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Anvisa's (the Brazilian FDA) regulation for Cannabis Products, Rule #327/2019, provides that, until the end of the 5-year period of their respective authorizations (Article 8), companies must seek approval as a drug, under penalty of automatic cancellation of the authorization (Article 74). The opinion of Anvisa’s Director Fernando Mendes, issued at the time Rule #327/2019[1] was approved, shows that Anvisa's objective with the automatic cancellation was to create an “incentive for products holding this health authorization to migrate to the drug category”. The reasons is that to carry out such change in the regulatory marketing category, it would be necessary to generate “concrete pharmacological information and data, based on scientific evidence, indicating that the use of cannabis or its cannabinoids is effective and safe in the treatment of human diseases”.

Rule #327/2019 is in the process of being reviewed and, according to Director Meiruze Freitas, alternatives will be discussed to keep products already authorized on the market[2]. The market welcomes such discussion, as automatic cancellation does not seem legally valid. The term “authorization” is used in administrative law within the topic of entities' legal power to enforce its own regulation, which is exercised by the Public Administration to conform private activities to the public interest. Traditionally, scholars define authorization as “a unilateral, discretionary, constitutive, and precarious act”[3]. Thus, an authorization can be revoked at any time due to its discretion and precariousness. The distinction made by scholars between authorizations and licenses is common, pointing out that the latter could not be revoked at any time as it is a “unilateral, declaratory and binding administrative act that enables everyone who fulfills legal requirements to perform economic activities”[4].

Would the marketing authorizations of Rule #327/2019 be such discretionary and precarious acts, with their automatic cancellation being legally valid? We don't believe this to be the case. For some time now, scholars have criticized this dichotomy between discretionary and binding acts. Floriano de Azevedo Marques states that the notion that discretion allows the Government to review acts authorizing the exercise of economic activities at its pleasure did not resist the influences brought by the Brazilian Constitution of 1988[5]. Gustavo Binenbojm even suggests abandoning the dichotomy, stating that “there is no absolute binding nor full discretion, but only situations subject to different intensity of legal controls”[6].

The distinction also makes no sense in light of the Brazilian Economic Freedom Act (Statute #13,874/2019), which encapsulated as “public acts of enablement of economic activity” (Article 1, paragraphs 4 and 6) all administrative acts that consent to the exercise of economic activities, such as an “authorization”, a “license” and even a “marketing approvals” (term used by Anvisa to refer to the approval of drugs, which the Agency wanted so bad to differentiate from the “authorization” of Cannabis Products). The Economic Freedom Act chose to subject all these “acts” to its principles (such as to those of guarantee of freedom and subsidiary intervention by the State), to its rules (such as those providing for the right to market new types of products despite outdated regulations), or their interpretation guidelines (as in the sense that “all norms of public ordering” should be interpreted “in favor of economic freedom”). All of this to enforce the sole paragraph of Article 170 of the Brazilian Constitution (economic freedom is the rule, and an intervention must be exceptional and provided for by law to the strict extent necessary to meet the public interest that justifies it).

Bearing this in mind, the provision in Article 74 of Rule #327/2019 does not seem legally valid, as it is incompatible with the assumptions that govern public acts of enablement of economic activity, whatever they may be: (i) prior legal provision; and (ii) content compatible with the parameter that, above all, controls the lawfulness of the administrative acts, the principle of proportionality in its three aspects (adequacy, necessity and proportionality in the strict sense).

Currently, there is no law providing for the specific treatment given by Anvisa to Cannabis Products. Rule #327/2019 was published based on general provisions that support the Agency's actions. Looking at the laws that regulate Anvisa's actions in the practice of public acts to enable economic activity, the cancellation of such acts is never treated as an incentive measure; it appears only as a sanctioning measure for the practice of serious health violations (e.g., fraud, tampering or falsification of drugs, according to Article 10, Statute #6,437/1977) or, when the circumstances of approval change in such a way that the product starts to be considered harmful to health (Article 6, Statute #6,360/1976). Thus, according to these provisions, product cancellation is only justified when there is a health risk in maintaining the product on the market. This would not be the reality of the automatic cancellation of Cannabis Products, as the cancellation would be imposed due to a new circumstance, but based on the same reality existing by the time the product was given the authorization. Since the publication of Rule #327/2019, data in favor of the efficacy and safety of these products have only increased, even if not with the scientific rigor desired by Anvisa.

For example, more than 140 clinical studies with Cannabis Products have already been completed in several countries, many of them attesting to their safety and effectiveness for the treatment of some diseases and syndromes. To focus on a single drug, 16 completed studies evaluating the use of cannabidiol for the treatment of epilepsy and other diseases involving convulsive conditions have been identified. These are phase 1 to 3 studies, carried out between 2014 and 2022, involving more than 2 thousand participants, in several cities in 8 countries in total.

In patients with Dravet Syndrome or Lennox-Gastaut Syndrome, average reductions of more than 40%[7] in the frequency of seizures were observed. In one of these studies, a significant portion (23.0%) of patients had 75% fewer seizures than before starting treatment and another 4.9% simply did not have any seizures during the study. The caregivers — whether professionals or family members — noticed an improvement in the patients' condition in more than 60% of cases. In another study[8] that evaluated children between 1 and 2 years old with seizures, an improvement in the child's communication and socialization skills was observed. The data from these studies cannot be ignored.

The provision for automatic cancellation is also not valid as it is incompatible with the principle of proportionality. This follows, firstly, because the measure does not seem appropriate, considering that Anvisa intended to encourage studies to increase the level of evidence in terms of safety and effectiveness of these products. The most obvious effect of the measure is not to encourage studies, but to create an environment of insecurity, given the threat of the product being withdrawn from the market. This is extremely harmful for companies that need financial resources and stability of their products on the market to finance the intended studies. Secondly, because the measure is not strictly necessary, since the intended result (incentive to studies) can be achieved with less burdensome and more efficient measures, such as the elimination of bureaucratic obstacles to carrying out the necessary clinical studies. Currently, there are many barriers faced by companies when carrying out clinical studies, including those imposed by Anvisa itself. This was evident in the case of the Federal University of Rio Grande do Norte, which had to go through three administrative levels within the Agency and wait more than a year to receive authorization from Anvisa to cultivate Cannabis sativa for scientific purposes. Finally, it is not proportional in the strict sense, considering that the negative effects are greater than the very low and possible incentive effect, in view of the practical consequence of applying the cancellation that would be the withdrawal of Cannabis Products from the market as a whole, reducing the revenue for their companies and restricting access for patients who need it. To illustrate, the cancellation will reach 68% of approved products in the next three years.

Therefore, it seems that the automatic cancellation provided for in Article 74 of Rule #327/2019 is not legally valid, not for any unimportant formal reason, but because it does not fulfills the purpose intended by Anvisa. Thus, in addition to being mandatory, given its unlawfulness, abandoning the automatic cancellation is a measure that is within Anvisa’s own interest, and the Agency must take advantage of the review process of Rule #327/2019 to replace it with another incentive measure, under penalty of this provision being declared illegal by the Brazilian Courts, as has been the case with other provisions of this Rule. This incentive shall be carrot-type, not a stick one.

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