Brazilian regulation prices, and future trends
Text taken from the interview with Bruno Abreu, available on our YouTube channel.
Bruno Abreu is a lawyer, specialist in Economic Regulation, Market Monitoring by UnB. He worked for 14 years at the Medicine Market Regulation Chamber – CMED, with Anvisa, where he headed the legal area and became Executive Secretary. Since 2014 he has been working at Sindusfarma, where he currently occupies the Market and Legal Affairs Department. Full Member of COMSAÚDE at FIESP. Head Counselor at the National Health Council/MS. (CNI)
Drug pricing policy in the world:
European countries have a long tradition of regulating markets. Mainly because they all work with reimbursement systems. Governments incorporate the products into their health systems, make them available to the population and for that they make an active pricing policy, obtaining relevant discounts, in order to make this incorporation.
In the United States it is different. Traditionally, the biggest economy in the world is very liberal. They do not do it in an active price regulation with state intervention. Markets are free. You have large PBMs that buy medicines for health plans, then they get it with discounts, but everything within the dynamics of the private market. However, for a few years now, with health technologies, medicines have been increasing a lot in innovation, and this innovation always reflects in higher prices. The American government itself has been very concerned and has proposed regulatory models to bring drugs into the programs, mainly Medicaid and Medicare.
It is also worth highlighting that in Oceania the work that Australia and New Zealand do is very similar to the European work of incorporating products, with lower prices (even lower than in Europe). Japan fosters incremental innovation. They have an economic regulation for incremental innovation, mainly to encourage the Japanese industry to invest in this innovation, they are very interested. South Korea has a government contribution, a wide regulation of biosimilar medicines. It's an innovation.
China is in that transition of being a market economy and still having the tradition of a communist country, but now it has a very active product incorporation program and has required higher discounts, from 70 to 90%, to incorporate a product on the market. Chinese prices are a part of this active culture.
It is also worth noting that Brazil was the first emerging country to actively regulate market prices. We already had a freeze back then, before the Collor government. Collor released the market, José Sarney, there were those general price thawings in the economy. Medicines had this freezing. After a decade being released, we returned to the regular pricing. But we started to plant a seed in other emerging countries. South Africa regulates prices, Mexico has a price regulation and now in South America we have the Chilean experience, and we have the experience of Ecuador that started to regulate prices actively.
Price regulation in Brazil: Modern regulation began in 2001, with a chamber prior to CMED; CAMED, the Chamber of Medicines. It came on the heels of a drug CPI we had in the late 90's that found several deviations in our market. Regulatory and price deviations. We are talking about a pre-ANVISA period, where the regulatory standard was much lower. We had the entire registration area done within the Ministry of Health by a secretariat. We had very complicated processes, regulatory and quality problems, counterfeiting… it was the most stolen cargo; we had problems with price increases at that time. And with the CPI, came this price regulation, by means of a temporary measure. This chamber was supposed to last a year, it ended up lasting two. 2003 came, starting a new discussion on the expansion of this regulation, which is the most modern regulation we have today. But we were talking about a time when the generic market was in its infancy. We had little competition and many markets, and this is not our current scenario. The big problem is that the regulation is much bigger than it should be. Today we have several drugs that cause competition and several therapeutic subclasses. We have several brand-name drugs that in the last 20 years have left the market because generics have gained the market with much lower prices. The major problem with regulation today is that it should be customized to the needs of the competitive market. We shouldn't have therapeutic subclasses with more than three generics or three similar ones competing, we shouldn't have state intervention. And regulation should focus on monopoly markets, markets without competition. Linked to this, another problem of regulation is the resolution that disciplines the starting price for launching on the market, which is Resolution 2 of 2004. It is a resolution that came in as modern in 2004, that is, it intended to be modern. Brazil started ahead of any other country, placing the assessment of health technologies for the entry price, an innovation that was not followed by anyone, it should have already been abandoned, because the assessment of health technology is for you to incorporate products into the health system, and not to give a price to the private market. It was a bold step at the time that was not followed. Another problem is that it is stuck in the 2004 market. We have all the pharmaceutical innovations, and there were many that came from 2004 until now, which are not considered innovations by this resolution. For example, we are experiencing the entry into the world markets of gene therapies and advanced therapies, which if you look at CMED Resolution 2 of 2004 are not innovations. They fall under a figure called “missing case” and the legislator is too tied up to give a price. It turns out that we are not able to price anything, staying on the sidelines of these new market technologies. They will not be possible if we do not modernize this legislation.
Impact of price regulation on the market and for patients: We have the impression that Brazil is not a priority for launching, which is not true. Brazil has launched products ahead of several countries. What sometimes prevents the release is this resolution 2 from 2004. It's too old and doesn't allow innovations to have the price that allows their release. So much so that today we already have two gene therapies with price analysis at CMED. We have several first-line cancers at CMED. Now, there's a twist, when you use that old resolution, you can't fit the release into the resolution categories. These new technologies are considered, as I said, omissions, and the case is not covered. You give a massive discretionary power to the public manager to define how the pricing will be. Today CMED is using a path that has prevented these technologies from entering. For example, an off-label comparison: we make a cost-effective comparison with comparable products that are registered and indicated for the same therapy. If you have disruptive technology, you have no comparator. There is no comparison. And CMED is forcing an unrealistic off- label comparison to older drugs. You have a whole line of cancers being compared to cancers from 20, 30 years ago. And it has unrealistic prices that will not allow these new ones to enter the market. We need to change that a little bit. But Brazil is a priority, yes. We have several examples. We have two ANVISA resolutions, RDC 204 and 205, which are registry prioritization RDCs for drugs that are coming in for unmet needs. Today, you have several products registered with ANVISA in phase 2, phase 1B clinical trials, which enter the CMED and have difficulty pricing. Sometimes you have the health registration and do not allow the launch of the product due to this legislation that is completely outdated. That's the biggest problem, from my point of view.