Brazil: An Update of the Most Relevant Events for Pharmaceutical Companies in 2014: Part 3 of a 5-Part Series

This is part 3 of a 5-part series providing updates on: 1) mailbox patent litigation; 2) the constitutional challenge filed by ABIFINA against the 10 year patent term guarantee; 3) new Productive Development Partnership (PDP) guidelines; 4) prior approval challenges and ANVISA; and 5) an opinion issued by the Brazilian Antitrust authority (CADE) regarding sham litigation. Part 1: Mailbox patent litigation can be found here. Part 2: The constitutional challenge filed by ABIFINA against the 10 year patent term guarantee can be found here.

New PDP guidelines define how branded and generic pharmaceutical companies will conduct business with the Brazilian government

On November 13, 2014, the Brazilian Ministry of Health published new guidelines redefining the requirements for establishing Public-Private Productive Development Partnerships (PDPs). Specifically, Ordinance #2531/2014 was published after public consultation for 23 days. The final text received extensive input from various associations and private industry which together were responsible for 70% of the total submissions to the text. As a result of these submissions, 47 of 76 of the articles of the final text were changed. Because of the requests from the various associations and private industry for more details and transparency, the new guidelines are clearer than previous guidelines and establish a procedure for submitting, deciding, monitoring and evaluating PDPs. 

The Federal government’s effort to establish a pharmaceutical technology transfer program started in 2008 in view of growing concern regarding the increasing expenditures by the government in purchasing medicines to supply the population through the Unified Healthcare System (referred to as “SUS”). For example, in 2013, the government spent USD$4 billion purchasing medicine. As a result, the growing trade deficit in the pharmaceutical sector led the government to create the “National Program for the Promotion of Production and Innovation in Public Health Industrial Complex”. However, the lack of specific rules for implementing technology transfer agreements led several companies to challenge certain agreements as being “illegal” before the Brazilian courts. 

In 2012, the government issued a specific rule for the technology transfer program (Ordinance #837/2012). However, despite introducing general guidelines for the presently referred to “PDP program”, the Ordinance failed to provide clear definitions and specific information, such as, for example, the responsibility of each party of a PDP agreement. 

New Ordinance #2531/2014 revokes Ordinance #837/2012 and has the goal of providing transparency to the PDP program. Specifically, Ordinance #2531 provides more accurate definitions of terms such as “PDP” and “strategic products”. Additionally, the final text is an improvement over previous drafts published for public comment as definitions such as “incremental innovation” and “radical innovation” have been removed. Nonetheless, the final text failed to amend other definitions that were not well written in the initial draft such as “PPB – Basic Productive Process”, “Technological” and “Technological Portability”. The lack of an accurate definition for each of these terms will create uncertainty for the industry. 

The new PDP guidelines also establish the mandatory compliance of PDPs with intellectual property and patent rights. Specifically, the guidelines establish that a PDP proposal must contain a list of granted patents or patent applications that cover a product that is the subject of a PDP proposal (See, Article 14, III). 

The existence of multiple PDPs for biologics was not well addressed in the new PDP guidelines. The distribution of biologics and biosimilars by different PDPs might raise pharmacovigilance problems with regard to the monitoring of use of different biologics by patients. How biologics and biosimilars will be distributed through the PDPs to patients remains unclear and will need to be addressed in a new specific rule. 

Ordinance #2531/2014 will affect all PDPs, both new PDPs as well as all those currently in existence. Existing PDPs will have a period of 180 days to comply with the provisions of Ordinance #2531 (See, Article 70, paragraph 1). Additionally, the new ordinance revoked Ordinance #3089 of 2013 (which defined the list of strategic products for the SUS that could be the subject of a PDP). However, the current list of strategic products established by Ordinance #3089 will be maintained until the Ministry of Health issues a new list (See, Article 74). There is ongoing debate regarding whether the Ministry of Health will publish a new list of strategic products for comment by industry or whether it will simply publish the list without allowing for any comment. 

Please find attached here the full text of Ordinance #2531, the current list of strategic products that might be subject of a PDP and a proposed PDP flowchart.  ORDINANCE LISTOFPRODUCTS PDPFLOWCHART

This post was written by Lisa Mueller and Roberto Rodrigues of Licks Attorneys.






One thought on “Brazil: An Update of the Most Relevant Events for Pharmaceutical Companies in 2014: Part 3 of a 5-Part Series

  1. Pingback: | Licks Attorneys | Brazil: Pharmacovigilance Risk in Evolving Biosimilar Regulation

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