PharmExec Blog

Brazil Profile: Latin America's Giant Repositions for Pharma Growth

Brazil claims a bright future as a drug research and clinical trials site — but IP issues continue to raise concerns among the multinational investor community.

Brazil

Health and regulatory officials of Brazil are making the rounds with a message for pharmaceutical companies and clinical research sponsors about what a great place it is to do business. Most pharma companies have had operations in Brazil for years, but largely to import and sell products made elsewhere. Now Brazilian officials are offering attractive financing and touting a sound regulatory system and clinical research network to persuade R&D and manufacturing operations to expand their presence in the market.

Washington was a logical choice for conference hosted by the Brazilian Health Ministry last month, coinciding with the signing of a information exchange agreement between the drug regulatory agency, the National Health Surveillance Agency  or ANVISA, and the FDA.  Brazilian officials used the occasion to describe the opportunities offered pharma and biotech firms from its large ($50 billion) retail drug market and the capacity of its export-import bank to finance investment projects. Brazil wants active pharmaceutical ingredient producers to set up shop so domestic manufacturers don’t have to import these products.

One attraction to pharma companies may be growing opportunities to conduct clinical trials in Brazil. The country boasts a large, ready patient population, a universal health care system with hospitals able to support clinical research, and rules to ensure adherence to ethical review standards. A National Clinical Research Network is taking its cue from the U.S. National Institutes of Health in establishing a network of research centers (Pesquisa Clinica), many linked to universities or teaching hospitals able to evaluate and study new technologies, pointed out Reinaldo Guimaraes, Brazil’s secretary of science and technology.  ANVISA has developed capacity to evaluate clinical protocols and monitor studies, while also conducting more plant inspections to ensure compliance with quality manufacturing standards, working with international authorities to approve new vaccines, and streamlining its registration process to cut the time to analyze new drugs to only 12 months.

IP: Still on the Radar Screen
One challenge is concern about the country’s poor record for recognizing and protecting intellectual property rights. Despite a lack of patent protection for medicines until 1996, Brazil is now in compliance with TRIPS, explained Jorge Raimundo, president of Interfarma, the country’s R&D-based pharmaceutical manufacturers’ association. More patents are being registered in Brazil, he said, acknowledging that this has created an immense backlog in patent applications.

However, US companies and key officials at the Office of the US Trade Representative [USTR] complain that the slow speed of patent reviews and regulatory overlaps make it difficult to enforce IP rights in Brazil.  The biggest challenge is coping with the lack of coordination between regulatory approval staff and the patent office. Local generic players continue to take advantage by obtaining marketing rights from officials who do not certify whether the reviewed product is under patent or not.  By the time an infraction of the patent terms is documented, the product is already on the market and competing with the originator.

Despite this implicit homegrown advantage, leading generic drug makers have not yet set up subsidiaries in Brazil, partly due to the complexity of Brazil’s generic policies. Prior to enacting a generics law in 1999, Brazil permitted marketing of “similaires” that did not have to document bioequivalence. In the past decade, generic drugs that meet standards for bioequivalence and interchangeability have become more common and are gaining a larger share of the market. The similaires are supposed to be eliminated by 2014, but are very cheap, and thus still very popular.

Ultimately, the real goal is to attract research operations able to spur development of new treatments that meet Brazil’s key areas of medical need. Brazil offers “spectacular areas for research,” said Raimundo, noting progress in stem cells, genetic engineering, and drugs for neglected diseases. A prime attraction is Brazil’s biodiversity, with 60,000 unique plant species.

Looking for Long-Term Gain
The transition to a new government next month is unlikely to force any dramatic changes in policy toward the sector, considering that the more conservative candidate in the run-off election has a record of supporting aggressive actions to require foreign drug-makers to make essential medicines available at low prices, nvestors can expect the next government to push for pro-generic policies on the international front while seeking to stabilize the environment for the innovative side of medicines in its domestic industrial strategy for the sector. A truly pro-patent approach to innovation may be too much to expect:  although Brazil has weathered the global economic downturn relatively well, the government remains under pressure to reduce its spending, which could prompt cuts in pharmaceutical coverage.  Still, taking a long term view of change, Novartis, Pfizer and other pharma companies are investing and purchasing local operations and launching clinical trials.

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