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Partnerships for Productive Development in Brazil: inside the latest changes in the PDP program

February 12, 2015

by Ricardo Campello

Right after President Dilma Roussef’s reelection for another four-year term, the Ministry of Health (MoH) issued Ordinance No. 2531, establishing the conditions for local and foreign companies to participate in the government’s Partnerships for the Productive Development (PDP) program.

Created in 2008, the PDP Program began without a proper regulatory framework. This first Federal Government’s effort to establish a pharmaceutical technology transfer program did not succeed, mainly due to the lack of specific rules for implementing the agreements signed.

In 2012, the government issued Ordinance No. 837, in order to establish basic rules for the PDP program. It had only 12 incipient provisions and failed to provide clear definitions and specific information regarding the agreements, the responsibility of the parties and other matters related to the PDPs proceedings. More seriously, it allowed companies that did not have the required technology for the partnership to sign a PDP contract – companies with no experience in manufacturing complex biological products were contracted to teach the government owned pharmaceutical labs how to do it.

Issued on November 11, 2014, Ordinance No. 2531 superseded Ordinance No. 837 of 2012 and aims at providing more transparency to the program, solving the problems coming from the previous ordinance and regulating important aspects that were not covered until now. Please find below some aspects introduced by new provisions:

Timing for submitting the PDP proposal to the MoH

According to article 13, the public institution must submit the PDP proposals between January 1 and April 30. Under special circumstances and in case of relevant public health interest, the Ministry of Health can open a new window for proposals.

Presentation of the proposal and eligible products

A PDP proposal must only be presented if the product is already included in the list of strategic products (article 11). The list will be defined according the following criteria established in article 6:

(i) the product must be important to the Brazilian Unified Health System (SUS), according to its programs;

(ii) it must be or capable of being acquired centrally and directly by the MoH; and

(iii) the government must have interest in the manufacturing of the product, its active pharmaceutical ingredient or critical technological component in Brazil (article 6).

It shall be noticed that a product that complies with these requirements is not automatically defined as strategic. It needs to be included in the Annual List of Strategic Pharmaceutical Products, which has recently been issued.

Mandatory compliance with Intellectual Property and Patent rights

Ordinance No. 2531 deals with possible intellectual property violation, establishing that the PDP proposal must contain the list of granted patents or patent applications that might cover the product subject of the PDP proposal (article 14, III).

Content of the PDP proposals

The PDP proposal must demonstrate that public institutions, which receive the technology transfer, will also receive the Drug Master File (in PDPs of small molecules products) or the master cell bank (in PDPs of biological products). In addition, the proposal related to medical devices must comprise the manufacturing of the critical technological component until the expiration of the PDP agreement.

It also has to disclose the manufacturer and its location, in case the active pharmaceutical ingredient or critical technological component is imported during the beginning of the PDP (article 14, VI, b).

According to article 14, the PDP proposal must inform and present documentation related to the identification and roles of all the parties to the agreement; the specifications of the product subject to the PDP; the term of the PDP agreement (maximum 10 years) and the schedule for the technology transfer. Such proposal has also to inform the suggested product’s price, which will have to comply with long list of criteria, such as the average price paid by the public administration and the product’s price approved by the Drug Market Regulation Chamber (CMED). The product’s price and its compatibility with the average price of the public market seems to be one of the major concerns of Ordinance No. 2531 and, consequently, of the MoH.

Participation in a PDP

It is very common for more than one company to participate in a PDP. In this regard, the new PDPs guidelines excluded the obligation for two or more companies to present a PDP proposal as a consortium, which implied a joint responsibility among its members, allowing other forms of agreements (article 9, II). Another provision that can help the association of private Brazilian companies with research-based companies is article 14, VI, c, as it allows part of the technology transfer such as courses, lectures and visitations into partner’s facilities to happen outside Brazil.

 

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