I INTRODUCTION

The life sciences sector has its own regulations and rules. The pharmaceutical and medical devices industries are regulated and supervised by the health authority. Compliance is paramount to obtain and maintain the licences and marketing authorisation required to do business. The main competent health authorities are the Ministry of Health (MPPS) and the Rafael Rangel National Hygiene Institute (INHRR). The main law is the Law on Medicaments.

II THE REGULATORY REGIME

i Classification

There are different regulations for medicines, foods and cosmetics. Each has their own rules, permits and authorisations. To know which requirements are applicable, definitions are given in the laws on medicine, food, medical devices and cosmetics.

Any substance and its associated substances or combinations thereof intended to prevent, diagnose, alleviate or cure diseases in human beings or animals, or to control or modify their physiological or physiopathological state is considered to be a medicine.

'Food' covers not only substances intended for the nutrition of the human body, but also those substances that are part of or brought together in the preparation, composition and conservation of food, drinks of all kinds and any other substances, with the exception of medicines, for the purpose of being ingested by human beings.

Cosmetic products are those made with natural or synthetic substances for external human use and local action, applicable on the skin for aesthetic and protective purposes. This definition also applies to products for use as or related to personal hygiene and perfumes.

ii Non-clinical studies

There is no regulation for non-clinical trials or the regulation of studies on animals.

The Venezuelan pharmaceutical industry is not well developed and therefore non-clinical trials are seldom carried out in the country.

There are also are no regulations on animal testing, only for clinical trials involving human beings.

iii Clinical trials

Venezuelan law defines a clinical trial as any experimental evaluation of a drug by its administration or application in human beings, to highlight its pharmacodynamic effects or to collect data on its absorption, distribution, metabolism and excretion in the human body, to establish its efficacy for a specific therapeutic, prophylactic or diagnostic indication and to know the profile of its adverse reactions and interactions and establish its safety.

All clinical trials must be authorised by the MPPS. They must be carried out under conditions that respect the fundamental rights of the person, and for ethical and scientific reasons that advance biomedical research that affects human beings, in line with the Declaration of Helsinki on Human Research and all subsequent updates. All candidates who participate in research studies must be informed in advance about the scope and risks of the trial, and give their written consent, in which they state that they are fully aware of both the scope and the potential risk in taking part in the trial.

iv Named-patient and compassionate-use procedures

There are no named-patient or expanded-access programmes in Venezuela. The practice of supplying a doctor with unapproved medicine to treat a named patient or for compassionate use is not explicitly regulated in Venezuelan law. However, there are several provisions regarding medicine and pharmacy laws and regulations that may apply.

The Review Board of the INHRR may grant a special authorisation for the importation of non-registered pharmaceutical products for specific cases where there is no available medication or for the treatment of rare diseases. The Review Board will decide which cases merit authorisation, which may be granted for a maximum period of six months. (This procedure is considerably shorter than processing a sanitary registration certificate.) The following must be verified as part of the INHRR's assessment: the pharmaceutical product to be imported under the above-mentioned circumstances is not available on the national market; the product is not intended for mass commercialisation; the specific health reasons for the importation; and any other fact that the Review Board may consider relevant. Following authorisation by the Review Board, the MPPS will grant an importation permit for the pharmaceutical products without a sanitary registration certificate (or marketing authorisation). In the event that the importer's intention is mass commercialisation of the product, a sanitary registration certificate must be obtained.

v Pre-market clearance

The registration procedure is initiated by filing an application form before the INHRR with the corresponding legal, technical, scientific and clinical documents, as well as samples of the product and the proposed container and labelling. The product name (or brand) must be specified and the following information, inter alia, must be provided: method of development, quali-quantitative formula, physicochemical properties of the active ingredients and excipients, clinical and preclinical studies, stability and bioequivalence protocols, package texts, labels and package insert with instructions (including dosage) and product samples.

After reviewing all the relevant documents and carrying out a pharmacological, physicochemical and microbiological analysis of the product, the Review Board of the INHRR issues a report stating the approved dosage, indications and contraindications of the product. This report is published in the Bulletin of the Review Board and then the INHRR issues an official communication containing the sanitary registration certificate (or marketing authorisation), which is later ratified by a resolution of the MPPS and published in the Official Gazette (in which all laws, regulations and main administrative authorisations are published).

vi Regulatory incentives

Medicines are not granted patents, in line with the Intellectual Property Law (1955). There are patents in existence that were granted during the period that Venezuela was part of the Andean Community of Nations (CAN); however, application of the Intellectual Property Law was resumed in 2008. There are no legal regulations that provide for extensions to patent terms.

There is also no special law that governs protection of the exclusivity of regulatory data; however, Venezuela is a signatory to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which establishes the minimum data protection standards that each Member State must provide. Pharmaceutical companies do not have an exclusive right to market medicines. Likewise, medicines should not be prescribed under the name of a specific brand, but by the active principle ingredients or the International Common Denomination.

The Law on Medicaments establishes that public entities should acquire generic medicines in preference to brand-name products, and generic medicines must have a lower price than the equivalent brand-name medication.

vii Post-approval controls

Pharmaceutical companies must employ a qualified chemist to oversee the procedures for quality assurance of medications. The Rules of Good Distribution Practice of Medicines set out further regulations on personnel, facilities and documentation relating to pharmaceutical companies. These Rules also regulate the procedures required for the recall of medicines in the event that actual or suspected health risks are detected.

The MPPS has procedures in place to ensure the continuing protection of users against the adverse effects of drugs and all related complaints, and to take the necessary action to safeguard public health. The Standards of Good Manufacturing Practices for Pharmacovigilance (2010) set out the duties of the National Centre for Pharmacovigilance (CENAVIF), which aims to maintain a system for effective pharmacovigilance and the evaluation of adverse events caused by drugs. The Law on Medicaments sets out a notification procedure (based on a 'spontaneous notification' system), whereby manufacturers and representatives of medicines must designate a person to be responsible for pharmacovigilance. Health professionals and drug manufacturers are obliged to inform the agencies responsible for pharmacovigilance, and provide evidence of any detected side effects or harmful or secondary effects caused by medications.

viii Manufacturing controls

The regulatory authorities maintain prior control (through authorisations) and subsequent control (through audits) of the facilities used for the manufacture, conditioning, storage, transport and sale of medicines, cosmetics and food. There are standards that establish the minimum requirements that these facilities must have, with the aim of minimising the risk of error; allowing for proper cleaning and order; avoiding cross-contamination; and maintaining the high quality of the products. The presentation to the authorities of the physical description of the facilities (plans, construction materials, ventilation systems and others) and compliance with rules of space distribution, separately by areas: storage, conditioning, raw materials, product is required finished, dispatch, waste, destruction, non-conforming, changing rooms and others. Depending on the type of product, there may be additional special requirements.

It is not necessary for the infrastructure to be owned by a manufacturer, distributor or marketer; the owner can be a third party. However, contracts must be signed prior to the use of any facilities by a third party, and the MPPS must be notified. All the installations, whether owned directly or by a third party, must have all the corresponding authorisations and uphold the required conditions.

ix Advertising and promotion

Advertising and promotion of medications are regulated by the Law on Medicaments (2000) and by the Venezuelan Standards for Advertisement and Promotion of Medications issued by the MPPS (2004).

Only medicines duly approved and registered for marketing purposes in Venezuela may be advertised. All advertising must be approved in advance by the MPPS. Advertising that targets the general public is limited to over-the-counter products. General advertising and promotion are forbidden for medicinal products that require a prescription from a physician or a pharmacist. Any advertising of medical products, whether verbal, audiovisual or written, must be informative, educative, true, up to date and testable; it must be in Spanish, and must contain the following warning: 'If ailment does not get better with treatment, stop using and consult a doctor.' Labels and containers must indicate the name of the product, the active substances, the concentration, the healthcare record number, the production and expiry dates, and the name and address of the representative or pharmacist of the medicinal product. Dosage instructions and contraindications must also be indicated clearly on the product.

Advertisements must not induce irrational self-medication or the abuse of medication, and it is prohibited for free samples of medication to be given out to the general public. The use of the words 'harmless' and 'quality' in the warning text is also prohibited. Comparing products and product prices is permitted, but mention must be made only of the generic denominations and not the brand names of the medications.

x Distributors and wholesalers

All pharmaceutical companies, distributors, representative offices and pharmacies must be authorised as sanitary authorities and must hold sanitary registration certificates.

The different processes involved in purchasing, importing, receiving, storing, dispensing and distributing medicines must be carried out in compliance with established procedures that guarantee the maintenance of quality of the medicines.

xi Classification of products

Medicines are classified as:

  1. those that must only be purchased in accordance with the provisions of the Organic Law on Narcotic and Psychotropic Substances;
  2. those that can only be purchased with a prescription or special permission from the MPPS;
  3. those that require a prescription prior to purchase. That prescription must be then retained by the chemist or pharmacy that supplies the medicine and be recorded in the log books kept for that purpose;
  4. those that require a prescription, but that prescription can be repeated as many times as stated therein; and
  5. those that can be purchased without a prescription.

Non-prescription medicines can be promoted and advertised on all forms of social media, but medicines that need a prescription must be promoted and advertised exclusively to doctors, dental surgeons, chemists or other health professionals. They can never be promoted or advertised to the general public.

xii Imports and exports

All medicines to be imported into Venezuela must be registered with the MPPS and importers must have the required sanitary registration certificate (or marketing authorisation) for each medicine to be imported and commercialised in Venezuela.

All imported medicines should have undergone clinical evaluation before being distributed, in the form of clinical trials carried out on patients in the country of origin by appropriate professionals linked to institutions that carry out research, such as universities and hospitals. An exception may apply if the appropriate technology for the clinical study does not exist in the country of origin. Medicines that do not comply with internal regulations cannot be imported. Certain kinds of medications (those that treat rare diseases, low-incidence pathologies in the country or those required for special sanitary circumstances or epidemics) may be imported and sold without a sanitary registration certificate (or marketing authorisation). However, these types of medications can only be imported by institutions, manufacturers or distributors that have been duly authorised, and may only be marketed by the authorised institutions.

In the case of exports, both pharmaceutical companies and their representative offices can export medicines that comply with all the statutory requirements.

xiii Controlled substances

Customs operations for importing and exporting narcotic and psychotropic substances shall be carried out by pharmaceutical and representative offices exclusively for raw materials, after obtaining the necessary licence and the corresponding authorisation, requested by the pharmaceutical agent and granted in his or her name.

xiv Enforcement

The MPPS and other regulatory authorities may carry out inspections at the facilities of importers and product marketers, including chemists, at any time at their discretion, or as a result of a third-party complaint, without prior notice. In the event that any irregularity or violation of the regulations is found, the authorities will initiate an administrative sanctioning procedure, during which the company can present its defence and supporting evidence; the time limit for this is four months, which can be extended for an additional two months. Offenders may be punished with a fine, partial or permanent closure of the establishment, revocation of the operating permits for the facilities, cancellation of the health records of any or all products, or confiscation or destruction of any or all products. During the procedure, precautionary measures can also be issued.

Any instance of advertising, offering or sale of adulterated, falsified, expired medicines, whose quantity, dose or composition has been altered, or substances that imitate medications or that endanger the health or life of users, will be sanctioned with imprisonment (of between six months and three years) and temporary disqualification from exercising one's profession.

III PRICING AND REIMBURSEMENT

Before 22 November 2011, the market price of a medicinal product was subject to a dual regulation depending on its active ingredients. The prices of some products were regulated by the authorities, but other products were not price-regulated, and the authorities were given only 30 days' notice of new market prices prior to the sale of products at those new prices. The Law on Fair Prices, as amended on 8 November 2015, applies to all individuals and corporations that, as a result of the performance of their activities within the territory of Venezuela, produce, import or commercialise goods or services for monetary reward. It establishes a maximum profit margin (of 30 per cent) for the determination of prices. Furthermore, as of November 2018, the National Superintendence for the Defence of Socioeconomic Rights, which is the agency that administers the Law on Fair Prices, issued a list of maximum prices for 54 essential medicines. These new prices were previously discussed with some pharmaceutical companies acting in the domestic market.

There is no public policy to reimburse the cost of medicines. The Venezuelan Social Security Office (IVSS) and public hospitals hand out medications free of charge. Private insurance companies do reimburse the cost of medicines, provided they are prescribed by a healthcare professional in connection with a condition covered by an insurance policy.

A programme entitled Pharmacy of High-Cost Medications was implemented in 2009. Under this programme, patients, whether affiliated to the IVSS or not, are given medication free of charge to treat the following diseases: cancer, multiple sclerosis, viral hepatitis, rheumatoid arthritis, haematological diseases, transplants, attention deficit hyperactivity disorder, osteoporosis, schizophrenia, Gaucher's disease, Fabry disease, pulmonary hypertension and terminal chronic failure. To access these high-cost medications, the patient must file a medical certificate confirming the presence of the disease, his or her identity document and the prescription. This programme is managed by the IVSS and currently 73 pharmacies throughout Venezuela are used exclusively for this purpose.

IV ADMINISTRATIVE AND JUDICIAL REMEDIES

Administrative redress can be sought against administrative decisions imposed by the authorities. There is the recourse of reconsideration, whereby the public official is asked to reconsider his or her decision. There is also the recourse of hierarchy, whereby a change to the decision is sought before a public official in a higher position.

It is also possible to go before the competent courts and bring an action to nullify the administrative decision. Natural and legal persons have the option of trying administrative recourses, as above, or going to court. If an administrative recourse has already been attempted, it is not possible to go to court until all the administrative recourses established by law have been exhausted.

V FINANCIAL RELATIONSHIPS WITH PRESCRIBERS AND PAYERS

The relationships between companies dedicated to the commercialisation of medicines and medical devices, including those who provide health services and insurers, are governed by the ordinary rules on common commercial relationships: the prohibition of constituting cartels, setting predatory prices, performing boycotts, exclusionary practices and unfair competition. The payment of bribes, the payment of or request for benefits to public officials, and individual bribes are also sanctioned. The public administration has the obligation to make bids for the acquisition of goods, including the purchase of medicines and health equipment.

The prohibited practices described above are sanctioned by the following regulations: Law Against Corruption, Antitrust Law, Organic Law of Fair Prices and Law of Insurance Activity. In the case of medicines, the provisions of the Rules of the Pharmaceutical Products Review Board of the INHRR and internal compliance code also apply and, for affiliated laboratories, the Code of Conduct of the Venezuelan Chamber of Medicine. The conduct of the health services is governed by the Law on the Exercise of Medicine and the Code of Medical Deontology.

VI SPECIAL LIABILITY OR COMPENSATION SYSTEMS

There is no special liability regime for damage or injury caused by medicines. The ordinary civil liability established in the Civil Code requires pharmaceutical companies to pay material and non-material damages.

VII TRANSACTIONAL AND COMPETITION ISSUES

i Competition law

The legislation governing anticompetitive practices is the Antitrust Law. Natural and legal persons, of public or private entities, national or foreign, for profit or non-profit, that carry out economic activities, or groups of the aforementioned who carry out these activities, in the national territory are subject to the provisions of the Law.

The anticompetitive practices designated in the Antitrust Law are: cartels; conduct, practices, agreements, contracts or decisions that prevent, restrict, distort or limit free economic competition; concerted practices; market concentration; and abuse of dominant position. Actions for unfair competition, infringement of patents, revocation or refusal to grant patents may be tried before ordinary courts; the procedure allows to agree precautionary measures.

ii Transactional issues

Strategic collaborations, joint ventures, mergers and acquisitions are allowed by any corporation. However, they are regulated by the Antitrust Law, since they can cause anticompetitive effects. It is not mandatory to request approval or authorisation from the authorities prior to conducting a market concentration operation, nor is any approval or authorisation necessary for the operation to become effective. There is also no obligation to notify the regulatory bodies once the operation is concluded. The parties involved, at their discretion, after evaluating the possible risks of the operation, depending on the market share of each of the participants in the operation, their location on the production scale, the total amount of the operation and the efficiencies to be generated, will decide whether it is expedient to request authorisation.

VIII CURRENT DEVELOPMENTS

Venezuela continues to experience critical shortages of medicines and food. Foreign currency and price controls, hyperinflation and political instability remain some of the causes of this crisis. Requests continue to be made in some political quarters for a humanitarian channel to be opened to allow essential medicines to be brought into the country. The government has not yet agreed to this; however, it has maintained agreements with China, Russia and India for the importation of medicines, which may create more of an opening in the pharmaceutical market. As yet, this opening has not appeared. Notwithstanding this, the relaxation of the foreign exchange control regime that occurred during 2018 might be beneficial for importers and manufacturers of medicines.

On the other hand, as part of Mercosur, Venezuela has incorporated the trade bloc's regulations into Venezuela's national legal system, which might allow for greater commercial relations with other member countries, although this possibility has also yet to become a reality.


Footnotes

1 Rosa Virginia Superlano and Victoria Montero are junior partners at Legˆa Abogados.