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October/2018 |
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LIFE SCIENCES & HEALTHCARE |
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Welcome to
the Life Sciences & Heathcare Newsletter, a
publication prepared by
our multidisciplinary team dedicated to the
Healthcare industry.
In this edition:
New
penalties for violation of drug market
regulations
Supreme
Federal Court: Public Prosecutors’ Office
has standing to file civil actions based on
violations of the individual right to health
Federal
Audit Court: before entering into
partnerships, public laboratories must allow
interested parties an opportunity to take
part in a public selection process
CADE
publishes report regarding concentration
acts in the markets of Health Insurance,
Hospital service and Diagnostic Medicine
Services
Brazilian
Supreme Court will decide if penalty imposed
for medicinal drugs’ importation with no
sanitary registry is constitutional
Commission vs. Bonus – The DSR Dilemma
The CFF
regulates the advertisement of professional
pharmaceutical activities
Superior
Court of Justice rules that health plans
must provide off-label treatment
Judicial
order for the supply of medicine not
included in the list of the Public Health
System (SUS) – Superior Court of Justice
“complements” its previous decision |
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New penalties for violation of drug
market regulations |
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Mauro Hiane de Moura |
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The CMED (“Câmara de Regulação do
Mercado de Medicamentos”), approved, on
April 16th 2018, a resolution establishing
the administrative proceeding for the
assessment of violations to drug market
regulations and the application of penalties
(“Resolution CMED/PR nº 2”). Such
resolution will be applied to any natural or
legal person acting in the drug market –
including importers, hospitals, clinics and
associations of entities or people. It
establishes two types of penalties:
“correction of unlawful practices” and
fines. They can be jointly imposed, and do
not prevent additional civil and criminal
sanctions from being applied.
When a violation complaint is received (or
when an unlawful practice is directly
verified), CMED’s Executive Secretary will
prepare a summary of the practice regarded
as unlawful and will send it to the
investigated party. If, prior to such event,
the investigated party repairs the damages
it caused, the administrative proceeding
will be promptly terminated. If reparation
is made after the notification is received,
but before an administrative decision is
rendered, the investigated party will
receive a different benefit: should a fine
be applied, it will be equivalent to half of
the illegal benefit that the investigated
party had.
The CMED also has powers to, before a
proceeding is initiated, or until it is
concluded, enter into a negotiated
settlement (“Compromisso de Ajustamento
de Conduta”) with the investigated
parties. Such settlement may be requested by
a party or proposed by CMED; when concluded,
it will cause the suspension of preliminary
investigations or administrative proceedings
to which it makes reference. Breaching the
settlement, however, will not only cause
such investigations and proceedings to be
resumed, but will also lead to additional
penalties and prevent the breaching party
from executing a new settlement with CMED
for 2 (two) years. |
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Supreme
Federal Court: Public Prosecutors’ Office
has standing to file civil actions based on
violations of the individual right to health |
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Mauro Hiane de Moura |
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The Supreme Federal
Court decided, on August 15, 2018, that the
Public Prosecutors’ Office has jus
standi to file civil actions aiming at
the supply of drugs to all people affected
by a certain disease. The Supreme Court
reversed a decision that had been issued, in
2007, by the Court of Appeals of the State
of Minas Gerais – in which Public
Prosecutors were denied the possibility of
filing civil actions for the protection of
individual rights, as well as of interfering
in the formulation of public health
policies. The case was remanded for a
decision on its merits to be rendered.
(Supreme Federal Court, en banc.
Extraordinary Appeal n. 605.533. Marco
Aurélio, Reporting Justice. Decision
rendered on 08.15.2018.) |
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Federal
Audit Court: before entering into
partnerships, public laboratories must allow
interested parties an opportunity to take
part in a public selection process |
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Mauro Hiane de Moura |
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The
Federal Audit Court (“TCU”) decided that a
certain public foundation could not extend a
“cooperation agreement” it had celebrated
with private companies for the development
of drugs for hepatitis C. According to the
TCU, “the choice of private partners for
the execution of partnerships with public
laboratories must be preceded by a public
selection or screening process – except when
a relevant justification exists.”
Therefore, even though art. 24, XXXII of
Federal Law 8.666/93 allows such
partnerships to be signed regardless of a
previous public tender, the Administration
is still bound by the principles of
publicity and morality – so as to guarantee,
to all interested parties, the possibility
of taking part in the selection process of
the private partner.
(Federal Audit Court, en banc.
Decision n. 1.867/2018. Bruno Dantas,
Reporting Justice. Decision rendered on
08.15.2018.) |
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CADE
publishes report regarding concentration
acts in the markets of Health Insurance,
Hospital service and Diagnostic Medicine
Services |
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Leonardo Maniglia Duarte & Thaiane Fernandes
de Abreu |
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CADE has
published a new edition of "Cadernos do
CADE" regarding concentration acts in
markets of the supplementary health care
production chain: health insurance, hospital
services and diagnostic medicine services. A
total of 155 transactions were evaluated in
this sector between 2003 and 2017. The
report describes CADE’s caselaw on the
definitions of relevant market and points
out situations in which CADE considered that
could raise competitive concerns.
Among the concerns pointed out by CADE in
the report are the cross-shareholdings, even
if minority, between companies of different
economic groups, and the effects of possible
vertical integrations that may result from
these transactions. According to CADE, these
relationships can result in possible market
foreclosure effects, depending on the market
power held by the companies involved.
This report (in Portuguese) consolidates
CADE's decisions in supplementary health
care transactions to date and can be a very
useful reference for companies involved in
M&A transactions in this sector.
The report is available on CADE's internet
address (content in portuguese). |
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Brazilian
Supreme Court will decide if penalty imposed
for medicinal drugs’ importation with no
sanitary registry is constitutional |
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Denise Provasi Vaz, Mariana Murad Leiva &
Giovanna Livia Martins Santoro |
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On August 3rd,
2018, the Brazilian Supreme Court has
recognized general repercussion on
extraordinary appeals that question the
criminal penalty for the importation of
medicinal or therapeutic product without
registration (art. 273, § 1º-B, Penal Code).
The appeals were filled by the public
prosecution office and the defendant´s
attorney.
Both appeals questioned the decision from
the 4th Regional Federal Court of Justice
(“TRF 4”) that considered the penalty from
10 to 15 years disproportional to the crime
because it was identical to the ones set out
for more serious conducts, such as the one
stipulated at the head of article n. 273
(falsification, corruption, adulteration or
modification of medicinal or therapeutic
products). As a result of this decision, TRF
4 declared the unconstitutionality of such
punishment and decided to use as a parameter
the penalty of the article n. 33 of the
Drugs Law, which determines a prison
sentence from 5 to 15 years for
drug-dealing, considering, also, the
attenuating circumstances if the perpetrator
is a first-time offender and a
non-participant in criminal organization.
The extraordinary appeal filed by the
defense states that the Court correctly
declared the unconstitutionality of the
penalty but has adopted the wrong solution
when substituted the penalty. According to
them, the Court has violated the principle
of strict legality provided for in art. 5º,
XXXIX of the Brazilian Constitution, which
prohibits punishment without legal
provision, because it has stipulated the
penalty of a different crime. The defense
also argued that the judiciary does not have
power to find a more suitable penalty when
it declares the unconstitutionality of a
crime. In conclusion, according to them, the
best solution for the case, after the
declaration of unconstitutionality of the
law 9.677/1998, would be the imposition of
the penalty provided by the previous law on
the subject.
The Federal Public Prosecution office
claimed that the Judiciary cannot combine
legal provisions, creating a third normative
rule non-existent in the Brazilian legal
system, given that it would violate the
principles of Separation of Constitutional
Powers and Legal Reserve. In sum, the
prosecution also agreed that the 4th Federal
Regional Court violated Article 5, clause
XXXIX, of the Constitution, but they have
sustained that the penalty provided for in
Article 273 should have been applied to the
case, whose constitutionality would have
already been confirmed by the Federal Court
of Justice and Superior Court of Justice in
previous judgments.
When acknowledging the general repercussion
of the matter, Minister Reporter Roberto
Barroso pointed out that the country's
regional courts use to recognize the
disproportionality of the sanction under
analysis and establish different
interpretative solutions to the issue (full
application of article 273 of the Penal
Code, drug trafficking, application of
contraband punishment, application of the
type of drug use, application of the
principle of insignificance), what produces
a diffuse sense of injustice and leads to
the potential discredit of the system of
criminal prosecution.
Therefore, it remains to be defined: if the
penalty provided for the medicinal drugs’
importation with no registry violates the
principles of Proportionality and
Offensiveness; and if it is possible to use
the penalty imposed on another crime to
sanction this conduct. |
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Commission
vs. Bonus – The DSR Dilemma |
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José Carlos Wahle & Silvia Figueiredo Araújo |
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IDSR is
due on commissions and many companies pay it
on sales-based bonuses as well. But is it
really the case?
DSR is the incremental pay due on the top of
wages that do not include the statutory
weekly paid holiday. Accordingly, DSR is due
on overtime (hourly wage), but not on
monthly salary.
Commission is compensation for the
completion of transactions (sales). It is
not calendar-based. Thus, it earns DSR.
Because the bonus corresponds to performance
over time it should not earn DSR. However,
as it often corresponds to sales
performance, companies may be misled to
paying DSR just like it does with
commissions.
In spite of such difference, the recurring
litigation on that matter indicates that
this issue requires close attention. Clarity
of compensation policies is the key to avoid
unnecessary costs or liabilities. |
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The CFF regulates the advertisement of
professional pharmaceutical activities |
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The
Federal Council of Pharmacy issued
Resolution No. 658/2018, which regulates the
publicity, advertisement and announcement of
the professional pharmaceutical activity by
any means.
Besides observing the ethical principles of
his profession, the pharmacist shall be
guided by the condition of providing content
that is supported by scientific evidence,
and is forbidden from self-promoting, as
well from ensuring or promoting treatment
results that have not been effectively
proven.
Within the more specific prohibitions set
forth by the referred resolution is the use
of expressions such as “the best”, “the most
efficient”, “the only qualified”,
“guaranteed result” and similar phrases, the
exposure of prices of services or forms of
payment to attract clients in discordance
with consumer rights, the offering of
benefits to a third party in exchange or in
consideration for obtaining service, and the
omission to declare conflict of interest
when participating as speaker in an event,
in which case it shall be mandatory to
disclose the receipt of financial support
and sponsorship from organizations and
corporations.
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Superior
Court of Justice rules that health plans
must provide off-label treatment |
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Priscila David Sansone
Tutikian, Amanda Celli
Cascaes, Amanda Mattos Rudzit & Carla Almeida |
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The 3rd
and 4th Panels of the Brazilian Superior
Court of Justice (“STJ”) recently rendered
decisions¹ determining that health plans
shall pay for medication prescribed by the
treating physician, even when the intended
purpose of the treatment is not among those
provided for in the leaflet (the so-called
“off label” medication).
In the appeal ruled by the 3rd Panel, the
claim was originally brought by a patient
diagnosed with a brain tumor who had
received medical recommendation to treat the
disease with a medicine called Temozolamida
(“Temodal”). The health insurance company,
however, denied coverage to the medication
alleging that Temodal’s patient information
leaflet did not foresee the indication for
treatment of said illness.
After the São Paulo Court of Appeals ruled
in favor of the patient, the health
insurance company appealed to the STJ,
arguing that the off-label treatment would
represent an experimental treatment, a type
of assistance that health plans are not
obliged to provide, as per Article 10 (I) of
Law 9,656/98 (the “Health Plans Law”),
regulated by Resolution 338/2013, issued by
the National Regulatory Agency for Private
Health Insurance and Plans (“ANS”).
However, the STJ dismissed the appeal and
its main grounds, arguing that experimental
treatments are those developed by academic
research and within a scientific context,
not yet fully embraced by the medical
community as effective. Therefore, a
medication already approved by the proper
authorities and legally marketed in the
country could not be classified as an
"experimental treatment".
In view of that, the STJ established that,
in order to be classified as an experimental
treatment, in the terms foreseen by Article
10 (I) of the Health Plans Law, the
medication must not have been approved by
the National Agency of Health Surveillance
(ANVISA) or must not be accepted as an
efficient treatment by the medical
community. Therefore, an off-label treatment
is not experimental and must be covered by
health plans.
The judgement rendered by the 4th Panel was
based on similar legal grounds, thus both
decisions enhance STJ’s ‘case law’ which
understands that doctors,
and not the
health plans, must dictate what the
best treatment for a patient is.
Withdrawal of
the appeal
The case ruled by the 3rd Panel also
presents an interesting procedural and of a
general repercussion issue. The health plan
company had withdrawn its appeal one day
before the date of ruling, claiming that it
would seek settlement out of court with the
Plaintiff.
However, the Reporting Justice called
attention to the fact that the withdrawal
was a procedural maneuver to avoid an
unfavorable decision on the merits and to
manipulate the courts’ ‘case law’. Based on
Article 998 of the Brazilian Code of Civil
Procedure, and defending the institutional
role played by the STJ, the Reporting
Justice determined that the Panel should
rule on the merits, given that the
controversy represented a matter of public
interest and not only a dispute between the
parties.
By adopting this extended interpretation of
Article 998, the STJ has signaled that
procedural tactics, usually employed by
frequent litigants, will be called out by
the Court and not go by unnoticed.
¹ Appeal
to the Superior Court of Justice n.
1721705/SP, Reporting Justice Nancy
Andrighi, ruled on 08/28/2018; and Appeal to
the Superior Court of Justice n. 1729566/SP,
Reporting Justice Luis Felipe Salomão, ruled
on 10/4/2018 |
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Judicial
order for the supply of medicine not
included in the list of the Public Health
System (SUS) – Superior Court of Justice
“complements” its previous decision |
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Priscila Sansone, Amanda Cascaes, Amanda
Rudzit & Bruno Braga |
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The First
Section of the Superior Court of Justice
(“STJ”) had already issued a ruling in a
so-called repetitive appeal (“recurso
repetitivo”) setting forth the
requirements for courts to impose to the
State the obligation to supply medication
not included in the Public Health System’s
list (“SUS”).
Recently, the Court granted a motion for
clarification filed by the State of Rio de
Janeiro and complemented the corresponding
decision that gave rise to said
clarification appeal¹. The decision now
states that, in cases involving off-label
drugs – i.e., a medication prescribed for
the treatment of a disease not listed in the
medical leaflet, the lack of registry of the
product before the National Sanitary
Surveillance Agency (“Anvisa”) may release
the State from the judicial obligation to
supply a medicine not incorporated into the
SUS list, i.e. except in cases in which the
off-label use was previously authorized by
Anvisa.
By means of the complementation of the
judicial decision, the expression “existence
of registry in Anvisa” – previously
indicated as prerequisite for the judicial
determination for supply of medicine not
incorporated in SUS - was modified to “existence
of registry of the product in Anvisa,
provided that the
usage intended is also authorized by the
Agency”.
Furthermore, the First Section of the STJ
refined its opinion about the prerequisites
for the provision of medicine not
incorporated into the SUS list by indicating
that the State shall only grant the supply
to the patient after confirming that the
medicine prescribed is, at the same time,
the sole treatment capable of treating the
patient’s disease and offering better health
conditions.
Nonetheless, despite the need to present a
medical report informing the imperativeness
and effectiveness of the medication to treat
the patient’s health, the STJ clarified that
both the abovementioned criteria rely on a
judicial evaluation. This means that the
medical report presented is not binding to
the judge, who can conclude otherwise and
reject Plaintiff’s claim.
What stands out in the position adopted by
the STJ is the differentiation of treatment
when the off-label drug must be provided by
the State or by private entities (such as
health plans). In recent decisions², the STJ
ruled that health plans are required to
provide off-label medication as long as they
are prescribed by the patient's physician,
this being the sole criterion. On the other
hand, the same obligation is only imposed on
the public entity when the intended purpose
of treatment has already been previously
recognized by ANVISA (although not described
in the leaflet) - which may lead to the
conclusion that the court is applying
different criteria to different obligees -
possibly due to the need for support from a
specialized public body for the imposition
of such obligations and usage of public
funds.
¹ Appeal
to the Superior Court of Justice n.
1.657.156/RJ, Reporting Justice Benedito
Gonçalves, 1st Section, ruled on 09/21/2018.
² Appeal to the Superior Court of Justice n.
1.721.705/SP, Reporting Justice Nancy
Andrighi, 3rd Section, ruled on 08/28/2018;
and Appeal to the Superior Court of Justice
n. 1.729.566/SP, Reporting Justice Luis
Felipe Salomão, 4th Section, ruled on
10/4/2018. |
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