Brazilian healthcare and pharmaceutical markets: changes regarding foreign participation in hospitals and clinics and the validity terms of marketing approvals and licenses to operate
November 10, 2017

by Eduardo Hallak and Ricardo Campello On January 20, 2015, the Brazilian Congress enacted Law #13,097, significantly changing the rules governing tax benefits, air transportation, energy supply contracts and the food and drug sector. The first important change relates to Law #8,080/1990 and the possibility of foreign companies to own or be shareholders in hospitals and clinics in Brazil, which is now allowed. Law #8,080/1990 formerly barred foreign companies from directly participating in the healthcare sector. Participation was limited to donations from international entities connected to the United Nations (“UN”); setting up entities of technical cooperation; and holding non-profit healthcare services to support its own employees in the country. Now, foreign companies can be shareholders or directly operate hospitals and clinics, as well as provide research and services relating to family planning. However, these changes are already being challenged before the Brazilian Supreme Court (“STF”). On February 11, 2015, the National Confederation of College Liberal Professionals (CNTU) commenced a constitutional challenge before the STF, arguing that these changes violate article 199, paragraph 3rd, of the Brazilian Constitution, which would bar foreign companies to participate in the Brazilian healthcare sector. CNTU requested a preliminary injunction to stay the corresponding provisions of Law 13,097/2015, but the STF is yet to render a decision in this regard. The second important change brought by Law 13,097/2015 concerns the validity term for marketing approvals (“MAs”) issued by ANVISA. Law 6,360/1976, in its article 12, previously provided for a 5-year term for MAs granted to drugs, medical devices, cosmetics and hygiene products, subject to successive renewals. Now, the validity term for each type of product will be defined by ANVISA, on a case-by-case basis, taken into consideration the product’s nature and sanitary risk, as well as limited to a 10-year term. There is no minimum validity term set forth by the new Law, a situation that can lead to judicial discussions in case ANVISA fails to provide reasonable periods for the applicants. A third significant change is the creation of the “Drug Marketing Approval Abbreviated Renewal”, an alternative procedure that aims at expediting MA’s renewals before ANVISA. The new system will apply to drugs that have been registered before ANVISA for more than 10 years, with no reported cases of inefficacy or relevant side effects, and that are fully compliant with the food and drug legislation. However, the newly created abbreviated renewal is not in force at this very moment, since its proceedings will be defined in future regulation to be issued by ANVISA. Further important changes relate to the streamlining of the regulation on Licenses to Operate, issued by ANVISA and by the Local (State or County) Sanitary Surveillance Authority. Previously, article 50 of the Law 6,360/1976 established that changes on the company’s activities or legal representation should be followed by the issuance of a corresponding License to Operate renewal before being in force. Now, companies with a valid License to operate no longer need to wait for ANVISA to issue a renewal mirroring the changes; it suffices to record before ANVISA any alteration on activities or legal representation. Regarding the License to Operate issued by the Local Sanitary Surveillance Authority, the 1-year validity term has been lifted and now each local unit will set an applicable term taking into consideration the sanitary risk related to the company’s activity. In view of the above, we expect a handful of new, specific, regulations by ANVISA in the upcoming months, further ruling on the matters that are now in its hands to define. Accordingly, there is no doubt that a good portion of it will be soon brought before courts for judicial review.   For more information about the new rules and their impact, please contact us at prevail@localhost/licks/site.

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