Innovation Stimulus and Pharma Update In Brazil
The Brazilian Government is bent on stimulating local cutting-edge innovation and thus wants to empower its domestic industry so that these industries can innovate and compete. This is the very reason that Brazil created a few years back, an ambitious project called “Plano Brasil Maior” (Greater Brazil Plan) as a country-wide industrial, technology and foreign trade policy in partnership with the private sector. The Federal Government has been welcoming foreign investment and encouraging multinational companies to rig up and install Research and Development Centers in Brazil. An example of the Federal Government’s efforts is the creation of an industrial Health Complex Programme aiming at increasing the number of technology transfer agreements among pharmaceutical institutions and to stimulate local innovation and increase domestic pharmaceutical production. IP, in particular patents, has been gaining more attention in the national agenda.
The present Administration seems determined to transform Brazil’s economy into a competitive one and to foster substantial innovation that can ultimately result into technology and patents. On June 25, 2014, Brazilian President Dilma Rousseff discreetly launched a “National Knowledge Platforms Programme”.The programme (PNPC) aims to create favourable conditions for fostering integration between enterprises and scientific research to spur innovation. Integration between universities and private companies was insignificant in the past and existing innovation programmes. One positive aspect in the programme is that certain sectors where Brazil’s is already a leader, such as, energy and agriculture will be prioritized. The programme contemplates investing nine billion dollars in the next ten years in twenty strategic sectors which are yet to be defined. Officials from The Ministry of Science, Technology and Innovation hold that the programme comes as an essential complement and is an advance to the existing policy. The creation of Platforms will involve the following steps: selection of scientific capacity; enrollment and selection of pre-projects and hiring companies and Research Institutions.
The National Knowledge Platforms Programme aims at having an international scope in attracting skilled professionals both domestic and foreign to work in sub-programmes, to develop infrastructure for research institutions, facilitate and support networking with institutional anchoring in various future platforms. It would appear that Brazil has mirrored on successful experiences conducted in other countries. China, for instance, has materialized sixteen mega-technological projects in a race for world leadership while Europe has joined forces to produce forty technological Platforms to compete with Asian giant-China. The US, leader in entrepreneurs, has come up with forty-five innovation hubs which is a remake of scientific policies to safeguard its economy.
In spite of these efforts, the Federation of Industries of the State of São Paulo believes that the Government’s innovation project will not resolve issues in a short term period as the technological challenge is a big one for Brazil. Industry leaders have viewed the Government’s project as a long term perspective which is more realistic.
The plan is to launch knowledge platforms in each major industry, namely, agriculture, health, energy, aerospace, advanced manufacturing, Amazon and information technology sectors. The platform for the health sector should be prioritized.
Recent statistics show that the Brazilian pharma market will continue to be an attractive one for multinational pharmaceutical companies than any other Latin American market. A slowly improving regulatory regime and substantial private healthcare growth signal that there are significant opportunities for drug manufacturers. Innovative pharma companies, however, will continue facing strong domestic competition especially because of the absence of patent extension terms for pharma patents. This has a negative impact on innovative foreign drugmakers as regulatory delays for innovative medicines will ultimately allow low-cost generic drugs to be launched sooner in the Brazilian market..
Brazil’s constant growth in its domestic pharmaceutical industry has reflected favorably in the clinical trials sector. In 2010, Brazil became the fourth largest emerging market for clinical trials. In the first quarter this year, representatives from Universities, scientific Research Institutions and the pharma industry created the “Alliance for Clinical Research in Brazil “ to promote clinical research and to reduce the timelimits for approvals.
The Ministry of Health estimates that there are 809 clinical studies that are being conducted in Brazil compared to 294 in Argentina, 178 in Chile, 164 in Colombia and 149 in Peru. A world ranking of clinical studies discloses that Brazil is in 15th position which is distant from the first five producers, namely, the US, Canada, Germany, France and the United Kingdom. Substantial efforts have been made by the present Government to improve the regulatory framework although ANVISA continues to face criticism from local and foreign industry people. It is expected that with the improvement of regulatory framework, Brazil should qualify for late-phase clinical studies.
Update on Rare Diseases
In February 2014, Brazil’s Minister of Health signed a decree incorporating 15 new tests for rare disease diagnosis in the Unified Health System (SUS). The Government will fund each medical service team and the special service team.
Brazil’s National Health Surveillance Agency (ANVISA) published (RDC) 38/2013 to enable patent access to new drugs before they are officially approved and available for purchase. Patients with rare or severe diseases will gain access to treatment through three programmes:
- Compassionate Use Programme: will allow use of a new unapproved drug when no other treatments are available to treat patients with severe or rare diseases.
- Expanded Access Programme: will allow use of drugs at late stage development, such as Phase III clinical trials, to patients who are unable to enroll in the clinical trial.
- Post-Study Programme: will provide patients who benefited from drug during clinical trials with a continued supply of the drug after study.
ANVISA stated that RDC 38/2013 will benefit patients in Brazil and that the process of the programmes will be uncomplicated.
“Patent Cliff” in the Current Landscape
Sales of patented pharmaceuticals in Brazil reached approximately US9.3 billion in 2012 which is more than twice the figure in 2006. The patented drugs that generated the greatest revenues in 2008 were GLIVEC, LIPTOR, ZYPREXA, MABTHERA, HUMIRA, CIALIS and AVASTIN, many of which have lost or are to lose patent protection, meaning that sales margins should be eroded by penetration of cheaper generic drugs. Other drugs without a re-enforceable patent in the country but which generate a comparable level of revenue include REMICADE, REBIF, PEGINTON, VIAGRA, CRESTOR and HUMULIN. The high sales volume is due to lack of advanced technology to produce generic versions of complex biological, and patience preference for branded pharmaceuticals. Thus, in spite of an increasing competitive generic drug sector and with the advent of an expected Patent cliff over the next five years, increasing access to branded drugs will be a trend as the country’s wealth increases. In addition, the ongoing demand for private healthcare will be a key factor of sales growth for branded and innovative products.
According to recent statistics, there are 237 biotech companies in Brazil, 63% of which were established after 2000. The majority of these companies are small and medium-sized businesses and are located in the South-Eastern region of Brazil. The Federal Government is the primary sponsor for biotech sector growth as it seeks to improve the country’s drug development, medical research capacity and stimulate domestic industry growth. The Government plans to allocate more resources to stimulate innovation in local companies producing biological drugs. This stimulus is specifically for drugs treating cancer and arthritis.. Some years ago, the Federal Government launched a ten-year biotech initiative with the purpose of providing incentives for private sector R & D and production. Key Biotech companies are : Butantan Instituto which is linked to the Secretary of Health of the State of São Paulo and produces 90% of the serum and vaccines in Brazil, Biomanguinhos, part of Fiocruz, is a primary supplier to the Programme for National Immunisation. and Instituto Vital Brasil is a private Institution that produces, drugs, biological products chemotherapy, etc. In December 2010, ANVISA (National Sanitry Suveillance Agency) published RDC No. 55/2010 which is the regulatory framework for the regulation of biological drugs, both innovation and biosimilars. Prior to the issuance of RDC 55/2010, ANVISA took into consideration regulatory guidelines from other countries and conducted Public Consultation No. 49/2010 2010.
According to RDC No. 55/2010, there are two categories of biological products, namely, new biological products and biological products (biosimilars) which are their copies. In October 2011, ANVISA published four guidelines for biosimilars. ANVISA’s objective is to encourage local production of biosimilars and reduce costs for the public sector.
The current IP law would have been satisfactory were it not for the multiple restrictions on pharma patents over the last decade. To some degree, the two-tier examination continues, the only difference being the inversion of work flow where the ANVISA examiner analyzes the patent application first and then hands it over to the PTO examiner. The Government (ANVISA) had announced in April 2013 that it would only conduct patentability examination on pharm applications when the subject matter is considered to be “contrary to public health”, in other words when the application relates to:
- a pharmaceutical product or process which poses a a health risk: a product, the use of which has been banned in Brazil, or a process producing such product, or
- 2 (a) a pharmaceutical product or process which is of interest to the policies or medicines or pharmaceutical assistance with the National Public Health System; and
- 2 (b) said product/process does not comply with the requirements of Brazilian IP law.
There is a concern that “strategic” products-which are of interest to policies on medicines or pharmaceutical assistance within the National Public Health System-will not receive prior consent. It is not clear whether whether ANVISA will restrict its analysis to safety and efficacy or it will continue to meddle with patentability issues. It is also not clear whether the “strategic” product list will be increased from time-to-time or continue to be limited to those listed in ANVISA’s Resolution.
As is the case of some large emerging economies, Brazil’s present Government has shown clear signs that Trips plus protection will not be easily conceded. Essential mechanisms existing in the developed IP world, such as, patent linkage and data exclusivity protection (DEP) have not yet been contemplated in Brazil’s IP regime but substantial effort has been made to staff the Brazilian Patent Office adequately to reduce the backlog of patent cases. To some extent, the Federal Government is taking measures to increase the number of examiners to at least a reasonable figure that would be able to cope with the backlog and reduce substantially the time limit from filing to the granting of a patent. The Government’s limited perspective is that the current IP law in force is adequate and does not have to be streamlined to conform to leading IP legislations especially because it is Trips compliant. The new President of the Brazilian Patent Office faces several big challenges to transform the agency into a reasonably efficient one and the first priority is to reduce the current backlog of approximately 160 thousand patent cases pending examination. An increase of one hundred patent examiners to the existing workforce is expected for the next year.