The Brazilian Ministry of Health has released for public consultation a new regulation governing the establishment of public-private Productive Development Partnerships.
IHS Life Sciences perspective | |
Significance | The health ministry has proposed a regulatory framework for the establishment of Product Development Partnerships for the production of pharmaceuticals in Brazil. |
Implications | The regulation aims to improve transparency and security of alliances in order to prevent fake partnerships. |
Outlook | The proposal has been released for public consultation but it is likely that the regulation will be approved. |
Brazil's Ministry of Health (MoH) has released for public consultation a new regulation governing the signing of public-private Productive Development Partnerships (PDPs). The proposed regulation includes the requirements and criteria for setting public-private partnerships (PPPs) to produce pharmaceutical products, equipment, and strategic materials for the national health system (SUS). The proposal establishes new rules for the pricing of products during the term of the partnership, and imposes a formal framework for the timeline and monitoring of these partnerships. The MoH's proposal can be accessed here in Portuguese.
Partnerships of mutual benefit
The MoH introduced the Productive Development Partnerships through Ordinance No. 837/2012 in 2012. According to the national health regulator Anvisa, under the PDPs, the MoH sets technology-transfer agreements between public and private pharmaceutical companies for the production of a specific medicine. Under the terms of the agreement, the private pharmaceutical company is in charge of the production of the medicines for 10 years and after that they will transfer the technology to the public company.
The government guarantees exclusivity in the purchase of the product from the private laboratory for 10 years. After the deadline for technology transfer, the national public laboratory begins full production of the drug to meet the national demand.
According to the MoH, the PDPs aim to develop a local industry capable of producing its own medicines in order to reduce dependence on imports and expand competitiveness and technological capacity. Additionally, they help to generate significant savings for the ministry. The MoH has forecasted a possible BRL4.1 billion (USD1.8 billion) per year saving if the new regulation is introduced.
The regulatory proposal
According to the new regulation, the institutions or pharmaceutical companies that have an interest in partnerships must submit proposals to the government within four months. Applications will be reviewed by a technical evaluation committee, an inter-ministerial group formed by representatives of the ministries of health, science, and technology, and development, industry, and trade, as well as Anvisa. All projects, approved or not, will have their results publicly published.
The regulatory framework also establishes rules for the pricing of the product during the term of the partnership. Product prices per unit, which should be decreasing over the duration of the partnership, may be renegotiated as a result of changes in the market such as fluctuation in average prices in domestic and international markets, the variation of prices measured by official sector indicators, and the variation of the exchange rate when it involves imports in the transfer. Additionally, when the product is close to the period of patent expiration or subject to unfair trading practices, the renegotiation of the prices is mandatory. Furthermore, the regulation introduces clear rules for setting the prices when the MoH purchases directly from the private provider, without a public laboratory involved.
Finally, the proposal establishes a 10-year deadline to finish the Productive Development Partnerships and strengthens monitoring by the federal government as a technical committee will make a constant assessment of partnerships, and may also suspend a partnership if it does not fulfil the criteria introduced in the new regulation.
Outlook and implications
PPPs in Brazil are helping to build technical expertise so that the country can produce a variety of pharmaceutical products itself in the long term. Thus, PDPs are part of the policy that focus on innovation and productive growth of the Brazilian industry. Additionally, these partnerships bring benefits to the population as they ensure the supply of essential medicines to the SUS at affordable prices.
Once the consultation period on the new regulation ends and the MoH presents a final version for approval, the proposed changes are expected to improve PDP monitoring and transparency. It is likely that the regulation will be approved as the PDP model is fostered by the MoH with the aim of facilitating the local production of medicines, mainly in the biosimilars industry. More than 27 public and private laboratories in Brazil entered into partnerships in June 2013 for the domestic manufacturing of 14 biological drugs through the PDP model.
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- Brazil: 7 August 2014: Brazil's MoH announces change in rules on productive development partnerships
- Brazil: 25 June 2013: Brazil to expand local production of biologic drugs with 14 new products.