a public tender, which may be waived when it concerns contracting by a scientific or technological institution or a development agency, and when there are no competitors for that specific production process or product. Nevertheless, the tendency in Brazil is to hold a bidding process, even in the form of invitation to bid to the few holders of the technology sought by the government.

In these procedures, before starting a negotiation, a confidentiality agreement is signed. The selection follows technical criteria and it is not just determined according to price. Once the choice of supplier has been made, only then is the technology transfer agreement signed. The exclusivity of supply by the winning bidder – for a specified period of time – is part of the consideration payable for the technology transfer, and is contractually guaranteed, as well as the other rights of the supplier, which will depend on the negotiations and the terms previously established in the invitation to tender.

vIII CURRENT DEvELOPMENTS

Pursuant to the new Resolution 466/2012:

‘[R]esearch using experimental methods in a biomedical field involving human beings should also […] ensure to all participants at the end of the study, by the sponsor, free and indefinite access to the best prophylactics, diagnostic and therapeutic methods that have been proved effective.

Under the previous Resolution, 251/1997, the clinical trial protocol included that ‘access to the medicine being tested must be assured by the sponsor or by the institution, researcher, or promoter, if there is no sponsor, in the event its superiority to the conventional treatment is proven’. At first sight, it seems that these sections impose on the research promoter the duty to provide the new medicine to ex-research participants forever – and for free. This perpetual obligation hypothesis, is, however, just one way of interpreting the concept of ensuring access. The legal texts allow the interpretation of ‘ensure access’ in different ways. The task, therefore, is to debate the concept of access and the different possibilities referring to access. For instance, would the obtaining of an MA from ANVISA and the public sale of the product in pharmacies not be considered a kind of access? What about the rebate programmes to ex-research participants? In some cases, the answer to both questions would likely be ‘yes’. This issue – as well as, generally, the clinical research regulation – is currently being debated in the Brazilian courts, but so far no conclusive answers have emerged.

469

Appendix 1

about the authors

BeAtriz MA CAMArgo KestenerMattos Muriel Kestener AdvogadosBeatriz MA Camargo Kestener is a co-founding partner at Mattos Muriel Kestener Advogados in São Paulo. Mrs Kestener has 25 years of practice in civil and commercial litigation, with emphasis on cross-border litigation, product liability and life sciences law. She is recognised and noted by her peers on preventive, regulatory and administrative proceedings in health and sanitation law, intervention with the health authorities in behalf of the pharmaceutical, food, cosmetics, medical devices and other products related to the public health industries. She specialised in life sciences law and product liability. Mrs Kestener received her law degree from São Paulo Catholic University (1989) and was admitted to the Brazilian Bar Association in 1990.

ruBens grAnjAMattos Muriel Kestener AdvogadosRubens Granja is an associate at Mattos Muriel Kestener Advogados in São Paulo. Mr Granja practises in life sciences law, product liability, tort litigation and corporate matters related to the pharmaceutical, food, cosmetics, medical devices and other products related to the public health industries. Mr Granja received his law degree from the University of São Paulo (2006) and holds a postgraduate degree in torts from the Getulio Vargas Foundation (2009), a master of laws degree in law, science and technology from Stanford University (2012) and a master of laws degree in civil law from the University of São Paulo (2013). He was admitted to the Brazilian Bar Association in 2007.

About the Authors

470

MArCo Aurélio AntAs torronteguyMattos Muriel Kestener AdvogadosMarco Aurélio Antas Torronteguy is an associate at Mattos Muriel Kestener Advogados in São Paulo. Mr Torronteguy practises in health law, particularly dealing with the Ministry of Health, the National Agency of Sanitary Surveillance, State Health Offices and other regulatory authorities. Mr Torronteguy received his law degree from the Federal University of Santa Maria (2003) and holds a PhD in health law from the University of São Paulo (2010). He was admitted to the Brazilian Bar Association in 2004.

MAttos Muriel Kestener AdvogAdosAlameda Santos, 1940, 10th floor01418-200 São PauloBrazilTel: +55 11 3149 6100 Fax: +55 11 3149 6101 biakestener@mmk.com.brrgranja@mmk.com.br matorronteguy@mmk.com.br

www.mmk.com.br