This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 03 BRASILIA 002143 
 
SIPDIS 
 
SENSITIVE 
 
H PASS 
HHS FOR VGIDI 
FDA FOR CGAYLORD 
PMEEKS AT OES/STC 
STATE PASS USTR 
NSC FOR CRONIN 
AID FOR LAC/SA 
 
E.O. 12958: N/A 
TAGS: ETRD SOCI TBIO KIPR IPR
SUBJECT: STAFFDEL O'KEEFE EXAMINES PHARMACEUTICAL REGULATORY 
ISSUES 
 
This cable was co-drafted by AmEmbassy Brasilia and 
AmConsulate Sao Paulo. 
 
¶1. (SBU) Summary and Introduction.  House Energy and Natural 
Resource Committee Counsel Colleen O'Keefe and Chris Knauer 
visited Brazil June 27 to July 2 to look at the degree to 
which local drug companies were producing substandard 
medicines - which eventually might find their way into the 
U.S.  The two counsel, accompanied by industry reps and 
Embassy/Consulate staffers, met with Brazilian regulatory 
authorities, government officials, current and former 
federal deputies, scientists, victims of substandard 
medicines, prosecutors and pharmaceutical production 
facility staff.  Staffdel focused in particular on a class 
of drugs labeled "similars," which are like generics but are 
not in all cases tested for bio-equivalence.  Officials at 
ANVISA (the Brazilian version of the FDA) admitted that only 
by 2014 would producers of similar drugs be required to test 
their products, but even then the required tests would only 
be a fraction of what the FDA requires.  The current (and 
former) Federal Deputies that Staffdel spoke with agreed 
that the situation was less than ideal, but felt that only a 
consensus solution (involving large and small "similars" 
producers, consumers, and government) would move the ball 
forward.  They did not anticipate major changes to the 
prevailing regulatory system in the short-term.  End Summary 
and Introduction. 
 
Background 
---------- 
 
¶2. (U) In 1999, Brazilian law authorized the production of 
generic drugs (i.e., pharmaceuticals which copy the formulae 
of reference medicines).  Generic products must undergo bio- 
equivalence tests prior to being authorized for use, and are 
sold under the name of the product's principal active 
ingredient.  The 1999 law, however, did not extinguish the 
existence of the country's pre-1999 category of home-grown 
low-cost medicines, called "similars," i.e., similar to 
reference drugs. 
 
¶3. (U) Similars sprouted in Brazil during the 1950s, a time 
when the Brazilian government did not recognize 
international pharmaceutical patents.  Similars account for 
nearly 40 percent of the local pharmaceutical market and 
sell for up to ten percent less than the corresponding 
reference drug.  They are sold under their own brand name, 
and prior to November 2003 were not required to undergo any 
bioequivalence tests at all.  While testing requirements are 
gradually being phased in, only in 2014 will all similars be 
obliged to undergo tests prior to their sale.  Of the 17,000 
drugs --  and 32,000 different variations of drugs/dosages - 
registered with ANVISA, a large percentage fall into the 
category of similars.  Among the firms producing similars 
are the 17 state-owned pharmaceutical manufacturing 
companies in Brazil.   The Brazilian government is also a 
purchaser of similars as well (overall, it buys 51% of drugs 
sold in the country). 
 
Ineffective Medicines 
--------------------- 
 
¶4. (SBU) Local Brazilian attorneys briefed staffdel on the 
problems caused by substandard similar medicines which may 
be ineffective, have no effect at all (placebo), or worse be 
harmful to those taking the drug.  Since many similars are 
used for chronic conditions, a causal link is often 
difficult to establish.  They pointed out that containing 
the same active ingredient does not mean the similar is as 
effective as the reference drug, which may have a completely 
different molecular structure.    An illustrative example 
these interlocutors offered was that of carbon:  diamonds 
and coal have the same chemical formula but that does not 
mean that would have the same effect on the body.  They 
argued that bioequivalency testing is essential.  However, 
only a fraction of similar medicines in Brazil have been 
subject to bioequivalency testing and it is not possible for 
consumers to determine which have undergone testing and 
which have not. 
¶5. (SBU) Yet another problem these attorneys identified was 
the issue of the quality of the active ingredients in 
similar drugs.  Often the active ingredients contained in 
such drugs are produced in labs, perhaps in India or China, 
which are not subject to strict quality control standards. 
Indeed, a February article from Veja magazine, Brazil's 
equivalent of "Time," noted that Aventis Pharma was in the 
midst of three years of litigation in an effort to get a 
similar drug with unclear lineage (and competing with one of 
the company's own products) withdrawn from the market. 
 
¶6. (SBU) Local attorneys introduced Staffdel to the 
surviving family members of two victims of an ineffective 
similar drug (Celobar).  According to these attorneys, 
ANVISA had approved Celobar - which contains the active 
ingredient barium sulfate - but later recalled the product 
after it was deemed unsafe for consumption.  However, 
notwithstanding the recall, they said, Celobar can still be 
purchased from many pharmacies in the country.  Overall, 23 
deaths have been attributed to the drug so far. 
 
Overburdened Regulators 
----------------------- 
 
¶7. (SBU) In a frank and open meeting with staffdel, ANVISA 
drug regulator Dr. Davi Romel outlined some of the hurdles 
ANVISA faces in bringing order to the chaotic Brazilian 
pharmaceutical market.  The situation involving similars, he 
stated, had already been dealt with legislatively and was 
gradually coming under control.  (Comment:  this was a 
statement with which other commentators did not agree.  End 
Comment.)  Romel said that in November 2004 the production 
of 30 similar drugs had been cancelled and another 100 
temporarily taken off the market.  He thought that the 
biggest problem ANVISA faces is the sheer number of local 
drug manufacturers, many of which are small and medium-sized 
firms which do not have rigorous quality control standards. 
While ANVISA seeks to improve industry quality through 
yearly inspections, he admitted that the agency lacks the 
FDA's decades-long regulatory tradition. 
 
¶8. (SBU) During the past few years the number of local 
companies in the field had dropped from 380 to 250, he 
noted, adding that in the end it would need to decline even 
more as eventually this would be an industry in which "only 
the big guys could play."  As the number of firms (and jobs) 
shrank, he continued, ANVISA faced increasing pressure to 
ease up on its regulatory oversight.  An even bigger 
problem, Romel felt, was the existence of 6,000 compound- 
producing pharmacists, comparable to the by-gone 
apothecaries in the U.S., who manufactured medicines in 
their backrooms.  These apothecary-manufactured drugs were 
often sold in low-cost pharmacies which cater to the poor. 
The conceptual problem that Brazil faced as a whole, Romel 
commented, was that often the issue of quality health care 
was equated with access to affordable medicines, with 
questions such as safety of medicines often taking a back 
seat.  While ANVISA could set standards, he declared, actual 
enforcement of its dictates fell to state law enforcement 
authorities, many of which were overburdened and 
understaffed. 
 
Comments from a Former Brazilian Congressman 
-------------------------------------------- 
 
¶9. (SBU) StaffDel also met with former Congressman Vicente 
Caropreso (PSDB) (please protect) from Santa Catarina state. 
Caropreso is a neurosurgeon and was one of the leaders in 
Congress that fought for the institution of generics in 
Brazil in the late 1990s.  At June 28 dinner, he opined that 
the 2014 deadline for similares to meet generic standards 
was too distant and alleged that corruption and deal making 
between the similar companies and ANVISA was keeping the 
industry alive.  When asked what should be done about 
similares, Caropreso said that the government should 
concentrate its efforts on monitoring the production, 
distribution and sale of all drugs.  Tighter 
controls/standards, he felt, would naturally push out the 
similar producers and make room for legitimate generic drugs 
as a safer alternative. 
 
Changing a Culture 
------------------ 
 
¶10. (SBU) Finally, StaffDel met with members of the 
Brazilian Bar Association (OAB) and a professor of pharmacy 
from the University of Sao Paulo (USP).  OAB members stated 
that they have launched a public awareness campaign in Santa 
Catarina State focusing on the distribution of pamphlets to 
physicians and citizens explaining the dangers of similares. 
In response, similar producers in Santa Catarina have 
accused the OAB of attacking national industry in support of 
"large, exploitative multinational drug companies." 
Meanwhile, in staffdel's conversations with Professor 
Yasaka, Vice-President of the Sao Paulo Pharmaceutical 
Society, the latter noted that he has done extensive 
research on the effectiveness and safety of similar drugs -- 
and as a result has become one of their strongest opponents. 
Both Yasaka and OAB members echoed Caropreso's view that 
there is widespread corruption within the industry. 
 
¶11. (U) Staffdel O'Keefe has cleared this cable. 
 
LINEHAN