Life Sciences 2020

Last Updated March 18, 2020

Brazil

Law and Practice

Authors



Pinheiro Neto Advogados is a firm with wide experience in major cases involving the life sciences industries, including M&A, compliance (regulatory, public law, criminal and competition), and public and private partnerships. Pinheiro Neto Advogados has a group of highly specialised lawyers in the health area, who provide advice in all areas to several industries such as pharmaceuticals, biologics, vaccines, medical devices, diagnosis, food, food supplements, cosmetics, crop defence, beverages and hospitals. The firm provides specialised regulatory legal advice through the product life cycle, following discussion on the best structure for the development of activities in the country, for example, incorporation of a subsidiary, appointment of a distributor, licensing, purchase of product, or acquisition of companies, as well as clinical trials, R&D and technology transfer, PDP – public private partnership, pricing, access (public and private markets) and recalls under ANVISA's regulation. The firm also assists clients in very strategic regulatory issues regarding GMP issues, the national immunisation programme, advertising, compliance, biotechnology and in administrative litigation before ANVISA.

The main regulatory framework governing pharmaceuticals and medical devices comprises:

  • Law No 5,991 of 1973, which regulates the commercialisation of pharmaceuticals (Law 5991);
  • Law No 6,437 of 1977, the sanitary infractions law (Law 6437);
  • Law No 6,360 of 1976 (Law 6360), regulated by Decree No 8,077 of 2013, which regulates activities in connection with products subject to health surveillance;
  • Law No 9,782 of 1999, which created the Brazilian Health Regulatory Agency - ANVISA; and
  • ANVISA’s resolutions.

ANVISA is the regulatory body tasked with applying and enforcing the regulation on pharmaceuticals and medical devices at federal level. ANVISA is an independent agency operating under a special regime and reporting to the Ministry of Health, created with the purpose of promoting and protecting people’s health through public health control over the production and commercialisation of pertinent products and services, including the environment, processes, materials and technologies related to them, as well as through public health control measures put in place at ports, airports and borders. State and municipal health authorities apply and enforce regulations at state and municipal levels, respectively.

The decisions of regulatory bodies can be challenged by means of an administrative proceeding. ANVISA issues administrative decisions subject to review in courts. Criminal and civil offences are prosecuted in court.

The decisions of regulatory bodies can be challenged by means of an administrative proceeding, within the deadlines provided in the regulation.

The decisions issued by ANVISA arising from technical analysis within the scope of the Agency may be challenged by the legitimate party by means of an administrative appeal, which must be filed with the Agency in 30 calendar days as from the date the decision is notified to interested parties. The appeal is reviewed by the department of ANVISA that rendered the decision. If the decision is not reconsidered, the appeal is sent to the higher instance court for a decision, ANVISA's General Management of Appeals (GGRec). Decisions issued by GGRec can still be subject to review by the Board of Directors of ANVISA.

Decisions issued by the higher instance court are still subject to review by the board of directors of ANVISA, which is the final administrative instance. Afterwards, it can be disputed in courts.

In the case of a decision on sanitary infraction, appeals against ANVISA's decision will follow the procedure provided at Law 6437.

Pharmaceuticals fall into different categories, eg, synthetic, biological, specific, dynamic and photo-therapeutic products. For commercialisation purposes, pharmaceuticals may fall into the following categories: hospital use, special control and prescription-only or non-prescription.

Medical devices, in turn, qualify as invasive, non-invasive or active. For commercialisation purposes, medical devices can be intended for lay or professional use.

Clinical trials of pharmaceuticals and medical devices are regulated from an ethical and regulatory perspective.

From an ethical perspective, clinical trials are regulated by the National Health Council (CNS), mainly through Resolution No 466 of 2012 and Resolution No 251 of 1997.

From a regulatory perspective, ANVISA regulates clinical trials of pharmaceuticals through Resolution RDC No 9 of 2015 and, in the case of cell and gene therapies, Resolution RDC No 260 of 2018 applies. Clinical trials with medical devices are regulated under Resolution RDC No 10 of 2015.

A bill is underway in the Brazilian Congress to address the legal aspects of clinical trials.

To obtain ethical approval for clinical trial of pharmaceuticals and medical devices, the investigator must submit to the Ethics on Research Committee (CEP) of the institution where the trial will be conducted the clinical trial protocol, together with the applicable documentation such as the Informed Consent Form. Depending on the scope of the trial, another approval of the clinical trial protocol may be required from the National Research Ethics Commission of the National Health Council (CONEP). ANVISA approval is required if the clinical trial has the purpose of obtaining a marketing authorisation in the country, upon submission of specific dossiers by the sponsor, sponsor-investigator or the Contract Research Organisation (CRO), as the case may be.

In order to obtain ANVISA’s regulatory approval for clinical trials, the sponsor, sponsor-investigator or the Contract Research Organisation - CRO, as the case maybe, of the trial must present to ANVISA:

  • in the case of pharmaceuticals: a Clinical Drug Development Dossier (DDCM) containing, among other requirements set forth in ANVISA’s Resolution RDC No 9 of 2015, the drug development plan and a description of the pharmaceutical, a brochure containing safety and efficacy information on the pharmaceutical, a summary of safety aspects based on previous human experience with the experimental drug (eg, expanded access and compassionate-use programmes) as well as post-marketing experience in other countries, if applicable, and dossier of the experimental drug; and,
  • in the case of medical devices, a Medical Device Clinical Investigation Dossier (DCID) containing, among other requirements set forth in ANVISA’s Resolution RDC No 10 of 2015, a product development plan containing a description of the medical device, a brochure containing safety and efficacy information of the product, a summary of safety aspects based on previous human experience with the experimental medical device (eg, expanded access and compassionate-use programmes) as well as post-marketing experience in other countries, if applicable, and a dossier of the experimental medical device.

For both pharmaceuticals and medical devices, information on the clinical trials approved by CEP and/or CONEP are publicly available at the system “Plataforma Brasil” and the trials approved by ANVISA are disclosed on its website. There is no public database for results of clinical trials conducted in Brazil.

There are no restrictions for using online tools to support clinical trials.

If data resulting from clinical trials contains non-anonymised health data that is capable of identifying an individual or group of individuals, it will be considered as sensitive data for Brazilian legal purposes. Sensitive data is defined as “personal data on racial or ethnic origin, religious belief, political views, unionisation, or participation in a religious, philosophical or political organisation, data related to health or sexual life, genetic or biometric data, when linked to a natural person".

According to Law No 13,709 of 2018, health-related data can be processed upon prior consent of its owner or under other applicable legal bases that include compliance with legal or regulatory obligations, conduction of studies, regular exercises or rights, health protection and protection of life. Health-related data cannot be shared between controllers for economic advantage purposes except in the context of (i) provision of healthcare, pharmaceutical assistance and health assistance services, to the benefit of the data subject, and (ii) to allow (a) data portability, when requested by the data subject, or (b) financial and administrative transactions resulting from the use and the provision of services described in item (i).

The creation of a database as part of a clinical trial is conditioned to the subject’s consent (owner of the personal or sensitive information). In the case of the creation of a new database containing personal or sensitive data outside the scope of a clinical trial, the owner of the data must also have previously consented to its creation and the requirements provided in Brazilian legislation must be observed.

By definition, pharmaceuticals are defined as “pharmaceutical products, technically obtained or prepared, for prophylactic, curative, palliative, or diagnostic purposes”, while medical devices are defined as “appliances, instruments and accessories used in medicine, dentistry and related activities, as well as in the activities of physical education, embellishment of aesthetic correction.” 

In practice, products containing an active pharmaceutical ingredient in the product will be considered as pharmaceuticals.

The registration for new biological product or bio-similar product manufactured in other countries may only be granted by ANVISA if the product is approved and released for use in its country of manufacture. Exceptionally, new biological products and bio-similar products not registered in the manufacturing country, but registered in another country due to epidemiological necessity, may be registered with ANVISA, after evaluation of the submitted documentation, if the epidemiological impact of its use in Brazil is confirmed.

Approval of new biological products requires a complete technical and scientific registration dossier. Approval of bio-similars may follow either the comparative development pathway (based on similarity with the innovator) or an individual full development pathway. Regardless of the route of development used, when filing the registration application for a new biological product or biological product, the company must present the immunogenicity study report.

By virtue of Resolution RDC No 317 of 2019, effective as of 21 January 2020, the validity of marketing authorisations for pharmaceuticals was extended to ten years. The marketing authorisation for medical devices under class of risk I and II is valid for an undetermined period (ANVISA’s Resolution RDC No 40 of 2015), and under class of risk III and IV for ten years (ANVISA’s Resolution RDC No 185 of 2001). 

Marketing authorisation for pharmaceuticals and medical devices are renewable for equal periods, provided that the requirements under ANVISA’s regulation are met and the application for renewal is made in a timely manner. If ANVISA does not render a decision on the application for renewal until the date of expiry of the marketing authorisation, the marketing authorisation will be conditionally approved until ANVISA confirms or denies the renewal application (Law 6360).

Failure to provide evidence that a pharmaceutical has been commercialised in Brazil serves as grounds for non-renewal of a marketing authorisation (Law No 13,411 of 2017). This is not applicable for medical devices.

The marketing authorisation for pharmaceuticals and medical devices can be revoked, suspended or withdrawn whenever: (i) the product does not meet the safety and effectiveness requirements; (ii) the manufacturing does not correspond to the official formula; or (iii)        there are other circumstances that may pose a sanitary risk to consumers.

To apply for a marketing authorisation for pharmaceuticals or medical devices, the applicant must be a legal entity properly incorporated in Brazil and licensed according to the regulation. The registration application must be supported by specific documentation, which varies depending on the pharmaceutical classification (new product, generic, branded generic, biologics, among others) or the risk classification of the medical device. Applications for medical devices specified under regulation must be supported with the Certificate of Conformity issued by the National Institute of Metrology, Quality and Technology – INMETRO.

Post-approval variations for pharmaceuticals can be subject to ANVISA’s prior approval or can be immediately implemented upon communication to ANVISA. For medical devices, variations are subject to ANVISA’s prior approval.

ANVISA’s Resolution RDC No 102 of 2016 allows the transfer of marketing authorisation in the case of corporate transactions (spin-off, amalgamation and merger) or commercial transactions (any transaction that results in a transfer of assets). In this case, the assignee of the marketing authorisations must submit a specific statement to ANVISA within 180 days from the transaction (ie, from registration of the corporate act with the board of trade for corporate transactions, and from execution of the assignment and transfer agreement for commercial transactions).

As a rule, pharmaceuticals and medical devices can only be manufactured, imported or used in Brazil after ANVISA’s approval. Exception to this rule are:

  • experimental use: in the case of pharmaceuticals, the exemption is limited to three years;
  • compassionate use and expanded use programmes (ANVISA’s Resolution RDC No 38 of 2013): under the compassionate-use programme, individual patients have access to unregistered pharmaceuticals under clinical development, while the expanded-use programme provides groups of patients with access to unregistered pharmaceuticals during a Phase III trial or after its completion. ANVISA’s reporting requirements apply to sponsors or CROs, as the case may be, in connection with such programmes. No compassionate-use programme or expanded-use programme applies in the case of medical devices; and
  • direct importation by the patient: ANVISA’s regulation also provides for the possibility of individuals, with a medical prescription, to import pharmaceuticals and medical devices directly in the case that there is no alternative treatment available in Brazil. The importation must be made in the name of the patient and the prescriber is solely responsible before the patient for the prescription of the non-approved product.

The marketing authorisation-holder is required to carry out pharmacovigilance or technovigilance activities to detect, evaluate, understand, prevent, and manage risks, and to report on adverse events caused by the use of those items. Depending on the severity and potential health risks of an adverse event, a recall or field of action may be voluntarily put in place by the marketing authorisation-holder, or otherwise required by ANVISA or consumer protection authorities. Pharmacovigilance and recalls are ruled by ANVISA’s Resolution RDC No 4 of 2009, Normative Ruling No 14 of 2009 and Resolution RDC No 55 of 2005. Ministry of Justice Ordinance No 618 of 2019 may also apply and require notice to consumer protection authorities. Technovigilance and field actions are ruled by ANVISA’s Resolution RDC No 67 of 2009.

In relation to recalls, in 2019, Brazil underwent an important regulatory effort trying to measure up to OECD standards. In July 2019, the Ministry of Justice issued a new Ordinance No 618 of 2019, updating the rules for product recall. Also in July 2019, ANVISA signed a Co-operation Agreement with the Brazilian Consumer Protection Authority (Senacon) in order to promote integrated measures aiming to exchange information and promote joint measures to improve consumer protection in Brazil.

In the case of pharmaceuticals, post-approval amendments to the marketing authorisation must be notified to ANVISA, as well as the suspension of commercialisation of a pharmaceutical (ANVISA’s Resolution RDC No 18 of 2014). These rules do not apply for medical devices.

Phase IV trials are not imposed by law as part of the marketing authorisation; however, upon approval of a new pharmaceutical, ANVISA may require further clinical data, ie, a phase IV trial to establish the therapeutic value of the pharmaceutical, the emergence of new long-term adverse reactions or confirmation of known reactions and treatment strategies.

Third parties cannot access pending applications for marketing authorisations for pharmaceuticals and medical devices, nor information disclosed by companies to ANVISA in the process of obtaining a marketing authorisation, since ANVISA must keep the applicant’s technical, operational, economic, financial and accounting information confidential for an indefinite period.

The protection of commercially sensitive data or information is governed by Law No 9,872 of 1999, Law No 9,279 of 1996 and ANVISA’s rules.

Activities with falsified pharmaceuticals and medical devices or illegal distribution of such products are deemed sanitary infractions under the Law 6437 and are also typified as crimes by the Brazilian Criminal Code.

Brazilian legislation does not establish a specific border measure to tackle counterfeited pharmaceuticals and medical devices. It is known, however, that the Federal Police in Brazil have intensified curbing activities (mainly in the borders of Brazil) by implementing a drug traceability system, having also created a public-awareness campaign to warn about the risks of using counterfeited pharmaceuticals.

Manufacturing plants of pharmaceutical and medical devices are subject to several authorisations, licences, permits, enrolments, approvals and certifications from different authorities at the Federal, State and City levels. On the sanitary front, manufacturing plants of pharmaceuticals and medical devices need specific authorisations and licences for their activities.

In the case of pharmaceuticals, the manufacturing site must bear, as a rule:

  • an Authorisation to Operate, which is an authorisation issued by ANVISA per company and valid for an undetermined period (AFE);
  • a Licence to Operate, which is a licence issued by the local public health authority (State or City) for each manufacturing site, and its validity varies depending on the location of the site (LF); and
  • a Good Manufacturing Practices certificate, which is a certification issued by ANVISA for each manufacturing line (GMPc) and valid for a two-year period.

For medical devices, the manufacturing site must also bear AFE, LF and GMPc. The AFE is, differently from pharmaceuticals, issued for each of the sites where medical devices are manufactured and not per company. GMPc is required only for manufacturers of medical devices classified under risk III and IV (ANVISA’s Resolution RDC No 39 of 2013).

The processes for obtaining the refereed licence and certification for manufacturers of pharmaceuticals and/or medical devices starts with the hiring of a professional enrolled with a competent professional council, who will be in charge of the activities performed at the site. The company must also be enrolled with the respective professional council.

The LF is issued after an on-site inspection by local health authority and issuance of an inspection report on compliance of the site with the technical and physical requirements. The LF describes each of the activities that the site is entitled to carry out.

The AFE is issued after documental verification by ANVISA, and based on the inspection report prepared by the local health authority for the issuance of the LF. An AFE for manufacturing pharmaceuticals and medical devices also comprises the storage, distribution, fractioning, packaging, repackaging, and shipping activities.

In the case of a manufacturer's site located in Brazil, the GMPc is issued after an on-site inspection by ANVISA. In the case of a manufacturer's site located abroad, ANVISA accepts inspections conducted by foreign agencies whenever there is an international agreement in force between ANVISA and the agency.

Wholesalers of pharmaceuticals and medical devices are subject to the same sanitary licences (AFE and LF) for distribution activities. For medical devices, the wholesalers must bear the AFE for each operational site.

Pharmaceuticals are classified according to restrictions on use (target population), prescription (OTCs or prescription-only), destination (commercial, hospitals, institutions), or hospital use (administration restricted to hospitals).

Imports and exports of pharmaceutical and medical devices are governed by Law No 6360, Decree No 8,077 of 2013, and Resolutions issued by ANVISA from time to time, mainly ANVISA’s Resolution RDC No 81 of 2008.

The governmental entities in charge of applying and enforcing import regulations of pharmaceutical and medical devices at the point of entry are The Brazilian Federal Revenue Office (RFB) and ANVISA. Foreign trade control, however, is exercised by the Foreign Trade Department (DECEX) and the Foreign Trade Secretariat (SECEX).

The importer of record for pharmaceuticals and medical devices is the marketing authorisation-holder, or any third party duly authorised by the marketing authorisation-holder to bring the product into the country. Importers must bear sanitary licences to import pharmaceutical products and medical devices, as applicable, and must also be registered in the Integrated Foreign Trade System (SISCOMEX), which takes place with its enrolment with the System for Registration and Track-down of Customs Agents' Activities (RADAR) before the RFB.

The importation of pharmaceuticals and medical devices are generally subject to automatic licensing and requires ANVISA’s consent. In certain specific cases, ANVISA’s approval is also required before shipping the goods abroad. As a general rule, only pharmaceuticals and medical devices registered with ANVISA can be imported to Brazil. The importer must also verify if the pharmaceuticals and medical devices are protected by intellectual property rights (especially patents) and, if this is the case, obtain the proper authorisation to trade from the IP owner.

ANVISA’s consent is not required for the importation of products by individuals for their own consumption. ANVISA does not control if products imported for individuals’ personal use are registered or notified before the Agency.

The administrative handling table indicates the need of import licensing (or other specific measures to be adopted upon importation) according to the tariff code of the product being imported under the Mercosur Common Nomenclature (NCM). Based on that NCM code, the importer may consult the administrative procedure on the following website:

https://siscomex.desenvolvimento.gov.br/tratamento/private/pages/consulta_tratamento.jsf

Brazil is signatory to the Trade Facilitation Agreement of the World Trade Organization (WTO), which came into force on 22 February 2017 after its ratification by two thirds of the Member Countries of the WTO.

In Brazil, the price of pharmaceuticals is monitored by the Medication Regulation Chamber (CMED) and is governed by Law No 10,742 of 2003 and CMED resolutions. The CMED is in charge of approving (i) the maximum product selling price to be adopted by the manufacturer and wholesaler to private entities (pharmacies or hospitals), and (ii) the maximum selling price of pharmaceuticals to consumers (PMC), to be observed by pharmacies and drugstores. Sales to the government are subject to a mandatory discount. Certain pharmaceuticals, mostly OTCs, may be released from price control at the CMED’s discretion. The price for pharmaceuticals, subject to the CMED’s control, can be adjusted for inflation at an index set by the CMED annually.

Once a pharmaceutical is approved by ANVISA, the marketing authorisation holder must apply to the CMED for price approval, upon submission of an economic dossier stating the intended price, which must be calculated in accordance with specific criteria posed in the regulation for each product type (innovative, new, generic, new presentation, etc).

Prices for medical devices are not subject to control in Brazil.

For a new pharmaceutical in Brazil, the CMED takes into account the lowest price for the product in a basket of ten countries: New Zealand, Australia, Canada, Spain, USA, France, Italy, Portugal, Greece, as well as the price in the country where the product is manufactured.

Brazil has adopted the universal healthcare access system by which the State has a constitutional duty to provide the population with full and free access to healthcare, including pharmaceuticals and medical devices. By extension, the costs of pharmaceuticals and medical devices are not reimbursed to the patient as the State is the direct payor of the products and services. Private healthcare and insurance plans, which play a supplementary role in the Brazilian healthcare system, bear with the cost of pharmaceuticals and treatments to beneficiaries paying for use of the private system rather than the public.

For new pharmaceuticals, the technology assessment can be made by the CMED to determine the category of the product and consequently the pricing rules. The CMED considers whether the molecule is patented in Brazil, and whether the product brings an improvement to the treatment in relation to pharmaceuticals already used for the same therapeutic indication, based on the following requirements: greater effectiveness compared to existing pharmaceuticals for the same therapeutic indication, the same efficacy with a significant decrease of adverse effects, or the same effectiveness with a significant reduction in the overall cost of treatment.

The Ministry of Health carries out a cost-benefit analysis to decide whether to add a given pharmaceutical or medical device to a Clinical Protocol and Therapeutic Directive (PCDT) or to the official lists of products. Only pharmaceuticals and medical devices included in a PCDT or in the official lists are supplied by the public healthcare system.

The prescribing of pharmaceuticals by physicians is regulated by the Pharmacy Federal Council and by ANVISA. Dispensing, in turn, is regulated by Law No 5991 and Law No 13,021 of 2014.

Under the public system, physicians must prescribe pharmaceuticals by the active principle, while in the private system physicians are free to determine if the prescription should be by the active principle or by the commercial name of the pharmaceutical product. Reference products and branded generics can be replaced for a generic, and vice versa, by the dispensing professional.

In the public system, the prescription and dispensing of pharmaceutical products supplied under the Brazilian public healthcare system will be carried out in accordance with the PCDT for the corresponding illness or in specific official lists approved by the Ministry of Health. 

For control of public expenditure on public health, pharmaceuticals and medical devices are acquired by the government via public procurement. The Ministry of Health also uses its purchasing power to negotiate prices under centralised acquisition processes.

In the private market, the pharmaceuticals and treatments covered by private healthcare and insurance plans are defined in the agreement and on a list defined by the National Private Health Agency (ANS). Costs for pharmaceuticals and treatments not covered by the healthcare plan are supported by patients.

Under ANVISA’s regulations – in particular, Resolution RDC No 185 of 2011 and Technical Note No 04 of 2012 – certain pieces of software can be considered to be medical devices if it is intended for prevention, diagnosis, treatment, rehabilitation or birth-control purposes. The assessment as to whether a piece of software fits into the concept of a medical device requires a careful review of the software functionalities and intended use. This regulation is currently under discussion in an initiative to keep up with the pace of technological advancements in the health sector.

Telemedicine is broadly regulated by the Federal Physicians Council under Resolution No 1,643 of 2002, Resolution No 2,217 of 2018 (Physicians’ Ethical Code) and Resolution No 2.264 of 2019 (which applies only to telepathology services).

As a rule, physicians are not allowed to prescribe medical treatment without a direct examination of the patient, except in cases of justified urgency, emergency or impossibility. Likewise, medical assistance using mass-media communication channels is considered unethical (except for mere clarification purposes). Companies engaged in telemedicine services must be registered at the local Physicians Professional Council.

In an attempt to regulate the telemedicine in Brazil further, the Federal Physicians Council published Resolution No 2,227 of 2018, which would have entered into force by May 2019. The medical community severely challenged the ethics of the new resolution, triggering its revocation and reinstatement of Resolution No 1.643 of 2002. In spite of the revocation, the Federal Council of Physicians reopened discussions on telemedicine's ethical framework and changes in the regulation are expected in the near future.

Law No 6,360 of 1997 and Consumer Protection Code (CDC) generally govern the advertising and promotion of pharmaceuticals and medical devices.

Advertisements of prescription-only products is restricted to healthcare professionals (HCPs). Only OTC products can be advertised to the public. Accordingly, advertisement of prescription pharmaceuticals on online platforms must secure mechanisms to restrict the access to HCPs. For non-prescription pharmaceuticals, only the updated and approved prescribing information can be disclosed, without promotional elements or appeal.

The advertisement and promotion of pharmaceuticals targeted at HCPs and the general public are specifically ruled by Law No 9,294 of 1996, as regulated by Decree No 2,018 of 1996 and ANVISA’s Resolution RDC No 96 of 2008. There are no specific regulations in force for medical devices.

Brazilian law is silent as to electronic prescription. In general, electronic documents are deemed authentic and legally valid in Brazil if certified by an authorised agent, pursuant to Provisional Executive Order No 2200-2 of 2001. Under the Ministry of Health’s Ordinance No 344 of 1998, however, prescription of certain controlled pharmaceuticals requires official medical prescription forms.

Online sales of pharmaceuticals are subject to restrictions under Brazilian regulation. Sales must be made through electronic websites owned by pharmacies and drugstores duly licensed by public health authorities, as per regulatory requirements under Resolution RDC No 44 of 2009. In addition, pharmaceuticals subject to special control cannot be sold online.

Nothing in Brazilian law prevents online sales of medical devices, provided that the seller is a Brazilian entity duly licensed by public health authorities and the products are duly registered with ANVISA.

Electronic health records are regulated by Law No 13,787 of 2018 and regulations issued by the Physicians and Dentistry Councils, which establish rules on digitisation and use of systems that store and handle patients’ medical records. In addition, under the Brazilian privacy law (Law No 13,708 of 2018) health-related information is considered sensitive data, and processing thereof is subject to stricter requirements than general personal data.

There are no special requirements for cloud platforms. Although in the future, there might be put in place restrictions for this type of data-processing, currently, sensitive data can be transferred and stored in cloud platforms.

Customary licensing deal structures in the life sciences industry in Brazil include the transfer of manufacturing technology for pharmaceuticals, vaccines and biologics, which have been incentivised in recent years under a governmental development programme known as Production Development Partnerships (PDPs).

The basic set of rules dealing with dispute resolution in Brazil are those contained in the Brazilian Code of Civil Procedure (mainly for court litigation), Federal Law No 13,140 of 2015 (the Mediation Act) and Federal Law No 9,307 of 1996 (the Arbitration Act). Arbitration, mediation and negotiation are commonly used in Brazil as alternative dispute resolution methods for complex cases, including those methods relating to licensing agreements in the healthcare/life sciences sector.

Settlements reached by the parties prior to litigation can be recognised by courts in a decision by consent and enforceable as a judgment.

The Brazilian Code of Civil Procedure establishes that mediation should be conducted before the courts after a claim is filed. Such provision, however, is not necessarily applied in all cases. Finally, it is possible to file requests for the taking of evidence before or during court or arbitration proceedings. The scope of such requests is limited and does not compare with traditional US discovery: parties must indicate precisely the evidence they wish to produce and the request must be justified.

Diligence-related obligations defining parties’ standard of duties, such as “best efforts” covenants, are not defined under Brazilian law; however, they are often used in commercial agreements, especially those involving foreign parties. In these cases, the parties usually propose a specific definition to qualify the best efforts covenants, with the purpose of avoiding misinterpretation of the covenant if the agreement is challenged in the courts.

Likewise, contracting parties may freely set forth the applicable diligence milestones, timelines and tasks required for the execution of an agreement.

No change of control restrictions should apply under licence agreements except if contractually agreed upon between the parties or, in the case of public agreements, pursuant to the restrictions provided under public procurement statutes. Accordingly, it is usual to make change-of-control events contingent on the prior consent of the other party, under the penalties of nullity or termination.

Consequences of termination vary according to the deal structure at stake. Licences involving unpatented technology (including clinical data and IP) are interpreted by the Brazilian Institute of Industrial Property - INPI as a technology transfer, rather than a mere licence. This means that, since the recipient of the technology is paying for the technology and that technology will be absorbed by the recipient, the transferor may not hinder the recipient from using the technology after termination of the agreement. However, if the licensed technology is protected by patents, the licensee must refrain from using the technology after the termination of the relevant agreement.

Patents are regulated under Law No 9,279 of 1996, the Brazilian IP Law (IP Law), which is aligned with the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement standards, incorporated into the Brazilian legal system by Decree No 1,355 of 1994. In addition to TRIPS, Brazil is a signatory to the major international treaties dealing with IP rights, such as the Paris Convention and the Patent Co-operation Treaty (PCT).

In Brazil, invention and utility models qualify for patent protection based on the attributive system and can be registered with the Institute of Intellectual Property (INPI). The INPI has entered into an agreement with other jurisdictions’ patent offices in order to implement a pilot programme for fast-track patent examination (PPH – Patent Prosecution Highway). This is part of INPI’s strategy to expedite the examination of patent applications and to reduce the backlog.

The main issues regarding pharmaceutical and medical devices products’ patentability are generally in connection with:

  • ANVISA’s prior approval on patents;
  • second-use patents;
  • products not eligible for patent;
  • a priority period under the terms of the Paris Convention; and
  • the Bolar exception.

To be patentable, an invention must meet the following requirements:

  • novelty (its subject matter is not included in prior art, meaning that it was not previously accessible to the public either by written or oral description or by use or other means, including the contents of patents in Brazil and abroad, before filing of the patent application);
  • inventive activity (when it cannot be taken by an expert as evidently or obviously deriving from prior art); and
  • industrial use: pharmaceuticals patents must be previously approved by ANVISA.

Second and subsequent medical uses of pharmaceutical products are patentable as long as the new use fulfils patentability requirements and does not comprehend subject matters not considered as inventions or non-patentable according to the IP Law.

IP Law establishes that the following are not inventions: operating or surgical techniques and methods, as well as therapeutic or diagnostic methods, for use on the human or animal body, which are the reasons why new dosage regimes or new selected patient populations should not be patentable, primarily or in subsequent uses.

Patent protection is determined by its claims and interpreted based on the specifications and drawings. Those claims must:

  • be substantiated in the specifications;
  • characterise the particulars of the application; and
  • define clearly and precisely the subject matter that is the object of the protection.

For comments on second and subsequent patents of pharmaceutical products infringement, see 10.4 Patent Infringement.

An invention patent is valid for 20 years (15 years for a utility model patent), counted from the filing date; however, the term for an invention patent cannot be fewer than ten years (seven years for a utility model patent) counted from the granted date, except in the case that INPI is impeded from examining the application due to a pending judicial claim or force majeure. There is no mechanism for patent extension under the IP Law and it is not possible to request a patent term extension to compensate for the time to obtain a marketing authorisation for the product by ANVISA.

According to the IP Law, the patent-owner has the right to prevent third parties from, without its consent, producing, using, offering for sale, selling or importing a product that reproduces the object of the patent and a process or a product directly obtained from a patented process. The patent-holder also has the right to prevent third parties from contributing to infringing acts committed by others.

The assessment of patent infringement is usually made through a technical comparison between the patent claims and the product, process or service put on the market by the alleged infringer.

Activities involving patents practised by unauthorised third parties for experimental purposes, related to studies or to scientific or technological research, do not characterise a patent infringement. In addition, the law allows the use of a patent during its life by a third party, for the purpose of obtaining marketing authorisation, which ultimately authorises the use of a protected patent, in order to conduct tests, researches, and produce necessary information and data in connection with a marketing authorisation.

The patent-holder may defend its exclusivity rights against any threat of infringement. It is not necessarily an "imminent infringement".

The foregoing also applies for infringement related to second and subsequent patents of pharmaceutical products.

There are basically two defences in patent infringement actions: (i) non-infringement and (ii) invalidity of the patent.

In the first case, the defendant will argue that the reproduction is not a patent infringement according to the IP Law and as supported by technical evidence. Regarding pharmaceuticals, the most common allegations are the Bolar exception and use of the patent for tests and researches to obtain a marketing authorisation.

That being the case, the patent-owner cannot block third parties when the product manufactured according to the patented technology is placed directly on the domestic market by the patent-owner, or with his or her consent (“national exhaustion”). Also, imports by third parties of a product manufactured under a process or product patent shall likewise be allowed, considering that it has been placed on the foreign market directly by the patent-owner or with his or her consent (“international exhaustion”).

Invalidity can be argued at any time as a defence strategy, which is a standard argument in patent-infringement actions. A patent granted in violation of any provision of IP Law could be declared null and void. The most common grounds are:

  • non-fulfilment of the legal requirements: novelty; non-obviousness or industrial utility;
  • lack of invention or utility model;
  • non patentable subject-matters;
  • lack of clear and sufficient description; and
  • amendments after the examination: if the patent application is amended after the date of the examination request, it could be declared null.

The IP Law provides for a compulsory licence. To date, there has been only one case, concerning an HIV drug. Compulsory licences can be applied against a patent granted in Brazil in the following events:

  • abusive exercise of the patent rights or abusive exercise of economic power duly evidenced and declared by an administrative or judicial decision;
  • lack of exploitation of the patent in Brazil (except in the case of economical infeasibility to do so, a situation in which the importation of the product will be authorised);
  • commercialisation insufficient to meet market demand;
  • a situation involving dependent patents; and
  • national emergency or public interest events declared by the Brazilian federal government.

The interested party must submit a request to the INPI, by proposing the licence terms and conditions. The INPI will notify the patent-owner, which must reply within 60 days. The case will be analysed by the INPI, which is also entitled to determine the remuneration (royalties) owed to the patent-owner if the parties do not reach an agreement.

The patent-holder (or licensees and parties with procedural interest, when authorised by the patent-holder), can sue for patent infringement. The procedure for patent infringement is the same as a regular civil procedure in Brazil regulated by the Brazilian Procedure Civil Code (claim, defence, evidences (with expert examination if it is the case), hearings, first instance decision and appeals).

Remedies for patent infringement include equitable remedies (injunction), removal of the products from the market and payment of indemnification.

Depending on the outcome, the judge can grant a permanent injunction prohibiting the defendant from carrying out infringing acts and order him or her to pay an indemnification.

Indemnification for loss of profits can be calculated on three different bases, at the discretion of the claimant:

  • benefits that the patent infringer would have earned if the violation had not occurred;
  • benefits that the patent infringer actually earned; and
  • the amount due by the patent infringer to the patent-holder under a hypothetical licence agreement between the parties.

For invalidity claims, see 10.5 Defences to Patent Infringement.

If a generic pharmaceutical reproduces one or more claim(s) of a patent, then the patent-holder will have the right of action. As previously mentioned, however, studies over a patented pharmaceutical and the application for marketing authorisation for a patented pharmaceutical to ANVISA are not considered infringement.

Apart from the IP Law, counterfeiting of pharmaceuticals and medical devices is also under the scope of:

  • Customs Regulation – Decree No 6,759 of 2009 (Customs Regulation) regulates the seizure of counterfeit goods at Brazil’s borders;
  • Sanitary Law – Law No 6,360 of 1976 and Law No 6,437 of 1977 prohibit the manufacture, importation, distribution, advertisement and sale of pharmaceutical and raw materials that may cause potential harm to the public health; and
  • Criminal Code – typifies the falsification, corruption and adulteration of health-related products as a felony against public health.

Applicable penalties are administrative civil and criminal sanctions, including payment of fines and imprisonment.

Trade-mark protection in Brazil is based on the attributive system, by which exclusive rights arise from registration of the respective sign before the INPI, except in the following cases provided by law:

  • in the case of famous marks (marks registered in Brazil in a determined class and considered to be famous are afforded special protection in all fields of activity, irrespective of their registration in all classes) (marca de alto renome);
  • in the case of well-known marks (marks that are well-known in their field of activity in terms of Article 6 bis (I) of the Paris Convention enjoy special protection, irrespective of their previous filing or registration in Brazil) (marca notoriamente conhecida); and
  • when the applicant claims priority on a “first-use” basis.

Under the IP Law, any distinctive and visually perceivable signs not covered by legal prohibitions are eligible for registration as a trade mark.

On the sanitary front, Law No 6,360 of 1976 governs pharmaceuticals and medical devices' names by prohibiting indications that can lead to error or false interpretation. ANVISA’s Resolution RDC No 59, as detailed by Service Guideline No 43 of 2017, also sets forth criteria regarding the formation of pharmaceuticals' names and conflicts between them.

There are no restrictions under trade-mark law to import and distribute non-counterfeit, genuine pharmaceutical or medical device products from other markets, regions or countries. Nevertheless, from a regulatory perspective, importation activities can only be performed by the product marketing authorisation-holder or its designee in Brazil.

Trade dress in Brazil is protected by the IP Law under unfair competition provisions, which prevent the use of fraudulent means to solicit, for one’s own or someone else’s benefit, a third-party clientele and secure equitable remedies, as the case may be, and compensation for losses and damages. Likewise, the CDC prohibits unfair competition practices that could lead consumers into error.

There is no data-exclusivity protection for pharmaceuticals or medical devices in Brazil, as available in other jurisdictions; however, data can be protected by confidentiality obligations, or on an unfair competition basis. ANVISA must keep non-public data confidential until they fall into the public domain.

Pinheiro Neto Advogados

Rua Hungria, 1100
01455-906
São Paulo
Brasil

+55 11 3247 8796

akung@pn.com.br www.pinheironeto.com.br
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Trends and Developments


Authors



Veirano Advogados assists clients with all the strategic, regulatory and litigation aspects of the healthcare and life sciences business. Its life sciences and healthcare team is made up of 20 lawyers with extensive industry knowledge, located in the four offices of Veirano in São Paulo, Rio de Janeiro, Porto Alegre and Brasília. The firm's main clients include manufacturers and distributors of medicines, medical devices and cosmetics, hospitals and clinics. The life sciences and healthcare team offers expertise in corporate, licensing/distribution, regulatory, compliance and IP matters, and works regularly with other departments in the firm, such as capital markets and tax. Areas of focus include mergers and acquisitions, strategic alliances, validation of strategic projects for healthcare providers, healthcare product liability litigation, compliance, IP registration and litigation and administrative litigation before regulatory authorities.

Increased Demand for Alternative Business Models for Healthcare Service, Funding and Payment

Brazilian demographics are changing rapidly. According to the Brazilian Institute of Geography and Statistics, the elderly is the fastest-growing group. The institute also pointed out that life expectancy keeps increasing at a steady pace; indeed, life expectancy in Brazil has increased from 45.5 years in 1940 to 69.8 years in 2000 and finally jumped to 76.9 years in 2018. An ageing population brings about an increase in age-related diseases. As a result, this group boosts demand for doctor’s appointments, therapies, exams and surgeries. This is challenging the current healthcare services model, its respective funding and payment structures; on the one hand, health services are still very hospital-centred; on the other hand, only a small percentage of the population has access to health insurance plans.

Looking at Brazil’s hospital-centred culture, the country has roughly 6,700 hospitals, of which 70% are privately owned and 30% are public. Private hospitals offer, of course, supplementary care. Besides that, private hospitals may also participate in healthcare alongside the public health system in a complementary manner. In other words, private hospitals complement certain treatment needs whenever the public health system is insufficient to ensure adequate coverage in a certain area. Finally, it is also true that hospital costs tend to be higher than in simpler structures such as in emergency units, intensive care units, retail clinics and home care. These simpler structures have just very recently started operating and still do not have the same range as hospitals in the provision of health services.

The National Supplementary Health Agency (ANS) reported in January 2020 that the rate of the Brazilian population covered by private insurance plans (with and without dentistry coverage) was of 24.2%. This means that around one quarter of the Brazilian population uses private healthcare services, relying on private health insurance or plan, while the remaining three quarters relies solely on the public health system. In fact, many people have to queue up for months to obtain treatment.

There are three main reasons for insurance costs to increase (and the number of beneficiaries to be reduced). Firstly, the increased demand for services associated with the elderly; secondly, the incorporation of new technologies in the ANS’s list of treatments subject to insurance plans’ mandatory coverage; and thirdly, the increasing number of health-related lawsuits (judicialização da saúde) and court decisions imposing obligations on healthcare operators to cover items not previously included in the insurance policy.

A pressing issue for managing healthcare in Brazil is, therefore, the lack of structure to serve the entire population, the lack of sources of funding healthcare in general, and the lack of efficiency in hospitals, which are unable to cope with too many demands for all sorts of needs.

In this scenario, Brazil has recently seen a wave of new business models that aim to bridge the gap between access to health services and funding and payment for specific services. On the one hand, these relate to a greater number of emergency care and first-aid units and clinics, urgent care clinics, primary care units, drugstores services, retail and low-cost clinics, and diagnosis treatments. On the other hand, a number of new alternative forms of financing for these services, such as discount cards and self-carried plans, are beginning to develop.

This is a great market opportunity to tap into. Although there are regulatory challenges to overcome, it is expected that alternatives to hospitals will emerge in the near future and they will play a key role in the Brazilian health system, thus relieving overstretched hospitals and providing the population with better, cheaper and more accessible services.

Legality of “Discount Cards” by Outpatient and Low-cost Clinics

Back in 2017, the Federal Medical Council (in Portuguese, Conselho Federal de Medicina, CFM) issued regulation on outpatient and low-cost clinics. Not only did the regulation define certain requirements for these clinics to operate legally, such as mandatory registration with the respective class council, but the regulation also went beyond that and forbade these entities from offering the so-called “discount cards”. The underlying idea is that this practice is unethical. In Brazil, it is illegal for doctors to advertise their services and fees openly, so the CFM thought “discount cards” were against the basic definitions of the medical profession.

The Consumer Defence and Protection Department claimed before the Brazilian antitrust authority (CADE) that the CFM and the Medical Council of the State of São Paulo had been threatening and applying disciplinary penalties to physicians and clinics who accepted discount cards. Based on that, the CADE started investigations against these bodies, asserting that the ban in the CMF’s regulation resulted in restricting the offer of alternative medical services to patients, to the detriment of the principles of free enterprise and competition.

As a result, on 5 April 2019, the CFM published a new rule, Resolution CFM No 2.226/2019, revoking Resolution CFM No 1.649/2002 Articles 4th and 5th, and Resolution CFM No 2.170/2017. The new rule also modifies Medical Ethics Code Article 72, with immediate effect. Therefore, as of 2019, the legality of the following practices were reaffirmed: firstly, physicians are authorised to participate, as owners, equity holders, managers or consultants in discount cards (but not in structures to finance healthcare services); secondly, physicians are authorised to associate with companies that advertise discounts on medical fees; and finally, outpatient clinics and medical companies in general are authorised to promote discount cards and similar products.

New Regime for Production and Importation of Low-risk Medical Devices

As of 2 May 2019, ANVISA’s RDC rule No 270/2019 came into force. This rule established that class I medical devices which had been subject to a registration regime (cadastramento) became subject to a simpler regime called notification (notificação). In practical terms, starting in May 2019, class I medical devices no longer required ANVISA’s technical analysis before companies can sell them. This change has drastically reduced the time manufacturers and distributors have to wait to sell these products legally.

Pressure to Offer Pharmaceutical Services

At present, just a small percentage of nearly 80,000 pharmacies in Brazil offer some kind of pharmaceutical service such as blood pressure measurement, glycaemic tests, ear-piercing, and vaccinations. Although offering several services to patients could help relieve the demand for health services, many regulatory obstacles hinder the increase of services pharmacies may offer; these include services such as remote lab tests, bio-impedance analyses, and other general check-ups.

In response to the pharmaceutical sector’s demands, ANVISA launched a Pharmacies and Drugstores Direct Consultation for local health inspection bodies to respond to by 31 July 2019. It was basically a questionnaire that aimed to gather information about healthcare and pharmaceutical services currently carried out in drugstores. The questionnaire also focused on health-related activities requested to local health-inspection bodies.

On 1 August 2019, ANVISA also promoted a summit to obtain information, complaints and suggestions on the use of remote lab tests in health services. The objective was to guide the revision and potential amendment to ANVISA’s RDC rule No 44 and ANVISA’s RDC rule No 302 sets forth the technical regulations for the operation of clinical laboratories.

The market expects ANVISA to issue new regulations on pharmaceutical services to expand the offer of services soon.

Brazil in the Market of Cannabis-Derived Products

In December 2019, Brazil joined the group of countries which approved the prescription and use of medicinal cannabis. On 9 March 2020, ANVISA’s RDC rule No 327/2019 came into force. This resolution regulates the manufacture, prescription, importation and sale of cannabis sativa-based products and sets forth the rules for monitoring and inspecting products containing this active ingredient for medicinal purposes.

The cultivation of cannabis remains forbidden (a separate resolution in that regard has been vetoed and archived). Thus, the active ingredient must be imported in bulk, phytopharmaceutical, or industrialised, in the form of vegetable derivates, exclusively for medicinal purposes.

Cannabis-derived products must be registered with the authorised entities under the applicable law. These products, however, will be subject to rules applicable to a new class of sanitary-inspected products that the resolution creates, which is “cannabis-based products” instead of “medicines”. This new category is being created so that cannabis-based products and medicines are characterised differently, thus complying with different frameworks.

In addition to establishing the requirements companies must fulfil to manufacture or import cannabis-based products, the regulation contains further rules on labelling and quality control, distribution, and sale in pharmacies and drugstores.

Anvisa has also simplified the rules for patients to continue to import cannabis-derived products for personal use, to facilitate access while the new products are not readily available for sale.

Finally, the end of 2019 also brought novelty to the Brazilian capital markets. In October and November, two Brazilian-registered investment funds targeting corporate medical and recreational cannabis investments were launched. If the Brazilian sanitary authority continues to be progressive in its criteria and regulation, new business opportunities in this market will arise.

Telemedicine

On 6 February 2019, the Federal Medical Council (in Portuguese, Conselho Federal de Medicina, CFM) published Resolution No 2.227/2019, which regulates long-distance medical appointments and procedures using technology. This resolution, however, which would have drastically changed the CFM’s previous views on the matter, did not even come into force. Although that would have occurred 90 days after its publication, it was revoked less than one month after its publication.

On the day of its publication, the fuss around the resolution expanding the legality of telemedicine services in Brazil was substantial. The regional councils mostly criticised four aspects: firstly, the lack of opportunities to participate in the debate on the text of the rule; secondly, the distance it could potentially create between physicians and patients; thirdly, the resolution’s lack of clarity; and finally, the short time to implement the measures necessary for compliance.

The CFM replied that the revocation of the Resolution resulted from the opposition by physicians and class representatives. Still in February 2019, the CFM opened a public consultation and indicated in a note issued on 9 July 2019 that it would accept suggestions to edit the text until 31 July 2019. Amazingly, it received 1,500 physicians’ contributions between February and July so this deadline was extended to 29 February 2020. All this input will be reviewed by a work group which will eventually issue a report that will serve as a basis for a new rule.

More than one year after the telemedicine regulation imbroglio, no new deadline for approving the new standards for the legal practice of telemedicine has been indicated.

In any case, telemedicine in Brazil is here to stay and healthcare operators, hospitals and similar services currently offer many telemedicine services, in spite of the CFM’s conservative views on the subject.

Adding technology to offer enhanced patient care while relieving overcrowded and overstretched hospitals and clinics seems to be a requirement for the country's current health care infrastructure. Without doubt, telemedicine’s potential for offering specialised medical treatment to patients who live in distant locations is vast. Telemedicine also aims to solve the problem of great demand for health services in Brazil — which is bolstered by the migration of patients in search of treatment. In addition to direct benefits to patients who will make use of long-distance medical services, the new regulation will also open up a new market for IT and telecommunications services and solutions' providers.

As per the Medical Code of Ethics, telemedicine is allowed in urgent and emergency situations. The coronavirus circumstances allow for a broader use of telemedicine and will serve to test the system.

The new Brazilian Data Privacy Law and Life Sciences

In a scenario of constant modernisation of the health sector in Brazil, it is also important to rethink how to reconcile technological innovation with the rights of patients concerning privacy, such as the confidentiality of their information and the protection of their data.

Brazil recently enacted a national privacy law (Lei Geral de Proteção de Dados, LGPD) which follows a European trend for more restricted data protection regulation. As far as health and medical data is concerned, the LGPD lists these types of information as "sensitive data", along with information about race, ethnicity, religious or political beliefs or sexual life, which demands a higher level of protection and more restrictive rules for processing, not only due to privacy concerns, but also in order to avoid targeting or discrimination. Sensitive data in the health sector may include data processed by AI, wearables, and certain IoT applications, patient profiling, biometric data, genetic data (including for medical diagnosis), DNA testing and medical research, social care records, among others. Except in some defined scenarios in which the law authorises the processing of sensitive data without consent, companies must obtain specific consent from data owners, and properly delimitate the purposes for which data will be used in each and every case. The law also prohibits health and medical data, particularly, from being commercialised, except for the purposes of portability and with the owner's explicit consent.

There are a number of aspects of the LGPD which are particularly challenging for life sciences businesses, as sensitive personal data accounts for the majority of personal data processed in a life sciences context, and this type of personal data attracts additional protections.

Territorial Scope

The LGPD applies not only to Brazilian organisations but also to foreign entities or individuals offering goods or services to data subjects in Brazil or monitoring their behaviour to the extent that processing takes place in Brazil. Enforcing the LGPD against a business without a presence in Brazil will be a challenge for the authorities and specifically for the Data Protection Authority, not yet constituted.

What Constitutes Personal Data

Personal data is defined as any information relating to an identified or identifiable natural person. This can include pseudonymised data. Pseudonymised data is data which can only be attributed to an individual when combined with additional information that is kept separately (subject to technical and organisational measures which protect the individual from being re-identified, a unique ID for a trial participant would be an example). This is an important aspect to be considered for life sciences businesses. It is only by completely anonymising personal data, in such a way that it cannot be re-identified from other available information, that data falls out of the scope of the LGPD.

Data Protection Principles

The data protection principles are at the core of the LGPD. Personal data must be processed fairly and lawfully, and individuals must be provided with information as to what is happening to their data throughout its processing journey, including information relating to any transfer to other controllers or processors.

Data has to be collected for specified, explicit and legitimate purposes and cannot be processed for additional purposes not compatible with the original purpose. Data has to be limited to what is necessary for the purposes for which it is processed and must be kept accurate and up to date. Data can only be kept as long as necessary and must also be kept appropriately secure against any unlawful processing, accidental loss, destruction or damage.

Most importantly, it is not enough to comply; entities and individuals must be able to demonstrate compliance due to the accountability principle set forth in the LGPD. In particular, a record of processing activities must be kept by the data controller or an appointed representative, as the case may be.

Basis for Processing

In order to comply with the principle that personal data shall be processed fairly and lawfully, the processing operations must be carried out under one of the lawful bases for processing set forth in Articles 7 or 11 of the LGPD. The data controller will have to opt for the most appropriate one.

The LGPD sets forth a number of lawful bases which may apply to data processing connected with life sciences organisations, but they are not altogether straightforward and data controllers will have to consider carefully which one to use. There is no guidance yet in Brazil, but the European Data Protection Board has already published an opinion that includes a discussion of appropriate lawful bases for the processing of personal data in clinical trials.

Consent

Life sciences organisations carrying out clinical trials or pharmacovigilance, for example, often process large amounts of sensitive data. Data can be processed lawfully on the basis that data subjects have given their consent to the processing operation. Consent must be “freely given, prior, specific, informed and an unambiguous indication of the data subjects’ desires”. Data subjects must be able to withdraw consent at any time. In the context of life sciences, consent may be difficult to obtain and may not be the most useful legal basis on which to rely. If, for example, a data subject withdraws consent to the processing of his or her data as part of a clinical trial, that could have a major impact on the study. Thus, healthcare providers should identify another lawful basis (such as the protection of life, health tutelage, etc). 

Data Transfers

Clinical trials often involve the transfers of large amounts of personal data across borders, including to other countries, in situations where a number of laboratories or healthcare providers or even the clinical trial sponsor may be in different jurisdictions. Although the LGPD sets forth a number of situations in which data can be transferred, there is a general lack of guidance in international transfers, as there is no Data Protection Authority yet in place. In addition to the LGPD, it may also be necessary to consider local legal or regulatory obligations relevant to the processing of health data in the context of cross-border clinical trials.

These are some of the issues life sciences businesses may need to consider when working to be compliant under the LGPD. Additional guidance would be expected from the Data Protection Authority, once it is in place, from ANVISA and from the National Health Council (CNS) as regards the processing of personal data in the life sciences sector, especially in relation to the treatment of sensitive personal data.

Federal Statute Demands that Public Entities Execute “Regulatory Impact Analyses” and Forbids the “Abuse of Regulatory Power”

Initially enacted as a Provisional Measure by President Jair Bolsonaro, and later converted into a statute by the National Congress, Federal Law No 13,874/2019 (the Act of Economic Freedom) contains a series of provisions aiming at reducing red tape and eliminating constraints that hamper the development of economic activity.

In addition to a “Bill of Economic Rights” (Article 3º), Federal Law No 13,874/2019 sets forth that “the Public Administration, when enacting administrative regulations, shall avoid the abuse of regulatory power” – in order to create artificial market barriers in order to benefit, through regulation, a specific professional or economic group to the detriment of their competitors; draft normative statements that prevent entry from new national or foreign competitors; demand technical specifications that are unnecessary in order to achieve a permissible goal; draft normative statements that prevent or delay innovation and the adoption of new technologies, procedures or business models, except in scenarios entailing high risks; artificially create demand for a product, service or professional activity; introduce limits to the free incorporation of business entities or execution of economic activities; and restrain the use and exercise of advertising activities connected to an economic sector, except as otherwise provided in federal statutes.

Further, Federal Law No 13,874/2019 provides that proposals for new administrative regulations, or amendments to existing regulations, “shall be preceded by a regulatory impact analysis, which will contain information and data on the possible effects of the intended rule, so as to allow the assessment of the reasonableness of its economic impact” (Article 5º). The Federal Government has yet to issue a decree establishing how such analyses are to be executed, as well as the hypotheses in which they can be waived. In any event, a similar requirement has already been imposed on the Federal Sanitary Surveillance Agency (ANVISA) and the Federal Health Agency (ANS) by Federal Law No 13,848/2019 – which established a new general framework for federal Agencies.  

Taken together, the duty to promote “regulatory impact analyses” and the prohibition to “regulatory abuse” are expected to increase the quality of federal regulation, as well as allow private parties who are harmed by arbitrary or flawed administrative rules to obtain prompt relief before the judiciary.

Federal Ministry of Health Introduces “Risk-Sharing Agreements” so as to allow the Introduction of new Drugs and Technologies in the National Healthcare System

In June 2019, the Ministry of Health allowed the employment of “risk-sharing agreements” by the Federal Government. Administrative Order No 1,297/2019 defined a “risk-sharing agreement” as a contract between the Ministry of Health and a pharmaceutical company “due to uncertainties as to [I.] whether the introduction of a drug within the National Healthcare System would be cost/effective”; and as to [II.] “the expected demand, considering the amount of pills/doses and its budgetary impact”. As such, it should necessarily contemplate:

  • a reduction in the price of that drug;
  • the description of the disease to be treated, as well as the eligibility criteria for patients who may benefit from the risk-sharing agreement;
  • the expected health outcomes, as well as the clinical parameters that will be employed to assess whether the drug was effective or not;
  • the maximum number of patients that, funded by the Ministry Health, will receive the new drug – with a clause indicating that, in the event that such number is exceeded, the pharmaceutical company will bear the cost of rendering the drug to additional patients;
  • technical criteria for the discontinuation of treatment, for those patients that do not present the expected health outcomes within the expected timeframe;
  • how often periodic assessments are to be executed, according to the best scientific evidence available.

As per Administrative Order No 1,297/2019, the introduction of risk-sharing agreements aims as “allowing the incorporation of [a new drug] to the National Healthcare System”, at a lower price, while also “gathering additional evidence on the cost entailed by the drug” and “allowing a new assessment of its incorporation under the light of such additional evidence.”

So far, the Ministry of Health has only authorised the execution of one pilot experiment involving the purchase of the drug Spinraza by federal authorities; the results of that pilot experiment will be employed in the drafting of a general rule on “risk-sharing agreements” for the incorporation of new health technologies to the National Healthcare System.

Veirano Advogados

Av. Brigadeiro Faria Lima, 3477
16º andar - Itaim Bibi
04538-133 - São Paulo – SP
Brazil

+55 11 2313 5700

renata.oliveira@veirano.com.br https://www.veirano.com.br
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Law and Practice

Authors



Pinheiro Neto Advogados is a firm with wide experience in major cases involving the life sciences industries, including M&A, compliance (regulatory, public law, criminal and competition), and public and private partnerships. Pinheiro Neto Advogados has a group of highly specialised lawyers in the health area, who provide advice in all areas to several industries such as pharmaceuticals, biologics, vaccines, medical devices, diagnosis, food, food supplements, cosmetics, crop defence, beverages and hospitals. The firm provides specialised regulatory legal advice through the product life cycle, following discussion on the best structure for the development of activities in the country, for example, incorporation of a subsidiary, appointment of a distributor, licensing, purchase of product, or acquisition of companies, as well as clinical trials, R&D and technology transfer, PDP – public private partnership, pricing, access (public and private markets) and recalls under ANVISA's regulation. The firm also assists clients in very strategic regulatory issues regarding GMP issues, the national immunisation programme, advertising, compliance, biotechnology and in administrative litigation before ANVISA.

Trends and Development

Authors



Veirano Advogados assists clients with all the strategic, regulatory and litigation aspects of the healthcare and life sciences business. Its life sciences and healthcare team is made up of 20 lawyers with extensive industry knowledge, located in the four offices of Veirano in São Paulo, Rio de Janeiro, Porto Alegre and Brasília. The firm's main clients include manufacturers and distributors of medicines, medical devices and cosmetics, hospitals and clinics. The life sciences and healthcare team offers expertise in corporate, licensing/distribution, regulatory, compliance and IP matters, and works regularly with other departments in the firm, such as capital markets and tax. Areas of focus include mergers and acquisitions, strategic alliances, validation of strategic projects for healthcare providers, healthcare product liability litigation, compliance, IP registration and litigation and administrative litigation before regulatory authorities.

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