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Jun 15, 2010 (Vol. 30, No. 12)

Opportunities & Challenges in Latin America

Guidelines on Tapping the Potential That Exists in This Emerging Market

  • Brazil

    Brazil represents the largest market in Latin America. As the political, economic, and regulatory conditions have evolved, in some sense Brazil is becoming more akin to a developed market. That said, “akin” does not mean exactly like. There are frequent political changes at the Ministry of Health and a large backlog of submissions pending technical evaluation. Nevertheless, Brazil exhibits good clinical trial and GCP  expertise and despite cost containment, there is considerable growth potential.

    The regulatory agency responsible for clinical trials in Brazil is Agencia Nacional de Vigilancia Sanitaria (ANVISA). Since 1996, when Brazil established a regulatory framework more in line with ICH guidelines, the Brazilian market for clinical trials started to advance. This development was coupled with the establishment of a national bioethical committee Comissão Nacional de Ética em Pesquisa (CONEP) responsible for investigating institutional review boards (IRBs). As a result of these changes, the clinical trials industry began to blossom and has been growing in Brazil ever since.   

    Any company wanting to conduct clinical trials in Brazil will need to prepare some key initial documents, namely the protocol, informed consent form (ICF), investigator’s brochure (IB), program of activities (POA), protocol approval letter from an IRB of the origin country, and insurance applicable to the Brazilian sites.

    There are three steps for clinical trials, and they involve the local ethics committee (EC), CONEP, and ANVISA. The processes related to CONEP and ANVISA run in parallel for a part of the overall process.

    In 2008 Resolution 39 went into effect in Brazil, making the CONEP and ANVISA reviews for approval a truly parallel process as in the EU. The implications are significant, since this could mean potential time savings of 6–8 weeks for the first site to reach the site initiation visit (SIV). It also granted ANVISA the ability to approve all study sites in one submission and review cycle, which would save 4–6 weeks for subsequent sites to reach SIV. If Resolution 39 proves effective, the total time for approval will be reduced from ten to about eight-and-a-half months.

    In general, the pharmaceutical market in Brazil experienced a growth of about 15% in 2008. While this is lagging the growth rate of 21.4% for 2007, it is nonetheless considerably higher than that of more established markets like the U.S. and Europe. Moreover, because Brazil is emerging from the economic downturn much quicker than predicted, demand should increase.

    The health sector comprises about 8% of Brazil’s GDP, or roughly $80 billion a year. In 2008, the pharmaceutical market in Brazil reached an estimated $14.9 billion, which represented 34% of Latin America. Noteworthy is that Brazilian companies only had a market share of about 20%. Also worth noting is that generic drugs make up about 20% of the market, and the growth of generics is expected to outperform the pharmaceutical market. 

    Like clinical trials approval, product registration in Brazil is a lengthy and involved process. Only companies that have local operations in Brazil can apply for registration of medical products. The price for registering a product is low in Latin America generally, and Brazil, in particular, offers incentives for registering generics by discounting the registration application fee for such products (as well as offering a shorter evaluation time for approval for generic and similar products). For originals (new) drugs, registration in Brazil can take 12 to 14 months to be approved.    

    ANVISA created three product categories for registration purposes: medicine products (drugs), pharmaceutical raw materials, and health products. The category for drugs is further broken down into new medicine product, similar products, and generic product.

    There are two avenues a pharmaceutical company can take in order to make headway into the Brazilian pharmaceutical market. One possibility is the importation of a pharmaceutical product. Since the product has not yet been approved in the source country, the Brazilian Health Authorities must inspect and approve this source product. A certificate of free sale (CFS) is not required for filing but at the least an approval letter needs to be submitted within six months and a pricing dossier is mandatory before final approval of the registration. ANVISA/CMED (Câmara de Regulação do Mercado de Medicamentos) approves the price typically within two to three months.

    Alternatively, a company may choose to have a local product with local manufacturing. In this case, CFS is not required for filing and approval as long as the local manufacturing is declared in the application. However, robust chemistry, manufacturing and controls (CMC) and clinical dossier are mandatory, and safety and efficacy must be proven by clinical trials.

    The dossier, which is almost full, consists largely of CMC data, summaries, and some preclinical and clinical reports. Phase III clinical reports are mandatory. The dossier also includes an approval letter from the country of origin. Also included is mandatory local zone IV data and a GMP certificate or inspection request for the manufacturing site. Although approval time varies depending on the therapeutic class, it typically takes anywhere from 9 to 12 months.

    There are many positive aspects to doing business in Brazil. While most senior officials in the ministries and regulatory agencies only speak Portuguese, some junior personnel can be found with a good command of English. Indeed, the U.S. Pharmacopeia has also recognized the importance of the Brazilian market; it opened its fourth overseas location (in addition to Switzerland, India, and China) in Sao Paulo. 

    That said, there are still a number of stark challenges faced by a pharmaceutical company entering Brazil. In general, Brazil has one of the most complex and highest tax burdens in the world. The World Bank reported that companies will use up to 72% of profits and 2,600 hours per year toward bureaucratic obligations in Brazil. This presents a bleak comparison vis-à-vis only 430.5 hours in other Latin American countries and 202.9 hours in developed nations.

    Additionally, a particular problem for pharmaceutical companies entering the Brazilian market is the high incidences of nonregistered drugs prevalent in the market. Some estimates suggest that as much as 30% of the drugs being sold in Brazil are not registered. In 2008, Brazilian Federal Police seized 500,000 units of nonregistered and counterfeit medications.

    To address this situation, some regulatory reforms have been introduced. New legislation, which is expected to be slowly implemented in the next three years, passed in January of last year. The new law aims to enforce monitoring of pharmaceutical products by using electronic barcode systems. 

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