The Life Sciences Law Review: Brazil
Regulation of pharmaceutical products and medical devices started to take form in Brazil during the 1970s: Law 5,991/1973 and Decree 74,170/1974 covered sanitary control of sales of drugs, pharmaceutical inputs and related items; Law 6,360/1976 established rules for production, marketing and sanitary surveillance of products; and Law 6,437/1976 defined sanitary violations and relevant penalties.
Later, as part of an economic and legal modernisation during the 1990s, the National Health Surveillance System and the National Sanitary Surveillance Agency (ANVISA) were created by Law 9,782/1999.
Included in the long list of ANVISA's duties are:
- coordinating the National Health Surveillance System;
- establishing rules;
- proposing, keeping track of and enforcing policies, guidelines and actions for sanitary surveillance;
- authorising the activities of companies that manufacture, distribute and/or import products regulated by the law;
- issuing import and export permits for the same products;
- granting marketing authorisation to products;
- issuing infraction notices and enforcing penalties; and
- establishing, coordinating and monitoring the systems for toxicological and pharmacological surveillance.
State and municipal governments also have sanitary surveillance bodies, whose competence involves inspection and licensing of facilities, as well as local surveillance of health products and compliance with sanitary legislation.
The regulatory regime
Medicines in Brazil are subject to stricter regulation than medical devices. For example, medicines are subject to price controls, while medical devices are not.
Medical devices are regulated by ANVISA under Resolution RDC 185/2001, Resolution RDC 36/2015 and Resolution RDC 40/2015. Restrictions on the advertising of medical devices are not as strict as those applicable to medicines (Resolution RDC 96/2008).
Activities related to the manufacture, import, export and distribution of products that are subject to sanitary control (including medicines and medical devices) require authorisation by ANVISA and licensing by local sanitary authorities.
According to Law 9,782/1999, the products submitted to the control and surveillance of ANVISA are:
- medicines for human use, their active substances and other inputs, processes and technologies;
- foods and beverages;
- cosmetics, personal care products and fragrances;
- disinfectants meant for cleaning, disinfection or disinfestation of homes, hospitals and public places;
- kits, reagents and inputs used for diagnosis;
- medical and hospital, dental and hemotherapy equipment and materials, as well as equipment and materials for laboratory and image diagnosis;
- immunobiologicals and their active substances;
- blood and blood products;
- human and animal organs and tissues to be used in transplants or reconstructions;
- radioisotopes for use in in vivo diagnosis and radiopharmaceuticals, and radioactive products used in diagnosis and treatment;
- cigarettes, cigarillos, cigars and any other smoking products, whether derived from tobacco or not; and
- any products that may result in the possibility of risk to health, obtained by genetic engineering, or by any other procedures, or submitted to radiation sources that may result in potential risk to health.
There are legal definitions of medicines and medical products. Article 4 of Law 5,991/1973 defines a medicine as a pharmaceutical product, technically obtained or prepared, for prophylactic, curative, palliative or diagnostic purposes. In turn, Article 25 of Law 6,360/1976 defines medical devices as appliances, instruments and accessories used in medicine, dentistry and medical-related activities, as well as in physical education, beautification or aesthetic correction.
Based on these definitions, to correctly classify a product under these categories, it is important to study its characteristics and uses.
ii Non-clinical studies
Law 11,794/2008 establishes rules for animal testing in science. It also created the National Council for the Control of Animal Experimentation (CONCEA), a body linked to the Ministry of Science and Technology (currently Ministry of Science, Technology, Innovations and Communications), responsible for coordination of the procedures for animal testing in trials.
Articles 11 to 16 of that law contain specific rules regarding protection of animal welfare: any entity involved in the breeding of animals for educational or scientific purposes must be licensed by the Ministry of Science and Technology, and for that purpose it must establish an internal ethics committee with the participation of veterinary surgeons, biologists, professors and researchers in the specific area of interest and one representative from an animal protection society legally established in Brazil.
iii Clinical trials
The rules that govern clinical trials in Brazil are ANVISA's Resolution RDC 9/2015 and Resolution RDC 10/2015, and the National Health Council (CNS) Resolution CNS 466/2012. No federal law has been enacted regarding this matter yet; however, there is a bill of law pending in the House of Representatives (formerly PLS 200/2015, currently PL 7.082/2017).
The National Research Ethics Committee (CONEP/MS), a body linked to the Ministry of Health, is responsible for deliberation, surveillance, follow-up and monitoring of public policies for health. It evaluates the ethical aspects of the studies; the research protocol is scrutinised to ensure its correctness, clearness and compliance with ethical standards). This is followed by an analysis by ANVISA, focusing on the technical and health aspects.
iv Named-patient and compassionate use procedures
According to Resolution RDC 81/2008, pharmaceutical products for which marketing authorisations have not been granted can be imported by individuals for personal use only. A request should be presented to ANVISA with documents that allow for an assessment of (1) whether the product has had marketing authorisation issued in its country of origin, and (2) the efficacy and safety of the drug.
Resolution RDC 203/2017 establishes criteria and procedures for the importation, on an exceptional basis, of products subject to sanitary surveillance without registration in Brazil, intended exclusively for use in public health programmes by the Ministry of Health and its related entities.
In addition, Article 24 of Law 6,360/1976 establishes that new medicines, exclusively for experimental use but under medical control, are exempt from registration, and may also be imported with the express authorisation of the Ministry of Health. This exception is valid for up to three years.
Brazilian legislation also allows patients, under compassionate use programmes, to have access to medicines that are still in the clinical development phase. Finally, under the expanded access programmes, patients may have access to medicines during and after Phase III clinical trials.
v Pre-market clearance
The first step to obtaining marketing authorisation for a pharmaceutical product is to obtain the proper licence from ANVISA. The bureaucratic process and technical requirements for these licences vary depending on the applicant's activity (i.e., whether manufacturer, distributor, importer or exporter).
The applicant must be Brazilian; foreign companies cannot apply directly, but they can do so through local distributors.
The applicant must then file the request for marketing authorisation. Along with the necessary forms, documents regarding the product, its composition, trade name (brand), pharmaceutical form, presentation, sanitary restrictions, validity term and instructions for storage must be presented. The same goes for reports on production and quality control and reports on experiments (including clinical trials) conducted by the company. A draft of the product's proposed instruction sheet or insert, a sample of the label's layout, proof of payment of the sanitary fee and the suggested price must also be submitted.
Issuance of marketing authorisation still takes a year. Law 13,411/2016 rationalises the analysis and establishes strict time limits based on how urgently patients need the drug and how complex the drugs are.
For medicines, this law establishes an examination procedure that takes into consideration the technical complexity of the matter and the clinical, economic and social benefits derived from use of the product, subject to the request. Processes are classified as prioritised (120 days for a decision, starting from the request for priority examination) or ordinary (365 days for a decision, starting from the date of the market authorisation request). These deadlines can be extended by one-third, once only, by ANVISA.
Law 13,411/2016 was followed by Resolution RDC 204/2017, which sets forth the products to which prioritised analysis applies.
According to ANVISA's regulations, the fees for obtaining marketing approval vary according to the size of the company and are measured by annual gross revenue – the amount may be as much as 157,416 reais for a new product that is part of a large group. For generic and branded generic medications, the costs are lower.
Medical devices are subject to either simply being listed by ANVISA or a registration process, depending on the level of risk attributed to the product. The listing process is simpler, since no registration examination is required. For some technical and more specific products, further certification by a technical agency (National Institute of Metrology, Quality and Technology (INMETRO), linked to the Ministry of Development, Industry and Foreign Trade) may be necessary.
vi Regulatory incentives
Intellectual property rights, including patents, trademarks and industrial designs, are considered fundamental rights, as per Article 5, Paragraph XXIX, of the Brazilian Constitution.
Brazil is also a Contracting State of the Paris Convention for the Protection of Industrial Property, the Stockholm Act, the Patent Cooperation Treaty and the TRIPS Agreement.
Law 9,279/96 regulates the rights and obligations related to industrial property, establishing the procedure for granting patents, the requirements placed on patent holders, and the extent of the rights granted by a patent. It also encompasses the procedures for granting trademarks and industrial designs. Copyrights and software are subject to separate laws.
Patents are valid for a period of 20 years starting on the filing date. It usually takes more than 10 years after an application is filed for a pharmaceutical patent to be granted, mainly because of the backlog faced by the National Industrial Property Institute (INPI). According to the Sole Paragraph of Article 40 of Law 9,279/1996, a patent of invention is valid for a minimum period of 10 years from the date it is granted (or seven years for utility model patents), thus ensuring that the patent owner has a minimum protection period. The Sole Paragraph of Article 40 of Law 9,279/1996 is the subject of an action for alleged unconstitutionality, awaiting judgment by the Supreme Court.
There is no specific link between marketing authorisations and patent protection. According to Article 43, Paragraph VII, a patent violation is not deemed to have occurred in connection with 'acts practised by unauthorised third parties, related to the invention protected by a patent, for the sole purpose of producing information, data and test results, aiming at obtaining marketing authorisation in Brazil or abroad for the exploitation and commercialisation of the patented product, after expiration of the time limits set out in Article 40'.
Article 195 of Law 9,279/1996 defines the types of criminal unfair competition, among which is to 'divulge, exploit or use without authorisation the results of tests or other undisclosed data whose preparation involves considerable effort and that have been submitted to government entities as a condition for approving the marketing of products'. However, there is no specific legal provision for the protection of dossiers (which are necessary for marketing authorisation requests, or contain data about clinical trials of reference drugs). These documents are considered confidential by ANVISA.
vii Post-approval controls
Post-registration alterations are regulated by Resolution RDC 73/2016.
Among the obligations of a marketing authorisation holder is the need to report to ANVISA any incidents, adverse effects or technical complaints related to the product. Periodic safety reports are mandatory, and proof of their submission is one of the conditions to be met when renewing a marketing authorisation.
After marketing authorisation is granted, the holder can make requests for alterations, from simple to complex ones. For requests of a simple nature, with no repercussions on safety, quality of efficacy of the product, the procedure is equally uncomplicated, with little or no analysis of documents. For complex topics (such as changes in formula or the ingredients of a product), technical evidence must be submitted to facilitate a thorough examination.
viii Manufacturing controls
Companies involved in the activity of extracting, producing, manufacturing, processing, packing or repacking pharmaceutical products or ingredients must have an operating permit (AFE) from ANVISA. For certain controlled drugs, applying for special authorisation (AE) is necessary. Additionally, authorisations from municipal and state health surveillance bodies may be necessary, depending on the where the facilities are located.
In addition to general information regarding the legal entity itself, the request must consider appropriate technical information. Demonstration of the adequacy of facilities and equipment, an established quality system, clear validation policies and qualified human resources, among other things, is a condition for obtaining an AFE. If an AE is necessary, submission of additional information, such as a copy of the guidelines on good manufacturing practices (GMPs) and a list of all controlled pharmaceutical substances that will be produced at the facility, is mandatory.
Inspections for issuance of AFEs and AEs for manufacturing are conducted by municipal, state and national bodies.
ANVISA is responsible for the issuance of GMP certificates. These apply to production facilities, covering production lines, pharmaceutical forms, therapeutic or product risk classes for which companies have been inspected. GMP certificates are valid for two years, starting from the date of publication in the official federal gazette. In August 2019, Resolution RDC 301/2019 was issued by ANVISA with changes to the General Rules for GMP.
According to Resolution RDC 102/2016, provided that the technical characteristics inspected at the time of issuance remain the same, GMP certificates only need to be updated in the case of a commercial or corporate transaction, to reflect the new situation of the certificate holder. According to the same regulation, management of AFEs and AEs depends on the nature of the operation.
ix Advertising and promotion
There are several instruments concerning the promotion and marketing of pharmaceutical products in the Brazilian legal framework, such as Law 6,360/1973, Law 9,294/1996 and Decree 2,018/1996.
The Brazilian Association of the Research-Based Pharmaceutical Industry (Interfarma) has a code of conduct for pharmaceutical product advertisements. The Brazilian Self-Regulatory Advertising Code, issued by the National Self-Regulatory Advertising Council (CONAR), also applies to drug advertising. However, the major guidelines for promotion of pharmaceutical products to both healthcare professionals and the general public are Resolution RDC 96/2008 and Normative Ruling 05/2009, both issued by ANVISA.
Promotion of prescription medicines is limited to media directed exclusively at healthcare professionals who are qualified to prescribe or dispense them. Advertisements must contain certain technical information, such as the number of the marketing authorisation, indications and counter-indications, possible adverse reactions and interactions with other medicines, food and alcohol. For specially controlled products, promotion is limited to publications of exclusively technical content, referring to diseases and medications, destined exclusively to healthcare professionals qualified to prescribe or dispense specially controlled medication. Advertisements citing scientific information must refer to data extracted from academic journals, with bibliographical data and an indication of the origin of the study.
Additionally, advertisements for specially controlled medicines can cite technical-scientific articles related to the active principle of the medication. Full bibliographical references must be disclosed.
Over-the-counter drugs (OTCs) can be advertised to the general public, through different media, but promotions must observe some limitations. Advertisements for OTC medicines must not:
- contain expressions mentioning 'scientifically proven' or 'demonstrated through clinical trials';
- suggest that a product is the only means of treatment, or that healthy habits or visits to a doctor are superfluous;
- employ celebrities or people known to the public stating that they use the product or recommending its use;
- employ direct or indirect language relating the use of the product to alcoholic or gastronomic excesses;
- relate the product to physical, emotional or sexual attributes or beauty of a person, except when these are properties approved by ANVISA;
- present abusive, deceitful or frightful images of diseases; or
- include messages, symbols or images directed at children or teenagers.
Medical devices are not subject to any specific guidelines but, according to Law 6,360/1973, health surveillance authorities may intervene if an advertisement for a specific product is considered harmful to public health.
x Distributors and wholesalers
Distributors, importers and exporters (as well as companies performing the activity of storage and transport) of medicines, health products, cosmetics, personal hygiene products, perfumes and sanitisers must obtain a licence from ANVISA to operate, under Resolution RDC 16/2014. Depending on the activities to be performed, further state and municipal authorisations may be necessary.
The request must be submitted to ANVISA, comprising both general aspects (acts of incorporation, taxpayer identification number, activities performed by the company, local authorisations, service agreements or similar documents signed with companies licensed by competent authorities, proof that the technical manager is a qualified professional, GDP manual if applicable) and technical aspects (proof of technical capacity, demonstration of qualified personnel, hygiene conditions, statements of purpose for reception, identification, stock control and storage of finished, returned or withdrawn products, proven quality system, among others). Official fees for licensing are variable, linked to the company's size and revenue.
xi Classification of products
There are five categories in Brazilian law regarding medicines, determined according to dispensation and restriction of access:
- drugs sold with medical prescription (without retention of the prescription);
- drugs sold with medical prescription, in which the prescription must be retained by the pharmacist or drugstore (no refill without another prescription);
- drugs subject to special control; and
- drugs exclusively used in hospitals.
OTCs can be advertised to the public, under limitations specified by Resolution RDC 96/2008. Advertising of prescription medicines (including those subject to special control and exclusively used in hospitals) is limited, and should be aimed at medical professionals only.
xii Imports and exports
The importation of medicines and medical devices is regulated by Resolution RDC 81/2008, issued by ANVISA. The holders of the marketing authorisation for a product, and third parties authorised by the marketing authorisation holder, can import and export it. In 2018, Resolution 228 brought a few changes to rules regarding the importation. The new rules require differentiated treatment for products subjected to ANVISA's inspection by creating four types of channels that consider the type of product and its risk. In addition, Resolution 228/2018 created nine criteria for managing the sanitary risk of imports, which include the history of the company, the existence of problems regarding the use of the product and the result of laboratory analyses.
Prior authorisation must be granted by ANVISA for the importation of medicines and medical devices, which can be granted either when the relevant shipment leaves its port of origin abroad, or when it arrives in Brazil.
Importers in general must be enrolled with the Integrated Foreign Trade System (SISCOMEX) and obtain authorisation for their activities from the Federal Revenue Service (i.e., an 'Ambient for Registration and Tracking of Activities of Customs Agents' licence).
xiii Controlled substances
If a company intends to manufacture, manipulate, distribute, import or export certain controlled pharmaceutical products, it must apply for special authorisation from ANVISA.
When applying for it, further information and structures are required by ANVISA, such as a list of all controlled pharmaceutical substances to be distributed or transported and the existence of a separate, restricted area for these products.
Pharmaceutical products that contain controlled substances can be sold, but ANVISA's regulations require a pharmacist to retain the medical prescription and record every sale.
Law 6,437/1977 defines the infractions of sanitary regulations in the activities of manufacture, distribution, import and export, marketing and advertising of products subject to sanitary surveillance, as well as the relevant penalties.
Infractions are classified according to their importance, and penalties are applied accordingly, ranging from 2,000 to 1.5 million reais (which may be doubled in the event of recidivism).
As well as fines, sanitary authorities may impose one or more additional measures on the offender: warning, product apprehension, product destruction, product interdiction, suspension of sales or manufacture of the product, cancellation of marketing authorisation, total or partial interdiction of the company, prohibition to advertise, cancellation of sanitary authorisations, intervention in cases where the company receives public funds of any nature, and corrective advertisement.
The Brazilian Penal Code also contains a specific provision involving violation of sanitary rules: falsification and adulteration of therapeutic or medicinal products is considered a crime against public health, as is the sale of such products without marketing authorisation or with incorrect information.
Pricing and reimbursement
Drug prices are subject to analysis by the Drug Market Regulation Chamber (CMED), following the criteria of CMED Resolution 2/2004. A company intending to commercialise a product in Brazil must submit documents demonstrating the category of the product (from I to VI, with I applying to a new product with a molecule that is subject to a patent and that brings improvement for treatment in relation to medications already used for the same therapeutic indication, and VI referring to a generic drug).
The price established by the CMED is the maximum price that can be charged for the product in the private market and to public entities. In addition, in view of the typically large volume of sales to public-sector entities, CMED Resolution 4/2006 created the Price Adjustment Factor (CAP), a linear and compulsory discount applicable on all sales to public entities under certain circumstances (e.g., sales by court order of pharmaceutical products not otherwise supplied at no charge by the National Health System – SUS). The current CAP discount rate is 20.09 per cent, according to CMED's Rule 11, of 19 December 2019.
For medical devices, prices are overseen by ANVISA through the Nucleus for Economic Assistance in Regulation (NUREM).
According to Article 196 of the Brazilian Constitution, health is a fundamental right of all citizens and a duty of the government. The government is thus obliged to provide the means necessary to supply medicines to all Brazilians. This is done through the Single Health System (SUS). Care and medicines are dispensed by public hospitals and clinics.
There are no legal provisions for reimbursement of costs incurred by patients to buy medicines. The list of drugs provided by the SUS is not comprehensive, and does not include expensive medicines or those for treating rare diseases, syndromes or conditions; the supply of these is generally sought through judicial measures with preliminary injunction requests.
In August 2018, CMED issued Resolution 02/2018, which regulates the general rules concerning administrative proceedings related to infractions in the drug market, and defines the sanctions to those infractions.
Administrative and judicial remedies
Law 9,784/1999 regulates the administrative procedures at federal level, including those related to ANVISA. However, ANVISA has a number of its own regulations that encompass varied procedures that it conducts as part of its day-to-day activities. It is ANVISA's Resolution RDC 255/2018 that dictates the general rules concerning all administrative proceedings.
In February 2019, ANVISA issued Resolution RDC 266/2019 regarding rules concerning administrative appeals. As a rule, with some specific exceptions, every decision issued by ANVISA is subject to an administrative appeal that stays the effects of the challenged decision.
Also, because the Brazilian Constitution contains the fundamental principle of access to justice, any final decision made by ANVISA (similar to any administrative act performed by any public entity) can be subject to judicial review through different means (ordinary suits, mandamus actions, declaratory suits, among others). Preliminary injunctions to stay the effects of harmful administrative acts can be sought through all these legal mechanisms.
Financial relationships with prescribers and payers
The limits involving relationships between prescribers and payers are specified by self-regulation and regulations issued by ANVISA.
Interfarma's Code of Conduct states that any gifts to professionals must be related to medical or educational practice, and must not exceed one-third of the Brazilian minimum monthly wage. Additionally, gifts are limited to a total of three per year.
Resolution RDC 96/2008 also applies to the relationship between prescribers and payers, stating that it is forbidden to give, offer, promise or distribute gifts, benefits or advantages to healthcare professionals, although exceptions are made for institutional items (not related to a specific product) and technical literature (scientific articles and journals, technical books and the like, aimed at professional development).
Companies must also observe limitations when (1) sponsoring the participation of healthcare professionals in scientific events, which is allowed, but must never be conditional on the prescription or promotion of a medicine, and (2) establishing relationships and interacting with patient associations or organisations. Any support given to such entities, according to Interfarma's Code of Conduct, must be based on a written agreement, not be conditional on any perquisite other than institutional promotion of the company, and not suggesting any degree of exclusivity.
Brazil's anticorruption law (Law 12,846/2013) holds companies civilly and administratively liable for acts against the public administration, either national or foreign. Such acts include offering, promising or giving illicit advantages to a public agent or related third party, sponsoring the practice of any illicit acts defined by Law 12,846/2013, performing fraudulent acts involving public bidding and administrative contracts or hampering investigations related to illicit acts. Administrative penalties range from 0.1 to 20 per cent of the company's gross revenue in the previous year (or a fine of up to 60 million reais if this criterion cannot be used), as well as publication of the relevant decision in the press, paid for by the offending company. Additional penalties may be sought by the federal, state and municipal governments through the relevant public prosecution services, aiming at forfeiture of gains resulting from the infraction, suspension or interdiction of the company's activities, compulsory dissolution of the company and prohibition to receive public incentives, loans or donations for a period of up to five years.
Special liability and compensation issues
Special liability or compensation systems
There is no special system or mechanism to compensate persons injured by medicines or medical devices in Brazil. These cases are subject to the general liability and compensation rules of the Civil Code and Consumer Defence Code.
Transactional and competition issues
i Competition law
Brazilian legislation defines several situations that violate competition law. The most important ones are described in Article 36 of Law 12,529/2011 (which includes harming free competition and free initiative by any means, dominating a relevant market for products or services, increasing profits arbitrarily, and abusively exercising a dominant position, among others).
Some important cases have been decided by Brazilian courts regarding anticompetitive activities in the life sciences industry.
In 2005, the Administrative Council for Economic Defence (CADE – the antitrust authority) found several pharmaceutical companies guilty of forming a cartel (an alleged attempt to prevent generic medicines from entering the market). Lawsuits were filed by the companies and a first-level decision was rendered in 2011 declaring CADE's decision null. Appeals were filed, but the lower court's decision was upheld at the second instance. There are currently pending appeals to the Superior Tribunal of Justice (the highest non-constitutional court in Brazil). Another important case was a decision rendered by CADE in 2015 against a pharmaceutical firm for sham litigation.
There is no settled jurisprudence from the courts addressing pay-for-delay agreements related to the pharmaceutical industry. However, there are legal scholars who advocate that pay-for-delay agreements cannot be accepted under Brazilian legislation.
ii Transactional issues
INPI Normative Instruction 70/2017 came into force on 1 July 2017, covering the administrative procedure for recordation of IP licensing and assignment agreements. The main aspect of this new regulation is that the INPI may no longer interfere in – and limit – the percentage of royalties paid by the licensee to the licensor, when the companies have any corporate relationship. Previously, irrespective of the agreement between the parties, the INPI interfered in the contract to limit royalty payments, imposing caps that applied only to tax deductibility (from 1 to 5 per cent depending on the relevant industry, according to their essentiality degrees). Certificates of recordation now must contain a disclaimer that reads: 'The INPI did not analyse the contract in light of laws on taxation and remittance of payments abroad.'
In 2019, ANVISA issued over 70 new Resolutions. These new regulations deal with several topics, such as importation of products, administrative appeals, good distribution, storage and transportation practices and the regulation of cannabis-based medicines.
A few of the most relevant regulatory changes are as follows:
- RDC 262/2019 updates regulation of importation of products;
- RDC 266/2019 establishes procedures for administrative appeals challenging decisions rendered by ANVISA;
- RDC 301/2019 updates General Rules for Good Manufacturing Practices for medicines;
- RDC 304/2019 establishes rules for good distribution, storage and transportation practices for medicines; and
- RDC 327/2019 establishes rules for granting marketing authorization for manufacturing and importation of cannabis-based medicines. RDC 327/2019 also includes rules for sales, prescription, monitoring and inspection of cannabis-based medicines.
1 Alexandre Einsfeld and Joaquim Augusto Melo de Queiroz are partners and Ivan Cunha is a senior associate at Fialdini Einsfeld Advogados.