The Life Sciences and Healthcare sector in Brazil is highly regulated, encompassing all sorts of products that represent risks to health, hospital, clinical, commercial activities, including the newest trends such as cannabis-based products, software as a medical device and telehealth.
2. LIFE SCIENCES
2.1 OVERVIEW OF THE BRAZILIAN life sciences regulation
According to the International Bar Association (IBA), the life sciences and healthcare sector “is concerned with those fields of science that involve the scientific study of living organisms, with a special focus on all aspects of healthcare law, including such areas as medicine law, intellectual property, biotech, bioethics, regulatory issues and scientific developments (…)”1.
This means that, in Brazil, the life sciences field is directly subject to the sanitary surveillance regulation. Pursuant to Federal Law No. 8,080/1990, “the sanitary surveillance is understood as the range of actions capable of eliminating, reducing, or preventing risks to health and intervening on sanitary issues caused by the environment, the production and circulation of goods and service rendering of health interest”2.
In this sense, the public authorities are competent to intervene in the private sector, in relation to those who manufacture and circulate goods and render services of health interest, to prevent risks and, thus, damages to human health.
One of the entities to which this duty/power has been assigned to is the National Sanitary Surveillance Agency (“Anvisa”), a regulatory agency related to the Ministry of Health (“MoH”), that has as its institutional purpose to “ensure the population’s health protection, by means of the sanitary control of the production and trade of products and services subject to sanitary surveillance, including associated establishments, processes, inputs and technologies (…)”3.
Such control can be expressed, mainly, as the need for a company that performs activities of health interest (that is, that can cause damage to health) to be granted several permissions by the public power to operate.
The main requirements so that companies subject to sanitary surveillance may perform their activities are generally listed below. We stress that such requirements may vary depending on the company’s specific activities and/or products manufactured. Thus, references below should be adapted to each specific situation.
1Available at https://www.ibanet.org/unit/Law+and+Individual+Rights+Section/committee/Healthcare+and+Life+Sciences+Law+Committee/3089. Access on September 13, 2021.
2Federal Law No. 8,080/1990, section 6, first paragraph.
3Federal Law No. 9,782/1999, section 6.
2.2. MAIN SANITARY REQUIREMENTS
2.2.1. COMPANY’S OPERATION PERMITS
The permission for private entities to operate, on a federal level4, with products subject to sanitary surveillance corresponds to the Operation Permit (“AFE”), necessary to establishments that perform storage, distribution, packing, expedition, exportation, extraction, manufacturing, fractioning, importation, production, purification, repacking, synthesis, transformation and transport activities of drugs and pharmaceutical inputs intended for human use, cosmetics, products for personal hygiene, perfumes, household sanitizers and packing of medical gases5. Even though food is subject to sanitary surveillance, food industries and service renderers are exempt from obtaining an AFE.
If the establishment also handles controlled substances or controlled drugs, as set by MoH Ordinance No. 344/1998, it is necessary to obtain a Special Authorization (AE) before Anvisa6.
On a local level, i.e. state and or municipal level, the licensing7 of the establishment that performs activities of health interest, as established by each local regulation, is required, food industries and service renderers included in this case8.
The reason of the need for previous approval of the establishment by the authorities is the preservation of health, as a prevention to the risk the activities mentioned above represent.
That is what can be interpreted from the requirements to obtain an AFE: assuring the establishment has set a quality system9, hygiene conditions, storage and operation suit to the product’s needs, so as to reduce the contamination risk, risk of altering its characteristics, etc.10.
4Federal Law No. 6,360/1976, section 50: The company’s operation to which this Law regards shall depend on an authorization granted by Anvisa, after the requirement for enrolment of their activities, payment pf the corresponding Sanitary Surveillance Inspection Fee and other requirements set by specific Anvisa regulations.
5Anvisa Resolution No. 16/2014, section 3.
6Anvisa Resolution No. 16/2014, section 4.
7Federal Law No. 6,360/1976, sections 51 and 52.
8Law-Decree No. 986/1969, section 46.
9Anvisa Resolution No. 16/2014, section 27, II, “b”.
10Anvisa Resolution No. 16/2014, section 27, II, “e”.
2.2.2. MARKETING AUTHORIZATIONS: REGISTER AND NOTIFICATION
As to products of health interest and, therefore, subject to health surveillance: drugs, pharmaceutical inputs, medical devices, products for personal hygiene, perfumes, cosmetics, household sanitizers, products for esthetic purposes11, among others, are subject to register or notification before Anvisa, depending on the risk they represent.
They are authorizations so that the products may be put in the market after their quality, efficiency and safety has been attested: register applies for products that represent a greater risk to health, whereas notification applies for smaller risks, as established by each specific regulation (e.g. on drugs, medical devices, cosmetics).
Some food products may also be subject to registration with Anvisa, such as new food and new ingredients, formulae for enteral nutrition, food for children12. However, food products are normally exempt from registration and are subject only to a communication to local sanitary authorities prior to manufacturing13.
11Federal Law No. 6,360/1976, section 25.
12Decree-Law No. 986/1969, section 3. Anvisa Resolution No. 27/2010, Annex II.
13As provided by Anvisa Resolutions No. 27/2010 (modified by Anvisa Resolutions No. 240/2018, No. 319/2019, and No. 460/2020) and No. 23/2000 (partially revoked by Anvisa Resolutions No. 278/2005 and No. 27/2010).
2.2.3. CERTIFICATION OF GOOD MANUFACTURING PRATICES (GMP CERTIFICATE)
Depending on the potential risk to health, a specific certification is necessary for the manufacturing of certain products (such as drugs, active pharmaceutical inputs and high-risk medical devices), as granted by Anvisa, attesting that the manufacturing facility complies with Good Manufacturing Practices (“GMP”).
In order to obtain this Certification of Good Manufacturing Practices (“GMPc”), Anvisa inspects the company’s manufacturing facility to check if the technical regulation with regard to the GMP of such product is totally complied with. Inspection to certify GMP in establishments located in Brazil can also be carried out by the local health surveillance (of the corresponding State or Municipality).
In the case of imported products, Anvisa usually travels to manufacturing sites abroad. Even though several countries demand a GMPc, the requirements established by each country are different, in spite of the fact that, in the last years, Anvisa has been adopting actions to standardize criteria.
Anvisa has been accepting reports and opinions issued by international entities in certain situations. In this sense, Anvisa is a certified agency by the Medical Device Single Audit Program (MDSAP), “a program that allows the conduct of a single regulatory audit of a medical device manufacturer’s quality management system that satisfies the requirements of multiple regulatory jurisdictions”14: Australia, Brazil, Canada, Japan and the United States.
Thus, if a company located at any of the countries above wishes to export their medical devices to Brazil, it may be subject to a single local audit, which shall be valid in Brazil, that is, Anvisa would not need to inspect the manufacturing facility.
Indeed, current norm on obtention or renewal of GMPc for medical devices15 establish special criteria due to MDSAP, Mercosur system and International Medical Device Regulators Forum (IMDRF).
Since January 2021, Anvisa is a member of the Pharmaceutical Inspection Co-operation Scheme (PIC/s), whose institutional purpose is the cooperation between regulatory authorities in the field of GMP of drugs for human or veterinary use.
In August 2022, Resolution Anvisa Np. 741/2022 was published, extending the possibility of applying international validation mechanisms to all product categories, subject to the publication of specific norms on each case16.
Even so, Anvisa is still the competent authority to grant GMPc to manufacturers of products in the Brazilian market.
The GMPc is applicable to most industries of products of health interest, but normally it is not a mandatory license, as described above. However, several rules establishing GMP exist in connection to different products with which industries and service providers need to comply with.
14Available at: https://www.fda.gov/media/90179/download?source=govdelivery&utm_medium=email&utm_source=govdelivery. Access on September 13, 2021.
15Anvisa Resolution No. 687/2022.
16Such Resolution also sets that other regulatory reliance measures can be adopted, as established by specific rules, including by means of regulatory harmonization and convergence measures, agreed upon and implemented by foreign authorities; as well as that documentation arising from multilateral organizations, international institutions or third party organisms can be used, pursuant to guidelines and rules on specific programs and mechanisms Anvisa is a part of.
2.2.4. DEFINITION OF PRICES OF DRUGS BY CMED
To be commercialized in Brazil, a drug must have its maximum price approved by the Chamber for Drug Market Regulation (“CMED”). CMED is the federal authority in charge of the economic regulation of the drug market, the definition of criteria for setting and adjusting the prices of drugs17.
The marketing authorization holder must submit a price information document for each new drug or new presentation18.
The companies are responsible for complying with the maximum prices approved by CMED. Non-compliance with CMED rules will subject the company to the administrative penalties of the Consumerist Code19.
In March 2021, Anvisa issued a Resolution regarding the economic monitoring of medical devices strategic to public health. Through this rule, Anvisa aims to contribute to the reduction of asymmetry of information in the market of medical devices, by providing the statistics of the historical prices of the products20.
2.3. NEW PRODUCTS AND GUIDELINES
Brazilian regulation on sanitary surveillance is very broad and, as products and technology evolve, Anvisa has been regulating new matters. We have listed below some of the trends and latest matters in connection with sanitary surveillance in Brazil.
17Federal Law No. 10,742/2003, section 6, I and II.
18Federal Law No. 10,742/2003, section 7.
19Federal Law No. 10,742/2003, section 8, and Federal Law No. 8,078/1990, section 56.
20Resolution Anvisa No. 478/2021, section 4, I.
2.3.1. CANNABIS-DERIVED PRODUCTS
The Law on Drugs (Federal Law No. 11,343/2006) laid the foundation for cannabis-based products to be used for medical purposes in Brazil.
In 2014 , the Federal Medical Council (“CFM”) regulated the prescription of cannabidiol-based products on CFM Resolution No. 2,113/2014, further developing the matter in Brazil and making way to more advances.
In 2015, Anvisa regulated, for the first time, the direct importation of cannabis-derived products, by an individual person, for personal use, pursuant to a prescription issued by a legally qualified professional, for health treatments. The rule was updated in 2022, by Anvisa Resolution No. 660/2022.
The main measure for the creation of the market of cannabis-derived products in Brazil was the publication of Anvisa Resolution No. 327/2019 in December 2019, which regulates the procedure of authorization for national manufacturing and importation of cannabis products for medical purposes, per specific concept created by the norm. Anvisa Resolution No. 327/2019 entered into force on March 10, 2020, and is under revision by Anvisa.
This new regulation has created a new regulatory category, that of cannabis products, regularized by means of a Sanitary Authorization, subject to fewer requirements in comparison to drugs. Nevertheless, cannabis products are subject to register as drugs five years after the publication of the Sanitary Authorization in the Union Official Gazette.
Further regulation is expected, including by the Ministry of Agriculture and Livestock (“Mapa”), especially concerning cannabis cultivation for medical purposes, which is prohibited in Brazil at this point.
Cosmetics and cannabis-based foods are currently not allowed in Brazil.
Health software are more and more present on our lives, for instance by means of programs that process medical routine exams and applications on our smartphones that aim to enhancing or keeping our health conditions.
Still, Software as a Medical Device (SaMD) has only been regulated by Anvisa recently, by Anvisa Resolution No. 657/2022. After a long time, the sector saw Anvisa elevating to normative status a former orientation, Anvisa Technical Note No. 4/2012, which was the regulatory interpretation basis for health software until then.
Pursuant to the norm, SaMD is a software that is encompassed by the definition of medical device and can perform one or more medical indications (such as prevention, diagnosis, treatment or rehabilitation), without being a part of a medical device’s hardware – that is the case of an embedded software21.
Anvisa Resolution No. 657/2022 is not applicable for (i) for well-being22; (ii) listed by Anvisa as a non-regulated product; (iii) used exclusively for administrative and financial management in health services; (iv) that process medical demographic and epidemiological data, without any clinical, diagnostic, or therapeutic purpose; and (v) that is embedded in a medical device under sanitary surveillance23.
Products that fall under the SaMD category are subject to the same regularization process applicable to medical devices in general, i.e. register regime for risk classes III and IV and notification regime for risk classes I and II24.
Software developed internally by a health service for its exclusive use, including its branches, are not subject to registration with Anvisa if they fall into risk classes I and II and do not interfere with the functioning of medical devices subject to registration, pursuant to criteria set by the norm25.
21Anvisa Resolution No. 657/2022, section 2, VII and VIII.
22Software for well-being are those intended to encourage and maintain well-being, including healthy activities such as physical exercise, or to encourage and maintain health management and a healthy lifestyle, not intended for prevention, diagnosis, treatment, rehabilitation or contraception. Anvisa Resolution No. 657/2022, section 2, IX.
23Anvisa Resolution No. 657/2022, section 1, second paragraph.
24Anvisa Resolution No. 657/2022, sections 9 and 10. Anvisa Resolution No. 751/2022.
25Anvisa Resolution No. 657/2022, section 5.
Remote rendering of health services is, currently, regulated by Federal Law No. 14,510/202226. The express mention to this model by the Brazilian legislation derives from the normative evolution caused by the Covid-19 pandemic, starting on 2020.
Even though telehealth today encompasses the remote rendering of services by all healthcare professions regulated by the federal Executive Power27, it is noeworthy that in the beginning of 2020, only CFM Resolution No. 1,643/2002 regulated the matter, as applicable only to the practice of medicine. Besides, the norm only regulated telemedicine as interation bewteen physicians, not involving patients.
With Covid-19 came the need to avoid in-person medical consultations so as to avoid unnecessary exposure to possible infections. Thus, MoH Ordinance No. 467/2020 and, later on, Federal Law No. 13,989/2020 authorized the use of telemedicine during the Covid-19 pandemic until the end of the corresponding Public Health Emergency of National Importance (“ESPIN”).
In 2022, before the end of the ESPIN, CFM Resolution No. 2,314/2022 came into force, revoking CFM Resolution No. 1,643/2002. Therefore, today remote medical consultations between physicians and patients are allowed both synchronously (in real time) and asynchronously (offline).
Finally, after the publication of Federal Law No. 14,510/2022, the practice of telehealth throughout the national territory was definitively authorized. Thus, not only the practice of telemedicine has been allowed, but also the practice of other health services that had been regulated only during the Covid-19 pandemic, such as remote consultations with psychologists, nutritionists, speech therapists, among others.
26Federal Law No. 14,510/2022 has amended Federal Law No. 8,080/1990, which sets the conditions for the promotion, protection and recovery of health, the organization and operation of corresponding services, among other matters.
27Federal Law No. 8,080/1990, section 26-A.
3.1. OVERVIEW OF THE BRAZILIAN HEALTH SYSTEM AND FOREIGN INVESTMENT ON HEALTH ASSISTANCE
Although there is no legal definition of the term “health assistance”, it is generally understood as the services rendered by public or private organizations for the promotion, protection and recovery of human health.
Pursuant to Law No. 8,080/1990, the public actions and services addressed to the protection of human health are performed by federal, state, and municipal public entities that shall ensure physical, mental and social welfare to the collectivity. Private entities may participate in the Brazilian Unified Health System (SUS) performing complementary activities.
The Brazilian Constitution establishes that “the direct or indirect participation of foreign companies or capital in the Brazilian health assistance is forbidden, except for cases permitted by law”28.
Since 2015, when Federal Law No. 13,097/2015 came into force, the direct or indirect participation, including control, of companies or foreign capital in health assistance has been allowed in the following cases29: (i) donations from international organizations related to the United Nations, from technical cooperation entities and of financing and loans, (ii) legal entities intended to implement, operate or explore (a) general hospitals, including philanthropic, specialized hospitals, polyclinics, general clinics and specialized clinics and (b) family planning actions and research and (iii) maintenance of health services by companies, for non-profit purposes, in benefit of their employees and dependents, without any burden for social security.
28Brazilian Constitution, section 199, third paragraph.
29Federal Law No. 13,097/2015, section 142.
3.2. HEALTH REGULATORY REQUIREMENTS
Since hospitals perform a broad scope of activities that may represent risks to the public health and to the environment, such establishments are subject to several requirements prior and during their regular operation, in order to attest that the activities carried out follow the applicable legal standards.
In this sense, we list below some of the main requirements hospitals need to comply with in Brazil, according to the Brazilian legislation and regulation:
3.2.1. APPOINTING A TECHNICAL RESPONSIBLE PARTY AND MAKING SURE ALL PROFESSIONALS ARE REGULARIZED BEFORE THE COMPETENT PROFESSIONAL COUNCILS
Pursuant to Decree No. 20,931/193230, public and private hospitals of any nature, as well as analyses and clinical trials laboratories, among other establishments performing healthcare activities, are only allowed to operate if under the responsibility and the technical management of physicians or pharmacists, as applicable, depending on the activities performed.
As a result, hospitals must appoint a physician to be the technical responsible party for the establishment (responsável técnico). The technical responsible must be duly licensed by the Regional Medical Council (“CRM”) of the jurisdiction of the hospital.
After being duly appointed, the technical responsible must supervise and coordinate all medical services provided by the hospital31.
Other duties of the technical responsible are: (i) applying for the company’s registration before the CRM (as explained in item 3.2.2. below)32, (ii) informing CRM of any modifications regarding their status as technical responsible party, as well as of (iii) informing CRM of any modifications to the company’s bylaws and the changes to the hospital’s clinical staff every year.
Depending on the activities performed by the company, which should be described in the hospital’s internal procedures, it may be necessary to also obtain certifications and authorizations before others class councils.
Thus, other healthcare professionals (e.g. nurses, physiotherapists, pharmacists) working at the hospital must also be registered at their corresponding professional councils, and the hospital must appoint a technical responsible for each of these areas, whenever applicable.
3.2.2. REGISTRATION of the entity BEFORE CRM AND OTHER PROFESSIONAL COUNCILS
Registration of the healthcare establishments and their branches, divisions, and subsidiaries before the CRM where they are located (as legal entities) is mandatory33.
Such registration shall also be necessary before other applicable professional councils, depending on the other professionals who work at the hospital, as explained above.
3.2.3. OBTAINING SANITARY LICENSES
As stated before, sanitary surveillance oversees activities and products considered “of health interest” in Brazil, therefore, including the infrastructure of health assistance establishments and the operation of pharmacies and drugstores.
State and municipal authorities are responsible for local inspections and supervision of compliance with both federal and local legislation and regulation, including for hospital activities.
Hospitals must obtain licenses from the corresponding local sanitary authority (State and/or Municipality, depending on the location)34, along with other licenses required for their specific activities, which refer to the medical specialties and their internal facilities and regulation (e.g. ICU – Intensive Care Units, which are subject to rules by Anvisa, by the MoH and by the professional councils).
The legislation, regulation, necessary licenses, and requirements are different from each State and Municipality. Thus, it is necessary to study the State and Municipality rules the hospital is/will be subject to, considering its activities and internal facilities. With this information, the hospital can assess which are the applicable licenses, as well as the requirements and procedures to obtain such authorizations.
In case the hospital outsources part of its activities, the outsourced companies must also have the necessary corresponding licenses, whenever applicable.
3.2.4. REGISTERING BEFORE THE National Database for Health Establishments (“CNES”)
All hospitals must also be registered with the CNES, a public database held by the MoH with the purpose of compiling general information of hospitals and medical clinics in the country, including performed activities and specialties, size, number of beds and employees.
Hospitals fit into the definition given by MoH Consolidation Ordinance No. 1/201735: a healthcare establishment is a “delimited and permanent physical space where human health actions and services are performed under technical responsibility”.
The purpose of CNES is the structuring and the preparation of public policies in healthcare. As explained in 3.1, private hospitals are also part of the Brazilian healthcare system as supplementary health establishments.
Therefore, registration before CNES is necessary prior to the health establishment’s operation and such enrollment needs to be frequently updated, as condition to maintain operations.
30Decree No. 20,931/1932, sections 24 and 28.
31CFM Resolution No. 997/1980, section 11.
32CFM Resolution No. 997/1980, section 3.
33CFM Resolution No. 997/1980, section 2.
34Decree No. 20,931/1932, section 24.
35MoH Consolidation Ordinance No. 1/2017, section 360, II.
3.2.5. REGULARIZATION OF PHARMACIES AND DRUGSTORES
In Brazil, pharmacies and drugstores are subject to: (i) federal health legislation; (ii) regulations issued by Anvisa; (iii) state and municipal (local) legislation; and (iv) regulation and ethical standards provided by the Federal Council of Pharmacy (“CFF”).
Federal health legislation sets that drugstores need to have permits and licenses for operation36, which are Operating Permit (AFE) and a Special Permit (AE), the latter due to controlled drugs or substances, as issued by Anvisa pursuant to Anvisa Resolution No. 275/2019, as well as local sanitary license.
Furthermore, the drugstore or drug dispensary should be registered with the Regional Council of Pharmacy where it is located (“CRF”), as well as have a technical responsible party duly registered at such CRF37.
If the activities of the drugstore or the drug dispensary involve drugs or substances controlled by the Federal Police, by the Civil Police or by the Brazilian Army, besides from obtaining an AE before Anvisa, additional licenses may be necessary.
3.2.6. OBTAINING APPROVAL FOR THE HOSPITAL BASIC ARCHITECTURAL PROJECT
Prior to construction, expansion, renovation and/or adaptation, all health facilities need to have the corresponding Basic Architectural Project (“BAP”), approved by the local sanitary surveillance authorities.
Anvisa Resolution No. 51/2011 and Anvisa Resolution No. 50/2002 list the technical requirements to the BAP regarding architectural and engineering standards and determine that the BAP needs to be filed at the competent State or Municipality authorities, depending on the location, for the issuance of a technical opinion.
The construction, expansion, renovation, or adaptation must be carried out in accordance with the BAP as approved by the authorities. At the end of the construction/renovation, the person responsible for carrying it out and the legal representative of the healthcare facility need to sign a Liability Term claiming that the construction has been carried out in compliance with the BAP. Sanitary surveillance authorities can make inspections at any time in order to check these measures.
36Federal Law 13,021/2014, Section 6.
37CFF Resolution No. 638/2017, section 43 and following sections.
Authors: Marcio Mello Baptista e Bárbara Bassani de Souza
Partner in TozziniFreire’s Life Sciences and Healthcare practice group and Doctor of Laws from USP (Universidade de São Paulo), Marco Aurélio has broad experience in regulatory matters and administrative health regulatory proceedings. He assists clients in several sectors of the industry, besides assisting health service providers. He also acts in regulatory consulting and administrative proceedings, especially before Anvisa (Brazilian Health Regulatory Agency) and MAPA (Brazilian Ministry of Agriculture, Livestock and Food Supply), as well as in matters involving the licensing and registration of products subject to health surveillance, new technologies, the launch of new products in the Brazilian market and drug recall.