|
July/2019 |
|
LIFE SCIENCES & HEALTHCARE |
| |
Welcome to
the Life Sciences & Healthcare Newsletter, a
publication prepared by
our multidisciplinary team dedicated to the
Healthcare industry.
In this edition:
[Regulatory] Obstacles
for pharmacies to offer point-of-care
testing
[Regulatory] The Federal
Revenue Service finds improper billionaire
health contracts in São Paulo
[Civil] STF rules on the
judicial release of medication not
registered before ANVISA
[Intellectual Property]
Federal decree prioritizes health area in
the application of the IoT
[Tax] TRF3 understands
that payments made to third parties for
development of R&D activities are deductible
[Antitrust] CADE
reviewed 24 mergers in markets in the
healthcare sector in the first half of 2019
[Administrative] New
Regulatory Agencies Act is enacted
[Administrative] Federal
Administration establishes Risk-Sharing
Agreement pilot project |
| |
|
| |
|
|
[Regulatory] Obstacles for
pharmacies to offer point-of-care testing |
|
Renata Fialho
de Oliveira & Susan Uquillas Mosquera |
| |
The National
Sanitary Surveillance Agency ("Anvisa")
has expressly informed that pharmacies are
prohibited from offering quick diagnostic
tests to the population known as
point-of-care testing (“POCT”),
indicating that it is exclusively for
professional use (Circular Letter
4/2019/SEI/GGTES/DIRE1/ANVISA). According to
the same, the Collegiate Board Resolution
No. 44, of August 17, 2009 ("RDC
44") allows pharmacies to measure
only the biochemical parameter of blood
glucose, through self-test equipment, in
addition to the commercialization of
self-tests for HCG and anti-HIV detection.
In this context, and in response to the
demands of the pharmaceutical sector, which
argues that POCT services are positive for
the early detection of diseases, Anvisa has
promoted a Directed Consultation on
Pharmacies and Drugstores for the local
health surveillances to respond, by July 31,
2019, a questionnaire that aims to gather
information about the activities associated
to the healthcare and pharmaceutical
assistance currently carried out in
drugstores, as well as the health related
activities that are being requested to local
health surveillance.
Also, on August 1, 2019, Anvisa will promote
a Sector Dialogue to obtain information,
critiques and suggestions on the use of POCT
in health services. The objective is to
guide the revision and potential amendment
of RDC 44 and Collegiate Board Resolution
No. 302, of October 13, 2005 ("RDC
302"), which sets forth the technical
regulations for the operation of clinical
laboratories.
The expectation of this health sector is
that Anvisa regulates these services to
cover a greater variety of quick diagnostic
tests that can be offered to the population,
assisting the medical diagnoses and
directing the clients to receive medical
attention when they detect altered results. |
| |
|
| |
|
|
[Regulatory] The Federal Revenue
Service finds improper billionaire health
contracts in São Paulo |
|
Rafael Urbano
Gimenes |
| |
The
Federal Revenue of Brazil announced in June
that a two-year tax investigation in the
social health organization (OSS) Seconci
points to the vast deviation of public funds
through payment for fictitious services. At
BRL3.5bn in 2014-2018, Seconci ranks No. 2
in the State of Sao Paulo amongst the OSS
publicly funded for management and logistics
services at public hospitals, all of it
under contracts that do not require public
tenders.
The Federal Revenue’s findings corroborate
the suspicions of corruption in OSSs of a
10-digit order of magnitude, already under
investigation by a 2018 Parliamentary
Inquiry Commission at the State legislature.
If the figures are impressive, the larger
context is even more impressive. Corruption
in the health industry has been receiving
consistent press coverage at least since
April 2017, when the Federal Police’s
Operation Open Facture (a wordplay) made
prime time headlines by arresting public
agents associated with former Rio de Janeiro
State governor Sergio Cabral.
Last May, the SEC and DOJ announced a FCPA
investigation against Johnson & Johnson,
Siemens, General Electric and Philips for
alleged bribery in the sale of medical
equipment in Brazil. Simultaneously, the
Brazilian Federal Public Attorney’s Office
gave Reuters an interview confirming that
U.S. and Brazilian authorities have been
sharing information, and that the FBI would
be helping to prepare a “new Lava Jato”
targeting the health industry in Brazil.
Lava Jato certainly changed the Brazilian
construction industry in an unprecedented
way, but nothing in it echoes the patterns
of coordination between multiple public
authorities that silently emerge from the
recent investigations on the health industry
– geographic coverage has expanded, timing
is much closer, the press play is up a
notch, and even new players (such as the
Federal Revenue and State legislatures) are
joining the ranks to help pull the threads
in the organized fight against corruption.
The more reasonable expectation is that the
response of the companies likewise must step
up in sophistication compared to the Lava
Jato context – whether in internal works
(compliance, internal investigations and
initiative to seek leniency) or in
participating of governmental
investigations. |
| |
|
| |
|
|
[Civil] STF rules on the judicial
release of medication not registered before
ANVISA |
|
Amanda
Cascaes, Amanda Mattos Rudzit & Isabella
Cunha |
| |
On May 22,
2019, the Supreme Federal Court1
(“STF”)
ruled in favor of the possibility, as an
exception, for courts to order the supply of
medication not registered before the
National Sanitary Surveillance Agency (“ANVISA”),
in case of unreasonable delay by the agency
in analyzing a request for registration
(exceeding the term provided in Law
13,411/2016, which is of 120 days for the
priority category and 365 days for the
ordinary category). The decision fixed three
criteria for such cases:
(i) the existence of a request for
registration of the medication in Brazil
(except in cases of orphan drugs for rare
and ultra-rare diseases);
(ii) the drug being registered before a
renowned foreign regulation agency; and
(iii) the inexistence of a therapeutic
substitute registered in Brazil.
For cases of rare and ultra-rare diseases,
registration before ANVISA may be waived, as
the laboratory may not have a commercial
interest in requesting such registration. In
such cases, the State may provide the
medication - on an exceptional basis.
The Federal Office of Public Defense
presented a chart in the lawsuit indicating
that the average time for registering
medication in Brazil varies from 490 to
1,286 days, much longer than the those in
countries such as the United States, Canada
and South Korea, world leaders in clinical
trials, “which vary in amounts that are
substantially inferior, especially when
considering the use of drugs for cancer
treatment”.
In addition, the STF determined that the
lawsuits that demand the supply of
medication not registered before the ANVISA
must necessarily be filed against the
Federal Government, since the reason for the
State’s obligation is the agency’s delay.
The general rule, however, remains that the
State cannot be obliged to provide
experimental medication, even if through
judicial means.
_____
1 - RE
657718/MG, Reporting Justices Min. Marco
Aurélio / Justice Roberto Barroso, ruled on
5/22/2019. |
| |
|
| |
|
|
[Intellectual Property] Federal
decree prioritizes health area in the
application of the IoT |
|
Adriana
Fernandes Rollo |
| |
The
Federal Decree No. 9.854, which establishes
the National Internet of Things Plan,
determines, in Section 4, health as one of
the priority areas for the application of
solutions involving the new technology in
national territory.
By allowing ordinary objects, such as
refrigerators and hospital beds, to
communicate with each other, the Internet of
Things (IoT) enables for great advances in
the provision of medical services, favoring
the evolution of the healthcare sector in
Brazil.
Published in June 25th, the decree also
establishes in Section 4, the preference of
health in the access to IoT mechanisms
related to the promotion of scientific
research, technological development and
innovation. It also emphasizes the priority
of this area in supporting technology-based
businesses.
Demonstrating similar concern, the National
Bank for Economic and Social Development
(BNDES) recently published an article in
which it presents the proposals and
challenges for the healthcare sector for the
next twenty years. In the text, the
expectation brought by the application of
IoT in the sector has been highlighted.
According to the Brazilian Development Bank,
technology may increase the operational
efficiency of medical units, with better
control of resources, either to monitor
patients, or to perform medical services at
a distance.
The prevention, diagnosis and treatment of
diseases have much to evolve with the
implementation of the IoT, defined on the
federal decree as an “infrastructure that
integrates the provision of services” as of
“devices based on existing information and
communication technologies and their
evolution, with interoperability”. |
| |
|
| |
|
|
[Tax] TRF3 understands that payments
made to third parties for development of R&D
activities are deductible |
|
Adriano
Milanesi Sutto & Rafael Fernandes |
| |
The Third
Federal Regional Court (TRF3) – a second
level Brazilian tribunal – recognized the
right of a taxpayer deducting of up to 60%
of its expenses with activities of
technological research and development of
technological innovations (R&D) from the
taxable basis of Corporate Income Taxes
(which comprise both Corporate Income Tax –
IRPJ – and Social Contribution on Net
Profits – CSLL).
The discussion referred to the deductibility
of expenses related to payments or transfers
made to other legal entities for the
development of such activities.
In the decision issued after an appeal was
filed by the Federal Union, federal judge
Marcelo Saraiva stated that Law 11,196/2005
does not contain any limitation regarding
the enjoyment of such benefit when the
expenses with R&D refer to the hiring of
third parties or other legal entities for
the developments of such activities.
In this sense, the judge concluded that
Normative Ruling 1,187/2011, responsible for
regulating the abovementioned tax incentive,
disrespected the legality principle by
establishing a restriction on the enjoyment
of the tax benefit not provided by law,
distancing itself from its regulatory
function. Even though not binding and still
subject to review by higher courts, this
decision is a relevant precedent for
taxpayers, since it recognizes the
illegality of an administrative rule that
was unduly extending the content of a law. |
| |
|
| |
|
|
[Antitrust] CADE reviewed 24 mergers
in markets in the healthcare sector in the
first half of 2019 |
|
Leonardo
Maniglia Duarte & Vivian Salomao Ianelli |
| |
In the first
half of 2019, the Brazilian Competition
Authority (CADE) analyzed 24 mergers in the
healthcare sector, 12 of them involving the
hospital services market, healthcare plans
and diagnostic medicine, 9 of them involving
the pharmaceutical industry, 2 of them
involving the laboratory industry (inputs
for laboratory tests) and 1 case involving
the market of software for healthcare
management. Most of these cases (20 mergers)
have been cleared unilaterally by CADE’s
Superintendent-General. Four transactions,
however, have been submitted to CADE’s
Administrative Tribunal, and three of them
had their approval conditioned to the
execution of Merger Control Agreements
(ACC).
A case that was in the spotlight involved
the acquisition, by GlaxoSmithKline PLC., of
the division of consumer healthcare products
of Pfizer, more specifically in the markets
of simple antacids, antifungals, analgesic
and others. Considering the expressive
concentration resulting in the market of the
simple antacid, in which the combined market
share exceeded 50%, CADE’s
Superintendent-General concluded that the
transaction could raise competition concerns
and the companies proposed a Merger Control
Agreement with a structural remedy for the
disinvestment of the antacid business of
Pfizer (“Magnésia Bisurada”). The proposal
was confirmed by the CADE’s Administrative
Tribunal.
Another relevant case was the acquisition of
Mediplan Assistencial Ltda. by Notre Dame
Intermédica Saúde S.A., which involved the
markets of healthcare plans, in both the
individual plans and collective plans
segments, and also the market of hospital
services. The transaction raised competition
concerns, particularly, in the market of
collective healthcare plans and in its
sub-segments corporate plans and plans with
joining options, with combined market shares
that exceeded 40% in some markets.
CADE’s Superintendent-General challenged the
transaction before CADE’s Administrative
Tribunal, recommending the approval
conditioned to the disinvestment of client
portfolios of healthcare plans.
Nevertheless, CADE’s Administrative Tribunal
approved the transaction, by majority,
conditioned to the execution of a Merger
Control Agreement that provided for
behavioral remedy only, with the commitment
not to discriminate competing healthcare
plans in the relationships with the
hospitals controlled by the resulting
company. Two members of CADE’s Tribunal
presented dissenting opinions and voted for
the rejection of the transaction. |
| |
|
| |
|
|
[Administrative] New Regulatory
Agencies Act is enacted |
|
Mauro Hiane de
Moura |
| |
Federal Law #
13,848, which contains rules about the
management, organization, decision-making
processes and social control of Regulatory
Agencies, was enacted on June 26, 2019, with
the aim of enhancing the independence of
Regulatory Agencies, the transparency and
efficiency of their processes and the
technical quality of their decisions.
Among the modifications and innovations
contained in the new statute, the following
are to be emphasized:
1.) Technical qualifications for
Board positions — the new statute
established more demanding requirements for
Board positions. In addition to “notorious
expertise”, “academic education
compatible with the position” and “untarnished
reputation”, one of the following
conditions must be met:
a) 10-year experience: (i)
in a “superior management position”,
in the public or private sectors, in the
field of activity of the Regulatory Agency —
or in a related field of activity; or (ii)
as a liberal professional working within the
field of activity of the Regulatory Agency,
or in a related field of activity.
b) 4-year experience: (i)
as a top-level manager, within the two
highest levels of a private company, within
the field of activity of the Regulatory
Agency; (ii) as a political appointee (“cargo
de confiança”), or as a civil servant
holding a temporary commission (“função
de confiança”) of a certain rank, in
the public sector; or (iii) as a professor
or researcher within the field of activity
of the Regulatory Agency, or in a related
field of activity.
2.) The “Strategic Plan” and the
“Regulatory Agenda” — Regulatory
Agencies will be required to determine, in
advance, their short and medium-term
objectives. Accordingly, they will have to
issue (a.) “Strategic Plans”
encompassing 4-year periods; and (b.) “Annual
Management Plans”, setting forth their
goals for each year and a “Regulatory
Agenda” indicating the main issues to
be regulated within it.
3.) Regulatory Impact Analyses and
Public Hearings — in the same
direction established by recent amendments
to the “Law of Introduction to Brazilian
Legal Rules” (“LINDB”) and by article 5
of the Provisional Measure #881/2019 (the “Economic
Freedom Act”), Regulatory Agencies will
have to promote “Regulatory Impact
Analyses” when drafting rules of “general
interest of economic agents, consumers or
users” of public services. Such
analyses will contain information on the
possible effects of the rule the Agency
intends to enact – and shall be made
available to the public, for comments,
through public consultations or public
hearings.
The President shall remain responsible for
the appointment of Agencies’ Board Members —
who may only take office after approved by
the Federal Senate. President Jair Bolsonaro
vetoed, on constitutional grounds, articles
of the bill that allowed the Federal Senate
to prepare a “shortlist” of three
candidates from which presidential
appointments should be made. The National
Congress will now decide whether Mr.
Bolsonaro’s vetoes will be overridden or
not. If Congress decides to grant the
Federal Senate powers to prepare such
shortlist, the Supreme Federal Court may be
called upon to evaluate its
constitutionality. |
| |
|
| |
|
|
[Administrative] Federal
Administration establishes Risk-Sharing
Agreement pilot project |
|
Mauro Hiane de
Moura |
| |
On June
11, 2019, the Brazilian Ministry of Health
enacted Administrative Order No. 1.297,
which “creates a risk-sharing agreement
pilot project for the adoption of new health
technologies”. Pursuant to such order,
the Ministry of Health will purchase
Spinraza (nusinersen), a treatment for
spinal muscular atrophy, through a
risk-sharing agreement - and offer it to
users of the National Healthcare System. The
agreement shall establish “the maximum
number of patients, per year, which will
receive the technology with funds provided
by the Ministry of Health” and “supply
interruption criteria for patients who do
not present the expected health outcomes
(...) pursuant to the best scientific data
available.” Once such maximum number is
exceeded, the “pharmaceutical company
will bear the treatment cost for additional
patients.” The Secretariat of Science,
Technology, Innovation and Strategic Health
Supplies of the Ministry of Health
(SCTIE/MS) will have the responsibility of
carrying out “periodic reviews” of
the pilot project in order to “subsidize
the future enactment of an administrative
regulation on the execution of risk-sharing
agreements within the context of the
National Healthcare System.”
While such regulation is not issued by the
Ministry of Health, and while no statutory
provision is enacted to allow it, the
lawfulness of risk-sharing agreements
executed by Public Law entities may
eventually be challenged. Federal Law No.
8,666/1993 (the general “Public Tenders and
Administrative Contracts Statute”), for
instance, does not allow performance-based
payments – a common feature of risk-sharing
agreements. Federal Law No. 12,462/2011 does
allow it for certain public contracts;
nevertheless, such statute does not apply to
contracts signed by Public Law entities for
the purchase of medications. A bill
proposing a complete overhaul of Federal Law
No. 8,666/1993 is currently under advanced
discussion at the Brazilian Chamber of
Representatives. As such, Brazilian
administrative authorities could take
advantage of such opportunity in order to
suggest, to the Legislative Branch,
adjustments that could lend a solid
foundation to future risk-sharing agreements
signed by Public Law entities. |
|
|
|
